The Los Angeles office real estate market is still unimpressive, but, believe it or not, we’ve got it better than most, thanks to our focus on green and technology.
“The energy and the tech-driven markets are the clear standouts right now. It has become a reoccurring theme that markets in Texas and California are leading the nation in most demand and rent growth metrics,” supports Kevin Thorpe, Cassidy Turley’s chief economist.
While San Francisco led the country in rent growth compared to a year-ago, Los Angeles ranked in the top 10 markets, along with San Jose, Seattle, Austin, Denver, Miami, Orlando and Raleigh, NC. Overall, the West region led the way with the largest amount of new net demand, followed by the South, then the Midwest and the Northeast, respectively. Nationwide, nearly one third of markets reporting an uptick in sales.
“We are at a point where there is healthy job creation, but over 50% of the jobs created in recent months using office space were temp jobs,” shares Thorpe. “These jobs don’t move the needle immediately for the office sector, but they do set the stage for much stronger demand numbers down the road.”
Export statistics note that U.S. office rents hit bottom at the end of 2010. But given that there are still high vacancy levels, lease rates are not expected to increase anytime soon. It’s anticipated that office asking will increase by approximately 1% this year.
“Overall, the first quarter presented a mixed bag of results and expectations for the rest of the year,” notes John Sikaitis, senior vice president of research at Jones Lang LaSalle. “While the recovery slowed during the quarter, it remains intact.”
Technology expansion and startup activity gained momentum in almost every market with prospects for growth. Additionally, energy-heavy markets posted some of the largest leases and witnessed sales momentum and speculative new construction.
“Looking ahead to the remainder of 2012, markets will continue to recover, and in some cases contract, at different rates of speed,” observes Sikaitis. “Overall rents across most markets will grow, but at slow and measured paces unless some significant cushion of technology or energy pockets exist.”
We evolve and we learn. When it comes to building efficiency, we are advancing at warp speed. The Department of Energy has revealed that buildings meeting the new 2010 energy efficiency standard will conserve 18.5% more energy than structures using the previous 2007 DOE standard. It’s like making the jump to hyperspace.
The DOE did some pretty serious study to come up with the new codes. For its findings, DOE simulated 16 representative building types in 15 U.S. climate locations. In addition, they analyzed the energy codes published by the American National Standards Institute/American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) and the Illuminating Engineering Society of North America.
The evolved 2010 standard covers a wide spectrum of the energy-related components and systems in buildings ranging from simple storage units to complex energy usage locations like hospitals and laboratories. The size of the structures also ranged from under 1,000 square feet to the largest buildings in the world.
States are expected to review Standard 90.1, Energy Standard for Buildings and update their building code to meet or exceed the energy efficiency of the new standard within two years. Certification statements by the states are due October 18, 2013.
California requires our state-developed commercial code the 2008 Building Energy Efficiency Standards, comprising Title 24, Parts 1 and 6, of the California Code of Regulations.
The DOE boasts that the newer version of the standard contains 19 positive impacts on energy efficiency. Among the modifications are new requirements for daylighting controls under skylights; increased use of heat recovery; cool roofs in hot climates; skylights and daylighting in some building types; reduced ventilation energy; supply air temperature reset for non-peak conditions; efficiency requirements for data centers; control of exterior lighting; and occupancy sensors for many specific applications.
Over a 20-year span, green buildings can $53 to $71 per square foot back on investment. LEED and Energy Star certified buildings achieve significantly higher rents, sale prices and occupancy rates as well as lower capitalization rates potentially reflecting lower investment risk…and green buildings make the world a better place.
We all need to live greener. Here are some innovative, inexpensive approaches to greening your real estate:
1. Start with a clean slate. Instead of reducing consumption, start with nothing and justify how much energy you actually need. Do you need to install a high-efficiency air conditioner or are you able to retrofit the building so effectively that it doesn’t need air conditioning? Limbo, limbo, limbo how low can you go should your approach to building energy performance.
2. Mind the Gaps. Air infiltration grows with time. Check the weather-stripping at doors and windows and seal those cracks. Don’t know where to start? Get a building energy audit (through your utility) with infrared imaging to show exactly where the heat is escaping. You will be surprised at what you see.
