Leading the Future
Conflict Resolution Strengthen Relationships with Your Team, Tenants and Vendors
Plus: Women in CRE: Closing the Compensation Gap Strategies for EnergyEfficient Elevators BOMA Leaders Share Best Practices â€˜Down Underâ€™
QQUUAALL II T RTOETC ET C T YY FFA A LL L LP RPO I OTNI O N
wall anchors wall anchors
r o or fo oa fn cahnoc rhso r s
horizontal life lines horizontal life lines
Work Worksafe. safe.Stay Stay anchored. anchored. Creating a safe workplacefor forsuspended suspended work on Creating a safe workplace on the theoutside outsideofofyour your facility is aiscritical It is imperative that your property meet facility critical.requirement. It is also imperative the suspended personnel meet OSHA regulations and ANSI guidelines OSHA regulations and ANSI guidelinesfor forfall-protection. fall-protection. American Anchorstaff knows the importance of to roofassist anchor so American Anchor is uniquely qualified yousystems in meeting today’ s demanding confusing We OSHA and ANSIof fall protecwell, they helped and writeoften the regulations. are members the ANSI country tionI-14 regulations. With A-120 over 700 completed projects county and the ASME committees, which help across protectthe workers we from have fall the related experience you want. American Anchor will work injuries. When you have OSHA /ANSI standardclosely and withrequirement you to insure your property and your contractors are protected questions… come to us, American Anchor! from harm. 3/4" stainless steelfall u-bar anchors equipment offers highest • •The finest quality prevention in quality the country of protection
Products made the hot USAdipped using recycled materials with lifetime warranty. • •Stainless steelinand galvanized construction FREE engineered design overview and layout of
• Inspections and Certifications of existing systems • May be installed during new construction or retrofit
• Professionally to an existingengineered structure and installed during construction or retrofit to any existing rooftop • Custom-made anchors for ANY roof
• Call us for a free evaluation of your current project and avoid costly liability
Corporate Office • 71 Elm Street, Suite 3 • 3Foxboro, MA MA 02035 Corporate Office • 71 Elm Street, Suite • Foxboro, 02035 Tel. 508-543-9199 • Email: email@example.com Tel.800-371-8221 800-371-8221• •Fax Fax 508-543-9199 • Email: firstname.lastname@example.org www.american-anchor.com www.american-anchor.com
Regional Offices located in: Albany 845-249-7841 • Houston 713-956-7521 • Newark • Phoenix 480-246-3256 Regional Offices located in: Albany 845-249-7841 • Houston 713-956-7521 •800-370-0087 Phoenix 623-209-2971 Regional Offices located in: Albany 845-249-7841 • Houston 713-956-7521 • Newark 800-370-0087 • Washington D.C. 703-971-3373 Washington D.C. 703-971-3373 • Opening soon in Salt Lake City and Las Vegas Washington, D.C. 703-971-3373 • Salt Lake City 800-371-8221 • Las Vegas 623-209-2971 Opening soon in Salt Lake City and Las Vegas Mid Atlantic Region 800-370-0087
New Chicago Office opening Jan 1st
KONE provides high-quality maintenance services and efficient maintenance processes in order to ensure top level service quality. KONE is continuously developing solutions for managing the people flow within buildings and improving the environmental impact of our solutions. To learn more visit us on the web at www.us.kone.com or call us at 800-956-KONE (5663).
Change How You Find Energy Loss FLIR Can Show You How
New Low Prices! i5: $1,595 i7: $1,995 Best-in-class performance. Groundbreaking affordability.
With FLIR, energy efficiency pays. Find it. Fix it. Prove it. FLIR sells more cameras into more applications than all other thermal imaging companies combined.
Visit www.flir.com or call 866.477.3687 to learn more.
Images/content for illustration purposes only.
The World Leader in Thermal Imaging
November/December 2010 Volume 6, No. 6
22 28 26 30 Conflict Resolution: Building the Bridge to Accord Natalie Brecher Make your team more effective and improve relationships with tenants and vendors. Also: findings from the 2010 SelectLeaders/Cornell Job Barometer Report.
For advertising rates and information, contact Paul Hagen at Stamats Business Media 866-965-4205.
Cracking the Glass Ceiling? Kristin Blount CREW study findings: There are more women in CRE, but are they making more money?
Join BOMA on LinkedInJoin the new EER Users Group See BOMA on YouTube: www.youtube.com/ bomainternational Follow BOMA on Twitter: BOMA Chair Ray Mackey @ rhmackey BOMA President Henry Chamberlain @ HenryBOMA BOMA Vice President Lisa Prats @ LisaPratsBOMA
Volume 6, No. 6 The BOMA Magazine November/December 2010, (ISSN 15324346), Copyright 2010. The BOMA Magazine is published bimonthly in January/February; March/April; May/June; July/August; September/October; and November/December by the Building Owners and Managers Association (BOMA) International, 1101 15th St., NW, Suite 800, Washington, D.C. 20005; Telephone 202-326-6300; Fax 202-326-6377; www.boma.org. Periodicals Postage paid at Washington, D.C. and additional mailing offices. POSTMASTER: Send address changes to: The BOMA Magazine, Attn: List Department, 1101 15th St., NW, Suite 800, Washington, D.C. 20005. Undeliverable U.S. copies should be sent to: The BOMA Magazine, Attn: List Department, 1101 15th St., NW, Suite 800, Washington, D.C. 20005. Return undeliverable Canadian addresses to: PO Box 875, STN A, Windsor, ON N9A 6P2.
Commercial Real Estate ‘Down Under’
Sasha Bailey Tips for increasing efficiency and reducing the cost of your elevators.
Henry Chamberlain and Ray Mackey, Jr. BOMA leaders visit Australia and New Zealand to network and share best practices.
Connect with BOMA Join BOMA on Facebook
Making Your Elevator Work for You
MESSAGE FROM THE CHAIR A Self-Regulating Success Story.
LEGISLATIVE UPDATE Congress adjourns, leaving unfinished business behind; EPA stormwater questionnaires hit the street. Plus, notes from NAC.
12 STATE & LOCAL UPDATE BOMA local associations continue to embrace energy-efficiency challenges.
14 CODES & STANDARDS UPDATE BOMA develops a new floor measurement standard for mixed-use buildings; codes victories save the industry billions.
16 LEADING THE WAY John Oliver—NAC chair, spoils ’em rotten granddad.
18 AROUND THE INDUSTRY SAPOA execs visit BOMA headquarters. Are there bed bugs in your building? Beyond the Restroom—where the germs are hiding.
32 TRENDS TRACKER Diana Osler-Zortea Recovery slam dunk in the Canadian market.
34 GREEN SCENE John Hoekstra Local governments eye commercial buildings to cut energy and carbon. Are you ready?
35 RESEARCH CORNER Best practices for bidding service contracts.
36 EYE ON EDUCATION BOMA’s new webinar series offers solutions for achieving a highperformance building.
38 TRADE TOOLS Becky Werra How McHenry County’s facilities management department is balancing the budget through energy-efficiency retrofits.
40 BUYERS’ GUIDE Check out the latest products and services.
42 CONFERENCE CONNECTION Three prominent thought leaders to discuss politics, real estate and the economy at the 2011 BOMA International Conference.
November/December 2010 The BOMA Magazine
Message from the Chair
A Self-Regulating Success Story Anyone who knows me knows that I think commercial real estate, and the business community in general, cannot thrive when choked by heavy regulation. As I mentioned in the last issue, costly regulations derail job growth and economic recovery. But that doesn’t mean we live in the “Wild West.” The best way to succeed in today’s market is through prudent self-regulation. No place is this approach more effective than with energy efficiency, where BOMA members have found success for years. Whether using no- and low-cost strategies to reduce energy consumption or signing onto BOMA’s 7-Point Challenge to reduce energy consumption by 30 percent by 2012, we have taken significant steps to reduce consumption and greenhouse gas emissions. Our most recent EER data proves that it’s working, as utility expenses are declining in many markets at a time when utility rates keep going up. Now it’s time to take it to the next level. One of the goals for 7-Point Challenge endorsers is to benchmark energy performance through ENERGY STAR® Portfolio Manager. Many of you have accepted this challenge, but we need more of you to both benchmark your energy usage and share that data with BOMA International. This is the best way to elevate the voice of commercial real estate before lawmakers and show them
Benchmark and Share Establish a user account in ENERGY STAR® Portfolio Manager Go to www.energystar.gov/benchmark and log in to Portfolio Manager. If you do not already have a user account, click the New User link on the log in page and follow the instructions. Enter your building(s) information and begin tracking energy performance. Share your facilities with BOMA International From the My Portfolio page, choose “Share Facilities.” From the drop-down menu labeled “Select a Portfolio Manager Master Account,” look for BOMA International-BOMABEEP. For step-by-step instructions and tips, visit the education page at BOMA.org and click on BEEP, Share Your Data with BOMA.
that voluntary marketplace transformation not only works, but is the clear option if we want to reduce consumption and add jobs to spur recovery. Another reason to benchmark and share is to stay competitive in markets where local governments are beginning to require commercial buildings to report energy information. It’s happening in New York City, Washington, D.C. and across California (see “Uncle Sam Wants … Your Energy Data”, page 34), as well as in international markets. I just returned from a trip to Australia with BOMA President Henry Chamberlain (see feature story, pages 30-31) where, at press time, a commercial building disclosure scheme was set to commence on November 1. The mandate requires owners and lessors of commercial office space to disclose energy-efficiency information to prospective buyers and tenants in buildings with a rentable area of 2,000 square meters (21,528 square feet) or more. The good news for BOMA members is that the resources and tools we have in place—education, advocacy, networking— have propelled us to the position of energyefficiency leaders. Our efforts are working and making a difference, but those efforts are only half fulfilled if they are not quantified. Take the next step and benchmark your building through Portfolio Manager. We measure to manage and we measure to improve, but, just as importantly, we measure to prove that a self-regulating market makes the business case as well as the sustainability case. Plus, it’s a success story we should all be proud to share. Thank you for supporting this great industry!
Ray Mackey, Jr., RPA, CPM, CCIM Chair and Chief Elected Officer
The BOMA Magazine November/December 2010
Publisher: Lisa M. Prats, CAE Editor: Laura Horsley Associate Editor: Lindsay Tiffany Contributing Editors: Karen W. Penafiel, CAE, Ronald Burton, James Cox, Henry Chamberlain, CAE, APR, Lorie Damon, Ph.D., Kristin Bowling, Tracy Glink Designer: Amy Belice Published by: Building Owners and Managers Association (BOMA) International
BOMA International Officers Chair and Chief Elected Officer Ray H. Mackey, Jr., RPA, CPM, CCIM Stream Realty Partners, LP Dallas, Texas Chair-Elect Boyd R. Zoccola Hokanson Companies, Inc. Indianapolis, Ind. Vice Chair Joseph W. Markling CB Richard Ellis, Inc. Los Angeles, Calif. Secretary/Treasurer Kent Gibson, CPM Property Reserve Inc. Salt Lake City, Utah President and Chief Operating Officer Henry H. Chamberlain, CAE, APR BOMA International Washington, D.C. Call for Nominations: Vice Chair, Secretary/Treasurer and Executive Committee Members BOMA International’s Nominating Committee is seeking candidates for the positions of vice chair, secretary/treasurer and for five members of the Executive Committee to the Board of Governors. For further information, contact Ann Coslett at email@example.com. The cost for The BOMA Magazine is $75 a year for subscribers and $50 a year for BOMA International members. Publication of advertising should not be deemed as endorsement by BOMA International. The publisher reserves the right in its sole and absolute discretion to reject any advertisement at any time submitted by any party. Material contained herein does not necessarily reflect the opinion of BOMA International, its members or its staff.
