the boma magazine

September/october 2009

Leaders in Commercial Real Estate

Plus:The BOMA 360 Value Proposition

EER 2009—The Numbers are In

TOBY Winners Take the Stage

The Power of the BOMA Network

Inside the BOMA Conference

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September/October 2009 Volume 5, No. 5

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Call for Nominations: Vice Chair and Executive Committee MembersBOMA International’s Nominating Committee is seeking candidates for the position of vice chair and for five members of the Executive Committee to the Board of Governors. For further information, please contact BOMA International, c/o Ann Coslett, BOMA International, 1101 15th St., NW, Suite 800, Washington, D.C. 20005, telephone (202) 326-6325; fax (202) 408-2699; e-mail [email protected].

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DEPARTMENTS

Volume 5, No. 5 The BOMA Magazine Sep-tember/October 2009, (ISSN 1532-4346), Copyright 2009. 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.

These Buildings are Claiming Competitive AdvantageLindsay TiffanyA case study of how to stand out in a down market.

The Power of the BOMA Network on Display in PhiladelphiaLaura HorsleyMarket survival and the path to recovery was on the minds of BOMA Conference attendees. Learn what they learned.

A Cut Above—TOBY International WinnersLindsay TiffanyLeaders in building operations and management are honored in Philadelphia.

6 MESSAgE FRoM ThE ChAiRThe BOMA Idea Exchange

8 LEgiSLATiVE UPDATEBoard of Governors approves new policy positions, Fed and Congress get focused on liquidity issues, the latest on climate change legislation.

12 STATE & LoCAL UPDATEBOMA/Chicago’s smart grid initiative, budgets dominate legislative agendas, BOMA/Greater Minneapolis caps off successful legislative year.

16 CoDES & STANDARDS UPDATEICC and AIA initiate green building code effort, changes to code development procedures, revised floor measurement standard completed.

18 LEADiNg ThE WAyUpcoming State Government Affairs Chair Susan Engstrom offers tips for talking to politicians and dishes on her big plans for the 7-Point Challenge.

20 ARoUND ThE iNDUSTRyH1N1 revisited, a new Public Buildings Commissioner for GSA, BOMA remembers two leaders, meet Wendy Williams.

32 SECToR WATChWeak trade is taking its toll on the industrial market, but better days may be ahead for those well-positioned.

36 TRENDS TRACkERCheryl English and Karyn GayleIntelligent lighting trends can be found at the crossroads of energy efficiency and functionality.

40 gREEN SCENE“Green shoots” abound at The Office Building Show.

42 RESEARCh CoRNERDespite the credit crisis, office building owners and managers report modest income gains in the BOMA Experience Exchange Report (EER).

44 EyE oN EDUCATioNFinancing structures, operating trends and healthcare reform top Medical Office Building Conference topics.

About the Cover: Heifer International’s Platinum LEED-certified headquarters building in Little Rock, Ark., took home the 2009 Earth Award during the annual TOBY Awards Banquet.

6 BOMA September/October 2009

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, Noel Popwell

Designer: Amy Belice

Published by: Building Owners and Managers Association (BOMA) International

BOMA International OfficersChair and Chief elected officer James A. Peck, RPA, FMACB Richard Ellis Albuquerque, N.M.

Chair-electRay H. Mackey, Jr., RPA, CPM, CCIMStream Realty Partners, LP Dallas, Texas

Vice Chair Boyd R. Zoccola Hokanson Companies, Inc. Indianapolis, Ind.

secretary/treasurer Kent Gibson, CPMZions Securities Corporation 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.

James A. Peck, RPA, FMA

Chair and Chief Elected Officer

The BOMA Idea ExchangeAs you read through this issue of The BOMA Magazine, you will notice

that the features and many of the columns are dedicated to highlights and news from the BOMA International Conference held this past June in Philadelphia. I encourage you to enjoy a close read because these stories go beyond a mere recap; they tell the story of how BOMA members from across the country and overseas came together to share information and seek out opportunities to harness the power of the BOMA Network.

Check out the insights

from the Sunday General

Session panel on ways

to find value in a declin-

ing market (pages 24-27)

or the takeaways from

Henry Chamberlain’s State

of the Industry address—

you’ll see that our tough

road ahead also includes

green shoots of opportu-

nity (page 40). I especially

encourage you to read about the new

BOMA 360 Performance Program des-

ignees honored during the Conference.

There are terrific BOMA 360 buildings

listed on pages 22-23 that demonstrate

how these folks are taking a holistic

approach to building operations and

management as they differentiate their

buildings in a tight marketplace.

In my last “Message from the Chair,”

I said that great ideas don’t happen in a

vacuum and that a few thousand minds

working hard to solve a problem are

always better than one. Now, I would

like to take that thought one step further

and ask that each of you reflect back on

what you learned at the BOMA Interna-

tional Conference and make a point to

put at least one of those ideas into action.

Many of you are already doing this and

are seeing results, but many of us may

have become bogged down in e-mails

and deadlines and haven’t had that

chance yet to act on what we learned.

Now is the time.

Because information sharing doesn’t

begin and end with the Conference,

please share your success stories with

your BOMA peers. Simply e-mail me at

[email protected] and tell me how you

are seeing results from a good idea you

acted on from the BOMA Conference.

We will share these success stories in The

BOMA Magazine and through other means

of communication. The point is to keep

the “BOMA Idea Exchange” churning as

we problem-solve together.

We also count on our BOMA Network

to come together on important legisla-

tive and regulatory issues. And there are

many before us now. Be sure to take a look

at “Legislative Update” (pages 8 and 10) to

read about BOMA’s new policy positions on

cap and trade, energy performance label-

ing and some of the financial and liquid-

ity challenges we now face. Not only are

we preparing for one of our biggest battles

on the energy front—ensuring that a vol-

untary, incentive-based marketplace sets

the tone on energy efficiency—but we also

have a huge tax battle before us. A healthy

commercial real estate industry is the

backbone of a healthy economy; the one

thing that will halt recovery in an instant

is an unfair tax burden on our industry.

It would be disastrous, and we won’t let

it happen.

We clearly have our work before us, but

we also have the best team to get the work

done.

Speaking of the health of our industry,

please remember to keep your emergency

preparedness and contingency plans up

to date as we head into flu season. The

experts are predicting a reoccurrence of

the H1NI strain. Get the information you

need at BOMA’s Pandemic Flu Resource

site at www.boma.org.

Thank you for your continued

commitment.


legislative UPDate

Continued on page 10

AT THE BOMA INTERNATIONAL CON-FERENCE, BOMA’s Board of Governors approved five new policy positions, pav-ing the way for BOMA’s advocacy team to continue to voice the concerns of the commercial real estate industry as we confront new challenges from Capitol Hill.

Congress is currently in the process of considering sweeping legislation on energy and climate change, including a cap-and-trade program for emis-sions reduction (see related article, this page). The Board of Governors approved a position in support of voluntary and incentive-based programs for reducing greenhouse gas (GHG) emissions. BOMA believes the value of GHG reductions will accelerate building energy-efficiency investments most efficiently if the ben-efits accrue directly to the building that makes these investments. In its current form in the House-passed bill (H.R. 2454, the American Clean Energy Security Act of 2009), however, the cap-and-trade program would not reinvest sufficient funds into building energy efficiency and we feel it will increase costs to business without reinvesting to effectively accom-plish its environmental objectives.

The second policy position supports the creation of a voluntary national model building energy performance labeling program, based on the EPA ENERGY STAR® Portfolio Manager benchmarking platform, which pro-motes knowledge of building energy performance without hindering real estate transactions. As part of any such program, utilities should be required to provide whole building benchmarking

Incoming Chair of BOMA’s Government Affairs Committee Judy Purviance-Anderson delivers BOMA’s five new policy positions during the Board of Governors Meeting.

BOMA’s Board of Governors Approves Five Policy Positions

data to building owners and managers, and disclosure should be limited to par-ties directly involved in the transaction.

The third position is supportive of incentives to promote investment in water-efficient products for commer-cial buildings, such as toilets, urinals, faucets, showerheads, re-landscaping, site irrigation systems and applicable HVAC systems.

The final two positions are intended to enhance BOMA’s ability to advocate on the financial and liquidity chal-lenges that are confronting our indus-try. The first simply states that credit capacity and liquidity must be restored to the commercial real estate industry. BOMA’s advocacy staff will continue to work with Congress, the Federal Reserve, the Treasury Department and others to enact regulations to help ease the credit crisis. The second supports amending the Real Estate Mortgage Investment Conduit (REMIC) rules to make securi-tization more attractive to commercial borrowers by allowing common modi-fications to property once the loan has been securitized.

Full text of all of BOMA’s policy posi-tions can be found on the BOMA Web site at www.boma.org.

Fed and Congress Focus on CRE and Liquidity Issues

In an effort to infuse capital into the commercial real estate market, the gov-ernment began extending funds in June to investors interested in applying for TALF (Term Asset Backed Securities Loan Facility) loans backed by newly issued, AAA-rated commercial-backed

securities (CMBS). The plan also makes the TALF eligible for so-called “legacy CMBS” (CMBS issued before Jan. 1, 2009), which started in July. The TALF program for CMBS is designed to help prevent defaults on economically via-ble commercial properties, increase the capacity of current holders of maturing mortgages to make additional loans and facilitate the sale of distressed properties.

In multiple hearings in both the House and Senate, the state of com-mercial real estate was one of the most asked about subjects in questioning by lawmakers in Chairman Bernanke’s testi-mony on the economy. Additionally, the Joint Economic Committee held a hear-ing on Capitol Hill, examining the grow-ing financing problems facing the com-mercial real estate market and potential solutions to the credit crisis.

On August 17, the Federal Reserve and U.S. Treasury announced that they would extend TALF for CMBS. The orig-inal sunset date of Dec. 31, 2009, was extended to June 30, 2010, for newly issued CMBS, and to March 31, 2010, for other asset-backed securities and “legacy CMBS” sold before Jan. 1, 2009.

Climate Change Clears House; Senate Action Anticipated in Fall

On June 26, the House of Represen-tatives mustered the votes to pass leg-islation that would reduce greenhouse gas emissions through a cap-and-trade program. The far-reaching legislation

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legislative UPDate

includes several other energy-efficiency provisions that would directly impact the commercial real estate industry. BOMA supports language that would provide tax incentives for increasing the energy efficiency of buildings; however, we con-tinue to strongly oppose a mandate that would require future versions of ASHRAE 90.1 to meet extremely aggressive and arbitrary energy-efficiency targets. If the prescribed targets are not met through

the consensus standard writing prac-tice, the Department of Energy would be tasked with writing the standard.

Action is now under way in the Senate. The Senate Energy and Natu-ral Resources Committee has already approved energy language, and the Envi-ronment and Public Works Committee is working on the climate change provi-sions. Senate Majority Leader Harry Reid has set September 28 as his target date to complete action.

At this time, it appears that the Demo-crats are going to have an extremely dif-ficult time getting enough votes to pass a cap-and-trade program. If the climate change package is not successful in the Senate, we fully anticipate that a stand-alone energy bill will be Congress’ back-up plan.

Legislation Would Require that Employers Provide Sick Leave

The U.S. House of Representa-tives Workforce Protections Subcom-mittee held a hearing in June on H.R.

2460—The Healthy Families Act (HFA), a bill that would require employers to provide employees with up to 56 hours of “paid sick time” each year.

