Californiabuildingsnewsq12017 by Ellen Eason

Q1 2017 â&#x20AC;˘ $5

HVAC Innovations Smarter Systems are Coming Online That Offer Energy Savings and Greater Tenant Comfort

Modern Carpenters

Beverly Center Innovations

Floorcare Solutions

Features Will Trump Administration Impede Green Buildings Efforts? Environmental Lobbies Pledge to Fight to Continue Advancements Environmental Protection Agency and Department of Energy programs have a long tradition of fostering energy reduction and sustainable practices in building design and operations. They have worked hand-in-glove with organizations like the U.S. Green Building Council and the State of California to lower the 40% of total energy used in America by all types of buildings. So when President Trump nominated and the Senate confirmed agency heads who have worked to destroy those very agencies, environmental leaders were shocked. In fact, more than 700 former EPA officials and the EPA 15,000-member union urged the Senate to reject Trump’s EPA nominee. Sierra Club Executive Director Michael Brune said, “Scott Pruitt is now set to be the most dangerous EPA Administrator in the history of our country. Pruitt has taken millions of dollars from corporate polluters, and has protected their interests at every turn—yet, he is now in charge of protecting our children from the dirty air and toxic water created by these very same polluters. Pruitt has a long record of ignoring science, assaulting public health safeguards, and holding the agency he now leads in contempt. His confirmation is an environmental and public health disaster.” Sounding more compliant notes in a recent interview with The Wall Street Journal and his initial address to EPA employees, Pruitt pledged to work to bring more areas into compliance with federal clean-air and water standards and said he will try to improve dams, levees and other water projects. He stressed that he supports turning over more authority to states. Trump’s pick for energy secretary, former Texas Governor Rick Perry, told senators he no longer wants to eliminate the Energy Department but instead intends to use the agency to increase American energy production.

USGBC’s Position on Trump’s Appointees The USGBC reacted to the confirmation of the new EPA administrator with hope and pledged to be “bold” in continuing its mission. “In regards to what some of the newly confirmed cabinet members might bring for green building, we remain optimistic and know that it’s not a partisan issue. USGBC will continue to press forward with its mission of supporting the mitigation of climate change while continuing to showcase a clear path to job creation and economic prosperity. We are going to be bold in articulating our solutions for mitigating many of the challenges our environment and our communities are facing today,” said Taryn Holowka, USGBC SVP, marketing, communications and advocacy, in response to a California Buildings News’ query. “Our investment in LEED, our support for green building around the globe, USGBC and our mission to transform the built environment will continue and endure. We know that in the U.S., buildings account for 40 percent of our energy use, 71 percent of our electricity use and 40 percent of our climate emissions. These numbers signify the opportunity for the green building community to make a real impact on people, planet and profit and our work has never been more relevant. Photo: Getty Images.

(Continued on page 48)

CRE Changes Accelerate

Intelligent HVAC Trends

Insider’s View on Facilities

Floor Care Innovations

Wood: Safe Solution for Apartment Complexes

Carpenters Harness Tech

Beverly Center’s New Design

Robots Coming to Your Hotel

Legislative Issues to Watch

Hotels Focus on Experience

Strategic Energy Use

Cover images: HVAC image, Getty Images. Beverly Center, courtesy of Beverly Center. Hard hat: Adobe Stock. Flooring: NAC.

California Buildings News Team Ellen Eason, Publisher ellen@easoncom.com Henry Eason, Editor henry@easoncom.com Contributing Editors Zachary Brown, CBRE 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 Larry Morgan, Facilities, SAP Steven Ring, Fulcrum Real Estate Development Carlos Santamaria, CEES-Advisors

www.cabuildingsnews.com Copyright © 2017 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 • Q1 2017

Real Estate Industry Facing Accelerated Change, Says LA Pundit Six Disruptors: Trends, Talent, Technology, Transition, Timing and Transactions

By Chris Lee

uring the past 12 months, the accelerated pace of disruptive innovations, advanced technologies, shift to the gig economy, impact of “Accelerators,” and the confluence of nearly 30 emerging trends are rapidly reshaping and redefining the real estate industry. Occurrences which, months or years ago, seemed improbable or unlikely are real, and the need to internally realign around a shared vision, motivating value propositions, realistic goals and aligned interests is now front and center in every real estate firm. No “one thing” or clear “tipping point” will be the fulcrum of this dramatic transformation. The rapidly changing economic, market, capital, demographic, business, regulatory, asset, occupier and service platforms combined with dynamic talent management conditions are major contributors to this accelerated transformation. Business as normal and status quo are no longer viable strategies. The future of the real estate industry now rests with creating valued relationships, incredible stakeholder Image: Adobe Stock.

