A few hundred square feet can significantly impact how a commercial property is evaluated.
Square footage influences lease rates, property valuations, underwriting assumptions, space planning, operating costs, and market comparisons. Yet the accuracy of building area calculations is often overlooked until a discrepancy surfaces during a transaction.
The reality is that not all buildings are measured the same way, and small differences in methodology can produce meaningful differences in reported square footage.
Why Building Measurements Vary
At first glance, measuring a building seems straightforward. In practice, however, the process involves a series of decisions about what is included and how areas are calculated.
Questions such as where to measure exterior walls, how common areas are allocated, whether vertical penetrations are excluded, and how building amenities are treated can all affect the final square footage.
As a result, two floor plans for the same building can sometimes produce different area calculations depending on the standard used and when the building was last measured.
The Role of BOMA Standards
To create consistency across the commercial real estate industry, the Building Owners and Managers Association (BOMA) developed standardized measurement methodologies.
These standards provide a common framework for calculating and reporting building areas, helping owners, brokers, tenants, lenders, appraisers, and property managers work from the same set of assumptions.
Standardized measurements make it easier to compare properties, evaluate lease economics, perform valuations, and communicate building information with greater confidence.
Why Remeasurement Can Matter
Many commercial buildings were measured years ago using older standards, legacy floor plans, or documentation that may not reflect current conditions.
When buildings are remeasured using current BOMA standards, the results can differ from historical records. In some cases, buildings remeasured to current BOMA standards reflect more rentable square footage than prior documentation, a difference that can translate directly into lease revenue and property value.
This does not mean the building has changed physically. Rather, the measurement methodology has been updated to align with current industry standards.
A Practical Example
A recent commercial property listing at 763–771 Bridgeway in Sausalito illustrates how updated measurements can affect property analysis.
Following a remeasurement performed to current BOMA International standards, the reported building area increased from 8,425 square feet to 8,727 square feet, an increase of 302 square feet.
According to the listing broker:
“The updated measurements increased the building size from 8,425 SF to 8,727 SF, which dropped the price per square foot from approximately $593/SF to $573/SF. That’s a meaningful difference for underwriting, comparing comps, and evaluating on a price/SF basis.”
While the building itself remained unchanged, the updated measurement provided a more accurate basis for evaluating the economic value of tenant spaces and comparing it against alternative properties.
Why Accurate Measurements Matter
Accurate square footage affects a wide range of real estate decisions, including:
- Leasing and rent calculations
- Property valuations
- Investment underwriting
- Comparable property analysis
- Space planning and test fits
- Property marketing
- Due diligence and transaction review
When area calculations are inaccurate or inconsistent, those decisions can be based on incomplete information.
The Importance of Current Documentation
As buildings change over time through renovations, tenant improvements, and ownership transitions, floor plans and area calculations can become outdated.
Periodic remeasurement using current industry standards helps ensure that stakeholders are working with accurate information and reduces the likelihood of surprises later in the transaction process.
In commercial real estate, even relatively small differences in square footage can influence financial outcomes. Understanding how buildings are measured and ensuring measurements reflect current standards is an important part of making informed real estate decisions.