Headlines
Winter Business Meeting and National Issues Recap
Mixing Business with Politics - BOMA Members Take to the Halls of Capitol Hill
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Charlie Cook peers into his crystal ball to discuss the upcoming 2010 elections |
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from left: BOMA President Henry Chamberlain with Maryland Senator Ben Cardin and BOMA Chair Jim Peck |
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Senator Isakson (R-Ga.) |
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Representatives from BOMA 360 Performance Buildings are recognized during the General Session |
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BOMAPAC image, caption: BOMA Chair-Elect Ray Mackey finds himself trapped between political superstars of opposite parties |
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BOMA Vice Chair Boyd Zoccola (left, BOMA/Indianapolis President Andy Banister(second from left) and Jeff Wright with Genea meet with Congressman Brad Ellsworth (D-Ind.)(right) on Capitol Hill. |
By Laura Horsley
BOMA members throughout the U.S. came to Washington in early February to take commercial real estate’s message straight to legislators on Capitol Hill during the 2010 Winter Business Meeting and National Issues Conference. A record number of meetings on the Hill took place as members met with lawmakers to discuss how issues such as energy, carried interest and leasehold depreciation have a tremendous impact on commercial real estate and the broader economy.
Here are a few highlights:
Senator Ben Cardin (D-Md.), co-chair of the Senate Real Estate Caucus, addressed BOMA members during the “How to Take our Message to Capitol Hill” session, telling attendees that job creation and a strong commercial real estate industry go hand-in-hand. Cardin also spoke about the current tax deductions for energy improvements, saying they are important but noted, “we need to improve it [the deduction] and make it more realistic with actual costs.”
During the General Session sponsored by AlliedBarton Security Services, keynote speaker Charlie Cook, publisher of the Cook Political Report and Columnist for the National Journal, offered insight into the tumultuous political climate in Washington. Cook referred to independents as the largest and most influential political group, coining independents as “purple America” and suggesting that they look to sway heavily Republican in the 2010 elections.
BOMA 360 Performance Program Council Chair Dan Chancey honored representatives from BOMA 360 Performance Buildings during the General Session. Said Chancey, “BOMA 360 is exactly the kind of program the industry has been asking for and designees are telling us it is the best way to position their buildings as best in class.”
Attendees also heard from Senator Johnny Isakson (R-Ga.)a, co-chair of the Senate Real Estate Caucus, and Representative Danny Davis (D-Ill.). Isakson told attendees that cap and trade is essentially dead in the U.S. Senate and that “tax treatments that incentivize business are needed.”
When it came time to take to the halls of Capitol Hill, BOMA members came out in record numbers to discuss energy and tax issues and the importance of a healthy commercial real estate industry to boost economic recovery.
Winter Business Meeting and National Issues Conference attendees had a chance to network during the Opening Reception, sponsored by Naylor, and swap Capitol Hill stories at the Networking Reception, sponsored by ThyssenKrupp. A very fitting BOMAPAC fundraiser during the Networking Reception had attendees posing for photos with Washington’s Political Elite - even if the politicians seemed a bit stiff.
Board of Governors Highlights
By Lindsay Tiffany
BOMA International Chair Jim Peck kicked off the business meeting with the approval of the general consent, minutes and new members. Peck told the Board of Governor’s that the “power of the BOMA business network is stronger than ever” and that we’re “creating a platform for high performance buildings as we interface with other groups.”
Bob Peck, commissioner of public buildings, U.S. General Services Administration (GSA), was among the guest speakers at the Board of Governors meeting. Peck remarked that GSA appreciates its strong relationship with BOMA and derives value out of BOMA’s meetings, education and the Experience Exchange Report (EER), which the federal government uses to benchmark against the private sector.
Peck briefed the crowd on how GSA is using its $5.5 billion in stimulus money to green the U.S. building stock and create green jobs. Said Peck, “I think GSA has a responsibility to be a green proving ground—to beta test new advances and share our information with you.”
The U. S. Environmental Protection Agency’s Director of ENERGY STAR® Commercial and Industrial Branch Jean Lupinacci also addressed the Board of Governors, praising BOMA and its members for their commitment to energy efficiency. At least 50 percent of all office buildings in the U.S. have assessed their energy performance through ENERGY STAR, which Lupinacci credited in part to BOMA’s market reach and the synergy between the two organizations.
BOMA Canada Chairman Michael Miceli briefed attendees on programs and news from BOMA members in Canada. Miceli reported that the annual BOMEX conference, held this past September in Quebec, saw an increase in attendance, and that BOMA Canada continues to bring pandemic preparedness resources to the industry, with a toolkit and guidebook available to property professionals. Miceli also discussed the success of “BOMA BESt,” an industry standard for environmental certification with 1,400 buildings certified since 2005.
BOMA International Chair-Elect Ray Mackey and Vice Chair Boyd Zoccola, presented the Year in Review address, where they stressed the important role BOMA has played over the past year in helping the industry through the economic downturn. Despite current challenges, membership and attendance at events remained strong and BOMA filled critical industry needs by introducing the BOMA 360 Performance Program, the new online EER and two new building measurement standards.
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BOMA Chair Jim Peck addresses the Board of Governors |
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GSA Public Buildings Commissioner Bob Peck discusses how GSA will use stimulus money to green federal buildings. |
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BOMA International Secretary/Treasurer uses the “Easy” button to demonstrate a point. |
They also noted that BOMA continues to lead in all things green. In 2009 BOMA was recognized by the EPA with a 2009 Climate Protection Award and a 2009 ENERGY STAR Award for Sustained Excellence, receiving the ENERGY STAR award for the third straight year. Mackey also cited BOMA’s work with the U.S. Department of Energy to launch the Commercial Real Estate Energy Alliance and the adoption of the 7-Point Challenge by several cities. Zoccola also delivered the report on the Medical Office Buildings Committee, which is preparing for its first stand-alone conference in Chicago, May 5-7.
