Property Insurance Rates Fall Up To 20% For Those With Low Catastrophe Risks

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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

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Investors Assess Development Potential Around Proposed Passenger Rail Stations

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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

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With The Internet Of Things, Smart Buildings Pose Big Risk

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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

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Remaking The Commercial Real Estate Office

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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

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Building Owners Responsible for Safety of Window Cleaners

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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

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Miami-Dade County Water & Sewer Rate Hikes Start

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Miami-Dade County has started a series of water and sewer rate hikes to pay for $12.6 billion in proposed improvements to its water and wastewater systems, including a $3 billion project to drastically reduce the amount of treated sewage the county discharges into the Atlantic Ocean by 2025.

The county’s Water and Sewer Department raised rates 8% for the fiscal year that started last October. Annual increases of 6%, 5%, and 5% are planned for the next three fiscal years, department Deputy Director Douglas Yoder told Miami Today.

And there should be more increases in the future – wiping out Miami-Dade’s longtime reputation for low water and sewer rates to raise money to fix an underfunded system that has been rife with unlawful discharges from weak and leaky pipes and system overflows, described by critics as an environmental nightmare. “Rates will continue to be impacted as we get into the actual construction, which is where you spend money quicker,” Mr. Yoder said.

Miami-Dade’s water and sewer rates have been among the nation’s lowest for many years, according to the department. Even with the 8% increase that’s already in effect, a customer using 6,750 gallons a month pays a monthly average of $45.39 – up $3.36 from the previous average. That’s still the lowest among the nine major municipal systems in Florida, the department said.

Under federal and state pressure for years to improve its wastewater system, a centerpiece of the department’s capital improvements plan for the next 15 to 20 years is the $3 billion “ocean outfall” project. The outfall project, Mr. Yoder said, is in response to a state law approved in 2008 that will ban Florida municipalities from flushing treated sewage into the ocean and will require them to reuse 60% of their wastewater by 2025. The law was eased last year, allowing municipalities to discharge up to 5% of their annual treated sewage flow into the ocean, but only due to “peak flow events” such as storms. It also gave municipalities more ways to meet the 60% reuse threshold.

Most of the cost of Miami-Dade’s outfall project – about $2 billion – will involve building a fourth wastewater treatment plant inland, somewhere near the west end of the county. It will also involve improvements to the county’s existing plants closer to the coast, including adding another layer of filtration and other cleansing steps, Mr. Yoder said. He said he expects construction for the outfall improvements to start in three to five years. Currently, he said, the county typically discharges 180 million gallons a day of treated sewage into the ocean – and sometimes 250 million gallons a day or more during peak flows – through two outfall pipes.

One pipe goes out from the Central District Wastewater Treatment Plant on Virginia Key in Biscayne Bay near downtown Miami and empties about three miles offshore, and the other pipe goes out from the North District Wastewater Treatment Plant and empties about two miles offshore, Mr. Yoder said. The central district plant was built in the 1950s and its outfall pipe was extended to its current length in the 1970s. The north district plant at Northeast 156th Street was built in the late 1970s, he said.

Before being discharged into the ocean, he said, the sewage entering the plants goes through a “biological treatment system” that removes about 90% of solids. The sewage also is disinfected with chlorine. The outfall pipes discharge into water about 190 feet deep offshore, where the outflow is swept up in the swift northern Gulf Stream current. “It’s a high volume of water that’s continuously moving,” he said. “It’s like the equivalent of eight Lake Eries going by the coast every day.”

There’s also the South District Wastewater Treatment Plant south of Cutler Bay, but treated sewage from that plant is not discharged offshore. Instead, he added, it’s discharged about 3,000 feet underground into “the boulder zone” amid the Florida saltwater aquifer. That doesn’t have affect drinking water, according to Mr. Yoder, because any saltwater from the aquifer that’s used for public consumption requires a high enough level of treatment anyway that other contaminants also are removed.

Meanwhile, the outfall plan calls for greatly increasing the amount of treated sewage that is reclaimed for reuse. A lot of the reuse, he said, will come from an agreement to send treated sewage to Florida Power & Light Co.’s enlarged and renovated Turkey Point nuclear plant for cooling its reactors.

 

Source: Miami Today

 

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Electric Bill Scam Targets South Florida Homeowners And Businesses

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A scam in which cons call people asking to collect “debt” for the electric bill has moved Miami-Dade police and Florida Power & Light to issue a warning to the public.

