Key Points of the Los Angeles Private Sector Green Building Ordinance
May 8, 2008 on 1:43 pm | In Fascinating Information, Fascinating Office Real Estate Information, Green, Office Fodder, PROPERTY MAINTENANCE, Statistics, Trends, Uncategorized, Winning Properties | 4 CommentsKey Points of the Los Angeles Private Sector Green Building Ordinance:
The Los Angeles Green Building ordinance was devised by the Mayor Antonio Villarigosa’s Office in partnership with City Council, the ordinance will create a series of requirements and incentives for developers to meet the US Green Building Council’s Energy and Design (LEED) standards – the country’s strictest environmental building standards.
“Our City is growing fast and growing up, and we’re holding the private sector accountable to their commitment to be friends to our environment,” Mayor Villarigosa declared. “Already the City of Los Angeles has the largest, most aggressive municipal green building plan of any large city in America. Now it’s time for green building to go private.”
* Require that all new projects greater than 50 units or 50,000 square feet show compliance with the LEED Certified level. Expedite processing through all departments, if LEED Silver designation is met.
* Initiate an ongoing review of city codes to ease use of environmentally sound and superior materials and processes.
* Create a cross-departmental Sustainability Team to review and revise green building policies and specific projects. They will meet weekly so that the development community can enjoy ongoing interaction with City staff.
* Direct City General Managers and department and agency heads (namely Planning, Building and Safety, Public Works, Water and Power, Transportation, and CRA) to train and certify their staff in green building methods and policies and/or as LEED Accredited Professionals. This training should be ongoing and appear in each departmental annual budget.
* Work with the Board of DWP Commissioners to continue to add DWP financial incentives for projects that meet green building standards.
* Create and confer the Mayor’s Annual Award of Excellence in Sustainable Design & Construction to recognize exemplary efforts by individuals and companies in the private sector.
http://www.globalgreen.org/press/releases/2008_04_23_la_earthday.htm
World’s Up-And-Coming Real Estate Markets
May 4, 2008 on 7:29 pm | In Fascinating Information, Fascinating Office Real Estate Information, Funny...Money, Investment Opportunities, New Developments, Statistics, Trends, Uncategorized, Winning Properties | 5 CommentsForbes can always find the silver line - As credit tightens around the globe causing a softening of many world markets, Forbes recently took a look at locations where real estate markets are poised for growth–not the explosive growth where prices frequently drop as quickly as they rose, but longer term growth likely to occur over the next five years, which typically makes for safer investments. To identify these emerging markets, Forbes looked at economic expansion, inflation rates, strength of individual property rights and access to lending in emerging markets. Among the top 10 real estate markets identified for growth are Tel Aviv, Israel, which after a 4% drop in prices in 2006, saw a modest 2% growth rate in 2007. This growth rate is expected to continue given the country’s robust 5.1% 2007 GDP growth and a 3.8% projected growth for 2008 according to the International Monetary Fund. Malaysian capital Kuala Lumpur was also named a top growth market due to strong economic growth coupled with an inflation rate and consumer prices among the lowest in the region. Home prices in some spots in Kuala Lumpur are going for 50% to 70% above initial asking price, according to Knight Frank, with builders rushing to keep up with demand. The list of Forbes’ up and coming markets was compiled based on data and from the World Economic Forum’s 2007 “Global Competitiveness Report” and the World Bank Group’s 2007 “Doing Business” study. Other markets on Forbes list include Colombia, Czech Republic, Morocco, South Africa, Jordan, Thailand, Chile and Peru. Read more about Forbes list and methodology.
Excerpted from:
http://www.forbes.com/2008/04/01/housing-global-property-forbeslife-cx_mw_0402realestate.html
Office Property Sales Update
April 30, 2008 on 5:42 pm | In Fascinating Information, Fascinating Office Real Estate Information, Funny...Money, Investment Opportunities, Office Fodder, Statistics, Uncategorized | 6 Comments
“We’re seeing no significant changes in vacancy rates or rent growth, so the fundamentals in commercial real estate still seem to be respectable,” notes NAR Chief Economist Lawrence Yun. “Under normal circumstances, near-full occupancy coupled with positive rent growth would be of strong interest to investors, but we’re not seeing that. The credit crunch has filtered into the commercial real estate market.”
