What Is GBA In Real Estate?

Commercial buildings are traded for rental or business occupancy income; the most widely used measurement unit is the gross building area (GBA). The gross building area usually includes all areas heated and cooled.

What Exactly Is GBA In Real Estate?

GBA is a term used to describe gross building area in real estate. It is a crucial measurement tool used to assess the size and total area of a building. The GBA encompasses all enclosed spaces in the building, both usable and unusable. In this piece, we’ll explore the concept of GBA and discuss its significance for the real estate market.

Definition of GBA

Gross Building Area (GBA) is the floor space of an entire structure as measured by its exterior walls. It encompasses all floors above and below the ground and comprises usable and non-usable areas. Functional spaces refer to areas used for various purposes, including retail spaces, offices, or even residential units. Non-usable spaces include elevator shafts, stairwells, and mechanical rooms or utility closets, which are required to run the building but are unsuitable for occupancy.

The GBA calculation typically excludes terraces, balconies, roof structures, rooftop structures, and parking lots because they are considered exterior or unenclosed spaces. The calculation of GBA is vital for various reasons, including valuation and leasing, zoning compliance, property management, and compliance with building codes.

Importance of GBA in Real Estate

Property Valuation

GBA is a critical element in determining the worth of the property. Investors and real estate appraisers use GBA as a primary metric to determine the value of a property. By looking at the GBA of similar properties on the marketplace, appraisers can identify a property’s fair value, a vital aspect of purchasing or selling real property.

Zoning Compliance

Local zoning regulations usually specify limitations on the maximum allowed GBA of a particular area or property. These regulations aim to regulate urban density, protect the character of neighborhoods, and maintain infrastructure capacity. Developers and property owners must ensure that the proposed projects conform to the allowed GBA limits to obtain the required permits and abide by zoning regulations.

Leasing and Rental Determination

GBA is a critical element of commercial leases as well as rental agreements. Landlords and tenants depend on GBA to negotiate lease terms such as lease duration, rent pricing, and allowances for tenant improvements. The GBA is a standardized measure that permits both parties to assess available space and determine the most appropriate rental rates following market trends.

Property Management

GBA is vital to ensuring effective property management. Property managers use GBA information to determine the best space allocation for various reasons, like tenant occupancy of common areas, amenities, or utility infrastructure. GBA data can be used to optimize space utilization by determining the need for maintenance, calculating standard area maintenance fees, and evaluating operational costs.

Building Code Compliance

Building codes typically specify specific requirements following the GBA of a building. These requirements include things like the safety of occupants in case of fire and occupancy load accessibility, as well as emergency exits. Engineers, architects, and construction experts use GBA as a base to design buildings that comply with these rules and codes, ensuring the occupants’ safety and security.

What’s The Main Difference Between GBA And GLA?

The primary distinction between GBA and GLA is that GBA covers the entire building area, including the areas that aren’t suitable to live in, like boiler rooms or hallways. GLA, however, in contrast, only measures the location of a suitable building, like bedrooms and living spaces.

When it comes to assessing and measuring the size and extent of a building, two famous metrics utilized in the real estate market are GBA (gross building area) and GLA (gross leasable area). Although these terms seem similar, they are distinct concepts and serve different objectives. In this piece, we’ll examine the differences between GBA and GLA to clarify their definitions and applications.

Gross Building Area (GBA)

GBA, as we mentioned earlier, is the total surface area that is within a building, which includes spaces that are usable and not. It covers all rooms within the walls of the building’s exterior and encompasses both above-ground and below-ground floors. GBA includes more than areas occupied by residential units, offices, or retail spaces; it also includes places that could be more usable, like utility rooms, mechanical rooms, closets, and corridors.

GBA is a broad measurement that covers the entire footprint, giving a complete view of its dimensions. It is frequently used to assess the value of a property, lease negotiations, zoning compliance, property management, and conformity to building codes. GBA is a crucial measure of the value of a building and of making sure it complies with the rules and regulations.

Gross Leasable Area (GLA)

Conversely, GLA refers explicitly to the space inside the building that tenants lease or rent. It is only the spaces that tenants use to conduct business. GLA does not include non-leasable spaces like common areas and hallways, stairwells, elevator shafts, mechanical rooms, or utility closets.

GLA is most commonly utilized for commercial real estate and lease agreements, where they are familiar. It is an essential measurement of rental income, lease terms, and the negotiation of rent rates. Landlords, property owners, and tenants depend on GLA to determine the space in the leasable room and the appropriate rates for rental based on market conditions and similar properties.

Critical differences between GBA and GLA

Scope of Measurement

The primary distinction between GBA and GLA is their measurement scope. GBA encompasses all spaces in the building regardless of their use, including usable and non-useable spaces. Contrary to this, GLA focuses solely on the rentable or leasable areas that tenants can use for business purposes.