Congress Adjourns, Lame Duck(s) to Come CONGRESS HAS ADJOURNED—temporarily—to return to their home districts to prepare for the November 2 elections; however, they will return on Nov. 15 for the first of two anticipated “lame duck” sessions. On the long list of unfinished business are some important commercial real estate issues. Below is a brief summary of BOMA’s pending agenda. Capital Gains: Unless Congress acts
soon, the capital gains tax rate will revert back to 20 percent from the current 15 percent on Jan. 1, 2011. This was originally lowered as part of the “Bush tax cuts.” Leasehold Depreciation: Congress also
failed to address the extension of the 15-year timeline for leasehold improvements, which expired at the end of 2009 and is a part of the tax “extenders” that was packaged with a tax increase on carried interest. BOMA supports extending the 15-year depreciation period for leasehold improvements, but opposes using a permanent increase on carried interest to offset the cost. Covered Bond Legislation: In late July,
the House Financial Services Committee approved H.R. 5823, legislation that would encourage the development of a covered bond market in the United States. Covered bonds are securities whose underlying assets are typically a pool of commercial or residential mortgage or public-sector loans. Already in use in Europe and Canada, they represent a potential complementary funding source in the U.S. housing financial system, as well as an alternative to securitization that could help address ongoing refinancing challenges in the commercial real estate sector. BOMA International joined an industry letter supporting the bill, which has a chance to be considered by the full House and Senate before the end of the year.
Commercial Real Estate Stabilization Act: Rep. Walter Minnick (D-Idaho)
introduced The Commercial Real Estate Stabilization Act, which would establish a temporary five-year program, managed by the U.S. Treasury Department, to provide federal loan guarantees of up to 75 percent of the current market value of viable commercial properties. At this time, BOMA International is unsure of how effective or appropriate the creation of another new government program, similar to the Term Asset-Backed Securities Loan Facility, would be in assisting the commercial real estate market. Energy/Climate Change: While the
House passed a comprehensive climate change bill last year, which included several energy provisions of concern to BOMA members, the Senate has not followed. Majority Leader Harry Reid (D-Nev.) hopes to pass a much narrower “non-controversial” energy bill during the lame duck session. The future of all these provisions is unclear and will largely depend on the outcome of the election.
Bonus Depreciation Signed by President Before adjourning, Congress did take action on one measure of importance to BOMA members: Both the House and the Senate passed legislation that extends, through the end of 2010, 50-percent bonus depreciation for qualifying property purchased and placed in service in 2010. President Obama has signed it into law. The provision was enacted in both 2008 and 2009 and applies to certain qualified leasehold improvement property.
Stormwater Surveys Hit the Street In early September, about 3,000 real estate owners and developers were sent surveys on stormwater management practices. The responses to these surveys could be used by the U.S. Environmental Protection Agency (EPA) to develop regulations for post-construction stormwater runoff. Every company that receives a survey has a legal requirement to complete it. Help is on the way! If your company has received a survey, please contact BOMA International’s advocacy staff as soon as possible. Our coalition has developed guidance materials to assist you in completing the survey. The guidance document, which was partially funded by BOMA’s Industry Defense Fund, is intended to help clarify the intent of EPA’s questions, suggest considerations regarding issues raised in those questions and explain how the information provided by respondents may be used by EPA in future rulemaking efforts.
GAO Issues New Report on Federal Building Security Standards Earlier this year, the U.S. Interagency Security Committee (ISC) issued new building security standards for federal facilities, also known as the Physical Security Criteria for Federal Facilities. On a directive from Congress, the Government Accountability Office (GAO) reviewed the standards for leased space and released a report in September that identifies challenges to protecting leased space and examines how the new standards address these challenges. The GAO study ultimately recommends that ISC establish a working group to determine guidance for working with lessors and incorporate that guidance into a future ISC standard. BOMA International will provide comments to the working group and keep members up-to-date on its findings. Continued on page 10
The BOMA Magazine November/December 2010
Heating the outdoors can be costly.
Copyright © 2010 ASSA ABLOY, Inc. All rights reserved.
Our energy efficient door openings actually pay you back. ASSA ABLOY can help you seal your building’s envelope and significantly reduce the loss of heat. To ensure optimal performance, our openings exceed air filtration standards and maximize thermal resistance. Plus, with ASSA ABLOY Group brands, you have a comprehensive range of products at your disposal, including insulated doors, kerf frames, gasketing, door bottoms and door closers. For more information, call 800.715.5148 or visit www.assaabloydss.com. CECO DOOR | CURRIES | McKINNEY | NORTON | PEMKO
NAC Chair John Oliver kicked off the NAC/ROC Meeting.
Talent Retention and an Anticipated Return to Optimism Top NAC/ROC Fall Agenda BOMA International’s National Advisory Council (NAC) and Regional Owners Council (ROC) convened in Sonoma, Calif., on Sept. 23-24 to converse with experts, share thoughts on marketplace trends and celebrate that the worst is likely over with industry colleagues and peers.
that we’re not in for a speedy recovery are supported by the fragility of the consumer-sector recovery (due, in part, to increased savings rates of Americans), the high deficit and the level of our national debt as a percent of GDP. “The commercial real estate market will return to ‘normalcy,’ but not quickly …,” predicted Vandell. We are in the middle stages of a serious commercial market recession, which started in mid-2007 and has been primarily systemic, not regional, with all sectors affected. Keep in mind, he cautioned, that in recovery, new space demand will come first from “shadow vacancy,” then from “excess vacancy” and only then from new construction. Keep in mind also that the length and depth of the CRE recession is dependent on the rest of the economy. Employment drives the demand for commercial space. If employment growth of only 100,000 per month is maintained and each worker requires 200 square feet of space, 20 million square feet of additional space will be required per month, or 240 million square feet per year.
Blame It on the Boomers
Kerry Vandell gave the good news/bad news economic forecast.
Cautious Optimism Professor Kerry Vandell of The Paul Merage School of Business at UC-Irvine kicked off the meeting. Vandell was cautiously optimistic that the recession is, in fact, over (from the perspective of GDP growth), corporate profits are increasing and fears of inflation are fading. Also, productivity is soaring, and unemployment concerns are abating with the unemployment rate beginning to trickle down. He reconfirmed, however, that it will be years before we see any real catching up in job creation, and, therefore, years before we see new construction. In addition, other indicators
Chris Lee, CEL & Associates, reiterated Vandell’s views on the economy, and further pointed to the fact that baby boomers (whose retirement savings are now diminished) are putting off retirement, blocking the way for the up and comers, to further exacerbate the current and future problems of attracting and retaining talent in the industry. Rewarding and keeping key staff was a topic we kept circling back to throughout the meeting, and Lee pointed out that now was a good time to shed the underperformers. Lee also focused on “12 strategies” for doing the right thing, at the right time and with the right people:
2. Re-Examine Your Business Model. 3. Protect Your Most Valuable Asset … Your People. 4. Strengthen Your Brand. 5. Become Customer Centric. 6. Improve Internal Systems and Processes. 7. Take Advantage of Competitor Difficulties. 8. Recognize Opportunities. 9. Expand Your Service Lines and Specialization. 10. Understand Your Risks. 11. Strengthen Your Capital. 12. Grow Personally. “If you’re not making money in this economy, you’re doing something wrong,” was the summation of Lee’s remarks.
Seeing Green Scott Muldavin, from the Green Building Finance Consortium, discussed valuation of green assets. BOMA International was one of the founding members of the Green Building Finance Consortium, which it helped fund through the BOMA Industry Defense Fund.
Not in My Backyard! Patrick Slevin, with Hill & Knowlton, discussed developing strategies to combat “NIMBYism.” Discussion included how to get involved quickly to prevent the vocal minority from slowing or halting a project, as well as tips to evaluate when the anticipated NIMBY sentiment would just be too great and too costly to successfully combat. Slevin, from Tallahassee, Fla., also addressed Florida’s Amendment 4 ballot initiative as an example of a loud and well-organized—but small— constituency that is threatening to halt economic development in that state.
Everything from Social Media to Healthcare Reform At the end of the meeting, an open discussion on topics ranging from employee and tenant retention, to social media policies/strategies and preparing for healthcare reform made for a lively exchange. For more information about membership in NAC or ROC, contact Karen Penafiel or Pat Areno at (202) 408-2662. Chris Lee delivered 12 strategies for success today.
1. Reset Your Priorities.
The BOMA Magazine November/December 2010
Scientific Conservation invites you to An intimate gathering with David Gottfried, John Picard & Rob Watson
WEDNESDAY NOV 17 5-7:30pm
HYATT REGENCY MCCORMICK PLACE 2233 SOUTH MARTIN L. KING DRIVE DURING
GREENTALK2010.COM TO REGISTER
state & local update
BOMA Local Associations Continue to Support Energy Challenges BOMA MEMBERS ARE RECOGNIZED as industry leaders in taking proactive steps to reduce energy costs and greenhouse gas emissions. These goals coincide with those of local governments, which include conservation as a centerpiece of their public policy agenda. Across the country, BOMA local associations have launched their own energy challenges or joined with other groups in such contests to engage the commercial real estate industry in taking energy conservation to the next level.
Kilowatt Crackdowns Get Cranking BOMA/Greater Minneapolis and BOMA/St. Paul, in partnership with Xcel Energy, recently launched Kilowatt Crackdowns, energy conservation initiatives that challenge the commercial real estate industry to improve energy
efficiency, in their cities. Since energy represents the single largest operating expense for commercial buildings, efforts to reduce energy usage make good business sense as well as good environmental sense. “Kilowatt Crackdowns not only improve a business’ economic competitiveness, they also help expand the existing energy conservation industry by creating new ‘green jobs’ and a national center of expertise,” says Kent Warden, RPA, BOMA/Greater Minneapolis’ executive director. “They also help reduce the use of fossil fuels along with the associated pollution and greenhouse gas emissions.” In addition to these new energy competitions, BOMA/Louisville, BOMA/ Portland and BOMA/Seattle have also launched successful challenges. Participation in the competition is based on building size, and buildings must be a minimum of 30,000 square
Roof Anchor Installations
Roof Safety is Our Business Nationwide, Based on ANSI/IWCA I-14.1 Specializing in: Maufacturing, Installation and Testing / Certifying of
ROOF ANCHORS DAVIT ARMS OUTRIGGER BEAMS
www.jpobelisk.com 110 Forge River Parkway, Suite E • Raynham, MA 02767 Phone 508-942-6248 • Fax 508-697-4390 • Call Toll Free: 877-942-6248
The BOMA Magazine November/December 2010
feet. BOMA and Xcel Energy will provide participants with free assistance by helping benchmark buildings through the EPA’s ENERGY STAR® Portfolio Manager tool. They are also working together to locate stimulus funding and utility rebates to offset the cost of improvements. Improvements can be made throughout 2011, providing participants with time to adequately budget, schedule and implement efficiency plans. Top performers will be awarded in the spring of 2012. Awards are based on three categories: highest performing buildings, most improved performance and most valuable tenant. As tenant engagement is also an important component of any energy competition, an award for the tenant who has shown the most leadership and enthusiasm for reducing energy also has been established.
Houston BOMA Takes the Green Office Challenge In September, the city of Houston launched the Green Office Challenge. Houston BOMA was one of its first
supporters and consulted with the city on the awards process and benchmarking. They have also joined in a partnership to drive BOMA member participation with the ultimate goal of 100-percent participation. Property managers and owners that participate in the Houston Green Office Challenge must demonstrate achievements in four primary areas: energy, waste, water and tenant engagement. Buildings will receive recognition for accomplishing “base” or “stretch” goals in each of these categories. The competition also challenges commercial office tenants in the city’s business districts to increase their environmental and economic performance in the areas of outreach, energy conservation, waste reduction, cleaner transportation choices and property management engagement. Commenting on the association’s participation in the challenge, Tammy Betancourt, executive vice president, Houston BOMA, notes: “Working with city leaders on the Green Office Challenge offered BOMA a unique opportunity to increase our members’ sphere of
TRANSFORM OPERATIONAL EFFICIENCY
exposure and influence citywide, while making a positive impact on greening the built environment.” BOMA International recognized early on the need to make commercial buildings more energy efficient and has rolled out several programs to help members achieve this goal. One of its biggest efforts, the BOMA International 7-Point Challenge, urges the industry to reduce energy consumption in commercial buildings by 30 percent by 2012. A critical step in the 7-Point Challenge is benchmarking your commercial building’s energy performance using EPA ENERGY STAR’s Portfolio Manager and sharing your building’s data with BOMA International. BOMA International encourages all members participating in energy challenges to benchmark their building’s energy consumption and share their data. By sharing your energy management progress and leadership with BOMA, you will help highlight the industry’s dedication to reducing greenhouse gas emissions.
Easy-to-use software for managing your people, property and assets Leading businesses in all major industries use 360Facility to manage more than 750,000,000 square feet of property around the globe every day. Our mission is to boost productivity and improve your bottom line. 360Facility is comprehensive, centralized and designed to be used wherever you need it.