Supporters of the legislation claim the mandate is needed to ensure workers are not forced to choose between their jobs and their health or the health of their family. They also claim that providing employees with paid sick leave increases morale and productivity and reduces the possibility of “presenteeism,” a phe-nomenon where employees show up to the workplace sick, thereby prolonging their own illness or spreading illnesses to coworkers and the public. Opponents of the measure say that a one-size-fits-all mandate, like the HFA, limits an employ-er’s flexibility in designing compensa-tion and benefits packages that meet the needs of its unique workforce and that a debate over an expensive mandate is not appropriate at a time when employers are struggling to avoid layoffs and busi-ness closures. BOMA International will continue to follow this bill as it moves through Congress.

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What is Green Construction? It’s something we’re all

focused on. The Painters and Allied Trades LMCI in

conjunction with the International Union of Painters

and Allied Trades and the Finishing Contractors

Association is continually presenting programs

designed to improve knowledge and standards in

the construction industry. These programs address

worker awareness to LEED AP exam preparation.

Practicing “green” construction not only helps the

environment, but can also improve profits and

stakeholder relationships, all while making a

healthier, more comfortable space for building

occupants. Through more efficient materials, better

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The Painters and Allied Trades Labor Management Cooperation InitiativeGREEN Construction programs are the result of a partnership with the FinishingContractors Association, International Union of Painters and Allied Trades,Cuyahogo Community College, and the Finishing Trades Institute.

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state & local update

BOMA/Chicago Leverages Stimulus for Smart Grid

BOMA/Chicago has initiated plans to develop the first commercial office building smart grid program in the United States. In August, the organiza-tion applied for $92.7 million in match-ing funds from the U.S. Department of Energy’s Smart Grid Investment Grant Program, which was formed under the recently passed American Reinvestment

in downtown Chicago. This represents more than 80 percent of the square foot-age and an estimated 1,000 megawatts of peak demand. The program will upgrade the buildings’ electric metering infra-structure with smart meters that will communicate with a BOMA/Chicago-run Network Operating Center (NOC). The NOC will analyze electricity demand and pricing fluctuations and send sug-gested response strategies to the build-ings for immediate implementation.

The economic and environmental benefits of BOMA/Chicago’s smart grid program are significant. The program will demonstrate that demand-side resources, such as commercial build-ings, can provide operating reserves, frequency regulation and capacity in wholesale grid markets. It will also create or retain more than 2,000 jobs, reduce carbon emissions by approximately 300 million pounds annually and provide a replicable blueprint for how other BOMA International affiliates can adopt similar smart grid programs in their markets.

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Budgets Dominate 2009 Legislative Agendas

The recession became the dominant issue faced by state lawmakers this year, as FY 2009 proved to be one of the most difficult fiscal years since the ’90s. And, according to a new report by the National Conference of State Legisla-tures, it’s only going to get worse for FY 2010 and subsequent years.

State legislators were forced to close a $113.2 billion budget shortfall for FY 2009 due to a severe decline in revenue. As bad as things were for FY 2009, the picture worsened as legislatures pre-pared their FY 2010 budgets with a cumulative gap of more than $142.6 billion to fill. Eight states failed to meet the July 1 deadline to enact their bud-gets. The report notes that at least 11 states raised taxes to eliminate budget gaps. Corporate tax breaks were cut or reduced, while incentives for sustain-able innovation were scaled back. Other states tapped their rainy day funds or reserves. California faced an arduous time this session as it worked to close

a FY 2010 budget gap of $38.9 billion. Governor Arnold Schwarzenegger and the state’s legislature became locked in a contentious budget battle, forcing the state to issue IOUs to its vendors.

Many states turned to funding pro-vided by the American Recovery and Reinvestment Act (ARRA) of 2009 to close gaps in their FY 2010 budgets. According to the report, 24 of the 25 states that pro-vided information used stimulus funds to close more than 20 percent of their budget deficits. Texas and Nebraska used the largest percentage of funds, with 96.7 percent and 88 percent, respectively.

Looking forward, states will continue

to grapple with budget issues in FY 2011 and FY 2012. Of the 30 states that fore-see a FY 2011 budget gap, 24 provided preliminary estimates to the research-ers of $58.5 billion. Florida’s shortfall is expected to fall in the $5 billion range, while Maryland is projecting a $2.3 bil-lion deficit. Of those states that prepare long-term economic forecasts, the report shows that 15 are projecting budget gaps for FY 2012. The report cites three con-cerns that will impact states in these years: recessions increase state spend-ing for safety net programs; the loss of ARRA funds; and the residual impact of the national recession on state revenues.

BOMA/Greater Minneapolis Caps Off Successful Legislative Year

Throughout 2009, BOMA/Greater Minneapolis successfully represented the interests of its members and the commercial real estate industry on a broad range of legislative and regula-tory issues at the state and local levels. BOMA fought a mandate that would


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to exempt properties within the city’s Downtown Improvement District if the owner agrees to comply with guidelines established by the District for marketing and maintaining the appearance of first-floor street-facing property.

In response to objections raised by BOMA and others, a proposed city building registration fee ordinance, designed to fund cyclical fire inspections of all commercial buildings, had its fee schedule reduced to a maximum of $910 annually applying only to buildings over two million square feet. The original pro-posal would have applied to buildings at 150,000 square feet.

Responding to a component of the federal stimulus package targeting the construction of high-speed rail service in the United States, the Minnesota Sen-ate added funding for a plan to study the feasibility of building a rail line from Chi-cago to the Twin Cities. Following a last-minute amendment to the bill specifying the route under study would end in St. Paul rather than proceed to Minneapolis, BOMA joined with a coalition of busi-ness leaders to urge local legislators to

state & local update

object to the amendment and succeeded in having it removed on the Senate floor prior to the bill’s passage.

The association also negotiated a favorable clarification from the state’s Department of Labor and Industry Ele-vator Inspection Department regarding minimum fire service operation require-ments for existing elevator installations. This new interpretation allows building owners to retain and upgrade existing elevator control systems, subject to certain parameters, without trigger-ing a comprehensive modernization or upgrade—resulting in a significant cost savings for its members.

Want to see your state and local advocacy victories in print? share your success stories and we’ll share them with BoMa International members. contact James cox, director of state & local affairs, at [email protected] for more information.

have required all new parking facilities to be equipped with charging stations for electric vehicles. Although the asso-ciation supports the promotion of elec-tric vehicles, the bill’s authors were per-suaded that these requirements were too premature to be considered at this time.

On a vacant building registration pro-posal, BOMA objected to a provision that would define as “vacant” any commer-cial property with vacant ground-floor storefront space of 30 percent or greater and subject it to a $6,000 annual fee. The association then successfully pushed

BoMa fought a mandate that would have required all new parking facilities to be equipped with charging stations for electric vehicles.

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Codes & standards update

THE INTERNATIONAL CODE COUNCIL and the American Institute of Architects are spearheading an effort to develop yet another green building code document, the International Green Construction Code (IGCC). A 29-member committee

ICC and AIA Initiate Green Building Code Effort

met for the first time in Chicago in late July to initiate work on a draft docu-ment, with a goal to have a completed draft by Spring 2010. The draft will then be submitted within the ICC code devel-opment process for consideration and

modification, with publication of the first edition scheduled to be included in the 2012 editions of the ICC codes.

BOMA is involved in the development of a green building code sponsored by the American Society of Heating, Venti-lating and Air-Conditioning Engineers, the U. S. Green Building Council and the Illuminating Engineering Society of North America—ASHRAE 189.1—which is scheduled for completion and publication early in 2010. The effort to develop the 189.1 green building code was launched in 2007, and the 34-mem-ber development committee, includ-ing BOMA representation, is currently vetting comments on the third public review draft.

Both the IGCC and ASHRAE 189.1 are intended to cover all buildings except low-rise residential buildings and apply to new construction, additions and major renovations. Both cover all aspects of green/sustainable construc-tion, including site development, energy and water efficiency, indoor environ-ment and materials and resources. Both also are being developed in code format and language and are intended for con-sideration by governmental jurisdictions for possible adoption and enforcement of green and sustainable construction projects.

ICC Announces Changes to Code Development Procedures

In response to past concerns and, in particular, to address what some viewed as voting and procedural irregularities during the final action hearings of the 2007-2008 code development cycle, the International Code Council (ICC) has initiated a series of changes to its code development procedures for the 2009-2010 cycle. ICC announced these changes are intended to:

• ReducethelengthoftheCodeDevel-opment and Final Action Hearings.

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• Maintainthecurrentthree-yearpubli-cation cycle and the ICC Governmen-tal Consensus Process.

• Reducecosts.

• Increaseelectronicprocessing.

• ScheduleCodeDevelopmentHear-ings at one central recurring location.

The changes include:

• Dividingthecodesintotwogroup-ings, with separate Code Develop-ment and Final Action Hearings dur-ing the first two years of the publica-tion cycle.

• HoldingCodeDevelopmentHearingsat the same central location every April/May.

• HoldingallFinalActionHearingsatthe ICC Annual Conference at loca-tions that will continue to rotate through the four quadrants of the United States in late October/early November.

• Makingasuccessfulassemblyactionat the Code Development Hearing, with the standing motion to be con-sidered at the Final Action Hearing.

BOMA is especially concerned with making assembly action the standing motion at the Final Action Hearings. Assembly action at the Code Develop-ment Hearing can be initiated and bal-loted by anyone in attendance regardless of their affiliation or ICC membership, and BOMA believes there is the poten-tial for special interests to “load” the audience to achieve a desired outcome. Previously, the recommendation of the Code Development Committee that presides at this hearing was the stand-ing motion at the Final Action Hearing, requiring a two-thirds vote to overturn.

Initiation of these changes will begin with the Code Development Hearings to be held in Baltimore, Md., October 24-November 11. BOMA will continue to monitor the impact of these changes on proposals of primary concern to the commercial real estate industry and keep BOMA members apprised of developments.

BOMA Completes Revision of Floor Measurement Standard for Office Buildings

At the 2009 BOMA International Con-ference in Philadelphia, BOMA’s Stan-dard Method of Floor Measurement

Committee approved a final draft of revisions to the industry’s premier floor measurement standard. This revision to the 1996 edition of the standard includes updated definitions, procedures and graphics, making this the most user-friendly version to date. The revised standard is currently being evaluated by the American National Standards Institute for certification as an American

National Standard. The revised Stan-dard Method for Measuring Floor Area in Office Buildings is now available for purchase on the BOMA Web site (www.boma.org).

For more information on any of these stories, contact Ron Burton at [email protected].

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leading the way

Political SavvySusan engstrom, Senior Real estate Manager tiarna Real estate Services, inc.

SUSAN ENGSTROM IS A SENIOR REAL ESTATE MANAGER with Tiarna Real Estate Services, Inc. and has worked in property management for more than 26 years. A BOMA member since 1995, Eng-strom is extremely active on the local level, serving on the Board of BOMA/Greater Phoenix and as president in 2004 and 2009. She is also president of Ari-zona BOMA, a coalition between Tucson and Phoenix BOMA members to pro-mote advocacy and education. She has served on several BOMA International committees, and, in 2010, she will begin her term as chair of the State Govern-ment Affairs Committee.

you were instrumental in getting Phoenix Mayor Phil gordon to sign onto the 7-Point Challenge. how did you make that happen?

