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Add On Factor

Add-On Factor

This term, applied to commercial real estate, can be defined by the following formula: usable square feet ÷ number of rentable square feet. If the two numbers are the same, the answer to this calculation will be 1, but since some square footage in a building is partly or completely unusable, it is usually a little lower. Examples of non-usable space: that occupied by certain structural components, e.g. interior walls, and that shared with other tenants, e.g. lobbies, restrooms. A prospective tenant needs to attend to the add-on-factor, because he will pay for unusable space in his lease.