Maybe a rose by any other name would smell as sweet, but a class A building wrongly labeled could have a major impact on capital flows. Sound unlikely? Ask Tom Bisacquino, president of the Washington, DC-based National Association of Office and Industrial Properties. In addition to its other activities, Bisacquino’s group has for the past four years been trying to nail down a standard lexicon of basic office development and leasing terms, a set of guides applicable to assets in markets across the country. It’s more than a matter of semantics, Bisacquino argued in a recent exclusive interview with It’s a matter of investors understanding target markets, a major factor in their ability and willingness to buy into the sector, and of driving more capital to often overlooked B locales. It’s ultimately a question of standardization, key in this era of transparency, which also means that the lexicon’s adoption by the industry could mean another nail in the coffin of the lone gunslinger. Read on: What are you hoping to gain by creating a standardized lexicon?

Bisacquino: We believe it adds credibility to the industry and increases both liquidity and capital flow. Capital flow?

Bisacquino: Yes. The bottom line is that there’s a lot of great real estate in a lot of different markets, but as an investor you’re always leery. If I buy 50 shares of Microsoft I know what it means. But I look at some of these portfolios and vacancy rates and shadow space—and I encounter these terminologies that can be interpreted differently from market to market. It has put pause to capital flows. We believe that becoming more standardized, like other asset classes, will improve that. What’s the genealogy of the program?

Bisacquino: It started three or four years ago. We have a national forums program, a series of special-interest groups. One of those is a capital-markets forum that meets twice a year to talk about various issues. At one of these meetings it came up that large institutional investors typically don’t consider second- and third-tier markets because of the parochial nature of how commercial real estate is characterized. As I said, the terminology varies from market to market. So where are you in the process now?

Bisacquino: We’re literally in the top of the ninth inning. The draft document has been out to all members across the US and Canada now for the past month. We hope to get their input and develop a final document. The whole process should be tied up and done by the middle of July. Tell me a bit about the process.

Bisacquino: This task force consists of members from development, research and investment, and it also includes financiers and brokers. The task force performed a comprehensive review of all the terminologies that currently exist–from other associations, research organizations, development companies and technology providers. The group slogged through all of these definitions, in some cases merging them and in some cases creating new definitions. What become evident was that, even though we started with only 10 phrases, we realized it’s like peeling back an onion. We couldn’t talk about gross rentable space without talking about market size. Ultimately the group came up with five clusters of terminology: Construction Status; Measurement; Space User and Availability; Transaction; and Rental-Rate. Under each, they’ve put the different definitions that supported that cluster. How big is the draft?

Bisacquino: It’s not as big as you think. It’s probably a 20- to 30-page document. Keep in mind that we refer back to other existing works; it wasn’t our goal to reinvent the wheel. So under rentable or usable area, we refer to the ANSI standard that was created by BOMA years ago. No reason to recreate that, but you will find clear definitions of what constitutes a government office building or a medical office, what’s multitenant and what’s single tenant. These are all issues that as an investor you want to know. So how will you get the industry to take notice?

Bisacquino: A lot of the people around the table were data providers and research folks. We got a commitment from all of them to adhere to the standards. If you’re the research person for CBRE or Cushman or Costar, all of whom were on our task force, and you’re collecting this data and reporting it back to your brokers, guess what? They’re going to use it the way it’s given to them. That’s how we believe it will get into the marketplace. But we still see a three-to-five-year timetable before complete utilization. How are you funding?

Bisacquino: Since the conversation started, we’ve formed the Naoip research foundation, which approved the funding. We secured that–close to $100,000–just about a year ago. What’s next?

Bisacquino: In the fall, we’re going to our foundation to secure new funding to do this on the industrial side, which will be an even a larger task. The terminology there is all over the map.

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