Understanding building areas is a fundamental component of real estate and development. But it can actually get surprisingly complicated. Definitions, naming conventions, and measurement techniques vary greatly around the world.
To some, “GLA” means gross leasable area. But to others, it means gross livable area. So it’s important to understand what exactly is being measured when someone tells you that that a building is X number of square feet. Are we talking gross building area, gross floor area, or rentable area? Does that number include the below-grade areas or just what is above-grade? To make matters even more complicated, there are nuances to consider depending on whether it’s a residential or commercial building.
By now, I am sure you’re starting to see how complicated something as seemingly simple as building areas can get. So let’s talk about some of the basics today. Again, definitions might vary depending on where in the world you area. They might even vary based on conventions you’ve adopted within your particular firm.
Gross Building Area: Also referred to as Gross Construction Area by some, this is the total area of the building, measured to the outside walls without any deductions. As you’ll see later, some area definitions allow for certain deductions. Gross Building Area is important because it’s a big driver of your costs – specifically construction costs. This is how much building you’re building. But, and this is important, it does not drive your revenue. That comes later.
Understanding building areas is a fundamental component of real estate and development. But it can actually get surprisingly complicated. Definitions, naming conventions, and measurement techniques vary greatly around the world.
To some, “GLA” means gross leasable area. But to others, it means gross livable area. So it’s important to understand what exactly is being measured when someone tells you that that a building is X number of square feet. Are we talking gross building area, gross floor area, or rentable area? Does that number include the below-grade areas or just what is above-grade? To make matters even more complicated, there are nuances to consider depending on whether it’s a residential or commercial building.
By now, I am sure you’re starting to see how complicated something as seemingly simple as building areas can get. So let’s talk about some of the basics today. Again, definitions might vary depending on where in the world you area. They might even vary based on conventions you’ve adopted within your particular firm.
Gross Building Area: Also referred to as Gross Construction Area by some, this is the total area of the building, measured to the outside walls without any deductions. As you’ll see later, some area definitions allow for certain deductions. Gross Building Area is important because it’s a big driver of your costs – specifically construction costs. This is how much building you’re building. But, and this is important, it does not drive your revenue. That comes later.
Gross Floor Area: This is usually a specific locally-defined measurement convention. It often allows you to deduct certain areas from your gross building area, such as “major vertical penetrations” and below grade parking areas. This number doesn’t directly drive construction costs or revenue (saleable/rentable area), but it’s important because it’s what the city will use to determine important planning numbers such as the building’s density/floor space index and to calculate any applicable levies. It’s also a fairly public number and might be what the brokers are using to calculate, as one example, what certain land sold for on a per buildable square foot basis.
Net Saleable/Rentable Area: This is a hugely important number because it directly drives revenue. It’s your top line. It’s the amount of space you can collect rent on or the amount of space that you can sell. And unless your revenue exceeds your costs (which you’ve calculated using the numbers above), you’re not going to be able to build.
Note: Commercial spaces (at least in this part of the world) often work a bit differently in that there is what is known as a gross-up factor. What that means is that tenants pay rent on portions of the common areas (such as corridors) that fall outside of what is known as their “usable area.” In this scenario, the rentable to usable area ratio (R/U) becomes important. Naturally tenants don’t like paying for a lot of space beyond their usable area.
This is just a brief overview of building areas. A good architect will make sure that your building area calculations are meeting all local rules and conventions. But as a developer it’s important to know and understand what exactly is being measured and what the “loss factor” of your building is. In other words, how much space is being lost to areas that cannot be sold or rented? Typically, you want to minimize lost space, unless maybe you’re pushing some new concept.
Anything to add to this building area summary? Do you use different terminology or conventions in your part of the world? Let us know in the comment section below. That would make for a fascinating discussion.
I recently had the opportunity to visit the 200,000 square foot manufacturing facility of H+ME Technology here in Toronto.
Here’s a photo of myself and Nick Zicaro:
Gross Floor Area: This is usually a specific locally-defined measurement convention. It often allows you to deduct certain areas from your gross building area, such as “major vertical penetrations” and below grade parking areas. This number doesn’t directly drive construction costs or revenue (saleable/rentable area), but it’s important because it’s what the city will use to determine important planning numbers such as the building’s density/floor space index and to calculate any applicable levies. It’s also a fairly public number and might be what the brokers are using to calculate, as one example, what certain land sold for on a per buildable square foot basis.
