The headline rate is not a price
Run the defaults and the trap is visible. Quote A asks $42 a rentable foot on 4,200 feet at an 18 percent load factor. Quote B asks $38 on 4,650 feet at 32 percent. B is four dollars cheaper on the number everyone quotes and it is the more expensive floor. A hands you 3,559 usable square feet for $226,800 a year all in; B hands you 3,523 for $227,850. That is $63.72 a usable foot against $64.68, and B is billing you for 1,127 feet you cannot stand on where A bills you for 641.
Load factor is the mechanism. Rentable area is usable area multiplied by one plus the add-on, and the add-on is your share of lobbies, corridors, restrooms and mechanical space. It is a real cost and there is nothing improper about charging for it — a building with a generous lobby genuinely costs more to run. What is misleading is comparing the rate per rentable foot between two buildings whose add-ons differ by fourteen points, because those two rates are denominated in different things.
Then your own shared rooms take another bite
The load factor accounts for the building. Inside your own demising walls there is a second loss nobody quotes: the meeting rooms, the kitchen, the phone booths, the printer alcove and the circulation joining them. At the defaults that is 850 square feet, which is nearly a quarter of the usable area, and the rent on it arrives every month whether the meeting room is booked or empty.
That is why the seat number is the one worth carrying into a decision. Hold the working density constant at 79.7 square feet a seat and A takes 34 seats while B takes 33, so the same money is spread over one fewer desk: $555.88 a seat a month against $575.38, or $233.96 a seat a year. The comparison only becomes visible once the seat count is derived from the floor rather than assumed to be the same in both. If you do not yet know how many seats a floor holds, the desk layout calculator works it out from the dimensions, and the net usable floor area calculator handles the case where wall build-up and a stair opening are eating the plan.
Three denominators, one pile of money
| Denominator | What it counts | What it is good for |
|---|---|---|
| Per rentable sq ft | Everything you are billed for | Checking the invoice. Nothing else. |
| Per usable sq ft | The floor inside your walls | Comparing two buildings honestly |
| Per working sq ft | Usable less your own shared rooms | Deciding how much meeting room you can afford |
| Per seat per month | All of it, over the heads | Deciding anything at all |
Notice what happens to the last row when a seat sits empty. The rent does not move. A floor planned for 34 and running 26 is paying a third more per occupied desk than the plan said, and no negotiation recovers it. That asymmetry is the argument for planning the seat count from measured attendance rather than from headcount, which is what the hot desk ratio calculator is for.
What to check in the document
Two suites quoted at the same load factor are still not necessarily measured the same way, because the standard the lease names decides what counts as usable in the first place — whether a structural column is subtracted, where the line falls at a demising wall, how a recessed entry is treated. Ask which standard the exhibit was drawn to and ask for the usable figure in writing. If the two numbers you are given do not divide out to the load factor you were quoted, that is worth a conversation before signing rather than after.
For the money around the lease rather than in it, the sublease carry calculator covers what happens when you take more floor than you need and try to place the rest, and the shared cost allocation calculator covers dividing the utility bill once more than one occupant is in the space.
Questions people ask
What is a load factor and who decides it?
It is the add-on that converts usable area into rentable area, so that rentable equals usable times one plus the factor. It represents your pro-rata share of the parts of the building everyone uses and nobody leases. The lease decides it, along with the measurement standard the lease names, and different landlords in the same market use different ones. That is exactly why this page asks you for the number rather than supplying one, and why it is worth getting the usable figure in writing so you can check that the two divide out.
Is a higher load factor always worse?
No, and treating it as a defect misreads what it is. A high add-on usually means the building has more common space per tenant — a bigger lobby, wider corridors, more restrooms and lift lobbies per floor. Whether that is worth paying for is a judgement about the building, not an arithmetic error. What is an arithmetic error is comparing rates per rentable foot across two buildings with different add-ons, which is what this page fixes. Convert both to a cost per usable foot, or better, to a cost per seat, and then decide whether the nicer lobby is worth the difference.
Why does the cost per seat differ so much from the cost per square foot?
Because the seat count is not proportional to the area. Two suites of the same usable area can hold very different numbers of desks depending on the shape of the plan, where the columns are, how much of it goes to meeting rooms and how wide you make the aisles. Fold all of that into one number and the differences that matter stop hiding behind a common denominator. It also makes the figure comparable to a desk rented from an operator, which is quoted per seat per month and never per square foot.
Should operating expenses be in this calculation?
Yes, if you pay them, and the first thing to establish is whether the quoted rate already includes them. A rate quoted on a full service basis and a rate quoted on a triple net basis are not the same kind of number, and the gap between them is often larger than the gap between the two buildings you are comparing. Enter the expense figure separately when it is billed separately, and enter zero when the rate is already all in. Getting that wrong is a bigger error than getting the load factor wrong.
Can I use this to work out what to charge people for a desk?
It gives you the cost side and only the cost side: what a seat costs you a month in rent and building expenses at the occupancy you plan. Everything else that goes into a price sits outside this page — furniture, internet, cleaning, insurance, the staffed hours, and whatever the space next door is charging. It also says nothing about whether you may license desks in your space at all, which is a lease and insurance question between you, your landlord and a lawyer, and one worth settling before the arithmetic rather than after.