In our earlier piece, “Office Tenants Pay for More Phantom Space than Ever,” we called out the landlord community, its landlord brokers and BOMA for their collective assault on commercial tenants by virtue of the creative ways they measure office space square footage. This is a game which always benefits landlords. Whenever BOMA issues its newly updated recommended standards for measuring space, BOMA 2017 being the most recent, tenants can bet that their space will mysteriously grow from years gone by.
BOMA 2017, the new standard, now encourages landlords to count as “rentable square footage:”
• Finished rooftop terraces
• Penthouse space
• Balcony space
• Major vertical penetrations in the lowest level of buildings (eg. at parking garage level)—Building service areas
• All-told, BOMA 2017 adds ~3 percent to the BOMA 2010 calculations.
Recently we were engaged in renewal negotiations for a few of our clients—in buildings just entering the sale process. In each case, the new building owner remeasured the buildings and found between 10 and 11.5 percent more space in the building. Under a prospective new lease, the landlords expected our clients to pay rent for the newly expanded space irrespective of what they’d been occupying for many years prior under the old square footage. Heads up, tenants.
BOMA is the largest landlord-lobby in the U.S. According to their website: “Founded in 1907, BOMA represents the owners and managers of all commercial property types including nearly 10.5 billion square feet of U.S. office space that supports 1.7 million jobs and contributes $234.9 billion to the U.S. GDP. Its mission is to advance a vibrant commercial real estate industry through advocacy, influence and knowledge.”
Vibrant, perhaps, but hardly serving tenants with respect to space calculations—tenants who understand little of the art of space measurement and are innocent bystanders who over the decades pay more and more for phantom space they do not use.
Tenants, if your spatial requirements are large enough to provide you with negotiating leverage, you should prepare to take on the building owner about their method of measurement. If your office market is tight, the landlord may invite you to take a leap. Know what you’re getting into.
Dan Mihalovich is the Founder & CEO of The Space Place, a San Francisco based commercial tenant-representation firm.
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