Commercial Real Estate Crash Is Here
By: Dan Weil
You wouldn’t call billionaire investor Wilbur Ross a bull on commercial real estate now.
He says a “huge crash” has begun in the sector.
“All of the components of real estate value are going in the wrong direction simultaneously,” Ross, CEO of WL Ross & Co, told Bloomberg.
“Occupancy rates are going down. Rent rates are going down, and the capitalization rate – the return that investors are demanding to buy a property – is going up.”
U.S. commercial property sales will hit the lowest level in almost 20 years, estimates research firm Real Capital Analytics Inc. Already, the Moody’s/REAL Commercial Property Price Indices have dropped 40 percent over the last two years.
Ross told Bloomberg he will exercise extreme caution before putting money into commercial real estate, especially office buildings. That’s because tenants are deserting office space in droves.
Office vacancies surged to a five-year high of almost 17 percent in the third quarter. “I think it’s going to take quite a while to work itself out,” Ross said.
Real estate icon Sam Zell takes issue with Ross’ pessimism.
“(As for) all the new savants on commercial real estate like Wilbur Ross, . . . I find their comments are inversely related to their knowledge of the industry,” Zell, chairman of Equity Residential said in a recent speech.
While Zell isn’t a raging bull, he says building vacancies won’t be an issue by mid-2011.
© 2009 Newsmax. All rights reserved.
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Maintenance is now cool!
Admit it. Maintenance and engineering management generally hasn’t been considered a trendy profession. And the shortage of front-line technicians that has plagued maintenance and engineering departments for years is pretty strong evidence people generally don’t see jobs in facilities maintenance as attractive employment options.
Is that attitude about to change? I ask for one big reason.
The federal stimulus package contains, among its many provisions, billions of dollars for modernization of K-12 schools, colleges and universities, as well as energy-efficiency upgrades to a host of government buildings. The goal of all this spending is to create jobs.
Doesn’t it stand to reason that skilled workers looking for employment will gravitate to maintenance, engineering and operations departments in these facilities, seeking employment that will help them tap into the new pool of money flowing into education facilities?
This big development, along with several smaller developments, leads me to believe it might be time to rethink the stereotypes surrounding jobs in maintenance and engineering departments.
So are we entering the Era of Maintenance in this country? What’s your opinion?
Reed the blog on: http://my.facilitiesnet.com/blogs/dan_hounsell/archive/2009/02/06/maintenance-is-now-cool-discuss.aspx
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Posted 02-06-2009 1:41 PM by Dan Hounsell
Filed under: Maintenance Management, Facilities Management | tell a friend
8 Things You Need to Know About LEED Credentialing Changes
Published by the CoStar Group September 8, 2009
Written By Andrew C. Burr
With major changes occurring to LEED credentialing -- including the popular LEED Accredited Professional (AP) designation -- CoStar News combed through pages of rule changes, tuned in to instructional webcasts, and spoke with Peter Templeton, president of the Green Building Certification Institute, the organization that oversees credentialing, to compile the eight things every LEED AP and future LEED-credentialed professional needs to know. read more... | tell a friend
Putting Energy Efficiency Benefits in Perspective
At Summit, Political Leaders Discuss Role of Efficiency in Clean Energy Economy
Published by the CoStar Group August 21, 2009
Written By Andrew C. Burr
The numbers behind a spate of new energy efficiency studies are mind-boggling: $520 billion invested in efficiency over the next decade would save $1.2 trillion in U.S. energy costs, McKinsey & Co. reported, while retrofitting 50 million U.S. buildings would create 625,000 jobs and shave up to $1,200 per year off the utility bills of American families, according to John Podesta’s Center for American Progress and the Energy Future Coalition.
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Developing a Yardstick for Measuring Energy
ASTM Committee to Standardize Processes for Collecting and Reporting Building Energy Information
Published by the CoStar Group August 24, 2009
Written By Andrew C. Burr
With an eye on lower operating expenses, tenants and real estate investors are beginning to question the energy use of buildings. But that has led a group of building energy experts to ask another question: What exactly does ‘energy use’ mean? read more... | tell a friend
Existing Bldgs. Must be Part of Climate Bill's Energy Label, Efficiency Leaders Say
After Last-Minute Revision, Label Applies Only to New Buildings
Published by the CoStar Group August 10, 2009
Written By Andrew C. Burr
After Last-Minute Revision, Label Applies Only to New Buildings
Over the objections of energy efficiency and environmental groups, billions of square feet of existing homes and commercial buildings have been written out of a building energy labeling provision in the pending climate bill.
House lawmakers narrowed the provision, which originally called on federal agencies to develop labels for both new and existing properties, to apply only to new construction after hearing complaints from the National Association of Realtors, a real estate trade group. The House passed the bill by a slim margin on June 26.
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CRE Clients Eyeing Sustainability Even in Downturn, Property Execs Say
Global Survey Finds Importance of Sustainability has Increased Globally in Past Year
Published by the CoStar Group August 7, 2009
Written By Andrew C. Burr
Sustainability is becoming more important to commercial property professionals and their clients even as the global downturn has intensified, according to a survey released Wednesday by the Royal Institution of Chartered Surveyors (RICS).
The Global Property Sustainability Survey polled commercial real estate decision makers from around the world during the second quarter. Ninety percent of respondents said that sustainability is as important to their clients as it was at the same time last year, with 40 percent of that group responding that the issue has grown in importance.
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McKinsey Study Finds Commercial and Residential Buildings Key to Unlocking Nation's Energy Efficiency Potential
Investment in Efficiency Measures Can Offset U.S. Energy Demands of Next Decade
Published by the CoStar Group July 31, 2009
Written By Andrew C. Burr
Investing $125 billion in efficiency measures over the next decade would reduce energy consumption and greenhouse gas emissions in the U.S. commercial sector to pre-2008 levels, according to a new report by the consulting group McKinsey & Co. read more... | tell a friend
Quantifying the Benefits of Green Buildings
A New Study Examines Three Office Buildings to Determine Green Building Benefits and Value
Published by the CoStar Group July 23, 2009
Written By Andrew C. Burr
On a national level, tenants are springing for sustainable and energy-efficient buildings, according to recent studies that have revealed higher-than-normal occupancy levels and rental rates at those properties. But on an individual property level, how exactly are those claims playing out? read more... | tell a friend
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
Published by the CoStar Group March 26, 2008
Written By Andrew C. Burr
A new study by CoStar Group has found that sustainable "green" buildings outperform their non-green peer assets in key areas such as occupancy, sale price and rental rates, sometimes by wide margins.
The results indicate a broader demand by property investors and tenants for buildings that have earned either LEED® certification or the Energy Star® label and strengthen the "business case" for green buildings, which proponents have increasingly cast as financially sound investments. read more... | tell a friend
