Do Commercial Real Estate agents calculate square footage using a formula other than Area=Lenght*Width?

Question

I have been looking for office space in the SF bay area and many of the suites I have seen will advertise that they are larger in square feet than the dimensions I actually measure. Is it standard pratie to add extra square feet to cover additional costs or are all commercial real estate agents dodgy sleezebags?

Answer 1

It depends on the agency. As an appraiser we use either the measured square footage or the local assessor's property card. If we measure a building that is quoted as 2000 sf and it is actually 4,000 we have to investigate why was the sf not accurate. Did they get permits to build? If so we use the measured square footage, if not we ue use the 2,000sf, that's why you need to get permits to get extension. I am giving the agents the benefit of doubt and saying they are getting incorrect info, however I feel that they most likely are not going the extra mile to find the correct square footage. I think you have to verify all the info your self before a purchase.

Answer 2

It's unclear if you are buying a commercial property that you will lease out, a commercial property you will run your own business out of or a biz op (business opportunity). If it's a biz op, yes, it is normal to get financial info upfront if there is a franchise involved & you will need franchise approval to take over. This & financing can be the biggest hurdles. Commerical real estate & the agents that specialize in it are different breed than residential real estate & agents. Your friends, although having good intentions, may not be well versed or experienced in the commercial real estate gig. Nothing unethical. Bear in mind, the seller will be providing you with enough financial information to fill a 3 ring binder: copy of lease, P&L, balance sheet, detailed inventory, detailed asset list, francise agreement & royalties, etc. They have a lot at stake & want to insure anyone interested in tying up their investment for 60 - 90 days or longer is sufficiently qualified financially and capable to do so, rather than some guy off the street that "always wanted to own a X business? . Do ya think I could get an SBA loan?" and has NO CLUE as to running a business.