How to Calculate Load Factor, With Examples

Rentable square feet (RSF) is the figure rent is charged on. Usable square feet (USF) is the space you occupy. This guide covers the math. For an explanation of what the two measures include and how to use them in a building comparison, see our guide to rentable and usable square feet.

The formula is usually written as a ratio.

• Load factor = RSF divided by USF.
• Add-on factor as a percentage = load factor minus 1, or (RSF minus USF) divided by USF.
• RSF = USF times load factor.
• USF = RSF divided by load factor.

All figures in this guide are hypothetical, for illustration, and should not be read as typical for any market or building.

1. A landlord quotes a suite at 6,000 RSF with 5,000 USF.
2. Divide: 6,000 divided by 5,000 is 1.20.
3. Express it as an add-on: 1.20 minus 1 is 0.20, or 20 percent.
4. Read it this way: for each usable square foot, you pay for 1.20 square feet.

You will usually use the formula in one of two practical situations.

From your needs to the listing. You need 5,000 usable square feet. In a building with a 1.15 load factor, that is 5,000 times 1.15, or 5,750 RSF. In a building with a 1.25 load factor, it is 6,250 RSF. Search with those figures, not the usable number.

From the listing to your needs. A suite is advertised at 6,000 RSF, and the landlord states a 1.20 load factor. Dividing, 6,000 by 1.20 gives 5,000 USF. That is the number to give your architect for a test fit.

You can also calculate a building-wide factor. The same idea works with total floor area and usable area. A hypothetical building with 120,000 square feet of floor area and 100,000 usable square feet has a load factor of 1.20. Keep in mind that a floor-level factor may differ from a building-wide factor, and that a measurement standard may treat some areas in ways this simple division does not. Ask how the landlord arrived at the number.

These terms describe the same gap between rentable and usable area, measured against a different base. The difference causes real confusion.

• Add-on factor: gap divided by usable area. For 6,000 RSF and 5,000 USF, 1,000 divided by 5,000 is 20 percent.
• Loss factor: gap divided by rentable area. For the same suite, 1,000 divided by 6,000 is 16.67 percent.

Same suite, two different percentages. Loss factor is often heard in New York City and the surrounding area, and load factor is more common in many other US markets, though usage varies. Confirm which is being used before you compare spaces.

To convert from one to the other, the load factor equals 1 divided by (1 minus the loss factor). A 20 percent loss factor gives 1 divided by 0.80, or a load factor of 1.25, which is a 25 percent add-on. A landlord describing a "20 percent factor" could therefore be describing either a 1.20 load factor or a 1.25 load factor. On 5,000 usable square feet, that is the difference between 6,000 and 6,250 RSF.

Do not compare percentages. Ask for RSF and USF for each suite, in writing, and do the division yourself.

Assume two buildings each offer the 5,000 usable square feet you need, at the same quoted rate of $30.00 per RSF.

• Building A has a 1.15 load factor: 5,750 RSF times $30.00 is $172,500 a year, or $34.50 per usable square foot.
• Building B has a 1.25 load factor: 6,250 RSF times $30.00 is $187,500 a year, or $37.50 per usable square foot.
• The difference is $15,000 a year for the same usable space.

To put them on equal footing, ask what rate in Building B produces the same cost. $172,500 divided by 6,250 RSF is $27.60. So Building B at $27.60 costs the same as Building A at $30.00 for your usable area.

Remember that load factor also affects pass-throughs, because your share of operating expenses is generally based on rentable area, and it can affect allowances quoted per rentable foot.

A lower load factor is not automatically better. A higher factor can still be worth it if the building offers better shared space. Gensler notes that high factors now often reflect amenities, not inefficient design. Weigh what your team will actually use. Some tenants value efficiency highly, as one client said after a move.

Load factors depend on how the building was measured. Office buildings are commonly measured using standards from BOMA, the Building Owners and Managers Association. Its 2017 office standard, ANSI/BOMA Z65.1-2017, changed how some areas are treated.

• Otten Johnson explains that BOMA 2017 counts certain exterior areas, including some balconies and finished rooftop terraces, and allows capped load factors on a tenant-by-tenant basis.
• Gensler notes that exclusive-use balconies or terraces are treated as rentable area, while shared outdoor space is allocated through the load factor.
• The Colorado Real Estate Journal reports a Gensler comparison of one building in which BOMA 2017 produced a rentable area about 3 percent larger than BOMA 2010. Results vary by building.
• Otten Johnson also notes that earlier BOMA standards remain acceptable for measurement, so a lease should state which one it uses.

A landlord’s number may therefore differ from one building to the next for reasons that have nothing to do with the floor plan, so ask.

• ✓What are the RSF and USF for this suite, as stated by the landlord?
• ✓Which measurement standard and version was used, and is it named in the lease?
• ✓Is the quoted factor a load factor, an add-on factor or a loss factor?
• ✓Is the factor set for the floor, the building or just this tenant, and is it capped?
• ✓Has the space been measured by an architect recently, and will the landlord provide the plans?
• ✓Can the landlord remeasure during the term or at renewal, and what would that change?
• ✓Does the higher rentable area also raise our share of operating expenses?
• ✓If we want to verify the figure, may our architect measure the space before signing?

An architect’s measurement before signing can be worth the cost, because any extra square feet are paid for across the entire term. At Tenant Advisory Group we represent tenants, and we compare options on cost per usable square foot, which gives a clearer answer than the quoted rate. Have your attorney confirm the measurement language in the lease, including whether the stated area can change.