The BOMA Magazine - November/December 2009 by lprats

Experience the Power of the BOMA Network

November/december 2009

It’s Time to Lead Strategies for a Distressed Market

Plus: Elevating your Elevator’s ROI A New Age for the Office Standard Leading the Way at GSA—Bob Peck Comes Home

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November/December 2009 Volume 5, No. 6

24 30

office buildings :

standard methods of measurement and calculating rentable area

Time to Lead Laura Horsley

Are your leadership strategies in place to deal with a distressed market . . . and a distressed staff?

building owners and managers association (boma) international www.boma.org

Elevating Your Elevator ROI Sasha Bailey

[ i ]

Lindsay Tiffany

Tips for preserving one of your building’s most critical assets.

For advertising rates and information, contact Paul Hagen at Stamats Business Media 866-965-4205. Call for Nominations: Vice Chair and Executive Committee Members BOMA International’s Nominating Committee is seeking candidates for the position of vice chair and for five members of the Executive Committee to the Board of Governors. For further information, please contact BOMA International, c/o Ann Coslett, BOMA International, 1101 15th St., NW, Suite 800, Washington, D.C. 20005, telephone (202) 3266325; fax (202) 408-2699; e-mail acoslett@boma.org. Volume 5, No. 6 The BOMA Magazine November/December 2009, (ISSN 15324346), Copyright 2009. The BOMA Magazine is published bimonthly in January/February; March/April; May/June; July/August; September/October; and November/December by the Building Owners and Managers Association (BOMA) International, 1101 15th St., NW, Suite 800, Washington, D.C. 20005; Telephone 202-326-6300; Fax 202-326-6377; www.boma.org. Periodicals Postage paid at Washington, D.C. and additional mailing offices.

Setting New Standards

New floor measurement methodology option looks to simplify lease calculations.

DEPARTMENTS 6 8

10 12

MESSAGE FROM THE CHAIR Full speed ahead. Senate Real Estate Caucus launches, new legislation would increase energyefficiency tax deductions, RAND study on energy performance released.

STATE & LOCAL UPDATE BOMA/Houston celebrates 75 years of advocacy, cities face bumpy financial future.

CODES & STANDARDS UPDATE

AROUND THE INDUSTRY BOMEX draws a crowd in Montreal, Behringer Harvard “connects the dots” with BOMA 360. Plus, the latest class of BOMA 360 designees announced.

Anthony Costa

TRENDS TRACKER Robert Schiller

Creating a sustainable urban oasis…in the desert.

36 GREEN SCENE

AOBA’s Green Conference focuses on smart solutions.

Research Corner Are declining income retail numbers a sign of things to come for office?

40 Eye on Education

The other option for distressed assets: What property professionals should know about receivership.

LEADING THE WAY Newly appointed GSA Public Buildings Commissioner Bob Peck talks about the Recovery Act, establishing a “test-bed” of innovation in public buildings and his vision for his second time around as commissioner.

SECTOR WATCH Food for thought: GSA merges wellness and sustainability through food service.

LEGISLATIVE UPDATE

ICC hearings kick off in Baltimore, ASHRAE Energy Standard (90.1-2010) nears completion, ASHRAE unveils new building energy label.

POSTMASTER: Send address changes to: The BOMA Magazine, Attn: List Department, 1101 15th St., NW, Suite 800, Washington, D.C. 20005. Undeliverable U.S. copies should be sent to: The BOMA Magazine, Attn: List Department, 1101 15th St., NW, Suite 800, Washington, D.C. 20005. Return undeliverable Canadian addresses to: PO Box 875, STN A, Windsor, ON N9A 6P2.

Buyers’ Guide

Conference Connection

Check out the latest industry products and services.

Feel the power of the BOMA network. What past attendees are saying.

November/December 2009 BOMA 5

Message from the Chair

Full Speed Ahead In this issue’s cover story (Time to Lead, page 24), there’s a reference to leaders who make the mistake of putting the management of their company’s “human assets” on autopilot during a difficult market cycle, wrongly assuming that their best and brightest will stick around because of a perception that there’s nowhere else to go. In a broader sense, it’s not unusual for organizations and associations to fall into a similar pattern, assuming that a recession—and the reduction in resources it can bring—somehow means that expectations will not be as high and innovation and new programming can go on hiatus. BOMA members know that it doesn’t work that way. In fact, the leadership experts we interviewed for the cover story told us again and again that, despite the challenges an organization faces during a distressed market, these are often the times of greatest opportunities. Knowing that property professionals need real solutions today, not a year from today, BOMA has taken the opportunity in the past several months to roll out the kind of new programming to give BOMA members true competitive advantage. Case in point, since its launch late last spring: The BOMA 360 Performance Program has elevated the profile of scores of office buildings, giving owners and managers a highly visible way of showing that their building is a market leader. Check out the case study on page 18 to see how the BOMA 360 designation is resonating with current and prospective tenants at Behringer Harvard. Likewise, innovation also fueled the release of the new online EER. Benchmarking and measuring performance is a critical tool for not just surviving a down market, but setting a course for competitive recovery. The new tools available through the online EER allow practitioners to save time by instantly accessing millions of data points and customizing reports, and save money by purchasing only the markets they need.

The force behind the innovation is, and always has been, the power of the BOMA network. These ideas do not come from 33 people sitting in an office in Washington, D.C.; they come from you. It was at last year’s Winter Business Meeting (WBM) that BOMA’s members met to craft the final version of the BOMA 360 Performance Program. And last year’s National Issues Conference (NIC) was where BOMA members took to the halls of Congress to testify to the critical role commercial real estate plays in a thriving economy, making important inroads on issues like card check and TALF expansion. In 2010, we are combining these two important events, February 1-4, in Washington, D.C., so that we have the critical mass to both educate lawmakers and build a strong business plan for the year ahead. Energy and tax issues are playing out now on Capitol Hill and look to have a profound impact on our industry and recovery if we don’t act collectively. This is also our opportunity to share ideas and problem-solve as we define the issues and find the solutions together. I look forward to seeing you in Washington, D.C., in February!

Editor: Laura Horsley Associate Editor: Lindsay Tiffany Contributing Editors: Karen W. Penafiel, CAE, Ronald Burton, James Cox, Noel Popwell, Kristin Bowling Designer: Amy Belice Published by: Building Owners and Managers Association (BOMA) International

BOMA International Officers Chair and Chief Elected Officer James A. Peck, RPA, FMA CB Richard Ellis Albuquerque, N.M. Chair-Elect Ray H. Mackey, Jr., RPA, CPM, CCIM Stream Realty Partners, LP Dallas, Texas Vice Chair Boyd R. Zoccola Hokanson Companies, Inc. Indianapolis, Ind. Secretary/Treasurer Kent Gibson, CPM Zions Securities Corporation Salt Lake City, Utah President and Chief Operating Officer Henry H. Chamberlain, CAE, APR BOMA International Washington, D.C.

The cost for The BOMA Magazine is $75 a year for subscribers and $50 a year for BOMA International members. Publication of advertising should not be deemed as endorsement by BOMA International. The publisher reserves the right in its sole and absolute discretion to reject any advertisement at any time submitted by any party. Material contained herein does not necessarily reflect the opinion of BOMA International, its members or its staff.

James A. Peck, RPA, FMA Chair and Chief Elected Officer

6 BOMA November/December 2009

Publisher: Lisa M. Prats, CAE

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November/December 2009 BOMA 7

legislative UPDATE

Senate Real Estate Caucus Launches THE 111TH CONGRESS REAL ESTATE launched on October 21 with a special briefing focusing on the state of the real estate industry, hosted by the National Real Estate Organizations (NREO). Attendees heard from industry experts and leading economists on how the current economic climate has affected commercial and residential real estate, and learned about the key drivers that will influence economic recovery in the industry. Honorary Co-Hosts and Senate Real Estate Caucus Co-Chairs Sens. Ben Cardin (D-Md.) and Johnny Isakson (R-Ga.) gave the opening remarks. Sen. Cardin was a key supporter of the first-time home buyers’ tax credit. Sen. Isakson was a long-time real estate professional before going into public service. BOMA President Henry Chamberlain moderated a dynamic panel discussion on the state of the real estate industry. William Maher, director of North American Investment Strategy for LaSalle Investment Strategy, gave the commercial real estate outlook. According to Maher, commercial real estate Senator Ben Cardin (left) with BOMA President Henry Chamberlain.

8 BOMA November/December 2009

prices have dropped 40.6 percent from their peak in October 2007, and are expected to drop to about 45 percent from that peak before they level off. He added that, while new supply of commercial real estate is not a concern as construction has virtually stopped, weak demand for commercial space is pushing up vacancy rates. Maher noted that one bright spot is the U.S. REIT market, as prices have rebounded and REITs are raising new capital. He emphasized that the availability of credit is the key to preventing commercial foreclosures and delinquencies. “The most important takeaway from today’s briefing is the power in dialogue as we discuss marketplace insights that will help shape policies,” said Chamberlain. “Collectively, we will find solutions to aid the economic recovery by improving bank lending, creating jobs and building back value in commercial and residential real estate.”

Healthcare, Climate Change Top Fall Congressional Agenda Congress is hard at work with some heavy lifting to complete before the end of the year. And many voices in Congress predict it will be a long year, with adjournment not expected before mid-December. According to their selfimposed agenda, healthcare reform and climate change are the big challenges they’d like to complete before year’s end, knowing that, if these issues are not addressed in 2009, they will be even more difficult to pass in 2010 as Congress gears up for the November 2010 mid-term elections. And then there are

the FY2010 spending bills that are a long way from completion … On September 30, Sens. Barbara Boxer (D-Calif.) and John Kerry (D-Mass.) introduced S. 1733, the Clean Energy Jobs and American Power Act. The new Senate bill includes an anticipated cap-and-trade program, as well as energy provisions (such as a section on strengthening building codes and an incentive program for retrofitting buildings). Despite the best efforts of many in Congress, it appears highly unlikely that they will have a bill passed prior to the December climate talks in Copenhagen. BOMA will continue its work to ensure that Congress understands the needs and concerns of the commercial real estate industry, and why voluntary incentive programs—not mandates— are more effective in spurring innovative energy-efficiency programs in commercial buildings.

