The liability lurking in the non-industrial building environment, the Albuquerque office market breaks bad, and what happens when tech turns to spec. It’s all here in the Commercial Real Estate News Roundup for July 22, 2104
Online auctions boosting Detroit commercial real estate, Detroit Free Press, July 20, 2014: Wherein Motor City’s grandest, farthest-fallen properties find buyers using online auctions.
Commercial property owners: Be aware of potential environmental liability, Business in Savannah, July 14, 2014 – Industrial properties are where all the environmental hazards and liabilities tend to pop up, right? Wrong.
CBRE Group is profiting from consolidation among office space firms, Chicago Tribune, July 20, 2014 – The days when multinational corporations run their own real estate departments may be coming to a close — especially if CBRE has anything to say about it.
Office tenants in grey area when it comes to green certification, Real Estate Weekly, July 17, 2014 – The truth is, landlords and tenants interests are only partially defined in leases: when adding LEED and other green certs to the mix, things get even murkier.
Manhattan Office Building Values Near Precrash Peak, WSJ, July 20, 2014 – The Big Apple returns to its precrash office bigness.
Office market vacancies leap higher in Q2, Albuquerque Journal, July 21, 2014 – In the city called Duke, sun belt office vacancies are on the rise.
Largest speculative industrial development in 15 years rising near Milpitas-Fremont border, San Jose Mercury News, July 17, 2014 – Is the big story in NoCal moving from high tech to industrial spec?
Austin industrial market slumps but interesting developments abound, Austin Business Journal, July 14, 2014 – Dell Computer skedaddles before Austin scrambles to fill the hole left behind.
Demand Growing for E-Commerce Warehouses, CIO Today, July 201, 2014 – The 3PL (third party logistics) craze continues to sweep national industrial property markets, tied to the rocket that is e-commerce.
Northeast Ohio shopping center market is booming, Crains Cleveland Business, July 20, 2014 – Meanwhile in the Buckeye state, retail recovery abounds.
Retail, apartments and hotel proposed for East Baltimore’s Pemco site, but city officials skeptical of plan, Baltimore Business Journal, July 18, 2014 – Baltimore civic leaders look askance at a Pemco development plan. But what’s theirs?
City meets with retail coach, Plainview (TX) Herald, July 17, 2014 – The thought of a “retail coach” brings to mind whistles and yelling. But Plainview Texas and its retail market are getting something else entirely.
Restaurants wrestle with rising rents, National Restaurant News, July 18, 2014
What’s in the July Beige Book? The usual compilation of anecdotal economic reportage from the districts of the Federal Reserve system, of course. The specifics this time around include positive news for commercial construction activity across the US, with mixed-positive news on commercial real estate lending and other factors. Here are commercial real estate-related excerpts from each district:
Commercial construction activity strengthened across most Districts. Cleveland and Atlanta reported increased commercial construction activity compared to a year ago, and Philadelphia, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco noted gains since the previous survey period. Boston and Richmond saw mixed commercial construction activity across their Districts since the previous report. Dallas indicated strong overall commercial real estate construction activity, and commercial real estate construction increased in the Minneapolis District compared with the previous report. Boston, New York, Richmond, Chicago, Kansas City, and Dallas reported tight commercial vacancy rates. Industrial real estate construction and leasing activity was strong in the Philadelphia and Chicago Districts.
FIRST DISTRICT: BOSTON
Reports from commercial real estate contacts across the First District are mixed. Leasing activity is down in Hartford in recent weeks, a fact attributed in part to usual seasonal patterns and in part to weak fundamentals. Office leasing activity is also down in Providence, while at the same time Rhode Island’s industrial leasing market is tightening amid strong demand and limited inventory. According to a Portland contact, the city’s tourism industry is booming, and three recently-opened hotels enjoy high occupancy rates. Also in Portland, strong office leasing is driven by growth of existing firms rather than by new firms, and investment demand is strong across industrial, multifamily, and medical properties. In Boston, office rents continue to display a modest upward trend, thanks to a lack of new inventory coming to market. A limited amount of speculative office construction is underway in Boston’s Seaport District, but contacts foresee constraints on similar construction in the form of high costs and limited financing. A regional lender to commercial real estate saw a surge in loan volume in recent weeks, a fact the contact attributes to changes in business strategy. According to contacts, hiring in both Portland and Hartford–and hence added office demand–is held back by a scarcity of young, educated workers in these cities. Contacts expect that Boston will continue to see at least modest improvement in commercial real estate fundamentals moving forward, while contacts in Providence and Hartford point to uncertainty surrounding the outcomes of upcoming elections in their respective states as a factor that could restrain economic growth in the near-term. A Portland contact’s outlook remains bullish.
