The Ground Floor

How to Cut Carbon Emissions through the Renovation of Existing Structures

A new publication from the Urban Land Institute (ULI), Retrofitting Office Buildings to Be Green and Energy Efficient: Optimizing Building Performance, Tenant Satisfaction, and Financial Return, adds a new dimension to the sustainable development discussion while showing how to achieve significant reductions in green house gas emissions through the renovation of existing buildings. The book explores the innovative trends, practices, and goals of building retrofits while serving as an authoritative guide to understanding the business aspects and policy implications of energy-efficient retrofits.

Written by accomplished speaker on sustainable real estate investment, Leanne Tobias, the book provides a comprehensive, international analysis of the implications and strategies behind renovating existing buildings. In contrast to other publications on green building and retrofitting, which describe the practice from the “20,000-foot” level, Tobias gives readers a ground floor perspective. Tobias provides data and numerous case studies to illustrate the importance of green building retrofits, the collaboration of building owners and tenants, global public policy initiatives that affect the industry, and how new technologies and materials are shaping sustainable building renovation.

In addition to serving as a how-to book for professionals involved in commercial real estate, this book echoes ULI’s efforts of promoting sustainable development by showing the significant connection between the built environment and energy use. Tobias stresses the big picture impact of green renovation over new construction by highlighting evidence which proves that existing buildings make up 98 percent of the building stock in developed countries, while new construction makes up only 2 percent. In addition, the majority of these existing buildings were constructed before green building regulations were implemented. 

In addition, Retrofitting Office Buildings to Be Green and Energy Efficient presents an approach for green renovation that is neither top down nor bottom up. Through case studies on the retrofits of corporate headquarters, multi-tenant buildings, and leased space, Tobias argues that a successful green renovation strategy must be a team effort that incorporates the owner, the tenant, as well as anyone involved with building operations. 

Some of the book's highlights include:

• Green retrofit case studies from around the globe, including: The Empire State Building (New York, NY);  Adobe Towers (San Jose, CA); the Joseph Vance Building (Seattle, WA);  McDonald’s Campus Office Building (Oakbrook, IL); One Beacon Street (Boston, MA);  Shui On Land Headquarters (Shanghai, China); Trevor Pearcey House (Canberra, Australia)
• The strategic steps to planning green and energy efficient retrofits, ranging from market feasibility to life cycle cost analysis.
• The extended management process of green retrofitting, including everyone from consultants, contractors, building owners, building managers and operations staff, and tenants.
• An in-depth look at global public policy initiatives and government spending intended to target green building and energy-efficient retrofits.

Retrofitting Office Buildings to be Green and Energy Efficient author, Leanne Tobias, is the founder and managing principal of Malachite LLC, a global real estate consulting firm. She is an accomplished speaker on sustainable real estate investment and development, having lectured at the United Nations; Harvard, Columbia and Wharton Business Schools; and the U.S. Green Building Council. 

Retrofitting Office Buildings to Be Green and Energy-Efficient: Optimizing Building Performance, Tenant Satisfaction, and Financial Return (ISBN: 978-0-87420-133-8; Urban Land Institute, 2009) is available everywhere books are sold, and through the Urban Land Institute at www.uli.org or by calling 1-800-321-5011.

Global Demographics 2009: Shaping Real Estate’s Future Examines

Impact of Population Growth, Urbanization, Aging On Land Use

The long-term land use implications posed by population growth, urbanization, aging, and migration are examined in Global Demographics 2009: Shaping Real Estate’s Future, a new publication from the Urban Land Institute.

Global Demographics 2009, authored by M. Leanne Lachman, president, Lachman Associates, LLC in New York City and Deborah L. Brett of Deborah L. Brett & Associates in Plainsboro, N.J., is the second in an annual series that explores how demographic trends are affecting real estate investment and development decisions worldwide.

This year’s edition of the report, which will be published annually, discusses trends in the United States and the rest of the Americas; and it places a special emphasis on Europe and Africa (including the Middle East). Trends in Asia and Oceania are also covered. Key themes for this year include labor force, education, and productivity; personal income, purchasing power, and poverty; and retailing.

"Global Demographics 2009 is one of many products and services provided by ULI as part of its ongoing focus on sustainable urban areas," said Rachelle Levitt, Executive Vice President for ULI's Global Information Group and publisher of ULI's publications. "This book reaffirms that population and demographic shifts will continue to place enormous pressure on urban areas around the globe. How cities are developed, how they welcome new residents, how they accommodate all income groups, and how they use energy and natural resources are all crucial elements of urban sustainability."  
 
Some highlights from Global Demographics 2009:

• Over the next forty years, the greatest population increases worldwide will occur in China, India and the U.S.; while Africa, the Middle East, Southeast Asia and South Asia will be the globe’s fastest growing regions.
• Europe is the one region of the world that will experience population declines between now and 2030 
• Mature but still growing economies (the U.S., Canada, U.K., Ireland, Australia, and New Zealand) will offer attractive real estate investment and development prospects once the recession subsides.
• The developed world’s large workforce is aging rapidly, while the young labor pools in the Middle East, Africa and South Africa are expanding.
• Fertility rates have dropped globally, even in developing countries. As national economies improve and household incomes rise, fertility drops, children receive more education, and they find better jobs than their parents.
• Many developing nations are emerging consumer markets, with expanding numbers of moderate- and middle-income households generating enthusiastic consumer demand.
• Population growth is highest in the poorest countries (Yemen, Bangladesh, Haiti, Liberia, and Afghanistan) and they have the most difficulty reversing a cycle of abject poverty.
• In developing countries, the number of elderly is rising because of longevity gains, but their share of the total population is reduced by very large younger cohorts.

