Encyclopedia
Price per square foot
Price divided by building area.
For example: A buyer compares buildings using price per square foot. (Illustration only, not a real deal.)
This is a general industry term with no single official definition. Your lease or contract wording controls.
Example only, not a real client. Say two strata office units are listed at different prices. Dividing each price by its area shows one is priced higher per square foot. You then check whether its better location or finish justifies the gap.
What I’d tell a friend
Price per square foot is a quick check, not a final answer. Make sure areas are measured the same way.
Why it matters to you
It's handy for a first look, but it ignores income, condition and how the space was measured. Paying a low price per square foot for a building that needs a new roof is not a bargain.
How to use it in your deal
Buyers should check which area is used, gross, rentable or strata lot area, and whether mezzanines are included, before comparing. Pair price per square foot with income measures for leased buildings, and with land value per buildable foot for development sites. Look at age, condition, ceiling height, loading and parking, since these drive price within a type.
Sellers should be ready with measured drawings and recent comparable sales. Appraisers adjust comparables for differences rather than using one average. Tenants can use asking rents per square foot the same way, again checking which area is used. Owners deciding whether to buy or lease can compare the two per square foot, but remember ownership carries other costs and benefits. Check whether the area is gross, rentable or usable before comparing.
Mistakes I see
Comparing different area measures. Including land-heavy sites. Ignoring mezzanines. Using outdated sales.
In BC and Vancouver
No statute defines it. Strata plans filed at the Land Title Office show strata lot areas. BC Assessment shows some building details.
Official sources: Land Title and Survey Authority of BC · BC Assessment appeal guide
What it is
Price per square foot is the sale or asking price divided by the building or unit area. It lets you compare properties of different sizes.
For land, price per buildable square foot is often more useful than price per square foot of land.
Watch for
Areas can be measured differently, such as rentable, usable or gross. Compare like with like.
Income, lease terms, condition and location can matter more than size. Use it with capitalisation rate (cap rate) and comparable sales, and ask me to adjust for differences between buildings.
Questions to ask before you sign
- Which area is used?
- Are mezzanines included?
- Are comparables really similar?
- Is land value driving the price?
- How recent are the sales?
Keep reading
Related terms: Comparable sale (comp), Rentable area
Working through this right now? Questions are free. Book a 15-minute call or call or text 604 256 2002, and I’ll give you a straight answer.
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General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.