The Gross Building Area, also known as “GBA”, is a key consideration in the valuation of a real estate property. In particular, buildings with high GBA’s are worth scrutiny. The GBA in commercial real estate is the area measured against the footprint of the building, not including parking. This eliminates issues like buildings adjacent to other buildings that may challenge the measurement of GBA and also accounts for issues like interstitial space. The higher the GBA of a property relative to its neighbors, the more valuable market standards could judge it.
Some market experts value commercial properties mainly based on their gross building area rather than square footage (or floor count). This provides an excellent example of why location Is Essential when Purchasing Real Estate.
Table of Contents
What is the Gross Building Area of a Real Estate Property?
The Gross Building Area, also known as “GBA”, is a key consideration in the valuation of a real estate property. In particular, buildings with high GBA’s are worth scrutiny. The Gross Building Area of a property is the area measured against the footprint of the building, not including parking. This eliminates issues like buildings adjacent to other buildings that may challenge the measurement of GBA and also accounts for issues like interstitial space. The higher the GBA of a property relative to its neighbors, the more valuable market standards could judge it. Some market experts value commercial properties based largely on their gross building area rather than square footage (or floor count). This provides an excellent example of whyLocation Is Essential when Purchasing Real Estate.
How to Find the Gross Building Area of a Real Estate Property
The first step in finding the gross building area of a Real Estate Property is to measure it against the footprint of the building. Start at the base of the building and measure outward. Add or subtract the width of the roof in square feet from the total surface area to get the gross building area in square feet. Note that the building may not be in the best location for this measurement. Either manual or automated technology should determine the GBA. Some real estate professionals may use a combination of these methods to optimize the value determination of a property. mentioned by founder of Problem Property Pals.
Why Is the Gross Building Area Important in Real Estate?
The Gross Building Area is an important consideration in real estate for several reasons. First, it is a key factor in the determination of the marketability of a property. If the GBA is low, then the profitability of the building will be challenged. Additionally, the presence of unplanned uses can potentially challenge the measurement of GBA. Unplanned uses may include parking lots, maintenance bays, storage areas, loading areas, and walkways. While it is not always possible to identify all of these uses in advance, a variety of means can be used to challenge the GBA measurement. Kurt Walker, founder of Cream City Home Buyers.
Different Types of Real Estate That Could Be Valued Based on their GBA
There are many types of real estate that could be valued using the gross building area method. Storefronts, condominiums, and resorts are all real estate types that would benefit from this method.
How to Determine Your own GBA
The first step in determining your own GBA is to map out the footprint of the building. This is to ensure that you are measuring the true size of the building. If you are measuring against the front facade of the building, you will likely miss important structural elements like foundation, walls, and roof. You can also use a survey to determine the actual GBA of a building Once you have the GBA value, you can use that number as the base to determine how profitable the building is expected to be. If the building is underperforming, you can use the low GBA to your benefit by raising the price. mentioned by Matt Bigach, real estate expert and founder of We Buy Houses For Cash.
Bottom line
The GBA in commercial real estate is a key consideration in real estate valuation. It is used to measure the size of the building relative to its neighbors and is an important factor in determining if a property is worth investing in. The key to finding the Gross Building Area of a building is to measure it against the footprint of the building. This could be done using a survey, a GPS device, or a measuring tool like a tape measure. If the building is underperforming, you can use the low GBA to your benefit by raising the price. The Gross Building Area is the area measured against the footprint of the building, not including parking. This eliminates issues like buildings adjacent to other buildings that may challenge the measurement of GBA and also accounts for issues like interstitial space.
