Office rent has a quiet exchange rate built into it, and operators arriving from asset classes where a foot is a foot deserve one clean page on it. Tenants occupy usable square feet, the space inside their walls. They pay on rentable square feet, which adds their share of lobbies, corridors, restrooms, and the building's other common areas. The markup between the two is the load factor, and it varies enough from building to building that comparing office rents without it is comparing prices in different currencies.
The arithmetic consequence is the part that costs people money. A building quoting a lower face rent with a heavy load factor can be more expensive per foot of actual occupancy than a rival quoting more with an efficient core. Sophisticated tenants and their brokers do every comparison on a usable basis for exactly this reason, and a landlord or buyer who negotiates on face rent against a counterparty thinking in usable terms is playing a slightly different game than they realize, on the losing side of the translation.
For the buyer underwriting a building, load factor shows up in three places worth checking. Comps, first: rent comparables normalized to usable economics can reorder which buildings are actually cheap, and the building you are buying competes on that normalized basis whether your model knows it or not. Measurement, second: standards have shifted over the decades and remeasurement under current methods can change a building's rentable area, which silently changes every per-foot metric in the deal, in either direction, and older buildings that have never been remeasured carry that uncertainty in inventory. Efficiency, third: a building with a bloated core is structurally disadvantaged in every lease negotiation it will ever have, which is a permanent feature being purchased, not a detail.
There is also a floor-plate dimension that connects load factor to leasing strategy. Carving full floors into small suites adds corridors, and corridors migrate feet from usable to common, nudging the load factor up across the affected floors. A spec suite program, whatever its leasing merits, is also a decision about the building's measurement economics, and the two conversations belong together rather than in separate meetings.
PropCalc™ carries load factor in the office property profile alongside the rent roll, because per-foot analysis that ignores the rentable-usable spread is precision applied to the wrong number. The habit for any office deal: establish the load factor early, restate the key rents in usable terms once, and see whether the deal still looks like the deal. Usually it does. The exceptions are worth every minute of the exercise.