Office Standard - BOMA

Applying the
New BOMA Standards to
Boost Property Value
William B. Tracy, MBA, NCARB

Copyrighted Materials
> This Presentation is protected by US and
International copyright laws. Reproduction,
distribution, display and use of the presentation
without written permission of BOMA International
is prohibited
> Copyright © 2010 by BOMA International, All
rights reserved

Learning Objectives
> Understand the Role of Measurement Standards
How they came to be
Role in Real Estate Market
Impact on Asset Value
> Know the BOMA Family of Standards
When to Apply Each Standard
Distinguishing Features
Key Concepts
Terminology
> Discover BOMA Standard Tricks and Traps

The Good Old Days

Today in Europe
> Meter is official
linear measure
> Most EU countries
have legal building
measurement
standards
> Uniform basis for
valuation, leasing,
taxation and codes

Building Measurement Practices in
North America
Bldg.
Codes
Cost
Estimating
Facility
Mgmt.
Office
Space
Local
Tax
Ass’mt
Property
Mgmt.
Appraisal
Leasing
Retail
Space
Residential
Space
Industrial
Space

The Smoot
Plaque on Harvard Bridge
Massachusets, USA
“This plaque is in honor of THE
SMOOT, which joined the
angstrom, meter and light year as
standards of length, when in
October 1958 the span of this
bridge was measured, using the
body of Oliver Reed Smoot, MIT
‘62 and found to be precisely
364.4 smoots and one ear.”
Smoot’s Ear: The Measure of
Humanity by Robert Tavernor

BOMA Standards
> American Consensus Standards
Represent most common industry measurement practices
> ANSI Certified
American National Standards Institute
Non-government , private, non-profit organization in New York
Stringent requirements for standards-making process
> Voluntary
There are no U. S. laws requiring use of BOMA Standards
> BOMA Floor Measurement Standards Committee
Author of BOMA Standards
Representatives from across the USA & Canada
Representatives from building owners, property managers, tenants
and other industry professionals
Expertise in management of specific property types
> Up to date
ANSI requires review every 5 years, re-certification every 10 years

Asset Value is direct function of
Square Footage
> Three Basic Appraisal Approaches
1. Replacement Cost Approach
Construction Area X Comparable cost per square foot
2. Comparable Sales Approach
Gross Area X Comparable Sales per square foot
3. Income Approach
Rentable Area X Comparable Rent per square foot
> The Three Most Important Things in Real Estate?
With apologies to William Zeckindorf,
Location, Location, Square Footage!
If you have no square footage, there is no there there!

Measurement Standards Help Make
Real Estate Markets!
Jones Lang LaSalle

The BOMA Family of Standards
> The Gross Areas of a Building (2009)
> Industrial Buildings (2012)
> Retail Buildings (2010)
> Multi-unit Residential Buildings (2010)
> Office Buildings (2010)
> Mixed-use Buildings (2011)
All BOMA standards measure only buildings
Site improvements like on-grade parking, sidewalks, patios,
amphitheatres, garden centers, stock yards and the like are
generally NOT measured by the standards

IFMA/BOMA Uniform Approach
> Published in 2007
3-year task force
Facility management
Property management
> Terminology
OSCRE compliant
> Taxonomy
Classes of space
> Clarify
Charts & illustrations
> Foundation for future BOMA Standards

The Gross Areas of a Building
> New in 2009
> All Occupancies
> Construction
estimating
> Appraisal
> Leasing
Single tenant buildings

The Gross Areas of a Building
> Uses IFMA/BOMA
terminology &
concepts
> A foundation for
2010 Office standard
2010 Multi-unit
residential standard
2010 Retail standard
2011 Mixed-use
standard
2012 Industrial Standard

The Gross Areas of a Building
> Two Methods:
• Construction Gross
(CGA)
Total constructed or
covered area
• Exterior Gross Area
(EGA)
Excludes unenclosed
areas (Balconies, roof
terraces, colonnades,
decks, etc.)
> Omits Voids

Industrial Buildings
> Re-published 2012
> For leasing
Factories
Warehouses
Flex Space
> 51% rule for mixed
occupancy
Except Flex Space
> Rentable area
Coordinated with BOMA
2010 Office Standard

Industrial Buildings
> Two Methods:
> A-Exterior Wall
Outside surface of
enclosing wall
Coordinated with BOMA
Gross Standard
> B-Drip Line
Edge of roof structure

Retail Buildings
> New in 2010
> For Leasing
Shopping centers
Strip centers
Big box retail
> Uses GLA - Gross
Leasable Area
Not Rentable Area
> Based upon the
Gross standard

Retail Buildings
> GLA includes all
perimeter walls
Walls between tenants
are shared
> Common Areas
Include malls, stairs,
elevators, etc.
Are not allocated to
tenant areas
> Ancillary Areas
Restaurant patio seating,
garden centers, etc.