experiences, a collaborative workplace environment, integrative technologies and the presence of outstanding aligned talent and leadership teams. The first step in dealing with the future and current challenges is to understand which disruptors are shaping the future and what is needed to compete and stay relevant. Multiple disruptors are reshaping the real estate industry every minute of each day. The future has arrived! Opportunities are no longer “uncovered,” but are “created” in this New Normal. Relevance needs definition and clarity almost daily. The impact on technology disruptors is changing the way real estate assets are acquired, financed, developed, designed, leased, managed, sold and operated. Industry consolidation (look for 30% fewer firms by 2025), aging founders and leaders, and the emergence of new competitors mandate new business models to succeed and prosper. Many point to 2017 as the breakthrough year during which long-term winners and losers will be created…and perhaps determined. (Continued on page 34)

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6 California Buildings News • Q1 2017

Intelligent HVAC...

Saves Energy and Boosts Tenant Productivity More intelligent HVAC has two major impacts: HVAC operations consume from 40-60% of a building’s operating budget. Shaving just a few percentage points can significantly reduce the cost of running a building. Secondly, and most importantly, increasing the productivity of a workforce within a building by increasing the wellness and comfort of the people who work there can impact a company’s entire budget.

Liebert® cooling products. Photo courtesy of Vertiv.

Much of what makes building HVAC perform better is attributable to its installed hardware, but smart digital products, features and systems can produce an even greater impact. Smarter buildings bring with them daunting challenges, many of the thousands of Californians who attended the HVAC industry-leading AHR Expo in Las Vegas this winter learned. Chief among the obstacles to making intelligent buildings operate better is the lack of facility managers who are adequately trained to run them. This problem is heightened by the retirement of droves of Baby Boomers and the dearth of new engineers to take their places. The dream of smarter buildings is also overshadowed by the multiplicity of competing product methodologies and the ever-crowded marketplace. That said, manufacturers are stepping up to the challenge of creating ever more efficient products and are working to streamline the educational process needed to put them into effect. This report features some stand-out products.

AHR Expo’s HVACR Innovation Awards Building Automation: Company: Danfoss (www.danfoss.us) Danfoss Enterprise Services Cooling: Daikin Applied (www.daikinapplied.com) for Pathfinder® Air-cooled Screw Chillers with Variable Volume Ratio (VVR) Technology Green Building: Carrier (carrier.com/commercial) Dual Stage Relief Economizer Heating: Noritz America (www.noritz.com) Noritz CB Combi Boiler Indoor Air Quality: Nortec Humidity (www.humidity.com) Nortec GS Series - CS Model (Nortec GS CS) Humidifier

Plumbing: Taco, Inc. (www.tacocomfort.com) SmartPlug Smart Hot Water Recirculation Control Refrigeration: Danfoss (www.danfoss.us) Danfoss CTM (Electrical Controlled Transcritical Multi Ejector) Software: Nidec Motor Corporation /U.S. MOTORS® (www.usmotors.com) Rescue Select Programming App Tools & Instruments: PEXOLOGY, Inc. (www.pexgun.com) PEXGUN Ventilation: Titus (www.titus-hvac.com) Helios Digital Diffuser

7 California Buildings News • Q1 2017

Other Outstanding Products Mitsubishi Electric Cooling & Heating has a wide variety of solutions to enable building owners to run a more efficient operation. From indoor units that feature the intelligent 3D i-see Sensor™, which scans a room and adjusts temperatures for maximum occupant comfort without sacrificing efficiency, to appMitsubishi ceiling cassette based zone and whole building controllers, Mitsubishi Electric is dedicated to innovating the future of HVAC. Vertiv™, formerly Emerson Network Power, introduced Liebert® iCOMTM Autotuning, an adaptive intelligence and machine learning software system that improves cooling system reliability, increases efficiency and significantly extends system life. Liebert iCOM Autotuning is a feature of the Liebert iCOM-S thermal system control and is available for select Liebert cooling systems installed in North America. Liebert® cooling products have earned the trusted AHRI Certified® mark through the AirConditioning, Heating, and Refrigeration Institutes’s (AHRI) Datacom certification program, an assurance to customers of the products’ efficiency and capacity performance. Vertiv is the first U.S.–based company to achieve this certification for data center cooling systems. AHRI is an independent organization that certifies the performance of products in the heating, ventilation, air conditioning, refrigeration and water heating industry (HVACR). AirPro™ Instruments from TSI are revolutionary wireless velocity and pressure measurement solutions that maximize productivity by offering easier measurement access, unmatched accuracy, seamless multi-data reporting, and a user-friendly interface for fast, intuitive operation. TSI provides superior service through license and probe management and extended service contracts, eliminatTSI’s AirPro™ Instruments ing downtime. For HVAC contractors and those specializing in air balancing, Dwyer has reinvented the traditional air flow

hood with a new ergonomic design that boasts several patented performance technologies. The resulting SMART Air Hood™ Balancing Instrument is the most accurate hood on the market. Lightweight and easy to maneuver, the hood delivers single-user ability with less physical stress while speeding up the balancing process and reducing costs. “The goal was to develop a game-changing performance instrument to meet the needs of the HVAC community, both domestically and in the global marketplace,” said Roger Mountford, Dwyer director of sales and marketing.