It would seem daunting to approach the mayor of a large city like Phoenix, but Mayor Gordon is just a person like you or me and he was very interested in envi-ronmental issues. I knew about his green commitments for Phoenix, but it can be difficult when you live in a desert where it’s hard to cool buildings efficiently and effectively. But there are low-cost, no-cost methods, and I was determined that Mayor Gordon needed to hear us out. When we discussed the Challenge and showed him the market transforma-tion document, he was impressed with our aggressive 2012 timeframe. It was a great moment for us when we got the endorsement letter from the mayor and the City of Phoenix. Now, we’re setting up appointments with the mayors of all our surrounding cities.

any good takeaways on how to deal with politicians?

There’s nobody who won’t listen to you if you have a point to make. With the mayor, we weren’t asking for money, we were asking him to review what BOMA is doing because we feel like we lead the industry.

you will be chair of the State government affairs Committee in 2010. what are the grassroots priorities for BOMa going forward?

I’m so excited about chairing the com-mittee. At my first meeting I’m going to challenge everyone to reach out to two cities in their state to get 7-Point Chal-lenge endorsements. Having 100 may-ors signed on would create tremendous momentum. We also plan to encourage all states to have advocacy days. We have an advocacy day every year and we com-bine our efforts with other groups like NAIOP, ICSC, IREM and IFMA. This helps us come together as a whole commer-cial real estate organization to bring our issues to the state legislature.

Beyond that, every state has different challenges, especially with issues that just keep coming back, such as property taxes and forced access. BOMA now has a toolkit on how to work with owners to combat forced access, which is based on a template of how Arizona BOMA won a forced access battle in 2006.

you have been extremely active on the local level with BOMa/greater Phoenix. what drives you to volunteer and your interest in government affairs?

Advocacy is a huge interest of mine and I’ve always been fascinated with pol-itics. I worked for Arizona’s Department of Racing early in my career, which was a very political organization, so I got to see how politics work firsthand. I remem-ber when I was a young girl, my father let me stay home from school when we thought Kennedy had lost to Nixon in the 1960 election; that’s how devastated I was, until the recount, of course, showed that Kennedy won.

When I joined BOMA, it made sense to be on the Government Affairs Commit-tee. At that time, the committee was just getting off the ground and I wasn’t that confident that I knew the issues so I just dug in and figured it out. Nobody sets out to be a property manager; I could never pretend to know everything there is, and it’s easy to run across an issue you’re unfamiliar with. Being involved with BOMA means you can always keep learning. We have a great group here in Phoenix; everyone works for the com-mon good.

what do you get most out of your BOMa membership?

You can call somebody at BOMA International and they will put you in touch with someone who has your same issue. The members are a terrific group of people who network and aren’t afraid to help each other. People will be honest about the problems they face and will ask for help. It is the best organization for anybody in commercial real estate.

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Around the industry

h1n1 revisited—Are you Prepared?WHEN THE H1N1 FLU VIRUS dissipated this summer and took a hike to the Southern Hemisphere, many breathed a sigh of relief, but building owners and managers should be gearing up for a possible round two of the pandemic this fall. Experts expect that the virus will move back to the Northern Hemisphere as schools reconvene, and it could mutate into a more dangerous strain.

The Centers for Disease Control and Pre-vention (CDC) recently came out with these tips to help businesses protect employees:

• Encourageinfectioncontrolpracticesinthe workplace, such as providing alco-hol-based hand sanitizers and sufficient facilities for hand washing.

• Shareflu-relatedpoliciesandplanswithemployees and clearly communicate expectations.

For more information, visit BOMA’s Pan-demic Flu Resources site at www.boma.org.

BOMA Mourns Passing of Two LeadersThe commercial real estate industry recently lost two leaders and long-time

BOMA members. Allan Bancroft Heaver, a managing member of Heaver Proper-ties in Lutherville, Md., and a member of BOMA/Baltimore, passed away July 2. He was involved with the creation of BOMA’s Regional Owners Council, was extremely active in legislative affairs and encouraged countless people to get involved with BOMA. He was also a member of the American Lung Association’s Task Force For Indoor Air Quality Control.

Mark Patrick Gillin, founding president of BOMA/Ottawa, passed away in Ottawa on July 18. Gillin was instrumental in expanding BOMA Canada and championed professional education and research during his tenure. BOMA/Ottawa has estab-lished The M. Patrick Gillin Award in his memory to recognize excellence in com-mercial real estate and dedication to BOMA/Ottawa.

Kimberly-Clark Commits to Stronger Fiber Sourcing StandardsKimberly-Clark Corporation has adopted stronger fiber sourcing standards that

will increase global forest conservation and make the company a leader in sustain-ably produced tissue products. Kimberly-Clark worked with Greenpeace on the revised standards, which reinforce the company’s long-standing ban on the use of wood fiber from illegal sources; add a preference for post-consumer recycled fiber; encourage the expansion of recycling initiatives; and support the identification and protection of areas that are potentially endangered or “high conservation value” forests. Kimberly-Clark has also set a goal of obtaining 100 percent of the company’s wood fiber for tissue products from environmentally responsible sources.

BOMA International Staff Lend a Hand to D.C.’s HomelessBOMA International staff recently dedicated a morning to volunteer-

ing for D.C. Central Kitchen, a local nonprofit organization devoted to solving poverty, hunger and homelessness. BOMA International’s 30-plus staff members spent the morning assembling toiletry kits for D.C. Central Kitchen’s First Helping program, a street-level outreach initiative with the goal of empowering people to address the complex issues at the heart of their personal challenges. Toiletry kits are just one of the tools First Helping uses to strengthen bodies, empower minds and build communities. Find out more about D.C. Central Kitchen at www.dccentralkitchen.org.

GSA Appoints New Commissioner of Public BuildingsThe U.S. General Services Administration has appointed Bob

Peck to serve as the commissioner of Public Buildings. Peck, who previously served as the commissioner of Public Build-ings during the Clinton Administration, will be responsible for managing the federal government’s building portfolio. He will oversee nationwide asset management, design, construc-tion, leasing, building management, security and disposals for 354 million square feet of government-owned and leased space accommodating one million federal workers. Peck most recently served as managing director of Jones Lang LaSalle, where he advised corporations, governments and nonprofit institutions on real estate portfolio strategy and on public-private, mixed-use developments.

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We’ve got Your News If you haven’t checked out BOMA’s e-News

in a while, be sure to take a look at the next issue. We took the advocacy and industry news you need and made it even more timely, compelling and concise. Look for e-News in your inbox the first and third Thursday of the month and check out the e-News archive at www.boma.org/news/enewsletters.


Member Spotlight:

Wendy WilliamsWendy Williams, general manager,

Vector Property Services, LLC and mem-ber of BOMA/Denver Metro, talked to The BOMA Magazine about why BOMA is like public television and how she communicates the value of member-ship to her owner.

TBM: What do you see as the most important benefit of your BOMA membership?

Wendy: If I had to choose one thing, personally, it is the education. All of the knowledge and information from the various courses and seminars over the years have really made me better at what I do. To owners, I think the most impor-tant benefit of BOMA is the advocacy on the local, state and national levels. The advocacy work BOMA does ends up sav-ing owners a lot of money. I sort of look at it like I do public television: Everyone benefits from it. Becoming a member and supporting the organization is sim-ply the right thing to do.

TBM: How has the economy changed your business? Has it changed the value you see in BOMA?

Wendy: It has meant that property man-agers are asked to do more with less—fewer staff and smaller budgets. I know of owners who have cut membership to industry organizations to save money. What I always point out is that BOMA membership dues are much less than all the money you save by being a BOMA member—on the advocacy front, staff training, etc. It is the responsibility of property managers to communicate to their owners the value of BOMA and the savings passed on to them through membership.

TBM: Besides the education, how has BOMA membership helped your career?

Wendy: The networking through BOMA makes my job easier. When I’m facing a particular issue, I have a group of peo-ple I can reach out to for advice. When I am filling positions, I always e-mail my “BOMA buddies,” as I call them. It has

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been extremely helpful and I have hired several people that way. Other BOMA resources like the EER and the BOMA/ Denver Metro Salary and Wage Survey are very valuable. I’ve been recruited for my last four jobs. I think in some way thatisreflectiveofmyinvolvementinBOMA.


BOMA 360 Building—One Gateway Center, Newark, N.J., managed by Advance Realty Management, Inc.

BOMA 360 Building—Rosewood Court, Dallas, Texas, managed by Stream Realty Partners, L.P.

Claiming Competitive Advantage

“[The BOMA 360] program, unlike others,

looks at all aspects of a building and a

building management team.”

Robert L. Carlen, CPM, Vice President of Property

Management, Crescent Real Estate Equities

By Lindsay Tiffany

The game has changed. In the wake of

the financial crisis, strategies that were

once considered rules for success in

commercial real estate no longer hold.

Owners are holding buildings longer,

tenants have the upper hand in leasing

negotiations and to say that budgets and

resources are stretched is an understate-

ment. All of this means that property

management is more important than

ever. Exceptional customer service,

efficient operations and excellence in

building management are what will

attract tenants and result in bottom-line

success. But how can property manag-

ers demonstrate to tenants, prospective

tenants, owners and stakeholders that

their buildings are market leaders?

For several companies, the answer is

the BOMA 360 Performance Program,

which demonstrates that their build-

ings meet industry best practices on

every level. The program is an online self

assessment that evaluates properties in

six major areas: building operations and

management; life safety, security and

risk management; training and educa-

tion; energy; environment and sustain-

ability; and tenant relations and com-

munity involvement. The holistic nature

of the BOMA 360 Performance Program

means that every aspect of building

performance is assessed, with scores

based on how buildings measure up to

an extensive checklist of best practices.

Crescent Real Estate Equities was

among the first companies to apply for

the designation, representing 10 out

of the 25 buildings conferred with the

inaugural class of BOMA 360 designa-

tions in June. The 10 buildings are part

of Greenway Plaza and total 4.3 million

square feet of office, residential, hotel

and entertainment space. Crescent’s

Vice President of Property Management

Robert L. Carlen, CPM, who manages

the complex, saw the program as a natu-

ral extension of the company’s manage-

ment philosophy and decided to get all

10 buildings designated at once.

“We give our managers autonomy,”

says Carlen. “Each of our building man-

agers has total responsibility for his or

her buildings. This program, unlike oth-

ers, looks at all aspects of a building and

a building management team.”

Carlen also notes that BOMA 360

stands out from other industry designa-

tion programs, making it a must have for

high-performance buildings. “First and

foremost, it is specific to our industry.

LEED is just a piece of the whole when

it comes to recognizing excellence,

in my mind. BOMA 360 adds to the

energy consumption piece by includ-

ing all other aspects of building manage-

ment—from certificates of insurance to

occupancy to customer service to clean-

ing, security, parking and much more.”

William F. Moebius, senior vice pres-

ident and director of energy and sus-

tainable operations with Stream Realty

Partners, likes that BOMA 360 fills a void

when it comes to designation programs.

“There really aren’t any comprehensive

building performance measurement

programs for properties today. ENERGY

STAR® deals with energy efficiency;

LEED focuses on sustainability; TOBY

is an award for the single best building

in a category; and other professional

designation programs are generally for

individuals rather than buildings,” he

explains.

