Ready to enter the next phase of your business? Before you start the hunt for your ideal new space, there are some terms you should familiarize yourself with: USF, RSF and Load Factor. Here’s an explanation of what they are—and why understanding how they impact your business can save you money in the long term.
Usable Square Footage
(USF) is the amount of space your business sovereignly occupies; anything directly inside your office.
Rentable Square Footage
(RSF) is your USF plus the additional square footage of any shared common space that you and all other building tenants have equal access to (on a proportional basis). For example, that could be shared bathrooms, front lobby, or hallways. All spaces, when advertised, highlight the RSF number.
The Load Factor (also known as Ghost Square Feet)
Usually represented by a percentage, is the difference between the USF and RSF. The term “Ghost Square Feet” gained traction when tenants began to understand this was a cost (represented in square feet) they were paying for but that was not present in their sovereign space.
Here’s How It Works
Say an office building has 140,000 total square feet. Out of that total, 25,000 square feet is common space (lobby, hallways, restrooms, food/refreshment area, etc.).
25,000 sq ft / 140,000 sq ft = 17.8%
Suite A:
USF: 5,405 sq ft
Load Factor: 17.8% or 962 sq ft
RSF: 5,405 sq ft + 962 sq ft = 6,367 sq ft
While you can’t negotiate down the Load Factor, the specific percentage can vary per building. It’s not uncommon to see a 7% difference between buildings, depending on what amenities they provide. On a 6,500 sq ft space, assuming a rate of $24/sq ft, a 7% difference in the load factor totals just under $11,000 per year.
Another important consideration—if the building you are leaving has an unusually high load factor, it is easy to believe you need more space than you actually do. For example, if you were searching for a new office because you need more space, and you’re basing your needs on RSF and not USF, you could be inflating your assumed need by 10%.