HEOS Sistema by CAREL

HEOS Sistema is a concept offered by CAREL for commercial refrigeration. Presented as an alternative to classic architecture in which a compressor rack supplies cabinets with refrigerant along different distribution lines, Heos Sistema is the most technologically innovative highefficiency solution for managing cabinets and cold rooms in supermarkets. This in fact represents a new way of constructing refrigeration systems, using plug-in cabinets fitted with variable-speed BLDC compressors and cooled by a water loop. The Reliable Controls® MACH-ProViewTM is a powerful and elegant MACH-ProViewTM Building BACNet® Building Controller from Reliable Controls Controller (B-BC) and BACNet Operator Display (B-OD) that provides a plenitude of attractive high-resolution, graphical interfaces for your controlled environment. There are a selection of configurations. Multiple LCD color themes allow the MACH ProView to fit virtually any decor. (Continued on page 11)

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11 California Buildings News • Q1 2017

Intelligent HVAC (Continued from page 7) Carrier, an industry leader, “recognizes that each hilmor’s Digital Adjustable Torque Wrench is critical building is unique. Delivering innovative and customizable for tightening flare nuts on mini-splits. Done wrong, it systems to meet our customers’ individual needs drives can cause leaks, bursts and a lot of headaches. hilmor’s new our product development strategy,” Digital Adjustable Torque Wrench says Chris Opie, director, marketgives technicians the peace of mind ing, Carrier Commercial Systems. that comes with precision. The tool’s “Advanced heating and cooling proddigital screen displays the torque value ucts are essential to healthy, comfortwhile tightening, and its indicator able and sustainable buildings — a LED lights and buzzer increase in responsibility that we take very seriintensity as the specified torque value ously. Our ‘Next Big Things’ show our is reached. commitment to continued innovaLG Electronics highlights recent hilmor’s Digital Adjustable Torque Wrench tion, which will enhance our portfolio HVAC solutions with a new customof customer solutions, improve building energy efficiency izable control system, next-generation variable refrigerant and reduce operating costs for building owners for years to flow (VRF) technology, powerful new heating capabilities come.” Its new products include new air-cooled and waterand design tools. LG unveiled the future of the connected cooled chillers that represent the future of chiller technolbuilding at the AHR Expo with three new controls prodogies and efficiency, new additions to its comprehensive ucts. The LG MultiSITE Remote Controller, LG MultiSITE portfolio of energy-efficient variable refrigerant flow systems Communications Manager and LG MultiSITE VM3 Building and a reinvented 39M commercial air handler that delivManagement Solution empower operators to take control of ers greater flexibility by increasing the number of available their buildings in ways that were not previously possible. sizes, configurations and options. (Continued on page 51)

12 California Buildings News • Q1 2017

Vision of 2017 for Facilities Management: An Inside Out Perspective Death to prescriptive contracting and the traditional RFP process can’t come soon enough: w I see more and more highperformance FM teams moving to performance-based service contracts and the trend continues to gain widespread implementation where FM is strategically embedded into the C-suite. w Background: Scope of work and corresponding details on how to By Larry Morgan the run operations and maintenance of our portfolios is the vendors’ core business—not mine— so why do many continue to prescribe the “how.” You’re not doing anyone any justice and for darn sure not getting any more favorable results. One core strength of performance-based contracting is that it puts the contract owner in the position of objectively evaluating performance. By clearly defining the set of numbers and other metrics against which success will be measured, personalities and other subjective influences are taken out of the contracting equation. It is, now, all about the metrics. w Truly successful performance-based contracting allows for measurement of metrics in stages: a baseline period, allowing for due diligence by both parties; a 90-day ramp-up period; and then full execution of the metrics and associated incentives/disincentives. Everything is up-front, in writing, and lasts the life of the project—even when personnel change. w Simplified example: Landscape performance-based contract language. If it’s brown, water it or replace it. If it’s green, mow it or trim it. I am not a horticulturist or an arborist, so I don’t act like it. Breadth of responsibilities now requiring more depth: w It wasn’t too long ago that FM departments worked pretty much in silos and were only called upon when something went wrong like no toilet paper in the C-suite restroom or it was over budget and then we became the “go-to people.” Then some geniuses decided that since the FM departments were second only to salaries and total compensation on the company’s expense lines, they might as well be invited to the table for more than a drive-by hello. Many FM leaders were or are not prepared to speak HR, IT, finance and other internal languages. We were or are

