Southern California Office Real Estate Blog

THE SENIOR HOUSING MARKET IS CHANGING

THE SENIOR HOUSING MARKET IS CHANGING

By Jodi Summers

The first of the Baby Boomers will soon be entering the senior housing market, and that is impacting the single and multifamily housing market.

The National Association of Home Builders and MetLife Mature Market Institute recently examined the 55-plus population and its preferences in homes and communities. Dubbed “Housing for the 55+ Market: Trends and Insights on Boomers and Beyond,” the report is based on data from the most recent American Housing Survey from the US Census Bureau and focused on trends that emerged between 2001 and 2007.

Some interesting conclusions, the age 55-plus population in the country has risen from 52.2 million–about 21% of the population–in 1990 to 59.3 million–again about 21%–in 2000 to 70.6 million, comprising 23% of the overall population, in 2007. By 2010, this group will grow to 76.6 million, or a quarter of the population, and to 85.3 million–26%–in 2014.

Most older households don’t currently live in age-restricted or–qualified housing, but that number is rising. In 2001, 2% of them lived in active adult age-restricted communities; in 2007, 3% did. What’s more, residents in this type of community had the highest satisfaction rates, although most 55-plus respondents related they were happy with their current homes.

Regarding property, design and looks were most important factors to older buyers of single-family homes. In age-restricted 55-plus rental or multifamily properties, proximity to family and friends topped residents’ priority lists.

Distance from work location was the driver behind choosing a community for 17% of older buyers of single-family detached homes in 2007, up from 11% in 2001 to 17% in 2007.

The buyers of units in active-adult communities are getting younger–no older than 60–and in multifamily and rental units, many of the heads of households are females. The share of college-educated buyers in age-restricted homes has also taken a leap, from 50% in 2001 to 72% in 2007.

“NAHB has tracked the 55-plus population and its share of the housing market for decades,” concludes David Crowe, NAHB’s chief economist. “But this new data gives us our first look at specific consumer behaviors and preferences–what they look for in a home, the reasons why they move, and the characteristics of the communities they choose–over an extended period of time. By examining emerging trends, we have a clearer picture of what the mature market wants in homes and communities, which gives builders the tools to build housing that will meet those needs.”

http://www.metlife.com/assets/cao/mmi/publications/studies/housing-for-the-55-plus-market.pdf

http://www.globest.com/news/1406_1406/insider/178616-1.html

http://www.docuticker.com/?p=25847

http://www.marketwatch.com/story/when-baby-boomers-move-family-often-is-reason

THE GOVERNMENT WANTS YOU TO BUY + INSTALL GREEN ROOFS ON YOUR REAL ESTATE

THE GOVERNMENT WANTS YOU TO BUY + INSTALL GREEN ROOFS ON YOUR REAL ESTATE

Green is still good. The latest government motivation is toward green roof installations.

Among the benefits of the Clean Energy Stimulus and Investment Assurance Act of 2009 (S.320) introduced by Sen. Maria E. Cantwell (D-Wash.) is to provide financial incentives for homeowners or commercial building owners which chose to install green roofs on their buildings.

A green (or sod) roof features of vegetation-usually drought-tolerant plants, or shrubs-that is planted in a growth medium. The roof generally involves a multilayer system of waterproof and root-repellent membranes, a drainage system, filter cloth, and lightweight soil.

Sedums are a suggest plant, as the 400+ varieties range from annuals and creeping herbs to shrubs. The plants have water-storing leaves.

Green roofs have been around for thousands of years. One of the first notable appearances of green roofs occurred in the Hanging Gardens of Babylon around 500 BC. The site is considered one of the Seven Wonders of the World.

The thrust of the Clean Energy Stimulus and Investment Assurance Act of 2009 is to create green-collar jobs and revitalize the economy through clean energy investments.

Section 506 of the bill, offers property owners a 30 percent tax credit for qualified green roof expenses. The tax credit applies to both new and retrofit projects, but it requires that at least 50 percent of the roof area be covered with vegetation.

“This is a watershed moment for the green roof industry,” observes Steven W. Peck, founder and president of Green Roofs for Healthy Cities, which worked with the American Society of Landscape Architects to help Sen. Cantwell’s office draft the section of the bill that is focused on the green roof incentive. “This bill will deliver an enormous number of green collar jobs, not just today, but also in five years from now, while also saving energy, improving stormwater management, cooling cities, cleansing the air, and

beautifying our rooftops.”