Stream Realty recently had three

buildings designated: 3811 Turtle Creek,

Rosewood Court and The Tower at City-

place, all in Dallas, Texas. For Moebius,


the stamp of excellence the designa-

tion implies is why his company chose

to participate. “The most important

benefit of the program is that build-

ings are recognized for incorporating

a very broad range of best practices,”

says Moebius. “Owners and tenants can

take comfort in the fact that the man-

agement team has excellent, industry-

leading systems and practices in place.”

RREEF also had two buildings earn

the designation, 555 Market Center and

575 Market Center in San Francisco,

Calif. Lisa Vogel, vice president and dis-

trict manager for RREEF, says the com-

pany’s primary motivation for partici-

pating was to demonstrate that its build-

ings are best in class. “We participated

in the BOMA 360 Performance Program

to illustrate that Market Center provides

our tenants with property management

services that rank among the best in the

industry,” she says. “The BOMA 360 des-

ignation provides Market Center with an

unbiased rating based on specific crite-

ria, giving prospective tenants an idea of

what they can expect in terms of atten-

tion and service, which, in the current

market, can assist them in evaluating

the wide array of available properties

and management companies.”

Ginny Carita, RPA, vice president

of property management for Advance

Realty Group, concurs that the designa-

tion gives her buildings a competitive

edge. “Being one of the first buildings

designated shows our tenants that they

are in the right building and signifies to

future tenants that this is the building

they should be moving into. It shows

that, as a company, we are staying ahead

of the industry.” Advance Realty Group’s

One Gateway Center, a half-million-

square-foot tower in Newark, N.J., was

among the buildings in the first class of

BOMA 360 designees.

The acknowledgement the 360 des-

ignation gives to property managers is

also a significant benefit. Says Carlen,

“Right now, industry conditions are

tough. I looked at this as an opportu-

nity to showcase our managers and as

an opportunity for them to feel good

about what they’re doing.”

Adds Carita, “From a management

perspective, it’s great to acknowledge

what our property management team

does on a daily basis. As managers, we

often take for granted the things that we

do every day. The designation confirms

that property managers are being cre-

ative, innovative and they are making

themselves stand out from the rest.”

The designees expect BOMA 360 to

give them a competitive edge even when

the industry turns the corner for recov-

ery. “No matter the market conditions,

the designation is an effective tool, both

for us to evaluate how we compare to

our peers and to provide our current and

prospective tenants with a tool to eval-

uate how Market Center rates among

various properties and their landlords

in the market,” notes Vogel.

Carita is excited about more Advance

buildings applying for the designation

in coming months. “The building that

was recently designated [One Gateway

Center] was our largest property. We

believed that, if we can get this building

certified, we can get them all certified.”

Applications for the BOMA 360 Per-

formance Program may be made at any

time throughout the year, with desig-

nations conferred quarterly. For more

information, visit www.boma.org/GetInvolved/BOMA360.

CONGRATULATIONS to the inaugural class of BOMA 360 Performance buildings:

One Greenway Plaza, Houston, TexasManaged by: Crescent Real Estate Equities Limited Partnership Owned by: MS Crescent Greenway Plaza SPV, LLC

Two Greenway Plaza, Houston, TexasManaged by: Crescent Real Estate Equities Limited Partnership Owned by: MS Crescent Greenway Plaza SPV, LLC

Three Greenway Plaza, Houston, TexasManaged by: Crescent Real Estate Equities Limited Partnership Owned by: MS Crescent Greenway Plaza SPV, LLC

Four Greenway Plaza, Houston, TexasManaged by: Crescent Real Estate Equities Limited Partnership Owned by: MS Crescent Greenway Plaza SPV, LLC

Five Greenway Plaza, Houston, TexasManaged by: Crescent Real Estate Equities Limited Partnership Owned by: MS Crescent Greenway Plaza SPV, LLC

Eight Greenway Plaza, Houston, TexasManaged by: Crescent Real Estate Equities Limited Partnership Owned by: MS Crescent Greenway Plaza SPV, LLC

Nine Greenway Plaza, Houston, TexasManaged by: Crescent Real Estate Equities Limited Partnership Owned by: MS Crescent Greenway Plaza SPV, LLC

Eleven Greenway Plaza, Houston, TexasManaged by: Crescent Real Estate Equities Limited Partnership Owned by: MS Crescent Greenway Plaza SPV, LLC

Twelve Greenway Plaza, Houston, TexasManaged by: Crescent Real Estate Equities Limited Partnership Owned by: MS Crescent Greenway Plaza SPV, LLC

125 East John Carpenter Freeway, Irving, TexasManaged by: Transwestern Owned by: Equastone

200 Kimball Drive, Parsippany, N.J.Managed by: Grubb & Ellis Company Owned by: Principal Real Estate

280 Plaza, Columbus, OhioManaged by: CB Richard Ellis Owned by: Nationwide Mutual Insurance Company

555 Market Center, San Francisco, Calif.Managed by: RREEF Owned by: RREEF American REIT III Corp F

575 Market Center, San Francisco, Calif.Managed by: RREEF Owned by: RREEF American REIT III Corp F

3800 Buffalo Speedway, Houston, TexasManaged by: Crescent Real Estate Equities Limited Partnership Owned by: MS Crescent Greenway Plaza SPV, LLC

3811 Turtle Creek, Dallas, TexasManaged by: Stream Realty Partners, L.P. Owned by: Metropolitan Life Insurance Co.

One Gateway Center, Newark, N.J.Managed by: Advance Realty Management, Inc. Owned by: Advance at One Gateway, LLC

Bank of America Plaza, Charlotte, N.C.Managed and owned by: Behringer Harvard

Denver Financial Center, Denver, Colo.Managed by: Transwestern Owned by: U.S. Premier Office Equities, L.P.

Granite 190—Building One, Richardson, TexasManaged by: Granite Properties, Inc. Owned by: GPI-M190A, LP

Granite Park One, Plano, TexasManaged by: Granite Properties, Inc. Owned by: Granite Park I, LLC

Granite Park Two, Plano, TexasManaged by: Granite Properties, Inc. Owned by: Granite Park II, LLC

Parkway Corporate Center, Montvale, N.J.Managed by: Grubb & Ellis Company Owned by: TCAM Core Property Fund Operating LP

Rosewood Court, Dallas, TexasManaged by: Stream Realty Partners, L.P. Owned by: Rosewood Court, LLC

The Tower at Cityplace, Dallas, TexasManaged by: Stream Realty Partners, L.P. Owned by: Dallas CPT Fee Owner, L.P.


Sunday General Session Highlights

Mayor Michael Nutter Welcomes BOMA to Philadelphia

Philadelphia Mayor Michael Nut-

ter helped kick off the BOMA Inter-

national Conference by welcoming

BOMA members to the city of broth-

erly “and sisterly” love and thanking

BOMA for its leadership in Philadel-

phia and across the country. Mayor

Nutter also recognized BOMA’s lead-

ership in energy and sustainability

during the opening general session

of the conference.

The Power of the BOMA Network on Display in Philadelphia

“We have to stay close to clients and find out what they need. This is where it will be won or lost.”

Chip Akridge, Chairman, Akridge

“While we think the development side will be frozen for some time, we believe capital will be used on the acquisition side. The fundamental side is not healthy, but it’s going in the right direction. I like 2010.”

William Hankowsky, Chairman, President & CEO, Liberty Property Trust

“Innovation and creativity will be key, especially with this group, because asset management is more important to more stakeholders … lenders are very interested in operators.”

Perry Schonfeld, Principal, LBA Realty LLC

“Get in front of tenants earlier to restructure leases and be ready to make deals … be proactive.”

T. Patrick Duncan, Chairman & CEO, USAA Real Estate Company

Panelists Discuss Marketplace Realities and OpportunitiesPanelists participating in the “Searching for Value in all the Right Places” Sunday

General Session, sponsored by Yardi/SiteStuff, pulled no punches about the stress the credit crisis has had on commercial real estate. Perry Schonfeld, principal with LBA Realty LLC, noted that a “lack of clarity and confidence” in the economy is holding back potential deals. Panelists agreed that asset management is more important than ever to stakeholders and will be key as the industry works toward recovery.

The session was moderated by Andrew C. Florance, president and CEO of CoStar Group. Significant takeaways from panelists included the following:

By Laura Horsley

Sunday General Session panelists discuss marketplace realities and strategies.

BOMA members throughout the commercial real estate industry gathered in Philadel-phia, June 28-30, for the BOMA International Conference and The Office Building Show, the industry’s premier gathering and perhaps BOMA’s most important conference in years. For three packed days, attend-ees networked; shared infor-mation and ideas; and were connected to the experts and strategies to help them survive one of the most difficult market cycles in recent memory.


Chamberlain Delivers State of the IndustryDuring his annual State of the Industry address at the Mon-

day General Session, BOMA President Henry Chamberlain

discussed the good, the bad and the ugly playing out across

the marketplace in response to the capital credit crisis.

Key takeaways from the State of the Industry address

included:

• Vacancyratesarenowcloseto16percentandlooktobe

headed to 20.

• Negativenetabsorption,totaling18.4millionsquarefeet,

continues to push vacancy rates higher.

• Thebillionsincapitaldollarswaitingonthesidelines

could spur recovery once we push beyond this difficult

cycle.

• Evenfirmsthathavestrongbalancesheetsarefindingit

difficult to navigate the current climate. Many firms are

conserving their cash as they revise their hold periods and

five-year plans for each asset in their portfolios.

• Besidesthegovernment,healthcareisoneofthefew

industries with positive job growth. The Medical Office

Building market continues to be a sought-after asset class.

• Becausecommercialrealestatewaslatetotherecession,

wecanalsoexpectittobelatetotherecovery.2010will

most certainly be another tough year for the marketplace,

butlookforsignsofgrowthin2011.

• TheTreasuryDepartmentrecentlymadecommercial

mortgage backed securities eligible collateral for TALF

loans, which should help prevent defaults on economi-

cally viable commercial properties, increase the capacity

of current holders of maturing mortgages to make addi-

tional loans and facilitate the sale of distressed properties.

• Moreandmorestateandcitygovernmentsarerequiring

leases in green buildings or new green building stan-

dards. We’re seeing this in places like D.C., Boston and San

Francisco.

• Amajorfocusoftherecentstimuluspackageisaninvest-

ment of $3.2 billion in energy-efficiency and conservation

projects in the nation’s cities, counties and states.Inaugural Class of BOMA 360 Performance Buildings Recognized

Also during the Monday General Session, BOMA Vice Chair

RayMackeyannouncedthefirstclassofBOMA360Perfor-

mance Buildings. “With this recognition these designees are

sending a message to their owners, tenants and prospective

tenants that they are optimizing building performance at every

level,” said Mackey.

BOMA360PerformanceBuildingsarelistedonpage23.

Monday General Session Highlights

Dr. Fareed Zakaria Offers Insight on New Global Marketplace

During the Monday General Session, sponsored by Thys-

senKrupp Elevator, renowned economist Dr. Fareed Zakaria

discussed the political, economic and technology transforma-

tions that have redefined the global marketplace. Dr. Zakaria

also told attendees that the recovery will not be shaped by the

predictions of academics, but by the 300 million unpredictable

responses from individuals across the country.

BOMA Vice Chair Ray Mackey (fourth from left) introduces the inaugural class of BOMA 360 designees.

