loss factor

loss factor

The ratio between the total square footage not available for lease in a building and the total square footage in a building.When comparing rents among buildings, be aware that owners may account for the loss factor differently. Some may quote a per-square-foot rate for usable space—the space you can count as “yours.”This may be higher than another's quote for a rate per square foot of rentable space—the space you can count as “yours”plus your share of the loss factor. For example,a building has 50,000 square feet,but only 40,000 square feet may be rented to tenants. The remaining 10,000 square feet is devoted to the lobby,elevators,corridors,and utility rooms.Then the loss factor is 10,000/50,000 or 20 percent.