Kansas City, Mo.-based McCownGordon Construction completed the Justice Center project - a new municipal building housing the police station, fire station and courthouse complex in the city of Shawnee, Kansas - in just 17 months. That included both construction and design work.

Contractors built the center, which covers 29 acres in a campus-like setting, using the design/build construction method. Because all the contracting teams involved in the project were selected at the same time, the city was able to start construction of the building even while the interior finishes were still being designed, saving precious time.

“This project would have taken at least an additional four months - and that’s only if everything went right - if we had gone with an alternative design method,” said Arlen Kleinsorge, division manager with McCownGordon Construction.

Kleinsorge, along with other construction pros interviewed for this story, agreed that build-to-suit projects are becoming more popular among municipalities, especially as these municipalities seek ways to keep their budgets under control in tough economic times.

“More municipalities are looking for expedited delivery of their projects,” McCown said. “Going with the design/build method is one way for municipalities to move projects along quickly and save money. You get the best team in place to execute a project. You’re not working with companies who happened to be the low bidders and are only responsible for one portion of the project. In design/build, you’re working with a team dedicated to bringing the project in on time and on budget.”

The growing popularity of the design/build method of construction is just one trend that commercial construction professionals cited when looking at the state of their industry as 2008 nears its end. They also pointed to continued demand for new healthcare facilities and research-and-development centers as providing a boost to a commercial construction market that is in the midst of a slowdown.

Interviewees also had kind words for municipal public works projects as one other area of the commercial construction industry that continues to thrive.

But other sectors - retail, certainly, and industrial and office in many markets - are slowing down. This means that it’s those general contractors and developers who adapt to what is certainly a changing market are those who will survive the slump, developers said.

“When things were on a roll, everyone and their mothers were opening a construction company,” said Bill Plesich, director of marketing with Columbus, Ohio-based Renier Construction. “These more challenging times will weed out a lot of the weaker contractors. The ones who are financially set, who are able to adapt to current market conditions, are the ones who are still going to be here when the economy starts to improve again. It’s just like in the housing industry. The ones who weren’t financially secure have gone out of business already.”

Preparing for a tough 2009

Commercial construction work may have slowed in 2008. But industry experts worry that this year may only be the beginning of a long stretch of sluggish building activity.

Commercial developers interviewed for this story said that 2009 may prove to be a tough year for the industry. The commercial markets in the Midwest tend to react to economic woes anywhere from six to nine months after they hit. Because the nation’s economy is suffering now, it makes sense, then, that the region will see a significant slowdown in commercial construction next year.

Part of the challenge is that developers will continue to find it difficult to obtain financing for their projects, said R. Hank Bellina, director of the division of major accounts for St. Louis-based ARCO Construction.

Banks and lending institutions are already requiring more equity on all types of construction projects, Bellina said. They are also looking for projects that already have several tenants attached to them.

“There is no such thing as a slam dunk for financing anymore for construction projects,” Bellina said. “It doesn’t matter how great your credit rating is. There are no more slam dunks.”

Speculative projects are drying up, and will continue to do so in 2009, he said. At the same time, the number of new retail projects, industrial centers and warehouse distribution centers is steadily falling, Bellina said, something that will only intensify in 2009.

“A lot of those projects have been put on hold,” he said. “It doesn’t look great for 2009. There are a lot of sectors that are definitely slowing down.”

Bellina does see some good news, though. The demand for healthcare and medical facilities continues to grow, and should do so throughout 2009, he said. Midwest construction companies are being called upon to build more biotech research laboratories and the developments that spring up around them.

Senior-living facilities are becoming a mainstay in the commercial construction industry, Bellina said. And public-works and university-sponsored construction projects are also providing a boost to the industry, he said.

“The universities and the public sector have money. They don’t necessarily have to go out and acquire these more difficult-to-get loans and project-financing that a typical developer would have to get,” Bellina said. “That’s part of the reason that those markets are still active.”

Staying active

Woodridge, Ill.-based Morgan/Harbour Construction is one of those construction firms that is adapting. The company, which specializes in design/build projects, is currently developing a 120,000-square-foot two-story public works facility for the village of Wheeling, Ill.

