Assessment Practices and Procedures Office 1
Office
Last Document Review Date: September 29, 2014
TABLE OF CONTENTS
Executive Summary .............................................................................. 2
Compliance Checklist ............................................................................ 3
Processing Office Properties ................................................................... 4
General ............................................................................................ 4
Practices and Procedures .................................................................... 5
Appendix A: Frequently Asked Questions ............................................... 13
General FAQs .................................................................................. 13
BOMA Rentable Area FAQs – Link to BOMA ......................................... 14
Appendix B: Occupancy Descriptions ..................................................... 23
Foreword ........................................................................................ 23
Assessment Practices and Procedures Office 2
EXECUTIVE SUMMARY
The following properties, identified by actual use, are within scope:
o 203 – Stores and/or Offices with Apartments
o 204 – Store(s) and Offices o 208 – Office Building (Primary Use)
Office properties often hold non-office components, such as apartment, retail, or parking that have to be valued
separately from the office property itself.
Assessment Practices and Procedures Office 3
COMPLIANCE CHECKLIST
The following is a list of items that must be completed in order to be considered compliant with this document:
1. Where they are determined to be the highest and best use
(HBU), office properties as defined in this document are to be be valued using a capitalized NOI except:
a. A cost or DCA approach may be used in rural/remote
areas only when information to support an income valuation is not available.
b. A cost approach may be used for properties determined
not to be at HBU.
2. Offices will be Class 6 – business and other except for any component determined to be used for other non-office
purposes.
3. Improvements will be based on an improvement residual unless the property is an air space parcel or designated
heritage building, where a land residual will be used.
4. Office properties with additional components will use a
separate model for each significant non-office use (De
Minimus rule applies).
5. Market support must accompany any adjustments to the
base rate or model for market influencing characteristics (attributes) at the model level. For example, adjustments to
income, expense, vacancy, land, quality, view, etc., that
varies from the base rate or model for the competitive market set.
6. Do not record individual expense amounts.
7. Do not record an occupancy for each office tenant. Instead, summarize all tenants within the same occupancy into one
spreadsheet entry.
Assessment Practices and Procedures Office 4
PROCESSING OFFICE PROPERTIES
General
1. Valuation method(s):
a. Capitalized NOI – primary method.
b. Cost or DCA methods in rural and remote (unincorporated) areas only when information to
support an income valuation is not available.
c. Units of measure are dollar per square foot of gross leasable area or GLA for multi-tenant and single tenant
office properties.
d. GLA will be based on reported space and be consistently determined for all properties linked to a model.
CAUTION: Some office owners do not include vacant space
and as such, their reported information may be understated.
e. A building residual approach will be used to determine
the improvement value.
TIP
Inability to obtain information in a local market should not be the
deciding factor in selecting the cost or DCA methods. Market information for competitive properties in similar communities
within the region should first be investigated.
EXCEPTIONS:
o The cost method will be used for properties for which
the current use is not the HBU. o The land residual method will be used for value
apportionment in the case of air-space parcels and designated heritage buildings.
o Regions will develop a DCA value as a backup only when the market trades on this basis. A business case,
approved by the Executive will be required for GIM backup models.
Assessment Practices and Procedures Office 5
Practices and Procedures
1. Attach the necessary documents to the viewers as needed,
refer to Attachments (valueBC).
2. When completing the mandatory fields in the IncomeDCA Model viewer/Keypane, keep the following in mind:
Office properties with one or more non-office
component(s) will be valued through application of a
separate model and income record for each significant non-office use within the building.
The De Minimus rule will be applied to determine whether space devoted to non-office use is significant enough to
require creation of one or more additional income records (drawing rates from another model).
CAUTION: Be careful when applying the De Minimus rule, for example when a large office has a small area of storage
or limited parking, this area is included in order to reflect what is on the rent roll.
o Model Creation: a model should be designed to encompass the largest number of relatively similar
properties, within the geographically broadest possible
competitive market set. valueBC provides considerable flexibility to account for the diversity of buildings within
a specific model (e.g., income quality, size or suite mix, variable adjustments).
