the boma magazine - november/december 2010
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The BOMA Magazine is the official magazine of the Building Owners and Managers Association (BOMA) InternationalTRANSCRIPT
Conflict Resolution
November/December 2010
Leading the Future
Plus:Women in CRE: Closing the Compensation Gap
Strategies for Energy-Efficient Elevators
BOMA Leaders Share Best Practices ‘Down Under’
Strengthen Relationships with Your Team, Tenants and Vendors
h o r i z o n t a l l i f e l i n e s
Q U A L I T Y FA L L P R O T E C T I O N
r o o f a n c h o r sw a l l a n c h o r s
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November/December 2010 The BOMA Magazine 5
November/December 2010 Volume 6, No. 6
For advertising rates and information, contact Paul Hagen at Stamats Business Media 866-965-4205.
22
DEPARTMENTS
Volume 6, No. 6 The BOMA Magazine November/December 2010, (ISSN 1532-4346), Copyright 2010. The BOMA Magazine is published bimonthly in January/February; March/April; May/June; July/August; Septem-ber/October; and November/December by the Building Owners and Managers Asso-ciation (BOMA) International, 1101 15th St., NW, Suite 800, Washington, D.C. 20005; Telephone 202-326-6300; Fax 202-326-6377; www.boma.org. Periodicals Postage paid at Washington, D.C. and additional mailing offices.
POSTMASTER: Send address changes to: The BOMA Magazine, Attn: List Department, 1101 15th St., NW, Suite 800, Washington, D.C. 20005. Undeliverable U.S. copies should be sent to: The BOMA Magazine, Attn: List Department, 1101 15th St., NW, Suite 800, Washington, D.C. 20005. Return undeliverable Canadian addresses to: PO Box 875, STN A, Windsor, ON N9A 6P2.
Connect with BOMA
Join BOMA on Facebook
Join BOMA on LinkedIn-Join the new EER Users Group
See BOMA on YouTube: www.youtube.com/bomainternational
Follow BOMA on Twitter:
BOMA Chair Ray Mackey @ rhmackey
BOMA President Henry Chamberlain @ HenryBOMA
BOMA Vice President Lisa Prats @ LisaPratsBOMA
2826
6 MESSAGE FROM THE CHAIRA Self-Regulating Success Story.
8 LEGISLATIVE UPDATECongress adjourns, leaving unfinished business behind; EPA stormwater questionnaires hit the street. Plus, notes from NAC.
12 STATE & LOCAL UPDATEBOMA local associations continue to embrace energy-efficiency challenges.
14 CODES & STANDARDS UPDATEBOMA develops a new floor measurement standard for mixed-use buildings; codes victories save the industry billions.
16 LEADING THE WAYJohn Oliver—NAC chair, spoils ’em rotten granddad.
18 AROUND THE INDUSTRYSAPOA execs visit BOMA headquarters. Are there bed bugs in your building? Beyond the Restroom—where the germs are hiding.
32 TRENDS TRACKERDiana Osler-ZorteaRecovery slam dunk in the Canadian market.
30
Conflict Resolution: Building the Bridge to AccordNatalie BrecherMake your team more effective and improve relationships with tenants and vendors. Also: findings from the 2010 SelectLeaders/Cornell Job Barometer Report.
Cracking the Glass Ceiling?Kristin BlountCREW study findings: There are more women in CRE, but are they making more money?
Making Your Elevator Work for YouSasha BaileyTips for increasing efficiency and reducing the cost of your elevators.
Commercial Real Estate ‘Down Under’Henry Chamberlain and Ray Mackey, Jr.BOMA leaders visit Australia and New Zealand to network and share best practices.
34 GREEN SCENEJohn HoekstraLocal governments eye commercial buildings to cut energy and carbon. Are you ready?
35 RESEARCH CORNERBest practices for bidding service contracts.
36 EYE ON EDUCATIONBOMA’s new webinar series offers solutions for achieving a high-performance building.
38 TRADE TOOLSBecky WerraHow McHenry County’s facilities management department is balancing the budget through energy-efficiency retrofits.
40 BUYERS’ GUIDECheck out the latest products and services.
42 CONFERENCE CONNECTIONThree prominent thought leaders to discuss politics, real estate and the economy at the 2011 BOMA International Conference.
6 The BOMA Magazine November/December 2010
Message froM the Chair
Publisher: Lisa M. Prats, CAE
editor: Laura Horsley
associate editor: Lindsay Tiffany
Contributing editors: Karen W. Penafiel, CAE, Ronald Burton, James Cox, Henry Chamberlain, CAE, APR, Lorie Damon, Ph.D., Kristin Bowling, Tracy Glink
Designer: Amy Belice
Published by: Building Owners and Managers Association (BOMA) International
BOMA International OfficersChair and Chief elected officer Ray H. Mackey, Jr., RPA, CPM, CCIMStream Realty Partners, LP Dallas, Texas
Chair-electBoyd R. Zoccola Hokanson Companies, Inc. Indianapolis, Ind.
Vice Chair Joseph W. Markling CB Richard Ellis, Inc. Los Angeles, Calif.
secretary/treasurer Kent Gibson, CPMProperty Reserve Inc. Salt Lake City, Utah
President and Chief operating officer Henry H. Chamberlain, CAE, APRBOMA International Washington, D.C.
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 neces-sarily reflect the opinion of BOMA International, its members or its staff.
Ray Mackey, Jr., RPA, CPM, CCIM
Chair and Chief Elected Officer
Call for Nominations: Vice Chair, Secretary/Treasurer and Executive Committee MembersBOMA International’s Nominating Committee is seeking candidates for the positions of vice chair, sec-retary/treasurer and for five mem-bers of the Executive Committee to the Board of Governors. For further information, contact Ann Coslett at [email protected].
A Self-Regulating Success StoryAnyone who knows me knows that I think commercial real
estate, and the business community in general, cannot thrive when choked by heavy regulation. As I mentioned in the last issue, costly regulations derail job growth and economic recov-ery. But that doesn’t mean we live in the “Wild West.” The best way to succeed in today’s market is through prudent self-regulation.
No place is this approach
more effective than with
energy efficiency, where
BOMA members have found
success for years. Whether using no- and
low-cost strategies to reduce energy con-
sumption or signing onto BOMA’s 7-Point
Challenge to reduce energy consump-
tion by 30 percent by 2012, we have taken
significant steps to reduce consumption
and greenhouse gas emissions. Our most
recent EER data proves that it’s working,
as utility expenses are declining in many
markets at a time when utility rates keep
going up.
Now it’s time to take it to the next
level. One of the goals for 7-Point Chal-
lenge endorsers is to benchmark energy
performance through ENERGY STAR®
Portfolio Manager. Many of you have
accepted this challenge, but we need
more of you to both benchmark your
energy usage and share that data with
BOMA International. This is the best way
to elevate the voice of commercial real
estate before lawmakers and show them
that voluntary marketplace transformation
not only works, but is the clear option if we
want to reduce consumption and add jobs
to spur recovery.
Another reason to benchmark and
share is to stay competitive in markets
where local governments are beginning
to require commercial buildings to report
energy information. It’s happening in New
York City, Washington, D.C. and across
California (see “Uncle Sam Wants … Your
Energy Data”, page 34), as well as in inter-
national markets. I just returned from a trip
to Australia with BOMA President Henry
Chamberlain (see feature story, pages
30-31) where, at press time, a commer-
cial building disclosure scheme was set to
commence on November 1. The mandate
requires owners and lessors of commercial
office space to disclose energy-efficiency
information to prospective buyers and ten-
ants in buildings with a rentable area of
2,000 square meters (21,528 square feet)
or more.
The good news for BOMA members is
that the resources and tools we have in
place—education, advocacy, networking—
have propelled us to the position of energy-
efficiency leaders. Our efforts are working
and making a difference, but those efforts
are only half fulfilled if they are not quan-
tified. Take the next step and benchmark
your building through Portfolio Manager.
We measure to manage and we measure to
improve, but, just as importantly, we mea-
sure to prove that a self-regulating market
makes the business case as well as the sus-
tainability case. Plus, it’s a success story we
should all be proud to share.
Thank you for supporting this great
industry!
Benchmark and shareEstablish a user account in ENERGY STAR® Portfolio Manager
Go to www.energystar.gov/benchmark and log in to Portfolio Manager. If you do not already have a user account, click the New User link on the log in page and follow the instructions. Enter your building(s) informa-tion and begin tracking energy performance.
Share your facilities with BOMA International
From the My Portfolio page, choose “Share Facilities.” From the drop-down menu labeled “Select a Portfolio Man-ager Master Account,” look for BOMA International-BOMABEEP.
For step-by-step instructions and tips, visit the education page at BOMA.org and click on BEEP, Share Your Data with BOMA.
8 The BOMA Magazine November/December 2010
legislative UPDate
Continued on page 10
CONGRESS HAS ADJOURNED—tempo-rarily—to return to their home districts to prepare for the November 2 elections; however, they will return on Nov. 15 for the first of two anticipated “lame duck” sessions. On the long list of unfinished business are some important commer-cial real estate issues. Below is a brief summary of BOMA’s pending agenda.
Capital Gains: Unless Congress acts soon, the capital gains tax rate will revert back to 20 percent from the current 15 percent on Jan. 1, 2011. This was origi-nally lowered as part of the “Bush tax cuts.”
Leasehold Depreciation: Congress also failed to address the extension of the 15-year timeline for leasehold improve-ments, which expired at the end of 2009 and is a part of the tax “extenders” that was packaged with a tax increase on car-ried interest. BOMA supports extend-ing the 15-year depreciation period for leasehold improvements, but opposes using a permanent increase on carried interest to offset the cost.
Covered Bond Legislation: In late July, the House Financial Services Commit-tee approved H.R. 5823, legislation that would encourage the development of a covered bond market in the United States. Covered bonds are securities whose underlying assets are typically a pool of commercial or residential mort-gage or public-sector loans. Already in use in Europe and Canada, they repre-sent a potential complementary fund-ing source in the U.S. housing finan-cial system, as well as an alternative to securitization that could help address ongoing refinancing challenges in the commercial real estate sector. BOMA International joined an industry letter supporting the bill, which has a chance to be considered by the full House and Senate before the end of the year.
Commercial Real Estate Stabiliza-tion Act: Rep. Walter Minnick (D-Idaho) introduced The Commercial Real Estate Stabilization Act, which would establish a temporary five-year program, man-aged by the U.S. Treasury Department, to provide federal loan guarantees of up to 75 percent of the current market value of viable commercial properties. At this time, BOMA International is unsure of how effective or appropriate the creation of another new government program, similar to the Term Asset-Backed Securi-ties Loan Facility, would be in assisting the commercial real estate market.
Energy/Climate Change: While the House passed a comprehensive climate change bill last year, which included several energy provisions of concern to BOMA members, the Senate has not followed. Majority Leader Harry Reid (D-Nev.) hopes to pass a much narrower “non-controversial” energy bill during the lame duck session.
The future of all these provisions is unclear and will largely depend on the outcome of the election.
Bonus Depreciation Signed by President
Before adjourning, Congress did take action on one measure of importance to BOMA members: Both the House and the Senate passed legislation that extends, through the end of 2010, 50-percent bonus depreciation for quali-fying property purchased and placed in service in 2010. President Obama has signed it into law. The provision was enacted in both 2008 and 2009 and applies to certain qualified leasehold improvement property.
Congress Adjourns, Lame Duck(s) to ComeStormwater Surveys Hit the Street
In early September, about 3,000 real estate owners and developers were sent surveys on stormwater manage-ment practices. The responses to these surveys could be used by the U.S. Envi-ronmental Protection Agency (EPA) to develop regulations for post-construc-tion stormwater runoff. Every company that receives a survey has a legal require-ment to complete it.
