• 46-Story CBD Houston building forging ahead.  Site work underway.
• $1.3 Billion in TALF funds are set to buy CRE bonds
• ConocoPhillips cutting budget by 10% in 2010.  86% dedicated to exploration and production.
• Banks are intensely lobbying Congress to not pass legislation that could break them up.
• Barclays banker going after Houston’s Kinkaid School for “sleezeball” remark.
• Wait, what? Retail deals are getting done?
• Mayor Bill White officially in Governor’s race against Perry.
• Dubai World may sell their trophy properties in order to raise cash.
• Costar and Loopnet settle differences.
• Interestingly enough, the government of Dubai, UAE has rejected the idea they are responsible for Dubai World’s debt.
• Geitner: Tarp to end soon.
• Could Dubai World’s issues cause a ripple effect in the U.S. hotel market?
• If the economy lost jobs, why did the unemployment rate decline?
• Year over year defaults on bank-owned commercial mortgages have doubled.
• Beige book suggests commercial real estate market conditions have weakened, and are deteriorating.
• In 2010, could that number double again?
• Lakewood Church to buy the Compaq Center from city of Houston.
• In a generally illiquid asset class, liquidity has been the key to REITs’ popularity.
• Southwest Airlines traffic improves 12% over last year.
• A Barclays Wealth report suggests that wealthy private investors will spur velocity for CRE.
• Amegy Bank CEO leaves to start own bank.
• What does the GGP settlement mean from a ratings perspective?
• TXDot underway with 290/I-10 reconstructions.  1/3 made up of  contingency stimulus funds.
• Could the FDIC give banks breathing room on capital requirements?
• Sugar Land named 11th the safest city in the nation.
• Life Insurers could face a staggering total of losses in the CRE sector, topping $19 Billion Dollars.
• Alvin’s Lyondell Chemical plant to be abandoned?  Solutia and Ascend fight.
• ING’s Retail Property Fund may be sold to Lend Lease.
• 3/4 of Stimulus…unspent?!
• Las Vegas is in a desert, and the 2010 CRE forecasts are appropriately flat.
• Cyrus One gets capital infusion-announces expansion.
• Manufacturing grows in November.

~ Llenrock & Lowery Blogs

This is the latest office building I have done. Squares is the keyword Suited for some hi-tech corp. located at some green area close to water. At least thats what I had in mind when doing it.

Building and images are © Thomas Stenberg 2009

A curved office building. Not much to say here I did this rather quick but still Im pretty pleased with what it became. A medium office building for some wealthy companies maybe My idea when I made it included that it would be built near water with the outer curve facing the shoreline giving the workers a beautiful scenery to help them relax when work gets to stressful.

Building and images are ©Thomas Stenberg 2009.

• LyondellBasell receives offer from Indian Reliance Industries.  What a short, strange trip it has been.
• The bond market has a healthy appetite for TALF-backed CMBS.
• Mortgage restructuring for Woodlands and Deerbrook Mall could extend terms until 2014, possibly 2018.
• CRE is getting blamed left and right for the slow economic recovery.
• Morgan Stanley hands over keys for 17 million square feet, including Greenway Plaza buildings.
• Is the CIT Group bankruptcy a sign that government rescue plans don’t work?
• Marathon Oil to decrease spending budget by 15-20% for 2010.
• Is CRE a bigger risk to smaller banks?
• 10411 Westheimer attracts 18 offers.
• Dozens of banks are in trouble despite TARP aid.
• Houston tacks on around 10,000 jobs in October, most via government say TWC.
• Persian Gulf states are promising markets for REITs.
• Nat gas plunges 12% this month.
• Oil, averaging $57 in fiscal 2009, brings 54% lower disbursements and lease sales from 2008.
• NRG’s Texas solar project on ice due to lack of financing.
• Apartment loan defaults are fueling more losses for Fannie and Freddie.
• October Architectural Billings up significantly.
• Could Simon Property Group be angling to by General Growth assets?
• Landry’s refinances debt to shore up a ongoing, but still possible buyout.
• Why are REITs succeeding?  Simple: Access to the capital markets.
• Houston food prices down around 5% from this time last year.
• Is Obama about to extend the TARP Prgram?
• Vince Young sued for not paying his bills in a South Houston rental facility.
• Moody’s might downgrade debt sold by major banks.
• Houston port to raise cargo fees due to huge revenue year over year loss.
• Starwood Property Trust is beginning to slowly invest $900M.
• Jacobs Engineering profits falling, but balance sheet remains strong.
• Is BofA’s CMBS another positive sign for the market?
• Chicago Bridge & Iron awarded refinery construction contract in Columbia, estimated at $1.4 Billion.
• Detroit Lions Stadium sells for 1% of previous estimates- Astrodome worried.
• And finally, all the ways in which Sam Zell has trashed the so-called CRE experts.

~Llenrock & Lowery Blogs

Morgan Stanley has given the keys back to Barclays Capital and JV partner Goff Capital, headed by John Goff.

Quick note:  Goff’s, Crescent Real Estate Equities, was purchased by Morgan Stanley in 2007.  So in a way, the portfolio of properties has come full circle.

The $6.5 billion purchase price for Crescent Real Estate Equities was at the height  of the commercial real estate market and during oil’s ascent.  In two years time, oil doubled from the 30’s up to the 70’s.  But, Morgan Stanley’s purchase was viewed with skepticism by Morgan’s investors.  Thus, the purchase was put on the balance sheet of the company.  Two years later,  the write-offs totaled around $1 billion.

So, with the building’s future in jeopardy and tenants scrambling for answers, the view of grass overgrowing the sidewalks, tenants skipping out on rent responsibilities, mold, graffiti, and theft come to mind…right?  Well, in the case of Barclays and Goff, think the opposite.  Actually, think the polar opposite.

A few things to keep in mind.

• The Crescent building portfolio is the first of its kind to be surrendered in the Houston market.   In other words, demand for office space is still prevalent.  Not everyone wants to work at home!

• The buildings are known locally, as well as nationally, as a premier office destination for attorneys, accountants, and financial.

• Goff will improve the property significantly to shed image of Morgan Stanley.

• The buildings have essentially been repriced- significantly below the market.  The new ownership is much more flexible in their financial dealings (rents, concessions, space improvement allowances) with tenants.

