BOMA Convention Breaks Records in Denver
The 2008 BOMA International Conference and The Office Building Show, June 22-24 in Denver, attracted 4,000 participants from around the country and overseas with its world-class speakers, premier education, information sharing and showcase of the best products and services available in the industry. Both full conference and Medical Office Buildings and Healthcare Facilities Conference registrations broke previous attendance records.

The Medical Office Buildings and Healthcare Facilities Conference kicked off this year’s program, and once again drew record attendance with more than 500 attendees, reflecting continued interest in these types of assets. Among the issues addressed in its expanded education program were discussions of whether or not Medical Office Buildings (MOBs) are now considered a core asset by institutional investors. Representatives from such firms as Morgan Stanley indicated that MOBs certainly seem to be moving in the direction of becoming core assets, as increasingly institutional investors look at their high occupancy rates, very stable tenant bases and strong hospital anchors.

Other sessions highlighted emerging trends in healthcare, including the continued move to ambulatory facilities, as hospitals attempt to trim costs of providing care, while at the same time enhancing the patient experience and assuring patient safety. Such a trend portends well for ongoing growth of MOBs, though all expert presenters agreed that MOBs would increasingly be equipped to treat higher levels of acuity in terms of patient procedures. Several sessions included case studies of various ambulatory models, such as medical malls and healthcare villages, for MOBs.

Historian Doris Kearns Goodwin

Renowned historian Doris Kearns Goodwin gave a captivating and heartfelt presentation based on her best-selling book Team of Rivals: The Political Genius of Abraham Lincoln during the opening General Session on Sunday sponsored by Yardi/SiteStuff. Goodwin described how part of Lincoln’s great success was his ability to put the welfare of the country before his personal feelings by surrounding himself with an inner circle made almost entirely of his former political enemies. Lincoln worked with his “team of rivals” to end slavery and the Civil War, and in the process provided future generations with lessons in leadership that apply to both politics and business. Goodwin explained that a big part of Lincoln’s success was that he “worked harder than most of his political rivals and he didn’t disparage them.” She listed several attributes that helped Lincoln succeed in politics and life, which include his acceptance of differing opinions, his willingness to share credit and shoulder blame, and an awareness of his own weaknesses. Goodwin also shared her memories of working with President Lyndon Johnson and inheriting a love of baseball from her father.

BOMA President Henry Chamberlain delivers the State of the Industry address

During the annual State of the Industry address, BOMA President and Chief Operating Officer Henry H. Chamberlain, CAE, APR, gave a fairly optimistic forecast for commercial real estate despite a weakening national economy that has seen more than 400,000 job losses since the begin of the year.

Highlights from Chamberlain's speech...

• Vacancy rates are beginning to creep up, but downtowns continue to thrive. Total income in downtown office buildings increased by 5 percent, while rental rates increased by 4.8 percent, according to the 2008 Experience Exchange Report.
• Rental rates continue to rise, although they have slowed somewhat.
• Although 15 million sq. ft. of new office space was delivered in the first quarter of 2008, the demand is slowing, which we can see through the sluggish rate of absorption. Total net absorption for 2007 was 53.4 million sq. ft., down from 79.8 million in 2006. (Divided Capital Research)
• The office sector is still the best investment in real estate. Torto Wheaton Research tells us that real estate continues to be a focus of institutions for diversification.
• BOMA’s legislative agenda on the tax side is building into one of the most contentious and important in years as lawmakers try to find an AMT “fix,” reduce the federal deficit and look for ways to pay for additional health care and more, many are eyeing real estate’s core tax extenders. Carried interest, brownfields and leasehold depreciation will be battleground issues.
• We are helping landlords stay competitive with sustainability and energy efficiency. The relative stability of utilities expenses in office buildings (2008 EER) despite the rise in energy costs tells us no- and low-cost energy efficiency strategies and initiatives like BEEP and the 7-Point Challenge are working.
• In a survey by BOMA, USGBC and Real Estate Media, an overwhelming 82 percent of property professionals said greening their portfolios was a priority. And nearly two-thirds of respondents have allocated funds to green initiatives.
• Recruiting and retaining talent will be among our biggest challenges in the coming years. Creating more curricula in colleges and in the workplace is crucial. BOMA’s Foundations of Real Estate Management is providing core education for the next generation of property professionals.
• The upcoming election could alter the political and business landscape. Both Sens. Obama and McCain have said that they value free market dynamics and the entrepreneurial spirit of our economy. We need to make the business case for commercial real estate with them to strengthen our efforts on Capitol Hill next year.