Net Saleable/Rentable Area: This is a hugely important number because it directly drives revenue. It’s your top line. It’s the amount of space you can collect rent on or the amount of space that you can sell. And unless your revenue exceeds your costs (which you’ve calculated using the numbers above), you’re not going to be able to build.
Note: Commercial spaces (at least in this part of the world) often work a bit differently in that there is what is known as a gross-up factor. What that means is that tenants pay rent on portions of the common areas (such as corridors) that fall outside of what is known as their “usable area.” In this scenario, the rentable to usable area ratio (R/U) becomes important. Naturally tenants don’t like paying for a lot of space beyond their usable area.
This is just a brief overview of building areas. A good architect will make sure that your building area calculations are meeting all local rules and conventions. But as a developer it’s important to know and understand what exactly is being measured and what the “loss factor” of your building is. In other words, how much space is being lost to areas that cannot be sold or rented? Typically, you want to minimize lost space, unless maybe you’re pushing some new concept.
Anything to add to this building area summary? Do you use different terminology or conventions in your part of the world? Let us know in the comment section below. That would make for a fascinating discussion.
I recently had the opportunity to visit the 200,000 square foot manufacturing facility of H+ME Technology here in Toronto.
Here’s a photo of myself and Nick Zicaro:
My friend Nicolas Koff – who I went to architecture school with, twice – recently completed a house near Hamilton, Ontario. I think it’s stunning and so I wanted to share it with you all today. It was also featured in Dezeen Magazine this week. That’s where the photos are from.
Beyond its good looks though, it’s also a great example of sustainable design. The walls were prefabricated and are 40cm thick in order to reduce energy consumption. There are also solar panels on the roof to offset some of the electrical loads. And this is just some of the sustainability strategies employed.
Click here to see the rest of the photos at Dezeen. I hope you like it as much as I do.
H+ME (originally called Brockport Home Systems Ltd.) is a division of developer Great Gulf, but they were never intended to be just an in-house provider and much of their business is now with outside clients.
What H+ME Technology does is manufacture and assemble factory-built wood panels for both low-rise and mid-rise new construction homes. That is, instead of the walls and floors being framed outside on the construction site, they are fabricated ahead of time in a controlled facility (see below) and then delivered to site. This allows for a single-family home to be framed in as little as 2 days on the job site.
What’s interesting about all of this is that architects have long been obsessed with the idea of shifting construction away from the actual job site. A great book on this topic is Refabricating Architecture by Stephen Kieran and James Timberlake. In it they talk about how inefficient our construction processes are and how we ought to move towards a fully integrated approach that brings together technology, materials, and production methods.
And in 2006 they put their money where their mouth is and built a fully prefabricated house on Taylors Island in Maryland. Here’s an snippet from their website:
“Most houses are built from thousands of parts, which are transported separately to the construction site and pieced together by hand—a process of extraordinary duration, cost, and environmental impact. With Loblolly House, by contrast, we wanted to use integrated assemblies of those parts, fabricated off site, to build a house in an entirely different way.”
The big advantage of this entirely different way is that you’re able to dramatically improve efficiencies, quality, and performance by fabricating the components in a controlled environment, as opposed to on-site by hand.
Despite all this, the industry has been incredibly slow to change and most houses are indeed not built this way. But H+ME is working to change that, which is why I was keen to check out their facility and learn about their business.
So here’s how it works:
H+ME starts by modeling out the entire home in 3D CAD according to the project drawings. This allows them to catch any design coordination errors before they happen on-site. And it’s why their slogan is “Twice built. Assembled once.” They are literally building the entire house in 3D ahead of time.
Once the house has been modeled, they then send the designs for the walls and floors to their factory and begin production. During this process, all of the rough-ins for electrical, plumbing, and so on, are provided, which makes it super easy for the trades on-site later on.
