There are three methods landlords use to charge electricity:
- Directly Metered Electric: This is the most cost effective method for the tenant. The tenant pays the utility company directly only for what it uses. A typical office tenant will pay between $1.50 and $2.00 per square foot per year.
- Sub-metered Electric: The landlord installs a meter in the tenant’s space and charges the tenant for utility use. The landlord generally charges a markup for any administrative expenses incurred. This markup could fall between 3% and 20%. A high markup can probably be negotiated down. The cost per square foot is generally between $2.00 and $2.40.
- Rent Inclusion: This is the least advantageous for the tenant;
in fact it is generally a profit center for the landlord. Furthermore,
New York City has a 3.9% occupancy tax on the base
rent of a lease.
Thus, this method ends up costing the tenant not only a high markup
for electricity, between $2.50 and $3.00 per square foot, but the tenant
also pays a tax to the city on its electric use because it is included
in the rent.
Below is a chart designed for a frequently asked question,
"How many watts of electricity per square feet do I need?" |
| |
|
WATTS PER SQUARE FOOT
|
TYPE
|
A/C
|
REQUESTED
|
USED
|
| |
| Normal Office |
Central |
5 - 7 watts |
3 - 5 watts |
| Normal Office |
Package |
8 - 12 watts |
6 - 8 watts |
| Data / Computer Center |
Package |
25 - 35 watts |
15 - 25 watts |
| Trading |
Supplemental |
15 - 25 watts |
10 - 15 watts |
| Trading |
Package |
25 - 30 watts |
15 - 25 watts |
| Telecom Facility |
Package |
Varies |
Varies |
| |
Code stipulates that office usage receive 6 watts PSF.
AMPS x Volts = Watts
Wattage = AMPS x Volts x 1.732 x .85
Watts per square foot = Watts / Square Footage |
Furthermore, electricity requirements are very complex. It is imperative to hire an engineer during the lease negotiations and planning process to ensure that you meet all your electrical needs.