Which type of properties does the price per square foot of net rentable area most often apply to?

The price per square foot of net rentable area is primarily associated with commercial properties, particularly office buildings. This measurement is significant in the real estate industry as it allows investors and appraisers to compare properties on a uniform basis.

In the case of office buildings, net rentable area refers specifically to the space that can be leased to tenants, excluding certain areas such as common spaces and facilities. This allows for an accurate assessment of how much rental income the specific space can generate, which is crucial for investment valuation and decision-making.

While it is possible to analyze price per square foot in other types of properties, such as residential homes or industrial warehouses, the practice is less common in those contexts because residential properties might be evaluated differently, focusing on overall home value and features rather than solely rental potential. Agricultural land usually doesn't fit into this category either, as its valuation often relies on factors like crop yield potential, land use, and market demand rather than rental income. Thus, the focus on net rentable area specifically highlights the characteristics of commercial spaces like office buildings where rental income is a primary driver of value.