SECOND DISTRICT: NEW YORK
Commercial real estate markets were mixed but, on balance, somewhat stronger in the second quarter. Office availability rates fell to multi-year lows in New York City and Long Island, but rose to multi-year highs in the Rochester and Buffalo areas; rates were little changed at high levels (near 20 percent) in northern New Jersey and Westchester & Fairfield counties. Asking rents for office space were flat across most of the District, except in Manhattan, where they continued to trend up and have risen nearly 10 percent over the past year. Office construction activity has been brisk in Manhattan but remains subdued across most of the District. Industrial availability rates were mostly steady to down slightly, with asking rents on industrial space rising on Long Island but mostly flat across the rest of the District. Finally, retail vacancy rates in Manhattan continued to trend up at mid-year; still asking rents continue to rise and are up roughly 8 percent from comparable 2013 levels.
THIRD DISTRICT: PHILADELPHIA
The market for commercial real estate and home mortgages, especially refinancing, remains much softer than other lines. Most banking contacts continued to report steady improvement in credit quality and loan portfolios. However, heated competition among banks to secure new loans has led to increased warnings of “too-risky” loan terms. Overall, bankers expressed greater optimism for general economic growth–tending to report a growing confidence among businesses and consumers alike.
FOUTH DISTRICT: CLEVELAND
Nonresidential builders reported little change in their pipelines during the past six weeks, while most said that activity is above year-ago levels. In general, our contacts are seeing an improvement in the number of inquiries and growing backlogs. Demand was strongest from the energy, housing (public and private), retail, and healthcare markets. Most builders are fairly optimistic in their outlook, but they remain concerned about labor issues and tight margins. One builder mentioned that rising margins contributed to a decline in his contract win rate.
FIFTH DISTRICT: RICHMOND
Realtors in Richmond, Virginia Beach, Raleigh, Columbia, and Charleston, South Carolina reported an uptick in commercial construction, while contacts in West Virginia and Washington, D.C. saw little change. A broker in Maryland said that medical construction had stopped. Grocery-anchored retail construction remained strong across the District. Commercial retail contacts reported solid leasing in Virginia Beach, Richmond, Columbia, and Charleston, South Carolina. Demand for retail space in Washington D.C. was flat. Industrial leasing demand weakened in West Virginia and Raleigh, but strengthened in Charleston, South Carolina. Office leasing was robust in Charlotte and Charleston, South Carolina. Most Realtors reported no change in vacancy rates, except in the Carolinas, where contacts in Charlotte, Raleigh, and Charleston noted a slight decrease across sub-markets. Reports on rents varied. Contacts said that commercial sales edged up in Raleigh, northern Virginia, Richmond, and Columbia. Commercial sale prices increased in Charleston, South Carolina and Virginia Beach.
SIXTH DISTRICT: ATLANTA
Demand for commercial real estate continued to improve across most of the region. Absorption rates remained positive. Construction continued to increase at a modest pace from last year and most contractors noted that their current backlog was ahead of year earlier levels. Contacts indicated that apartment construction remained fairly strong and reported that the level of construction activity across other property types remained steady. The outlook among District commercial real estate contacts remained positive with most expecting activity to grow at a steady pace through the summer months.
SEVENTH DISTRICT: CHICAGO
Commercial real estate activity continued to expand, as vacancies ticked down and rents rose. Leasing of industrial buildings, office space, and retail space all increased.
EIGHTH DISTRICT: ST. LOUIS
Commercial and industrial real estate market conditions have improved, on balance, since the previous report. A contact reported weak demand for office space in the Louisville downtown area, but expected an increase in office space leasing activity because of recent employment gains. Contacts in Memphis noted strong retail leasing activity. A contact in Little Rock reported a stable and healthy industrial market. A contact in St. Louis reported tight market conditions in the industrial market and an increasing demand for new warehouse distribution centers with high ceilings and good multi-modal access. Commercial and industrial construction activity improved throughout most of the District. A contact in Memphis reported a commercial expansion in Shelby Farms Park. A contact in Louisville reported a new commercial development project in northern Kentucky. A contact in Little Rock reported a new office building under construction in Pinnacle Hills Promenade in Rogers, Arkansas. A contact in St. Louis reported an increase in commercial construction projects in north St. Louis County.