There is a lag factor in the current office market to backfill space by tenants who moved into newly constructed space. At the same time, concerns about the overall economy are causing some tenants to put expansion or relocation plans on hold. These present a challenge to timely and cost-effectively lease space in older office buildings.
Since the level of new supply will be greater this year, office vacancies are expected to rise to 13.3 percent in the fourth quarter from 12.5 percent in the last quarter of 2007. Annual rent growth in the office sector is forecast at 3.5 percent in 2008, following an 8.0 percent gain last year.
Estimates for the first quarter show areas with the lowest office vacancies include New York City; Honolulu; Long Island, N.Y.; and San Francisco, all with vacancy rates of 9.4 percent or less.
Net absorption of office space in 57 markets tracked, which includes the leasing of new space coming on the market as well as space in existing properties, should total 38.5 million square feet in 2008, down from 57.3 million last year.
Office building transaction volume in 2007 totaled a record $211.0 billion, compared with $133.5 billion for 2006. Equity funds accounted for 40 percent of office investment last year. Foreign investors purchased a record $17.7 billion in office buildings last year.
http://www.realtor.org/press_room/news_releases/2008/fundamentals+holding+in+commercial+real+estate
LOS ANGELES OFFICE MARKET SUFFERING FROM CREDIT CRUNCH
April 27, 2008 on 10:01 am | In Fascinating Office Real Estate Information, New Developments, Office Fodder, Trends, Uncategorized | 4 CommentsThe credit crunch has slowed the Los Angeles office-investment market, according to Commercial Real Estate Direct. Since the last summer, L.A.-area buyers and sellers have become increasingly timid. Buyers have become more conservative shoppers as the availability of debt has tightened, while sellers have become unwilling to reduce their prices. The few landlords that have placed properties on the sales block have seen investors offer prices far lower than they had expected. So far this year, $1.8 billion of sales transactions were recorded, according to Real Capital Analytics.
GREEN OFFICE BUILDINGS ARE EARNING BIGGER GREEN $$$$
April 23, 2008 on 6:49 pm | In Fascinating Office Real Estate Information, Green, New Developments, Office Fodder, PROPERTY MAINTENANCE, Statistics, Trends, Uncategorized | 12 CommentsGREEN OFFICE BUILDINGS ARE EARNING BIGGER GREEN $$$$
Studies and Awards are praising green commercial buildings for creating higher occupancy rates, stronger rents and higher sales prices.
The study, performed by CoStar Group, concluded that sustainable “green” buildings consistently outperform their non-green peer assets in key areas such as occupancy, sale price and rental rates. The awards for energy efficiency were national honors handed out by the Department of Energy and the Environmental Protection Agency.
The sum total of the information reinforce the socially popular trend and the invest opportunity in green buildings.
According to the CoStar study, nationally, LEED buildings command rent premiums of $11.33 per square foot over their non-LEED peers and have 4.1% higher occupancy. Rental rates in Energy Star buildings represent a $2.40 per square foot premium over comparable non-Energy Star buildings and have 3.6% higher occupancy.
“The information we’ve discovered is very compelling. Like all good science, we discovered it by accident,” noted Andrew Florance, president and CEO of CoStar. “Green buildings are clearly achieving higher rents and higher occupancy, they have lower operating costs, and they’re achieving higher sale prices.”
Gary Jay Saulson, director of corporate real estate for PNC Financial Services Group in Pittsburgh, discussed the company’s decision to incorporate green building techniques in the PNC Firstside Center, which has a silver LEED rating. The 647,000-square-foot building, completed in 2001, includes raised flooring that makes the workspace flexible to reconfigure. The carpet contains 72 percent recycled material, and the material for hard floor surfaces is 100 percent recycled, made from sawdust and soda bottles. The decision to build green entailed substantial material and design changes from the original plans, which were for conventional construction, but Saulson said he was “determined to figure out how to do it, not how not to do it.”
