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September/October 2011 Volume 7, No. 5
34 28 BOMA•Kingsley REPORT: Analysis From the 2011 EER® Lindsay Tiffany, Phil Mobley, Laura Horsley and Lorie Damon, Ph.D The latest data shows strong asset management balancing dips in income levels, among other trends.
Commercial Real Estate in South Africa Leveraging Technology to Enhance Your Security Program J. Michael Coleman New tips and best practices for ensuring your building is protected.
For advertising rates and information, contact Paul Hagen at Stamats Business Media 866-965-4205. Connect with BOMA
Volume 7, No. 5 The BOMA Magazine September/October 2011, (ISSN 1532-4346), Copyright 2011. 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,
Collaborations OSCRE brings real estate global technology standards and innovation.
Legislative Update How the debt ceiling deal could affect taxes on commercial real estate; DOE prepares to launch new asset rating program; and more.
State & Local Update Proposed labor legislation in California bad for business; BOMA scores green codes victory; the latest on the 7-Point Challenge and BOMA STARS.
BOMA President Henry Chamberlain @ HenryBOMA BOMA Vice President Lisa Prats @ LisaPratsBOMA
20 ‘A Team’
Message from the Chair How to Tame a Wild Ride.
See BOMA on YouTube: www.youtube.com/ bomainternational Follow BOMA on Twitter:
Commercial real estate celebrates 14 buildings with outstanding operations and management.
Ray H. Mackey, Jr., RPA, CPM, CCIM and Henry H. Chamberlain, APR, FASAE, CAE CRE in South Africa, including economic recovery, new opportunities and insights from the 2011 SAPOA conference.
Join BOMA on Facebook Join BOMA on LinkedInJoin the new EER Users Group
International TOBY® Award Winners
Lawrence Melton New GSA Smart Buildings Program creates an innovative, low-cost model for commercial buildings.
38 GREEN SCENE
Richard Restuccia Sustainable landscaping tips to give buildings a boost.
40 Research Corner
Codes & Standards Update BOMA prepares for green construction code hearings and participates in expanded code development forums; Seattle-King County adopts new codes.
36 Trends Tracker
Leading the Way Boyd Zoccola—BOMA leader, aviator.
New study highlights American and British outlooks on economic recovery and tenant drivers.
Eye on Education BOMA’s 2011 conference education prepares attendees for tomorrow’s challenges.
50 Trade Tools
Andy Romano New roofing technology helps rebuild a green town.
On the Cover: 300 Capitol Mall, Sacramento, Calif., managed by Hines and owned by 300 Capitol Associates NF LP, was selected as 2011 TOBY® winner in the “250,000499,999 sq ft” category.
September/October 2011 The BOMA Magazine
Message from the Chair
How to Tame a Wild Ride No one said recovery would be easy, but no one said it would have as many dips, twists, turns and white-knuckle free falls as a deficit debate on Capitol Hill. The recent debacle between Congress and the Obama Administration, along with an increasingly volatile stock market, have many reflecting back to the darkest days of the recession in the fall of 2008. Despite the many ups and downs we’ve been through, the trump card that BOMA members have been able to use throughout is operational excellence. The 2011 Experience Exchange Report ® (EER) tells this story best. Although the overall income numbers ticked down from 2009 to 2010, BOMA members once again were able to balance the income dips by maximizing operations. We saw this in reductions in utilities and fixed expenses. The utilities decrease shows that, despite rising energy costs, property professionals have fine-tuned energy management plans and made significant reductions. The decrease in fixed expenses speaks, in part, to the success of recent appeals of real estate tax bills. Read a complete analysis of the EER findings on pages 23-26. Benchmarking through the EER and ENERGY STAR® and signing onto the 7-Point Challenge are among the strategies BOMA members are successfully employing to reduce consumption, improve efficiency and show lawmakers that the voluntary marketplace is working. The data and information we collect through these programs are more important than ever, as lawmakers and regulators make decisions on taxes and mandates that impact our industry and the pace of economic recovery.
Innovation is another key component of recovery. During the most recent meeting of BOMA’s National Advisory Council, executives from some of the largest real estate firms and corporations discussed how they are reshaping the traditional office environment to make better use of space and the creativity and talent of employees. Many of these companies discovered creative ways to save money by downsizing space—from hoteling to virtual offices to standardizing office sizes. And, while the jury is still out in some cases on how the new space dynamics will work, many are finding that the necessities of space realignment are leading to more collaborative and team-oriented work environments. There may not be a magic pill to fix Washington or stimulate the job growth that will ultimately lower vacancy rates and spur development, but the good news is that we are already achieving high performance through innovation. The creative strategies and operational expertise that we have implemented through the lean times will position us to stand out that much stronger in the prosperous times. Thank you for supporting our great industry!
Publisher: Lisa M. Prats, CAE Editor: Laura Horsley Associate Editor: Lindsay Tiffany Contributing Editors: Karen W. Penafiel, CAE, Ronald Burton, James Cox, Henry H. Chamberlain, APR, FASAE, CAE, Lorie Damon, Ph.D, Emily Naden Designer: Amy Belice Published by: Building Owners and Managers Association (BOMA) International
BOMA International Officers Chair and Chief Elected Officer Boyd R. Zoccola Hokanson Companies, Inc. Indianapolis, Ind. Chair-Elect Joseph W. Markling CB Richard Ellis, Inc. Los Angeles, Calif. Vice Chair Richard W. Greninger, CPM Carr Properties Washington, D.C. Secretary/Treasurer Rebecca B. Hanner, CPM, RPA Cassidy Turley Raleigh, N.C. President and Chief Operating Officer Henry H. Chamberlain, APR, FASAE, CAE BOMA International Washington, D.C. Call for Nominations: Vice Chair and Executive Committee Members
Boyd R. Zoccola Chair and Chief Elected Officer
BOMA International’s Nominating Committee is seeking candidates for the position of vice chair and for five principal members and one associate member 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.
The BOMA Magazine September/October 2011
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Debt Ceiling Talks Could Lead to Higher Taxes on CRE On August 2, 2011, President Obama signed the Budget Control Act of 2011. Under the agreement, the debt ceiling will be raised in two stages, avoiding default. The debt ceiling increases will be accompanied by dollar-for-dollar deficit cuts. Tax increases are off the table, but revenue raisers are on the table. “Revenue raisers” is Washington-speak for tax loopholes and earmarks in the tax code. Unfortunately, many in Washington believe that carried interest is such a loophole, erroneously linking it to hedge fund managers and not understanding its implications and use by the commercial real estate industry. In the short term, more than $900 billion in spending cuts and hard caps on discretionary spending will be implemented and the debt ceiling will be immediately raised the same amount. To identify the spending cuts and revenue raisers for the second phase, the bill calls for the creation of a Joint Select Committee on Deficit Reduction, which will hold its first meeting by September 16. The committee is tasked with finding at least $1.5 trillion in deficit reduction over 10 years and
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The BOMA Magazine September/October 2011
reporting those recommendations by November 23. Both chambers must vote on the recommendations through an up and down vote, with no amendments, by December 23. Congress also has the option of approving a balanced budget amendment to the Constitution and sending it to the states for ratification. BOMA is carefully watching and weighing in. For the past several years, BOMA has been working to educate Congress that, by changing the tax treatment of carried interest, it would raise the tax on the commercial real estate industry, not close a loophole on hedge fund managers. BOMA is also carefully watching spending cuts to ensure that Congress understands the potential implications of its choices on the commercial real estate industry.
DOE Poised to Launch Asset Rating Program On August 8, the U.S. Department of Energy (DOE) published a Notice of Request for Information on its plans to develop a voluntary national asset rating program for commercial buildings. The program would establish an asset rating system for commercial buildings based on a national standard and would evaluate physical characteristics and asbuilt energy efficiency of buildings. DOE is seeking comments on or before Sept. 22, 2011, and plans to have an initial program design available by the end of September. The department will likely begin a pilot program in early 2012. BOMA International has several concerns about this program. First and foremost, though DOE calls it a “voluntary” program, it will likely be adopted by states/cities as they move to implement benchmarking and disclosure laws. With that in mind, it is critical that DOE gets this right. It is also very unclear how the program will fit in and coordinate with the existing Operational Rating system, ENERGY STAR® Portfolio Manager. BOMA is also concerned that DOE plans to have its initial program design completed by September 30, just eight days after comments are due. Nonetheless, BOMA will do everything it can to ensure that DOE receives usable feedback from the commercial real estate industry. BOMA International will file comments to DOE and will post them on the BOMA website once final. We encourage
BOMA members to provide comments, either directly to DOE or to BOMA. Visit www.boma.org for more information.
House Committee Slashes GSA Budget On June 23, the House Appropriations Committee approved the FY2012
Financial Services and General Government Appropriations bill, which includes funding for the U.S. General Services Administration (GSA); however, the funding levels approved are drastically below what GSA requested and what they need to continue to realistically maintain and operate governmentowned facilities and to pay private-sector Continued on page 10
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September/October 2011 The BOMA Magazine
legislative UPDATE landlords for leased space. Funds appropriated to pay for leased space are $585 million short of GSA’s contractual lease obligations to private-sector landlords. Overall, GSA requested $9.5 billion for FY2012 and the House bill reduced it to $7.2 billion, a reduction of more than $2 billion. BOMA International is now working
to educate the Senate on why it is necessary for the federal government to maintain its building stock and to avoid defaulting on contractual obligations to private-sector landlords. To this end, BOMA coordinated a letter from a wide variety of stakeholders to key senators. Read the letter on the Advocacy page at www.boma.org.
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The BOMA Magazine September/October 2011
Senate Energy Committee Approves BOMA-Opposed Building Code Bill On July 14, the Senate Energy and Natural Resources Committee overwhelmingly passed S. 1000, the “Energy Savings and Industrial Competitiveness Act of 2011,” by a vote of 18-3. Sponsored by Sens. Jeanne Shaheen (D-N.H.) and Rob Portman (R-Ohio), the bill would ratchet up the energy efficiency of building codes (ASHRAE 90.1) and potentially grant the U.S. Department of Energy (DOE) the authority to develop a national model energy code if the ASHRAE standard didn’t meet the required efficiency targets. Unlike legislation on this issue that surfaced during the last session of Congress, the energy-efficiency targets are not set in the bill; DOE would set the targets through a rulemaking process. Despite the improved language, BOMA continues to oppose these proposed changes to the building code development process. The legislation also contains energy retrofit loan guarantees, which BOMA supports.
DOE and Appraisers Join Forces to Assess Value of Energy Efficiency In February, President Obama announced the Better Buildings Initiative, a new White House plan with the goal, among others, of improving commercial building efficiency 20 percent by 2020. In June U.S. Department of Energy (DOE) Secretary Steven Chu announced a partnership with The Appraisal Foundation that will help achieve this goal by expanding access to energy-efficiency and building performance information for commercial buildings. Under the new partnership, DOE and The Appraisal Foundation will work to ensure that appraisers nationwide have the information, practical guidelines and professional resources they need to evaluate energy performance when conducting commercial building appraisals. BOMA International applauds this effort, as we believe this will help enable investors, financers, building owners and managers and others to accurately assess the value of energy efficiency as part of a building’s overall appraisal.
state & local update
Proposed California Legislation Erodes Businesses’ Right to Hire
In the midst of one of the nation’s worst economic downturns, the California state legislature is considering a bill that would erode businesses’ ability to control who they can hire. Assembly Bill 350 would require employers with a new contract for property services, such as building maintenance, licensed security, window cleaners and food cafeteria services, to hire all of the prior contractor’s employees for at least 90 days. It impacts any property with service contracts, including commercial properties, hospitals and hotels. This means that, if a business switches security or food service providers, it can change the letterhead and the business terms but cannot change the employees who are responsible for delivering that service. In the event that a building is sold, the new owner would be mandated to retain all of the existing service contractors’ employees and would not be able to bring in new service contractors with different employees. With support from BOMA International’s Industry Defense Fund, BOMA
The BOMA Magazine September/October 2011
California has mounted a campaign against the measure and its members are actively reaching out to legislators to educate them on the bill’s onerous impacts. It has also formed a coalition, “No on AB 350 Coalition,” whose other members include the California Chamber of Commerce, NAIOP of California and many others. For more information on this effort, visit www.ab350are youkiddingme.com.
