New BOMA standards clarify lease space

The American National Standard for measuring floor area in office buildings is changing. The new version (officially labeled ANSI/BOMA Z65.1-1996) is an improved method designed to meet the current and future needs of the many industry professionals concerned with the measurement of office buildings.

The Building Owners and Managers Association International developed the standard. A diverse group of real estate industry professionals participated in the two-year revision process.

Included were building owners and managers of multitenant office buildings, managers of owner-occupied facilities, asset managers, leasing professionals, brokers, architects, interior designers, space planner and appraisers. The result is a consensus document that has gained approval of the American National Standards Institute.

Since 1915, BOMA's standard has been the principal method used in the marketplace, a valuable tool in rent negotiations, and a baseline for comparing building occupancy, costs and value. BOMA's floor measurement standard pioneered the concepts of "rentable" and "usable" areas, distinguishing the space actually occupied by tenants on a given floor and their pro rata share of that floor.

Office building design has evolved considerably since 1980, when the standard was last revised. Over the years, the standard has been a floor-by-floor method of measurement. In a multitenant building, this has meant that space could not be allocated to a given tenant unless that space was located on the same tenant's floor.

However, as real estate leasing agents increasingly began to consider use of common areas as part of lease negotiations, up cropped different methods for calculating the leasable space. That presented difficulty for tenants desiring true building-to-building comparisons of leasing offers.

The revised approach is a building-wide method, designed to fairly account for spaces in the building that benefit all tenants, for example, entrance lobbies, conference centers, daycare facilities, health clubs and building core and service areas.

Revision of the standard also meets a need for greater clarity in the presentation of concepts and definitions. The previous edition generated questions on many issues which are now addressed in a definitive manner in the new publication. Ten new definitions are provided, explaining concepts such as floor-usable area, floor-rentable area, floor-common area and building-common area. More than 20 illustrations help to convey these definitions visually and provide guidance on typical floor measurement conditions and situations.

An indication of the major impact that the standard will have is its acceptance by the U.S. General Services Administration. The GSA plans to use the revised method in calculating its owned space and in assessing the space needs of federal agencies when leasing space from the private sector. GSA will convert offers to lease space from private building owners to BOMA's usable-area definition, so the agency will now be able to compare "apples to apples" when evaluating competitive bids.

The standard is intended for use in both existing and new office buildings. In addition to being applied in multitenant buildings, facilities professionals are encouraged to use the method for allocating expenses to various cost centers or for comparing occupancy.

The revised standard should soon make its mark as space is measured, values are assessed and leases are negotiated or renegotiated. Thousands of real estate professionals will become familiar with it in the coming months -- it will be "the" way to measure office buildings for the foreseeable future.

Excerpts of this article were taken from Insite, a BOMA International publication. This article was originally published in the San Antonio Business Journal

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