boma calculations

Understanding BOMA Calculations: Your Guide to Commercial Space Measurement

In the world of commercial real estate, understanding how space is measured and priced is paramount. One of the most widely accepted and critical standards for this is the Building Owners and Managers Association International (BOMA) Standard Method of Measurement. BOMA calculations are essential for landlords, tenants, and brokers alike, ensuring transparency and fairness in lease agreements.

This comprehensive guide will demystify BOMA calculations, explain key terminology, and highlight why these standards are so crucial for anyone involved in commercial property transactions. Use our interactive calculator above to see these concepts in action!

What is BOMA and Why Does it Matter?

BOMA International is a professional organization that has developed a series of standards for measuring floor area in commercial buildings. These standards provide a uniform method for calculating the usable and rentable areas of a building, which directly impacts lease rates and tenant costs. Without a standardized approach, measuring and leasing commercial space would be a chaotic and often disputed process.

• Fairness: Ensures all tenants are charged consistently for their share of the building.
• Transparency: Provides a clear methodology for space measurement.
• Comparability: Allows for easier comparison of lease terms across different properties.
• Dispute Resolution: Offers a common ground for resolving measurement disagreements.

Key BOMA Terminology Explained

1. Usable Area (UA)

The Usable Area is the actual space occupied by a tenant for their exclusive use. This includes offices, conference rooms, break rooms, and any other area within the tenant's demising walls. It's the space where a tenant conducts their business operations.

• What it includes: All functional space within the tenant's leased premises.
• What it excludes: Common areas like lobbies, restrooms, corridors, elevator shafts, and mechanical rooms.

2. Common Area (CA)

Common Area refers to the spaces within a building that are shared by all tenants or are essential for the building's operation. These areas are not part of any single tenant's Usable Area but are crucial for the building's functionality and accessibility.

• Examples: Building lobbies, multi-tenant corridors, public restrooms, elevator shafts, stairwells, mechanical rooms, loading docks, and sometimes even shared amenity spaces like fitness centers or conference rooms.
• Allocation: Tenants are typically charged for a prorated share of these common areas.

3. Rentable Area (RA)

The Rentable Area is the total area for which a tenant pays rent. It is calculated by adding the tenant's Usable Area to their prorated share of the building's Common Area. This is the figure that typically appears in lease agreements and determines the total rent amount.

The formula is generally: Rentable Area = Usable Area + (Tenant's Prorated Share of Common Area).

4. Load Factor (Loss Factor)

The Load Factor, also sometimes called the "Loss Factor" or "Common Area Factor," is a percentage that expresses the ratio of common area to usable area. It's used to convert a tenant's Usable Area into Rentable Area. A higher load factor means a larger proportion of common area is being allocated to the tenant.

The formula is: Load Factor = ((Total Building Rentable Area / Total Building Usable Area) - 1) * 100%. Total Building Rentable Area equals Total Building Usable Area plus Building Common Area.

Understanding the load factor is crucial because it directly impacts the effective cost per square foot for a tenant. A building with a lower usable area but a high load factor might end up having a similar effective rental cost to a building with a higher usable area and a lower load factor.

Using the BOMA Calculator

Our simple calculator above helps you quickly determine key BOMA metrics:

• Tenant's Usable Area: Input the square footage of the space you will exclusively occupy.
• Building Common Area: Input the total square footage of common areas in the entire building.
• Total Building Usable Area: Input the sum of all tenants' usable areas in the building.

The calculator will then output:

• Tenant's Share of Common Area: The specific common area square footage allocated to your lease.
• Tenant's Rentable Area: Your total billable square footage.
• Building Load Factor: The overall common area factor for the building, expressed as a percentage.

Conclusion

BOMA standards are the backbone of fair and transparent commercial real estate leasing. By understanding the distinctions between usable, common, and rentable areas, and the impact of the load factor, tenants can make informed decisions, and landlords can ensure consistent and equitable practices. Always refer to the latest BOMA standards for precise definitions and methodologies when dealing with actual lease agreements.