TALF Loan Program for CMBS Gets Much-Needed Extension In August, the Federal Reserve and U.S. Treasury announced that they would extend the Term Asset-Backed Securities Loan Facility (TALF) for commercial mortgage backed securities (CMBS). The original sunset date of Dec. 31, 2009, was extended to June 30, 2010, for newly issued CMBS, and to March 31, 2010, for other asset-backed securities and CMBS sold before Jan. 1, 2009 (the so-called “legacy CMBS”). The extension followed a request in a “Dear Colleague” letter from Representatives Paul Kanjorski (D-Pa.), Gary G. Miller (R-Calif.) and 39 other members of

Congress requesting its extension. Given the amount of lead time needed to put together a CMBS deal, it was necessary to extend the program further in order for it to be more effective in providing liquidity to the market. The TALF’s intent is to help prevent defaults on economically viable commercial properties, increase the capacity of current holders of maturing mortgages to make additional loans and facilitate the sale of distressed properties.

IRS Issues New REMIC Guidance On Sept. 15, 2009, the IRS issued guidance applicable to Real Estate Mortgage Investment Conduits (REMICs) that removes the tax impediments that have been preventing borrowers, lenders and other stakeholders from having meaningful negotiations in connection with securitized commercial mortgage loans. The new guidance makes clear that discussions involving modifications to the terms of a securitized loan may occur at any time without a REMIC losing its special tax status. It enables a loan servicer to modify a loan if it meets specific criteria and the servicer believes the modification will reduce the chances for default. The guidance became effective on September 16 and applies to loan modifications after Jan. 1, 2008. The new guidance has no termination date. This new IRS guidance will provide more options for modifying securitized commercial mortgage loans, which will help to reduce foreclosures and lost jobs, as well as prevent depressing commercial real estate values even further.

This new IRS guidance will provide more options for modifying securitized commercial mortgage loans, which will help to reduce foreclosures and lost jobs, as well as prevent depressing commercial real estate values even further.

RAND Study on Energy Performance Released In September, the RAND Corporation, a nonprofit research organization, released its long-awaited technical report on energy performance in

buildings. The report was funded by the Real Estate Roundtable and BOMA International, through the support of BOMA’s Industry Defense Fund. The study, “Improving the Energy Performance of Buildings: Learning from the European Union and Australia,” examines policies that promote energy efficiency in buildings implemented by the European Union (EU) and the Australian Commonwealth and some of its states and territories, and why they are working or not working. Finally, the study examines the implications these policies or similar policies would have if implemented in the United States. Specifically, public policies in the EU and Australia that promote building energy efficiency include building codes, energy-efficiency certificates (labels), requirements for public buildings, training and certification of experts and white-certificate programs. In general, the report concludes that most of the policies that have been put in place to-date are still being “tweaked” and amended to achieve the desired outcomes, and many are still too new to fully assess their impact. RAND also concludes that, though the experiences of the EU and Australia suggest that these types of policies can prove useful to promote energy efficiency in buildings, their rollout and consistent implementation pose challenges. To view a copy of the full report or summary, please visit www.rand.org/ pubs/technical_reports/TR728/.

Legislation to Increase Energy-Efficiency Tax Deduction On August 7, Sens. Olympia Snowe (R-Maine), Jeff Bingaman (D-N.M.) and Dianne Feinstein (D-Calif.) introduced S. 1637, legislation to increase the energy-efficient commercial buildings tax deduction from $1.80 to $3.00 per square foot. This tax incentive was first passed as part of the Energy Policy Act of 2005 to improve the energy efficiency of commercial buildings. The “Commercial Building Tax Deduction” establishes a tax deduction for expenses incurred for energy-efficient building expenditures made by a building owner. The deduction is currently limited to $1.80 per square foot of the property or renovated space, with allowances for partial deductions for improvements in

interior lighting, HVAC and hot water systems and building envelope systems. The upgrades must achieve a 50-percent reduction in annual energy cost to the user, compared to a base building defined by the ASHRAE/IESNA 90.12001 Standard. This deduction has been extended through Dec. 31, 2013.

Get Ready for Capitol Hill! With all the critical real estate issues before Congress—energy efficiency, climate change, leasehold depreciation, capital gains, carried interest, card check and the list goes on—it is imperative that we take every opportunity to communicate with our elected officials to educate them on our issues and the impact pending legislation could have on an industry whose health is vitally important to the recovery of our nation’s economy. In February 2010, BOMA members from across the country will take part in an important industry event—the National Issues Conference (NIC). Please make your plans now to join us! This next year, the NIC has been combined with the BOMA International Winter Business Meeting and Leadership Conference to cut down on the number of meetings, expense and time out of the office. Please join us February 1-4 in Washington, D.C. You’ll have an opportunity to get involved in committee meetings, network with your peers from around the country, attend “how to lobby” briefings, hear from Congressional leaders and policy experts and make our voices heard on Capitol Hill. To kick off the program, Charlie Cook, one of the premier experts on Congress, will share his insights on the Obama Administration, Congress’ ability to accomplish its policy objectives and how the 2010 mid-term elections are shaping up. We will also hear from some elected officials directly on the importance of delivering our messages to Capitol Hill. As always, BOMA’s advocacy staff will be on hand to discuss the legislative issues, as well as the do’s and don’ts for our Hill meetings—then we’re off to meet with our elected officials! For more information or to register, please visit the BOMA Web site at www. boma.org.

November/December 2009 BOMA 9

state & local update

BOMA/Houston Celebrates 75 Years of Advocacy THIS YEAR MARKS BOMA/HOUSTON’S 75TH ANNIVERSARY; and, throughout its existence, the association has championed commercial real estate’s interests at both the state and local levels. Their advocacy efforts have included countering an effort by the Service Employees International Union (SEIU) to unionize the city’s janitors; working with the city’s fire department to install automatic fire sprinkler systems in all high-rise buildings; and collaborating with the mayor and the Building Services Department to assist them in placing the city’s facilities under the management of a third party. The association also mitigated the cost to the commercial real estate industry by lessening the impact of a false fire alarm ordinance, as well as onerous regulations on power washing. Other issues tackled by BOMA/Houston members include parking lot standards, historic preservation ordinances, elevator issues and signage requirements.

They have also been involved in several building code reviews. Through its political action committee, BOMA/Houston encourages its members to take an active role in government and allows the association to support local candidates favorable to the commercial real estate industry. Notes Robert Carlen, BOMA/Houston president, “We have become a force in impacting legislation through the dedicated efforts of our members and through our involvement with Texas BOMA.”

Cities Face Budget Deficits According to a report from the National League of Cities, cities faced a 2.9-percent budget deficit in 2009 due to a decline in income and sales tax revenues. Eighty-eight (88) percent of municipal financial officers reported that their cities were less able to meet their fiscal needs than in 2008. The

10 BOMA November/December 2009

report also shows that many cities will have difficulties in meeting their financial needs in 2010 and in coming years. Income and sales taxes are the earliest source of city revenue to decline due to job losses and decreases in consumer purchasing. Property taxes, which make up the bulk of city revenue nationwide, began to slow in 2009 (1.6-percent growth) as real property assessments were adjusted to reflect declining values. Collections of property taxes lag behind the current real estate market. Consequently, tax bills reflect property values from anywhere between 18 months to several years prior, so the full impact of the economic downturn will not be realized until the coming years. The report shows that 25 percent of cities raised property taxes, while 19 percent increased the level or impact of development fees. Ninety-one (91) percent reported that their cities made spending cuts in 2009, and 82 percent predict that their cities will make further cuts in 2010. The most common cuts were hiring freezes and layoffs, and delaying or canceling capital infrastructure projects.

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November/December 2009 BOMA 11

Codes & standards update

ICC Public Hearings—

• Mandatory on-site renewable energy systems.

Pivotal Issues for BOMA Members THE INTERNATIONAL CODE COUNCIL’S 2009-2010 CODE DEVELOPMENT CYCLE kicked off with a series of Public Hearings to consider more than 3,000 proposals for incorporation in the 2012 editions of the 12 ICC codes—the largest number of code change proposals ever considered in one cycle by ICC. The hearings included two tracks of continuous sessions from October 24 through November 11 in Baltimore, Md. BOMA will be representing the interests of our members on a host of issues during this cycle of ICC code development. The cycle will conclude with multiple Final Action Hearings in May and October, 2010. Of critical importance are proposed modifications dealing with occupant egress, fire control, structural and energy efficiency. Here are a few of the issues BOMA will be facing in this ICC cycle :

• Increased spray-on fireproofing of steel structural members with annual inspections. • Extensive video surveillance systems for elevator lobbies. • Mandatory vulnerability assessments for specific buildings. • Additional protection for elevator wiring and cabling. • More extensive mandatory fire evacuation plans. • 10,000-square-foot fire control compartmentalization of floor plates in some buildings. • Blast-resistant wall construction. • Additional 25-percent more stringent energy-efficiency requirements impacting walls, glass/windows, doors, lighting, piping, ducts, HVAC and other systems. • Automatic shut-off escalator controls.

• Overhangs on building windows/glass walls depending on orientation. BOMA will provide extensive updates on the outcome of these hearings and the prospects for final action on code change proposals that could negatively impact BOMA members via www. boma.org and BOMA’s LinkedIn and Facebook sites.

ASHRAE Energy Standard (90.1-2010) Nears Completion Development of the next edition of the most widely used commercial building energy design standard from the American Society of Heating, Refrigerating and Air-Conditioning Engineers—ASHRAE 90.1-2010—is slated for completion early in 2010. BOMA has represented its members as an organizational voting member of the 90.1 Standards Project Committee for many years and the impacts from this standard on BOMA members continue to grow. ASHRAE set a goal for the committee to reach a 30-percent energy savings

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over what would be achieved in buildings designed to the 2004 edition of 90.1 and the committee set about trying to achieve this target in late 2007. Changes made to the standard have so far achieved approximately 24-percent energy savings with the inclusion of very aggressive added insulation levels, window/door/glass efficiencies, piping and duct insulation, HVAC efficiencies and other measures that will add considerable cost to constructing new buildings, tenant finish-out projects and renovations to existing buildings. Although BOMA is fully engaged in the effort to achieve these aggressive energy-savings targets, it is clear that measures necessary to meet these goals will result in significant added cost. Achieving the 50-percent savings over 90.1-2004 that ASHRAE has set for the 2016 edition will be much more difficult than initially envisioned.