The daylit interiors afford 90 percent of the occupants with an outdoor view. The urban infill site is adjacent to a bike trail and a light rail transit stop and has helped to revitalize the downtown area. “Why put employees in a black box when you can put them in an environment where they want to go to work? At PNC, our sick days are down…The (building) environment has taken over for them and productivity is up,” Saulson said. “Going green has been a way for us to differentiate our office buildings from others.”
The study also noted that Energy Star buildings are selling for an average of $61 per square foot more than traditional buildings, peers, while LEED buildings command a remarkable $171 more per square foot.
“We think of Energy Star and LEED in concert with each other,” says Bob Ratliffe, an executive vice president of portfolio management with Kennedy Associates Real Estate Counsel LP, which also features development operations. “LEED and Energy Star come up in every investment we make, they come up in the investment committee, they come up in asset management committee meetings. Both are part of our fabric.”
The trend is showing an increased desire of both property investors and tenants for buildings that have earned either LEEDR certification or the Energy StarR label. These numbers may light a fire under the investment strategies of institutional investors.
“This past winter, I replaced my roof with an energy efficient white roof. It’s supposed to bring my cooling costs down by 27%. The summer is coming, so we’ll see how well it works notes office building owner Elvin Moon of E.W. Moon Inc., talking about his building at 3619 Motor Ave. in Los Angeles. (http://www.3619motorave.jodisummers.com/) “In the meantime, I’ve been offered 25% more for the building – and I’ve owned the building less than a year.”
Florance conducted the study with Jay Spivey, CoStar’s director of analytics, and Dr. Norm Miller of the Burnham-Moores Center for Real Estate at the University of San Diego. The group analyzed more than 1,300 LEED and Energy Star buildings representing about 351 million square feet in CoStar’s commercial property database of roughly 44 billion square feet, and assessed those buildings against non-green properties with similar size, location, class, tenancy and year-built characteristics to generate the results.
“We wanted to take each and every one of these green buildings in our database and compare them to the buildings they directly compete with in the submarket,” Florance said at the seminar.
Note that green premiums appear to be constricted by the supply of green buildings, which account for just a fraction of the total U.S. building stock (less than 1 percent of space in CoStar’s database.) The study indicates that while the number of LEED-certified and Energy Star buildings continues to grow, the supply has not kept pace with demand.
LEED, which stands for Leadership in Energy and Environmental Design, indicates a property’s overall sustainability by awarding points for just about any and all sustainable features, from bike racks and rainwater collection and reuse systems, to energy-efficient lighting and low-flow plumbing fixtures. Programs are tailored for new buildings, existing buildings and tenant build-outs, and awards different tiers of certification such as Silver, Gold or Platinum, the highest.
Mark Bennett, a senior attorney with law firm Miller Canfield who specializes in green building and climate change issues observes, “LEED certification is a component in the definition of a Class A office building…If you’re building today without LEED, you’re building in obsolescence.”
The EPA’s Energy Star program, is an energy-benchmarking tool and a flag for the nation’s most energy-efficient properties. The program targets simple, cost-effective strategies for improving energy efficiency in buildings – things like installing energy efficient windows, turning off computers at night and adding motion sensors to control lighting.
NOTEWORTHY FACTOID: Buildings that have earned the Energy Star label use an average of almost 40% less energy than average buildings, and emit 35% less carbon.
According to EPA, as many as 500 buildings out of the approximately 4,100 commercial buildings that have earned Energy Star use a full 50% less energy than average buildings. Many of the efficiency practices - such as upgrading light bulbs or office equipment - pay for themselves in energy cost savings.
Couple with a minimum net outlay and the premium price a seller can command for an Energy Star building, are a clear demonstration of the overall impact of energy efficiency on property value, deduces Stuart Brodsky, national program manager for the Commercial Properties division of Energy Star.