See more about the MOB Conference.
In his financial report, BOMA International Secretary/Treasurer Kent Gibson explained that while 2009 was a tough year for the industry, BOMA International remains on solid financial footing and ended the year with a positive bottom line.
Dan Chancey, chair of the BOMA 360 Council, reported on the new BOMA 360 Performance Program. In the first six months of the program, close to 50 buildings have been designated and 40 more are in the pipeline. He added that the Council has decided to change the renewal schedule from annual to every three years, though designees will still need to participate in the EER and benchmark with ENERGY STAR every year. Chancey also announced that the Council has developed a guidebook on how to develop a Standard Operating Procedure manual.
Judy Purviance-Anderson with BOMA/Denver Metro delivered reports on the activities of the Government Affairs Committee, the Preparedness Committee and the BOMAPAC Council, during which the Board of Governors passed two new policy positions. The first was a revision to BOMA’s policy on Preserving a Democratic Workplace. The second was a new policy on energy efficiency/green building codes.
John Scott, BOMA/Miami, briefed attendees on the Sustainability Task Force’s new addition to the 7-Point Challenge, which provides guidelines for vendors who want to adopt the challenge. by delivering innovative and cost-saving solutions to BOMA members to deploy in the reduction of energy use in existing buildings.
The 2009 Local Association EER Participation Award Winners were announced during the Board of Governors. The winners are:
Overall Winners
First Prize - BOMA/Houston
Second Prize – BOMA/Sacramento
300 Members Plus
BOMA/Atlanta
150 to 300 Members
BOMA/Austin
BOMA/Cincinnati
BOMA/Cleveland
Less than 300 Members
BOMA/Virginia
BOMA/Portland
BOMA/Carolinas-West Virginia
BOMA International President Henry Chamberlain ended the program with a report on “the BOMA pulse,” a snapshot of current conditions in the commercial real estate industry and a look at opportunities and challenges ahead. Chamberlain cited stable membership, strong fund balances and a strong financial base as the keys to BOMA local associations’ continued success and noted that some stabilization in office sector jobs will boost recovery for the commercial real estate market.
Help for Earthquake Victims in Haiti
BOMA International extends its concerns and prayers to all those impacted by the recent earthquake in Haiti. Relief organizations are on site and are asking for help. Here are two ways you can help:
Climate Change Bill Tackles First Senate Hurdle
In what is perhaps prophetic of the full-blown partisan fight that is looming in the Senate over climate change legislation, the Senate´s climate change bill stumbled through its first hurdle. On Nov. 5, S. 1733, the Clean Energy Jobs and American Power Act (also known as the "Kerry/Boxer Bill") passed out of the Environment and Public Works Committee, the first of six Senate committees with jurisdiction over the bill. Not surprisingly, not a single Republican voted for passage. In fact, not a single Republican Senator was in the room, having boycotted the markup altogether.
Under Senate rules, a quorum, including at least two members of the minority party, must be present to proceed with a mark up. After failing to establish a quorum due to the Republican boycott, Chairman Barbara Boxer (D–Calif.), through a seldom-used procedural maneuver, opted to call for a vote on the bill without considering any amendments. The bill passed; however, members of both parties were denied the opportunity to improve the bill through the amendment process. Republicans opted to boycott the markup when Boxer refused to delay it to allow more time for the U.S. Environmental Protection Agency to conduct further analysis of the bill.
The Senate bill goes beyond the anticipated cap and trade proposal and also includes energy provisions that mirror many of the provisions that were in both the House-passed bill and the Senate Energy Committee bill. While there are some notable differences that make this new version more palatable to BOMA members, the energy provisions already approved by the Energy and Natural Resources Committee may be substituted in their place. We expect to see the version that comes to the Senate floor to include a section on strengthening building codes and an incentive program for retrofitting buildings. It may also include a building labeling requirement.
Several more hurdles remain, and it appears to be an uphill battle. BOMA International continues to work to educate Senators on the positive and negative provisions of the bill that deal with energy efficiency in buildings.
PAC in Action
BOMA´s advocacy staff has been busy, as the fundraising season is in full swing and BOMAPAC is overwhelmed with requests for support from Senators and Representatives of both parties. Just this week, BOMA´s advocacy team attended two real estate events: a small lunch for Senate Majority Leader Harry Reid (D-Nev.) and a dinner for Sen. Bob Corker (R-Tenn.).
By partnering with other real estate associations, we are able to arrange exclusive functions with powerful decision makers. At the lunch with Senate Majority Leader Reid, we outlined the credit and financing issues still confronting the real estate industry, as well as the need for more robust incentives to help promote energy efficiency retrofits in buildings. Sen. Reid was especially interested in our feedback on meetings the industry has held with the Treasury Department and the Federal Reserve and promised to follow up with both on ongoing questions and concerns the industry shares.
A republican from Chattanooga, Tennessee, Sen. Corker was elected to the Senate in 2006 and serves on the Banking, Housing, and Urban Affairs Committee and the Energy and Natural Resources Committee. Sen. Corker is refreshingly bipartisan in his views and believes that both sides need to come together to work out intelligent solutions to the myriad of issues at hand. Corker was a long-time member of ICSC before beginning public service and is a true friend to the real estate industry.
