California Buildings News Q4 2018

Design & Operation of Office, Multifamily, Hospitality, Medical and Government Facilities Q4 2018 • $5

Lighting Water

Green

Fire CO2

ADA

Most Challenging Building Codes From ADA to Resiliency to Title 24: Are You Up to Code?

Facility Managers' Roles Expand

Multifamily Grows, But Not Enough

Top CRE Firm to Go Carbon Neutral Fire Safety Challenges

Contents Election Impact on Commercial Buildings Sector?

November election results will mean little overall change for the greater buildings’ ecosystem (commercial real estate, construction, buildings products’ sales, etc.). The buildings’ sector is so large that it will be influenced by overall economic conditions, which appear to be in fairly good shape, assuming trade relationships aren’t damaged with major partners.

Divided government in Congress will produce gridlock in Washington, which means neither party has enough clout to rock the boat too much.

The bright spot nationally is the bipartisan talk of infrastructure spending—great news for the construction industry. California voted "no" on Proposition 6, meaning the state will continue to fund public construction projects through fuel taxes. It’s part of a plan to fund a $52 billion state infrastructure initiative.

In California, election of a Democratic super-majority in the legislature and a Democratic administration means that business will need majority party buy-in on its agenda and will be on the defensive when Governorelect Gavin Newsom pushes for populist measures like healthcare for all and other liberal initiatives. Election of public employee union-backed Newsom will strengthen the hand of unions in all matters. Failure to pass the statewide rent-control proposition will remove impediments to building badly needed rental housing across the state.

Having both party leaders in the U.S. House from California (Nancy Pelosi and Kevin McCarthy) will surely be a plus in funding and congressional matters that directly affect the state. “CRE values are more likely to be influenced by interest rates and the tremendous amount of capital targeting North American assets,” says Cushman & Wakefield.

CREATE To The Rescue!

In her column on page 29, veteran CRE exec Kathy Mattes makes a compelling case for an industry commitment to educational programs like CREATE to bridge the serious gap that’s developing in staffing building operations. Getting behind this program — and emulating it in other areas of the state — is the surest way to ensure the effective management of building assets.

Live Where You Shop?

One of the brightest concepts in commercial development these days is adding housing to shopping malls, a concept which could enliven fading retail by adding housing, entertainment, medical services, some municipal services (like libraries) and routing nearby transportation, creating villages.

Seniors have long resorted to using malls as a safe walk-about and pleasant place to have coffee. Life would be much easier for them if they could walk safely to fulfill many of their needs.

Codes Reform is Achievable This issue’s cover story takes a comprehensive look at commercial real estate codes and laws that are very difficult to implement. The article concludes with prescriptions worth considering by our contributing editor Mike Malinowski, former head of the American Institute of Architects California Council, a Sacramento-based architect with plenty of experience dealing with state laws and regs. Check it out and consider backing AIA’s legislative initiatives locally, statewide and in D.C. — Henry Eason

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Major CRE Firm Pledges Carbon Neutrality by 2020

6

Hot FM Issues and Advice

10

Meeting Challenging Codes

East Bay CRE is Booming

18

Lighting Improves Interiors

Hotels Reflect Communities

25

22

Beverly Center Reimagined

Multifamily Housing Shortage at Crisis Level

29

14

27

Educating CRE Managers

Association News from BOMA, USGBC, CMAA, IFMA, AIA

30

Cover images: Adobe Stock.

California Buildings News Team Henry Eason, Editor henry@easoncom.com Ellen Eason, Publisher & Associate Editor ellen@easoncom.com Contributing Editors

Zachary Brown, CBRE Ken Cleaveland, Public Affairs Advocate Bob Eaton, Eaton Hotel Investments Jessica Handy, CodeGreen Solutions Rich Lerner, Construction Consultant Michael F. Malinowski, AIA, President, Applied Architecture Inc. Katherine A. Mattes, Real Estate Consultant Steven Ring, Fulcrum Real Estate Development Carlos Santamaria, CEES-Advisors

Advertising Information Ellen Eason, ellen@easoncom.com 415.596.9466 © Copyright 2018 Eason Communications LLC PO Box 225234 San Francisco, CA 94122-5234

www.cabuildingsnews.com Copyright © 2018 by Eason Communications LLC, publisher of California Buildings News. The publisher assumes no liability for opinions expressed in editorial contributions to the magazine or third-party quotations within articles. The publication is not responsible for claims in advertisements. Printed in the U.S.A.

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4 California Buildings News • Q4 2018

Major California CRE Firm Pledges Carbon Neutrality by 2020 Kilroy Realty Sets Boldest Sustainability

By Sara Neff Strategy in North America At the Global Climate Action Summit in September, John Kilroy, CEO of Kilroy Realty Corporation (NYSE: KRC) announced that KRC commits to achieving carbon neutral operations by year end 2020. KRC is the only North American real estate company to make such a commitment. How is KRC going to achieve this ambitious goal? And why?

First, the how. Achieving carbon neutral operations will involve three steps for KRC. First, KRC will continue to reduce the energy consumption of its properties through maximizing onsite energy reductions. It has reduced onsite consumption by approximately 15% since 2010 and intends to achieve a 20% reduction by 2020. Second, KRC will continue to take advantage of all onsite solar and battery installation opportunities. It has 5.2 MW of solar installed, and is in the process of installing 4.2 MW of battery storage, all of which reduce the carbon footprint of its buildings. Finally, KRC will make the remainder of its energy consumption 100% renewably powered by adding capacity to the grid through a large offsite energy power purchase agreement. Further, KRC is committed to achieving the same objective for its entire announced development pipeline.

Through these programs, KRC will reach Scope 1 (direct emissions from onsite combustion of natural gas) and Scope 2 (indirect emissions from onsite consumption of electricity) carbon neutrality by the end of 2020, exceeding its carbon reduction goals previously validated by Science-Based Targets (https://sciencebasedtargets.org/). Science-Based Targets is a collaboration between the Carbon Disclosure Project (https://www.cdp.net/en), the United Nations Global Compact (https://www.unglobalcompact.org/), the World Resources Institute (https://www.wri.org/), and the World Wide Fund for Nature (https://www.worldwildlife.org) which independently assesses and approves the carbon reduction goals of companies. KRC is also investigating methods to reduce its Scope 3 emissions, which encompass all other total carbon emissions from its business activities, including those in its supply chain.

Next, the why? KRC recognizes that climate change is rapidly impacting the planet, and that dramatic action is needed to avoid the worst of these impacts. Real estate represents 40% of U.S. climate emissions, but it has mostly been ignored in environmental conversations and regulation. Solving global climate problems requires that real estate deeply and immedi-

ately reduce its carbon emissions, and KRC saw an opportunity to push real estate to make dramatic carbon reductions with its commitment. Further, all of the programs needed for KRC to achieve carbon neutrality have been and will continue to be positive for KRC’s bottom line. They draw better employees, improve morale, reduce operating costs, and make KRC’s buildings more resilient.

Even more, carbon neutrality is increasingly important to KRC’s tenants. At the same Summit, Salesforce CEO Marc Benioff announced the Step Up Declaration (https://stepupdeclaration.org/), in which tech companies from across the economy committed to reducing carbon emissions in their supply chains. Crucially, these companies realize that their buildings are part of their supply chains. Therefore, landlords need to be able to provide carbon neutrally operating buildings to be able to attract today’s top tenants.

The response to John Kilroy’s announcement continues to be very positive. Tenants, investors, the media and other stakeholders have praised the company for its bold commitment. This is important because there has been hesitation in the real estate community to embark on large offsite energy procurement projects to reduce carbon emissions; the prevailing belief is that real estate companies must fully maximize all onsite opportunities before tackling offsite projects.

KRC believes, along with many leaders in the environmental community such as the World Green Business Council (https://www.worldgbc.org/) and the Green Building Council of Australia (https://new.gbca.org.au/), that onsite and offsite efforts should occur simultaneously. Onsite work to reduce carbon emissions, such as by reducing energy consumption or installing renewables, is critical, but adding large amounts of renewables to the grid offsite at the same time will accelerate the switch away from fossil fuels and enable much faster market transformation. KRC hopes demonstrating that achieving carbon neutral operations is both possible and good for the bottom line will spur the real estate market to rapidly and dramatically reduce its environmental footprint.

Neff is SVP, Sustainability, Kilroy Realty Corporation in Los Angeles.

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6 California Buildings News • Q4 2018

Facility Management Issues…and Advice Today’s Building Engineer Is a Multitasking Manager with New Challenges The management of all types of commercial and institutional facilities is becoming much more complex, a reality which recent conferences have highlighted. California Buildings News reports on three of the most important educational events in recent months — along with some of the many products and services developed that offer solutions to new and old challenges.

The conferences include National Facilities Management Technology, Northern California Facilities Expo and the International Facility Management Association’s “World Workplace.”

The observations are offered by speakers and industry leaders.

Photos above and right page: Adobe Stock.

7 California Buildings News • Q4 2018

Role of Facility Manager Expanding

a business case for it, put a sensor on it,” Kay said. One example he used is using sensors to monitor the temperature of food and medicine used in seniors’ care homes. If temps rise too high, medicine will be ineffective and food will spoil, causing serious problems for the residents under care.

Quoting IBM, Kay said some structures are evolving from “smart buildings” to “cognitive buildings.” A modern IoT-enabled building, he said, is “becoming a living, breathing entity that tells you when it’s sick,” predicting possibly costly breakdowns.

“The breadth and complexity of responsibilities that our facilities managers are facing is rapidly expanding. FM has traditionally been known as a ‘wear many hats’ profession. With a diminishing facilities workforce in which to delegate the mounting tasks, this rings even more true as the extra load falls on the manager to handle,” says Jeremy Goodland, IFMA Silicon Valley’s president, who recently attended the World Workplace Conference.

Goodland, who is also a senior project manager at Western Allied Mechanical Inc. in Menlo Park, continued, “Until we FMs are Retiring…Leaving build a strong foundation of young Serious Knowledge Gap facilities professionals to support In his NFMT Vegas talk, ProFM’s the growth of the industry, faciliRandy Olson focused on the need ties managers will continue to face to transfer decades of accumulated an uphill battle. It’s more important knowledge from retiring Boomers to than ever to support the efforts of the younger workers entering the indusIFMA Foundation and their Global try, alleviating a serious knowledge Workforce Initiative (GWI), as they gap that could impact building manlook to educate our youth regarding agement. “There is no global stanFM as a career choice. dard” to train facility professionals.

“While our FMs may never Of the 3.2 million facility managers in IoT resources can empower facility managers. receive the appreciation they truly America, few have real credentials. deserve, we should celebrate the proOlson said facility managers need to have a greater fession as a whole for finally being recognized by the U.S. understanding of broader asset management, such as straDepartment of Labor as an official occupation! As of 2018, tegic and capital planning. They need to better ‘Facilities Management’ is now listed under the Standard know how to manage risk, from environmental health Occupational Classification (SOC) System.” to security to emergencies. They also need, he said, to

IoT Resources Needed by FMs

In his presentation Tom Kay with Entouch called, “Changing Role of Facilities Management in a Connected World,” told an NFMT Vegas audience that $1.3 trillion is budgeted to be spent on Internet of Things’ building technology in 2020. Much of this money is being spent to help a diminishing number of facility managers with limited resources cope with increasing responsibilities and added inventory. “Data is the new money,” Kay told his standing-room only session. He said too many FMs are living in a reactionary world and don’t have the time to do more than react to problems. Increasingly, they will need smart machines to assist in monitoring building equipment and conditions.

