The Ground Floor

Trumps seeks the other green

A newcomer to the Philadelphia market is chasing the green -- the LEED kind of green.

The new Trump Tower Philadelphia, which will sit on the Delaware River, is striving to achieve a LEED Silver certification. At 45 floors, the residential complex features 225 residences and 31 different floor plans.

Employing Philadelphia-based Alesker & Dundon Architecture, LLC, to design the sustainable features to meet LEED requirements, Trump has integrated several green roofs among standard amenities such as a tennis court, indoor and outdoor pool, fitness center, putting green, a business center, and a wine cellar and tasting room. Exempting the highest roof, most will be landscaped and will house recreation areas such as the swimming pool and serenity gardens, to make the building LEED worthy.

Rainwater catchments systems will be placed on the roofs allowing for self-irrigation of the plants. Condensate from the air conditioning system will also be collected and used for watering. Any excess rainwater that collects will be purified and released into the Delaware River.

In addition, the design team integrated living walls will help filter out fumes from the parking garage. In addition, the building is set on a former brownfield industrial site, and 35 percent of the land will remain undeveloped, leaving some open space.

Heat will also be recycled from the units’ kitchens and bathrooms and used to heat corridors and the lobby areas. Building materials will come from sustainable sources and local businesses, to reduce the effects of transportation.

The Ultimate Green Building

New York City-based Work Architecture Company (Work AC) designed an apartment building with a working farm on top of it. The firm is interesting in urban farming and trying to make cities sustainable by cutting vehicle miles traveled (VMT) for food.

New York magazine asked four architects to design a vacant block site at the Canal and Varick Streets in NYC, in an article called  "Blue Sky on Canal Street." In it's criteria, New York required the designs to include a residential element and that it more or less meet zoning requirements.

Crops could be grown on different floors and green areas not in use could be used for recreation. The water tanks on the top of the building would be used for irrigation.

The owner of the vacant lot, Trinity Real Estate, has plans to construct a sculpture park in the location.

Walking Through Walls

Recently, the Washington, D.C.-based National Association of Home Builders (NAHB) awarded 17 building industry professionals for excellence and innovation in green home building at the 10th Annual NAHB National Green Building Conference in New Orleans.

“These honorees are pioneers, artists and building scientists," said NAHB Sandy Dunn,president of NAHB and a home builder from Point Pleasant, West Virginia. "They've worked hard to bring sustainable building practices into the mainstream.  These winners are not afraid to put great ideas in motion."

Although not everyone in the industry can be recognized, there are companies not afraid to put great ideas into motion. According to the OPEN Prototype Initiative (OPI), the answer lies in the Open-Built® system of home construction.

For OPI, not all houses are created equal. OPI, a program of the MIT House_n Research Consortium, along with the help of Bensonwood Homes in Walpole, New Hampshire, and other industry partners, have set a goal to improve homebuilding across the country and to make homes more affordable, adaptable, and environmentally friendly. OPI developed a process that makes it possible to construct thousands of environmentally friendly Net-Zero homes, which produce as much energy as they consume).

"There are countless examples of green homes, but the industry has not developed a process to affordably mass produce these homes," said Kent Larson, director of the MIT House_n Research Consortium. "The OPEN Prototype Initiative has developed scalable processes, such as prefabrication and the separation of core services that, when followed, enable builders to create thousands of customizable Net-Zero homes that are being made more affordable right now."

Today's builders of tomorrow's homes are addressing a whole new reality: that to be truly durable and sustainable, houses should be able to adapt to homeowners' needs over time. A key ingredient that separates OPI’s homes and the building process from other green or prototype home projects, is the use of Open-Built(R) principles. Open-Built(R) thinking takes a layered approach to building, with each layer defined by its life span and anticipated need for future alteration.

Multifamily Strong, Retail Weak, Jones Lang LaSalle Reports

GlobeSt.com's Ryan Clark reported that poor Q1 reports and economic woes have dotted the landscape of a struggling economy in 2008. A stand out among other sectors, the multifamily sector perseveres in the minds and opinions of real estate professionals, while retail stumbles. Clark reported, the Chicago-based financial and professional services firm, Jones Lang LaSalle, surveyed 80 nationwide property owners, development firms and professional services firm/consultants attending the Urban Land Institute's Spring Council Forum in Dallas. There were positive and negative predictions in all sectors, but the multifamily was where most of the confidence lay, and retail had the least, Clark said.

