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Sustainability Grant Program Announced
As real estate managers, we may offer recycling programs, other traditional eco-friendly services or larger initiatives to counter the carbon footprints of our buildings, but think about how much more we can do together to create a cleaner, more sustainable world.
Elaina Tattersdale thought about sustainability a lot. As the daughter of 2020 IREM President Cheryl Gray, CPM, Elaina grew up in a commercial real estate family and dreamt of working in sustainability to reduce the impact that buildings have on the environment. Sadly, she was not able to realize her dream. On June 5, 2019, Elaina passed away after a short battle with colon cancer. She was just 35 years old.
While Elaina’s time with us was too short, we can all make sure her dream is not short-lived. To honor Elaina’s passion for sustainability, her parents have donated $50,000 to the IREM Foundation to launch Elaina’s Sustainability Fund. Financial commitments to this fund will provide grants in commercial real estate that reduce the demand for resources, increase recycling efforts, or improve occupant wellness, all ultimately leading to a cleaner and more sustainable planet. Please consider joining Rick and Cheryl Gray in honoring Elaina’s dream by donating today. No matter the size of your commitment, it will make a positive impact.
To support Elaina’s Sustainability Fund, please click “donate now” at irem.org/elaina and select Elaina’s Fund from the dropdown box. For additional information, please contact Rebecca O’Brien at robrien@irem.org or (312) 329-6008.
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Ethics—Universally, a Very Good Place to Start
There are best practices for property management that are specific to the regions where business is being conducted. But there are also aspects that are shared throughout the world, no matter where you practice.
Real Estate Management News is taking a look at where best practices globally converge and separate. And where better to start than with one area that is important to every IREM member—and for that matter, every real estate professional? That area is ethics.
Saadat Keshavjee, CPM, CMOC, CEO and managing director of Amhurst Property Management Ltd., based in Calgary, Alberta, Canada, notes that ethics have been the most critical part of building his practice, which he began in 1982. “We’re known for our very strict and unbending code of ethics and that’s the way in should be,” he says.
The weight he puts on ethics helps his business stay in good standing with the government: “We’re governed by our province (of Alberta), and we have regulations that say you will report every month and you will report in a certain way. Banking statements, banking reconciliations. Basic, simple reporting—we do an accounting statement for every property, consistently every month. It’s clean and crystal clear. There are no side deals.”
Keshavjee notes that IREM’s Professional Code of Ethics, for most Canadians, follows naturally with respect to discrimination: “It’s part of our DNA to be fair and equitable, because we all hail from somewhere else.”
One tip that Keshavjee has for managers of all levels, regardless of where in the world they manage, is to review IREM’s materials and courses to stay up to date with the latest practices.
“As a faculty trainer, I repeat the concepts to my new students, and that reinforces my habits in the business. I recommend that every member of IREM audit at least one course every two or three years, to gain a ‘refreshed’ approach to the practice of management. It has given me a tremendous edge.”
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Industry headlines
2020 Trends to Watch in Multifamily Property Management
Multifamily Executive (12/09/19) Marshall, Justin
Apartment operators looking ahead to 2020 should prepare for a busy year of integrating new technology, introducing solid on-site talent, and streamlining package management. The industry is evolving fast, but property managers who pay attention to changing trends and retain a strong degree of service and professionalism can stay ahead of the curve. Management would first be smart to remember that performance starts with people, so employing friendly, professional, and dedicated staffers is key. Turnover was high in 2019, so apartment properties may look to employee referral bonus programs, job training programs, and learning management programs to find and retain good talent.
Owners and operators should also remember to balance high-tech services with a comfortable human touch. Relying too much on technology takes away the personalized service that apartment residents like, but eschewing technology entirely will overload a team with responsibilities that can be automated. A third trend is the emergence of package management systems. With online shopping stronger than ever and one-day shipping increasingly common, apartment buildings that install package storage rooms with 24/7 access for tenants to ensure access to their goods around the clock will stand out. Fourth, apartment owners should exercise caution when investing in smart-home tech, keeping in mind that cost savings may be offset by the high price of retrofitting.
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Preventing Mold in the Workplace
MarketScale (12/10/19) Reed, Sam
Mold is a tricky problem anywhere, but it can be especially bad if it festers in office settings. Mold spreads rapidly wherever there is moisture and can damage materials like sheetrock, wallpaper, insulation, drywall, and carpet. Furthermore, mold in the workplace can cause serious health issues for the people working there. Even if a worker is not allergic to mold, he or she can develop respiratory problems, asthma, and even immunological reactions as a result of prolonged exposure to mold in the workplace. Exposed workers commonly have upper and lower respiratory issues, breathing difficulties, skin rashes, headaches, coughing, and wheezing, though long-term exposure can also cause chronic fatigue and flu-like symptoms. Complicating matters, mold can be difficult to detect in older buildings.