BOMAPAC Sponsors Events for Reps. Matheson and Neal; Sens. Schumer and Shelby
BOMAPAC has been busy supporting legislators who support commercial real estate issues. BOMAPAC recently sponsored an event in honor of Rep. Jim Matheson (D-Utah). Matheson sits on the House Energy and Commerce Committee and successfully passed an amendment to the energy and climate change legislation on our behalf to temper the most onerous provision in the advanced energy codes section of the bill. Matheson is also a member and past co-chairman of the Blue Dog Coalition, a group of fiscally conservative House Democrats.
BOMAPAC also took part in an event supporting the reelection efforts of Congressman Richard Neal (D-Mass.). A member of the powerful Committee on Ways and Means, which is responsible for development of tax policy, Neal is the chairman of the Subcommittee on Select Revenue Measures. In addition, Neal co-chairs the Congressional Real Estate Caucus, a group of members from the House and Senate interested in real estate issues.
On the Senate side, BOMAPAC recently took part in events supporting the reelection campaigns of Sens. Chuck Schumer (D-N.Y.) and Richard Shelby (R-Ala.). Elected to the Senate in 1998, Schumer is New York’s senior senator. He currently sits on the Senate Finance Committee, which oversees the nation’s tax, trade, social security and health care legislation. He also served as chairman of the Democratic Senatorial Campaign Committee (DSCC) for the last two election cycles before stepping down in 2008.
Shelby, first elected to the Senate in 1986, is the ranking member of the Banking, Housing and Urban Affairs Committee. In addition, he is a senior member of the Appropriations Committee. He has authored and introduced legislation to create a balanced budget amendment to the Constitution every Congress since his election to the United States Senate.
Local Advocacy Update: Legislative Agendas, Energy Innovation Projects and More
Here´s the latest on what’s happening in advocacy at BOMA local associations around the country.
- At its state coalition meeting last month, BOMA Florida set its legislative agenda for 2010. The coalition´s top issues are taxes, insurance, building codes, permit and impact fees, energy and sustainability, Hometown Democracy, water regulations, growth management, elevator regulations, and rapid transit. According to BOMA Florida President Jack Goodrich, their biggest challenge in 2010 will be Hometown Democracy, or Amendment 4, which would require voters to approve all local land use plan changes. BOMA Florida also launched a YouTube site to bring the voice of the state´s commercial real estate industry to a wider audience.
- Last week, the Bay Area council President and CEO Jim Wunderman addressed BOMA San Francisco´s Government and Public Affairs Committee about the Council´s Repair California campaign. As a result of the state’s current economic situation, the Council is proposing two ballot initiatives. The first would allow Californians to call a Constitution Convention, and the second would call for the Convention itself and set the process in motion. The Bay Area Council is a business–sponsored, public-policy advocacy organization for the nine–county Bay Area. It advocates for a strong economy and a vital business environment.
- BOMA /Minneapolis and BOMA /St. Paul have joined with other business associations, government entities, utilities, and the University of Minnesota in the Energy Innovation Corridor Project. The project was formed to create a sustainable energy and transportation showcase along an 11–mile light rail transit project route between downtown St. Paul to downtown Minneapolis. Its goal is to advance government efforts to invest in alternative and renewable energy, address global climate change and create new jobs.
Senators Boxer and Kerry Introduce Climate Change Legislation
Over the summer, the House of Representatives passed a broad climate change and energy bill. In the Senate, the Energy and Natural Resources Committee passed an energy bill, which was expected to be matched up with a climate change bill being drafted by Sen. Barbara Boxer (D-Calif.), chair of the Environment and Public Works Committee. On September 30, Boxer, joined by Sen. John Kerry (D-Mass.), introduced S. 1733, the Clean Energy Jobs and American Power Act.
The new Senate bill goes beyond the anticipated cap and trade proposal and also includes energy provisions that mirror many of the provisions that were in both the House bill and the Senate Energy Committee bill. However, there are some notable differences that make this new version more palatable to BOMA members. First, the bill includes a section on strengthening building codes, but allows the relevant federal agencies to set the energy efficiency targets via rulemaking rather than allowing Congress to impose arbitrary targets. Second, it does not include a building labeling requirement, as the Senate Energy Committee bill would do and as the House version would require for new buildings. Similar to the other two bills, the Clean Energy Jobs and American Power Act also includes an incentive program for retrofitting buildings.
The Senate still hopes to address climate change later this year, following the health care reform debate. BOMA will continue its work to ensure that Congress understands the needs and concerns of the commercial real estate industry.
EPA Releases Steps for Reducing Exposure to Harmful PCBs
The U.S. Environmental Protection Agency (EPA) has released key strategies that building owners should implement to reduce exposure to harmful Polychlorinated biphenyls, or PCBs, that may be found in caulk in many buildings constructed or renovated between 1950 and 1978. PCBs are man-made chemicals that persist in the environment and were widely used in construction materials and electrical products prior to 1978. They can affect the immune system, reproductive system, nervous system and endocrine system and are potentially cancer-causing if they build up in the body over long periods of time. The EPA announced they’ll be conducting additional research to assess the magnitude of the problem and identify the best long-term solutions. They have also created a Web site with updated information and a toll free hotline, 1-888-835-5372.
PAC at Work
With the 2010 elections just over a year away, campaigns are getting into full-swing. This means that all of the U.S. House of Representatives and one-third of the Senate are up for reelection -- and many are looking to BOMA International’s political action committee, BOMAPAC, to help fund their races. Through contributions from BOMA members, BOMAPAC supports incumbents who have a history of supporting the commercial real estate industry and/or hold a key committee or leadership position. Recently, BOMA’s advocacy staff has attended three real estate-focused political fundraising events, with many more lined up over the coming weeks.