Help is on the way! If your company has received a survey, please contact BOMA International’s advocacy staff as soon as possible. Our coalition has developed guidance materials to assist you in completing the survey. The guid-ance document, which was partially funded by BOMA’s Industry Defense Fund, is intended to help clarify the intent of EPA’s questions, suggest consid-erations regarding issues raised in those questions and explain how the informa-tion provided by respondents may be used by EPA in future rulemaking efforts.
GAO Issues New Report on Federal Building Security Standards
Earlier this year, the U.S. Interagency Security Committee (ISC) issued new building security standards for federal facilities, also known as the Physical Security Criteria for Federal Facilities. On a directive from Congress, the Gov-ernment Accountability Office (GAO) reviewed the standards for leased space and released a report in September that identifies challenges to protecting leased space and examines how the new stan-dards address these challenges. The GAO study ultimately recommends that ISC establish a working group to determine guidance for working with lessors and incorporate that guidance into a future ISC standard. BOMA International will provide comments to the working group and keep members up-to-date on its findings.
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10 The BOMA Magazine November/December 2010
legislative UPDate
Talent Retention and an Anticipated Return to Optimism Top NAC/ROC Fall Agenda
BOMA International’s National Advi-sory Council (NAC) and Regional Own-ers Council (ROC) convened in Sonoma, Calif., on Sept. 23-24 to converse with experts, share thoughts on marketplace trends and celebrate that the worst is likely over with industry colleagues and peers.
that we’re not in for a speedy recovery are supported by the fragility of the con-sumer-sector recovery (due, in part, to increased savings rates of Americans), the high deficit and the level of our national debt as a percent of GDP.
“The commercial real estate mar-ket will return to ‘normalcy,’ but not quickly …,” predicted Vandell. We are in the middle stages of a serious com-mercial market recession, which started in mid-2007 and has been primarily systemic, not regional, with all sectors affected. Keep in mind, he cautioned, that in recovery, new space demand will come first from “shadow vacancy,” then from “excess vacancy” and only then from new construction. Keep in mind also that the length and depth of the CRE recession is dependent on the rest of the economy. Employment drives the demand for commercial space. If employment growth of only 100,000 per month is maintained and each worker requires 200 square feet of space, 20 mil-lion square feet of additional space will be required per month, or 240 million square feet per year.
Blame It on the BoomersChris Lee, CEL & Associates, reiterated
Vandell’s views on the economy, and fur-ther pointed to the fact that baby boom-ers (whose retirement savings are now diminished) are putting off retirement, blocking the way for the up and com-ers, to further exacerbate the current and future problems of attracting and retain-ing talent in the industry. Rewarding and keeping key staff was a topic we kept cir-cling back to throughout the meeting, and Lee pointed out that now was a good time to shed the underperformers.
Lee also focused on “12 strategies” for doing the right thing, at the right time and with the right people:
1. Reset Your Priorities.
2. Re-Examine Your Business Model.
3. Protect Your Most Valuable Asset … Your People.
4. Strengthen Your Brand.
5. Become Customer Centric.
6. Improve Internal Systems and Processes.
7. Take Advantage of Competitor Difficulties.
8. Recognize Opportunities.
9. Expand Your Service Lines and Specialization.
10. Understand Your Risks.
11. Strengthen Your Capital.
12. Grow Personally.
“If you’re not making money in this economy, you’re doing something wrong,” was the summation of Lee’s remarks.
Seeing GreenScott Muldavin, from the Green Build-
ing Finance Consortium, discussed val-uation of green assets. BOMA Interna-tional was one of the founding members of the Green Building Finance Consor-tium, which it helped fund through the BOMA Industry Defense Fund.
Not in My Backyard!Patrick Slevin, with Hill & Knowlton,
discussed developing strategies to com-bat “NIMBYism.”
Discussion included how to get involved quickly to prevent the vocal minority from slowing or halting a proj-ect, as well as tips to evaluate when the anticipated NIMBY sentiment would just be too great and too costly to success-fully combat. Slevin, from Tallahassee, Fla., also addressed Florida’s Amend-ment 4 ballot initiative as an example of a loud and well-organized—but small—constituency that is threatening to halt economic development in that state.
Everything from Social Media to Healthcare Reform
At the end of the meeting, an open discussion on topics ranging from employee and tenant retention, to social media policies/strategies and preparing for healthcare reform made for a lively exchange.
For more information about mem-bership in NAC or ROC, contact Karen Penafiel or Pat Areno at (202) 408-2662.
NAC Chair John Oliver kicked off the NAC/ROC Meeting.
Cautious OptimismProfessor Kerry Vandell of The Paul
Merage School of Business at UC-Irvine kicked off the meeting. Vandell was cau-tiously optimistic that the recession is, in fact, over (from the perspective of GDP growth), corporate profits are increasing and fears of inflation are fading. Also, productivity is soaring, and unem-ployment concerns are abating with the unemployment rate beginning to trickle down. He reconfirmed, however, that it will be years before we see any real catching up in job creation, and, therefore, years before we see new con-struction. In addition, other indicators
Kerry Vandell gave the good news/bad news eco-nomic forecast.
Chris Lee delivered 12 strategies for success today.
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12 The BOMA Magazine November/December 2010
state & local update
BOMA MEMBERS ARE RECOGNIZED as industry leaders in taking proactive steps to reduce energy costs and green-house gas emissions. These goals coin-cide with those of local governments, which include conservation as a cen-terpiece of their public policy agenda. Across the country, BOMA local associa-tions have launched their own energy challenges or joined with other groups in such contests to engage the commer-cial real estate industry in taking energy conservation to the next level.
Kilowatt Crackdowns Get Cranking
BOMA/Greater Minneapolis and BOMA/St. Paul, in partnership with Xcel Energy, recently launched Kilowatt Crackdowns, energy conservation ini-tiatives that challenge the commercial real estate industry to improve energy
efficiency, in their cities. Since energy represents the single largest operat-ing expense for commercial buildings, efforts to reduce energy usage make good business sense as well as good environmental sense.
“Kilowatt Crackdowns not only improve a business’ economic com-petitiveness, they also help expand the existing energy conservation industry by creating new ‘green jobs’ and a national center of expertise,” says Kent Warden, RPA, BOMA/Greater Minneapolis’ exec-utive director. “They also help reduce the use of fossil fuels along with the associ-ated pollution and greenhouse gas emis-sions.” In addition to these new energy competitions, BOMA/Louisville, BOMA/Portland and BOMA/Seattle have also launched successful challenges.
Participation in the competition is based on building size, and buildings must be a minimum of 30,000 square
BoMa local associations continue to support energy challenges
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feet. BOMA and Xcel Energy will provide participants with free assistance by help-ing benchmark buildings through the EPA’s ENERGY STAR® Portfolio Manager tool. They are also working together to locate stimulus funding and utility rebates to offset the cost of improve-ments. Improvements can be made throughout 2011, providing participants with time to adequately budget, sched-ule and implement efficiency plans. Top performers will be awarded in the spring of 2012. Awards are based on three cat-egories: highest performing buildings, most improved performance and most valuable tenant. As tenant engagement is also an important component of any energy competition, an award for the tenant who has shown the most leader-ship and enthusiasm for reducing energy also has been established.
Houston BOMA Takes the Green Office Challenge
In September, the city of Houston launched the Green Office Challenge. Houston BOMA was one of its first
supporters and consulted with the city on the awards process and benchmark-ing. They have also joined in a partner-ship to drive BOMA member participa-tion with the ultimate goal of 100-per-cent participation. Property managers and owners that participate in the Hous-ton Green Office Challenge must dem-onstrate achievements in four primary areas: energy, waste, water and tenant engagement. Buildings will receive rec-ognition for accomplishing “base” or “stretch” goals in each of these catego-ries. The competition also challenges commercial office tenants in the city’s business districts to increase their envi-ronmental and economic performance in the areas of outreach, energy conser-vation, waste reduction, cleaner trans-portation choices and property manage-ment engagement.
Commenting on the association’s participation in the challenge, Tammy Betancourt, executive vice president, Houston BOMA, notes: “Working with city leaders on the Green Office Chal-lenge offered BOMA a unique opportu-nity to increase our members’ sphere of
exposure and influence citywide, while making a positive impact on greening the built environment.”
BOMA International recognized early on the need to make commercial buildings more energy efficient and has rolled out several programs to help members achieve this goal. One of its biggest efforts, the BOMA International 7-Point Challenge, urges the industry to reduce energy consumption in commer-cial buildings by 30 percent by 2012. A critical step in the 7-Point Challenge is benchmarking your commercial build-ing’s energy performance using EPA ENERGY STAR’s Portfolio Manager and sharing your building’s data with BOMA International. BOMA International encourages all members participat-ing in energy challenges to benchmark their building’s energy consumption and share their data. By sharing your energy management progress and leadership with BOMA, you will help highlight the industry’s dedication to reducing green-house gas emissions.
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14 The BOMA Magazine November/December 2010
Codes & standards Update
Mixed-Use Floor Measurement Standard in the WorksA TASK GROUP OF BOMA’s Standard Method of Floor Measurement Com-mittee is currently working on the first draft of a new mixed-use floor measure-ment standard to complement BOMA’s standards for office, retail, industrial and multi-unit residential buildings. These four standards assume that each build-ing is a single-use building under single ownership, and none have any provi-sions for measuring buildings that con-tain more than one use, more than one building or buildings that are legally divided and owned by different enti-ties. BOMA’s Gross Area Measurement Standard, while occupancy neutral, also assumes a single building under single ownership. The need for a mixed-use standard has become necessary as more and more buildings are designed, built and altered to accommodate multiple uses.
The new BOMA mixed-use standard will address properties that contain mul-tiple uses, including:
• Uses for which BOMA has produced standards (office, retail, industrial and multi-unit residential).
• Uses for which BOMA has not pub-lished measurement standards.
• Mixed-use common areas that serve two or more uses.
• Parking components, or parking that is shared by multiple uses and is not used exclusively by and included in a use.
A final draft of the new standard is scheduled to be completed in the third quarter of 2011.
BOMA’s Codes and Standards Advocacy Continues to Pay Dividends
BOMA continues to be a major force in the development of national model codes and standards and is the only commercial real estate trade associa-tion with an aggressive advocacy pro-gram targeting these critical regulatory activities. BOMA’s code advocacy team is the first line of defense in preserving safe and affordable building codes and standards against the growing influence of powerful lobbying groups. Each year, BOMA members save billions of dollars in direct costs and long-term revenues with the elimination or modification of overly stringent and costly require-ments impacting fire protection, occu-pant accessibility and egress, structural integrity, plumbing and mechanical sys-tems and a host of other areas impacting new construction and existing buildings alike.
Recent efforts in the ongoing develop-ment of the family of codes produced by the International Code Council resulted in significant savings for U.S. office buildings, including:
• $2.58 per square foot (psf) savings in additional annual construction costs by defeating overly stringent energy code requirements.
• $10.50 psf in additional annual con-struction costs with the disapproval of redundant passive fire protection measures providing no significant life-safety benefits.
• $2.62 psf saved in annual lost income avoided with BOMA’s defeat of propos-als for additional structural strength and emergency exit requirements.
This is but one of the host of codes and standards development forums
where BOMA plays a major role. Other recent successes in the development of ASHRAE energy and green building standards resulted in more workable and cost-effective provisions, trade-offs for renewable energy and other require-ments and consideration of project costs and basic business investment principles.
DOE Stokes Site vs. Source Energy Debate
The U.S. Department of Energy (DOE) is proposing to change how it estimates the likely impacts of energy conservation standards for commercial and industrial equipment. DOE proposes to use full-fuel-cycle measures of energy and green-house gas emissions, rather than the pri-mary energy measures currently in use. At this time, energy cost calculations for determining the requirements in codes and standards, such as ASHRAE Stan-dard 90.1 (commercial building energy), are based on site energy, primarily because it is more visible to building owners through utility meter readings.
