How to Calculate Real Estate Pro Rata

Pro rata shares are used to allocate real estate expenses.

Managers and owners of multitenant leased investments like retail centers and office buildings use each tenant's pro rata share of the building to allocate common area maintenance costs to each tenant. This way, the tenant's share of the cost directly correlates to the portion of the building that they use. Given that many leases of office buildings, retail centers and industrial buildings are written on a triple-net basis where the tenant takes responsibility for all of the costs of running the building, tenants demand an equitable distribution.

Things You'll Need

• Calculator
• Building Plans
• Measuring Equipment

Instructions

1. Measure each tenant's space. A tenant's usable space is defined as the area inside the demising walls of their space. If you have current plans, you can easily complete this measurement by simply referring to the plans. Otherwise, you will have to physically measure the space.

2. Measure every vacant space using the same standard as you used for the occupied spaces.

3. Add up all of the spaces that you measured to find the building's total usable area.

4. Divide each tenant's usable space by the total usable area to find their pro rata share, expressed as a percentage. For instance, if your building has 25,000 usable square feet, and a tenant's space measures 3,000 usable square feet, their pro rata share of the building is 12 percent.

References

• The Axiant Group: Knowledge Center