3. Simple task, big saving. Install light switches with built-in occupancy and/or daylight sensors in every room. Buy task lamps so employees have spot lighting as needed. Create a lighting landscape; you’ll realize you probably need only half the level of ambient lighting you’re using. And if your HVAC system isn’t programmed, that is a 21st century must-have for homes and commercial buildings.
4. Retro Fits. Retro-commissioning applies a quality assurance process “retroactively” – to an existing building. It consists of investigating how and why a building’s systems are operated and maintained and identifying ways to improve overall
5. Community Green. Support energy efficiency financing programs in your community, and chamber of commerce. New programs may include third-party businesses paying for efficiency upgrades through your property taxes (PACE) and “on bill” through your utility. Properties greened through these programs produce predictable, replicable and relatively low-risk value in energy efficiency.
6. Golden State. California is the Golden State, clear up the window clutter and let the sun shine in. Perhaps a little selective demolition to open up the work areas, improves the space plan, and let the sun shine in. An easy fix > a fresh coat of light-colored paint and replace those depressing yellowed ceiling panels. Watch your employees get more enthusiastic about coming to work.
7. Film your windows. Window films have transformed in the past decade. Gone are the tinted sun shades. New retrofit films are practically clear and achieve nearly 50% heat rejection – both inside and outside, depending on the season. Combine this with sealing and retrofitting your windows for exceptional performance.
8. Ducts + seals. We’re not talking wildlife here. Recent studies indicate that leaking ductwork is one of the primary construction defects in both commercial and residential buildings, with common repercussions resulting in 10-25% leakage in commercial buildings and ridiculously more in homes. Do yourself a fever and check existing ductwork for leakage. A number of terrific elastomeric products are available for addressing this.
9. Made in the shade. Add awnings, trees, green roofs. In Southern California we need to do what we can to cool our buildings. Indirect lighting is much more effective than the sun streaming through your afternoon energy.
10. Congratulate yourself. Human behavior has a huge impact on energy efficiency. Studies suggest people influence building energy consumption between 12-17%. Create a green team, install a real-time energy and water consumption display, monitor every aspect of the building’s performance and reward facilities staff for great management.
450 ENGINEERS INVADE DURING NOVEMBER
By Jodi Summers
Williams said that another 70,000 square feet at undisclosed locations has also been leased nearby, a common Google practice that ensures the company can maintain a long-term place in the community.
“We managed to hire almost 150 people last year,” Williams said. “We expect a steady rate of hiring, continuing to grow. The building we’re moving into should give us another year to a year and a half at current growth. Ideally, I’d like to keep it under 1,200 Googlers.” Williams acknowledged that things could change however.
Binocular building. By the time the press is over, you’ll know that it was built by Frank Gehry in 1985 as the west coast headquarters of advertising giant Chiat/Day. You’ll learn that the binoculars are the entrance to the parking garage, and that they were designed by husband and wife sculpting team Claes Oldenburg and Coosje van Bruggen. Dig deep enough and you may read about Chiat/Day’s failed office and paper-less work experiment, and that the three different building facades are actually a part of the same design, meant to reflect the nuances of the buildings around them.
When creating fresh office space, use a fresh approach. Google’s idea for their new space on Main St. Venice, put the user first. For the same reason Google chose one of the hippest locations in the country for their office space > 340 Main St., Venice, 90291 > in hopes of luring the best talent. They’ve taken the same approach to their office space in the Binoculars building > make it a user-friendly experience.
Google’s goal (try saying that 5x fast) is to create the healthiest work environments possible so Google masterminds can thrive and innovate. From concept through design, construction and operations, the search engine’s goal is to create a brick + mortar workplace that optimizing access to nature, clean air and daylight.
To keep the Google brain trust at peak performance, they avoid materials that contain volatile organic compounds (VOCs) and other known toxins that may harm human health. Furniture, carpet, flooring, toilets > all green, and augmented by dual stage air filtration systems to eliminate plankton-like particles and remaining VOCs, further augmenting indoor air quality. Or, they could Additionally, the location is so fine, they cay just open the west facing windows and let the ocean breeze come rolling through, as it does from 10:30 a.m. – sunset on all days except for Santa Ana conditions.
Betcha want to know > in North America, Google purchases materials free of the Living Building Challenge Red List Materials and EPA Chemicals of Concern, and through the Pharos Project. They also ask their suppliers to meet strict transparency requirements.
