Are you looking to buy a new house or are you attempting to sell the one you already own? In such cases, you might have heard of the words GBA and GLA. Even though they may sound like technical jargon, knowing the distinction between GBA and GLA is essential in the real estate industry.

GBA stands for Gross Building Area, while GLA stands for Gross Living Area.  Both are used to estimate a property’s size, but they are computed in different ways, and their effects on home prices may be profound.

So why is this important? Knowing the distinction between GBA and GLA, though, can make the difference between a profitable and a disappointing deal. It can also assist you in making wise choices while buying a new house. Let’s examine the differences between GBA and GLA and how they affect real estate in more detail.

What is Gross Building Area or GBA?

Gross Building Area, or GBA, is the total area of a building that is measured from the outside of its walls. This includes all floors, walls, staircases, and other structural elements. GBA is often used to determine the size of a commercial property or multi-family residence.

How GBA is calculated?

GBA is calculated by measuring the length and width of the building, including any exterior walls, and then multiplying these measurements to get the total square footage of the building. Any common areas, such as hallways or lobbies, are included in this calculation. This means that GBA can sometimes include areas that are not usable or rentable, like a boiler room or elevator shaft.

For example, let’s say you are looking at a commercial property that has two floors. The first floor measures 50 feet by 50 feet, while the second floor measures 40 feet by 40 feet.

To calculate the GBA, you would add the square footage of each floor together (50 x 50 = 2,500 sq ft for the first floor, and 40 x 40 = 1,600 sq ft for the second floor), resulting in a total GBA of 4,100 sq ft.

Importance of GBA in real estate:

Due to its potential to affect a property’s value, GBA is a crucial real estate statistic. GBA is frequently used to estimate the amount of rentable space and potential revenue for commercial buildings. Lenders can also use GBA to calculate the maximum amount of loan a property is eligible for.

For anybody trying to purchase or sell a commercial property or multi-family housing, GBA is, in a nutshell, a crucial statistic.

What is Gross Living Area or GLA?

Gross Living Area, or GLA, is the total area of a building that is suitable for living in. This includes areas such as bedrooms, living rooms, and bathrooms, but excludes areas like garages, attics, and basements.

How GLA is calculated?

GLA is calculated by measuring the total area of each room that is suitable for living in and then adding them together. Staircases, closets, and hallways are usually not included in this calculation. GLA can also be referred to as “livable square footage.”

For example, let’s say you are looking at a single-family home that has three bedrooms, two bathrooms, and a living room. The first bedroom measures 10 feet by 12 feet, the second bedroom measures 11 feet by 10 feet, and the third bedroom measures 12 feet by 12 feet.

The living room measures 14 feet by 16 feet, and the two bathrooms measure 6 feet by 8 feet each. To calculate the GLA, you would add the square footage of each room together (10×12 = 120 sq ft for the first bedroom, 11×10 = 110 sq ft for the second bedroom, 12×12 = 144 sq ft for the third bedroom, 14×16 = 224 sq ft for the living room, and 2x(6×8) = 96 sq ft for the bathrooms), resulting in a total GLA of 694 sq ft.

Importance of GLA in real estate:

Due to its potential to affect a property’s value, GLA is a crucial real estate statistic. A single-family house or condo with a greater GLA will typically be worth more money. The amount of property taxes that a homeowner must pay can also be impacted by GLA.

In essence, it is crucial for both buyers and sellers in real estate transactions to comprehend the GLA of a property.

Differences between GBA and GLA:

Now that we have a clear understanding of both GBA and GLA, let’s take a look at the key differences between the two and how they impact real estate properties.

The main difference between GBA and GLA is that GBA measures the entire area of a building, including any areas that are not suitable for living in, such as hallways or boiler rooms.

GLA, on the other hand, only measures the area of a building that is suitable for living in, such as bedrooms and living rooms.

How do these differences affect real estate properties?

The value of a property may be significantly impacted by this discrepancy. For instance, if a significant amount of a commercial building’s GBA consists of non-rentable areas like stairwells or storage rooms, the value of the property may be lower than it would be for a comparable building with a smaller GBA.

Similar to the previous example, a single-family home with a higher GLA may be worth more than a property with a lower GLA if the extra space is used for desired living areas like more bedrooms or a bigger living room.

For example, let’s say you are looking at two different apartment buildings. Building A has a GBA of 10,000 square feet and 10 rental units while Building B has a GBA of 9,000 square feet and 12 rental units.

Despite having a lower GBA, Building B may be more valuable than Building A because it has more rentable units, which translates into more potential rental income.

What is NLA/NRA (Net Leasable Area/Net Rentable Area)?

Another method for calculating the amount of space that is available for rent in real estate is NLA/NRA (Net Leasable Area/Net Rentable Area). NLA/NRA, like GLA, only calculates the size of a building that is appropriate for renting and eliminates any spaces such as common areas, corridors, and storage spaces that are not rentable.

A property owner or real estate expert will often measure the building’s external measurements and deduct any spaces that are not available for rental in order to determine NLA or NRA. As a consequence, a complete area is created that may be rented to renters.

All things considered, it’s critical for everybody involved in real estate transactions to understand the distinction between GBA and GLA.

Understanding these crucial indicators may help you achieve your objectives, whether you’re a buyer seeking for your ideal house, a seller attempting to get the greatest price for your property, or a real estate advisor giving clients advice.