Online Tenant Services Automated Assignments & Work Loading
www.360Facility.com | 847.425.3600
November/December 2010 The BOMA Magazine
Codes & Standards Update
where BOMA plays a major role. Other recent successes in the development of ASHRAE energy and green building standards resulted in more workable and cost-effective provisions, trade-offs for renewable energy and other requirements and consideration of project costs and basic business investment principles.
DOE Stokes Site vs. Source Energy Debate
Mixed-Use Floor Measurement Standard in the Works A TASK GROUP OF BOMA’s Standard Method of Floor Measurement Committee is currently working on the first draft of a new mixed-use floor measurement standard to complement BOMA’s standards for office, retail, industrial and multi-unit residential buildings. These four standards assume that each building is a single-use building under single ownership, and none have any provisions for measuring buildings that contain more than one use, more than one building or buildings that are legally divided and owned by different entities. BOMA’s Gross Area Measurement Standard, while occupancy neutral, also assumes a single building under single ownership. The need for a mixed-use standard has become necessary as more and more buildings are designed, built and altered to accommodate multiple uses. The new BOMA mixed-use standard will address properties that contain multiple uses, including: • Uses for which BOMA has produced standards (office, retail, industrial and multi-unit residential).
BOMA’s Codes and Standards Advocacy Continues to Pay Dividends BOMA continues to be a major force in the development of national model codes and standards and is the only commercial real estate trade association with an aggressive advocacy program targeting these critical regulatory activities. BOMA’s code advocacy team is the first line of defense in preserving safe and affordable building codes and standards against the growing influence of powerful lobbying groups. Each year, BOMA members save billions of dollars in direct costs and long-term revenues with the elimination or modification of overly stringent and costly requirements impacting fire protection, occupant accessibility and egress, structural integrity, plumbing and mechanical systems and a host of other areas impacting new construction and existing buildings alike. Recent efforts in the ongoing development of the family of codes produced by the International Code Council resulted in significant savings for U.S. office buildings, including: • $2.58 per square foot (psf ) savings in additional annual construction costs by defeating overly stringent energy code requirements.
• Mixed-use common areas that serve two or more uses.
• $10.50 psf in additional annual construction costs with the disapproval of redundant passive fire protection measures providing no significant lifesafety benefits.
• Parking components, or parking that is shared by multiple uses and is not used exclusively by and included in a use.
• $2.62 psf saved in annual lost income avoided with BOMA’s defeat of proposals for additional structural strength and emergency exit requirements.
A final draft of the new standard is scheduled to be completed in the third quarter of 2011.
This is but one of the host of codes and standards development forums
• Uses for which BOMA has not published measurement standards.
The BOMA Magazine November/December 2010
The U.S. Department of Energy (DOE) is proposing to change how it estimates the likely impacts of energy conservation standards for commercial and industrial equipment. DOE proposes to use fullfuel-cycle measures of energy and greenhouse gas emissions, rather than the primary energy measures currently in use. At this time, energy cost calculations for determining the requirements in codes and standards, such as ASHRAE Standard 90.1 (commercial building energy), are based on site energy, primarily because it is more visible to building owners through utility meter readings. DOE’s move stokes the long-smoldering debate between the powerful electric utility and gas interests. Each energy supplier group believes that measuring energy use should be done in a way that most benefits their respective industry— site for electric utilities and source for gas utilities—because of the inefficiencies associated with the conversion of thermal energy to electrical energy.
BOMA Codes Expert Scores Industry Accolade BOMA’s Director of Codes and Standards, David P. Tyree, P.E., C.B.O., was named “Industry Person of the Year” by the County Building Officials of California (CBOAC). Dave has been a member of CBOAC for 20 years, served on the Board of Directors for four terms and assisted in the development of its national code development efforts. The award presentation highlighted Dave’s time and commitment in helping to get the International Codes adopted in California, as well as his influence in the code adoption process. Dave continues his involvement with CBOAC, representing BOMA’s Codes, Standards & Regulatory Affairs advocacy program.
REALIZE THE POTENTIAL OF $160 BILLION* IN ENERGY SAVINGS. WWW.USGBC.ORG / LEED
* Potential energy efficiency savings of building sector by 2030. McKinsey & Company (2007). Reducing U.S. Greenhouse Gas Emissions: How Much at What Cost?
leading the way
John Oliver, CPM NAC Chair, Spoils ’Em Rotten Granddad
JOHN OLIVER IS MANAGING DIRECTOR with Wells Real Estate Funds, where he is responsible for national business development. Wells Real Estate Funds has invested more than $12 billion in core, mainly Class A, real estate, and has a tenant base that represents the “Who’s Who of Corporate America.” Oliver has been an active BOMA member on the local, regional and international levels for more than 25 years, and is the current chair of BOMA International’s National Advisory Council, a group of senior executives from the nation’s largest companies that own or manage commercial real estate.
What do you see as the important issue/concern currently facing commercial real estate? The faltering economy is still the biggest concern with the huge unemployment and under employment that it has created. Companies have had to reduce staffing and headcount over the last two years, which consequently created unreported vacancies in many office buildings. Even when the economy turns, those “seats” have to be filled first before there is new demand for office space. We’re all looking for job growth; when will it start and at what pace? We read that businesses are sitting on large capital reserves. Companies appear to be unsure of the long-term effects of the new government initiatives (healthcare and taxes, to name two), and it appears that many are waiting to see the final rules written before they commit to longer-term strategies.
What was the most important takeaway from the NAC meeting this past September? BOMA’s NAC meeting is always a wonderful opportunity to come up for air and to compare notes with other senior executives within the real estate industry. We had a great turnout for the meeting and covered topics ranging from the economy and what’s happening with our tenants to the proposed changes to FASB and healthcare. We also compared notes on employee retention in this tough time when everyone is doing more with less. I think the consensus was that we need to remain vigilant and flexible. It appears to be a slow road to recovery.
You work with several corporate clients. What is the biggest impact the recession has had on those clients? How is 2011 looking? Cost containment is a trend we have noticed with our clients during the recession. It touches all areas of their business, but people and real estate costs are significant areas. Not all companies have been severely strained by this economy, but very few have come through without some impact. Much attention has been paid to staffing levels and taking advantage of the soft market by renewing and extending leases at significant savings. Another trend is the buildup of cash by large investment-grade firms. Some have already made purchases of other firms, and there appears to be a lot of “dry powder” for the right acquisitions. With these acquisitions or mergers will come opportunities to consolidate business units into more efficient space.
The BOMA Magazine November/December 2010
Landlords with cash and the ability to work strategically with these tenants will help solve these issues.
What do you get most from your BOMA membership? My more than 25 years of active involvement can be summed up in one word: PEOPLE. The people I have met and the opportunities to network and exchange experience have been invaluable to my career and the companies I have worked for. My advice to people in this business is to get involved in BOMA. I don’t care if you’re young and new to the business or an “old hand” like me. Get out of your comfort zone. Meet some new people. Quit thinking you’re too busy to be involved. You and your company will benefit.
We heard from BOMA sleuths that you are a very proud granddad. Tell us about the joy you get from your grandkids. Maybe we should have made this interview solely on this topic! My wife, Karen, and I have two grandchildren: Oliver (yes, because of the name, I will pay his Notre Dame tuition), who is two years old, and our beautiful Kate, who is 10 months old. We have four children so we hope to be avalanched with grandkids! There is magic in grandchildren; we had no idea how much it would impact our lives. Thankfully, all of my children are still here in Atlanta so we will continue our new tradition of spoiling the grandkids rotten, obeying none of the “rules” from our well-meaning children and returning them exhausted and cranky. It’s a rite of passage!!
Every year your tenants pay about $1320 PER EMPLOYEE for absenteeism.1 Do the math. It can really add up.
But you can help them save that money with the Healthy Workplace Project from KIMBErly-ClarK ProFESSIonal*. an innovative approach to hand hygiene that goes beyond the restroom. That engages your tenants’ employees to stay healthier. Saving your tenants money. Call your KIMBErly-ClarK ProFESSIonal* representative or visit www.healthyworkplaceproject.com to find out how you can implement it today.
Source: Free Health Inc. 2005 Study
®/* Trademarks of Kimberly-Clark Worldwide, Inc. or its affiliates. Marques déposées de Kimberly-Clark Worldwide, Inc. ou de ses filiales. © 2010 KCWW. K02043 K5216-10-01
Around the industry
Protect Workers— Break the Germ Transmission Chain
SAPOA Execs Visit BOMA Headquarters THE SOUTH AFRICAN PROPERTY OWNERS ASSOCIATION (SAPOA) President Samuel Ogbu, CEO of Liberty Properties, and Chief Executive Officer Neil Gopal visited BOMA International’s offices in October to share information, exchange ideas and explore ways the two organizations can work together. In addition to meetings with BOMA staff, SAPOA’s representatives also met with executives from the National Association of Real Estate Investment Trusts, the Urban Land Institute and the National Multi Housing Council. SAPOA’s mission is to actively and responsibly represent, promote and protect the interests of their members’ commercial activities within the property industry in South Africa. Visit BOMA’s YouTube channel (www.YouTube.com/BOMAInternational) to watch an interview with SAPOA’s Neil Gopal and Samuel Ogbu, where they discuss advocacy issues, the economy and the impact of the 2010 World Cup.
Research shows that the nine areas listed below harbor the greatest number of germs. Educating and encouraging employees to Wipe, Wash and Sanitize can help reduce the risk of transmission. And it’s also where KIMBERLY-CLARK PROFESSIONAL* has focused the efforts of the Healthy Workplace Project. Please go to www. healthyworkplaceproject.com for more information. • Stair railings; • Elevator buttons; • Conference tables; • Lobby areas; • Reception areas; • ATM in lobby; • Water cooler/kitchen space; • Copy stations; • Doors. Continued on page 20
Where education and fun come together www.BOMANevada.org EDUCATIONAL COURSE SCHEDULE 2011 Location: Las Vegas, Hilton DATE January 24-26
COURSE Fundamentals of Facility Management
Design, Operations and Maintenance II
Environmental Health & Safety + Ethics
Real Estate Investment & Finance
Budgeting & Accounting
Leasing & Marketing
Managing the Organization
Law & Risk Management
Technologies for Facilities Management
Design, Operations and Maintenance I
For Information and Registration call BOMA Nevada’s office at 702-938-BOMA
The BOMA Magazine November/December 2010 Shortridge_ad.indd 1
11/20/08 9:30:58 AM
Around the industry
What are You Bringing to Work? A Recent Study Reveals It’s More Than Just a Briefcase By Ron Harrison, Ph.D. Office workers may find that unwanted bloodsuckers are joining them on their commute to work. Bed bugs have long been vacationing in hotels and motels, and the problem is rapidly migrating into other industries. The insects have made themselves at home in apartments and single-family residences, which has led to an emerging new trend—bed bugs in office properties. In a recent Orkin Commercial Services survey of BOMA members, respondents indicated they are largely unaware that bed bugs are a growing concern in office buildings. While you might not have experienced bed bugs at your property, you’ve certainly heard of the commercial spaces where they’ve already made appearances. The Fox News Manhattan newsroom, CNN, Bill Clinton’s offices, Penguin Publishers, Broadway, the Denver Public Library—quite a lineup for a pest no bigger than an apple seed. While the majority of BOMA members indicated that bed bugs pose “little to no threat” or a “minor threat” to the commercial real estate industry, one statistic might convince them otherwise. The survey found one in 10 respondents has dealt with bed bugs at a property. Ten percent might not seem like much, but for an environment without beds—long thought to be a necessary element for a bed bug infestation—this is a startling number. What’s more, Orkin saw its commercial bed bug treatments more than triple from 2008 to 2009. Bed bugs are nocturnal and feed exclusively on blood, giving them a reddish
360 Buzz More than 150 buildings have now received the BOMA 360 Performance Program designation, demonstrating that their properties are achieving excellence in all aspects of building management and operations. How does the designation give properties an edge? Here is what people are saying: Bank of America Plaza, Jacksonville, Fla.