Sustainability Visionaries took the stage during the Monday General Session sponsored by Kimberly-Clark Professional. Green business leaders discussed the realities and opportunities before commercial real estate. Setting the stage for the sustainability discussion was FORTUNE senior writer Marc Gunther, revealing how corporate America is making the business case for going green. The panel was moderated by award-winning broadcast journalist Forrest Sawyer and panelists included BOMA Chairman Brenna Walraven; Sally Wilson, CB Richard Ellis; Arah Schuur, Clinton Climate Initiative; Catherine Greener, Saatchi & Saatchi S.; and Rick Fedrizzi, USGBC.

From left: Moderator Forrest Sawyer, BOMA Chairman Brenna Walraven; Sally Wilson, CB Richard Ellis; Arah Schuur, Clinton Climate Initiative; Catherine Greener, Saatchi & Saatchi S.; Rick Fedrizzi, USGBC.

Insights from the panelists...
“You’re seeing brilliant CEO's putting their energy into sustainability. We need to understand that this is where we’re headed.” –Rick Fedrizzi

“We’ve trained more than 1,000 in BEEP courses alone, but the other part is educating tenants – communication is huge.” –Sally Wilson

“Walmart is training their 1.8 million associates on sustainability, and they are also working with their 60,000 suppliers.” –Catherine Greener

“We work in 40 cities and are seeing all kinds of mechanisms being used. There is some very creative thinking as owners get in front of regulatory rules with energy efficient best practices.” –Arah Schuur

“We can move faster and accomplish more with incentives in a voluntary marketplace, and real estate companies should get the credit for efficient operations.” –Brenna Walraven

Attendees of The Office Building Tradeshow take a break at the ValleyCrest “green roof.”

The Office Building Show, presented by BOMA International and Buildings magazine, drew thousands of real estate professionals looking to solve the most challenging building performance and operations issues. A popular attraction of the Show, the Green Pavilion and ENERGY STAR® Showcase, featured cutting-edge products and services specifically designed to help existing buildings implement sustainable solutions. Among the innovative exhibits on the show floor was a replica of a “green roof” by exhibitor ValleyCrest, which gave show attendees a “green” rooftop garden to relax in, as well as a glimpse into the energy-saving capabilities of state-of-the-art green roof technology.

The Green Pavilion wasn’t the only place to see sustainability in practice. From selecting hotels with energy management practices to providing registration bags made of recycled material to reusing name badges and other conference materials, the theme of “Reduce, Reuse and Recycle” was put into practice throughout the conference. With a reputation for being one of the greenest cities in America, Denver met BOMA’s challenge to put on the greenest conference to date.

Many of the education sessions were standing room only

The green theme could also be experienced in the educational programming offered during the conference. Achieving Sustainability was just one of five core education track, along with Building a High Performance Team, Enhancing Asset Value, Exploring New Business Opportunities, and Optimizing Technology. Leading industry experts—both practitioners and scholars—presented on more than 40 sessions on a broad range of topics from recruiting, retaining and developing talent to achieving better NOI, and everything in-between.

No BOMA conference would be complete without a great party or two…or twelve, and this year there was plenty of celebrating as industry peers gathered to network, share information and celebrate the continued success of commercial real estate. The celebrations kicked off with a “Party in the Park” sponsored by Schindler Elevator Corp. to open The Office Building Show, immediately followed by the BOMA/Denver Metro “mile-high” Welcome Party at the Denver Center for the Performing Arts with a breathtaking view of the Colorado Rockies as a backdrop.