“Demographics are the foundation of real estate decision-making. Population, household, and income characteristics – and the direction of future trends – determine whether demand will exist for new housing or retail space, and household mobility suggests where that new space should be built. Growth in the labor force, as well as characteristics of its composition (age, education, skills, and mobility), strongly influence the success of office and industrial properties,” states the report.

“Although population growth is not an absolute prerequisite for successful investment and development, it certainly helps to work with rather than against trends…Meeting the demands of explosive, evolutionary growth requires sensitivity to urban form and sustainable designs – new communities that offer mixed uses, walkable environments, and access to jobs. The real estate implications of demographic changes around the world are enormous.”

Global Demographics 2009 (978-0-87420-123-9; Urban Land Institute, 2009) is available everywhere books are sold and through the Urban Land Institute at www.uli.org/bookstore or by calling 1-800-321-5011. The price is $29.95 for ULI members and $39.95 for non-members.

Real Estate and the Financial Crisis

Real Estate and the Financial Crisis, a new publication from the ULI, offers a comprehensive analysis of how turmoil capital markets worldwide is restructuring real estate finance.

Written by highly acclaimed real estate finance expert and Brookings Institution Senior Fellow Anthony Downs, this timely book provides candid insights into what caused the financial market meltdown and the long-term consequences. Downs provides an insider’s view, examining public policy and the role of the Federal Reserve. He discusses ensuing policy recommendations for commercial and residential real estate lending, as well as scenarios for a new era in the financial sector.

Chapter highlights include:

• An explanation of what happened in financial markets, the housing market, commercial property markets, and mortgage backed securities, and their roles in the financial crisis.

• An analysis of public policy responses and recommendations for future policies to improve the financial system–including new approaches for operating within a shrinking financial system; responding to a shift in housing and financial policies; and approaches for stabilizing commercial real estate markets.

• An explanation of the long term impacts on the residential housing sector, residential mortgage securitization, the commercial property sector, and commercial real estate finance.

Downs offers a look at four different scenarios for moving beyond the current financial crisis:

• Scenario one: weak U.S. recession, speedy return of credit availability by late 2009–likelihood of occurring, 15 percent.
• Scenario two: strong U.S. recession in 2009, continued lack of real estate credit availability until 2010–likelihood, 65 percent.
• Scenario three: serious U.S. recession, collapse of the dollar, higher interest rates and a prolonged recession through 2010–likelihood, 8 percent.
• Scenario four: two- to three-year recession, massive federal spending, inflationary pressures, high interest rates–likelihood, 12 percent.

The capital markets will not stabilize until confidence can be restored among capital suppliers – providers of both equity and debt capital – in the availability of reliable information on the true market value of real estate securities and real estate properties, Downs notes.

He lists four ingredients to restore confidence: 1) the passage of time (“capital supplies must go through a period in which the frequency of write-downs and losses by those who create securities fades away”); 2) the steady of improvement of space market conditions over a period of time long enough to provide higher profits to property operators; 3) a favorable comparison of real estate to other asset classes such as stocks and bonds; and 4) a downward adjustment of property prices to reflect the new investment and economic realities.

From these observations, Downs concludes that:

• The credit crunch will not end quickly, but will take at least one more year and perhaps up to three more years to disappear;
• Real estate capital markets will gradually improve as investors become impatient with low yields on other assets and as more property owners accept the need to give investors higher returns; and
• The recovery of real estate capital markets will depend in part upon how well the non-real estate investment trust part of the broader stock market fares: the better it does, the longer it will take for capital to come back to real estate.

Real Estate and the Financial Crisis (978-0-87420-119-2; Urban Land Institute, 2009) is available everywhere books are sold and through the Urban Land Institute at www.uli.org/bookstore or by calling 1-800-321-5011. The price is $29.95.

NAREE Awards ULI Publication

Last week, the National Association of Real Estate Editors (NAREE) awarded ULI’s publication, Creating Value:  Smart Development and Green Design by Vernon Swaback, the Silver Award in the Robert Bruss Real Estate Book Awards. 

The book’s author is a well known architect and apprentice of Frank Lloyd Wright. His book makes a convincing argument that greener and more sustainable design creates additional economic value as well as a more livable appealing community. Swaback uses case studies to argue his case that such design is imperative to financial success in the real estate industry.

Taking the Gold Award in the competition was Prefabulous: The House of Your Dreams Delivered Fresh from the Factory by Sheri Koones and published by Taunton Press. The book, Hines: A Legacy of Quality in the Built Environment edited by George Lancaster and published by Fenwick Publishing rounded out the top three.

The awards competition is named after the late Bob Bruss, a syndicated real estate columnist.  The competition is open to any real estate author, regardless of NAREE membership, and is judged by a panel of real estate professors and editors.