GLA: Gross Leasable Area Definition and Explaination
Gross Leasable Area (GLA) is the amount of commercial space reserved for the exclusive use of a tenant. Find out more in our commercial mortgage quick reference guide.
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Gross leasable area, or GLA, is the area in a commercial property designed for the exclusive use of a tenant. GLA typically includes mezzanines, basements, or upper floors, but shared areas, such as public bathrooms or maintenance areas. Gross leasable area is usually measured from the center of the wall separating tenants. Internal walls (but not those shared with other tenants) are incorporated into GLA.
BOMA Standards Determine How GLA is Calculated
BOMA, the Building Owners and Managers Association, is an international organization that sets standards for how commercial and industrial buildings are measured. To ensure that your estimation of a building’s GLA is accurate, it’s an excellent idea to check BOMA’s exact standards, which can be found here on their website.
The Relationship Between GLA and Gross Potential Rent
Gross potential rent (GPR) is a calculation of the potential rent that a commercial or multifamily property can generate, usually on an annual basis. Because of the fact that most properties are rented on a PSF (per square foot) basis, you can use gross leasable area to determine a building’s estimated GPR. For instance, a building with a GLA of 5,000 sq. ft., renting for $20/PSF would have a GPR of $100,000. GPR, however, is not an accurate calculation of a what a building will actually make in revenue, since, in practice, building occupancy almost never reaches 100%.
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