There are several indications that mold may be festering, however, including a musty smell, rusty pipes, warped walls, and other moisture problems. The best way to minimize the risk is to take preventative steps. The Center for Disease Control has issued a number of recommendations that, when followed, will decrease the chance that mold will spread through an office. One is to keep humidity levels as low as possible -- certainly under 50 percent -- for as long as possible. Installing exhaust fans in kitchens and bathrooms will also help take moisture out of the air. There should be no carpet in the kitchens and bathrooms, and any flooded carpet should be immediately removed and replaced. Anyone cleaning the bathroom should use products with mold inhibitors. If time and resources permit, repainting the walls with mold inhibitor-treated paint will also minimize the risk.
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Teens Could Be a Saving Grace for Malls, New Research Says
CNBC (12/10/19) Olick, Diana
New research from CBRE has found that members of Generation Z could be a saving grace for shopping malls. While millennials as a group have turned to online shopping, teenagers appear to prefer shopping in brick-and-mortar stores, suggesting that a resurgence for malls could be imminent in some markets. Gen Z spends roughly $143 billion every year and influences an additional $450.5 billion spending in others, according to CBRE's research. Spencer Levy, chairman of Americas research at CBRE, said Gen Z shoppers have a habit of browsing for clothing online, then going to the store to actually try it on and purchase it. Levy suggested that Gen Z shoppers are looking for a "social experience" at the mall, adding that the social component leads to higher sales for stores. "People buy up to 70 percent more goods when they walk back into the store, than if they just buy it online," Levy noted.
Levy posited that Gen Z shoppers are more willing to go to malls than their millennial counterparts because they grew up with online shopping, as opposed to millennials who experienced the convenience of online shopping as a novelty. "The Gen Zers grew up in a world with both [types of shopping], and they liked both at the same time—not one or the other, but both," Levy reasoned. With more young shoppers opting to actually visit stores, mall managers have begun diversifying their options to attract such customers. Calvin Schnure, senior vice president, research and economic analysis at NAREIT, said malls now increasingly feature "tenants that provide experiences like exercise clubs, restaurants, and bars that keep shoppers coming back."
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Custom Glass Mast Car Tops Off Empire State Building Modernization
FacilitiesNet (12/12/19)
In New York City, the Empire State Building's modernization project has included updating the elevators carrying passengers from the 86th floor to the 102nd floor observatory. Otis, the company that installed the Manhattan landmark's original elevators, was entrusted with the modernization process and delivered a custom all-glass elevator to enhance the visitor experience. The new Otis Gen2 unit elevator has steel-reinforced flat belts in lieu of conventional steel cables, contributing to a smooth and quiet journey to the observatory. During the ride, a light show is projected onto the hoistway wall and a curated soundtrack adds to the atmosphere. The landing at the 102nd floor has glass hoistway walls to reinforce the feeling that visitors are encased in glass at the top of the world. The observatory itself now has floor-to-ceiling windows.
Otis began the elevator modernization in 2011 with the aim of saving time and energy. The Otis Gen2 unit makes use of regenerative technology to achieve this goal. Regenerative technology captures energy that would normally be wasted as heat and returns it for use in other systems in the building. In total, the new elevator system uses 50 percent to 75 percent less energy than the original system. Moreover, the new elevators get visitors to the 102nd floor 50 percent faster during peak travel times than the original system. That is good news for the approximately 10 million people who visit the Empire State Building every year, but Otis professionals are onsite at the iconic building every day just in case repairs are needed.
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Shopping Malls Are Reusing Closed Stores
Crossroads Today (Texas) (11/27/19) La Monica, Paul R.
Stores inside shopping malls may be struggling, but mall owners are finding creative ways to reclaim vacant space and enhance their centers' offerings. For example, many are splitting up the large spaces where anchor stores used to be to create multiple smaller spaces. Those smaller spaces are being filled with an eclectic mix of tenants, ranging from hospital offices and pop-up stores to gyms and sports centers. According to Kurt Ivey, vice president of marketing for mall owner Macerich, companies with A-list malls in top markets should have no problem finding new tenants to fill in vacant spaces. Ivey said that several of Macerich's malls have found creative ways to fill in old anchor tenant space. In Brooklyn, an old Sears has been replaced by Primark, Zara, JCPenney, and Burlington Stores. Meanwhile, in Arizona, an old Barney's now hosts a co-working location and an Apple Store. And in upstate New York, the information technology division and other office support staff of Saratoga Hospital will soon move into the space once occupied by another Sears. "It's all about reusing space and finding the proper mix," Ivey remarked.