Modern green roofs trends began in Germany in the 1960s; today, it is estimated that about 10% of all German roofs have been “greened.” Several European Countries have very active associations promoting green roofs including Germany, Switzerland, the Netherlands, Italy, Austria, Hungary, Sweden and the UK. The City of Linz in Austria has been paying developers to install green roofs since 1983 and in Switzerland it has been a Federal law since the late 1990s. In the UK their up-take has been slow but a number of cities have developed policies to encourage their use, notably in London and Sheffield.

Green roof advocates note a variety of benefits for property owners, including added insulation and cooling. It has been found that they can retain up to 75% of rainwater, gradually releasing it back into the atmosphere via condensation and transpiration, while retaining pollutants in their soil.

“If you install enough in an area, it cools the area, which saves money in energy costs and limits greenhouse gas,” offers Peck.

Cities like Los Angeles can truly benefit from the cooling effect, as green roofs reduce the “heat island effect,” a situation in which traditional building materials such as asphalt roofs in a city-absorb sunlight and radiate it back into the atmosphere as heat, making cities at least 4 degrees Celsius (7 °F) hotter than surrounding areas.

The new California Academy of Sciences building in San Francisco’s Golden Gate Park has a green roof that provides 2.5 acres (10,000 m2) of native vegetation designed as a habitat for indigenous species, including the threatened Bay checkerspot butterfly. According to the Academy’s fact sheet on the building, the building consumes 30-35% less energy than required by code.

Green roofs have also been found to dramatically improve a roof’s insulation value. A study conducted by Environment Canada found a 26% reduction in summer cooling needs and a 26% reduction in winter heat losses when a green roof is used. In addition, greening a roof is expected to lengthen a roof’s lifespan by two or three times, according to Penn State University’s Green Roof Research Center.

Another upside of green roofs is added local employment, as green roof installations tend to be local projects. “For every dollar spent, the $2 or $3 generated goes toward creating jobs where the roof is installed,” he boasts.

Sen. Cantwell noted this benefit as well in a statement introducing the bill. “In these times of economic uncertainty, growing the green economy and investing in clean energy technologies is the key to job growth and breaking the United States’ debilitating dependence on foreign oil,” she said. “While installing a green roof may seem like a small step, these upgrades save energy, filter and absorb pollution, and store carbon. As individuals and businesses continue to look for ways to combat high energy costs and improve the health of their neighborhoods and environment, providing green roof incentives just makes sense.”

Builder magazine reports that, Green Roofs for Healthy Cities has launched a new, multi-disciplinary Green Roof Professional (GRP) program–much like U.S. Green Building Council’s LEED Professional Accreditation-and will administer the first exam at its annual conference this June in Atlanta. Under the program, an individual can become GRP-accredited to provide green roof design, products, and installation services to meet the new demands that potentially could be generated from this bill.

American landscape architects and a Canadian nonprofit green roof industry association says that the United States could see a surge in green roof installations if a provision in a recently introduced Senate stimulus bill becomes law.

Information from:

http://www.builderonline.com/green-building/financial-incentives-in-stimulus

http://egrfaculty.villanova.edu/public/Civil_Environmental/WREE/VUSP_Web_Folder/GR_web_folder/GR_paper_files/image002.jpg

http://en.wikipedia.org/wiki/Sedum

http://blog.lib.umn.edu/iruss001/architecture/green_roof.jpg

http://en.wikipedia.org/wiki/Green_roof

http://www.inhabitat.com/wp-content/uploads/calroof3.jpg

http://www.localecology.org/images/deyoung_casgreenroof.jpg

http://www.cactusjungle.com/blog/wp-content/uploads/2008/05/green_roof.jpg

http://www.lotuslive.org/buildings/files/norwaygreenroof.png

LOS ANGELES WINS THE ENERGY STAR GREEN PRIZE

LOS ANGELES WINS THE ENERGY STAR GREEN PRIZE

By Jodi Summers

Yeah for us! Los is the most Energy Star efficient city in the United States!

This information comes courtesy of our government. The latest U.S. Environmental Protection Agency (EPA) index of the 25 U.S. cities with the most Energy Star buildings. Los Angeles leads the list with more than 260 buildings encompassing 74 million square feet, or about as much floor space as 27 Empire State buildings.

“We’re setting the green standard in LA. Reducing our carbon footprint by 35 percent below 1990 levels is the most ambitious goal set by a major American city,” stated Mayor Antonio Villaraigosa.

The goal for the city’s GREEN LA imitative is to reduce Los Angeles’ greenhouse gas emissions by 35 percent below 1990 levels by 2030. This target is greatest reduction target of any large U.S. city. The core of GREEN LA is increasing the city’s use of renewable energy to 35 percent by 2020.