BOMA Scores Green Codes Victory At the annual meeting of the National Conference of State Legislatures (NCSL), held in August in San Antonio, the organization’s governing body tabled a resolution calling on Congress and the Obama Administration to ensure that stakeholders had access to the latest iteration of the International Green Construction Code (IgCC). BOMA staff worked to halt or amend this measure due to its conflicts with BOMA’s policy, which supports the development of Continued on page 14
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state & local update model codes through a consensus process. The IgCC is slated to complete the consensus review process in 2012. The NCSL resolution was written in a way that could refer to the IgCC 2.0, a draft document. The resolution passed unanimously out of the NCSL Environment Committee earlier in the week, where representatives from the real estate industry did not have an opportunity to speak
to legislators. Following the meeting, BOMA, the National Association of Home Builders and other industry groups crafted an amendment and began lobbying sympathetic legislators. BOMA also met with groups who were supporting the resolution, including the American Institute of Architects, the International Code Council and the U.S. Green Building Council, to craft a compromise amendment with an agreement
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The BOMA Magazine September/October 2011
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to move it forward at the business meeting; however, during debate, Kansas Rep. Forrest Knox moved to table the resolution rather than introduce the compromise amendment. BOMA staff will continue to monitor the issue and work with interested parties to represent commercial real estate’s issues.
CRE Embraces Benchmarking through the 7-Point Challenge and BOMA STARS The commercial real estate industry continues to embrace market transformation, as new companies endorse the 7-Point Challenge and share their energy management data with BOMA through the BOMA STARS initiative. Recent endorsers include 500 West Monroe in Chicago, 5330 Carroll Canyon Road/ Canyon View Owners Association, Equity Office of Northern California, Fourth & Walnut Centre in Cincinnati, Kilroy Realty Corporation, Spectrum Properties, Tanglewood Property Group and The Tower Companies. The goals of the Challenge include decreasing energy consumption by 30 percent across portfolios by 2012 (in comparison to an “average” building scoring a 50 on ENERGY STAR®); benchmarking energy performance and water usage; and providing ongoing education to building owners and operators. BOMA STARS is an initiative to promote the importance of benchmarking energy management data using the U.S. Environmental Protection Agency’s ENERGY STAR Portfolio Manager and sharing that data with BOMA. Since its launch in January, nearly 3,000 facilities representing more than 730 million square feet of space have shared their data with BOMA. While this is a major step forward, this is just 12 percent of the nine billion square feet owned or managed by BOMA’s members. BOMA still needs help in reaching our goal. By sharing their energy management progress, BOMA members demonstrate the effectiveness of the voluntary marketplace and help show policymakers that the commercial real estate industry can reduce energy consumption without new mandates. All data shared with BOMA is kept confidential in the data collection and reporting processes, and BOMA does not identify submitters by name or location within a market. To join your industry colleagues in transforming the marketplace, visit www. boma.org.
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Codes & Standards Update
BOMA Prepares for IgCC Final Action Hearing THE FINAL STEP IN THE DEVELOPMENT of the International Green Construction Code (IgCC) from the International Code Council (ICC) will take place in hearings scheduled for early November during ICC’s annual conference in Phoenix, Ariz. The 2012 IgCC, the first edition developed through the full ICC consensus process, is scheduled to be available in March 2012 along with the rest of ICC’s family of 2012 model codes. BOMA filed comments in August identifying critical code change proposals for further debate and balloting by ICC voting members at the Phoenix hearings on topics including: the use of ASHRAE Standard 189.1 as an IgCC compliance option; the 10 percent or higher energy-efficiency mandates over base energy codes; the mandatory inclusion of renewable energy systems on all buildings; the inclusion of an outcomebased code compliance option; indoor
environmental quality; and more. BOMA also submitted a proposed change to include references to BOMA floor measurement standards.
BOMA Participates in Expanded ICC Code Development Forums As a natural outgrowth of the changing of the code development process from an 18-month cycle to a three-year cycle, the International Code Council has expanded the number of committees charged with developing future code change proposals. These new Code Action Committees (CAC) began their work this summer by focusing on complex technical issues, identifying emerging issues and drafting proposed code changes for the 2012-2013 code change cycle. To ensure the work of these committees does not result in more costly building code requirements for BOMA garvin-Buildings-June 6/6/11 members, BOMA will participate as a
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The BOMA Magazine September/October 2011
voting member in four of the committees, including those that deal with building codes; fire codes; plumbing, mechanical and fuel gas codes; and sustainability, energy and high-performance building codes.
Seattle-King County Adopts New Codes Requiring Luminous Egress Markings Seattle-King County, Wash., is the latest in a growing list of jurisdictions to adopt the 2009 International Building and Fire Codes (IBC and IFC), containing requirements for luminous egress markings as a required retrofit in all stairwells of existing high-rise buildings (more than 75 feet tall). According to provisions in the 2009 IBC and IFC, luminous markings are required for all doors, steps, landings, handrails, floor perimeters and obstacles in exit enclosures and passageways. In addition, new directional signage is also mandated. These requirements are in addition to the mandatory emergency exit area lighting that has been required in the ICC codes for many years.
the efficiency of commercial buildings. This guideline will apply to the commissioning of buildings, those who commission them and how. The document will complement the IgCC, CALGreen, LEED and other codes and programs and work to avoid conflict in the marketplace or with current regulations. The guideline will be aimed at building inspectors, contractors, architects, engineers and other design professionals who will carry
out commissioning tasks or enforce commissioning from a regulatory perspective. ICC said this effort will provide regulators and third parties with a guide to determine who is competent to be a commissioning agent, what skill sets are required, how to enforce commissioning from a regulator’s perspective and will serve as the basis for a future ICC certification program.
ASHRAE Develops Position on Building Commissioning The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) recently developed a position statement on the role of professional engineers in the building commissioning process. The statement recognizes that registered design professionals may be required to perform some commissioning tasks as a result of state or local governing authority statutes or rules defining particular services to be performed under the responsible charge of a professional engineer. ASHRAE holds that, regardless of jurisdictional requirements, commissioning providers must act ethically and responsibly, and must have the education, expertise and experience as specified in ASHRAE guidelines. Importantly, ASHRAE’s statement recognizes that it is not prudent to advocate that building commissioning must be conducted by registered engineers.
ICC to Develop Building Commissioning Guideline The International Code Council (ICC) recently announced its intention to develop a Guideline for Building Commissioning to meet the need to increase
September/October 2011 The BOMA Magazine
leading the way
Meet the New Chair
Boyd Zoccola BOMA Leader, Aviator
We are experiencing a volatile economic recovery with weak job growth. What should BOMA members be focusing on to weather a storm that never seems to let up? We can have no impact on the jobs recovery, which is what will spur the resurgence of commercial real estate, but what we can focus on right now are best practices—making sure tenants are satisfied, that we’re benchmarking operating expenses and managing properties in the best manner possible. It’s easier to retain a tenant than get a new one. This is a time to make sure your corners are crisp, and you’re taking care of all the details; don’t give anybody a reason to leave your office building.
What’s our biggest challenge in the year ahead? We need to make sure we aren’t called upon to pay more than our fair share and that we have the dollars to invest back into our properties and our people. We need to stay focused on tax issues and regulatory issues. I think the regulatory issues could be even more burdensome than the tax issues. One concern is if the EPA decides to tackle energy reform on its own without a consensus process. We’ve worked very hard with the 7-Point Challenge to show how we can successfully regulate our industry through the voluntary marketplace to reduce energy consumption. And, through the BOMA STARS program, we are using the aggregate data from ENERGY STAR® submissions to show that we have the actual
data, not just the subjective knowledge, of what we’ve been able to achieve as an industry. We also want to make sure that unattainable goals are not set. We’ve seen some aggressive mandates adopted in cities and states. We need goals we can realistically work toward; they can be aggressive goals, but they need to be attainable.
What are you most excited about in the year ahead as BOMA chair? I’m most excited about being able to get out and represent the industry and to meet members in the BOMA local associations that we’ll visit. The program I’m most excited about is our young professionals program. We have the BOMA Foundation Thought Leaders Symposium coming up in November at Georgetown University that will bring together more than 100 students to discuss careers in real estate. We have an aging workforce, particularly on the management and operations side of the industry. These are stable jobs and I think that’s more appreciated than it was four years ago. Today’s property managers are different people than they were 15 years ago. They need to have computer skills and financial skills for complex reconciliations and lease analyses. We’re looking for more of an asset manager who understands the overall value to the owner. There are more challenges and opportunities, and more diversity in the day-to-day activities.
The BOMA Magazine September/October 2011
During your acceptance speech in D.C., you talked about how you started your CRE career with your biology degree in hand. What made you choose this industry and what does it mean to you today? I turned to real estate after deciding I did not want to go to medical school. I was in Laggenbeck, Germany, in a meeting buying dryers for a veneer mill as part of a summer job I had visiting Europe, and during the meeting they were talking about selling a face plant in High Point, N.C. I had friends in the real estate industry and I decided right then that, when I got back to the States, I would get my real estate license and look for a job in commercial real estate. I love the diversity of my job and what I tackle on a daily basis—some days, it’s leases; some days, entitlements; some days, it’s financing challenges; other days, it’s construction challenges on projects we’re working on. I think 90 percent of the battle is finding something that you really enjoy doing so it doesn’t feel like work, it’s just what you do during the day.
Tell us something about yourself that most people don’t know. I’m a pilot. I got my pilot’s license in 1999 and I began my instrument training immediately after 9/11 when they wouldn’t open the skies. I use my flying 90 percent for business, and I usually fly a Cessna 182 or 206. I do miss the convenience of flying in and out of small airfields as I’m traveling around the country—they have taken the fun out of flying commercially.
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‘A TEAM’ COLLABORATIONS
OSCRE Brings Real Estate Global Technology Standards and Innovation By Lindsay Tiffany BOMA INTERNATIONAL IS AN ACTIVE MEMBER of the Open Standards Consortium for Real Estate (OSCRE) as it pursues its mission to produce global industry standards for real estate information exchange and drive their adoption. This relationship combines BOMA’s traditional role in providing the commercial real estate industry with standards and benchmarking tools needed to evaluate building performance with OSCRE’s international platform to drive efficiency in the market. BOMA’s floor standards, chart of accounts, Experience Exchange Report (EER) database, lease guide and more are all integrated into OSCRE’s standards. Through OSCRE’s work, a myriad of systems, software and databases can now share information through common standards, saving vast amounts of time and money. A virtual who’s who of software providers, major real estate data users and trade associations come together under OSCRE, including The Appraisal Institute, Argus Software, CB Richard Ellis, CoreNet Global, Cushman & Wakefield, the U.S. General Services Administration, Jones Lang LaSalle, Manhattan Software, MRI Software, Public Works and Government Services Canada, Real Capital Analytics, Realcomm, Real Foundations, RREEF Deutsche Asset Management, TIAA-CREF and Yardi Systems.
Turning Ideas Into Action OSCRE is organized by broad industry sectors—investment, facility management and residential—in order to
identify the key data exchange challenges and prioritize the creation of standards to help address them. OSCRE creates an environment where all parties can work together without competing. It has the processes and methodology to turn members’ ideas into real standards that comply with the best working practices of other global standards bodies. OSCRE can police future requirements and changes to ensure they are compliant with the way in which standards are created. Perhaps most importantly, OSCRE works globally to harmonize similar standards that come from different countries or regions. OSCRE has a number of workgroups that are designed to identify high-value interoperability issues and develop standards to alleviate those issues. Those workgroups concerned with issues in commercial real estate and property management include the Commercial Introductions Workgroup, the Commercial Property Information Exchange Workgroup, the Lease Abstract Exchange Workgroup and the Work Request and Work Order Fulfillment Workgroup. The newly created Occupancy Cost Exchange Standard Workgroup is working on a standard for the exchange of actual, cost-related data and indicators of normalized relative performance across properties. This will link BOMA’s EER database with data from around the world. Earlier this year, BOMA and OSCRE signed a memorandum of understanding with the common goal of advancing interoperability among information systems that exchange real estate-related
The BOMA Magazine September/October 2011
information. BOMA and OSCRE have a common interest in several issues that will benefit the commercial real estate industry. Both groups have agreed to exchange information, participate in the other’s events, seek each other’s views in the development of new products, collaborate on data standards development in order to take advantage of work already accomplished and develop special agreements for the promotion and distribution of each other’s products and services.