The 2008 BOMA International Conference came to a close with the highly anticipated TOBY and Earth Awards Reception and Banquet. The Office Building of the Year (TOBY) and Earth Awards honor the buildings—and the men and women who own and manage the buildings—that exemplify excellence in building management, operational efficiency, tenant retention, emergency planning and community impact. A special thanks to Grubb & Ellis for sponsoring the TOBY reception and Securitas Security Services USA for sponsoring the TOBY awards program and banquet.

The party of the year – The TOBY Awards

TOBY Award winners:

Earth Award Winner:
John J. Duncan Federal Building, Knoxville, TN

Medical Office Buildings Category
Seton Northwest Health Plaza, Austin, TX

Government Building Category
Garden City Tower, St. Catherines, Ontario, Canada

Suburban Office Park Low-Rise Category
300 Southpark Center, Orlando, FL

Suburban Office Park Mid-Rise Category
Wilshire Courtyard, Los Angeles, CA

Industrial Office Park Category
Sunport Center, Orlando, FL

Renovated Building Category
Complexe Desjardins, Montreal, Quebec, Canada

Historical Building Category
The Chicago Board of Trade Building, Chicago, IL

Corporate Facility Category
Sony Corporation of America, New York, NY

Under 100,000 Square Foot Category
1500 Quail/Westerly Place, Newport Beach, CA

100,000 to 249,999 Square Foot Category
PriceWaterhouseCoopers Place, Vancouver, BC, Canada

250,000 to 499,999 Square Foot Category
Tower 42, London, England

500,000 to 1 million Square Foot Category
Centre CDP Capital, Montreal, Quebec, Canada

Over 1 million Square Foot Category
Time Warner Center, New York, NY

Another highlight of the evening was the induction of BOMA International 2008-2009 Chair, Richard D. Purtell, RPA, portfolio manager of Grubb and Ellis Management Services, Inc., Cincinnati, Ohio, and member of BOMA/Greater Cincinnati.Purtell was inducted by his long-time mentor and former BOMA International President Bill Carleton. “When Bill Carleton introduced me to BOMA 30 years ago, he opened the door to wonderful opportunities that have shaped my professional career,” said Purtell. “As Chair of BOMA International, I look forward to giving back to our members, our industry and our communities across this great country.”

Board of Governors Meeting

A report on BOMA’s aggressive Sustainability and Environmental Initiatives was delivered by BOMA Chair Brenna S. Walraven, RPA, CPM, BOMA/Orange County; John Scott, RPA, BOMA/Miami-Dade; and BOMA International Vice Chair James A. Peck, RPA, FMA. Walraven briefed delegates on BOMA’s recently announced Energy Performance Contracting Model in partnership with the Clinton Climate Initiative. The landmark model contract will allow building owners to perform major energy retrofits to the existing building marketplace by removing key barriers and providing a turnkey solution. Scott gave an update on the continued momentum of the 7-Point Challenge, which asks BOMA member companies and local associations to reduce energy consumption in commercial buildings by 30 percent by 2012. To date, more than 50 BOMA local associations and 35 companies have endorsed the challenge. Peck briefed delegates on recent climate change and carbon reduction offset legislation that was defeated in the Senate.

Ginny Carita, RPA, BOMA/New Jersey announced that BOMA has developed a Corporate Social Responsibility awards program that will launch in 2009 and will award companies for their positive social programs and policies in several categories, including civic and community innovation, business and social innovation, public education and information, and skills training and professional development.

