Loss factor

For Dielectric loss factor, see Dielectric loss.

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 often confused with load factor, but the formulas for each term vary.

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.