really good at tech language, but not much beyond that. Today’s top talent FM teams will be called on more and more to make presentations on the benefits of x, y & z programs in HR terms, using cost benefit ratios. Translate that to financial terms using return on investment and or total cost of ownership. Impact on and of IT requirements, etc. Basically taking the horizontal responsibilities and driving down in depth the required aptitude to exceed expectations. This will be a major requirement in 2017 and beyond as the pool of top FM leaders thins out. w Enough has been said about the lack of FM talent coming up through the ranks, so I won’t go there in any detail. However, as the C-suite grasp the true value of top-talent FM staff, the compensation packages are becoming more in line with the bottom-line responsibilities, and that will ultimately lead to attracting the “right stuff” kind of people from diverse backgrounds. w Don’t stress over training: I can train a monkey to change a light bulb, but I can’t train a monkey on when it’s time for a group relamp plan or better yet a LED conversion program. Breadth and depth of critical thinking. IoT: Not so fast. w The Internet of Things (IoT) has been deemed the next revolution in technology because it holds the potential to enable new insights and efficiencies by tapping into data from smart, connected devices, machines and sensors. All good things…but until FM organizations can prove out the ROI of not only the hard and software, but more importantly the ROI of human capital required to implement the technology the widespread adoption of IoT will not gain significant enough traction at the FM C-level to warrant a huge “WOW we have to do this,” IMHO. There are always going to be exceptions, but we still have facilities that have pneumatic controls and old school “run to break” FM mentality (reference point one) that will be barriers at least through 2018. Net of the inside-out perspective IMHO, is that there will be no earth-shattering breakthrough for FM’s in the near term without a shift from bottom-line thinking to critical thinking that has major impact on the physiological reaction to the built environment for our internal and external clients. Peace and Love.

Morgan is a global facilities management executive with SAP in Silicon Valley.

Trends Image: Adobe Stock.

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14 California Buildings News • Q1 2017

Floor Care Innovations Improve Installation and Maintenance Installing surface materials and providing better floor care is easier and less costly now than ever before with a host of product innovations, many recently debuted at The International Surfaces Event in Las Vegas. In response to growing demand for flooring that’s exceptionally durable and resistant to the wear and tear of everyday life, Mannington introduces Adura® MAX. Tagged as “Waterproof –Noiseproof – Oopsproof”, Adura® MAX features a HydroLoc™ core and a black Ultra-Quiet pad that, together, form a superior water and noise resistance system. In addition, Adura® MAX features ScratchResist™ with aluminum oxide, Mannington’s patented technology that keeps floors looking newer longer by resisting everyday scratches (See photo next page.). Mohawk’s new Airo carpet is a breakthrough in soft flooring, a revolutionary alternative to traditional carpet and for retailers an easy-to-install, easy-to-service product.

“Airo is not just an improvement to an existing product line; it represents an entirely new category of soft floorcovering,” said Seth Arnold, senior director of brand, soft surface. There are a lot of advantages to Airo, but early responses from retailers indicate the greatest advantage of this product is its simplicity of installation. Retailers continually tell us their number one challenge when it comes to growing their business is related to labor. With Airo, we have reduced the install time by 25 percent and eliminated 100 percent of the complexity. This gives retailers remarkable flexibility with labor crews and has the potential to dramatically increase their productivity and grow their top line sales.”

Photo above: NAC’s crack isolation solutions for surfaces that require protection from structural movement were ideal for airport project. Photo credit: NAC .

15 California Buildings News • Q1 2017

NAC revolutionized the way decorative floors are installed beginning with ECB®, the first self-adhering anti-fracture membrane. The success of ECB® evolved into an extensive line of crack isolation, sound control and waterproofing solutions. Crack isolation solutions are used for surfaces that require protection from structural movement. Two waterproofing membranes are ideal for projects in which waterproof protection is required. And sound-control membranes are for surfaces that require sound reduction. NAC membranes have been featured in thousands of commercial, residential and industrial applications worldwide. Lauzon Flooring came out with Pure Genius technology that allows natural or artificial light to activate the titanium dioxide particles in the finish and transform them into an air-purifying agent. Pure Genius makes the air up to 85% purer. It is included with its Émira, Organik & Authentik Series