The facility, which will sit on nearly 12 acres of land, is another example of both the public-works projects and design/build construction method that is now fueling building activity.

As Warren Seil, vice president with Morgan/Harbour, says, the Wheeling project is a true public-works project. The village will house its police, public-works department, engineering staff, vehicles and equipment and road-salt dump in the facility.

“They have everything covered there,” Seil said.

Greg Freehauf, vice president with Morgan/Harbour, said he expects to see municipalities continue to rely on the design/build method even more frequently in the coming months and years.

“Design/build for the most part has been popular in the private sector. But now we’re seeing more of it in the public sector,” Freehauf said. “It is attractive to both the builder and the public municipality because it gives you the advantage of fast-tracking a project and compressing its schedule. It gives you a better value for your dollar. Right now the private-sector work is slow. The public work is helping us maintain our construction volume.”

The village has been schedule-conscious throughout the process, Seil said. That’s why going with design/build, and the speed and flexibility that it allows, was so important, he said. The goal now, he said, is to complete the project by Jan. 31.

It’s a compressed timetable that never would have been possible with more traditional construction methods, Seil said.

“We don’t necessarily have to do all the drawings, put them out for pricing and then wait for responses,” Freehauf said. “We can go out for pricing on those items that do require a long lead time, the pre-cast and the steel, say, and get those in order so we can rush the schedule for both design and construction.”

Under traditional construction methods, the possibility of delays is high, Freehauf said. In the standard way of building, the owner of a project hires an architect and then puts those drawings out to bid. This very beginning stage of the process is a lengthy one itself, as it can take anywhere from a month to two months for the architecture team to draw the plans and about four more weeks for the bidding process to play out.

There could be early problems, too. What if the bids all come in too high? The design process has to start over again, costing more precious time.

This is avoided in the design/build method.

“In design/build, we are working with pricing much closer,” Seil said. “We can put together a budget much quicker. That’s what we did on this particular project, and it is paying off in a compressed construction schedule.”

William Birck, president of Chicago-based Reed Illinois Corporation, a general contractor and construction manager, says that his firm has relied upon a diverse pipeline of projects to ride out the construction slowdown so far.

Reed is doing what other survivors are doing: The company does not focus its efforts on one particular sector of the market. Instead, it tackles projects in all fields.

“We are strong believers in diversification,” Birck said. “We are active now in health care, in corporate construction and in institutional markets. We will even get involved in hospitality and retail projects. Of course, at this point in time those markets have slowed, it not stopped.”

And that’s the point. Reed is able to overcome the slowdown in the retail and hospitality businesses by focusing on the other areas of its practice that are doing well, such as healthcare and public-works projects. In fact, Reed is now involved in about a dozen hospital projects in the Chicago area, Birck said.

This focus on diversity has led Reed to have an active first two quarters of the year. Business has slowed in the third and fourth quarters, Birck said, but his company will still have a profitable and successful year.

“You have to always be looking for those markets that are doing well,” Birck said. “If you look at healthcare, you see that hospitals are driven by the demographics of the population. No one is getting any younger. Hospitals also benefit from the development of new technology. That’s a driver to more hospital work, too. As new technology comes in, hospitals have to embrace it.”

Several different projects have helped keep Reed busy during even these slow economic times.

“Our company has been through the Great Depression. We’ve been through two World Wars,” Birck said. “We’ve survived the recessions of the ’70s, ’80s and ’90s. What we’ve learned is that all you can do is maintain good relationships with your clients, and provide them with the best service you can. That is what has kept us going this long. It’s not exciting, but it works.”

Happy to be in the Midwest

When Paul Chuma reads the headlines that bemoan the state of the housing and construction industries across the country, he has one quick thought: “I’m glad I work in the Midwest.”

Chuma is president of Meridian Design Build in Deerfield, Ill. His company has seen the effects of the slowdown, of course. But it’s also staying active with several projects, including many that are renovations and adaptive re-uses, work that has remained steady in the Midwest.

“When the economy goes through its cycles, being in the middle of the country and in the Midwest seems to really help,” Chuma said. “We don’t experience the high highs or the low lows that other parts of the country experience. It definitely helps.”

That being said, Chuma isn’t denying that the construction industry is a bit sluggish these days, even in traditionally steady markets like Chicago.

