Gross Leasable Area

Definition

Gross Leasable Area (GLA) is a real estate metric typically used in the context of retail buildings like malls and office spaces to denote the total floor area that is available for rent or lease to tenants. GLA includes areas such as common areas and service areas, measured from the center of joint partitions to the exterior surface of outer walls. GLA is critical for property owners and tenants as it directly impacts the revenue potential of the property.

Examples

Shopping Mall: Imagine a shopping mall with a total building area of 500,000 square feet, out of which 400,000 square feet is GLA. The remaining 100,000 square feet includes corridors, restrooms, and maintenance areas.
Office Building: In a downtown office building with a total of 100,000 square feet, about 85,000 square feet might be classified as gross leasable area. The rest would be common areas like lobbies, stairwells, and hallways.
Warehouse: A commercial warehouse has a total area of 50,000 square feet, with 40,000 square feet designated as GLA. The remaining space consists of administrative offices and shared loading docks.

Frequently Asked Questions (FAQs)

Q: What is the difference between Gross Leasable Area (GLA) and Net Leasable Area (NLA)?
A: GLA includes all the space occupied by tenants and the common areas shared among them, while NLA refers to the exclusive space available to tenants, excluding common areas.

Q: How important is GLA in determining lease agreements?
A: GLA is vital as it directly influences rent calculations, tenant allocation, and overall revenue potential of the property.

Q: Can GLA vary for different types of real estate properties?
A: Yes, GLA measurements can differ based on the type of property, such as office spaces, retail spaces, and industrial properties, reflecting variations in layout and usage.

Q: What areas are typically included in GLA?
A: GLA includes tenant spaces, interior walls, corridors, lobbies, restrooms, and sometimes service areas like mechanical rooms.

Q: Is GLA used only in commercial property leasing?
A: While most commonly used in commercial property contexts, GLA may also be relevant in residential projects with shared amenities or mixed-use developments.

Net Leasable Area (NLA): The floor space exclusively available to the tenant, excluding communal or service areas.
Common Area Maintenance (CAM): Costs associated with maintaining shared areas in a leased property, often included in leases proportionately based on GLA.
Rentable Area: Another term often used interchangeably with Gross Leasable Area to describe the amount of space a tenant is charged rent for.
Building Owners and Managers Association (BOMA): An organization that provides guidelines for measuring commercial space, including GLA and NLA.

Online Resources

BOMA Standards: BOMA’s Measurement Guidelines for commercial spaces.
International Council of Shopping Centers (ICSC): Detailed explanation and usage of GLA in retail leasing. ICSC Resources
U.S. Small Business Administration (SBA): Real estate resources including GLA. SBA Real Estate Guide

References

“ICSC Shopping Centers: Retail’s GLA Fundamentals” by the International Council of Shopping Centers (2020).
“The BOMA Method for Measuring Office Buildings: Standard Practice” by Building Owners and Managers Association.

Suggested Books for Further Studies

“Real Estate Principles: A Value Approach” by David C. Ling and Wayne R. Archer.
“Commercial Real Estate Analysis and Investments” by David M. Geltner and Norman G. Miller.

Real Estate Basics: Gross Leasable Area Fundamentals Quiz

### Is Gross Leasable Area (GLA) inclusive of common areas like corridors and lobbies? - [x] Yes, GLA includes those common areas. - [ ] No, GLA only includes tenant-occupied spaces. - [ ] Yes, but only for retail spaces. - [ ] No, GLA is specific to the exterior footprint only. > **Explanation:** GLA includes both the tenant spaces and common areas such as corridors and lobbies. ### Which areas do NOT contribute to Gross Leasable Area? - [x] Rooftop mechanical areas - [ ] Tenant retail spaces - [ ] Internal corridors - [ ] Shared lobbies > **Explanation:** Rooftop mechanical areas generally do not contribute to GLA; instead, tenant spaces, internal corridors, and shared lobbies are included. ### Does Gross Leasable Area (GLA) impact the rent calculation for tenants? - [x] Yes, GLA is directly used in rent calculations. - [ ] No, it has no impact on rent calculation. - [ ] Only for residential properties - [ ] Only for industrial properties > **Explanation:** GLA is a key factor in determining the rent for tenants as it directly reflects the amount of usable space. ### Which term is commonly used interchangeably with Gross Leasable Area? - [x] Rentable Area - [ ] Net Operating Income - [ ] Tenant Improvement Allowance - [ ] Tax Assessed Value > **Explanation:** "Rentable Area" is often used interchangeably with GLA to describe the space for which tenants are charged rent. ### How is GLA measured? - [ ] Exterior surface to exterior surface of outer walls. - [x] From the center of joint partitions to the exterior surface of outer walls. - [ ] From one end of the property boundary to the other. - [ ] From the center line of the property plot. > **Explanation:** GLA is measured from the center of joint partitions to the exterior surface of outer walls. ### Which organization provides standard guidelines for measuring GLA? - [ ] Central Bank - [ ] The IRS - [x] Building Owners and Managers Association (BOMA) - [ ] Federal Trade Commission (FTC) > **Explanation:** The Building Owners and Managers Association (BOMA) provides standard guidelines for measuring commercial spaces including GLA. ### Can GLA vary between different types of commercial properties such as retail and industrial? - [x] Yes, GLA calculations may differ based on property type. - [ ] No, GLA is always calculated the same way. - [ ] Only for retail properties. - [ ] Only for mixed-use properties. > **Explanation:** GLA calculations can vary based on the property type, reflecting differences in layout and usage. ### Is the entire square footage of a property always included in GLA? - [ ] Yes, every part including roof and exterior services is counted. - [x] No, typically excluded areas like mechanical rooms and non-leasable rooftops are not counted. - [ ] Only in residential areas. - [ ] Only in industrial areas. > **Explanation:** Some areas such as mechanical rooms and non-leasable rooftops are typically excluded from the GLA calculation. ### Why is GLA particularly relevant in leasing agreements? - [ ] It determines the aesthetic value of the property. - [ ] It serves as a basis for zoning laws. - [ ] It is a primary determinant of property insurance premiums. - [x] It is critical for calculating rental rates and lease terms. > **Explanation:** GLA is crucial in the context of leasing agreements as it is a primary factor in calculating rental rates and lease terms for tenants. ### What is usually the biggest chunk of GLA used for in retail spaces like malls? - [x] Tenant storefronts and leased spaces. - [ ] Parking lot. - [ ] Roof access. - [ ] Utility infrastructure. > **Explanation:** In retail spaces like malls, the biggest chunk of GLA is typically reserved for tenant storefronts and leased spaces.