DOE’s move stokes the long-smolder-ing debate between the powerful elec-tric utility and gas interests. Each energy supplier group believes that measuring energy use should be done in a way that most benefits their respective industry—site for electric utilities and source for gas utilities—because of the inefficien-cies associated with the conversion of thermal energy to electrical energy.
BOMA Codes Expert Scores Industry Accolade
BOMA’s Director of Codes and Stan-dards, David P. Tyree, P.E., C.B.O., was named “Industry Person of the Year” by the County Building Officials of Cali-fornia (CBOAC). Dave has been a mem-ber of CBOAC for 20 years, served on the Board of Directors for four terms and assisted in the development of its national code development efforts. The award presentation highlighted Dave’s time and commitment in helping to get the International Codes adopted in California, as well as his influence in the code adoption process. Dave continues his involvement with CBOAC, represent-ing BOMA’s Codes, Standards & Regula-tory Affairs advocacy program.
WWW.USGBC.ORG /LEED
OF $160 BILLION*
IN ENERGY SAVINGS.
REALIZE THE POTENTIAL
*Potential energy ef�ciency savings of building sector by 2030.McKinsey & Company (2007). Reducing U.S. Greenhouse
Gas Emissions: How Much at What Cost?
WWW.USGBC.ORG /LEED
OF $160 BILLION*
IN ENERGY SAVINGS.
REALIZE THE POTENTIAL
*Potential energy ef�ciency savings of building sector by 2030.McKinsey & Company (2007). Reducing U.S. Greenhouse
Gas Emissions: How Much at What Cost?
16 The BOMA Magazine November/December 2010
leading the way
John Oliver, CPMnaC Chair, Spoils ’em Rotten granddad
JOHN OLIVER IS MANAGING DIREC-TOR with Wells Real Estate Funds, where he is responsible for national business development. Wells Real Estate Funds has invested more than $12 billion in core, mainly Class A, real estate, and has a tenant base that represents the “Who’s Who of Corporate America.” Oliver has been an active BOMA member on the local, regional and international levels for more than 25 years, and is the current chair of BOMA International’s National Advisory Council, a group of senior exec-utives from the nation’s largest compa-nies that own or manage commercial real estate.
what do you see as the important issue/concern currently facing commercial real estate?
The faltering economy is still the big-gest concern with the huge unemploy-ment and under employment that it has created. Companies have had to reduce staffing and headcount over the last two years, which consequently created unre-ported vacancies in many office build-ings. Even when the economy turns, those “seats” have to be filled first before there is new demand for office space.
We’re all looking for job growth; when will it start and at what pace? We read that businesses are sitting on large cap-ital reserves. Companies appear to be unsure of the long-term effects of the new government initiatives (healthcare and taxes, to name two), and it appears that many are waiting to see the final rules written before they commit to longer-term strategies.
what was the most important takeaway from the naC meeting this past September?
BOMA’s NAC meeting is always a won-derful opportunity to come up for air and to compare notes with other senior executives within the real estate indus-try. We had a great turnout for the meet-ing and covered topics ranging from the economy and what’s happening with our tenants to the proposed changes to FASB and healthcare. We also compared notes on employee retention in this tough time when everyone is doing more with less. I think the consensus was that we need to remain vigilant and flexible. It appears to be a slow road to recovery.
you work with several corporate clients. what is the biggest impact the recession has had on those clients? how is 2011 looking?
Cost containment is a trend we have noticed with our clients during the reces-sion. It touches all areas of their busi-ness, but people and real estate costs are significant areas. Not all companies have been severely strained by this economy, but very few have come through with-out some impact. Much attention has been paid to staffing levels and taking advantage of the soft market by renew-ing and extending leases at significant savings. Another trend is the buildup of cash by large investment-grade firms. Some have already made purchases of other firms, and there appears to be a lot of “dry powder” for the right acquisi-tions. With these acquisitions or mergers will come opportunities to consolidate business units into more efficient space.
Landlords with cash and the ability to work strategically with these tenants will help solve these issues.
what do you get most from your BOMa membership?
My more than 25 years of active involvement can be summed up in one word: PEOPLE. The people I have met and the opportunities to network and exchange experience have been invalu-able to my career and the companies I have worked for. My advice to people in this business is to get involved in BOMA. I don’t care if you’re young and new to the business or an “old hand” like me. Get out of your comfort zone. Meet some new people. Quit thinking you’re too busy to be involved. You and your company will benefit.
we heard from BOMa sleuths that you are a very proud granddad. tell us about the joy you get from your grandkids.
Maybe we should have made this interview solely on this topic! My wife, Karen, and I have two grandchildren: Oliver (yes, because of the name, I will pay his Notre Dame tuition), who is two years old, and our beautiful Kate, who is 10 months old. We have four children so we hope to be avalanched with grand-kids! There is magic in grandchildren; we had no idea how much it would impact our lives. Thankfully, all of my children are still here in Atlanta so we will con-tinue our new tradition of spoiling the grandkids rotten, obeying none of the “rules” from our well-meaning children and returning them exhausted and cranky. It’s a rite of passage!!
1 Source: Free Health Inc. 2005 Study
®/* Trademarks of Kimberly-Clark Worldwide, Inc. or its affiliates. Marques déposées de Kimberly-Clark Worldwide, Inc. ou de ses filiales. © 2010 KCWW. K02043 K5216-10-01
Every year your tenants pay about $1320 PER EMPLOYEE for absenteeism.1
Do the math. It can really add up.
But you can help them save that money with the Healthy Workplace Project from KIMBErly-ClarK ProFESSIonal*.
an innovative approach to hand hygiene that goes beyond the restroom.
That engages your tenants’ employees to stay healthier. Saving your tenants money.
Call your KIMBErly-ClarK ProFESSIonal* representative or visit www.healthyworkplaceproject.com to find out how you can implement it today.
18 The BOMA Magazine November/December 2010
Around the industry
SAPOA Execs Visit BOMA HeadquartersTHE SOUTH AFRICAN PROPERTY OWNERS ASSOCIATION (SAPOA) President Samuel Ogbu, CEO of Liberty Properties, and Chief Executive Officer Neil Gopal visited BOMA International’s offices in October to share information, exchange ideas and explore ways the two organizations can work together. In addition to meetings with BOMA staff, SAPOA’s representatives also met with executives from the National Association of Real Estate Investment Trusts, the Urban Land Institute and the National Multi Housing Council.
SAPOA’s mission is to actively and responsibly represent, promote and protect the interests of their members’ commercial activities within the property industry in South Africa. Visit BOMA’s YouTube channel (www.YouTube.com/BOMAInternational) to watch an interview with SAPOA’s Neil Gopal and Samuel Ogbu, where they discuss advocacy issues, the economy and the impact of the 2010 World Cup.
Protect Workers— Break the Germ Transmission ChainResearch shows that the nine areas listed below harbor the greatest num-ber of germs. Educating and encour-aging employees to Wipe, Wash and Sanitize can help reduce the risk of transmission. And it’s also where KIMBERLY-CLARK PROFESSIONAL* has focused the efforts of the Healthy Workplace Project. Please go to www.healthyworkplaceproject.com for more information.
• Stair railings;• Elevator buttons;• Conference tables;• Lobby areas;• Reception areas;• ATM in lobby;• Water cooler/kitchen space;• Copy stations;• Doors.
Continued on page 20
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For Information and Registration call BOMA Nevada’s office at 702-938-BOMA
January24-26 Fundamentalsof FacilityManagementFebruary21-23 Design,OperationsandMaintenanceIIMarch14-17 EnvironmentalHealth&Safety+ EthicsApril18-20 RealEstateInvestment&FinanceMay16-18 Budgeting&AccountingJune13-15 FacilityPlanningJuly11-13 Leasing&MarketingAugust15-17 ManagingtheOrganizationSeptember12-14 AssetManagementOctober17-19 Law&RiskManagementNovember14-16 TechnologiesforFacilitiesManagementDecember5-7 Design,OperationsandMaintenanceI
20 The BOMA Magazine November/December 2010
Around the industry
By Ron Harrison, Ph.D.
Office workers may find that unwanted bloodsuckers are joining them on their commute to work. Bed bugs have long been vacationing in hotels and motels, and the problem is rapidly migrating into other industries. The insects have made themselves at home in apartments and single-family residences, which has led to an emerging new trend—bed bugs in office properties.
In a recent Orkin Commercial Services survey of BOMA members, respondents indicated they are largely unaware that bed bugs are a growing concern in office buildings. While you might not have expe-rienced bed bugs at your property, you’ve certainly heard of the commercial spaces where they’ve already made appear-ances. The Fox News Manhattan news-room, CNN, Bill Clinton’s offices, Penguin Publishers, Broadway, the Denver Public Library—quite a lineup for a pest no big-ger than an apple seed.
While the majority of BOMA members indicated that bed bugs pose “little to no threat” or a “minor threat” to the com-mercial real estate industry, one statis-tic might convince them otherwise. The survey found one in 10 respondents has dealt with bed bugs at a property. Ten per-cent might not seem like much, but for an environment without beds—long thought to be a necessary element for a bed bug infestation—this is a startling number. What’s more, Orkin saw its commercial bed bug treatments more than triple from 2008 to 2009.
Bed bugs are nocturnal and feed exclu-sively on blood, giving them a reddish
brown color. A bite can cause itchy red welts or no reaction at all, but the one thing bed bugs all share (luckily) is that they have not been known to transmit dis-ease. The problem with bed bugs is they multiply, growing from just two insects to hundreds in a matter of months. Besides the negative social stigma bed bugs elicit, an entirely new set of problems come with this pest. Infestations can ruin company reputations and spark litigation from their victims.
So now you’re probably asking, “What can I do to prevent them in my property?” First, understand how they’re getting in the building. Bed bugs are hitchhiking on the belongings of someone who has a problem at home, a frequent business traveler bringing luggage into work or, in rare cases, in product shipments that arrive at your building. Second, seek out their hiding spots. Bed bugs prefer to be close to a feeding source—you, your staff or other building occupants. Since there aren’t any beds, look for these pests in other soft furniture, such as lobby furni-ture, plush chairs in conference rooms and fabric cubicle dividers. Bed bugs can also hide in electrical outlets, bundled com-puter wiring and behind framed artwork. In addition to bed bugs, check for the inky or rust-colored stains they leave after feed-ing and the cast-off skins they shed on the fabric of chairs and couches or behind pic-ture frames and furniture.
Bed bugs are resilient—capable of living up to 12 months without a blood meal—and can be tough to spot, so enlist the help of your staff to prevent these pests from taking over your office space. With
the problem growing, the time to take ACTION is now:
Awareness. Knowing that bed bugs can be a problem in commercial real estate is the first step.
Communication. Inform and educate your tenants about bed bugs in the office. Include the information in tenant newslet-ters or on building bulletin boards.
Training. Ask your pest management provider to train tenants, maintenance professionals, cleaning crews and other building staff about bed bug basics.
Inspection. Encourage routine inspec-tions in typical bed bugs office hot spots for signs of bed bug presence.
Openness. Be transparent and truth-ful with your tenants about bed bugs. Establish a reporting protocol so you can address any problems early.
Notification. In the event that bed bugs are found, notify management and your pest management provider immediately. Do not move any items from the infested area.
A strong pest management partnership and proactive approach to bed bugs can help keep these pests from becoming your property’s worst nightmare.
Ron Harrison, entomologist, Ph.D., is director of technical services for Orkin and an acknowl-edged leader in the field of pest management. Contact Dr. Harrison at [email protected] or visit www.orkincommercial.com for more information.