And what better time to capitalize on this opportunity!

Businesses are in a downsizing mode and need to rid themselves of excess space by moving to other locations that can be built-out to there needs.  Rent is becoming burdensome and landlords are doing less to keep their buildings above par.  In the CBD, just minutes from Greenway Plaza, office space is marketed at double the rental rate and double the traffic dilemma.  With the newly expanded Interstate 59 in Houston, commutes are easier, safer, as well as closer to the homes of decision-makers, most of which live west of the CBD.

This all makes Goff’s Greenway Plaza buildings even more attractive.

Let’s go a step further.  A few years from now, once the buildings are fully leased and improved, and risk appetite returns from the commercial real estate investment community- Goff & Barclays will likely sell.  And Goff, the savvy investor, will make his second fortune on the same portfolio of buildings he began with at Crescent Real Estate Equities.  Kind of neat considering Crescent Real Estate Equities was hemorrhaging when it was purchased in 2007.

————————————————–

As tenant representatives, we locate opportunity.  Call us.  832-275-6514 to represent your interests in relocation and subleasing.

An article from the Costar Group today mentions that office rents are down and landlords/brokers are getting creative – not necessarily aggressive.  A tenant can expect a different negotiation outcome from each building owner.  So, it is of utmost importance that a tenant representation broker performs an exhaustive, investigative search of an area to disclose ‘hidden deals’.

Here are some bullet point highlights of the article… whose link is posted below.

• The fickle leasing market is the “new normal”
• Leasing office is a “deal by deal” balancing act
• A dramatic increase in renewals points to uncertain economy and landlord concessions
• Rents declining with no end in exact site, with estimations of 2010-2011
• Rents lag vacancy by 2-4 quarters
• Landlords enticing new tenants with concessions

http://www.costar.com/News/Article.aspx?id=A26A104B1930E72E852EEAF667D58515

(Wall Street Journal) - Some of the country’s top office-building owners reported they are cutting rents and increasing tenant incentives to keep buildings filled during one of the worst commercial real-estate markets in decades.

Boston Properties, which owns the GM Building in New York, above, said new tenants are paying 17% less in gross rents.

Boston Properties Inc., owner of the GM Building in Manhattan and other trophy properties, reported Tuesday, after the market closed, that new tenants are paying 17% less in gross rents than the prior tenants who had occupied that space. Boston Properties also reported that occupancy of its total portfolio, which includes 146 properties, declined 2.4 percentage points, to 92.1%, compared with the end of 2008.

The results follow similar releases Monday by SL Green Realty Corp., one of New York’s largest office landlords, and Liberty Property Trust, of Malvern, Pa., which owns more than 700 properties, including office and manufacturing. Their funds from operations, a closely watched metric in the real-estate industry, declined 28% and 10%, respectively, in the third quarter compared with the same period last year.

“While competitive market occupancies continue to erode, we may be seeing the first signs of what will, with no doubt, be a slow market recovery,” said Bill Hankowsky, Liberty’s chief executive.

The office market is getting pounded by the economic downturn as businesses shed workers and put off leasing decisions. In the third quarter, companies vacated 19.6 million square feet of space throughout the country, the equivalent of more than six Empire State Buildings, according to Reis Inc.

Boston Properties reported that third-quarter revenue rose 5.7% to $377.3 million compared with $357 million in the same period in 2008. SL Green’s revenue declined 7%, to $249.6 million, and Liberty’s rose 2.7%, to $187.5 million.

Problems may be on the way. Office buildings often don’t show financial strain in the early stages of a downturn because they are occupied by tenants who have signed long-term leases. As long as the tenants stay in business, their landlords can even see revenue increases because of escalation clauses in their contracts.

The pain starts hitting when leases expire. In tough markets, landlords typically have to spend a lot to retain or attract tenants through brokerage commissions or incentives such as free rent or interior construction. The cost of attracting tenants is a factor that is cutting into funds from operations.

Also, because rents have declined in most major markets, new leases carry lower rents than the leases that are expiring. Nationwide, effective office rents fell 8.5% in the third quarter compared with the same period in 2008, according to Reis. Effective rents take into account the cost of free rent and other tenant incentives.

SL Green during the third quarter beefed up tenant incentives, adding nearly an extra month of free rent, to 6.9 months, and offered new lease signers a construction allowance of $56.19 a square foot, up $23 from the third quarter of 2008. The company said average starting Manhattan rents were $47.31 a square foot, down from $66.78 during the same period last year. Also, the company signed 11 fewer leases in New York during the third quarter compared with a year ago.

“We already knew rents were down, and here is the proof,” said Michael Knott, an analyst at Green Street Advisors.

SL Green Chief Executive Marc Holliday said during an earnings call Tuesday that rents have dropped so steeply partly because there is a large inventory of high-quality sublease space available for leases over 10 years. He predicted that market conditions will improve once that sublease inventory is absorbed. He also said he expected a turnaround in the second half of 2010.

In 4 p.m. composite trading on the New York Stock Exchange, Liberty’s and SL Green’s shares were down 4.2% and 5.3%, respectively.

Victor Calanog, director of research at Reis, said the drop in rents likely will spur a pickup in leasing activity over the next 12 months.

Diese kleine Abhandlung wurde am Anfang aufgefordert durch die rückläufigen erschienenen mit einbeziehenden Geschichten, den Schwierigkeiten der Fluglinien, beim Fertig werden mit außerordentlich hoch und „flüchtigem Stoff,“ Strahlen-Brennstoffkosten.  Allerdings wendet sich sie mit gleicher Kraft an Benutzer des Heizöls und des Dieselkraftstoffs, die selbstverständlich auch die raffinierten Produkte sind, die vom Rohöl abgeleitet werden und die Turbinentreibstoff ein wenig ähnlich sind, der selbst Kerosin am entsprechendsten ist.  Benutzergruppen anders als Fluglinien würden Eisenbahnen, Transportfirmen umfassen, Abfallansammlungsfirmen, ob allgemein oder privat, Schulbezirke, die Schulbusflotten, Taxiflotten, Buslinien, Kurierdienste laufen lassen, die Flugzeugflotten, Regierungen, Schiffseigner und Kreuzfahrtlinien, Hotel und Motelfirmen laufen lassen, und Inhaber oder Operatoren der Bürohaus, der Industriegebäude und der Wohnanlagen.  Zurzeit lassen Sie uns jedoch auf den Fluglinien, über die die meisten geschrieben worden und gesprochen worden ist, und durch andere selbst fokussieren.

