Gross Leasable Area: How It Is Calculated

Gross leasable area (GLA) is the total square footage available to lease in a building or property, measured from the inside face of exterior walls and including tenant spaces, hallways, restrooms, and other rentable common areas. It is the foundation metric for calculating rent, occupancy rates, and property value in commercial and retail real estate.

Definition and Role in Real Estate

Gross leasable area is the total floor area in a building that generates rent or is available to generate rent. It is the denominator in occupancy calculations (occupied space ÷ GLA), the basis for rent per square foot, and a key input into property valuations. Unlike net operating income (NOI), which captures profit after expenses, GLA is purely a physical measure—square footage, regardless of how fully it is leased or maintained.

GLA differs from adjacent concepts:

• Usable area (also called “net usable area” or NUA) is the space a single tenant can actually occupy—desks, workspace, private offices, or retail shelves. It excludes that tenant’s pro-rata share of hallways, elevators, and restrooms.
• Rentable area (RA) is similar to GLA but measured differently by jurisdiction and property type; some definitions of RA include a tenant’s share of common areas, others exclude them.
• Buildable area is the area within the building envelope (inside exterior walls) and is larger than GLA because GLA excludes structural elements, shaft walls, and mechanical chases.

In practice, GLA is the broadest and most commonly cited measure for shopping centres, office towers, and mixed-use properties.

BOMA Area Standards: The Industry Methodology

The Building Owners and Managers Association (BOMA) publishes Area Standards, the de facto North American template for measuring GLA. Different standards apply to retail, office, and industrial properties, reflecting their different uses and configurations. Most institutional investors and lenders require GLA calculated under BOMA standards for comparability.

BOMA Method for Office Buildings

1. Start with the building perimeter. Measure from the inside face of the exterior walls (glass, curtain wall, masonry, or concrete). This perimeter defines the building’s overall footprint.

2. Include all rentable floor area. This encompasses:

   • Tenant suite usable area
   • Corridors and lobbies
   • Restrooms
   • Building management/janitorial spaces (if available for lease)
   • Mechanical and electrical rooms (only if tenant-accessible and charged separately)

3. Exclude non-rentable elements:

   • Exterior walls themselves (the thickness of the wall, not the floor area)
   • Vertical shafts (elevator shafts, stairwells, ductwork chases, electrical conduits) measured as their full cross-sectional area from floor to floor
   • Mechanical penthouses on the roof (unless rented as office space)
   • Parking garages (measured separately, not as GLA for office buildings)
   • Building structural columns and load-bearing walls (their cross-sectional footprint is deducted)

4. Measure each floor separately. Sum the areas floor-by-floor, accounting for variations in shape (setbacks, atriums, etc.).

Example: A 10-story office building with each floor roughly 20,000 square feet from the interior perimeter. Subtract the elevator core (1,500 sq ft) and stairwells (500 sq ft) from each floor. Deduct 2,000 sq ft per floor for mechanical chases and shafts.

• Per-floor GLA = 20,000 − (1,500 + 500 + 2,000) = 16,000 sq ft
• Building GLA = 16,000 × 10 = 160,000 sq ft

BOMA Method for Retail Properties

Retail GLA is calculated differently because the layout and tenant arrangements differ:

1. Start from the inside of exterior walls. Same as office.

2. Include all tenant-facing space:

   • Individual store footprints
   • Enclosed common areas (corridors, atriums, restrooms, security, common hallways)
   • In shopping centres, the GLA includes the entire mall floor area accessible to shoppers

3. Exclude:

   • Exterior wall thickness
   • Vertical shafts (elevators, stairs, mechanical chases)
   • Non-tenant-accessible back-of-house (loading docks, storage for the mall owner’s exclusive use, building systems that are not accessible to or rented to tenants)
   • Parking structures (separate measurement)
   • Roof and basement areas unless they are tenant-facing

For a shopping centre, GLA encompasses the shop spaces plus the enclosed mall corridors where shoppers walk; it does not include the mall’s management office or mechanical room (unless rented to a tenant).

Retail versus Office: Why GLA Differs

The difference in how retail and office GLA are calculated reflects their economic structure. In a shopping centre, common areas (hallways, atriums, elevators) are part of the tenant experience and do increase property value, so they are included in GLA. Rent is typically quoted as $/sq ft of GLA, and the landlord collects base rent plus a pro-rata share of common-area maintenance (CAM) charges.

