Posted by: BayAreaComRE | February 20, 2010

Education: BOMA Standards, Square Feet Measurements and Class Designations

It is widely recognized that the Building Owners and Managers Association International (BOMA) designation is the industry standard when determining guidelines for measuring commercial buildings. Recently, BOMA made some changes to their class standards and ADA compliance guidelines. While the new changes, listed below, may not resonate with the average reader of our blog (notwithstanding the brokers out there who follow BayAreaComRE), we thought this is a good a time as any to put some of the esoteric jargon of our business into layman’s terms.

Class Designations

Firstly, there are class designations. Classes are dependent on historical data as much as the quality of building systems and aesthetics, meaning age, design, quality, amenities and so forth are all weighted when determining a building’s class. Most people can differentiate the Top Tier, Class A buildings (Embarcadero Center, TransAmerica, 1 Market, Moffett Towers, Googleplex, etc) to the class C buildings, but buildings in the gray area (like an A- or B+) are generally differentiated on a historical basis.

While we assign a class to each individual building, BOMA does not endorse individual building classifications, as they maintain general standards. Additionally, building classes differ in each submarket. The same building could be a different class if put in different submarkets, even within the Bay Area. Below are the standards that BOMA set along with our market specific input. Also, there is a subjective nature to building classes. Sometimes a high class B building that gets significant upgrades that otherwise wouldn’t get a class A designation due to age, will get bumped by a general sentiment in the market i.e. “that’s an A building.”

Class A – Most prestigious buildings competing for premier office users with rents above average for the area. Buildings have high quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence. In San Francisco, this entails 24 hour security, full HVAC, higher quality common areas (lobby, hallways, bathrooms).

Class B – Buildings competing for a wide range of users with rents in the average range for the area. Building finishes are fair to good for the area and systems are adequate, but the building does not compete with Class A at the same price. Some class B buildings have operable windows and may or may not have HVAC. Security may be during business hours or none at all.

Class C – Buildings competing for tenants requiring functional space at rents below the average for the area. Class C Buildings may not be ADA compliant and lack some of the building systems that you find in higher tiers. The common areas are generally marginal and sometimes non-existent, which is an advantage for tenants amenable to lower quality buildings because there are lower load factors (we explain this below).

While this market has seen a flight to quality with rents in San Francisco Bay Area decreasing significantly, we only recommend spaces that work specifically for our clients. We do not show Class C space to institutional law firms or show high quality view space to start-ups. We predominately work with tenants and find spaces that best align with our clients business model and bottom line, and the class of building is only a part of that decision-making process.

Rentable vs Usable Square Feet

The total square feet of a building is measured according to BOMA standards, and differs slightly from market to market. For instance, in San Francisco building measurement ends within the building, but in New York measurement of a buildings total square footage includes parts of the sidewalk.

Most all measurements in commercial properties have a  rentable square feet (the amount of space you pay for) and the usable square feet (the amount of functional space that can be used). The rentable is always greater or equal to the usable and is measured by the building’s Load Factor. The Load Factor is a percentage that takes into account the common areas (lobby, hallways, etc), HVAC systems, ducts, pillars, etc. The greater common area, the higher the Load Factor, the less usable sf to rentable sf. Average Load Factors in Class A buildings in San Francisco range from 15-20%, meaning there is an additional 15-20% square footage added to the particular space you occupy as a tenant. This allows the landlord the ability to share some of the common area costs with tenants, by inflating the portion of space that they pay on.

Rentable and Usable measurements were the main revisions to the BOMA standards. According to their website, this new version of the BOMA Standard signifies a major revision, including a new name, Office Buildings: Methods of Measurement and Calculating Rentable Area. The standard provides a uniform basis for measuring rentable area in both existing and new office buildings by taking a building-wide approach to floor area measurement. It provides a methodology for measuring both occupant space as well as the space that benefits all occupants.

New features of the 2010 office standard

  • Single Load Factor Method. A new calculation applied to the occupant area of each floor to determine the rentable area and is the same for all floor levels of a building. This method is referred to as “Method B.” This method was not permitted in the 1996 version.
  • A new class of space, “Occupant Storage” has been created for measuring certain occupant areas in a building, such as basement occupant storage, that is not calculated in the Single Load Factor.
  • Regional leasing practices, particularly for tropical climates, are included in the new standard to allow for enclosure requirements and limited (unenclosed) circulation.
  • New interactive, downloadable format includes hyperlinks throughout the document text, expanded definitions and 45 full-color illustrations.

For more information, visit the BOMA International website. The local San Francisco office is 233 Sansome Street – 8th Floor and the phone number is (415) 362-8567.

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Responses

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