▪ The starting point for development of office models will be occupancy and region.
o Method: select CAP Direct Capitalization o Model Type: select OFF – Office
o Primary Model Use: select applicable occupancy (1800, 1801, 1802, 1803).
o Model Description: The model description will be based on the following naming convention, in the following
order:
▪ Occupancy Short Description
▪ Geographic Area that model applies – Region, Jur or
NBHD or smaller area (if necessary) ▪ Physical Attributes that further define model (if
necessary) ▪ Sub-Markets included (if any)
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- The Model Description will apply to space with
similar office rental amenities in mixed-use properties.
- Examples: Offices with Elevator – North Fraser Region
Office Blg C Class – Victoria – Pre 1960 Office Blg C Class – Vancouver CBD – 1 Sub-
Market Indus Flex Warehse – Vancouver Isl Region –
Small Towns and Rural Strata Res Low Rise – Downtown Poco to Pitt
River Rd Strata Res High Rise – Vancouver Nr Joyce St
Sky Train
o Additional information documenting the Model should be
placed in:
- Income-DCA Model viewer/Notes tab/Category: 08 – General.
TIP
While it is not strictly necessary to identify the occupancy and
geographic application of the model in the model name, addition of this information improves clarity when multiple models are
open at the same time.
3. When completing the mandatory fields in the Income DCA Model viewer/Occupancies and Adjustments tab, keep the
following in mind:
Enter a spreadsheet row for each required combination of
Quality and Unit of Measure by Unit of Measure order (e.g., Q1 GLA, Q2 GLA, Q3 GLA, etc.).
Size adjustment curve, general vacancy, non-variable adjustment, all model attribute adjustments, CAP rates
and adjustments, and effective age adjustments must have market support.
o On the Occupancy spreadsheet:
▪ Occupancy: select appropriate occupancy – refer to
occupancy definitions in Appendix B:
- 1800 Class D Office
- 1801 Class C Office - 1802 Class B Office
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- 1803 Class A Office
▪ Quality: select appropriate.
- Establish quality classes based on the properties
within the geographic competitive set. - Determine an average quality property from this
competitive set. - Determine the range of qualities required to
encompass the competitive set, (sub markets may be required if there is a rate differential
between areas for similar qualities of property. - The variance between qualities for additional
occupancy entries (new rows) should be significant, representing a differential of at least
five percent in net operating income. - In many cases, only two to three qualities may be
necessary to encompass a specific rental office
competitive set.
▪ Economic Rate: enter economic rate associated with
occupancy and quality.
- The economic rate for an occupancy, unit of
measure, and quality will be recorded to the nearest 25 cents per annualized period (annual).
- The economic rate will be determined from analysis of net lease information for the specific
competitive market set. The lease type will be based on the amount of expenses being passed
through and the industry standard associated with the competitive market set.
- Record the basis for economic rates (e.g. type of net lease) in the Income DCA Model viewer/Notes
tab.
- The economic rate for an occupancy and quality may be adjusted at the model and incomeDCA
record level to reflect non-typical obligations of the building owner or tenants within the
competitive market set.
▪ Unit of Measure: select GLA.
▪ Annualization: select An – Annual ▪ Size Adjustment Curve: select Size Adjustment
Curve if associated with the office model. ▪ Size curve, if used, must have market support.
Assessment Practices and Procedures Office 8
o On the General Vacancy/Occupancy field, enter general
vacancy as percentage of potential gross income directly (do not use detailed Vacancy).
▪ A vacancy entry in the occupancy spreadsheet will override the general vacancy field entry – use
general vacancy only.
o The General Expense field is a non-editable field that
shows the amount totals from the Expense and Adjustment tab.
o On the Non-Variable Adjustments spreadsheet:
- Record a non-variable adjustment only if the
feature is not captured in the economic rate for a specific occupancy and quality.
▪ Adjustment Type: select Rev or Vac (Revenue or Vacancy).
- Do not select Expense Adjustment Type at the
model level. If an expense adjustment is required for anomalies in the competitive set, apply the
adjustment at the income record level. Ensure you are not adjusting for a landlord’s poor or
superior management (value to owner). - Vacancy adjustments will be expressed as percent
of potential gross rental income.
▪ Attribute: select appropriate.
- Ensure that attribute is not included in economic rate for the specific model occupancy and quality
to avoid double adjusting.
▪ Value: enter appropriate value, e.g., “Y” for presence
or “N” for absence of most attributes, (other attributes, such as basement, require "Finished" or
"Unfinished", etc.)
