In the vanilla lease floor number instance, there are two cases
- A tenant may occupy one (of many units) – and units do not straddle floors
- A tenant may occupy an entire property – here the unit straddles all floors
(Note, the occupied property’s category is important here. Office and retail may be multi-storey. Industrial, generally, is single storey (an understanding / review of components here is relevant))
There are a range of floor occupation permutations that exist in between the above. Drilling down into the spectrum of permutations:
- A tenant may occupy an entire floor in a property – i.e. one lease floor number
- A tenant may occupy various floors – some completely, others partially – i.e. multiple lease floor numbers
Note: One can extend the lease occupation focus beyond floors. An analyst may be interested to know what components or buildings are occupied by a lease, and choose to reconcile structured unit level data back to these values.
Advanced – reconciliations
In a property comprising multiple buildings or components, for reconciliation purposes it is recommended to decompose the property into its hierarchy, and to be clear on the floor plate sizes per floor, per component, per building. To explain, here is an example of a property of 5,200 sqm GLA, comprising two buildings – Building A and Building B:
- Building A is two storeys high, with equal-sized floor plates of 1,000 sqm each (total building GLA: 2,000 sqm)
- Building B is four storeys high, with equal-sized floor plates of 800 sqm each (total building GLA: 3,200 sqm)
The total occupiable floor space for storey 1 would be 1,800 sqm (Building A 1,000 plus Building B 800 sqm). The total occupiable floor space for story 3 would be Building B’s 800 sqm (Building A does not have a third storey). Thus the “reconciliation to” value for storey 1 would differ to the value for storey 3.
Advanced – tenant perspective (vs lease)
A single tenant may occupy various pockets of space in the property through various leases (all with various rentals, lease expiry dates and other conditions). In this instance, the effect is that the tenant is occupying entire floors. This will not be obvious when looking through the lense of individual leases, but when viewed from the perspective of tenant, will be the case.