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September 25, 2013
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LEADERSHIP SPOTLIGHT
Open Plan Offices Attract Highest Levels of Worker Dissatisfaction, Study Finds

IREM HEADLINES
Gross Possible Rent for Conventional Rental Apartments Increased 1.6% -- 4% in 2012
IREM Executive Edge: Join Us in Scottsdale
Real Estate Forum names IREM members as Women of Influence

INDUSTRY HEADLINES
JLL Extends Coworking Concept to Enterprises by Matching Supply and Demand of Professional Workplaces
Green Scheme Cuts Sydney CBD Buildings' Emissions
Omaha Noticed for Listings of Smoke-Free Apartments
Pepco Energy to Implement Comprehensive Energy Efficiency Project With Sarah Bush Lincoln Health System
Senate Passes Bill Giving Landlords More Power in Tenant Dealings
From Desks To Desktops: WSJ Office Net Brings Audience Retargeting to Digital Out-Of-Home
Homeowners Fight Moratorium on Landlord Registries
Anderson Group Investing Millions Upgrading Office Buildings
Retrofits Rise as Companies Forgo New Buildings
Report: Midtown East Zoning to Encourage More Skyscrapers Won't Cause Overdevelopment of Office Space
Report: Atlanta Becoming Strong IT Hub
Planners Release Height Act Study Findings
Chicago Moves to Require Building Owners to Disclose Energy Use
Remote Interactive Monitoring Services From World Wide Security/GC Alarm Introduced


Leadership Spotlight


Open Plan Offices Attract Highest Levels of Worker Dissatisfaction, Study Finds

Phys.Org (09/17/13) Creagh, Sunanda

A new study conducted by the University of Sydney and published in the Journal of Environmental Psychology found that open plan offices attract the highest levels of worker dissatisfaction, with cramped quarters, lack of privacy, and noise topping the list of complaints. Open plan workplaces typically eschew enclosed rooms in favor of partitioned or non-partitioned desks arranged around a large room. They are supposed to promote interaction between staff members and enhance teamwork. However, a survey of more than 40,000 survey responses collected has found that the benefits for employees are outweighed by the disadvantages.

The analysis of 42,764 survey samples was collected in more than 300 office buildings throughout the United States, Canada, Australia, and Finland by the Center for the Built Environment at the University of California, Berkeley since 2000. The polls asked respondents to list their level of satisfaction or dissatisfaction felt for various aspects of office design such as visual privacy, noise, and temperature. According to the University of Sydney's analysis of the data, nearly 66 percent of respondents work in open plan offices. The researchers wrote in their paper: "In general, open-plan layouts showed considerably higher dissatisfaction rates than enclosed office layouts." More than half of the occupants in open-plan cubicles (59 percent for high-partitioned cubicles and 58 percent for low-partitioned cubicles) and 49 percent in open-plan with no or limited partitions expressed dissatisfaction with the condition of sound privacy. Lead author Jungsoo Kim adds, "Between 20 percent and 40 percent of open plan office occupants expressed high levels of dissatisfaction for visual privacy and over 20 percent of all office occupants, regardless of office layout, registered dissatisfaction with the thermal conditions."
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IREM Headlines


Gross Possible Rent for Conventional Rental Apartments Increased 1.6% -- 4% in 2012

Key findings reported in the 2013 edition of the Income/Expense Analysis: Conventional Apartments, published by the Institute of Real Estate Management (IREM):
  • Gross possible rents for low-rise buildings with 25-plus units had the highest increase at 4.0 percent, raising the rent per square foot to $10.47. Low-rise buildings with 12 to 24 units reported a rent increase of 3.1 percent to $11.79 per square foot; elevator buildings reported a 2.6 percent rent increase to $16.83 per square foot; and garden buildings reported a 1.6 percent gain to $10.57 per square foot.
  • NOI for elevator buildings increased 12.3 percent to $9.92 per square foot; NOI for garden apartments rose 4.2 percent to $5.16 per square foot; NOI for low-rise buildings with 25 or more units rose 1.5 percent to $4.89 per square foot; and NOI for low-rise buildings with 12-24 units declined 4.9 percent to $5.07 per square foot.
  • In terms of expenses, all four building types analyzed were more costly to operate in 2012. Elevator building expenses rose 2.5 percent to $7.90 per square foot; low-rise buildings with 12-24 units rose 3.5 percent to $5.66 per square foot; low-rise buildings with 25 or more units reported a 6.2 percent increase to $5.33 per square foot; and garden buildings rose 3.6 percent to $5.17 per square foot.
For more information go to the Income/Expense Analysis: Conventional Apartments’ products page or contact the IREM Customer Service Department at 430 N. Michigan Ave., Chicago, IL 60611-4090 or call toll-free to (800) 837-0706, ext. 4650.
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IREM Executive Edge: Join Us in Scottsdale

Hurry! Register by October 1 to receive an earlybird discount!