▪ Dollar Value/Percent: enter dollar/percent amount adjustment to economic rate.
- Use dollar adjustments to apply lump-sum adjustments only for market attributes (expressed
in dollars) which are relatively stable over several years. It will still be necessary to review dollar
adjustments on an annual basis along with associated economic-market rates. Examples of
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dollar adjustments to economic rates may be
“heat not included” or “parking”. - Use percent adjustments to apply relationship
adjustments only for market attributes which are potentially unstable over the long-term (actual
dollar amounts will fluctuate). Examples of percent adjustments may be location or view.
Percentage adjustments will not likely require review as frequently as dollar adjustments.
- Dollar and percent adjustments will be applied consistently for all ICI models in a region on a
property specific basis. See Appendix A.
o On the Variable Adjustments spreadsheet:
- Extreme caution should be applied when adding variable adjustments.
▪ Adjustment Type: select Revenue, Vacancy or
Expense.
- Vacancy and expense adjustments will be
expressed as a percent.
▪ Attribute: select appropriate
- A sub-market attribute should only be selected for a significant number of properties in the
competitive set, which share a similar range of non-typical rents or vacancies (e.g., greater than
10). Otherwise, adjustments for anomalous situations should be made at the income record or
property specific level.
▪ To – From Values: enter From/To Values associated
with attribute (e.g., total GLA of building, ceiling height, number of floors, etc.).
- When applying these adjustments consider the
impact on other model variables such as expenses, vacancy, and OCR.
▪ Basic Range $/% Adj per unit: enter dollar amount or percent adjustment.
▪ Add Range $/% Adj per unit Cumulative: enter dollar amount or percent amount for ramp-up of
adjustment (e.g., on basis of building floor level).
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o On the CAP/GIM tab:
- A CAP adjustment for a variety of attributes should be made at the incomeDCA model level,
See CAP/GIM User Guide.
NOTE
Make sure to add a model-level CAP/GIM attribute to all qualities. A corresponding attribute must be added to the
IncomeDCA Valuation viewer to reflect the model-level adjustment on the income record.
- Surplus or excess land can also be valued through one or more additional land component (refer to
Highest and Best Use – Interim Use).
▪ Quality: select appropriate quality
- Range of qualities selected should be consistent with range of occupancy qualities recorded in
model.
▪ From Eff Year to Eff Year: CAUTION: use only in exceptional circumstances due to potential for double
adjustment (e.g., effective age already accounted for in quality of economic rate, CAP, and other
adjustments). ▪ CAP/GIM tab: enter CAP rate for each quality
required.
- CAP rates should be rounded to nearest 0.25%.
4. When completing the mandatory fields in the Income DCA Model viewer/Expenses tab, keep the following in mind:
o Expense: select overall expense category.
▪ No new expense items will be added to available expense categories.
▪ The total of all expenses will sum directly to the Income and Vacancy tab\General Expenses field.
o Rate: enter percentage of effective gross income.
5. When completing the mandatory fields in the Income DCA
Valuation viewer/Keypane, keep the following in mind:
Create one or more additional income records for mixed-
use properties where it is necessary to draw rates from a non-office model (e.g., retail tenancies on first floor,
apartments, parking, etc.).
Assessment Practices and Procedures Office 11
o Model Name: enter Model Name (e.g. OFF 150) if
known or query Income-DCA Model viewer to identify appropriate model based on Model Type, Area, Jur, and
Neighbourhood. o Model Type: select OFF – Office.
o Primary Model Use: select office. o Building Name: enter if applicable.
o CAP/GIM Adjustment: enter percent adjustment (plus or minus) only for building size, FSR or site coverage
differences relative to the typical property for a specific occupancy and quality (competitive set).
▪ If there are multiple income records contributing to the value of the property, a Folio CAP/GIM
adjustment may be required. Use the Property viewer/Commercial Building tab to enter the
predominant income record and an overall CAP
adjustment (only if required) in the CAP/GIM Adjustment field.
▪ Adjustments must have market support.
6. When completing the mandatory fields in the Income DCA
Valuation viewer/Valuation tab, keep the following in mind:
Do not record an occupancy for each office tenant. All tenants within the same occupancy will be summarized
into one spreadsheet entry.
o On the Occupancy spreadsheet:
▪ Tenant Description: enter Office
▪ Occupancy: select occupancy associated with appropriate model.