House Majority Whip, Rep. James Clyburn (D-S.C.), outlined the House of Representatives’ agenda for the remainder of the year, which includes health care reform, climate change (the House has passed legislation and awaits Senate action), and conclusion of the government’s spending bills. While Rep. Clyburn seemed all but certain that raising the tax rate on carried interest was no longer on the list of potential revenue raisers to offset the costs associated with health care reform, he warned real estate groups to remain vigilant as it would most certainly come up again.
Rep. Cliff Stearns (R-Fla.) has represented Florida’s 6th district since 1989 and sits on the House Energy and Commerce Committee, which took the lead on the climate change and energy legislation passed this summer by the House. BOMA staff and the representatives of the other real estate associations updated the Congressman on the current state of the real estate industry and how congressional action on some key real estate issues would assist the industry.
BOMA International also took part in a fundraiser for Rep. Geoff Davis (R-Ky.). The Congressman represents Kentucky’s 4th district which extends across the northern part of the state. Congressman Davis serves on the Ways and Means Committee with assignments to the Subcommittees on Select Revenue Measures and Trade. He is also co-chairman of the National Security Interagency Reform Working Group and holds a leadership role within the Republican Conference as a Deputy Whip.
Fed Extends TALF Loan Program for CMBS
This week the Federal Reserve and U.S. Treasury announced that they would extend the Term Asset–Backed Securities Loan Facility (TALF) for commercial mortgage backed securities (CMBS). The original sunset date of December 31, 2009 was extended to June 30, 2010 for newly issued CMBS, and to March 31, 2010 for other asset–backed securities and CMBS sold before January 1, 2009, also known as "legacy CMBS."
The extension followed a request in a "Dear Colleague" letter from Representatives Paul Kanjorski (D–Pa.), Gary G. Miller (R–Calif.) and 39 other members of Congress requesting its extension. Given the amount of lead time needed to put together a CMBS deal, it was necessary to extend the program further for it to be more effective in providing liquidity to the market. The TALF´s intent is to help prevent defaults on economically viable commercial properties, increase the capacity of current holders of maturing mortgages to make additional loans and facilitate the sale of distressed properties.
Legislators Home for Recess Need to Feel BOMA Heat
Members of Congress have headed home to their districts for their annual August recess. Now is the perfect time for BOMA members to visit legislators in their district offices to express concern over a number of issues, specifically energy/climate change legislation, Term Asset Backed Securities Loan Facility (TALF) extension and card check legislation. Below is a brief update on each issue. Should you need more guidance or information for your visits or calls to district offices, do not hesitate to contact Karen Penafiel or Jason Todd of the BOMA International Advocacy staff.
Energy/Climate Change Bill
The climate change bill passed the House of Representatives in late June and action is currently pending in the Senate. It is imperative that BOMA members voice their concern on this bill. In addition to newly released estimates by the Department of Energy (DOE) that the House-passed version would increase annual energy costs to a typical family by $114, the building codes provisions in the bill also raise serious concerns. If passed, the next version of ASHRAE 90.1 must reduce energy use by 30 percent, and 50 percent by 2015—if the ASHRAE standard fails to do so, DOE will enact a National Building Code.
TALF Extension
The TALF funds for commercial mortgage–backed securities (CMBS) run only through the end of this year. Given the months it takes to pull together a CMBS deal, Congress must extend the program further in order for it to be more effective in providing liquidity to the market. BOMA members should contact their legislators and ask that they support extending this important program through the end of 2010.
Card Check
Senator Tom Harkin (D-Iowa) has publicly stated that Senate Democrats are attempting to work out a "compromise" deal that would not include the card check provision whereby a union would be recognized through the majority sign up process (collection of 50 percent + 1 cards). However, union leaders continue to express the desire to get card check passed. Consequently, it seems the card check issue will continue in the fall. BOMA members should remain vigilant in expressing opposition to card check legislation.
Industry Gathers to Map a Road to Recovery at BOMA Conference
BOMA members throughout the commercial real estate industry gathered in Philadelphia, June 28–30, for the BOMA International Conference and The Office Building Show, the industry´s premier gathering and perhaps BOMA´s most important conference in years. For three packed days, attendees networked, shared information and ideas, and were connected to the experts and strategies to help them survive one of the most difficult market cycles in recent memory.
Sunday General Session Highlights
Mayor Michael Nutter Welcomes BOMA to Philadelphia
Philadelphia Mayor Michael Nutter helped kick off the BOMA International Conference by welcoming BOMA members to the city of brotherly "and sisterly" love and thanking BOMA for its leadership in Philadelphia and across the country. Mayor Nutter also recognized BOMA´s leadership on energy and sustainability, refering to the success of both the 7–point Challenge and BEEP.
Panelists Discuss Marketplace Realities and Opportunities
Panelists participating in the "Searching for Value in all the Right Places" Sunday General Session, sponsored by Yardi/SiteStuff, pulled no punches about the stress the credit crisis has had on commercial real estate. Perry Schonfeld, principal with LBA Realty LLC, noted that a "lack of clarity and confidence" in the economy is holding back potential deals. Panelists agreed that asset management will be key as the industry works toward recovery and is more important than ever to stakeholders. Chip Akridge, chairman of Akridge, stressed the importance of keeping clients happy, telling attendees "We have to stay close to clients and find out what they need. This is where it will be won or lost."
Other panelists included William P. Hankowsky, chairman, president & CEO of Liberty Property Trust and T. Patrick Duncan, chairman & CEO, USAA Real Estate Company. The session was moderated by Andrew C. Florance, president and CEO of CoStar Group.