“When facility managers use data, they elevate themselves to a profit center,” Kay said. Such data can be used to enable prescriptive diagnosis, predicting and determining needs. This will enable FMs to extend the value of their assets —and their value to upper management. With the cost of building sensors going down, it will become easier for FMs to apply them throughout buildings. “If there is

understand the fundamentals of business management, from human resources to contracts, communications to procurement and financial management.

Technology Will Disrupt Traditional FM Disruption has become a standard force in all economic activity, as new technology antiquates traditional activities and introduces new ones. It will be no different in facility management, Chris Kluis with Transcendent told an NFMT Vegas audience. He predicted that “there will be no massive wipeout of jobs,” but said functions in many industries will evolve. For instance, he observed that in most states driving some type of vehicle is the number one occupation, from warehouse vehicles to local delivery vehicles to passenger vehicles to long and shorthaul trucks. He forecasted that a tremendous number of these jobs will disappear when driverless vehicles gain ascendancy. Studies show, he said, that although driverless vehicles can wreck, they are statistically far safer than vehicles driven by people. “My daughter will never learn to drive,” he predicted.

(Continued on page 44)

8 California Buildings News

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10 California Buildings News • Q4 2018

Most Challenging Buildings Codes & Laws

Why Many Codes Are Difficult to Follow…And How We Can Improve Them Laws passed in Sacramento, Washington or city halls often have language that is very general, leaving to area officials the task of interpreting and variously enforcing laws that may not have been properly researched at the legislative level.

One California service provider told California Buildings News “acoustical codes and standards, for instance, are ambiguous. You often don’t know what is required. You call the planners, and they are embarrassed because they don’t know what’s required because the city or the state was in a hurry in passing legislation and didn’t take time to understand just what the law meant. The poor planning staffer can’t challenge these politicians. We ask for benchmarks, but often they don’t or can’t tell you what they are.

There is a lack of clarity in codes, no sensible, clear guidelines.”

Another industry player — who did not wish to incur retaliation from officials — said, “Green building codes can Photo: Getty Images.

be nonsensical…so out to lunch. Why? Sacramento wanted them passed by a certain date, so they rushed. Sound evaluation? They just threw out a number. The state required acoustical measures that show peak sound levels can’t exceed 50 decibels. A city or state employee tasked with overseeing this never voted on this. When you complain, there is finger pointing. The governor points to his staff. The staff says they didn’t have the time to develop good standards, that they had no budget to hire consultants who do know. It’s ridiculous.

So, you get these extraordinarily arcane building standards.

Developers are chary. They don’t want to offend officials, but they face protracted litigation if later someone says they didn’t meet certain standards.”

11 California Buildings News • Q4 2018

If Better Designed…Good Building Codes Can Be Vital to Proper Operations

Architect Skip Soskin of Huntsman Architectural Group, a frequent speaker at Building Owners and Managers Association code events, said, “In interiors, aside Danny Murtagh, vice president for engineering at Boston from accessibility which is often costly, the most challengProperties in San Francisco, said, “The energy codes in ing and costly is the one that requires two-way communiCalifornia are among the best in the nation and are responcation between the elevator lobby — when locked—and the sible for better building performance and developments, guard desk on the ground floor lobby. Often spaces that and they should continue to tighten over the years because companies take that are in buildings that were originally they have proven through the last few rounds of Title 24 warehouses or light manufacturing were never set up to be updates that the tighter standards can be met by developers office space and then an office tenant arrives and there is and construction. no infrastructure for this requirement. Unfortunately, this “The areas that can immediately get better, tighter, is something the Fire Department is very adamant about stronger, faster are solar electric and solar thermal as well and they pull the life safety card and they get their way, so as thermal storage for I don't see much chance of cooling. These areas making a change. still have many loop“ One of the larger negative “There are so many others holes for developers that come into play once a to minimize effect outcomes of the newer Title 24 tenant wants to use a buildon development by ing or space for a purpose for has to do with the cumbersome making the building which it was not originally Lighting solar ready instead amount and nature of the intended and then there are of installing actual a lot of things that come into documentation required. solar systems, or opt play, but these are on a case out. You know, where The documentation is overbearing and not by case basis and the problem building cannot effecis often not the code, but the necessary to achieve the energy savings.” tively launch solar or way the tenant wants to use wind in their develop— Danny Murtagh, Boston Properties the space.” ment, there should be Orange County’s Simon an alternate to install Turner, CEO of Healthy thermal storage for the HVAC system because that becomes Buildings, says, “One of the most confusing and challenging more achievable for many urban developments but only laws impacting property owners this year has been recent offers a system demand offset as opposed to true energy changes to Prop 65, which specifies what warnings must reduction. say and how they must be provided in order to avoid the “In California demand management has been an ongoing potential threat of litigation. This past August 30th of this topic with the energy grid in crisis from time to time, so year saw requirements to post new signs on buildings or shifting HVAC loads to off demand times is meaningful. In face lawsuits or penalties which could be up to $2,500 per general, not too costly to implement on the above. Things day. While not strictly a code, owners have been forced to that may not be ready for prime time yet, are net zero conconsult lawyers and pick their way through a complex maze struction mainly because there are very limited building of chemicals listed by the state to figure which compounds size models that can achieve actual net zero today, so it limthey should name when posting warnings. Making matters its the audience to small buildings and the cost to develop worse, legal experts are telling us that the confusion sursmall buildings is high and net zero would make them not rounding these changes will not be resolved until litigation pencil for developers. In San Francisco, building owners settles matters.” can opt to purchase renewable power from SF Clean Power Joel Koppel, director of sustainable energy solutions and get all of their electricity from a renewable resource like with the San Francisco Electrical Construction Industry, wind and solar from the SFPUC. The only cost to this today and a member of the San Francisco Planning Commission is about an 8-9% cost premium to buy the power. says, “The need to dramatically decarbonize our built envi“One of the larger negative outcomes of the newer Title ronment is no longer either controversial or radical, and our 24 has to do with the cumbersome amount and nature of codes need to reflect that fact. The Planning Commission’s the documentation required. The documentation is overapproach to shaping the local built environment can be a bearing and not necessary to achieve the energy savings.” mirror image of what happens with building codes, where (Continued on page 40)

12 California Buildings News • Q4 2018

New Projects Artfully Sculpted MIRA Condos Adorn San Francisco Rising majestically at the corner of Spear and Folsom, MIRA offers creative design, distinctive layouts, and expansive views for luxury dwellers. Designed by award-winning architecture firm Studio Gang, MIRA features a twisting façade and luxury condominium homes that are fresh and forward-thinking, offering potential buyers an opportunity to own a part of an architecturally iconic building in San Francisco. Developed by Tishman Speyer, MIRA is their latest in a series of high-quality condominium properties where SoMa meets the Embarcadero. This inspired community will include a 40-floor luxury tower of residences topped by a Panorama Collection of penthouse homes offering stunning views and expansive floor plans.

Near Embarcadero, MIRA is convenient to San Francisco’s waterfront recreation, the city’s buzzing nightlife and restaurants, luxury retailers, iconic landmarks, and local sports and entertainment venues.

MIRA condo towers. Photo credit: Binyan.

New Science Center at Chapman University Chapman University’s Keck Center for Science and Engineering in Orange was just completed by C.W. Driver Companies. The 149,697-square-foot, state-of-the-art education and research facility is the largest, most expensive and most technologically advanced project in the university’s history. The center is home to the Schmid College of Science and Technology and Fowler School of Engineering and includes an additional 145,560 square feet of subterranean parking. The total cost of the center is $130 million, $87 million of which was completed by C.W. Driver Companies.

“It’s a privilege helping Chapman continue its promise of providing rich academic and student-centered experiences, and we’re honored to partner with them on this project,” said Dave Keck Center at Chapman University. Photo credit: Lawrence Anderson.

McGlothlin, senior project manager at C.W. Driver Companies.

“Our expertise in developing higher education science facilities enabled us to construct an innovative facility that will serve the institution’s fast-growing STEM programs and transform the learning experiences for future generations of science professionals.”

Fix Planned for “Leaning Tower of San Francisco” The Millennium Tower Homeowners Association plans to retrofit the building at 301 Mission Street in San Francisco to halt its settlement and reverse its tilt by installing new foundation piles that will tie the 58-story tower to bedrock.

Mission Street Development, LLC, the original developer of the Millennium Tower, has agreed to perform and warrant the work for the retrofit, which is anticipated to be paid for by a settlement pursuant to an ongoing, confidential mediation. In a permit application filed with the City and County of San Francisco, the association outlined plans—called the "Perimeter Pile Upgrade"— to install 52 concrete piles that will transfer a portion of the building's weight from its existing foundation system to bedrock about 250 feet below. That shift will relieve stress on soils that have compressed beneath the building, causing it to settle more than anticipated and to tilt. Engineers who designed the upgrade plan said the new piles along the building's north and west sides will limit future settlement of the tower to minimal levels and reverse the building's tilt.

13 California Buildings News • Q4 2018

Moscone Center Expansion When it opens in January, the Moscone Center expansion will add 305,000 square feet to the San Francisco Bay Area’s primary convention center, giving it 504,000 square feet of contiguous exhibition space, making it more competitive on a national scale.

The expansion will feature a functional area, including new exhibition space, new meeting room and prefunction space, new ballroom space, and support areas. The expansion project will also include a number of urban design and streetscape elements which are designed to both improve Moscone’s connection to the surrounding Yerba Buena Moscone Center in San Francisco. Photo credit: Louis Raphael. neighborhood and to provide a number of bicycle, pedestrian and urban design improvements for neighboring residents and businesses. The expanded center will also be one of the most sustainable in the world, with an extensive solar panel array supplying the center with about 20% of its power. Moscone also has an in-house recycling system, and all products used, from hand-soap to floor cleaner, are environmentally friendly.

Luxury Complex Opens in LA’s Koreatown The Pearl on Wilshire, a luxury mixed-use development featuring 346 apartment homes with a blend of studio, one- and two-bedroom units atop 8,300 square feet of retail space has just opened by Cityview, a premier urban multifamily investment management and development firm.

“Koreatown is experiencing an incredible revitalization and The Pearl is the manifestation of what the young, vibrant community has been craving in urban living,” said Sean Burton, CEO of Cityview. “VTBS Architects and Nadia Geller Designs were fantastic partners that helped us bring to life a space that seamlessly integrates into the Koreatown community.”

Cityview intentionally selected ground-floor retailers that would enhance the resident experience. The Pearl also provides easy access to entertainment, dining, recreation and shopping offerings in Koreatown.

Rooftop view. Photo credit: David Guettler.

New San Diego Office Campus Rises in Mission Valley AMP&RSAND, a 330,000-square-foot Class A creative office center located on San Diego UnionTribune’s former headquarters in the Mission Valley area of San Diego, was just completed by C.W. Driver Companies. The redevelopment of the 13-acre iconic campus included a major overhaul of a five-story office tower and a three-story industrial/office building. Each consists of 165,000 square feet, creating a modern and highly AMP&RSAND in San Diego. Photo credit: Javier Laos Photography. amenitized office complex. The re-imagined spaces incorporate the outdoors with parks throughout the property and along the adjacent San Diego River.