“The velocity in the market has definitely declined,” he said. “There is definitely cause for concern, but there are opportunities out there for those companies that are willing to put forth the effort to figure out how to get a deal done.”

For Meridian, that involves tackling the company’s specialty, design/build projects. The company is now working on a 30,000-square-foot facility near the old stock yards area in Chicago for Gypsum Supply Co. and a 103,000-square-foot build-to-suit headquarters for Auto Truck Group in Bartlett, Ill.

“The big-box spec development has slowed,” Chuma said. “It hasn’t stopped entirely, but it certainly has significantly slowed. We’ve seen several developers who had planned projects that are sitting on the sidelines now. They may eventually happen, but now is not the time. Now it seems that the developers and the commercial brokers are focusing more on pursuing build-to-suit clients.”

Russ Henke, principle at Edwardsville, Ill.-based Contegra Construction, said that not all is gloom-and-doom in his industry. It’s impossible to predict when the commercial market will shake out of its doldrums, Henke said, but he’s looking for positive signs to start showing up as soon as the November presidential elections wrap up.

“We could definitely use some positive news,” Henke said. “There have been enough people waiting it out. I think people are looking for any reason to kick loose and move ahead. Look at it this way, owners are going to see in this coming fourth quarter and the first quarter of next year some of the best construction pricing from a materials and installation standpoint than they are going to see in a long time.

“There are still companies wanting and planning to grow,” he said. “That is the good news. There is nothing worse than the status quo. There are still market sectors that are strong. There are still opportunities on the horizon to take advantage of.”

Source:  RE Journals

About half of the 20 rigs in question are rented for when they’re completed in two to three years — no longer enough to ensure financing for units that can cost $800 million to build, said Brian Uhlmer, an analyst at Pritchard Capital Partners in Houston. The drillers building those rigs are mostly fledgling contractors and may lack enough cash to satisfy lenders amid a global credit crunch, he said.

Norway’s Sevan Marine ASA has lost 70 percent of its value this month amid concern it won’t get financing for two drilling units. Houston-based Atwood Oceanics Inc. said Oct. 16 that it won’t exercise an option to build a deepwater rig at Jurong Shipyard Pte. Ltd. in Singapore. New rigs were being ordered to ease a shortage of deepwater gear needed to exploit offshore prospects like Brazil’s Tupi, announced in November by Petroleo Brasileiro SA, or Petrobras.

“Petrobras would probably be the dominant oil and gas company that gets hit by this,” Uhlmer said.

Jose Sergio Gabrielli, chief executive officer at state- controlled Petrobras, said the Rio de Janeiro-based company may need to help find financing for some of its suppliers. “We are concerned about the supply chain of products for Petrobras,” Gabrielli told reporters at a conference in Houston last week. >more

Some projects for city, state could be delayed

The list of casualties stemming from the credit crisis is about to get longer.

Local governments, long dependent on debt as a bedrock financing mechanism, could be forced to put off or even scrap plans for new schools, sports stadiums, even road and bridge projects as credit markets continue to dry up.

While Houston has one of the strongest regional economies in the nation, as well as a high credit rating, the region’s public entities may not be spared the troubles rippling through municipalities around the country.

“Market circumstances right now are extremely difficult for any entity to navigate,” City Controller Annise Parker said.

She added that some public improvement projects may have to be postponed in the coming months, although it is too soon to tell which.

Amid the failure of lawmakers in Washington to pass legislation authorizing a $700 billion rescue plan for the country’s wounded financial markets, the City Council today will take up several measures intended to shore up city finances already hit hard by Hurricane Ike.

They include borrowing up to $95 million to deal with hurricane-related costs, restructuring nearly half a billion dollars’ of debt and shifting funds to pay for capital expenditures that ordinarily would be bought with bond monies.

Still, analysts and city officials said, the Houston area likely will weather the crisis well.

Many other cities, counties, school districts, transit authorities and states — already roiled by sagging sales and property tax revenues in the economic downturn — may not.

Public service cutbacks

Some states have made sharp cutbacks to public services, and some cities, such as Philadelphia and New York, have initiated hiring freezes that extend to police officers. Being cut off from credit could make matters worse.