Monday General Session Highlights
Dr. Fareed Zakaria Offers Insight on New Global Marketplace
During the Monday General Session sponsored by ThyssenKrupp Elevator, renowned economist Dr. Fareed Zakaria discussed the political, economic and technology transformations that have redefined the global marketplace. Dr.Zakaria also told attendees that the recovery will not be shaped by the predictions of academics, but by the 300 million unpredictable responses from individuals across the country.
Chamberlain Delivers State of the Industry
During his annual State of the Industry address at the Monday General Session, BOMA President Henry Chamberlain discussed the good, the bad and the ugly playing out across the marketplace in response to the capital credit crisis. While vacancy rates are now close to 16 percent and look to be headed to 20 percent, the billions in capital waiting on the sidelines could spur recovery once we push beyond this difficult cycle. Chamberlain emphasized the role of property management as the best practices value creator in the industry.
Read the State of the Industry Address
Inaugural Class of BOMA 360 Performance Buildings Recognized
 BOMA 360 Designees |
Also during the Monday General Session, BOMA Vice Chair Ray Mackey announced the first class of BOMA 360 Performance Buildings. "With this recognition these designees are sending a message to their owners, tenants and prospective tenants that they are optimizing building performance at every level,"said Mackey.
Read more about the BOMA 360 Performance Program Buildings
Other Highlights
A Night to Remember at the TOBY Awards
During the annual Office Building of the Year (TOBY) Awards, sponsored by Securitas Security Services USA, 14 commercial properties were recognized for excellence in office building management and operations in specific categories of building size or type. Other highlights of the evening included BOMA International Chair Dick Purtell honoring BOMA Secretary/Treasurer Dave Stucky with the annual Chair’s Award, and the announcement of three Outstanding Members of the Year from three local BOMA Regions:
- Middle Atlantic Region – Louis J. Mantia, BOMA/New York.
- Southern Region – Sally Elliott, BOMA/Atlanta
- Southwest Region – Karrie S. McCampbell, Dallas/BOMA and Texas BOMA.
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 2009–2010 BOMA Chair James A. Peck
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James A. Peck, RPA, FMA, was formally sworn in as 2009–2010 BOMA International Chair during the ceremony. In his acceptance speech, Peck told BOMA members "We have had many challenges in recent months and more may be on the horizon, but I´m confident that BOMA is uniquely positioned to strengthen all of our careers through our programs, education and advocacy."
Financing Structures, Operating Trends and Healthcare Reform top MOB Topics
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MOB Keynote Speaker Dr. Peter Linneman |
Prior to the BOMA International Conference, nearly 450 healthcare real estate professionals (hospital executives, healthcare owners and managers, lenders, investors, developers) attended BOMA´s annual Medical Office Buildings and Healthcare Facilities (MOB) Conference in Philadelphia. Thought leaders from healthcare real estate companies and hospital systems addressed key issues before the industry, such as the financial wherewithal of health systems, whether the "recession–proof" label many have given healthcare real estate is valid, "clinic" models for ambulatory care, emerging hospital–employed physician models, CMS reimbursements and the effects of potential healthcare reform under a new Administration and Congress.
Renowned Wharton School of Business Economist and Keynote speaker Dr. Peter Linneman told attendees that healthcare was the only sector of the economy, besides the government, not shrinking, and that the "stimulus"effect of spending the trillions of dollars waiting on the sideline could be stunning.
Look for a full recap of the MOB Conference in upcoming BOMA publications, including The BOMA Magazine.
The Value BOMA Members Come for—Education and The Office Building Show
BOMA members packed into the 40–plus Education Sessions offered across five value–driven tracks focusing on the strategies property professional need to survive in today´s turbulent marketplace. Tracks included: Maximizing Asset Value, Building a Sustainable Bottom Line, Leading Effectively in Challenging Times, Going Lean: Managing With Less, Optimizing Building Operations: Tools for Building Engineers
The Office Building Show was bustling with commercial real estate professionals looking for the cutting–edge, cost effective products and services to ensure that their buildings stand out. The best minds, best products and best services were on all on display on the tradeshow floor, including the latest in energy efficient solutions at the popular BOMA Green Pavilion and ENERGY STAR® Showcase.
BOMA/Philadelphia helped attendees connect with history and so much more during the Welcome Party at the National Constitution Center. Sensational entertainment, fabulous food and interactive exhibits and displays made it a night to remember. BOMA/Philadelphia also sponsored a popular "diamond heist" BOMAPAC fundraiser that raised more than $11,000 dollars for the PAC.
Board of Governors Meeting Highlights
 New BOMA Officers and Executive Committee Members are sworn in |
BOMA Vice President of Education and Research Lorie Damon, and Vice President with Kingsley Associates Phil Mobley, announced that the Experience Exchange Report (EER) has migrated online with greater functionality, cost efficiency and ease of use. BOMA members participated in live demos of the online 2009 EER throughout the tradeshow in the BOMA booth.
The Board of Governors also voted to adopt the following five new policy positions on:
- Voluntary Greenhouse Gas Emission Reduction
- Voluntary Model Building Energy Performance Program
- Voluntary Model Building Energy Performance Program
- Commercial Real Estate Credit Crisis
- Real Estate Mortgage Investment Conduits, or REMIC rules
BOMA International´s newest officers and executive committee members were approved during the Board of Governors.