BOMA International Former Chair Dave Hewett, RPA, CPM, CCIM, FMA, CFM, BOMA/Portland, reported on BOMA’s Research programs. Hewett announced that the 2008 Experience Exchange Report (EER) included benchmarking data from more than 5,000 buildings totaling more than one billion square feet. He also reported that the EER had reached a milestone with 100 percent paperless input, further enhancing BOMA’s sustainability commitment. Hewett announced a partnership between BOMA and Kingsley Associates to produce the EER going forward, which will enhance the reporting and analysis of the EER and convert it to a web-based tool.

Incoming Chair Richard D. Purtell, RPA, BOMA/Greater Cincinnati, spoke about one of BOMA International’s latest initiatives, the Accredited Building Program, set to launch in early 2009. Purtell explained that the program will not only recognize the industry’s best practices in building management, but will offer the tools to show tenants that their property meets and exceeds industry standards.

BOMA’s new Vice Chair Ray Mackey

Ray H. Mackey, Jr., RPA, CPM, CCIM, BOMA/Dallas, briefed the board of governors on BOMA’s Education programs.

• The recent pilot launch of BOMA’s latest education program, Foundations of Real Estate Management, was a tremendous success, receiving excellent student reviews. The inaugural offering of the program, being offered by the Apartment and Office Building Association (AOBA) in Washington D.C. this fall, is already sold out.
• The 2008 Medical Office Building Conference drew a record-setting 550 attendees.
• This fall a new sustainable education Webinar series will launch, which will build on the no- and low-cost offerings of the BEEP educational series. The first Webinar is set for October 27.

The Advocacy report was given by Lou Mantia, BOMA/New York, who reported that taxes and environmental issues continue to lead BOMA’s advocacy agenda and that BOMA is hopeful that there will be a “tax extenders” package enacted into law this year, which will include an extension of the 15 year depreciation period for leasehold improvements and brownfields expensing, as well as a five-year extension of the energy efficient commercial building tax deduction.

John Scott, RPA, BOMA/Miami-Dade, reported on BOMAPAC, saying that the ½ percent challenge, in which BOMA local associations are challenged to donate ½ percent of their annual budget to BOMAPAC, was going strong. Recent PAC pledges include $5,500 from BOMA/Seattle-King County and $10,000 from BOMA/San Francisco.

Lyla Gambow, CPM, BOMA/Denver Metro, gave the Industry Defense Fund (IDF) report, stating that the IDF Oversight Committee approved two applications from BOMA International for a total of $45,000 to fund additional building codes and standards efforts for 2008. One application included work on three projects targeting possible codes changes with significant negative impacts to BOMA members and the other focused on BOMA’s work on a new ASHRAE IAQ Design Guide. Gambow also announced that the IDF Committee has completed work on an update to the oversight rules for operation of the IDF which allows more flexibility for consideration of future funding applications from BOMA local associations.

Ed Fallon, RPA, BOMA/New York, delivered the report of the Preparedness Committee. Fallon reported that the committee reaffirmed that all BOMA members need to be placed on the list to receive important alerts from the Real Estate Sharing and Analysis Center.

During the Inclusive Membership portion of the meeting, Purtell stated that BOMA International has launched a new international newsletter, and that there are ongoing conversations with the British Council for Offices and the Property Council of New Zealand regarding becoming a part of the Federation. He also reported that the number of Canadian Members-at-Large has tripled in the past year to more than 600, U.S. Federated membership has grown by nearly 2 percent, and National Associate Members continue to grow with approximately 100 corporate members.

Marc Intermaggio, CAE, Chair, BAE Council, BOMA/San Francisco, reported on the status of the BOMA baseline standards, designed to help deliver a consistent level of service and to reinforce the BOMA brand in the marketplace. BOMA is creating a compliance resource with tools for BOMA local associations to measure how well they are meeting the baseline standards.

Don Erb, RPA, BOMA/Buffalo, briefed delegates on initiatives launched by the
Local Association Services Committee, including the development of a Best Practices Program. Erb announced the winners of the Best Practices awards, demonstrating outstanding accomplishments in marketing communications, media relations, communications management and electronic and interactive communications.

