Southern California Industrial Real Estate Blog

Poll Finds Rising Awareness of Concrete Systems

Poll Finds Rising Awareness of Concrete Systems

Thirty percent of recently surveyed home owners said they believe that concrete is a more environmentally friendly material than wood or steel, according to a survey by the Portland Cement Association (PCA). [more]

  Concrete Wall Systems Can Assist with a Tight Thermal Envelope [more]
  In Down Market, Builders Look To Concrete Solutions [more]
  Saving Energy = Saving Money for Concrete Show Home [more]
  NAHB Resources Promote Home Buyer Tax Credit [more]
  Residential Concrete Remains Solid at World of Concrete [more]
  National Green Building Standard Approved [more]
  Events & Webinars [more]
  Publications [more]

For more information or to contact us directly,
please visit www.nahb.org l ©2009, National Association of Home Builders

THE GOVERNMENT WANTS YOU TO BUY + INSTALL GREEN ROOFS ON YOUR REAL ESTATE

THE GOVERNMENT WANTS YOU TO BUY + INSTALL GREEN ROOFS ON YOUR REAL ESTATE

Green is still good. The latest government motivation is toward green roof installations.

Among the benefits of the Clean Energy Stimulus and Investment Assurance Act of 2009 (S.320) introduced by Sen. Maria E. Cantwell (D-Wash.) is to provide financial incentives for homeowners or commercial building owners which chose to install green roofs on their buildings.

A green (or sod) roof features of vegetation-usually drought-tolerant plants, or shrubs-that is planted in a growth medium. The roof generally involves a multilayer system of waterproof and root-repellent membranes, a drainage system, filter cloth, and lightweight soil.

Sedums are a suggest plant, as the 400+ varieties range from annuals and creeping herbs to shrubs. The plants have water-storing leaves.

Green roofs have been around for thousands of years. One of the first notable appearances of green roofs occurred in the Hanging Gardens of Babylon around 500 BC. The site is considered one of the Seven Wonders of the World.

The thrust of the Clean Energy Stimulus and Investment Assurance Act of 2009 is to create green-collar jobs and revitalize the economy through clean energy investments.

Section 506 of the bill, offers property owners a 30 percent tax credit for qualified green roof expenses. The tax credit applies to both new and retrofit projects, but it requires that at least 50 percent of the roof area be covered with vegetation.

“This is a watershed moment for the green roof industry,” observes Steven W. Peck, founder and president of Green Roofs for Healthy Cities, which worked with the American Society of Landscape Architects to help Sen. Cantwell’s office draft the section of the bill that is focused on the green roof incentive. “This bill will deliver an enormous number of green collar jobs, not just today, but also in five years from now, while also saving energy, improving stormwater management, cooling cities, cleansing the air, and

beautifying our rooftops.”

Modern green roofs trends began in Germany in the 1960s; today, it is estimated that about 10% of all German roofs have been “greened.” Several European Countries have very active associations promoting green roofs including Germany, Switzerland, the Netherlands, Italy, Austria, Hungary, Sweden and the UK. The City of Linz in Austria has been paying developers to install green roofs since 1983 and in Switzerland it has been a Federal law since the late 1990s. In the UK their up-take has been slow but a number of cities have developed policies to encourage their use, notably in London and Sheffield.

Green roof advocates note a variety of benefits for property owners, including added insulation and cooling. It has been found that they can retain up to 75% of rainwater, gradually releasing it back into the atmosphere via condensation and transpiration, while retaining pollutants in their soil.

“If you install enough in an area, it cools the area, which saves money in energy costs and limits greenhouse gas,” offers Peck.

Cities like Los Angeles can truly benefit from the cooling effect, as green roofs reduce the “heat island effect,” a situation in which traditional building materials such as asphalt roofs in a city-absorb sunlight and radiate it back into the atmosphere as heat, making cities at least 4 degrees Celsius (7 °F) hotter than surrounding areas.

The new California Academy of Sciences building in San Francisco’s Golden Gate Park has a green roof that provides 2.5 acres (10,000 m2) of native vegetation designed as a habitat for indigenous species, including the threatened Bay checkerspot butterfly. According to the Academy’s fact sheet on the building, the building consumes 30-35% less energy than required by code.

Green roofs have also been found to dramatically improve a roof’s insulation value. A study conducted by Environment Canada found a 26% reduction in summer cooling needs and a 26% reduction in winter heat losses when a green roof is used. In addition, greening a roof is expected to lengthen a roof’s lifespan by two or three times, according to Penn State University’s Green Roof Research Center.

Another upside of green roofs is added local employment, as green roof installations tend to be local projects. “For every dollar spent, the $2 or $3 generated goes toward creating jobs where the roof is installed,” he boasts.