Designed by Wolcott Architecture, AMP&RSAND brings the two dated buildings, originally designed and constructed in 1973, into the new era by incorporating modern design elements that pay homage to the property’s unique past. Thirteenfoot ceilings and new oversized windows bring in natural light, while the interior design creates an industrial loft-style feel with exposed brick, concrete pillars and polished concrete floors.

(Continued on page 35)

14 California Buildings News • Q4 2018

East Bay Growth Is Handling San Francisco’s Huge Overflow Two Key Area CRE Leaders Give Insights Into Future Developments

Q&A

With Manny Moreno, property experience manager at Nextplay Consulting in Pleasanton and a long-time leader of the Building Owners and Managers Association of Oakland/ East Bay and Julie Taylor, executive director, BOMA Oakland/East Bay

(Questions for Manny Moreno) Which cities in the East Bay area best positioned to accommodate additional growth?

As we have seen in the last year to year and a half, Oakland is definitely leading the way with new development, re-development, and growth, both commercial and residential. This growth is what several commercial real estate professionals predicted as rents and occupancy rates continue to rise in San Francisco. There are several high-rise buildings currently under construction in downtown Oakland, several approved to be built as spec space, and others undergoing major renovations and repositioning.

After Oakland, the most logical cities where we would expect to see additional growth is Walnut Creek/Concord and the Tri-Valley (Dublin, Pleasanton, and Livermore). These cities offer the most Manny Moreno open land for development and new building. Vacancy rates in these areas continue to decline, as rents continue to rise. Each area also offers flexibility in product type from office space to industrial buildings to medical office space. These two geographic areas are also where a majority of the workforce lives and plays. If employers are really trying to accommodate a work/life balance, they would be well served to open offices closer to their employees, thus reducing commute times and allowing employees more time for personal pursuits.

Finally, as the Bay Area region continues to grow and expand, the Tracy/Mountain House area are now considered the outer Bay Area. Tracy has been experiencing unprecedented growth and expansion, especially in the logistics/distribution industry. Several large and well-known companies such as Amazon, FedEx, Costco, Safeway, Medline, Crate and Barrel, and Lindt Chocolate have all moved into brand new industrial buildings within the past year or two. All view the Tracy area as a central location for their logistics and distribution businesses. This area has not yet experienced the skyrocketing rents that industrial spaces in the Bay Area have. As a result, these companies are able to occupy larger buildings. In most cases, the buildings that they are occupying are at least 750,000 square feet or larger. I would say the outlook for the commercial real estate industry in the Bay Area looks bright.

Image: Adobe Stock.

15 California Buildings News • Q4 2018

As a BOMA leader you have taken quite an interest in government relations. What needs to be done by federal, state and local governments to facilitate continued growth and a healthy economic climate for commercial real estate in the East Bay? Government at all levels needs to work on legislation that is business friendly and supports our economic growth.

There is a tendency for government to view the commercial real estate industry as heavy polluters of the environment and deep pockets that can support and fund other social causes. This is simply untrue.

The commercial real estate industry has taken steps to be one of the most environmentally friendly industries in the country. We have embraced and are fully utilizing LEED certifications for new and existing buildings, benchmarking our properties with Energy Star, and are always looking for new ways to increase our diversion rates of waste we send to the landfills. Zero waste is something we have talked about and it has become an objective for several building facilities, sports venues, and municipalities. The objective is driven by the desire to minimize and eliminate waste in order to save money, while also meeting owner, employee, and customer expectations for environmental responsibility. State and local governments need to work with their franchise haulers and our industry to encourage and support higher diversion rates, provide incentives for property owners and tenants who participate in these programs, and increase the educational offerings to help everyone better understand how to properly recycle and compost. In most cases, these programs vary from city to city, county to county, thus causing more confusion and frustration. We need a more uniform approach to take the guess work out of this these environmental initiatives.

One of the biggest threats, ever, to our industry in California is coming in 2020. In August of this year, a group of labor unions, progressive activists, and community action groups that have been advocating for gutting Proposition 13 and creating a split-roll property tax by ending the protections and certainty for commercial property, submitted signatures to place the initiative before voters on the November 2020 ballot.

The measure itself is very clear in its actions: 1) Bring all commercial properties to a new assessed 2020 value that becomes the new base year for taxation, 2) Require that all commercial property be reassessed every three years thereafter, 3) Establishes an exemption for properties valued at less than $1 million — however, this is a specious exemption because as the property is reassessed every three years eventually it will lose that exemption, 4) The measure removes all the tax protections provided by Proposition 13, and

5) Ends the treating of all property the same for taxation purposes for the first time in California’s history.

Our industry is taking a strong opposed position against any proposed split-roll tax initiative. The proponents have said it will create $10 billion dollars in new taxes. However, studies have shown it will have a negative impact on values and put many small businesses and tenants out of business.

It will cost jobs and impact negatively the overall economy of California. This is a fight the commercial real estate industry cannot afford to lose and we must start our opposition mobilization now.

I recommend everyone visit CBPA’s current campaign website for information: http://www.stophigherpropertytaxes.org/ for more information.

At the federal level, BOMA has been advocating on three issues: ADA reform, Energy-Star funding, and infrastructure investment. For ADA reform we are asking the Senate to approve H.R. 620 which the House passed earlier this year. This bipartisan legislation includes a notice and cure provision which allows business owners 120 days to fix any ADA violations before having to pay legal fees. Plaintiffs retain all their rights guaranteed to them under the ADA, but small businesses are protected from expensive demand letters. For Energy-Star we are urging Congress to maintain the program’s funding at its historic levels in future budgets. Additionally, we believe that Energy-Star should continue to be administered by the EPA and not moved to another agency. For infrastructure investment we are asking Congress to significantly increase investment in our nation’s infrastructure and pursue new and updated funding mechanisms solely dedicated to infrastructure improvements that maintain safe, reliable and usable forms of transportation.

Getting and keeping the right people to manage and service buildings is becoming a daunting challenge. What are your recommendations for recruiting and training an adequate workforce?

Let’s start with the recruiting piece. This is an area that, up until a few years ago, was a challenge no one was looking at or really considering. This has changed in recent years with the creation of CREATE, the Commercial Real Estate Alliance for Tomorrow’s Employees. From its website, “CREATE is a collaborative effort by leading commercial real estate companies and service firms to address the industry’s growing workforce challenges throughout the San Francisco Bay Area. CREATE provides funding and support for college level instruction, job shadowing and internship opportunities relevant to employers, in order to meet the hiring needs of building owners, investors, operators and service firms.”

(Continued on page 37)

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18 California Buildings News • Q4 2018

Array of Lighting Products, Concepts Are Improving Interiors LightShow West Drew Numerous California Lighting Experts, Firms

acuity in a variety of tasks to avoid eyestrain and to minimize productivity losses and headaches.”

It continues, “In addition to facilitating vision, light influences the human body in non-visual ways. Humans and animals have internal clocks that synchronize physiological functions on roughly a 24-hour cycle called the circadian rhythm…

“Multiple physiological processes — including those relating to alertness, digestion and sleep— are regulated in part by the variance and interplay of hormones involved in this cycle. A consideration of light exposure is particularly significant considering the role this plays in sleep, and given that the Institute of Medicine reports that about 50 to 70 million U.S. adults have a chronic sleep or Well Building Institute wakefulness disorder.

Lighting Standards Further, such disorCertified lightders and chronic sleep ing designer Dawn deprivation are assoHollingsworth of Van ciated with increased Nuys, who addressed risk of certain morbidithe conference on ties, including diabetes, WELL standards, obesity, depression, observed that people heart attack, hypertenAttendees at LightShow West learn about products from 300+ manufacturers. spend 90% of their sion and stroke. time indoors, dramatizing the significance of the influence “All light — not just sunlight — can contribute to cirof lighting on our lives. Better lighting, she said, produces a cadian photoentrainment. Given that people spend much better return on the investment companies make to provide of their waking day indoors, insufficient illumination or healthy lighting, as well as reduces healthcare costs associatimproper lighting design can lead to a drift of the circadian ed with more beneficial illumination. People can benefit, she phase, especially if paired with inappropriate light exposaid, from daylight and lighting systems that are designed to sure at night. Humans are continuously sensitive to light, increase alertness, enhance experiences and promote better and under normal circumstances, light exposure in the late sleep. This can happen through circadian design, daylightnight/early morning will shift our rhythms forward (phase ing, glare control, color quality, activity-based levels and advance), whereas exposure in the late afternoon/early night visual acuity. will shift our rhythms back (phase delay). To maintain optiThe International WELL Building Institute is providing mal, properly synchronized circadian rhythms, the body leadership on how light can be used to improve all types requires periods of both brightness and darkness.” of lighting experiences in buildings. According to WELL, For much more about WELL lighting standards: https:// “Current lighting codes and guidelines provide illumistandard.wellcertified.com/light nance recommendations for different room types, derived Lighting and Health Issues from usual lighting requirements for typical activities per Lighting can be beneficial in healthcare settings, says room. These standards, created by technical groups such as conference speaker and Carlsbad-based Robert Soler, VP Illuminating Engineering Society (IES), ensure good visual From darkness to blaring sunlight, there is a vast array of lighting methods that have numerous effects on people.

Certain lighting can stimulate— or retard — productivity, improve health and provide a range of sustainability benefits. Hundreds of lighting products along with dozens of educational sessions were featured recently at the LightShow West conference and expo in Las Vegas, attended by thousands of nearby Californians.

LightShow West has grown to become the West Coast’s largest and foremost destination for architects, designers and other lighting professionals to keep current on the latest lighting trends through educational seminars and face-to-face access to more than 300 leading international lighting manufacturers.

19 California Buildings News • Q4 2018

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Human Biological Research and Technology at Biological Innovation & Optimization Systems. “The aging eye creates a paradox that gives the elderly stronger likelihood for circadian disruption. Yellowing lenses and a reduction of overall light transmission leads to a need for more and bluer light, however the aging eye is also more susceptible to glare caused by bluer and brighter light sources. Thus we need to provide the right light in the right way.

“Furthermore, when we consider dementia, there’s an inability of these occupants to learn new concepts and a struggle to communicate their frustrations, so these frustrations often arise as emotional outbursts. Thus, lights that change around them, such as color tuning systems, may be confusing and cause more harm than good. This is especially true in private spaces such as bedrooms and bathrooms when they may feel they should be in control of what happens in these spaces. So it’s imperative to do the best we can from a design standpoint while meeting all the requirements of not being too glary or too ‘novel,’ otherwise we might be creating new problems. What we need is simple ways to implement circadian lighting without compromising comfort and familiarity.”

Naomi J. Miller, Pacific Northwest National Laboratory, lists five essential lighting principles: 1. The daily light dose received by people in industrialized (Continued on page 46)

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21 California Buildings News • Q4 2018

Your Wine Country Getaway “Home”

Fully Furnished Suite in Healdsburg…You Can Rent by the Night or Longer If you’ve ever dreamed of having a place in Sonoma County’s most charming city, but you don’t want to commit to an extended lease or can’t afford a second home—not to worry. Seaview Investors-owned new Hotel Trio in Healdsburg offers a complete home environment, with smartly decorated and affordable suites complete with kitchens, living room areas and bathrooms you wish you had at home. Stay for a week or just a few days. And, since it is cobranded as a Residence Inn, you can use your Marriott rewards.