The IREM Executive Edge is a dynamic blend of education and events that combine to deliver a unique leadership experience focused on the real estate management industry.

Your attendance is an assurance that you’ll leave Scottsdale with ideas and solutions to implement in your career and business right away.
  • Lessons in Leadership. IREM CEO and Executive Vice President Russ Salzman takes the helm for this dynamic presentation designed to motivate and inspire. Learn about emotional intelligence, situational leadership, personality assessments, and much more.
  • Technology: Lessons Learned. Evolving technology can make or break a business. Julie Yesnick, CPM, of Gene B. Glick Co., leads this panel on developing a technology strategy – and choosing the right tool for the right job. Practical and informative.
  • Keynote speakers Anant Yardi and Steve Rizzo will be worth the trip on their own.

More than anything else, Executive Edge is about people. You’ll make new business contacts, grow your network, and share ideas with leaders in the industry. Unique networking opportunities include:
  • Joe Aveni Open Golf Tournament
  • IREM Foundation Party with a Purpose
  • Inaugural Gala Dinner
  • Morning Fun Runs
IREM Executive Edge
October 17-19, 2013
Scottsdale, AZ.
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Real Estate Forum names IREM members as Women of Influence

For the 20th year, Real Estate Forum magazine has listed “the most powerful and prominent female executives in commercial real estate today.” Each person listed was “chosen based on her achievements in, contribution to and reputation in the business.” Among those listed were Beth Machen, CPM, President of the Machen Advisory Group, and Carolyn Perrigo, CPM, Senior Vice President of Transwestern. Beth also serves as the IREM’s 2013 President, and oversees her firm’s portfolio of office, retail, mixed-use, showroom, and industrial properties in the Carolinas. She is also the LEED AP for several LEED projects. Carolyn has worked in almost every area of commercial real estate over her 27-year career and has helped Transwestern become one of the largest real estate management firms in Southern California. She has served IREM in a number of positions, and has been an IREM Instructor for many years. To read more about the Women of Influence check out the July/August edition of Real Estate Forum
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Industry Headlines


JLL Extends Coworking Concept to Enterprises by Matching Supply and Demand of Professional Workplaces
4-Traders (09/18/13)

Jones Lang LaSalle (JLL) is adopting a new approach to workforce productivity, dubbed proworking, that balances shifting worker needs with a firm's ability to fit those needs within its current environment. JLL is launching Space Exchange, a new service that applies the proworking approach through services that assess workforce space requirements; align people and venues; connect corporations with a vetted network of professional locations outside of a company's portfolio; and manage those locations on an ongoing basis. The 2013 CoreNet Global Summit in Las Vegas on Oct. 21-23 will offer attendees the opportunity to test a virtual workplace outside a company's traditional portfolio. Attendees will be able to use Space Exchange to reserve private meeting rooms for up to a dozen people.

Studies have shown that most of the office space that corporations own or lease is underutilized for up to 60 percent of a typical workday. Consequently, there is clearly a need to balance supply and demand in corporate real estate. Bernice Boucher, managing director of JLL's workplace strategy practice in the Americas, comments, "Proworking is a natural extension of coworking at the enterprise level, consistently providing professional and well-maintained work environments to mobile professionals by owners of real estate. Businesses need a way to overcome the barriers presented by traditional real estate models and achieve greater flexibility." Space Exchange's marketplace technology is powered by LiquidSpace, whose enterprise-grade software-as-a-service (or SaaS) platform provides mobile and Web user interfaces along with the underlying asset management platform, for approved enterprise employees to securely find and book workspace and meeting space assets. LiquidSpace CEO Mark Gilbreath remarks, "Proworking companies understand that workplace is defined by where their employees work -- and is now a continuum of spaces, including internal company workplace assets, privileged spaces via Space Exchange and public third places, all accessible through one simple application."