- Add occupancies entries (new rows) for multiple floors when:
A building is not uniform in rentable floor area for each floor
Economic rates vary significant with numbered storeys
Some floors are not built-out A floor adjustment (variable) is required to
account for impact of floor height on economic rates.
▪ Quality: select quality that will apply to all space associated with the selected office occupancy and
unit of measure.
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▪ Unit of Measure: GLA Gross Leasable Area.
▪ Num Units: GLA units expressed as square feet.
o On the Attributes/Adjustments spreadsheet:
▪ Attribute: select attribute(s) from model or apply a manual adjustment.
- Do not enter manual attribute adjustments if the adjustment is already present in the model – this
will result in a double adjustment. - Adjustments for the present value of capital cost
to cure items should be made in the Commercial Building viewer/IncomeDCA Summary tab/Non
Assessable spreadsheet (cost to cure capital, TI build-out required). Key reason for deduction in
Notes tab.
▪ Value: enter value consistent with attribute selected
from model (e.g., ceiling height, GLA size, sub-
market number, etc.) ▪ Rate Adj $/%: enter dollar/percent value only if a
manual adjustment is recorded.
- If a value is entered for a model adjustment, the
total adjustment applied will be equal to model adjustment plus the amount entered in the Value
field.
▪ Vac/Exp Adj %: enter percent only if anomalous
situation with property.
o On the Distribution spreadsheet:
▪ Property Class: select property class 6. ▪ Exempt Tax Code: select 00 – fully taxable.
▪ Exempt Percent: key “100%” (e.g., 100 percent of value associated with income record).
Assessment Practices and Procedures Office 13
APPENDIX A: FREQUENTLY ASKED QUESTIONS
General FAQs
BOMA Rentable Area FAQs
General FAQs
Question
How should reported area be treated for recording GLA units of measure in valueBC?
1. Answer
First, determine the standard for space measurement in the competitive market set. For example, in some suburban or
rural markets, most owners and property managers may report rentable area equivalent to NLA (essentially space
occupied by the tenant, exclusive of common areas).
Second, review each property linked to a model to ensure that the standard for space measurement has been applied –
this may require an adjustment to rentable area recorded for some properties. For example, if most buildings are reported
on an NLA basis but several are reported on a GLA or other basis, it will be necessary to convert the non-NLA buildings to
the NLA standard. This is a critical step since the economic rates applied to properties linked to the model will have been
determined on the basis of the space standard for the model,
in this example – NLA.
The rentable area for assessment purposes for all office properties will be recorded as GLA units of measure in
valueBC.
Question
How should buildings, which are leased on a single tenant basis, be valued and recorded in valueBC?
2. Answer
While property owners or managers of single tenant buildings
may quote rentable areas on the basis of gross building area (GBA), the property will be valued as a conventional multi-
tenanted property based on the space standard that applies
Assessment Practices and Procedures Office 14
to the applicable office model (e.g., GLA). This approach is
necessary since BC Assessment (BCA) is not valuing the landlord or tenant’s interest but the sum of all interests.
Economic rates, vacancy, expenses, etc. will be applied to the building in the same fashion as all other properties in the
model.
It will be necessary to apply an efficiency factor to the GBA reported space to determine the rentable area for assessment
purpose.
BOMA Rentable Area FAQs – Link to BOMA
Question
Is atrium space measured by the standard?
3. Answer
Atrium space above the main lobby floor does not constitute
rentable area. It is empty space and is treated, in effect, as a major vertical penetration. The base of the atrium, however
(i.e., the finished floor) is measured.
Question
How are enclosing walls defined in conjunction with major
vertical penetrations? What about the floor of the stair tower or the elevator pits of the elevator shaft?
4. Answer
The term enclosing walls refers to those walls required by
building code, and not to the architectural or decorative treatments of those walls. The floor of a stair tower and the
pits of the elevator shaft, when found inside the enclosing walls, are part of the major vertical penetration. However, if
an area is not within the enclosing walls (such as a storage room under the stair tower), the area is part of the rentable
area.
NOTE
If the elevator starts at the parking level, the floor area of the
elevator is not included.