New Officers include:
- Vice Chair – Boyd R. Zoccola, Hokanson Companies, Inc., BOMA/Indianapolis
- Secretary/Treasurer - Kent Gibson, CPM, Zions Securities Corporation, BOMA/Utah
Read More
New Executive Committee members include:
- Angelo J. Grima, Grubb & Ellis Management Services, Inc., BOMA/New York
- Karrie S. McCampbell, CPM, Transwestern, BOMA/Dallas
- Laura T. Ragans, RPA, Manulife Financial, BOMA/Orlando
- Perry Schonfeld, MBA, CPA, LBA Realty, BOMA/Orange County
- David M. Stucky, City of San Diego, BOMA/San Diego
Read More
Look for a full wrap–up of the Board of Governors´ Meeting in upcoming BOMA publications.
Energy/Climate Change Bill Passes House Committee; Focus Shifts to Senate
Keeping his promise of passing energy/climate change legislation before Memorial Day, Rep. Henry Waxman (D–Calif.), chair of the House Energy and Commerce Committee, passed H.R. 2454, the American Clean Energy Security Act of 2009, out of committee on May 21, largely along party lines.
Of particular interest to the real estate community, the House bill would establish a national model building labeling program and incentives for retrofitting existing buildings. Additionally, it includes language for "Greater Energy Efficiency in Building Codes," setting aggressive targets for the 2010 version of ASHRAE 90.1 Standard that are 30 percent more energy efficient as compared to the 2004 version. By 2016, a 50 percent reduction is required, with an additional five percent every three years thereafter, reaching 75 percent in 2030. In addition to the unrealistic energy efficiency targets, new language providing for legal cause of action and civil penalties was added to the latest version of the bill. Through the amendment process, we were able to chip away at some of the most onerous parts of the enforcement language; however, BOMA International remains strongly opposed to the entire building codes section of the bill.
It is still unclear what path this bill will take to the House floor, as eight additional House committees have jurisdiction over various parts of the legislation. However, House leadership still hopes to act on it at some point this summer.
Meanwhile, the Senate is beginning work on an energy bill of its own. At this point, a stand–alone energy bill, which does not include the cap and trade provisions that are in the House bill, is under discussion; on June 4, the Senate Energy and Natural Resources Committee is scheduled to mark up the bill, including provisions directly affecting the commercial real estate industry. The real estate provisions in this bill are much the same as those in the House bill, though the codes language is less onerous in the Senate version.
BOMA and our coalition partners continue to work with the House and the Senate to ensure that any energy legislation include incentives, not mandates, for achieving enhanced energy performance in both new and existing buildings.
House to Begin Action on Energy/Climate Change Bill (5/7/09)
The House Committee on Energy and Commerce plans to begin its markup of the American Clean Energy and Security Act of 2009 (ACES), the sweeping energy and climate change bill, as early as next week. The committee´s chair, Rep. Henry Waxman (D–Calif.), has set a goal of passing a bill out of committee prior to Memorial Day. To keep to that schedule, they will likely bypass subcommittee action on the bill.
On March 31, Chairman Waxman released the draft bill that they hope will create jobs, reduce dependence on foreign oil and combat global warming. In addition to creating a cap and trade program, ACES includes several provisions that will impact commercial buildings´ energy use.
For one, language in the bill would require the 2010 version of ASHRAE Standard 90.1 to be 30 percent more energy efficient than the 2004 version. More problematic, it would require a 50 percent energy reduction by 2016. BOMA International is actively opposing this language.
Second, an incentive program called Retrofit for Energy and Environmental Performance (REEP) is included in the bill to encourage energy retrofits in existing buildings. REEP would provide a $/square foot of retrofit space incentive for meeting certain efficiency thresholds. BOMA International strongly supports this and is working with Congress to ensure that the program is designed to be of value to the industry.
Third, the legislation encourages states to adopt a building labeling program to require all buildings to display achieved performance and designed performance data to owners, lenders, tenants, occupants and other relevant parties.
The legislation still has not been formally introduced, and according to several members of the committee there are still major issues that must be resolved to move forward; however, action is expected to begin next week. If passed, the full House will likely vote on it in June.
BOMA Participates in White House Briefing on H1NI (5/3/09)
BOMA International was invited to participate in a White House briefing for the business community on the H1N1 outbreak. Administration officials asked the business community to take proactive steps to educate their constituents on pandemic preparedness planning and techniques for reducing the transmission of the virus. They are also encouraging employers to allow employees to stay home if they are sick, even if they lack sick leave. Due to the economic downtown, many people feel they must show up at work to ensure to protect their job. Staff also stressed employer flexibility in cases when family members are impacted.
BOMA International’s Director of State & Local Affairs James Cox attended the White House briefing where he discussed the steps BOMA has taken to help commercial real estate professionals prepare for a possible outbreak. Cox explained that BOMA´s Pandemic Flu Resource page has been an important tool as the site provides industry professionals with the latest updates, information and FAQ´s about H1N1, as well as information to help protect tenants and building.
BOMA Scores an ENERGY STAR® Three–Peat
BOMA International received the 2009 ENERGY STAR Award for Sustained Excellence March 31 in Washington, D.C. BOMA International Chair Dick Purtell accepted the award on behalf of BOMA.
BOMA Chair Dick Purtell (left) accepts the ENERGY STAR Award for Sustained Excellence |
Several BOMA members companies were also honored. Akridge, CB Richard Ellis, CoStar Group, Kennedy Associates Real Estate Investment Advisors and TIAA–CREF all received the Partner of the Year Award. Hines, TRANSWESTERN and USAA Real Estate Company were honored with the Sustained Excellence Award.
This is the third consecutive year that BOMA has been recognized by ENERGY STAR. BOMA is still the only commercial real estate association to receive this honor.