San Francisco, Houston, Washington, DC, and Dallas-Fort Worth round out the top five.

“Energy Star buildings typically use 35 percent less energy and emit 35 percent less greenhouse gases than average buildings,” noted EPA administrator Lisa Jackson. “They are saving energy, saving money and protecting our environment.”

The EPA noted that Energy Star buildings in just the top five cities have saved more than $315 million in energy costs.

The list did have some surprises. Big East Coast hubs did not fare well, with just two — Washington, DC, and Atlanta — placing in the top 10. In fact, the total number of Energy Star buildings in New York (#12), Boston (11), Philadelphia (17) and Miami (23) was less than the number in Los Angeles, EPA reported.

Also being savvy enough to make the list were several smaller, Midwestern cities where energy tends to be cheaper, such as Grand Rapids, MI, and Madison, WI.

Details courtesy of http://www.costar.com/News/Article.aspx?id=0F9ACA2C00BDA94C9DB4DED0A6B19C9B&ref=100&iid=123&cid=383F14EEE265B182474DA2442BACBBBF

http://www.ens-newswire.com/ens/may2007/2007-05-15-01.asp

http://www.daylife.com/topic/Antonio_Villaraigosa

THE LOS ANGELES CLEAN TECH CORRIDOR WILL MAKE L.A. THE LEADER IN GREEN TECHNOLOGY

By Jodi Summers

Mayor Antonio Villaraigosa and the Community Redevelopment Agency (CRA/LA) hope to transform L.A. into ‘the global capital of clean technology.” The goal is to transform the manufacturing corridor east of downtown into the center of green innovation. The mayor and his team are marketing this industrial parcel, dubbed the CleanTech Manufacturing Center, as a green business incubator, the way Silicon Valley hatched technology.

“We will make clean tech as synonymous with LA as motion pictures,” Mayor Villaraigosa boldly declared. “We will make LA the capital of green technology … and transform the city into a laboratory for green development.”

The CleanTech Corridor city planners envision spans 2,236 acres — about 10% railroad-owned — east of Alameda Street, and is accessible by the Metro Gold Line. It begins at a swath of land straddling the L.A. River, near Los Angeles State Historic Park (the former Cornfield), that Councilman Ed Reyes hopes to transform into a neighborhood where bicycles and pedestrians would rule and carbon emissions would be cut by 35%. Then it runs south through the site of a future Department of Water and Power research center into the Artists-in-Residence district, which stretches from Alameda to the river and from 1st Street to south of 7th Street. The vacant CleanTech Manufacturing site at Santa Fe Avenue and 15th Street, just south of the 10 Freeway, forms the corridor’s southern anchor.

“…The City is standing with the world-class academic institutions of Los Angeles and our dynamic business community to stake a claim as a global leader in the clean and green technologies that will drive the 21st century economy,” the mayor pronounced. “From R&D to manufacturing to design, this partnership taps into the creative assets and innovative spirit of our City to foster new industry and spur job growth.”

Of course, there are no local funds to make this conversion happen, so the city of Los Angeles will be calling for private investment and money from state and federal sources,

Last fall, CRA officials and the mayor’s business team began courting clean technology companies — talking up the purchasing power of the city’s public utilities, as well as the array of federal, state and city tax incentives available to business.

More than 100 companies, from solar and electric car manufacturers to a garment recycling business, expressed interest in the CleanTech site, which the city purchased from the state last April for $14 million.

“The Los Angeles Business Council believes that attracting green-tech companies will be a prime economic driver for the region,” said Los Angeles Business Council President Mary Leslie. “We were proud to launch the website CleanTechLA.org at our Sustainability Summit last year and look forward to continuing our partnership with the consortium to build a vibrant green economy in Los Angeles.”

For capitalist development, the Los Angeles Times reports that the most intensive push has been for an Italian rail manufacturer, AnsaldoBreda, which is angling for a $300-million rail car construction contract with the Metropolitan Transportation Authority. If it secures the contract, AnsaldoBreda has promised to build a $70-million manufacturing plant. The contract is controversial because some MTA officials have been unhappy with the company’s performance in meeting rail car contract specifications in the past, but the company has several political insiders in town pushing this deal, said to be Los Angeles County Federation of Labor lobbyist Chris Lehane, and the green building company Shangri-LA Construction, founded by prominent Democratic contributor and Villaraigosa donor Steven Bing.

More altruistically, farther north in the corridor, a DWP research center focusing on renewable energy, climate change and water intended to attract companies that want to work with area universities.