New Building Energy Label from ASHRAE ASHRAE has unveiled a new building energy labeling program designed to provide a snapshot of energy use, much

1GJ09-COMMRETAILERS-NC_BOMAHLF.i1 1

like MPG ratings for automobiles. The program—Building Energy Quotient, or Building EQ—includes ratings for all buildings except residential. Each building would be given two ratings based on energy use per square foot, per year: one based on building design and another based on energy-use data from operations. Buildings would be rated from A+ to F, with A+ denoting net zero (producing as much energy as consumed) and F for “unsatisfactory” buildings. An Alternative to ENERGY STAR? Building EQ has been touted by ASHRAE as an “enhancement” to the

EPA ENERGY STAR building energy labeling and benchmarking program, rather than an alternative program. ASHRAE says Building EQ “will expand on the type and amount of information provided by the ENERGY STAR program” and will cover some buildings not currently covered by ENERGY STAR. BOMA has worked closely with EPA to make the ENERGY STAR label a valuable commodity in the marketplace and we are interested in exploring how the Building EQ program could enhance that effort. Like ENERGY STAR, the ASHRAE program is voluntary. BOMA has expressed concerns that, with proposals introduced in Congress to mandate building energy labels, Building EQ or ENERGY STAR could be used to fulfill that intent. BOMA is working with ASHRAE to assess how this program would enhance our efforts in the areas of energy efficiency and sustainable buildings. We are especially interested in how Building EQ might work with the BOMA 360 Performance Program to give building ratings even more value to prospective tenants, brokers, buyers and others.

4:59:03 November/December 2009 6/10/09 BOMA 13 PM

leading the way

Public Building Priorities from Bob Peck Commissioner, Public Buildings Service U.S. General Services Administration BOB PECK WAS APPOINTED the Commissioner of Public Buildings by the U.S. General Services Administration (GSA) this past August. The role is a familiar one for Peck who also served as commissioner during the Clinton Administration. He brings a diverse perspective on returning to GSA. His extensive resumé includes experience working for several public and private entities, including Jones Lang LaSalle, the American Institute of Architects, the Greater Washington Board of Trade, the U.S. Army and as a private-sector attorney. The BOMA Magazine Editor Laura Horsley had the opportunity recently to visit with the commissioner to discuss the priorities for the Public Buildings Service (PBS).

What is your No. 1 priority as you lead GSA’s Public Buildings Service? I also did this job for about five years under the Clinton Administration. I’ve been saying that this administration is so green, they are recycling people. First off, the biggest priority is our Recovery Act projects. We have about $5.5 billion in Recovery Act funding and we are supposed to spend it fast. I’m happy to say we are on track to do that. Secondly, we are supposed to spend it on green programs. We hope to have a significant impact on our real estate inventory by making it more sustainable and less energy consumptive. The purpose of the Recovery Act funding is to create jobs, so we are trying to get the money into the economy as fast as we can. And we are doing pretty well—we have committed about $1.4 billion to-date and are on track for our goal of $2 billion by December 31. We will hit $5 billion another year from now. Recovery Act projects include new

14 BOMA November/December 2009

construction of courthouses and land ports of entry, and converting existing federal buildings into high-performance green buildings.

What else do you want to revisit or enhance? When I was here before, we started benchmarking against the Experience Exchange Report (EER) to see how we did. And I’m happy to say that the first time we benchmarked we found that we paid much less in utilities per square foot than the private sector. It taught us a lot of great lessons, and we are still doing that. I want to focus even more on our metrics and getting performance measures really embedded in the thinking of our people. We collect rent from federal agencies and we use that money to operate, so we need to be very careful about how much we spend.

You are on BOMA’s National Advisory Council and you recently participated in AOBA’s green conference. Why is BOMA involvement important? It’s not only important for me, but for everyone at GSA. We have people out there every day who are negotiating leases with BOMA members. They need to know the market. They don’t just need to know where there is vacant space, but they need to know what deals are being done in the marketplace, what are the concessions being offered, what are the asking rates and what are the effective rates people are getting. It’s my obligation to listen to people in the industry who might say, “Here’s

a place where you guys might do a better job,” or “Here’s a place where we’re experiencing problems.” The NAC members didn’t get where they are by being bashful, so I never have problems getting either the good or bad commentary.

How do you hope your broad experience will help you at the PBS? For me, this is the perfect job. I really, really like real estate and I like government and public service. I think one advantage I have is that I worked on Capitol Hill—working for the Senate Committee that approves the GSA building program, and on the Executive Branch side at the Office of Management and Budget. I have also worked in real estate on the private side, so I have a lot of different ways to test the ideas that come in here to see if they will work in this environment—which is partly the private-sector building industry and partly the Washington, D.C., political industry.

Is there anything else that you would like to add? The way we operate our buildings is incredibly important. You can waste all that great energy savings if you don’t operate well, and I’m not just talking about letting the air filters get clogged. I’m talking about recycling, training people to use only the artificial light they need, etc. I think operations is the untapped well of energy and environmental savings that we are all going to be taking a much closer look at.

LOOK FOR IT: Check out the full interview with Bob Peck and a video interview at www. boma.org/news/BOMAorgMagazine

Around the industry

Above the Mark—Behringer Harvard Case Study IN TODAY’S DISTRESSED MARKET, tenants have more choice than ever about where to sign a lease. Several commercial real estate companies have found a new tool to attract tenants and prove that their buildings are best-in-class in every aspect of management and operations: the BOMA 360 Performance Program. Bank of America Plaza in Charlotte, N.C., owned and managed by Behringer Harvard, was among the first class of buildings conferred with the BOMA 360 designation. Behringer Harvard has used the program to differentiate their building from the competition, showing tenants and investors that they are a notch above the rest. Behringer Harvard knew BOMA 360 would be an asset to their buildings as soon as they heard about it. The company’s Vice President of Property Management-Southeast Region John Murray was especially drawn to the program for its comprehensive nature. “Having obtained LEED Gold and ENERGY STAR® as our benchmark, we looked to the BOMA 360 program to connect the dots, which translates into added value for us, for tenants and for our investors,” says Murray. Behringer Harvard´s Real Estate Manager Mary Cook concurs: “The program is so comprehensive. Not only are you looking at a building from 10,000 feet, but you’re also evaluating the day-to-day operations and best practices.” The value of the program was also clear to M. Jason Mattox, chief administrative officer at Behringer Harvard. “From a corporate perspective, we’re proud of our

18 BOMA November/December 2009

Bank of America Plaza is a BOMA 360 Building.

operational best practices, tenant relations, sustainability—all of those things,” says Mattox. “The BOMA 360 designation is a badge of honor that exemplifies best practices and creates a wonderful goal for other properties in our portfolio. It proves we are way above the mark.” Murray says that the most important benefit of earning the designation is the way it resonates with current and prospective tenants. “It is imperative to

operate as efficiently and effectively as possible. Prospective tenants who are looking to lease are asking good questions and are increasingly savvy. The 360 designation allows us to be in a position to answer their questions. It is really positive information to give out.”

View the latest class of BOMA designees on page 20. Continued on page 20

IED F I T R E C

OGRAM

SA F E T Y CE

CATI O

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Around the industry Johnson Controls and CBRE Score High in Newsweek’s Green Rankings

Congratulations to the Latest Class of BOMA 360 Designees!

Newsweek magazine recently ranked the environmental performance of the 500 largest U.S.-based publicly traded companies. BOMA members Johnson Controls and CB Richard Ellis (CBRE) both scored high on the list, coming in at 11th and 45th, respectively. The rankings are based on each company’s actual resource use and emission levels, its environmental policies and strategies and its reputation among its peers. To see the full list of rankings, visit greenrankings.newsweek.com.

17901 Von Karman Irvine, Calif. Owned by: Von Karman Associates, LLC Managed by: LBA Realty

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BOMEX Focuses on Canadian Market Recovery BOMA International leadership, including Chair and Chief Elected Officer Jim Peck and President and Chief Operating Officer Henry Chamberlain, recently attended BOMEX in Montreal, BOMA Canada’s annual expo and BOMA Chair Jim Peck at BOMEX. conference. BOMEX had a strong turnout and a high-caliber program featuring an industry panel and renowned economist Jeff Rubin. The education tracks were focused on tenant and client relations, green/sustainability, emergency preparedness and ways to be more efficient. Many sessions were standingroom only. The economy was a key issue at BOMEX, though there was a general consensus that the Canadian commercial real estate market has stabilized and is poised for a gradual recovery. While the markets have softened considerably, regulations that were put in place following the downturn of the early 1990s prevented the kind of leverage in financing the United States is now dealing with. For more information on BOMEX, visit www.boma canada.com.

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Time to Lead Are Your Leadership Strategies in Place to Deal with a Distressed Market . . . and a Distressed Staff ? By Laura Horsley

Here’s a scenario not unfamiliar to property professionals in today’s marketplace: The budget is being squeezed even tighter and on the chopping block is staff training (again), the energy-saving retrofit that has a mere two-year payback but has been postponed for three years and two staff positions. Oh, and another tenant has asked to “negotiate” their upcoming renewal. With the challenges commercial real estate professionals are facing, sometimes managing a building’s “human” assets can be left on autopilot.