Creating New Standards OSCRE recently unveiled an exciting standards-based technology that will enable substantial new efficiencies in property management. At a launch event held in London in early July, more than 80 leading investment, property management, legal and software firms came together to see a live demonstration of new technology that will enable the rapid, accurate creation and communication of lease summary documents. Currently, lease summaries are produced in text formats that are transcribed and re-keyed multiple times, a process that can result in delays, errors and inefficiencies. Bringing together a diverse group of sponsors, OSCRE has facilitated the creation of new standardsbased technology that removes these challenges and opens the door to new efficiency opportunities for all parties involved. As the real estate industry grows increasingly global and technology plays an ever greater role in our sector, the need for standards-based solutions is critical. OSCRE has created a unique, non-competitive, collaborative forum to develop standards and serve as a platform for innovation. The organization brings real estate professionals together with their solution providers to agree on intelligent and effective ways to exchange information over the Internet and within their businesses to drive accuracy and efficiency. It is a non-profit model that depends on member financial and volunteer resources to get the job done. For more information on how to get involved, go to www.oscre.org.
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BOMA • Kingsley REPORT
BOMA Kingsley REPORT Practical Industry Intelligence for Commercial Real Estate Benchmarking Autumn 2011
Data Drives Performance By Lorie Damon, Ph.D
There’s no question that measuring operational performance is key to running a good, profitable business—particularly in commercial real estate. As an asset class, commercial office buildings lend themselves to data-driven decision-making, in part because their operations are imminently “measurable.” From the standards for measuring and classifying the office space itself, to metrics for tracking income and operating expenses, to gauging consumption of energy, water and other consumables, the office building industry offers countless opportunities for tracking performance. And, savvy property, facility and asset managers not only measure these elements of an asset’s performance, but use them to drive value to building owners. As market conditions continue to pressure managers to deliver strong NOI, the desire for tools to track various elements of performance has only increased. In this edition of the BOMA•Kingsley REPORT, we explore BOMA’s 2011 Experience Exchange Report® (EER) and highlight the aggregate changes in office building expenses in the last year. We also explore the changing impacts of increased density on office building operations—and highlight ways in which traditional models for leasing space and allocating operating expenses back to tenants are becoming increasingly inadequate as the “Twittersphere” gives rise to densely packed “collaborative workspaces.” And, we explore the next generations of benchmarking, as emerging technologies converge with occupier demands to drive better, faster, “real-time” data into the hands of both occupiers and managers of office space.
The Numbers Tell the Story By Phil Mobley The 2011 BOMA Experience Exchange Report (EER) is a unique tool for real estate professionals across the United States and Canada seeking to create performance benchmarks on office building operations. But the wealth of available data also affords the opportunity to examine trends in the industry at large and test the validity of some commonly held assumptions. Even a brief, high-level look at this year’s data set is revealing. This report will look at only a few of the key takeaways from this year’s data set. But first, here are a few clarifying notes about the analysis. While the EER contains information from 6,572 office buildings across the United States and Canada, this trend analysis focuses only on buildings meeting a specific set of criteria: those for which data was submitted in both 2010 and 2011, whose total rentable area did not change by more than 10 Continued on page 24
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BOMA • Kingsley REPORT
percent and whose occupancy did not change by more than 15 percent. This two-year, same-building analysis nets out the potential impact of changes in occupancy, building size and overall building composition, thus providing a truer picture of the trend in building expenses. This year’s same-building data set includes 1,790 buildings and represents nearly 375 million square feet.
Utility Expense Comparison—Building Types
General Expense Analysis During 2010, owners and operators of private-sector office buildings in the United States spent $0.07 more per square foot than in 2009—an increase of about one percent. This followed a decrease of similar magnitude from 2008 to 2009 and is not surprising given the low rate of inflation in 2010 (the Bureau of Labor Statistics reported a non-seasonally adjusted increase in the Consumer Price Index of 1.5 percent as of December 31, 2010). This modest increase was by no means uniform. The largest increase in percentage terms occurred in the repairs/maintenance category, where expenses increased an average of $0.07 (4.1%) per square foot. Roads/grounds expenses were up only $0.01 per square foot, but that represented a 3.6 percent increase for this small category. Rounding out the major nonutility categories, administrative expenses increased by $0.02 (1.6%), while cleaning and security expenses were essentially flat, with increases less than one percent.
Key Trends in 2010 But the most interesting operating expense trend in 2010 was a continuation of something that began in 2009: decreasing utility expenses. Managing utility expenses through design, operation and consumption has clearly been a key focus area in commercial real estate, and the fruit of these efforts is visible in the form of a savings of $0.11 (4.3%) per square foot over 2009. Further, as the charts illustrate, the decrease is broad-based, both by building type and geography. Perhaps an even bigger—if less surprising—story was the decline in fixed expenses. Fixed expenses (which are overwhelmingly comprised of real estate taxes) fell $0.40 in 2010, a decrease of 8.8 percent. Moreover, this decrease in fixed expenses was more than large enough to offset the modest increase in operating expenses. In a market that yielded a relatively slow flow of capital transactions in 2010, it is apparent that anecdotal reports of successful tax appraisal appeals have been accurate.
Digging Deeper Office buildings are far from monolithic, and the EER tracks dozens of building demographics that allow its users to zero in on the most relevant comparative information possible. At a high level, the downward trends in utility and fixed expenses are broad in nature. Even so, a glance at general location and building type reveals some fascinating subplots.
The BOMA Magazine September/October 2011
As the “Utility Expense Comparison—Building Types” chart indicates, utility costs were, on average, 6.2 percent higher at buildings in downtown locations for 2010 when compared to all U.S. private-sector buildings. Conversely, suburban buildings experienced utility costs 8.4 percent below this average. But the downward trend was similar for both, with a 4.2 percent decrease for downtown buildings and a 5.9 percent decrease for suburban. There was a similarly consistent trend across major building types in 2010, though it is notable that government buildings outdid their private-sector counterparts in utility savings with a 7.7 percent decrease (compared to 4.6% for U.S. privatesector buildings). And, despite a 5.3 percent decrease that exceeded the overall trend, corporate facilities continued to report relatively high utility costs—9.8 percent above the U.S. private-sector average. The “Fixed Expense Comparison—Building Types” chart illustrates that the trend in fixed expenses, while similarly downward, was less consistent across location and building type than that of utility expenses. Buildings in downtown locations saw a substantial decrease in fixed expenses (down 9.6%, by implication, through relatively steep valuation adjustments), but still reported expenses 18 percent above the U.S. privatesector average. Fixed costs at suburban buildings decreased only 6.8 percent, but remained 23.1 percent below average.
Fixed Expense Comparison—Building Types
Market Variability Equally interesting are variations in these two categories across private-sector buildings in the major markets in the United States. While the general trend of lower utility and fixed expenses held in most cases, there were exceptions. Atlanta and San Francisco both experienced slightly rising utility costs (up 1.3% and 4.1%, respectively), though Atlanta was 13.1 percent below the U.S. private-sector average for 2010 and San Francisco was 9.2 percent above. Washington, D.C. experienced one of the more peculiar trends in this year’s results: Utility costs in the District of Columbia proper—already 54.8 percent above the national average—increased 8.3 percent, while in the Virginia suburbs they fell 10.3 percent and were 7.6 percent below the national average. Miami and Philadelphia are both notable for the magnitude of the utility expense decreases they witnessed (14.4% and 16.8%, respectively). Utility costs changed very little in New York (down 0.9%), but remained extremely high at 107.8 percent above the national average. Chicago remained a market with relatively low utility expenses—27.5 percent below the national average downtown and 27.4 percent in the suburbs.
Utility Expense Comparison—Markets
The Next Generation of Benchmarking By Lindsay Tiffany With a lack of transaction activity and a limited amount of available capital, the last few years have ushered in a back-tobasics approach to building management where maximizing operational efficiencies is key. To stay competitive in a tight market, the reasoning goes, you have to know what it costs others to do what you do. Many companies rely on the Experience Exchange Report (EER) to give them an edge. At CB Richard Ellis, asset managers use the EER when evaluating the upcoming budget year compared to historical trends for the major expenses categories. “In our forecasting, we analyze market data, asset data and the comparable property data, which includes the EER data,” says Pam Huning, director, Asset Services, CB Richard Ellis. “We use it to evaluate our cost per foot compared to what’s going on in the marketplace.” William Jegher, vice president, Ernst & Young Real Estate Services Inc., also uses it to evaluate operating costs: “The EER is a great way to see how your property is operating vis-à-vis the guy across the street. Let’s say you’re operating at a level higher than the guy across the street on certain cost items. The EER helps you identify that. From there, you have to find the reason behind it and implement an action plan to try and get to a competitive cost.” Cushman & Wakefield has established a sophisticated benchmarking system that is modeled on the EER data charts, but that is customized to fit the needs of its clients. “We recognize that, since we manage corporate facilities as well as investor-grade properties, there are a number of facility-specific expenses that are not included in the EER,” comments Gary Merron, CPA, senior managing director, Global Head of Financial Management, Corporate Occupier & Investor Services, Cushman & Wakefield of Pennsylvania, Inc. “We’ve created our own categories of accounts, such as concierge services, daycare services, gymnasiums—all things that are provided by a corporate facility.” Merron is now exploring what he calls the next generation of benchmarking. “Benchmarking is not just about cost per foot. There is an awful lot of benchmarking that is necessary outside of that. We are also measuring consumption, productivity and sustainability,” he says. Productivity, for example, will include statistics like the total cost per foot of running the building divided by the number of client employees, the number of leases in the building divided by the number of Cushman & Wakefield accountants working on the account and the number of mail room employees per square foot.
With respect to fixed expenses, buildings in Chicago enjoyed the most substantial savings vs. 2009 among the largest markets. Downtown buildings reported an average fixed expense decrease of 18.4 percent, while fixed expenses were down 29.6 percent in the suburbs. Fixed expenses were still relatively high in downtown Chicago (43.5% above the national average, compared to 23.8% below in the suburbs). Double-digit percentage decreases also occurred in Houston, San Francisco
While there seems to be an adequate supply of detailed benchmarking information available to property professionals, some clients are continually asking for more. Remarks Merron: “More and more of our clients are asking for very specific benchmarking, almost on a daily basis in different parts of the country. Technology is finally making it possible to deliver that data with increased frequency. Now, we are just waiting for the utilities industry to catch up with us on cost segregation.”
Continued on page 26
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BOMA • Kingsley REPORT
Differences in fixed expenses are more pronounced across building types. Corporate facilities (doubtless by virtue of their highly motivated occupants) led the way with a stunning 23.8 percent decrease from 2009 to end up with 21.1 percent lower fixed expenses as compared to all U.S. private-sector buildings. Medical buildings, on the other hand, saw a much smaller annual savings (1.5%), though they still have low relative fixed expenses, at 28.6 percent below average.
