How a bay is measured, and why two 3,000 sq ft bays are not the same

Area is the unit of pricing in a lease, so how it is measured is a commercial term, not a technicality. There is no legal requirement that an industrial bay be measured by any particular standard, and the lease is free to define the area however the parties agree.

The three areas

• Usable area — what you can actually use, inside your walls.
• Rentable area — what you pay rent on. Usable area plus, in many leases, a share of common areas.
• Gross building area — the whole building measured to its exterior. A landlord and appraiser figure, not usually a leasing one.

Where the lines are drawn

In multi-tenant industrial, area is commonly measured to the outside face of exterior walls and to the centreline of demising walls between units. That means you are paying for half the thickness of the wall you share with your neighbour, and all of the exterior wall on your side. This is conventional, and it is worth knowing rather than discovering.

The professional reference is the BOMA industrial standard, which sets out a consistent method. Many leases reference it; many do not, and simply state an area as agreed. Either is acceptable — what is not acceptable is a lease that states an area without saying how it was derived, then charges additional rent on a proportionate share calculated a different way.

Mezzanines

How a mezzanine is treated is the single largest source of area disagreement in a bay. It can be counted in full, counted at a discount, or excluded entirely, and all three appear in the market. A 3,000 square foot bay with a 600 square foot mezzanine included is a 2,400 square foot bay at floor level.

Ask explicitly: is the quoted area inclusive of the mezzanine? Then ask the same question about the additional rent calculation, because the two do not always match.

Why the numbers drift

• The area was measured once, years ago, and has been repeated ever since.
• A demising wall was moved and nobody re-measured.
• The mezzanine was added later and the area was never updated.
• Building measurement standards changed between the original measurement and today.
• The marketing area and the lease area were prepared by different people for different purposes.

What to do about it

1. Ask how the area was measured and to what standard.
2. Ask whether the mezzanine is included, in both the rent and the additional rent calculation.
3. Measure it yourself at the viewing. A laser measure and ten minutes gets you within a few percent, which is enough to spot a real discrepancy.
4. If the difference is material, raise it before firm-up. After signing, the lease area is the area.
5. For a larger commitment, consider a professional measurement. On a long term it can pay for itself many times over.

Note that neither of the public records this site draws on publishes a leasable area for any building. Calgary publishes parcel area; Edmonton publishes a gross building area without asserting its unit of measure. Neither is a bay area, and neither should be used as one.