Primary commercial property insurance is a buyers’ market with rate decreases of up to 20% for many U.S. accounts that renewed at midyear, with the exception being those with high catastrophe exposures.

Limited catastrophe losses and an influx of insurance capacity exerted considerable pressure on prices, brokers and market experts say. “The market is very insurance buyer-friendly right now,” said Duncan Ellis, U.S property practice leader at Marsh USA Inc. “Purchasers of property insurance are finding a very favorable environment toward pricing, toward capacity and toward interest in their risks.”

Premium decreases should be “on an average basis, probably high single digits to low double-digit percentage decreases,” Mr. Ellis said. Some accounts could see rates fall up to 20% “based upon good solid competition in the marketplace.”

“For 2014, we are definitely in a rate decrease environment,” said David Finnis, Atlanta-based national property practice leader at Willis North America Inc. Willis clients saw property rates fall 7.5% to 12% through June 30, he said.

However, catastrophe-exposed accounts will find a somewhat “less friendly” market than those without catastrophe exposure, Mr. Finnis said. “As one would expect, premiums are still higher in high-catastrophe areas like Florida and California vs. noncatastrophe areas like the Midwest,” he said.

Stewart Ellenberg, risk manager for the city of Boulder, Colorado said the city was fortunate to renew with a “slight” rate increase despite a large property insurance claim related to the September 2013 flood in the region. Likewise, Union County, North Carolina renewed its commercial property coverage for a 2% price increase, but deductibles for flooding and earthquake each doubled to $50,000, said Tiffany Allen, the county’s risk manager.

Looking ahead, about the only thing that could turn the market would be a major hurricane or other disaster. “If there are no catastrophe events, we predict that you’re going to be looking at double-digit decreases for the remainder of the year,” said Al Tobin, New York-based managing principal of Aon Risk Solutions’ property practice. “Double-digit decreases will continue,” approaching 20% for some accounts, he said.

“There’s just so much capacity in the property market right now, between incumbent insurers wanting to increase their lines or new underwriters trying to get on to the accounts,” Mr. Finnis said.

Mr. Tobin said, “What’s driving the market as much as anything is increased appetite among the top 10 catastrophe property carriers.”

“The absence of major losses … would be the No. 1 market driver, because that’s starting to attract capital,” Mr. Ellis said. “When looking at the results for 2013 combined with what we have seen in 2014 thus far, property is looking like a solid bet right now and is thus why we are seeing a lot of money or capital flowing into the property space.”

Analysts Agreed

“If you take a step back, it’s how financial markets work,” said Cliff Gallant, an analyst at Nomura Securities International Inc. in San Francisco. “There’s been an area where profits have been pretty good in recent years relatively speaking and so capital is flowing there in different forms.”

“I think where there’s underwriting success, that attracts capital to those lines,” said James Auden, managing director at Fitch Ratings Inc. in Chicago. “So if you have large underwriting gains in a segment, existing players put more capital into those lines.”

Alternative capital flowing into the reinsurance space may reduce reinsurance pricing for primary insurers, but it has not significantly affected primary insurance prices. “Reinsurance is just one ingredient in the makeup of (primary insurance) costs,” Mr. Tobin said.

Also, there is no broad lingering effect from Superstorm Sandy on property pricing this year, Mr. Tobin said. “Insurance companies are more acutely aware of deductibles and limits, but price has not been affected,” he said.

“There is no Sandy hangover on pricing,” Mr. Finnis said. “The only lingering result is that individual insurers are no longer providing $100 million in limits in the areas that were affected.” Those policy limits now vary by account but usually range from $25 million to $50 million.

What’s more, the uncertainty of congressional renewal of the federal terrorism insurance backstop thus far has not caused property pricing movement. The backstop will expire at the end of the year unless Congress renews it. Renewal legislation has been introduced in the House and Senate.

“There has not been any effect on (property) pricing and there is not likely to be because there is more supply,” Mr. Tobin said of the federal terrorism program.

 

Souce: Business Insurance

As traffic congestion worsens in South Florida, a plan to restore passenger service to the Florida East Coast Railway corridor that dates back to industrialist Henry Flagler’s first train service to Miami in 1896 is generating a buzz in the local real estate development community.

Opportunity-minded investors are closely monitoring a two-tiered process that could ultimately result in regular daily train service from Miami to Orlando with multiple stops in between in various downtowns in Miami-Dade, Broward and Palm Beach counties. To accommodate the proposed new passenger commuter service, plans call for the creation of nearly 30 train stations to be built east of Interstate 95 along the South Florida coast.

The creation of train stations for the planned passenger service is expected to trigger a wide array of indirect investment in the surrounding areas to develop everything from residential towers to retail centers, hotels to office buildings. Under a pair of separate but interconnected plans, All Aboard Florida — an entity that is privately controlled by the owner of the Florida East Coast tracks — wants to launch a high-speed passenger rail service from downtown Miami to Orlando with stops in the downtowns of Fort Lauderdale and West Palm Beach. This service is scheduled to begin by 2016.

