Understanding the Difference Between Net Useable Space vs. Gross Leasable Space 

By Amy Hawley


This is an important concept to understand by all tenants, especially when they are trying to calculate the cost of their leasehold obligation. A simple definition of these two terms is as follows.

Net Usable Space: This the amount of space this is contained within the perimeter walls of the rental unit that is designated for the exclusive use by the tenant.

Gross Leasable Area: The quoted rental unit size includes the net usable space that is within the actual rental unit and a proportionate share of the common area within a multi-tenant building, like: Shared restrooms, lobby area, hallways, elevators, stairwells, or shared freight delivery areas.

Another terms to understand when calculating the amount of space that is included within a tenant’s leasehold obligation is Pro-Rated Share of Space. This refers to the overall percentage that a rental unit has when weighed against the total size of the entire multi-tenant building. For example: An 11,000 square foot unit within a 60,000 square foot building would equate to about an 18% proportionate share of the entire building. The operating expenses (landscaping, snow removal, common area lighting etc.) that the 11,000 SF tenant would be responsible for would equate to an 18% share of the total cost for these building services.

Your SVN Broker can prepare a cost comparison analysis for the short-list of properties that are under consideration. Understanding the total cost of the leasehold obligation is paramount when calculating your operating budget for your facility.


For assistance with your property, contact SVN | Imperial Realty today at 484-245-1000