Assessment Practices and Procedures Office 15
Question
Are areas outside the fire resistance enclosure of a major vertical penetration considered part of that penetration? For
example, plumbing chases behind restrooms?
5. Answer
No. Walls enclosing the major vertical penetration, which are required by building codes, are part of the penetration.
Additional walls outside these enclosing walls are not considered part of the penetration and are not deducted from
rentable area.
Question
Are areas of refuge (mainly a feature of Canadian buildings) deducted as major vertical penetrations?
6. Answer
If the area of refuge is not isolated from the stairwell, then it
is part of the major vertical penetration and is deducted as
such. If the area of refuge is isolated from the stairwell with its own set of doors, then it is part of floor rentable area and
is distributed to each office area through the application of the R/U ratio.
Question
Can a mechanical room serving tenants on an aboveground
floor be part of building common area?
7. Answer
Yes, if it is not already part of a floor common area.
Question
On an aboveground floor, can a corridor that is ordinarily floor common area be assessed to a particular tenant if it provides
the only access to their space? Similarly, can a portion of a ground floor lobby that is ordinarily part of building common
area be assessed to a particular tenant if it provides the only
access to their space?
8. Answer
Corridors by their nature typically provide the only access to an office or store, even when the corridor is required primarily
for fire egress. Page 16 of the standard states that:
Assessment Practices and Procedures Office 16
"where alcoves, recessed entrances or similar deviation
from the corridor line are present Usable Area shall be computed as if the deviation were not present."
You should first determine whether the suite entrance could
be positioned to incorporate the area in question without obstructing other occupants, fire egress, or other building
services, before deciding that the area belongs to the usable area of an office or store. Remember that no area can be
accounted for more than once. If an area belongs to the usable area of an office or store, it must be excluded from
floor common area, building common area, or the usable area
of any other office or store.
Question
Is storage space part of building common area in a multi-tenant building? Is storage space usable area if it is for the
express use of a given tenant?
9. Answer
Areas that are used for storage, whether above or below grade, are measured just like an office (or store in the cases
of street frontage), because these spaces could house tenants’ personnel, furniture, files or supplies. If the space is
a common storage area available for use by all tenants at no additional charge, than it would be calculated under building
common area. If it is for the express use of a given tenant, the storage space would have both a usable and rentable
measurement.
Question
Is a courtyard included in building common area if it is
enclosed by four sides but not a roof?
10. Answer
Fully enclosed refers to an enclosed space where environmental conditions are maintained by a heating,
ventilating and air conditioning system. Therefore, there must be a roof in order for the courtyard to be fully enclosed.
Question
The standard states that “building common areas are
considered to be part of floor usable area”. Can this possibly mean that the building common areas on a ground-level floor
are to be measured twice?
Assessment Practices and Procedures Office 17
11. Answer
No, the standard does not allow the same space to be measured twice.
The intent of the standard is for building common area to be
part of the floor usable area. Building common area needs to take part of the floor common area allocation on the floor(s)
on which the building common area is located. Building common area, just like store area and office area, benefits
from the circulation corridors and other floor common area. This allocation is necessary in order to fairly distribute the
floor common area to the users. If the allocation were not made, occupants on floors with building common area would
receive an unfair higher allocation of floor common area.
Question
Are the exercise club and restaurant part of building common
area if they serve the entire building?
12. Answer
No; these areas represent rent-paying tenants; so while they do provide a service to the entire building (indeed to any
paying customer); they are store area rather than building common area. However, if these areas were a building
amenity that all tenants could use as part of their lease, then they would be considered building common area instead.
Question
In an office complex, would mechanical areas located in one
building, but which serve others as well, be considered building common area? What about underground corridors
that link one building with another?
13. Answer
Although the standard does not deal specifically with building
complexes, it would be a reasonable adaptation to consider the entire project as one building and to allocate the common
corridors and building mechanical area as allowed through building common area.
Question
On a single tenant floor, are the elevator lobby and restrooms
considered usable areas?
Assessment Practices and Procedures Office 18
14. Answer
The BOMA standard defines usable area as space that tenants can actually occupy and use and may allocate to house
personnel and furniture. Thus, if an elevator lobby is under the tenant’s control and could be put to use (as a reception
area, for instance), it is usable area. However, if the tenant cannot use that space because of fire code or other
restrictions, it is not usable area. Restrooms are not considered usable area under the standard, although they are
part of rentable area.
