FAQs
Term. Main definition. Core Factor. The percentage of common areas in a building (rest rooms, hallways) that, when added to the net usable square footage equals the net rentable square footage. May be computed for a building or floor of a building.
How is the core factor calculated? ›
The core factor can be calculated by dividing the rentable square footage by the usable square footage. It is imperative that we, as Tenant Rep's educate our clients on understanding this number in order to allocate costs and compare different options.
What is the difference between core factor and load factor? ›
Core factor, loss factor and load factor are exactly the same thing. Different terminology is used throughout the industry, but they all mean the ratio between the rented and usable space in a commercial building.
What is the loss factor of 27% in REBNY? ›
In order to compute usable area from REBNY rentable area all one must do is multiply the rentable area by one minus the loss factor. For example, in the case of a 27% loss factor, multiply rentable area by 1 minus . 27 = . 73.
What does core mean in real estate? ›
What is core real estate? The term “core” refers to class A real estate located in high-quality locations with high-quality tenants that is purchased with little to no debt. Due to their relatively low risk profile, investors typically compare these types of equity investment opportunities to bond investments.
What are the core four in real estate? ›
While many property types fall under the “commercial” umbrella, the core four are industrial, multi-family, office, and retail.
What should be the load factor? ›
Its value is always less than one because maximum demand is never lower than average demand, since facilities likely never operate at full capacity for the duration of an entire 24-hour day. A high load factor means power usage is relatively constant. Low load factor shows that occasionally a high demand is set.
What does a load factor include? ›
In commercial real estate, load factor is the ratio of rentable space to usable space. Usable square footage includes only the portion of the space that is dedicated entirely to one tenant for use in normal occupancy.
What is the best load factor? ›
If your load factor ratio is above 0.75 your electrical usage is reasonably efficient. If the load factor is below 0.5, you have periods of very high usage (demand) and a low utilization rate.
What is the difference between Boma and REBNY? ›
REBNY measurements can be taken on a floor by floor basis, whereas with BOMA the entire property must be measured in order to come up with calculations. With REBNY you measure to the outside surface of exterior and corridor walls, whereas with BOMA you measure to the inside surface.
Loss factors are calculated by subtracting the usable area from the gross/rentable area and dividing by the rentable area. (Rentable SF – Usable SF)/Rentable SF = Loss Factor. Loss factors and usable sf are typically not disclosed by landlords.
Does Boma have a higher loss factor than REBNY? ›
The REBNY standard is far more aggressive than BOMA, as usable space is measured to the outer face of the building exterior wall and the thickness of corridor walls are included as useable footage. REBNY also allows a loss factor to be applied to office usable areas.
What is the most important factor in real estate? ›
Property Location
The adage "location, location, location" is still king and continues to be the most important factor for profitability in real estate investing. Proximity to amenities, green space, scenic views, and the neighborhood's status factor prominently into residential property valuations.
What is core strategy in real estate? ›
“Core” is considered the safest strategy and the one that's closest to fixed income (bonds) in terms of risk and potential returns. It tends to use less leverage than other strategies, very little about the property changes, and cash flows are stable and predictable.
What is considered to be the core of the real estate industry? ›
Core assets are typically high-quality, well-located, and low-risk properties that generate stable, predictable income streams. These properties are often sought after by institutional investors for their long-term value and resilience to market volatility.
What is the core factor of a building? ›
Building efficiency ratio, sometimes called efficiency factor or core factor, is a real estate metric calculated by dividing the net rentable square footage of a building by its usable square footage.