Fundamentals of Facilities Management, ©2003

The pages listed below contain revisions that have been made to this course book since it was last printed.The rest of this file provides the corrected, print-ready pages, along with the reverse of each page. To updateyour book, print the pages on both sides of your paper by following the directions provided on the nextpage. Then simply filter the pages into your course book.

Chapter 9

Pages 9-60 – 9-66 April 2004 Updated Appendix C: SpaceMeasurement Systems

Student Packet

Chapter Review Test:Chapter 6 April 2004 Removed question 1, which was taken from

Chapter 5 in errorChapter Review TestAnswer Key April 2004 Chapter 6: renumbered questions and changed

former question 3 to correct letter A; Chapter 14: changed question 7 tocorrect letter C

Updates and Errata

Revised Pages Date Revised Description of Revision

page 1BOMI Institute

9-59Appendix B

7. Where appropriate, use professionals (who care, but not too much) to represent you in negotiations.

8. Ensure that during negotiations all parties know: • Who the spokesperson is for each side • What the limits are of the spokesperson's authority and flexibility

Meeting Corporate Objectives1. Use cooperative bargaining rather than confrontation. • Try to achieve a satisfactory and sound solution. • The goal is a basic meeting of the minds.

2. Control the process based on your negotiating strategy and model. • Use your negotiating model. • Determining important facts is essential to defining business and negotiating issues. • Prudent preparation should result in understanding the assumptions.

3. Be prepared for reciprocal provisions.

Ensuring You Get What You Thought You Were Getting:1. What are the necessary requirements for your customer? Have they been satisfied? 2. What conditions does the seller or landlord require to close? 3. Where possible, require specific remedies and liquidated damages.

Making the Final Agreement and Closing the "Deal":

1. Be ready to concede appropriate items or issues within your negotiating model. 2. If you are purchasing, consider using a closing attorney whose experience includes closing where the acquisition is located. • Require the right to assign the purchase or lease without unreasonable restraint. • Do not waive essential contingencies, warranties, and representations that must survive the closing. • Require an inspection as appropriate. • When rights and duties are indisputably clear in the real estate lease or purchase contract, take a firm position. • Support your leasing or closing attorney while achieving your business objectives. • Do not forget that you can stop the lease process or reschedule a closing if required business terms and issues have not been achieved.

3. Be gracious, civil, and professional.

4. If you decide to try to squeeze the last buck out of the deal, understand what this will mean to both parties. If it is a good deal, close the transaction.

Appendix CFor your reference, this appendix contains an updated, abridged version of a com-parison of the various revised space measurement systems. The original comparisonwas provided by Lawrence W. Vanderburgh, RPA, FMA, CFM, RA, vice president ofcustomized and workforce programs, BOMI Institute.

Space Measurement Systems

Space measurement is a relatively obscure aspect of property and facilities man-agement, but it plays a crucial role in setting rental rates and space assignmentrecords. The subject is best approached with some caution.

Several space measurement systems are in use in North America. Many of them useidentical or similar terms but interpet them in different ways, and sometimes theirlanguage is not precise. All systems strive to ensure the utmost fairness to occu-pants and building owners, but their rules are quite complex, particularly if youmust translate from one system to another.

Six space measurement systems are presented here, although several additionalregional variations are in use in major North American urban centers. The sixmeasurement systems presented are the following:

1. BOMA (Building Owners and Managers Association) — new standard

2. BOMA (Building Owners and Managers Association) — old standard

3. REBNY (The Real Estate Board of New York, Inc.)

4. WDCAR (Washington, DC, Association of Realtors)

5. GSA (General Services Administration) — former system

6. IFMA (International Facility Management Association)

Before 1992, there was little attempt to compare the systems. Now, the trend ismore toward reconciliation than standardization.

The most recent development in this field has been the promulgation of a majorrevision by BOMA to its standard. The U.S. General Services Administration hasrecently decided to classify all future space assignments, including lease actions, interms compatible with BOMA’s new system. The BOMA system is the most widelyaccepted in commercial real estate transactions, such as leasing. It is also used fortenants’ space assignment allocation in many buildings. (A copy of the StandardMethod for Measuring Floor Area in Office Buildings can be ordered through thesupplemental readings section at the back of the text.)

9-60 Appendix C

The New BOMA SystemThe BOMA system is tailor to the needs of the commercial office building lessor. Itis by far the oldest and most widely used system. In June 1996, BOMA completeda major revision of its measurement standard, which has again been endorsed byANSI (the American National Standards Institute).

As with the old standard, HVAC convectors, columns, and interior building projec-tions are included in measurements; tenants must absorb this in their rent bills andspace planning procedures. Another aspect that remains the same is that usablearea exclusive to one tenant is still measured from the office (tenant) side of wallsseparating tenant space from public corridors.