Police say there’s been an increase in the scam calls. Similar cases were reported in 2012, said police spokesman Alvaro Zabaleta. “They’ll call you, they’ll identify themselves as FPL employees and try to collect outstanding debt,” Zabaleta said.

The fraudulent callers claim that the victim’s electrical service will be discontinued unless they purchase a prepaid card for amounts ranging from $150 to $500. The scammers then ask for the account and PINs from those cards.

But it’s not only homeowners falling prey to the swindlers. “Lately they’ve been targeting businesses,” Zabaleta said.

Police are reviewing evidence and talking to witnesses, Zabaleta said, but their main focus is to get the word out about the scam. “We want the community to know. Don’t provide any information,” Zabaleta said.

Utility scammers also are hitting Key West customers. Three Key West businesses have reported being targeted by a telephone scam and one, Blossom’s Grocery, is out $1,300.

Keys Energy Services, the Key West-based electric company, is warning customers of a so-called phone spoofing scam. Spokesman Julio Torrado said customers have received phone calls that show up on caller ID as coming from the power company’s main phone number.

“Customers then hear an automated voice alert … to an electrical emergency within their home and the need for a crew to be dispatched,” the utility said. The automated system attempts to capture personal information that can jeopardize the identity of the resident.

Torrado said the Blossom’s incident happened Feb. 15. Faced with what it believed to be a power cutoff threat, store management paid $1,300, although Torrado said he didn’t know with what or to whom.

Miami Subs and Blackfin, a Duval Street restaurant, were also targeted. Miami Subs employee Sean Wright reported the attempted con to Key West Police Officer Thad Calvert on Feb. 11.

Wright said a caller identifying himself as a Keys Energy employee asked for $3,000 to avoid a service interruption and wanted payment by way of six $500 gift cards. Still on the phone with the apparent scammer, Wright called Keys Energy and was alerted to the issue.

If customers are unsure of the authenticity of a call and need to verify its legitimacy, they should hang up and call Keys Energy at 295-1000.

Keys Energy provides service to around 29,000 customers south of the Seven Mile Bridge. It’s overseen by a five-member elected board created in 1965 by the state Legislature.

FPL also urges customers to call the police if they get a suspicious call. Customer can also call the number at the bottom of their FPL bill and report the call to either the Florida Department of Agriculture and Consumer Services (800-435-7352) or the Financial Fraud Enforcement Task Force (stopfraud.gov).

“FPL will never call and ask for credit card info or take prepaid cards as payment. Also, FPL will never ask for any personal information from you unless you initiate the contact,” said FPL spokeswoman Heather Kirkendall.

Customers wary of whether a call or visit is legitimate, should call the utility for verification.

For further information and safety tips visit www.FPL.com/protect.

 

Source: Miami Herald

 

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Will Lease Taxes Soon Be A Thing Of The Past?

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The reduction and elimination of the tax on commercial leases continues to gain considerable support.

The Florida CCIM Chapter and active CCIMs , which represents more than 1,200 commercial real estate industry professionals, join the efforts of a number of industry groups and large associations including the 127,000 member Florida Realtors, the Miami Association of Realtors (more than 31,000 members), NAIOP, ICSC, and SIOR in support of the Governor’s 2014-2015 “It’s Your Money Tax Cut Budget,” which highlighted his commitment to eliminating $500 million in taxes and fees for the upcoming legislative session.

“The Florida CCIM Chapter is happy with Governor Scott’s initiative, as its members represent the leading commercial real estate brokers, lenders, developers and numerous other commercial real estate practitioners.  This proposed sales tax reduction will help to drive more companies to establish or expand their operations in Florida and promote community development and jobs,” commented Florida CCIM Chapter President Peter J. Barnett, CCIM.

Florida is the only state that imposes a state-wide sales tax on commercial leases.

A state tax of six percent (6%) is imposed on the total rent charged under the lease, however the Department of Revenue (DOR) has taken the position that any payment required to be paid as a condition of occupancy under a commercial lease is taxable as rent. This means that in addition to the base rent being taxed, “passed through expenses” including building insurance, common area maintenance, and ad valorem real estate taxes themselves are taxed (double taxed). In addition, individual counties and taxing authorities may impose additional taxes, such as Miami-Dade County, which charges one percent (1%) additional, for a total of seven percent (7%).