Just this month, All Aboard Florida issued $405 million of debt to help finance the creation of the high-speed rail service that is expected to cost at least $2 billion. Complementing the All Aboard Florida private-sector initiative, the South Florida Regional Transportation Authority — a public entity that oversees the Tri-Rail passenger service on tracks west of Interstate 95 — plans to introduce a new commuter line that is to travel on the Florida East Coast line on the east side of Interstate 95 with stops in various downtowns from Miami to West Palm Beach.

Under the Tri-Rail plan, Miami-Dade County would have eight stations stretching from Aventura to the Miami Design District to a newly proposed Grand Central Station to be built in downtown Miami. Plans call for the east of Interstate 95 commuter service — dubbed the TriRail Coastal Link — to be “implemented” within seven years for a launch in or before the year 2020, according to the organization’s website.

Ironically, the same train tracks that have historically meant lower prices and constant complaints about noise and traffic delays from nearby residents are expected to trigger a wave of new residential developments for individuals seeking easy access to planned passenger rail service.

Anyone who has ever relied on public transportation knows that train service is much more predictable than that of buses. Many commuters in cities around the world generally attempt to live and work close to train stations to improve the efficiency of using public transportation. As a result of this phenomenon, the introduction of passenger rail service in Miami-Dade County has the potential to stimulate real estate development in areas that are far removed from the water.

It is not surprising that developers who focus on the South Florida mainland have typically tried to build condo towers on sites that front Biscayne Bay or the Intracoastal Waterway. If waterfront land is not available at acceptable prices, the next best alternatives are usually development sites in popular neighborhoods such as Midtown Miami or on iconic streets such as Brickell Avenue.

Generally, the interest level in land near the railroad tracks — which are west of Biscayne Boulevard and east of Interstate 95 — is not the first choice for developers or buyers in South Florida, especially in Miami-Dade County. For example, fewer than 385 condos between west of Biscayne Boulevard and east of Interstate 95 from Flagler Street in downtown Miami north to Aventura were sold, at an average price of about $187 per square foot, between January and May of this year, according to the Southeast Florida MLXchange. By comparison, nearly 1,025 condo units east of Biscayne Boulevard from Flagler Street in downtown Miami north to Aventura were sold, at an average price of $250 per square foot, during the first five months of the year.

Some quick arithmetic suggests condo units east of Biscayne Boulevard traded at an average premium of 34 percent over the units on the west side of the street, according to the data. As for the supply of available condos, about 800 units are currently on the resale market west of Biscayne Boulevard from downtown Miami to Aventura.

Based on the 2014 sales pace of about 77 transactions monthly, there is more than 10 months of available inventory on the market west of Biscayne Boulevard, according to the data. The condo market east of Biscayne Boulevard from downtown Miami to Aventura has nearly 1,800 units available for resale. Despite having more units up for resale than the area west of Biscayne Boulevard, the condo market east of Biscayne Boulevard has less than nine months of supply available, according to the data.

For the rental market, there is less of a difference between east and west of Biscayne Boulevard in Miami-Dade County from downtown Miami north to Aventura when it comes to price and transactions. Tenants leased more than 1,025 residential properties west of Biscayne Boulevard at an average price of $1.63 per square foot monthly between January and May of this year, according to the data.

For the same five-month period, tenants leased nearly 1,200 residential properties east of Biscayne Boulevard at an average price of nearly $1.62 per square foot month. Currently, about two months of rental-property supply are available for lease west and east of Biscayne Boulevard, according to the data.

Given the market trends, developers could become more open to the idea of building residential towers in the area located west of Biscayne Boulevard and east of Interstate 95 especially since land costs are generally cheaper and rents are comparable to those rates being achieved on the east side of Biscayne Boulevard.

The unanswered question going forward is whether developers and residents will ultimately embrace a lifestyle in South Florida that revolves more around public transportation than the current dependence on cars. If this were to happen as the government planners are hoping, the future of real estate development in Miami-Dade County could increasingly focus on the land west of Biscayne Boulevard in the coming years.

 

Source: Miami Herald

Three homeowners associations at Quantum on the Bay are suing a company tied to Terra Group, claiming the developer cut corners during construction of the Miami condo project.

The associations accuse the Terra company and seven other defendants of 17 counts of negligence, professional negligence, breach of common-law implied warranties and building code violations. According to the Miami-Dade Circuit Court lawsuits, defects at the 698-unit development ranged from jammed doorknobs to crumbling stucco. The purpose of the litigation is to get Terra and the codefendants to cover the cost of repairs.

