How to Calculate a Load Factor

You hear the term load factor in real estate all the time. But what exactly is it? The load factor is simply the difference, percentagewise, between the useable versus the rentable square footage in a building. Here is a quick and very easy way to calculate it.

Instructions

Difficulty: Moderately Easy

Things You’ll Need:

• Calculator

1. Get the total useable square footage of the space.
2. Get the total rentable square footage of the space.
3. Subtract the useable number (which will always be smaller) from the rentable.
4. Take that number, and divide it by the useable square footage.
5. Know that what you have left is the load factor.

Tips & Warnings

• Once you have the basic formula, you can then calculate the useable rentable square footage, as long as you have the rentable and load factors, or you can calculate the rentable as long as you have the useable and the load factor.
• When the load factor is excessively high, for example, 20 percent or greater, be sure to bring it to the attention of your client, or whoever is interested in the space. A high load factor basically means that you're getting a lot of non-useable space.

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