But cities like Houston or states like Maryland, both of which have high credit ratings, will be able to borrow, said Robert Inman, professor of finance at the University of Pennsylvania’s Wharton School.

“For at least the next year or so, there may be a significantly lower quality of services,” said Inman, who specializes in public finance.

Protective regulation

Money will be tight, but few municipalities will be bankrupted because of regulations that govern how they can borrow and invest money, said Robert L. Bland, chairman of the Department of Public Administration at the University of North Texas.

Chief among them in Texas, he said, is the Public Funds Investment Act, passed by the Legislature in 1989 to protect municipalities from poor investments.

“We’re not immune, and not so arrogant as to say we’ll never suffer a loss,” Bland said. “But we have provisions so that we only incur losses if there’s total incompetence. And that’s not likely to happen.”

Around the region, elected leaders are keeping an eye on the credit markets. Budgets are busting with rising fuel and utility costs and steep tax revenue drops caused by housing foreclosures or lower consumer spending.

Harris County financial officials said there would be serious repercussions locally if Congress fails to inject liquidity into the markets. If the market to finance short- or long-term construction debt collapses, it could be difficult for the county to tackle expensive capital projects, officials said.

“I don’t think that’s going to happen,” said Financial Services Director Edwin Harrison. “But it could.” The county has $3.8 billion in debt outstanding in principal alone. The Harris County Toll Road Authority is responsible for about $2.1 billion of that.

Short-term loan

The Woodlands Township, a special district that collects sales throughout the master-planned Montgomery County community, has struggled to find a buyer for $17 million in bonds it needs for payments to Houston and Conroe under regional agreements.

The township may have to resort to a short-term loan, its board chairwoman said.

Houston Independent School District officials said they did not expect an immediate impact, although they are closely following the credit markets.

The district still must sell about $400 million in bonds approved by voters in November.

In the city of Houston’s $2 billion investment portfolio, finance officials already have begun to capitalize on some of the problems other areas are facing. In the past week, they have invested millions in bonds from the Broward County, Fla., Airport System and the Harris County Flood Control District. Interest rates in both cases hovered around eight percent, city officials said.

Today, City Council will vote on whether to refinance $423 million in public improvement bonds in an effort to get a lower interest rate. Council also will consider opening a line of credit for Ike-related expenses, a tab that already has hit $30 million.

Houston officials said those steps should ensure enough cash is available to run the city before the state releases property and sales tax revenues at the beginning of 2009. The city’s efforts to keep cash flowing are not unusual: municipalities often try to save money by adjusting high short-term interest rates or borrowing against anticipated tax revenues.

But because interest rates have remained high, city officials have had to delayed issuing some bonds or restructuring other debt used for planned improvements in airport and utility infrastructure.

The city currently has about $12 billion in debt, about $4 billion of which is supported by property tax revenues. The remainder is backed by airport and utility fees, and hotel occupancy taxes.

Sooner or later, Parker said, the city may have to pay higher interest rates for many of these projects, leaving less money for everything else.

“These are things we do on a routine basis,” she said. “The timing is a factor and the amount of money may be bigger because of market issues and Ike, but this is not yet an emergency situation.”

Source: Houston Chronicle

Rowan Companies Inc. is missing one of its nine rigs in the Gulf of Mexico and is assuming the worst.

According to Rigzone.com, Houston-based Rowan thinks the Rowan-Anchorage jackup capsized and sank at its pre-storm location in Vermillion Block 201 off the coast of Louisiana. All personnel were evacuated from the jackup before Hurricane Ike struck.

Rowan’s Sabine Pass facility was also hit hard by the storm and is expected to be out of commission for the foreseeable future.

Houston-based Pride International Inc. also reported Tuesday morning that its jackup Pride Wyoming likely sank during the storm.

Sugar Land-based Noble Corp. said two of its semisubmersible platforms — the Paul Romano and the Amos Runner — drifted off their moorings during Ike but otherwise suffered minimal damage.

BP PLC reported this morning that the drilling derrick to its Mad Dog spar rig toppled and sank during the storm.

The jackup Ocean Tower, belonging to Houston-based Diamond Offshore Drilling Inc., also lost its drilling package, the company reported Monday.

Houston-based Transocean Inc. reported Monday that its Marianas semisub had been located two miles off its mooring site.

