Glossary
Lease Terms & Dates
Load Factor (Common Area Factor)
The multiplier that converts a tenant's usable square footage into rentable square footage by adding a proportional share of the building's common areas. A load factor of 1.15 means the landlord adds 15% to the tenant's usable space to reach the rentable figure billed for rent and CAM.
Firm impact
An inflated load factor raises a client's pro-rata share on every reconciliation without adding a single square foot of usable space. Because the load factor multiplies into both base rent and the CAM denominator, even a small inflation compounds into a meaningful annual overcharge for the client.
How this gets abused
A landlord applies a 1.25 load factor building-wide, well above the 1.10 to 1.20 range typical for a mid-rise office building, and never discloses the underlying common-area square footage used to calculate it. Every tenant in the building pays a higher pro-rata share than the actual common area justifies.
Practitioner note
Ask for the building's total rentable area, total usable area, and the underlying common-area square footage used to calculate the load factor. Compare the resulting ratio against BOMA-standard ranges for the property type before accepting the number in the lease.
FAQ
Questions about load factor (common area factor)
What is a typical load factor for an office building?
Most office buildings run a load factor between 1.10 and 1.20, meaning 10 to 20% of rentable area comes from common-area space. Retail buildings often run lower. A load factor above that range deserves a closer look.
Can a load factor change after the lease is signed?
Only if the lease allows a remeasurement clause or the parties sign an amendment. A load factor that changes without one of those triggers is a sign the pro-rata share needs review.
You know the term. Now check the math.
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