brown color. A bite can cause itchy red welts or no reaction at all, but the one thing bed bugs all share (luckily) is that they have not been known to transmit disease. The problem with bed bugs is they multiply, growing from just two insects to hundreds in a matter of months. Besides the negative social stigma bed bugs elicit, an entirely new set of problems come with this pest. Infestations can ruin company reputations and spark litigation from their victims. So now you’re probably asking, “What can I do to prevent them in my property?” First, understand how they’re getting in the building. Bed bugs are hitchhiking on the belongings of someone who has a problem at home, a frequent business traveler bringing luggage into work or, in rare cases, in product shipments that arrive at your building. Second, seek out their hiding spots. Bed bugs prefer to be close to a feeding source—you, your staff or other building occupants. Since there aren’t any beds, look for these pests in other soft furniture, such as lobby furniture, plush chairs in conference rooms and fabric cubicle dividers. Bed bugs can also hide in electrical outlets, bundled computer wiring and behind framed artwork. In addition to bed bugs, check for the inky or rust-colored stains they leave after feeding and the cast-off skins they shed on the fabric of chairs and couches or behind picture frames and furniture. Bed bugs are resilient—capable of living up to 12 months without a blood meal— and can be tough to spot, so enlist the help of your staff to prevent these pests from taking over your office space. With
“When prospective and current tenants see the plaque, they want to know what it means. We then get the opportunity to communicate the value that we are bringing to them by the things we do at the buildings, with third-party credibility from BOMA.” —Steve Harrison, Vice President of Facilities, Parmenter Realty Partners
The BOMA Magazine November/December 2010
the problem growing, the time to take ACTION is now: Awareness. Knowing that bed bugs can be a problem in commercial real estate is the first step. Communication. Inform and educate your tenants about bed bugs in the office. Include the information in tenant newsletters or on building bulletin boards. Training. Ask your pest management provider to train tenants, maintenance professionals, cleaning crews and other building staff about bed bug basics. Inspection. Encourage routine inspections in typical bed bugs office hot spots for signs of bed bug presence. Openness. Be transparent and truthful with your tenants about bed bugs. Establish a reporting protocol so you can address any problems early. Notification. In the event that bed bugs are found, notify management and your pest management provider immediately. Do not move any items from the infested area. A strong pest management partnership and proactive approach to bed bugs can help keep these pests from becoming your property’s worst nightmare. Ron Harrison, entomologist, Ph.D., is director of technical services for Orkin and an acknowledged leader in the field of pest management. Contact Dr. Harrison at ronharrison@rollins. com or visit www.orkincommercial.com for more information. Get additional facts about bed bugs and tips on how to prevent them by visiting Orkin University Online’s Property Management resource center on orkincommercial.com.
“We strive to be the best at all times, but during a down economy, you can’t afford to be less than your best. The BOMA 360 designation is proof that we excel at all aspects of property management and operations.” —Edward Fallon, RPA, Vice
300 Madison Avenue, President of Operations for the New York City New York Region, Brookfield
T H E B O MA I N T E R N AT I O N A L O N L I N E B U Y E R S’ G U I D E :
CONNECT YOUR COMPANY WITH MORE THAN 17.500 BOMA INTERNATIONAL MEMBERS Available 24 hours a day, 365 days a year, the BOMA International Online Buyers’ Guide is the internet’s most comprehensive resource for products and services in the commercial real estate industry. Our members spend more than $104 billion a year on oﬃce-related purchases, and they refer to our oﬃcial Online Buyers’ Guide when they are looking to buy. Make sure your company has a presence!
Categories include: · · · · · · ·
Building Services Cleaning Design Management Services Mechanical Restoration Waste Management And many more!
Reach the people you want to do business with at the moment they are making their purchasing decisions. Reserve your space on the BOMA International Online Buyers’ Guide today!
For information about advertising on the BOMA International Online Buyers’ Guide, contact Melissa Zawada at 800-369-6220, ext. 3407 or firstname.lastname@example.org
Creating a Bridge to Accord Takes Conflict Resolution Skills By Natalie Brecher Conflict is a normal occurrence, yet people fear it and take precious energy and efforts to avoid it, in turn, sometimes exacerbating the situation. When conflict resolution skills are strong, the organization will be more effective, the company—and the property professionals—will have more of their needs met and stress levels will be considerably reduced. Not fearing conflict is energizing: To eagerly jump into the resolution process, knowing that having the difficult conversations now will result in higher satisfaction to all parties involved sooner, is a liberating sensation.
What is Conflict? Assuming that disagreement is conflict can produce conflict itself. People can disagree, yet not have conflict. For example, the manager who keeps 38 folders to locate e-mails and the employee who has five folders and uses
The BOMA Magazine November/December 2010
the search index proficiently can agree to disagree without any side effects. People can also have conflict in spite of agreeing: Two engineers want to help with a new project but the daily maintenance work must continue so it seems neither will be able to meet his or her needs. Conflict exists when what we want appears incompatible with what the other party wants. The key term is “appears.” Sometimes what appears as an unsolvable conflict is not.
Uncover Causes to Find Agreement Almost anything can be the source of conflict. What’s amazing is not that there are so many grounds for disagreement, but that we don’t have more. We give and take in relationships every day—so often and so automatically, in fact, that we are often unaware of it. Watch out for these six key grounds for conflict:
1. Facts/Data: When facts aren’t straight or everyone is not aware of the same data, problems can surface. A bookkeeper recalls the report as due on the 15th; the boss remembers it as the 5th and thinks it’s late. 2. Goals/Objectives: Unexpressed (or not agreed to) expectations are essentially unilateral, and when it’s assumed there is agreement, a wedge is created for understanding and agreement. A salesperson thinks 20 sales are an exceptional goal; another thinks 30, so believes the other is a poor performer. 3. Methods: Believing the proverb “What’s good for the goose …” applies in all situations can raise many an issue. One person’s skills aren’t strong and it takes three hours to do the work; another person thinks it should take two, so perceives the other as slow. 4. Structural: Hierarchy and authority are big issues in the workplace. A co-worker has greater approval limits than another and believes that indicates complete authority; the other is jealous. 5. Relationships: Personal connections, likes and political agendas can be deadly. One employee is given the choice assignments, so other employees don’t like him or her.
gift. Unwrapping the gift, the recipient found it was something she had. “Thank you, but I have one,” she said, and the gift giver was offended, resulting in the two’s discord harming the entire office. Using private discussions, it was first uncovered that the gift exchange started the conflict. More in-depth investigation revealed the recipient’s culture taught her it would be an insult to take something she already had. In her mind, keeping it would have been the insulting thing to do. With the personal inference and values discovered, and after an emotionally charged mediated conversation, the two walked away as friends again and the office got its productivity back.
Use an Interest Base of Reference
Conflict exists when what we want appears incompatible with what the other party wants.
Once the basis for the conflict is uncovered, the parties’ requests are next for investigation. What is presented as the solution may not necessarily be the answer. Anytime a person’s requests are filled, yet he or she remains dissatisfied with the results, it’s a sure sign that what was wanted was not the accurate solution to achieve satisfaction. The interests under the surface request need to be addressed for solutions to stick. Continued on page 24
6. Personal Inference and Values: These are the most difficult to uncover, define, rectify and often even to discuss. It’s normal to see the world through personal filters and hard to recognize, making them all the more dangerous. Individuals’ emotions, senses, desire for authority and control, interpretation of right and wrong and the like all contribute to the cause of the conflict as well as how resolution should take place to be successful. Before resolution efforts can make progress, the underlying causes must be fleshed out and carefully planned discussions (sometimes using a moderator) are the only reliable vehicle to do so. In one such discussion, for example, one employee gave another a birthday
November/December 2010 The BOMA Magazine
If there is only one position, it’s not collaborating or negotiating; it’s demanding.
People present their “positions”—how they want the conflict resolved—as their solution. However, that position isn’t the whole story. There are “interests” (why people want what they want and the reasons they feel the way they feel) behind the position they present. Interests tell why something is important. Interests are often not disclosed without prompting; some people have trouble identifying (and admitting) them to themselves. Thus, the skills of the person working on resolution are crucial to success. Violating people’s interests are reasons for conflict. Addressing those interests provides fixes that work. For instance, a maintenance engineer working in a tenant space rushes off to handle an emergency, leaving a mess in the tenant space in the process. What the tenant says he wants seems apparent to both parties and is expressed
Where are the Jobs? Recent headlines have stated that the United States is eight million jobs short of the pre-recession peak and that it could be at least seven to nine years before employment levels return to their 2007 peak … if ever. During the next 10 years, unemployment will likely remain high by historical standards, while the number of would-be workers continues to grow. “An Assessment of the Job Market in Commercial Real Estate,” SelectLeaders/Cornell Job Barometer Report’s fourth quarter 2010 update for the BOMA Career Center, takes a look at how commercial real estate is being affected and how property professionals will weather the storm.
The Commercial Real Estate Employment Outlook from the 2010 SelectLeaders/Cornell Job Barometer Report
when distress levels forced over-leveraged owners to sell properties for pennies on the dollar. Now, though distress levels remain elevated, there are signs that the market may be on the mend. However, hiring is still lagging. The U.S. Department of Labor recently reported that nonfarm payrolls (jobs) decreased by 54,000 in August—the third consecutive decline. The current job market has suffered losses that are more than triple as much as what occurs at the lows of the average recession/job loss cycle.
Cap rates across property types have begun to stabilize and prices are now 4.7 percent above their October 2009 trough, according to the Moody’s/Real Commercial Property Index. During the course of the recession, commercial real estate found itself in the midst of a liquidity trap, where falling asset prices and a low inflationary environment caused investors with capital to remain on the sidelines. Moreover, many investors took a wait-and-see approach, hoping to re-enter the market
clearly: His solution (position) is that someone clean the mess immediately and that it never occur again. His interests, however, are deeper. The questions to ask for a satisfactory solution to this incident are these: Would the tenant be happy if only the space was cleaned? What are the tenant’s interests? Why does he want what he wants and how does he feel? The answers expose the true essence of the conflict. He feels taken advantage of— that the business, people’s time, etc., are not being respected. Perhaps, using time to resolve this, he was late to his daughter’s soccer game and felt he had disappointed her; now his self-image as a father is involved. The position is presented as “clean up the mess,” but the interests are “prove to me you respect me and my business and know this has been an inconvenience.”
The BOMA Magazine November/December 2010
Job Postings by Sector Multi-family dominated the job market early in the recession, then fell off the charts by September 2009. Not unexpectedly, banking, responding to the stimulus, overtook multi-family for the highest number of jobs of any sector from September 2009 to September 2010. Retail showed a modest upturn since May 2010, as consumers and businesses adjust to the new economy, with back-to-school shopping moving retail to the top in job postings heading into September 2010.
Job Postings by Sector
When those interests are addressed, the resolution will last.
Work for Flexible Solutions Addressing the interests instead of the position has an added benefit. It allows for alternative solutions. If there is only one position, it’s not collaborating or negotiating; it’s demanding. For the tenant with the messy office, yes, his position of cleaning the space must be addressed, but knowing the principal interests opens up more solutions. Whether it is a direct, sincere statement acknowledging the tenant’s value, a basket of sweets presented to the office or a gift card for his daughter, treating the interests will result in lasting satisfaction.
Job Postings by Business Field The decline in development jobs is daunting. Finance, similarly to banking, took the lead in September 2009, as companies analyzed their holdings (see chart, below).
Job Postings by State California continues to be on top, with 16 percent of total U.S. jobs posted thus far in 2010. However, combining New York (12 percent) and New Jersey (four percent), the West and East Coasts are neck
Polish Your Skills The ability to resolve conflicts is a learned skill, and one that all property professionals can use to their advantage throughout their career. Whether working with employees, contractors, tenants or supervisors, imagine the stress that will be avoided when conflict is not a scary monster kept out in the hall. Invite the monster in, satisfy its interests and the results will be worth it. About the Author: ©Natalie D. Brecher, CPM (email@example.com) is the Management-Mentor™, an accomplished authority who helps organizations improve workforce performance and managers develop and improve leadership and professional skills. She provides consulting, coaching, training and keynote speeches to fortify positive, lasting change. Visit www.BrecherAssociates.com for more information.
and neck, with postings in the Northeast due, in part, to the increase in banking and finance jobs. Texas holds steady at 10 percent, followed by Florida with six percent and Illinois with five percent of the jobs posted.
