November 24, 2007
It used to be that when a new owner of an office building or office park set out to “add value”, it meant getting contractors involved to make improvements to anything from upgrading lobbies and common areas to improving lighting.
Now, more and more landlords are turning to architects to help them “add value” by re-measuring buildings to the latest BOMA/ANSI standards. As the office market has rebounded, owners (particularly new ones) are taking this opportunity to re-measure their buildings and recalculate load factors and rentable square footage numbers (see the glossary for definitions).
As existing tenants look to sign new leases or renew in this market, they might find that they have to fork over more rent, both based on the healthy condition of the market, but also as a result of an increase in square footage.
One example is in Mountain View where the previous owner was leasing space utilizing a load factor of approximately 12%. The new owners have gone out and remeasured all the tenant spaces and common areas and have revised the load factor up to over 20%!
As a tenant, it is therefore important to pay attention to this trend and work to mitigate risk in this regard by: 1) measuring space upon move-in to confirm its accuracy, and 2) including language into the lease which solidifies the square footage and limits the ability of the landlord to remeasure and revise a tenant’s rent during the course of the lease.
- BOMA: The Standard For Measuring Office Space
- SF Chronicle Article Today On San Francisco Office Space Market
- A Guide to Office Building Classifications; Class A, Class B, Class C
- Rising Rents Allowing Tenant’s To Exit Leases
- Tenants Concerned About Landlord Financials