Green Scheme Cuts Sydney CBD Buildings' Emissions
ABC Online (Australia) (09/19/13) Malone, Ursula

Office properties have historically been big-time energy users. However, a new scheme has seen commercial buildings in Sydney's central business district reduce their carbon emissions by 25 percent, saving roughly A$25 million on their annual power bills. Over half of the Australian city's offices have signed up for the Better Buildings Partnership, which was launched by the City of Sydney Council two years ago. The latest results show that members are on pace to realize a 70 percent reduction in energy use by 2030. Sydney Lord Mayor Clover Moore notes that the days of entire office blocks leaving lights on overnight are over. She adds, "With half our city's greenhouse gas emissions coming from its commercial buildings, the Better Buildings Partnership shows just how much can be achieved. It's a fantastic result for the people of Sydney because this is about the planet." Centennial Plaza, for instance, has undergone a radical overhaul as part of the scheme. Low-energy lighting has been installed in addition to rainwater collection tanks and even waterless urinals. The building's temperature is controlled by an advanced operating system that responds to changing weather conditions and how many people are in the building.

Omaha Noticed for Listings of Smoke-Free Apartments
Omaha.com (09/17/2013) Gonzalez, Cindy

The National Apartment Association (NAA) has dubbed the Omaha metro area a leader in the national trend for smoke-free apartment listings. Based on listings in a recent Apartment Guide, Omaha ranked No. 2, trailing only Chicago, for the highest percentage of smoke-free apartments. According to the Douglas County Health Department, its "Putting Prevention to Work" unit has joined forces with the Metro Omaha Tobacco Action Coalition to increase the number of apartments offering smoke-free options. The NAA's magazine said Oklahoma City, Charlotte, and Raleigh followed Omaha in the trend.

Pepco Energy to Implement Comprehensive Energy Efficiency Project With Sarah Bush Lincoln Health System
Daily Finance (09/19/13)

Pepco Energy Services Inc. has been chosen to implement a comprehensive energy savings performance contract project for Sarah Bush Lincoln Health System (SBLHS) in Mattoon, Ill. The Pepco Holdings Inc. subsidiary will install more than $3 million in new energy conservation measures and infrastructure for a dozen buildings -- a portfolio that includes medical centers, office buildings, clinics, and one hospital. The project will include everything from exterior LED lighting retrofits and building automation system upgrades to water conservation measures, ventilation system retrofits, and building envelope sealing. These upgrades are designed to improve the patient and work environment internally through improved air distribution and reduced infiltration. Furthermore, the new and improved energy infrastructure is guaranteed by Pepco Energy Services to cut energy consumption by over 22 percent, saving SBLHS more than $334,000 a year. Construction has already begun and should be completed by the end of this year.

Senate Passes Bill Giving Landlords More Power in Tenant Dealings
Milwaukee Journal Sentinel (09/18/13) Stein, Jason

Under a bill approved by the Wisconsin Senate last week, apartment owners statewide would gain more leverage and flexibility in their dealings with residents. The Senate passed the bill by an 18-15 party-line margin, with all Republicans voting unanimously in favor. The bill now heads to the Assembly, which passed similar legislation 57-37 earlier this summer. The measure has received the backing of the Apartment Association of South Central Wisconsin, the Wisconsin Realtors Association, and the Wisconsin Housing Alliance. The bill would allow owners to: one, dispose of evicted residents' property if the owner has notified the residents that he or she could do so; two, evict residents if a crime is committed on the rental property, even if the resident could not have prevented the crime; and, three, require courts to hand over apartments to owners immediately once the court has ruled in their favor.

From Desks To Desktops: WSJ Office Net Brings Audience Retargeting to Digital Out-Of-Home
MediaPost (NY) (09/17/13) Mandese, Joe

A new method of audience "retargeting" is now available that can extend the reach of place-based consumers online. The initiative was developed by The Wall Street Journal Office Network (WSJON) and B2B audience data firm Bizo. It enables advertisers who run ads on WSJON's screens in office buildings to distribute ads to those same office employees when they are on their online browsers. Financial services marketer Oppenheimer Funds beta-tested the bricks-to-clicks retargeting model in August. WSJON began developing the new audience retargeting scheme with Bizo as a means of extending its reach of office workers and corporate executives online. While there are no audience-tracking cookies in WSJON's method, the office network has detailed data on the people in the office buildings it distributes in. That data is correlated with Bizo's vast B2B audience database that can follow those workers onto the Internet by targeting company IP addresses.

