Wednesday, December 16, 2009

Commercial Real Estate Tsunami Hits Walnut Creek Ca.

Proving there are very few "safe-harbors" from the commercial real estate tsunami, 1111 Civic Drive in Walnut Creek has slipped into default on its nearly $23 Million mortgage. Published reports in the Contra Costa Times state that "lenders...are moving towards a foreclosure of the $22.8 million loan and seizure of the office building." (to read the full article click HERE)

The building changed hands in 2007, well within the commercial real estate "death period" of 2005 - 2008, and the ownership's plans to turn the space into commercial condos never materialized.

There could yet be a happy ending (for the next ownership group). Foreclosure will "re-set" the building's value, and free up the next ownership group to actively court new tenants with lower rents and the potential of higher TI allowances. And the cycle continues....

Tuesday, December 15, 2009

A San Francisco Icon Goes Green...

A landmark building in San Francisco has completed its journey into the 21st century by going green. The iconic Transamerica Pyramid building, long associated with the San Francisco skyline, has acheived LEED-Gold certification.

Image CC licensed by Daniel Schwen.

In 2009, LEED certified square footage in San Francisco increased five-fold, and SF now has more green buildings than New York or Los Angeles.

A report by the San Francisco Existing Commercial Buildings Task Force, which provides "practical solutions to green the city's commercial buildings" has also recently been released.

To download a copy of the report click (HERE).

Monday, December 14, 2009

2010 - Year of the "Zombie" Building

How will the impending crash in commercial real estate play out in the field..." Knowledgeable sources in the industry are talking about 2010 as the year of the "Zombie" building... A Zombie building is an office building where the ownership no longer has the resources (capital and/or access to capital), to fund needed leasing requirements (such as Tenant Improvements and/or Commercial Broker commissions).

Word is that an unofficial "blacklist" of current or potential "zombie" buildings is already shaping up. The blacklist contains buildings that are "excluded" from being shown to potential tenants. Much like the "counter-party" risk in the stock market that hastened the demise of Bear Stearns and Lehman Brothers (where other firms stopped lending because they were afraid they would not get paid back), ending up on the "blacklist" will most likely choke off the stream of needed tenants, and speed up the death spiral of the "zombies..."

Friday, December 11, 2009

8 steps to mitigating the risk of Green construction...

Any construction project contains an element of risk. "Green" projects (where LEED certification is a goal) have there own set of "special" challenges. A recent article written by attorney Leonard Goodman posted on Greenerbuildings.com, 8 Steps for Better Management of Green Design and Construction Risks provides some insight into mitigating the risks associated with a green project. 
  1. Have A Clear Understanding of Your Particular Green Objectives and the Options for Meeting Them Under LEED
  2. Engage Experienced A/Es and Contractors Capable of Working Together Collaboratively Early in the Development Process
  3. Determine if BIM is Right for Your Project
  4. Consider Pursuing the LEED Credit for Enhanced Commissioning
  5. If Time Permits, Opt for LEED's Two-Phase Certification Process
  6. Do Not Rely on Industry Standard Forms of Agreement
  7. Consider Integrated Project Delivery
  8. Purchase Property Insurance that Covers Losses Associated with Green Buildings

To view the complete article, click: (HERE).



    

Wednesday, December 9, 2009

California is growing Green Jobs...

A recent report titled, Many Shades of Green:Diversity and Distribution of California's Green Jobs  details the explosion in "green" businesses and jobs in California over the last 13 years.

Issued by the non-partisan group Next 10, the report states that "green" employment expanded 36% between 1995 and 2008, while "all" employment expanded only 13% during the same time period. 

The complete report can be viewed (HERE).

Tuesday, December 8, 2009

Where are we in the recession (II)

An update from the September 8, 2009 posting: Where Are We In The Recession -- the Fortune Magazine Big Picture Index which records 7 metrics on the overall state of the economy has TICKED UP a notch!



The 7 factors measured are: Foreclosures, total employment, total marketcap for stocks, total bank loans, total consumer loans, total household income, and CEO confidence (measured by stock buy backs). A quick analysis shows the slight uptick has been driven by the increase in the stock market, as well as CEO confidence (which also reflects the stock market through share buybacks).

Unfortunately the critical factors (Jobs and Business Loans) are still declining. To see the index click HERE.

Monday, December 7, 2009

Tips for "Greening" Your Business

The following is taken from an article published on Greenerbuildings.com by Carrie Langforda "green advisor" at Ecker Green, a business unit of Howard Ecker + Company that focuses on providing green office services to commercial office tenants. The original article A Dozen Tips for the Total Greening of Your Business can be found:  (HERE)

Tips to Green Your Business:

1.The time is now for companies to start thinking about sustainable practices. It isn't something we are going to see coming in the future. It is already happening.


2.Businesses that align their practices with core values, such as sustainability, are often better positioned to recruit and retain employees. 58 percent of people working in office environments are under the age of 44 (bureau of labor statistics), placing them in the Millennial and Gen X demographic categories. A business's sustainability practices are increasingly important to people within this age group.

3.Energy aware real estate strategies, space selection and efficient design can cut energy costs and increase work productivity and employee retention.

4.Reducing total energy use by 40 percent (average Energy Star Building reduction) would net savings of $1 a day per employee.

5.While LEED-certified buildings are designed to perform based on a set of prescriptive data, it's how you live and occupy the space after the building is built that will ultimately decide the buildings performance. How you live and occupy your space also defines and demonstrates your commitment to the environment and the health of your organization.

6.Computers are proliferating and it appears growth will continue to be exponential. Computers use a great deal of power and disposal is a big problem. Server consolidation or cloud computing will reduce a company's carbon footprint and save a lot of money.

7.Employees are often looking for a better work/life balance and telecommuting accomplishes this objective and at the same time improves productivity and the bottom line.

8.Avoid seeking the elusive environmental "silver bullet." It doesn't exist. It's essential to look out for opportunities to use less. If an asset doesn't improve customer service or productivity, get rid of it.

9.Design performance is all about beginning to research strategies on how to measure from four primary drivers: emotional, cultural, economic and environmental. The most important thing to do is to develop an understanding of space utilization and design accordingly.

10.The regulatory environment surrounding green building will change drastically in the next year or two, from a market-driven, locally-regulated environment, to a mandated, federally-regulated one.

11.Cities and counties, armed with federal funding and resources, are adopting climate change plans and regulations and are not waiting for federal direction, but are moving forward with a wide variety of programs and regulations.

12.Developers and building owners who are considering green construction practices or retrofit projects now will be ahead of this regulatory curve.