BOMA takes industry's 'Pulse' with new members survey.

One of the first things a doctor does when visiting a patient it take a pulse; without it, it's difficult to fully assess a patient's general health. Similarly, it's next to impossible for BOMA International to determine the strength and overall confidence of the industry without periodically surveying members' top priorities in ownership/asset management, operational and advocacy issues.

Although the BOMA Pulse, a bi-annual analysis, is the result of a survey given only to our own members, its findings can be easily transferred to the industry as a whole; our 18,000+ members, it is estimated, own or managed more than 8.5 billion SF of office space out of the approximately 12 billion SF of office space nationwide. A member survey, we therefore believe, is an industry survey. What follows are highlights of BOMA's most recent Pulse:

The top scoring ownership and asset management issues in the short-term (less than six months) and the long-term (more than six months) are:

Top Short-term Issues: Return on investment; portfolio management; new construction/development.

Top Long-term Issues: Return on investment; strategic corporate planning; new construction/development

The most significant shift in the short-term issue priorities from the last Pulse (June 2000) is the appearance of return on investments as the most important issue. Traditionally, return on investments has only been a highly ranked long-term priority for survey respondents.

This shift could signal the fact that investors are looking at shorter-holding terms, or that property mangers are looking for better performance in terms of revenue in order to indicate worthiness to building owners. It also must be remembered that a majority of survey respondents for this edition of the Pulse classified themselves as "property managers." This is important because historically, property managers were not as concerned with return on investment over the short-term. But if an owner decides to sell a building in order to see his return on investment, it could mean a change in property management company when the new owners took over giving property managers good reason to make return on investment a top short- and long-term priority.

Concern about new construction and development was also highly ranked as a priority. In some markets, there is concern over a possible slow down in economic growth, which could impact new buildings that have yet to be fully leased. On a positive note, few respondents were concerned about new developments over the long-term. In addition, this edition of the Pulse showed a resurgence in the importance of portfolio management as a dominant issue.

The highest-ranking Pulse scores for operational issues as identified by survey participants in the short- and long-term are:

Top short-term issues: Aging equipment/building; operations/maintenance; technology.

Top long-term issues: Aging equipment/building; leasing/marketing; tenant retention.

For the first time, BOMA's Pulse has identified aging equipment/building as the highest priority from both a short-and long-term point of view.

This finding seems to go hand-in-hand with the highest-ranking return on investment received in the ownership/ asset management section of the Pulse. Clearly, survey respondents have been linking greater returns with increasing investments in the building itself and the equipment needed for its operation. It will be interesting to see if this trend becomes noticeable in the 2001 BOMA Experience Exchange Report (EER), which for the first time will capture capital expenditures.

The highest ranked Pulse scores for government/legislative issues for the survey participants in the short- and long-term are:

Top short-term issues: Electric utility deregulation; building/safety codes; environmental issues

Top long-term issues: Environmental issues; building/safety codes; electric utility deregulation.

Some clearly identified issues were singled out as priorities from a governmental and advocacy point of view. Survey respondents were quite certain that associations such as BOMA should be concentrating efforts on electric utility deregulation, building and safety codes and, for the first time, environmental issues. Respondents, particularly property managers, were overwhelmingly in favor of BOMA's continued assistance with the electric utility deregulation process. This was of prime importance to the majority of property managers from California.