24 BOMA November/December 2009

It’s Impossible to Over Communicate It’s when the news is bleakest, or might appear to be, that managers and companies need to revisit the fundamentals of leadership, regardless of any stress they might be under themselves. Anthony LoPinto, managing director and CEO of Equinox Partners, an executive search firm focused exclusively on the real estate industry, is finding that something that would seem to be very basic is tripping up more than a few real estate companies as they attempt to lead their way through the recession. “The single most significant issue that companies are grappling with is communicating effectively with employees,” says LoPinto, who recently participated in Cornell University’s Real Estate Conference where communication (or the lack thereof) was brought up time and again as a barrier between management and staff, especially when it came to issues of retention. “Be transparent,” stresses LoPinto. “In my experience, it’s the rare executive or leadership that is enlightened in this area. The effective communicators are having a much better time managing the motivational issues within a company.” Communicating to staff that lay-offs or benefit reductions are imminent is an unpleasant part of any manager’s job, but transparency and honesty may translate to increased respect and even productivity from staff that might be underperforming due to anxiety or stress. “If you’re in a situation where there aren’t going to be bonuses or raises, you have to be honest and upfront,” explains P. Marc Fischer, senior vice president, director, Management Services, Transwestern. “A lot of people don’t want to deliver bad news so they don’t say anything, but then people start gossiping and talking. You have to continually have the conversation about what’s positive and negative. People are on edge, especially if they have seen friends or relatives laid off, and you have to let them know what’s going on.” “Do more with less” is one communication being heard loud and clear by employees, and some are finding this “mantra of management” to be overwhelming and hard to meet. Efficiency improvement requests, though essential, are often met with a groan when decreed from the top down. Smart leaders will ask employees to suggest ways to improve efficiency and reduce costs. This bottom-up approach can create buy-in from the team, especially when there’s some incentive involved. Notes Fischer, “It pays to ask employees to help find efficiencies, and it pays to offer a percentage of the savings back to the employee.” Constructive communication can come in a variety of ways: staff meetings, one-on-one discussions, a communication from the president—and sometimes it needs to come in several ways. Chief Operating Officer of Advance Realty Kurt R. Padavano communicates with staff on a daily basis and, to ensure that no one is missed, he sends out a monthly e-mail update to everyone in the company, highlighting market conditions as well as what’s happening across the Advance Realty

“Attention is often focused on physical assets in real estate instead of the human assets that are responsible for creating value. Smart companies realize that, if they consider their human capital in the same way, they will get good returns.” Dan Stravinski, Senior Vice President of Human Resources, Berkshire Property Advisors

portfolio. “The summary-level communication is critical,” explains Padavano. “There are a lot of employees in different departments and they may not follow the industry in The Wall Street Journal or on GlobeSt.com. They need to know what is going on in the company, and how the economy is impacting our business plan. They also need to know how leadership is going to direct the company and position it for recovery.”

The Human Asset At Berkshire Property Advisors, a multi-family investment and management firm headquartered in Boston, staff morale and retention have steadily increased since 2003 and are holding strong despite the broader market trauma in the residential sector over the past couple years. The secret of this company’s success is a progressive employee survey system, and the actions it inspired. Dan Stravinksi, senior vice president of Human Resources at Berkshire, instituted the program shortly after he joined the company in 2002 and thinks it works because it focuses on management behaviors that employees desire and that make the company successful. “We came up with 13 dimensions that measure how we are doing compared to our ideal,” explains Stravinski. “This allowed us to determine where the gaps are in important areas, such as setting clear expectations, developing employees and clearly linking pay with performance.” The company surveys its employees annually on the 13 dimensions, which make up the Elements of Berkshire Property Advisors Culture. The elements range from “vision of future” and “empowered employees” to “teamwork” and “work/life balance.” When the first surveys were administered in 2004, the results revealed gaps as large as three points on a 10-point scale; now, however, Berkshire is at a gap of one or less on all 13 dimensions. “Our turnover went down significantly between 2003 and 2009 because of actions prompted by the survey,” says Stravinksi, “and we were reducing turnover even during the good times.” One outcome of the employee survey system was a property manager feedback questionnaire that allowed employees to Continued on page 26

November/December 2009 BOMA 25

Landing a Job in a Distressed Market Smart companies help their employees broaden their skill set to allow for a transference of skills when times are tight (like now) and employees are asked to work beyond their area of expertise. Individuals should be thinking about their professional development in the same way and be prepared to “reinvent” themselves should the need arise. Says Anthony LoPinto, managing director and CEO of Equinox Partners, “If you’re a developer looking for a job, you’ll find there’s not much development work right now. Reinvention is part of the game. You need to step back and look at your background predevelopment; maybe you worked in asset management earlier in your career. You’ll need to re-orient your resumé to highlight other experience.” Below are more tips from “A Field Guide to a Job Search,” a resource put out by LoPinto and Equinox Partners with advice for individuals searching for a job during “challenging and dramatically changing times.” • Relevance. Demonstrate how your work experience is relevant and can help address many of the problems (and opportunities) real estate firms are facing today. • Results. When developing your resumé, focus on results rather than responsibilities. A prospective employer is more interested in what you actually accomplished than in what you were supposed to accomplish. • Network. Network and keep in touch with your existing relationships and important contacts and participate in industry events that give you the opportunity to network with a large number of executives. Check out Ken Ferazzi’s “Never Eat Alone” about building a community of colleagues, contacts, friends and mentors. • Link Up. Social networking sites like LinkedIn (www. linkedincom) are becoming powerful tools for posting your resumé and credentials in a way that makes it easy for potential employers, recruiters, business partners or clients to contact you. • Define Your Online. Be sure to concentrate your job search on industry-specific niche sites that have relationships with all of the major industry associations that “power” their career centers. The Select Leaders career site focuses on real estate jobs (http://boma.selectleaders.com). • Be Thoughtful. If you land an interview, make yourself stand out from the other candidates by taking the time to do the small, thoughtful things that employers will remember— send a thank you card after the interview or forward an interesting article that relates to your discussions. Visit the BOMA Career Center at http://boma. selectleaders.com for the latest job openings in commercial real estate, post resumés and receive guidance, tips and advice.

26 BOMA November/December 2009

“The single most significant issue that companies are grappling with is communicating effectively with employees.” Anthony LoPinto, Managing Director and CEO, Equinox Partners

rank the performance of their managers across a broad range of expectations, with property managers held accountable for low rankings and rewarded for excellent rankings. Berkshire also has a message center where any employee can post questions to management and expect to get an answer. Stravinksi notes that the elements of the Berkshire system are not unique to residential or commercial real estate. “It goes back to the basics of people management,” says Stravinski. “Attention is often focused on physical assets in real estate instead of the human assets that are responsible for creating value. Smart companies realize that, if they consider their human capital in the same way, they will get good returns.”

Professional Development in a Recession At Shorenstein Realty Services, an investment and property management firm in San Francisco, the human asset is top-of-mind as the company is taking the somewhat unique approach to actually invest in its employees during the recession. At the beginning of 2009, Shorenstein executives did a national property tour to meet face-to-face with employees, service advisors and their tenant customers. “We explained what was happening at the macro level as well as the micro levels. We asked them how we’re doing and we came away with lots of good ideas,” says Stanley Roualdes, managing director of construction and property management at Shorenstein. Some of those good ideas have meant the company is rethinking and reinvesting in training and education. “We have actually added very senior positions to address training and education and we have reworked all of our business training modules to make them more user-friendly and Webenabled.” Shorenstein has also taken advantage of training provided through other organizations, including BOMA. Through BEEP® (BOMA Energy Efficiency Program) alone, more than 100 Shorenstein employees have been trained. Shorenstein is not burdened with the crushing debts that might keep other companies from investing in staff and training, but they are also not “sitting on assets,” so to speak, and waiting for a recovery. They are making the human investment now to be better positioned when the market turns. This strategy also allows Shorenstein to take advantage of a slow cycle to reinforce its commitment to the professional development

and education of its staff and helps buoy morale. For Roualdes, the decision to invest in and promote staff during a recession is an easy one, especially if it means employees will spend less time worrying about job security and more time concentrating on customers and business. “I want them out in the building meeting with customers,” stresses Roualdes. “Now, especially, when everyone is struggling to maintain occupancy levels, we want them talking to tenants in advance.” Even for organizations not in the enviable position to invest significant funds and resources in human capital, which is the vast majority of commercial real estate firms, staff development should still be an absolute priority. Budgets may be slashed, but there are low-cost ways to ensure that training is not dropped—from hosting luncheon Webinars where 20 employees can participate in a seminar for a flat fee, to asking a vendor or an in-house expert to instruct a course. Down markets are often a good time to build business and innovate around outstanding employees and team members. For Fischer, times like these present excellent opportunities to evaluate your team. “When things are going really well, you may not pay close attention to your hiring decisions. During the height of the business cycle, it was hard to find qualified people, and many companies may not have hired the ‘best and the brightest.’ Now is the time to reevaluate and separate your strong players, those who can be developed, from your weaker players.” Now is also the time to lay out a career and development path for your star performers. “This is no time to take your eye off the ball,” Fischer emphasizes. “Poaching is alive and well and it’s entirely possible that somebody is going to steal talent from you. In many cases, what keeps those star performers on your team is showing them a career progression in the company.” Conversely, knowing that many companies are cutting benefits and pay, managers should stay closely tuned to the market for talent that might be seeking a new home.

Leading or Managing? Ultimately, the manager that makes leadership a priority by communicating and listening to staff will have an enormous advantage today and a year from today. The manager with the “they should just be thankful to have a job” attitude that allows leadership to slip into cruise control could be in for an unpleasant awakening when the industry recovers and half the staff has left. Differentiating between good management and good leadership is key. “A lot of people are good managers, they can get a project done or handle business operations well; but great leadership is a requirement for getting through a cycle like this,” says Padavano. “It’s about long-term vision and strategy and conducting yourself by example in how hard you work and your commitment to employees and clients.”

