Warehouses don't have to be located in California's Inland Empire, New Jersey or Memphis to be effective. Emerging warehouse markets throughout the country offer corporate real estate opportunities for companies to access regional, national and international markets with access to excellent transportation networks. Here are three of the country's emerging markets:
When your company's office utilization drops, you'll probably find that you have unused space. Whether you have a portion of an existing office sitting vacant or you vacate entire locations, the carrying cost for the space is a drain on your bottom line. Finding a subtenant stops the red ink. However, finding the right one isn't always easy.
Continue ReadingJust adopted in July 2013, version 4 of the U.S. Green Building Council's LEED environmental rating system will be officially announced at the GreenBuild conference in Philadelphia in November 2013. LEED v4 is a quantum change in the way that commercial real estate projects qualify for recognition as green. After a long process of public comment, it passed the USGBC's voting process with 86% support, when only 66.7% was needed.
The basics of LEED certification remain the same. New or existing projects can earn one of four levels of certification by earning "LEED points." LEED still has a 100 point system where projects earning 40 to 49 points are "certified," 50-59 point projects are "Silver," 60-79 point properties get "Gold" certification and the highest "Platinum" certification gets awarded to projects with 80 points or more. However, the way that those points are earned, and the properties that qualify for points, are changed. Here is the website for v4.
LEED v4 has separate rating systems and criteria for 21 different types of residential properties, developments and commercial real estate buildings. Some of the new building types added to LEED v4 include warehouses, distribution centers, and data centers. LEED is not an office building-only standard anymore.
The Green Building Council has gone a step beyond the regional credits in previous LEED systems by redesigning LEED v4 to be globally appropriate. One example of this is that LEED is now fully compatible with the metric system. The USGBC is so dedicated to making LEED global that it will absorb the certification fees for the first LEED-certified projects in 112 different countries from Afghanistan to Zimbabwe. This makes it easier for global companies to meet their green commitments in their commercial real estate anywhere they locate.
With the v4 standard, the USGBC has refocused LEED on reducing building carbon emissions. Approximately 20% of a building's LEED points can come from exceeding the ASHRAE 90.1-2010 energy efficiency standard, which covers efficiency for a building's lighting, HVAC and hot water systems as well as the efficiency of its envelope. The USGBC estimates that this one change will do more to reduce a building's carbon footprint than anything else in the LEED standard.
Builders can also earn up to 9 points for selecting certain green building materials, such as FSC-certified wood, in the construction of commercial real estate properties. LEED v4 also includes a new "Integrative Credit" that allows projects to earn points for including environmental outcomes as a part of their planning from the start of the project, instead of just bolting on green systems.
While industrial buildings have earned LEED certification prior to v4, the new LEED categories for data centers and for warehouses and distribution centers make the process of qualifying for certification more straightforward. For instance, LEED v4 contains standards for lighting that include the use of daylight to replace some electric lighting and occupancy sensors to further reduce energy consumption. It also uses ASHRAE or Energy Star standards to guide warehouse designers in how to minimize HVAC energy consumption. For data centers, water usage is now a major part of earning LEED v4 certification.
LEED v4 will lead to greener commercial real estate buildings. However, many property types will also find it harder to earn points due to the higher carbon-output focus in the new credit weighting system. Since one of the primary ways to reduce a building's carbon footprint is to reduce its energy use, companies can recoup these costs relatively quickly. A five-year payback period is now a new standard for many commercial real estate efficiency projects, with many hitting three-year paybacks. With generous subsidies available for LEED-friendly upgrades like photovoltaic solar panels or LED lighting systems, the LEED points and the attendant cost savings are within reach for many developers and occupants. In this way, LEED v4 could lead to a greener future for company's bottom lines as well as for the planet as a whole.
Solar panels utilize the energy of the sun to produce power for a building. The use of photovoltaic solar systems have become a popular way to retrofit commercial real estate properties and increase environmental sustainability. While solar panel installations typically have longer pay-back periods than other environmental retrofits like high-efficiency lighting or water conservation measures, they can generate meaningful cost savings as well as help your company qualify for additional LEED credits for its green building portfolio.
Photovoltaic solar systems are relatively simple. They have large arrays of panels mounted to face the sun and an inverter that converts their direct current output into regular alternating current power. The more space that you have with an unobstructed view of the sun, the more power you can generate.
There are two ways to install a PV system. The first is to put it on a commercial real estate building with a large roof surface area. The other is to use PV panels as shades for large parking lots, which is more expensive. As such, solar systems usually work better with retail centers, warehouses, or low-rise office campuses that offer large areas of space either on the roof or on the ground. While you could put a PV system on a high-rise office building, the total power generating area is relatively low. Also, if your building isn't the tallest one in the area, shadows could block the sun and your panels.
There are two ways to tweak the return of the solar systems on your commercial real estate buildings. The first is to change what you pay for them. The second is to squeeze more production out of them. Both factors are directly related to where you build your system.
Through the end of 2016, the IRS offers a 30% tax credit against the cost of a new solar system, with no upper limit. In addition, many states, communities and utilities offer additional credits that can help you reduce the cost of a solar system. Nevada offers small businesses rebates of up to $62,500 in addition to property tax abatements. New York City offers a property tax abatement while New York state exempts solar systems from sales tax. You can learn more about the incentives available in your area at the DSIRE Solar Portal, administered by the U.S. Department of Energy and North Carolina State University.
The location of your system has a direct impact on its production. A system installed in Seattle should on average, produce for 3.6 hours per day at full effectiveness. The same system in New York City gets 4.1 hours per day. In St. Louis, it's 4.4 hours per day, in San Antonio, it's 5.3 hours and in LA you get 5.6 hours. To get maximum return, install systems on your commercial real estate buildings in Albuquerque (6.8 hours), Phoenix (6.6 hours), and Las Vegas (6.4 hours). Putting a system in a more effective area isn't just good for your bottom line - it also improves your corporate sustainability by reducing your carbon footprint.
The payback periods on commercial real estate solar installations vary greatly based on four variables: the cost of the system, the value of the incentives that you receive, your total production and your cost of power. If you can get generous credits and use a relatively inexpensive system to produce a lot of power and get out of paying a high electric rate, a seven year payback is possible.Commercial real estate solar paybacks frequently take 15 to 20 years. However, photovoltaic technology is quickly advancing and it appears that payback periods could be reduced even further in the near future.
When you lease office space, it's not as simple as picking one and setting a price. Lease terms are frequently written in an opaque language of their own. In office buildings, gross leases aren't gross at all and you don't pay rent on your actual usable space. Along the way, your landlord will entice you with concessions that don't cost him anything to give while setting you up to pay more for other freebies. Once you understand typical lease terms and what they mean, you can turn the tables and negotiate more effectively.
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Being a commercial real estate director isn't an easy job. Your duties can take you all over the country, if not the world. While you know that the assets you oversee are a fundamental part of your company's success, others in your company view your portfolio as a cost center. If you're underfunded, overworked and understaffed, or if everything's great and you'd still just like to make your job easier, here are five time-saving tips that will change how you do business.
To effectively a negotiate commercial real estate lease as a tenant, it's helpful to understand what the landlord at the other end of the table is thinking. If he's a long-term holder of the building, he may have a different leasing strategy than if he's planning to sell soon. Landlord priorities shift depending on how their portfolio is structured, how they manage their buildings, or even how they finance their buildings. Something as far removed from you as an adjustable-rate mortgage can have a significant impact on how your landlord structures your lease.
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