Methods of Measurement

Comparison of Methods of Measurement for Office Space in the Washington, DC Metropolitan Area

Overview

In the Washington, DC metropolitan area the most commonly used methods of measurement for officespace are the GWCAR (Greater Washington Commercial Association of Realtors) method and the BOMA (Building Owners and Managers Association) method. These methods of measurement are very similar in the basic way they measure space and only diverge in their definitions of what portions of buildings may be included as “rentable area”. Both methods measure the tenant rentable area from the inside of the outer window or wall and include columns and heat pumps (and similar floor mounted HVAC units) as rentable area. Common areas, such as elevator lobbies, restrooms, telephone closets, janitorial areas and electrical rooms are rentable areas under both definitions. Both methods also exclude vertical penetrations, such as air shafts, fire stairs, plumbing and elevators from rentable area. However, both definitions allow for stairs installed within a tenant’s space to be included as rentable area.

The GWCAR method of measurement has remained the standard, particularly for older buildings in the Washington, DC market. However, since its introduction to this area over 10 years ago, many, if not most, new buildings have been measured according to the BOMA method. More recently, many older buildings are being re-measured according to BOMA standards and Tenants are frequently surprised to find that their offices have grown significantly when renewing their lease. This trend towards the BOMA method of measurement was initially introduced by national developers. Its more widespread use was fueled by changes in building codes and has continued to grow as building owners look for new avenues to increase the income generated by their real estate investments.

The GWCAR Standard was previously known as the WDCAR (Washington D. C Association of Realtors) Standard, and is applied in Washington, D.C. and nearby parts of Virginia and Maryland. It has many similarities to the BOMA Standard (such as a 2% tolerance and a sample summary spreadsheet) and many subtle differences (the “Dominant Surface” is based upon vertical wall area not vertical dimensions). Like the BOMA standard, it is a substantial document (14 double-sided pages) containing many illustrations and technical definitions. This current version was adopted by GWCAR on June 13, 1995.

The BOMA standard is published by the Building Owners and Managers Association (BOMA) under the title “Standard Method for Measuring Floor Area in Office Buildings”. It also carries the designation “ANSI Z65.1″ which designates it as an American National Standard. The current version was approved June 7, 1996. Although widely referred to as “The BOMA Standard”, the best way to cite this standard is with the designation “BOMA/ANSI Z65.1-1996″.This standard has been around since 1915 and has evolved through several versions. The current 1996 version is significantly different from the previous 1989 version. It applies only to office space and store areas in office buildings, and is generally not employed in the metropolitan areas of New York City, where the REBNY standard prevails.

The main difference between the BOMA and GWCAR methods of measurement is in their treatment of portions of the building main entrance areas and common area spaces. BOMA allows a number of areas supporting the main entrance floor (i.e. Fire Command Room, Fire Pump Room and Main Electrical Room) to be included as rentable areas, where GWCAR does not. BOMA also states that the building’s fitness facility may be included as a rentable area, subject to interpretation (by the building owner). The rough impact is that common area factors (a.k.a. core factors) under buildings using the BOMA method of measurement can be 4% to 8% higher than under the GWCAR method, depending upon total building size and the relative size of the common areas supporting the main entrance floor.

It is interesting to note that a number of the items permitted under BOMA are building features imposed by local governments. Some of these functions are relatively new requirements for code compliant buildings in Washington, DC (i.e. Fire Command Room and Mailroom). Thus, when a building using the GWCAR method is forced reduce the size of its lobby or other rentable area to install a Fire Command Room, the building’s total rentable area could drop. The reality is that the owners of most buildings that are forced to retrofit their buildings with these features will re-measure the building according to the BOMA method, thus recapturing the rentable space and them some. Furthermore, some of the spaces which may be considered rentable area under BOMA are functions which also represent amenities to all tenants of the building (i.e. Fitness Facility, Vending Machine Area, etc.). Another generalization is that buildings measured under the BOMA method tend to benefit the building owner (no surprise, given that their association created the standard) and that buildings using the GWCAR method favor the tenant.