Jobs by Gender and Age Earlier this year, women became the majority in the workforce for the first time in U.S. history. Unemployment figures show that, starting as early as third-quarter
Job Postings by Business Field
2008, the rate of unemployment for men surpassed women, reaching two- to threepercent higher levels for men by secondquarter 2009. Yet, the single factor that could most greatly impact our industry for years to come is the loss of entry-level jobs. By the third quarter of 2009, unemployment was 20-percent higher for job seekers 24 and under, compared to those over age 25. Even internship postings diminished— despite the fact that anyone can post an internship for free on BOMA Career Center or any partner site in the SelectLeaders Job Network. Visit the BOMA Career Center for the full update at http://boma.selectleaders. com.
The SelectLeaders/Cornell Job Barometer Report, “An Assessment of the Job Market in Commercial Real Estate,” is written and published by Dr. David Funk, director, Cornell University Program in Real Estate. Special thanks to Sung Won Suh and the entire Cornell Graduate School team. BOMA Career Center excerpt by Susan Phillips-LoPinto, CEO, SelectLeaders Real Estate Job Network.
November/December 2010 The BOMA Magazine
Cracking the Glass Ceiling? How Women in Commercial Real Estate are Faring Today By Kristin Blount
Women continue to make progress in the field of commercial real estate, but challenges remain, according to a new report from the Commercial Real Estate Women (CREW) Network, Women in Commercial Real Estate: 2010. The study, underwritten by CB Richard Ellis, Prudential and Kutak Rock LLP, and independently researched by Cornell University Program in Real Estate, is a follow up to the CREW Network report in 2005, which was the industry’s first ever in-depth look into women and commercial real estate. The survey was conducted among nearly 3,000 professionals from all areas of the industry. The good news is that respondents to the survey reported a seven-percent increase in women in their organizations since 2005, and it was the experienced (more than 20 years of experience) industry veterans and the new entrants with less than five years of work experience that fueled that growth. Both men and women with six to 20 years of industry experience declined significantly as a percentage, raising the question of whether the current recession will see the mid-level professional
The survey reported a seven-percent increase in women in their organizations since 2005, and it was the experienced (more than 20 years of experience) industry veterans and the new entrants with less than five years of work experience that fueled that growth. 26
The BOMA Magazine November/December 2010
leave the industry, as happened during the early 1990s real estate downturn. Market conditions have undeniably impacted men, as 70 percent of men who experienced a work absence of greater than three months were involuntarily laid off, compared to 52 percent of women. The question remains as to whether this trend offers women an opportunity to secure a higher position on the ladder or be reminiscent of the “Rosie the Riveter” phenomenon during World War II, with men regaining these positions when the market returns. The survey showed that women had modest gains in compensation, as higher percentages of women moved into the $100,000 through $250,000 annual compensation levels since 2005. Whereas only eight percent of women surveyed in 2005 were at the $250,000 level, by 2010 that figure had increased to 11 percent (the percentage of men in the same compensation category had decreased from 34 to 31 percent). These findings regarding the narrowing of the compensation gap in commercial real estate mirror recent Census data indicating that women earned 82.8 percent of the median weekly wage of men in 2009, which is the highest ever recorded—up from 76.1 percent just a decade earlier. While it is positive to observe these compensation gains for women, one still wonders why equality remains an issue in 2010.
Compensation Imbalance? Some have theorized that men may be losing their jobs at a higher rate because their compensation is higher; women, with lower salaries, are more economical to retain. It is also possible that the
positions of men have been cut in greater numbers and their salaries have diminished. Particularly at the higher levels, a greater portion of men’s compensation draws from various forms of variable compensation, such as bonuses, commission and profit sharing—all of which have been affected adversely in the downturn. Despite women’s relative compensation gains, however, three times the number of men as women respondents are represented at the $250,000 compensation level in 2010. Moreover, when compensation is analyzed considering both years of experience and age, a clear and troubling trend emerges: Women with the same amount of experience as men are not represented equally in the highest pay levels, thus increasing the chance that this trend will continue unless employers make a concerted effort to address the issue of equity. Dramatic increases in the sources of income occurred from 2005 to the present, as annual base salaries went from 58 percent to 67 percent of the total, while long-term incentive compensation declined from eight percent to two percent.
Success and Satisfaction in Commercial Real Estate Women in Commercial Real Estate: 2010 also surveyed both perceptions of career success and levels of satisfaction. Despite declines in the last five years, 62 percent of men and 54 percent of women reported feeling “very successful” in their commercial real estate careers and less than two percent of all respondents said they felt “not at all successful” in their careers. Overall levels of satisfaction increased with years of experience and differed among areas of specialization, with women in asset/property/facilities management with 20-plus years of experience reporting the highest levels of career satisfaction. Notably, only 27 percent of women with less than five years of experience reported feeling “very satisfied” with their level of career success and women, in general, lagged behind their male counterparts in career satisfaction among those with less than 10 years’ work experience. Women catch up on career satisfaction with increasing years of experience, indicating that the larger challenges in terms of commercial real estate career satisfaction exist for women entering or early in their careers. Success and satisfaction come together when plotting job characteristics, according to those that generate the greatest satisfaction and are perceived to be of greatest importance. Not surprisingly, men and women share the opinion that “co-worker respect” and “a challenging job” are very important,
and that “job enjoyment” is key to satisfaction at work. Real gender differences emerge, however, when areas of high importance but low satisfaction are identified. “Maximize earnings potential” and “disposable income” topped the list for men, while “level of decision-making” and “job enjoyment” came first for women. Both men and women reported feeling slightly less satisfied with their work/life balance in 2010 than five years earlier; however, 92 percent still reported feeling “somewhat successful” or “very successful” in achieving a work/life balance. Those reporting to be most satisfied with their work/life balance were in brokerage/sales/leasing, while professionals in financial/professional services reported feeling least satisfied.
Overall levels of satisfaction increased with years of experience and differed among areas of specialization, with women in asset/property/facilities management with 20-plus years of experience reporting the highest levels of career satisfaction. Management Dynamics in the Workplace While women constitute just a third of the commercial real estate industry, the report found interesting management and reporting dynamics when looking at gender relationships within commercial real estate organizations. Even though men significantly outnumber women in the industry, a remarkable 62 percent of female managers’ direct reports were women, whereas only 45 percent of direct reports to male managers were women. Looking behind the numbers, it is clear that a much higher percentage of men work autonomously without direct reports. We are happy with the progress that women are making in commercial real estate, which some may argue is one of the last of the traditional “good ole boys” networks. Women are joining the field in greater numbers and expressing long-term satisfaction. Parity issues remain between men and women, however, particularly at the highest levels. About the Author: Kristin Blount is 2010 President, Commercial Real Estate Women (CREW) Network (www. crewnetwork.org). Blount is also partner and vice president, brokerage, at Colliers Meredith & Grew in Boston.
November/December 2010 The BOMA Magazine
Making Your Elevator Work for You Strategies for Increasing Efficiency and Lowering Costs By Sasha Bailey, LEED AP BD+C
As green initiatives become an essential part of many build-
ing projects, elevator companies are creating plans to execute and maintain long-term visions toward a goal of sustainability. Some elevator manufacturers have committed to evaluate and quantify the current environmental impact of their products through life cycle assessments (LCA). These analyses cover the product’s life, from the impact of procuring resources to the manufacturing processes to shipping, installation, service maintenance, repair and modernization improvements. The process takes into account energy utilized in both manufacturing and shipping, as well as the product’s use phase. The assessment also reviews information on resultant waste generated and its disposal or recycling. An internationally recognized tool often used to guide LCA projects is International Organization for Standardization (ISO) 14040, Environmental Management: Lifecycle Assessment—Principles and Framework. The majority of an elevator’s environmental impact over a lifetime is during the equipment’s use phase. Leading companies are focusing on reductions in energy use via research and development on newly manufactured products, but are looking for ways to increase elevator efficiency and reduce energy consumption by monitoring, upgrading and installing new equipment on existing products as well.
Elevators and Energy
All elevators use energy. Although levels of energy efficiency may vary among them, most new elevators make up a very small percentage—generally three to five percent—of a building’s overall energy consumption. In the past, however, elevators with less efficient technology utilized a much larger footprint of a building’s energy use. Motor generators were necessary until a few decades ago in order to take AC power and convert it into usable DC power to run the machine, which moved the elevator. DC machines were required to control the precision of the lift for leveling, acceleration, deceleration and positioning. Advances in AC technology allow elevators to control the same parameters with even greater accuracy, thereby eliminating the additional step of converting AC power to DC power. Currently in the United States, it is estimated that 200,000 motor generator drives are being used to power elevators.
The BOMA Magazine November/December 2010
These older drives consume approximately 40,000 kWh of electricity annually, approximately 72-percent more than modern drives available on the market today. As a point of reference, the amount of energy used by these outdated drives is enough to power 80,000 homes annually. In addition to a reduction in the energy needed to run motor generator equipment, the decrease in associated machine room cooling is significant. Upgrading to current technology results in a 45-percent reduction in associated BTUs in the elevator machine room. Over the building’s lifetime, the savings in cooling cost is quite substantial. The move away from old MG sets also eliminates potential indoor air quality (IAQ) issues associated with carbon dust created by using carbon brushes in the machines themselves. Typical DC generators require multiple carbon brushes to operate. It is estimated that a single brush can emit 272.16 grams of carbon dust monthly or 7.2 pounds annually per generator (based on 16 brushes per generator). In a large building with multiple elevators, the amount of dust per pound and the coinciding number of filters needed to keep that dust out of the air is considerable when multiplied over multiple units and multiple years of service. Using light-emitting diodes (LEDs) for illumination and programming the controller to shut off the fan and lights when the unit is not in use are two simple, cost-effective practices to further enhance energy efficiency in both existing buildings and new construction projects. Traditionally, elevators of past generations were not programmed to turn off the lights when the unit was not in service. The impact of lights running continuously in a single elevator over a 25-year life is significant. Now, consider 200,000 MG units with nine incandescent bulbs each running for 25 years. By installing automatic light shutoff, enough energy to power almost another 80,000 homes for a year could be saved.
callbacks and eliminate unneeded paperwork. As the systems can be enabled and viewed from anywhere in the world, building management has real-time data at its fingertips, anytime from anyplace.
Selecting a Service Provider
Hydraulic life cycle analysis studies help manufacturers quantify and evaluate the environmental impact of their products.
Whether modernizing existing elevators or installing new ones, the reduction of operating costs through green upgrades can outweigh capital costs in a reasonable timeframe. Expenses associated with creating a sustainable elevator system range from minor upgrades, such as lighting improvements, to a complete energy-efficient system design and installation. Once simple elevator upgrades like LED lighting are installed, a building’s energy consumption decreases, helping building owners save money on a yearly basis. These upgrades also benefit building owners through improved tenant retention and attraction.
Service and Modernization
Elevators running at their peak performance use less energy, create a more pleasant riding experience and improve air quality. To maximize the performance and safety of elevator products, a code-compliant preventive maintenance program is important. Historically, 80 percent of all elevator trouble calls are related to doors and door operation. A typical elevator door opens 1.75 million times over 10 years. Closed loop technology, accompanied by a digital control system, allows for settings to overcome changes in atmospheric conditions, minor obstacles in the door track and other door-related problems. Upgrading to closed loop door operator technology can significantly reduce callbacks. Partnering with a reliable service provider can ensure equipment is maintained to the highest industry standards, providing safe service to meet the elevators’ expected life cycle. Remote monitoring options are available to keep property managers up-to-date on a building’s elevator systems. By detecting possible problems early, these monitoring systems are an efficient way to reduce unnecessary emergency
Consider the following when selecting a service provider: • Experience. It is essential that service professionals are knowledgeable about all new products and technology, industry standards and, most importantly, safety precautions. Training programs that include field and local sessions, as well as regular factory seminars, are crucial. Field engineers should also be available at any time. • Service. Even after an elevator’s warranty expires, it is important it receives preventive maintenance to ensure optimum and safe performance. This maintenance should involve fast, reliable service and trained technicians. Most companies offer programs that can be customized to fit a building owner’s specific needs. • Parts. It is essential that service parts be available as needed. When selecting a provider, it is important to ensure they have access to an extensive inventory of spare parts, as well as an efficient parts distribution system for getting equipment out quickly. • Compliance with regulations. The Americans with Disabilities Act (ADA) stipulates buildings must comply with new requirements that make elevators easier to operate by people with special needs. If an elevator is deemed as noncompliant with current regulations, the service provider should be able to provide a quick, cost-effective solution. • Modernization. Elevator modernizations can update an elevator’s performance, reduce energy consumption and decrease impact on IAQ. Cab and lobby upgrades can offer a new updated look, compared to older styles. Experienced technicians and engineers can customize modernization packages that are both time- and cost-efficient. About the Author: Sasha Bailey, LEED AP BD+C, is a corporate sustainability manager in ThyssenKrupp Elevator’s Americas Business Unit. She can be contacted at Sasha.Bailey@thyssenkrupp.com.