“The unit owners want to have the property that should have been delivered to them,” attorney Jeffrey Respler, who represents the Quantum residents, told the Daily Business Review. “At the end of the day, we’re not looking for a windfall. We’re only looking to be made whole.”

Terra’s David Martin told the Review the dispute would be “expeditiously and responsibly resolved in the appropriate forum.”

Unit prices at the 1900 North Bayshore Drive condo range from $229,000 to about $1.2 million. Monthly rents vary from $1,750 to $5,500.

 

Source: The Real Deal

As the curtain closed on the legislative session, Florida lawmakers approved new rules on condominium association bylaws, paved the way for a private flood insurance market and approved tighter controls on property insurers.

Consumers got new safeguards in legislation from state Sen. Aaron Bean, R-Jacksonville, whose Senate bill would ban post-claim underwriting, prevent insurers from canceling policies or using other tactics to avoid paying legitimate claims. The Legislature also moved to weed out some unethical players in the real estate sector, allotting $500,000 in the state budget to fight unlicensed real estate activity.

Among the big winners were community association managers, who fought for years with the Florida Bar over whether some their administrative duties amounted to the unlicensed practice of law. In a victory for managers, the Senate voted 36-3 for a bill that would expand the role administrators play in condominiums, cooperatives and homeowner associations across the state. Licensed by the state Department of Business and Professional Regulation, community association managers perform management functions including disbursing funds, preparing budgets and other financial documents, and conducting meetings.

But the bill by state Rep. Ross Spano, R-Dover, would gi ve the managers broader powers, including the ability to negotiate financial terms of contracts, draft pre-arbitration demands, and calculate and prepare assessment and estoppel certificates. The managers say this wider scope of responsibilities would save thousands of dollars in attorney fees, but the Florida Bar has taken its case to the Florida Supreme Court and is awaiting a decision. The Bar petitioned the court in 2012 to define many of the managers’ duties as the unauthorized practice of law, a third-degree felony.

“There is no rule or test to determine whether an activity is considered to be the practice of law,” according to a state House staff analysis. “However, if an activity is within a profession’s sphere of activity, it is more likely that the court will allow a nonlawyer to perform the activity, even if the activity involves drafting a legal instrument.”

Lease Taxes

While association managers celebrated, real estate lobbyists saw a bid to cut taxes on commercial leases fail for the second time. In an election year when legislators offered sweeping tax cuts, real estate industry advocates couldn’t sell lawmakers on a proposal that would shave $235 million from state coffers.

Even with powerful support, Senate Bill 176 couldn’t drum up enough support in the Senate. An earlier version sought to remove Florida’s distinction as the only state that collects tax on commercial rent, levying a 6 percent fee that generates $1.2 billion in annual revenue. This year’s bill would have cut the tax from 6 percent to 5 percent.

“Of course we’re disappointed it didn’t pass. This is an issue we feel strongly about,” said Trey Goldman, legal counsel for Florida Realtors. “It does have a big fiscal impact, but the way to approach it is to take a small bite. That way you can have a small impact that won’t affect the state’s budget in the same way it would if you tried to do it all in one year.”

Going into the session, industry supporters were backed by Gov. Rick Scott, who pledged $100 million in the state budget to phase out commercial lease taxes as part of sweeping cuts totaling $500 million for fiscal year 2014 and 2015. But the Legislature wanted broad-based tax cuts and settled on an agreement that once again disappointed Realtors. Instead of allocating funds to phase out the tax, negotiators settled on $395 million to lower vehicle registration and title fees and $105 million for three tax holidays on energy-efficient appliances, hurricane provisions and back-to-school supplies.

There was one bright spot for the industry and a hint that legislators expect the issue to resurface. House Speaker Will Weatherford promised a comprehensive study before the start of the next session to determine the effect of reduced commercial lease taxes on state revenue. “In an election year with the governor also up for re-election, the Legislature was trying to do a lot of things for a lot of people. Next year will be different. Every year has new concerns, but next year won’t quite be like this year,” Goldman said. “I think we will revisit this issue. It’s not just important for Realtors. We believe it’s important for commercial businesses of all sizes, and we’re going to keep trying.”

Flood Insurance

In a busy legislative session, lawmakers also took steps to reduce the escalating flood insurance premiums. A bill to create an alternative to the national flood insurance program created through the Biggert-Waters Act won strong support in both the House and the Senate. SB 542 by state Sen. Jeff Brandes, R-St. Petersburg, encourages insurers to write polices in Florida to create an open market that supporters say will curb rising national premiums.

“I will not stand on the sidelines while homeowners in our community are being forced out of their home by more bait-and-switch tactics in Washington,” Brandes said. “Floridians deserve an alternative to the drastic rate increases of Biggert-Waters. This legislation builds a framework for a Florida-based solution that gives flexibility to homeowners. This will put Florida at the forefront of addressing this issue nationwide.”

