What is Gross Leasable Area (GLA)?
Gross Leasable Area (GLA) is the floor space within a building that is available to be rented by tenants. It includes the area measured from the center of joint partitions to the outer sides of exterior walls.
Why is GLA important?
Understanding GLA is crucial when negotiating rental agreements as it helps to determine how much space is actually rentable to tenants. Adjusting the GLA can have significant impacts on your revenue stream and property value.
An Example of Understanding GLA
Imagine a multi-story commercial building with a total of 20,000 square feet of Gross Leasable Area on each floor. Of this space, around 25% may be utilized for common purposes like hallways, restrooms, and maintenance rooms. This means the remaining 75% of each floor’s space is available for tenant use.
Contrast with Net Leasable Area (NLA)
While Gross Leasable Area includes all usable space, Net Leasable Area (NLA) subtracts any space that is used for common areas. Knowing the difference can be helpful whether you are a landlord or a tenant.
Key Considerations
- Common Charges: Tenants typically contribute to maintenance costs for common areas.
- Measurement Standards: Always measure from the center of joint partitions to outer walls to maintain consistency.
- Maximizing GLA: Effective space planning can help maximize the GLA, thus increasing revenue generation.
Frequently Asked Questions (FAQs)
What does Gross Leasable Area include?
GLA includes the entire floor space accessible to tenants, measured from internal partition centers to the outer edges of exterior walls.
How does GLA affect rental income?
Higher GLA can result in more tenants and potentially higher rental income, as you maximize the rentable floor space.
How is GLA different from Net Leasable Area?
Net Leasable Area deducts spaces used for common purposes, focusing solely on the tenant-occupied parts of the building.
Can I increase my Gross Leasable Area?
Yes, effective space management and thoughtful planning can maximize the usable floor area, potentially increasing your GLA.
Related Terms: Net Leasable Area, Rentable Square Footage, Common Area, Usable Square Footage.
