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How to Measure an Apartment in Order to Determine the Rentable Area

We are often asked how to determine the size of an apartment. The short answer is: measure to the outside surface of the exterior stud walls, and exclude unheated spaces such as balconies, patios, or outside storage lockers. This will typically be the unit size an architect shows on building plans, unless directed otherwise. The rentable space must be “conditioned space”, meaning heated and/or air conditioned, finished living space. This is the same standard for measuring a single family home, so a 1,000 SF apartment will be the same size as a 1,000 SF house.

In practice, after a building is constructed, you cannot see, and therefore cannot measure to the outside surface of a stud wall. During a property inspection, measure across the interior of the apartment, and add 4 inches for each exterior wall – allowing 3.5” for the stud plus 0.5” for the drywall. If it is not possible to measure across the length of the apartment, measure each room, and add 4.5” for the interior wall thickness, since it has drywall on both sides of the stud.

The Department of Housing and Urban Development (HUD) many years ago set a standard of measuring only to the inside surfaces of the exterior walls, or “paint to paint”. This results in what could be called the usable area, to borrow a term from the office market, rather than rentable area, and it understates the unit size compared to standard architectural measurements by approximately 4% to 6%. Many properties financed using a HUD 221-d4 loan will quote these smaller unit sizes, as these figures were provided by the architect during construction. Using inside dimensions is the typical method for measuring condominiums, as you own the air rights, and not the structure and/or walls.

Some properties, in an effort to make their apartments appear larger, add the balcony, patio, or storage locker area to their quoted sizes. Once this practice begins in a submarket, it can spread to competing properties that do not want to appear inferior in size. However, most owners fear the repercussions of overstating the size of their apartments, and quote the correct rentable area.

Nuances:
Apartments may have an interior hallway or stairway leading to an attached garage. If this is not part of the main entry to the apartment, exclude this area as it does not contribute to the utility of the space. Part of the premium rent associated with an attached garage includes getting to the garage.

Townhouses (2-story units) will have a stairwell connecting the two levels. Do not make a deduction for this area from either level.

Some loft or mezzanine apartments have a portion of the first floor that is open to the second story ceiling. This open area is excluded from the second floor area calculation.

We typically include primary entry stairs, especially if there is a coat closet near the front door, and a half height wall between the living room and the stairwell. The living room will appear larger, and there is a benefit to having a private, ground floor entrance. This benefit is reflected by including the stairwell area.

For a second floor unit, with front entry stairs plus secondary stairs that lead back down to an attached garage - we exclude the second stairwell. If the front entry stairs are separated from the living space by a door, we also would typically exclude that space.

BOMA, who for years has set the standard for measuring commercial properties, in mid-2012 finally published a standard for determining the size of an apartment. But, they came up with two standards instead of just one, with no preference indicated for one method over the other, and also introduced confusing terminology for their two standards. One standard is essentially the HUD paint-to-paint standard, and BOMA refers to this approach as the Net Method. BOMA calls the other standard that includes the perimeter wall area the Gross Method. Since the term gross building area normally includes community areas and interior hallways, they came up with a new term - Construction Gross Area - that includes these shared elements. The BOMA Gross Method has been the predominant technique for determining apartment area, and is the approach we use to calculate the rentable area.


 

 

 


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