The hotel was built by hospitality specialist R.D. Olson Construction of Orange County (see accompanying story on page 22.)

You can even buy a steak at a gourmet grocery store just across the Dry Creek Road and charbroil it on a pool-side grill—get a full breakfast every day, have your room cleaned, enjoy wine tastings right in the off-lobby bar and get all the other amenities you are accustomed to at high-end hotels. You can also get a free shuttle ride in a Mercedes van to and from downtown Healdsburg, the crown jewel of the wine country, boasting dozens of restaurants, galleries, wine tastings and frequent entertainment in the town park.

Don’t be alarmed if, when you ask for an extra bottle of shampoo or fresh towels, you open the door to meet Rosé, the hotel’s efficient robot, who can be sent by the desk on a variety of service missions. (She is featured here with Brooke Ross, director of sales & marketing.)

Hotel Trio offers 122 suites and a meeting room that can accommodate as many as 80 people theatre-style or be configured with its adjacent courtyard into a pleasant social

venue for wedding receptions, cocktail parties or corporate events. The lobby and hallways are also attractively enough decorated to seem like an art gallery.

If you enjoy yourself so much that you want to live in the area, you might be able to rent at the Citrine Apartments, located adjacent to the hotel. The community offers residents one-, two- and three-bedroom options. Amenities include a bike storage area, playground, outdoor lounge area, laundry facility, community room with Wi-Fi and a BBQ beach area. The development brings a much-needed affordable option for residents in a high-cost-ofliving area.

“We are excited to introduce a two-part project to California’s wine country that brings much-anticipated options for affordable accommodation to travelers and area residents alike,” said Bill Wilhelm, president of R.D. Olson Construction. “The combination of a hotel and affordable housing project is a first-of-its-kind for R.D. Olson Construction, and adds to our robust portfolio of hospitality and multi-unit projects.”

R.D. Olson Construction project partners include: Axis/ GFA Architecture + Design, Roche + Roche Landscape Architecture, ZFA Structural Engineers, CSW/StuberStroeh Engineering Group, Inc., Design Force Corporation and Robison Engineering.

From top: exterior of Hotel Trio. Inviting lobby area. Photos: Martin King Photography. Lower left: Brooke Ross and Rosé, the robot..

22 California Buildings News • Q4 2018

Builder's Hotels Reflect Their Communities

Q&A

With Bill Wilhelm, president R.D. Olson Construction, Irvine

Q: Your firm has built numerous hotels and resorts throughout California, putting you in a good position to address the uniqueness of construction in that sector.

How does hospitality construction differ from other commercial projects, and how does your firm provide unique services?

A: Unlike many other commercial projects, a hotel property is comprised of three marquee segments – multi-unit living, a restaurant environment and public communal spaces.

It’s crucial that builders and developers understand how to seamlessly fuse these components in a way that’s unique and tailored to the property’s target market in order to be successful. However, this can be a challenge for builders if they lack experience in one or more of these areas.

At R.D. Olson Construction (RDOC), we have 40 years of experience constructing multi-unit housing, restaurant, hospitality and public amenity projects. The diversity of our skillset and our established reputation as a builder that’s at the forefront of emerging technologies and building trends is what allows us to bring value-add services to the industry.

Above: Lido House in Newport Beach. Photo credit: Werner Segarra.

Q: Since R.D. Olson Construction is a player in the hospitality field, can you address issues that either encourage or discourage future hospitality development?

A: In the last 15 years, the hospitality industry has changed drastically. Yes, you need to be a qualified builder. But hoteliers are looking for more than a standard property and guest experience – they want accommodation that reflects the history and culture of the surrounding community.

Essentially, it all comes down to the end-user and how we can meet their wants and needs.

The opportunity to make a major impact in the communities we enter is what encourages us to continue hospitality development. One way we do this is by delivering on consumers’ desire for a local and customized experience by adding the flair of the community into the property. This requires extensive research to truly understand our audience and the social aspects the space will require to stand the test of time.

As builders, we also must anticipate what consumers will want and need five to 10 years from now and design in a

23 California Buildings News • Q4 2018

way that creates a memorable experience and leaves guests wanting more. There’s a lot of careful planning that goes into hotel development, and we don’t see the same prototype day-in and day-out — this is what encourages us to stay actively engaged.

than ever that we find ways to reduce construction costs, which in turn encourages new development. Modular construction, in which buildings are constructed offsite in a factory before being installed in their final location, is one solution. While full or partial prefabrication is not right for every project, it can help make projects more cost-effective and shorten construction timelines, which is much needed given the market’s lack of supply.

At the same time, we must consider how to retain renters. If a property doesn’t elicit an engaging and tailored experience, it’s not going to do well. They key is finding cost-effective materials and construction processes that still offer tenants the living experience they desire.

Q: What can our state and local governments do to remove obstacles to both hospitality and multifamily development?

When you have large entities, the policies and procedures in place can pose development challenges. Additionally, local governments are often understaffed and budget constrained. By acknowledging the need for change, together with our government, we can work to find creative solutions that meet the community’s hospitality and multifamily development needs now and in the future.

Q: How are you and your subcontractors sourcing a qualified workforce these days?

A: R.D. Olson Construction is diligent about hiring talent that represents the diversity of the communities in which we build. We take great pride in our craft and create project teams which reflect the markets of which we are a part.

We also continue to enhance and build the depth of our relationships with our subcontractors. As a result, our subconHomewood Suites /H Hotel in Los Angeles. Photo credit: Martin King Photography. tractors become partners of RDOC— an extension of our own teams— because they share Q: Your firm is also helping the state bridge the huge the same commitment to excellence in what we build, housing gap by constructing a number of multifamily where we build and for whom we work. This gives us a projects. Do you foresee ways apartment and condo strong buying power, a competitive advantage and creates projects can be designed and built more cost-effectivea subcontractor base that’s confident that RDOC will keep ly and come to market faster? them busy as long as they continue to deliver on our motto A: As California continues to search for solutions to our “every detail counts.” state-wide affordable housing crisis, it is more important (Continued on page 36)

24 California Buildings News • Q4 2018

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Renovations

25 California Buildings News • Q4 2018

LA’s Reimagined Beverly Center Opens

Glitz & Glamour on Display in $500 Million Renovation of Landmark The $500 million reimagination of Beverly Center that transformed every aspect of the iconic shopping destination that has been located in the heart of Los Angeles for 36 years was opened this fall by Taubman Centers, Inc. (NYSE: TCO).

“Beverly Center has a special place in the history of this creative community, and our intention with this transformation was always to ensure the center best reflects and serves both its neighbors and those who visit Los Angeles each year,” said Chief Operating Officer William S. Taubman. “We sincerely thank our many partners who have joined us in creating this true homage to fashion and food in one of the most vibrant and exciting markets in the world.”

“The Beverly Center is so much more than a place to shop—it’s a landmark in our city, an anchor in its community, and a destination for Angelenos and people from everywhere,” said Los Angeles Mayor Eric Garcetti. “The reimagining of this landmark will bring a better experience

for visitors, deliver new retail and dining to the neighborhood, and create good jobs for workers.”

Key focus areas for the project included creating a bright, contemporary exterior that connected the center to the neighborhood, bringing in plenty of natural light, further elevating the retail lineup, adding a variety of dining options and ensuring easy access and parking. Beverly Center was open during all three phases of construction.

“We thank the community for its ongoing patronage of Beverly Center during the reimagination, and for the three-and-a-half decades of support that have made the center one of the nation’s premier shopping and dining destinations,” said Taubman. “Even before the renovation was complete, traffic and sales productivity materially improved, and the center continues to perform above our expectations.”

Top: Beverly Center's Grand Court. Above: exterior. Photos courtesy of Beverly Center.

26 California Buildings News • Q4 2018

Multifamily News

California Multifamily Market Growing, But Not Enough Apartments.com Reports Detail State’s Major Three Markets California’s largest metro areas’ rental housing markets are robust but with heightened building activity still incapable of meeting housing needs, according to market analysts at Aparments.com. The company also reported steadily increasing rents and strong trends toward consumer movement to exciting downtown markets.

Even with a steady stream of new supply rolling into the metro, San Diego is perennially under-supplied. Annual deliveries have not hit 4,000 units this cycle, and likely won’t reach that level over the next few years either. Add in heightened demand, and San Diego’s landlords continue to benefit from a steady mix of high occupancies and minimal suburban supply growth enabling them to push rents up more than 4 percent annually since 2015, according to Joshua Ohl, senior market analyst at Apartments.com, a subsidiary of CoStar Group.

“In fact,” says Ohl, “vacancies have largely flat-lined around 4 percent since 2016. Developers have targeted downtown with new supply, which accounts for 30 percent of the more than 7,900 units underway across the county. But that’s a shift from the historic norms in San Diego, where job and residential growth has been most pronounced in the suburbs. Developers are banking on residents following national cyclical trends of migration to urban cores, and so far, residents are. And while vacancies might remain perpetually high here and concessions always in play, office development on the horizon could provide the missing ingredient that downtown’s live/play environment is missing. As 2018 nears its end, a strong, diverse economy that is supported by limited new supply and escalating housing costs should only reinforce demand for apartments. That demand, too, is expected to provide additional runway for area landlords to continue raising rents above the historic average.”

Rent growth for the multifamily sector in San Francisco has picked up in 2018 and is approaching the market’s average pace of increase achieved early in the economic expansion period, according to Jesse Gundersheim —market economist at Aparments.com.

“Over the last 12 months, asking rents have increased by 3.5%.

Asking rents have increased by 38% since the end of the recession, prompting wide-scale construction in the process. As a new wave of inventory reached completion in 2016, completion among landlords intensified and rent growth stalled temporarily in response to the markets rising vacancy rate. However, with absorption outweighing supply growth since mid-2017, vacancy has declined to Photo: Adobe Stock.

(Continued on page 39)

27 California Buildings News • Q4 2018

California’s Housing Shortage Is Humanitarian Crisis

Some of the Richest Cities Fail to Meet Minimum Global Shelter Standards whether to risk their capital and energies building The lack of housing in California, coupled with undermultifamily complexes in California were surveyed by housing and the soaring cost of existing homes constitutes California Buildings News. a humanitarian crisis affecting millions of people….and one Here are some of their thoughts: with severe macroeconomic consequences. w NIMBY groups in cities and counties all over the state are Failure to resolve this crisis impacts the entire state’s currently able to pressure local officials into refusing pereconomy: its economic development appeal to firms, the mits to construct apartment complexes in their neighborjobs market, social welfare and infrastructure hoods. State government— spending, quality of life and acting for the good of the California’s ability to attract state overall —must strictly investment and talent. limit local governments’ In Palo Alto, tech workability to kill or severeers are living in their cars. ly restrict new housing.

Recent college grads in San A good start is using the Francisco are crowding into Housing Accountability Act old dilapidated apartments. and the density bonus law, Low-paid service employbut even more comprehenees are sleeping in shifts in sive actions are needed. barely habitable quarters. w CEQA must be rewritHundreds of thousands of ten to prevent its uninworkers are driving three tended obstruction to all to four hours a day from forms of development. The outlying areas to jobs in high-sounding California cities. Millions are spendEnvironmental Quality Act ing as much as 40% of their According to a recent McKinsey report, “50% of was originally enacted to earnings on shelter.

The United Nations California’s households cannot afford the cost prevent raping the state’s precious natural features. It recently named San of housing in their local market.