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Adura® MAX is a durable flooring solution from Mannington. Photo credit: Mannington.

and available as on option on most products in the Designer and Ambiance collections. Baseboards are one of the finishing touches that help to complete any space. Choosing a baseboard that is attractive, durable, and easy to install is particularly important in commercial settings. Schluter-Systems has introduced Schluter®-DESIGNBASE-SL, a new top-set wall baseboard that provides a unique alternative to traditional baseboards in commercial buildings and condominiums. Because it is made of metal, DESIGNBASE-SL provides added durability and won’t crack or shrink over time, eliminating a common problem with many commercial baseboards. Made without the anchoring leg used on traditional Schluter profiles and trim pieces, DESIGNBASESL is designed to be installed after the floor and is suitable for use over any type of new floor surface. Wagner Meters is offering a handy new tool developed especially for contractors, flooring installers, and others in the concrete industry, that enables them to predict the relative humidity (RH) of a concrete floor slab at service conditions — even before those service conditions are met. The widely used and highly accurate, science-based method for measuring moisture in concrete (standardized as ASTM F2170) mandates taking RH measurements at service conditions. But project timelines are often such that contractors would like to be able to estimate RH before reaching service conditions — now possible with Wagner’s new meter. (Continued on page 16)

16 California Buildings News • Q1 2017

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Floor Care Solutions (Continued from page 15) “Unfortunately, especially in new construction environments, the required service conditions don’t exist early on,” says Jason Spangler, Sales Manager for Wagner Meters. “Wouldn’t it be great to have a tool that allows you to predict the RH in the concrete slab once service conditions are met, and to be able to do this easily?” Tile is a very strong building resource, as it endures in high-traffic areas, offers versatility in design and is universally easy to maintain due to its frequent composition of ceramic, porcelain and natural stones. New collections from Daltile broaden its extensive selection of quality and attractive tile and natural stone offerings. The Severino, Gainswood and Woodbrigde product lines are ideal for commercial spaces such as public lounges, lobbies and Woodbridge glazed porcelain floor in a lounge setting. Photo courtesy of Daltile. retail spaces. The additions allow customers to remimagine the spaces in which they work and play. Gainswood glazed porcelain floors with Reveal® Imaging feature a softly aged, rustic visual in four classic hues. (See photo above.) n

18 California Buildings News • Q1 2017

Multifamily News

Is Wood a Safe Material for Apartment Complexes?

Wood Burns More Easily Than Other Materials…But Can Be Safe, Green and Affordable From Bergen County, N.J. to San Francisco, wood-frame multifamily buildings have burned in recent years all across the country, resulting in calls for changes in construction codes to limit the use of wood in multi-story apartment complexes. Naturally, organizations like Build With Strength that represent concrete manufacturers and producers of other competing building materials are fanning the flames of this issue. “These fires should cause state lawmakers and members of the building code community to pause and consider the consequences when analyzing regulations and legislation that permits the use of vulnerable construction methods,” said Kevin Lawlor, a spokesperson for Build with Strength said recently. “Fortunately, no one was killed in these fires, but as long as the regulatory environment authorizes this type of development, the threat will remain, it’s up to state lawmakers to protect their constituents.” And the Wood Products Council is responding with a public information campaign, including a workshop held recently at the American Institute of Architects office in San Francisco. Is wood safe to be used in multifamily construction? “Absolutely,” says Janelle Leafblad, West Coast central regional director of WoodWorks, affiliated with the Wood Products Council. “Building codes are meant to be material neutral, which means that a midrise wood-frame building is required to meet all of the same safety and performance requirements as a similar building made from any other material. This is true of all building types. “In terms of fire protection, the code allows a base height and area, which can be increased if the building has additional safety features such as an approved automatic

sprinkler system throughout. In terms of seismic performance, wood buildings actually have some advantages over other materials and have been shown to perform well during earthquakes. This is because of their relative light weight, ductile connections, and the fact that they tend to be comprised of repetitive framing members, which provide multiple load paths for resistance to seismic forces. This is also an advantage in high winds. “Regardless of material, the most vulnerable time for any building is during construction. Building codes provide extensive safety precautions for this phase, but the fires that do occur are often caused when required elements—such as fire doors, smoke alarms and sprinklers — haven’t been put in place yet. There are a lot of resources available to design teams that want to make sure their buildings are safe during construction, including the website www.constructionfiresafetypractices.com. Using wood in building projects has a number of attributes, chiefly that it is less costly at a time when California badly needs multifamily housing that is economical to construct, and also because wood is a renewable resource that causes less impact on the environment to produce than other materials.” BAR Architects is one of California’s foremost designers of multifamily projects. Senior Associate Stephen Hegedus, who recently attended a Woodworks event in San Francisco said, “At BAR, our larger multifamily projects are often of Type III (wood) construction. The intent of Type III is to contain the spread of fire within a building’s envelope, which is required by the code to be of non-combustible materials and allows the use of fire-retardant-treated wood framing for the exterior walls. With urban populations

Images above and opposite page are of Equity Residential’s 1 Henry Adams project in San Francisco designed by BAR Architects. Photo credit: Doug Dun/BAR Architects.

