More good news...and I was worried. Guess which sentence is my favorite????
RAVEL
Y2K glitches could turn buildings into ghost towns
15:32:28, 12 May 1998
San Francisco Business Times, 05/08/98
Picture this: You stumble into work following the New Year's bash of the century - it's now the year 2000, after all - but you must have arrived the wrong day of the week. In your office, the lights are dim, the air chilly, and the elevators don't work. It's like a silent bomb went off over the long weekend.
Such a scenario may be worst-case, but it's not unthinkable. And it's one that real estate owners and property managers will face if their building systems fail to meet Year 2000 compliance.
As most know by now, the inability of computer hardware and software to recognize the digits "00" in computer code as the year 2000 could wreak havoc for businesses worldwide.
Commonly called the Year 2000 Problem, the Millennium Bug or Y2K, the problem could cripple countless operations that rely on calendar readings. Any system that is "date sensitive" is likely to conclude that January 1, 2000, is actually January 1, 1900, causing systems to shut down or spit out erroneous information.
Building systems are no exception.
"We're telling our members to make one assumption: You can make no assumptions," warned Michael Jawer, assistant vice president of government and industry affairs for the Building Owners and Managers Association International in Washington, D.C.
According to Jawer, the due diligence window is closing fast. It could take 18 to 24 months to identify and fix problems, and Jan. 1, 2000 is less than 20 months away. Building professionals should have started checking building systems by now.
To be fair, no one is exactly sure how extensively building systems - lighting, security, elevators, parking, heating, ventilation, air conditioning - will be affected. Some of these systems run independent of hardware and software, or are controlled by equipment that is not be date-sensitive, but others are. And still others remain a question mark.
"We're in the discovery stage right now," said Michael Steele, chief operating officer of Equity Office Properties Trust, one of the nation's largest REITs. Equity Office owns and operates 3.5 million square feet in downtown San Francisco, including One Market St., One Maritime Plaza and 580 California St.
Like many large property owners, Steele said his company is trying to evaluate the level of exposure by assigning engineers to test systems, contacting vendors and working with tenants to update them on progress.
Steele declined to put a dollar figure on the process.
"The problem will not be as catastrophic as many people think," he added, but such an audit involves "a fairly significant inventory of items."
"It's anything dealing with two digits," noted Mark Ancevic, global program director for Minnesota-based Honeywell Home & Building Control, one of the nation's largest energy management companies.
Most glitches, if they happen, will likely fall into the annoying category, Ancevic and others said. For example, an automated maintenance system might send out building crews to fix errors that haven't occurred, or put lighting schedules out of whack.
On the other end of the spectrum, it could disable sensitive fire and security systems, he said.
In most buildings, three central platforms are at stake: software, hardware and embedded systems.
PC-based software typically automates some building functions. Hardware controlling LAN (local area networks) and WAN (wide area networks) systems may also be date-sensitive. But these are generally easier to correct, often with off-the-shelf remedies or newer versions of the same systems, property professionals said.
While software programs have received the lion's share of media attention, only recently has the public considered the potential problem posed by embedded chips - tiny, ubiquitous microprocessors that run appliances such as VCRs and cellular phones, said BOMA's Jawer.
The same chips control an entire spectrum of automated systems with myriad building functions.
"People are waking up to the fact that this is an embedded systems issue, and not just a software issue," Jawer said.
BOMA estimates that between 5 percent and 20 percent of embedded systems could fail to function properly when the date rolls over to the next century. Defective chips will have to be retrofitted.
BankAmerica Corp. will spend $6.5 million in 1998 - and significant employee-hours - to check its worldwide operations, which encompass 40 million square feet in 40 countries.
Steven Jeffrey, BofA's vice president of corporate real estate, said the major challenge is locating and piecing together the various systems.
"You have to put on your Sherlock Holmes hat to find where components are placed," he said. "Building systems are anywhere and everywhere, and they're hard to get your arms around."
The job of ascertaining whether or not all "firmware" in a facility's automated building system is Year-2000 compliant is likely to be difficult, time-consuming and frustrating, he said.
Unless it's very old or very new, much will have to be visually inspected.
In addition to testing sensitive data centers (Jeffrey said that some tests have disclosed problems), the bank is contacting vendors and suppliers to make sure their products are Year-2000 compliant.
Even if an individual system tests out OK, when interacting with other systems it may become confused.
"What you're told by a manufacturer is valid when you're running it as a standalone," noted Jeffrey. "But when it's part of a system, it's anyone's guess."
To be sure, many systems simply don't run on a yearly calendar. "Customers have asked us to test for Y2K problems, but there's nothing to test," said Fred Essenwein of New Jersey-based Schindler Elevator Corp. "It's like testing a cup of coffee for Year-2000 compliance."
Essenwein said his company's elevators don't use data storage even in newer microprocessor systems.
Many of the systems can easily be manually overridden, and there are fewer interdependencies than in, say, the data-processing world, so the consequences should be less severe, he added.
But Y2K raises some sticky liability issues. If building systems fail - especially those affecting certain classes of equipment such as sophisticated security and fire-protection controls - tenants may attempt to sue building owners and managers.
Equity Office's Steele said letters between landlords and tenants are already flying back and forth to make sure they are covered in case of breakdowns, though most leases, even those written several years ago, contain language that protects against major business interruptions.
"I don't expect leases to be rewritten," he said.
However, he has heard of cases where vendors are being put on notice by property professionals that if their products aren't Year-2000 compliant by a certain date they will cease to do business with them.
Insurers are taking notice.
Steve Gaitley, vice president of insurance broker Sedgwick's real estate practice, said that many insurers are adding Year 2000 exclusions to their policies to protect against property damage and business interruptions.
"The common sentiment from underwriters is that there will be a Year-2000 big exclusion from renewals," he said.
Few companies are actually offering Y2K coverage specifically for buildings because it's still in the embryonic stage, he said.
"It's a big question, and so far there's been little consensus on how it will flesh out," he said.
One effect it has had: spawning a whole new crop of consultants ready to address the problem.
While the deadline to deal with the Year 2000 Problem is fixed and immovable, some property professionals might find solace in this little-known fact: January 1, 2000, falls on a Saturday, buying at least one day before tenants return to work if all hell breaks loose.
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