Florida Statute §212.031 addresses sales tax on leases and Florida’s DOR interprets the provisions in Fla Administrative Code Rule 12A-1.070.

It is argued that this additional tax places Florida at a competitive disadvantage when attracting new businesses to the state. Opponents contend that the tax forces landlords to charge more for rent than comparable facilities just across state lines. In addition, it increases their record keeping burdens as they become tax collectors for the state.

Governor Rick Scott announced on January 28th that his budget proposes reduction of the tax on commercial leases by one-half of a percentage point for a savings of approximately $104-million the first year. According to all research, the impact of this reduction would be $500-million gain in terms of jobs and economic activity.

Additionally, two bills filed for the 2014 Florida legislative session push for more and would begin a complete phase out of the tax.  SB 176 by Sen. Dorothy Hukill (R-Port Orange), Senate Finance and Tax Chairwoman, and HB 11 by Rep. Greg Steube (R-Bradenton) would lower the rate from 6 percent to 5 percent.

“With the support of the governor, these efforts are gaining considerable traction. Compelling cases have been made that the increased economic activity more than offsets the decreased collections,” said John Dohm, CCIM, SIOR, CFP. 

Dohm, a licensed real estate broker for more than 25 years, tirelessly analyses important issues affecting the commercial industry.

John currently serves on the board of the CCIM Miami District, is past president of the CCIM Broward Chapter and served for several years on the board of the Florida CCIM Chapter.

Dohm also served as President of the Realtors Commercial Alliance of MIAMI in 2012 and is one of fewer than 700 individuals in the world to hold both the CCIM and SIOR (Society of Industrial and Office Realtors) designations and the only one to have also been awarded the CFP (Certified Financial Planner) certification in addition to all major securities licenses.

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A CCIM (Certified Commercial Investment Member) is a recognized expert in the commercial and investment real estate industry. The CCIM lapel pin is earned after successfully completing a designation process that ensures CCIMs are proficient not only in theory, but also in practice. This elite corps of CCIMs includes brokers, leasing professionals, investment counselors, asset managers, appraisers, corporate real estate executives, property managers, developers, institutional investors, commercial lenders, attorneys, bankers, and other allied professionals. The mission of the Florida CCIM Chapter is to provide the highest quality of marketing and networking opportunities, services, and education that will enhance our members’ ability to conduct business successfully. For more information, please visit http://flccim.com/ or contact Florida CCIM Chapter President Peter J. Barnett, CCIM at 813.351.2791.

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Incandescent Bulb Phase-Out Myths Debunked

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The New Year brought big changes to the lighting industry.

The final step of the Energy Independence and Security Act took effect January 1, 2014, which means that incandescent 40- and 60-watt bulbs can no longer be manufactured. According to Osram Sylvania’s Socket Survey, only four out of ten Americans are aware of these changes.

Facility managers have dealt with light bulb phase-outs before with the 100-watt in 2012 and the 75-watt in 2013.
See tips for dealing with lighting phase outs.

According to Lowe’s, here are five things you need to know about the change:

1. You Can Keep Your Current Bulbs
According to the legislation, consumers can still use their existing incandescent light bulbs and retailers are allowed to sell bulbs they have on their shelves and in stock. Manufacturers are simply required to stop producing non-compliant products. Some specialty types of incandescent light bulbs, such as reflectors, three-way, appliance, and some decorative bulbs, are exceptions to the law and can still be manufactured.

2. You Won’t Notice A Major Difference
Halogen light bulbs are a popular pick by interior designers because of their crisp, white light and welcoming ambiance. For customers who love the look and feel of incandescent light bulbs, there is no need to worry. Manufacturers have developed halogen light bulbs that both meet the new efficiency standards and offer the characteristics of traditional bulbs. While these bulbs may cost more up front, they pay off in the long run by saving 28% in energy costs over the life of the product.

3. You Won’t Replace Your Bulb Until Your Baby Graduates From College
It’s a great time to upgrade to LED light bulbs as prices have steadily decreased while performance and appearance have improved. According to Lowe’s manufacturers, an average LED bulb will last more than 22 years (based on three hours of usage per day), and over its lifetime will cost about $30 to operate, whereas an incandescent bulb will cost $165 over the same period of time. Lowe’s carries a wide variety of LED bulbs for almost every household application with prices starting under $10.