See footage of BOMA Chair Dick Purtell at the ENERGY STAR Awards Banquet on BOMA International´s YouTube Channel.
GSA Submits $5.5 Billion Economic Recovery Plan to Congress
GSA has unveiled a $5.5 billion project list that highlights the unprecedented role the agency will play in assisting in the nation’s economic recovery and putting American citizens back to work. Projects are funded across the country, providing benefit for local and state economies, and every state should see at least one GSA project related to the Recovery Act. The full story and a complete list of projects is available online at: www.gsa.gov/recovery.
BOMA International President Named 2009 ASAE Fellow
BOMA International’s President and Chief Operating Officer Henry Chamberlain, APR, CAE, has been named a 2009 Fellow to the American Society of Association Executives (ASAE) and The Center for Association Leadership. The Fellows program recognizes individual accomplishments and contributions to ASAE & The Center and the association community, and is a call to service for the profession.
Read more.
President Signs Stimulus Legislation Into Law; Includes Benefits to Commercial Real Estate
President Obama signed into law the recently passed stimulus bill, H.R. 1, The American Recovery and Reinvestment Act of 2009. Last week, the conference report was approved by both the House and Senate, largely along party lines. In addition to providing grants to the states and funding a variety of infrastructure investments, the new law contains three provisions that will have varying degrees of impact on the commercial real estate industry: bonus depreciation, cancellation of debt (COD) income and Net Operating Loss carryback (NOL) relief.
The bonus depreciation is an extension of a provision enacted in 2008 that allows for immediate write–off of fifty percent of the cost of depreciable property, including qualified leasehold improvements, placed into service in 2008. This temporary benefit will be applied to capital expenditures incurred in 2009 as well.
The COD provision enacted provides significant tax relief for businesses that reacquire, satisfy or otherwise discharge debt obligations at a discount in 2009 and 2010. The new law allows companies to defer any tax on 2009 and 2010 COD income until 2014. It then taxes that COD income ratably over the following five years (2014–2018). Before this change, COD income was recognized the same year it was claimed and based on the total amount of the discount.
Finally, the NOL carryback provision allows companies to receive a tax refund by using current losses to offset taxes paid in prior years, but only for companies with gross annual receipts of less than $15 million in revenues. Current law only allows businesses to get refunds of taxes paid within two years. The initial proposal did not have the gross receipts limitation, which was unfortunately inserted during House–Senate conference negotiations.
Recovery Act state-by-state jobs.
http://www.recovery.gov/.
Media Reports on Growing CRE Credit Crisis
In recent days the media has been reporting on the letter commercial real estate associations, including BOMA International, sent to Treasury Secretary Henry Paulson and other key leaders detailing the urgency of the credit crisis and lack of confidence in the financial markets. The letter also recommends the Treasury Department and Federal Reserve take several actions to stem the crisis, including the extension of the Term Asset-Backed Securities Loan Facility (TALF) to guarantee, finance or purchase highly rated, asset-backed securities collateralized by newly or recently originated commercial real estate mortgages. Recent estimates indicate that more than $400 billion of debt will mature by the end of 2009.
Articles and stories relating to the letter have appeared in several national outlets, including The Wall Street Journal, The Washington Post, and CNN. BOMA is helping coordinate media coverage, and the Real Estate Roundtable held a press conference call on December 22 to provide further information to the media. During the press conference Real Estate Roundtable President and CEO Jeffrey D. DeBoer stressed that the industry isn’t asking the Treasury to ensure financing for every mortgage coming due for refinancing, but just the safest, highest-rated securities, which in turn will create leverage in the market. “We’ve talked to major players at the Treasury and the Federal Reserve,” said DeBoer. “It’s very complicated but policy makers understand it and we are encountering a positive reaction. This is about preventing a bailout so credit-worthy borrowers can access the credit market.” Added DeBoer, “It is critical for policy makers to announce their intention to make sure credit markets function so debt coming due will be able to be refinanced. We’re trying to prevent a catastrophe to the financial system and state and local governments.”
The letter was sent to Secretary Paulson on November 26. Proposed solutions are expected to take at least a few months to introduce as part of a comprehensive plan.
BOMA will report on the credit crisis and its effect on commercial real estate as news continues to break, and the topic will be discussed in full at the Winter Business Meeting, January 16-19 in Indian Wells, Calif., where BOMA will be discussing formal policies on an economic recovery plan.
Visit www.boma.org for more information and read the letter to Secretary Paulson.
Read Real Estate Roundtable’s 5-Point Plan to restore credit capacity for commercial real estate.
Industry Economists discuss Recession Survival Strategies
Raymond Torto, Ph.D., global chief economist with CB Richard Ellis (CBRE), joined a panel of economists yesterday for a GlobeSt.com webinar on surviving the real estate credit crisis. The panelists discussed strategies for weathering the crisis and made predictions on future job losses and when we can expect a turnaround. Torto predicted that the current office vacancy rate of 13.4 percent (CBRE statistics) could jump to 16.2 percent by end of 2009, and when factoring in negative absorption that number could climb to more than 19 percent. Torto described the current recession as the “classic liquidity trap” in which there is a lot of capital but no traction and said strong policy and fiscal stimulus is imperative to turning things around. Learn more about the webinar at GlobeSt.com.
BOMA members can hear more of Torto’s predictions for commercial real estate during the 2009 Winter Business Meeting in Indian Wells. Calif., January 16-19, where he will be the Opening Luncheon keynote speaker. Learn more.