BOMA • Kingsley REPORT
Deconstructing Density By Laura Horsley You don’t have to work at Facebook or Google or any of the Silicon Valley behemoths to know that the big corner office, or any office for that matter, is becoming a threatened if not endangered species in some office environments. An increasingly mobile workforce is spending more time in home offices and on the go, and, when they do come “into work,” they are collaborating with co-workers in team spaces with more open floor plans. Blake Peterson, MBA, RPA, LEED AP O&M, senior property manager with Ashforth Pacific of California, LLC, sees the second wave of the tech boom creating a more sophisticated workforce. “This workforce wants very collaborative spaces, so they’re much smarter than the dotcom crowd that came in and wrote big checks and took tons of space,” says Peterson, who explains that collaborative space might include conference rooms with removable walls and rolling desks that can move to designated team space at any moment. This changing office environment allows for more workers per square foot and more collaboration, as well as more challenges for the property professionals that manage and benchmark their buildings. “The way most buildings are set up is based on the assumption that all users [tenants] are doing the same thing—if two tenants lease the same amount of space, it’s assumed that they will flush the toilet the same number of times and use the same amount of toilet paper,” explains Peterson, “but if one of those tenants doubles their headcount, their consumption is also going to be doubled. Leases are written so that tenants will continue to pay their cost per square foot of the building, but, as a manager, you may have to increase overall expenses to accommodate the extra wear and tear and demand on consumables as occupancy increases.” Large accounting firms and companies with employees that spend the majority of their time at client sites are reducing square footage through space strategies such as hoteling, where employees are assigned space for the days they are in the office. When they are not in the office, that space is filled by someone else, thereby reducing dead space and empty offices. The public sector is also rethinking density. Plans are under way to redesign the space of the D.C. headquarters building of the U.S. General Services Administration (GSA) from a space that currently accommodates 2,500 people to one that accommodates 6,000 people. This is part of GSA’s enterprise-level plan to modernize public buildings to provide more green, flex space to meet the demands of a more mobile workforce. Interesting to note is that the trend toward increased density is occurring at a time when square footage per worker is actually ticking up slightly nationally. 2011 Experience Exchange Report data showed an increase of one square foot per office worker. This incongruity is due, in part, to the prevalence of shadow space or space that is leased but not occupied—and, in many cases, is tied to downsizing. Relatively healthy firms making efficient use of space are slowing the shadow space trend.
The BOMA Magazine September/October 2011
and Washington, D.C. On the other end of the spectrum were New York, where fixed expenses actually increased 4.9 percent, and Miami, where they increased 2.0 percent. Irrespective of time trends, Atlanta and Philadelphia were among the markets with the lowest fixed costs in 2010 (31.3% and 31.5% below the national average, respectively). Boston (85.8% above the national average) and New York (124.9% above) had relatively high fixed costs. As with utility costs, Washington, D.C. was again mixed, depending on location. Despite annual decreases similar to those in the Virginia suburbs, the District of Columbia proper led all major markets with fixed costs at 129.7 percent-above the U.S. private-sector average, while the suburbs reported fixed costs 14.7 percent below average.
Fixed Expense Comparison—Markets
Some Conclusions The 2011 EER clearly shows that building owners and managers were locked in on controlling utility costs and receiving equitable tax treatment in 2010. While there is no indication that this will change any time soon, the increase in repairs/ maintenance expenses hints that this may be an additional area of focus for 2011. Even so, market realities in some geographies make expense control particularly challenging. Macro trends, after all, are created by the sum of individual efforts. With employment stagnant and the larger economic outlook far from certain, there will be continued pressure to manage all the expenses tracked by the EER.
Access the 2011 Experience Exchange Report (EER) by visiting www.bomaeer.com. The BOMA•Kingsley REPORT is written and published by BOMA International, www.boma.org, and Kingsley Associates, www.kingsleyassociates.com.
Leveraging Technology to Enhance Your Security Program By J. Michael Coleman Following the tragic events of 9/11, there was a movement to enhance the security of commercial buildings through the creation of closed-access environments. That effort principally focused on barriers, card access readers and enhanced closed-circuit television monitoring; however, property managers still wanted facilities to feel welcoming and safe and relied on their security teams to find ways to make that happen. With advances in technology and more financially palatable solutions available today, security in the commercial real estate industry has arrived at a new juncture that can satisfy these requirements. The development of innovative security technologies greatly impacts our lives and can offer a wealth of new possibilities for each facility. Whether the building is many years old or currently being built, an integrated technology solution, supported by a responsive and well-trained team of security officers, can enhance any security program. An increased focus on the importance of security officer training has helped create tech-savvy officers who see the benefits of a careful mix of technology and customer service to enhance commercial real estate security. These officers are prepared to quickly implement and use technology as part of their daily responsibilities. Advances in remote
The adoption of new technological platforms is helping to enhance the functionality of a security officer. 28
monitoring and real-time use of field devices are not replacing manpower but are increasing efficiencies and reducing overall cost. The adoption of new technological platforms is helping to enhance the functionality of a security officer. Over the last few years, property professionals have been asked to do more with less. Implementing the right technology can augment the efforts of a property’s security personnel and cut costs without exposing the building to additional risk. With what is typically a one-time, short-term financial investment, commercial real estate facilities can create a meaningful return on investment on safety and security while still taking advantage of the experience and knowledge of security officers. This is the future of securing our commercial real estate assets. The challenge is making a wise technology investment, assessing needed adjustments and embracing changes in a way that is very transparent to your most important asset—the people who work, visit and service the facility. There are several things to consider prior to investing in technology: • What is the technology risk? Are the commercial real estate assets within the facility going to be protected as well as, or better than, they are with the current security program? • What is the cost, value and projected return on investment? • Is the system appropriate for the facility size, individual volume and environment? There are many options to choose from, so inquire if an integrated technological system is appropriate for the building specifications. • Are security teams able to provide training to property management and office personnel on how to operate new security technology? Training should be consistent to ensure the system is being used correctly.
The BOMA Magazine September/October 2011
It is recommended that you work with your security team so they can provide helpful insight on technology solutions. Your security provider may even partner with companies that can deliver the right solution. By partnering with a high-quality technology provider that can offer many options and provide solutions based on specific facility needs, you may find there are more technology solutions and securityrelated products and services available than you may have thought and they may even save you money in the long run. To avoid some of the pitfalls of embracing new technologies, follow these guidelines.
Beware of closed or proprietary platforms and programs wherein you cannot own, change providers or self-manage. When looking for a technology solution, be cautious of closed or proprietary platforms. There may be problems if you want to change equipment or integrate with other systems. You should have control of the equipment and input on what equipment is to be used. If you don’t, be aware that there may be a cost involved with moving away from a proprietary system.
Vet the technologies through a trusted third party. By thoroughly vetting a solution through a trusted third party, you can help ensure a comprehensive evaluation and selection process. Your security provider can assist you with the research, demonstrations, request for proposal process and selection. Inquire with your security provider about its partnerships and ask if it can remain involved in the relationship between your facility and the solution to continue to add value and expertise to your security program.
Look to a solution that can grow or change with your needs. Technology is constantly evolving and always improving, driving commercial real estate security needs to a higher standard. Facilities need to maintain existing technology, as well as innovate and create new ways of incorporating the latest advancements. Look for a technology solution that can help your facility stay on top of innovations and upgrades.
Avoid hidden costs. Be aware of costs associated with your technology solution. Expenses could include licensing fees, charges for additional platforms, software updates or even upgrades. You will want to keep
up-to-date with the latest technology program, so look to budget for future expenses.
when it comes to training others on how to control, operate and program the system.
Assess reporting costs.
Use the solution across multiple properties or portfolios.
Sometimes there are costs associated with running a report, depending on where it comes from. Some providers charge a fee for a report if it is webbased. If this is the case, find a way to gather important reports in a timely fashion without exceeding your report budget.
Choose faster and more efficient tools. It is important to report critical incidents in a timely manner to help ensure that everyone within the facility is safe. The right technology solution will make communication easier. Vet your provider to make sure it is capable of giving your security team faster and more efficient tools. Security teams can improve their current security process by implementing the latest technology solutions to meet building safety and security needs.
Test the ease of use. A technology system that is userfriendly is key. Most field devices and technology solutions are easy to use, but this is an important part of your evaluation process. Avoid a complex system and keep it simple. This will also help
A technology system that is consistent across many sites or locations is important. Many systems have menus that can be standardized for the whole organization but customized for each location. Each location is unique, and individual safety and security needs should be considered. With a consistent technology program at all locations, training and reporting can also be standardized. Following these guidelines can help property professionals implement a successful security technology solution that helps protect the property and reduce costs. To achieve the greatest benefits from technology solutions, these options must be integrated with a high-quality physical security program. The result is a comprehensive, progressive program that can keep pace with a facilityâ€™s changing needs. About the Author: J. Michael Coleman is vice president of Commercial Real Estate for AlliedBarton Security Services (www. alliedbarton.com). He can be reached at email@example.com.
September/October 2011â€ƒ The BOMA Magazineâ€ƒ
And the Award Goes to … Commercial Real Estate Honors This Year’s TOBY® Winners The commercial real estate industry celebrated 14 exceptional properties with The Outstanding Building of the Year® (TOBY®) Awards during the 2011 BOMA International Conference, held June 26-28 in Washington, D.C. This year’s TOBY winners were recognized for excellence in building management and operations in specific categories of building size or type. To win the international award, the buildings first won both local and regional competitions. Judging was based on community impact, tenant/employee relations programs, energy management systems, accessibility for disabled people, emergency evacuation
procedures, building personnel training programs and overall quality indicators. A team of expert industry professionals also conducted a comprehensive building inspection.
Kimberly-Clark Professional* is the Official Sponsor of the BOMA International TOBY® Awards and Banquet through 2014.
Earth FBI Chicago Regional Office Chicago, Ill. Managed by: USAA Real Estate Company Owned by: FBI Chicago Partners LLC The Earth Award recognizes excellence in environmentally sound office building management. Located in Chicago’s West Loop area, the FBI Chicago Regional Office has all the key features of a modern Class A office building. Flexible and attractive work space, sensitivity to the neighborhood context and inclusion of low environmental impact design concepts make this an award-winning building. It is monitored by two energy management systems and outfitted with three different energy-saving central plants.
Corporate Facility Hearst Tower New York, N.Y. Managed by: Tishman Speyer Properties Owned by: Hearst Corporation The Hearst Tower is the global headquarters for the Hearst Corporation, an icon of publishing and entrepreneurial drive. This 46-story, 856,000-square-foot building is New York City’s first LEED Gold office tower. The building has become an ambassador of sustainability, proving that “green” is achievable for business, desired by occupants and beneficial to the city. The Tishman Speyer Properties management team offers an outstanding array of tenant amenities to the 2,200 employees who work on-site.
The BOMA Magazine September/October 2011
Government Building Wayne Lyman Morse United States Courthouse Eugene, Ore. Managed and owned by: U.S. General Services Administration The Wayne Lyman Morse U.S. Courthouse opened in 2006 and was declared the first 21st century courthouse in America. The management team provides unparalleled security while allowing for a full range of building uses and tenant amenities. The Courthouse has several energy and operational strategies in place to conserve costs. The management team has also established a community green space by converting a vacant lot adjacent to the building into a flourishing fruit and vegetable garden.
Industrial Office Park World Park @ Union Centre West Chester, Ohio Managed and owned by: Duke Realty Corporation World Park @ Union Centre is comprised of 11 buildings, totaling more than 2.6 million square feet. The park sits at the crossroads of a major transportation artery and serves as an important distribution center for a myriad of high-profile companies. The management team provides comprehensive emergency preparedness and security standards and staff training. The complex hosts several major events a year, including a road race that benefits charities and a summer festival featuring live music.
Historical Building Theodore Levin U.S. Courthouse Detroit, Mich. Managed and owned by: U.S General Services Administration The Theodore Levin U.S. Courthouse was built from 19321934. Most of the original character remains intact, including vaulted ceilings, two-story courtrooms and hand-painted plaster ceilings. One of the building’s most unique features is an 1897 Romanesque-style courtroom that was preserved from the previous courthouse and reconstructed piece-bypiece. Managed by the U.S. General Services Administration, this building is listed on the National Register of Historic Places as part of the Detroit Financial District.
Medical Office Building Physicians Medical Center of San Diego San Diego, Calif. Managed by: Cambridge Healthcare Management Corp. Owned by: Rady Children’s Hospital-San Diego This ultra-modern building hosts more than 1,500 patient visits a day. It is the home to more than a dozen medical specialties and features two full-service labs, a retail pharmacy and imaging and MRI centers. Physicians Medical Center is committed to providing its tenants and visitors with a facility operated and maintained to ensure their safety and comfort. Its energy conservation efforts are state-of-the-art, and it has implemented an award-winning green janitorial program. Continued on page 32
September/October 2011 The BOMA Magazine
Suburban Office Park Mid-Rise Howard Hughes Center Los Angeles, Calif. Managed and owned by: Equity Office
Renovated Building Metropoint 600 Building St. Louis Park, Minn. Managed by: Cushman & Wakefield Owned by: BPG Properties, Ltd.