BOMA President Henry Chamberlain tells it like it is during his State of the Indus-try address.


Find more information on the 2009 BOMA International Conference and The Office Building Show online at www.boma.org. Mark your calendars for the 2010 Conference and The Every Building Show, June 27-29, at the Long Beach Convention & Entertainment Center, Los Angeles County, Calif.


Other HighlightsBOMA members packed into the

40-plus Education Sessions, offered

across five value-driven tracks, focus-

ing on the strategies property profes-

sionals need to survive in today’s tur-

bulent marketplace. Tracks included:

Maximizing Asset Value; Building a

Sustainable Bottom Line; Leading Effec-

tively in Challenging Times; Going Lean:

Managing With Less; and Optimizing

Building Operations: Tools for Building

Engineers.

The Office Building Show was bus-

tling with commercial real estate pro-

fessionals looking for the cutting-edge,

cost-effective products and services to

ensure that their buildings stand out.

The best minds, best products and best

services were on all on display on the

tradeshow floor, including the latest in

energy-efficient solutions at the popu-

lar BOMA Green Pavilion and ENERGY

STAR® Showcase.

During The Office Building of the Year

(TOBY) Awards, sponsored by Securitas

SecurityServicesUSA,14commercial

properties were recognized for excel-

lence in office building management

and operations in specific categories

of building size or type (read about the

TOBYwinnersonpage28-31).Other

highlights of the evening included

BOMA International Chair Dick Purtell

honoring BOMA Secretary/Treasurer

Prior to the BOMA International Conference, nearly 450 healthcare real estate professionals (hospital executives, healthcare owners and managers, lenders, investors, develop-ers) attended BOMA’s annual Medical Office Buildings and Healthcare Facilities (MOB) Conference in Philadelphia. Financing structures, operating trends and healthcare reform were among the MOB topics. Read a full recap of the MOB Conference in “Eye on Education” on pages 44-46.

A Night to Remember at the TOBY AwardsDave Stucky with the annual Chair’s

Award, and the announcement of three

Outstanding Members of the Year from

three local BOMA Regions:

• MiddleAtlanticRegion,LouisJ.

Mantia, BOMA/New York;

• SouthernRegion,SallyElliott,

BOMA/Atlanta;

• Southwest Region, Karrie S.

McCampbell, Dallas/BOMA and

Texas BOMA.

James A. Peck, RPA, FMA, was for-

mally sworn in as 2009-2010 BOMA

International Chair during the cere-

mony. In his acceptance speech, Peck

told BOMA members, “We have had

many challenges in recent months and

more may be on the horizon, but I’m

confidentthatBOMAisuniquelyposi-

tioned to strengthen all of our careers

through our programs, education and

advocacy.”

BOMA/Philadelphia helped attend-

ees connect with history and so much

more during the Welcome Party at the

National Constitution Center. Sensa-

tional entertainment, fabulous food and

interactive exhibits and displays made it

a night to remember. BOMA/Philadel-

phia also sponsored a popular “diamond

heist” BOMAPAC fundraiser that raised

morethan$11,000fortheBOMAPAC.

Jim Peck takes the helm as 2009-2010 BOMA Inter-national Chair.

Attendees seek out cutting-edge building solutions at The Office Building Show.

NOTE: The Office Building Show is now The Every Building Show; a new name for the industry’s premier show for every type of building.


Board of Governors MeetingDuring the Board of Governors meeting, BOMA Vice

President of Education and Research Lorie Damon and

Vice President with Kingsley Associates Phil Mobley (pic-

turedbelow)announcedthattheExperience Exchange

Report (EER)hasmigratedonlinewithgreaterfunctional-

ity, cost efficiency and ease of use. BOMA members par-

ticipated in live demos of the online 2009 EER throughout

the tradeshow in the BOMA booth. Read about the new

online EERin“ResearchCorner”onpages42-43.

The Board of Governors

also voted to adopt the fol-

lowing five new policy posi-

tions on:

• VoluntaryGreenhouseGas

Emission Reduction;

• VoluntaryModelBuild-

ing Energy Performance

Program;

• InvestmentIncentivesforWater-EfficientProducts;

• CommercialRealEstateCreditCrisis;

• RealEstateMortgageInvestmentConduits,or

REMIC rules.

Learn more about BOMA’s new policy positions in “Leg-

islativeUpdate”onpages8-10.

BOMA Incoming Chair Jim Peck reported on the BOMA Partnership Program, which is now in its sixth year.

BOMA’s Cornerstone Partners include:

• AlliedBartonSecurityServices,BOMA’sfirstCorner-

stonePartner,joiningtheprogramin2004;

• IBRoofSystems,abrandnewCornerstonePartner;

• Kimberly-ClarkProfessional,apartnersince2004;

• NaylorPublishing,apartnersince2008;

• ThyssenKruppElevator,apartnersince2004;and

• Trane,apartnersince2007.

BOMA’s Leadership Circle Partners include:

• ISSFacilityServices,apartnersince2005;

• SIEMENS,apartnersince2008;

• UGLUnicco,apartnersince2007;and

• ValleyCrest,anewpartner.

BOMA’s Supporting Partners include:

• AcuityBrandsLighting,apartnersince2008;

• Nalco,apartnersince2006;and

• OrkinCommercialServices,apartnersince2007.

During the Inclusive Membership portion of the meet-

ing, Steve Ash, BOMA/Houston, and chair of the Local

Association Services Committee, announced the winners

of the Best Practices Awards. The winners were:

• Marketing Communications category—BOMA/San

Francisco for its Membership Brochure;

• Communications Management category—BOMA/

Austin for its PR Initiative to reach out to the city of

Austin on codes and energy-efficiency issues;

• Communications Management category (honorable

mention)—BOMA/SuburbanChicagoforitsfirst-ever

“Green” Golf Outing; and

• Electronic & Interactive Communications category—

BOMA/Oakland-East Bay for its redesigned Web site.

In addition, BOMA International’s newest officers and executive committee members(pictured)wereapproved

during the Board of Governors meeting.

New Officers are:

• ViceChair—BoydR.Zoc-

cola, Hokanson Compa-

nies, Inc., BOMA/India-

napolis; and

• Secretary/Treasurer—Kent

Gibson, CPM, Zions Secu-

rities Corporation, BOMA/

Utah.

New Executive Committee

members are:

• AngeloJ.Grima,Grubb&

Ellis Management Services, Inc., BOMA/New York;

• KarrieS.McCampbell,CPM,Transwestern,

BOMA/Dallas;

• LauraT.Ragans,RPA,ManulifeFinancial,

BOMA/Orlando;

• PerrySchonfeld,MBA,CPA,LBARealty,

BOMA/Orange County; and

• DavidM.Stucky,CityofSanDiego,BOMA/SanDiego.

BOMA welcomed several guest speakers during the

Board of Governors meeting, including:

• NickRidley,president,British

Council for Offices;

• AndyFuhrman,CEO,OSCRE;

• PatrickFinchandTerryLogue,

Department of Energy, Commer-

cial Real Estate Energy Alliance;

• AdolfZubia,president,Interna-

tional Codes Council Board of

Directors;

• HenryGreen,presidentandCEO(pictured),National

Institute of Building Sciences; and

• RobertWible,FIATECH.

BOMA Outgoing Chair Dick Purtell addresses the Board of Governors.


CORPORATE FACILITYCiti Campus—JacksonvilleJacksonville, Fla.Managed by: Grubb & Ellis Management Services, Inc.Owned by: Citicorp Credit Services, Inc.The Citi Campus—Jacksonville, a six-building, 629,000-square-foot complex in Jacksonville, Fla., is committed to energy efficiency. To help reduce energy consumption, rooftop unit crossover ducts were installed and in two months they helped save more than $19,600. In 2007, the building challenged all employees to provide suggestions to reduce costs and green the property. To date, the challenge has had a cost sav-ings of more than $250,000. Community involvement is also important to the owner and management team, and in 2008 Citi Campus—Jack-sonville contributed more than 23,825 volunteer hours and raised more than $2 million for its community partners.

EARTH AWARDHeifer InternationalLittle Rock, Ark. Managed by: Heifer International—Facilities Management TeamOwned by: Heifer InternationalThe Earth Award recognizes excellence in environmentally sound office building management. Heifer International’s LEED® Platinum-certified world headquarters building is the largest brownfield clean-up by volume in state history. This four-story, 96,000-square-foot building is just 62 feet deep, so daylight penetrates the entire floor plate. Raised flooring improves ventilation and makes heating and cooling more efficient. Atrium floors are made from renewable bamboo, and the restrooms contain block glass walls to enhance natural light. Heifer International made a concerted effort to use resources found within a 500-mile radius to reduce transportation costs and fossil fuel emissions.

A Cut AboveIndustry Honors Standouts in Building Operations and Management in Philadelphia

Coming off a year full of challenges

for commercial real estate, industry

professionals gathered to celebrate

achievement and excellence as 14 com-

mercial properties were honored with

The Office Building of the Year (TOBY®)

Awards during the 2009 BOMA Interna-

tional Conference and The Office Build-

ing Show. This year’s competition was

perhaps even more meaningful, as the

winning buildings demonstrated how

to deliver unsurpassed building man-

agement in the face of weak economic

conditions.

The TOBY Awards are sponsored by Securitas Security Services USA. The largest provider of security officer services in the United States,

Securitas provides security solutions, including uniformed security staff, consulting and inves-tigations and security systems integration to building owners and managers nationwide. For more information, visit www.securitas.com.

The TOBY winners were recognized

for excellence in office building man-

agement and operations in specific cate-

gories of building size or type. To win the

international award, the office buildings

first won both local and regional compe-

titions. Judging was based on commu-

nity impact, tenant/employee relations

programs, energy management systems,

accessibility for disabled people, emer-

gency evacuation procedures, building

personnel training programs and over-

all quality indicators. A team of expert

industry professionals also conducted

a comprehensive building inspection.

This year’s TOBYs were highly competi-

tive, with 79 entries in 14 categories.

The TOBY winners for 2008-2009 are

listed below by category.

By Lindsay Tiffany


GOVERNMENT BUILDINGSandra Day O’Connor United States CourthousePhoenix, Ariz.Owned and managed by: U. S. General Services AdministrationThe Sandra Day O’Connor United States Courthouse is a six-story, 832,000-square-foot building in downtown Phoenix. By utilizing natural light, approximately two-thirds of lighting fixtures in public spaces have been de-lamped. In other spaces, ambient light sensors adjust lighting depending on conditions. As a result, the Sandra Day O’Connor U.S. Courthouse received an ENERGY STAR® rating of 89. GSA’s Good Neighbor Program helps revitalize the economic and civic livelihood of communities, while improving work environments for federal employees.

HISTORICAL BUILDINGToronto College ParkToronto, Ontario, CanadaManaged by: GWL Realty Advisors Inc.Owned by: Toronto College Park Ltd.Built in 1928, Toronto College Park is a Canadian architectural landmark located in downtown Toronto. The management team developed a detailed building emergency and disaster plan that includes Web-based support features and manuals on emergency response procedures. Building management is committed to a three-percent reduction in energy consumption, with the team bonus directly tied to achievement. To meet this goal, real-time monitoring equipment was installed, allowing the team to maximize efficiency. Toronto College Park received Go Green Plus certification in November 2007.