State residents already account for nearly 2 million, or about 40 percent, of all National Flood Insurance Program policies. However, they get back only $1 in claims for every $4 paid in premiums. Lawmakers agreed on the need to control escalating costs by creating a statewide private flood insurance market. The Senate voted 30-3 and the House 98-11 to approve the legislation.

 

Source: DBR

In an Internet of Things (IoT) world, smart buildings with web-enabled technologies for managing heat, lighting, ventilation, elevators and other systems pose a more immediate security risk for enterprises than consumer technologies.

The increasing focus on making buildings more energy efficient, secure and responsive to changing conditions is resulting in a plethora of web-enabled technologies. Building management systems are not only more tightly integrated with each other, they are also integrated with systems outside the building, like the smart grid. The threat that such systems pose is two-fold, analysts said. Many of the web-enabled intelligent devices embedded in modern buildings have little security built into them, making them vulnerable to attacks that could disrupt building operations and pose safety risks. Web-connected, weakly protected building management systems also could provide a new way for malicious attackers to break into enterprise business systems that are on the same network.

The massive data theft at Target for instance, started with someone finding a way into the company’s network using the access credentials of a company that remotely maintained the retailer’s heating, ventilation and air conditioning (HVAC) system. In Target’s case, the breach appears to have happened because the company did not properly segment its data network.  Such issues could become more common as buildings and management systems become increasingly intelligent and interconnected, said Hugh Boyes, cybersecurity lead at the U.K.’s Institution of Engineering and Technology.

“It creates some interesting challenges for enterprise IT,” Boyes said. “They need to know there are some increasingly complex networks being put into their buildings that are running outside their control. “As one example, Boyes pointed to the growing use of IP-enabled closed-circuit security cameras at many buildings. In some cases, the cameras might be used instead of a motion sensor to detect whether someone is in a room, and whether to keep the lights or heat turned on. In such a situation, the camera, the lighting and the heating systems would all need to be integrated. Each of the systems could also have web connectivity linking them with an external third party for maintenance and support purposes. “You quickly get into a situation where a network that was just inside the building goes to locations outside the building,” Boyes said.

It’s not only heating, lighting and security systems that are integrated in this manner. An elevator manufacturer might stick smart sensors on all the elevators in a building to detect and spot a failure before it happens. Or, a building manager might have technology in place to monitor and conserve water use in a facility. Many of these technologies will have a path out of the building and over an IP network to a third-party supplier or service provider, Boyes said. Often the data from these systems are captured not only for real-time decision support but also for longer-term data analytics.

Exacerbating the situation is the fact that many of the communications protocols for building automation and control networks, such as BACnet and LonTalk, are open and transparent, said Jim Sinopoli, managing principal at Smart Buildings LLC. Device manufacturers have adopted these protocols for product compatibility and interoperability purposes, Sinopoli said. However, the openness and transparency also increase the vulnerability of building automation networks. “None of these systems are isolated any longer,” Sinopoli said. A security breach in one system could have a cascading effect on multiple building automation systems and networks, he said.

The threat is not only about someone penetrating a building system to cause serious disruptions. There is also a potential impact on IT, such as a loss of communications due to a building system outage or unauthorized access to enterprise data because of poor segmentation between the building automation network and the IT network. “The penetration of IT into building systems is an issue that is front and center,” at a growing number of companies, Sinopoli said.

As buildings have become smarter, vendors of consumer devices have begun entering the space, said Rolf von Roessing, president of German security consulting company Forta AG and a member of ISACA’s Professional Influence and Advocacy Committee. ISACA is a trade group focused on IT governance issues, with 128,000 members. “Building automation, including critical functionality, is now readily available through web shops and hardware or electronics stores. While professional solutions usually feature in-built security and protection against hacking, consumer offerings are less well protected,” von Roessing said.

In terms of preparation, IT practitioners should extend their information security and cybersecurity management processes to cover buildings and building management systems, he said. “In many cases, these will be controlled through a Windows-based or compatible interface, using standard PC equipment and network connectivity via standard IP,” von Roessing said. “Where remote control is a known or desired feature, security practitioners should look long and hard at mobile devices, the remote control apps and underlying processes. If and where critical building functionality can be controlled and manipulated from an unprotected mobile device, there is a significant risk of breaches,” he said.

For a growing number of companies, the issue is already upon them, said John Pescatore, director of emerging security trends at SANS. In a SANS survey on the security of the Internet of Things, smart buildings and industrial control systems were the second most frequently cited near-term concern behind consumer devices, Pescatore said. Often, IT has little idea of the sheer scope of the issue, Pescatore said, He gave the example of one university’s chief information security officer at a recent SANS conference who ran a security scan of a new building on the campus. “In a single six-story building, he found nearly 1,500 sensors,” in elevators, doors, camera systems, lighting and heating systems and elsewhere, Pescatore said.

