1. Purpose of this Document

This document explains why, when space is allocated to departments for internal recharge purposes, the total allocated space shown on individual floors may be higher or lower than the physical rentable area of those floors. This situation can appear counterintuitive at first glance, but it is a natural and expected outcome of allocating shared (common) space at a building level rather than a floor level.

The intention of this paper is to:

• Describe how space is defined and allocated
• Explain the distinction between direct space and shared space
• Demonstrate, using worked examples, why apparent discrepancies occur
• Provide a clear mental model for interpreting floor-level reports correctly

This explanation applies particularly to multi-floor tenancies in the US context, where both usable and rentable areas are defined and used for internal recharges.

2. Key Definitions

Before exploring the issue in detail, it is helpful to clarify several commonly used terms.

2.1 Directly Assigned Space

Directly assigned space is space that is clearly and exclusively attributable to a single department or customer. Examples include:

• Individual desks or workstations
• Offices
• Team rooms or dedicated labs

This space is typically easy to understand and reconcile because it exists physically on a specific floor and is used by a specific group.

2.2 Floor Common Space

Floor common space supports occupants on a specific floor. Examples include:

• Local circulation and corridors
• Pantries or break areas serving that floor
• Small meeting rooms primarily used by that floor’s occupants

Floor common space is normally allocated only to departments occupying that floor.

2.3 Building Common Space

Building common space supports occupants of the entire building, regardless of where it is physically located. Examples include:

• Large meeting and conference suites
• Central reception areas
• Shared training facilities
• Amenities intended for use by all occupants

Although building common space physically exists on specific floors, its functional purpose is building-wide.

3. How Space Is Allocated

3.1 Building-Level Allocation Principle

For internal recharge purposes, building common space is allocated proportionally across all departments occupying the building. The allocation is typically based on each department’s share of direct space or headcount, depending on the chosen methodology.

The crucial point is this:

Building common space is allocated across the whole building, not reassigned to the floor on which it physically sits.

This ensures that all occupants who benefit from shared amenities contribute fairly to their cost.

3.2 Total Allocation Always Reconciles at Building Level

When allocations are viewed at the building level, the following will always be true:

• The sum of all departmental allocations equals the total rentable area of the building
• All building common space is fully allocated

Any apparent inconsistencies only arise when allocations are examined at an individual floor level.

4. Worked Example: A Simple Three-Floor Building

4.1 Building Overview

Consider a building with the following characteristics:

• Three floors
• Total rentable area: 3,000 square metres
• Total building common space: 600 square metres

The physical distribution of space is as follows:

• Floor 1: 1,200 m² (mostly departmental space)
• Floor 2: 1,200 m² (mostly departmental space)
• Floor 3: 600 m² (primarily building common space such as conference rooms)

4.2 Departments and Direct Space

Two departments occupy the building:

• Department A: 1,200 m² of direct space (primarily on Floor 1)
• Department B: 1,200 m² of direct space (primarily on Floor 2)

Total direct space equals 2,400 m². The remaining 600 m² is building common space.

4.3 Allocation of Building Common Space

Since both departments occupy equal amounts of direct space, the building common space is allocated equally:

• Department A: 300 m²
• Department B: 300 m²

Each department therefore has a total allocated area of 1,500 m².

At a building level, the reconciliation is straightforward:

• Total allocated space: 3,000 m²
• Total building rentable area: 3,000 m²

5. What Happens When Viewed by Floor

5.1 Floor 1: Apparent Over-Allocation

Floor 1 has a physical rentable area of 1,200 m². Department A occupies most of this floor directly.

However, when reviewing allocations:

• Department A’s direct space on Floor 1 might be 1,100 m²
• Department A’s allocated share of building common space is 300 m²

This results in a total allocation associated with Department A of 1,400 m², which exceeds the physical rentable area of Floor 1.

This is not an error. The additional 300 m² represents Department A’s share of building common facilities that are physically located elsewhere.

5.2 Floor 3: Apparent Under-Allocation

Floor 3 contains most of the building’s common facilities and has a physical rentable area of 600 m².

Because this space is allocated across all departments rather than retained on the floor itself:

• Floor 3 may show little or no departmental allocation
• In some cases, only a small allocation may appear (for example, for conference services)

This can make Floor 3 appear significantly under-allocated when viewed in isolation.

Again, this is expected and correct.

6. Why Floor-Level Reconciliation Is Misleading

A common assumption is that departmental allocations on a given floor should sum to that floor’s rentable area. This assumption does not hold when building common space is allocated at building level.

In reality:

• Floors with a high concentration of departmental space will appear over-allocated
• Floors dominated by building common space will appear under-allocated

Neither condition indicates a problem with the allocation methodology.

The only meaningful reconciliation point is the entire building.

7. An Analogy: Shared Services Costs

Building common space can be compared to shared services such as IT infrastructure:

• A data centre may be physically located in one part of a building
• Its costs are allocated across all departments
• No one expects the cost allocation to match the floor area of the data centre

Similarly, building common space is a shared resource whose cost is distributed based on usage or occupancy, not physical location.

8. Key Takeaways

The following points summarise the issue:

• Building common space is allocated at building level, not floor level
• Floor-level totals are not expected to match physical rentable areas
• Apparent over- or under-allocation by floor is normal and unavoidable
• Correct reconciliation should always be performed at building level

Understanding this distinction helps avoid confusion and ensures that internal recharge figures are interpreted correctly.

9. Conclusion

Floor-level discrepancies in space allocation are not errors, inconsistencies, or data quality issues. They are the logical result of a fair and consistent approach to allocating shared space across all building occupants.

By viewing space allocations through a building-level lens rather than a floor-level one, the numbers become clear, defensible, and internally consistent.