What is Add On factor ?
Definition of Add On factor
The Add On factor can be defined as the total number of usable square feet divided by the number of rent able square feet when leasing a commercial real estate.
Brief Explanation of Add On factor
Usually the result of the abovementioned calculation is less than one because the two values are not often identical and some square feet of the property will eventually be fully non-unusable. This non unusable part of the commercial estate could comprise of shared spaces including lobbies, hallways, elevator’s, stairways and restrooms. The structural components of the building such as the poles and interior walls can also be termed as non unusable space. The usable area will be considerable less than the rentable space if the overall structure of the building is poorly designed and executed. The add on factor is important for the tenants because it will help tenants determine the total lease cost of the rentable commercial estate which would eventually include the areas that are not usable too.