The multiplier to a tenant's useable space that accounts for the tenant's proportionate share of the common area (restrooms, elevator lobby, mechanical rooms, etc.)In short, the load factor is the percentage of space on a floor or building that is not usable and is expressed using the simple formula of rentable area divided by useable area minus one.
For example, if an office building has 200,000 square feet of useable square and a total rentable area of 220,000 square feet then the building has a load factor of 10.0% (220,000 rentable square feet divided by 200,000 usable square feet less one). This is an important metric as rental rates can be quoted on a per rentable square foot basis.
For example, if a tenant is comparing two equally sizes suites at different buildings, both with the same rental rate per rentable square foot, but building A has a load factor of 5.0% while building B has a load factor of 15%, then building B would be 10% more expensive even though the tenant is occupying the same amount of space at the same rental rate.
Another common use of load factors is in calculating CAM charges in a multi-tenant building. Here, even if base rent is based on useable square footage, expense reimbursements are often based on a tenant’s proportionate share of rentable square feet. The logic in both these examples is that the tenant benefits from use of the building’s common areas and thus should contribute financially for its use.
Realized does not make investment recommendations, and no communication through this website or in any other medium should be construed as investment advice, nor does it make any recommendations regarding the appropriateness of particular opportunities for any investor. Realized does not provide tax or legal advice and no communication through this website or in any other medium should be construed as tax or legal advice. All prospective investors must certify that they are accredited investors, suitable for this type of illiquid investment, and must acknowledge that they have received and read all investment terms and conditions. Many investment opportunities posted on this website are “private placements” of securities made pursuant to an exemption from registration and have not been registered with Securities and Exchange Commission (“SEC”) or any state securities regulator. Securities offered on this website are not publicly traded, are subject to holding period requirements, and are intended for investors who do not need a liquid investment. Securities offered on this website are NOT bank deposits (and thus NOT insured by the FDIC or by any other federal governmental agency), are NOT guaranteed by Realized, WealthForge or their respective affiliates, and MAY lose value. Realized makes no representations or warranties as to the suitability of any investment opportunity posted on this website as eligible like-kind property in connection with tax deferred exchanges under IRC §1031. Neither the SEC nor any federal or state securities commission or regulatory authority has recommended or approved any investment opportunity presented on the website or the accuracy or completeness of any of the information or materials provided by or through the website. Investors must be able to afford the loss of their entire investment.
Any financial projections or pro-forma returns shown on the website are illustrative examples only, and there can be no assurance that any such projections or valuations provided are accurate or in agreement with market or industry valuations. Any investment representation or information contained herein has been secured from sources Realized believes are reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefor. Offers to sell, or the solicitations of offers to buy, any security can only be made through official offering documents that contain important information about risks, fees and expenses. Investors should conduct their own due diligence, not rely on the financial assumptions or estimates displayed on this website, and are encouraged to consult with a financial advisor, attorney, accountant, and any other professional that can help you to understand and assess the risks associated with any investment opportunity. Fluctuations in the value of the assets that are the subject of any investment are to be expected. Tenant vacancies, competition from similar properties, or potential environmental conditions at the property may negatively impact rents and cash flows. Additional risks exist due to a variety of factors, including, but not limited to, leverage, market risks, business risks, management, adverse tax consequences, and such other risks more particularly described in the related offering materials. There is a potential for loss of part or ALL of the investment capital, and each investor should understand that all capital invested may be lost. Investors should only consider these investments if they have no need for liquidity and can bear the risk of losing their entire investment. Check the background of this firm on FINRA's BrokerCheck.
*Past performance is not indicative of future performance.