Historisch sind die größten einzelnen Kosten der Fluglinien der Arbeitslohn gewesen.  Jedoch in den letzten Jahren – besonders während des großen Preisfortschritts des Turbinentreibstoffs 2007 und 2008 – die Gleichung wurde auf seinen Kopf gedreht, hingegen die Kosten des Kraftstoffs die einzelne größte Linie Einzelteil von Betriebskosten wurden.  Dass noch zutreffend, wir hält, werden erklärt, trotz des massiven Preisrückgangs Kraftstoff ihrer Spitze am Sommer von 2008 folgend.

Einige Fluglinien (verhältnismäßig) bereitet für die Preisspitze 2008 aufgrund bestimmter Heckenprogramme vor, die den Effekt der Verringerung ihres Kostenpreises Kraftstoffs hatten.  Andere hatten keine Heckenprogramme überhaupt, und wurden herausgestellt verlassen, als Preise schwankten.

Einige Fluglinien haben Kraftstoff Preishecke Programme an der richtigen Stelle im Augenblick.  Man wundert sich, ob sie lediglich defensiv sind oder ob eine Anstrengung, handelngewinne positiv zu verwirklichen unternommen wird.  Eine große Fluglinie hat einen Kraftstoffheckeverlust von nah an $400 Million für das späteste Viertel verkündet.  Lesen wir mit Recht das, um zu bedeuten, dass die Effektivkosten des Kraftstoffs zusätzlich zum Heckenverlust waren?  Wenn das Programm völlig defensiv ist, funktioniert es nicht sehr gut; und wenn es Elemente einer Beleidigendart Strategie enthält, funktioniert es nicht sehr gut, auch nicht.

Es tritt zu mir, dass wirklich erfolgreich geworden, damit eine Kraftstoffheckenstrategie, es muss nicht nur zu einer Strategie der Verteidigung gegen verhängnisvolle KraftstoffPreiserhöhungen übersetzt werden kann, aber zu einer Strategie, um auf einen Profit auf Kraftstoffhandel auch zu erzielen.  Ein Basketballspiel kann nicht gewonnen werden, indem man nur Verteidigung spielt; Sie wirklich müssen die Kugel in den Korb des Fußbodens am anderen Ende einsetzen hin und wieder.  Er tritt auch zu mir auf, dass es notwendig ist, unsere wahrscheinliche Position innerhalb des Wellenzyklus jederzeit zu verstehen, der der Reihe nach ein Wissen der Wellengrundregel an erster Stelle erfordert.

Der vollständige Aspekt der Kraftstoff-Heckenabteilung einer Fluglinie muss von der eines notwendigen Übels ändern, das Dollar in einer lediglich defensiven Bemühung zu dem einer Profitmitte verbraucht.

Das angegebene Ziel der Profitmitte, sein Auftrag, würde NettoBrennstoffkosten von null sein.

Es ist nicht angemessen, zu erwarten, dass ein Ziel von null erreichbar sein würde.  Solch ein Resultat, wenn theoretisch möglich, konnte eine Verteilung der Kapital über dem Reich der Möglichkeit hinaus gut wild erfordern.  Allerdings und selbst wenn die Investition zu einem realistischen Niveau heruntergeschraubt werden sollten, ist die Grundregel noch gültig.  Die Profitmitte würde auf den messbaren Resultaten geordnet, die vierteljährlich halbjährlich und jährlich Monats sind, gegründet auf einigen Kriterien, unter denen sein konnten (1) Anlagenrendite und (2) erreichter Prozentsatz des Ziels während des Zeitraums, das Ziel, das null ist.  Z.B. wenn die Kraftstoffrechnung für den Monat $10.000.000 waren und Handelsprofite (im Heizöl, z.B.) für den Monat $1.000.000 waren, würde der erreichte Prozentsatz des Ziels während des Zeitraums .10 sein.  Es konnte sein, dass ein erreichter Prozentsatz von .10 betrachtet würde, ein gutes Resultat zu sein.  Es konnte auch sein, dass ein erreichter Prozentsatz von .010 betrachtet würde, ein guter Grad zu sein.  Die wichtigen Aspekte sind, dass es ein Ziel geben würde, an dem, Monat für Monat bis zum Monat zu zielen und dass die Resultate und abhängig von Vergleich messbar sein würden, Zeitraum bis zum Zeitraum.

Selbstverständlich würde solch eine Annäherung wahrscheinlich zur Folge haben, Kraftstoff-Heckenannäherung einer Fluglinie gedreht und inner zu drehen anwesende – heraus.  Sie würde eine Umlenkung des Gedankenprozesses erfordern.  Einige Leute konnten sie tun; einige konnten nicht.  Sie konnte den Import der verschiedenen handelnfähigkeiten gut erfordern.  Der Übergang konnte schwierig sein.  Er würde die Gesamtverpflichtung des Managements erfordern.

Ich höre den Ton von Applecarts, der umgekippt wird.  Aber, bevor das Wort „nicht“ kommt zum Vorderteil kann, möglicherweise wir eine Stimme finden könnten oder, zwei, wer sagen „möglicherweise.“

Respektvoll eingereicht.

William Kurtz

30. Juli 2009

Über den Autor:

Der Autor besitzt CandleWave, LLC, das sein Investitionsrundschreiben zweimal wöchentlich bei http://www.candlewave.com/ veröffentlicht und veröffentlicht, dreimal wöchentlich, seine Tätigkeits-Vorschläge für den Major Indizes einschließlich einen Bericht des Goldes, Silber, Rohöl, fünf Devisenpaare und das Dow 30, einzeln. Er ist auch der Schöpfer des „Candelaabra“ Systems der technischen Analyse für Gebrauch in allen Geldmärkten. „Candelaabra“ beschmutzt Trendumschwung, sogar bevor sie auftauchen! „Candelaabra“ ist auf einer Geld-zurückgarantiebasis in einem 30 Taggemeinsamen Versuch „der Geschäftsnautiker“ Plattform der Genese und des Candelaabra, zusammen vorhanden. Sie sind in einem einzelnen Paket an der http://www.candelaabra.com/-Geld-zurückgarantie beides vorhandenes! Kommen Sie sie erhalten, bevor dieses Angebot abläuft! William Kurtz info@candlewave.com CandleWave, LLC