NINTH DISTRICT: MINNEAPOLIS
Activity in commercial real estate markets increased since the last report. Several commercial real estate sales and leasing transactions were announced since mid-May. An office building in Minneapolis will be sold for a city record of $365 per square foot. Residential real estate market activity was mixed. In the Sioux Falls area, May home sales were down 7 percent, inventory increased 7 percent and the median sales price increased 4 percent relative to a year earlier. May home sales were down 10 percent from the same period a year ago in Minnesota; the inventory of homes for sale increased 3 percent and the median sales price rose 7 percent. However, in Eau Claire, Wis., May home sales were up 9 percent from the same period a year ago and the median sales price dropped 3 percent. May home sales increased relative to a year ago in the Bismarck area.
TENTH DISTRICT: KANSAS CITY
Commercial real estate activity strengthened further, with lower vacancy rates and increased sales, construction and absorption. The commercial real estate market was expected to expand moderately over the next few months.
ELEVENTH DISTRICT: DALLAS
Robust apartment demand pushed up occupancy rates, and increases in rents were strong in several major metros. Construction activity remained brisk, and contacts are optimistic in their outlooks through year-end. Office leasing activity remained solid and occupancy high during the reporting period. Rents continued to trend upwards, especially for Class A office space, and were above their pre-recession peaks in some markets. Office investment activity picked up in Dallas but slowed in Houston. Demand for industrial space was strong, with vacancy rates in Dallas and Houston near historic lows. Outlooks remained generally positive.
TWELFTH DISTRICT: SAN FRANCISCO
Vacancy rates for commercial space were mixed. Some contacts reported low vacancy rates overall, while others pointed to high vacancy rates–particularly for retail space–in part due to transitions to online distribution. Private-sector commercial construction activity increased modestly in most areas but more robustly in the San Francisco Bay Area and Southern California. Contacts from Southern California and Hawaii also reported vigorous public-sector construction activity.
Does the EPA’s own framework for determining potential lead paint hazards in commercial buildings skip Congressional directives?
The Real Estate Roundtable and real estate trade groups in the Commercial Properties Coalition last week filed the latest in a series of comment letters relating to efforts by the U.S. Environmental Protection Agency (EPA) to regulate purported lead paint hazards that may arise from renovation and remodeling activities in public and commercial buildings.
The real estate coalition also raised questions about the methodology behind the EPA framework, calling it a “novel approach that has not been independently peer reviewed, validated, or even explained.” Additionally, the coalition asserted, the framework “does not identify what underlying exposure data would be used in running the proposed models, and without reliable data, the models cannot be expected to produce useful results.”The June 30 comment letter focuses on EPA’s proposed “framework” for determining whether renovation and remodeling activities in public and commercial buildings — such as new tenant build-outs — actually cause lead-based paint hazards. On the basis of such a determination, EPA could then move forward with proposed regulations affecting commercial real estate.
Although EPA’s framework correctly acknowledges that public and commercial (P&C) buildings “vary greatly” (with respect to sizes, shapes, configurations, uses, occupancies and cleaning frequencies) — and that a “one-size-fits-all” approach is not appropriate for renovation, repair and painting (RRP) activities in such buildings — it appears to circumvent a series of steps set forth by Congress in Subchapter IV of the Toxic Substances Control Act (TSCA) in developing new regulations.
“. . . EPA must not skip over key steps in the Subchapter IV process in issuing final RRP rules for P&C buildings,” the coalition stated in its letter. “At a minimum, the failure. . . to first identify LBP [lead-based paint] hazards in P&C buildings — by rule as the statute requires under section 403 — would undermine the soundness of any ultimate RRP regulations for those structures …. From the Coalition’s vantage point, the Framework at issue appears to collapse and avoid discrete steps in the subchapter IV chronology” for rulemaking.
The coalition emphasized that its members “have a strong interest in constructing, owning, and managing healthy, safe, and desirable commercial buildings,” noting that their “reputations depend on it, and they must be vigilant in responding to ever increasing demands of tenants and investors seeking socially and environmentally responsible leasing and investment opportunities.”
