How is building efficiency measured?

Building efficiency is an important metric in real estate development that quantifies how effectively the useable space within a building is utilized relative to its total space. This is measured by the ratio between net square feet, which refers to the usable area available for tenants or residents, and gross square feet, which includes all areas of the building, such as hallways, walls, service areas, and mechanical spaces.

This ratio provides insight into how well the building is designed and how efficiently it utilizes its total floor area. A higher ratio indicates a building that provides more usable space relative to its total size, which is a desirable quality in real estate as it often translates into better value for tenants and higher return on investment for developers. Understanding building efficiency helps developers and stakeholders make informed decisions about space planning and utilization.