The Little Things When monetary incentives such as bonuses, raises or even cost of living increases are slashed, managers are faced with building motivation with seemingly empty hands. This is a time when a simple but genuine “thank you,” “good job” or inexpensive gift token can have a tremendous impact on morale. Notes P. Marc Fischer with Transwestern, “You have to genuinely appreciate the people who work for you. And yes, those folks would love a trip to the Caribbean or a $1,000 bonus, but often just a sincere thank you or a Starbucks gift card can mean the world.” Fischer shares several inexpensive ways to “thank you” that can go a long way… • Thank You from the Top. If someone on your team does something exceptional, ask the president of your company to send that individual a signed thank you note congratulating him or her on a job well done. • Score Points at Home. Don’t stop at thanking an employee for a great job; also consider sending a note home to a spouse, partner or parent. Tell them how much their loved one means to the company, thank them for sharing him/her during an especially busy time and offer a gift card for a family dinner out “on the company.” • Make It Personal. When recognizing an individual for a job well done, make a point to tailor it to his or her interests or needs. An employee who has a daughter graduating from school might love a comp day around a graduation weekend. Another employee who’s a sports fan might appreciate complimentary tickets to a local sporting event. • Be Specific. When publicly recognizing excellence, a “good job, team” is nice, but to make it really special, point out specifically what a team or person did to merit praise. • Catch Someone Doing Something Right. Keep gift cards handy that you can give employees on the spot when they “get caught doing something right.” The free coffee or lunch the gift card buys are nice, but from a morale standpoint, the recognition is priceless.

November/December 2009 BOMA 27

Elevating Your Elevator ROI By Sasha Bailey

In today’s economy, it’s more important than ever for building owners and managers to ensure that they are preserving one of a building’s most critical assets—the elevators. Having a sound maintenance program and service contract from a reliable and trusted company is vital for owners and managers to stay on top of their capital investment and minimize shut-downs and downtime. This not only ensures that the elevator meets its expected life-cycle and runs at peak performance, but over time it can save an owner money. One way to “elevate” a return on investment is to consider these seven elements when selecting an elevator service and maintenance provider: experience, preventative maintenance frequency, around-the-clock service, troubleshooting capabilities, inventory of parts, remote monitoring and modernization.

Experience It is essential for service professionals to be knowledgeable and up to date on all new products and technology, industry standards and, most importantly, safety precautions. Participation in periodic training programs, including field programs that are dedicated to education on new technologies and local sessions to stay abreast of industry

28 BOMA November/December 2009

standards and safety requirements, is paramount. Building managers should ensure that their selected contractor is accredited to work in their specific market. Some states require service providers to have a contractor’s license. Others have specific licensing programs for the vertical transportation industry.

Preventative Maintenance Frequency Even after an elevator’s warranty expires, it is important it receives ongoing preventative maintenance to ensure optimal and safe performance. This maintenance should involve fast, reliable service and trained technicians. It is also important that service providers evaluate the existing elevator equipment on a regular basis, as well as the wear and performance of parts.

Around-the-Clock Service Most elevator service providers offer a monitoring program for the elevator telephones 24 hours a day, 365 days a year. Because of the potential impact of a shut-down on a building’s tenants, it is critical for building owners and managers to have a service provider that responds to service calls both during and after business hours, ensuring reliable response. It is also important to find out how many service technicians

are available to respond to calls, which can ultimately improve response time. When a problem arises, many service providers guarantee around-the-clock emergency services. Whether it’s a small or large building, knowing that a service provider is dependable no matter the time of day can grant peace of mind to any building manager and to the building’s tenants. As some service contracts only guarantee 24-hour service in emergency situations, property professionals should thoroughly read the service guidelines to better understand whether or not around-the-clock service is provided in non-emergency situations.

Troubleshooting for Multiple Elevators Property owners and managers with multiple buildings, which may have elevators from more than one manufacturing company, have an additional issue to address when selecting an elevator service company. In this case, in addition to diagnosing problems, the service provider must be able to troubleshoot and fix multiple elevators from different elevator manufacturing companies. Whether it’s for single or multiple buildings, service providers that have the capacity to troubleshoot a variety of elevators increase the ability of building managers to streamline the

maintenance process by only having to rely on one service provider for all their elevator-related needs.

Parts Inventory It is essential to review a service company’s inventory and evaluate whether it has adequate access to spare parts, as well as the appropriate logistics to get them to the jobsite efficiently. Managers and owners should examine where the parts are stored and the maintenance providers’ delivery process. The hassle of having to wait for parts to arrive can be detrimental to business operations, decreasing the building’s efficiency.

Remote Monitoring Remote monitoring is an innovative service feature for control systems that monitors the performance of an elevator at all times. These systems provide real-time progress reports that can be enabled and viewed by service providers and building managers at any time and from anywhere. If something out of the ordinary occurs, or if an elevator stops performing optimally, the monitoring system immediately alerts the service provider, sometimes before a problem is even exposed to the facility managers, thus ensuring seamless adjustments and repair and minimizing costly elevator downtime. An added bonus is the elimination of unnecessary service calls and the accompanying paperwork, which, in turn, helps decrease an elevator’s environmental footprint through a decrease in both vehicle and paper use.

As some service contracts only guarantee 24-hour service in emergency situations, property professionals should thoroughly read the service guidelines to better understand whether or not around-the-clock service is provided in non-emergency situations.

Modernization Elevator modernization products can dramatically improve an old elevator’s performance, as well as its appearance. Experienced technicians and engineers can customize a modernization package that is both energy- and cost-efficient. Here are just a few modernization options: Cab Modernization. Installing lightemitting diodes (LEDs) can save up to 80 percent of the energy costs associated with traditional elevator lighting. LED lighting reduces heat loss and increases life span—in some cases up to 10 years per light. LEDs also eliminate potential cab interior fading that can occur over time due to ultraviolet light. In addition, they do not contain harmful mercury common in traditional fluorescent lighting. Energy savings are further increased by enabling the elevator controller to automatically shut off the cab’s lights and fans when the elevator meets certain criteria related to inactivity. According to a study conducted by the Swiss Agency for Energy Efficiency based on their review of varying elevator types and models, stand-by energy consumption can account for between 25 and 80 percent of an elevator’s total energy consumption. Another consideration is to replace elevator panels with urea-formaldehyde-free (UF-free) panels, which can improve the indoor air quality of the building as well. Upgrading the Motor. Upgrading older technology, such as upgrading a motor generator (MG) drive to a newer variable voltage variable frequency (VVVF) drive, can save approximately 30 to 40 percent of energy consumption, depending on the elevator type and size. The move away from the old MG sets also eliminates potential indoor air quality issues associated with carbon dust created by the use of carbon brushes in the machines themselves. In addition, the oil that has traditionally been used in hydraulic elevators can be replaced with biodegradable

Installing light-emitting diodes (LEDs) can save up to 80% of the energy costs associated with traditional elevator lighting. LED lighting reduces heat loss and increases life span—in some cases up to 10 years per light.

hydraulic oil, designed to minimize environmental impact. Recycling Energy. Another modernization strategy involves putting some of the elevator’s unused energy back into the building. This can be done by installing regenerative drives. The power that is transferred back into the building would traditionally be dissipated via heat into the machine room. With the regenerative drive, the excess energy is captured and reused, and the system also reduces costly traditional cooling of the elevator machine room. Having a sound preventive maintenance program and engaging a highquality service provider maximizes elevator performance and ensures that the equipment is maintained to the highest of industry standards. Elevators that run at peak performance use less energy, improve building efficiency, increase overall property value and are more likely to meet their maximum lifecycle, giving property owners and managers peace of mind.

About the Author: Sasha Bailey, LEED AP, is a corporate sustainability manager in ThyssenKrupp Elevator’s Americas Business Unit. She can be contacted via e-mail at Sasha.Bailey@thyssen krupp.com.

November/December 2009 BOMA 29

Setting New Standards

New Floor Measurement Methodology Option looks to Simplify Lease Calculations

By Lindsay Tiffany

Since the first skyscrapers began shaping our city skylines, BOMA has set the standard when it comes to measuring buildings. The first office building measurement standard was released in 1915 by BOMA International, then known as the National Association of Building Owners and Managers (NABOM), as property professionals were figuring out how to maintain and operate the new buildings hitting urban markets. Nearly a century later, the “BOMA Standard” remains property professionals’ go-to source when measuring space to calculate leases, allocate building expenses and compare occupancy. Before year’s end, BOMA International will release the highly anticipated Office Buildings: Standard Methods of Measurement & Calculating Rentable Area. The new office measurement standard provides important improvements and changes to the Standard Method for Measuring Floor Area in Office Buildings, the last office measurement standard released in 1996. The new publication has several key enhancements that aim to simplify the methodologies, clarify gray areas and make it more userfriendly. BOMA International’s Standard Floor Measurement Committee, co-chaired by William B. Tracy, MBA, NCARB, principal metrologist, Building Area Measurement LLC, and Kent Gibson, CPM, vice president, Zions Security Corporation and secretary/ treasurer of BOMA International, spent more than two years in twice weekly meetings to bring the new version to the marketplace. Tracy emphasizes that BOMA changed the previous version of the standard to reflect what many people were already doing in the marketplace. “There are a lot of people out there

30 BOMA November/December 2009

who needed to do something different than the current BOMA office standard allowed them to do, and were thus using what were considered ‘modified’ versions of the standard. In developing this new version, we’ve listened to what people are doing—how they are leasing and evaluating space—and we’ve made changes based on what’s actually going on in the industry,” he explains.

Single Load Factor Defined The single biggest change to the standard is that it now includes two methods for calculating load factors. Method A, or the legacy method, allows users the option outlined in the 1996 standard, under which each floor in a building has its own load factor. Method B, or the single load factor method, provides property professionals with a methodology that allows them to use a single load factor for all floors of a building. The total rentable areas of the building are the same in both methods; Method B simply manipulates the way rentable area is allocated through the floors of the building so all floors have the same load factor. The single load factor method will greatly simplify leasing calculations for building owners and managers. “One of the biggest issues with the current standard is that the load factor is different for every floor of a building,” notes Gibson. “When a landlord makes a proposal to a tenant, they’re not sure which load factor the tenant is going to bear until they figure out where to place the tenant. That has posed a problem for brokers, and that has posed a problem for property managers. Now, if you select Method B, you can put a tenant on any floor or move them from floor to floor, and the load factor will remain the same.”