The June 30 comments on EPA’s proposed framework follows on a June 19 letter raising concerns that the agency’s plans this summer to convene a federally-mandated small business impact review panel are premature. “With only generalized statements and hypotheticals of possible means by which EPA may determine the presence of lead-based paint hazards in P&C buildings … the Coalition respectfully believes that the Agency is not ready to convene” a panel to assess alternate forms of RRP regulations as the Small Business Regulatory Enforcement Fairness Act (SBREFA) requires, according to the June 18 letter.In the coalition’s view, “EPA should proceed by identifying whether a P&C RRP hazard exists, subjecting its proposed Framework methodology to peer review, satisfying other prerequisites established in TSCA Subchapter IV, and only after completion of these essential steps move to develop proposed regulations to address any P&C RRP hazards that have been found to exist.”
Since EPA enacted RRP rules for pre-1978 residential buildings in 2008, the agency has considered whether to adopt similar rules for P&C buildings for a number of years (particularly as a result of litigation filed by environmental organizations). Through the Coalition, The Roundtable has supplied comments and input to EPA throughout the rulemaking process. [See RW - June 28, 2013 and RW - Dec. 10, 2010]
What Is The Real Estate Roundtable?
The Real Estate Roundtable brings together leaders of the nation’s top publicly-held and privately-owned real estate ownership, development, lending and management firms with the leaders of major national real estate trade associations to jointly address key national policy issues relating to real estate and the overall economy.
In addition to The Roundtable, the Commercial Properties Coalition presently includes: the American Hotel & Lodging Association (AH&LA) ; Building Owners and Managers Association (BOMA) International; International Council of Shopping Centers (ICSC); National Multifamily Housing Council (NMHC); NAIOP, the Commercial Real Estate Development Association; National Association of Home Builders (NAHB); National Association of Real Estate Investment Trusts (NAREIT); and the National Association of REALTORS®.
Saving energy and reducing greenhouse gas emissions aren’t just good economic sense, they’re the new norm. Don’t believe it? Check out the EPA’s latest program leveraging competition between buildings to cut emissions and shrink energy footprints:
WASHINGTON – Today, the U.S. Environmental Protection Agency (EPA) launched the 2014 Energy Star Battle of the Buildings: Team Challenge. More than 5,500 buildings nationwide are going head-to-head to reduce their energy use. In support of President Obama’s Climate Action Plan, which calls for businesses to cut in half the amount of energy they waste over the next 20 years, the competition specifically targets wasted energy in commercial buildings, and will motivate businesses to improve energy efficiency, reduce harmful carbon pollution, and save money.
“The competitive spirit is alive and well among the building teams working to improve their energy efficiency in this year’s Battle of the Buildings,” said EPA Administrator Gina McCarthy. “After four successful years, we’re excited to see the innovative ideas that will emerge from the competitors as they find new ways to save energy and money while reducing greenhouse gas emissions and protecting the environment.”
In the only coast-to-coast competition of its kind, dozens of different types of commercial buildings are facing off in this year’s Energy Star Battle of the Buildings. This year’s theme, “Team Challenge,” features teams of five or more buildings who will work together to reduce their collective energy use as much as possible over the course of a year. For example, “Team Staples” includes 17 Staples stores, while 15 Whole Foods stores will support each other as part of “Team Whole Foods Market.” In New Castle County, Del., 13 elementary schools will compete as part of a team, and they’re going up against their county’s five middle schools and six high schools. In Hillsborough County, Fla., fire stations will team up to compete against libraries.
This year marks the fifth year that EPA has hosted the Battle of the Buildings. The competition—and positive environmental impacts—have grown exponentially since that time. Altogether, last year’s competitors saved an estimated $20 million on utility bills. Nearly 50 buildings in the competition demonstrated energy use reductions of 20 percent or greater.
Commercial buildings in the United States spend more than $100 billion in annual utility bills and are responsible for approximately 20 percent of both the nation’s energy use and greenhouse gas emissions. By improving the energy efficiency of the places they work, play, and learn, the competitors will save energy and reduce harmful greenhouse gas emissions that contribute to climate change.
Competitors will measure and track their buildings’ monthly energy consumption using EPA’s online energy measurement and tracking tool, Energy Star Portfolio Manager. Building teams will work to optimize or upgrade equipment, retrofit lighting, and change occupants’ behaviors—all with help from Energy Star. The team that reduces its buildings’ average energy use the most, on a percentage basis over a 12-month performance period, will be declared the winner. In addition to the team competition, 700 individual buildings are also competing in a special water reduction category, and will work with EPA’s WaterSense program to apply best practices for commercial building water management.
