What is a loss factor for office space in NYC?
If you are on the market for office space in NYC, then this article is for you. This article describes what’s a Loss Factor for commercial real estate in NYC. There is currently confusion on why you would get less office space than what is advertised. For example, if you see an advertisement for 3000 sq. ft. of office space for lease, then you are going to get around 2400 sq. ft. of space depending on the loss factor percentage utilized by the ownership of that space. So, yes you are going to get less space than what was advertised, and this is because of something called Loss Factor Percentage. What is a Loss Factor Percentage? Its extra space that you pay for and this extra space is not within your office space or demised space, but within the office building or the parcel of land that the office building is built on. This extra space are areas of the office building that is shared with other tenants. Examples of these shared spaces are the office buildings restrooms, lobby, hallways and even space that a tenant cannot utilize such as a utility closet or the spaces in between the walls. Your most likely saying to yourself, why are you being charged for this extra space? The landlords reasoning behind this is so that they can gain profit from all areas of the building that service the tenants. Can you negotiate a loss factor? Unfortunately, there is no current law that regulates Loss Factors. Keep in mind office building Loss Factors percentage varies from building to building. I created a video describing what a loss factor is and how to calculate it. Please click on the following link to see this video. Loss Factor Video.