The committee hopes that the single load factor method will also facilitate clearer communication between property managers, architects, contractors, appraisers and other parties who measure space. Tracy adds, “We’re hoping it will eliminate those instances where someone hires an architect, the architect measures the space and their square footage is different than the landlord’s square footage because the architect didn’t understand the measurement method. With a clearer measurement standard, there will be fewer disputes and misunderstandings.”

BOMA Sets the Standard: Simplifying Gross Area As BOMA International’s Standard Floor Measurement Committee began revising the 1996 office measurement standard, its members realized there was a need for a clearer explanation of how to calculate the gross area of a building. This past June, BOMA International released Gross Area Measurement of a Building (GRAMS), a stand-alone publication that provides a uniform basis for measuring both the construction gross area and the exterior gross area of office, retail, industrial, single- and multi-unit residential, hospitality, entertainment, public and institutional buildings. GRAMS is also especially useful for property managers when leasing a building to a single tenant based on gross area. GRAMS features an interactive downloadable format with 37 illustrations and 19 definitions of measurement terms. For more information on GRAMS, the new Office Standard or the entire BOMA family of standards, visit http:// shop.boma.org.

Another feature of the new standard is the introduction of a market cap, or a cap on the load factors that will bring load factors into a range where the building is leasable in its market, which will be particularly helpful for historical buildings. “One thing we struggled with is what happens when you finish all these measurements and your load factor is really high? The new standard introduces a market cap that will help buildings with very high load factors stay competitive,” remarks Gibson.

office buildings :

standard methods of measurement and calculating rentable area

Making Measuring Easier The new standard addresses regional leasing practices, which will be advantageous for buildings in warm climates. Previously, only spaces that were enclosed within a building could be included in measurement calculations, even though many buildings in southern areas were built with external corridors. A new clause states that, if external corridors are the only way tenants can access their space, property managers can include them as building common areas and, therefore, include them in their common area maintenance allocations. The standard is also updated with new terminology that the committee hopes will eliminate ambiguity. The new terms conform to those used by the Open Standards Consortium for Real Estate (OSCRE), a group that is trying to standardize real estate terminology worldwide. Gibson thinks the new language may take some getting used to but will be useful. “I think learning the new lingo is going to be one challenge for property managers. For instance, the term ‘common area’ is going away, and instead we’re using more specific terms like ‘service area’ and ‘amenity area.’ By changing the language, we’ve eliminated some of the gray areas.” In their quest for greater clarity and ease of use, the committee has updated the standard with a variety of 21st century enhancements that will make the methodologies easier to understand and interpret. The new document will be an interactive PDF, with a text portion, definitions and an illustration section. Users

building owners and managers association (boma) international www.boma.org

[ i ]

will be able to zoom in on full-color illustrations to get a closer look at how classes of space transition. They are also provided with a hyperlink to definitions and illustrations when cited in the text. Gibson thinks users will find the updates to the global summary of areas (the section that explains how load factors and other measurements are derived) very useful. “People found it very difficult to recreate the spreadsheet in the ’96 standard, as there wasn’t sample data and the formulas weren’t included. The new version includes two worksheets, one that shows sample data and another that explains all the formulas. Now, it’s very easy to set up a spreadsheet that will calculate the rentable area and load factors.” The 1996 version of the standard also came with a supplementary document called The Answers to 26 Key Questions about the ANSI/BOMA Standard Method of Measuring Floor Area in Office Buildings. The committee streamlined the new version by incorporating all of those commonly asked questions right into the document, making it easier to

understand. “There are a lot of people out there who are going to say, ‘This went from a 27-page document to an 80-page document. What happened?’ The reason is really all the additional clarity we included. The definitions, the illustrations, the formulas—it’s all spelled out for you,” says Tracy. As the committee prepares to send the standard to the American National Standards Institute for its stamp of approval, they feel they have ultimately come up with a document that will make measuring buildings easier. “I can’t begin to tell you how many hours have been volunteered to come up with this new standard, and we believe it is a big step forward from the existing standard. As with anything new, we’re holding our breath. We think we’ve done our best to add clarity, answer most of the questions that could come up and simplify property professionals’ jobs,” says Tracy. For more information or to order Office Buildings: Standard Methods of Measurement & Calculating Rentable Area, visit http://shop.boma.org.

November/December 2009 BOMA 31

Sector watch A fruit stand at the the EM Dirksen Federal Courthouse Café in Chicago, Ill.

Sustainable services. Vendors will

Food for Thought

GSA Merges Wellness and Sustainability Through Food Service By Anthony Costa WITH AN INVENTORY of more than 350 million square feet in 8,600 owned and leased buildings across the country, you can imagine that, as the landlord for federal civilian agencies, food service is a significant concern for the Public Buildings Service (PBS). More than one million employees and contractors work in these buildings, which range from traditional office space to courthouses, labs and land ports of entry. And that’s not counting the visitors and general public that are served as well. To meet these needs, PBS provides food service in a number of ways, from vending machines, sundry stands, prepackaged snack bars and on-site snack bars to full-service cafeterias, cafés and food courts. We first assess whether enlisting services in the area will meet our employees’ needs. If not, we decide the size and type of the new operation required and then solicit and select from proposals submitted by vendors. A significant change many are seeing—both in the public- and privatesector real estate business—is the exploding awareness of wellness and sustainability. This awareness will mean significant changes in our contracts for food services. The wellness issue was given a particularly high profile when President Obama challenged all federal agencies to improve the health of federal employees. The focus on sustainability, on the other hand, has been a priority at GSA

32 BOMA November/December 2009

since the 1970s. What, perhaps, is new is that these have come together as standards in the execution of our food service contracts. Moreover, we think this approach is emerging as the norm in the real estate industry. Here are some specific things PBS is doing to merge wellness and sustainability.

RFPs for new contracts. This year, we are initiating a pilot program to convert existing food service contracts to new wellness/sustainability-focused contracts. The idea is to phase in the new criteria as contracts come up for renewal. At press time, the first Request for Proposal for the new contract model was scheduled to go out October 2009. The RFP is for a cafeteria in the Department of Interior Washington, D.C., headquarters that will be up and running in May 2010.

Contract deliverables. The new contracts will have the flexibility to adapt to local market offerings and consumer demand, ensuring adequate competition and successful vendor operations. Healthier menu options, menu variety to address customer needs, product placement to encourage healthy choices, nutrition information, hormone-free products, elimination or reduction of trans-fatty acids and saturated fats and the use of a nutritionist or dietician in the development of menus are among the contract deliverables vendors will be asked to meet.

also be asked to incorporate green food and sustainable services, including organic and locally sustainable products, recycling, composting, food donation programs, energy-saving practices, cleaning services adhering to Green Seal environmental standards and alignment of their operations with the Leadership in Energy and Environmental Design (LEED) Green Building rating system. In surveys, the majority of tenants are satisfied with vending and food service cafés in GSA-controlled spaces. That’s good, but GSA wants to do even better. As the premier public real estate organization in the nation, we regard food service operations in federal buildings as opportunities to showcase our customer service skills to tenants, to improve the health and wellness of federal employees and to extend our green and sustainable agenda.

About the Author: Anthony E. Costa is deputy commissioner for the U.S. General Services Administration’s Public Buildings Service (PBS), where he oversees one of the nation’s largest public real estate organizations with a portfolio of 354 million square feet housing more than one million federal employees. He can be reached at tony.costa@gsa.gov.

5 Strategies for Healthier Food Options in Your Building 1. Make healthier options and sustainability part of your food service contracts. 2. Refine your healthier options/ sustainable criteria to reflect the local market and consumer demand. 3. Communicate to your staff and tenants about your healthier food service products. 4. Use your building’s design of the space to celebrate and showcase your healthier food options. 5. Integrate your healthier food service options into a comprehensive program related to wellness and green design.

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trends tracker

Creating a Sustainable Urban Oasis…in the Desert Case Study of Camelview Village By Robert Schiller IN THE HEART OF DOWNTOWN SCOTTSDALE, ARIZ., is an urban oasis that calls to mind the Hanging Gardens of the ancient world: Optima Camelview Village. While it would be an overstatement to claim that Optima Camelview Village is a new World Wonder, the project has yielded some pretty wonderful results that property and landscape managers might want to pay attention to. Camelview Village is a 14-acre mixed-use development that includes nearly 700 individually designed private terraces and a green roof that spans the majority of the 11-building community. The integrated landscape design of Camelview Village is the brainchild of architect and developer David Hovey and The mixed-use community of Camelview incorporates semi-arid, native and seminative plants and trees to create a sustainable environment in the Arizona desert.

was created with vital input from Dr. Chris A. Martin, professor of Horticulture at Arizona State University (ASU). While nowhere near the scale of the ancient Hanging Gardens it calls to mind, a green development of this magnitude—in the Arizona desert—is still an impressive achievement. “Good landscape management integrates plants and landscape design into the entire project rather than merely decorating around the edges as an afterthought,” says Tyler Storey, a landscape and garden coach in Phoenix. “A real living environment is created when the constructed elements and growing elements of the living environment are two parts of the same whole.” The original vision for the constructed elements of the project was supplied by Optima and Hovey, but, ultimately, everything hinged on being able to create and implement a site-specific plan that allowed the growing elements to flourish within an urban context. For this, Optima turned to Dr. Martin, who examined every aspect of the proposed development and recommended plants for the project based on intended use, climate, soil depth, lighting and water and fertilization requirements. Test planting beds were developed to meet the unique plant requirements, which included various sun exposures as well as limited planting depths. Planting beds were built to accommodate depth requirements (six inches) and soil types, complete with drainage and automatic watering systems. To create the various sunlight conditions that the plants would be growing in, walls and covers were used to shade the plants and a window pane was used to reflect the light to create sunny conditions. Heat and moisture sensors were installed in the test beds to monitor soil conditions year-round. This information was used to determine the final plant palette. Once the palette was decided upon, ISS Grounds Control installed the landscape and collaborated with Optima to refine the original designs as needed. The entire grounds are watered by a computer-managed, two-wire irrigation control system including an automated fertilization system, which supplies calculated amounts of water and nutrients to the plants. By using semi-arid, native and semi-native plants and trees, the team was able to create a sustainable environment in the harsh desert climate. Unlike Nebuchadnezzar who conquered nature and created the Hanging Gardens through sheer imperial force, an urban oasis in Scottsdale was created through the power of good landscape management and focused effort. Property and landscape managers are paying close attention to the success of Optima Camelview Village, where the careful planning and skillful implementation of an integrated landscape design have created an oasis in the desert that is beneficial for the environment and for the people associated with it. Property owners and tenants are saving money through the use of green rooftops by reducing both energy consumption and heat radiation. This project has been recognized with five awards for outstanding creative and sustainable work, including the national Environmental Improvement Grand Award by Professional Landcare Network (PLANET).