Artikel-Quelle: ArticlesBase.com – Ziel: NettoBrennstoffkosten von null

Diese kleine Abhandlung wurde am Anfang aufgefordert durch die rückläufigen erschienenen mit einbeziehenden Geschichten, den Schwierigkeiten der Fluglinien, beim Fertig werden mit außerordentlich hoch und „flüchtigem Stoff,“ Strahlen-Brennstoffkosten.  Allerdings wendet sich sie mit gleicher Kraft an Benutzer des Heizöls und des Dieselkraftstoffs, die selbstverständlich auch die raffinierten Produkte sind, die vom Rohöl abgeleitet werden und die Turbinentreibstoff ein wenig ähnlich sind, der selbst Kerosin am entsprechendsten ist.  Benutzergruppen anders als Fluglinien würden Eisenbahnen, Transportfirmen umfassen, Abfallansammlungsfirmen, ob allgemein oder privat, Schulbezirke, die Schulbusflotten, Taxiflotten, Buslinien, Kurierdienste laufen lassen, die Flugzeugflotten, Regierungen, Schiffseigner und Kreuzfahrtlinien, Hotel und Motelfirmen laufen lassen, und Inhaber oder Operatoren der Bürohaus, der Industriegebäude und der Wohnanlagen.  Zurzeit lassen Sie uns jedoch auf den Fluglinien, über die die meisten geschrieben worden und gesprochen worden ist, und durch andere selbst fokussieren.

Historisch sind die größten einzelnen Kosten der Fluglinien der Arbeitslohn gewesen.  Jedoch in den letzten Jahren – besonders während des großen Preisfortschritts des Turbinentreibstoffs 2007 und 2008 – die Gleichung wurde auf seinen Kopf gedreht, hingegen die Kosten des Kraftstoffs die einzelne größte Linie Einzelteil von Betriebskosten wurden.  Dass noch zutreffend, wir hält, werden erklärt, trotz des massiven Preisrückgangs Kraftstoff ihrer Spitze am Sommer von 2008 folgend.

Einige Fluglinien (verhältnismäßig) bereitet für die Preisspitze 2008 aufgrund bestimmter Heckenprogramme vor, die den Effekt der Verringerung ihres Kostenpreises Kraftstoffs hatten.  Andere hatten keine Heckenprogramme überhaupt, und wurden herausgestellt verlassen, als Preise schwankten.

Einige Fluglinien haben Kraftstoff Preishecke Programme an der richtigen Stelle im Augenblick.  Man wundert sich, ob sie lediglich defensiv sind oder ob eine Anstrengung, handelngewinne positiv zu verwirklichen unternommen wird.  Eine große Fluglinie hat einen Kraftstoffheckeverlust von nah an $400 Million für das späteste Viertel verkündet.  Lesen wir mit Recht das, um zu bedeuten, dass die Effektivkosten des Kraftstoffs zusätzlich zum Heckenverlust waren?  Wenn das Programm völlig defensiv ist, funktioniert es nicht sehr gut; und wenn es Elemente einer Beleidigendart Strategie enthält, funktioniert es nicht sehr gut, auch nicht.

Es tritt zu mir, dass wirklich erfolgreich geworden, damit eine Kraftstoffheckenstrategie, es muss nicht nur zu einer Strategie der Verteidigung gegen verhängnisvolle KraftstoffPreiserhöhungen übersetzt werden kann, aber zu einer Strategie, um auf einen Profit auf Kraftstoffhandel auch zu erzielen.  Ein Basketballspiel kann nicht gewonnen werden, indem man nur Verteidigung spielt; Sie wirklich müssen die Kugel in den Korb des Fußbodens am anderen Ende einsetzen hin und wieder.  Er tritt auch zu mir auf, dass es notwendig ist, unsere wahrscheinliche Position innerhalb des Wellenzyklus jederzeit zu verstehen, der der Reihe nach ein Wissen der Wellengrundregel an erster Stelle erfordert.

Der vollständige Aspekt der Kraftstoff-Heckenabteilung einer Fluglinie muss von der eines notwendigen Übels ändern, das Dollar in einer lediglich defensiven Bemühung zu dem einer Profitmitte verbraucht.

Das angegebene Ziel der Profitmitte, sein Auftrag, würde NettoBrennstoffkosten von null sein.

Es ist nicht angemessen, zu erwarten, dass ein Ziel von null erreichbar sein würde.  Solch ein Resultat, wenn theoretisch möglich, konnte eine Verteilung der Kapital über dem Reich der Möglichkeit hinaus gut wild erfordern.  Allerdings und selbst wenn die Investition zu einem realistischen Niveau heruntergeschraubt werden sollten, ist die Grundregel noch gültig.  Die Profitmitte würde auf den messbaren Resultaten geordnet, die vierteljährlich halbjährlich und jährlich Monats sind, gegründet auf einigen Kriterien, unter denen sein konnten (1) Anlagenrendite und (2) erreichter Prozentsatz des Ziels während des Zeitraums, das Ziel, das null ist.  Z.B. wenn die Kraftstoffrechnung für den Monat $10.000.000 waren und Handelsprofite (im Heizöl, z.B.) für den Monat $1.000.000 waren, würde der erreichte Prozentsatz des Ziels während des Zeitraums .10 sein.  Es konnte sein, dass ein erreichter Prozentsatz von .10 betrachtet würde, ein gutes Resultat zu sein.  Es konnte auch sein, dass ein erreichter Prozentsatz von .010 betrachtet würde, ein guter Grad zu sein.  Die wichtigen Aspekte sind, dass es ein Ziel geben würde, an dem, Monat für Monat bis zum Monat zu zielen und dass die Resultate und abhängig von Vergleich messbar sein würden, Zeitraum bis zum Zeitraum.

Selbstverständlich würde solch eine Annäherung wahrscheinlich zur Folge haben, Kraftstoff-Heckenannäherung einer Fluglinie gedreht und inner zu drehen anwesende – heraus.  Sie würde eine Umlenkung des Gedankenprozesses erfordern.  Einige Leute konnten sie tun; einige konnten nicht.  Sie konnte den Import der verschiedenen handelnfähigkeiten gut erfordern.  Der Übergang konnte schwierig sein.  Er würde die Gesamtverpflichtung des Managements erfordern.