19 California Buildings News • Q1 2017

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growing, Type III wood over a Type I concrete podium cost effectively gives rise to larger infill mid-rise developments. This allows density to be maximized, in many cases right up to the property lines, to meet market demand with the economical use of wood.” The highly respected National Fire Protection Association endorses the use of wood as a building material. “NFPA believes that wood is a safe and suitable material for apartment complexes but as with any construction material, the behavior and characteristics under fire conditions must be carefully evaluated and understood. The contribution of furnishings and contents in the dwelling unit and the rate at which they can be ignited and contribute to the fire growth, the presence of early warning equipment (smoke alarms) and the installation of automatic sprinklers must all be weighed carefully and together to get the full picture. In other words, the construction material is simply one part of the equation. “One of the challenges we are working through right now is ‘should these combustible attic spaces in apartment buildings that are protected using NFPA 13R, Standard for the Installation of Sprinkler Systems in Low-Rise Residential Occupancies have supplemental performance criteria?’

The attic spaces do not require sprinkler protection and we have seen a number of fires where buildings have been substantially damaged and in some cases destroyed by fires that penetrated these unprotected attic spaces. Fortunately, no serious injuries to either the building occupants or the firefighters have occurred. This issue is the subject of a report that NFPA issued in June 2016. (www.nfpa.org/ lifesafetysprinklers), ”says Robert Solomon, NFPA’s division manager for building fire protection. n

20 California Buildings News • Q1 2017

Modern Carpenters Receive Technology Training

Investments in Computerized Learning Enhance On-the-Job Productivity Today’s construction industry technology is changing the way we traditionally perform daily tasks. PlanGrid is a construction software designed for the field. The platform providing real-time updates and seamless file synching over Wi-Fi and cellular networks will help with the modern construction production needs. The Carpenters Training Committee of Northern California (CTCNC) is incorporating this software into the journeyman upgrade blueprint reading classes for both commercial and residential to prepare journeymen for today’s changing industry. CTCNC has acquired 29 Microsoft Surface tablets and is starting this pilot program with the goal of updating training to meet today’s industry needs. The class will cover PlanGrid key features. During class, participants will practice: w Loading sheets to plan grid w Navigating and using hyperlinks on details, section cuts and elevation callouts w Taking measurements and adding markups, notes and photos w Layering one sheet over another to see how they differ w Referencing RFIs, specifications, submittals and more. CTCNC has acquired a Computer Numerical Control– Machine (CNC–Machine). CNC machines are electromechanical devices that manipulate machine shop tools using computer programming inputs. CNC generates prototypes from a digital software file. Machining, in general, is a way to transform a stock piece of material such as a block of wood and arrive at a finished product (typically a prototype part) by means of a controlled material removal process. CNC relies on digital instructions from a Computer Aided Manufacturing (CAM) or Computer Aided Design (CAD) file. The CNC machine interprets the design as instructions for cutting prototype parts. The ability Image: Adobe Stock.

By Jesus De La Torre

to program computer devices to control machine tools rapidly advances shop productivity by automating the highly technical and labor intensive processes. Automated cuts improve both the speed and the accuracy with which parts can be created. Oftentimes machining processes require the use of multiple tools to make the desired cuts (e.g. different sized drill bits). CNC machines commonly combine tools into common units or cells from which the machine can draw. Basic machines move in one or two axes while advanced machines move laterally in the x, y-axis, longitudinally in the z-axis, and oftentimes rotationally about one or more axes. Multi-axis machines are capable of flipping parts over automatically, allowing you to remove material that was previously “underneath.” This eliminates the need for workers to flip the prototype stock material and allows them to cut all sides without the need for manual intervention. Fully automated cuts are generally more accurate than what is possible with manual inputs. That said, sometimes finishing work like etching is better accomplished by hand as well as simple cuts that would require extensive design work to program the machine for automation. The two units that we take for the CNC machine operation are: Unit 913 CAD Basics, which gets apprentices or journeymen acquainted with how to create the geometry using a Computer Aided Design (CAD)–based system like Alpha Cam and/or Cabinet Vision and where we learn to create part programs to send to the CNC Router. The second class is Unit 914 Intro to CNC where we get more involved with the use of the CNC Machine Operations, tool setup and machine maintenance and troubleshooting.