INDUSTRIAL OFFICE PARKCrosstown North Business CenterBrooklyn Park, Minn.Owned and managed by: Duke Realty CorporationCrosstown North Business Center is an 87-acre, eight-building industrial office park consisting of 1.186 million square feet of flex, warehouse and office space. Both building staff members and tenants receive training on the HVAC system during space turnover. Training includes the proper and efficient use of programmable thermostats and managing expecta-tions with Xcel energy unit saver switches. Duke’s safety program is corporately sponsored, and all Duke employees participate in monthly safety conference calls to discuss new programs and ideas. Duke Realty Corporation also gives each of its associates two paid community serv-ice days annually, resulting in 400 hours of volunteer service.

MEDICAL OFFICE BUILDINGArnold PavilionSeattle, Wash.Managed by: CB Richard EllisOwned by: 1221 Madison Street Owners AssociationArnold Pavilion is a high-rise medical office building on Swedish Medical Center’s campus in Seattle. The building has a demonstrated commit-ment to environmentally sound building practices. The team worked with designers and builders to save 30 tons of material from going to the landfill during roof replacement. The new overlay is ENERGY STAR® rated with energy-saving reflective material. Building management also conducted a waste audit, which helped identify an additional 30 percent of trash that can be recycled.



RENOVATED BUILDING100 Park AvenueNew York, N.Y.Managed by: SL Green Realty Corp.Owned by: SL Green Realty Corp. and Prudential Real Estate InvestorsThis 36-story, 887,000-square-foot building underwent a $70 million renovation, transforming the building in just three years and resulting in a Silver LEED® EB rating. 100 Park Avenue was designed with 13 green roofs, a first in a New York commercial high-rise, collectively remov-ing 18 tons of CO2 from the air annually. The building is fully compliant with local mandates requiring low-flow water fixtures. As a result, water consumption has been reduced by 50 percent, equivalent to nearly one million gallons of water per year.

SUBURBAN OFFICE PARK, LOW-RISECarlson CenterMinnetonka, Minn.Owned and managed by: Carlson Real Estate CompanyCarlson Center is a multi-tenant office park located in suburban Min-neapolis. The complex includes office, industrial, residential, retail, recreational, dining, medical and lodging properties, as well as a park. All five buildings in the Carlson Center complex are ENERGY STAR® benchmarked. The management team is also in the process of obtaining LEED® EB certification for the properties. To further their sustainability efforts, the management team hosts twice-annual commuter fairs, which promote alternative commuting options. Carlson Center was awarded the Property Management Commuter Choice Award from Metro Transit for its efforts.

SUBURBAN OFFICE PARK, MID-RISEPearson Corporate CentreEtobicoke, Ontario, CanadaManaged by: Bentall Limited PartnershipOwned by: Westpen Properties Ltd.Environmental stewardship is an important focus at Pearson Corporate Centre, located in the Toronto area. The Bentall management team launched “ForeverGreen—Responsible Property Management,” a pro-gram through which management partners with tenants to reduce the property’s environmental footprint. Pearson Corporate Centre recently took the “Commuter Challenge” during the Canadian Environment Week, encouraging tenants to use public transportation, bike, walk or carpool to work. Recycling is also a cornerstone of its sustainability plan. A waste audit conducted in 2008 showed that, through its efforts, Pearson Corporate Centre saved more than 1,200 trees in a calendar year.

UNDER 100,000 SQUARE FEETWest 101 GatewayPhoenix, Ariz.Managed by: Opus West Management Corporation Owned by: Opus Real Estate AZ VII WG, LLCWest 101 Gateway is a two-story, 50,500-square-foot, multi-tenant, Class A office building. The staff at West 101 Gateway uses ENERGY STAR® Portfolio Manager to track energy performance, and in 2008 the building achieved an energy performance rating of 96. The manage-ment team practices “sensible sustainability,” leveraging design and construction practices that maximize building performance and reduce the impact of buildings on the environment. The management team is committed to community stewardship and contributes 10 percent of their pre-tax profits and countless employee volunteer hours to dozens of nonprofit organizations.


100,000 - 249,999 SQUARE FEETWhole Foods Market World Headquarters Building Austin, TexasManaged by: Schlosser Development Corp.Owned by: LSA/WF Project Ltd.The Whole Foods Market World Headquarters Building, located in the heart of Austin’s downtown Market District, pays homage to an agrarian past while celebrating its vibrant urban community. Emergency preparedness and security are priorities for the owner and building management team. The Building Emergency Safety Team (BEST) was created in 2005 to involve tenants in emergency preparedness. Multiple meetings are held annually, which focus on safety and emergency preparedness. To complement energy conservation programs already in place, building management works with employees to identify conserva-tion ideas that benefit the building and the environment.

250,000 - 499,999 SQUARE FEET601 TowerMinnetonka, Minn.Managed by: CB Richard EllisOwned by: TIAA-CREF601 Tower, a 15-story Class A+ high-rise, is a landmark that can be seen for miles in the Minneapolis metropolitan area. Community involve-ment is important to the management team and the tenants, and, to date, they have donated more than 10,000 pounds of food to Second Harvest Heartland Food Shelf. Building management carefully tracks energy use and has received an ENERGY STAR® rating of 90. 601 Tower implemented a food recycling program, which reduced its trash load by approximately 10 percent.

500,000 - ONE MILLION SQUARE FEETMGM TowerLos Angeles, Calif.Managed by: JMB Real Estate Services, Inc.Owned by: Constellation Place, LLC MGM Tower, a Class A, 775,000-square-foot, 35-story building in Los Angeles, is LEED® Silver certified, the first existing office building in LA to receive this designation. Recently, the management team installed solar panels on the roof of the parking structure, which generates enough energy to offset more than 12 percent of annual energy use and reduce daytime demand by up to 29 percent. MGM Tower has a successful tenant relations program in place that focuses on exceptional customer service, quick response time and effective communications between ten-ants and the management team.

OVER ONE MILLION SQUARE FEETFifth Street TowersMinneapolis, Minn.Managed by: CarterOwned by: Strategic Real Estate AdvisorsFifth Street Towers, a two-tower Class A office complex, is located in downtown Minneapolis. Fifth Street Towers participates in the local util-ity’s voluntary load reduction program, a cooperative energy curtailment program that has resulted in approximately $90,000 savings in annual operating expense. Both towers have ENERGY STAR® certification and scored impressive ENERGY STAR ratings of 92 and 96 in 2008. The Fifth Street Towers team is also active in their community, collaborating with local organization The Caring Tree on its annual back-to-school campaign by collecting supplies and funds to ensure that low-income students have adequate school supplies.


Sector watch

Industrial SnapshotBy Laura Horsley

MUCH OF THE FOCUS OF THE CREDIT CRISIS and ensuing recession has been concentrated on the collapse of the resi-dential real estate market, the deterio-ration of retail and rising vacancy rates in commercial office space. Although the industrial market may appear to be holding its own somewhat compared to other areas, recent declines in global GDP and trade, along with continued job losses, are definitely being felt in ware-houses across the nation. CB Richard Ellis (CBRE) reports national net absorp-tion of -80,296 million square feet (msf) for the first quarter 2009 (1Q09), a steady decline from a year ago when absorption was just entering negative territory at -28,117 msf and well off the 2006 num-bers when absorption was well-estab-lished in positive territory at nearly 65

msf. CBRE also reports that the national availability rate has risen in the past year, with 2Q09 at 13 percent—an increase from 10.4-percent availability in 2Q08.

The California ports are among the regions hardest hit. According to Louis Tomaselli, executive vice president with Voit Real Estate Services, the ports of Long Beach and Los Angeles (which han-dle approximately 40 percent of trade for

Chicago Rents down -5.4% from a year ago

-16.0MM SF YTD net absorption

Vacancy: 9.4%

Dallas/Fort Worth Rents down -2.4% from a year ago


Vacancy: 12.0%

Northern New Jersey Rents down -4.9% from a year ago


Vacancy: 7.9%

Southern California Rents down -7.3% from a year ago


Vacancy: 6.7%

The hardest hit markets thus far in 2009

Continued pain from occupancy losses

Source: Jones Lang LaSalle

Phoenix Rents down -8.4% from a year ago


Vacancy: 15.8% Orlando Rents down -10.1% from a year ago


Vacancy: 12.3%

The nation’s two largest industrial markets account for

more than one-third of YTD negative net absorption

Houston Rents up 5.4% from a year ago

0.4MM SF YTD net absorption

Vacancy: 6.6%

Atlanta Rents down -3.8% from a year ago


Vacancy: 12.7%

Denver Rents down -3.5% from a year ago


Vacancy: 7.7%

Philadelphia Rents up 0.5% from a year ago


Vacancy: 10.6%

* Marketed rents

the country) are 40- to 50-percent off of the highs from 2006, which has a direct impact on warehouses in that region. “It’s pretty scary that the ports are down 40 percent and aren’t due to recover for possibly three or four years,” says Toma-selli. “The question becomes: ‘How are we going to fill the vacant space?’ ” Avail-able industrial space in Orange County


The hardest hit markets thus far in 2009Continued pain from occupancy losses

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Sector watch

is at roughly 11 percent, a 58-percent increase from last year.

The pain, however, does not reside on the West Coast alone. Jones Lang LaSalle (JLL) reports that rents are down in sev-eral markets across the country, includ-ing Atlanta, Orlando, Phoenix and New Jersey (see illustration, page 32).

Panama canal effectIt may take more than a recovery to

put the wind back in the sails of the West Coast ports. Many firms are expanding or positioning their services in Gulf Coast and East Coast port areas to be ready for the predicted influx of supply once the widening of the Panama Canal is complete in 2014 (which will mean that ships bearing up to 10,000 contain-ers will be able to pass through, opening up the eastern U.S. to more trade from Asia and South America).

Jones Lang LaSalle is expanding its services into the industrial market to leverage its platform across a spec-trum of real estate beyond office. Greg Grainger, a managing director at JLL

overseeing national industrial manage-ment services, is eyeing markets all along the East Coast and Gulf Coast—New Jer-sey, Philadelphia, Atlanta, Miami, Hous-ton—as the 2014 Panama Canal time-frame draws closer. “One of the biggest beneficiaries to the canal expansion will be the Texas Gulf Coast, where there is a lot of port expansion. This should cor-relate with an economic recovery across the global real estate market.”

ripe for rail?One company that isn’t letting the

recession deter development plans is CenterPoint Properties. The Chicago-based industrial development and management company recently broke ground on a $2 billion intermodal cen-ter in Joliet, Ill. The project is expected to generate more than 14,000 jobs and, when combined with its sister intermo-dal center in Elwood, Ill., will create the nation’s largest inland port with more than 6,000 acres and multiple 1,000-acre Class 1 railroad intermodals, as well as 30 million square feet of industrial facilities.

“It will be the greenest, most modern intermodal in the country, designed to eventually handle 3.5 million containers per year,” says CenterPoint’s CEO Mike Mullen. The Joliet intermodal is sched-uled to open in Fall 2010.

Mullen and his team strongly believe the future of industrial business is going to be proximity to rail hubs as transpor-tation costs are much greater than rent. “We’re not building new highways and the highways we do have are congested with trucks,” he explains. “It’s much greener and more efficient with rail. With one gallon of fuel, you can move 1,000 pounds of freight 429 miles by train; you get less than 100 miles by truck.”

