By Steven W. Ford

What was once considered a sound emergency preparedness and security plan for office buildings has changed dramatically since the attacks on the World Trade Center and the Pentagon. Weather catastrophes, power outages, civil disobedience, and health emergencies were once the primary threats to commercial properties. Today, with terrorism looming as the most dangerous threat to our infrastructure, the 9/11 Commission has proposed new emergency preparedness reforms for office buildings.

The Report recommends new standards of emergency preparedness that will affect those who own and manage commercial real estate, and suggests that insurance companies and financial institutions use these factors to assess insurability and credit-worthiness. How will these proposals impact the commercial real estate industry?

Emergency Preparedness Reforms
In their report to Congress, the 9/11 Commission proposed using a voluntary uniform national emergency preparedness standard for both commercial office buildings and government properties, integrating the public and private emergency response networks. Having a single, unified standard is significant to the industry because it ensures that all emergency responders nationwide will work under one identical plan, use the same nomenclature, and receive consistent training across all jurisdictions. Several standards were considered by the 9/11 Commission, and National Fire Protection Agency (NFPA) Standard 1600 on Disaster/Emergency Preparedness and Business Continuity Planning was the standard recommended to Congress. Currently, numerous government agencies, municipalities, and some states already follow certain provisions of NFPA 1600. The Commission’s proposed penalty for non-compliance with the standard, once determined, is to withhold Homeland Security grants and funds from those jurisdictions.

Liability
Although there is not currently a building standard adopted industry-wide by commercial real estate, the 9/11 Commission recommends property managers take proactive steps to upgrade their preparedness and security plans now, which will minimize liability and maintain or reduce insurance premiums. The Commission advised insurance companies to measure a client’s insurability and premium cost based on whether a business complies with NFPA 1600. Their hope is that the NFPA 1600 will become the "standard of care" for building professionals. When property managers defend their building’s emergency response programs, one of the first things they will be asked is whether they’ve met the industry "standard of care." If the government decides that the standard of care is NFPA 1600, property professionals will find themselves liable if they’ve failed to comply.

Threat and Risk Assessment
There are several factors insurance professionals take into consideration when assessing the risk and threat to a commercial property. The level of threat is a function of a building’s political, cultural, and historic symbolism. Is the property a local area landmark or does it have historical or cultural implications? The level of threat is also a function of a property’s importance to the national or international economic infrastructure. Is the building a key financial, telecommunication, or manufacturing hub, or vital infrastructure supporting commerce such as bridges, airports, tunnels, or seaports? The level of threat is additionally a function of a property’s tenants. Is there a high profile U.S. government or corporate executive in the building? Finally, the level of threat is a function of a building’s structural vulnerability with respect to its architecture. How old are the building’s security components, and how easy is it to take action against the property?

Like insurance firms, terrorists make their own risk and threat assessments when preparing for an attack. Any counter measure a property manager can adopt will force the terrorists to alter their operational strategy and reconsider their target.

Emergency Preparedness Planning
When emergency preparedness plans fail, it is often due to poor design and implementation. It is incredibly important today, for building managers to establish a site specific, updated emergency preparedness plan for their properties. If a property has an outdated plan, and the building employees and tenants are not trained or familiar with their responsibilities in the case of an emergency, building managers will have a difficult time convincing tenants they work in a safe, secure environment.

A well- managed emergency event will show up on page 8 of the local newspaper and disappear the following day. A poorly managed event will be a front page headline and, in addition to putting your tenants and building staff in danger, will haunt the company’s and building’s future reputation. Real estate professionals can ensure the security of their property, tenants, and businesses by proactively responding to the 9/11 Commission’s recommendations, and establishing an up-to-date, comprehensive emergency preparedness plan.