Get additional facts about bed bugs and tips on how to prevent them by visiting Orkin University Online’s Property Management resource center on orkincommercial.com.
What are You Bringing to Work?A Recent Study Reveals It’s More Than Just a Briefcase
360 BuzzMore than 150 buildings have now received the BOMA 360 Performance Program designa-tion, demonstrating that their properties are achieving excel-lence in all aspects of building management and operations. How does the designation give properties an edge? Here is what people are saying:
“When prospective and current
tenants see the plaque, they
want to know what it means.
We then get the opportunity to
communicate the value that
we are bringing to them by the
things we do at the buildings,
with third-party credibility
from BOMA.”
—Steve Harrison, Vice President of Facilities, Parmenter Realty Partners
“We strive to be the best at
all times, but during a down
economy, you can’t afford to
be less than your best. The
BOMA 360 designation is
proof that we excel at all
aspects of property man-
agement and operations.”
—Edward Fallon, RPA, Vice President of Operations for the New York Region, Brookfield PropertiesBank of America Plaza,
Jacksonville, Fla.
300 Madison Avenue, New York City
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Reach the people you want to do business with at the moment they are making their purchasing decisions. Reserve your space on the BOMA International Online Buyers’ Guide today!
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contact Melissa Zawada at 800-369-6220, ext. 3407 or [email protected]
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22 The BOMA Magazine November/December 2010
Conflict is a normal occurrence,
yet people fear it and take precious
energy and efforts to avoid it, in turn,
sometimes exacerbating the situa-
tion. When conflict resolution skills are
strong, the organization will be more
effective, the company—and the prop-
erty professionals—will have more of
their needs met and stress levels will be
considerably reduced.
Not fearing conflict is energizing:
To eagerly jump into the resolution
process, knowing that having the dif-
ficult conversations now will result in
higher satisfaction to all parties involved
sooner, is a liberating sensation.
What is Conflict?Assuming that disagreement is con-
flict can produce conflict itself. People
can disagree, yet not have conflict.
For example, the manager who keeps
38 folders to locate e-mails and the
employee who has five folders and uses
the search index proficiently can agree
to disagree without any side effects.
People can also have conflict in spite
of agreeing: Two engineers want to help
with a new project but the daily mainte-
nance work must continue so it seems
neither will be able to meet his or her
needs. Conflict exists when what we
want appears incompatible with what
the other party wants. The key term is
“appears.” Sometimes what appears as
an unsolvable conflict is not.
Uncover Causes to Find Agreement
Almost anything can be the source of
conflict. What’s amazing is not that there
are so many grounds for disagreement,
but that we don’t have more. We give and
take in relationships every day—so often
and so automatically, in fact, that we are
often unaware of it. Watch out for these
six key grounds for conflict:
Creating a Bridge to Accord Takes Conflict Resolution Skills
By Natalie Brecher
November/December 2010 The BOMA Magazine 23
1. Facts/Data: When facts aren’t straight
or everyone is not aware of the same
data, problems can surface. A book-
keeper recalls the report as due on the
15th; the boss remembers it as the 5th
and thinks it’s late.
2. Goals/Objectives: Unexpressed
(or not agreed to) expectations are
essentially unilateral, and when it’s
assumed there is agreement, a wedge
is created for understanding and
agreement. A salesperson thinks 20
sales are an exceptional goal; another
thinks 30, so believes the other is a
poor performer.
3. Methods: Believing the proverb
“What’s good for the goose …”
applies in all situations can raise
many an issue. One person’s skills
aren’t strong and it takes three hours
to do the work; another person thinks
it should take two, so perceives the
other as slow.
4. Structural: Hierarchy and author-
ity are big issues in the workplace. A
co-worker has greater approval limits
than another and believes that indi-
cates complete authority; the other is
jealous.
5. Relationships: Personal connec-
tions, likes and political agendas can
be deadly. One employee is given the
choice assignments, so other employ-
ees don’t like him or her.
6. Personal Inference and Values:
These are the most difficult to
uncover, define, rectify and often
even to discuss. It’s normal to see
the world through personal filters
and hard to recognize, making them
all the more dangerous. Individuals’
emotions, senses, desire for authority
and control, interpretation of right
and wrong and the like all contribute
to the cause of the conflict as well as
how resolution should take place to
be successful.
Before resolution efforts can make
progress, the underlying causes must
be fleshed out and carefully planned
discussions (sometimes using a mod-
erator) are the only reliable vehicle to do
so. In one such discussion, for example,
one employee gave another a birthday
gift. Unwrapping the gift, the recipient
found it was something she had. “Thank
you, but I have one,” she said, and the
gift giver was offended, resulting in the
two’s discord harming the entire office.
Using private discussions, it was first
uncovered that the gift exchange started
the conflict. More in-depth investiga-
tion revealed the recipient’s culture
taught her it would be an insult to take
something she already had. In her mind,
keeping it would have been the insult-
ing thing to do. With the personal infer-
ence and values discovered, and after an
emotionally charged mediated conver-
sation, the two walked away as friends
again and the office got its productivity
back.
Use an Interest Base of Reference
Once the basis for the conflict is
uncovered, the parties’ requests are next
for investigation. What is presented as
the solution may not necessarily be the
answer. Anytime a person’s requests are
filled, yet he or she remains dissatisfied
with the results, it’s a sure sign that what
was wanted was not the accurate solu-
tion to achieve satisfaction. The inter-
ests under the surface request need to
be addressed for solutions to stick.
Conflict exists when
what we want
appears
incompatible with
what the other
party wants.
Continued on page 24
24 The BOMA Magazine November/December 2010
Recent headlines have stated that the United States is eight million jobs short of the pre-recession peak and that it could be at least seven to nine years before employ-ment levels return to their 2007 peak … if ever. During the next 10 years, unemploy-ment will likely remain high by historical standards, while the number of would-be workers continues to grow. “An Assess-ment of the Job Market in Commercial Real Estate,” SelectLeaders/Cornell Job Barometer Report’s fourth quarter 2010 update for the BOMA Career Center, takes a look at how commercial real estate is being affected and how property profes-sionals will weather the storm.
Cap rates across property types have begun to stabilize and prices are now 4.7 percent above their October 2009 trough, according to the Moody’s/Real Commer-cial Property Index. During the course of the recession, commercial real estate found itself in the midst of a liquidity trap, where falling asset prices and a low infla-tionary environment caused investors with capital to remain on the sidelines. More-over, many investors took a wait-and-see approach, hoping to re-enter the market
when distress levels forced over-leveraged owners to sell properties for pennies on the dollar. Now, though distress levels remain elevated, there are signs that the market may be on the mend.
However, hiring is still lagging. The U.S. Department of Labor recently reported that nonfarm payrolls (jobs) decreased by 54,000 in August—the third consecutive decline. The current job market has suf-fered losses that are more than triple as much as what occurs at the lows of the average recession/job loss cycle.
Job Postings by SectorMulti-family dominated the job market early in the recession, then fell off the charts by September 2009. Not unexpect-edly, banking, responding to the stimu-lus, overtook multi-family for the highest number of jobs of any sector from Sep-tember 2009 to September 2010. Retail showed a modest upturn since May 2010, as consumers and businesses adjust to the new economy, with back-to-school shop-ping moving retail to the top in job post-ings heading into September 2010.
Where are the Jobs? The Commercial Real Estate Employment Outlook from the 2010 SelectLeaders/Cornell Job Barometer Report
People present their “positions”—how
they want the conflict resolved—as their
solution. However, that position isn’t
the whole story. There are “interests”
(why people want what they want and
the reasons they feel the way they feel)
behind the position they present. Inter-
ests tell why something is important.
Interests are often not disclosed without
prompting; some people have trouble
identifying (and admitting) them to
themselves. Thus, the skills of the per-
son working on resolution are crucial to
success. Violating people’s interests are
reasons for conflict. Addressing those
interests provides fixes that work.
For instance, a maintenance engineer
working in a tenant space rushes off to
handle an emergency, leaving a mess in
the tenant space in the process. What
the tenant says he wants seems appar-
ent to both parties and is expressed
clearly: His solution (position) is that
someone clean the mess immediately
and that it never occur again. His inter-
ests, however, are deeper.
The questions to ask for a satisfac-
tory solution to this incident are these:
Would the tenant be happy if only the
space was cleaned? What are the ten-
ant’s interests? Why does he want what
he wants and how does he feel? The
answers expose the true essence of the
conflict. He feels taken advantage of—
that the business, people’s time, etc.,
are not being respected. Perhaps, using
time to resolve this, he was late to his
daughter’s soccer game and felt he had
disappointed her; now his self-image as
a father is involved.
The position is presented as “clean up
the mess,” but the interests are “prove to
me you respect me and my business and
know this has been an inconvenience.”
If there is only
one position,
it’s not collaborating
or negotiating;
it’s demanding.
Job Postings by Sector
November/December 2010 The BOMA Magazine 25
Job Postings by Business FieldThe decline in development jobs is daunt-ing. Finance, similarly to banking, took the lead in September 2009, as companies analyzed their holdings (see chart, below).
Job Postings by StateCalifornia continues to be on top, with 16 percent of total U.S. jobs posted thus far in 2010. However, combining New York (12 percent) and New Jersey (four per-cent), the West and East Coasts are neck
and neck, with postings in the Northeast due, in part, to the increase in banking and finance jobs. Texas holds steady at 10 percent, followed by Florida with six percent and Illinois with five percent of the jobs posted.
Jobs by Gender and AgeEarlier this year, women became the majority in the workforce for the first time in U.S. history. Unemployment figures show that, starting as early as third-quarter
2008, the rate of unemployment for men surpassed women, reaching two- to three-percent higher levels for men by second-quarter 2009.
Yet, the single factor that could most greatly impact our industry for years to come is the loss of entry-level jobs. By the third quarter of 2009, unemployment was 20-percent higher for job seekers 24 and under, compared to those over age 25. Even internship postings diminished—despite the fact that anyone can post an internship for free on BOMA Career Cen-ter or any partner site in the SelectLeaders Job Network.
Visit the BOMA Career Center for the full update at http://boma.selectleaders.com.
The SelectLeaders/Cornell Job Barometer Re-port, “An Assessment of the Job Market in Commercial Real Estate,” is written and pub-lished by Dr. David Funk, director, Cornell Uni-versity Program in Real Estate. Special thanks to Sung Won Suh and the entire Cornell Gradu-ate School team. BOMA Career Center excerpt by Susan Phillips-LoPinto, CEO, SelectLeaders Real Estate Job Network.
When those interests are addressed, the
resolution will last.
Work for Flexible Solutions
Addressing the interests instead of the
position has an added benefit. It allows
for alternative solutions. If there is only
one position, it’s not collaborating or
negotiating; it’s demanding.
For the tenant with the messy office,
yes, his position of cleaning the space
must be addressed, but knowing the
principal interests opens up more
solutions. Whether it is a direct, sincere
statement acknowledging the tenant’s
value, a basket of sweets presented to
the office or a gift card for his daughter,
treating the interests will result in last-
ing satisfaction.
Polish Your Skills The ability to resolve conflicts is a
learned skill, and one that all property
professionals can use to their advantage
throughout their career. Whether work-
ing with employees, contractors, tenants
or supervisors, imagine the stress that
will be avoided when conflict is not a
scary monster kept out in the hall. Invite
the monster in, satisfy its interests and
the results will be worth it.
About the Author: ©Natalie D. Brecher, CPM ([email protected]) is the Management-Mentor™, an accomplished authority who helps organizations improve workforce performance and managers develop and improve leadership and professional skills. She provides consulting, coaching, training and keynote speeches to fortify positive, lasting change. Visit www.BrecherAssociates.com for more information.
