10 Jul Beyond the Walls: Understanding Unenclosed Areas in BOMA Office 2024
For commercial real estate professionals, accurately assessing rentable area is paramount to successful transactions. The Building Owners and Managers Association (BOMA) standards serve as the industry benchmark, and while they’ve historically focused on enclosed spaces, recent iterations, particularly BOMA Office 2024 (ANSI/BOMA Z65.1-yyyy), have significantly evolved their treatment of unenclosed exterior areas. This shift has considerable implications for property valuation, leasing agreements, and due diligence.
Historically, BOMA Office Standards explicitly excluded unenclosed areas – spaces lacking four-season protection from the elements. However, as building designs and tenant needs have evolved, so too has the interpretation of rentable space.
A Shifting Landscape: How Unenclosed Areas Entered the Rentable Realm
The journey of unenclosed areas into BOMA’s rentable calculations can be traced through key standard updates:
- BOMA 2010: The “Building Line” Concept: This version introduced the “building line” for ground-floor tenant areas with street frontage. This allowed the rentable boundary of these spaces to extend to the building line, even if the actual storefront was recessed. This marked a departure from strictly enclosed measurements, acknowledging the commercial value of street-facing visibility and access.
- BOMA 2017: Universal Dominant Portion and New Classifications: The “building line” concept was short-lived. BOMA 2017 reverted to the principle of “dominant portion” as a universal rule for all exterior tenant walls, regardless of floor level. Crucially, 2017 also brought unenclosed areas directly into the “Rentable Area” through specific classifications:
- “Unenclosed Occupant Circulation”: Particularly relevant in temperate climates where exterior pathways might replace traditional interior corridors.
- “Unprotected Exterior Openings”: Think recessed loading dock areas that, while open, serve a functional purpose for the tenant.
- “Unenclosed Features”: This category covered amenities like finished balconies, covered galleries, and finished rooftop terraces – spaces with clear tenant benefit despite being open to the elements.
- BOMA 2024: Refinements and New Categories: The BOMA Office 2024 standard builds upon the 2017 framework, introducing critical modifications and new concepts:
- Reduced Allowable Width: The maximum allowable width for certain unenclosed circulation paths has been reduced from 6 feet to 5 feet, a detail that can marginally impact overall rentable square footage.
- Clarified Circulation Paths: The methodology for determining unenclosed circulation paths has been further clarified with detailed guidelines and illustrative examples, aiming for greater consistency in measurement.
- “Unenclosed Occupant Service Areas”: A significant new introduction is the concept of “Unenclosed Occupant Service Areas.” These are exterior spaces dedicated to equipment specifically for a tenant’s operations, rather than for the building’s overall function. Examples include rooftop occupant generators, communications devices, or dedicated unenclosed storage areas.
Implications for Real Estate Professionals
The evolving inclusion of unenclosed exterior areas in BOMA rentable calculations has several key implications for those involved in real estate transactions:
- Due Diligence: When evaluating properties, a thorough understanding of how unenclosed areas are measured and classified under BOMA 2024 is essential. This impacts accurate square footage reporting and, consequently, valuation.
- Lease Negotiations: Both landlords and tenants must be acutely aware of these definitions. For landlords, it means potentially realizing additional rentable area. For tenants, it’s about understanding what they are paying for, especially in spaces with significant exterior components.
- Property Marketing: Accurately representing rentable area, including qualified unenclosed spaces, ensures transparency and avoids discrepancies during the transaction process.
- Risk Assessment: Misinterpretations of BOMA standards can lead to disputes and legal challenges. Adhering to the latest guidelines minimizes this risk.
Conclusion
In conclusion, the BOMA Office 2024 standard continues the trend of recognizing the value and utility of certain unenclosed exterior areas. For real estate professionals, staying current with these nuanced definitions is not merely about compliance; it’s about optimizing property value, ensuring equitable lease agreements, and fostering informed real estate transactions. Understanding “beyond the walls” is now a critical component of successful commercial real estate practice.
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