What Does "Leasable" Mean in Real Estate? A Complete Guide to Leasable Space

In the real estate world, the term “leasable” refers to any property or space that can be rented or leased to a tenant. This can include everything from commercial office buildings and retail storefronts to residential apartments and industrial warehouses.

Whether you’re a property owner, investor, or business looking for space, understanding what qualifies as leasable and how it’s measured is crucial for valuation, negotiation, and return on investment (ROI).

What Is Leasable Space?

Leasable space (also known as net rentable area or rentable square footage) refers to the area within a property that a tenant can lease, often measured in square feet or meters.

Key Characteristics:

Includes usable interior space, plus a portion of common areas (lobbies, hallways)
Excludes structural elements, mechanical rooms, or owner-only areas
Used as the basis for calculating rental rates in commercial leases

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Types of Leasable Properties

Commercial Leasable Properties

Office buildings (Class A, B, C)
Retail spaces (malls, shopping centers, street shops)
Industrial warehouses or distribution centers
Co-working spaces

Residential Leasable Properties

Apartments or condos for rent
Single-family homes
Multi-family residential buildings
Short-term vacation rentals

Mixed-Use Properties

Combine commercial and residential units
Leasable units may include ground-floor retail and upper-floor apartments

How Is Leasable Area Measured?

Leasable space is typically measured using one of the following industry standards:

BOMA (Building Owners and Managers Association) standards for commercial spaces
Gross leasable area (GLA) for retail properties
Net usable area (NUA) for actual tenant-occupied space

Gross vs. Net Leasable Space:

Term	Includes?	Used for…
Gross Leasable Area (GLA)	Total space including shared/common areas	Retail & mall leases
Net Leasable Area (NLA)	Tenant’s exclusive space	Office and industrial leases

Pro Tip: Always clarify the type of measurement used before signing a lease agreement.

Why Leasable Space Matters in Real Estate

Affects Rental Income

More leasable space = greater earning potential for landlords.

Determines Rent per Square Foot

Rental rates are calculated based on total leasable area.

Impacts Property Valuation

The total leasable space helps assess a building’s market value and cap rate.

Influences Design & Layout

Architects and developers plan around maximizing leasable area for profitability.

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Examples of Leasable Use Cases

A landlord leasing out 5,000 square feet of office space in a shared building
A mall owner renting out individual retail units to different brands
A property investor calculating ROI based on leased vs. total leasable area
A startup renting 200 square feet in a coworking space

Maximizing Leasable Space: Tips for Owners

Design floor plans with minimal unusable space
Offer flexible layouts to suit multiple tenant types
Use common areas efficiently to maximize rentable square footage
Keep vacancy rates low with competitive pricing and modern amenities

Conclusion

Whether you’re a property owner, developer, or tenant, understanding what “leasable” means is essential for making smart, profitable decisions. From accurate rent calculations to increasing property value, leasable space plays a major role in the economics of real estate.

As markets become more competitive, maximizing your leasable area—and understanding how it works—is key to success in real estate.

FAQs

1. What does “leasable” mean?

Leasable refers to any property or space that is available for rent or lease to a tenant, typically in residential or commercial real estate.

2. Is leasable space the same as usable space?

Not always. Leasable space includes a tenant’s personal area plus a portion of common areas, while usable space is the area exclusively used by the tenant.