Ultimately, their vision is to be able to deliver fully closed walls to site. This would mean that all the plumbing, electrical, insulation, and so, would already be in the walls and be ready to get connected/assembled. All of this is a significant step forward.
Because as Stephen Kieran and James Timberlake argued in their book, this is where the industry is headed. We are headed towards much closer integration across design, technology, materials, and production methods.
And in the end this is a great thing for both the industry and for consumers. It will translate into less coordination errors. Less construction waste. Less environmental impact. Greater construction efficiency. And much higher quality homes. I can’t wait to see more of this.
A big thanks to the folks at H+ME Technology for taking the time to speak with me and tour me around their facility. If you’re interested in this space, they will be hosting a Q&A session on Twitter this Wednesday, November 25th at 8pm eastern time. You can join here or using the hashtag #TalkHomeTech. I’ll be tuning in.
My friend Nicolas Koff – who I went to architecture school with, twice – recently completed a house near Hamilton, Ontario. I think it’s stunning and so I wanted to share it with you all today. It was also featured in Dezeen Magazine this week. That’s where the photos are from.
Beyond its good looks though, it’s also a great example of sustainable design. The walls were prefabricated and are 40cm thick in order to reduce energy consumption. There are also solar panels on the roof to offset some of the electrical loads. And this is just some of the sustainability strategies employed.
Click here to see the rest of the photos at Dezeen. I hope you like it as much as I do.
H+ME (originally called Brockport Home Systems Ltd.) is a division of developer Great Gulf, but they were never intended to be just an in-house provider and much of their business is now with outside clients.
What H+ME Technology does is manufacture and assemble factory-built wood panels for both low-rise and mid-rise new construction homes. That is, instead of the walls and floors being framed outside on the construction site, they are fabricated ahead of time in a controlled facility (see below) and then delivered to site. This allows for a single-family home to be framed in as little as 2 days on the job site.
What’s interesting about all of this is that architects have long been obsessed with the idea of shifting construction away from the actual job site. A great book on this topic is Refabricating Architecture by Stephen Kieran and James Timberlake. In it they talk about how inefficient our construction processes are and how we ought to move towards a fully integrated approach that brings together technology, materials, and production methods.
And in 2006 they put their money where their mouth is and built a fully prefabricated house on Taylors Island in Maryland. Here’s an snippet from their website:
“Most houses are built from thousands of parts, which are transported separately to the construction site and pieced together by hand—a process of extraordinary duration, cost, and environmental impact. With Loblolly House, by contrast, we wanted to use integrated assemblies of those parts, fabricated off site, to build a house in an entirely different way.”
The big advantage of this entirely different way is that you’re able to dramatically improve efficiencies, quality, and performance by fabricating the components in a controlled environment, as opposed to on-site by hand.
Despite all this, the industry has been incredibly slow to change and most houses are indeed not built this way. But H+ME is working to change that, which is why I was keen to check out their facility and learn about their business.
So here’s how it works:
H+ME starts by modeling out the entire home in 3D CAD according to the project drawings. This allows them to catch any design coordination errors before they happen on-site. And it’s why their slogan is “Twice built. Assembled once.” They are literally building the entire house in 3D ahead of time.
Once the house has been modeled, they then send the designs for the walls and floors to their factory and begin production. During this process, all of the rough-ins for electrical, plumbing, and so on, are provided, which makes it super easy for the trades on-site later on.
Ultimately, their vision is to be able to deliver fully closed walls to site. This would mean that all the plumbing, electrical, insulation, and so, would already be in the walls and be ready to get connected/assembled. All of this is a significant step forward.
Because as Stephen Kieran and James Timberlake argued in their book, this is where the industry is headed. We are headed towards much closer integration across design, technology, materials, and production methods.
And in the end this is a great thing for both the industry and for consumers. It will translate into less coordination errors. Less construction waste. Less environmental impact. Greater construction efficiency. And much higher quality homes. I can’t wait to see more of this.
A big thanks to the folks at H+ME Technology for taking the time to speak with me and tour me around their facility. If you’re interested in this space, they will be hosting a Q&A session on Twitter this Wednesday, November 25th at 8pm eastern time. You can join here or using the hashtag #TalkHomeTech. I’ll be tuning in.