This is an update to an article that appeared in the November/ December 2008 issue of The BOMA Magazine.
One of the many benefits of modernizing an elevator system with new drives, controllers and machines is a machine room environment that is cleaner, cooler and safer.
November/December 2010 The BOMA Magazine
Sydney, Australia (top), and Auckland, New Zealand (lower left), were the sites of business meetings between BOMA International leadership and the Property Council of Australia and Property Council New Zealand.
high property values. The setting is spectacular by the harbor with the city center a combination of historic architecture and very modern Green Star buildings— their “LEED” program.
Macquarie’s Peter Merrett and 1 Shelley Street— Green Star 6
Dialoguing with the Property Councils of Australia and New Zealand By Ray Mackey, Jr. and Henry Chamberlain BOMA Chair Ray Mackey, Jr. and BOMA President Henry Chamberlain traveled to Australia and New Zealand in September for meetings with two important affiliates of BOMA International. In the case of the Property Council of Australia, the visit combined business meetings in Sydney and participation in the annual congress in the Gold Coast region. Two days of business meetings with the Property Council New Zealand took place in Auckland after original plans to participate in its annual conference were thwarted by a major earthquake in Christchurch.
Property Council of Australia: The Voice of Leadership Headquartered in Sydney, the Property Council is comprised of a staff of 90 people managing a $25 million annual budget heavily focused on advocacy, with issues ranging from taxes, nation building (infrastructure, land use and
sustainable growth), regulation reform, greening the built environment and liquidity. The council’s mission is to champion the interests of the property sector. During the annual congress, National President Daniel Grollo (Grocon Party Ltd.) launched a new five-year initiative titled Powerhouse 3D, “…a decisive, member-focused strategy to leverage industry and community prosperity. It builds on the Property Council’s solutions-based advocacy and will turbocharge our programs to deliver member value.” Its five goal areas are: 1. Foster a more attractive asset class. 2. Secure economic growth leveraged by long-term nation-building programs. 3. Create a more competitive business environment by reforming taxes and business regulation. 4. Promote a positive image for the property industry that reflects its critical community role. 5. Deliver high-value member services. Sydney is a terrific, vibrant financial center with a recovering economy and
The BOMA Magazine November/December 2010
We toured 1 Shelley Street, a striking property featuring an external “diagrid” steel frame, open floor plates and spectacular interior design, with International Region Committee Co-Vice Chair Peter Merrett. Peter recently relocated from Tower 42 (a 2009 International TOBY winner) in London to join the Macquarie Group (a leading provider of banking, financial, advisory, investment and funds management services, with more than 70 offices in 28 countries) in Sydney. Among the factors leading to the top Green Star rating are a chilled beam HVAC system, natural daylighting and automatic adjustable lighting systems, a double-glazed façade and easy access to mass transit.
“Re-ignite-Renew-Reshape”: Property Council of Australia Congress 2010 Highlights The BOMA duo traveled just south of Brisbane to the beautiful Gold Coast area for the Property Council’s congress of over 500 mainly senior real estate executives from all over the country. We were saluted and welcomed very warmly from the podium at the opening general session by Chief Executive Peter Verwer, who touted BOMA as the “geniuses of asset management.” There was an orchestrated debate here about how much development should take place over the next 40 years—Big Australia? There are 22 million residents now and the estimate is
the population could double by 2050. Much of the growth is coming from trade with Asian nations, particularly China. The resistance comes from those who want to preserve wild Australia and do not feel they have the water to support a large population, among other sustainability issues. The dilemma is that, with the baby boomers retiring, they have to grow the economy or risk large deficits to pay for entitlement programs. Both commercial and residential real estate prices are high and there is concern over how sustainable the prices and quality of life (much larger homes than in the United States) are long term. The programming was very strong and included a CEO Roundtable, which Ray participated in. Oxford University Professor Linda Yueh reinforced the strong and growing relationship between Australia and China in areas like real estate investments, mining and tourism. We also had a terrific technology presentation by Peter Williams, CEO of Deloitte Digital, during which he exhorted the crowd to embrace mobile technologies and integrate them into buildings. New high-tech, sustainable developments were featured in case studies, including the ultra-modern Songdo, Korea, the world’s first new sustainable city designed to be an international business district. We heard from Gale International Executive Vice President Tom Murcott via Cisco’s Telepresence system about the project. We also heard about three major urban developments in Sydney, Melbourne and outside Brisbane that are reshaping their communities in terms of residential development, retail and enhanced educational systems. All of these projects are about creating sustainable communities. There was also a panel focusing on the existing building stock in which Henry participated. Wrapping up the programming was a general session titled “Nation Building in 21st Century Australia,” which returned to the theme about how the country can handle its future growth. The discussion centered on supporting all Australians, both poor and rich, in creating a sustainable
BOMA Chair Ray Mackey, Jr. (far left) and wife, Cami, take in the sights of Sydney with BOMA President Henry Chamberlain and wife, Lisa.
country with the right infrastructure in energy, transportation and broadband, which will allow them to be a key player in Asia.
Property Council New Zealand In lieu of participating in the Property Council’s rescheduled conference, November 17-19 in Christchurch, we flew to Auckland for meetings. Our first stop was the Property Council’s offices and a meeting with Executive Director Connal Townsend and his impressive staff team. There are 10 staff members: seven in Auckland and three staffing branch offices around the country. The Property Council represents commercial, industrial, retail, property funds and multi-unit residential property owners, managers and investors. Its vision is to create a quality, vibrant New Zealand commercial property sector. We share a lot in common with them on advocacy issues from taxation, investment, compliance, sustainability and energy efficiency. They work with the Green Building Council and have endorsed the Green Star program (Australia and South Africa as well), but are open to other programs and liked our menu approach of promoting alternatives in the green arena. We also met with National President Chris Gudgeon, chief executive of the country’s largest REIT, the $2 billion Kiwi Income Property Trust. The economy in New Zealand resembles that of the United States, with the nation working its way out of the global recession.
At a Property Council Board meeting, Chris complimented us for being there, for laying out what we are doing and for pointing out numerous places we could collaborate. Among the new business were topics including foreign investment in real estate, and we plan to share FIRPTA information, along with a new Auckland spatial plan and work they need to do on performance benchmarking to meet market standards. The meeting adjourned and its Senior Member Council, similar to BOMA International’s National Advisory Council, met and decided to hold a supercharged two-day meeting in November, blending the program that was scheduled with an emphasis on the earthquakes and lessons learned.
Long-Standing Relationships For the BOMA historians in our ranks, both Property Councils were originally called BOMAs and, as they broadened their scopes to include all asset classes, they rebranded themselves. We have long-standing relationships with both groups and these visits reinforced how we can collaborate on a variety of issues and learn from each other as we advance commercial real estate. The depth and breadth of expertise they both represent are impressive. For more information on the Property Council of Australia, visit www.propertyoz.com.au For more information about the Property Council New Zealand, visit www.propertynz.co.nz
November/December 2010 The BOMA Magazine
trends tracker ‹ David Rosenberg, chief economist and strategist, Gluskin Sheff + Associates Inc., briefed the crowd on how the economy is affecting the commercial real estate industry.
Canadian Commercial Real Estate Market Sees Signs of Recovery
the world. Those who want to set up shop on the Champs Élysées or Fifth Avenue can expect to shell out a whopping $1,250 (U.S.) per square foot, while prime space in Montreal or Toronto, in contrast, costs a mere $294.12 (U.S.) per square foot.
By Diana Osler-Zortea, President of BOMA Canada
Green Takes Center Stage
THE PROPERTY MANAGEMENT INDUSTRY IN CANADA has endured the last few turbulent years, weathering the storm of uncertainty in the financial markets and is now poised to navigate somewhat calmer waters. Many of the hot-button issues facing Canadian property management were front and center at BOMA Canada’s annual BOMEX® National Conference and Exhibition. Some of the new developments discussed included an increase in foreign investors looking for marquee properties at competitive prices and an overall greening of Canadian commercial properties led by the BOMA BESt™ program.
What’s in Store for Canadian Commercial Properties? BOMA Canada sought the insight of the brightest minds in the industry during BOMEX and asked them to take part in a National Advisory Council forum to give their perspective on how Canada’s economy is performing. Gluskin Sheff Chief Economist and BOMEX keynote presenter David Rosenberg engaged in a spirited dialogue about longer-term strategies to guard the commercial real estate industry against future instability.
During the hour-long roundtable, Rosenberg was both animated and frank in his assessment of the current state of the global economy and its impact on the North American real estate industry. He said that the immediate forecast for the Canadian commercial real estate sector appears favorable, with a recovery in the domestic retail real estate market powered largely by big-name foreign brands migrating to Canada in search of prime mall and main-street spaces— and shoppers ready to buy. The appeal of Canada for foreign retailers is due, in large part, to a relatively robust economy in comparison to that of the United States and much of Europe. A diverse array of retail real estate opportunities is available, as well as bargain-priced rents, providing a major draw for big brands that are seeking everything from urban street front to suburban big-box configurations. According to a recent article appearing in the Oct. 13, 2010, issue of The Globe and Mail Newspaper, Canada’s two priciest high streets by cost per square foot—Sainte-Catherine in Montreal and Bloor in Toronto—rank 32nd and 33rd in the world, respectively, compared to other premium retail corridors around
The BOMA Magazine November/December 2010
Environmental and sustainability initiatives were prominent again this year at BOMEX, with featured sessions on BOMA Canada’s new eEnergy training program, rooftop solar installations, energy incentive programs, energy management, building information modeling and the BOMA BESt program. BOMA BESt is widely used in Canadian commercial real estate. When asked whether the program is getting real environmental results, Nada Sutic, BOMA Canada, and Andres Bernal, national director of sustainability and energy management for GWL Realty Advisors (GWLRA), presented two perspectives. Taking a national view, Sutic explained that BOMA BESt is achieving environmental results by moving buildings into a continuous improvement cycle and achieving better energy performance. BOMA BESt achieves those results for more than 2,000 buildings that have been involved in the program. Reaching a critical mass in uptake, BOMA BESt has quickly become part of the vernacular of how the industry operates buildings. In GWLRA’s experience, BOMA BESt has become a standard tool, helping move the portfolio towards better energy and environmental practices— an increasingly common experience throughout the Canadian market. BOMA BESt has also helped support tenant engagement initiatives in several case studies GWLRA presented.
The interactive downloadable formats include hyperlinks, expanded definitions and many full-color illustrations.
he Order t te le p com ite of Su BOMAards today Stand receive and r the all 5 foof 4! price
BOMA SUITE OF STANDARDS NOW AVAILABLE For almost 100 years, BOMA International has set the standard for measuring buildings. In 1915 BOMA published the first office floor measurement standard… and the rest is history. Today, BOMA International is the secretariat of a suite of measurement standards covering a broad range of building types. Need a floor measurement standard? BOMA has you covered. Check out BOMA’s Suite of Standards:
ld e bui
rd Me standa
t ureMen of Meas
ers s and Managtional ) interna g owner buildin ation (boMa associ www.b
A s Are
A s Of
rd Me stAndA
t ureMen Of MeAs
ORDER ONLINE TODAY AT HTTP : //SHOP.BOMA.ORG
ID t REs
lD l BuI ENtIA
RD ME stANDA
M u lt
ers s and Managtional ) Interna g Owner Buildin ation (BOMA Associ g oma.or www.b
Gross Areas of a Building: Standard Methods of Measurement (ANSI/ BOMA Z65.3–2009)
[ i ]
Industrial Buildings: Standard Methods of Measurement (ANSI/BOMA Z65.2–2009)
[ i ]
Of Me thODS
by: ers Developed s and Managtional ) Interna g Owner Buildin ation (BOMA Associ ial and ® of Industr SocietyRealtors Office
Office Buildings: Standard Methods of Measurement (ANSI/BOMA Z65.1–2010) ANSI/BOMA
RD Me StAnDA
t uREMEN Of MEAs
Ild Il Bu
[ i ]
Of Me thOds
ers s and Managtional ) Interna g Owner Buildin ation (BOMA Associ g oma.or www.b
by: ers Developed s and Managtional ) Interna g Owner Buildin ation (BOMA ement Associ Estate Manag Builders e of Real of Home ® Institut Association g Council National Multi Housin National
Multi-Unit Residential Buildings: Standard Methods of Measurement (ANSI/BOMA Z65.4-2010)
rd Me stAndA
r e tA
Retail Buildings: Standard Methods of Measurement (ANSI/BOMA Z65.5-2010) [ i ]
Who benefits from BOMA Standards? A cross section of real estate professionals: building owners and managers, facility managers, architects, space planners, interior designers, engineers, leasing professionals, asset managers, appraisers, brokers, general contractors and many others.
