Commercial Property
Posted on June 22, 2011 |
What does this mean? It means that the property owner is adding almost 22 cents to every dollar he charges his tenants per usable square foot. The higher this number, the more the tenant will be paying for space he or she can’t use.
Buildings with a high load factor may indicate inefficient design, and if, as a tenant, you are negotiating to sign a lease for a commercial space, you will definitely want to know the load factor.
If you are an investor considering the purchase of a commercial property, check comparable properties in the area to help you determine what the average cost is. If your potential property is above the average load factor, you may have difficulty attracting the interest of tenants because they will be paying for per square feet than they would in other properties near yours.
I hope this quick tutorial has been useful in helping you understand the importance of knowing the load factor for a commercial property.