Multi-unit Residential
> New in 2010
> Residential
Buildings with 4
or more units
Apartments
Condominiums
Common Interest
Communities
> Individual units
> Based upon
Gross Standard

Multi-unit Residential
> Two Methods
> A – Gross Unit Area
Outside face of unit
enclosing walls
> B – Net Unit Area
Inside face of unit
enclosing walls

Office Buildings
> Updated 2010
> Replaced 1996
version
> New terminology
Service areas
Amenity areas
> Updated concepts
External circulation
Tenant Storage
Enclosure
Mezzanines
Restricted headroom

Office Buildings
> Two Methods
Total rentable areas for the
building are identical
> Method A
Legacy Method
Floor-by-floor load factors
> Method B
Single load factor
Load factor is the same on
all floors
Requires Base Building
Circulation

Mixed-Use Properties
> New in 2011
Updated in 2012
> Mix of uses
Residential
Office
Retail
Industrial
Other
> Ground-level retail
in an office building
Incl. in Office Standard

Mixed-Use Properties
> Disentangle into a
“virtual building”
for each use
> Allocates Mixed-
Use Common Areas
> Each virtual
building measured
by appropriate
BOMA Standard

Campus settings
> Groups of buildings under common ownership that
share common assets (campus common area)
Physical plant
Management office
Conference center
Cafeteria
> Identification and allocation of Campus Common
Area
> Will be added as addenda to each BOMA Standard
Included in 2012 BOMA Industrial Standard
Working on Office Standard Campus Addendum for 2012

The 1996 BOMA Standard
> Still in use!
> Still available
from BOMA.org
> Need companion
document
> Terminology &
methods different
from newer
standards

Tips and Tricks
> Due Diligence
> Documentation
> Lease Language
> Unenclosed Areas
> Amenities in Buildings with High Load Factors
> The Office Standard Method B Advantage

Due Diligence Case Study
> Multi-tenant
office building
Leases cited BOMA
Office Standard
> Seller claimed
108,000 RSF
> BOMA Study
showed 106,000
RSF
Cost: $5,000

Due Diligence Case Study
> Difference
equated to $0.5
Million in
purchase price
> Seller measured
to the outside of
the stone bumps
Not BOMA Dominant
Portion!

Documentation Case Study
> Large mixed-use
building
> Competing for
large tenant
Tenant has professional
representative
> Building R/U
Ratio
Question: Why 1.0820?
What comprises Building
Common Area?

Documentation Case Study

Documentation Tools
> Adobe Acrobat
View & measured files
ending in “.pdf”
> Autodesk Design
Review
View & measure files
ending in “.dwf”
and“.dwg”
> AutoCAD WS
View & measure online
AutoCAD files in your
browser - PC or tablet!
AutoCAD WS

Good Documentation will:
> Deflect questions about Rentable Area
Calculations
From sophisticated tenant representatives
From sophisticated tenants
From lease auditors
She/he who has the best documentation wins!
> Preserve Rentable Area
Record of actual measurements, not negotiated rentable area
> Help to qualify your building for BOMA-360
Good documentation of Rentable Area is a factor in awarding
BOMA-360 designation
A hallmark of superior property management

Lease Language
> When to cite a BOMA Standard in the lease?
A BOMA Standard is applicable to your building
You are certain that your measurements confirm to the standard
> Why cite a BOMA Standard in a lease?
The clearest and most complete methodology available
Incorporates consensus measurement practices
Tolerance & dispute resolution procedure
> How to cite a BOMA Standard in a lease?
Use the ANSI Standard designation and remember to add the
method:
Office Standard: “ANSI/BOMA Z65.1-2010 - Method B”
Industrial Standard: ANSI/BOMA Z65.2-2012 - Method A”
Gross Standard: “ANSI/BOMA Z65.3-2009 - EGA”
Residential Standard: “ANSI/BOMA Z65.4-2010 – Method A”
Retail Standard: “ANSI/BOMA Z65.5-2010”

Lease Language
> Use the correct terminology in the entire lease
document
Office Standard: “Rentable Area” and “Occupant Area”
Industrial Standard: “Rentable Area” and Occupant Area”
Gross Standard: “Exterior Gross Area” or “Construction Gross
Area”
Residential Standard: “Gross Unit Area” or “Net Unit Area”
Retail Standard: “Gross Leasable Area”
> Most standard lease forms already incorporate
the correct terminology
Exception 1: An office lease for a single tenant occupying an entire
building. You need to replace “Rentable Area” with “Exterior
Gross Area”
Exception 2: In office and industrial leases, replace “Usable Area”
(if mentioned) with “Occupant Area”

Unenclosed Areas in the
BOMA 2010 Office Standard
External Circulation
Loading Docks
Trash Area
Parking Elevator Lobby
Exterior Door Set-back

External Circulation

External Circulation

Loading Dock

Trash Area

Trash Area and Loading Dock

Parking Elevator Lobby

Exterior Door Set-backs

Amenities and High Load Factors
Health Club
Auditorium

Amenities and High Load Factors
In building with high load factors, reclassifying amenities to occupant area
(and charging for their use) is a better strategy than capping the load factor

The BOMA Office Method B Advantage
> Method A calculate load factors floor-by-floor
On floors with less occupant area the load factor is higher
Large building service areas, upper atria and exterior set-backs can
reduce occupant areas on some floors
Floors with high load factors may be a problem to lease
> Method B calculates a single load factor for all
floors of a building
The load factor is the same on all floors of a building regardless of
the amount of occupant area on a floor.
A leasing advantage, but is that all?
> Method A and B Both allow capping of load
factors
In Method A, the cap can solve the problem of a high load factor on
particular floors without loss of rentable area on other floors
In Method B, the cap impacts all floors of a building equally

The BOMA Office Method B Advantage
640
RSF lost
390
RSF lost
1,030 RSF gained

Thank You!
BOMA Standards available at www.BOMA.org
Links to Official Interpreters
More help available at
www.BuildingAreaMeasurement.com