Situated on 70 acres, Howard Hughes Center is comprised of five office buildings totaling more than 1.3 million rentable square feet. Often described as the most significant live/work development in West Los Angeles, the Center offers a range of amenities, such as retail, theaters, restaurants, healthcare, an athletic club and garden setting with a seating area. The Equity Office management team prides itself on its energy management and conservation measures, energy-saving retrofits and preventive maintenance.
Metropoint 600 Building was originally constructed in 1975 as the centerpiece of a four-building office campus. The vast scope of the renovations in this 20-story building included interior, exterior, aesthetic and mechanical improvements. The building-wide modernization project has transformed the property and includes many renovations designed to enhance the building’s energy conservation efforts. With the beautiful new environment and impressive amenities, Metropoint boasts a growing tenant roster.
Under 100,000 sq ft 21900 Burbank Boulevard Woodland Hills, Calif. Managed by: PM Realty Group Owned by: Woodland Burbank Corporation, a project by American Realty Advisors
Suburban Office Park Low-Rise Pleasanton Corporate Commons Pleasanton, Calif. Managed by: Hines Owned by: 6200 Stoneridge Mall Road Investors, LLC Pleasanton Corporate Commons is a Class A, multi-tenant office campus. The four identical buildings sit on 28 acres and are home to a variety of major U.S. companies. The management team takes pride in the building’s BOMA 360® designation and its silver LEED® EB certification. The Commons is also known for its community involvement. Separate blood, food, shoe and toy drives are held, as well as the annual healthy planet fair.
The BOMA Magazine September/October 2011
21900 Burbank Boulevard is a Class A, low-rise building in Woodland Hills, Calif. The building has received the ENERGY STAR® Award every year since 2006, and the management and engineering staffs continue to participate in classes and seminars to stay up-to-date on the latest green best practices. The management team is committed to promoting a positive impact on the surrounding community through a number of annual charitable drives.
500,000-1 Million sq ft Fox Plaza Los Angeles, Calif. Managed and owned by: Irvine Company
100,000-249,999 sq ft Gwinnett Commerce Center
Fox Plaza’s elegant design features a mixture of red granite and glass. It has been featured in several TV shows and movies, and has been the home to a number of prominent companies. Former President Ronald Reagan had a penthouse office in the building for more than 10 years. Fox Plaza remains an engaged, dedicated part of the community by holding charitable drives and partnering with the local fire department for preparedness training.
Duluth, Ga. Managed and owned by: Parmenter Realty Partners The Gwinnett Commerce Center is a Class A office building completed in 1988. It stands 11 stories tall and has 213,000 rentable square feet. It is a BOMA 360 Performance Program® Building and several building features are LEED compliant. The Parmenter Realty Partners management team participates in the BOMA BEEP courses and the 7-Point Challenge. The Center has more than 35 tenants and is deeply involved in the Gwinnett County community.
Over 1 Million sq ft Wells Fargo Plaza Houston, Texas Managed by: CB Richard Ellis Owned by: Metropolitan Life Insurance Company and Metropolitan Tower Realty Company, Inc.
250,000-499,999 sq ft
Wells Fargo Plaza is the center of Houston’s contemporary skyline, standing 992 feet tall with 71 stories of tenant space. It is the largest multi-tenant building in the southwestern United States. The building’s exquisite architectural design includes two sky lobbies, which serve as transfer levels to upper tenant floors. The management team prides itself on its community involvement and tenant outreach.
300 Capitol Mall Sacramento, Calif. Managed by: Hines Owned by: 300 Capitol Associates NF LP 300 Capitol Mall includes an 18-floor office tower, attached to a two-story annex building. Visitors are greeted by classical Italian granite flooring, bordered by inlayed stone tile, and unique deep curved walls. The building’s physical attributes, location and amenities have attracted a strong mix of locally and nationally recognized companies. The Hines management team partakes in regular security and energy conservation training.
September/October 2011 The BOMA Magazine
Commercial Real Estate in South Africa Opportunities, Challenges and Economic Recovery By Ray H. Mackey, Jr., RPA, CPM, CCIM and Henry H. Chamberlain, APR , FASAE, CAE We attended the South African Property Owners Association (SAPOA)’s annual conference in Capetown in May and presented the session “Is This a Great Recession or Will the Recession Make Us Great?” With 1,100 attendees, the conference was a huge success and provided a great venue for business networking and education. The format featured multiple general sessions alternating between national politicians, futurists/trend watchers and industry experts, and was thought provoking and stimulating. It was interesting to note that the average age of attendees was at least 10 years younger than at the BOMA International Conference. The South African economy has made some progress in recovering from the global recession. GDP growth increased to 4.8 percent in the second quarter of 2011 from -5.9 percent in March 2009. While threats to the domestic recovery have heightened in recent months due to deteriorating global conditions— especially the worsening of the Euro zone sovereign debt crisis and slow
growth in the United States—positive economic growth is expected for the foreseeable future. South Africa has a two-tiered economy, one rivalling developed countries and the other with only the most basic infrastructure. It is therefore a productive and industrialized economy that exhibits many characteristics associated with developing countries, including a division of labor between formal and informal sectors and an uneven distribution of wealth and income. The primary sector, based on manufacturing, services, mining and agriculture, is well developed. There are some opportunistic plays in the market, but unemployment is very high at 25 percent and the economy is just getting by. They are seeing some investment from China and have joined BRICS, the organization of leading emerging market countries consisting of Brazil, Russia, India, China and South Africa, but see themselves as a much smaller economy. Similar to our situation, they see the recovery taking hold the second half of next year. We
South Africa GDP Growth Rate (in percentage)
Jan/07 Jan/08 Jan/09 Jan/10
SOURCE: TRADINGECONOMICS.COM; STATISTICS SOUTH AFRICA
The BOMA Magazine September/October 2011
were struck by the fact that, although we are worlds apart from South Africa, our issues and opportunities seem very similar. Attracting young talent and skilled labor is just one of the challenges we both face. They have a very diverse membership, including bankers, property owners, developers, fund managers, architects, property managers, consultants and contractors. Our terrific hosts from SAPOA included: Samuel Ogbu, SAPOA president and CEO of Liberty Group Properties Ltd.; Kevin Roman, SAPOA president-elect and Group CEO of Hermans and Roman Property Solutions; and Neil Gopal, chief executive officer, SAPOA. All three joined us in June at BOMA’s annual conference. The SAPOA conference’s program featured sessions on business and the economy, leveraging technology, politics and real estate-specific presentations. Incoming President Kevin Roman was sworn in and laid out his priorities, which include collaborating with other groups including BOMA, becoming more effective federal advocates, increasing participation in SAPOA affairs and educating and training staff. They are looking at creating their own advocacy legal defense fund patterned after BOMA International’s Industry Defense Fund. One presentation featured futurist and author of The Shift Age David Houle. He sees three major forces at work today: the evolution of everything being global, the power of every individual to make a difference by being connected by technology and the acceleration of connectedness at all levels. For real estate, he sees the future with a very distributed workplace merging commercial, retail and residential real estate into one. He also sees high energy costs driving sustainability, as he believes long-term oil costs will remain above $100 per barrel
From left: Kevin Roman, Ray Mackey, Samuel Ogbu, Neil Gopal and Henry Chamberlain at the SAPOA Conference.
and could range up to $150. The session “Smart Cities” featured Guru Banavar, IBM’s vice president and chief technology officer, Global Public Sector, and Monhla Hlahla of the Airports Company of South Africa. Banavar sees future success based on people’s ability to access information and effective data integration. From his perspective, in the future virtually all things, processes and ways of working will be intelligent. Our world will be totally interconnected, as it becomes more and more instrumented with sensors and smart devices. Hlahla talked about future cities built around airports, with a case study on Johannesburg’s airport.
Deloitte’s Robert Grossman reported that e-retail is growing at five times the speed of traditional retail. This trend is impacting malls, as shoppers are going to malls to see merchandise but may actually purchase online. To counter this trend, retail operators are reshaping the mall shopping experience to be an overall experiential event, with things for kids to do, spas for adults, better restaurants and theaters and other attractions to entice shoppers back to malls. This trip highlighted the fact that, with technology and improved transportation, the world really is getting effectively smaller and that we truly do operate in a global economy. Human
A Rebounding Recovery
According to the June SAPOA/IPD South Africa Trends Report, the South African property market is recovering sooner and stronger than expected. The second half of 2010 saw a return of confidence in the economy and market fundamentals began to improve. Commercial real estate vacancies decreased from 7.4 percent in 2009 to 6.6 percent in 2010. Large shopping centers and prime offices remained well leased, but vacancies continued to rise in secondary markets, B and C grade offices and neighborhood shopping centers. At the end of 2010, vacancies stood at 5.2 percent for retail, 10.6 percent for offices and 5.4 percent for industrial. Investors may also be able to benefit from rising prices in the commercial real estate sector this year. The most recent SAPOA/IPD South Africa Property Index revealed that total returns from this type of investment stood at 13.3 percent in 2010, up from 8.8 percent in the previous year. It is the kind of marketplace we would like to see return in the United States.
talent and capital both move freely across national boundaries to seek the highest returns. South Africa is a beautiful country with a lot of opportunity and we hope you get to visit and experience. If you are looking for a chance to visit South Africa, the 2012 SAPOA Convention and Property Exhibition will be in Durban from May 30 to June 1 and they welcome international delegates. By the way, we answered the question “Yes.” Yes, it was a great recession and, yes, the recession will make us great. Despite the current wrestling match we have with the economy, the fact is that entrepreneurs are figuring out future space usage, leveraging technology, creating sustainable properties, increasing density and pursuing transit-oriented projects and developing the workplaces of future businesses and generations of workers. It will all create value and an even more dynamic marketplace. About the Authors: Ray H. Mackey, Jr., RPA, CPM, CCIM is immediate former chair and chief elected officer of BOMA International and chief operating officer at Stream Realty Partners. Henry H. Chamberlain, APR, FASAE, CAE is president and chief operating officer of BOMA International. Special thanks to Neil Gopal for contributing material.
More About SAPOA
SAPOA’s mission is to be committed to actively and responsibly represent, promote and protect the interests of its members’ commercial activities in terms of ownership, management and development within the property industry. SAPOA’s aims and objectives are very similar to BOMA International’s and include: • Maintaining a unique organization that encourages its members to share their expertise through active participation in the association; • Fostering key relationships whilst maintaining government acceptability; • Maintaining a non-political bias whilst participating in governmental legislative structures; • Contributing through excellence in educational programs and setting quality standards; and • Providing an efficient forum for responding to change. A truly national organization, SAPOA has six regions: East London, Port Elizabeth, Western Cape, Gauteng, Limpopo and KwaZulu-Natal. For more information, visit www.sapoa.org.za.
September/October 2011 The BOMA Magazine
New GSA Program Creates an Innovative, Low-Cost Model for Commercial Buildings By Lawrence Melton The San Francisco Federal Building is a facility in which GSA’s smart buildings strategy is being implemented.