Virtually none has become a lawyers’ tool Francisco and Oakland as the two worst cities in of California’s low-income and very-low-income for waging political war and enabling extortion against the world for dealing with households can afford the local cost of housing.” growth of any form. homelessness. According to w Modular factory housing a recent McKinsey report, construction will speed delivery of new projects and lower “50% of California’s households cannot afford the cost of costs. It is supported by some unions (like the carpenters) housing in their local market. Virtually none of California’s and fiercely opposed by others. low-income and very-low-income households can afford the w More public-private partnerships, such as measures to local cost of housing.” identify land that could be used to build housing.

This crisis is one that local and state government sectors w Approvals for denser and higher housing construction have done much to aggravate and little to alleviate. But a both in urban and suburban settings. raft of new proposals are before the legislature. It will take w Construction costs can be alleviated when architects, engiimaginative, robust entrepreneurs — along with government neers and contractors begin to adopt new technologies that reformers—and an aroused public to restore adequate help them achieve labor, cost and time-saving efficiencies. housing in California. And it will take many years, but w Reducing “development” or local impact fees required failure to act in a comprehensive manner will doom the by local governments for each housing unit built, some of state to decline. which are as high as 18% of the cost of a home, among the It is far easier to compile a list than it is to it see adopthighest in the nation. ed, but it’s a start. Developers who will ultimately decide Photo: Getty Images.

(Continued on page 38)

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29 California Buildings News • Q4 2018

Commercial Real Estate Education Is Meeting HR Needs By Kathy Mattes As I enjoy the sixth year of my “retirement,” I can’t help but find it a bit ironic to see how I have applied my time and skills since my last day of work in May 2013. Two primary factors have joined forces to lead me where I am today. First, I came into real estate after 10 years working in another field. Up to that point, all I knew about real estate was the process of selling single-family homes and owning rental property. The second factor is that about one-third of the workforce today is comprised of baby boomers like me, meaning that many more boomers are still in the workforce and will be retiring, leaving a large gap in the employee pool.

This is not news to those in the commercial real estate industry who are in the unenviable position of hiring new talent. Tawni Sullivan, associate managing director at CBRE, had the following to say: “For a senior professional at CBRE, it had become increasingly difficult to find employees.

Sitting at a table of industry leaders in a similar situation, the concept of the SF BOMA Foundation was formed, which since has become the Commercial Real Estate Alliance for Tomorrow’s Employees (CREATE).” https://www.createworkforce.org .

In 2015 I was asked to teach a real estate course at San Francisco State University (SFSU). Coincidentally, I had just joined the board of the BOMA Foundation, which funded a program with SFSU to add real estate course to their finance degree program. At that time BOMA (later CREATE) was sponsoring four real estate courses. Students who completed all four courses received a certificate evidencing their concentrated focus on real estate, as well as access to entry level job opportunities. This program transitioned into the CREATE Fellows program in 2017, and the fellows program expanded to include Merritt College in 2018. The program provides an overview of the entire CRE industry and the students are interviewed and selected based on their interest in CRE and their ability to attend and gain the benefits of the program. It also provides job skills such as communications and critical thinking, as well as resume writing and interviewing skills. Students who complete this 16-session program receive a certificate of completion as well as access to internships and entry-level jobs.

This program is ground-breaking, as it addresses both of the primary factors I mentioned earlier. First, it introduces

college students to the possibility of a career in commercial real estate. (I cannot name any person in commercial real estate who planned their CRE career while in college.)

Second, it enables young people to enter the industry early, thereby taking a dent out of the baby boomer shortage.

I can explain the benefits of this program by telling you the story of one student. Brian Lu, currently a real estate services coordinator at CBRE, never dreamed of a career in commercial real estate. When he first entered SFSU he intended to get a degree in mechanical engineering. He had no knowledge of commercial real estate. In his sophomore year Brian decided to change to a finance major, but still had no knowledge of the possibilities with CRE. During his junior year, while taking some real estate courses as electives, he saw a poster promoting the CREATE Fellows program at SFSU. He applied for and was accepted into the fellows program and continued to take all four of the real estate elective courses.

While still at SFSU, Brian connected with the Careers Committee at BOMA and was able to participate in building tours and other career-readiness activities. He accepted a part time job with the owner of a building on Market Street and worked there until he graduated. In preparation for graduation in May 2018, his resume was forwarded to Tawni Sullivan at CBRE, who considered him for a position as a real estate services coordinator. Of course he was qualified —just think of how his background compared to other entry-level candidates!

Brian started at CBRE in September and is loving it.

His responsibilities include working with vendors who are preparing to do work in the building, responding to tenant service requests and getting back to them the same day as prescribed by CBRE policy, and other daily administrative duties. It won’t be long before his interests in mechanical engineering may be helpful to him. When asked what surprised him the most about his new job his answer was “tracking certificates of insurance.” None of his classes had prepared him for that! According to Brian, the best parts of the CREATE-sponsored program were the building tours and the ongoing mentoring that came along with it via the BOMA Careers Committee.

I now find myself walking around downtown San Francisco, on my way to attend a BOMA meeting, and running into former students. They are often hired in entry-level positions and, because they are bright and well-trained, they are advanced as opportunities arise.

Mattes is a San Francisco–based real estate consultant and can be reached at www.kathymattes.com

30 California Buildings News • Q4 2018

Association News

BOMA San Diego Recognizes TOBY Award Winners Kilroy Realty’s Del Mar Corporate III, RP Aventine’s The Aventine and Oberlin’s The Yard took top honors at this year’s San Diego Building Owners and Managers Association’s annual TOBY® (The Outstanding Building of the Year) and BOMA 360 Award winners.

Del Mar Corporate III, winner in the Corporate Category

“BOMA San Diego is proud to celebrate this year’s TOBY winners who demonstrate a commitment to excellence in building operations and management,” said Tom Magnussen, president of BOMA San Diego. “The three buildings recognized are managed by dynamic and innovative members of the commercial real industry and have set high standards for achievement.”

The TOBY® Awards celebrate an evaluation of building excellence standards and the management teams dedicated to improving the commercial real estate industry. Judging for the TOBY® Awards is based on community impact, tenant/ employee relations programs, energy management systems, accessibility, emergency evacuation procedures, building personnel trainThe Aventine: renovated building winner ing programs and overall quality indicators. A team of expert industry professionals also conducted comprehensive building inspections.

The following properties were honored with local TOBY® Awards: u Under 100,000 Square Feet Category: The Yard, owned

by Oberlin Owner, L.L.C. and managed by Makai West

u Renovated Building Category: The Aventine, owned

by RP Aventine Office Owner, L.L.C. and managed by Rockhill Management u Corporate Category: Del Mar Corporate III, owned by Kilroy Realty Corporation and managed by Kilroy Realty Corporation

The Yard, winner in the under 100K SF category

This year, BOMA San Diego also introduced a BOMA 360 awards recognition program. Originated by BOMA International, the BOMA 360 Performance evaluates buildings against industry best practices in six major areas: building operations and management; life safety, security and risk management; training and education; energy; environmental/sustainability; and tenant relations/community involvement.

Two local properties fulfilled the benchmark requirements and received the hard earned BOMA 360 designation: La Jolla Commons II, owned by JP Morgan and managed

by Hines; and Symphony Towers, owned by Symphony Tower, L.L.C. and managed by Irvine Company Office Properties.

La Jolla Commons Tower

Symphony Tower

Photos provided by BOMA San Diego on behalf of its member buildings.

31 California Buildings News • Q4 2018

San Francisco Among Greenest Cities in the U.S. San Francisco continues to its streak as a top performer in the annual U.S. Green Building Adoption Index by CBRE and Maastricht University, coming in at number two this year for the second year in a row. Although it exceeded survey leader Chicago in the percentage of both LEED and ENERGY STAR labeled buildings, the market’s total square footage at 64 percent, trailed the leader by 9 percent.

The CBRE study found green certified office space across America’s 30 largest metros has reached 41 percent of market totals—the highest in the index’s history.

“Green” office buildings in the U.S. are defined as those that hold either an EPA ENERGY STAR® label, USGBC LEED certification or both. According to the report, 11.5 percent of all buildings surveyed are ENERGY STAR labeled, while 5.0 percent of buildings are LEED certified, both at all-time highs in the five-year study.

San Francisco consistently ranks in the top five in nearly every category year after year, and the city experienced a 2.7 percent increase in total certified footage since last year. San Francisco also has the third

highest total of certified buildings, even though it is only the 9th largest in the survey. An early adopter of environmental legislation, the city government has embraced green buildings and has some of the highest standards in the area.

“The Bay Area is the global hub of innovation, so it’s no surprise that sustainability and efficiency are crucially important here to developers and tenants alike,” said David Pogue, CBRE’s Senior Vice President, Global Client Care. “This market may also pose a more formidable challenge to Chicago next year as several new, large, certified buildings are being completed in the city this year, including the 1.4 million-square-foot LEED Platinum Salesforce Tower, the new home of our own CBRE San Francisco office.”

Chicago again claimed the top spot with nearly 70 percent of its space green certified. In addition to defending its title as the nation’s greenest city, Chicago saw a difference of nearly six percent with second-place San Francisco, the largest spread ever recorded in the Green Building Adoption Index. Atlanta maintained the third spot with more than 58 percent of all space green certified, while a surging Los Angeles claimed fourth— up from sixth last year. Minneapolis rounds out the top five with 55 percent of office space certified.

LA Lakers/UCLA Facility Gets Top Green Award The U.S. Green Building CouncilLos Angeles Chapter (USGBC-LA) Board of Directors has selected its 2018 ‘visionaries,’ who will be recognized at the USGBC-LA 14th Annual Green Gala on December 6, 2018 at Taglyan Cultural Complex in Hollywood. This year’s Visionary Award recognizes the Los Angeles Lakers and UCLA, who through their sustainability leadership developed cutting-edge athletic facilities that are

LEED Platinum and a model for athletic facilities around the globe.

For the second year in a row, special awards, Business Leader of the Year and Non-Profit Partner of the Year, will also be presented.

“USGBC-LA recognizes all types of projects that accelerate sustainability in the Los Angeles area, and we are excited to see sports facilities and their organizations recognizing the importance of sustainable design and

resilient strategies for all involved,” states Sara Neff, USGBC-LA Board Chair. “In addition, we are thrilled to recognize partners such as LADWP and GRID who are vested in promoting sustainable practices through every aspect of their businesses.” The Lakers’ El Segundo facility, UCLA Health and Training Center, Home of the Los Angeles Lakers, is a premier practice training center certified LEED Platinum (Aug. 2017) and Fitwel.

32 California Buildings News • Q4 2018

Association News

CMAA Southern California Recognized The Southern California Chapter presented the Construction Management Association of America award to the association’s largest chapter, with a population greater than 1,000 members. The Southern California Chapter held 61 events, including 25 which were focused solely on owners. Their strong performance and dedication by both members and their board of directors is remarkable, having exceeded goals for charitable contributions and scholarship funding through the chapter’s foundation. Student chapters have also exceeded growth goals due to the enormous support and collaboration efforts by chapter volunteers. In addition, a Project Achievement Award was given for the San Diego State University Engineering & Interdisciplinary Sciences Complex.

Southern California Chapter receives its award.

AIA Los Angeles Names Its 2018 Award Winners

The American Institute of Architects Los Angeles Chapter bestowed its 2018 AIA|LA Design Award winners last October.

