Everyone wants to save energy; everyone feels the pressure to reduce costs and improve the bottom line of their business in a lousy economic climate.

Energy Savings Companies (ESCOs) come in two varieties, guaranteed savings or non-guaranteed savings. So where does the facilities manager start? The answer: get an energy study done.

Common Sense
First and foremost, be honest about the goal of your energy savings program. Whomever you hire needs the facts so they can get down to serious work and be successful. You owe them your honesty to give the energy savings program a chance of working out to your company’s benefit.

Before the Study
Utility Bills: 
This is like the EKG for your building. Compile the bills and understand them. Know the patterns so you understand how much energy your building is using during the day, the night and season to season. Make a spreadsheet, trend the data and study it.

Metering: This is the calorie counter of your building. The biggest loads should be metered. You cannot save where you do not measure. ESCO’s of all stripes will implement metering strategies early on, so get this done to be in charge of baseline data and save money.

Equipment: Make a detailed list of every piece of energy consuming equipment in the building with all of its pertinent data. This quest to save energy can quickly move from merely saving money to asking yourself why you are behind on maintenance, since well-maintained equipment uses less energy. Get ROI quotes now.

Lighting: Knowing how everyone circulates through the building at every hour will help you to understand lighting needs within your facility. Carefully scheduling lighting patterns can far out-pace the payback period of a re-lamping project. Get quotes with pay-back periods for controls and re-lamping to compare.

Building Envelope: Invest in an infrared camera or have an IR scan done by a professional to know where the heat is going in your building. An IR scan may show an area that has been vexing you for years. Execute a plan to plug the holes, and do it now.

Controls Strategies: Make sure your building works well. This is the place where the ROI is typically the most attractive for energy projects.

Now you’ve got a list of things you can control, all you need is time and money. So, let’s look at what is really working against you (apart from time and budget crunches) in all of this.

Human Behavior
The occupants in your building are people. People have habits, both good and bad. It is nearly impossible to change these habits, especially when it comes to their work environment. All day employees give their sweat and effort, so they demand comfort. To better provide this comfort, ESCO’s need your common sense and understanding of the building and its occupants to truly weigh the validity of the Energy Savings Measures (ESM’s) they propose.

Handling energy in buildings is one of the biggest issues facing facilities managers, and most aim to become better stewards of the planet’s resources. No matter how old or what type of building you manage, there is something more you can do to make the energy spending go down. However, obtaining the money to implement it and the sheer will (and consensus) to make the changes are the biggest impediments to any challenge, that and the human behavior thing.

 

Source:  Facilities Magazine

 

Facing pressure to manage costs, risks and energy consumption, commercial building owners and investors are exploring how smart building technologies can help a company’s triple bottom line—people, planet, profits.

Five key trends are making smart buildings a “no-brainer” for commercial property owners and investors, according to Jones Lang LaSalle’s latest report, The Changing Face of Smart Buildings: The Op-Ex Advantage. “Commercial and public property owners are looking to smart building technology to boost operational efficiency, achieve energy savings, improve capital planning and reduce their carbon footprints,” says Dan Probst, JLL’s chairman of Energy and Sustainability Services. “These advantages, combined with tenant preferences for smart building features, provide a competitive edge for owners and investors.”

Five Reasons For Smart Building Investment

The report, which details the landscape for smart building technology, identifies five major trends:

1. Rapid Return On Investment
Smart building technology investments typically pay for themselves within one or two years by delivering energy savings and other operational efficiencies. Also driving the fast payback is the low cost of automated building technology, which has fallen as adaptation has increased. For example, intelligent lighting components that cost $120 four years ago today sell for just $50. Procter & Gamble’s building management pilot program, for example, generated a positive return on investment in just three months.

2. Operating-Expense Advantage
Relative to other energy-related building upgrades, smart building technology requires little upfront capital expenditure (cap-ex), while delivering significantly reduced operational expenditures (op-ex). Using automated systems, smart buildings generally cost less to operate  than buildings operating solely on legacy systems, therefore offering a long-term op-ex advantage. By combining smart building systems and data analytics with facilities management, a smart building management system can detect and resolve building issues before equipment failures and capital expenditures ensue. Additionally, operational and energy savings begin shortly after the smart building management system is implemented.

3. Marketing Mileage
As reported in JLL’s October 2012 “Global Sustainability Perspective,” numerous studies and surveys have demonstrated that tenants and their advisors increasingly expect smart building features such as zoned HVAC, sophisticated equipment maintenance alert systems, advanced security systems and “green” buildings. Like a new lobby or elevator bank, an improvement in sustainability makes an office building more desirable to tenants. These benefits can justify collecting higher rent and can increase competitive advantage and occupancy rates. And when the building is sold, sustainable investments can be recouped in an increased sales price. In fact, a 2011 study by Eichholtz, Kok and Quigley indicated the premium for LEED-certified or ENERGY STAR-labeled buildings is approximately 13%.