EPA will maintain a website devoted to the competition, featuring a list of the competitors and their starting, midpoint, and final standings, a live Twitter feed where competitors will post updates on their progress and an interactive map of the competitor’s locations. Midpoint results will be posted in October, with the winner announced in April 2015.
Products, homes and buildings that earn the Energy Star label prevent greenhouse gas emissions by meeting strict energy efficiency requirements set by the U.S. EPA. From the first Energy Star qualified computer in 1992, the label can now be found on products in more than 70 different categories, with more than 4.8 billion sold. Over 1.5 million new homes and 23,000 buildings have earned the Energy Star label.
More information on the competition: http://www.energystar.gov/
The brick-and-mortar retail universe of ten years ago is gone and won’t be coming back. The intercession of the internet has rewritten the retail equation and disrupted a great many decades-old practices in fulfilling customer need under a roof. While it may not be news that parking, malls and traditional retail are finding more selective appeal, what is news is that the rate of change is increasing and mobile-enabled shoppers are accelerating the trend.
How fast? The Custora E-Commerce Pulse Report published this month puts some genuinely shocking numbers together. While retail is only a part of e-commerce as a whole, the mobile e-commerce growth in the past four years has made the previous growth patterns in e-tailing look tame by comparison. As RetailCustomerExperience.com writes:
According to the new Custora E-Commerce Pulse Mobile Report, in the past four years the percentage of traffic to e-commerce sites from mobile devices (phones and tablets) jumped from 3 percent to nearly 37 percent, while US mobile e-commerce sales grew from $2 billion in 2010 to $43 billion in 2013.
The Custora E-Commerce Pulse Mobile Report analyzed data from more than 100 retailers, 70 million consumers and $10B in transaction revenue to gain a deeper level of understanding as to which mobile e-commerce trends marketers should pay the closest attention to.
Highlights of the report include:
- US mobile e-commerce is a $40 billion market, poised to hit $50 billion in 2014. In the past four years, the mobile e-commerce market grew nineteenfold: From $2.2 billion in 2010 to $42.8 billion in 2013. This represents 1875 percent growth over four years, and 111 percent four-year CAGR. 2014 is off to a strong start with $12.2 billion in mobile e-commerce sales in Q1 alone; it’s likely that mobile e-commerce will hit $50 billion in 2014.
- Email marketing drives mobile purchases; social media not so much. Email marketing drove 27 percent of sales on mobile phones, compared to only 21 percent on desktop, and 23 percent on tablet. This is a surprising data point considering the challenges of displaying email correctly on mobile devices, and deep-linking into mobile apps. Social media accounted for only 0.6 percent of sales on phones and 0.2 percent on tablets.
- Cross-device shoppers are a small but highly valuable customer segment. As of Q1 2014, just 12 percent of online shoppers make purchases on more than one device type, however this represents significant growth from only 4 percent in 2012. This customer segment is also 19 percent more valuable, in terms of customer lifetime value, than the average single-device shopper.
When markets change, we get in front of those changes or we risk disaster. The rise in e-commerce always suggests that data center and logistics property plays become more attractive. But when a rise looks this steep – a twelvefold increase in mere years – I think we can replace “suggests” with “screams”.
(Photo credit: Rakeman)
A recent acquisition by a Chicago RE investment firm of Austin, TX airport industrial buildings shows one way to play the US infrastructure slowdown.
Relative to other countries where airport capacity continues to expand, including Canada, Singapore and Germany, US airport property expansion is flat. A The 2014 report by British consulting firm Skytrax indicates the ten best airports in the world are all located outside the United States. Reports like this tend to underscore what we can see with our own (red) eyes as we drag our luggage through our nation’s airports: outdated, dingy terminals, wretched parking and insufficient access.
The scarcity of new airports has attracted an interesting investment strategy: buying logistics buildings in these airports is a classic example of money following a tight supply. That’s the thinking behind Origin Capital Partners recent snapping up of five industrial properties in Austin’s Bergstrom International Airport. WSJ’s Barbara Dellolis writes:
Bryan Sullivan, a director of acquisitions at Origin, said the company ventured into the airport space because it sees limited competition, rising demand and constrained supply. The buildings have direct access to the tarmac at a time when the airport’s cargo shipments have been steadily growing due to rising e-commerce and international shipping.
