If you’ve been in the industry long enough—or for that matter, not a long time at all—you know the importance of accurate building measurements. Floor measurement standards are what BOMA has been famous for since 1915. But the “what” of accurate floor measurements wasn’t the focus of an in-depth educational session at the 2019 BOMA International Conference & Expo in Salt Lake City. It was the “why.” And simply put, the why comes down to asset value.
“Why should you care about floor measurements? One reason is that you have to bring in two to three times your salary in order to justify your position,” said moderator Rebecca Hanner, BOMA Fellow, principal of Hanner Commercial Asset Services. And that value proposition is key to job security.
“Floor measurements touch everything we do,” agreed Chris Horsley, executive vice president of the Hokanson Companies. “It’s how we normalize. It’s how we buy, how we lease and how we operate. What’s your electric cost? You don’t say its $500,000 a year. You say it’s a buck seventy. These numbers are all based on that denominator.”
Clearly, it’s a critical part of the property manager’s job to nail that number. Kent Gibson, BOMA Fellow, president of Capstone Property Management, proved the point, explaining that his shop had a building in Minneapolis, where “the operating costs were higher than the market. Ownership wanted to drop the rental rate to attract new people. "We re-measured the building and found that some areas hadn’t even been counted, and when we got through we found the operating costs were better than others in the market, and it immediately started renting," said Gibson. "You have to know what numbers you’re using.”
Want more proof? Susan Engstrom, BOMA Fellow, RPA, FMA, senior manager at Main Street Real Estate Advisors, told her tale of value found. Using a conservative $20/square foot rental rate and a cap rate of seven, she related the following experience: “Prior to purchasing a building, the owner did not perform due diligence on building’s square footage. After the purchase, he needed As-Built plans for the building. Since there were no plans, layouts, or configurations conveyed upon sale, he had no idea how to discern the actual occupancy ratio of the building. He needed good plans for the vacant suites in order to make sure his lease up was accurate. It turned out that the square footage was 61,666 square feet larger than purported at sale. When capped at seven percent, the increase in value was tremendous. The owner got lucky.”
As if the point weren’t clear at this point in the session, Gibson drove it home to the standing-room-only crowd: “I always re-measure when I get a new assignment. Typically, I find square footage. I’ve saved ownership millions of dollars.”
Learn more about BOMA International's world-renowned floor measurement standards here.
ABOUT THE AUTHOR: John Salustri is editor-in-chief of Salustri Content Solutions, a national editorial advisory firm based in East Northport, New York. He is best known as the founding editor of GlobeSt.com. Prior to launching GlobeSt.com, Salustri was editor of
Real Estate Forum.