It’s high time to correct some of the myths that are perpetrated about commercial real estate, myths that can cause bad public policy.
Myth: Commercial buildings are owned by old fat cats who limo around town stuffing their pin-striped silk suits with gobs of rent money.
Reality: We the people actually own most of the skyscrapers: the millions of us who have an interest in pension funds and other financial instruments that invest in real estate investment trusts and various types of partnerships. Your retired mother, or your kid’s schoolteacher, or the worker who is repairing your cable TV or collecting your trash own commercial real estate. Actions that damage the financial interests of building owners directly affect such people.
Myth: Big buildings are full of nothing but large corporations that can afford to pay plenty of taxes.
Reality: The 187 million square feet of office space in the four counties represented by BOMA San Francisco contain tens of thousands of small companies, branch offices, numerous sole proprietors, nonprofits, medical offices, educational institutions and government agencies.
There aren’t that many large corporations that occupy entire commercial buildings or even multiple floors. When legislators think of tall buildings as cash boxes, they should know that when they impose any additional property taxes or other costly regulatory burdens on commercial building owners, those increased operating costs will largely fall on their tenants, mostly small businesses. Public officials should also realize that these small firms — which are, incidentally, the largest driver of employment growth — are agile enough to escape the harm of overburdensome costs by moving across the county line ... or over the Bay or Golden Gate bridges ... and even into neighboring states, taking their tax revenues and their jobs with them to more business-friendly areas.
Myth: Buildings irresponsibly consume vast quantities of energy.
Reality: Buildings, per se, consume almost no energy while standing empty. It’s the occupant firms that consume the energy. Property operators and their staffs foster many programs that help tenants use energy wisely and efficiently. One example is BOMA San Francisco’s popular EARTH Awards program, which encourages buildings to compete to attain higher levels of energy efficiency and overall sustainability. But ultimately, it is the tenants who must agree to practice sustainability.
Myth: Big cities are nothing but inefficient energy hogs that cause pollution.
Reality: Wrong again. Cities are actually much more energy-efficient than suburbs. New York City, for example, requires fewer resources per person to operate than any other city in America. Why? Because big cities aggregate and share resources. And they are vertical, so they maximize the benefits of smaller real estate footprints. This is particularly true of cities where people can walk to work or ride mass transit or bikes, as opposed to the suburbs, where most workers need to commute by car.
Tall buildings symbolize different things to different people. But they are not merely monolithic, self-serving structures — either in terms of ownership, operation or occupancy.
Our buildings house many small businesses banding together under the same roof to produce goods and services, provide jobs for our local citizenry and support the communities in which our properties are located. In San Francisco alone, our industry supports nearly 15,000 jobs and contributes more than $2.5 billion to the local economy.
Legislators and regulators would do well to remember the human faces and jobs behind the brick and mortar, steel and glass. Human beings — and their need for safe, clean, secure, well-maintained workspaces in which to create and produce goods and services — are why our buildings are here in the first place.
Marc Intermaggio, CAE, is the executive vice president of BOMA San Francisco.