Question
If a private stairway is built between two floors occupied by one tenant, is that stairway part of rentable area? Is it part of
the usable area?
15. Answer
Yes and yes. The standard states specifically that “vertical
penetrations built for the private use of a tenant occupying office areas on more than one floor” are counted as rentable.
The stairway would also be part of the usable area of the tenant.
Question
If a tenant expands its rentable area, does the floor R/U ratio
and building R/U ratio change as a result – meaning that each tenant’s rentable area would change?
16. Answer
Tenant expansion and new tenant activity may indeed affect
the floor R/U ratio and/or building R/U ratio. If tenant expansion or new tenant activity occurs in part or all of an
existing store area or office area, the ratios remain unchanged. However, if tenant expansion or new tenant
activity incorporates what had been floor common area or
building common area into the newly created store or office area, or creates additional floor common area or building
common area from what was previously store or office area then one or both ratios will be affected.
The floor R/U ratio will change if floor common area is
increased or decreased (e.g., by changing the configuration of floor circulation corridors or enlarging a restroom). The
building R/U ratio will change if building common area is increased or decreased (e.g., by leasing an exercise room) or
Assessment Practices and Procedures Office 19
if the floor R/U ratio is adjusted on a floor containing building
common area.
Changes to the floor R/U ratio and building R/U ratio will affect the rentable area of all the offices or stores located on
that floor or in the building. For purposes of stability, adjustments to existing leases based on changes to rentable
area are typically not made, although the new ratios are used in future lease transactions.
Question
Is parking ever counted as rentable area?
17. Answer
No, the standard excludes parking space.
Question
Are major vertical penetrations included in store area?
18. Answer
No. Major vertical penetrations are excluded when calculating
store area. Rentable area itself excludes major vertical penetrations – and, since store area is less than or equal to
floor rentable area on the floor where the store is located, store area likewise will exclude major vertical penetrations.
Question
If a store area is on a corner, is the measurement taken to
the building line on both sides? Does it matter whether entrances to the space are located on both sides?
19. Answer
Store area requires a street frontage and a ground level. It is
possible for a square building to meet these conditions on every one of its sides. In that situation and on that level, the
dominant portion would be the building line on each side.
However, the sides do not have to be at the same level. A building can have street frontage and ground level on one
side (e.g., Floor 1) and street frontage and ground level on another side (e.g., on Floor 3). Each of those two floors would
be considered store area, and the dominant portion would be the building line. Having a separate street entrance for the
space is not a requirement in determining street frontage for a store area.
Assessment Practices and Procedures Office 20
Question
How is building line defined where the ground floor building face is set back further than the upper floors from the street
frontage?
20. Answer
The standard is intended to measure space that is fully enclosed. Therefore the building line, as used in the standard
to determine store area, is the outside face of the column line (or the exterior building surface if columns are not present) of
the ground floor on the street frontage exposure. Deviations to the building line, including projections or recesses, are
ignored unless they are part of the permanent building exterior of the ground floor.
Question
Should ground floor spaces that have separate entrances and
have no access to ground floor lobbies still receive a gross-up
for those areas?
21. Answer
Yes, all tenant spaces within a building should be treated equally. Therefore, tenant spaces with separate entrances
and no access to ground floor lobbies are treated in the same manner as tenants who do have access to the ground floor
lobby.
Question
Regarding dominant portion … where a wall meets a column a bite appears to be taken out of the column as the
measurement line shifts. If the column is not square, how are the dimensions of the bite determined?
22. Answer
Columns are not considered in the standard. Therefore, where
a column interrupts the dominant portion, the dominant
portion that exists on each side of the column continues through one-half of the horizontal distance of the column.
Where a column interrupts a dominant portion that is the same on both sides, the dominant portion continues through
the column as if the column did not exist. Where a column interrupts a dominant portion that is different on each side,
the dominant portion on one side continues for one-half the horizontal distance and then either steps in or out to meet the
dominant portion from the other side.
Assessment Practices and Procedures Office 21
Question
Is the measurement taken to the centre line of partitions between adjoining tenant spaces and to the centre line of
partitions between tenant spaces and building common areas?
