Mixed News about the state of small business...

Recent information on the default rate of small and medium sized businesses illustrates that a portion of the economy is still struggling to climb into the recovery.

In the latest report, defaults by small and medium sized business on loans, leases, and lines of credit used to finance equipment investment, rose to .85% in September, up from .81% in August. This information is according to Paynet, a provider of risk management tools to the commercial lending industry.

The report isn't all bad news, as it showed that accounts in "moderate and severe" delinquency, actually fell during the month (from 4.35% in August to 4.22% in September), showing that some businesses are finding it easier to meet their obligations.

Shocker...CFO's don't plan to spend more on sustainability...

File this under Things That Are Not Surprising... - A recent survey conducted by Robert Half Management Resources, showed that 68% of CFO's don't expect to increase spending on "green initiatives" in the next 12 months. At the same time, 28% indicated they "expect an increased focus on the issue.."

Essentially this translates into "we don't want to pay for it -- but we expect you to provide it anyway..." Which can be summed up as the overall theme for 2009. The specific results from the survey can be seen (HERE).

Show me the money...

The "stimulus fairy" has sprinkled federal stimulus money to five Bay Area companies and one university, all which focus on "high risk" energy technology . Recipients of the most recent awards are:

• Envia Systems of Hayward - $4 Million
• NanOasis Technologies of Richmond - $2 Million
• PAX Streamline of San Rafael - $3 Million
• Porifera in conjunction with Lawrence Livermore National Labs - $1 Million
• Stanford University - $5 Million

The money was initialy designated under the Advanced Research Projects Agency - the actual funding for the programs came from $400 Million in Federal Stimulus money.

Increased commercial mortgage delinquency is the forecast...

Foresight Analytics, a provider of real estate market consulting services, is forecasting an increase in the total delinquency rates for Commercial Mortgages for the third quarter of 2009.

According to their estimates, "the total delinquency rate rose to an estimated 4.7%, up from 4.1% in Q2, and more than double the 2.1% in Q3 2008. To keep this in a historical context, the estimated 4.7% delinquency rate is far less than the 8% delinquency rate acheived during the third quarter of 1991.

Foresight Analytics bases their preliminary estimates on earnings reports and call reports from many smaller banks.

Foresight Analytics principal Matthew Anderson appeared on Bloomberg TV, click (HERE) to see his comments on the Commercial Real Estate market.

Ouch.... The last quarter takes a pound of flesh from the Big 4

The recession may be technically over, but you wouldn't know it by reviewing the most recently reported quarterly results from the largest domestic office furniture manufacturers:

• HNI (Parent company of Allsteel): quarterly sales down 31.5%
• Herman Miller: "Consolidated" (read slashed) another 150 jobs in October, and announced their quarterly sales down 32.4% 
• Steelcase quarterly sales down 35.9%
• Knoll quarterly sales down 36.1%

What does this all mean? Continued deep discounting on large (and not so large) projects, and a feeding frenzy over any project on the street.

Case in point, there was an estimated 40 people representing 29 different office furniture dealers and/or manufacturers at a mandatory project walk-through this past Monday.  For the time being, I don't think I'm going too far out on a limb to say it remains a "buyer's market" for office furniture.

And now for something completely different...brighter financial news

Continuing signs that the economy may be improving were evident today with the release of the Federal Reserve's "Beige Book", which reports on economic activity throughout the Federal Reserve's 12 regional districts. Specific to Northern Calfornia, the reports states,

"Economic activity...appeared to pick up slightly during the reporting period of September through early October, with reports pointing to additional signs of stabilization or improvement in some sectors."  To view the report for all 12 districts, click (HERE).

Anecdotally, we have seen a slow but steady improvement in the small office (transactional) side of our business, with showroom traffic steadily increasing over the past 60 days.

How Stressed is your Market?

Want to learn how stressed your county is? AP has a pretty cool and easy to operate interactive map showing the "financial stress" of every county in the U.S. As an example, Contra Costa County (where we are located) was at a stress level of: 7.44 in October of 2007, and is at a current stress level of: 16.31.

To Access the Stress Index - Click (HERE)

Stress level is measured by comparing current levels of Unemployment, Foreclosure, and Bankruptcy to previous levels.