Homeowners Fight Moratorium on Landlord Registries
FOX59.com (09/19/13) Keil, Ann

A group of Indianapolis homeowners has teamed up with state representatives to fight a moratorium on landlord registries in the state, claiming they want to take back their neighborhoods. The Indiana Apartment Association is working on a law that would prohibit the creation of registries, arguing that they hurt affordable housing options. But the homeowners and legislators friendly to them want the right to create such registries so that contact information for responsible parties is easily accessible. The registries typically require apartment owners to pay a fee, which both owners and managers oppose. Critics say the registry fees range anywhere from $50 to $250 per unit. The Economic Development Committee is scheduled to meet at the statehouse on Sept. 25 to try and determine how effective such registries really are.

Anderson Group Investing Millions Upgrading Office Buildings
Albany Business Review (09/16/13) DeMasi, Michael

The Anderson Group LLC is in the midst of a multi-year, multimillion-dollar improvement of its Albany-area buildings. The upgrades range from energy-efficient lighting to new HVAC systems to re-facing building facades. All of the improvements are geared toward retaining tenants and attracting new ones. The Anderson Group owns a total of 18 buildings and manages two others, tallying approximately 500,000 square feet. Managing partner Willard "Andy" Anderson remarks, "We've been talking a lot around here about getting all these properties ready for the next 20 years." Anderson points to the lighting upgrades that were done at the company's building at 125 Wolf Road in the first quarter of 2012 as having led reduced electrical costs for tenants by 25 percent in the first year. The Anderson Group ranks as one of the biggest owners of commercial offices in the Albany, N.Y., metro area.
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Retrofits Rise as Companies Forgo New Buildings
Fort Wayne Journal Gazette (IN) (09/15/13) Jackson, Anna-Louise; Feld, Anthony

More and more U.S. businesses are opting to save money by renovating existing commercial buildings instead of erecting new ones -- further proof that caution persists even as the economic recovery lumbers into its fifth year. As the recession began, alteration projects costing more than $100,000 rose as a share of total nonresidential construction and have yet to come down. Robert Murray, vice president of economic affairs at McGraw Hill Construction, notes that updates to commercial, manufacturing, and institutional structures comprised 26.7 percent of total nonresidential building starts in the first eight months of this year. That was little changed from the 26.3 percent average in 2010-12 following the 18-month recession that ended in 2009.

In a low-growth environment, many firms have not been able to justify adding new space or expanding their existing digs. Brian Jacobsen, chief portfolio strategist at Wells Fargo Advantage Funds, states that business leaders are instead focused on trying to make better use of existing structures in order to minimize costs. New investment opportunities are emerging, as a result. Lighting systems are especially "ripe for renovation," and companies specializing in these products are beginning to attract the eye of more investors, reports Scotty McConnaughey, senior vice president of U.S. equities at Standard Life Investments. Lighting expenses currently make up nearly 30 percent of total energy costs for a typical commercial building, so there are significant potential cost savings within one to two years of an upgrade.

Report: Midtown East Zoning to Encourage More Skyscrapers Won't Cause Overdevelopment of Office Space
New York Daily News (09/19/13) Chaban, Matt

A new report shows that New York City Mayor Michael Bloomberg's ambitious plan to rezone a wide swath of Midtown Manhattan for new office towers will not undermine growth in other parts of the city. Even if there is only modest demand for new offices in the coming decades, the city's Independent Budget Office (IBO) still forecasts a strong potential upside in the proposed "upzoning" of 78 blocks between Fifth and Third Aves. from 39th St. to 57th St. IBO budget and policy analyst Sean Campion wrote: "The rezoning could help satisfy a pent-up demand for new office space in the area. . . . The additional supply could also make office rents more affordable citywide." The average age of office buildings in Midtown East is 70 years. In addition, many buildings in the zone are small by modern Manhattan standards.