About the Author: Robert Schiller is vice president of sales and marketing with ISS Facility Services, which provides facility management, cleaning and property services (including landscape maintenance and construction, support services, catering and security) to more than 50 countries around the world. He can be reached at Robert.Schiller@us.issworld.com.

34 BOMA November/December 2009

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Green Scene

AOBA Green Conference Focuses on Smart Solutions By Lindsay Tiffany “GREEN IS HERE TO STAY” was the catchphrase of the Apartment and Office Building Association of Metropolitan Washington (AOBA)’s 2009 Green Conference, held September 30 in D.C. The conference featured a variety of solutions for property professionals from around the region who, feeling the crunch of a distressed market, are looking for ways to green their buildings while saving time and money. Attendees came away with ideas and resources to help them implement green strategies and a big-picture perspective of how the green movement will transform real estate in the future.

Lessons from Top Leaders The program kicked off with a keynote address from Marc Gunther, contributing editor for Fortune magazine, touching on the lessons commercial real estate companies can learn from leading American companies like Google, GE and Wal-Mart. He emphasized that green is not going away, and that the real estate industry is “going to have to embrace it.” He noted that the most successful organizations in the commercial real estate industry will be those who follow the lead of Fortune 500 companies by proactively integrating green strategies into their company philosophy. Gunther emphasized that the government is the “single biggest driver of green right now.” He looks to the increasing involvement and regulation from agencies like the U.S. Department of Energy and the Environmental Protection Agency as proof. He added that many companies have put green initiatives on the back burner as they are facing other issues due to poor market conditions; however, once the recession passes, customers and the government will be asking companies about their green initiatives and it is wise to be prepared. Sustainability is also a key factor in recruiting young talent, Gunther stressed, because “young people want to be part of companies that are solving, or at least trying to solve, the climate change problem.”

36 BOMA November/December 2009

Number Crunching: ROI and Payback Period Attendees also heard from green guru P. Marc Fischer, CPM, RPA, CCIM, senior vice president, director, management services, Transwestern, in the session “Beyond the Basics: ‘Shovel Ready’ Ideas and Resources.” The session examined sustainability strategies that require a bigger investment and longer payback period than the typical “low-hanging fruit” tactics, but that yield high-impact results and good return on investment (ROI). Fischer covered topics like permeable concrete, green roofs, low-flow toilets, composting, energy demand management and integrated pest management. Fischer stressed that property managers should take a close look at the payback period and ROI when deciding what makes sense for a specific property. While the numbers don’t substantiate redoing a three-year-old roof in order to put in a green roof, he suggested a green roof might be something to consider when doing a planned replacement. He also talked about the importance of tenant buy in, as the success of many green initiatives is determined by the end-user.

Green Ahead A panel discussion on cap and trade, energy mandates and regional sustainability goals rounded out the program,

Lee predicted that, while the Waxman-Markey bill currently pending in Congress may not pass, cap-and-trade legislation will likely get pushed through in the future and stressed that commercial real estate firms should be ready.

Jay Fisette of the Arlington, Va., County Board, Thomas James of GSA and Eileen Lee of the National Multi Housing Council discuss cap and trade, energy mandates and regional sustainability goals.

featuring speakers Thomas James, deputy regional commissioner-property development, Public Buildings ServiceNational Capitol Region, U.S. General Services Administration (GSA); Jay Fisette, vice chair, Arlington, Va., County Board; and Eileen Lee, vice president of energy and environmental policy, National Multi Housing Council. James and Fisette gave a regional perspective on green issues. James stated that, of the $5.5 billion in Recovery Act money for GSA, $1.2 million is slated for use in the Washington, D.C., area, which will mean opportunities for public-private partnerships around the area. Fisette outlined Arlington, Va., County Board’s incentive program, which encourages private developers of large office, highrise residential and mixed-use projects to design, construct and operate environmentally responsible buildings. Lee presented the national perspective, stressing that, though there is ongoing debate about how to value green properties in the marketplace, most properties’ bottom lines can be improved by implementing green practices. She also underscored the importance of government incentives for major green projects. She stated that for no- and low-cost green measures, the savings that result from implementation serve as the incentive; however, in order to execute expensive retrofits, the industry needs tax breaks and other programs to make them feasible. Lee ended by predicting that, while the Waxman-Markey bill currently pending in Congress may not pass, cap-and-trade legislation will likely get pushed through in the future and stressed that commercial real estate firms should be ready. The government is looking for ways to cut carbon emissions and, as buildings account for nearly 40 percent of those emissions, “commercial real estate is ripe for the picking,” she said.

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Research corner

While retail area comprises a relatively small percentage of total rentable area in the EER data set, it nevertheless represents an important income stream for these assets and property owners are surely experiencing shortfalls in income.

Methodology and Data Sample Demographic Profile

Declining Income From Retail Could Mean More Pressure on Office NOI By Noel Popwell

THE HEADLINES ARE UNMISTAKABLE: The retail sector is taking a beating. The conditions of a distressed real estate market, combined with a sharp drop in consumer spending, means that retail tenancies and income from those tenancies are in decline. While media reports have focused on how the retail sector will be hard hit, office properties that house retail space will also feel the effects. Negative absorption in most markets across the country is putting strain on rent from office space as well. All told, property managers will face mounting pressure on office net operating income (NOI) in 2009. BOMA Internationalâ&#x20AC;&#x2122;s 2009 Experience Exchange Report (EER), which analyzes office building income and expenses for 2008, illustrates that income from office rent increased modestly last year. Income from office rent in 2008 increased roughly seven percent from the previous year, growing from an average of $23.70 to $25.37 per square foot. At the same time, income from retail rent experienced a significant decline. Average income from retail areas in 2007 were $23.39 per square foot, while in 2008 it was only $20.45 per square foot (a drop of 12.6 percent). The data was from a control sample comprised of buildings that submitted data in both 2007 and 2008, where occupancy levels did not change by more than 15 percent and total rentable area (TRA) also did not change by more than 10 percent. It is important to note that the EER tracks data primarily related to office buildings;

38â&#x20AC;&#x192; BOMAâ&#x20AC;&#x192; November/December 2009

thus, only properties with 70 percent or more of their total rentable area devoted to office activities are included in the report.

Retail Office Area Defined Total retail rentable area includes any space used for selling services or merchandise and involves face-to-face interaction with the general public. Such tenants could include banks, travel agencies, insurance providers, merchandise stores and cafeterias. Office space is the largest component of rentable space for EER survey respondents. In 2008, retail space made up only 1.5 percent of total rentable space. This share has notably decreased, from 2.7 percent in 2007 and two percent in 2006.

The data used to examine trends for retail space were compiled using a control sample from properties that reported having retail floor space and that have submitted data to the EER for both 2007 and 2008. This methodology generated a sample of more than 200 buildings. To be included in the performance indicator comparison, the properties needed to have reported data in those categories for both years for which comparisons are made. This reduced the sample even further. Of the roughly 200 buildings in the sample, 27 percent were located in the Western United States, closely followed by those in the East (26.5 percent), the Midwest (25.1 percent) and the South (20 percent). Buildings contained an average total of retail floor space of 23,000 square feet, with about 68 percent located downtown and the remainder in suburban areas. The chart below indicates that buildings with retail space reported significant erosion in key performance metrics. While total retail space remained largely unchanged, average retail rental income declined from more than 23 percent per building in 2008 to close to 18 percent in 2007 based on square footage. Building owners also reported a 70-percent

Private-Sector Retail Rentable Area Performance (2007-2008) Performance Indicator Total Retail Space

2007

2008

Change % Change

5.0

462,359

354,836

-107,523

-23.3%

29.72

24.49

-5.23

-17.6%

-14

-70.0%

2,639

3,068

429

16.2%

(millions of rentable square feet, or rsf)

Average Retail Rental Income per bldg ($) Average Retail Rental Income/rsf ($) Average No. Retail Tenants per building Average Occupied Retail Area per tenant**

** The average occupied retail area per tenant is computed by first calculating the actual occupied square footage of each building in the sample by multiplying the retail area by the occupancy rate. The occupied square footage is then summed and divided by the total number of retail tenants in the sample.

decline in retail tenants, with an average of six tenants per building in 2008 compared to 20 per building in 2007.

What’s Ahead In the August issue of Cycle Monitor magazine, economist Dr. Glenn Mueller reports that retail rents and occupancy declined almost two percent in the second quarter of 2009, and both were down by close to five percent over the same period last year. He predicts that retail occupancies will decline by almost two percent and rents by eight percent in 2009. This analysis, along with the fall off in retail sales and news of the bankruptcies of some large retail conglomerates, paints a dismal picture of the retail office market for 2009 and beyond. In addition to the additional pressure it puts on NOI, the decline in retail tenancies and income from retail areas also underscores how difficult the current market cycle will be for the office sector in coming months. Most analysts agree that the office market typically lags behind other indicators of economic activity during times of recession. Therefore, the results from the EER data for retail office space may well be a harbinger of what’s in store in the broader cross-section of commercial real estate in 2010. While there is some evidence that the recession has hit bottom, several key indicators that would spell improvements in the retail sector have not yet experienced a turnaround. Media reports suggest that consumer spending is still severely curtailed and consumer confidence remains low. The unemployment rate continues to rise, albeit more slowly than it did in the first two quarters of the year. Building owners and managers should follow these benchmarks, as improvement in the retail sector could relieve some pressure on NOI and may indicate that a recovery for office is not too far behind.

