In the world of commercial real estate, square footage calculations and rentable areas are critically important factors owners and asset managers must take into account when leasing their buildings. Even more important, though maybe not as fully understood, is the value of re-measuring buildings. Building re-measurement helps CRE professionals maximize the true value of a property.
And there are enormous benefits in re-measuring your building including:
- The ability to confirm the accuracy of space calculations
- Discovering additional square footage to increase rentable income
- Determining if a property is over or under valued.
Although many CRE asset managers and owners, like yourself, may understand the value of remeasuring their buildings there are a lot of moving parts to building re-measurement that you should be aware of. And without a true understanding of the process you risk inaccuracies in re-measuring, leaving money on the table.
To help negate risk, we’ve rounded up three common mistakes that CRE asset managers and owners make when re-measuring their buildings:
1. They don’t fully understand the standards methods of measurement
Measurement standards were developed to standardize rentable square footage in properties and to determine what is acceptable as leasable square footage. Utilizing these standards can increase the value of a property in an acquisition phase, or help a buyer or seller determine an accurate sale price. But different methods applied to the same spaces will provide different calculations.
For example, the BOMA (Building Owners and Managers Association) standards are the most common method in the United States and apportions building common areas to each tenant space. REBNY (Real Estate Board of New York) standards applies a market driven loss factor on usable areas. This is why it is extremely important to understand regional standards and how each can affect potential RSF and maximize your building growth.
2. They make errors in building calculations
Many times CRE organizations hire firms, such as architecture firms, that may not specialize in building re-measurement. And firms that do not specialize in building re-measurement can make mistakes while conducting re-measurement surveys. It is also not uncommon for square footage numbers to be miscalculated or misrepresented from previous years of errors or older measurement standards that were used. Therefore, it is vital to work with firms who stay up to date with the latest standards. BOMA standards for example have undergone several revisions, the most recent being in 2017. Working with companies, such as RDM, who are experts in building re-measurement and measurement standards ensure that you are provided with a floor-by-floor analysis that is accurate and compliant.
3. They don’t use a tech database or system of record for their building portfolio
The CRE industry has been slower to adopt technology and are still stuck using spreadsheets, pen and paper, and unorganized methods to keep all their building information. All this data can be lost or misinterpreted, as there is no simple way to easily view and track the re-measurement and growth of your buildings.
A tech database stored in the cloud can solve these pain points. RDM is a leading provider of software that gives users the one screen experience when it comes to managing portfolios. RealAccess software is a fast and easy to use solution that keeps you organized provides instant access to all your building data. Gone are the days of inaccurate calculations or discrepancies. You can reduce risk and errors by simply keeping all your data updated, organized, and in one place.
Keeping up with market trends and the latest standards ensures that you are getting the most out of your portfolio. If these mistakes sound familiar, RDM can assess your building and help you realize the full value of your assets through re-measurement. To learn more, download RDM’s Whitepaper on Methods of Building Measurement and schedule a Measurement Matters workshop.