Given the caliber of work, the program is one of the most competitive in the United States. This year’s recipients were selected by juries composed of accomplished architects, designers, and academics from New York, Seattle, and San Francisco as well as Los Angeles. Winning projects ranged from transit centers, schools, and cultural centers to small homes, all of which transformed the urban environment.

“Today, architects are at the forefront of resolving societal challenges. Honoring stellar design and highlighting projects that influence the wellbeing of our communities is an essential component of the American Institute of Architects Los Angeles,” stated the organization’s president, Tania Van Herle, AIA. “I am delighted to congratulate the winners. We also commend all members for their daily contributions to cities and clients.”

Executive Director Carlo Caccavale, noted that, in

San Diego State University, Clark Construction Group.

terms of Chapter activities, the 2018 AIA|LA Design Awards are not an isolated evening. “The ideas these projects embody are advanced throughout the year in programs and advocacy initiatives.”

Completed projects, located anywhere, that are designed by AIA members from firms based in the Los Angeles area, and architecture constructed in Los Angeles by any AIA member, no matter their base of operations, are eligible for submission for Design Awards entry. The awards include the following: 2018 AIA|LA DESIGN HONOR AWARD WINNERS u Animo South Los Angeles, Brooks + Scarpa, Los Angeles u Parallax Gap, FreelandBuck, Washington, DC u Camelot Kids Child Development Center, KeltnerCo Architecture + Design, Los Angeles u Mariposa1038, Lorcan O’Herlihy Architect [LOHA], Los Angeles u Fenlon House, Martin Fenlon Architecture, Los Angeles u Mayumi, ShubinDonaldson, Culver City 2018 AIA|LA COTE HONOR AWARDS u CSUN Sustainability Center, Gensler, Northridge u Arizona State University, Biodesign Institute C, ZGF Architects LLP, Tempe, AZ

33 California Buildings News • Q4 2018

Californian Named IFMA Distinguished Member Wayne Whitzell received the “Distinguished Member of the Year Award” by the International Facility Management Association at its 2018 global conference, World Workplace. He is executive VP of corporate services at DFS Green in the San Francisco Bay Area. Whitzell is a member of the chapters in Sacramento, Silicon Valley, East Bay, and San Francisco as well as the IFMA Corporate Facilities Council.

According to IFMA, the award is presented to “a professional or associate member who has provided sustained, outstanding leadership to an IFMA chapter, council, or community, and the association at the international level. This person is highly valued by his or her company, IFMA and the facility management profession. This individual keeps current on changes in the facility management profession and educates other IFMA members and peers. Recipients demonstrate the best in leadership and ethics.”

Whitzell has been an active member in IFMA since 2000.

In 2015, he was selected as IFMA’s International Associate of the Year at IFMA’s World Workplace (WWP) in Denver, and in 2016 he received the Distinguished Author award at WWP San Diego. He has held over a dozen leadership roles in local chapters, councils, and committees throughout IFMA. Whitzell’s record of service reveals a deeply rooted commitment to IFMA through his consistent leadership and countless hours over the past 18 years.

He says, “IFMA is for me…that place, those people, those friends that offer that missing piece in my life. It’s a sense of belonging and an oasis for me in an otherwise difficult career field. IFMA is the place where all of my best friends are. It’s the place that has molded me and guided my career and lifted me to places in my professional life that I never would have achieved otherwise.”

Above: Trena Ellis, CFM, president of IFMA Sacramento, winner of the Small Chapter of the Year Award, with awardee Wayne Whitzell, DFS Green.

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34 California Buildings News • Q4 2018

Association News

California Boasts Three BOMA International TOBY Winners The Outstanding Building of the Year Awards conferred by the Building Owners and Managers Association International was given to three groups of building owner/ operators in California for management of their buildings.

In the Medical Office Building category, the winner is Hoag Health Center Irvine– Sand Canyon in Irvine, California. The property is managed by California Commercial Real Estate Services and owned by Shady Creek, LLC. Hoag Health Center Irvine–Sand Canyon also is a BOMA 360 Performance Program building.

In the Retail category, the winner is Tarzana Village Walk in Tarzana, California.

The property is managed by Madison Marquette Retail Services, Inc. and owned

by Aslan II Tarzana VW, LLC. In the Renovated Building category, the winner is US Bank Tower in Los Angeles.

The property is managed by Hines and owned by OUE. US Bank Tower also is a BOMA 360 Performance Program building.

The TOBY Awards are the commercial real estate industry's highest recognition honoring excellence in commercial building management and operations in specific categories of building size or type. To win an International TOBY Award, a property first must win both local and regional competitions. Judging is based on community impact, tenant and employee relations programs, energy management systems, accessibility, emergency evacuation procedures, building personnel training programs and overall quality indicators. A team of expert industry professionals also conducted comprehensive building inspections.

From top: Hoag Health Center Irvine-Sand Canyon in Irvine. US Bank Tower in Los Angeles. Tarzana Village Walk in Tarzana. Photos provided by BOMA on behalf of its member buildings.

35 California Buildings News • Q4 2018

New Projects (Continued from page 13)

New Downtown Los Angeles Medical Center Opens The new Los Angeles Downtown West Medical Center just opened. It’s a four-story, 60,000-square-foot Class A medical office building, provides a state-of-the-art wellness campus and enhanced outpatient services to the surrounding downtown L.A. community. Ware Malcomb, an international design firm, announced its construction is complete at 1120 W. Washington Boulevard. Ware Malcomb provided architectural design and civil engineering services for the project, which was managed out of the firm’s Irvine-based headquarters.

The concrete and glass building features store-fronts on the first level, with metal panels and tile bars completing the modern exterior aesthetic. A circular entry plaza Downtown West Medical Center. Photo credit: Troy Ament. serves as the core of the medical campus and circulation hub, providing continued visibility and openness throughout the site, as well as linking the existing three-story building to the medical development. An adjacent nine-story parking structure is directly connected via a bridge on the third level. “The urban infill location and footprint combined with the very specific tenant requirements of a modern medical office building, posed unique challenges that were addressed through collaboration with Ware Malcomb’s healthcare architecture and civil engineering teams,” said Michael Petersen, Principal overseeing Healthcare Design and the Architecture practice in Ware Malcomb’s Irvine office.

36 California Buildings News • Q4 2018

Olson Q&A (Continued from page 23) Q: Can you tell us about some future plans at R.D. Olson Construction?

A: We have a lot of exciting projects in the pipeline and as we grow the business, we remain committed to making a difference in the communities where we live, work and play. To deliver on this, our employees and subcontractors remain actively engaged in the communities we serve—whether it’s in the small town of Healdsburg in Northern California or the bustling downtown Los Angeles.

Next year, we will participate in rebuilding some of the communities in California that have been greatly affected by natural disasters and we’re building up our resources to accommodate our project volume. RDOC also will continue to grow its robust portfolio of dual-brand Marriott Hotel in Irvine. Photo credit: Marriott Irvine Spectrum. projects and reinvigorate its focus on the renovation market next year, and at a stronger force than ever before. This means more work across the United States.

Looking ahead, RDOC will have solid growth, but for us, it’s not about how big we can be, but how successful we can be in our delivery. n

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37 California Buildings News • Q4 2018

East Bay Growth (Continued from page 15) CREATE also works closely with the following associations to connect students and local employers: NAIOP, BOMA San Francisco, BOMA Oakland/East Bay, and IREM. This collaboration has been very successful in getting new people into our industry, and the industry has supported it with an annual gala that raises tens of thousands of dollars each year. We need to continue to support CREATE and use it as a resource when hiring needs arise. As CREATE continues to be successful, I feel we also need to take another step back and approach our local high schools to form partnerships with them and introduce the commercial real estate industry to their students. The earlier we can familiarize students to our industry, and explain the many facets and career opportunities that exist in the CRE industry, the better we prepare ourselves to receive a steady stream of educated, qualified employees in the future.

Once in the industry, training can come in many forms. Each association listed above has a certification program that provides industry-specific training and information to meet the needs and desires of the student.

BOMA through the Building Owners and Managers Institute International (BOMI) offers the Real Property Administrator (RPA) and Facility Management Administrator (FMA) designations, IREM offers the Certified Property Manager (CPM) designation along with several others, NAIOP offers a Certificate of Advances Study, and offers several courses through The Center for Education. Each of these programs is tailored to accommodate different product types and different areas of focus, but all centered on the commercial real estate industry. As employers, we need to encourage and support our employees’ participation in one or more of these programs, as well as our own participation both as designees and instructors. n

(Questions for Julie Taylor) BOMA Oakland/East Bay has seen growth in membership and programs in recent years. To what do you attribute this?

Over the past two years, we’ve seen quite a growth in our luncheons and programs.

This can be attributed to not only the growth of the East Bay economy, but also Julie Taylor on the laser focus we’ve been using to plan our events and topics. We re-imagined our committee roundtables and focused on collaboration and larger strategic issues. We had the committees plot out their ideas on a huge wall calendar. As a group (40 volunteer leaders and staff), we walked through it month by month asking some targeted questions focusing on our member needs.

From that first session in September 2016, we were able to cull down some of our offerings and had our committees’ partner with each other on shared events.

From there we kept the discussion of members needs and collaboration at all levels. We started holding interactive luncheons where members worked on issues and discussion topics throughout the luncheon. The key takeaways from these discussions formed the focus for our board and committee leaders.

Our board took on a new strategic shaping in May of 2017 and developed four key strategic areas: Governance and Finance (finances and strategic focus), Stakeholder Engagement (our community of CRE connections), Education & Careers (tours, workshops and education) and Marketing & Collaboration (improve marketing and communication, website). During this strategic shaping process our facilitator brought us all up to speed on the technology and how it could affect our industry. It was eye-opening and has been a key thrust as we plan and develop anything.

These four areas have become the foundation for our new structure that sees our committees falling into one of each of these areas. These Super Committees then work together on the projects and events for the year. We’ve seen increased engagement and less burn-out for our volunteers.

Looking ahead to 2019, do you foresee any new directions, focus?

The landscape of Oakland/East Bay is changing dramatically, the number of cranes and construction projects is the highest it’s been in decades. As we move into 2019 we are focusing on how to engage our members — new and long-time — to have them prepared for all the new inventory and the technology that will change our buildings and expectations of our tenants. I am so proud of our Board and Committee Leaders for doing the hard work of looking forward and being able to nimble and responsive to our members’ and community needs.

38 California Buildings News • Q4 2018

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Housing Shortage (Continued from page 27)

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w Repurpose available vacant lands in urban areas for housing and add units to existing single-family homes.

Building more and less costly housing will result in fewer people leaving the state and more accepting jobs here, thereby alleviating some of the state’s human resource challenges. More affordable housing will stem the blight of homelessness and provide lower middle-class workers — like teachers and marginally compensated workers — with more and better housing options.

Approving dense complexes near mass transit will also reduce air pollution by limiting commute exhaust. It would also curb suburban and exurban expansion deeper into the state wildfire-prone woodlands, where lower-paid workers can find housing.

Ultimately, if the state is unable to overcome various forms of resistance to housing development, we will see a decline in overall government services and quality of life because of diminished tax revenues and fewer jobs. We will experience less of the economic prosperity that has made the Golden State golden. n

39 California Buildings News • Q4 2018

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Multifamily Growth Not Enough (Continued from page 26) an expansion-era low of 4.1%. In response, rent growth has increased steadily.