Dallas-based Ensco International Inc. has still been unable to locate its Ensco 74 jackup, which was reported missing Monday.

San Ramon, Calif.-based Chevron Corp. has acknowledged that some of its Gulf rigs were damaged but is not releasing the names yet.

Royal Dutch Shell PLC reported no damage to Gulf drilling assets.

The MMS reported Sunday that 28 of the approximately 3,800 offshore oil and gas platforms in the Gulf were severely damaged or destroyed by Ike, based on flyovers of the area. On Tuesday, the MMS reported that 97.2 percent of oil and 84.2 percent of natural gas production in the Gulf is shut in.

Source: Houston Business Journal ]]> http://synergenconsultingblog.com/rowan-pride-jackups-believed-sunk-in-gulf/feed/ http://synergenconsultingblog.com/wall-streets-bloodletting-what-does-all-this-mean-for-texas/ http://synergenconsultingblog.com/wall-streets-bloodletting-what-does-all-this-mean-for-texas/#comments Tue, 16 Sep 2008 13:57:57 +0000 admin http://synergenconsultingblog.com/?p=74

Large tracts of Texas are underwater, submerged by Hurricane Ike, with damage estimates at $16 billion.

Much of Houston, the nation’s fourth-largest city, lacks power, shorting out the center of Texas’ energy industry. Nationally, Wall Street, oil, banking and housing are tempest-tossed, with Lehman Brothers adrift in bankruptcy.

So will the Texas economy be set back by these natural and financial disasters?

“There’s a bloodletting on Wall Street. Whatever the fallout is, we’ll feel it here,” said Bernard Weinstein, a University of North Texas economist.

“The sunshine, frankly, is that we’re in Texas,” Weinstein said. “Our economy statewide is pretty good.”

Said Cheryl Abbot, regional economist for the U.S. Bureau of Labor Statistics: “Everything is relative. Compared to other parts of the country, Texas was certainly doing better.”

North Texas and Houston led the nation in job growth over the last year. The Bureau of Labor Statistics announced at the end of August that the Metroplex led the nation in new nonfarm jobs over the past 12 months, with a 2.3 percent growth rate in July compared with the same month last year. Houston, which represents roughly a quarter of the state’s economy, and San Antonio grew 2.2 percent each.

The Gulf Coast’s oil infrastructure — rigs, pipelines, refineries — apparently ducked a worst-case hurricane scenario. Ray Perryman, a Waco-based economist, said Texas ports also escaped severe damage.

Crude oil prices fell $5.47 Monday to $95.71 per barrel, the lowest price since March. Weinstein predicted that prices will settle at somewhere between $80 and $100 per barrel in coming months.

“At $80 to $100, Texas does pretty well, ” Weinstein said, adding that energy-associated industries will also prosper. “We sell our expertise all over the planet.”

He also predicted that the price consumers pay at the gas pump should decline soon.

As for Ike, there’s probably a silver — or green — lining. Weinstein tracked the impact of Hurricane Katrina on Louisiana and found that it was hardly visible, at least on the national economic radar. And Ike was no Katrina.

“As serious as the hurricane was, it’s probably just a blip,” Weinstein said. “There could be $15 billion to $20 billion in new money flowing into Texas. The rebuilding process will be a tremendous stimulus to the economy, particularly since that money’s going to come from elsewhere . . . insurance from all over the world.”

Abbot concurred on the rebuilding benefit.

“Construction is going to continue to be a good driver along the coast,” even if it takes a while for rebuilding to begin, Abbot said. “People need to keep in mind: Houston will see increases in some individual employers.”

She noted that even if Texans who work in the energy business aren’t able to get to the office for a while, their companies will likely continue to pay them, since many are large multinationals.

Texas financial institutions have come through the housing crisis and credit crunch better than in other states. While local consumers are feeling the effects of tighter credit, community banks appear healthy.

“Our community banks are incredibly strong,” Perryman said. “None of them drank this Kool-Aid.”

But, Perryman said, don’t look for any major housing developments to crank up soon.

“It’s harder to get anything financed than it was a year ago, or two or three years ago,” Perryman said. “Everybody’s kind of nervous and on the sidelines right now.”

