Building Owners and Managers Association
Founded in 1907, the Building Owners and Managers Association (BOMA) is an international real estate trade organization representing owners and managers of commercial real estate. The organization promotes, provides advocacy and develops various pertinent research publications in support of its members. BOMA members span the entire property and investment type spectrum. BOMA International is widely recognized as a primary source of information on building management and operations, development, leasing, building operating costs, energy consumption patterns, local and national building codes, legislation, occupancy statistics, technological developments and other industry trends.
Most notably, BOMA is the go-to resource that industry professionals work with to calculate accurate building measurements.
Putting ‘Building Owners and Managers Association (BOMA)’ in Context
Scenario:
Windy City Properties, a real estate investment firm based in Chicago, IL, recently acquired Lakeshore Tower, a Class A office building located in the core business district of downtown Chicago. The acquisition was part of the firm’s core investment strategy, targeting well-located, stabilized assets with strong tenant rosters and predictable cash flows.
Challenge:
After acquiring Lakeshore Tower, Windy City Properties conducted a thorough review of the building’s current Net Rentable Area (NRA). They discovered that the building’s NRA was calculated using older measurement standards, which were not aligned with the latest BOMA guidelines. Recognizing the opportunity, the firm decided to remeasure the building’s NRA using the most up-to-date BOMA standards.
Outcome:
By applying the BOMA standards, Windy City Properties identified a 3% increase in the Net Rentable Area of Lakeshore Tower. This increase was primarily due to the more accurate inclusion of certain common areas and the clarification of what constituted rentable space under the latest guidelines.
For example, if the building was originally measured at 500,000 square feet, the remeasurement added 15,000 square feet, bringing the total NRA to 515,000 square feet. This 3% increase in NRA directly impacted the building’s revenue potential, as it allowed the firm to charge rent on an additional 15,000 square feet across future lease agreements.
Financial Impact:
Assuming the average rental rate in the market is $40 per square foot, the remeasurement translates into an additional potential rental income of $600,000 annually (15,000 sq ft * $40/sq ft). This adjustment not only enhances the building’s value by increasing its cash flow but also positions Windy City Properties to achieve a higher valuation upon future sale or refinancing.
Conclusion:
This scenario underscores the importance of adhering to BOMA standards in accurately measuring building spaces. For Windy City Properties, leveraging these standards to remeasure Lakeshore Tower’s NRA resulted in a meaningful increase in rentable space, directly adding value to the asset. BOMA continues to serve as an essential resource for real estate professionals, ensuring that property measurements are accurate, standardized, and in line with industry best practices.
Frequently Asked Questions about Building Owners and Managers Association (BOMA)
What is BOMA?
BOMA stands for the Building Owners and Managers Association, a global trade organization founded in 1907 that represents commercial real estate owners and managers. It provides advocacy, research publications, and standards for the industry.
What is BOMA best known for in commercial real estate?
BOMA is widely recognized as the go-to resource for calculating accurate building measurements, especially Net Rentable Area (NRA).
How can BOMA standards affect property income?
Accurate remeasurement using BOMA standards can increase a building’s Net Rentable Area. In the case of Lakeshore Tower, a 3% increase in NRA resulted in $600,000 in additional annual rental income based on market rates.
Why did Windy City Properties remeasure Lakeshore Tower using BOMA standards?
They remeasured the building to align with current BOMA guidelines and discovered a 3% increase in NRA, unlocking new rental revenue and enhancing the property’s long-term valuation.
What areas are typically included in BOMA measurement standards?
BOMA standards clarify the inclusion of rentable areas such as certain common areas and core spaces that older measurement methods may exclude.
Who uses BOMA standards?
BOMA standards are used by building owners, property managers, appraisers, leasing professionals, and investors to ensure consistent and fair building measurements across the industry.
How do BOMA standards impact property valuation?
Increasing NRA through BOMA remeasurement can raise a property’s rental income and cash flow, which in turn can increase the asset’s appraised value and resale or refinancing potential.
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