“As predominantly luxury properties have been built in the development cycle, demand for middle class housing has been overwhelming. Although gains have been solid across the board, year-over-year rent growth in 3 Star properties has outpaced 4 & 5 Star inventory by an average of nearly 100 basis points since 2009.

“Affordability may be limiting rent growth potential as the market’s average asking rent of $3,022 commands roughly 31% of the metro’s median household income, a relatively high share. San Francisco has become the most expensive metro in the country for renters. As of October 2018, the average apartment rent in the San Francisco metropolitan division is $2,278 for a studio, $2,770 for one bedroom, $3,590 for two bedrooms, and $4,654 for three bedrooms.”

With more than 17k apartment listings available, the Los Angeles multifamily market has been one of the strongest in the country during the post-recession recovery and momentum continued to build over the first half of 2018, according to Stephen Basham, senior market analyst at Apartments.com.

“Among other factors, rock-bottom vacancies, and historic levels of demand are keeping the market strong. The one-two punch of intense demand and limited new supply continues to define the L.A. apartment scene, as a variety

of factors make it nearly impossible to build enough new housing to keep pace with the area’s needs. Despite the fact that more units are under construction than at any point this century, the vacancy rate is at its lowest level since 2006 at 3.5%,” says Basham.

“Downtown Los Angeles remains not just the busiest submarket for new multifamily construction in L.A., but one of the busiest in the entire country. More than 2,000 new units were delivered in Downtown in each of the last three years and more than 6,000 were underway at mid-year 2018.

Several years of outsized growth earlier this cycle pushed rents to record highs, with more and more renter households needing to dedicate an unsustainable amount of their income (34%) to rent. Despite all of these new deliveries, increasing demand has forced apartment rents in Los Angeles to increase by 14.4% in the past year. As of August 2018, the average apartment rent in Los Angeles, CA is $2,014 for a studio, $2,436 for one bedroom, $3,662 for two bedrooms, and $3,865 for three bedrooms.

“As the first half of 2018 drew to a close, the Los Angeles multifamily market remained very healthy. The market’s large population, diverse economy and unaffordability of home ownership help to underpin consistent, strong demand for apartments. Given strong demand and very tight vacancies, affordability appears to be the main factor limiting growth.” n

40 California Buildings News • Q4 2018

Buildings Codes (Continued from page 11) adding requirements like prescribed parking minimums act can add costs but fail to reduce carbon drivers. By setting explicit performance benchmarks such as Net Zero Carbon building standards, strict water conservation and storm water management goals and removing parking requirements we signal to architects and engineers where they need to get to and let them use their best practices to get there. A similar approach to building codes can leave industry professionals with the flexibility they need to get the market where want it to go.”

Can Tall Buildings Survive Quakes?

Photo: Adobe Stock.

Earthquakes in California in recent decades have generated concern about the resiliency of tall buildings to withstand shaking during the quake and to be in a condition to accommodate tenants afterwards. That was the main discussion during a codes seminar sponsored by the Building Owners and Managers Association of San Francisco in November.

Looming above the discussions was the big question: Can building owners afford what codes creators might eventually require, if the codes require major structural changes? Regulators have a tendency to demand unrealistic and punitively costly codes.

It is a very complicated issue involving many engineering and seismic unknowns.

Owners want to preserve their assets and ensure their tenants’ safety and business continuity, but they cannot afford to re-engineer their entire buildings.

There are an estimated 749 buildings higher than 240 feet, many more taller than 160 feet in San Francisco and even more in Los Angeles, Orange County and San Diego. It’s a challenging issue at this point that state and local authorities are confronting with the full cooperation of building owners associations, like BOMA. Engineers observed that these buildings are built on soil of varying qualities and were constructed in different manners for over a century. Some of the buildings sustained

structural damage over the years during previous quakes, and many of these stresses are unknown, since to uncover them would require stripping the walls down to their mechanical, electrical and plumbing foundations — a punitively costly and disruptive procedure.

Among the unknowns is the fact that many tall buildings adjacent to each other in crowded corridors are interdependent: one weak building could fall and damage others. Cleaning up the streets following a big quake, restoring basic services, and finding contractors to make repairs in an already over-committed market are all issues that would affect the resiliency of urban areas and continued economic activity.

BOMA members are working with government officials and getting input from the engineering and architectural community to arrive at better plans and realistic codes.

It will be a lengthy process. Under way is the San Francisco Tall Buildings Study. It is the first study in the nation to look at the impact of earthquakes on a large group of buildings higher than 240 feet. The resulting report will characterize the issues and available information; propose regulatory and procedural recommendations where appropriate; and identify areas where future studies would be helpful.

The San Francisco Office of Resilience and Capital Planning under City Administrator Naomi Kelly is working with the Applied Technology Council (ATC) to conduct the study. ATC is a non-profit organization with a mission to develop and promote state-of-the-art, user-friendly engineering resources and applications for use in hazard mitigation. A panel including the city administrator, Department of Building Inspection, Department of Emergency Management, and the San Francisco Public Utilities Commission is overseeing the various work products. In addition, a broad group of tall building stakeholders and experts will meet several times during the study to provide additional feedback and review. For more information, visit: https:// sfgov.org/orr/tall-buildings-san-francisco-0

41 California Buildings News • Q4 2018

ADA…An Often Abused Code The California Restaurant Association, whose members have been plagued by “drive-by” lawsuits, recently gathered local restaurants in San Diego for a Restaurant Roundtable discusADA sion on the federal application of the Americans with Disabilities Act (ADA) and the continued trend for “gotcha” lawsuits against restaurants. They have been focused on business websites, even though no individual’s access to an establishment was limited or where there was no harm to any individual.

CRA says it and the restaurant community “fully support the ADA and full access for all individuals, but dubious lawsuits continue to hit

businesses and undermine the very spirit of the landmark ADA. The CRA, joined by the National Restaurant Association, gathered the roundtable to discuss these issues with the offices of Senator Dianne Feinstein and House of Representative members Mimi Walters and Scott Peters.

“While the CRA has successfully pushed incremental changes to California’s application of the ADA, enterprising attorneys have shifted many of their cases to federal courts, where those California law changes are not in play. Restaurants shared their experiences of predatory lawsuits and encouraged the lawmakers to continue the push for federal ADA reform when a new Congress is constituted in January.

“Senator Feinstein has been a champion in leading the cause for rational reform and is a power-

ful member of the Senate Judiciary Committee, which will play a decisive role in this effort. House members Peters and Walters also remain strong supporters of reform efforts at the federal level.

“A relatively new, and rapidly expanding, area of ADA lawsuits regards business websites. The ADA precedes the internet and, as a result, there are no laws or federal guidelines on how websites can become ADA compliant. This has opened up many businesses to allegations of ADA non-compliance based on accessibility of websites for hearing- and visually-impaired individuals. Whether lawsuits are brought regarding websites or brick and mortar restaurants, many attorneys have shifted their ‘playing field’ to what is perceived as the more friendly federal courts that lack California’s reasonable reforms.” n

Moving Towards Codes' Solutions is Complex Sacramento-based Mike Malinowksi, president of the Streamline Institute and the former head of the California Council of the American Institute of Architects, says, “What it means to streamline codes and regulations is often misunderstood. It’s not just about ‘fast’—after all, you can get to ‘fast’ just by abandoning codes and regulation. When I talk about real streamlining I’m talking about increasing effectiveness and efficiency. The ‘fast’ comes along as a byproduct of having high-performance codes and regulations.

“We can have environmental quality, resiliency, prosperous business environments—and regulatory streamlining— ALL at the same time. It takes some effort—here’s how to make this hat trick happen: 1) Treat those being regulated as “customers” are treated in retail. A customer perspective and experience cannot be just ‘bolted on’ after the fact.

2) Our California aspirations are leading us toward ever more complex engineering solutions. Complexity itself does NOT require throwing in the towel on streamlining. Even the most complex requirements can be framed with simplicity, clarity, and the customer perspective as drivers. Today, we see some of the most complex technology on the planet made so intuitive that customers can use it, right out of the box without reading a manual. If that were not true, a cell phone would not be in everyone’s pocket. We need to take a similar approach with codes and regulations.

3) There needs to be a means built in from the beginning

to address the ‘unanticipated quirks’ that occasionally come up in the real world. It’s based on rational assessment, as well as good old common sense, judging compliance based on intent when the literal code simply doesn’t work. This kind of mechanism has always existed in the uniform building codes; we need similar means for energy codes, water conservation, and other regulations.

4) Our California aspirations to continually move the bar higher should be grounded with a goal of a win-win for everyone in the game: plans driven by shared values, collaboration, and mutual respect--not one side’s win at the other side’s expense.

5) Keep it together. When new codes end up in legalese, instead of in the code books on design and code professionals' desks—unnecessary confusion and complexity is created. This seems to happen more frequently on focused hot topics like solar and water conservation.

A simple road map like this was behind the Streamline Institute’s work in development of a permit streamlining program called PASS. Partnering with stakeholders on both sides of the counter, it shaped the first regional permit streamlining in 18 Northern California jurisdictions. PASS shows a bottom line time savings of 50-70% for applicants, with time savings on the public side as well, while at the same time increasing code conformance and regional consistency. That’s what High Performance Codes and Regulation should and can look like."

42 California Buildings News • Q4 2018

Industry News

Worker Shortages Hamper Construction Industry

Optimism Reigns, But Trump’s Immigration & Trade Policies Add Burdens The Trump Administration’s tariff and immigration policies are hampering the nation’s ability to build sorely needed housing, workplaces and infrastructure in California as well as the rest of the nation, according to speakers at a September conference in San Francisco sponsored by the U.S. Chamber of Commerce, USG Corporation and the San Francisco Business Times.

Chamber Executive Vice President and policy chief Neil Bradley urged the federal government to “do no harm,” saying that the administration’s current restrictive immigration policies have the effect of reducing needed workers, and he appealed for comprehensive immigration reform that could affect people needed in construction and related fields. Bradley further added that Trump’s restrictive tariffs—especially on steel—are increasing construction costs and causing uncertainty.

Major contractor Swinerton’s CEO Jeffrey Hoopes said that an overwhelming majority of construction workers in California are Hispanic, and he expressed frustration that tariff-driven price hikes are introducing uncertainty and adding daunting costs to construction projects.

The remarks were made during a conference in which the USG-U.S. Chamber’s Q3 Commercial Construction Index was released, a report which statistically dramatized the nation’s crippling worker shortages. It said there is “overall optimism” in the construction market, “despite contractors’ ongoing challenges with skilled workforce availability and tariff-related concerns.”

Commercial Construction Index Findings Detailed The report indicates skilled labor shortages will have the greatest impact on commercial construction businesses over the next three years. It revealed 88 percent of contractors expect to feel at least a moderate impact from the workforce shortages in the next three years with over half (57 percent) expecting the impact to be high/very high.

The skilled labor shortage has been consistently identified as a major issue facing the industry, but it is now reported by 80 percent of contractors to be impacting worker and jobsite safety. In fact, the Q3 report found that a lack of skilled workers was the number one factor impacting increased jobsite safety risks (58 percent).

“The commercial construction industry is growing Photos above and right page: Adobe Stock.

but the labor shortage remains unresolved,” said Jennifer Scanlon, president and CEO of USG Corporation. “As contractors are forced to do more with less, a renewed emphasis on safety is imperative to the strength and health of the industry. It continues to be important for organizations to build strong and comprehensive safety programs.”

