As renting office space is often a significant expense for companies, we should ensure we’re actually paying for usable office space. This may seem obvious at first, but many don’t realize the various traps and hidden costs that may be buried in the details of leases. We have created a checklist to uncover some of these common traps to increase awareness and hopefully help you save on costs.
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Loss factor of usable office space
Typically, only 75-90% of the rentable office space that you pay for is actually usable. 3 factors come into play in determining this:
1. Your office's physical configuration;
2. Your landlord's method of defining and measuring rentable space;
3. Your landlord's (arbitrary) discretion
1. Office's physical configuration
It is common practice and typically acceptable for rentable area to include portions of common areas. This may include (but not limited to):
- Common areas, such as hallways and stairways;
- Elevators;
- Lobbies;
- An abundance of pillars/columns in your work area;
- Inefficient placements of elevators (e.g. in the middle of the building);
- Uncommon shapes of the building leading to unusable space;
2. Landlord's method of measuring rentable space
Landlords can sometimes get 'creative' in their way of defining what's rentable in order to overstate the actual usable space. Some examples include:
- Measuring from the exterior building, from one wall to the other (how is that usable space?);
- Including questionable 'public areas' such as ventilation ducts;
- Including space occupied by ornaments (e.g. statues, gargoyles?);
3. Your landlord's (arbitrary) discretion
Some landlords skip the whole smoke and mirrors altogether and bluntly inflate the numbers by an arbitrary percentage into the 'usable area'. Other landlords may 'remeasure' the space and suddenly claim the usable space to be significantly larger than before, and may even demand a higher rent as a consequence.
These cases can get tricky may be difficult to verify on your own, so it may be best to hire a consultant or architect if you believe the usable area declared by the landlord to be overstated.
And that's it for now - being diligent in looking over the details can save you thousands of dollars, especially if they are not costs that you actually had to pay for!
If you suspect that your landlord is overstating your usable office area, seek legal advice and find an independent consultant to verify the issue. Better yet, find a better place (and honest landlord) to work with.
If you suspect that your landlord is overstating your usable office area, seek legal advice and find an independent consultant to verify the issue. Better yet, find a better place (and honest landlord) to work with.