Federal Government (GSA) Method of Measurement

Historically, the United States Federal Government (GSA) only evaluated and leased office space on a useable square foot basis. Also known as the “GSA Method of Measurement” or the “Net Useable Square Foot (NUSF)” Method, this method was unique to the GSA. As the name implies, it included only the useable space to be occupied by the GSA, excluding all building and floor common areas. For example, unless the GSA leased the entire floor of a building, the elevator common area on the floor and restrooms were excluded from the leased premises. The net result was that space leased on an NUSF basis to the GSA would be approximately 12%-18% smaller than the same space measured according to the “net rentable” (BOMA or GWCAR) methods. This method of measurement had the inverse impact on rental rates to the GSA. That is, in order to charge an equivalent rent, landlords grossed-up rental rates to receive an equivalent amount of income on a net rentable basis. For example, if a space was leased to the private sector at $30/sf on a net rentable basis where the conversion to net useable square feet would result in 15% less space, a landlord would have to increase the rental rate by 15% ($4.50/sf) in order to receive the equivalent income.

Although this method of measurement is not currently being used by the GSA in the leasing of new space, it is important to understand because the vast majority of space currently leased by the Federal Government was contracted under this system. Therefore, the gross rental and effective rents for any leases to the Federal Government should be looked at closely when underwriting buildings with GSA leases.

Currently, the Federal Government uses the ANSI/BOMA Office Area Square Feet measurement is used for the purpose of evaluating offers. These are the measurement systems/definitions from the GSA’s solicitation language:

RENTABLE SPACE (SEP 2000)
Rentable space is the area for which a tenant is charged rent. It is determined by the building owner and may vary by city or by building within the same city. The rentable space may include a share of building support/common areas such as elevator lobbies, building corridors, and floor service areas. Floor service areas typically include restrooms, janitor rooms, telephone closets, electrical closets, and mechanical rooms. The rentable space does not include vertical building penetrations and their enclosing walls, such as stairs, elevator shafts, and vertical ducts.

ANSI/BOMA OFFICE AREA SQUARE FEET (SEP 2000)
A. For the purposes of this SFO, the Government recognizes the American National Standards Institute/Building Owners and Managers Association (ANSI/BOMA) international standard (Z65.1-1996) definition for Office Area, which means “the area where a tenant normally houses personnel and/or furniture, for which a measurement is to be computed.”

B. ANSI/BOMA Office Area square feet shall be computed by measuring the area enclosed by the finished surface of the room side of corridors (corridors in place as well as those required by local codes and ordinances to provide an acceptable level of safety and/or to provide access to essential building elements) and other permanent walls, the dominant portion (refer to Z65.1) of building exterior walls, and the center of tenant-separating partitions. Where alcoves, recessed entrances, or similar deviations from the corridor are present, ANSI/BOMA Office Area square feet shall be computed as if the deviation were not present.

Other Methods of Measurement

The BOMA and GWCAR methods are by no means the only methods of measurement used in the Washington, DC metropolitan areas. There are several variations on these standards, frequently referred to as “Modified BOMA” or “Modified GWCAR”, which are used by different building. When this term is used, parties should take great care to understand and define precisely the nature of the modification. Our experience is that there can be tremendous differences in these “modified” methods of measurement. Sometimes these methods of measurement will only include one or two unique features of the building into rentable area (such as the building’s fitness center). However, whenever the word “modified” appears in a building’s definition of their method of measurement, it always means that the building owner has added space types to their common areas.

Lastly, we have seen a few building owners use their own unique methods of measurement. Too often, these unique methods of measurement have little in common with the BOMA and GWCAR standards. Rather, they frequently tend to be a way for property owners to stretch the limit of market acceptance for core factors. Sometimes this is the result of a new building owner purchasing a building of a supposed size that was never properly measured and having to make due with the consequences. Sometimes this is a result of a building owner just seeing what he can get away with. Irrespective of the cause, it is important to know what method of measurement is used for determining the size of a particular space or building and understanding the impact of any non-standard methods of measurement.

BOMA and GWCAR Comparison of Rentable and Non-Rentable Space

The above comparison is for informational purposes only and should be used with the full text of each measurement method for proper calculation of rentable square footages.