Dubbed CleanTech Los Angeles, the city is seeking to create a research alliance (not unlike the Department of Energy’s Commercial Building Energy Alliances) involving local area educational institutions, with major roles being played by the California Institute of Technology, University of California Los Angeles and the University of Southern California, among others.

“I’ve often said that Los Angeles may have the best collection of intellectual talent of any county in the nation. I believe it’s important to invest our intellectual capital in programs that enhance the quality of life for all of our citizens” noted University of Southern California President Steven Sample. “USC is delighted to partner with our colleagues in higher education, and with our friends from the public sector and from private business, to help make Los Angeles the greenest city in America.”

“Broader recognition of Los Angeles as a global regional center of science and engineering research and clean technology development bodes well for its economic competitiveness in a rapidly changing world,” added Dr. Jean-Lou Chameau, President of the California Institute of Technology.

The cluster of laboratories would be housed in an old transformer warehouse overlooking the river on the DWP’s Main Street site, and the DWP recently secured a private donation that will allow the department to perform a $4.5-million “green retrofit” of the building.

Among the projects planned: development of aerospace technology with Caltech and NASA’s Jet Propulsion Laboratory that would help the DWP better measure snowpack in the Eastern Sierra and dust in the Owens Valley.

In the basement of the DWP building, UCLA would build a wind tunnel testing facility. Meanwhile, USC is exploring the site as a home for a research institute that would study how to make data centers more energy efficient.

“The city really provides a platform to have a lot of technologies tested,” said John X. Chen, the DWP’s executive director of customer service and water conservation. He said the city will be spending billions of dollars trying to reach the mayor’s renewable energy goals. For those reasons, he argued that when competing for grants, “We will be very, very competitive against anybody out there.”

And, you can’t have business without housing nearby. At the northern end of the corridor, the Cornfield/Arroyo Seco specific plan area spans more than 600 acres — from Los Angeles State Historic Park, across the river into Lincoln Heights. It will be one of those picture pretty pedestrian- and cyclist-centered neighborhood

The city would also place special restrictions on developers within a mile of the river, requiring open space and measures to reduce carbon emissions in the neighborhood.

FYI…The L.A. Times notes that the CleanTech corridor is a critical component of the mayor’s “green jobs” agenda as he eyes a probable run for governor in 2010. And it could be a test of his pledge to transform Los Angeles into “the greenest and cleanest big city in the nation,” drawing more than a third of its electrical power from renewable sources by 2020.

**

http://www.latimes.com/news/local/la-me-clean-tech28-2009apr28,0,669366,print.story

http://www.ioe.ucla.edu/news/article.asp?parentid=3347

http://www.today.ucla.edu/portal/ut/la-to-become-the-capital-of-green-88893.aspx

http://cleantechlosangeles.org/

http://www.lachamber.com/clientuploads/EWE_committee/RFI_FINAL_9_16_2008.pdf

http://www.zimbio.com/pictures/hoDaoA3nwB-/Mayor+Antonio+Villaraigosa+Votes+Election/jvGcHFcTcLF/Antonio+Villaraigosa

10 Unhappiest American Cities

10 Unhappiest American Cities

by Jodi Summers

Oh, be glad we live in a part of the country where the weather is delightful. Hard to be depressed on a beautiful day. As a recent BusinessWeek.com report reveals, no sun, no jobs and lots of foreclosures are the recipe for unhappy citizens. Statistics show higher levels of suicide, clinical depression, divorce and violent crime.

In the name of analysis, BusinessWeek.com ranked 50 of the largest metros based on their misery and depression levels. The depression scoring is based on insurance reporting. The rest of the rankings come from the National Assembly of County & City Health Officials, FBI crime reports, the U.S. Weather Bureau and the U.S. Census.

Most of these cities had these problems before the economy headed south – and current economic woes certainly can’t be helping.

Here are the top 10 most depressed cities as per Businessweek.com No place in California is on the list:

1. Portland, Ore.

2. St. Louis

3. New Orleans

4. Detroit

5. Cleveland, Ohio

6. Jacksonville, Fla.

7. Las Vegas

8. Nashville, Tenn.

9. Cincinnati, Ohio

10. Atlanta

Source: BusinessWeek.com, Prashant Gopal (02/26/2009)

THINK GREEN - REAL ESTATE IS STRONGER NEAR METROPOLITAN AREAS

By Jodi Summers

The statistics are in – properties closer to cities with thriving economies and mass transit will outperform outer-ring suburbs and “exurban areas,” where high gas prices are making long car commutes prohibitively expensive and rising energy costs mean higher utility bills. We’re thinking and spending green.

This information comes courtesy of a report released by the Urban Land Institute and PricewaterhouseCoopers LLP. The study interviewed more than 600 real estate experts, including investors, developers, lenders and real estate brokers.

