Alternate Measuring Methods

Fixed Gross-Ups

Rentable area is determined by calculating a tenant's usable area and then by applying a fixed gross-up (i.e. 12%) to recover common expenses. Fixed gross-ups can be applied to an entire complex, building, floor or tenant. Though this technique may result in desirable or marketable rentable area figures, fixed gross-ups are artificial and do not necessarily recover the actual rentable area of a given premesis.

Capped Gross-Ups

The tenant lease specifies that the tenant gross-up percentage will not exceed a specified amount (usually based on local market conditions). If it is determined that a tenant's actual gross-up exceeds the capped gross-up, then the capped gross-up will be applied. If it is determined that the actual gross-up is less than the capped gross-up, then the actual gross-up is used.

Gross Area Definitions

Gross Area may be referred to as Gross Building Area, Gross Rentable Area, Gross Floor Area or Construction Area. Generally, such calculations are all-inclusive and do not exclude any building elements (such as parking areas or vertical penetrations). Depending on the specifics of a given lease, Gross Area may be calculated to the interior or exterior finished surface of outside walls.

Custom Lease Definitions

Building owners and managers may develop unique or novel methods for determining tenant rentable area. Such methodologies are usually outlined in the lease document and may or may not resemble actual industry standards. Ultimately, as long as the lessor and lessee are able to agree on the stated method, there is nothing wrong with using a custom lease definition.

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