Dundee BOMA Presentation

Last week we had the opportunity to make a presentation at Dundee Realty's semi-annual management conference. We were asked to explain the new BOMA 2010 measurement standard for office buildings.

Our production manager, Jitesh Mandalia, did a great job of explaining the core concepts. Here are Jitesh's slides:

BOMA Measurement Standards

View more presentations from Mikael Sandblom.

One of the questions that we got afterward was about the adoption rate of this new standard. Is it catching on? How long will it take to become the dominant standard?

In my opinion, the adoption of the BOMA 2010 standard will be very slow for three reasons.

1. First, the standard is confusing. There are two options that are fundamentally different. Gross-ups for a particular space can be quite different under each method. It could be confusing to compare spaces in two buildings if one is measured under method A and the other under method B.
2. Next, the real estate market is currently slow. There is little new development and few building transactions. A building purchase or sale is the likeliest time to re-assess the areas. As long as the market stays quiet, the status quo on area calculations is likely to dominate.
3. And Finally, there's no compelling reason to change. Moving from BOMA 80 to BOMA 96 allowed landlords to fairly distribute building common areas to all the tenants in the building. Most landlords were therefore able to legitimately charge for several percentage points more total area. The buildings got bigger! - which is a very good reason to change the standard. In both variants of the BOMA 2010 standard, the total area of the building will not change from the 96 standard.

I may well be wrong, but I think that BOMA 96 will remain the dominant method for a long time. If BOMA 2010 numbers are used, it will be 'Method A' or the legacy method as it's very similar to the old BOMA 96 standard.