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Facility Use Agreement Calculation
Occasionally an outside company will want to rent lab space at ISU. The most common scenario is that
they plan to move to the ISU Research Park at some time in the future but are waiting for space to open up or be remodeled. Below is the process that should be followed:
- Sponsoring department contacts Financial Accounting and Reporting (FAR) for a rate. The sponsor needs to know the specific room(s) in which the company
would be housed.
- FAR will calculate the monthly rate for the room(s). See below for details on what is included in the rate.
- Sponsoring department fills out the facility use agreement template.
The contract is then signed by the company, sponsoring department, College dean and Senior VP for University Services Office, Pam Cain (interim).
- FAR establishes a department detail within the university's Commercial Space Rent Worktag (PG101454) for each rental agreement.
- Sponsoring department invoices the company through ISU Accounts Receivables. Company pays rent which is deposited inot the Commercial Space Rent/department detail.
- Space rent income is earmarked for building repair within the college.
- The company must provide a certificate of insurance to verify coverage for the rented space. Questions regarding insurance contact Deb Cramer in the
Office of Risk Management.
The rate per square foot will consist of four elements and will be computed by the Controller's Department:
- The basic O&M rate charged under the budget model. This will be consistent across all buildings.
For FY22, this is $10.38 per square foot.
- The average utility rate per square foot for the building being rented per FP&M Utility Enterprise contact Mark Kruse.
- The depreciation per square foot for the building being rented per the annual depreciation schedule. Building square footage is found on the FP&M website.
- The interest expense per square foot for the building being rented per the most recent
Facilities & Administrative rate proposal.
Annual room cost is the cost per square foot times the square footage of the room. Monthly rate is 1/12th
of that calculation. A clause will be added to the lease agreement that allows the rates to be adjusted annually.
The model described above is just for the rental of space.
If equipment will also be rented by the company, the equipment number and whether this will be exclusive use will need to be provided to FAR as well.
FAR will verify that the equipment was not purchased with Federal funds. The department should determine the intended usage and FAR will compute a depreciation
factor based on anticipated use. Equipment rental income and any other expenses reimbursed to the department (i.e.Telecommunication charges) may be deposited into the
department's own account instead of the university's Commercial Space Rent account.
- When requesting the use of equipment to be included in the agreement, please provide the equipment tag number for each piece of equipment.
- Fully depreciated equipment will be assessed a rate consistant with the information as if it was not fully depreciated. This is to ensure compliance with
the university's Competition with the Private Sector policy.
- When requesting the use of equipment that is under the capitalization threshold of $5,000, the rental rate will be $40/month. (The monthly rate is based on the average costs of
non-capitalized equipment ($1-$4,999) depreciated over 5 years.)
- Requested use of equipment already included in a fee-for-service (FFS) operation should be billed from the FFS. The rental should not be included in the
Please contact the FAR staff with any questions regarding the facility use agreement process.