Sen. Cantwell noted this benefit as well in a statement introducing the bill. “In these times of economic uncertainty, growing the green economy and investing in clean energy technologies is the key to job growth and breaking the United States’ debilitating dependence on foreign oil,” she said. “While installing a green roof may seem like a small step, these upgrades save energy, filter and absorb pollution, and store carbon. As individuals and businesses continue to look for ways to combat high energy costs and improve the health of their neighborhoods and environment, providing green roof incentives just makes sense.”

Builder magazine reports that, Green Roofs for Healthy Cities has launched a new, multi-disciplinary Green Roof Professional (GRP) program–much like U.S. Green Building Council’s LEED Professional Accreditation-and will administer the first exam at its annual conference this June in Atlanta. Under the program, an individual can become GRP-accredited to provide green roof design, products, and installation services to meet the new demands that potentially could be generated from this bill.

American landscape architects and a Canadian nonprofit green roof industry association says that the United States could see a surge in green roof installations if a provision in a recently introduced Senate stimulus bill becomes law.

Information from:

http://www.builderonline.com/green-building/financial-incentives-in-stimulus

http://egrfaculty.villanova.edu/public/Civil_Environmental/WREE/VUSP_Web_Folder/GR_web_folder/GR_paper_files/image002.jpg

http://en.wikipedia.org/wiki/Sedum

http://blog.lib.umn.edu/iruss001/architecture/green_roof.jpg

http://en.wikipedia.org/wiki/Green_roof

http://www.inhabitat.com/wp-content/uploads/calroof3.jpg

http://www.localecology.org/images/deyoung_casgreenroof.jpg

http://www.cactusjungle.com/blog/wp-content/uploads/2008/05/green_roof.jpg

http://www.lotuslive.org/buildings/files/norwaygreenroof.png

STRANGE TIMES MAKES FOR STRANGE REAL ESTATE TRANSACTIONS

STRANGE TIMES MAKES FOR STRANGE TRANSACTIONS

by Jodi Summers

 As you’re aware, the New York Times Co. recently sold its portion of its headquarters building at 620 Eighth Ave. to investment firm W.P. Carey & Co. and two affiliates in a $225-million sale-leaseback. In this custom-crafted transaction, W.P. Carey bought the 21 floors, totaling 750,000 square feet, which the Times Co. uses as headquarters space. The transaction does not include the six floors which the Times Co. leases to other tenants.

In another unique transaction, Global information technology firm Unisys Corp. disposed of a 356,000-square-foot suburban Philadelphia office property in a $19.5-million sale-leaseback transaction with Exeter Property Group and Strategic Realty Investments LLC.

Interesting to note that in this transaction, Unisys leased back only about half of the space at the Malvern, PA asset. Partial sale-leasebacks aren’t an entirely new phenomenon, but they appear to be on the rise, at a time when increased interest in sale-leasebacks in general are up.

“A lot of corporations have identified that using a sale-leaseback is a great way to take capital they have tied up in real estate and invest that in their business,” says Jones Lang LaSalle capital markets senior vice president Suzanne Martinez.

 In many instances, flexibility is a key motivator behind companies pursuing partial sale-leasebacks, Martinez notes. In the case of Unisys, “doing a partial sale-leaseback in this instance allowed them to lower their operating expenses, and at the same time capitalize on the fact that that was great real estate in a good market.”

Motorola’s five-building, 1.1-million-square-foot Arlington Heights campus in suburban Chicago are being sold either as a portfolio or individually. As part of its right-sizing effort, Motorola will continue to occupy three buildings with long-term staggered lease terms.

 Given the inherent repositioning aspect of partial leaseback deals, traditional sale-leaseback investors are not typically attracted to these kinds of transactions, observes Martinez. Rather, value-add players are the more likely bidders, but they are attracted to having a stabilized rental income stream component while repositioning efforts for the remainder of the space are undertaken.

 Market experts foresee that sale-leasebacks will be an increasingly used corporate real estate strategy this year as companies look for ways to shave costs, raise capital and otherwise strengthen their balance sheets.

Expect to see sale leaseback transactions trickle down into small business. Bill Reynolds recently sold off a 6-tenant automotive facility in Gardena, keeping one space for his muffler supply business. “I did a seller-carryback,” he offers. “The ongoing cash flow is nice.”

New York City-based market research provider Real Capital Analytics notes in its February Capital Trends Monthly reports that owner/occupiers are likely to be parties to an increasing share of transactions this year, both as buyers and sellers. On the sell side, “the increase in deal making stems not only from dispositions of excess/vacant property, but also from sale-leasebacks,” RCA notes. “For some companies, sale-leaseback may be the preferred–or only–method for raising capital at present.”

http://www.globest.com/news/1365_1365/insider/177413-1.html

http://byfiles.storage.live.com/y1pBgEx1qEZ0E5wwsBWLlMC7jOCArmtti2zGadk6gHY6E3jOmlSgdbe9CHkDlnA_K9HNbYj7aY_JFQ

http://www.nytimes.com/2009/03/10/business/media/10paper.html?_r=1

http://www.globest.com/news/1362_1362/newyork/177327-1.html

http://www.loopnet.com/xnet/mainsite/news/news.aspx?DocID=6755&sourcecode=1lntd009

LOS ANGELES INDUSTRIAL REAL ESTATE WILL BOUNCE BACK SOONER -> GET READY TO BUY WHEN LOANS BECOME AVAILABLE

LOS ANGELES INDUSTRIAL REAL ESTATE WILL BOUNCE BACK SOONER

GET READY TO BUY WHEN LOANS BECOME AVAILABLE

By Jodi Summers

Silver linings are beginning to shine for Southern California real estate. Although we’re currently in the trough of the downturn, industrials in port cities are particularly well positioned to immediately profit once consumer demand picks up momentum.