“The business case for energy efficiency is indisputable,” Brodsky asserts. “The business case is so strong that the financial results can be applied to asset value, through increased NOI [net operating income], or leveraged to pursue other aspects of green buildings that do not show as strong of a financial rate of return.”
To date, almost 8 billion square feet of U.S. property has been benchmarked through Energy Star.
Expect the green trend to continue, as everyone is promoting it. Last week, the Department of Energy and the EPA released the “Profiles in Leadership, 2008 Energy Star Award Winners,” – awards went to 74 organizations across many sectors of the U.S. economy, including schools, hospitals, real estate, manufacturing, and chemicals, were honored for their efforts to reduce greenhouse gas emissions. The winners were selected from more than 12,000 organizations that partner in the Energy Star program.
Among real-estate related companies winning awards were Winton/Flair Custom Homes, which was recognized with the Excellence in Energy Star promotion award. This custom home builder focus in El Paso, Texas, and southern New Mexico and builds 100% of its homes to Energy Star standards. In 2007, the builder constructed 189 Energy Star-qualified homes, bringing the company total to nearly 600.
The Nashville Area Habitat for Humanity was honored with the Award for Excellence in Energy Efficient Affordable Housing, having promoted the use of Energy Star products and building practices since 2006.
The Energy Star and LEED programs work well together. “They’re complementary,” offers Christian Gunter, a LEED-Accredited Professional, who points out that LEED-EB buildings must achieve a certain Energy Star score as a prerequisite for certification.
“In a recessionary environment there’s more than one way to cut costs, it’s not just cutting employees.” Ratliffe concludes. Look to energy and operational efficiencies emphasized under Energy Star and LEED-EB to cut costs in a transitional environment.
Jodi Summers
Sotheby’s International Realty Santa Monica
jodi@jodisummers.com
http://www.SoCalInvestmentRealEstate.com
http://www.SoCalIndustrialRealEstateBlog.com
http://www.SoCalOfficeRealEstateBlog.com
http://www.SoCalGreenRealEstateBlog.com
http://www.SantaMonicaLandmarks.com
http://www.SantaMonicaPropertyBlog.com
Original articles:
http://www.costar.com/News/Article.aspx?id=D968F1E0DCF73712B03A099E0E99C679&ref=100
March 26, 2008
CoStar Study Finds Energy Star, LEED Bldgs. Outperform Peers Demand in Marketplace for Sustainability Creates Higher Occupancy Rates, Stronger Rents and Sale Prices in ‘Green’ Buildings
Andrew C. Burr
http://www.builderonline.com/green-building/energy-star-awards.aspx
April 4, 2008
More Than 70 Organizations Honored by Energy Star
Robb Crocker
http://www.inman.com/news/2004/04/1/planners-push-green-real-estate-development
Planners push ‘green’ real estate development
Roundtable hints at lower electricity costs, higher property values
April 26, 2004
Inman News
Southern California Major Business Expansion Activity Declined in 2007; Challenging Year Ahead in 2008
April 16, 2008 on 9:06 pm | In Fascinating Office Real Estate Information, New Developments, Office Fodder, Trends, Uncategorized | 4 Comments
Southern California Major Business Expansion Activity Declined in 2007; Challenging Year Ahead in 2008
According to the Los Angeles County Economic Development Corporation (LAEDC), the number of major business expansions in Southern California during 2007 declined by 17.5 percent to 203 projects. This result was not unexpected given the economic uncertainties that developed over the course of 2007. In addition, conditions in the region’s industrial and office markets also had an impact. The press release and full report is now available at www.LAEDC.org.