Types of Machines Carpenters Use

CNC machines typically fall into one of two general categories: conventional machining technologies and novel machining technology.

21 California Buildings News • Q1 2017

Novel technologies: electrical and/or chemical machining. There are a number of novel technologies that use specialized techniques to cut material. Examples include Electron Beam Machining, Electrochemical Machining, Electrical Discharge Machining (EDM), Photochemical Machining, and Ultrasonic Machining. Most of these technologies are highly specialized and are used in special cases for mass-production involving a particular type of material. Other cutting mediums: There are a number of other novel technologies that use different mediums to cut material. Examples include laser cutting machines, oxyfuel cutting machines, plasma cutting machines, and water-jet cutting technology. Almost any material can be used in a CNC machine. It really depends on the application. Common materials include metals such as aluminum, brass, copper, steel, and titanium, as well as wood, foam, fiberglass, and plastics such as polypropylene.

to meet the demands of employers in today’s competitive global market. We also use the mill cabinet shop for constructing marketing handouts. We recently attended the California School Board Association (CSBA) in San Francisco and made a wood tool box with the NCCRC and CTCNC logos branded at each end of the tool box. We handed out almost 500 boxes at the CSBA conference for the Northern California Carpenters Regional Council (NCCRC) marketing booth. We also use virtual welder simulators for training members in different processes. Nothing fills seats faster than utilizing the latest technology available to train students in the classroom. The VRTEX captures student interest and adds a new element of excitement to traditional welding training. Assessment of the students’ performance is based on a numerical weld score, based on AWS guidelines. This helps the student understand and learn industry recognized skills.

Application for Rapid Prototyping and Manufacturing

CNC machines were the first major break-through in the field of rapid-prototyping. Before numerical control (in the case of punched tape technology) and computer numerical control (with analog and digital computing), parts had to be machined by hand. This invariably led to larger margins of error in end prototype products and even more so if/when machines were manually used for larger scale manufacturing. Many novel CNC specialty machines are built specifically for niche manufacturing processes. For example, electrochemical machining is used to cut highly durable metal products not otherwise feasible. Conventional CNC machines are more adept at and typically used for prototype development than manufacturing. CTCNC has a CNC machine and computer lab with 12 computers with the software needed for the mill cabinet industry (e.g. AutoCad, Cabinet View and BIM) for the training of mill cabinet apprentices and journeymen upgrade classes, in our Fairfield Training Center. In today’s competitive mill cabinet industry, having these skills is necessary in order to compete in the global economy. Mill cabinet shop also uses a laser engraver for woodcutting and engraving, two of the most popular applications for the laser because they can encompass so many different projects. From cabinetry to photo frames to knife handles, laser systems are used in almost every woodworking category you will run across. Whether you are working with hardwoods, veneers, inlays, MDF, plywood, walnut, alder, or cherry, you can engrave amazingly intricate images with a laser system. At the training center, we also instruct our members on the programming and maintenance of the laser equipment which engraves and cuts in order to prepare UBC members

CTCNC has a CNC machine (shown above), plus a computer lab with computers and the software needed for the mill cabinet industry.

Hands-on learning of a skill is based on the look and feel of a welding machine, but packaged in a game design. The user interface is intuitive and operates with graphical elements and sounds that engage the student. The VRTEX provides immediate and continuous feedback to the student, instructor and fellow classmates. This allows the classroom to benefit from continuous improvement at the student level, but also through coaching and viewing how to adjust and correct improper techniques to achieve a good score. The VRTEX allows the instructor the opportunity to adjust and change tolerances to match local industry needs or preferred instructor techniques. Instructors can customize the training software of the VRTEX to match their course objectives. n De La Torre is Training Officer at the Carpenters Training Committee of Northern California.

22 California Buildings News • Q1 2017

Association News

Meeting San Diego’s Housing Challenge San Diego is the 8th largest city in the United States by population. In 2015, its Association of Governments (SANDAG) completed the “San Diego Forward: Regional Plan” that forecast 1 million more citizens in the county by 2050. Only 50% of this growth will be from immigration into California, while the other 50% will be natural demographic increase from current inhabitants. This demand translates to 330,000 additional housing units that will require construction of at least 10,000 units per year countywide. Less than half that was built in 2016 and trended similarly in the past decade. A broad San Diego coalition called Housing You Matters was started last year by the Building Industry Association, Habitat for Humanity, the Urban Land Institute, the Association of Realtors, the San Diego Architectural Foundation, and the American Institute of Architects (AIA|SD), among others to take on the task of finding solutions. The group prepared an agenda for 2017 to address the severe housing shortage, promote a wider range of housing prices, and create a discourse on regulatory reform with the City. Branded as the Year of Housing for the region, a robust calendar of conferences and activities has been developed to engage and inform citizenry and the marketplace and also promote a new generation of “Yimby’s” (Yes in my back yard). Conferences are hosted by San Diego’s City Council, Citizens for Century-3, the ULI, San Diego Architectural Foundation, Housing You Matters, and the AIA|SD, as well as CityAge (a National Housing Conference) on April 25/26th.