Traditionally, building management systems have not been considered IT systems. They are not selected by the CIO and have long been considered operational technology under the purview of building and facilities management teams. That attitude will have to change. Building management and IT organizations will need to work together to identify and mitigate potential risks, said Robert Stroud, the incoming international president of ISACA. But any response will need to be based on a thorough understanding of the risks, Stroud said. Companies will likely have to pay more attention to practices like network segmentation, strong authentication and network monitoring. Vendor management processes will need special attention, Stroud noted.

Many of the devices integrated in smart buildings have little security built into them and come from vendors that are unfamiliar to most IT organizations. Suppliers in the building automation world don’t have the same kind of processes in place that IT vendors do for responding to vulnerabilities in their products. Few have any notification process to let customers know about security threats to their products. IT organizations will need to work with building management teams to update vendor lists, build a register of contacts and know who to reach out to in case a response needs to be escalated, Stroud said.

 

Source: CiteWorld

In this office, there are no cubicles, no lavish corner suites for executives and very few filing cabinets.

Employees hustle about, plugging in laptops and hooking into phone lines at any desk that’s convenient. A giant video screen overlooks a cafe where employees can conduct business in an informal setting, grab a bite or maybe catch an inning or two of the San Francisco Giants game.

This could be the headquarters of Google, Facebook or maybe Apple. But it’s not. It’s the 24th floor of 500 Capitol Mall, where the Sacramento office of commercial real estate services firm CBRE is test-driving an emerging concept in workplace design. Can a modern, perk-laden, almost-paper-free office be better for business? Los Angeles-based CBRE Group Inc., which has more than 40,000 employees and 300 offices worldwide, thinks so.

The transformation of its Sacramento office is part of a global CBRE initiative, known as “Workplace360”. It was implemented last year in Los Angeles and earlier this month in Orlando, Fla. The Sacramento office makeover is the fifth CBRE transition in the United States; more than two dozen CBRE offices worldwide are converting to the model in 2014. It’s intended to save space, promote collaboration, offer more flexibility, trim costs and even help attract the next generation of younger employees.

It’s also part of a trend in workplace design, commonly referred to as “untethered” or “free address” office space. With the advent of mobile technology, some companies are abandoning traditional office cubicles, in favor of shared or communal workspace. In a 2008 survey of 950 companies, about 60 percent said they had some kind of “unassigned workspace,” according to the International Facility Management Association, a trade group of facility managers.

For the local CBRE office, the recent move represents a major shift, physically and philosophically. In its first Sacramento office relocation in more than 40 years, the company only moved across the street but entered into a completely new way of operating. At its former offices, at 555 Capitol Mall, CBRE was spread out over three floors, with most employees working in traditional cubicles. High stacks of paper and rows of filing cabinets were the norm.

At its new address, all operations are on one floor, encompassing about 17,500 square feet. Mountains of paper have been all but banished. Each employee was allowed to bring one filing cabinet to the new office, which meant purging, scanning and recycling old files. With no assigned desks, CBRE’s Sacramento employees – about 100 in all – can plug in anywhere. Each has a company-issued laptop with Wi-Fi access to printers and digital files, as well as a virtual private network that lets them securely connect to their office documents from anywhere in the world. According to the company, ahead of the move, employees purged 500,000 paper documents, many of which are now accessed digitally by “key word” searches from their laptops.

Each desk is fully equipped with pens, highlighters, notepads, even a bottle of hand sanitizer. When employees leave at night, every desktop is “100 percent clear,” except for a phone, computer mouse, blue-tooth headsets and dual computer monitors. That “clean desk” policy applies to everyone, from top executives to junior staffers. David Brennan, senior managing director of CBRE Sacramento, said the everything-on-one-floor concept alone “was huge for us. It encourages a more collaborative environment.” Additionally, the firm’s new offices serve as a “real-world example” for corporate clients, who often seek advice on incorporating new workplace technologies, he noted.

“Workplace360” was launched after CBRE officials did extensive research on office designs that would foster mobility and flexibility, but also consolidate workspace to encourage more teamwork, as well as reduce square footage requirements. CBRE officials believe there’s a payoff in collaboration among the company’s many commercial real estate divisions, which range from financing and property management to a unit that specializes in auto dealership transactions.

Research showed that its brokers and staff typically spent about 50 percent of their time working with others and the other half working alone. Employees are encouraged to work in “neighborhoods” of colleagues doing similar tasks. There are seven “huddle rooms,” where small teams can meet for conferencing and video presentations. There are also single-person “focus rooms” when privacy is a must.

It can be an adjustment for longtime employees used to sitting at the same desk every day, perhaps surrounded by personal photos and mementos. “There was some anxiety at first,” said Chris Schempp, who oversaw hundreds of details as director of CBRE’s in-house project team during the 15-month planning and moving process. “But as things started coming together, you could tell that more (employees) were buying into the concept.”

