what is gba in real estate

Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more generally) buildings or housing in general.

Real estate is different from personal property, which is not permanently attached to the land, such as vehicles, boats, jewelry, furniture, tools and the rolling stock of a farm.

Residential real estate

Residential real estate may contain either a single family or multifamily structure that is available for occupation or for non-business purposes.

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Residences can be classified by and how they are connected to neighbouring residences and land. Different types of housing tenure can be used for the same physical type. For example, connected residences might be owned by a single entity and leased out, or owned separately with an agreement covering the relationship between units and common areas and concerns.

As an investment

In markets where land and building prices are rising, real estate is often purchased as an investment, whether or not the owner intends to use the property. Often investment properties are rented out, but “flipping” involves quickly reselling a property, sometimes taking advantage of arbitrage or quickly rising value, and sometimes after repairs are made that substantially raise the value of the property.

Luxury real estate is sometimes used as a way to store value, especially by wealthy foreigners, without any particular attempt to rent it out. Some luxury units in London and New York City have been used as a way for corrupt foreign government officials and businesspeople from countries without strong rule of law to launder money or to protect it from seizure.

Valuation Management Group’s quality assurance reviewers routinely review a variety of appraisal reports covering nearly every property type imaginable.  Occasionally clients will ask our opinion on the size of the building; they have concerns if the appraiser measured correctly or they may not be familiar with what area is included in the calculations provided. Our goal is to help answer some questions we frequently receive regarding building size and provide some explanations of industry acronyms.

ANSI

The American National Standard Institute (ANSI) is a non-profit, private organization that has a mission to facilitate standards throughout many various industries.  Under that mission, ANSI has created national standards for single family residential measurements in the appraisal industry.

Under ANSI standards, Gross Living Area (GLA) is the term used in most residential appraisal reports.  GLA is defined by The Dictionary of Real Estate Appraisal as the “Total area of finished, above-grade residential space; calculated by measuring the outside perimeter of the structure and includes only finished, habitable, above-grade living space.  (Finished basements and attic areas are not generally included in gross living area.  Local practices, however, may differ.)”  The appraisal industry relies on  these standards in order to ensure  appraisers are comparing apples to apples when measuring and valuing a property.    Additionally, a consistent measuring method can reduce liability for parties involved in a residential purchase transaction.

One aspect of the GLA that garners many questions and often creates confusion is when the living or finished area in the basement is not included in the GLA, particularly if the home is listed and being marketed with a higher GLA that includes the finished area of the basement.   Aside from ANSI standards, the GSE’s (Fannie Mae and Freddie Mac), FHA/HUD, VA  and the USDA  instruct appraisers to count only finished above-grade areas when calculating the GLA.   If any portion of the improvements is below-grade, regardless of quality or the presence of windows, it would not be included in the GLA, but would be accounted for in the basement & finished rooms and below grade of the sales comparison grid.

GBA

Commercial appraisals are not typically held to ANSI standards.  Since commercial buildings are commonly traded for business occupancy or rental income, the industry accepted measurement unit is Gross Building Area (GBA).  Gross building area typically includes all heated and cooled areas.  Basements may be included in this calculation if the appraiser determines that the finish, access, and utility are similar to the above grade areas of the building.  It is common to include unheated and/or uncooled areas of industrial buildings in the GBA since the use of that space is typically critical to the function of the property type.

NRA

Another measurement term sometime used in commercial real estate appraisal is Net Rentable Area (NRA).  Net rentable area is actual square footage of a building that may be leased or rented to tenants; the area upon which the lease or rental payments are computed.  It usually excludes common areas, elevator shafts, stairways, and space devoted to cooling, heating, or other equipment.  This term is also called Net Leasable Area (NLA) in some areas of the country.

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Valuation Management Group is a national, full service appraisal management service company that manages the appraisal process for community banks, mortgage bankers and credit unions. We offer a  full array of commercial and residential appraisal products and services. We take the appraisal process from ordinary to extraordinary.

Also know, what does GBA mean on an appraisal?

Gross Building Area

Similarly, what is GBA in construction? Gross Building Area (GBA) The sum of areas at all floor levels, including the basement, mezzanine, and penthouses included in the principal outside faces of the exterior walls without allowing for architectural setbacks or projections. (

Secondly, what is GBA area?

3.1 Gross Building Area [GBA] Gross Building Area (GBA) is the most commonly used method of measurement. The Gross Building Area is the area of the building at all building levels, measured between the normal outside face of any enclosing walls (or the centre line.

What is the gross living area of a house?

GLA Measures Above Ground Living Areas The main rooms and bedrooms, hallways, bathrooms and kitchen footage is calculated to determine the gross living area. Finished attic space with a minimum of 5-foot walls and heat is calculated for GLA.

WHAT DOES GBA MEAN IN COMMERCIAL REAL ESTATE?

You might have been looking for a commercial property, and wondered, ‘What does GBA mean in commercial real estate? In the property market, particularly in regards to commercial real estate, there are many different ways of calculating the area of a property or building. As such, it is important to understand the differences between them, so when you look for your next commercial property, you will be able to understand exactly what you are paying for. We have gone through and explained some of the key terms used when calculating the area of a commercial property.

WHAT DOES GBA (GROSS BUILDING AREA) MEAN?

GBA, or Gross Building Area, is a unit of measurement unit used in commercial property valuations. This measurement differs from the measurement type of residential real estate, which predominantly uses GLA or Gross Living Area.

GBA includes the total enclosed area of a building and the sum total of all floors. This is determined by the slab area measured to the exterior surface of the exterior walls, excluding elevator shaft openings.

WHAT IS GLA (GROSS LIVING AREA)?

Gross Living Area has been defined by the Dictionary of Real Estate Appraisal, as the “Total area of finished, above-grade residential space; calculated by measuring the outside perimeter of the structure and includes only finished, habitable, above-grade living space. Finished basements and attic areas are not generally included in the gross living area.”. Or put simply, the habitable area of the property, including both heated and cooled areas.

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GLA will also tend to include common areas and areas that the tenant can use but do not necessarily occupy. This can include areas such as elevator space, common bathrooms, stairwells and other shared spaces. It usually includes certain common areas, elevators, common bathrooms, stairwells. And other portions of the building that the tenants do not occupy, but can use.

Tip

Appraisers measuring gross living area will not include below-ground space as part of their square footage equation. But will include the space in their appraisal valuation.

Measure Externally for GBA

Exterior measurements of a two-to-four family building are used to calculate the Gross Building Area. The interior must be finished to count in the calculation. The main difference between GLA and GBA is that below-grade living space is included in the GBA. Interior stairways, hallways, storage rooms and laundry rooms are part of the GBA. If the building has an exterior stairway, it is not included in the footage measurement.

Basement Not Included