As for the long-term effects of the Wall Street meltdown, coupled with Ike?

“We won’t know those for a good period of time . . . several months,” said O. Homer Erekson, dean of Texas Christian University’s business school. “That by itself is destabilizing.”

Erekson remained confident in the U.S. economy’s resilience, despite the “extraordinary” Lehman Brothers failure and other recent Wall Street developments.

Meanwhile, Weinstein recalled the mid-1980s for historical perspective.

“We lost our banks, we lost our savings and loans,” he said. “There was blood running in the streets of Dallas and Houston. Three years later, there were more people working in Texas than in 1985.”

Source: Star Telegram

The announcement, which can be read on the AIA’s Web site, says the groups have agreed to collaborate in the areas of advocacy, education, and research, and have identified at least 10 possible collaborative projects. Scott Frank, AIA’s director of media relations, emphasizes that they intend to form a strategic alliance, not a partnership. He says nothing more definitive can be said until the AIA board reviews the proposed alliance, which it plans to do during its next meeting in September.

The announcement came three weeks after the AIA released its assessment of three green-building rating systems. As RECORD reported, the study was favorable toward LEED, citing it as “a good example of a rating system that provides a measurement of environmental achievement.” Frank says there’s no connection between the study and the proposed strategic alliance. “The two things shouldn’t be connected whatsoever,” he says. “They’re two separate ideas.”

The strategic alliance could mark an important step toward creating some synergy between the groups. While Templeton says they have had “a strong relationship” since the USGBC’s founding 15 years ago, the AIA has worked independently, for the most part, in developing green-building standards and goals. During a forum at the Greenbuild convention last fall, USGBC president Rick Fedrizzi questioned why AIA hasn’t endorsed LEED and asked the association “to tell us what’s wrong with LEED.”

Nadav Malin, vice president of BuildingGreen*, an information provider for the sustainable design community, conjectured that the announcement is ³fundamentally about restoring trust² between the groups. The disconnect at the national level, he says, has been odd, given that in many places, close collaboration is common and green practitioners are often members of both groups.

The prospect of closer ties is exciting to Bruce Fowle, FAIA, senior partner of FXFOWLE, who laments competition between the groups. “There are too many independent green organizations that aren’t necessarily working together,” he says. “What’s great about the USGBC is that it’s being universally adopted. You can have a conversation with practically anyone in the world about how green you want to be.” The USGBC is continuing to improve its system, Fowle says, “and for AIA not to get on that bandwagon would be very shortsighted.”

Source: Architectural Record

Encompassing nearly 1 square mile, the project will be the largest park built in London since the Victorian era. It will include areas for community gardens, wildlife preservation, and concerts and festivals. The design also calls for bicycle routes and footpaths that will connect the Valley with the River Thames for the first time. Hargreaves Associates, which designed the Sydney 2000 Olympic Park, is aware of how much hinges on the project. “It is the centerpiece of Europe’s largest regeneration program,” says firm partner Andrew Harland, “and [it] will have a positive economic and social impact on the whole area.”

Another recently announced project aims to have a lasting impact: In May, the developer Lend Lease revealed the winners of a competition to design the Olympic Athletes Village on a site master-planned by Vogt, a Swiss landscape architecture firm, and London-based Patel Taylor. Whittled down from 400 entries, the chosen candidates are mainly established and emerging names from the U.K., such as DSDHA and de Rijke Marsh Morgan Architects. The overall scheme calls for 13 mid-rises and two 30-story residential towers. Post-Games, the Village will be wrapped into Stratford City, a 180-acre mixed-use redevelopment of derelict rail lands.

Similarly, Olympic venues already underway reflect a concern for long-term use. The 6,000-seat Velodrome, designed by Hopkins Architects, will be reconfigured with road cycle circuits and a mountain bike course, making it a major cycling hub in London. Zaha Hadid’s sinuous Aquatics Centre complex, with its two 164-foot-long swimming pools and diving pool, will be the city’s largest natatorium. And the Olympic Stadium, designed by HOK Sport and Peter Cook, contains a detachable top tier with 55,000 seats that will be removed after the Games. While critics have decried the stadium’s design as too ordinary for a world-class event, the architects say that practical character is precisely what ensures its usefulness well into the future.