That’s good news for the future on the tails of a skeptical present, and yet another round of statistics confirming that buyers are skeptical on real estate – even stalwart favorites like industrials. Newly released data from Jones Lang LaSalle observes that the volume of US industrial transactions plunged 56% in 2008. The group’s Winter report revealed that a mere $21.7 billion of industrial sales transpired in 2008, compared to $49.7 billion In 2007.

The report also confirmed what we all knew – that the trend worsened as the year wore on, with Q4’s total of $3.1 billion in transactions down 69% from a year earlier.

The industrial market’s relatively firm performance has been attributed to,  ”…A smaller average transaction size, which made debt financing more accessible, rather than the sector’s inherently greater strength,” stated the report. “In addition, because industrial volumes and values did not experience as large a surge as other sectors during the recent boom, they also didn’t suffer as large a fall.”

Part of the decline in the volume of sales activity can be attributed to the fact that debt availability for industrial transactions remains significantly constrained, with banks continuing to tighten loan standards and lending spreads remaining high. The report’s authors note that 79% of respondents to the Federal Reserve’s survey of senior loan officers reported tightening standards for commercial real estate lending. Additionally, the survey found that demand for loans remains very weak.

According to JLL, total US industrial vacancy increased 110 basis points last year to 8.9%, the highest level since the market began recovering from the last economic downturn in late ‘04. The vacancy rate for the distribution and warehouse subsector is even higher at 12.3%. On a positive note, the industrial sector has not experienced a dramatic upswing in sublease vacancy.

The good news is, in the opinion of JLL researchers, “The industrial real estate market will have the opportunity to recover sooner than other real estate sectors provided manufacturing, production and distribution operations continue to seek greater efficiencies and remove friction from worldwide supply chains.”

 They predict the current year will nonetheless be challenging, with leasing activity continuing to weaken and additional consolidation driving vacancy higher. However, they add, as the market bottoms there will be opportunity for well-positioned occupiers as well as investors.

Info courtesy of

http://www.globest.com/news/1384_1384/insider/177942-1.html

INDUSTRIAL REAL ESTATE UPDATE

INDUSTRIAL REAL ESTATE UPDATE

By Jodi Summers

We’ve been pretty lucky here in SoCal – thanks to our proximately to major ports, airports, and distribution hubs, our industrial sector has stayed relatively strong. But even that area is weakening. According to the most recent Commercial Leading Indicators Report, the industrial sector is now beginning to feel the impact of the global economic slowdown, which is reducing the demand for exports.

Vacancy rates in the industrial sector are forecast to rise to 12.2% in the third quarter of 2009 from 10.7% in the third quarter of last year.

Annual rent is estimated to fall 4.1% this year, after declining 0.8% in 2008. Net absorption of industrial space in 58 markets tracked should be a negative 148.1 million square feet this year. Because much of recent construction has been built to suit specific needs, many obsolete structures are on the market.

In addition to the lack of demand, the lack of available financing has impacted the industrial market.

 “The credit crunch has especially hammered down some components of NAR’s commercial leading indicator,” Lawrence Yun, NAR chief economist, noted. “A lack of commercial credit is a serious threat to the overall economy. The Federal Reserve needs to use the Term Asset-Backed Securities Loan Facility (TALF) to provide liquidity and support for commercial mortgage-backed securities.”

NAR has concluded that commercial real estate activity, as measured by net absorption and the completion of new commercial buildings, is likely to weaken further over the next six to nine months.

This attitude is confirmed by the Society of Industrial and Office Realtors®, in its SIOR Commercial Real Estate Index, which surveyed 644 local market experts, confirmed an anticipated lower level of business activity in upcoming quarters. Ninety% of respondents indicate leasing activity in their market is down, and vacancy rates are generally higher.

The SIOR index has declined for eight consecutive quarters and is 58.5%age points below the 100 point criteria that represents a balanced marketplace.

“The stimulus package is designed to create jobs, and that would eventually lead to an upturn in the commercial market,” observed Realtors® Commercial Alliance Committee chair Robert Toothaker. “However, we need to quickly restore liquidity to commercial real estate lending so transactions can move forward and debt on existing properties can be rolled over.”

Get the bit story @ http://www.realtor.org/press_room/news_releases/2009/02/commercial_re_activity_to_continue_decline