Unlike the old standard, the new standard defines floor usable area to includebuilding-wide common areas on that floor. Such areas are prorated to all buildingtenants on all floors. Areas such as public toilets and electrical and janitorialclosets are considered floor common areas. For a side-by-side comparison of thedifferences between the old and new BOMA systems, please refer to Figure A.

The 1996 standard represents a major departure from the previous one in thefollowing areas:

It measures space on a building-wide basis, rather than exclusively floor byfloor.

Most areas that were formerly amortized or absorbed in the base buildingcost, and therefore covered in the base rent, are now measured andprorated to all tenants.

The new standard is much more explicit in naming many of the newbuilding features designed to support all tenants in a building.

9-61Appendix C

Old BOMA SystemMeasures space on a floor-by-floor basis

Building common area not considered usable

Building common areas not defined

Simple calculations but wide variation in core/loss factors

New BOMA SystemMeasures space by the building as a whole

Building common areas measured and prorated to all tenants

Building common areas precisely defined

Complex calculations but more consistent core/loss factors on all floors

Figure A Differences between the Old and New BOMA Systems

Calculations are more complex, but the results provide a more rationalapproach to real contemporary situations.

Several new definitions have been introduced. Familiar terms like rentableand usable have been revised to reflect required changes in how they arecalculated.

The definition of rentable area includes office, store, portions of buildingcommon areas, and floor common areas prorated to each tenant. Buildingrentable area almost always remains constant for the life fo the building.Usable area changes over the life of the building as tenant space changes.

Basement storage and loading dock areas within the building line are con-sidered part of rentable area; parking areas are not.

Old BOMA SystemThe previous BOMA standard is also included for comparison. It remains the base-line for rentable areas stated in thousands of leases. Of the six systems mentionedhere, the old BOMA standard is the most generic, has the simplest set of defini-tions, and is the easiest to administer — as long as its few categories are specificenough for the intended application. Its major features include the following:

Space is measured floor by floor, rather than by the building as a whole.

Rentable space is constant for the life of the building; usable area changesover the life of the building.

Private stairs, washrooms, and kitchens are considered part of the rentablespace.

HVAC convectors are included in measurements; tenants must absorb thisin their rent bills and space planning procedures.

Amenities shared by several tenants — such as fitness centers, conferencecenters, lounges, and vending areas — are not considered rentable.Landlords are expected to factor the costs of such facilities into their basicrental rates. Basement storage and parking areas are not included as part ofrentable area.

Except for mechanical penthouses, there is little definition of the allocationof space for central building support operations, such as HVAC, electrical,telephone switch, and UPS systems for the entire building. Common prac-tice is to exclude them all from rentable area, but the standard is notdefinitive.

9-62 Appendix C

Since the old BOMA system measures floor by floor, main lobbies andatrium areas are considered rentable. Since core factors tend to be very highon these floors, BOMA suggests renting usable area in this case.

Usable area exclusive to one tenant is measured from the office (tenant)side of walls separating tenant space and public corridors. Usable spaceexcludes such support areas as public toilets, mechanical rooms, andelectrical and janitorial closets.

REBNY SystemThe REBNY space measurement system is the most landlord oriented of the sixbecause it includes the most nonusable space in the rentable area billed to a tenant.From a landlord’s viewpoint, this approach has an advantage over the others: thetotal rentable area of the floor remains constant. In addition, unless space isactually added to or deleted from a tenant’s holdings, the tenant’s percentage ofrentable area of the floor and of the entire building remains constant. This facili-tates uniform, consistent allocation of tax increases and operating costs, therebysimplifying administrative procedures.

WDCAR SystemThe WDCAR system was adopted by Washington, DC, Association of Realtors in1989 and supersedes an earlier system used by the Washington, DC, Board ofRealtors. It is generally complementary to BOMA’s old system, but it is more spe-cific. By explicitly excluding more general building support areas, it narrows therange of core factors on unusual floors and simplifies negotiations. Its featuresclosely parallel those of the BOMA system.

Former GSA SystemAs of this writing, the GSA is undergoing the most profound change in its relation-ship with its tenant agencies since its founding in 1949. As a result, the FPMR(Federal Property Management Regulation) 101-17, Temporary Regulation D-76,which included the language of GSA’s space measurement system, has expired,leaving no official space measurement system of record.

GSA has also decided to endorse the new BOMA standard as the method referencedin all future leases with private-sector building owners. To embrace this new stan-dard and reconcile it with thousands of existing agency space assignments andleases, GSA has determined that what is called occupiable space in its old systemequates almost exactly with floor usable area in the new BOMA system. The onlysignificant discrepancy concerns HVAC convectors, which are excluded fromGSA’s occupiable space definition but are included in BOMA’s floor usable area.