4. Energy Savings
Smart building technology can generate energy savings of 8% to 15% annually almost immediately after deployment, with the potential for incremental improvements over time. A 2012 report by the Rockefeller Foundation and Deutsche Bank Group’s DB Climate Change Advisors estimates that $289 billion in building efficiency investment would produce savings in excess of $1 trillion in the US alone, with every dollar invested in energy efficiency producing three dollars of operational savings.

5. Improved Corporate Social Responsibility Profile
Redirecting energy spend to building efficiency has allowed some corporate decision-makers to gain the reputational advantages of doing the right thing by the environment while also gaining significant performance and productivity improvements. Another benefit is a smart building system’s ability to measure and report greenhouse gas emissions. Some owners feed building emissions data to multiple benchmarking organizations, such as Greenprint and GRESB, as well as to Ceres and similar third-party reporting organizations, and smart systems can roll up the information from across a portfolio.

 

Source: GlobeSt

An 8,300-square-foot building operating as a fashion store for Guess in Miami Beach has sold for $12.5 million, which equates to $1,499 per square foot.

Marcus & Millichap represented the seller, a Miami-based owner/developer. The buyer, also represented by Marcus & Millichap, is an institutional investment group interested in building a South Florida retail portfolio.

“The building is a trophy retail asset located in the heart of the Collins Avenue fashion district,” said Drew Kristol, VP of investments in Marcus & Millichap’s Miami office. “Guess has occupied the property since 1998, and over the years has re-invested into their build-out. The new owner is an excellent position to capitalize on the below market in-place rental structure.”

The two-story building, located at 736 Collins Ave. between Seventh and Eighth streets in Miami Beach, was extensively remodeled in 1998 and has received complete interior renovations from Guess within the last 18 months.

 

Source: SFBJ

An $18 million plan to redevelop one of Coconut Grove’s most important waterfront parcels won approval from voters Tuesday.

The vote makes it possible for Grove Bay Investment Group to move forward with its plan to replace the Chart House and Scotty’s Landing and overhaul the Grove Key Marina that is located to the north of city hall.

The group, which is now able to sign a 50-year lease for the site, plans to locate new restaurants including Shula’s Steak House at the property. It will also restore and put to new use a pair of historic Pan Am hangars located there and build a promenade that will end at a new pier.

The city on Tuesday also began demolishing the Coconut Grove Exhibition Center to make way for a park. The area’s overall revitalization plan includes a public parking garage, with the developer contributing $5 million toward its construction, that would serve all the new facilities.

 

Source:  SFBJ

 

From Manhattan to Miami, foreign investors seeking U.S. visas are a growing source of real estate financing through the job-creating federal EB-5 Immigrant Investor Program.

To help developers navigate the program’s complex requirements and frustrating delays, veteran developer Rodrigo Azpúrua’s new book, EB-5 Visas & Real Estate Development, provides a step-by-step approach to create successful projects.

The book guides real estate professionals in designing and building commercial real estate projects that meet requirements of the U.S. Citizenship and Immigration Service’s (USCIS) EB-5 program. It’s a financing method being used nationwide to fully or partially fund projects including office buildings, mixed-use centers and resorts.

“When traditional financing evaporated in 2008, the EB-5 program really came into its own,” explains Azpúrua, who has been responsible for managing over $200 million in land development projects that created about 1 million square feet of office space throughout Florida.  “For development teams who master the complexities, it’s great financing alternative,” he said.  “Funding is relatively low cost, since investors are more focused on finding a reliable project to secure their immigration status than on high returns.”

Foreign participation in the EB-5 program keeps climbing, from 1028 visa petitions in 2009 to a 6,041 in 2012, toward the government’s current annual cap of 10,000 visas.  Launched in the early 1990s, the program lets qualified foreign investors obtain conditional resident status (green card) for investing a minimum of $1 million in U.S. businesses, or $500,000 in an economically challenged Targeted Employment Area.  If the individual’s investment creates at least 10 jobs within two years, the government grants permanent U.S. residency.

The book’s readers will learn how to:

  • Establish a job-producing project concept that aligns with EB-5 regulations and investors’ needs.
  • Assemble the multi-disciplinary team crucial to secure funding and manage the process.
  • Gauge if a project should move forward, based on financial feasibility, site selection, due diligence and marketing planning.
  • Understand EB-5 requirements, the Immigrant Investor Visa process and who can apply.
  • Evaluate job-creation projections, based on USCIS precedent and econometric analysis.
  • Create the highly disciplined business plan needed for government approval.
  • Reduce investor risk at every stage of the project.

