Tenants are not only charged for the square footage that they occupy (called the “usable square footage”). They are also responsible for things that might not belong to any tenant – things like corridors, elevators, stairwells, etc. The loss factor is calculated by dividing the difference of the usable square footage and rentable square footage by the rentable square footage. So if a tenant needs 10,631 usable square feet and the loss factor is 27% (typical for full floors now in Manhattan, and much higher for multi-tenant floors), the tenant needs to be prepared to budget for 14,563 rentable square feet.