Greening Commercial Buildings a Priority despite Economic Downturn
Despite a faltering economy, commercial building owners are continuing to allocate funds and resources to green their portfolios. According to the “2008 Green Survey: Existing Buildings,” the second annual national survey of the commercial real estate sector, more than 80 percent of respondents have allocated funds to green initiatives this year, while 45 percent said that their sustainability investment will increase in 2009. Findings of the study by Incisive Media’s Real Estate Forum, the Building Owners and Managers Association (BOMA) International and the U.S. Green Building Council (USGBC) were released yesterday during a press conference at Greenbuild 2008, the annual conference and expo sponsored by the USGBC. Look for a full analysis of the survey in the January/February 2009 issue of The BOMA Magazine.
Also at Greenbuild, the results of an energy-savings survey conducted by FMLink, BOMA International, USGBC and the Association for Facility Engineers (AFE), was released. The survey found that more and more facility managers are implementing re-commissioning and energy audits to measure and improve their building’s energy performance. Key findings also indicated that most energy savings successes were the result of aggressive low-cost operational strategies rather major capital projects.
Find more information at the BOMA Press Room.
President Signs Bill that Amends Definitions in ADA
On September 25th, President Bush signed the Americans with Disabilities Act Amendments Act of 2008 (ADAAA). The law will take effect January 1, 2009.In proposing this legislation, Congress said that since the enactment of the Americans with Disabilities Act in 1990, a series of U.S. Supreme Court decisions had narrowed the definition of disability too much, thus the introduction of the bill.
How will it affect buildings? Current assessment is that it will not since it does not affect making public accommodations more accessible. That issue was addressed in the recent proposed guidelines by the Department of Justice. The ADAAA is focused on the definition of 'disability.' What the ADAAA may change is that more people will be able to claim that they are disabled and thus under the coverage of the ADA.
While the legislation maintains the definition of a disability as one involving a physical or mental impairment that substantially limits one or more major life activities, it makes changes to the meaning of major life activity under that definition. The new act now states that major life activities include, but are not limited to, caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating and working. In addition, the legislation states that a major life activity also includes the operation of a major bodily function, including but not limited to, functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine and reproductive functions.
The legislation also includes clarifications of other aspects of the law. For example, the legislation includes provisions that state:
- An impairment that substantially limits one major life activity need not limit other major life activities in order to be considered a disability, and
- An impairment that is episodic or in remission is a disability if it would substantially limit a major life activity when active.
The determination of whether an impairment substantially limits a major life activity shall be made without regard to the ameliorative effects of mitigating measures.
The legislation also includes a measure that states that the term disability should be construed in favor of broad coverage of individuals under the ADA.
ACT NOW! Ask Congress to Pass the Financial Markets Stabilization Plan and Tax Extenders Immediately!
This week, Congress will make a second attempt at passing a financial market stabilization package that now includes the extension of BOMA-supported tax deductions for leasehold depreciation, brownfields expensing and energy efficient commercial buildings. Our economy could be headed to an even greater catastrophe if Congress does not act swiftly, making it next to impossible for the commercial real estate industry and our tenants to obtain the capital necessary to do business and provide jobs.
BOMA International urges you to act now and ask your United States Senators and Representatives to implement a plan that will bring certainty to the financial markets and provide critical tax relief to the industry. Swift enactment of legislation is needed to help stabilize the economy and ensure credit flows to businesses, commercial property professionals and consumers.
Ask Congress to Pass the Financial Markets Stabilization Plan and Tax Extenders.
Real Estate Roundtable Tackles Economic Downturn
BOMA International Chair Dick Purtell, RPA, and BOMA International President Henry Chamberlain, CAE, APR, participated in this week’s Real Estate Roundtable where the recent economy troubles in the financial sector were the focus of the agenda.
Featured speaker Dr. Alan S. Binder, vice chair of the board of governors of the Federal Reserve Systems, told attendees that U.S. GDP is up despite the fact that the financial markets are in disarray. U.S. GDP growth is outpacing the other G7 nations due to exports and gains in productivity – numbers that will be hard to maintain with a weakening global marketplace and employment market. Commenting on the current economic crisis in the financial sector, Binder stressed that “nationalizing” Fannie Mae and Freddie Mac as well as AIG (an insurance institution that does more than half its business overseas and was not under Federal jurisdiction) but not helping Lehman Brothers, means the financial rules are now unknown, which is creating more instability.
A financial panel featured speakers from Morgan Stanley, Goldman Sachs, TIAA-CREF, and Capital Trust. The consensus was that things may get much worse before they begin improving. The panelists were also concerned about the health of the regional banks. It was also agreed that the fundamentals of real estate remain good, but consumer weakness is growing. The panelists viewed lenders as being ahead of the equity players on writing down the value of real estate, with 10 percent write downs common for good properties, and 20-25 percent for bad properties. Lenders are building in a cushion on any loans they are writing as they anticipate declines in asset values.
The meeting also featured presentations by Sen. Kent Conrad (D-N.D.) and Sen. Orrin Hatch (R-Utah). Sen. Conrad is Chair of the Senate Budget Committee and he sees the need for serious remedies and action to stabilize the markets but also is very concerned over the expanding federal budget deficit and U.S. reliance on foreign governments. Sen. Hatch is leading the fight in the Senate against enactment of the Employee Free Choice Act or “card check” legislation as it is commonly referred to, which would widen the unions’ ability to organize around the country by effectively eliminating the use of secret ballots, possibly leading to intimidation of people around organizing efforts. All of the real estate associations and members, Chamber of Commerce and business groups in general, are strongly opposed to this legislation.
Look for a full report from the Real Estate Roundtable meeting in the next issue of The BOMA Magazine.