The U.S. General Services Administration (GSA)’s Public Buildings Service (PBS), the civilian federal government’s landlord, is embarking on a new smart buildings strategy for its portfolio of 1,500 federally owned buildings across the country. This is a next step in the agency’s commitment to creating sustainable, productive work spaces for the 1.1 million federal workers housed in GSA space. Under GSA Commissioner of Public Buildings Bob Peck, the agency has developed an industry-leading plan for both new buildings and cost-effective retrofits that deals with how to increase performance efficiencies in a budgetconstrained climate. And, because of GSA’s stature in the real estate market, PBS wants to continue to drive changes in the real estate market as a whole and believes that its smart buildings program can do so with the help of the industry and innovative technology solutions. Leading these changes within our organization are the Offices of Design and Construction, Facilities Management and Program Services and the PBS Chief Information Officer. These departments represent the three pillars of our smart buildings strategy: buildings, people and technology. Together, we came up with a framework and a new approach for all building controls systems in GSA-built and managed buildings. In a nutshell, the smart buildings strategy is about connecting the building, technology and human behavior to make our federal buildings run more
efficiently while creating comfortable work spaces where employees can contribute to the outcome. This is the type of decisive action that Commissioner Peck hopes will “make the market” and drive lasting changes that will improve building energy and operational efficiency and ultimately deliver more sustainable and cost-efficient operations. Commissioner Peck has also invited the commercial real estate industry to closely follow the strategy and take advantage of the lessons learned for their own portfolios and development. Under what the agency calls its “fast 50” initiative, smart buildings technology is being implemented in 50 of our most energy-intensive buildings. We’ve partnered with GSA’s Federal Acquisition Service, tapping into one of their IT contract vehicles to see what the industry can provide in terms of technology solutions that will help connect our buildings’ systems. The goal is to gather information on how buildings are operating into a centralized database that would then provide real-time data. Property managers and facilities’ staffs can use the information to make decisions about how to increase efficiencies within the building while reducing operating costs and meeting GSA’s sustainability objectives. Through a dashboard, posted in the building’s public spaces, tenants can see how the building is operating—including energy consumption—during different periods of the day. We hope that it will serve as a catalyst for changing behavior and encouraging tenants to do their part
The BOMA Magazine September/October 2011
in conserving energy with such simple tasks as turning off lights and computers when not in use. Ideally, this will create better intimacy between building managers and tenants by empowering tenants with more real-time and predictive information about the building. Notably, nearly all of these changes are low cost and mainly affect how PBS builds and manages planned or existing buildings through strategy, staffing, software and purchasing filters. This approach will establish a new way of doing business that will lock in savings over the long haul by increasing existing asset utilization and reduce the actual cost structure of operating their buildings. PBS feels that, as a government service, it has a role and responsibility to share this information and invite others in the real estate industry to observe, critique and collaborate along the way. Look for more updates and information as we begin to implement smart technology in our buildings later this year. About the Author: Lawrence Melton is assistant commissioner for Facilities Management and Program Services at the U.S. General Services Administration. For more information on GSA’s Smart Buildings Program, visit www.gsa.gov/smartbuildings. Melton can be reached at firstname.lastname@example.org.
Reflectivity Updates Required for Traffic and Other Signage The time for assessment, making improvements is drawing near. Just over a year remains for building owners and property managers to assess the traffic signage at properties and devise a replacement plan in order to get in line with new traffic sign standards geared around reflectivity. For sites under construction, building owners and property managers should plan to use these new rules now to avoid replacing traffic signage later.
Why the new regulations? The new regulations were created in early 2008 by the Federal Highway Administration (FHWA) to improve safety on the nation’s roadways. The push is largely due to an everchanging driving environment caused by an increase in aging drivers, altered headlamp performance and varied vehicle sizes. Who is affected by these new regulations? If your property has paved areas including roads open to the public, private roads and parking lots for shopping malls and restaurants, office complexes, apartment and residential developments, sports and recreational facilities and other businesses open to the public, you will be affected when the regulations go into place. What are the suggested reflectivity levels for traffic signage? • Parking signs should use engineer-grade or better. • Street signs and other traffic control signs should use high-intensity grade or greater. Why does reflectivity matter? Studies show that highly reflective signage significantly reduces the number of injury collisions. Conformance with the new standards provides a better position to defend against litigation should someone get hurt on your property. Information provided by Grimco.
SIGNARAMA is ready to help you evaluate your site to ensure it is aligned with the new regulations. Contact your local SIGNARAMA for more information. Find your nearest store at www.signarama.com/locations or call 1-866-360-7446. September/October 2011 The BOMA Magazine
Consider converting large water features to sustainable planters to decrease water and energy consumption. Maintaining the natural look of plants conserves water, creates less plant debris and saves money on green waste reduction.
Sustainable Landscaping Tips to Give Buildings a Boost By Richard Restuccia Sustainable landscape choices play a significant role in gaining a competitive advantage today by attracting tenants and saving money. Many tenants notice which buildings are green and seek out properties that have adopted sustainable practices and look attractive. A smart landscape partner can recommend sustainable approaches that offer cost savings without sacrificing aesthetics, which is critical for owners looking to enhance an office building environment or achieve a green certification. Often, greening a building’s landscaping means adding water management programs, installing smart controllers, incorporating recycled water, building bio-swales or designing landscapes appropriate to the climate of the property. Here are tips to consider when implementing sustainable solutions that add value and drive ROI at commercial properties.
Focus on Water Management Adopting sustainability measures helps improve water management and complies with mandated water use restrictions that are in place in many areas. Water management, conservation and reuse are being factored into new and existing landscapes, just as sustainable landscape practices are becoming standard in virtually every property type. Today, smart landscape plans are more strategic and typically incorporate advanced technologies, such as “smart controllers,” Internet-enabled, centralcontrol systems that eliminate irrigation water waste and achieve significant cost savings by adjusting watering times based on weather conditions. Landscape plans frequently feature improved irrigation systems and grids of inline drip
irrigation rather than spray heads in small landscape areas. Often, water fountains are being converted to planters, decorative turf is being removed and only turf on which people sit or play remains. Bio-swales or on-site storm water quality treatment systems are increasing in use to manage storm water runoff. Bio-swales work to decrease the quantity of impervious surface on the site, remove pollutants from runoff and increase infiltration of storm water directly back into the ground. The benefit of this approach is a reduction in the volume of flow off the site, thus reducing loads on municipal storm water systems.
Use Recycled Water Recycled water can provide a reliable source of irrigation water, thus ensuring that the investment in an irrigated landscape is protected during times when potable irrigation water is restricted. Landscape irrigation systems will need to accommodate recycled water, which is available in many cities. Property owners may also collect water for landscape use from parking lots, perimeter roads or roofs by incorporating rain harvesting systems, barrels, cisterns or retention ponds. The plant palette may need to be adjusted to work with recycled or reclaimed water because recycled water typically contains heavy metals and salts that can negatively affect some plants.
Establish a Water Program The proper selection and placement of plants and trees on a site play a significant role in achieving sustainability goals and fiscal objectives, while still creating the desired “curb appeal.” Correctly watering a mix of large plants, trees and small specimen plants as a landscape matures over time requires constant
The BOMA Magazine September/October 2011
adjustments by an experienced landscape maintenance team. An incorrect water balance can inhibit the establishment process or waste precious water. To ensure proper amounts of water for each plant, landscape experts might recommend the practice of hydrozoning, which simply means grouping plants with similar water requirements on the same irrigation valve.
Plant Flowers That Bloom Year-Round Most properties require landscapes that feature flowering plants and pleasant green spaces. Typically, flower beds are replanted four or five times a year with seasonal color. A more sustainable and cost-effective approach is to convert seasonal flower beds to flowering perennials that do not need to be changed out as frequently. Flowering shrubs with different colored foliage can be pruned to different heights. The combination of structure and color can be quite dramatic and reduces the use of flowers. If done properly, visitors to the property still discover an attractive outdoor space, but owners can achieve significant savings because changing out flowers can be expensive and demanding. Studies and experience shows that, by adopting sustainability measures, properties rise above the competition. In fact, a recent study by CB Richard Ellis noted that building owners strive to adopt sustainability measures because it helps reduce long-term costs, achieves higher rental and occupancy rates and improves the health and productivity of those who work at the building. In short, going green has been found to be good for the owner and is important to those who occupy the space. About the Author: Richard Restuccia is director, Water Management Solutions for ValleyCrest Landscape Maintenance. He can be reached at email@example.com.
IFMA’s WORLD WORKPLACE 2011 The Facility Conference & Expo
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American and British Outlooks on Economic Recovery, Tenant Drivers By Lindsay Tiffany A survey of American and British property professionals published recently reveals that more American property professionals feel that the economic recovery is under way than their British counterparts (60% vs. 47%, respectively); however, professionals on both sides of the Atlantic agree that there are reasons to be optimistic, with more than three-quarters of respondents in both countries agreeing that the economy is either already out of the recession or will be within 12 months. The survey was jointly produced by BOMA International and the British Council for Offices (BCO) and includes responses from more than 380 property professionals in the United States and the United Kingdom.
Despite remaining optimistic about the economic outlook, only 39 percent of American property professionals reported a rise in demand for office space, with another 26 percent expecting demand to improve in the next 12 months. Conversely, British professionals described a buoyant market, with a total of 78 percent of respondents reporting rising demand for office space or expecting it to come in the next 12 months. U.S. property professionals felt strongly that the current downturn reflected a more permanent shift or reset in terms of tenants’ space needs. Nearly 70 percent of U.S. respondents indicated that the current downturn is reflective of changing trends in the industry, such as less space per worker, telework and
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The BOMA Magazine September/October 2011
alternative workplace arrangements that reduce needs for office space. Just less than half of U.K. respondents believe this to be the case. Property professionals on both sides of the Atlantic believe that rental affordability will be the biggest driver for tenants when deciding where to sign leases over the next five years, reflecting the current pressures on company budgets. Both countries’ respondents agreed that the terms of the lease, the efficiency of the workplace, energy efficiency and access to public transportation were other important factors. The survey also measured attitudes about the after-effects of the credit crunch. U.S. respondents expressed concern over tenant acquisition as Continued on page 42
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research corner Top Tenant Drivers for the Next Five Years unemployment persists. Quite a few U.S. respondents predicted that commercial building foreclosures would increase in the coming months. They also reported having financing issues, a lack of access to capital and a lack of funding for capital expenditures. The good news was that many felt confident that the U.S. office market is not overbuilt, which will help expedite recovery when employment picks up. Sustainability was ranked more important by British respondents. U.S. respondents were nearly evenly split on whether the world needs a global standard for sustainability. Perhaps unsurprisingly, those who thought there should be one believed it should be the U.S. Green Building Council’s LEED certification. U.K. professionals responded, at a rate of two to one, that a world standard is needed, and more than half think that standard should evolve from BREEAM, a voluntary measurement rating for green buildings that was established in the U.K. by the Building Research Establishment. For the most part, the survey results
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highlight the many parallels in attitudes and market conditions between the U.S. and U.K. commercial real estate industries. BOMA International President Henry H. Chamberlain, APR, FASAE, CAE comments: “While our nations face different government policies, financial regulations and cultural factors, both BOMA and BCO memberships agree on several major issues, including when recovery will gain footing, the drivers of demand for office space, the impact of the credit crunch and the importance of sustainability and transit-oriented
development in the future.” Richard Kauntze, chief executive of the British Council for Offices, adds: “This latest research from BCO and our counterparts in the United States shows that there is cautious optimism on both sides of the Atlantic, with the British seeing some positive indicators of economic recovery in the property market, despite expressing concerns that the recession is not yet over.” See the complete findings from the survey at www.boma.org.
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The BOMA Magazine September/October 2011
Compliance Deadline Coming in March After March 15, 2012, new construction and alterations are required to comply with the 2010 ADA Standards. Don’t be taken by surprise. Act now to ensure you’re ADA compliant.
The ADA Standards have Changed… Is Your Building Compliant?
BOMA’s new Guide to the 2010 ADA Standards specifically addresses the next generation of accessibility rules and regulations. A follow-up to BOMA’s groundbreaking ADA Compliance Checklist, the 2011 Guidebook helps property professionals understand and implement the revised Americans with Disabilities Act (ADA) design standards implementing Title III of the ADA, adopted by the U.S. Department of Justice in 2010. The Guide to the 2010 ADA Standards includes updated requirements for accessible routes and a variety of building elements, including employee work spaces, restrooms, reach ranches, sales and service counters, stairways, telephones, special rooms and spaces, recreation facilities and much more.
