Net Rentable Area is actual square footage of a building that may be leased or rented to tenants the area upon which the lease or rental payments are computed. It is common to include unheated and/or uncooled areas of industrial buildings in the GBA since the use of that space is typically critical to the function of the property.Īnother measurement term sometimes used in commercial real estate appraisal is Net Rentable Area (NRA). Basements may be included in this calculation if the appraiser determines that the finished, access, and utility are similar to the above grade areas of the building. Gross building area typically includes all heated and cooled areas. Since commercial buildings are commonly traded for business occupancy or rental income, the industry accepted measurement unit is Gross Building Area (GBA). If any portion of the improvements is below-grade, regardless of quality or the presence of windows, it should not typically be included in the GLA, but would be accounted for in the basement & finished rooms and below grade on the sales comparison appraisal grid.Ĭommercial buildings square footage is not typically calculated by ANSI standards. One aspect of the GLA that garners many questions and often creates confusions is when the living or finished are in the basement is not included in the GLA, particularly if the home is listed and being marketed a higher square footage that includes the finished area of the basement or terrace.Īside from ANSI standards, the GSE”S (Fannie Mae and Freddie Mac), FHA/HUD, VA and the USDA instruct appraisers to count only finished above-grade areas when calculating the GLA. Additionally, a consistent measuring method can reduce liability for parties involved in a residential purchase transaction. Local practices may differ under some circumstances).” The appraisal industry relies on these standards in order to ensure appraisers are comparing apples to apples when measuring and valuing a property. (Finished basements and attic areas are not generally included in gross living area.

GLA is defined by The Dictionary of Real Estate Appraisal as the “Total area of finished, above-grade residential space calculation by measuring the outside perimeter of the structure and includes only finished, habitable, above-grade living space. Under ANSI standards, Gross Living Area (GLA) is the term used in most residential appraisal reports.

Under that mission, ANSI has created national standards for single family residential measurements in the appraisal industry. The American Nation Standard Institute (ANSI) is a non-profit, private organizations that has a mission to facilitate standards throughout many various industries. Dart’s goal is to help answer some questions frequently asked regarding building size and provide some explanations of industry acronyms. Often clients or appraisers will ask for opinions about building size they may have concerns about the property being measured correctly or they may not be familiar with what area is included in the calculations provided. The licensed appraisal review team, with over 20 years’ experience, have seen appraisals on almost every property type. Dart Appraisal’s experienced appraisal review team routinely review a variety of unique commercial and residential appraisal reports.

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