To find new opportunities in 2003, real estate developers will have to look beyond mainstream office, industrial, retail, and hotel development to markets with long-term growth potential.
“A slow-growing economy, global uncertainty, a weak job market, and corporate cost-cutting all point to a year of little or no growth in traditional real estate markets,” says Stan Ross, chairman of the board of the USC Lusk Center for Real Estate, Los Angeles.
Development opportunities include:
Public/private developer partnerships and local, state, and federal agencies in the rehabilitation of civic centers, administrative buildings, libraries, airports, stadiums and arenas, convention centers, cultural centers, jails, and prisons.
Remodeling and expansion of educational institutions from primary schools to universities.
Retirement housing, vacation homes, and senior living and healthcare facilities for an aging population.
Outsourcing services to corporations that are transferring more of their functions, including facilities management, to third-party providers.
NAI Report Reveals Mixed Indicators in Economy’s Long Glide Path
The NAI Planning Guide is an annual publication that surveys the current state of the commercial real estate industry. NAI (www.naidirect.com) is a global real estate service provider with more than 230 offices covering 300 markets in the United States, Canada, Latin America and the Caribbean, Europe, and Asia Pacific.
NAI members reported mixed signals in 2003, as the markets took a “wait-and-see” attitude in light of a volatile world economic outlook.
In the United States, nearly all property types have seen a jump in vacancy rates over the past year. Only retail power centers and regional malls saw tightened vacancy.
The mixed signals in office space and rates over the year included huge blocks of space and sublease space coming onto the market as a result of the WorldCom, Enron, Global Crossing, and Adelphia bankruptcies, as well as the implosion of Arthur Andersen.
Canada made a positive report and in Asia Pacific, China is the economic leader, with an impressive 7.5-percent growth rate in the past year. Hong Kong, however, has seen a 35-percent decline in office rents, with occupancy dropping from 85 percent to 70 percent in 2002.
European markets also felt the aftershocks from the negative factors that affected the U.S. economy, and now are anxiously looking at the possibility of war in the Middle East. The strength of the Euro, however, somewhat buffered what was a turbulent year.
Uncertain global economic conditions have affected the European industrial and retail markets, but key retail markets have seen a slow improvement in occupancy.
Survey: Leadership Programs on the Rise
Hiring may be down as the economy slows, but leading architecture, engineering, and construction firms say they’re spending more to train their senior executives.
That’s the word from a leadership survey by New Orleans-based Construction Executive, a career advancement and executive development service company for executives employed in the A/E/C industry.
Spending on leadership development programs and “human capital services” – such as executive retention, succession planning, and executive coaching – increased six percent in the past 12 months.
Contractors continued through 2002 to focus on quality vs. quantity in job hires, with talent retention and leadership development the dominant themes throughout the year. This upward trend is expected to continue in 2003.
Nashville Symphony Unveils Concert Hall Design
The Nashville Symphony unveiled the design for the world-class concert hall it will begin building in downtown Nashville this year and which will open in 2006.
The neo-classical design, clad in limestone, features a 180-foot-long colonnade on the building’s west front facing Nashville’s Gateway Park, as well as windows, which allow natural light into the concert hall – a unique feature in North America.
Sustainability in the United States Concerns a Select Few
A new report published by the RICS Foundation, London, claims that current attempts to make U.S. cities more sustainable are insufficient and fragmented. The study, “Painting the Town Green,” analyzes the use of urban sustainability indicators to monitor progress and drive change.
The author, architect ,and urban planner, Anindita Mitra, concludes that while interest in sustainability indicators is growing rapidly throughout the United States, their use to drive policy remains the concern of a select few.
LCA Publishes White Paper Series
The Lighting Controls Association (LCA), administered by the National Electrical Manufacturers Association (NEMA), Rosslyn, VA, has published a series of white papers at its website (www.AboutLightingControls.org), which address a range of lighting and energy management issues.
These are free to building owners and managers, specifiers, contractors, distributors, and other building professionals interested in energy efficiency and green design.
New Management Team for Forest Stewardship Council U.S.
Forest Stewardship Council U.S. (FSC-U.S.), Washington, D.C., recently announced the appointment of two new vice presidents: Edward “Ned” Daly of Takoma Park, MD, as FSC-U.S. vice president of operations, and Dr. Michael Washburn of New Haven, CT, as vice president of forestry and marketing.
“Daly and Washburn will help the FSC expand its membership base, diversify and expand markets for certified wood, and increase [the] number of certified acres,” says Roger Dower, FSC-U.S. president.
The FSC is the global and national leader in the independent certification of forests.
NIST (National Institute of Standards and Technology) News:
Expanded BEES Software Helps Builders Go Green. An updated, expanded version (3.0) of the popular BEES (Building for Environmental and Economic Sustainability) software, designed by NIST to help the construction industry select cost-effective, environmentally friendly products, is now available free of charge at (www.bfrl.nist.gov/oae/software/bees.html). BEES uses the life-cycle assessment approach specified in the ISO 14040 series of environmental management standards to measure the environmental performance of almost 200 building products. All stages of the life of a product are considered – from raw material acquisition to manufacture, transportation, installation, and use, and, ultimately, to recycling and waste management. Unlike version 2.0, BEES 3.0 evaluates not only generic products (including wall finishes, wall and roof sheathing, insulation, and roof and floor coverings) but also evaluates about 80 brand-specific products provided by manufacturers participating in the BEES Please program.
WTC Investigation Off to Solid Start. Officials at the National Institute of Standards and Technology (NIST) report solid progress in the first three months of the agency’s federal building and fire-safety investigation into the World Trade Center (WTC) disaster of Sept. 11, 2001.
NIST Director Arden Bement Jr. urges the public and the media to help the investigation team acquire more photographs and videotapes that could help to better document the initial damage.
Study Shows Industries Taking a Big STEP to Savings. A number of U.S. industries already are saving millions of dollars a year, and could save a total of more than $90 million annually, by using a suite of international standards that reduce interoperability problems encountered in the exchange of digital product information, according to a new report from the NIST. The report assessed the economic impact of the STandard for Exchange of Product (STEP) model data, which provides a neutral format that enables the exchange of data between proprietary systems. Data from industry surveys and case studies were used to estimate that, within the industries studied, full implementation of STEP could save $928 million (in 2001 dollars) per year. Much of the savings is due to the avoidance of labor costs associated with the use and support of redundant software applications.
“The Buzz” in this month’s issue was compiled and edited by Christy Dendurent, Contributing Writer