Green Scene Uncle Sam Wants…Your Energy Data
Local governments eye commercial buildings to cut energy and carbon. By John Hoekstra HUNDREDS OF THOUSANDS OF COMMERCIAL BUILDINGS are now required to report energy information to the U.S. government. Recent legislation in New York City, California and Washington D.C. mandates that buildings over a specific square footage track energy and water consumption using the U.S. Environmental Protection Agency’s (EPA) ENERGY STAR® Portfolio Manager. These regulations don’t just apply to the biggest building on the block either. Most hotels, office buildings and shopping malls will easily exceed the square-footage thresholds. In fact, in California, size doesn’t even matter: All buildings, regardless of square footage, must track their energy data. The recent flurry of legislation has sent building owners and managers scrambling to collect the data they need to comply. Building managers must pull electricity, natural gas and even water consumption data from paper invoices, and then enter this information into the online ENERGY STAR Portfolio Manager. For the property to gain an official ENERGY STAR label, a registered professional engineer must review and sign off on the data to confirm that the building gained a score of 75 or greater.
Coming to a City Near You If you think you’re in the clear because your building isn’t in one of these three places, think again. If California, NYC or D.C. can prove that these recent regulations have caused a decline in carbon emissions and energy use, odds are that similar guidelines will spread to cities and states across the nation. According to figures from the EPA, buildings account for 40 percent of total energy use nationwide. And, wherever you find energy, you’ll find carbon, too. According to a recent press release by the New York City government, “Approximately 80 percent of New York City’s carbon footprint comes from buildings’ energy use.”
The Legislation Low Down • New York City passed a Benchmarking Bill that requires private buildings over 50,000 square feet to use the U.S. ENERGY STAR tool beginning May 2011. • Washington, D.C. approved the Clean and Affordable Energy Act, which put into place graduated requirements for private buildings greater than 50,000 square feet. Building owners started tracking energy use in January 2010. • California adopted Assembly Bill 1103, which goes into effect January 2011. When a building is sold, leased or refinanced, building owners must provide energy benchmarking data.
The BOMA Magazine November/December 2010
As cities and states look for ways to improve their “green” profile, decision-makers will look to commercial real estate companies to help achieve their targets. As cities and states look for ways to improve their “green” profile, decision-makers will look to commercial real estate companies to help achieve their targets. Both the state of California and New York City have explicitly cited their recent benchmarking regulations as key tools for meeting carbon reduction goals. Buyers and tenants may also start calling for more legislation around energy benchmarking. The New York City government claims the benchmarking legislation it recently introduced could “save consumers $700 million annually in energy costs.” In effect, cities and states are hoping to bring about a world in which tenants and buyers can compare energy efficiency as easily as square footage.
Pain or Profit? Collecting, entering and verifying data about electricity and natural gas usage is a time-consuming and involved process, but some property managers have found that engaging professionals to manage the entire ENERGY STAR process can both cut their resource commitment and ensure an accurate rating. Those who measure the way their buildings consume energy often find multiple ways to bring savings and improve efficiency. In fact, the ENERGY STAR website states, “Energy represents 30 percent of the typical office building’s costs and is a property’s single largest operating expense.” With electricity and natural gas accounting for such a large portion of a building’s overall budget, cutting energy costs can boost the bottom line in a serious way. About the Author: John Hoekstra is the director of sustainability at Summit Energy, a consulting firm specializing in energy and sustainability services. Contact John at firstname.lastname@example.org or visit www.summitenergy.com.
Best Practices for Bidding and Evaluating Service Contracts By Tracy Glink
CONTRACTING FOR GOODS AND SERVICES is one of the most important jobs in property management. The primary goal of the bidding process is to ensure excellent service from each vendor at market competitive rates. The contracting process is one full of risk and potential liability; contract disputes are one of the most common forms of litigation for property managers. Good contracting practices, however, can resolve most typical disputes—long before the parties enter a courtroom. Regular bidding of contracts is a key element of a property manager’s fiduciary responsibility. Management agreements often stipulate the frequency of the bidding process and many may require an annual bid. One of the most important ways to minimize liability and assure professionalism in the bid process is to follow these steps: 1. Create a bid list. Pre-qualify vendors to prove they have the experience, financial wherewithal and capability to do work on your property. 2. Issue a Request for Information (RFI). Invite contractors to submit information about their firms; no proposal or bid is included. The RFI is often used to reduce the number of bidders to a reasonable number. 3. Issue a Request for Proposal (RFP). A comprehensive bid package or document that includes all of the details of the bid being solicited—scope of work, job specification, scheduling requirements, bid form requirements, a pricing matrix and a copy of the service agreement vendors will be expected to sign. 4. Host pre-bid meetings. These meetings not only enable the property manager to meet prospective service contracts, but also enable all bidders to hear and see the same information, at the same time. 5. Evaluate bids. The evaluation process is lengthy and includes many phases. It involves comparing costs and service levels among bids, ascertaining the contractor’s ability to do the job, ensuring bid compliance and conducting interviews. All bids should be reviewed by the property owner. The entire process should be documented.
6. Select contract. Notify the service contract that the firm has been selected. One important tool property managers can use to determine if a bid is competitively priced is BOMA’s Experience Exchange Report (EER). The EER tracks actual expense information for most building services, including cleaning/ janitorial, repairs/maintenance, security and roads and grounds. Within each of those major categories, the EER also tracks specific line item expenses. For instance, cleaning/janitorial tracks not only routine contract cleaning services, but also window washing and waste removal. It is important to bear in mind that the EER is published annually based on the prior year’s actual building expenses. Many property managers apply a cost of living adjustment, appropriate for the market at hand, to EER data to get current year rates. A sample table from the 2009 EER (below) illustrates how the line item data is presented. Note that the EER presents average, median and mid-range highs and lows for both total rentable area (the column on the left) and total office rentable area (the column on the right).
While the EER can be a powerful tool, it has its limits. The EER only captures costs; it doesn’t capture service levels. In some cases, examining the midrange high and low data can be helpful, as those statistics reflect the broadest range of what buildings that reported to the EER are paying for a given service. The mid ranges exclude the highest and lowest quarter—25 percent—of the data reported by submitters. Before recommending any change to the scope of services, be sure to evaluate the implications for tenant service and satisfaction. Will a change in service levels increase tenant complaints? Do any leases stipulate specific service levels? If the building uses a tenant council, involving the tenants in any decision to change service levels may help to head off complaints or dissatisfaction, or warrant retaining higher service levels, even if they cost more. For more information about BOMA’s EER, go to www.bomaeer.com. For more information on bidding service contracts, visit BOMA’s Knowledge Portal at www.boma.org. Click on “Education,” then “Knowledge Portal.” Search for “Best Practices for Bidding Service Contracts” to purchase the on-demand webinar on the subject.
Income and Expense Detail – Trend Data 2008
Total Building Rentable Area
Avg. Median Low High
Payroll, Taxes, Routine Contracts
Other Specialized Contracts
Trash Removal/ Recycling
Total Office Rentable Area Dollars/S.F.
Mid Range High
SOURCE: 2009 EER
November/December 2010 The BOMA Magazine
EYE ON EDUCATION
Strategies for Supporting Sustainable Building Operations BOMA’s New Webinar Series Offers Solutions for Achieving a High-Performance Building By Kristin Bowling
BY NOW, SUSTAINABILITY HAS BECOME more than just a buzzword. Property professionals have embraced sustainable and energy-efficient operational practices, so much so that “going green” is now a universal concept. Still, the information in the marketplace can be overwhelming and sometimes confusing, leaving many scratching their heads and wondering if they are doing enough. Sure, you might have set up a recycling program in your building, but are you enhancing indoor environmental quality for your tenants and using environmentally friendly materials? Have you benchmarked your building and learned how to reduce greenhouse gas emissions? The biggest concern now for many is how to implement green strategies without breaking the bank— especially in today’s economy. BOMA’s new three-part webinar series, Strategies for Supporting Sustainable Building Operations, is designed to help property professionals adopt green operational practices to effectively enhance the bottom line, improve occupant satisfaction and comfort and benefit the environment. The new courses offer solutions to help you bring your building to a new level of sustainability and feature practical strategies and case studies of buildings that have executed various sustainable building operations. Whether you’re looking to implement a few new cost-saving measures or preparing to achieve an all-around high-performance building, BOMA’s new webinar series is an important tool to help you achieve your goals.
The new series consists of three 90-minute webinars:
Course 1 focuses on looking at the range of high-performance initiatives that are out there. It identifies and explains all of the major elements that play a role in sustainable building operations. Participants will learn the key steps in the roadmap to sustainability—benchmarking, setting performance goals, building strategies and measurement and reporting. The course will demonstrate how to identify opportunities for change in order to establish goals that are viable and obtainable and will offer no- and low-cost strategies for achieving these goals. Participants will understand how buildings can adapt from non-sustainable operating practices and protocols to sustainable ones— even if a certification, such as LEED-EB, isn’t an objective. In Course 2 sustainable building operations are taken to the next level. This course will offer higher stakes investments—things that may cost you up front, but eventually pay back in
dividends. Participants will closely follow a building through these processes and discover how goals are established and decisions are made regarding the triple bottom line. Whatever the goal, obstacles will undoubtedly arise and Course 2 will cover how to prepare for and overcome them. Participants will also learn to measure the full range of benefits of sustainability—from impacts on NOI and asset value to tenant satisfaction—and explore tools that are available for tracking the range of performance.
Course 3 will focus on how to maintain a high-performance building and will challenge participants to reach even higher standards. It will cover how to identify opportunities to continuously improve the building’s performance and look to the future to discover the next frontier of critical sustainable initiatives. Additionally, participants will learn how to work effectively with owners, tenants and other building service contractors to implement sustainable strategies and will learn best practices for marketing the value of a high-performance building to potential tenants and the community. Strategies for Supporting Sustainable Building Operations will be offered live in 2010 beginning in early November. Registration fees are $125 for BOMA members and $175 for non-members. These programs provide timely information, best practices and live Q & A with expert speakers. There is no more costeffective way to gather the most critical industry intelligence. Better yet, all webinars qualify for continuing professional development credits for the renewal of industry designations, including RPA, FMA, CPM, ARM, SIOR and SMA/SMT. Visit BOMA’s Knowledge Portal, www. bomaeducation.com, for webinar information or to register, or e-mail web email@example.com.
Participants will learn to measure the full range of benefits of sustainability—from impacts on NOI and asset value to tenant satisfaction—and explore tools that are available for tracking the range of performance.
The BOMA Magazine November/December 2010
Marathon Oil Tower, Houston, TX Owner: Hanover Real Estate Partners Management Company: Transwestern Designated a BOMA 360 Performance Building in December 2009
Give your building an edge
q The market has never been more demanding. You need an edge. That’s where the BOMA 360 Performance Program® comes in. It can help distinguish your property in today’s competitive environment. It’s designed to recognize commercial properties that demonstrate best practices in all major areas of building operations and management. The benefit is clear. The BOMA 360 Performance Program designation demonstrates to owners, tenants and prospective tenants that your building is being managed to the highest standards of excellence. That’s the kind of edge that enhances asset value in any kind of market. For more information, visit us at www.boma.org.
