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Landlords are adding more value to their portfolios by enlisting building remeasurements to uncover overlooked usable space. Beyond market fluctuations and capital improvements, e.g. lobby renovations, remeasuring buildings is a key way to grow value today and sell value tomorrow.
The Building Owners and Managers Association established building measurement standards in 1915, and has updated them every few decades to keep up with ever-evolving trends in commercial real estate spaces. Unlike the 1996 Method A, the BOMA 2010 Methods A and B—the “Single Load Factor” measurement method—allow for measuring rentable areas in multi-tenant, multi-story edifices through a single load factor, which is the total gross-up of all tenants on a particular floor.
These new guidelines additionally account for external circulation (most heavily featured in warmer climates, such as Florida or California, where a building’s primary circulation runs outside the exterior). Furthermore, BOMA 2010 has a third measurement method, in which building owners can draw up their own Capped Load Factors—a recurring theme in older, more inefficient properties with a lot of common space. These regulations offer owners the ability to choose between traditional and modern measurement practices, in addition to unofficial “Modified BOMA” methods to increase RSF around the property.
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These innovations in building measurement methods have created a rising demand among property owners for user-friendly ways to both maximize and organize investments in retail and office space.
But once that value is established, how do owners move forward with their newfound square footage? As Uncle Ben once (sort of) said, with more space comes more responsibility, and many owners are employing online management software to effectively oversee the rediscovered area.
Most online CRE platforms offer only management software, while others specifically provide space survey and measuring services. For businesses focused on one or the other, the secret to garnering marketplace trust and providing value above the competition may be to offer the surprisingly rare combination of both. An added benefit is the inherent creation of efficiencies when there is a single point of contact.
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Make no mistake, carrying out both steps is a hefty investment. Fusing them together not only allows clients to cut costs, but to feed, analyze and synthesize remeasurements inside a single software and assess how to grow into space that hasn’t yet been allocated for. Ultimately, property managers can add valuable square feet without purchasing or constructing additional space.
“It’s more than having a great software application—you have to provide the whole service,” says Ryan Green, VP of CRE data management firm RDM. “We offer this space management software, but landlords also hire us to go and measure their buildings and create their floor plans, and that’s all fed into RealAccess. It saves the client time and money by keeping both aspects of the operation in one place.”
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The art of the deal is twofold: firstly, personalizing this combination for each client, particularly in markets like New York City, where property managers utilize numerous approaches to calculate and recalculate their buildings’ rentable areas; and secondly, making up for the mistakes and shortcomings of outdated measurements. Simply remeasuring a building with newer, improved techniques can help landlords searching for cost-effective ways to reposition their buildings and thereby maximize yields.
“These combo services and improvements are needed across the country, and are even beginning to trend in global markets,” Ryan says.
To learn more about Bisnow partner RDM and its space and asset management software, click here. You can also download its white paper, Methods of Building Measurement and National Trends for 2016, here.
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