As you may or may not know, BOMA has released a new Office Measurement Standard this year, in January 2010. This is in addition to the Gross Area Standard that was released late 2009; together, these new Standards are intended to replace the BOMA 1996 Floor Measurement Standard for office buildings. For Industrial / Retail buildings, the 2004 Industrial Standard is still the recommended Standard to use (for any building that is more than 50% non-office).
There is a lot of confusion out there at this point as to which standard to follow, and the intent of this blog is to attempt to clarify. In addition, I would encourage you to submit specific questions you might have on any of the Standards in our Knowledge Base, from our home page.
Many are confused when it comes to single-tenant vs multi-tenant, and which standard would apply. There is no single answer, but its important to understand the intent of each of the Standards, and the differences. At the end of the day it is up to the building owner as to which Standard will be used for his/her building.
First, if you have a single-tenant building, BOMA does allow for leasing based on the “Exterior Gross Area”, as defined in the Gross Area Standard (2009). It is important to note that this is NOT Rentable area (as defined in the 1996 or 2010 Office Standards). EGA is simply calculated to the building exterior, but does exclude void areas, exterior decking and balconies. It does include parking areas within the building. There is no load factor calculated, nor common areas defined.
This does not mean you MUST use EGA for single-tenant buildings, it is just allowed, and is fairly common practice. Keep in mind if you need to compare your building to other, multi-tenant buildings, you cannot compare EGA with Rentable; Rentable is typically about 10% less than EGA, as it excludes vertical penetrations (stairwells, elevators) and most of the exterior wall thickness.
So the first decision you need to make with single-tenant buildings is whether to lease based on EGA, or Rentable. Also, all things being equal, the rental rates should be less for leases based on EGA vs Rentable, due to the space that is excluded from Rentable area.
If you decide to go with Rentable, then you have 3 choices basically as to which Standard to use. It is highly recommended that your leasing language be referenced, to see if there is specific reference to a Standard or methodology to use.
If your leases refer to ‘current BOMA Standards’, then you should go with the new 2010 Office Standard, as that is the current Standard, and likely will be for the next 10 years or so. If reference is made to the 1996 BOMA/ANSI Z65.1 Standard, then you should use that Standard (or of course update your lease language to reference 2010 Standards). (Note that this is no longer an ANSI Standard, it should simply be referred to as the BOMA 1996 Office Standard.)
If you go with the new 2010 Office Standard, then you need to be aware that there are 2 methodologies defined in this Standard, and it is up to you as to which one to use. Both can apply to single or multi-tenant buildings.
Methodology A is referred to as the Legacy Method, simply because it is an update to the 1996 Standard, and will result in different ‘load factors’ for each floor. It is the simplest to implement, and the most accurate and fairest methodology, in terms of the distribution of common areas throughout the building. Each tenant in a building is allocated a pro-rated share of building common areas (areas for the benefit of all tenants in a building), as well as a pro-rated share of the floor common areas on THEIR FLOOR ONLY (that would be restrooms, mechanical closets, etc that service their floor only).
Methodology B is referred to as the Single Load Factor Method, as it results in 1 single load factor for the building. Each tenant on each floor will have the same load factor used in the calculation of their Rentable area. This can be viewed as unfair of course by tenants on floors with little common area (eg ground floor), and beneficial to tenants on floors with lots of common area. It basically averages throughout the building.
Its important to note that the total rentable in the building will be the same under Method A or B. The decision comes down to whether you want a single load factor for the building, or floor by floor factors.
The other option of course is remaining with the 1996 Standard. The total Rentable for the building will not vary significantly from 1996 to 2010, though we are seeing some increases on ground floor, as the rules for when you can calculate to the building line (exterior) vs the inside or dominant portion, have been relaxed somewhat. As a result, we are able to include exterior wall thickness more under 2010 vs 1996, and thereby increase the RSF of the building.
There are some other advantages to the new 2010 Standard over the 1996 Standard, which I will elaborate on at a later date.