# What Is Gross Leasable Area?

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In the world of commercial real estate, various metrics and terms are used to assess and describe properties. One such crucial metric is Gross Leasable Area (GLA), which plays a significant role in determining a property’s value, rental potential, and overall functionality. In this blog post, we will explore the concept of Gross Leasable Area, its definition, calculation, and its importance in the commercial real estate industry.

## What Is Gross Leasable Area?

Gross Leasable Area refers to the total floor area within a commercial property that is available for lease to tenants. It represents the space that can be rented out for various purposes, such as retail stores, offices, restaurants, or other commercial activities. GLA is typically measured in square feet or square meters and is an essential metric used by property owners, developers, investors, and tenants in assessing and comparing properties.

## Calculating Gross Leasable Area:

The calculation of Gross Leasable Area involves measuring the usable space within a building while excluding certain areas that are not directly available for lease. Here are key components typically included and excluded in the GLA calculation:

### Included in GLA:

1. Tenant Space: This refers to the actual areas leased by tenants, including their sales floors, offices, storage areas, and any other space dedicated to their operations.

### Excluded from GLA:

1. Common Areas: These are shared spaces within a property that are not directly rented out but are necessary for the functioning and accessibility of the property. Examples include hallways, lobbies, restrooms, elevators, staircases, and common seating areas.
2. Utility Areas: Spaces dedicated to building infrastructure, such as mechanical rooms, utility closets, electrical rooms, and HVAC systems, are typically excluded from GLA.

## The Importance Of Gross Leasable Area:

1. Rental Determination: GLA serves as a fundamental factor in determining the rental income potential of a commercial property. The usable space available for lease directly influences the revenue generated from tenant leases, making it a critical consideration for property owners and investors.
2. Comparative Analysis: GLA allows for meaningful comparisons between different properties. Investors and developers use GLA as a benchmark to evaluate rental rates, market value, and potential returns on investment when considering multiple properties or similar assets in the same market.
3. Tenant Evaluation: Tenants also rely on GLA to assess the space available for their specific business needs. They consider the amount of GLA required to accommodate their operations effectively, ensure sufficient customer flow, and determine the viability of leasing a particular property.
4. Asset Valuation: Gross Leasable Area is a key component in property valuation. Appraisers and real estate professionals use GLA as part of their assessment when determining the market value of a commercial property, considering factors such as rental income potential, demand, and location.

## Conclusion:

Gross Leasable Area (GLA) is a critical metric in commercial real estate that represents the total rentable space within a property. Understanding GLA is essential for property owners, investors, developers, and tenants to evaluate rental income potential, compare properties, and assess market value. By grasping the concept and calculation of GLA, stakeholders can make informed decisions and navigate the commercial real estate landscape more effectively, ensuring optimal utilization and maximizing returns on their investments.

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## FAQ

### What Is The Difference Between Net And Gross Leasable Area?

In reality, the gross leasable area of a building includes all the common areas, elevators, common bathrooms, stairwells, and other portions of the building that the tenant doesn’t occupy (regularly). The actual square footage of the tenant’s space is called the Net Rentable Area of the building.

### How Do You Calculate Gross Leasable Area?

Gross leasable area (GLA) is calculated by measuring the area from the center of a wall or other partition that separates tenants from the lease line in common areas. It also takes into account any walls that are not shared with other tenants.

### What Does Gla Mean In Real Estate?

gross living area

January 29, 2020 | Texas REALTORS® Staff. The gross living area (GLA) of a home refers to its above-grade, finished living space—what’s also commonly referred to as its square footage. How the GLA of a home is calculated, however, depends on who is doing the measuring.

### What Is Included In Gla?

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.

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