For almost 100 years, the Building
Owners and Managers Association
has sponsored a Standard Method for Measuring
Floor Area in Office Buildings. The BOMA "standard"
has undergone a number of revisions over the years
but remains a widely recognized industry standard for measuring
the amount of "rentable area" in an office building.
The BOMA standard has been amended in
response to changing architectural designs and leasing
concepts. Today, there are two BOMA standards prevalent
in the commercial real estate market. The BOMA standard
released in 1980 is commonly referred to as "BOMA 80"
and the BOMA standard released in 1996 is commonly
referred to as "BOMA 96".
Under BOMA 80, "rentable area" of a
tenantís premises is comprised of the aggregate floor
area occupied by such tenant and a share of the
unallocated areas on the same floor. Under BOMA 96, the
Landlord is permitted to include not only a share of the
unallocated areas on the same floor, but also a share of
all of the common areas of the entire building. A
tenantís rentable area under BOMA 96 will therefore include a
proportionate share in spaces such as lobbies, exercise
facilities, storage rooms, conference rooms, loading
docks, utility rooms and any other areas in the building
that can be said to benefit the tenants generally.
Simply put, if rental rates remain the same, a
tenant will pay more basic rent under BOMA 96 than BOMA 80, perhaps considerably
more. In a report at
area surveyors reported that they have seen gross up
values on common areas increase anywhere from 5% to 15% with BOMA 96.
The genesis of BOMA 96 is rooted in the
general trend of office building design towards
providing larger common areas, for which the landlord
should be compensated. BOMA 96 effectively accommodates
this additional common space in the building and
reflects it in rentable area.
A change in measurement, of course,
does not necessarily mean that a tenant will pay more
total rent. Market factors will govern notwithstanding
the method of measurement. As with any lease
negotiation, as long as the parties understand what is
and is not included in rentable area, the tenantís
recognition that the BOMA 96 standard is being used to
measure their premises may provide the tenant with some
leverage to negotiate for a reduction in face rents.
It is estimated that less than 20% of
the Vancouver market has converted to BOMA 96 (as
opposed to an estimated 60% in Toronto). As a result, it
is difficult to currently measure the impact, if any, on
rents in Vancouver.
Anne Tanner, a Commercial
Office Leasing Agent at
expressed the view that as the commercial real estate market heats
up, more of the Vancouver market will move
to BOMA 96. According to her, "the office leasing market
in the Downtown core has a vacancy rate of
11.7%Öthe vacancy rate will decrease over the next year and a
half to 9.82%. As the vacancy rate decreases,
landlords will gain more leverage in the marketplace." With
this increased leverage, we should expect a move to BOMA 96
on new leases.
Regional Manager of Royal
Lepage Commercial, reports that some
buildings are operating with both BOMA 80 and BOMA 96 in
effect. During the transition period from BOMA 80 to
BOMA 96, it will be necessary to use both, as leases
come up for renewal or expiry. Landlords might well
consider including re-measurement clauses in their
leases, and whether adopting BOMA 96 is possible upon
In any event, reliance on a standard
like BOMA provides greater certainty for
(with research from Mike Jaworski, Articled