Source: McGraw Hill

Although the ordinances vary in scope and timeframe as well as stringency, none of them requires buildings to achieve actual LEED certification. This makes the cities responsible for examining building plans for green attributes, presenting financial and organizational challenges.

Although the U.S. Green Building Council (USGBC), the organization behind the LEED Rating System, has noted that LEED-certifiable buildings may not perform as well as LEED-certified buildings, for municipalities, requiring certification presents political and legal challenges.

According to Krista Kline, the urban planning and design coordinator for Los Angeles, the City did not require certification because it is “expensive and time-consuming, and we wanted buy-in from the development community” for the overall green goals. Projects that pursue LEED Silver certification or higher are eligible for expedited permitting that saves between one and six months in the process. Kline noted that requiring certification would make building permits or occupancy certificates contingent on the decisions of USGBC. That situation is legally untenable, explains Kline. “We didn’t want to give USGBC control over our land use.” Although municipalities could incorporate green building requirements similar to LEED into their building codes, the rating system offers both recognition and choice for developers.

“People like LEED as a standard,” said Zaida Basora, AIA, assistant director of administration and architectural services for Dallas and a past board member for USGBC, “so we felt that it was better to go ahead and use it.”

Using LEED as a standard also makes it easy for developers to pursue certification for buildings if they want to do so, since many of the documentation requirements have already been met. In addition to its popularity and marketing cachet, LEED allows developers to choose which credits to pursue.

“We wanted to give flexibility to the development community and didn’t want to quash creativity,” said Kline.

Without certification through USGBC, however, cities must find ways to verify that buildings aren’t ducking requirements. In Boston, where buildings larger than 50,000 ft2 (4,600 m2) must meet LEED standards at the Certified level, an interagency permit-review process has evolved to encourage integrated design and ensure that large buildings are meeting green requirements. All members of a project team meet with representatives from several City agencies before a project is submitted for permit review as well as throughout the design process. The team must submit documentation to the City, approved by a LEED accredited professional (LEED-AP), that shows a project has met LEED requirements.

Coordinating several city agencies as well as project team members represents a shift from the typical permit review process and has not been simple. “There was a learning curve, and it’s challenging, but it’s a steadily improving thing,” said Barbra Batshalom, executive director of The Green Roundtable in Boston, a nonprofit. The biggest challenge, according to Batshalom, was educating city staff about green building and the LEED checklist so that all projects could receive similar assessments. The result has been a more streamlined, uniform review process.

In Los Angeles, the City had to figure out—quickly—how to include green building review in its permit process with little added funding. For now, front-line staff members are being trained to look for a LEED-AP on the project team and the basic requirements for the LEED checklist. Higher-level staff members are being trained to read the checklist and plans more closely. “We know it’s not perfect,” Kline said of this limited review, “but it’s what we could come up with without being punitive.”

To ensure green requirements are being met, every seventh project will be audited by USGBC; if the city finds a lot of projects would not have been certified, it will consider changing the ordinance. Both Los Angeles and Dallas plan to track energy and water use in the new buildings to see if the green building requirements are making a difference.

Source: McGraw Hill

However, for the commercial real estate market in Texas, things are continuing to look up; particularly in the commercial real estate sector. According to Lewis Realty Advisors, a real estate valuation and consulting firm located in Houston, Texas, major metropolitan areas around the state are continuing to post gains in significant areas such as employment and population, two of the most important groups in terms of business.

David Lewis, who is the founder of the company, tells Dallas Business Journal that while he does not feel as though Texas is not immune to some of the same economic problems that has affected other regions of the country, he does see many positive trends in the area of real estate and in the general economy of the state of Texas.

The report names Dallas/Forth Worth, Austin, Houston and San Antonio as top gainers in terms of job growth in the nation. Coinciding with those numbers are increased numbers of population growth for all four cities as well. The economy in Texas relies mainly on healthy education, technology and health care sectors. However, the energy sector is what continues to drive the Texas economy, with a large presence in the Dallas/Fort Worth area.

Lewis’ view of the numbers is that because Texas is seeing overall growth, it is a signal that Texas real estate is performing just as well and likely will continue the trend for the foreseeable future.

Source: NewsWire