Each employee has a personal, locked filing cabinet, which some use to keep family photos that they prop up on whatever desk they’re using that day. There also are banks of lockers for storing laptops, briefcases or other personal items and a coatroom where suits and ties can be stashed for client meetings.

Amy DeAngelis, the CBRE Sacramento senior vice president who brokered the deal for the 24th floor space and the 11-year lease in the office building owned by Tsakopoulos Investments, said care was taken to make sure CBRE workers could utilize space efficiently, “which affects the bottom line financially.” The elimination of nearly 1,320 square feet of filing cabinet space alone will yield an estimated $453,000 savings in storage costs, during the lease term.

The new office design also takes into account employee health and wellness. Desktops, which have an antimicrobial coating to prevent retention of germs, can be height adjusted at the touch of a button. Stand-up work stations give employees the option of taking a break from their self-adjusting ergonomic chairs. Strategically placed treadmill “walk stations” enable employees to burn off nervous energy without bothering others. Subtle white noise fills the office, muffling what could otherwise be an annoying cacophony of dozens of brokers talking to clients on phones. The building also has a fitness gym and bike-to-work lockers and showers.

Perhaps the most eye-popping perk is the cafe area’s video screen that can, with Google Earth technology, zoom in on virtually any spot on the globe. Brennan said the ability to scope out every angle of a commercial real estate site – remotely – saves enormous amounts of time and money. “Think of all it would take to make a trip to, say, Chico, and do all that work on the ground,” he said. “Here, we can get a detailed look at any property and its surroundings in minutes.”

CBRE is pursuing “green building” certification for its 24th-floor office, under the Leadership in Energy and Environmental Design rating system, which requires meeting stringent environmental standards in construction and operation, including reduced water use and renewable energy sources.

The “Workplace360” model also is designed to attract the next generation of employees – particularly young, tech-savvy workers who are likely to be drawn to offices similar to those of high-powered, Bay Area tech companies. “If you have the resources to remake your office setting, it’s a good way to go,” said Peter Schaub, a New York-based marketing and branding expert. “Talented millennials who have the skills to be in demand aren’t necessarily thinking like their parents. Pay and benefits still count of course, but they put high emphasis on the look and feel of a workplace. “It could make the difference between landing talent, or not,” said Schaub. “If you have a recruit say, ‘Wow, I get to work in a place that looks this cool,’ you’ve probably got them hooked.”

The company doesn’t divulge what it spent on all of its new office technologies, but considers it a long-term investment. “It was not so much a cost-saving initiative but an investment in our employees and the workplace of the future,” said CBRE consultant Matt Fritsch. Now, when he visits the company’s traditional offices in Roseville and Stockton, those office environments seem so “foreign,” he said. “For employees who enjoy a clutter-free environment, this is a beautiful place to be.”

 

Source: The Sacramento Bee

Approximately 10,000 baby boomers turn 65 every day.

That staggering fact is not lost on the world of commercial real estate, and many in the property management field in particular are working to deal with the waves of coming retirements.

And, as the younger generation of property managers take over, many experts say they will continue to carry the flag of sustainability and push property management to be even greener than it is now. “It’s not that the new generation will save our bacon,” says Marc Intermaggio, executive vice president of BOMA San Francisco, noting that property management has come a long way in sustainability goals. “But there is a broader level of consensus among the younger folks simply because these environmental issues have been elevated more for them, than during the 1950s and 1960s.”

BOMA San Francisco has been partnering with San Francisco State University’s College of Business to develop curriculum that allows students to get a certificate in commercial real estate by taking four specially designed classes. The first four students graduated from that program this winter. “We’re trying to take this to the rest of the California state university system,” says Intermaggio. “This is going to help students be more job-ready, to have even more training, to have a greater familiarity with the issues.”

Industry analyst CEL & Associates Inc. estimates that there could be an annual shortage of 15,000 to 25,000 qualified real estate professionals—in all fields— nationwide, says Christopher Lee, president of the group. Property managers are a profession that is also constantly in demand, Lee says. In a boom, more managers are needed to meet demand of new construction; in a downturn, managers are still needed to keep existing buildings going—and to ensure they operate at peak efficiency to save crucial capital.

Lee says it is difficult to predict when real estate professionals will be leaving because many are staying on longer due to the recession. Property management is also a field that allows people to work into their later years, unlike more physically taxing jobs, he says. “Many people are holding back on retirement because of economic uncertainty,” says Lee. “But once they leave, they will leave at a quick pace and my concern is that there is a lack of people in the pipeline to take their place.”