Azpúrua brings life to the technical topic, sharing his first-hand development and immigration experiences.

An attorney who practiced real estate law for 14 years in his native Venezuela, he immigrated to the U.S. in 2001 and launched his development career in Miami.  He travels regularly to speak about EB-5 investment to audiences in the U.S., South America and China, and he has appeared as an expert on the subject in media including CNN and Fox News.

For information visit www.rivierapmo.com

Adam Von Romer, CCIM, Senior Investment Associate at Fitzgerald Group also has a new book on the shelves, “Getting Started in Commercial Real Estate Ten Step Program to Success!“ The book was co-authored by Von Romer and Patricia O’Connor.

Adam has taught or spoken for national and regional companies and associations such as Tandy/Radio Shack, Wiechert Realty, Marcus & Millichap, Coldwell Banker, Century 21, ERA, the Florida Association of Realtors, West Virginia Career College, and many more. He routinely conducts workshops and seminars on commercial real estate sales, commercial real estate leasing, commercial real estate financing,and commercial mortgage restructuring and modification.

 

The South Florida Office market ended the third quarter 2013 with a vacancy rate of 13.5%.

The vacancy rate was down over the previous quarter, with net absorption totaling positive 551,507 square feet in the third quarter. That compares to positive 769,100 square feet in the second quarter 2013. Vacant sublease space decreased in the quarter, ending the quarter at 722,903 square feet.

Tenants moving into large blocks of space in 2013 include: Miami Herald Media Company moving into 158,266 square feet at 3511 NW 91st Ave; Management Resources Institute moving into 40,000 square feet at 550 LeJeune Rd; and Aldridge Connors moving into 39,788 square feet at 1615 S Congress Ave.

Rental rates ended the third quarter at $26.04, a decrease over the previous quarter.

A total of three buildings delivered to the market in the quarter totaling 31,512 square feet, with 812,735 square feet still under construction at the end of the quarter.

This trend is compared to the U.S. National Office vacancy rate, which decreased to 11.6% from the previous quarter, with net absorption positive 23.48 million square feet in the third quarter. Average rental rates increased to $21.75, and 244 office buildings delivered to the market totaling more than 12.2 million square feet.

 

Source:  CoStar

 

Condos may get all the publicity, but industrial space in Miami is hot again, with developers competing for land and tenants.

More than 4 million square feet of space is in the development pipeline. And land prices are reaching record level, attracting as much as $1 million per acre. The investment industry now considers Miami a tier 1 city, which is attracting more institutional investors, Steve Medwin, managing director for Jones Lang LaSalle South Florida told WPC News. “REITs, the life insurance companies, private equity firms, all have raised tremendous amount of capital for real estate… they want to have a location here,” Mr. Medwin said.

Several catalysts are driving the market, including the Panama Canal expansion, which will bring Panamax-class container ships to Miami’s port in 2015, as well as the growth of the economy in Latin America.   Developers delivered almost 300,000 square feet of warehouse and distribution space in Miami during the third quarter. An additional 733,737 square feet is currently under construction, according to CBRE. Another 3.9 million square feet of space is in the development pipeline.

The largest delivery during the third quarter was Building 1 in South Florida Logistics Center, adding 171,545 square feet to the area known as Airport/Doral. The South Florida Logistics Center will eventually add 1.6 million square feet of industrial space across 200 acres next to Miami International Airport.

net-absorption-cbre-research-q3-2013The popularity for land in Doral has pushed up prices for competing investors.  “Prices went from a $1 million an acre [before the recession], down to about $400,000 an acre in the bottom of 2009 in Doral, and are now back to about $750,000 an acre — if you can find it,” Mr. Medwin said.   The year-to-date net absorption of 794,356 square feet at the end of the third quarter already surpassed the total absorption for 2012. Starboard Cruise Services signed the largest lease — 220,000 square feet at the future Flagler Station Building 34, according to CBRE.

The vacancy rate for Miami’s industrial market is down to 4.9 percent, dropping 40 basis points from the previous quarter, and down 120 points from last year. Average asking rates were up to $7.81 per square foot during the third quarter, which is $0.43 per square foot higher than last year, CBRE reports.

The recent development has led to a glut of product in certain areas, which is helping to keep down prices, Mr. Medwin says. “We are seeing is a lot of speculative construction by these big institutions who were able to buy land in the last couple of years and they are all delivering around the same time,” Mr. Medwin said. “There are a number of choices so rental rates are staying low there, they’re not shooting through the roof.”

under-construction-and-completions-cbre-research-q3-2013The demand for Miami’s industrial product should continue to increase, analysts say. “Several sizable investments sales, both institutional and private, are expected to close during Q4 2013, resulting in a boost in sales volume,” CBRE said in the report.