Your Next Lease...in black and white AND GREEN

Anyone betting against the staying power of the current going Green trend may want to think twice. The sacrosanct standard form lease document is starting to go green.

The Model Green Lease document which was unveiled this summer by a self-proclaimed "group of savy, commercial real estate professionals" claims to bring the "green building movement to the economic center of commercial real estate - the lease agreement..."

The new lease document claims that it:

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. Is equitably balanced to meet the financial and operational needs of landlords, lenders, investors, and tenants.
3. Can Cut energy use by 30 to 50 percent over comparable office buildings (with appropriate construction and operating standards)

I can't speak to whether the lease can deliver on all of its promise, but one thing is certain: if the Model Green Lease goes into use on a routine basis, it will "lock-in" and commit the U.S. business community to go Green into the foreseable future.

The Golden State is turning Greener...

The state of California boasts 33 LEED certified state office buildings, within their portfolio of more than 350 buildings totaling more than 32 Million square feet of space. The certified buildings are a mix of LEED for New Construction and LEED for Existing Building, and include two LEED Platinum certifications.

Elihu Harris State of California Office Building, designed by AECOM -- Image courtesy of AECOM Design and Greener Buildings.com.

Under Executive Order S-20-04, The Green Building Initiative,  the state is mandated to bring all existing buildings larger than 50,000 square feet, and design all new buildings larger than 10,000 square feet, to the minimum standard of LEED Silver certification. Buildings under 10,000 square feet must adhere to the LEED Silver design principles, but are not required to be certified.

To see a complete list of California's LEED building efforts, click HERE and for a link to the comprehensive California Green Building Directory, click HERE.

Idea Paint - Permission to write on the walls

A new product idea (on a relatively slow and very rainy news day)... Finally a solution for those creative work spaces which never seem to have enough white boards or writing areas... Idea Paint -

Idea Paint in a Conference Room

Idea paint litrerally allows you to write on the walls. The paint is a dry erase surface that can be applied to almost any smooth area. The product boasts a strong "green-story" in that it eliminates all of the energy, materials, and refuse associated with standard white boards.

For more information click HERE

LEED Buildings = Greater Productivity...

A very interesting survey measuring and attempting to quantify productivity increases in green buildings was recently released. The survey titled "Green Buildings and Productivity", is scheduled to be published in the forthcoming Journal of Sustainable Real Estate. The survey was conducted by the University of San Diego and CBRE.

Some of the findings from the study are:

• Healthier buildings reduce sick time and increase productivity
• The steps required to provide a healthier building are not that much of a design and engineering challenge
• Generally natural light, good ventiliation, the absence of organic compounds, provides happier, healthier workers.
• LEED certified buildings tend to require better and safer work environments

The conclusion of the survey is: "there is an economic pay-off to tenants who pay attention to space quality... Consider[ing] the benefits in terms of recruitment, retention of employees, less sick time and greater productivity, tenants should be willing to pay more rent for such space or require a steep discount for less healthy space.

To read the entire survey, click HERE.

Continued Trend: Commercial Real Estate As Project Manager

In the latest example of corporate "outsourcing", software giant Cisco Systems has signed a multi-year agreement with Commercial Real Estate brokerage CB Richard Ellis Inc., for CBRE to provide Cisco with global project and construction management services. Under the agreement, CBRE will manage capital construction projects within Cisco's 506 locations, spanning 87 countries and totaling 23.6 million square feet. According to the press release project types range from, "fit-out of small field ofices, to large-scale campus development, to complex data center construction."

This agreement is certainly at the large end of the scale, however it is consistent with the trend towards Commercial Real Estate (CRE) firms branching further and further into "alternative" services.

Aside from CBRE, locally active CRE project management groups include Jones Lang Lasalle (locally working with Tesla Motors on their large projects), and recently rebounded Grubb and Ellis, who has been very active in the East Bay and is currently working witht Bank of the West on their consolidation to Bishop Ranch.

The A-B-C's on LEED Certification...

Great article regarding the Bentley Reserve building in San Francisco that also covers the A-B-C's on LEED certification, and how it applies to office projects.