Individual companies are also working to ensure that the younger generation is ready to take the reins—and that they will continue to maintain sustainability programs. CBRE Group Inc. has put 15,000 employees through BOMA’s Energy Efficiency Program. It has 500 LEED AP (Accredited Professionals) employees in all fields. Cushman Wakefield has 71 LEED AP professionals and 100 LEED GA (Green Associate)-certified employees, mostly in property management. Over the next two years, the company plans to train 80 managers through the Urban Green Council’s GPRO courses.

 

 

Source: National Real Estate Investor

Advances in building and information technologies have brought a new “big data” analytics-based approach to facilities management—one that ushers in a new era of operational control, reliability and productivity for businesses and workers. Smart buildings can increase employee comfort, engagement and productivity, according to Jones Lang LaSalle’s latest report, The Changing Face of Smart Buildings: The Op-Ex Advantage.

Technological advances have finally converged with long-existing and significant opportunities for improving energy efficiency and the user experience within buildings. We are seeing tenant satisfaction improve while building operating costs are reduced, especially when tenants are actively engaged with controlling energy usage.

The Big Data generated by smart building systems is a major force shaping the human experience within buildings. Building data analytics provides unprecedented insight into energy use and facilities operations.

Today’s computer-controlled “smart” building systems can be programmed to accommodate the needs of building occupants. Lighting and temperature, for instance, can automatically adjust during peak and off-peak occupancy periods. Smart building technologies can be used to provide a more customized and energy-efficient experience for building users—think, better temperature, lighting or security control for offices, and more reliable power for manufacturing facilities.

In addition, these automated systems generate reams of data that a smart building management service can transmit to a remote data center for analysis by facilities professionals. Using predictive analytics, facilities managers can anticipate and address user needs and requests related to heating, ventilation, lighting, way-finding, security and more.

Affordable new technologies driving smart building progress

Recent significant price reductions in cloud computing-based building management technologies have made these systems affordable. For example, wireless sensors used in smart building managed services are now available for less than $10 per unit. These sensors can transmit data from smart systems in hundreds of buildings to far-flung remote cloud-computing platforms where advanced analytics can turn data into actionable intelligence to improve building performance.

Building occupants’ growing expectations

Smart buildings can boost tenant satisfaction and productivity, according to The Changing Face of Smart Buildings. Along with next-generation buildings comes a new generation of building occupants, with new workplace preferences and expectations for their work facilities. Companies increasingly rely on mobile workers, and smart buildings are able to adapt more readily to new flexible workplace models. Clean, green, efficient buildings are gaining a marketing advantage for landlords.

The trend for employees to connect from anywhere, or to bring their own devices to custom-fitted work settings, will profoundly change the way building owners lease space. Demand for more network sophistication that can adapt to changing work patterns will play to the advantage of smart building owners.

Smart buildings also can help companies use sustainability as a hook for engaging employees. In a major Empire State Building energy retrofit, for example, the project team added smart building components to the landmark office property. Real-time energy displays enable Empire State Building tenants to better monitor and control their energy consumption, and even compete with other tenants in the building to achieve energy savings.

Looking ahead is Fraunhofer CSE’s Building Technology Showcase in Boston that houses Fraunhofer’s building science research facilities, designed to consume half the energy of a comparable structure. In the lobby, an iPad-driven display shows the building’s internal smart building technology at work, with digital read-outs showing real-time energy gains in lighting, cooling and heating, water use and energy generation. It’s a simple but powerful idea that potentially could be applied in every smart building lobby.

Jones Lang LaSalle’s report, The Changing Face of Smart Buildings: The Op-Ex Advantage, provides a comprehensive, state-of-the-market view on smart buildings, providing the first multi-dimensional business case for smart technology investment. The full report can be downloaded here: http://bit.ly/HvhSx6

 

 

Source: NREI

biggest office deals of 2016

Homeowners that want coverage from Citizens Property Insurance could end up with a much more expensive policy from unregulated out-of-state insurers under a new bill passed in the Senate Friday.

The Senate voted 22-16 for the bill that could result in homeowners seeking coverage from Citizens to be shifted to a private surplus line insurance company that aren’t subjected to state regulations.

Several senators, includings some Republicans, objected to the bill. “We have insurance regulation in the state of Florida for a good reason,” said Sen. Jeff Clemens of Lake Worth. “It’s to make sure consumers in Florida aren’t being taken advantage of.”

Since the tea party wave of 2010, the Republican majority in the legislature has chipped away at the policies covered by Citizens. The state-backed insurer was set up to be the insurer of last resort, but grew as private insurers tried to limit their exposure in the state.

Last year legislators approved creating a clearinghouse that requires insurance agents to look at offers from private insurers before allowing someone to purchase a Citizens policy. A customer is ineligible for Citizens if one of the insurers charges premiums that are within 15 percent of Citizens rates.

The Senate bill (SB 1672) would add surplus line insurers to those insurers that could be offered through the clearinghouse starting in January.

