What is the difference between net area and gross area?

Net Area vs Gross Area in Real Estate

The difference between net area and gross area in real estate pertains to the measurement and usage of space within buildings:

• Gross Area: Also known as Gross Leasable Area (GLA) in commercial properties, this encompasses the total floor area inside the building, including walls, columns, and other spaces that cannot be occupied or used by a tenant. In addition to the tenant's space, it includes common areas such as lobbies, restrooms, and hallways. Essentially, it's the entire enclosed space of a building.
• Net Area: This refers to the actual usable space that a tenant can occupy and use for their specific purposes, excluding common areas, structural elements, and spaces occupied by building services. The net area includes only the space within a tenant's leasehold boundary where they can conduct their business or live.

Gross area is the total space within the outer walls of a building, while net area is the usable space available to the tenant, excluding common areas and structural components.