Gross Leasable Area (GLA)

Definition

Gross Leasable Area (GLA) refers to the total floor area of a building that can be rented out to tenants. It is typically measured from the exterior walls of the building and includes all rentable space. This is a crucial metric in real estate, particularly for commercial properties, because it determines the rental value and the revenue potential of a property.

Examples

1. Shopping Malls: The GLA of a shopping mall includes all the retail spaces, anchor stores, and any other rentable spaces within the mall, measured from the exterior walls.
2. Office Buildings: For an office skyscraper, the GLA includes all office spaces available for lease measured from the outer walls.
3. Industrial Warehouses: The GLA in an industrial warehouse covers all the storage and operational areas that can be leased to tenants, calculated from the outer structural boundaries.

FAQs

Q1: How is Gross Leasable Area different from Net Leasable Area?

• A1: Gross Leasable Area includes the total rentable space measured from the building’s outer walls, whereas Net Leasable Area excludes common areas such as hallways, lobbies, and restrooms.

Q2: Why is GLA significant for property owners?

• A2: GLA is significant because it determines the potential rental income of the property. The larger the GLA, the more rentable space available, which can lead to higher revenues.

Q3: Is GLA used in both residential and commercial properties?

• A3: While GLA can be used for any type of property, it is most commonly applied to commercial properties like shopping malls, office buildings, and industrial warehouses.

Q4: Does GLA include parking spaces?

• A4: No, GLA typically does not include parking spaces. Parking areas are often considered separately from the building’s leasable area.

Related Terms

• Net Leasable Area (NLA): The portion of the GLA excluding common areas like hallways, lobbies, restrooms, and mechanical rooms. This represents the actual rentable space available to tenants.
• Common Area Maintenance (CAM): Fees charged to tenants to cover the maintenance of areas shared among tenants such as lobbies, elevators, and restrooms.
• Building Load Factor: The ratio of a building’s GLA to its NLA, representing the portion of common area each tenant is responsible for.

Online References

1. Investopedia - Gross Leasable Area
2. Wikipedia - Leasable Area
3. NAIOP Commercial Real Estate Development Association

Suggested Books for Further Studies

1. “Commercial Real Estate: Analysis and Investments” by David M. Geltner and Norman G. Miller
2. “Real Estate Principles: A Value Approach” by David Ling and Wayne Archer
3. “Investing in REITs: Real Estate Investment Trusts” by Ralph L. Block
4. “The Millionaire Real Estate Investor” by Gary Keller
5. “The Real Estate Management Handbook” by Alphonso O. Ogbuehi

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