Sen. David Simmons, R-Altamonte Springs, defended the bill and said it would give homeowners another choice for coverage. He said homeowners would be told ahead of time that the surplus line insurers are not regulated the same way as other insurers.

Simmons added that homeowners would also be allowed to move back to Citizens after receiving coverage from the surplus line insurer. He also noted some Floridians already insure their homes with these type of insurers.

“We have gone overboard to protect the consumer so the consumer can make an intelligent decision,” Simmons said.

Florida’s former insurance consumer advocate, however, blasted the proposal.

“These surplus lines insurers are a last resort given the lack of regulatory oversight,” said Sean Shaw, founder of Policyholders of Florida and who is running for the Florida Legislature. “These companies would be able to jack up rates on Floridians without state regulation — putting seniors and families at risk. We stopped this from happening before and it needs to be stopped again.”

Source:  NBC Miami

We’ve all seen them hanging from the side of a building and thought to ourselves, “Man, I would never do that. Those guys must be crazy.”

Well, to be honest, some of them are, but most are not. The fact is, the profession of washing windows on high rise buildings is actually very safe when all of the standards and regulations are followed properly. Of course, it still takes a tremendous amount of courage to climb over the side of a building and into a boatswain’s chair or to power that stage down when there is nothing separating you from the ground other than a thin aluminum floor.

So how do these folks do it? What makes them secure enough to make a cognitive decision to walk off of a perfectly good rooftop and into thin air, where, for the next hour or so, they will be suspended from lines as thin as your thumb, all the while cleaning the glass of your office or condo building?

The answer is, or should be, safety. Safety is the most important factor when any suspended maintenance work is being performed. Who is responsible for this safety, and what does working safely really mean?

The first question is being asked all across the United States every day with respect to window cleaning, particularly window cleaning done from a boatswain’s chair. Up until now, there was no clear definitive rule with respect to boatswain’s chair work under Federal OSHA. Federal OSHA does address cleaning windows using a powered platform. While some of those rules can be applied to chair work, there are so many areas of uncertainty that Federal OSHA has made proposed changes to Sub Part D – Walking Working Surfaces where they include some rules with respect to this common form of window cleaning.

The new document and the existing ANSI Standards clarify that it is the responsibility of the building owner to provide anchorages for these window cleaning professionals to attach their suspension and safety lines. This is important when the workers are utilizing boatswain’s chairs because more often than not, they are rigging directly to the rooftop anchors for both the suspension and safety lines. The rules and regulations both state that the suspension (the line supporting the worker) and safety lines (used in the event the suspension line fails) should be attached to separate and independent anchorages.

The standard form of anchorage is a rooftop anchor attached to the building’s structure that has been ideally installed during construction. We do know, however, that most building’s do not have these permanent rooftop anchors. Thus, the window washing professionals are required to make do with what structure is available on the rooftop.

We cannot expect a window washing contractor to obtain permission to drill through the roofing and down into the structure and attach a rooftop anchor as, quite simply, they are not qualified to perform this type of work. Therefore, it is incumbent upon the owner of the building to ensure rooftop anchors are available for workers to attach to prior to commencing their work.

The next burning question, assuming we have rooftop anchors or some other form of structure, is how are these workers to attach safely?

Many buildings, maybe even yours, have some form of window washing system installed. Unfortunately, more often than not, they are not in compliance with today’s rigid standards and proposed regulations. We often see derelict davit bases at an unprotected roof edge. These davit bases were originally designed to be used for suspended stages. However, as you know, most window cleaning operations are performed using a boatswain’s chair. So, how do the window washers work safely if there are no independent rooftop anchors available? The workers do what they must to ensure they can complete the work as safely as possible. This does not mean they complete the work in compliance with all the codes and standards. It means they do what they must, which, at times, really is crazy.

They will attach to vent stacks, stair railings or cinder blocks piled on the roof, none of which are designed to take the applied loads of a fall. Further, if these davit bases are existing at the roof edge, often the window washers will attach a tag line between the davit bases and attach both the suspension and safety lines to this line. The problem is the tag line has not been engineered, and in the event of failure of this line, both suspension and safety lines are attached to the same “anchorage.” The failure of one line leads to a catastrophic failure of this unengineered system, resulting in serious injury or death of the worker.

Now, realizing this is a lot of information to take in, I expect you have a lot of questions about the codes and standards. What is required? How do I know? Etc. The test is simple. Take a walk out onto your rooftop and ask yourself, “If I had to,would I attach my entire life to that anchorage?” If there is any doubt in your mind at all, contact a rooftop anchor design professional and have your building assessed for compliance and safety. Once you have the building assessed and certified and when someone asks you if those window cleaners are crazy, you can confidently answer, “Not as crazy as you think.”

 

Source: Facilities Magazine