The Power of Performance
trade tools [Energy Management] A Case Study in Energy-Efficiency Retrofits in McHenry County, Ill. By Becky Werra AFTER ADDITIONS AND NEW BUILDING PROJECTS, the McHenry County, Ill., building portfolio was growing, but the county’s Facilities Management department’s budget was not. As a result of outdated systems and ad hoc additions, many buildings in the county’s 706,944-square-foot portfolio were inefficient. Half of the county’s Facilities Management budget is allocated for utilities and the county wanted to dramatically reduce this expenditure by increasing energy efficiency. By partnering with Siemens Industry, Inc. on a performance contract, the county could pay for building systems to be retrofitted or replaced via low-cost financing and by the energy savings generated over a decade. Siemens engineers performed an audit to identify energy conservation measures (ECMs) and the guaranteed savings resulting from their implementation. The work would
The McHenry County Administration Building is part of the $3.9 million, three-phase, 10-year performance contract, which will result in $1.3 million in energy savings.
be completed as part of a $3.9 million, three-phase, 10-year performance contract with a total of $1.3 million in energy savings. The first phase entailed replacing a single-pass boiler and cross-connecting new high-efficiency boilers to help gain efficiencies, achieving an estimated $402,026 in savings over 10 years. During the second phase, inefficient T12 lamps were replaced with T8s, with a projected savings of $179,188 over 10 years. For the third phase, the County Board authorized the Facilities Management department to spend $2.4 million from an American Reinvestment and Recovery Act (ARRA) grant on ECMs, and selected 16 measures to be completed, including: daylighting technology; occupancy sensors; exterior lighting upgrades to highefficiency LEDs; a DDC building controls upgrade, demand control ventilation, in-row cooling in the IT server room and
BARTLETT. BEcAusE cusTomER sERvicE, jusT LikE TREEs, shouLd BE A BREATh of fREsh AiR. We’re Bartlett Tree Experts and we’ve been exceeding our customers’ expectations for over 100 years. No matter the size or scope of your tree and shrub needs, our experts bring a rare mix of local service, global resources and innovative tree care practices that makes your landscape thrive. Trees add value to your property. And Bartlett adds value to your trees.
For the life of your trees. pruning fertilization pest & disease management removal
CALL 877 BARTLETT 877.227.8538 OR VISIT BARTLETT.COM
The BOMA Magazine November/December 2010
upgrade to high-efficiency motors with variable frequency drives; window film installation and new thermal windows; and a 15-kilowatt photovoltaic system. In one example, the Department of Transportation facility saw a 15-percent reduction in electric usage since the installation of the ECMs, a projected $720,195 in savings over 10 years. Despite the county’s growth, the total energy savings will keep the Facilities Management budget flat. John Hadley, director of facilities management, McHenry County, notes, “Had we not utilized this vehicle, I would have to go to the director of finance with budget increase requests. This has pretty much created a budget-neutral situation.” About the Author: Becky Werra, LEED-AP, is an account executive for Energy and Environmental Solutions at Siemens Industry, Inc. She can be reached at becky.werra@siemens. com.
Weâ€™re Leading the Future. Make pLans to join us. Looking for the strategies and solutions that matter most in the changing commercial real estate environment? Attend the 2011 BOMA International Conference and The Every Building ShowÂŽ, the one event of the year that brings together the foremost experts and resources in the industry. Come together with building owners and managers the world over to grapple with current trends and learn firsthand what industry leaders are doing to stay ahead. BOMA 2011 is conveniently located at the Gaylord NationalÂŽ Resort & Convention Center, just outside of Washington, DC. Learn more at bomaconvention.org.
Buyers’ Guide to Building Products and Services PRODUCT
DETAILS Bacharach Introduces PCA®3 Portable Combustion Analyzer Bacharach Inc., a world leader in testing and measurement instrumentation for the HVAC/R industry, has introduced the PCA3 Portable Combustion Analyzer. The PCA3 is the industry’s first advanced portable combustion analyzer with a full-color graphic display for superior visibility and user-friendly interface. In addition to the included sensors for oxygen and carbon monoxide, the PCA3 can be ordered to include sensors for nitric oxide, nitrogen dioxide and sulfur dioxide.
For more information, visit www.mybacharach.com
OMG Roofing’s PipeGuard Provides Reliable Pipe Support OMG Roofing has introduced the Height-Adjustable Strut Model PipeGuard for applications requiring support for multiple small pipes in one location. Diverse and flexible, the PipeGuard can be used for a wide range of small rooftop pipe applications, including gas and refrigeration lines, electrical and solar conduit, as well as HVAC lines. The system is compatible with PVC, copper, cast iron and most other pipe materials, and is adjustable to heights from five to 10 inches, with custom heights available.
For more information, visit www.olyfast.com
Sloan Valve Offers Efficient Dual-Flush Toilet Bowls Sloan Valve Company’s commercial dual-flush toilet bowls have been listed and certified by the International Association of Plumbing and Mechanical Officials (IAPMO®). These water closet bowls have been specifically engineered for water-efficient dual-flush operation and optimal performance. High-efficiency toilets with dual-flush Flushometers reduce water usage by about 30 to 65 percent compared to standard toilets, which annually saves hundreds or thousands of gallons of water.
For more information, visit www.sloanvalve.com
Swegon’s Compact Chilled Beam Module Ranks High in Comfort Swegon AB, one of Europe’s market leaders in the ventilation and air conditioning sectors, has launched Parasol Evo2, a compact chilled beam comfort module for commercial and industrial use, in the United States. Designed for the control of air quality and temperature in rooms, Parasol Evo2 offers low-energy running and maintenance costs, coupled with the benefits of chilled beam technology. Parasol’s compact design makes it compatible with competing fan coil unit sizes.
For more information, visit www.swegon.com
Kee Safety Provides Safe Walkways on Roof Surfaces Kee Safety, Inc., has introduced its new Kee® Walk, a slip-resistant walkway for workers accessing a roof during construction or maintenance. Contrasting with the roof’s surface, it provides a clear demarcation route that protects the roof from unnecessary damage and uniformly distributes the pedestrian load across its surface. Easy to install with pre-assembled standard lengths supplied from stock, Kee Walk is designed for modern roofs.
For more information, visit www.keesafety.com
Chief Makes Displaying TVs in Commercial Buildings Easier Chief, a leader in professional AV solutions, has debuted the new Thinstall™ low-profile swing arm wall mounts. Designed for use with all types of flat panel TVs, the slim, ruggedly constructed mounts have an ultra-slim 1.5-inch profile, are easy to install, extend up to 25 inches for viewing from any angle and support as much as 125 pounds. High-strength, forged steel arms are used in the Thinstall design for maximum rigidity and support.
For more information, visit www.chiefmfg.com
For rates and information about advertising in The BOMA Magazine, contact Paul Hagen at Stamats Business Media 866-965-4205.
The BOMA Magazine November/December 2010
GENERAL ELEVATOR PARTS INC. 1-800-848-3329 or (773) 491-1927 Fax: 1-800-578-6349 or (773) 463-2827
Otis, Westinghouse, Dover, Imperial, etc. SURPLUS MOTORS & GENERATORS
n n n ✓
Rotors – IMO Pumps Armatures – Door Motors Machine Parts – Controls Obsolete’s Largest Supply
GeGeLu at AOL Networking your inventory is like fishing. Just send over your list and we will hook you up! Otis turtleback longneck and shortneck hoist motors size 1 1/2, 2 1/2, 3 1/2, 4 1/2, 5 1/2,ect. Otis wound rotors type 1ac,2ac, 3ac, 5ac, 7 1/2 ac, ect. Otis 63g, and all other dc hoist motors leg mount and flange mount. Westinghouse dc flange mount 63a, 93 and 93.5 frame
See our website at elevatorexchange.com
ADVERTISING INDEX Company
360Facility............................................................ 13 American Anchor......................................... Cov 2 ASSA ABLOY Door Security Solutions........... 9
Zonecheck is a simple way to test Flow Switch operation, without the need to discharge water.
Bartlett Tree Experts........................................... 38 BOMA International.......................... 33, 37, 39 BOMA Nevada.................................................... 18 Creative Flooring Concepts Inc.— Proform............................................................. 38 E-Mon LLC........................................................... 41 FLIR Systems........................................................... 4 General Elevator Parts....................................... 41 Global Vision Inc................................................. 41
To learn more contact Global Vision
Johnson Controls Inc............................................ 7 JP Obelisk.............................................................. 12 Kimberly-Clark Professional*........................... 17 KONE Inc................................................................ 3 Naylor Publications............................................ 21 Pro-Bel............................................................. Cov 4 Scientific Conservation..................................... 11 Shortridge Instruments Inc............................... 18 Southern Elevator and Electric Supply......... 19 U.S. Green Building Council—USGBC........ 15 Yaskawa Electric America........................... Cov 3
November/December 2010 The BOMA Magazine
Three Thought Leaders Forecast the Future at BOMA 2011 Gergen, Zell and Linneman to Discuss Politics, Real Estate and the Economy By Lindsay Tiffany EXPERTS DAVID GERGEN, Sam Zell and Peter Linneman will headline the 2011 BOMA International Conference, June 26-28 in Washington, D.C., providing BOMA conference attendees with an insider look at the forces shaping commercial real estate and the economy. Gergen, revered journalist and White House advisor, will present the Sunday Keynote Address, sponsored by Constellation
A White House adviser, journalist and teacher over the past 40 years, David Gergen worked in the administrations of Presidents Nixon and Ford and was director of communications for President Reagan. He also served as counselor to President Clinton on both foreign policy and domestic affairs. He is a senior political analyst for CNN, a professor of public service at the Harvard Kennedy School and the director of its Center for Public Leadership. Gergen began a career in journalism in 1985. He was the moderator of World @ Large, a 13-part PBS discussion series for two seasons, and for five years teamed up with Mark Shields on the MacNeil/Lehrer NewsHour for widely acclaimed Friday night political discussions. Today, he contributes to CNN as a senior political analyst, Parade Magazine and U.S. News & World Report as editorat-large. He holds 19 honorary degrees and sits on many boards, including Teach for America, the Aspen Institute and Duke University.
Energy and AOBA Alliance, Inc. Real estate icon Sam Zell and world-class economist Dr. Peter Linneman will debate the state of commercial real estate in the United States and around the globe in a lively dialogue during the Monday General Session, sponsored by Yardi.
Sam Zell is chairman of Equity Group Investments LLC, the private, entrepreneurial investment firm he founded more than 40 years ago. Zell’s investments span industries and continents and include interests in real estate, energy, logistics, transportation, media and healthcare. He is recognized as a founding father of today’s public real estate industry after creating three of the largest real estate investment trusts (REITs) in history. Previously, he served as chairman for Equity Office Properties Trust, which was sold in February 2007 to The Blackstone Group for $39 billion in the largest private-equity transaction in history at the time. Zell serves on the JPMorgan National Advisory Board; the President’s Advisory Board at the University of Michigan; the Visitor’s Committee at the University of Michigan Law School; and, with the combined efforts of the University of Michigan Business School, established the Zell-Lurie Entrepreneurial Center. He is a long-standing supporter of the University of Pennsylvania Wharton Real Estate Center, and has endowed the Samuel Zell-Robert Lurie Real Estate Center at Wharton. He has also endowed the Northwestern University Center for Risk Management.
The BOMA Magazine November/December 2010
Dr. Peter Linneman is the principal of Linneman Associates and also serves as the Albert Sussman Professor of Real Estate, Finance and Public Policy at the Wharton School of Business, the University of Pennsylvania. A member of Wharton’s faculty since 1979, he served as the founding chairman of Wharton’s Real Estate Department and was the director of Wharton’s Zell-Lurie Real Estate Center for 13 years. He is the founding co-editor of The Wharton Real Estate Review. His teaching and research focuses on real estate and investment strategies. He has published over 80 articles during his career. Linneman is widely recognized as one of the leading strategic thinkers in the real estate industry. He was cited as one of the 25 most influential people in real estate by Realtor Magazine and was named one of the 100 most powerful people in New York real estate by The New York Observer. He is also a co-coordinator/sponsor/moderator, with Sam Zell, of the prestigious industry roundtable, The Marshall Bennett Classic. For more information about the 2011 BOMA International Conference and The Every Building Show®, visit www.bomaconvention.org.
STIMULUS PACKAGE = Need to stimulate your company’s recovery? Our E7 family of HVAC drives lower operating costs, decrease maintenance demands and increase client comfort. Your budget also will stretch further when using Yaskawa HVAC drives. Stimulate your bottom line with Yaskawa’s E7 HVAC Drives. Call Yaskawa today. Follow us: ™
YA S K A W A A M E R I C A , I N C . - D R I V E S & M O T I O N D I V I S I O N 1 - 8 0 0 - YA S K A W A
YA S K A W A . C O M