Price per existing square footage is the value of the building divided by its square footage. Price per buildable square footage assesses the potential of the land and what you have to spend to convert it. Price per existing square footage evaluates the property and what it is actually worth. A misconception many have about these two terms is treating buildable square footage the same as existing square footage. As a property owner, it's crucial to know these two terms, because together they tell you the value of the property, its development potential, and the investment risk you might be taking.

Example: You have a building with 10,000 sf of existing space and the sale price is $5,000,000. To find the price per existing square footage, divide $5,000,000 by 10,000 sf = $500 per existing square foot.