Winners of the Best Practices Awards

Marketing Communications category
BOMA/Boston for their Emerging Professionals Blueprint Success Series to attract the next generation of leaders in the industry.

Communications Management category
BOMA/San Francisco for their Earth Awards Program entry. Honorable mention to BOMA/Houston for their BOMA/IREM Golf Tournament

Electronic & Interactive Communications category
BOMA/Suburban Chicago for their podcast communications to retain new members and reach out to potential new members through a weekly electronic update. Honorable mention to BOMA/Atlanta for their Legislative Communications through legislative alerts.

Laura Ragans, RPA, BOMA/Orlando, briefed delegates on the creation of the new Careers in Real Estate Task Force to help address the shortage of young talent in commercial real estate, specifically property management. The committee will be chaired by Marc Fischer, CCIM, CPM, RPA, BOMA/Baltimore and co-chaired by Ragans.

During the Standard Method of Floor Measurement report, Kent Gibson, CPM, BOMA/Utah, reported that BOMA is moving forward on a revised office standard and the retail standard.

Bob Denney, RPA, chair of the Nominating Committee, BOMA/New Jersey, announced the new slate of BOMA International Officers and Executive Committee. The slate was unanimously approved.

2008-2009 Officers:
Richard D. Purtell, RPA, BOMA/Greater Cincinnati, Chair and Chief Elected Officer
James A. Peck, RPA, FMA, BOMA/New Mexico, Chair-Elect
Ray H. Mackey, Jr., RPA, CPM, CCIM, BOMA/Dallas, Vice Chair
David M. Stucky, BOMA/San Diego, Secretary/Treasurer

Executive Committee:
Daniel W. Chancey, BOMA/Memphis
Don L. Erb, RPA, FMA, BOMA/Greater Buffalo
Murray S. Greene, RPA, SMA, CPM, BOMA/Greater Miami
Gordon W. Hester, BOMA/Spokane
Joseph W. Markling, BOMA/Greater Los Angeles
Catherine A. Pullen, BOMA/Philadelphia

Two new Policy Positions were approved during the meeting:

Green Building Carbon Credit
BOMA International believes the value of Greenhouse Gas (GHG) reductions will accelerate building energy efficiency (and on site renewables) investments most efficiently if the party that makes these investments is allowed to accrue the benefit. In other words, buildings – not utilities – need to accrue any credits or offsets in a regulatory cap and trade program. Legislation must allow the free market to work by rewarding investors in efficiency or renewables with the financial value of the resulting CO2 emissions reductions.

BOMA International also believes that the allocation of carbon credits in any regulatory system must be done in a regionally fair manner and the methodology needs to recognize leaders in conservation already achieved by giving credit for those regions of the country – and buildings - that have been leaders in conservation and have invested in renewables.

Written Procedures for the Development of BOMA Accredited Standards
The standard development procedures developed by the Standard Method of Floor Measurement Committee fulfill the requirements the American National Standards Institute requires of all accredited standard development organizations to show evidence of consensus for the approval, reaffirmation, and revision of standards.  BOMA is an ANSI accredited standards development organization, and these procedures will ensure that the development of BOMA standards are accomplished in a process that is open to all and not dominated by any single category of special interest or individuals. 

Special Guests

Gary Haverkamp, CPM, FMA, RPA, SMA, president of BOMA/Iowa was a special guest speaker during the Board of Governors gathering. Haverkamp spoke about the devastating flooding in Iowa, specifically in the hard-hit cities of Cedar Rapids and Iowa City. To help in the recovery efforts, BOMA/Iowa is working with relief organizations in collecting donations to help flood victims. BOMA/Iowa donated $15,000 to help the cities rebuild.

Steve Shapiro, president, International Code Council (ICC), spoke on the strong partnership BOMA and ICC have developed over the years. Shapiro thanked BOMA for its continued support and help in getting the building codes adopted in all 50 states and lauded the joint efforts of BOMA and ICC for the mutual benefit of public safety.