The Bloomberg administration hopes the zoning will encourage the development of modern office towers in a part of the city rich with public transit. This has been a particularly important issue for Bloomberg, who is concerned the city may be losing its competitive edge to such other global capitals as London, Shanghai, and Tokyo. The mayor recently wrote: "If new and existing businesses can't find the kind of modern space they need in East Midtown, they may well look outside the five boroughs -- and that will mean fewer jobs for New Yorkers and lost tax revenue we need to invest in our schools, parks and neighborhoods." Critics, though, charge that the rezoning could undermine projects still developing citywide, most notably Hudson Yards and the new World Trade Center.

Report: Atlanta Becoming Strong IT Hub
GlobeSt.com (09/12/13) LeClaire, Jennifer

Marcus & Millichap's third-quarter office report shows that corporate expansion in the Atlanta area has converged with limited construction over the past 12 months, dropping the market's vacancy rate to its lowest point since the Great Recession. The study states: "Of particular importance is the absorption of new space appears to be correlated to Atlanta becoming a strong IT hub in the Southeast. Coca-Cola signed a 275,000-square-foot lease in the SunTrust Plaza building in downtown, where it plans to add 2,000 jobs with the launch of its Information Technology Center of Excellence." AT&T and General Motors are among the other firms expanding information technology operations in the region, boosting metro Atlanta's IT hub stature. Marcus & Millichap forecasts continued expansion by companies in and around the city. Transaction activity in the office market is expected to remain strong through the rest of this year. Private investors and owner/users are most active in the suburbs, the study shows, with many utilizing cash or SBA financing to acquire commercial properties.
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Planners Release Height Act Study Findings
Washington Post (09/12/13) St. Martin, Victoria

According to a preliminary report by the National Capital Planning Commission, height limits on some buildings in Washington, D.C., could be amended, but not without protections for sightlines of federal buildings. The draft report looked at the height limits on buildings in the city. Researchers found "some opportunities for strategic change" in D.C.'s historic L'Enfant City. Any changes made to the 1910 Height Act, which restricts building height in the nation's capital, must consider the sightlines of such federal buildings as the White House. The study was initiated in 2012 after a request from Capitol Hill legislators. A 30-day public comment period began Sept. 12 and ends Oct. 15.

Chicago Moves to Require Building Owners to Disclose Energy Use
Chicago Tribune (09/12/13) Wernau, Julie

Owners of large buildings in Chicago will soon need to report how much energy their buildings use and how they compare to peers as part of a city-wide effort to reduce energy usage that was recently passed by the city council. The city has not yet mandated that building owners take steps to improve energy efficiency, but wants to curb energy use among half of the city's buildings by 30 percent by 2020. The law requires yearly reports on buildings' energy efficiency starting in 2014. However, information about individual buildings will not be publicly available until 2015 to provide building owners a year to improve their scores before the information becomes public.

Buildings larger than 50,000 square feet, which are responsible for 22 percent of city buildings' total energy consumption, would be required to disclose information on energy consumption as well as building size, use, and occupancy levels using a software program administered by the U.S. Environmental Protection Agency. The "benchmarking" tool, called ENERGY STAR(R) Portfolio Manager, would allow the comparison of the energy efficiency of similar buildings. The EPA says energy use fell by 7 percent in the 35,000 buildings that used the tool to benchmark energy performance from 2008 to 2011. "This ordinance doesn't require residents to invest in a single dime in the buildings. It will provide them with information in a much more transparent format. So they will know whether and how it may make sense for them to invest in their buildings if they choose to do so," says Chicago Alderman Daniel Solis, 25th Ward.

Remote Interactive Monitoring Services From World Wide Security/GC Alarm Introduced
Newsday (09/05/13)

Under the launch of its Managed Services division, World Wide Security/GC Alarm recently announced its new service offerings. They include an entire division devoted to the needs of commercial buildings and residential complexes in the New York tri-state area, with technology-based automation of doorman services, package delivery management, virtual guard tours, and hosted access and video services. "These services are designed to assist doorman and building managers during the day and off hours to make sure certain tasks are carried out," said Kenneth Mara, President and CEO of World Wide Security/GC Alarm. "Technology can go the distance to increase efficiencies and reduce costs." To manage the market response, the company has increased its technical services department. The news comes after the firm completed its acquisition of CCTV Security last month.



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