A Decade of Evolution for Building Owners, Managers

WASHINGTON DC--Over the last decade, a number of game changers have shifted the way we think about commercial real estate. Federal regulations, building codes, technology, globalization, generational changes to the workforce—a myriad of trends have made owning and operating buildings a much more sophisticated and challenging job than ever before. Three events in particular stand out as having changed the way we manage and operate buildings: 9/11, the green movement and the global financial crisis.

Emergency Preparedness Takes Center Stage

Emergency preparedness has always been a top consideration for commercial real estate professionals but the tragedy of 9/11 offered a somber reminder about the potential scale of disaster. Following 9/11, terrorism insurance rates for commercial buildings skyrocketed. BOMA International and other industry groups formed the Coalition to Insure Against Terrorism to fight for the passage of the Terrorism Risk Insurance Act in 2002, a federal backstop program to help businesses purchase adequate levels of terrorism risk insurance coverage at reasonable rates. The group succeeded in getting the bill extended several times, most recently in 2007 for an additional seven years, through 2014. Securing federal support for terrorism insurance was a significant achievement for building owners who might otherwise face financial collapse if a terrorist attack were to occur.

Today, communication and information sharing is a centerpiece of effective emergency preparedness. After 9/11, BOMA and a handful of industry groups partnered with the U.S. Department of Homeland Security to create the Real Estate Information Sharing and Analysis Center, which coordinates the dissemination of information in the event of any catastrophes. Commercial real estate is also actively engaged with federal agencies, such as FEMA and The American Red Cross, in promoting September as National Preparedness Month.

Several other events in the last decade—Hurricane Katrina, the Swine Flu pandemic and the recent hostage situation at the Discovery Channel building in Silver Spring, MD to name a few—have only solidified the fact that preparedness is a critical component to effectively manage commercial real estate.  

Going Green and Staying Green

Perhaps the biggest trend in commercial real estate over the last decade has been the emphasis on sustainable and energy-efficient buildings. Energy expenses are the largest controllable operating expense and have been of prime importance for generations, but the tie to sustainable, high-performance buildings has been a change.

Property professionals have proactively implemented no and low-cost strategies and are embracing new technologies to significantly reduce their carbon footprint. In 2007, BOMA International challenged the industry to reduce its energy consumption by 30% across their portfolios by 2012 as measured against an “average building” on the ENERGY STAR