When renting warehouse space, there are many terms that you may encounter, such as Common Area Maintenance and Common Area Factor. While these two terms may sound similar, they actually refer to different aspects of renting commercial space. In this article, we will explain what Common Area Factor is and how it differs from Common Area Maintenance.
What is Common Area Factor?
Common Area Factor is a ratio used to calculate the rentable square footage of a commercial space. It refers to the percentage of the building’s common areas, such as hallways, elevators, and lobbies, that are shared by all tenants in the building. The Common Area Factor is typically expressed as a percentage and is used to determine how much of the total square footage of the building is available for rent.
For example, if a building has a total of 100,000 square feet, but 10,000 square feet is dedicated to common areas, the Common Area Factor would be 10%. This means that only 90,000 square feet of the building is available for rent, and the rentable square footage would be calculated based on this figure.
How is Common Area Factor different from Common Area Maintenance?
While Common Area Factor and Common Area Maintenance may seem similar, they refer to different aspects of renting commercial space. Common Area Maintenance is a fee that commercial property owners charge tenants to cover the cost of maintaining and repairing common areas of the property, such as hallways, elevators, and parking lots. Common Area Factor, on the other hand, is used to calculate the rentable square footage of a commercial space based on the percentage of common areas in the building.
Common Area Factor is used to determine the actual amount of usable space available to a tenant. For example, if a tenant is looking to rent 1,000 square feet of space in a building with a Common Area Factor of 10%, they would only have access to 900 square feet of actual usable space. This is because the other 100 square feet are common areas shared by all tenants in the building.
Common Area Maintenance fees are separate from the rentable square footage calculation based on Common Area Factor. Common Area Maintenance fees are used to cover the costs of maintaining and repairing common areas, while the Common Area Factor is used to calculate the amount of usable space available to a tenant.
Conclusion
When renting commercial warehouse space, it’s important to understand the difference between Common Area Factor and Common Area Maintenance. Common Area Factor refers to the percentage of common areas in the building, which is used to calculate the actual rentable square footage of a space. Common Area Maintenance, on the other hand, is a fee charged to tenants to cover the cost of maintaining and repairing common areas.
By understanding these two terms, tenants can make informed decisions about which space is the best fit for their business needs. It’s important to review lease agreements carefully to understand any additional fees, such as Common Area Maintenance, that may be charged on top of the rentable square footage based on the Common Area Factor. This can help ensure a smooth leasing experience and avoid unexpected costs.