Job Postings by Business Field
26 The BOMA Magazine November/December 2010
Women continue to make progress in the field
of commercial real estate, but challenges remain,
according to a new report from the Commercial
Real Estate Women (CREW) Network, Women in
Commercial Real Estate: 2010. The study, under-
written by CB Richard Ellis, Prudential and Kutak
Rock LLP, and independently researched by Cornell
University Program in Real Estate, is a follow up to
the CREW Network report in 2005, which was the
industry’s first ever in-depth look into women and
commercial real estate.
The survey was conducted among nearly 3,000
professionals from all areas of the industry. The
good news is that respondents to the survey
reported a seven-percent increase in women in
their organizations since 2005, and it was the expe-
rienced (more than 20 years of experience) industry
veterans and the new entrants with less than five
years of work experience that fueled that growth.
Both men and women with six to 20 years of
industry experience declined significantly as a per-
centage, raising the question of whether the cur-
rent recession will see the mid-level professional
leave the industry, as happened during the early
1990s real estate downturn. Market conditions have
undeniably impacted men, as 70 percent of men
who experienced a work absence of greater than
three months were involuntarily laid off, compared
to 52 percent of women. The question remains as
to whether this trend offers women an opportu-
nity to secure a higher position on the ladder or be
reminiscent of the “Rosie the Riveter” phenomenon
during World War II, with men regaining these posi-
tions when the market returns.
The survey showed that women had modest
gains in compensation, as higher percentages of
women moved into the $100,000 through $250,000
annual compensation levels since 2005. Whereas
only eight percent of women surveyed in 2005
were at the $250,000 level, by 2010 that figure had
increased to 11 percent (the percentage of men in
the same compensation category had decreased
from 34 to 31 percent).
These findings regarding the narrowing of the
compensation gap in commercial real estate mirror
recent Census data indicating that women earned
82.8 percent of the median weekly wage of men
in 2009, which is the highest ever recorded—up
from 76.1 percent just a decade earlier. While it is
positive to observe these compensation gains for
women, one still wonders why equality remains
an issue in 2010.
Compensation Imbalance?Some have theorized that men may be losing
their jobs at a higher rate because their compensa-
tion is higher; women, with lower salaries, are more
economical to retain. It is also possible that the
By Kristin Blount
Cracking the Glass Ceiling?How Women in Commercial Real Estate are Faring Today
The survey reported a seven-percent increase in women in their organizations since 2005,
and it was the experienced (more than 20 years of experience) industry veterans and the new entrants with less than five years of
work experience that fueled that growth.
November/December 2010 The BOMA Magazine 27
positions of men have been cut in greater numbers
and their salaries have diminished. Particularly at
the higher levels, a greater portion of men’s com-
pensation draws from various forms of variable
compensation, such as bonuses, commission and
profit sharing—all of which have been affected
adversely in the downturn.
Despite women’s relative compensation gains,
however, three times the number of men as women
respondents are represented at the $250,000 com-
pensation level in 2010. Moreover, when compensa-
tion is analyzed considering both years of experi-
ence and age, a clear and troubling trend emerges:
Women with the same amount of experience as
men are not represented equally in the highest pay
levels, thus increasing the chance that this trend will
continue unless employers make a concerted effort
to address the issue of equity. Dramatic increases
in the sources of income occurred from 2005 to
the present, as annual base salaries went from 58
percent to 67 percent of the total, while long-term
incentive compensation declined from eight per-
cent to two percent.
Success and Satisfaction in Commercial Real Estate
Women in Commercial Real Estate: 2010 also
surveyed both perceptions of career success and
levels of satisfaction. Despite declines in the last
five years, 62 percent of men and 54 percent of
women reported feeling “very successful” in their
commercial real estate careers and less than two
percent of all respondents said they felt “not at all
successful” in their careers.
Overall levels of satisfaction increased with years
of experience and differed among areas of spe-
cialization, with women in asset/property/facili-
ties management with 20-plus years of experience
reporting the highest levels of career satisfaction.
Notably, only 27 percent of women with less than
five years of experience reported feeling “very
satisfied” with their level of career success and
women, in general, lagged behind their male coun-
terparts in career satisfaction among those with
less than 10 years’ work experience. Women catch
up on career satisfaction with increasing years of
experience, indicating that the larger challenges in
terms of commercial real estate career satisfaction
exist for women entering or early in their careers.
Success and satisfaction come together when
plotting job characteristics, according to those that
generate the greatest satisfaction and are perceived
to be of greatest importance. Not surprisingly, men
and women share the opinion that “co-worker
respect” and “a challenging job” are very important,
and that “job enjoyment” is key to satisfaction at
work. Real gender differences emerge, however,
when areas of high importance but low satisfaction
are identified. “Maximize earnings potential” and
“disposable income” topped the list for men, while
“level of decision-making” and “job enjoyment”
came first for women.
Both men and women reported feeling slightly
less satisfied with their work/life balance in 2010
than five years earlier; however, 92 percent still
reported feeling “somewhat successful” or “very
successful” in achieving a work/life balance. Those
reporting to be most satisfied with their work/life
balance were in brokerage/sales/leasing, while
professionals in financial/professional services
reported feeling least satisfied.
Overall levels of satisfaction increased with years of experience and differed among areas of specialization, with women in asset/property/facilities management with 20-plus years of experience reporting the highest levels of career satisfaction.
Management Dynamics in the Workplace
While women constitute just a third of the com-
mercial real estate industry, the report found inter-
esting management and reporting dynamics when
looking at gender relationships within commercial
real estate organizations. Even though men sig-
nificantly outnumber women in the industry, a
remarkable 62 percent of female managers’ direct
reports were women, whereas only 45 percent of
direct reports to male managers were women.
Looking behind the numbers, it is clear that a much
higher percentage of men work autonomously
without direct reports.
We are happy with the progress that women are
making in commercial real estate, which some
may argue is one of the last of the traditional
“good ole boys” networks. Women are joining the
field in greater numbers and expressing long-term
satisfaction. Parity issues remain between men
and women, however, particularly at the highest
levels.
About the Author: Kristin Blount is 2010 President, Com-mercial Real Estate Women (CREW) Network (www.crewnetwork.org). Blount is also partner and vice presi-dent, brokerage, at Colliers Meredith & Grew in Boston.
28 The BOMA Magazine November/December 2010
As green initiatives become an essential part of many build-
ing projects, elevator companies are creating plans to execute
and maintain long-term visions toward a goal of sustainability.
Some elevator manufacturers have committed to evaluate and
quantify the current environmental impact of their products
through life cycle assessments (LCA). These analyses cover
the product’s life, from the impact of procuring resources to
the manufacturing processes to shipping, installation, service
maintenance, repair and modernization improvements. The
process takes into account energy utilized in both manufactur-
ing and shipping, as well as the product’s use phase. The assess-
ment also reviews information on resultant waste generated
and its disposal or recycling. An internationally recognized tool
often used to guide LCA projects is International Organization
for Standardization (ISO) 14040, Environmental Management:
Lifecycle Assessment—Principles and Framework.
The majority of an elevator’s environmental impact over a
lifetime is during the equipment’s use phase. Leading com-
panies are focusing on reductions in energy use via research
and development on newly manufactured products, but are
looking for ways to increase elevator efficiency and reduce
energy consumption by monitoring, upgrading and installing
new equipment on existing products as well.
Elevators and EnergyAll elevators use energy. Although levels of energy effi-
ciency may vary among them, most new elevators make up a
very small percentage—generally three to five percent—of a
building’s overall energy consumption. In the past, however,
elevators with less efficient technology utilized a much larger
footprint of a building’s energy use. Motor generators were
necessary until a few decades ago in order to take AC power
and convert it into usable DC power to run the machine, which
moved the elevator. DC machines were required to control
the precision of the lift for leveling, acceleration, deceleration
and positioning. Advances in AC technology allow elevators
to control the same parameters with even greater accuracy,
thereby eliminating the additional step of converting AC power
to DC power.
Currently in the United States, it is estimated that 200,000
motor generator drives are being used to power elevators.
These older drives consume approximately 40,000 kWh of elec-
tricity annually, approximately 72-percent more than modern
drives available on the market today. As a point of reference,
the amount of energy used by these outdated drives is enough
to power 80,000 homes annually.
In addition to a reduction in the energy needed to run motor
generator equipment, the decrease in associated machine
room cooling is significant. Upgrading to current technology
results in a 45-percent reduction in associated BTUs in the
elevator machine room. Over the building’s lifetime, the sav-
ings in cooling cost is quite substantial.
The move away from old MG sets also eliminates potential
indoor air quality (IAQ) issues associated with carbon dust
created by using carbon brushes in the machines themselves.
Typical DC generators require multiple carbon brushes to oper-
ate. It is estimated that a single brush can emit 272.16 grams
of carbon dust monthly or 7.2 pounds annually per generator
(based on 16 brushes per generator). In a large building with
multiple elevators, the amount of dust per pound and the
coinciding number of filters needed to keep that dust out of
the air is considerable when multiplied over multiple units
and multiple years of service.
Using light-emitting diodes (LEDs) for illumination and
programming the controller to shut off the fan and lights when
the unit is not in use are two simple, cost-effective practices to
further enhance energy efficiency in both existing buildings
and new construction projects. Traditionally, elevators of past
generations were not programmed to turn off the lights when
the unit was not in service. The impact of lights running con-
tinuously in a single elevator over a 25-year life is significant.
Now, consider 200,000 MG units with nine incandescent bulbs
each running for 25 years. By installing automatic light shutoff,
enough energy to power almost another 80,000 homes for a
year could be saved.
Strategies for Increasing Efficiency
and Lowering CostsBy Sasha Bailey, LEED AP BD+C
Making Your Elevator Work for You
November/December 2010 The BOMA Magazine 29
Whether modernizing existing elevators or installing new
ones, the reduction of operating costs through green upgrades
can outweigh capital costs in a reasonable timeframe. Expenses
associated with creating a sustainable elevator system range
from minor upgrades, such as lighting improvements, to a
complete energy-efficient system design and installation.
Once simple elevator upgrades like LED lighting are installed,
a building’s energy consumption decreases, helping building
owners save money on a yearly basis. These upgrades also
benefit building owners through improved tenant retention
and attraction.
Service and ModernizationElevators running at their peak performance use less energy,
create a more pleasant riding experience and improve air qual-
ity. To maximize the performance and safety of elevator prod-
ucts, a code-compliant preventive maintenance program is
important.
Historically, 80 percent of all elevator trouble calls are related
to doors and door operation. A typical elevator door opens 1.75
million times over 10 years. Closed loop technology, accom-
panied by a digital control system, allows for settings to over-
come changes in atmospheric conditions, minor obstacles in
the door track and other door-related problems. Upgrading to
closed loop door operator technology can significantly reduce
callbacks.
Partnering with a reliable service provider can ensure equip-
ment is maintained to the highest industry standards, pro-
viding safe service to meet the elevators’ expected life cycle.
Remote monitoring options are available to keep property
managers up-to-date on a building’s elevator systems. By
detecting possible problems early, these monitoring sys-
tems are an efficient way to reduce unnecessary emergency
callbacks and eliminate unneeded paperwork. As the systems
can be enabled and viewed from anywhere in the world, build-
ing management has real-time data at its fingertips, anytime
from anyplace.
Selecting a Service ProviderConsider the following when selecting a service provider:
• Experience. It is essential that service professionals are
knowledgeable about all new products and technology,
industry standards and, most importantly, safety precau-
tions. Training programs that include field and local ses-
sions, as well as regular factory seminars, are crucial. Field
engineers should also be available at any time.
• Service. Even after an elevator’s warranty expires, it is impor-
tant it receives preventive maintenance to ensure optimum
and safe performance. This maintenance should involve
fast, reliable service and trained technicians. Most compa-
nies offer programs that can be customized to fit a building
owner’s specific needs.
