When Does 2+2=5?

Tenants just evaluating the rental rate when comparing building A ($22/sf) to building B ($20/sf) may be making an error much more costly than a 10% discount.


We recommend determining the size of your office as the first step in a renewal or relocation process.


For example: expanding your 10,000sf suite by four 120sf offices requires much more than 480sf!


Let’s break it down:

A “Circulation Factor” should be included for hallways, closets and file space, and it can add 30%-40% to the 480sf, for a new total of 624-672sf.

An “Inefficiency Factor” represents the potential variance between a floor plan with the greatest efficiency and one with extra, unneeded space. For example, if you need four 10’ wide offices, but the suite contains a 43’ wide space, either due to poor layout or design problems, then the extra 3’ represents the Inefficiency Factor. Generally, an Inefficiency Factor can add up to 5% more space, bringing our total to 655sf – 706sf.


A “Loss Factor” refers to space in a building that encompasses areas such as fire stairs, cafeterias, common hallways and bathrooms, building lobbies, utility closets, and basement/penthouse mechanical rooms.  The space a tenant physically occupies is referred to as usable square footage. To compute the rentable square footage of a suite, a loss factor is used to convert the usable square footage to a rentable number (the amount of square footage you actually pay for). A typical Loss Factor increases the usable square footage by 15% – 25%, creating a new total of 753sf – 882sf.

What’s the impact on cost by adding four 120sf offices for a seven year transaction with a $30 rental rate?  $158,130 - $185,220. Significant, isn’t it? So plan carefully when evaluating your office space requirements. In most cases we recommend bringing an architect on-board to program the various components of your office space needs and design a space that is efficient and productive for your company.