http://laedc.org/eedge/archive/2008/ee080407.html#1
10 REASONS IT MAKES SENSE TO BUILD GREEN
April 10, 2008 on 9:54 pm | In Fascinating Information, Fascinating Office Real Estate Information, Green, Investment Opportunities, New Developments, Office Fodder, PROPERTY MAINTENANCE, Uncategorized, Winning Properties | 6 Comments10 REASONS IT MAKES SENSE TO BUILD GREEN
The Urban Land Institute and the U.S. Green Building Council offer 10 reasons that green development makes smart business sense:
1) Upfront costs can be recovered 2) Integrated design lowers operating costs
3) Better buildings mean better employee productivity 4) Green technology provides healthier indoor air
5) Healthier buildings reduce owner liability 6) Tenants’ costs can be lowered
7) Property values will rise 
Public and some private financial incentives are available
9) Recognition as a good community steward builds public relations and 10) Using best practices yields more predictable results.
The Urban Land Institute is a nonprofit education and research institute whose more than 20,000 members represent all aspects of land use and development disciplines.
The ULI uses a variety of media to clear up misinformation and help green and sustainable development become a standard practice. 
CENSUS BUREAU STATISTICS – MORE PEOPLE IN SOUTHERN CALIFORNIA
April 6, 2008 on 10:43 pm | In Fascinating Information, Statistics, Trends, Uncategorized | 2 CommentsCENSUS BUREAU STATISTICS – MORE PEOPLE IN SOUTHERN CALIFORNIA 
This just in - U.S. Census Bureau county population estimates for July 2007. According to the Bureau, Riverside County was Southern California’s fasted growing area between 2006 and 2007. Its population rose by 3.3% or 66,365 persons to a total of 2,073,571 residents. San Bernardino County’s population increased by 1.0% or by 20,295 persons to a July 1, 2007 count of 2,007,800 residents. San Diego County was right behind with a 0.9% population increase, or 26,497 persons, to a total of 2,974,859 residents.
Ventura County recorded a 0.5% population increase between 2006 and 2007, up by 4,359 persons to a total of 798,364 residents. However, Los Angeles County saw its population edge down by 2,354 persons (no change in percentage terms), to 9,878,554 residents.
The California Department of Finance (DoF) came out with their July 1, 2007 population estimates in mid-December 2007, and comparisons with the Census estimates are interesting. The two agencies were fairly close on the head count in Riverside County, with the Census Bureau placing the population at 2,073,571 people, while the DoF estimated 2,070,315 residents. The 2006-2007 numerical gains were close as well, Census reporting a gain of 66,365 persons while DoF counted 66,141 new residents.
However, there were significant differences for the other five counties, with the DoF counting more people than the Census Bureau. The best example was Los Angeles County, where the DoF estimated there were 10,294,280 residents, and the 2006-2007 population gain at 46,608 people.
Info courtesy of Jack Kyser + LAEDC.org
http://laedc.org/eedge/index.html#4
COSTAR NOTES A DOWNWARD TREND IN OFFICE OCCUPANCY
March 28, 2008 on 10:17 pm | In Fascinating Information, Fascinating Office Real Estate Information, New Developments, Office Fodder, Statistics, Trends, Uncategorized | 11 CommentsLEASING TRENDS SLOWING THROUGHOUT THE COUNTRY
The economy is slowing. Job growth is slowing. There is more office space available. According to an early quarterly analysis of CoStar Group Inc., nationally, net absorption of office space dipped into negative territory in January and February with tenants giving back about 4.5 million square feet of office space.
CoStar Group, Inc., is the number one provider of commercial real estate research and information services for property investors and sales professionals in the United States and United Kingdom notes that while March deals are still to be reported, current economic and leasing trends are pointing toward the negative trend continuing. The economy has lost jobs for two months in a row and CoStar data shows that the amount of office space tenants are putting on the market for sublease has started to increase. Historically, when sublet vacancies start to increase, the actual vacancy also increases.
According to CoStar Group analysis, the amount of office space listed for sublease has gone up more than 2 million square feet since the start of the year. That would be the largest quarterly increase in six years. The contraction of office space is widespread across the country and the market has not seen negative net absorption since the second quarter of 2003.
