Add-On Factor
Categories: Real Estate, Investing
No relation to Mac, the makeup king.
Add-on factor refers to the incremental square feet available in a commercial building or office, should the tenants want to...add-on. The actual calculation puts usable square feet in the numerator, and total growth, i.e. theoretically rentable square feet, in the denominator.
In most commercial buildings, there live a bunch of non-usable square feet that landlords love charging tenants for the pleasure of not being usable. What's not usable? Elevators. The room where they store the urinals and toilets. Stairways, hallways, lobbyways, etc. All of those areas are counted as the gross leasable feet in practice, so that the per square foot cost appears to be lower to the renter.