LEED Certified Bentley Reserve Building in San Francisco

Click Here: ( LEED Certification: The Bently Reserve - A Commercial Example) for the article which was originally published on Clean Techies.

Things to think about for your next conference or meeting room...

A timely article in the San Jose Mercury News today regarding how new technology is making Video Conferencing easy and affordable (Click HERE to view article). I found the article timely because it ties directly into what we are finding as we work with our client's on designing their new conference and meeting rooms.

Converge Line of Conference Furniture by Gunlocke

Almost every conference or meeting room we have worked on recently has involved some level of integrating Audio Visual (A/V) components into the furniture. This is not difficult, but it is something that needs to be considered early in the process, and requires a "team" approach between all trades. Critical items that must be factored early in the design and construction process include:

• Determining where the flat screen T.V. monitor will be positioned, to insure that the wall has adequate backing to support the equipment.
• Confirming the total cabling requirements for the equipment, to insure that any required "floor cores" are positioned properly, and are large enough to accommodate the required cabling, and that the conference table is designed to accommodate the required hardware plug-ins.
• Determining where all of the equipment will be housed, to insure that either the furniture or mill work is designed to accommodate both the weight of the equipment and to insure that the furniture is properly ventilated to keep the equipment cool.

The best suggestion we have for our clients is to think about three years ahead. You may not be using video conferencing (for example) today, but think about where you will be in three years, and plan the equipment and the office accordingly.

Bay Area trails FRESNO in overall Employment Ranking??

To prove you can find a survey on anything - Portfolio.com has released a pretty cool (and easy to operate), survey where you can find details on the top 100 employment markets in the country.

What do we learn from the results: That FRESNO ranks #73 in the country, the Oakland-San Francisco market ranks #74, and Portland OR. comes in at #75. Austin TX is #1, and not surprisingly, Detroit MI. comes in dead last at #100. The survey results are based on 6 metrics, measuring everything from Percent Growth in Private Sector Jobs between 2004-2009, to the June 2009 Unemployment Rate.

To view the interactive survey, click HERE.

Everything you wanted to know about energy conservation (but were afraid to ask...)

Something for everyone today (big companies and small companies) how to improve our Energy Conservation.

The Pew Center for Global Climate Change conducted a multi-year research study where they benchmarked best practices for energy conservation. The study will be released in 2010, in the interim their website provides a good central resource for learning about climate change, reducing ones carbon footprint, and managing and improving your organization's energy conservation. 

Specific to our industry is the section on improving your buildings energy performance (click HERE to view).

Soon on Craig's List: Fully Furnished Corporate HQ's Ready for Move-In...

Hopefully this is not a trend we will see more of... There are currently two fully furnished, ready for move-in, corporate headquarter's building being marketed in the East Bay. These spaces combine to over 450K sqft of plug-n-play space, ready for the next occupant (as long as they can use 1,500 existing workstations).

I'm speaking of the the former Mervyn's Headquarters building in Hayward Ca.(336K sqft), and the former Longs Drug Store General Office (GO) in downtown Walnut Creek Ca.(90K sqft), and Antioch Branch Office (ABO) in Antioch Ca. (60K sqft (approx)).

An article on Globest.com states the Mervyn's facility is being sold by the court appointed receiver, and will be "sold via competitive bid" (click HERE for article). The Longs facilities are being handled by the Walnut Creek Office of Jones Lang Lasalle (JLL), on behalf of CVS which acquired Longs in 2008.

Having designed and installed the 350 workstations currently housed in the Longs facilites (installed in December 2007 and January 2008), I can personally attest to how "great" their office environment will be for the next occupants.

My apologies to my readers who receive this blog via email. The "clip" from yesterday's posting didn't come through (it is posted on my blog site, but didn't come through in the email) - here is a link to view the clip:

http://www.vendorclientvideo.com/

Client's in the 21st Century

Today's posting has nothing to do with office furniture, but everything to do with the current state of client / supplier relationships. If you are in a business that has no clients, please feel free to skip this brief clip, if your business is client dependent, this will hit home (by the way, I rarely even look at things like this, but it really caught my attention):



Credits to: http://www.scofieldedit.com/