Would you hire an unqualified contractor to rewire your home? What about an inexperienced CPA to handle your finances? When it comes to situations that have the potential for serious consequences, we always turn to the seasoned experts in their respective fields. They’ve handled countless situations and have the qualifications to prove their value. Performing building area measurements, such as BOMA studies, is no different.
Performing a BOMA measurement is often viewed as a simple add-on service and not given the serious consideration that it deserves—a metric that significantly affects the valuation and income potential of your building. Misunderstood and misinterpreted building measurement data can result in serious implications when negotiating the sale, purchase, or lease of a building. While some firms have these capabilities, many lack true expertise when it comes to BOMA and other building area measurement standards. Unfortunately, this may not be directly apparent to the client.
We were recently asked by a client as to why Gensler takes building measurements so seriously. Here is Mitch Luehring’s response:
“Over the last 5 years the complexity of the BOMA measurement standards has grown significantly as BOMA has tried to offer a more tightly defined suite of standards and reign in many of the arbitrary “modified BOMA” interpretations out in the marketplace. We are also aware of various cases of litigation regarding erroneous leasing calculations. For these reasons, Gensler has a team of specialists available to advise our clients when area calculations are requested. The team actively participates on the BOMA International Floor Area Measurement Standards committee and best practices task force and is deeply aware of all the implications of the BOMA area calculations.”
To illustrate the value of accurate BOMA calculations, let’s use the image above as an example.
Two brokers are negotiating the sale of a building, but one claims the rentable square footage is 71,208 SF and the other claims that it is 75,000 SF—a difference of 3,792 SF. According to BOMA, the average cost of office space in the U.S. is $23 per square foot. That means that the difference under negotiation is $87,216 (3,792 SF X $25). A ten year lease based off of the incorrect measurement turns that number into $872,160. When discrepancies like this are spread across a large real estate portfolio, it could be millions of dollars that are left on the table.
Next time you’re buying, selling, leasing, repositioning, or developing a building—make sure you are working with a reputable source for your BOMA analysis.
Still not convinced? Check out this short video:
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