"...Their (owners and managers) desire to squeeze maximum space out of buildings is hardly unique, although their fervor may be. Hundreds of real estate investors keep an eye out for buildings that previous landlords failed to fully exploit."

''New York City is a city of square feet,'' said Bernard H. Mendik, president of the Mendik Company, which has bought and improved office buildings with more than 15 million square feet of space. ''Every square foot is valuable...''

"...it makes sense to find space rather than buy it. "

"Schroder Real Estate found an extra 19,000 square feet in its Arlington acquisition, known as the Century Building, when a local architect remeasured it."

"Adding leasable space to an office building can often be done with only a measuring tape. A thorough remeasuring of a building almost always adds 5 percent to 12 percent to its recorded square footage - and, therefore, the monthly lease payment."

"When Hookston Square in Pleasant Hill was remeasured about 18 months ago, 3,000 square feet was added to the total, bringing the building to 199,741 square feet."

Rentable … Useable … What’s the Difference?
By: Fraser Rowe and John Keeler

Most owners and managers of commercial properties think they know the size of the building assets under their control. But, how many are actually aware of the important changes in the determination of what is “rentable?” BOMA International has published the “Standard Method of Measuring Floor Area in Office Buildings” since 1915, and in 1955 the document was named an American National Standard by the American National Standard Institute (ANSI). As the commercial real estate industry has evolved over the years, so too has the methodology of measuring office buildings. The latest edition of this popular measurement guideline was produced in 1996 and is commonly referred to today as ANSI/BOMA Z65.1 (1996) in many lease documents. Why should owners and managers of office buildings have more than a passing knowledge of ANSI/BOMA Z65.1 (1996)? Because office buildings must be measured in a way that is fair and equitable to both the owner and the tenant. In recent years, modifications to the “Standard” have been developed in order to allocate “common areas” within a building. More importantly, since 1996, more space within an office building has been clearly defined as “rentable,” thereby potentially increasing a property’s income potential. Forthright office building owners have realized the advantages of an accurate re-measurement and space calculations to ANSI/BOMA Z65.1 (1996). The benefits include:

• Increasing net operating income (NOI) by ensuring that tenants are paying their pro-rata share of all clearly defined common areas;

• Improving property, portfolio and shareholder value through an accurate measurement of rentable areas;

• Increased revenue forecasting, especially important during due diligence;

• Better marketing of buildings as tenants will be aware of their “up-front” operating cost charges.

From a manager’s point of view, the benefits of having an accurate building measurement are also notable. For example, accurate measurement information is vital when negotiating building contracts for maintenance, cleaning, HVAC and capital expenditures. The ANSI/BOMA Z65.1 (1996) Standard is a guideline that has rapidly become an “industry standard.” But the document is just that – a guideline. Landlords would be wise to consult their tenants before re-measuring their space to avoid any anticipated shocks when it comes around to lease renewal time. A thorough knowledge of the ANSI/BOMA Z65.1 is of paramount importance when measuring an office building for rental purposes. With millions of dollars riding on the outcome, one must be certain that the measurements are done correctly. Copies of the “Standard Method of Measuring Floor Area in Office Buildings” can be obtained by calling (800) 426-6292 or visiting www.boma.org/pubs/floor96.htm. Cost for members is $25.00 and $35.00 for non-members.