Increasingly, it appears that the proper mix Ivey referenced includes recreational and athletic offerings as well as niche stores. After delivering a blistering criticism of traditional mall tenants, Washington Prime CEO Louis Conforti praised the addition of athletic centers to malls as a new draw for shoppers. Sports centers, including for indoor golf, have become anchor tenants at malls run by Washington Prime in Colorado and Ohio. Other shopping centers have added bowling alleys and even bocce venues. On a similar note, malls are increasingly turning to entertainment venues to attract customers. Randy Ruttenberg, founder of Fairmount Properties, said shoppers are looking for experiences just as much as bargains. As a result, wineries, brewpubs, and live music venues have become popular additions to malls.
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In the Airbnb Era, Apartment Landlords Are the New Hoteliers
Wall Street Journal (12/10/19) Putzier, Konrad
After initially regarding Airbnb with distrust, apartment owners have begun embracing the short-term rental listing site as an opportunity for more revenue. Developers are increasingly teaming up with start-ups like Sonder Corp., Domio Inc., and Lyric Hospitality Inc., issuing long-term leases of blocks or even floors of furnished apartments to the new companies. In turn, Sonder, Domio, and Lyric rent out individual units to travelers who can stay as short as one night or as long as several weeks. Both sides regard the deal as a win-win. Apartment operators are able to rent out large blocks of units immediately as opposed to waiting for individual tenants to fill a building up, while the start-ups are able to cultivate a steady flow of business from Airbnb travelers.
Greystar Real Estate Partners is one real estate firm that has embraced Airbnb. Greystar recently agreed to lease 100 units in a San Diego apartment community to Lyric. Greystar CEO Bob Faith remarks, "We could have just continued to put our head in the sand and say 'it's not happening.' Or we could really try to more deeply understand what's driving this and how we might be able to respond to this need." Greystar is not alone. RXR Realty is converting multiple floors in two of its New York City office buildings into hotel suites in a direct partnership with Airbnb. When the suites are finished, they will be managed by the hospitality company AKA. If the model is successful, RXR will expand it to others in its portfolio. Meanwhile, Domio recently leased an entire 175-unit apartment development in Miami, and Rastegar Property Co. leased all of a 26-floor Dallas building this past autumn. But the rapid expansion may be slowed by state and local government crack downs on behalf of disgruntled neighbors who have reported irritation with short-term renters in their buildings.
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New York City Passes Country's Most Wide-Ranging Bird-Friendly Building Legislation
Civil & Structural Engineer (12/10/19)
The New York City Council recently approved legislation placing new requirements on buildings erected in the city. The rules established under Proposed Initiative 1482B are designed to make such structures more bird-friendly. Specifically, the policy requires that a new building's materials meet new standards that lower collision risks for birds. It also covers renovations like changing glass. The rules apply to building construction in all five boroughs of the city. "The materials and techniques that prevent bird collisions are already commonly used for a variety of reasons in our buildings. This legislation mandates their use in ways that also protect birds in cost effective ways," said Benjamin Prosky, Executive Director of AIANY and the Center for Architecture. The legislation comes after research found that a large number of birds die during their migrations through New York City. Glass collisions are considered one of the major factors in bird deaths citywide each year.
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Visits with Santa for Deaf Keiki, Children with Special Needs Happening This Weekend
Hawaii News Now (12/02/19)
Two shopping malls in Oahu, Hawaii, recently arranged special sensory-friendly Santa programs for kids with "exceptionalities." Ala Moana Center and Pearlridge Center held sensory-friendly Santa visits earlier this month, welcoming families with children of all needs to attend and get their holiday moment with Santa. Ala Moana Center partnered with Autism Speaks to host its event. Both shopping centers limited sensory output during the special programs to make the atmosphere more accommodating for children with sensory-processing disorders. That meant the lights were dimmed and the music was muted. Both malls offered reservations so families could arrange their visits around a time that worked for them. While visiting Santa was free, mall-sponsored photo packages came at a cost. In addition to its sensory-friendly Santa, Pearlridge Center continued its annual tradition of visits with Deaf Santa. For almost 30 years, Deaf Santa has visited Pearlridge Center and communicated with children through American Sign Language (ASL). The event routinely draws more than 150 children.
