Commercial Property Terms – Definitions You Should Know (Part 1)
If you currently invest or are considering investing in commercial real estate, here are a few commercial property terms that you should be familiar with.
When deciding whether to build a rectangular or a square building, you have several factors to consider. For one thing, it may be important to know that the square building usually has a smaller footprint. For instance, a 40,000 square foot building constructed as a square, would be 200 feet x 200 feet. However, that same building as a rectangle could be 100 feet x 400 feet and still have 40,000 square feet.
Although it’s the same square footage, if you’re going to build:
• 200 x 200, you have walls that are exactly the same.
So, you have only 800 lineal feet of wall to build.
• 400 x 100, you have 400 for both sides or 800 feet, plus 100 on each end, or another 200 feet.
So, you have 1,000 lineal feet of wall.
Although the amount of lineal feet involved is smaller with a square building, lessening the expense of construction, far more rectangular buildings are being built. Why? One big factor that shapes this outcome is that it’s easier to put the roof on a rectangle building. The maximum truss length from the standpoint of practical economical efficiency is 50 feet. As soon as you have more than that, you’re into incredibly larger engineering requirements to build that truss, because of the additional length in the roof that it has to support.
Column Spacing and Bay Depth
These are important commercial property terms to understand, because if you have a building that’s 400 feet x 100 feet, you must have one column in the middle of this building. That means your trusses have a one-column distance. This becomes important, when your tenant requires more usable interior space. If your tenant is using big trucks, tow motors, and similar equipment in your warehouse and is trying to navigate a column with a 200-foot truss, they would have trouble.
So, more buildings are being built like this, due to required elements such as column spacing and bay depth. Normally your columns are going to be 20 feet apart. So, if you’ve got a 100-foot building, it’s 50 feet to the column. You have a total of 50 feet of what is called clear span area. You can actually run a tow motor in that area without worrying about any kind of column spacing or impediments. The utility of the space becomes greater, even though it costs more to build.
Also, the cost of trusses is less and makes up for the extra cost in the lineal footage of wall space. Most of your tenant companies in this kind of property are going to be doing a lot of storage. If they want your warehouse facilities for storage, either long-term or short-term, there must be access to that storage.
Tip: The more efficient the access to storage, the more efficient the space becomes for the user.
Stay tuned for upcoming articles with more commercial property terms you’ll want to know.
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Gary began his real estate career in Honolulu in 1966, selling land and homes as head of one of Hawaii’s largest brokerages, and has now sold and leased real estate in Idaho, Virginia, Puerto Rico and Florida. For the last 30+ years Mr. Tharp has been one of the leading commercial investment real estate brokers in Orlando, Florida and a nationally known mentor. Gary is widely regarded in commercial real estate, having developed tools and systems of commercial property evaluation that have become industry standards used by professionals nationwide. He is in demand by lawyers seeking expert witnesses in real estate cases. With development experience ranging from office buildings to industrial parks, Gary is Florida Partner for the Lynxs Group, national developer of air cargo facilities, Fellow of the faculty of the CCIM Institute, and Board of Advisor with HIS Real Estate Network, a residential and commercial buying group.