Ich höre den Ton von Applecarts, der umgekippt wird.  Aber, bevor das Wort „nicht“ kommt zum Vorderteil kann, möglicherweise wir eine Stimme finden könnten oder, zwei, wer sagen „möglicherweise.“

Respektvoll eingereicht.

William Kurtz

30. Juli 2009

In an interesting turn of events, the “greening” of America has slowed down in at least one sector; commercial real estate.  Why does this matter? Because commercial properties account for a significant portion of our carbon footprint and the continued push toward building designs that minimize that footprint are vital to achieving a respectable decrease in greenhouse gas emissions.

Based on a recent survey by the Urban Land Institute, the importance of climate change and alternative energy sources has diminished, at least temporarily, as a factor in real estate investment decisions. Other findings include:

• Lenders tend to view energy efficiency as an important bottom-line issue, focusing on reducing energy costs not emissions
• Most respondents are adopting a “wait-and-see” attitude with regard to business strategies involving climate change
• Environmental issues play a factor only when they produce an immediate return or mitigate investment risks

The fact that the economic stimulus funds aimed at reducing the carbon footprint of both new and existing buildings  seems to have failed to entice many investors to “get with the program” only further demonstrates an increased scrutiny of bottom line costs as a result of the recession.  Many are waiting for  legislative regulation to shake out at the federal, state and local levels first.  With so much still unknown about the impact of government on policies related to climate change, the approach by the lending community is one of extreme caution (particularly after a period of loose lending followed by a government clamp down).

Industry expert Patrick Phillip, CEO of ULI,  predicts that green investing will gain relevance and importance as the market rallies from the downturn. As more information is collected on the performance of green projects delivered prior to the commercial crash, it will be easier to determine the impact on value for lenders and investors.

Source: CoStar.com

SustainDex (environmental|sustainable|clean/bio tech)

Central Business District

Entrix – Columbia Square | 111 SW Columbia St | 4,936 SF

Collins Companies – Riviera Plaza | 1618 SW First Ave | 14,520 SF renewal

TechDex (apps|provider|hardware|var)

Westside

XpanD Inc – Cornelll Oaks | 15201 NW Greenbrier | 15,438 SF

Vancouver

AOP Technologies – Quad 205 Biz Park | 4018 NE 112th | 1,064 SF

GeneralBizDex (consulting|finance|insurance|legal|other)

Central Business District

Maloney Lauersdorf Reiner – 117 SW Mikado St | 4,500 SF

Marten Law Group – Congress Center | 1001 SW Fifth Ave | 3,193 SF renewal

Mainz Brady Group – Montgomery Park | 2701 NW Vaughn St | 1,980 SF

Eastside

Comcast Cable Holdings – College Sq. Ctr. | 2830 NE Hogan Rd | 1,445 SF

Westside

Rick Meyer/Bradley Fields – 660 SW 92nd Ave | 1,418 SF renewal

Delta Financial – 6600 Bldg | 6600 SW 92nd Ave | 1.445 SF renewal

It appears that post Labor Day activity has picked up as businesses seem to be over the panic of a dropping market. Tenants continue to be cautious and careful with their expenses, but also recognize some excellent opportunities to secure low market rents and even make moves into higher quality space. 

DesignDex (A/E|consulting|graphic d)

Central Business District

Ash Creek Associates – 3015 SW First Ave | 8,800 SF

MediaDex (traditional|digital|research)

Central Business District

EnviroMedia Social Marketing - Skidmore Bldg/White Stag Block | 24 NW First | 777 SF

GeneralBizDex (consulting|finance|insurance|legal|other)

Central Business District

Talon Group LLC – Skidmore Bldg/White Stag Block | 24 NW First | 1,166 SF

North Star Consultants – 5100 SW Macadam | 7,625 SF renewal

Eastside

Northland US LLC – 205 Plaza | 10570 SE Washington | 2,459 SF

Minarik Corp – Ambassador Center | 7515 NE Ambassador Pl | 3,426 SF renewal

Griffin Underwriting – Airport Biz Ctr | 6645 NE 78th | 990 SF renewal

Westside

Scheller Financial – Pacific Parkway Ctr | 12909 SW 68th | 2,936 SF

HealthDex (hospital/provider|managed care|equipment)

Central Business District

Oregon Male Clinic – 9320 SW Barbur Blvd | 1,799 SF

Westside

NDS Surgical Imaging – BG Plaza | 3800 SW Cedar Hills | 969 SF

Orbit Medical – Scholls Business Ctr | 10150 SW Nimbus | 2,462 SF

TechDex (apps|provider|hardware|var)

Central Business District

InFlow Systems – 11000 SW Barbur Blvd | 3,000 SF

Westside

ColumbiaSoft – Pacific Corp Ctr | 15495 SW Sequoia Pkwy | 6,338 SF

I read this article by The Sacramento Bee, which I found interesting.  California leads the nation in green revolution, it says.  Office buildings that have the latest energy-saving standards rent for more than comparable structures.  It went on to say that researches at the Center for the Study of Energy Markets did a study and their findings were that rental rates for “green” buildings were 3 percent higher per square foot than rents for otherwise identical buildings, and sales were 16% greater for the energy-efficient buildings.  This is good for the planet and for investor’s pocketbook.  “Go Green”

1) Hello, Lady in the Pink Shirt. I have a brand new office, on the 11th floor right on I St NW. And I can see the people in offices across the street. I find this hilarious. Today in particular I’ve just been standing in the window, mostly daydreaming, but also spying a little. It’s not a good thing my vision isn’t great, so tomorrow I’ll bring my glasses . Aw, a pigeon just walked on the ledge outside my window. Peck, peck, peck. What would I do if someone turned and stared back? Or waved? Would I close my blinds forever? So, today I see a guy in a white shirt, he’s sitting with his side toward me and I haven’t seen him move at all. Unless he moves when I’m not here, which is totally possible considering I take 1.5 hour lunches and mini fro-yo breaks. Ooh – someone just opened their curtains. Very exciting. Oh, but now they’re gone. I wonder how many of those people are shopping for shoes on Endless, or looking up VA divorce laws, or reading celeb gossip. And, I totally just took a picture of my view:

2) What’s my snooping policy? As the parent of a girl – a someday-to-be teenaged girl – I wonder if I’ll snoop. I’m not the type to dig through people’s medicine cabinets (my fear that the cabinet would come crashing to the ground just as it squeaks shut keeps me from ever doing this!). But I was a teenager. A not so great one. I was never where I was supposed to be, when I was supposed to be there. I talked back and smelled weird (weird= alcohol, cigarettes and pot) and had bloodshot eyes when I walked through that door, way past curfew. So, my mom read my diary. It’s like husbands who are caught cheating via email by their snooping spouses. All of a sudden, it’s the snooping that’s the crime. Not the cheating. And somehow the argument gets turned on the finder: “I’ll never be able to trust you again!”. Laughable, really. So, in 10 year’s time will I be having a blowout with my girl?