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November/December 2009 BOMA 39

Eye on Education

The Other Option for Distressed Assets: What Property Professionals Should Know about ReceivershipBy Kristin Bowling

WITH DOUBLE-DIGIT VACANCY RATES, limited access to capital and a fundamental lack of liquidity, the commercial real estate industry is facing a perfect storm that will likely leave a trail of distressed assets in its wake. Companies are increasingly finding themselves unable to refinance their assets, and when they can, interest rates are sky-high. What is more, experts predict that the worst of the credit crisis has yet to hit the office sector. But the fallout is expected soon: An average of $400 billion in maturing debt is expected to roll into 2010. Although the vast majority of lenders still choose foreclosures and workouts for their distressed assets, there is a small but steady increase of assets going into receivership. In the case of receivership, the lender takes back ownership of the asset because the owner cannot cover debt service. In receivership, not only is the ownership relinquished, but the property’s debt is also carried over. While the task of guiding an asset through the receivership process is often daunting, property managers can simplify their responsibilities by understanding the lender’s goals for the asset and implementing the new asset management plan. Most lenders are reluctant to manage the assets they take back, as they typically know little about the business of property management. Depending on the scenario, the lender may either

40 BOMA November/December 2009

maintain the current property management firm or hire a new one. Many property management firms have even developed specialized programs to manage distressed assets, and are actively pursuing opportunities with various lenders. Those firms that manage the asset in receivership may also find brokerage opportunities, as some distressed assets may need to be leased up. Once the lender has decided an asset will go into receivership, they develop an asset management plan for the building. The planning usually involves a thorough review of the asset—a process very similar to the due diligence undertaken by potential buyers when seeking to acquire an asset. All aspects of the asset must be examined: occupancy and vacancy; lease rollover; asset integrity, including structural and operating system functionality; and capital planning. Many property management firms can assist with this process, as they have first-hand experience managing the financial and operational performance of assets. The assets the property manager will inherit may be leased or vacant. Many assets in receivership are performing assets occupied by tenants who pay their rent on time. When managers are charged with managing a leased asset, tenant relations play an important role in propping up the value of the asset. Property managers will serve as the primary tenant contact, alleviating their

concerns and providing insight into how their leases and overall building operations may be affected by changes in ownership. In cases where the asset is not fully leased, the property manager will likely be involved in the lease up process, which can be complicated by the financing and loan structures that are in place. Understanding the key financing elements that dictate leasing plans and terms is vital for property managers involved in leasing a distressed asset. Property managers will also likely be charged with reviewing other aspects of the asset’s financial and operational performance, as they work to provide the lender with information needed to get the building back in the black. Until the storm passes and the industry rebounds, property managers will play a vital role in helping bring distressed assets back to life. Learn more about how to prepare for and manage assets through receivership when BOMA hosts a Webinar, “Managing Assets in Receivership”, during Winter 2010. Visit www.boma.org/Training AndEducation/Webinars for more information. For a complete listing of BOMA’s education programs, go to: www. boma.org/TrainingAndEducation /upcomingeducation/Pages/ default.aspx.

Upcoming BOMA events Foundations of Real Estate Management courses are being offered by BOMA local associations throughout the country, from Orange County, Calif., to Washington, D.C. Please view the education calendar at www.boma.org for more information or contact Emily Naden at enaden@boma.org. November 18: Tenant Financial Distress, Webinar,

2:00pm ET Winter 2010 (Date TBA): Managing Assets in Receiver-

ship, Webinar, 2:00pm ET February 1-4, 2010: Winter Business Meeting and National Issues Conference, Hyatt Regency Capitol Hill, Washington, D.C. May 5-7, 2010: Medical Office Buildings and Healthcare Facilities Conference, Hyatt Regency, Chicago, Ill. June 27-29, 2010: The BOMA International Con-

ference and The Every Building Show, Long Beach Convention and Entertainment Center, Los Angeles County, Calif. For detailed information on BOMA educational offerings, contact Emily Naden at enaden@boma.org or visit www.boma.org/TrainingAndEducation RS09078 BOMA Print Ads

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buyers’ guide

Buyers’ Guide to Building Products and Services PRODUCT

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Rubbermaid Introduces Hygen Microfiber Cleaning Program Rubbermaid Commercial Products has introduced a comprehensive microfiber cleaning program. The Rubbermaid® Hygen™ System features 100-percent premium quality split microfiber for maintaining healthy, safe environments in commercial buildings. The system includes innovative textiles for dry and wet cleaning, unique hardware (such as handles and frames that help maximize productivity and value) and buckets and carts designed to enhance productivity and cleaning power.

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Company Page No. 1-800-GOT-JUNK?..................................................... 13 American Anchor.......................................................... 4 Bartlett Tree Experts................................................... 39 Bay Alarm Company.................................................... 22 BOMA International.........................................35, 37, C3 Contemporary Walls................................................... 42 Dorlen Products......................................................... 39 Duro-Last Roofing...................................................... 20 Eklund’s Inc.............................................................. 43 E-Mon, LLC.............................................................. 43 Fuller Phoenix Architectural........................................... 12 Grailey Material LLC.................................................15-17 Healthy Buildings Intl.................................................. 22 International Window Cleaning Association....................... 19 MJM........................................................................ 43 MyOpenJobs.com....................................................... 18 Naylor Publications..................................................... 23 New Jersey Sanitary Supply Association............................ 12 NuTech National.........................................................10 Orkin Pest Control....................................................... 7 Proform.................................................................... 43 Road Safe Traffic Systems.............................................. 41 Rooftop Anchor.........................................................C2 Shortridge Instruments Inc............................................ 41 Solutia Performance Films/Saflex..................................... 11 ThyssenKrupp Elevator................................................C4 Universal Protection Services......................................... 21 U.S. Green Building Council-USGBC..............................33 U.S. Lawns................................................................. 3

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conference connection

Don’t Take Our Word for It ATTENDEES OF THE 2009 BOMA INTERNATIONAL CONFERENCE know why you can’t afford to miss the 2010 BOMA International Conference in Greater Los Angeles. We heard it again and again; it’s all about the “BOMA Network”—that powerful

resource of industry peers that share ideas, problem-solve and find solutions together. Feel the power of the BOMA Network. What past attendees are saying . . .

Alisa Molyneaux Real Estate Manager CB Richard Ellis Washington, D.C.

Peter Merrett General Manager Tower 42 London, England

“The BOMA conference was an incredible experience for me. I had the chance to network with other commercial real estate professionals from all over the world. The tradeshow was perfect for one-onones with product and service providers in a more relaxed atmosphere than everyday property management.”

“We are extremely proud of our association with BOMA, and have enjoyed building an international relationship between North America and the UK. The annual convention is a first-class opportunity for sharing best practices, benchmarking industry standards of property management and comparing current market trends. We learn a great deal from the comprehensive education sessions and always take home many new contacts and initiatives from the tradeshow.”

Roy B. Toguchi II Senior Property Manager Colliers Monroe Friedlander Honolulu, Hawaii “For a first-timer attending the BOMA conference and tradeshow, it has proved to be an excellent opportunity to network with others in the industry. It has also provided many opportunities to participate in educational seminars and potential partnerships with the numerous product/service providers at the tradeshow.”

The Every Building Show The BOMA network connects you to the companies you want to reach. From the major national players to the small boutique firms, these companies represent every building type, from high-rise office buildings to industrial properties. They choose The Every Building Show because they know they will be able to see the products, services and technologies they need in an atmosphere designed for presenting cutting-edge solutions, exchanging information and making key purchasing decisions.

44 BOMA November/December 2009

Steve Whitcomb Building Engineer RREEF San Francisco, Calif. “The BOMA conference and tradeshow was an eye-opening experience for me. For the first time, I was able to see things from the perspective of management—how they weigh costs, benefits and timing in making decisions about maintenance and mechanical improvements. I received some excellent ideas from the education sessions, particularly in the area of tenant relations.”

New for 2010: California Day

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California is home not only to the 2010 BOMA International Conference, but to several of the largest commercial real estate markets and companies in the industry. It’s a bellwether state that sets trends for markets across the country. We’re saluting the local host state with a special education track for practitioners who are located in or doing business in California. From California’s state regulatory climate to innovative operating practices, California Day will showcase what works in the Golden State.

GROSS AREAS OF A BUILDING : METHODS OF MEASUREMENT

GET INTERACTIVE!

The interactive downloadable format of GRAMS features 37 illustrations and 19 deﬁnitions of measurement terms.

GRAND STANDARD FOR MEASURING GROSS AREA

From the first skyscrapers to modern industrial complexes, BOMA has been defining the way commercial real estate professionals measure their properties for nearly 95 years. The latest edition to the BOMA family of standards, The Gross Areas of a Building: Methods of Measurement (GRAMS), provides a uniform basis from which to compute, communicate and compare the measurement of buildings by gross areas, and offers the industry’s first direct measure of the physical size of a building.

HERE ARE JUST FOUR WAYS GRAMS CAN HELP YOU: ROS THE G

S A

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• Get on the same page. GRAMS uniform methodology helps a cross section of industry professionals—architects, appraisers, general contractors, owners, and the list goes on—do their jobs better because it provides a actionable document for practitioners to measure gross area.

NT UR E ME

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ME A S

• Get comprehensive. GRAMS applies to all buildings—ofﬁce, retail, industrial, single and multi-unit residential, hospitality, entertainment, and public and private institutional buildings. Plus, GRAMS applies to both new and existing buildings.

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• Get a “twofer.” GRAMS provides a uniform basis for measuring both the construction gross area and the exterior gross area of a building. • Get what you want. GRAMS meets an important and growing industry demand for a true methodology for measuring gross area.

BOMA Sets the Standard. Order BOMA’s gross area measurement standard, The Gross Areas of a Building: Methods of Measurement , or the other measurement standards from the BOMA family of standards– Office Buildings: Methods of Measurement and Calculating Rentable Area ; Standard Methods for Measuring Floor Area in Industrial Buildings ; and Unified Approach for Measuring Office Space: For Use in Facility and Property Management .

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