The report, Emerging Trends in Real Estate 2009, projects that the worst of the national housing downturn may be over, with the bottom of the market being confirmed by the end of this year.

The report is focused on commercial real estate such as commercial, office, industrial and apartment properties, but includes an overview of housing markets and how they may be affected by macroeconomic trends and changing regional conditions. Some interesting observations:

· Seattle, San Francisco, Washington, D.C., New York and Los Angeles are expected to be the top five markets for investment in commercial property in 2009.

· Wall Street layoffs and office vacancies will help Seattle and San Francisco to reclaim top rankings for commercial investment from New York.

· The thriving energy industry is expected to boost commercial investment prospects for “long-forlorn” Texas markets, but Midwest factory towns are expected to lose even more ground,

· “24 hour cities” like New York, Boston, Chicago, San Francisco, and Washington, D.C., should also benefit from mass transit systems that can free residents from car dependence.

But, gains in the attractiveness of 24-hour cities could be “squandered” if cutbacks in police, fire and sanitation result in less safe and appealing environments. Falling property values and the economic slowdown are expected to cut into tax revenues, forcing cities to reduce services.

“Nothing would undermine 24-hour dynamics more quickly than rising crime rates,” the report warned.

· “24 hour cities” like New York, Boston, Chicago, San Francisco, and Washington, D.C., should also benefit from mass transit systems that can free residents from car dependence.

But, gains in the attractiveness of 24-hour cities could be “squandered” if cutbacks in police, fire and sanitation result in less safe and appealing environments. Falling property values and the economic slowdown are expected to cut into tax revenues, forcing cities to reduce services.

“Nothing would undermine 24-hour dynamics more quickly than rising crime rates,” the report warned.

http://www.ulisf.org/imgManager/1000000877/Cover%20-%20EmergingTrends2009.jpg

http://www.ulisf.org/imgManager/1000000025/maps.png

http://4.bp.blogspot.com/_ERJ3VTs4Tho/STMgbiE4PcI/AAAAAAAADOE/Os15Z_s-TBI/s400/iStock_000002504258XSmall.jpg

http://exitrealestate540.com/files/2008/12/thefutureroadsign.jpg

COMMERCIAL MARKETPLACE MAY BE STARTING TO IMPROVE

By Jodi Summers

The residential real estate market may be starting to stabilize in Southern California, but the industrial and office is still on the slide…but the rate of decline has not increased. In all its twisted logic, the Boxwood Means Inc. a research company that specializes in small-capitalization properties, concludes that the lack of an increased drop could signal that the market might be close to reaching its cyclical bottom.

Nationally, rents at office properties with less than 50,000 square feet fell by 27 basis points in May to $18.21/sf, per year, while industrial properties, fell 61 bp to $7.63/sf. Those rates of decline are similar to the drops in previous months. Boxwood Means Inc. reports that on a relative basis, that’s good news.

Even relatively positive news is better than what’s been happening in the recent past. Records show that rents have fallen at industrial properties for 18 months straight and at office properties for 12 months.

Statically, larger-cap properties have suffered greater declines in rent. According to Reis Inc., national office rents fell by 4.1% in the first quarter, to $24.08/sf, from their peak in the second quarter of 2008. During the same period, rents at small-cap companies fell by only 1.67 percent, to $18.31/sf.

FYI, Boxwood Means compiles property-level operating and sales data on small-cap properties through a partnership with LoopNet Inc. It has found a strong correlation between the performance of the residential housing market and small-cap commercial properties and noted that the residential market has been showing signs of stabilization of late. The same could be said of the small-cap commercial market.

(see  BUY SOON – THE SOCAL REAL ESTATE MARKET IS STABLIZING - http://www.santamonicapropertyblog.com/?p=1256) small-cap commercial properties “might also be finding a market floor,” Boxwood Means said, noting that such properties are “highly dependent on neighborhood-based businesses and residential communities.”

Of course there is a wide disparity among geographic regions, with the Southeast being especially hard hit and the Northeast relatively unscathed. These trends mirror the residential housing market.

“Financing availability has been a differentiator that has propped up the small-cap sector,” Boxwood Means said. The lack of financing, prompted by the shutdown of the CMBS market and a substantial pullback by other traditional lenders, such as life insurers, has put the larger-cap market into a tizzy.

http://www.loopnet.com/xnet/mainsite/news/news.aspx?DocID=8167&sourcecode=1lntd009

http://www.boxwoodmeans.com/

http://www.tradein.com/TrendForm-Office%20Workstation.jpg