Mom: What the hell are you doing with the Jell-O shots? And kissing all those boys?

Emma: That is my personal space, mom! You can’t read my diary. See – I can’t trust you with ANYTHING. I knew I couldn’t talk to you! I am FIFTEEN YEARS OLD. I can do want I want!

And then what? Do I laugh and say “Well, if you were trustworthy, I wouldn’t have to snoop”. Do I smack her and tell her she’s ruining her life? Do I hug her and cry and beg her to love herself?

3) Spy jackets are so cool. I took Emma to Lord & Taylor over the weekend with me to do some “shopping”. I think I may get rich on pioneering something in department stores: making clothes racks unfriendly toward children. It’s thousands of square feet of forts and cool hiding spots. And, unfortunately, they are cause for thousands of heart jumps and cold sweats, as frantic calls echo around the store “Emma! Emma!” only to find she’s in the Michael Kors leather jackets. I pull her out (confession: I said in Stern Mommy Voice “Get out of there NOW.”) So, she did and she looks at the mass of black leather in which she was just hiding and said “Oh, Mommy – these are spy jackets. You have to get one.” I don’t know what made her think I was the sort who wore “spy jackets,” but as I think of it – the 007 in me is thinking that conversation above would be a hell of a lot cooler if I wore a spy jacket.

]]> http://squarefeetpdx.com/2009/09/15/whos-on-the-move-week-ending-91109/ Tue, 15 Sep 2009 17:08:30 +0000 squarefeetpdx http://squarefeetpdx.com/2009/09/15/whos-on-the-move-week-ending-91109/

TechDex (apps|provider|hardware|var)

Westside

Perceptive Pixel – Kruse Way Place 1 | 4000 Kruse Way | 2,152 SF

Biamp – Nimbus Corp Ctr | 9300 SW Gemini Dr | 70,944 SF

Central Business District

OCHIN – Union Bank of Cal | 707 SW Washington | 5,094 SF sublease

MediaDex (traditional|digital|research)

Central Business District

Overland Agency – DeSoto Building | 720 NW Davis St | 6,403 SF

Prichard Communications – 620 Bldg | 620 SW 5th | 600 SF

Westside

Targetpath – 9375 SW Commerce Circle -Wilsonville | 2,950 SF

GeneralBizDex (consulting|finance|insurance|legal|other)

Central Business District

Willis or Oregon - KOIN Center | 222 SW Columbia | 13,367 SF

Westside

SW Corp Federal Credit Union – 8909 SW Barbur Blvd | 15,814 SF renewal

Steel Canyon Enterprises – Sylvan Westgate | 5319 SW Westgate | 1,536 SF

Coach Inc – 9425 SW Commerce Circle, Wilsonville | 2,100 SF

Eastside

Netmore American – 3 Town Center | 10121 SE Sunnyside | 2,763 SF

Coppersmith Inc – Airport Biz Ctr | 6135 NE 80th | 2,697 SF renewal

D&M Auto Brokers – 2715 N Hayden Island Drive | 1,981 SF

HealthDex (hospital/provider|managed care|equipment)

Westside

Inovise – Creekside Corporate | 8770 SW Nimbus | 4,322 SF downsize

DesignDex (A/E|graphic d)

Central Business District

Cooper Zeitz Engineering – 620 Bldg | 620 SW Fifth | 1,741 SF

SustainDex (environmental|sustainable|clean/bio tech)

Central Business District

Green Transportation – 10118 E Burnside | 3,840 SF

EcoNorthwest – KOIN Center | 222 SW Columbia | 9,833 SF

NonProfDex (charitable|education|trade assoc)

Central Business District

American Forest Resource Council - Riverside Centre | 5100 SW Macadam | 1,699 SF

New York City’s Small Residential and Commercial - NOW you can Save on their Electric Bill and/or receive Free Energy Supply!

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NonProfDex (charitable|education|trade assoc)

Eastside

Oregon Education Assoc. – MMC Building | 333 SW 223rd, Gresham | 3,445 SF

TechDex (apps|provider|hardware|var)

Westside

AuctionPay – Tigard Triangle Corp Ctr | 13221 SW 68th | 14,580 SF renewal

MediaDex (traditional|digital|research)

Central Business District

Bradshaw International – 4800 SW Macadam | 2,794 SF

GeneralBizDex (consulting|finance|insurance|legal|other)

Central Business District

Strategic Investment Group – River Forum I | 4380 SW Macadam | 2,143 SF

Trammell Crow Residential – One Pacific Sq | 220 NW Second | 3,525 SF

NorthStar Consultants - Riverside | 5100 SW Macadam | 7,625 SF renewal

Salt Grotto LLC – Lovejoy Square | 908 NW 14th Ave | 1,900 SF

SustainDex (environmental|sustainable|clean/bio tech)

Westside

Plas2Fuel Corp – Wall Street Industrial Park | 7904 Hunziker | 22,307 SF

The much touted American Clean Energy and Security Act of 2009 cleared the House of Representatives in June and is gaining momentum as it approaches the U.S. Senate floor in September. The impact of this legislation, however, is either a winner or loser for commercial real estate depending on how you view it.  For starters, let’s ignore the extremely controversial cap and trade portion of the bill and focus on three other key provisions that directly affect commercial real estate: building code, energy labeling, and incentives to offset the cost of retrofits.

