Net Square FootageRealized1031.com2020-12-07 08:00:00
Net Square Footage
Net square footage (NSF) is the usable or “rentable” area of a specified space (e.g., a suite, floor, or an entire building). This measurement generally excludes non-rentable areas such as common areas, hallways, and mechanical rooms.
As an example calculation, if a building consists of 100,000 Gross Square Feet, and 10,000 square feet are utilized as lobbies and hallways, then the Net Square Footage of the building would be 90,000 square feet.
Gross square footage (GSF) contains all areas of the building, including maintenance areas, walkways, balconies, attics, common areas, and any walkable area of the building. Parking lots and pools are not included in GSF. GSF is mostly used in construction cost budgeting.
Digging a little more into NSF, it is a combination of assignable square feet and non-assignable square feet. Non-assignable square feet are maintenance or structural areas that are necessary for the operation of the building.
Our above building has 90,000 NSF. But that might be divided into two 45,000 NSF sections for tenant use. Within each 45,000 NSF is 40,000 square feet of assignable area. The 40,000 square feet is the area where a tenant within the 45,000 square foot section will be charged.
Dividing a building up into its various sections and determining each area's right square footage category can be a complex task. Starting with GSF and working into NSF based on tenant areas, further dividing those sections into billable tenant areas can remove some of the complexity involved.
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Hypothetical example(s) are for illustrative purposes only and are not intended to represent the past or future performance of any specific investment.
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