What is the difference between gross area and net area?

Gross area is the full floor area measured to the outside of the exterior walls. Net area is what is left after you take out the walls and other space nobody can use, so it is always the smaller number.

What counts as unusable depends on the property. In an office building, net area usually leaves out the exterior walls, stairwells, elevator shafts, and mechanical rooms. Commercial leases often define their own version, and many follow the measuring standards published by BOMA.

Houses work differently. An appraisal does not report a net figure at all. Gross living area under ANSI Z765 is a gross measurement, taken to the outside of the walls, but it only counts finished living space above ground. It keeps the walls and drops the garage, the basement, and any unfinished rooms.