Check Your Understanding: Loss Factors

Generally speaking, the majority of landlords consider their calculation of the rentable square footage (“RSF”) of a space to be non-negotiable.

From a tenant’s perspective, although not necessarily pleased to do so, the vast majority take an “it is what it is” mindset as to a landlord’s calculation of the loss factor (also referred to as “load factor”).

If a tenant is receiving an improvement allowance from its landlord, although it would most definitely prefer to have its space measured with a low loss factor (also referred to as “load factor”), one benefit of a higher loss factor is that attributable to the fact that its calculation is based on the higher rentable square footage calculation, and not a lower usable square footage calculation.