Google is also making an effort to shrink our environmental footprint by investing in the most efficient heating, cooling and lighting systems (and opening the windows). In Venice, like in their other offices, they will perform energy and water audits and implement conservation measures to develop best practices. Venice’s efficiency will be tallied into Google’s worldwide office talley.
Their internal Sustainable Pursuit program allows location teams to earn points based on their office’s green performance—whether it’s through green cleaning programs, water efficiency or innovative waste management strategies. Using Google Apps to help track progress and achieve set goals has helped Google meet or exceed the U.S. Green Building Council’s LEED standards, and make the world a greener place.
By Jodi Summers
When creating office space, use a fresh approach. Google’s idea for their new space on Main St. Venice, puts the user first. For the same reason Google chose one of the most unique building in one of the hippest locations in the country for their office space > 340 Main St., Venice, 90291 > in hopes of luring the best talent. They’ve taken the same approach to their office space in the Binoculars building > make it a user-friendly experience.
Google’s goal (try saying that 5x fast) is to create the healthiest work environments possible so Google masterminds can thrive and innovate. From concept through design, construction and operations, the search engine’s goal is to create a brick + mortar workplace that optimizing access to nature, clean air and daylight. The great thing about is happens to be is what’s good for Google is good for the neighborhood.
Let’s explore how the fabric of Main St. is going to change for a better non-car experience…Thomas Williams, Google’s Venice office director, recently attended a Venice Neighborhood Council meeting and shared the info that about 450 engineers will move into space @ 340 Main Street in early November. He also pledged that the company will have a positive impact on the community.
“Generally, they are fairly young, they like computers, and they are really smart,” Williams shared.
At the same meeting, the VNC approved a motion that is also of interest to Main St. Santa Monica. They approved the “Main Street Diet,” a plan to change the configuration of Main Street by adding bike lanes, reducing traffic lanes and adding a center median. These bike tracks are also being discussed in Santa Monica’s bicycle action plan.
It is expected that approximately one-third of the company’s employees bike, walk or take public transportation to work. “A lot of people are happy because they are going to be able to walk to work now,” Williams said. All 450 of the people who will be relocating to the Venice office currently work in Google’s local offices.
Google is well-known for its support of bike commuters – Venice has a large number of bikers and surprisingly little support for them in the North-South directions. Perhaps now we will develop plans for bike lanes and street lights through the long, dark stretches along Main Street.
WeLoveVenice.com noted that this is a huge potential win for locals. They are hoping that Google will bring more logical bus routes, such as from Washington Blvd. to downtown Santa Monica. As well as other innovative routes from Santa Monica’s Big Blue and Culver City buses that run throughout Venice without it being necessary to walk a mile to Windward Circle to catch one.
Anything to make Main St. more pedestrian friendly is a good thing and a nice step to greening the neighborhood….
Cut the expenses on your commercial property. Building performance tracking promises continuous improvement for every building. Even a building constructed to the most exacting environmental standards needs to be operated and maintained properly to perform as designed. By employing a strategy to monitor and improve the energy and system operation of commercial buildings, building performance tracking is the first step in seeing operating costs fall, asset values grow, and market differentiation improve.
“The Building Performance Tracking Handbook” was developed by the California Commissioning Collaborative with funding from the state’s Energy Commission and can be applied to commercial buildings throughout the country. It allows operators to understand how their buildings are running and improve standard operating procedures and energy usage for a building.
“The Building Performance Handbook” outlines the steps needed to continually manage building performance, demystifies the complex array of building performance tracking tools available, and provides guidance on selecting the most appropriate tracking strategy.
There are four elements to performance tracking:
• Collect data and track the performance of the HVAC and lighting systems, plus energy use data.
• Identify performance problems.
• Diagnose problems and identify solutions.
• Fix problems and verify results.
To help facility managers build a business case, the handbook identifies a range of benefits from performance tracking, including enhanced occupant satisfaction, reduced energy costs and increased property values.
Building Owners, managers, and engineers will find this handbook valuable, whether they are just embarking on a formal performance tracking approach, or are looking to take their existing strategies to the next level.
The Handbook, endorsed by BOMA California’s Energy Committee, is the outcome of research funded by the California Energy Commission, under a project managed by the non-profit California Commissioning Collaborative. The handbook was written by PECI, a non-profit organization devoted to energy efficiency.
Download a copy of the manual @ http://cacx.org/PIER/documents/bpt-handbook.pdf.
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