• Parts. It is essential that service parts be available as needed.
When selecting a provider, it is important to ensure they
have access to an extensive inventory of spare parts, as well
as an efficient parts distribution system for getting equip-
ment out quickly.
• Compliance with regulations. The Americans with Dis-
abilities Act (ADA) stipulates buildings must comply with
new requirements that make elevators easier to operate by
people with special needs. If an elevator is deemed as non-
compliant with current regulations, the service provider
should be able to provide a quick, cost-effective solution.
• Modernization. Elevator modernizations can update an
elevator’s performance, reduce energy consumption and
decrease impact on IAQ. Cab and lobby upgrades can offer
a new updated look, compared to older styles. Experienced
technicians and engineers can customize modernization
packages that are both time- and cost-efficient.
About the Author: Sasha Bailey, LEED AP BD+C, is a corporate sustain-ability manager in ThyssenKrupp Elevator’s Americas Business Unit. She can be contacted at [email protected].
Hydraulic life cycle analysis studies help manufacturers quantify and evaluate the environmental impact of their products.
One of the many benefits of modernizing an elevator system with new drives, controllers and machines is a machine room environment that is cleaner, cooler and safer.
This is an update to an article that appeared in the November/December 2008 issue of The BOMA Magazine.
30 The BOMA Magazine November/December 2010
BOMA Chair Ray Mackey, Jr. and BOMA
President Henry Chamberlain traveled
to Australia and New Zealand in Sep-
tember for meetings with two important
affiliates of BOMA International. In the
case of the Property Council of Australia,
the visit combined business meetings in
Sydney and participation in the annual
congress in the Gold Coast region. Two
days of business meetings with the
Property Council New Zealand took
place in Auckland after original plans
to participate in its annual conference
were thwarted by a major earthquake in
Christchurch.
Property Council of Australia: The Voice of Leadership
Headquartered in Sydney, the Prop-
erty Council is comprised of a staff of 90
people managing a $25 million annual
budget heavily focused on advocacy,
with issues ranging from taxes, nation
building (infrastructure, land use and
sustainable growth), regulation reform,
greening the built environment and
liquidity. The council’s mission is to
champion the interests of the property
sector.
During the annual congress, National
President Daniel Grollo (Grocon Party
Ltd.) launched a new five-year initia-
tive titled Powerhouse 3D, “…a decisive,
member-focused strategy to leverage
industry and community prosperity. It
builds on the Property Council’s solu-
tions-based advocacy and will turbo-
charge our programs to deliver member
value.” Its five goal areas are:
1. Foster a more attractive asset class.
2. Secure economic growth leveraged by
long-term nation-building programs.
3. Create a more competitive business
environment by reforming taxes and
business regulation.
4. Promote a positive image for the
property industry that reflects its
critical community role.
5. Deliver high-value member services.
Sydney is a terrific, vibrant financial
center with a recovering economy and
high property values. The setting is spec-
tacular by the harbor with the city center
a combination of historic architecture
and very modern Green Star buildings—
their “LEED” program.
Macquarie’s Peter Merrett and 1 Shelley Street— Green Star 6
We toured 1 Shelley Street, a striking
property featuring an external “diagrid”
steel frame, open floor plates and spec-
tacular interior design, with Interna-
tional Region Committee Co-Vice Chair
Peter Merrett. Peter recently relocated
from Tower 42 (a 2009 International
TOBY winner) in London to join the
Macquarie Group (a leading provider of
banking, financial, advisory, investment
and funds management services, with
more than 70 offices in 28 countries) in
Sydney. Among the factors leading to the
top Green Star rating are a chilled beam
HVAC system, natural daylighting and
automatic adjustable lighting systems,
a double-glazed façade and easy access
to mass transit.
“Re-ignite-Renew-Reshape”: Property Council of Australia Congress 2010 Highlights
The BOMA duo traveled just south
of Brisbane to the beautiful Gold Coast
area for the Property Council’s congress
of over 500 mainly senior real estate
executives from all over the country. We
were saluted and welcomed very warmly
from the podium at the opening general
session by Chief Executive Peter Verwer,
who touted BOMA as the “geniuses of
asset management.”
There was an orchestrated debate
here about how much development
should take place over the next 40
years—Big Australia? There are 22 mil-
lion residents now and the estimate is
Dialoguing with the Property Councils of Australia and New ZealandBy Ray Mackey, Jr. and Henry Chamberlain
G’day!Sydney, Australia (top), and Auckland, New Zea-land (lower left), were the sites of business meet-ings between BOMA Inter-national leadership and the Property Council of Austra-lia and Property Council New Zealand.
November/December 2010 The BOMA Magazine 31
the population could double by 2050.
Much of the growth is coming from
trade with Asian nations, particularly
China. The resistance comes from those
who want to preserve wild Australia and
do not feel they have the water to sup-
port a large population, among other
sustainability issues. The dilemma is
that, with the baby boomers retiring,
they have to grow the economy or risk
large deficits to pay for entitlement pro-
grams. Both commercial and residential
real estate prices are high and there is
concern over how sustainable the prices
and quality of life (much larger homes
than in the United States) are long term.
The programming was very strong
and included a CEO Roundtable, which
Ray participated in. Oxford Univer-
sity Professor Linda Yueh reinforced
the strong and growing relationship
between Australia and China in areas
like real estate investments, mining and
tourism. We also had a terrific technol-
ogy presentation by Peter Williams, CEO
of Deloitte Digital, during which he
exhorted the crowd to embrace mobile
technologies and integrate them into
buildings. New high-tech, sustainable
developments were featured in case
studies, including the ultra-modern
Songdo, Korea, the world’s first new sus-
tainable city designed to be an interna-
tional business district. We heard from
Gale International Executive Vice Presi-
dent Tom Murcott via Cisco’s Telepres-
ence system about the project. We also
heard about three major urban devel-
opments in Sydney, Melbourne and
outside Brisbane that are reshaping
their communities in terms of residen-
tial development, retail and enhanced
educational systems. All of these proj-
ects are about creating sustainable
communities.
There was also a panel focusing on
the existing building stock in which
Henry participated. Wrapping up the
programming was a general session
titled “Nation Building in 21st Century
Australia,” which returned to the theme
about how the country can handle its
future growth. The discussion centered
on supporting all Australians, both
poor and rich, in creating a sustainable
country with the right infrastructure in
energy, transportation and broadband,
which will allow them to be a key player
in Asia.
Property Council New Zealand
In lieu of participating in the Prop-
erty Council’s rescheduled conference,
November 17-19 in Christchurch, we
flew to Auckland for meetings. Our first
stop was the Property Council’s offices
and a meeting with Executive Director
Connal Townsend and his impressive
staff team. There are 10 staff members:
seven in Auckland and three staffing
branch offices around the country. The
Property Council represents commer-
cial, industrial, retail, property funds
and multi-unit residential property
owners, managers and investors. Its
vision is to create a quality, vibrant New
Zealand commercial property sector.
We share a lot in common with them
on advocacy issues from taxation,
investment, compliance, sustainability
and energy efficiency. They work with
the Green Building Council and have
endorsed the Green Star program (Aus-
tralia and South Africa as well), but are
open to other programs and liked our
menu approach of promoting alterna-
tives in the green arena.
We also met with National President
Chris Gudgeon, chief executive of the
country’s largest REIT, the $2 billion
Kiwi Income Property Trust. The econ-
omy in New Zealand resembles that of
the United States, with the nation work-
ing its way out of the global recession.
For more information on the Property Council of Australia, visit www.propertyoz.com.au
For more information about the Property Council New Zealand, visit www.propertynz.co.nz
At a Property Council Board meet-
ing, Chris complimented us for being
there, for laying out what we are doing
and for pointing out numerous places
we could collaborate. Among the new
business were topics including foreign
investment in real estate, and we plan
to share FIRPTA information, along with
a new Auckland spatial plan and work
they need to do on performance bench-
marking to meet market standards. The
meeting adjourned and its Senior Mem-
ber Council, similar to BOMA Interna-
tional’s National Advisory Council, met
and decided to hold a supercharged
two-day meeting in November, blend-
ing the program that was scheduled with
an emphasis on the earthquakes and
lessons learned.
Long-Standing RelationshipsFor the BOMA historians in our ranks,
both Property Councils were originally
called BOMAs and, as they broadened
their scopes to include all asset classes,
they rebranded themselves. We have
long-standing relationships with both
groups and these visits reinforced how
we can collaborate on a variety of issues
and learn from each other as we advance
commercial real estate. The depth and
breadth of expertise they both represent
are impressive.
BOMA Chair Ray Mackey, Jr. (far left) and wife, Cami, take in the sights of Sydney with BOMA President Henry Chamberlain and wife, Lisa.
32 The BOMA Magazine November/December 2010
trends tracker
THE PROPERTY MANAGEMENT INDUSTRY IN CANADA has endured the last few turbulent years, weathering the storm of uncertainty in the financial markets and is now poised to navigate somewhat calmer waters. Many of the hot-button issues facing Canadian prop-erty management were front and cen-ter at BOMA Canada’s annual BOMEX®
National Conference and Exhibition. Some of the new developments dis-cussed included an increase in foreign investors looking for marquee proper-ties at competitive prices and an overall greening of Canadian commercial prop-erties led by the BOMA BESt™ program.
What’s in Store for Canadian Commercial Properties?
BOMA Canada sought the insight of the brightest minds in the industry dur-ing BOMEX and asked them to take part in a National Advisory Council forum to give their perspective on how Canada’s economy is performing. Gluskin Sheff Chief Economist and BOMEX keynote presenter David Rosenberg engaged in a spirited dialogue about longer-term strategies to guard the commercial real estate industry against future instability.
During the hour-long roundtable, Rosenberg was both animated and frank in his assessment of the current state of the global economy and its impact on the North American real estate indus-try. He said that the immediate forecast for the Canadian commercial real estate sector appears favorable, with a recovery in the domestic retail real estate market powered largely by big-name foreign brands migrating to Canada in search of prime mall and main-street spaces—and shoppers ready to buy.
The appeal of Canada for foreign retailers is due, in large part, to a rela-tively robust economy in comparison to that of the United States and much of Europe. A diverse array of retail real estate opportunities is available, as well as bargain-priced rents, providing a major draw for big brands that are seek-ing everything from urban street front to suburban big-box configurations.
According to a recent article appear-ing in the Oct. 13, 2010, issue of The Globe and Mail Newspaper, Canada’s two priciest high streets by cost per square foot—Sainte-Catherine in Montreal and Bloor in Toronto—rank 32nd and 33rd in the world, respectively, compared to other premium retail corridors around
the world. Those who want to set up shop on the Champs Élysées or Fifth Avenue can expect to shell out a whop-ping $1,250 (U.S.) per square foot, while prime space in Montreal or Toronto, in contrast, costs a mere $294.12 (U.S.) per square foot.
Green Takes Center StageEnvironmental and sustainability
initiatives were prominent again this year at BOMEX, with featured sessions on BOMA Canada’s new eEnergy train-ing program, rooftop solar installations, energy incentive programs, energy man-agement, building information model-ing and the BOMA BESt program.
BOMA BESt is widely used in Cana-dian commercial real estate. When asked whether the program is getting real envi-ronmental results, Nada Sutic, BOMA Canada, and Andres Bernal, national director of sustainability and energy management for GWL Realty Advisors (GWLRA), presented two perspectives.
Taking a national view, Sutic explained that BOMA BESt is achieving environ-mental results by moving buildings into a continuous improvement cycle and achieving better energy performance. BOMA BESt achieves those results for more than 2,000 buildings that have been involved in the program. Reaching a critical mass in uptake, BOMA BESt has quickly become part of the vernacular of how the industry operates buildings.
