How big is a square foot? Group wants a standard
WASHINGTON – May 29, 2014 – Building owners throughout the world use different systems for measuring square footage or square meters of office spaces that tenants want to lease. The measurements also could differ by up to 24 percent from one another, reports The Wall Street Journal.
As such, an international coalition of real estate organizations has banded together to create a single measurement system for the global office market. The International Property Measurement Standards Coalition plans to announce its new standard measurement in June.
"The current situation on measuring standards is totally unacceptable," Ken Creighton, chair of the coalition's board of trustees, told The Wall Street Journal.
But once the new standard is released, building owners will have the choice of whether to adopt or ignore it. The coalition lacks the authority to require owners to follow the standards, so adoption will be voluntary. But some officials say there may be pressure from government organizations and tenants to adopt the standards.
Still, some landlords may be hesitant to adopt a new measurement standard, which could potentially shrink the size of their buildings.
"There is a risk that some firms may be sitting on balance sheets that are actually worth significantly less when measured by a common standard," says Scott McMillan, chief of real estate at the International Monetary Fund.
The measuring of space influences rents, which typically are charged on a price-per-square-foot or per-square-meter basis.
Source: "Building Owners Brace for Tall Order: One Way to Measure Space," The Wall Street Journal (May 27, 2014)
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