Of 62 office markets analyzed, CoStar is showing that more than half (35) were showing negative net absorption. The list of cities includes major markets such as New York, Northern New Jersey, Los Angeles, Orange County, Chicago, Washington and Detroit. Growth could be found in Boston, Dallas/Fort Worth, Philadelphia and Westchester/Southern Connecticut. These areas showed net absorption of 500,000 square feet or more so far this year.
The number of layoffs in the United States in January, the most recent month for which data is available, increased to 144,111 workers. That was the fifth-straight monthly increase.
“There is substantial evidence that the problems of unemployment are at least as bad now as they were at the beginning of the economic slowdown of the early 1990s or the early 2000s, both recessions when extended benefits were enacted,” Rebecca M. Blank, the Henry Carter Adams Professor of Public Policy and Professor of Economics, University of Michigan.
“Recent months have shown a marked slowdown in employment growth,” Blank said. “From January 2006 through January 2007, employment grew by 2%. Over this past year, from January 2007 through January 2008, employment grew only 0.2%. The number of people employed has actually declined in a few recent months.”
The semi-annual Manpower Employment Outlook Survey for the United States released this week shows the weakest employment prospects since the first quarter of 2004.
According to seasonally adjusted survey results, employers in nine of the 10 industry sectors surveyed expect the hiring pace to remain stable or decline during the second quarter. Only transportation/public utilities employers anticipated improved conditions for job seekers in the coming quarter.
For the second quarter, mining, construction, durable and non-durable goods manufacturing, wholesale/retail trade and public administration employers foresee a decrease in hiring pace. Hiring is expected to remain relatively stable in the finance/insurance/real estate, services and education sectors.
Employers in the West anticipate a considerable decrease in hiring pace while Midwest employers anticipate a moderate decrease. Employers in the Northeast and South were predicting hiring conditions to remain about the same as they are currently.
This story was initiated by a story in CoStar from Mark Heschmeyer.
3760 MOTOR AVE, LOS ANGELES, CA 90034 ~ WINNING PALMS OFFICE BUILDING FOR SALE
March 20, 2008 on 5:03 pm | In Fascinating Office Real Estate Information, Investment Opportunities, New Developments, Office Fodder, Uncategorized, Winning Properties | 9 CommentsIf you know someone who is looking for a fine, centrally-located office building, well then check out…
3760 MOTOR AVE, LOS ANGELES, CA 90034
WINNING PALMS OFFICE BUILDING FOR SALE ~ USE IT OR LEASE IT ~ Currently bringing in $297,570 annually.
Offered at $3,900,000
Please email jodi@jodisummers.com for an offering summary.
Property Use Type: Office
Can be Vacant/Owner-User or Tenant Occupied.
Primary Type: Office Building
Building Size: 9,836 SF
Building Class: B
Lot Size: 7,265 SF
Price: $3,900,000
Price/SF: $396.50
Year Built: 1989
Floors 2 + Parking garage
Currently bringing in $297,570 annually
http://www.3760motorave.jodisummers.com/
PROPERTY DESCRIPTION
Designed for an owner looking to maximize their return on investment. Brilliantly maintained, 2-story office building with flexible leases, centrally located on Motor Avenue. Long quiet hallways open into individual offices + junior suites. Productive environment, with lots of privacy. Conference room on each floor. All utilities are on timers. 23 parking spaces - 21 enclosed. Winning building. 
Successful location - walk to lunch + amenities. Use it or lease it.
Let us know how we can move forward together in meeting your real estate goals - jodi@jodisummers.com.
Our business thrives on referrals. We can always make time for you, your friends and your family when it comes to your real estate needs.
best,
Jodi Summers
Sotheby’s International Realty
jodi@jodisummers.com
www.SoCalInvestmentRealEstate.com
www.SoCalIndustrialRealEstateBlog.com
www.SoCalOfficeRealEstateBlog.com
www.SoCalGreenRealEstateBlog.com
www.SantaMonicaLandmarks.com
www.SantaMonicaPropertyBlog.com
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Nature does nothing uselessly. - Aristotle