In GWLRA’s experience, BOMA BESt has become a standard tool, help-ing move the portfolio towards better energy and environmental practices—an increasingly common experience throughout the Canadian market. BOMA BESt has also helped support tenant engagement initiatives in several case studies GWLRA presented.
David Rosenberg, chief economist and strategist, Gluskin Sheff + Associates Inc., briefed the crowd on how the economy is affecting the commercial real estate industry.
Canadian Commercial Real Estate Market Sees Signs of RecoveryBy Diana Osler-Zortea, President of BOMA Canada
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Green Scene
HUNDREDS OF THOUSANDS OF COMMERCIAL BUILDINGS are now required to report energy information to the U.S. gov-ernment. Recent legislation in New York City, California and Washington D.C. mandates that buildings over a specific square footage track energy and water consumption using the U.S. Environmental Protection Agency’s (EPA) ENERGY STAR® Port-folio Manager.
These regulations don’t just apply to the biggest building on the block either. Most hotels, office buildings and shopping malls will easily exceed the square-footage thresholds. In fact, in California, size doesn’t even matter: All buildings, regardless of square footage, must track their energy data.
The recent flurry of legislation has sent building owners and managers scrambling to collect the data they need to comply. Building managers must pull electricity, natural gas and even water consumption data from paper invoices, and then enter this information into the online ENERGY STAR Portfolio Man-ager. For the property to gain an official ENERGY STAR label, a registered professional engineer must review and sign off on the data to confirm that the building gained a score of 75 or greater.
Coming to a City Near YouIf you think you’re in the clear because your building isn’t in
one of these three places, think again. If California, NYC or D.C. can prove that these recent regulations have caused a decline in carbon emissions and energy use, odds are that similar guide-lines will spread to cities and states across the nation.
According to figures from the EPA, buildings account for 40 percent of total energy use nationwide. And, wherever you find energy, you’ll find carbon, too. According to a recent press release by the New York City government, “Approximately 80 percent of New York City’s carbon footprint comes from build-ings’ energy use.”
Local governments eye commercial buildings to cut energy and carbon.
As cities and states look for ways to improve their “green” profile, decision-makers will look to commercial real estate companies to help achieve their targets.
The Legislation Low Down• New York CiTY passed a Benchmarking Bill that requires
private buildings over 50,000 square feet to use the U.S. ENERGY STAR tool beginning May 2011.
• wAshiNgToN, D.C. approved the Clean and Affordable Energy Act, which put into place graduated requirements for private buildings greater than 50,000 square feet. Building owners started tracking energy use in January 2010.
• CALiforNiA adopted Assembly Bill 1103, which goes into effect January 2011. When a building is sold, leased or refinanced, building owners must provide energy bench-marking data.
As cities and states look for ways to improve their “green” profile, decision-makers will look to commercial real estate com-panies to help achieve their targets. Both the state of California and New York City have explicitly cited their recent benchmark-ing regulations as key tools for meeting carbon reduction goals.
Buyers and tenants may also start calling for more legisla-tion around energy benchmarking. The New York City govern-ment claims the benchmarking legislation it recently introduced could “save consumers $700 million annually in energy costs.” In effect, cities and states are hoping to bring about a world in which tenants and buyers can compare energy efficiency as easily as square footage.
Pain or Profit?Collecting, entering and verifying data about electricity and
natural gas usage is a time-consuming and involved process, but some property managers have found that engaging profes-sionals to manage the entire ENERGY STAR process can both cut their resource commitment and ensure an accurate rating.
Those who measure the way their buildings consume energy often find multiple ways to bring savings and improve efficiency. In fact, the ENERGY STAR website states, “Energy represents 30 percent of the typical office building’s costs and is a property’s single largest operating expense.” With electricity and natural gas accounting for such a large portion of a building’s overall budget, cutting energy costs can boost the bottom line in a serious way.
About the Author: John Hoekstra is the director of sustainability at Summit Energy, a consulting firm specializing in energy and sustainabil-ity services. Contact John at [email protected] or visit www.summitenergy.com.
Uncle Sam Wants…Your Energy Data
By John Hoekstra
November/December 2010 The BOMA Magazine 35
reSearch corner
CONTRACTING FOR GOODS AND SERVICES is one of the most important jobs in property management. The pri-mary goal of the bidding process is to ensure excellent service from each ven-dor at market competitive rates. The contracting process is one full of risk and potential liability; contract disputes are one of the most common forms of litiga-tion for property managers. Good con-tracting practices, however, can resolve most typical disputes—long before the parties enter a courtroom.
Regular bidding of contracts is a key element of a property manager’s fidu-ciary responsibility. Management agree-ments often stipulate the frequency of the bidding process and many may require an annual bid. One of the most important ways to minimize liability and assure professionalism in the bid proc-ess is to follow these steps:
1. Create a bid list. Pre-qualify ven-dors to prove they have the experience, financial wherewithal and capability to do work on your property.
2. Issue a Request for Information (RFI). Invite contractors to submit infor-mation about their firms; no proposal or bid is included. The RFI is often used to reduce the number of bidders to a rea-sonable number.
3. Issue a Request for Proposal (RFP). A comprehensive bid package or docu-ment that includes all of the details of the bid being solicited—scope of work, job specification, scheduling require-ments, bid form requirements, a pricing matrix and a copy of the service agree-ment vendors will be expected to sign.
4. Host pre-bid meetings. These meet-ings not only enable the property man-ager to meet prospective service con-tracts, but also enable all bidders to hear and see the same information, at the same time.
5. Evaluate bids. The evaluation process is lengthy and includes many phases. It involves comparing costs and service levels among bids, ascertaining the con-tractor’s ability to do the job, ensuring bid compliance and conducting inter-views. All bids should be reviewed by the property owner. The entire process should be documented.
6. Select contract. Notify the service contract that the firm has been selected.
One important tool property manag-ers can use to determine if a bid is com-petitively priced is BOMA’s Experience Exchange Report (EER). The EER tracks actual expense information for most building services, including cleaning/janitorial, repairs/maintenance, secu-rity and roads and grounds. Within each of those major categories, the EER also tracks specific line item expenses. For instance, cleaning/janitorial tracks not only routine contract cleaning services, but also window washing and waste removal.
It is important to bear in mind that the EER is published annually based on the prior year’s actual building expenses. Many property managers apply a cost of living adjustment, appropriate for the market at hand, to EER data to get cur-rent year rates. A sample table from the 2009 EER (below) illustrates how the line item data is presented. Note that the EER presents average, median and mid-range highs and lows for both total rentable area (the column on the left) and total office rentable area (the column on the right).
While the EER can be a powerful tool, it has its limits. The EER only captures costs; it doesn’t capture service levels. In some cases, examining the mid-range high and low data can be helpful, as those statistics reflect the broadest range of what buildings that reported to the EER are paying for a given service. The mid ranges exclude the highest and lowest quarter—25 percent—of the data reported by submitters.
Before recommending any change to the scope of services, be sure to evalu-ate the implications for tenant service and satisfaction. Will a change in service levels increase tenant complaints? Do any leases stipulate specific service lev-els? If the building uses a tenant council, involving the tenants in any decision to change service levels may help to head off complaints or dissatisfaction, or war-rant retaining higher service levels, even if they cost more.
For more information about BOMA’s EER, go to www.bomaeer.com. For more information on bidding service contracts, visit BOMA’s Knowledge Por-tal at www.boma.org. Click on “Educa-tion,” then “Knowledge Portal.” Search for “Best Practices for Bidding Service Contracts” to purchase the on-demand webinar on the subject.
Best Practices for Bidding and evaluating service Contracts
Expense, Cleaning
Payroll, Taxes, Routine Contracts 0.61 0.66 0.54 0.72 0.61 0.66 0.54 0.72
Window Washing 0.02 0.02 0.02 0.03 0.02 0.02 0.02 0.03
Other Specialized Contracts 0.01 0.01 0.00 0.02 0.01 0.01 0.00 0.02
Supplies/Materials 0.12 0.12 0.09 0.14 0.12 0.12 0.09 0.14
Trash Removal/ Recycling 0.04 0.04 0.03 0.06 0.04 0.04 0.03 0.06
Misc./Other 0.08 0.02 0.01 0.12 0.08 0.02 0.01 0.12
SOURCE: 2009 EER
income and expense Detail – Trend Data 2008
Total Building rentable Area Total office rentable Area
Dollars/S.F. Mid Range Dollars/S.F. Mid Range
Avg. Median Low High Avg. Median Low High
By Tracy Glink
36 The BOMA Magazine November/December 2010
EYE ON EDUCATION
BY NOW, SUSTAINABILITY HAS BECOME more than just a buzzword. Property professionals have embraced sustainable and energy-efficient opera-tional practices, so much so that “going green” is now a universal concept. Still, the information in the marketplace can be overwhelming and sometimes con-fusing, leaving many scratching their heads and wondering if they are doing enough. Sure, you might have set up a recycling program in your building, but are you enhancing indoor environmen-tal quality for your tenants and using environmentally friendly materials? Have you benchmarked your building and learned how to reduce greenhouse gas emissions? The biggest concern now for many is how to implement green strategies without breaking the bank—especially in today’s economy.
BOMA’s new three-part webinar series, Strategies for Supporting Sus-tainable Building Operations, is designed to help property profession-als adopt green operational practices to effectively enhance the bottom line, improve occupant satisfaction and com-fort and benefit the environment. The new courses offer solutions to help you bring your building to a new level of sus-tainability and feature practical strate-gies and case studies of buildings that have executed various sustainable build-ing operations. Whether you’re looking to implement a few new cost-saving measures or preparing to achieve an all-around high-performance building, BOMA’s new webinar series is an impor-tant tool to help you achieve your goals.
dividends. Participants will closely fol-low a building through these processes and discover how goals are established and decisions are made regarding the triple bottom line. Whatever the goal, obstacles will undoubtedly arise and Course 2 will cover how to prepare for and overcome them. Participants will also learn to measure the full range of benefits of sustainability—from impacts on NOI and asset value to ten-ant satisfaction—and explore tools that are available for tracking the range of performance.
Course 3 will focus on how to main-tain a high-performance building and will challenge participants to reach even higher standards. It will cover how to identify opportunities to continuously improve the building’s performance and look to the future to discover the next frontier of critical sustainable initiatives. Additionally, participants will learn how to work effectively with owners, tenants and other building service contractors to implement sustainable strategies and will learn best practices for marketing the value of a high-performance building to potential tenants and the community.
Strategies for Supporting Sustainable Building Operations will be offered live in 2010 beginning in early November. Registration fees are $125 for BOMA members and $175 for non-members. These programs provide timely informa-tion, best practices and live Q & A with expert speakers. There is no more cost-effective way to gather the most critical industry intelligence. Better yet, all webi-nars qualify for continuing professional development credits for the renewal of industry designations, including RPA, FMA, CPM, ARM, SIOR and SMA/SMT.
Visit BOMA’s Knowledge Portal, www.bomaeducation.com, for webinar infor-mation or to register, or e-mail web [email protected].
Strategies for Supporting Sustainable Building OperationsBOMA’s New Webinar Series Offers Solutions for Achieving a High-Performance BuildingBy Kristin Bowling
The new series consists of three 90-min-ute webinars:
Course 1 focuses on looking at the range of high-performance initia-tives that are out there. It identifies and explains all of the major elements that play a role in sustainable building operations. Participants will learn the key steps in the roadmap to sustainabil-ity—benchmarking, setting performance goals, building strategies and measure-ment and reporting. The course will demonstrate how to identify opportu-nities for change in order to establish goals that are viable and obtainable and will offer no- and low-cost strategies for achieving these goals. Participants will understand how buildings can adapt from non-sustainable operating prac-tices and protocols to sustainable ones—even if a certification, such as LEED-EB, isn’t an objective.