4. These Aren’t The CFLs Of Years Past
CFLs, one of the most popular replacements for incandescent bulbs, have changed dramatically with recent technological improvements. Manufacturers have addressed common customer feedback so that these bulbs now create better light output and turn on faster when you flip a switch. Once considered a safety concern because of mercury content, today’s CFLs contain less mercury than a common household thermometer.

5. There’s A Full Light Spectrum For Different Applications
Light bulbs are available in a variety of color temperatures and should be selected based on application and personal preference.

 

Source: Buildings.com

 

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New Office Designs, Amenities Redefining The Meaning Of “Class A”

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By the numbers, office development still remains a shadow of its former self.

But, the few corporate and multi-tenant buildings that are coming out of the ground are raising the bar on class-A standards.

These new buildings—which some have dubbed “class-AA”—are packed with amenities and features that aim to meet the needs of a changing workforce and shifting workplace trends. “The market in general is showing that tenants have a growing awareness of how the office environment can be used as a means to draw and retain talented employees,” says Sabrina Kanner, senior vice president, design and construction, U.S. commercial operations at Brookfield Office Properties in New York City.

As such, the task at hand for developers these days is more than just building a generic stand-alone office tower. The emphasis is on creating a vibrant community that combine a variety of amenities both inside and out such as park spaces, retail, restaurants, fitness centers and rooftop gardens. Office buildings need to embrace the new urban paradigm that fits the “live/work/play lifestyle” of today’s workers, adds Kanner.

Case in point is the first phase of Brookfield Place Calgary in the heart of downtown Calgary. Brookfield broke ground on the 1.4-million-sq.-ft. east tower in October. The building houses a number of amenities including a Winter Garden. The 27,000-sq.-ft. indoor park-like pavilion will host a variety of events and programs such as art exhibits, speakers and concerts. The intent is to have those events as an added offering to building tenants at lunchtime or after work. It also pulls in other neighboring office workers and residents to create more vibrancy and activity for the building’s retail tenants, says Kanner.

Real estate has become a big recruiting tool for companies today. “That is really driving tenants to step up into these more state-of-the-art buildings,” says Philip Croker, director of development for Hines in Houston.

Hines is in the process of putting the finishing touches on the design for 609 Main at Texas in Downtown Houston. Site prep work on the 1 million-sq.-ft. building began in early November. The 47-story commercial office building will sit next to the 46-story BG Group Place that was completed in 2011. Both buildings were designed by New Haven, Conn.-based Pickard Chilton. Even though the two projects are a scant few years apart, there are distinct design changes being made to 609 Main.

The design on BG Group Place was done in an era when it was still early in the game when new workplace trends were emerging, notes Croker. For example, the 7,500-sq.-ft. gym at 609 Main is three times larger than the gym at the neighboring BG Group Place. Fitness centers that for years have been seen as a scarcely used token amenity are in high demand and are getting a big makeover. Not only do these gyms feature state-of-the-art exercise equipment, but they have added features such as yoga and cycling studios, full-size basketball courts and virtual golf. “That is probably the number one amenity that people are asking for is the ability to get out of the office and go do something to break up the day,” says Croker.

Tenants also are asking for conference centers that are not in their own space, but part of the base building. Hines will build a 7,000 to 8,000-sq.-ft. conference center at 609 Main that overlooks Main Street. In addition, Hines plans to transform the traditional formal lobby space into a more informal meeting space. Employees are asking for spaces where they can come down from their own floor and be able to collaborate, relax or just hang out, notes Croker. So, rather than the lobby just being a place where people pass through to go to the elevators, it will be a more vibrant common area space, he adds.

Sustainable building and LEED certification is a standard component to the next generation of office buildings. But, tenants view that as more than a requirement that they need to check off the list. Tenants want natural light and fresh air, and they recognize that those are important qualities for workers and can be a real asset and not just a marketing gimmick, adds Kanner.

Modern designs clearly reflect the shift to a higher density workplace and different work styles. New office buildings have to include all of the infrastructure that supports that shift to higher density space in terms basic infrastructure such as floor loading, restrooms and HVAC systems, as well as space that allows for more collaboration. “The next generation of employees feed on proximity to each other,” says Kanner. It is a very collaborative work model that the office space now has to support.”

 

Source:  NREI

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