A rule of thumb ratio commonly
associated with commercial property and more
specifically, the leasing of office space.
The efficiency ratio refers to the
percentage of total building square footage
in relation to its net leaseable area. Net
leaseable area is broadly defined as all
areas of the building excluding elevators,
common washrooms, hallways, maintenance
closets, building management offices,
facilities for heating and cooling, and
other areas not specifically included within
tenant-leased areas.
Example of Efficiency Ratio
A Developer is
constructing an office building consisting
of 50,000 square feet on five floors. The
net leaseable area for each floor (excluding
hallways, common washrooms, elevators, and
other support/service areas), is 8,300. The
efficiency ratio for this building is:
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