In office buildings, common areas are still included in GLA, but the treatment varies. Some office leases quote rent per sq ft of usable area (the tenant’s private space), with a load factor (20–30%) added to account for the tenant’s share of hallways, lobbies, and restrooms. Others quote per GLA directly. This can confuse cross-property comparisons.

Practical Measurement: Plans, Field Survey, and Lease Schedules

In reality, GLA is determined by three overlapping sources:

1. Architectural plans. The building’s original construction documents contain floor plans with dimensions. These are the starting point, but plans can be outdated if renovations or reconfiguration have occurred.

2. Field measurement. A professional surveyor physically measures the building (or key floor plates) using laser or tape measures. This confirms the plans and catches omissions. Field surveys are expensive for large buildings, so they are often done on a sample basis.

3. Lease schedules. Existing tenant leases contain schedules showing the square footage of each lease. Aggregating lease areas gives a lower bound on GLA (since some common areas may not be included in individual leases), but it is useful as a cross-check.

Third-party GLA certifications are increasingly common. An appraiser or surveyor will measure a sample of the building and attest to its GLA, which lenders and institutional investors require for financing or acquisition.

Load Factors and Tenant versus Rentable Area

In office buildings, the load factor (or “loss factor”) reconciles usable area (what the tenant occupies) with the GLA (what the landlord owns). A tenant may lease 10,000 square feet of usable area, but their pro-rata share of hallways, lobbies, and mechanical rooms adds another 2,500 square feet, for a total rentable area of 12,500 square feet.

Load factor = (Rentable area − Usable area) ÷ Usable area

A load factor of 20% (common in Class A office) means the tenant’s rentable area is 1.2× their usable area. Higher load factors (25–35%) are typical in older, less efficient buildings with longer hallways or more extensive common areas. Lower load factors (15–18%) are found in newer, more efficient buildings.

This matters because office rent is quoted per rentable square foot, not per GLA. If a building’s GLA is 100,000 sq ft and the average load factor is 25%, the total usable area is only 80,000 sq ft. A $50/sq ft rent quoted per rentable area means tenants are paying based on the 80,000 usable sq ft, not the full 100,000.

GLA and Property Valuation

GLA is fundamental to real estate valuation. A cap rate calculation requires net operating income (the numerator) and property value or price (the denominator). Price is often expressed as $$ per sq ft of GLA, making GLA a critical benchmark for comparability.

When valuing a shopping centre, a 200,000 sq ft property trading at $100 per GLA sq ft has an implied market value of $20 million. If the same property is later measured at 210,000 sq ft (due to a remeasurement or renovation), the comparative price metric shifts, affecting how investors view returns and market trends.

Occupancy rate is similarly GLA-dependent:

Occupancy = Occupied square footage ÷ GLA

A 95% occupancy rate in a 200,000 sq ft property means 190,000 sq ft is leased and 10,000 is vacant. If GLA is remeasured upward, occupancy drops (same occupied space ÷ larger GLA), which can trigger loan covenants or affect perceived property quality.

Variations and Common Challenges

• Basement and upper-level parking. In some urban office or mixed-use buildings, parking is multi-level. GLA typically excludes parking, which is measured and valued separately as “parking ratio” (spaces per 1,000 sq ft of GLA).

• Mechanical penthouses. Some office towers have roof-top mechanical systems enclosed in a structure. If this space can be leased (e.g., as antenna space or server farm), it is included in GLA; if it is exclusively building system, it is excluded.

• Mixed-use and conversion. When a building changes use (office to residential, industrial to retail) or is renovated, GLA can shift if the new configuration alters what is rentable versus structural. A careful remeasurement is required.

• Atrium deductions. Multi-story atriums are open floor-to-floor. BOMA standards deduct the atrium footprint once (not per floor) because the same air space is not leased multiple times.

• Pre-built vs. built-to-suit. When a landlord constructs space to a tenant’s specifications, the GLA of that space is fixed at completion. Later, if the tenant does not renew or the space is reconfigured, GLA remains constant (it is a physical measure, not usage-based).

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