Building Codes

A change to the national building code would include a mandate of energy improvements in existing buildings.  Beginning with 2018, buildings would be required to use 5% less energy than a baseline consumption marker established in 2005. Every third year thereafter, an additional 5% reduction would be required culminating in a 25% total reduction by the year 2030.

Enforcement of these codes is still unclear with regard to method. The most recent version of this legislation is proposing federal fines for non-compliance within stated timeframes. Owners of older buildings most definitely face the largest burden. Their properties will need greater capital investment in order to make reductions in energy usage on the scale that is being mandated by the federal government.

Energy Labeling

This portion of the proposed legislation is much like the EnergyStar program in so far as the EPA would develop an energy performance labeling program. The provision would only affect new construction completed since the enactment of the bill and require property owners to disclose the energy scores or performance ratings of their properties. California already has a law in place that requires reporting of energy consumption on buildings trading hands (bought/sold). Some argue the market will become the largest deterrent to non-compliance by penalizing owners who don’t improve their property’s energy efficiency (ie. tenants will eventually opt away from low efficiency options). If this proved to be true, then federal fines would not be issued often as owners made the move toward achieving total compliance.

REEP Incentives

Perhaps the stickiest piece of legislation, at least in the current economy, is the energy retrofit requirement portion of the ACES Act.  The capital required to bring existing buildings up to the new code will be significant. To address this expense, the bill calls for the set up of the Retrofit for Energy and Environmental Performance (REEP) program, which would support retrofitting initiatives and potentially offer credit enhancements, interest rate subsidies, and initial capital for public revolving loan funds. This could feel like more handouts from the government and, as of yet, is not clear how it will be funded.

Cap And Trade

This all brings us back to the hot button portion of the ACES Act – Cap and Trade. This provision calls for a 17% reduction in carbon emissions across the U.S. by 2020. This is of particular concern to manufacturing and mining operations, who would be required to make the most aggressive cuts in order to comply. Most office buildings are unlikely to fall within the parameters defined as “unacceptable” and therefore unaffected directly by cap and trade. However, in states where there are coal-fired utilities (midwest for example) or rural areas relying on coal energy, the costs will most certainly be passed down to businesses and consumers alike.

On the bright side, Oregon is mostly hydro-powered so impact to our state would not be as heavy as, say, Ohio or Pennslyvania. 

For the full story, click here http://budurl.com/vzya

SANATOGA PA – After two months of review and deliberations, and without further public discussion, the Lower Pottsgrove (PA) Township Zoning Hearing Board on Tuesday night (July 21, 2009) gave its approval to all zoning variances needed to finally allow Specht Investors LLC to build a proposed an office condominium complex  at 1800 E. High St.

An artist's rendering of two new office buildings (at left) in what would be the Specht complex, in a view envisioned as looking north on South Sunnybrook Road toward East High Street.

The developer plans to construct two Colonial-style office buildings to join another office building already on the four-acre site, at the corner of East High and South Sunnybrook Road. The largest new building would consist of 19,846 square feet; the second, smaller building would contain 13,280 square feet.

The buildings will be located in a Limited Commercial Office District, and within a floodplain. Board members unanimously agreed to authorize variances that:

• Allow an office building use in the Floodplain Conservation District;
• Permit a proposed building width of 150 feet in the Sanatoga Village District;
• Allow parking in the front yard of the buildings;
• Reduce the number of required parking spaces from 205 to 172;
• Extend the time period approved variances would be effective to 18 months, instead of the usual 6 months, to accommodate the land development approval process;
• Allow use of the property despite limitations imposed by steep slopes there; and
• Deviate from the requirement to install sidewalks along Sunnybrook Road.

The approvals, board Solicitor Robert Brant noted, were subject to Specht’s compliance with plans already approved by the township Planning Commission and Board of Commissioners, and with all conditions placed by subsequent agreements.

Township commissioners’ approval came with several conditions: the need for more detailed plans, limitations on building size, assurances of adequate parking, landscaping requirements, cooperation with neighboring property owners on extension of the township trail system, creation of a condominium owners association to manage the buildings, and obtaining the required variances.

Related:

• Township Commissioners OK Offices
• Commissioners Consider Conditional Use Tonight
• Planners OK Specht Office Proposal
• Office Complex On Planning Agenda
• Trifecta Possible For Office Development
• Awaiting Agenda In Lower Pottsgrove
• Slope Issues Cause Specht Delay
• 2 Hearings Set For 2 Proposed Offices

Sign up to get The Sanatoga Post delivered free daily by e-mail.

Real estate brokers on both the East and West Coasts are among those thrilled by release of the Model Green Lease. In Los Angeles, Jeff Woolf, Executive Vice President, Cushman & Wakefield, says “it’s clear we need to encourage more green buildings. It’s a major issue in this economy as corporate tenants are looking to cut their costs and improve worker productivity. At the same time, landlords are seeking to keep tenants and stop the decline in building value. The Model Green Lease is a powerful tool to do just that.”

“Apart from the issues raised by the current state of the economy,” adds Laurie Mc Mahon, LEED AP, Managing Director, Cassidy & Pinkard Colliers, Washington DC; “rising energy costs, and concerns about carbon and climate change have upped the stakes for addressing the spilt-incentive. Our experience shows that greening any building benefits both tenants and the building owner. The first step is getting the financial incentives aligned, and then pairing that with an educated, engaged and effective property management and leasing team to execute.”

The Model Green Lease is distinct from other green lease efforts in three critical areas:

1. Resolves the critical financial problem of the split-incentive that has hobbled the progress of greening existing office buildings and constructing new green buildings.
2. It’s equitably balanced to meet the financial and operational needs of landlords, lenders, investors, and tenants.
3. Preliminary estimates show that buildings adopting the structure of the Model Green Lease, with appropriate construction and operating standards can cut energy use by 30 to 50 percent over comparable office buildings, with corresponding financial benefits accruing to landlord, investors and tenants.

Historically, the industry is polarized. If a tenant signs a net lease, the building owner sees little benefit from investing time and money in saving energy. A tenant that signed a gross lease doesn’t care how energy efficient a building is – because the tenant never sees the savings. Ironically under both types of leases, tenants that manage their energy use wisely often subsidize tenants that waste energy or operate beyond normal business hours. The Model Green Lease changes the game, says Whitson, “We redesigned the modified gross lease to put the economic incentives in the right spots to get the economic and environmental results everybody wants. Plus, it’s written in plain English.”