In Course 2 sustainable building operations are taken to the next level. This course will offer higher stakes investments—things that may cost you up front, but eventually pay back in
Participants will learn to measure the full range of benefits of sustainability—from impacts on NOI and asset value to tenant satisfaction—and explore tools that are available for tracking the range of performance.
Give your building an edge
qThe market has never been more demanding. You need an edge. That’s where the BOMA 360 Performance Program®
comes in. It can help distinguish your property in today’s competitive environment. It’s designed to recognize
commercial properties that demonstrate best practices in all major areas of building operations and management.
The benefit is clear. The BOMA 360 Performance Program designation demonstrates to owners, tenants
and prospective tenants that your building is being managed to the highest standards of excellence. That’s the kind
of edge that enhances asset value in any kind of market. For more information, visit us at www.boma.org.
Marathon Oil Tower, Houston, TXOwner: Hanover Real Estate PartnersManagement Company: TranswesternDesignated a BOMA 360 Performance Building in December 2009
The Power ofPerformance
38 The BOMA Magazine November/December 2010
trade tools [energy ManageMent]
AFTER ADDITIONS AND NEW BUILD-ING PROJECTS, the McHenry County, Ill., building portfolio was growing, but the county’s Facilities Manage-ment department’s budget was not. As a result of outdated systems and ad hoc additions, many buildings in the coun-ty’s 706,944-square-foot portfolio were inefficient. Half of the county’s Facili-ties Management budget is allocated for utilities and the county wanted to dramatically reduce this expenditure by increasing energy efficiency.
By partnering with Siemens Indus-try, Inc. on a performance contract, the county could pay for building systems to be retrofitted or replaced via low-cost financing and by the energy savings gen-erated over a decade. Siemens engineers performed an audit to identify energy conservation measures (ECMs) and the guaranteed savings resulting from their implementation. The work would
be completed as part of a $3.9 million, three-phase, 10-year performance con-tract with a total of $1.3 million in energy savings.
The first phase entailed replacing a single-pass boiler and cross-connect-ing new high-efficiency boilers to help gain efficiencies, achieving an estimated $402,026 in savings over 10 years. During the second phase, inefficient T12 lamps were replaced with T8s, with a projected savings of $179,188 over 10 years.
For the third phase, the County Board authorized the Facilities Management department to spend $2.4 million from an American Reinvestment and Recovery Act (ARRA) grant on ECMs, and selected 16 measures to be completed, including: daylighting technology; occupancy sen-sors; exterior lighting upgrades to high-efficiency LEDs; a DDC building controls upgrade, demand control ventilation, in-row cooling in the IT server room and
upgrade to high-efficiency motors with variable frequency drives; window film installation and new thermal windows; and a 15-kilowatt photovoltaic system.
In one example, the Department of Transportation facility saw a 15-per-cent reduction in electric usage since the installation of the ECMs, a projected $720,195 in savings over 10 years.
Despite the county’s growth, the total energy savings will keep the Facilities Management budget flat. John Had-ley, director of facilities management, McHenry County, notes, “Had we not utilized this vehicle, I would have to go to the director of finance with budget increase requests. This has pretty much created a budget-neutral situation.”
About the Author: Becky Werra, LEED-AP, is an account executive for Energy and Envi-ronmental Solutions at Siemens Industry, Inc. She can be reached at [email protected].
A Case Study in Energy-Efficiency Retrofits in McHenry County, Ill.By Becky Werra
The McHenry County Administration Building is part of the $3.9 million, three-phase, 10-year performance contract, which will result in $1.3 million in energy savings.
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Looking for the strategies and solutions that matter most in the changing commercial
real estate environment? Attend the 2011 BOMA International Conference and The Every
Building Show®, the one event of the year that brings together the foremost experts
and resources in the industry. Come together with building owners and managers the
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40 The BOMA Magazine November/December 2010
PRODUCT DETAILS
Bacharach Introduces PCA®3 Portable Combustion AnalyzerBacharach Inc., a world leader in testing and measurement instrumentation for the HVAC/R industry, has introduced the PCA3 Portable Combustion Analyzer. The PCA3 is the industry’s first advanced portable combustion analyzer with a full-color graphic display for superior visibility and user-friendly interface. In addition to the included sensors for oxygen and carbon monoxide, the PCA3 can be ordered to include sensors for nitric oxide, nitrogen dioxide and sulfur dioxide.
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OMG Roofing’s PipeGuard Provides Reliable Pipe SupportOMG Roofing has introduced the Height-Adjustable Strut Model PipeGuard for applications requiring support for multiple small pipes in one location. Diverse and flexible, the PipeGuard can be used for a wide range of small rooftop pipe applications, including gas and refrigeration lines, electrical and solar conduit, as well as HVAC lines. The system is compatible with PVC, copper, cast iron and most other pipe materials, and is adjustable to heights from five to 10 inches, with custom heights available.
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Sloan Valve Offers Efficient Dual-Flush Toilet BowlsSloan Valve Company’s commercial dual-flush toilet bowls have been listed and certified by the International Association of Plumbing and Mechanical Officials (IAPMO®). These water closet bowls have been specifically engineered for water-efficient dual-flush operation and optimal performance. High-efficiency toilets with dual-flush Flushometers reduce water usage by about 30 to 65 percent compared to standard toilets, which annually saves hundreds or thousands of gallons of water.
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Swegon’s Compact Chilled Beam Module Ranks High in ComfortSwegon AB, one of Europe’s market leaders in the ventilation and air conditioning sectors, has launched Parasol Evo2, a compact chilled beam comfort module for commercial and industrial use, in the United States. Designed for the control of air quality and temperature in rooms, Parasol Evo2 offers low-energy running and maintenance costs, coupled with the benefits of chilled beam technology. Parasol’s compact design makes it compatible with competing fan coil unit sizes.
For more information, visit www.swegon.com
Kee Safety Provides Safe Walkways on Roof SurfacesKee Safety, Inc., has introduced its new Kee® Walk, a slip-resistant walkway for workers accessing a roof during construction or maintenance. Contrasting with the roof’s surface, it provides a clear demarcation route that protects the roof from unnecessary damage and uniformly distributes the pedestrian load across its surface. Easy to install with pre-assembled standard lengths supplied from stock, Kee Walk is designed for modern roofs.
For more information, visit www.keesafety.com
Chief Makes Displaying TVs in Commercial Buildings EasierChief, a leader in professional AV solutions, has debuted the new Thinstall™ low-profile swing arm wall mounts. Designed for use with all types of flat panel TVs, the slim, ruggedly constructed mounts have an ultra-slim 1.5-inch profile, are easy to install, extend up to 25 inches for viewing from any angle and support as much as 125 pounds. High-strength, forged steel arms are used in the Thinstall design for maximum rigidity and support.
For more information, visit www.chiefmfg.com
buyers’ guide
Buyers’ Guide to Building Products and Services
For rates and information about advertising in The BOMA Magazine, contact Paul Hagen at Stamats Business Media 866-965-4205.
November/December 2010 The BOMA Magazine 41
ADVERTISING INDEX
ComPANy PAGE No.
360Facility ........................................................... 13
American Anchor ........................................Cov 2
ASSA ABLOY Door Security Solutions .......... 9
Bartlett Tree Experts .......................................... 38
BOMA International ......................... 33, 37, 39
BOMA Nevada ................................................... 18
Creative Flooring Concepts Inc.—
Proform ............................................................ 38
E-Mon LLC .......................................................... 41
FLIR Systems .......................................................... 4
General Elevator Parts ...................................... 41
Global Vision Inc. ............................................... 41
Johnson Controls Inc. .......................................... 7
JP Obelisk ............................................................. 12
Kimberly-Clark Professional* .......................... 17
KONE Inc................................................................ 3
Naylor Publications ........................................... 21
Pro-Bel ............................................................Cov 4
Scientific Conservation .................................... 11
Shortridge Instruments Inc. ............................. 18
Southern Elevator and Electric Supply......... 19
U.S. Green Building Council—USGBC ....... 15
Yaskawa Electric America ..........................Cov 3
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42 The BOMA Magazine November/December 2010
conference connection
A White House adviser, journalist and teacher over the past 40 years, David Gergen worked in the administrations of Presidents Nixon and Ford and was director of communications for Presi-dent Reagan. He also served as counselor to President Clinton on both foreign pol-icy and domestic affairs. He is a senior political analyst for CNN, a professor of public service at the Harvard Kennedy School and the director of its Center for Public Leadership.
Gergen began a career in journal-ism in 1985. He was the moderator of World @ Large, a 13-part PBS discus-sion series for two seasons, and for five years teamed up with Mark Shields on the MacNeil/Lehrer NewsHour for widely acclaimed Friday night political discus-sions. Today, he contributes to CNN as a senior political analyst, Parade Magazine and U.S. News & World Report as editor-at-large. He holds 19 honorary degrees and sits on many boards, including Teach for America, the Aspen Institute and Duke University.
Sam Zell is chairman of Equity Group Investments LLC, the private, entre-preneurial investment firm he founded more than 40 years ago. Zell’s invest-ments span industries and continents and include interests in real estate, energy, logistics, transportation, media and healthcare. He is recognized as a founding father of today’s public real estate industry after creating three of the largest real estate investment trusts (REITs) in history. Previously, he served as chairman for Equity Office Properties Trust, which was sold in February 2007 to The Blackstone Group for $39 billion in the largest private-equity transaction in history at the time.
Zell serves on the JPMorgan National Advisory Board; the President’s Advisory Board at the University of Michigan; the Visitor’s Committee at the University of Michigan Law School; and, with the combined efforts of the University of Michigan Business School, established the Zell-Lurie Entrepreneurial Center. He is a long-standing supporter of the University of Pennsylvania Wharton Real Estate Center, and has endowed the Samuel Zell-Robert Lurie Real Estate Center at Wharton. He has also endowed the Northwestern University Center for Risk Management.
Three Thought Leaders Forecast the Future at BOMA 2011
EXPERTS DAVID GERGEN, Sam Zell and Peter Linneman will headline the 2011 BOMA International Conference, June 26-28 in Washington, D.C., providing BOMA conference attendees with an insider look at the forces shaping commercial real estate and the economy. Gergen, revered journalist and White House advisor, will present the Sunday Keynote Address, sponsored by Constellation
Dr. Peter Linneman is the principal of Linneman Associates and also serves as the Albert Sussman Professor of Real Estate, Finance and Public Policy at the Wharton School of Business, the Uni-versity of Pennsylvania. A member of Wharton’s faculty since 1979, he served as the founding chairman of Wharton’s Real Estate Department and was the director of Wharton’s Zell-Lurie Real Estate Center for 13 years. He is the founding co-editor of The Wharton Real Estate Review. His teaching and research focuses on real estate and investment strategies. He has published over 80 articles during his career.
Linneman is widely recognized as one of the leading strategic thinkers in the real estate industry. He was cited as one of the 25 most influential people in real estate by Realtor Magazine and was named one of the 100 most power-ful people in New York real estate by The New York Observer. He is also a co-coor-dinator/sponsor/moderator, with Sam Zell, of the prestigious industry round-table, The Marshall Bennett Classic.
Energy and AOBA Alliance, Inc. Real estate icon Sam Zell and world-class economist Dr. Peter Linneman will debate the state of commercial real estate in the United States and around the globe in a lively dialogue during the Monday General Session, sponsored by Yardi.
By Lindsay Tiffany
Gergen, Zell and Linneman to Discuss Politics, Real Estate and the Economy
For more information about the
2011 BOMA International Conference
and The Every Building Show®, visit
www.bomaconvention.org.
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