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Influx of Student Apartments Brings Luxury Living—and High Rents
Minnesota Daily (MN) (12/08/19) La Casse, Morgan
Over the past decade, the neighborhoods surrounding the University of Minnesota's Minneapolis campus have seen an influx of more than 30 new apartment buildings to accommodate the student population. This growth has led to a significant increase in rent prices, with some apartments now rivaling one-bedroom, one-bathroom units in Manhattan in terms of price. The buildings have commanded higher rents because they cater toward high-end audiences, relying on students' parents to help them financially. These properties advertise themselves as "resort-like," with "luxury" and "high amenity" offerings for their residents. In addition to the now-standard gyms and study areas, such buildings increasingly boast rooftop terraces, yoga studios, swimming pools, hot tubs, movie rooms, and even tanning beds. The most luxurious buildings -- the ones that rival Manhattan prices -- have gone so far as to introduce cabanas, music rooms, and golf simulators.
Margaret Kaplan, president of Housing Justice Center, a Twin Cities-based housing advocacy organization, said the buildings can get away with it because students are "a bit of a captive market" given that they need to live close to campus. While there are some affordable options for students, for the most part buildings near campus are run by large real estate firms. Meanwhile, Chris Lautenschlager, executive director of the Marcy-Holmes Neighborhood Association, said that the high-cost student apartments disrupt the surrounding community. "These newer buildings that are being proposed and popping up [all] over Marcy-Holmes are displacing some of the older housing that could have been affordable," he lamented. While some proponents of the high-rises argue that luxury housing will drive down rents at other buildings, that is rarely true in practice, said Ed Goetz, head of the University’s Center for Urban and Regional Affairs.
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California Fines CVS Pharmacy Chain a Record $3.6 Million for Failing to Recycle
Associated Press (12/10/19)
A recent investigation by the California Department of Resources Recycling and Recovery (CalRecycle) reveals that 81 of CVS Pharmacy's 848 retail stores in the Golden State failed to redeem deposits on recyclable bottles and cans or pay a required $100 daily fee as an alternative. As a result, CalRecycle fined CVS a record $3.6 million in its recent enforcement filing. Regarding state regulators, Consumer Watchdog advocate Liza Tucker observes: "They're sending a signal that it isn't business as unusual. We're really going to apply fines that are bigger than in the past." The enforcement action seeks to recover $1.8 million in $100-per-day fees that the 80-plus CVS stores failed to pay as of Oct. 31 and another $1.8 million in civil penalties. The overall fine marks a state record against a single retailer.
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South Florida Spent $12.3 Billion on Rent in 2019 — But Not Because Rents Are Rising
Miami Herald (12/13/19) Rodriguez, Rene
A new Zillow study reveals that renters in Miami and Fort Lauderdale spent $12.3 billion in rent in 2019, up 54.5 percent from $7.9 billion in 2009. The current median rent in the Miami-Fort Lauderdale area is $1,876 for apartments of all sizes, a reflection of the increasing demand for rentals in the face of rising home prices. The median sales price of single-family homes in Miami-Dade surged 6.8 percent to $365,000 in October, marking the 95th consecutive month of increases, reports the Miami Association of Realtors. The median sales price edged up 2 percent in Broward County to $362,000. Meanwhile, a recent study by Florida International University's Metropolitan Center shows Miami-Dade lost 56,584 owner households and gained 95,880 renter households from 2007 to 2017. "It is tempting for people to say millennials are renting longer because they don't want commitment and aren't ready to lay down roots," said Zillow economist Josh Clark. "But this is really an affordability issue. . . . People who want to buy homes are having to move away. Many of those who stay have no choice but rent."
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Windows: No Longer Just for Letting in the Light
Scientific American (12/09/19)
The Ubiquitous Energy company has designed glass panes that dually function as solar panels and can power lights, air conditioners, and even laptop computers in buildings. The panes are composed of organic polymers sandwiched between glass sheets. Some allow all light to pass through, while others absorb particles of non-visible infrared and ultraviolet light. As light comes through the window, the flow of electrons between the polymer layers generates electricity harnessed by microscopic wires. The windows currently produce about 33 percent of the electricity from a given amount of sunlight as the typical solar cells in roof panels, and they are roughly half as transparent as regular glass.
Ubiquitous' Veeral Hardev says windows can cover a much greater surface area than roofs, so the sheer number of windows will exceed electrical production from a rooftop of higher-efficiency solar panels. Other notable window innovations include Mackinac Technology's development of a thin sheet of multilayer-coated plastic placed over ordinary window glass. The plastic layers trap air between them to improve insulation, and the coating reflects infrared rays while letting visible light pass. Also significant is electrochromic windows developed at the University of Colorado at Boulder, designed to capture energy while reducing glare by adjusting shade.
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