In commercial real estate in the USA, a building's loss factor is the percentage of the building's area shared by tenants or space that are dedicated to the common areas of a building used to calculate the difference between the net (usable) and gross (billable) areas.
That portion of the space is considered "lost" because it cannot be directly leased and the maintenance and operation costs must be covered by the other rentable areas.
The loss factor is calculated as follows:
Loss Factor = (Rentable Area – Usable Area) / Rentable Area
The Building Owners and Managers Association has established a standard with American National Standards Institute, ANSI/BOMA Z65.1-2010 for measuring floor area and calculating gross leasable area and loss factor.
- Real Estate Investment and Finance. Arnold, Maryland: Building Owners and Managers Association. pp. G16.
- "How is loss factor calculated?...and more questions answered". The Real Deal online. Korangy Publishing Inc. Retrieved 5 December 2011.
- "Glossary of Square Footage Terms". Building Area Measurement LLC. Retrieved 13 May 2013.
- Office Buildings: Standard Methods of Measurement (ANSI/BOMA Z65.1 – 2010). Arnold, Maryland: Building Owners and Managers Association, American National Standards Institute. 2010.