Government stimulus funding for infrastructure projects could also nour-ish the green shoots industrial is look-ing for as those projects (roads, bridges, rail) tend to require warehouse prod-ucts. And, although there is debate as to whether the stimulus is shovel ready or shovel broken, intermodal and other industrial projects could certainly ben-efit when the “digging” begins.

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An Energy Audit Of Your BuildingWill Outline Savings Options

E Even in our current economic situation, energy forecasters are confident that elec-tricity demand will, over time, continue to grow. That’s just one reason renewableenergy sources are such a popular news topic today. As you may have read recently,

solar photovoltaic panels and wind turbines are valuable new technologies forgenerating electricity without adding toxic emissions to the environment.

However, improving energy efficiency offers an even greater energyresource, at a much lower per-kilowatt (kW) cost.

In other words, it’s a bargain. In the words of Stephen Chu, theNobel-prize-winning Secretary of Energy: “Energy efficiency is not justlow-hanging fruit; it is fruit that is lying on the ground. And energyefficiency means money back in your pocket because you pay less onyour energy bills.”

Audits involve measurement!For owners of existing buildings, improved efficiency also means

lower overhead expenses. Resulting savings increase available capitalfor more productive uses, including funding installation of solar orwind – which could further reduce your energy costs.

Keep reading or download this FREE report atwww.ElectricalDesignLibrary.com

Energy Audit:Layout 1 8/10/09 11:17 AM Page 1


trends tracker

Intelligent Lighting TrendsFinding the crossroads of energy efficiency and Functionality By Cheryl English and Karyn Gayle

LIGHTING SOLUTION DECISIONS have become even more crit-ical in recent years as more and more buildings undergo energy-efficient renovations and green certifications. New technologies and intelligent lighting approaches promise both energy savings and increased functionality for building occupants and owners.

Solid State Lighting and LEDsThe emergence of solid state, semiconductor-based light-

emitting diodes (LEDs) shows all the signs of changing the way people light their spaces. Over the last several years, white high-brightness LEDs have realized exponential growth in useful life and light output, making it possible to develop lighting fixtures that consume one-third of the energy of an incandescent ver-sion, with 10 to 20 times the life. At present, the cost of LEDs is higher than traditional sources; however, consumers can sometimes offset the higher initial costs through energy and maintenance savings in certain applications. Looking towards the future, the price/performance gap is closing rapidly as LED technology continues to advance.

RT5TM Volumetric Recessed Luminaires from Lithonia Lighting shine down on the offices of CHG Healthcare in Salt Lake City.

Office Lighting RenovationsThere are several hundreds of millions of office lighting fix-

tures installed in the United States, most of which are 10 to 25 years old. Nearly all are extremely costly to operate when com-pared to newer, more energy-efficient alternatives. In the past, lighting renovation decisions required a tradeoff between energy reduction and aesthetic enhancements. This is no longer the case. New retrofit lighting and control solutions address both requirements and are more cost effective than ever.

Warehouse RenovationsTraditional technologies, such as linear fluorescent and high-

intensity discharge (HID) lamps, have also benefitted from a focus on greater energy management. For indoor applications, fluorescent and newer HID technologies are still among the most efficient sources around, and integrating lighting controls (such


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as occupancy sensors) can generate even more energy savings. For example, a large national electronics retail chain recently replaced its outdated HID high bay lighting in hundreds of its stores with energy-efficient, dimming-enabled, electronic HID luminaires. The result was a savings in excess of 25 percent of their lighting load. Similarly, a large distribution center in the southeastern United States reported a 43-percent reduction in its energy usage after replacing metal halide HID fixtures with a fluorescent lighting system utilizing occupancy sensors.

Lighting Controls for Interiors and ExteriorsThe simplest form of lighting controls is the act of manually

turning lights on and off. Automating this process, however, can yield significant energy savings, and some degree of light-ing automation is now required for new construction in most states. Modern systems offer features—occupancy sensing, time-based scheduling, daylight harvesting and dimming control—for almost any lamp type, although special dimmable ballasts are usually required.

Interior lighting controls solutions range from simple wall-switch replacement occupancy sensors to advanced and highly customizable systems with graphical computer interfaces. Selecting the best system depends on the goals of the building owner or operator. Depending on the equipment installed and application, lighting energy savings of 20 to 50 percent can be realized over manual control. Many lighting controls systems have also become easier to commission and operate, adding intelligence to lighting fixtures and controls components to

optimize them for energy management. Intelligent plug-and-play lighting systems are flexible and automate many setup, calibration and programming tasks that must be performed manually on other systems. Changes to the use of a building no longer require reprogramming or re-commissioning of the control system, a welcome departure for most users.

Some new approaches to outdoor lighting controls include the use of wireless controls devices that not only adjust light lev-els, but also include feedback mechanisms to report diagnostic information and energy use for each fixture. Through the use of software, a facility manager is now able to instantly assess the on/off status and working condition of all of the lights in a parking garage from a laptop located anywhere in the world. Wireless outdoor monitoring systems eliminate visual patrolling and repeat maintenance trips for crews, resulting in improved efficiencies and reduced operating costs.

With new technologies and financial incentives for energy-efficient lighting, the time has never been better to renovate your building’s lighting.

about the authors: Cheryl English ([email protected]) is vice president of market & industry development for Acuity Brands Light-ing. She is responsible for energy and environmental activities, marketing and education. Karyn Gayle ([email protected]) is director of business development for Acuity Brands Lighting and specializes in strategic partnerships and other corporate development initiatives.

trends tracker

Look for it—View an Acuity Brands Lighting case study in the re-sources section at www.boma.org. Click on “Articles and Tools.”

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Green Scene

ECO-FRIENDLY PRODUCTS STOLE THE SHOW at BOMA’s The Office Build-ing Show this past June in Philadelphia, where top industry suppliers showcased the latest green solutions and services. Over the past few years, sustainability has gone from an emerging trend to a critical element in operational excel-lence in commercial buildings. As building managers strive to compete in a down market, they are increasingly partnering with vendors who help them harness the power of “green.” Here are just a few of the sustainable solutions that were on display at The Office Build-ing Show …

Going Green, from the roof Down

IB Roofing Systems, an industry leader in roofing, featured its line of sustain-able roofing solutions at the tradeshow. Operating by a set of principles based on environmental stewardship, IB Roof Sys-tems has developed high-performance PVC membrane roofing products that are at the forefront of sustainable roofing technologies. Its roofing product design maximizes long-term reflectivity and a special top finish keeps roofs cleaner longer to increase their reflective prop-erties, thereby cooling the roof, reducing energy consumption and diminishing the urban “heat island effect.”

IB Roof Systems also briefed attend-ees on how its products could opti-mize the performance of other green applications. The company partnered with experts in the solar energy field to develop a membrane proven to support

solar panels for the long term, ensuring that the cost savings of solar systems are not offset by early roof replacement. It has also ensured that its products are durable enough to support the condi-tions of a “green” roof or a rooftop gar-den. IB Roof’s membranes are impen-etrable to strong root systems, resis-tant to acidic soil conditions and offer proven leak-free performance for at least 30 years. Learn more at www.ibroof systems.com.

Taking Benchmarking to a Higher Level

Experts at the Nalco booth spoke to attendees about how their Nalco 360 Serv- ice™ water system monitoring program saves money and makes buildings more efficient. With the Nalco 360 Service pro-gram, a team of professionals vigilantly monitors a building’s water system 24 hours a day, seven days a week. In addition to checking for problems and responding within minutes to system alarms and emergencies, Nalco’s team conducts comprehensive assessments to ensure that water systems are oper-ated in accordance with industry best practices. Based on those observations, Nalco then makes recommendations for operational improvements, saving water, energy and money.

Nalco also demonstrated the advanced reporting tools they use to communi-cate water system performance trends to building managers. The sophisti-cated system provides users with direct,

on-demand access to system informa-tion and allows users to create custom-ized reports based on a variety of data specifications. Monthly reports include trend graphs for key parameters, icons to facilitate instant interpretation of results and a summary of actions taken by Nalco experts to optimize efficiency. Learn more at www.nalco.com.

Sustainable Hygiene Solutions

High-quality, low environmental impact was the mantra at Kimberly-Clark Profes-sional’s booth, where attendees got a hands-on look at the company’s sustainable hygiene solutions. With a focus on recy-cled content and reduced packaging, Kimberly-Clark displayed a variety of tissue, towel and skincare products ideal for property professionals interested in enhancing their building’s sustainability quotient. In addition to the environmen-tal benefits, many of the products last longer than standard hygiene products.

Among the solutions on display was the Scott brand 100-percent recycled fiber line of paper products, which recently earned the Green Seal™ Certifi-cation. Perfect for use in buildings seek-ing green certification, the Scott brand 100-percent recycled fiber offerings include three kinds of paper towels and two types of bathroom tissue.

Kimberly-Clark also featured its Kleenex Naturals facial tissues, made with a blend of virgin fiber and 20-per-cent post-consumer recycled fiber. The new blend is soft and durable, and also exceeds the U. S. Environmental Pro-tection Agency’s (EPA’s) minimum stan-dards for post-consumer fiber content in facial tissue. Learn more at www.kimberly-clark.com.

Suppliers Spotlight Sustainable Solutions at The Office Building Show

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BOMA International Conference

& The Every Building Show...

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ReseaRch coRneR

Private-Sector Office Building Income PerformanceAlthough 2008 saw deterioration in real estate performance

due to the crisis in the financial markets and the ongoing reces-sion, office building owners and managers in the EER survey sample reported modest gains in their revenue streams (see Figure 1).

Comparing the same properties year to year, office income (7.0 percent), total income (5.4 percent) and rental income (4.2 percent) all increased in 2008 compared to 2007. Retail income, however, fell from $23.39 per square foot (psf) to $20.45 psf—a 12.6-percent drop—reflecting lower consumer demand brought on by the economic downtown. In 2008, net operating income (NOI) increased from $13.57 psf to $14.21 (4.72 percent). It should be noted that not all properties that report expenses also report income; therefore, data for NOI should be inter-preted accordingly.

Private-Sector Office Building Expense Performance Reflecting financial constraints, office building expenses were

relatively low in 2008 compared to 2007 (see Figure 2). Total operating expenses increased modestly, from $7.51 in 2007 to $7.99 psf in 2008 (6.4 percent). The highest increases were in roads/grounds (23.5 percent); administration (10.5 percent); security (8.3 percent); and cleaning (7.0 percent).

Of note, utility expenses decreased marginally, dropping from $2.31 psf in 2007 to $2.28 in 2008 (1.3 percent). This decline may reflect the fall in energy prices in the second half of the year, as well as energy conservation efforts by commercial property managers.

Fixed expenses, including items such as real estate taxes, personal property taxes and building insurance, increased from $3.96 psf to $4.14 psf (4.5 percent).

Private-Sector Office Building Total Expense RatiosFor all U.S. private-sector buildings, fixed expenses, most

notably real estate taxes, have consistently been the largest component of expenditures for commercial office real estate (34 percent in 2008). Utilities, which are almost all energy costs, are the second largest component of total expenses (21 percent).

EER data for 2008 indicates that commercial property own-ers and managers managed to report modest gains while keep-ing operating costs under control. But the economic outlook remains uncertain for 2009 and 2010. Commercial real estate tends to lag other industries during times of recession, mean-ing the industry is impacted by the recession later and recov-ers later.