“It’s time to rethink the traditional lease document,” says real estate attorney Ronald B. Grais, Jenner & Block, Chicago. “While drafted at the onset of a lease term that may go five, 10 or even 20 or more years: many things will change over the lease term. Although the Model Green Lease includes specific ‘standards’ for IAQ, cleaning, recycling, and temperature range; these standards are going to change. The real genius of the Model Green Lease is its flexibility to adapt the landlord tenant relationship to change, and encourage continuous improvement.”

The Task Force created a lease that is consistent with ASHRAE, Energy Star, Green Globes, and LEED rating systems. Yet, it can be used in any buildings that for various reasons may not be seeking certification. Other goals include; having a user-friendly format with key deal points itemized at the front of the lease, and work across a portfolio of buildings with minimal changes. Besides key environmental issues such as IAQ, energy use, carbon credits, recycling, insurance, operating costs, tenant improvements, green cleaning specifications, and building regulations; the Model Green lease includes a requirement for an Annual Environmental Performance Report.

“The Model Green Lease Task Force did an outstanding job achieving our objectives,” says Whitson. “We resolved the biggest obstacle to green office buildings — the split financial incentive in a fair and equitable manner. From the landlord’s standpoint the Model Green Lease provides a framework to compete for tenants by designing, building and managing high performance and sustainable office buildings while maximizing their return on investment. From the tenant’s standpoint, the Model Green Lease ensures they receive the full benefit of being a tenant in a green office building — a healthy and productive workplace at a competitive rate.”

The Model Green Lease is available by download at www.squarefootage.net or on CD. It includes a reference guide on “Understanding and Working with the Model Green Lease,” plus an editable copy to use in your own leasing transaction. A series of educational workshops on the Model Green Lease are also running throughout North America. The workshops cover provisions of the Model Green Lease, its evolution, and how to apply it to new or existing buildings. An expert panel/ mock lease negotiation session is part of the seminar. This educational program is part of the Turning Green into Gold® series; and is offered in cooperation with the IFMA Corporate Real Estate Council and other collaborating organizations. Additional information is available at www.squarefootage.net or by calling 503-274-7162.

The national office vacancy rate is inching toward 17% and a significant number of maturing loans are coming due in the next 18-24 months. As a result, building owners are pressing hard to retain tenants  and clean up balance sheets before the next real estate aftershock.

A year ago, owners believed they could offer more generous tenant improvement allowances and free rent (rather than lower rates) and ride out the economic storm. But that didn’t happen. Instead, the U.S. office vacancy rate escalated to 15.3% in 1Q 08 up from 12.5% in 3Q 07 while rents fell by 3.6%.   In 2008, many people felt, despite the fact we were headed into an unprecedented economic situation, that it would be somewhat manageable. And this feeling wasn’t without facts to support it: unemployment was at 5.6% in June 2008 and the office market was showing only modest signs of weakness (particularly downtown Portland). But by June 2009, unemployment skyrocketed to 9.5% (I don’t even want to mention the Oregon unemployment rate) and office markets across the country were experiencing large vacancy rates as tenants downsized or disappeared completely.

Unfortunately, for property owners this is only half of the problem as maturing debt and major drops in property valuations continue to increase volatility.  The price per square foot for office buildings, according to Real Capital Analytics, fell 62% from November 2007 to May 2009. This means many owners are now upside down on their mortgages, just like homeowners. For now, as long as owners can service their debt payments, many lenders are granting short-term extensions. The trouble with this option is that these extensions are coinciding with a mountain of debt set to mature in 2011 and 2012 (estimated to be around $602.4 billion).

There are a few bright spots however, in the office sector. Energy markets (Houston, For Worth) are seeing positive rent growth and the growth of government has helped to keep rents stable in the nation’s capital – just not in California. Yep, that’s it for the brightspots.

For the full story, click here http://budurl.com/nzqf

It’s 90 degrees outside and we’re freezing.

There’s my co-worker J., shuffling past my office door draped in a heavy red wool blanket. Down the hallway sits B., wrapped in her blue poncho. Both brave the chilly office temperatures and wear summer dresses to work. (It’s June, after all.) But they also drink hot tea and coffee to warm their stiff fingers.

Even our tanned 20-something intern is cold. Every morning I watch her pull a cardigan from her bag before she even turns on her computer.

Air conditioning opened up the American South to northerners half a century ago and turned backward, sleepy cities such as Atlanta into metropolitan boom towns. It transformed Singapore into an international business hub, made Phoenix livable, and millions of workers worldwide more productive.

Air conditioning also gobbles up 5 percent of all electricity produced in the United States, accounting for as much as 15 percent of energy consumption in homes and one-fifth or more of energy used in commercial buildings, depending on latitude. And here’s the sobering part: The commercial sector – schools, office buildings, malls, movie theaters and so on – are accountable for an ever-growing share of energy-related carbon dioxide emissions as their consumption of energy from dirty power plants continues to grow.

In the United States, 87 percent of our greenhouse gas emissions are related to our energy consumption, with the commercial sector’s emissions growing faster than any other sector’s. So you’d think that somebody would suggest that we cancel the warm sweaters and blankets and turn up the thermostat a few degrees.

It’s not only about saving the Earth, by the way. Raising the indoor temperature from 73 to 76 degrees can shave nearly one-third off your air-conditioning bill during the summer months, according to Duke Energy, the Charlotte-based energy giant.

But, oh, no. When our office air conditioning system malfunctioned a few weeks ago, some people – mostly men in suits – complained that it was “sooo hot.” The truth is, as a society, we’ve become addicted to cool spaces.

Today, more than half of all home owners in the United States run their air conditioner all summer long, up from one-third of homes in 1981.

Even in Minnesota, they’ve gone crazy with air conditioning. Twenty years ago, one-quarter of homes in this northern state had no AC. Today, fewer than 10 percent do and peak energy demand has shifted from winter to summer. Hear Minnesota Public Radio’s report from the North Star State!

Sounds to me like we need to look to China for some leadership. Faced with energy shortages a few years ago, the city of Shanghai ordered office buildings not to set their thermostat below 26 degrees Celcius, or 79 degrees Fahrenheit.

Of course, in a democracy like ours where everybody has a say and very little gets accomplished policy-wise, you can forget 79 degrees.