CREJ

December 2018 — Office Properties Quarterly — Page 11 www.crej.com A fter nine years, the Build- ing Owners and Manag- ers Association appears to be gaining on the latest trends in new and exist- ing office buildings. The BOMA 2017 for Office Building standard was released in October 2017 with some significant changes to how building spaces are measured. In concept, all the changes favor land- lords, which is one of the primary goals of any BOMA standard. But the 2017 version seems to be a bit more equitable by identifying trends in building common areas clearly influenced by both the mar- ket and the collective culture of how office work is being done. More specifically, the 2017 stan- dard is focused on amenities. It is BOMA’s latest answer to the way tenants are using common areas today, and it’s a clear departure from the last standard, released in 2010. Beefed-up building amenities have been on the upswing even before 2010, but it has only been in the last five years or so that cultur- al changes in the workplace have redefined how an office should function. BOMA’s response to those cultural changes is to include bal- conies, covered patios and finished rooftop terraces in tenants’ rent- able square footage calculations, all of which are quite expensive to design and build out. Owners who do incur these expenses in new and remodeled buildings can now pass some or all those costs on to the tenants. Those new tenant expenses will affect the common area load factor. The load factor is a combination of usable square feet and a percentage of the square feet of common areas. To put a finer point on that, a tenant who wishes to re-up on a lease could be looking at a load factor of 3 to 5 percent higher for staying in the same space. Also included in BOMA’s new standard are major vertical pen- etrations at their lowest point, like elevator shafts and stairwells. Although vertical penetrations do allow for additional revenue for landlords, they certainly do not appeal to tenants as a practicality. They’re just not that significant. Every new BOMA standard includes language that further enhances the landlord’s oppor- tunity to collect more revenue. While the 2017 standard certainly is in line with previous standards as a revenue builder, it also satis- fies ongoing design and market- ing requirements for tenants and brokers on both sides of the lease deal. Arguably, no other recent BOMA standard can make that claim. Call it market timing or something else, but it’s always a plus when landlords and tenants can share the same vision for com- mon area amenities. Of course, tenants must pay a premium for those amenities, and they are. In fact, amenities like those specified in the stan- dard – and others – are becom- ing essential rather than optional, which increases competition among owners and their buildings for ten- ants who immediately recognize the long-term value in higher lease rates. Tenant representation brokers have the benefit of essentially being on the same page as owners when it comes to what tenants really want in today’s buildings. Similarly, brokers who represent owners with vision can more accurately market their product since clearly defined market demands have been met by the new equally defined BOMA standard. And the standard can yield other “secondary benefits” to owners and tenants as well. Balconies and covered patios, for example, can serve as break areas for rest and decompression as well as for coffee breaks, lunch or as another space for work. Both new tenants and those in a remodel cycle have the benefit of adjusting their own existing square footage proportionally to what the build- ing’s amenities spaces might offer. If you’re a tenant and half your staff and management are using the building’s amenities spaces multiple times daily, might it be wise to allocate less square footage to the company’s “break” area? BOMA 2017 standards create shared benefits Leasing Tia Jenkins President, Kieding The BOMA 2017 for Office Buildings standard includes balconies, patios and finished rooftop terraces in tenants’ rentable square footage calculations. Rooftop terraces with plants, soft seating and stunning views can offer tenants alternative places to relax, recharge or work. Please see Jenkins, Page 20