23. Answer
Yes, the measurement is taken to the centre line of partitions
between adjoining office area(s) or store area(s), building common area(s) and the building common area being
measured. Building common area is measured just like office or store area in determining usable area.
Question
Are mezzanines measured by the standard?
24. Answer
All floor space in a building is measured, including
mezzanines. The purpose of the standard is to measure the
actual square feet contained in the building. The usefulness of a particular space is not addressed by the standard, and is
better left for lease negotiations between landlord and tenant. Varying lease rates are common in the market using such
criteria as location on the floor, proximity to the elevator lobby, windows, views, heights in the building, and the
usefulness of a particular space.
Question
Does the standard measure space in belowground floors?
25. Answer
Yes, except for those areas specifically excluded by the standard, such as parking areas.
Question
Is gross building area an appropriate way to measure a single
occupant building?
26. Answer
The standard is a systematic method for measuring office
buildings, and should be used in its entirety for each building. Its purpose is to provide a common and agreed-upon basis
for comparing lease rates, building efficiencies, operating costs and other relevant data. For example, gross building
area is used within the industry primarily to determine
Assessment Practices and Procedures Office 22
construction costs or building value. Usable area is often used
to determine cleaning costs and space efficiencies.
Single occupant buildings will often need to be compared to multi-occupant buildings and, in these cases, building
rentable area is the recommended measurement to use. Gross building area would be an appropriate method in
determining lease rate only if the parties agree. Each part of the standard has its own use and needs to be applied
regardless of the number of occupants.
Question
Does the standard provide for the measurement of warehouse or industrial space? Does it cover a shopping centre or strip
mall?
27. Answer
No, the standard is intended to apply specifically to the
measurement of office buildings. A method for measuring store area in office buildings is contained in the standard. No
provision is currently made for measuring any other types of buildings.
Question
Does BOMA certify space measurement firms or instruments?
28. Answer
Neither BOMA nor the American National Standards Institute
(ANSI) certifies, approves, or endorses any space measurement firm or measurement device.
Question
Is it appropriate to treat Corporation Capital Tax (CCT) as an
expense when calculating the net operating income to the real estate?
29. Answer
The CCT is a tax on the corporation, not on the real estate owned by the corporation. CCT varies widely depending on
the corporation, its investments and its financing structure. Because the CCT is unique to the corporation, it would not be
appropriate to treat it as an expense in calculating the net operating income to the real estate.
Assessment Practices and Procedures Office 23
APPENDIX B: OCCUPANCY DESCRIPTIONS
Foreword
Determination of office building occupancies according to
class of building or space within a mixed-use property with similar amenities is subjective since buildings in each class
will exhibit a number of the characteristics but not necessarily all. It will be important to ensure that the approach taken to
determine the occupancy for office properties within regions is consistently applied for the competitive market set.
Code 1800 Class D Office
Size Average one to two storeys
Age Varies considerably but most are older properties.
Building
Systems
No elevator
HVAC and utilities do not meet modern standards.
Design and
Materials
Typically wood frame or concrete block construction
Poor to average quality finishing. Limited or no entrance lobby or reception
area.
Example
Assessment Practices and Procedures Office 25
Code 1801 Class C Office
Size Varies from 1 to 10 storeys. Rentable area of most buildings varies from 10,000 square feet
to 100,000 square feet.
Age Varies, but typically older buildings in urban centres
Building Systems
Elevator access, HVAC
Design
and Materials
Good quality design, common foyer area,
tenant improvements are functional and are not often upgraded in older buildings
Example
Assessment Practices and Procedures Office 26
Code 1802 Class B Office
Size Average 15 floors, 110,000 square feet
Age Average age 1965
Building
Systems
Mechanical, HVAC and utilities meet current
tenant requirements
Design
and Materials
High quality design; more use of brick and
concrete and less glass Tenant improvements are mid to high
quality and are updated regularly.
Assessment Practices and Procedures Office 27
Example
Code 1803 Class A Office
Size Average 25 floors, 275,000 square feet
Age Average age 1981
Building
Systems
Mechanical, HVAC and utilities meet current
and anticipated future tenant requirements
Assessment Practices and Procedures Office 28
(e.g. telecomm infrastructure)
Design and
Materials
High quality design and materials; extensive use of glass
Tenant improvements are high quality and updated regularly.
Older buildings remain competitive with newer product
Example