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Class system Commercial building classification is not an exact science by Heather Setka WHEN SKI- ERS HIT the slopes, they usually know if their skills are up to taking on a black diamond run, or whether they should stick to the greens and blues. But it can be tricky, because the ratings are relative — there’s no universal standard for what constitutes each classification. The same might be said of office buildings and their own ranking system. It’s a setup similar to the colour and shape ratings for ski runs, but commercial buildings receive letter designations: AA, A, B and C. And as with ski runs, it’s a fluid evaluation system that compares facilities with each other rather than with a fixed standard. WHO DECIDES? The City of Calgary’s assessment department creates the classification to determine where a building sits on the spectrum. Harvey Fairfield, deputy city assessor, says the classification reflects what happens in the marketplace. He adds that there’s “no rigid framework” for the final classification. However, there are some obvious factors to consider. WHAT ARE THE FACTORS? A few key components are the foundation of the ratings: size, quality, age and location. A more modern building will likely receive a higher classification, for example. New buildings are constructed to the highest standard, Fairfield says. Additional factors are building functionality, number of floors, total rentable area, floor plate, type and quality of construction, parking availability and capacity, quantity of retail space, tenant amenities and rent-generating capability,” as listed on the City’s website. WHAT IT ALL MEANS Of course, such a classification system can be controversial. For one thing, it’s tough to improve ranking. “Once the class is set, [a building] remains in that classification,” Fairfield says. “Renovation might improve that classification,” but raising a building’s rating is challenging. Maury Dubuque, Colliers International’s Vancouver managing director, says prestige, along with the ability to charge higher rental rates, drives the desire to go after that A or AA rating. He says the classifications work as a benchmark. “They allow us to compare buildings of a like quality.” DO TENANTS ALWAYS CHOOSE A BUILDING FOR THE RIGHT REASON? It really depends on needs and wants. In choosing which run to ski, we have a general idea of what we’re looking to experience or achieve. Tenants should ask themselves the same questions when it comes to considering an office space. After all, the higher the classification, the higher the rent (see sidebar). Dubuque says the primary driver for tenants should be what’s right for their people and their business. CLASS AA: Described by the City as the “most prestigious buildings competing for premiere office users,” this category certainly sounds the best. With “high-quality standard finishes, state-of-the-art systems, exceptional accessibility and a definite market presence,” an AA building is suited to an expert client. Just like a black diamond run, it’s not for newbies. CLASS A: A-designated buildings are similar to AA, but for whatever reason — age, location or size — they don’t compete at the same rental rate. They’re the perfect choice for many an experienced tenant. CLASS B: THE BLUE SQUARES OF BUSINESS Class B buildings serve a wide range of users, with rents in the average range. In the same way the average skier spends a lot of time on the blue runs, and this category is a very active one, with some solid value to be found. By the numbers As of July 1, 2014, here’s where Calgary’s buildings ranked: BUILDING CLASS NUMBER OF BUILDINGS RENTAL RANGE PER SQ. FT. AA 13 $32.50-$39.50 A 39 $31.50 B 52 $17.50-$30.50 C 60 $16.50-$19.50 CLASS C: THE GREEN CIRCLE OF REAL ESTATE The rent for Class C space is below average. And like a green run, it’s a fine place to start — and for many tenants, it’s all they need. ■ 14 BOMA CALGARY BUILDING GUIDE 2015-2016
Skills are on target People from a variety of backgrounds find commercial real estate careers a perfect fit T HEY COME FROM classrooms, boardrooms and even locker rooms. People with all kinds of backgrounds and skill sets are drawn to careers in commercial real estate. “People who have previously worked as teachers, athletes, business owners — and from almost every other background — have built careers in commercial real estate,” says Jeanette Sutherland, manager of workforce and productivity at Calgary Economic Development. “People who enter the industry with strong networks seem to do particularly well in the sales areas. We also see people from other industries in finance and sales, including professionals such as investment bankers, going into commercial real estate as landlords, property managers and brokers. “There really is room for people with all kind of skills in commercial real estate.” People making a transition into a second career or entering the industry as young adults can find opportunities, as both adby Shannon Sutherland Smith vanced and entry-level positions abound. For its part, BOMA Calgary has been diligent in ensuring that the upcoming generation is aware of the career opportunities in commercial real estate. The NextGen committee at BOMA Calgary is a group of professionals under the age of 35 in the commercial real estate industry. Its mandate is to attract and retain talent by educating, informing and connecting with students and young professionals. “The commercial real estate industry is a well-kept secret. Not many outsiders know it exists,” says Melissa Heer, a senior property manager with Enright Property Management Ltd. who was chair of the committee last year. Industry experience is not always necessary, so even those who didn’t set out to build a career in commercial real estate may find doors opening despite what may seem to be an unrelated resumé. “Transferable skills can help offset your lack of experience,” says Adrienne Hill, with Alberta’s Ministry of Jobs, Skills, Training and Labour. “You can show employers you have developed many of the skills they are looking for — even if you don’t have direct job experience in the area you are applying for.” She says many essential workplace skills, including the ability to evaluate and make decisions, communicate effectively and work independently or collaboratively, along with computer literacy, are applicable to a broad range of careers. For example, people with skills in managing assets might find it a relatively easy transition into property management, and those who have built careers in sales by analyzing people’s needs might find a career in commercial real estate sales and leasing to be a good fit. “We are seeing a lot of people with sales skills seeking employment right now after some major retailers have had to let people go,” says Sutherland. “Sales skills can be very valuable in commercial real estate.” Although there has been some belt-tightening in Calgary, buildings still need to operate — boilermakers, landscapers and other skilled tradespeople are all required. There also tends to be activity in commercial real estate as building owners and managers adapt to change, so leasing agents can become quite busy. Oil and gas industry workers, such as power engineers, may want to explore careers in building operations at times when jobs in the energy sector become a little scarcer. Those wanting to explore a career as a building operator might want to consider the Building Operator Level 3 online course offered through BOMA Calgary. The course, a 50-module program equivalent to 30 hours of classroom instruction, is an introduction to building operations. “We see a lot of people transitioning into commercial real estate because there are so many opportunities for professional development,” Sutherland says. “It’s an industry that is very proactive in making sure there are training opportunities and career support.” Heer says she is dedicated to getting the word out that people who move into the industry end up with more than just jobs — they are able to build life-long careers. “I am very proud to be a part of this industry and I wanted others to know about it,” she says. “The industry has a strong sense of community. It’s a small world and not many people leave it once they are established, because there are so many diverse opportunities within it.” ■ “There really is room for people with all kinds of skills in commercial real estate.” The pulse of Calgary’s commercial real estate industry TM 15
Page 1 and 2: BUILDING GUIDE INSIDE Building list
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Page 7 and 8: FIND YOUR SPACE The pulse of Calgar
Page 9 and 10: BUILDING GUIDE A publication of BOM
Page 11 and 12: Sense of optimism Projects are gene
Page 13: Renewal comes in many forms A new g
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Page 23 and 24: ANALYSIS: DOWNTOWN Confidence conti
Page 25 and 26: ANALYSIS: BELTLINE Changing Expecta
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