The multifamily sector lead the "best optional" sector with 52 percent of respondents who predicted movement from zero to 30 percent over the last year. An optimistic 16 percent of respondents think multifamily investments will "outperform the previous year at 75 percent or more." Those that felt multifamily investments will fall zero to 10 percent totaled 22 percent, while no one thought it would fall by 20 percent or higher.

Retail received the most negative reviews with 44 percent of those surveyed who said it will underperform in 2008 from zero to 20 percent. Another 16 percent said retail would underperform by 20 percent or more. Although a few optimistic respondents (12 percent) said retail will secure a performance premium of 75 percent or more than last year.

According to Clark, survey respondents gave a moderate review for industrial with 13 percent saying it will outperform 2007 by 75 percent or more and 15 percent saying it will underperform by 10 percent or more. While the majority of respondents, at 33 percent, predicted a zero to 10 performance underperformance for industrial. The office sector recieved a mixed review with 42 percent of respondents predicting that it will underperform from zero to 20 percent; and 30 percent who said it would bring "a performance premium of zero to 30 percent". Related to 2007, 14 percent said they think office "will outperform at 50 percent or more".

"This survey indicates what many in the industry have been feeling--the market is holding steady," Minter said.

Monday's Numbers and Noteworthy News

Indicated Spreads for Conventional Commercial Mortgages (as of April 30, 2008)

According to the most recent survey of indicated spreads for conventional commercial mortgage loans by Cushman & Wakefield Sonnenblick Goldman, spreads remained generally unchanged with a modest amount (25 basis points) of widening here and there. However, overall cost to borrowers spiked in the most recent survey due to the widening in spreads of 5-year Treasury bonds (+46 basis points in two weeks) and 10-year Treasury bonds (26 basis points in two weeks).

	Commercial Mortgage Rate Spreads for 5-10 Year Fixed-Rate Mortgages
Property Type	<65% LTV	>65% LTV
Multifamily	+230 - 260	+250 - 300
Regional Malls	+225	+250 - 350
Strip/Power Centers	+250 - 300	+300 - 450
Multi-Tenant Industrial	+250 - 300	+300 - 500
CBD Office	+225 - 325	+325 - 450
Suburban Office	+250 - 350	+350 - 500
Full-Service Hotel	+300 - 400	+350 - 500
Limited-Service Hotel	+300 - 450	+400 - 500
	5-Year treasury -- 3.14%; 10-Year Treasury -- 3.86%
Source: Cushman & Wakefield Sonnenblick-Goldman, LLC.

"What a difference a year makes"

	April 30, 2008	One Year Ago	Change
Prime Rate	5.00%	8.25%	-3.25%
Federal Funds Rate	2.00%	5.25%	-3.25%
3-Month LIBOR	2.87%	5.36%	-2.49%
3-month Treasury	1.45%	4.86%	-3.41%
10-year Treasury	3.80%	4.67%	-0.87%
30-year Treasury	4.53%	4.84%	-0.31%

Monday’s Numbers

Year-to-Date Equity Market Performance:

DJIA⁽¹⁾: -3.91%
S & P 500⁽²⁾: -5.45%
NASDAQ⁽³⁾: -7.80%
Russell 2000⁽⁴⁾: -6.01%
MSCI U.S. REIT⁽⁵⁾: 5.33%

(1) Dow Jones Industrial Average.
(2) Standard & Poor’s 500 Stock Index.
(3) NASD Composite Index.
(4) Small Capitalization segment of U.S. equity universe.
(5) Morgan Stanley REIT Index.

U.S. Treasury Yields: (as of May 10, 2008)

3-month: 1.68%
6-month: 1.74%
2-Year: 2.24%
5-Year: 2.97%
10-Year: 3.77%

Pricing of Various Tranches of Commercial Mortgage-Backed Securities (as of March 12, 2008)

Rating; Term; Spread to U.S. Treasury Bonds

AAA; 5 years; +253 basis points
AAA; 10 years; +231 basis points
AA; 10 years; +661 basis points
A; 10 years; +681 basis points
BBB; 10 years; +1511 basis points
BBB-; 10 years; +1811 basis points
BB; 10 years; +2100 basis points
B; 10 years; +2500 basis points

Source: Various Investment Banking firms such as Lehman Brothers, JP Morgan, and Morgan Stanley