As contractors grapple with a scarcity of skilled workers, findings show a majority are working to improve the overall safety culture on the jobsite (63 percent) and at their firm’s offices (58 percent). However, the indicators that were reported to have the highest impact on improving safety culture and outcomes are those that engage employees throughout the organization. This includes developing training programs for all levels of workers (67 percent), ensuring accountability across the organization (53 percent), empowering and involving employees (48 percent). Other indicators reported include improving communication (46 percent), demonstrating management’s commitment to safety (46 percent), improving supervisory leadership (43 percent) and aligning and integrating safety as a value (42 percent).

In addition to the skilled labor shortage, the report found addiction and substance abuse issues are a factor in worker and jobsite safety. Nearly 40 percent of contractors are highly concerned over the safety impacts of worker use/addiction to opioids, followed by alcohol (27 percent) and marijuana (22 percent). Notably, the report showed that while nearly two-thirds of contractors have strategies in place to reduce the safety risks presented by alcohol (62 percent) and marijuana (61 percent), only half have strategies to address their top substance of concern: opioids, which is a newer growing concern. The opioid epidemic cost our economy $95 billion in 2016, and could account for approximately 20 percent of the observed decline in men’s labor force participation.

“The opioid crisis has both human and economic costs,” said Bradley of the U.S. Chamber. “The U.S. Chamber of Commerce remains committed to helping combat the opioid epidemic, which continues to devastate too many families, communities, and industries every day. While there is no one-size-fits-all answer, a multipronged legislative approach is a critical first step.”

To view the entire commercial construction report, visit www.CommercialConstructionIndex.com

43 California Buildings News • Q4 2018

New Building Tech Promises Greater Efficiency, Less Cost Construction Industry Will Benefit from Blockchain, But So Will Commercial Real Estate

Blockchain and other emerging technologies will streamline construction transactions, make them more transparent and cut costs, according to a variety of speakers who addressed a recent Bisnow-sponsored conference in San Francisco called “CRE Tech Summit.”

And since Fluidity’s Maggie Hsu said with Blockchain “you can digitize anything,” its transactional benefits may well extend to the entire $30 trillion global real estate community.

Both construction and real estate are late adopters of technology, so new digital methods can make significant achievements that speakers said can dampen soaring building costs and improve government permitting in a bedeviled California market.

Blockchain is a compilation of records protected by cryptography. Each record or “block” contains transaction data agreed to by parties to a contract. A Blockchain resists data modification. It is an open, distributed ledger that records transactions between multiple parties in a verifiable manner. Linked to financial institutions, Blockchain makes payments to vendors as soon as the receiving party signs off on a project or deal.

The technology provides a “common record

Soaring Growth in HVACR Market Expected into 2019

HVACR manufacturers reported positive 2018 sales growth, according to the latest AHR Expo and ASHRAE Journal Annual Economic Outlook Survey. Last year’s confidence in the industry’s economic outlook is forecasted to carry into 2019, with 87% of respondents anticipating positive business prospects heading into the new fiscal year.

The report indicates that the HVACR market is primed for continued business growth. Reports for 2018 are at an all-time

across multiple parties,” said Don Bowden, CEO of BuilderChain, adding that it makes construction loans more efficient and reliable. It also reduces discrepancies and clarifies legal issues.

A smart buildings panel at the Bisnow conference praised BIM technology for giving architects, engineers and contractors 3D-imaging tools needed to complete jobs more efficiently and better inform owners.

Various speakers said local officials, however, are still reviewing projects and issuing approvals based on old-school 2D methods.

The conference was attended by numerous venture capitalists who are investing in increasingly popular technologies that aim to modernize construction practices and improve building environments. Kilroy Realty sustainability leader Sara Neff sees hope in technologies ensuring better air quality and, hence, greater tenant productivity and reduced healthcare costs.

Aliza Skolnik, with the engineering design firm ESD, said the goal in modern building construction is to go beyond basic mechanical, electrical and plumbing issues and focus more on the “human experience” in which “everyone wants access to everything, anytime, anywhere.”

high, with 44% of respondents reporting a significant sales increase of more than 10% year-on-year; this is up from an already impressive 2017 record of 35%.

“This is considerable data confirming the continued growth of our industry, even amongst market shifts and issues facing professionals,” said Clay Stevens, manager of AHR Expo. “It is further indication that the changing market has potential to grow in unexpected ways, and industry professionals need to stay abreast of the latest technologies and equipment available to them. The AHR Expo is a catalyst for this business growth, as engineers, contractors, manufacturers and other professionals from all facets come together to share ideas that advance the industry.”

44 California Buildings News • Q4 2018

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FACILITY SOLUTIONS TO HELP YOU SUCCEED For more information or to register, visit FacilitiesExpo.com To exhibit, contact Lisa Nagle, 800-827-8009 x4402, Lnagle@Facilitiesexpo.com Facility Management Issues (Continued from page 7) FECV19_7.5x4.5_ad.indd 1 Kluis said one major technology impact will be robotics, already gaining a foothold in many structures, from hotel deliveries to assembly lines to warehousing and garages.

He cited one Chinese factory that became automated reducing 650 jobs to 30, not so much to save labor, but to prevent human errors in equipment manufacturing, which cost the company immense amounts to replace and repair. He predicted that more than a third of all jobs across all industries could be eliminated with the use of artificial intelligence, robots and other forms of smart technology.

Amazon, he reported, is expected to hire half the number of workers this holiday season — even though it anticipates dramatically greater activity —because it is automating so many warehouses. Infrared thermography and drones are increasingly used to detect building flaws, he said, and a fleet of water-spouting drones are even being used in a few cases to fight building fires. “Drones can even change (ceiling) lights,” he said.

Other industry experts pointed out that FMs who embrace technology and learn to use it have no fear of losing their jobs. It can, in fact, eliminate time-wasting activities and elevate a days’ work. For instance, workers wearing headgear cameras that send real-time images to supervisors who can collaborate on a problem and gain insights into it even when their supervisors or another colleague is also viewing the problem on a screen across the campus or 40 floors below.

11/20/18 10:09 AM

Women in FM Panel Shares Insights

A vibrant trio of women shared their thoughts on the impact and visibility of women in the industry at the Women in Facilities Management Panel, a popular program that has become a tradition at NFMT Vegas. Positive changes in this traditionally male profession mean that women are prospering in FM careers while also mentoring the next generation.

Women in FM bring a diverse background, observed Saddie Smith, Vice President of Facilities and Field Service, ConEdison. She began as a lawyer for the company but saw a more promising career path in FM, since there was only one general counsel at the company. Smith manages 30 facilities, as well as a fleet. “I never know what will happen minute to minute… it’s a fabulous job.”

Tracy Higuera, District Manager, Sodexo, worked in construction management after earning a degree in engineering and entering project and engineering management. Pamela Tyler, Director of Facilities, Rio All-Suites Hotel Casino, Caesars Entertainment, was an apprentice electrician and taught at vocational schools.

Attracting new talent to the industry is a key concern.

Tyler expressed the need to get young people interested in FM in junior and high schools. “It’s harder to retrain people.

We need to show (young) people how cool it is.” Panelists shared their passionate for talent development among their (Continued on page 45)

45 California Buildings News • Q4 2018

Facility Management Issues (Continued from page 44) existing teams. Higuera stressed that FM is a “service,” with many transferrable skills such as serving customers and understanding their expectations.

“Things are really changing. Facilities are the right place for anyone,” notes Smith. Tyler shared that Caesar’s has an initiative to have 50% of women at all levels of management.

Sodexo is working toward gender balance, said Higuera.

“There’s already been a culture shift. I don’t feel like there’s a glass ceiling over my head.”

Bottom line: women are suited to FM, typically bringing self-awareness, self-management, empathy and social skills to the job and to a career with opportunities for advancement. They are also mentoring the next generation of managers to follow in their footsteps.

RIME and Reason: How to Prioritize Your Maintenance Work Effectively News flash: the “squeaky wheel syndrome” is not the most effective manner in which to handle maintenance requests at your facility! An objective system that ranks maintenance by type of work and type of asset can help your team prioritize tasks, said C. Paul Oberg, CEO, EPAC Software Technologies, Inc. at an NFMT Vegas session.

Oberg recommended implementing the Ranking Index

for Maintenance Expenditures (RIME), one of the most widely used work order priority systems. The easy-to-use system, developed for the Navy by Albert Ramond and Associates, enables you to more effectively plan, schedule, analyze and evaluate efforts.

RIME works like this: All maintenance and repair work is separated into 10 classes. The most important Type of Work carriers a value of 10 and the least important a value of 1.

For example, life safety carries a rank of 10, while routine and miscellaneous work is ranked at the bottom of the list.

Asset Types are ranked from one to 10 as well, with utilities being a 10 and landscaping and miscellaneous assets at the bottom. The RIME value is derived by a simple formula: Type of Work x Asset Type = RIME value. The higher value, the higher it goes on a schedule of work. Using the RIME value of various work orders, maintenance professionals can prioritize their work flow. Best of all, unlike complex systems, the RIME index fits easily on an 8.5” x 5.5” card.

Ready to bring more order to your facilities operation, as well earn the respect of management, customers and workers? A priority system offers a means of evaluating activities and backlog, creates an effective measure of communicating importance, and provides a decision-making tool. n

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Lighting Concepts (Continued from page 19) countries might be too low.

2. Healthy light is inextricably linked to healthy darkness.

3. Light for biological action should be rich in the regions of the spectrum to which the non-visual system is most sensitive.

4. The important consideration in determining light dose is the light received at the eye, both directly from the light source and reflected off surrounding surfaces.

5. The timing of light exposure influences the effects of the dose.

She added, “Disrupted circadian rhythms from shift changes are associated with obesity, digestive problems, immune dysfunction, cellular repair and regeneration disruption, sleep problems and long-term problems such as heart disease, cancer and metabolic disorders.”

More Conceptual Design Trend In her “Improvisation in Design” presentation,” Addie Smith with AE Design suggested “a more inclusive and personal approach to creativity in lighting, and outlined a design process that promotes compelling and meaningful concepts. In Smith and associate Bryan Jass’ seminar “Lighting Design with Electrical in Mind,” they offered “strategies for consultants to work together with an inte-

grated, informed and collaborative approach that brings true value to the client. From our time at LightShow West, and as leaders in the industry, we see a trend toward integrated solutions that work well, and are at the same time beautiful and transformative. Other trends we’ve identified include circadian lighting, light fixtures that integrate acoustic properties, and lighting controls integration with special systems (AV, BAS, PMS, motorized shades, and most importantly HVAC). The energy savings story is critical — both for the planet and our client’s bottom line. California is leading the way with specialized code requirements for lighting controls, and integrating lighting controls with specialty systems for increased energy reduction is not far off.”

Young California Lighting Designers Honored Among the 40under40 lighting designers honored at the Lighting Design Awards 2018, six young professionals emerged as rising talents and leaders in their California lighting communities: Brandon Thrasher and Amaia PurasUstarroz of HLB Lighting Design; Nick Albert and Neha Sivaprasad of Illuminate Lighting Design; Galen Burrell of Arup; and Kera Lagios of Integral Group. These individuals will shape the future of the lighting design profession, and the built environment. n

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