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EYE ON EDUCATION
2011 Conference Education Prepares Attendees for Tomorrow’s Challenges By Emily Naden Education took center stage at the 2011 BOMA International Conference, June 26-28, held at the Gaylord National® Resort & Convention Center outside of Washington, D.C., as enthusiastic commercial real estate learners participated in nearly 50 education sessions designed to help them lead the future. Industry experts shared their knowledge, best practices and case studies on a variety of topics, from measuring the performance of ever “smarter” portfolios to essential leadership skills and strategies for team building. The sessions were grouped into five tracks focused on key issues the industry faces: Boosting Asset Values; Raising the Bar: Creating High-Performance Buildings; Forging Current and Future Leaders; Getting (to) Smart: Leveraging Technologies and Systems for Better Operational Performance; and Meeting the Demands of Emerging Regulations and Standards. To address the wide-ranging needs of conference attendees, the education program was designed to offer sessions on both high-level strategy and the critical technical skills that drive value in assets. Highly regarded industry training expert Charlie Dismore led “Managing Tenant Construction Projects I & II,” back-to-back sessions that were standing room only. Dismore outlined the intricacies of managing increasingly complex tenant build-out projects with panaché. Thanks to his pointers and best practices, attendees learned how to execute small construction projects with both their bottom lines and their sanity intact. Several sessions addressed ongoing
efforts to measure the financial, environmental and social effects of sustainability efforts in both conceptual and tactical ways. One of the most popular sessions was “Building Performance Tracking: The Future for Sustaining High-Performance Buildings,” a panel discussion that highlighted key measures for assessing the effectiveness of sustainability efforts in buildings and across portfolios. The conference’s D.C. location provided an excellent opportunity to showcase U.S. federal government building programs. The session “Moving from Strategy to Execution: GSA Smart Building Program” offered attendees the opportunity to hear first-hand about the Public Buildings Service’s new initiatives to connect buildings, technology and people through “smart” systems. Leadership was another cornerstone of the programming. Stephen Rice, president, PerforMAX, Inc., presented two sessions: one focused on maintaining talent and another on building leadership skills in challenging times. David Hewett, former BOMA International chair and president of davidhewett inc., emphasized the incredible importance of grooming new entrants to the industry and turning them into rising stars in the session “Mentoring the Next Generation.” In another session, Kirk Anderson, principal and managing member, ActionPointe, LLC, highlighted the foundations of authenticity for great leaders and how to harness that for success. Marc Fischer, CPM, RPA, CCIM, senior vice president and director of management services for Transwestern, discussed strategies for preparing the next generation of property managers and examined how technology and tenant
The BOMA Magazine September/October 2011
expectations will alter the commercial real estate business in “Fast Forward: The Property Manager of the Future.” Fischer challenged attendees to think like an asset manager in “Elevating Your Game: Strategies for Achieving an Asset’s Investment Goals” in order to help them excel in the long run. A dedicated Student Day offered local college and university students in business and real estate programs a glimpse into the rich array of opportunities available to them in commercial real estate. The program featured an exciting panel of industry practitioners and offered a real-world view of life in the commercial real estate world. The panelists discussed their pathways into the industry and the diversity of career paths and job functions, noting the key skills, education and training that can help today’s students find success in property management. Whatever the industry challenge or emerging trend, one thing is clear: Ongoing education and professional development are essential to the success of today’s and tomorrow’s leaders and to the success of the industry as a whole.
Missed a Session? The Entire Conference? If you were unable to attend the 2011 BOMA International Conference or missed a session you wanted to attend, you can purchase the conference recordings in the BOMA Knowledge Portal. The portal also has recordings from BOMA’s 2011 Medical Office Buildings and Healthcare Facilities Conference and other webinars. For more information, visit www.boma.org.
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Real World Training … For Real World Needs—With American Trainco! American Trainco provides live training for maintenance personnel. Our public seminars can be found in hundreds of cities and we conduct training at the customer’s site for larger, private groups. We know how to train maintenance workers! To register or for more information, visit www.americantrainco.com, call 1-877-978-7246 or e-mail firstname.lastname@example.org.
Industrial, Facility and Building Maintenance Training
Ornamental Fencing From Ameristar Fence Products, Inc. Ameristar’s Montage Plus® ornamental fencing, the first choice among contractors for providing owners with a decorative fence that balances strength, aesthetics and cost. Montage Plus provides consumers with a maintenance-free solution that’s matched with a rigid steel construction for strength and durability. Phone: 866-702-3192; e-mail: email@example.com; www.AmeristarFence.com.
Aquatherm: The Right Pipe For Your Building! With a better material, leak-free connections and a 10-year warranty that even covers incidentals, what’s not to love? Switch to Aquatherm’s heat-fused polypropylene and learn why Aquatherm is the fastest growing pressure piping system in North America! www.aquathermpipe.com, or contact Charlie Clark, Inside Sales Manager, at Charlie. firstname.lastname@example.org or 801-805-6657.
The Easy Way to Analyze Building Performance— Automated Logic’s EnergyReports EnergyReports™ is a flexible, easy-to-use reporting tool that enables facility managers to produce a wide variety of reports showing a building’s energy consumption. ER’s color graphs provide users with a powerful tool to analyze building performance, maximize comfort and achieve sustainable building operations. For more information, visit www.automatedlogic.com or e-mail email@example.com.
BAC Factory-Authorized Parts at Cooling Tower World Cooling Tower World is the only place to purchase BAC Factory Authorized Parts online. BAC’s parts are manufactured to meet rigorous cooling tower duty specifications and are guaranteed to fit your unit and perform as original equipment. Cooling Tower World offers Free 2-Day Shipping on all orders placed, and all parts carry a full 1-year warranty backed by BAC. For more information, visit www.CoolingTowerWorld.com.
Cleaner, Healthier Environments With Cleaning Services Group As a leader in the industry with over 25 years of experience, CSG will provide your business with customized programs to fit your janitorial needs AND help you maintain a cleaner, healthier environment for your customers and employees. More information on Cleaning Services Group, Inc. at www.cleanservicesgroup. com. Phone: 800-683-6572; Fax: 800-789-5440.
‘Shield Your Budget From Costly Compromise’ Through Coast to Coast Direct Painting Products One word that just doesn’t fit in the professional workplace: compromise. A professional doesn’t compromise quality or value for speed. Now there’s an easy-to-use paint roller tool that delivers quality, speed and value, the patented Paint Shield system. This tool produces the cut-in quality of a seasoned professional painter, while reducing the time from start to clean by up to 50 percent. Less time, less cost, more savings. It’s the only no-compromise approach to profit and value. Coast to Coast Direct: 714-904-8320; firstname.lastname@example.org; www.coast-coastdirect.com. September/October 2011 The BOMA Magazine
Of Products & Services
Special Advertising Section
‘Breathing Life Back Into Your Building’ With Dadanco Just because you have an existing 30-year-old perimeter induction system, doesn’t mean you can’t go “Green” and increase tenant comfort while reducing energy and running costs. DADANCO replacement induction units with patented nozzle technology provide very high air entrainment ratios at low operating static pressures. Come see us at Greenbuild 2011—Booth 6534; call 413-564-5775; or visit www.dadanco.com.
Protection With Delta T Alert Delta T Alert™—Wireless temperature monitoring of electrical enclosures on a daily basis. When permanently installed, these sensors can provide year-round monitoring of electrical system components and can alert personnel when problems arise prior to equipment downtime or catastrophic failure. More information from Delta T Engineering, LLC at 877-321-0576 or www.deltatengineering.com.
Electronic Building Directories From Directory Solutions, Inc. 25-year leader in electronic and touch screen building directories. Unlimited listings that can be updated in seconds from your office. Wide variety of features and directory styles. Visit www.TouchSource.com or call 800-704-3458.
Electrodyn: Save Money On Your Current Elevator System With Added Energy Efficiency! Energy Saver is the only unit of its kind that is fully code compliant. Designed to disable the ELEVATOR’S lights and fan when it’s not in use. Unit must be installed by a certified elevator technician. For more information, please contact us at 800-447-5442 or visit our website at www.electrodyn.com.
Final Flat Roof … Helps Owners Take Control of Both Repair Cost & Timing • Energy Star® rating can reduce utility consumption up to 40%. • Our tax-deductible solution is typically 40-60% less than a reroof. • No maintenance required for a Final Flat Roof warranty. • No damage to inventory and displays due to tear off dust and debris or toxic pvc/asphalt fumes. www.finalflatroof.com; National Headquarters: 866-637-ROOF (7663); 24-Hour Field Hotline: 561-921-ROOF (7663).
Mezzanine Safety Gate From Garlock Safety Systems Preventing falls off elevated access points for material handling is easy with the LedgeGuard™ Mezzanine Safety Gate. The system has two gates, and one is always closed. There’s always an OSHA-compliant gate in place to prevent falls. And personnel can’t forget, because raising one gate lowers the other automatically. A 60- by 60-inch landing area easily accommodates a 50-inch machinery pallet. LedgeGuard doesn’t have any overhead obstructions, so there’s nothing to interfere with tall loads. Systems are easy to install; they have a small footprint; and at only 82 inches high, even work with most low ceilings. Call Garlock Safety Systems 763-694-2614 or visit www.railguard.net/ledgeGuard.asp.
Asphalt Preservation From Gee Asphalt Systems, Inc. Asphalt Preservation is about taking care of your good pavements while they are still good. We’ll show you how to preserve your asphalt pavements for a fraction of the cost to replace them. Serving clients Nationwide. For more information, contact us at 800-747-8567 or log on to www.geeasphalt.net. “The Asphalt Preservation Specialists”
The BOMA Magazine September/October 2011
Special Advertising Section
General Elevator Parts Inc.—We Buy & Sell Single Source Supplier: 1-800-848-3329 or 773-491-1927; Fax: 1-800-578-6349 or 773-463-2827. Otis, Westinghouse, Dover, Imperial, etc. Surplus Motors and Generators: Rotors—IMO Pumps; Armatures—Door Motors; Machine Parts—Controls; ✓ Obsolete’s Largest Supply. GeGeLu@comcast.net: 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, etc. Otis wound rotors type 1ac, 2ac, 3ac, 5ac, 7 1/2ac, etc. Otis 63g, and all other dc hoist motors leg mount and flange mount. Westinghouse dc flange mount 63a, 93 and 93.5 frame. See the website at elevatorexchange.com.
Corrosion Protection for Dry Fire Sprinkler Systems From Huguenot Laboratories! MICBlast Nitrogen generation technology replaces your existing air compressor with corrosion inhibiting, high purity Nitrogen (N2) for your Fire Protection Systems. Call Huguenot Labs for details 800-228-3793. www.huguenotlabs.com.
Jessup® GloBrite® Offers Total Egress Path Marking Solution The choice of forward-thinking building owners and property managers, GloBrite Photoluminescent Systems represents the total solution in egress path marking as required in the 2009 IBC/IFC building codes and standards. Don’t be caught unprepared! Request a stairwell audit by the experts in photoluminescent technology by calling us at 815-385-6650 or visit us at www.globritesystem.com.
Services Through Kemna Restoration & Construction Kemna Restoration & Construction provides service for the repair, restoration and continued exterior maintenance of your facility. Our primary scopes are masonry, concrete, sealants and building cleaning. Also, general contracting focusing on exterior construction, industrial coatings, window work, specialty high-rise work, as well as historical restoration and renovation. For more information, call 317-927-9253 or visit www.kemnarestoration.com.
PAR-Style Lamps From LEDtronics Continuing to add to its line of innovative and energy-efficient LED replacements for incandescent and halogen light bulbs, LEDtronics® announces its new series of PAR-style high-power, high-efficacy lamps with highest-grade LEDs and Fresnel lens. Phone: 800-579-4875; Web: www.ledtronics.com.
Green Elevator Solutions From Magnetek Magnetek’s Quattro® Elevator Drives are the green solution for high-rise buildings. Quattro AC-PM can provide energy savings of as much as 42 percent, and Quattro DC saves up to 40 percent over MG sets. Quattro offers proven energy savings, lower installation costs and superior ride quality while helping your projects qualify for utility rebates. Visit www. elevatordrives.com or call 800-236-1705.
COLORSeal/Microguard: Ugly Grout—Means—Unhealthy Workplace—and Reduced Occupancy The Number 1 complaint of office tenants is “dirty” bathroom floors (read as grout). COLORSeal restores a clean, fresh, new grout appearance that will NOT stain again. Microguard provides a clean gloss appearance free of wax, with exceptional anti-slip performance. Applied dust-free in less than 8 hrs. www.marblelife.com; phone: 866-653-9737.