Purpose

GBA serves many functions in the real estate industry, such as property valuation, property management, zoning compliance, and building code compliance. It gives a complete view of the size of a building and assists stakeholders in assessing its value and conformance with the regulations. Conversely, GLA is primarily used in rental and commercial leasing contexts. It is essential in determining the rental rate and lease terms and calculating rental income.

Exclusions

GBA encompasses all areas within the walls of a building’s exterior, including usable and non-usable spaces. The definition does not include particular kinds of spaces except for those defined explicitly as outside areas or spaces that are not enclosed. However, GLA excludes non-leasable spaces like common areas such as hallways, mechanical rooms, and utility closets. GLA is focused on locations that yield rental income and can be adapted for occupancy by tenants.

How To Calculate Gross Building Area (GBA)?

GBA is determined by measuring the outside of the permanent exterior walls of the building without deductions for features like walkways, stairwells, common areas, shared spaces, and unusable or non-leasable areas.

The calculation of the gross building area (GBA) of the property is crucial for various fundamental estate-related purposes, including valuation of the property, zoning compliance, and compliance with building codes. GBA is the surface area of a structure that includes usable and non-usable areas. While the method used for formulating GBA will vary based on the location and industry practices, The thelowing steps offer general guidelines for calculating GBA.

Step 1: Determine the Building’s Exterior Dimensions

To calculate GBA, you must determine the outside dimensions of your building. This is done by taking measurements of the width and length of every floor. Make sure you measure from the outermost point of the wall’s exterior. Note the dimensions for each foot.

Step 2: Calculate the Floor Area of Each Level

Then, determine the floor area for each floor of the structure. It is done by multiplying the length by the width for each foot. If the building is irregular in shape or has different floor plans, break each floor into measurable sections and then calculate the size of each section independently. Take the total area of each team on the floor to determine the floor space of the level.

Step 3: Include Below-Grade Areas

If the structure has below-grade areas like basements and underground levels, add them to the calculations. Take measurements of the exterior dimensions and calculate the floor area for each below-grade group using the same procedure for levels above grade.

Step 4: Account for Vertical Penetrations

Vertical penetrations, like elevators, stairs, and shafts, need to be taken into account when making calculations for GBA. Take the measurements of these spaces and subtract them from the floor of each level. This adjustment ensures only available floor space is considered in the GBA calculation.

Step 5: Include Non-Occupiable Areas

GBA comprises non-useable areas inside the building, like utility closets, mechanical rooms, and corridors. Take measurements of these spaces and add them to the GBA calculation. It is essential to consider all unoccupied areas within the walls of the building’s exterior.

Step 6: Sum up the Floor Areas

Take the floor areas of all levels, above-grade and below-grade, and include the areas that are not occupied. This will provide you with the building’s gross building area (GBA). The resultant measurement is the total floor area of the walls of the building’s exterior, including usable and non-usable areas.

It is crucial to remember that local regulations, such as industry practices, local laws, and particular property types, could differ concerning the GBA calculation process. It is recommended to consult the local building codes, professional appraisers, or real estate experts to get the most precise guidelines and recommendations specific to your location.

By precisely calculating the gross building area (GBA) and accurately estimating the gross building area (GBA), you will be able to ensure that you are in compliance with the regulations, provide an accurate description of the size of your property, and make it easier to conduct various actual appraisals and transactions.

FAQ’s

What does GBA stand for in real estate?

GBA stands for Gross Building Area in real estate.

What is the Gross Building Area (GBA)?

The Gross Building Area (GBA) is the total floor area within a building, including all the enclosed spaces, such as offices, hallways, storage areas, and common areas.

How is the Gross Building Area (GBA) calculated?

GBA is typically calculated by measuring the floor area of each level within a building and summing them up. It includes both usable and non-usable areas, such as walls, columns, and mechanical spaces.

Why is Gross Building Area (GBA) important in real estate?

GBA is an essential metric in real estate as it provides a comprehensive measure of the size and space available in a building. It helps determine the property’s value, rentable area, and potential uses.

Is Gross Building Area (GBA) the same as Gross Floor Area (GFA)?

Gross Building Area (GBA) and Gross Floor Area (GFA) are similar terms and are often used interchangeably. They both refer to the total area of a building, including all floors, but GBA might include non-usable areas while GFA usually excludes them.

How does Gross Building Area (GBA) differ from Net Leasable Area (NLA)?

Gross Building Area (GBA) represents the total floor area of a building, while Net Leasable Area (NLA) refers to the actual rentable space within a building that tenants can occupy. NLA excludes common areas, such as corridors and lobbies, that are included in GBA.