The Origin deal highlights the value investors are placing on airport real estate.
“The investors are playing where they’re not making that much product anymore,” said Tom Kirschbraun, international director with JLL’s Capital Markets. “If they’re buying property on an airport, there’s going to be appreciation of consequence in controlling that kind of real estate.”
Industrial-property rents rise in proportion to airport proximity, Mr. Kirschbraun said. At Chicago O’Hare airport, for instance, “there’s a 30% increase in rent [for buildings] immediately around the airport,” he said.
Most airports are owned by municipal governments, which rent out gates and hangars to airlines, and storefront space inside to retailers, restaurant operators and other concessionaires. On the edges of the airport property, many airports also lease the grounds to private companies, which develop warehouse buildings to rent to airlines and cargo-logistics and handling companies. After the ground lease expires, the property reverts back to the airport.
Acquiring airport industrial property can let you ride the tail of the e-commerce rocket in a whole new way. Something to consider while you’re stuck on the taxiway. Again.
If you haven’t investigated the REALTORS® Property Resource (RPR) by now, this is the perfect time to get an eyeful of this truly cutting-edge data and demographics tool from NAR. Help a business find the best place to locate using demographic, psychographic and spending data to identify areas with the most target customers for the retail business or desirable talent pool for office recruitment. Check out this video to learn more about your REALTOR® benefit!
When customer attributes drive location decisions, business success follows. But getting the right view of the right demographic sections is no easy task. RPR was built with the commercial client in mind at every stage, and it shows with every tool and drilldown capability. Learn more about the incredible RPR at the RPR Blog.
INDIANAPOLIS – During the Indiana Commercial Board of REALTORS® 20th anniversary celebration at the Indiana Commercial Real Estate Conference, June 20, Brad King was announced as the association’s 2014 REALTOR® of the
Held at the NCAA Conference Center, nearly 250 commercial real estate professionals attended the conference
which provides brokers the opportunity to complete all state continuing education requirements in one day.
Following conference, many gathered to find out and honor this year’s outstanding professional in commercial real
King, a broker with RE/MAX Ability Plus Commercial Division since 2011, was presented the REALTOR® of the Year
award by ICBR in recognition of his professional success, commitment to furthering the commercial real estate
profession and dedication to community involvement.
“Brad is a deserving recipient of the 2014 REALTOR® of the Year Award, based on his continued success and
dedication to the industry,” said Steven Martin, 2014 ICBR President. “His involvement and volunteerism over the
years with ICBR and many other professional and community organizations demonstrates his leadership ability and
passion for commercial real estate. I am honored to be able to present him with this award.”
With more than 20 years of experience in real estate marketing, project management, planning and zoning,
economic development and regulatory assistance, King provides clients expertise in tenant representation, owner
representation, incentive procurement and zoning compliance assistance.
As a staff member of former Indianapolis Mayor Stephen Goldsmith starting in 1994, King served as the recording secretary for the Metropolitan Development Commission, then as township administrator followed by five years at the Indianapolis Economic Development Corporation and Indy Partnership. While involved in local economic development, King played a role in implementing the first regional approach to economic development, fostering some of the highest job creation and retention in the City’s recent history.
About The ICBR
The Indiana Commercial Real Estate Conference is recognized as the premier event for real estate professionals to
earn commercial continuing education credits and to gather with like-minded peers. This year’s event is sponsored
by Bradley Company, Hays & Sons Complete Restoration, Sperry Van Ness Commercial Real Estate Advisors,
Brickman Group, Colliers International, Zeller Realty Group, August Mack Environmental, Browning Chapman,
Citimark, Duke Realty, First Financial Bank, Holladay Properties and Quality Building Maintenance. For complete
details, visit www.myICBR.org.
ICBR is a commercial overlay board for commercial real estate professionals. Its members are dedicated to serving
the needs of commercial clients in aspects of brokerage, leasing, appraising, property management, and
development. ICBR has a statewide membership base of more than 600 professionals. For more information, visit
the ICBR website at www.myICBR.org.
First Wave of the 2012 Commercial Building Energy Consumption Survey (CBECS) Released
The first sets of data from the 2012 Commercial Building Energy Consumption Survey (CBECS) were released last week in Washington, DC. The data, which is one of several sets to be released by the US Energy Information Administration (EIA) over the next several months, provides important insights into the national commercial buildings profile and energy use.
