How to Calculate Gross Leasable Area

Understanding Gross Leasable Area

Gross Leasable Area (GLA) is a fundamental metric in commercial real estate, representing the total floor space within a property that can be leased to tenants. GLA is crucial for property owners, tenants, and investors, impacting valuation, leasing, and investment analysis by quantifying a building’s income potential.

GLA’s primary purpose is to set rental rates and compare properties. Owners charge rent per square foot, making GLA a direct determinant of potential income. Tenants use GLA to assess usable space and ensure fair lease terms, while investors project revenues and evaluate property viability.

GLA includes areas designated for a tenant’s exclusive use that generate income. This encompasses spaces like office suites, retail sales floors, stockrooms, storage areas, and private restrooms within the tenant’s premises. Mezzanines, basements, and upper floors usable by a tenant are also included, as are structural elements like columns or arches within leased boundaries.

Conversely, GLA excludes common or shared areas that serve multiple occupants or are essential for building operations but do not generate rental income from a specific tenant. These excluded spaces include lobbies, shared hallways, public restrooms, stairwells, and elevator shafts. Mechanical rooms, utility closets, maintenance areas, and other service spaces are also not included. For multi-tenant spaces, GLA is commonly measured to the outside face of exterior walls and the centerline of demising walls separating different tenants.

Key Measurement Standards

While GLA’s fundamental concept is consistent, its measurement methodology varies based on industry standards. These standards provide a framework for defining and quantifying commercial property spaces, ensuring consistency and accuracy. Knowing the applicable standard is important as it directly influences reported GLA.

The Building Owners and Managers Association (BOMA) offers widely used standards in the U.S. and internationally. BOMA provides specific measurement standards for different property types, including office, retail, industrial, multi-unit residential, and mixed-use buildings. These standards establish uniform methodologies for calculating area types like rentable and usable areas, impacting GLA definitions. For example, BOMA’s Retail Standard defines GLA as demised portions of a retail property suitable for occupancy and storage by individual tenants.

The Real Estate Board of New York (REBNY) provides specific measurement rules for New York City properties. The REBNY method can differ substantially from BOMA, often resulting in higher reported rentable square footage due to its accounting for common areas and exterior walls. For instance, REBNY standards measure usable space to the outer face of a building’s exterior wall and include corridor wall thickness as usable footage. This divergence highlights the importance of specifying the measurement standard used, as it can lead to different GLA figures for the same physical space.

These established standards provide detailed guidance on specific measurement scenarios. They dictate how to handle elements like columns, where to draw measure lines (e.g., inside vs. outside face of exterior walls), and how to differentiate common from leasable areas. Adherence to these standards is essential for accurate property valuation, transparent leasing negotiations, and reliable financial reporting.

The Calculation Process

Calculating Gross Leasable Area (GLA) requires a systematic approach, beginning with precise documentation. Obtaining accurate, up-to-date scaled floor plans is the first step. These plans, often CAD drawings or architectural blueprints, serve as the foundational visual reference for all measurements. Without reliable floor plans, GLA calculation accuracy is compromised.

The next step involves clearly identifying the leasable boundaries of the space. This means precisely locating exterior walls, interior demising walls (those separating different tenant spaces), and other perimeter lines. For single-tenant spaces, the measurement usually extends to the inside surface of the exterior walls.

After identifying boundaries, distinguish between leasable and excluded areas. This involves separating spaces for exclusive tenant use from non-leasable areas like shared lobbies, public corridors, stairwells, elevator shafts, and mechanical rooms. This segregation follows GLA definitions and rules outlined by the chosen measurement standard, such as BOMA or REBNY.

Once leasable segments are identified, accurately measure each area’s dimensions. This involves determining the length and width of every leasable portion. Professionals use specialized tools like laser measuring devices or digital tools integrated with CAD software. Traditional tape measures are also used for detailed or smaller-scale measurements.

The area of each leasable segment is calculated by multiplying its length by its width. For irregularly shaped spaces, the area may be broken into simpler geometric shapes (e.g., rectangles, triangles) whose individual areas are summed. This methodical approach ensures every square foot of leasable space is accounted for.

Finally, all calculated areas of individual leasable segments are summed to arrive at the total Gross Leasable Area for the property or specific tenant space. This summation provides the comprehensive GLA figure. After calculation, cross-reference results with the chosen industry measurement standard (e.g., BOMA or REBNY) to ensure compliance and accuracy. For high-value properties or complex layouts, engaging a professional building measurement expert for verification provides additional assurance, mitigating potential disputes or errors.