Although land is predominately scarce, the city still offers potential for developers and investors, analysts say.   “It’s a supply constrained market, so there’s not a lot of land around,” Mr. Medwin said. “But there’s enough to build another 10 million to 20 million square feet, which is 5 to 10 percent of the base we already have in Miami, over the next 3 to 5 or 10 years.”

 

Source: World Property Channel

biggest office deals of 2016

The 3.8 percent healthcare tax, which took effect on Jan. 1, has wide-reaching implications for investment real estate.

The impacts of this law were examined in a recent CCIM Institute member webinar hosted by Jeff Bilsky, senior director of BDO USA’s national tax office.

The 3.8 percent tax is imposed on the lesser of net investment income or modified adjusted gross income over $250,000 (married filing jointly), $125,000 (married filing separately), or $200,000 (individual filing). The tax also applies to the lesser of a trust or estate’s undistributed net investment income or the excess of adjusted gross income over $7,500.

Bilsky examined the categories of investment income that are tax eligible as well as exclusions, including rental income and gains on sale of rental property when income is generated by a real estate professional who materially participates in the rental activity or the rental activity constitutes a trade or business.

View CCIM’s Section 1411 Net Investment Income Tax webinar to learn more about the effects of the 3.8 percent tax on net investment income, how to calculate the potential changes in rental income, and more.

 

Source:  CCIM Institute

 

The most recent initiative makes it a goal for the costs of solar to continue their trend downward to meet those of conventionally generated electricity by the end of this decade.

This comes with the announcement by the White House reinvigorating solar energy through the Department of Energy’s SunShot initiative.  These goals don’t only come from government offices.  Laboratories too are leading the way. Technological advances are helping along the trend, as silicon may be able to be replaced as the main ingredient in solar panel construction.  A recent discovery that a light-absorbing material known for a century may work in solar panels and dramatically increase their efficiency has the industry talking.  Thanks to the combined developments, the cost per watt of solar-generated electricity may fall to the 10-20 cents per watt range where fossil fuel-generated electricity resides.

All that said, the opportunity for commercial space users to take advantage of these new technologies and for commercial landlords to convert their properties into energy-producing ones remains mired in the financial barriers and customs of an industry that views (and pays for) property improvements for multi-tenant buildings in very specific ways.  To answer the question of how the costs and benefits of solar improvements are apportioned usually needs to begin with how such improvements are paid for.

One California company says they have used real estate legal forms to address this problem. Working with a leading law firm, EPR Squared, a real estate firm specializes in cracking the tough problem of opening commercial rooftops to solar.  In solar improvement,  as with most other features of commercial property usage, the all-important capital source is the third party financier.  But the territory is new and forms and deals have little precedent to work with.  Establishing revenue flows on a tenant or space subdivision basis to cover construction costs and to apportion energy-generation benefit requires a new kind of real estate deal. EPR Squared says they’ve constructed such a boilerplate.

According to real estate research firm data cited by Energy Producing Retail Realty, Inc. Founder/CEO, Chris Pawlik, 90 percent to 95 percent of commercial building rooftops remain essentially beyond the reach of third-party financing, “When you have a commercial building with multiple tenants,” Pawlik said, third parties “can’t technically finance those unless the owner takes it on, and commercial owners won’t do that.”

Third-party financiers, he explained, “can get an agreement signed or financing in place because they have the credit of the off-taker that takes care of the risk.” With a twenty-year commitment, third-party financiers have certainty that their loan will repaid. But, Pawlik said, “owners typically own properties five to seven years and tenants are typically in properties five to ten years. You can’t have a ten- to twenty-year agreement in situations like that.”

EPR Squared’s idea is to create a real estate interest on the property and have it be a separate interest from the improvements and from the land. It is similar to agreements with property owners for cell tower and billboards, though, Pawlik stressed, the solar legal structure is not identical. DLA Piper, which Pawlik called “the gold-standard, top-tier law firm” for commercial real estate, “has finalized the form documents we need to take to the owners to show them how this structure would work.”

EPR2 has “a dozen or so deals in the pipeline with groups that have either portfolios of properties or single properties,” Pawlik said. The first deal, he explained, must be one that demonstrates to the 60,000 California real estate brokers, agents and mortgaging agents that “this is almost identical to a real estate transaction.” When they see commissions in it for themselves, he said, “we can really scale the idea and bring it to a size at which pension funds and insurance companies will start looking at it.”

 

Source: Commercial Source