Applying a set full floor loss factor throughout the property. It should be noted that full floor loss factors can yield very high multi-tenant loss factor on inefficient multi-tenanted floors. In this case, most landlords decide to cap the multi-tenant loss factor (usually between 33%-35%).
Applying set rentable numbers throughout the property to simplify leasing and marketing efforts. This may result in each floor having a different loss factor.
Matching the rentable area to the propertyâ€™s building gross area. This method tends to result in loss factors lower than the market standard.
code calls for using the outside of the walls which in my case is about 1 foot thick. Seems criminal that they recommend this method as it is a clear misrepresentation of the actual usable space.
All commercial deals I do are negotiated point by point. Every little detail and agreement that is put in place with the landlord is what accompanies you the entire time you are in the space. So price per foot, utilities, landlord's work, tenant's work, escalations, tax caps and pass through, garbage, HVAC, sprinklers, water, heat, electric, fixtures, use limitations, sublease provisions... and the list goes on.
If you've never rented commercial space, you need to have a professional walk you through it.
You will want to hire your own engineer to get accurate square footage.
SVP/ Associate Broker
Rutenberg Realty NYC