Despite Credit Crisis, Office Building Owners and Managers Report Modest Income Gains online eeR Rolls out with easy access to More Data

0

5

10

15

20

25

30 Figure 1 • 2007-2008* Income Comparisons

* 2007 dollar values are equal to 2008 dollar values because of a reported 0.0 percent net change in the CPI-U for all of 2008.

Office Income

Retail Income

Other Income

Total Rental Income

Total Income

Net Operating Income

0

3

6

9

12

15 Figure 2 • 2007-2008* Expense Comparisons

Cleaning

Repairs/M

aintenance

Utilities

Roads/Grounds

Security

Administrative

Total Operatin

g

Expense

s

Fixed Exp

enses

Total Exp

enses

By Noel Popwell

Access the EER by following the steps outlined on page 43.

Key: 2007 2008

2008 Private Sector Expense Ratios (All Buildings)

Fixed Expenses

34%

Utilities21%

Repairs/Maintenance

15%

Cleaning12%

Adminis-trative11%

Security6%

Roads/Grounds

2%


about the eeRThis year, the eeR survey was conducted entirely online by BoMa International and Kingsley associates. The 2009 BoMa experience exchange Report contains operating income, expense and other data for nearly 4,500 office build-ings. Data for a total of 110 mar-kets across the United states and canada are included.

easy access to the online eeRThe new online EER, brought to you by BOMA International and Kingsley Associ-ates, allows you to access 15 million data points in 40 seconds or less, and it has never been easier. Simply follow this two-step process:

First, set up a subscription:

• Gotowww.bomaeer.com.

• CreateanaccountbyenteringyourloginIDandpassword(newuserswillneedto create an account).

• Clickon“Order2009Data”atthetopofthescreen.

• Select“Iwouldliketopurchasesubscriptionserviceformyself”andclick “Continue.”Ifyouarepurchasingmultiplesubscriptions,selectadditionalusersnow and add their names and e-mail addresses.

• Makeyourmarketselections.

• Proceedto“ReviewOrder”and“PaymentInfo.”

• Enteryourpaymentinformation.

• Receiveyourconfirmatione-mail.

Second,runthereportsforthemarket(s)selected:

• Clickon“2009EERReports,”whichshouldnowappearatthetopofthescreen.

• Makeparameterselectionsandrunreports.

Remember:BuyingtheEER is more affordable, flexible and easier than ever. Customizeandbuyyoursubscriptionbasedonyourandyourentirestaff’sneeds—allinoneeasytransaction.Visitwww.bomaeer.comtogetstarted.Askaboutgroup

andcompany-widesubscriptions—call(202)326-6314or(202)326-6346.

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EyE on Education

NEARLY 450 HEALTHCARE REAL ESTATE PROFESSIONALS (hospi-tal executives, healthcare owners and managers, lenders, investors, develop-ers) attended BOMA’s annual Medical Office Buildings and Healthcare Facilities (MOB) Conference in Philadelphia, June 25 and 26. Thought leaders from health-care real estate companies and hospital systems addressed key issues before the industry, such as the financial where-withal of health systems, whether the “recession-proof” label many have given healthcare real estate is valid, “clinic” models for ambulatory care, emerging hospital-employed physician models, CMS reimbursements and the effects of potential healthcare reform.

cFo PerspectiveThe MOB Conference kicked off with

a topic on everyone’s mind—the bot-tom line—during “Gauging the Health of Healthcare Systems: A CFO Round-table.” Financial executives Chick Boyle, Universal Health and Universal Health Realty Income Trust; Robert H. Lux, Temple University Health System; and James Foley, Shore Memorial Hospital, discussed operating trends, access to capital and monetization.

Lux focused on issues in the urban market in his system’s Philadelphia region, including physician shortages and flat or declining revenue, noting that there continues to be a shift to outpa-tient services to offset costs. “You have to be laser focused on cost and produc-tivity,” stressed Lux.

Financing Structures, operating trends and Healthcare Reform top MoB topicsBy Laura Horsley

At Shore Memorial Hospital in Southeast New Jersey, an acceleration in unemployment due to a decrease in the casino employment base has had a significant impact on the hospital, according to Foley, where cost of care is “at or more than revenue” and more and more uninsured people are using the ER as their primary care. Foley also noted that there is pressure on the expense side as hospitals lose endowments and that there are more pension expenses due to stock market declines.

Boyle explained that insurance com-panies are looking at declining enroll-ment with the economy as a plaguing factor. On the flip side, he noted that the poor economy has at least helped control costs, with more stabilization as nurses come back into the workforce.

deal diagnosisThis year’s MOB Conference featured

a two-pronged look at deals in health-care real estate, with back-to-back ses-sions focusing on deals from the equity and lenders’ angles.

During “Deal Diagnosis: Equity Per-spective,” a panel of leading health-care real estate executives discussed equity strategies for MOB deals and whether the market is prime now for deals or if the “wait and see” attitude is still en vogue. PJ Camp, with Shattuck

Hammond Partners, provided some optimism, remarking, “The markets caught us all off guard, but we have reasonable parties to discuss strategies going forward. We are seeing markets loosen up and deals happening.” Clint Hinds, with Kennedy Associates Real Estate Counsel, LP, added that MOBs are more accepted today as an asset class as transaction volumes are up for this sector. “The appetite is there. The key is pricing. Investors are looking for double-digit returns.”

“Deal Diagnosis: The Lenders’ Per-spective” looked at risks and opportu-nities that banks and lenders see as the lending market begins to loosen. “There are people lending,” said panelist Timo-thy J. Cobb, with Heavenrich and Com-pany, Inc. “The true gems are the smaller regional and local banks,” he noted, add-ing that today most banks are looking for a significant banking relationship of five to 10 percent of the loan amount. Jack Dudick, with Lillibridge, stressed the importance of knowing what the “hot buttons are” and that being proactive is essential to getting deals done. Said Dudick, “There is a market out there; it just takes understanding.” The panelists did emphasize that there are still poten-tial non-starters. For instance, if the guarantee isn’t there with a substantial percentage down, loans will be tougher to acquire; also, many lenders are skepti-cal about off-campus locations.

Economic EmergencyDuring the Keynote Luncheon spon-

sored by GE Healthcare Financial Serv-ices, renowned Wharton School of Busi-ness Economist Dr. Peter Linneman told attendees that healthcare was the only sector of the economy, besides the gov-ernment, not shrinking. Speaking to the collapse of the financial markets and the ensuing recession, Dr. Linneman stated that the collapse came about because the United States “threw out the eco-nomic rules.” He predicted a weak recov-ery for the remainder of 2009 if we can find stability, but also stressed that we are all living through an unprecedented monetary policy experiment that will probably result in inflation. On a some-what positive note, Dr. Linneman antici-pated that the “stimulus effect of spend-ing the trillions of dollars waiting on the sideline could be stunning.”



HcRE trendsBack by popular demand, healthcare

real estate executives gathered for “Vital Signs: Trends in Healthcare Roundta-ble” for a discussion of several key top-ics, touching on everything from merg-ers and acquisitions (M&A) to informa-tion technology to the outlook for the financial markets.

David Whelan, with Stroudwater Associates, noted that there is a signifi-cant increase in M&A activities as well as regional and statewide consolidation: “Drivers of consolidation include access to capital; systems tend to have more access to capital than hospitals.”

IT discussions focused on the integra-tion challenges of converting medical records from hard copy to electronic, a priority for the Obama Administration and many hospital systems. Warren L. Lyons, with Temple University Health System, said some physicians are saying that electronic records are sometimes less useful because it changes workflow, adding that the “cost for installation can escalate quickly and surpass budget pro-jections” but that eventually it will be a competitive advantage.

Hospital financing was a hot topic throughout the MOB Conference. Dur-ing the “Vital Signs Roundtable,” par-ticipants agreed that, although access to capital has been difficult, the market is restoring that access, that the focus on credit ratings is paramount, that there is much more appreciation today for risk and details and that the fixed rate will continue to modestly improve. Andrew Majka, with Kaufman, Hall & Associates, noted that, despite positive signs, there are still big wild cards to be concerned about, including the possible effect of healthcare reform on investment.

R

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More MOB Conference InsightFor even more news and trends from the 2009 MOB Conference, visit www.boma.org. And, mark your calendars for the 2010 MOB Conference, May 5-7, in Chicago.


EyE on Education

Education and Events calendar

Peak Fall ProtectionDesigned Safety Solutions

adVERtiSinG indEX

coMPany PaGE no. coMPany PaGE no.Foundations of Real Estate Manage-ment courses are being offered by BOMA local associations throughout the country, from Orange County to Washington, D.C. Please view the education calendar at www.boma.org for more information or contact Emily Naden at [email protected].

September 16: The Road to Renewals: Keeping Tenants Happy in a Depressed Economy, Webinar, 2:00pm ET

October 7-9: IFMA World Work-place, Orange County Convention Center, Orlando, Fla., www.world workplace.org

October 14: No Mention of Money: Understanding the Economic Impact of “Nonfinancial” Lease Clauses, Webinar, 2:00pm ET

November 11: BEEP Course 2: How to Benchmark Energy Performance, Webinar, 2:00pm ET

December 2: BEEP Course 3: Energy-Efficient Audit Concepts and Economic Benefits, Webinar, 2:00pm ET

February 1-4, 2010: Winter Busi-ness Meeting and National Issues Conference, Hyatt Regency Capitol Hill, Washington, D.C.

May 5-7, 2010: Medical Office Buildings and Healthcare Facilities Conference, Hyatt Regency, Chicago, Ill.

June 27-29, 2010: BOMA Inter-national Conference and The Every Building Show, Long Beach Conven-tion and Entertainment Center, Los Angeles County, Calif.

For detailed information on BOMA educational offerings, contact Emily Naden at [email protected] visit www.boma.org/TrainingAndEducation

American Anchor ...................................37

Angus Systems Group—Canada................ 14

Bartlett Tree Experts ............................. 45

Bobrick Washroom Equip. Inc. .................. 9

BOMA Atlanta ......................................43

BOMA International .............................. 41

Cree Inc.—HQ ....................................C4

Dorlen Products ................................... 45

Duro-Last Roofing ................................. 17

EVAC+Chair Corp. ............................... 12

Fujitec America Inc. ............................... 10

Fuller Phoenix Architectural ..................... 21

Griswold Controls .................................38

Healthy Buildings Intl. ........................... 36

IB Roof Systems ................................... 39

Jamestown Technologies ........................ 36

JP Obelisk ............................................ 13

Mitsubishi Electric—HVAC Canada ........... 15

NECA .................................................35

Next Parking LLC ..................................32

NuTech National ...................................34

Orkin Pest Control ................................. 7

Painters & Allied Trades Labor Management

Cooperative Initiative (LMCI) ............... 11

Peak Fall Protection ............................. 46

Pro-Bel...............................................C2

Quality Filters Inc. ................................. 16

Road Safe Traffic Systems ........................43

RoofMart Intl. Inc. (RMI) .......................32

Sanyo HVAC.........................................33

SealMaster Corp.—Thorworks ................. 21

Shortridge Instruments Inc....................... 12

Solutia Performance Films/Saflex .............. 19

Universal Protection Services .................... 3

U.S. Green Building Council—USGBC..... C3

U.S. Lawns............................................ 4

PHOENIX, NOVEMBER 11-13, 2009. REGISTER AT GREENBUILDEXPO.ORG


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