The International Property Measurement Standards Coalition, a nonprofit group made up of 45 national and international real estate organizations, is seeking to put into effect a standard system of measurement for the worldwide office market.
The goal is to have a common set of standards that will allow investors, landlords, and tenants to accurately compare buildings and spaces across international markets.
The coalition published its first draft of a set of standards in January. The second draft will be released shortly, and the final version is set to be released in November. Those in favour of a single standard support the need for transparency in measuring space in the market.
However, the reaction to the initiative from New York has been chilly with professionals questioning the need for implementing global standards.
Peter Boritz, the CEO of Real Data Management, stated recently that the idea that the new system would increase transparency in the market “has no basis.”
Across the U.S., buildings are measured according to the guidelines put in place by the Building Owners and Managers Association (BOMA). In New York, most building measurements fall under REBNY guidelines, and these allow for more aggressive building measurements.
Measurements for the Durst Organization’s One World Trade Center were originally calculated at 2.6 million sq ft but were later changed to 3 million sq ft after a re-measurement based on REBNY guidelines as well as a conversion of some interior space. A company spokesperson said that the increase was due to converting some shaft space outside the core into “usable area.”
Another example is Tishman Speyer’s MetLife Building which is recorded as 3.1 million sq ft – a 275,000 sq ft increase on the figure reported 10 years ago.
This jump in usable rentable space has led to an increase of $24.3 million in annual rental income.
If the coalition’s proposals were adopted, they would lead to a drop in the value of New York assets and are likely to be resisted for this reason.
For its part, the coalition says that New York must realise that it is part of the global office market and must embrace the new standards.