The CBECS takes four years to complete from start to finish and the data is referred to by the year of the survey initiation.
What Is The CBRECS?
The CBECS is a national sample survey that collects information on the stock of U.S. commercial buildings, including their energy-related building characteristics and energy usage data (consumption and expenditures). Commercial buildings include all buildings in which at least half of the floorspace is used for a purpose that is not residential, industrial, or agricultural. By this definition, CBECS includes building types that might not traditionally be considered commercial, such as schools, hospitals, correctional institutions, and buildings used for religious worship, in addition to traditional commercial buildings such as stores, restaurants, warehouses, and office buildings.
This initial data set identified more than 100 unique subcategories of building types within the commercial sector, comprising 87.4 billion square feet of floorspace. Buildings used for lodging were shown to be the largest building type measured in square footage. Half of all building types increased in number from 2003 to 2012. The last CBECS was completed in 2003.
Please visit the CBECS web site to learn more about the survey and the data available.
PROJECTED SCHEDULE OF 2012 CBECS DATA RELEASES
Building characteristics (BC) preliminary estimates
Released June 2014
BC detailed tables
BC public use microdata
Consumption & expenditures (C&E) preliminary estimates
C&E detailed tables
C&E public use microdata
For more information on the CBECS survey, please contact Stephanie Spear of NAR Commercial Policy at 202-383-1018.
A few days ago, Stephanie Spear, NAR’s Policy Representative for Commercial Real Estate attended the 3rd Annual Washington DC Federal Property & Public/Private Partnerships Summit put on by Bisnow. As Stephanie was kind enough to share her notes, a quick report follows on the three sessions, each dedicated to a different aspect of public/private partnerships.
Take it away, Stephanie:
GSA is undergoing a cultural shift in terms of how they approach space and how space is used. This is a result of the Total New Workplace initiative and the executive order to Freeze the Footprint. There are enough large sized, high profile P3 projects that have been successful that it is reasonable to expect more P3 opportunities in the future.
Bottom line for commercial members is that while government funding isn’t increasing, it’s staying steady and there are many opportunities to do business with the government through traditional landlord/tenant relationships and the emerging P3 arrangements. Building owners/lessors who can accommodate the changing needs of the modern workforce will have a better chance of a successful working relationship with the GSA.
Panel 1: GSA Operations Now And The Future, featuring the Commissioner of the GSA Public Buildings Service and the director of the GSA’s National Capital Region office.
- Freeze the federal footprint – is happening but is creating more opportunities for private industry partners (landlords, building owners) because agencies have to be more creative with how they use space
- Market is more competitive because agencies are signing shorter leases so there is more churning going on
- GSA wants to have agencies be more forward-thinking about the end of their leases and work with landlords to think about it well in advance, work with landlords to get new needs met, concessions, manage the progress from upstream
- Increased emphasis on reducing the number of lease holdovers being held by GSA
- Agencies are being responsive to funding challenges and cooperating with shrinking footprint efforts because they understand that it frees up more money for running the actual program
- “Total New Workplace” – GSA encouragement of new building designs for a remote workforce, hoteling spaces and cooperative work spaces
- GSA personnel, telework, technology, IT priorities all go into the shrinking footprint and what exactly the remainders look like
- GSA transparency goals
- Making a lot of use of Section 14/412 construction/swap authority to be creative about using space, rebuilding, etc
- Many success stories of P3 projects – The Yards, Old Post Office, St Elizabeth’s – hope to be a model because private industry partners are where the money is – govt doesn’t have, won’t have access to huge cash needed to do these big deals
- GSA surplus property
- Trying to be more mindful of using govt resources, part of a larger data-driven effort to be more efficient
- Property Disposal Unit – 669% increase in properties sold in FY2013 over Fy2012
Panel 2: Talked about a P3 project in DC – was very interesting but hyper-local to DC
Panel 3: Perspectives on Leasing with GSA
- Cultural shifts from GSA are having an impact on the way agencies use space – ‘total new workplace’ goals are main culprit
- Skepticism about whether this new style of work will stick around, we have seen it come and go in private sector
- Competition for contracts has focused on price only instead of best value
- Structural requirements in procurements are challenging to accommodate in leases
- Avoiding holdover leases
- Working with tenants in advance of the lease termination to avoid vacancies
- Shorter leases will favor new buildings because old buildings can’t be prepared fast enough to accommodate tenants’ needs