As Omni Consulting Group’s Southeast Director of Real Estate Operations, you are hunting for 7,500 square feet of usable office space for a new branch office for 20 of your employees in Mobile, Alabama. A commercial real estate leasing broker shows you a 7-story multi-tenant office building with 250,000 square feet of gross building area. 50,000 square
As Omni Consulting Group’s Southeast Director of Real Estate Operations,
you are hunting for 7,500 square feet of usable office space for a new
branch office for 20 of your employees in Mobile, Alabama. A commercial
real estate leasing broker shows you a 7-story multi-tenant office building
with 250,000 square feet of gross building area. 50,000 square feet is
nonrentable interior space. Another 50,000 square feet is common area
usable by all tenants. The 7,500 square feet of usable area that you seek is
on the 2nd floor, which contains 21,500 square feet of rentable area, and is
leased by other tenants who occupy a combined total of 12,000 square feet
of usable space. The broker indicates that the base rents will be $22 PSF of
rentable area.
a. Calculate the total rentable area in the building as though it would be
leased to one tenant
b. Calculate the load factor and common area on the 2nd floor only.
c. Calculate the rentable area, including the load factor for common
areas on the 2nd floor. Also calculate the total rent per square foot
Omni Consulting Group will pay for the coming year if it chooses to
lease the space.
d. Adjust (b) assuming that the owner adjusts the load factor for other
common areas in the building.
e. Calculate total rent per square foot, assuming that adjusted load
factors are applied to usable area for both the common areas in the
building lobby and on the 2nd floor.