9-63Appendix C

IFMA SystemThe IFMA system has been most recently developed. It has been adopted as a stan-dard of ASTM (the American Society for Testing and Materials). It is based on andcomplements the old BOMA system. It differs in its detail of measurement cate-gories of particular interest to the tenant and to space planners laying out actualfurniture and equipment. It is positioned to align with efforts in other countries,particularly through the ISO (International Standards Organization), where theemphasis on space measurement tends to be more tenant-oriented.

Summary

F igure B (Space Measurement Systems Compared) and Figure B-1 (Key Measure-ment Terms) summerize some general comparisons between the six systemslisted on page 66. The first shows the basic types of space encompassed in the

definitions of each measurement system. All types of space fall into one of the fol-lowing threecategories:

Space rented by measurement. This is shown in the large block on theright side of Figure B. It represents space in each system that is measuredand becomes the basis of the space allocated to a particular tenant and therent calculation.

Space allocated pro rata. This is shown in the center block of Figure B. Itrepresents space in each system that is measured, tallied, and allocated prorata to each tenant, in proportion to its share of space in the building. Thisshare of space, often called the core, or loss factor, is added to the measuredspace described above to calculate the total rentable area written into a ten-ant’s lease.

Space amortized into the base building cost. This space, represented bythe large block on the left side of Figure B, includes areas that are neithermeasured nor allocated pro rata in the tenant’s lease. Therefore, the costs ofsuch space must be recovered in the base rent charged in relation to meas-ured space in the previous two categories.

Figure B-1 shows only the last two categories — space rented by measurement andallocated space — as well as the most important terms of each system.

The BOMA Standard Method for Measuring Floor Area in Office Buildings is by farthe most widely accepted floor measurement standard in use today and with theadoption of the new BOMA standard by GSA, it is likely its predominance in theindustry will increase.

9-64 Appendix C

9-65Appendix C

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Select the one choice that best answers the question.

1. When a bundle or full range of services is provided by a third-party single contractor or groupof contractors, this arrangement is referred to as:

a. outsourcing.b. out-tasking.c. consulting.d. contracting.

2. To convey fairness, the scorecard should be presented to the contractor:

a. in the RFP or IFB.b. after the selection has been made.c. at no time.d. after bids have been received.

3. One aspect of laying off staff and outsourcing facilities work is that it:

a. helps maintain better control.b. allows for manpower flexibility.c. eliminates patterns of problems.d. protects the organization’s business interests.

4. From the facility manager’s perspective, in most situations, the best person(s) to form analliance between firms is/are the:

a. vendors themselves.b. facility manager.c. company attorney.d. company financial officer.

5. A facility manager with seniority and experience working on a large job will likely have:

a. contracting training for the facility department.b. closer supervision from the contracting officer.c. a contracting specialist on staff.d. some delegated contracting authority.

6. The least risky contractual arrangement for a contractor is:

a. fixed price incentives.b. fixed price with economic adjustments.c. fixed price for fixed level of effort.d. firm fixed price.

Chapter Review Test: Chapter 6

7. The first draft of a contract for an outsourcing partner should be written by the:

a. legal department.b. facility manager.c. chief financial officer.d. senior manager.

8. When combining similar activities into functional areas to prepare specifications, you shouldgroup the staff into:

a. similar roles.b. current work aggregations.c. chains of command.d. project-oriented teams.

Chapter 6 (continued)

Chapter 1

1. A2. D3. B4. B5. C6. D7. B8. C9. A

10. D

Chapter 2

1. D2. B3. A4. A5. A6. D7. C8. C9. C

10. C

Chapter 3

1. A2. B3. D4. D5. B6. A7. A8. A9. A

10. A

Chapter 4

1. A2. C3. A4. A5. C6. C7. B8. B9. D

Chapter 5

1. D2. B3. C4. A5. A6. A7. A8. B9. D

10. B

Chapter 6

1. A2. A3. B4. A5. D6. C7. B8. D

Chapter Review Test Answers

Chapter 7

1. A2. C3. A4. C5. D6. B7. B8. D9. B

10. B

Chapter 8

1. C2. A3. D4. B5. A6. C7. A8. C9. B

10. C

Chapter 9

1. C2. C3. B4. C5. A6. A7. B

Chapter 10

1. A2. C3. D4. D5. D6. A7. D

Chapter 11

1. D2. B3. C4. A

Chapter 12

1. A2. B3. A4. D5. C6. D7. A8. B

Chapter 13

1. C2. D3. B4. C5. D6. B7. C8. D9. D

10. B

Chapter 14

1. A2. A3. D4. D5. B6. A7. C

Chapter 15

1. B2. D3. B4. B5. D6. B7. D8. D9. B

10. D