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Rentable Square Footage

Rentable Square Footage (RSF) is a term commonly used in the commercial real estate investment industry, especially in leasing and renting office spaces, retail spaces, and other commercial properties. RSF refers to the total square footage for which the tenant will pay rent. This measurement includes the actual usable square footage of the individual tenant’s space, as well as a pro-rata share of common areas in the building such as lobbies, restrooms, hallways, and other shared amenities.

Here is a more detailed breakdown:

  1. Usable Square Footage (USF): This is the actual space that the tenant occupies, where they can conduct their business operations. It includes the interior of the tenant’s premises but excludes common areas.
  2. Common Area Maintenance (CAM): These are the shared spaces in a commercial property that are available to all tenants and their invitees, such as hallways, restrooms, and lobbies.
  3. Add-On Factor: This is a percentage that represents the tenant’s pro-rata share of the common areas. It’s used to calculate the RSF from the USF. The add-on factor is calculated by dividing the total amount of shared space by the usable area.

The formula to calculate RSF is as follows:

RSF = USF + (USF × Add-On Factor)

Understanding RSF is crucial for both landlords and tenants in a commercial lease transaction, as it directly impacts the rent amount that the tenant will pay. The tenant pays for not just the actual space they occupy, but also for a portion of the common areas that they have access to. Different buildings might have different methods of calculating RSF, and it’s always essential to clarify the components and calculation methods involved in determining the RSF in a lease agreement.