VinylGuard: Eliminate Waxing, Save a Ton! Vinyl floor treatment eliminates the need to wax, strip or buff and will not scuff. Superior anti-abrasion chemistry boosts hardness sufficiently to allow us to offer a 2-year guarantee against wear. Rapid payback. www.marblelife.com; phone: 866-653-9737.
September/October 2011 The BOMA Magazine
Of Products & Services
Special Advertising Section
A Friendly Hydraulic Elevator Service Tech Tip Has it been a while since you adjusted a Maxton hydraulic control valve? Need a tune-up before your next job? No problem! Visit http://maxtonvalve.com, login or register and download our Field Training Aid Software absolutely FREE. Now you’re ready for the job at hand.
Featured In 2011 Buildings magazine’s ‘Money-Saving Products’ Did you know Maxton’s Valve Exchange Program (VEP) offers, like for like, re-furbished elevator control valves up to 50% off the cost of new? How about saving time and man power as well? “We save at least 2 crew hours for every valve exchange that we do,” said John C. ThyssenKrupp. Save money and time with elevator control valve repairs that maximize your resources. Call Maxton Manufacturing 1-775-782-1700 or go online www.maxtonvalve.com.
Big Spheres From Meltdown Glass Utilizing the beauty and durability of cast-glass, Meltdown Glass’ Big Spheres product offers a clean, geometric solution to partition walls while preserving the organic qualities of cast-glass. This product allows designers to create spaces that allow light transmittances while still maintaining privacy. Meltdown Glass textures are available in oversize panels and can be tempered to meet safety codes. For more information, please visit meltdownglass.com or call 800-845-6221.
Nexus Valve’s UltraMatic The UltraMatic™ by Nexus Valve is a combination automatic flow control valve, ball valve and union. Using the UltraMatic for balancing hot and chilled water coils saves energy and money. Learn more at www.nexusvalve.com or 888-900-0947.
Stop Pest Birds With Nixalite Solutions Keep your buildings and facilities clean and free of pest birds. Since 1950, Nixalite of America has manufactured and supplied effective and humane pest bird and animal control products. To request your free catalog, please call 800-624-1189 or visit www.nixalite.com.
Quadlogic Controls Corp. For Monitoring Metered Loads IQ² is Quadlogic’s new Web-based package for energy monitoring and tenant billing, with an intuitive graphical user interface. Property managers and engineers can monitor metered loads for consumption (kWh) and demand (kW), prepare measurement and verification reports and produce tenant invoices. Visit www.Quadlogic.com, call 212-930-9300 x326 or write email@example.com.
R2 HINGE Cuts Door Repair Costs In 1/2 With Fully Adjustable VARYX Continuous Hinge Field proven in the retrofit market, R2’s adjustable VARYX™ hinge restores hightraffic entranceways at a fraction of the cost of replacement. Error-free, fast, one-man installation minimizes carpentry labor and VARYX sets new benchmarks for performance and durability. Visit www.r2hinge.com for more information, including How to Buy. Or, call 713-647-8000 or e-mail R2 at firstname.lastname@example.org.
Redi Controls’ Oil-Acid-Moisture Purger Regains chiller capacity and saves thousands of dollars per year in energy savings due to oil migration during chiller operation. Consider opportunities for Utilities Rebates, LEED & Green Buildings points. Video presentation at www.RediControls.com.
The BOMA Magazine September/October 2011
Special Advertising Section
RoofConnect … 24/7/365 Nationwide Service For All Your Roofing Needs One call offers peace of mind for your reactive roofing emergencies & proactive roof asset planning. Utilize RoofConnect’s nationwide coverage and resources for your roof management, leak repairs, capital re-roof or coating projects, snow removal and coordinated disaster response. Schedule an assessment of your roofing needs today. Call RoofConnect 24/7/365 at 877-942-5613 or www.roofconnect.com.
Safety Chairs: Save $$$ Now On All Evacuation & Safety Devices Safety Chairs emergency evacuation chairs are the best value in the evacuation chair industry. Our emergency evacuation chairs have the highest weight capacity, are lightweight and are the only devices designed to move evacuees safely down AND up stairs. They are also the only emergency evacuation chairs on the market that are ergonomically designed for the safety of all parties involved. Are you prepared in the event of an evacuation or emergency? Manufactured in U.S.A. and the company is U.S. veteran owned. Learn more at www.safetychairs.net. Call 877-760-0868 and mention BOMA and receive 10% off your first order!
Upscale Recycling Bins, Benches and Planters From T2 Site Amenities Finally. Great looking recycling bins for lobbies, meeting spaces and offices. Extraordinary benches and planters. Huge array of styles, colors and materials. T2 Site Amenities. www.t2-sa.com. Call 847-579-9003. E-mail email@example.com.
In-Floor Active Chilled Beams From Tate Access Floors Tate’s In-floor Active Chilled Beams provide the energy savings and capacity of an overhead chilled beam while eliminating the concern over leaks and condensation. Water is distributed under a raised floor to condition the perimeter of a building, maintaining the benefits of underfloor air distribution. www.tateaccessfloors.com. 877-999-8283. firstname.lastname@example.org.
Roof Asset Management From Tecta America TectaTracker, Tecta America’s roof asset management platform, allows customers to optimize and maintain their roofing portfolios. It provides customers with real-time access to system information, condition reports, photos, warranties and estimated roof life, which allows clients to accurately forecast roofing expenditures. Phone 847-581-3888 and website www.tectaamerica.com.
Total Door: Not Just Another Pretty Door Total Door systems deliver • Lower upfront costs • Durability 10 times greater than conventional doors • Lower maintenance costs • Unmatched security • Fast delivery • Free comprehensive maintenance and installation training • Quick installation—no assembly required • New, retrofit and custom. Manufactured in the United States. Visit www. totaldoor.com or contact email@example.com or 800-852-6660.
ADVERTISING INDEX Company
AAON....................................................................................Cov 4 American Anchor........................................................Cov 2, 45 American Trainco....................................................................... 45 Ameristar Fence Products...............................................42, 45 Aquatherm Inc............................................................................ 45 Automated Logic....................................................................... 45 Baltimore Aircoil Co. Inc.-Cooling Tower World............ 45 Bartlett Tree Experts.................................................................. 16 The Blue Book............................................................................. 15 BOMA International.........................................................43, 50 BOMA Nevada........................................................................... 40 Center for Environmental Innovation in Roofing-RoofPoint..............................................................3 Ciralight Global Inc.................................................................... 17 Cleaning Services Group.......................................................... 45 Coast to Coast Direct.............................................................. 45 COIT Restoration Services...................................................... 50 Concept Development Associates Inc. Safety Chairs........................................................................... 49 Crown Castle.................................................................................4 Dadanco................................................................................. 46 Danfoss Inc.....................................................................................7
Delta T Engineering...................................................................46 Directory Solutions Inc.-TouchSource................................ 46 Easy Lobby......................................................................................9 Electrodyn Systems Ltd............................................................46 Final Flat Roof.............................................................................46 FLIR Systems...............................................................................14 Garlock Equipment Co............................................................46 Garvin Industries........................................................................16 Gee Asphalt Systems Inc.........................................................46 General Elevator Parts..............................................................47 Huguenot Laboratories............................................................47 IFMA..............................................................................................39 Jessup Mfg. Co.-GloBrite Photoluminescent Systems.....................................................................................47 Johnson Controls Inc................................................................11 JP Obelisk........................................................................................8 Kemna Restoration & Construction..................................... 47 Keyscan Access Control Systems.......................................... 21 Kidde Fenwall........................................................................Cov 3 LEDtronics Inc............................................................................47 Magnetek......................................................................................47 Marblelife Inc..............................................................................47
Maxton Manufacturing............................................................48 Meltdown Glass Art & Design............................................... 48 Nexus Valve.................................................................................48 Nixalite of America...................................................................48 Painters & Allied Trades-LMCI................................................ 27 Pro-Bel..........................................................................................12 Quadlogic Controls Corp........................................................ 48 R2 Hinge LLC..........................................................................48 Redi Controls Inc.......................................................................48 RoofConnect..............................................................................49 S-5! Attachment Solutions...................................................... 42 Salsbury Industries......................................................................41 SERVPRO Industries Inc...........................................................19 Sheffield Metals..........................................................................13 Shortridge Instruments Inc...................................................... 40 SIGNARAMA..............................................................................37 T2 Site Amenities.......................................................................49 Tate Access Floors.....................................................................49 Tecta America.............................................................................49 Total Door...................................................................................49 VP Buildings.................................................................................10 Waste Management..................................................................22
September/October 2011 The BOMA Magazine
trade tools [ROOFING]
New Roofing Technology Helps Rebuild a Green Town By Andy Romano In May 2007, a tornado ripped through Greensburg, KAN., destroying 95 percent of the community. Inspired by their town’s name, the citizens set out to build a more sustainable community and become a model “green” town for the future. Greensburg’s city council passed a resolution requiring all buildings to be built to the U.S. Green Building Council’s LEED® Platinum standard, making it the first city in the nation to do so. One of the buildings demolished by the storm was the Kiowa County Library and Historical Museum. In order to achieve the city’s green standard, the Kiowa County Commons project designers set out to utilize roofing-related
products and systems, such as low-slope reflective cool roof surfaces, an energyefficient rooftop garden system and a renewable building-integrated photovoltaic (BIPV) system. BIPV systems are typically mounted directly to a low slope roofing membrane and can create temperatures as high as 190 degrees F on roofing surfaces, thus stressing typical TPO roofing membranes that are constructed using organic polymers that can be damaged by extreme heat, sunlight and UV exposure. To address this problem, scientists at roofing manufacturer GAF created a new grade of TPO single-ply membrane that is built to handle the extreme demands that rooftop applications can place on roofing membranes. GAF’s EverGuard® Extreme™ TPO uses proprietary stabilizers and UV absorbers to achieve weathering performance far beyond current standards. In fact, GAF
conducted accelerated weathering and aging tests on EverGuard Extreme and other commercial TPO membranes, subjecting them each to a temperature of 280 degrees F. EverGuard Extreme TPO membranes survived the rigorous testing without signs of failure. Kevin Gwaltney, president of Diamond Roofing, who used EverGuard Extreme TPO in the Kiowa Commons project, comments: “Not only does GAF’s product have the potential to yield a more sustainable solution for this project, it proved to be economically feasible, too. We’ve had such great feedback in the Greensburg community about this product that another local architect plans to specify it for another building.” About the Author: Andy Romano is senior project manager at GAF. He can be reached at firstname.lastname@example.org.
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The BOMA Magazine September/October 2011
It’s 2 a.m. Do you know why your tenant’s CO alarm is beeping?
It May Not Be What You Think About seven years ago, New York City passed a law requiring carbon monoxide (CO) alarms in multi-family and private dwellings. Those alarms now need to be replaced. In fact, some of them may be sounding. Underwriter’s Laboratories (UL) requires an end-of-life warning in CO alarms. As part of Kidde’s commitment to safety, all our alarms are UL-listed and have this built-in safety feature. This means seven years after installation the alarm will sound, letting you know it’s time to replace the unit. Avoid that 2 A.M. call from your tenants. Install new Kidde CO alarms in your building today!
For more information, contact your local contractor or visit www.beatthebeep.com.
We asked customers what they looked for in commercial heating and cooling equipment. They told us:
Reliability, Quality, Durability, Serviceability So, we made sure we had all of these covered... and added one more:
up to 16 EER
up to 14 IPLV (AC) / 24 IPLV (EC)
lfC Un ont its ain e
er Ch ill
up to 13 EER / 4 COP
up to 22 EER / 7 COP
G W eot SH he P rm Un a its l/ Ai r Pu -So m urc p e Un H its eat
up to 14 EER
La Sy rge st Sp em l s it
up to 17 SEER
Sm Sy all st Sp em l s it
up to 14 EER
p rg e Un Ro its oft o
al l Un Ro its oft o
up to 19 SEER
Contact your local AAON representative to learn more about AAON products and discover the many heating and cooling solutions AAON can provide.
Locate AAON Representative R89580
(AC) = Air Cooled (EC) = Evaporative Cooled
Rooftop Units • split systems • GeotheRmal heat pUmps • aiR-soURce heat pUmps • chilleRs • self contained Units