By Philip J. Bona

With 90% of San Diego’s available land zoned residential and already occupied, most of the remaining 10% are unbuildable sites. Because of this constrained housing inventory, rent and sale prices continue to escalate to what the market will bear and more. Based on inflationary home prices between 1995 and 2015, the projected median price of a home in 2050 is expected to be $1.6 million. This rising cost of housing in San Diego is not sustainable, and left to the marketplace for the next 33 years, along with slower acceleration of personal income, our grandchildren and great-grandchildren face certain hardship. Using the successful Regional Urban Design Charrette model for “Housing the Next Million in the Silicon Valley” led by AIA San Mateo County in the year 2000, AIA|SD will lead the same effort for San Diego County in 2017. In March, interdisciplinary teams, made up of volunteer architects, planners, landscape architects, engineers, builders, universities, community representatives, developers, city agencies, community banks, realtors and others, will come together monthly to study regional and local solutions for a leaner housing industry and more resilient land use. In November, the teams will meet for a two-day charrette to target 12 transit growth areas identified by SANDAG. The goal is to dream and employ best practices in planning, design and visualizations that demonstrates solutions to how the county could absorb 330,000 additional housing units in a smart, healthy, sustainable, mobile, and resilient way for the region.

Philip Bona is 2017 President of the San Diego Chapter of the American Institute of Architects, a member of the AIA National Strategic Council, and a practicing architect & planner with BNIM. Downtown San Diego. Image: Adobe Stock.

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24 California Buildings News • Q1 2017

Association News

California Tops Nation in LEED Buildings, Says USGBC But…Golden State Still Lags Others in LEED Awards Per SF

certifications rose again in 2015 and 2016 signaling the The U.S. Green Building Council (USGBC) reported rebound of the construction market. Construction of highthat California leads the nation with 632 LEED green rise buildings in downtown L.A. is at a peak. buildings—but it is in fifth place with LEED-certified projects, “In the early years of the program, representing 2.39 square feet of LEED Silver was the most frequent certified space per resident, up certification level in Los Angeles; but from seventh ranked. since 2009, LEED Gold makes up the The annual list highlights largest faction (over 30%), as well as states throughout the country the largest square footage (50%),” that made significant strides in says USGBC-LA Executive Director sustainable building design, Dominique Hargreaves. “But there construction and transformation is a lot more work to do,” she adds. over the past year. “In 2014, there were nearly 2 million This year, in moving from buildings in L.A. County. At slightly seventh to fifth place, “California more than 1,500 buildings, LEED cerhas been a phenomenal trailblazer tifications comprise less than a tenth in green building and LEED Los Angeles Harbor College Science Complex is slated to of a percent of total buildings in the certifications and is leading the achieve LEED Platinum certification. Photo by Tim Griffith. County. USGBC-LA continues to way toward a more sustainable guide owners, builders and legislators future for generations to come,” in moving ahead. The upcoming (April 20) Municipal Green said Mahesh Ramanujam, president and CEO of USGBC. Building Conference & Expo is one avenue.” “The success of LEED could not happen without support from Compared with California’s 632 LEED buildings, other states likes California that believe in being environmentally major states had: New York (211), Texas (211), Virginia and socially responsible and have committed to transforming (155), Illinois (151), Massachusetts (136). the built environment. With each new LEED certification, we are lowering carbon emissions, creating a healthier environment, driving economic growth and prioritizing sustainable practices that will positively impact the way residents, communities and cities live, work and play.” According to USGBC’s 2015 Green Building Economic Impact Study, LEED construction is projected to support 668,000 total jobs in California and have a total impact on GDP of $58.4 billion from 2015-2018. WHY PROFESSIONALS JOIN SMPS “With nearly 89 million square feet of building space NETWORKING MARKETING A COMMUNITY certified to LEED standards in 2016, California continues OPPORTUNITIES RESOURCE FOR EMERGING to prioritize a sustainable built environment across all sectors,” said Brenden McEneaney, director of community, CENTER LEADERS USGBC Northern California. “With continued leadership from Governor Brown, ambitious goals in cities and counties, businesses committed to reducing carbon, and a sophisticated construction industry, we see more green building leadership in California’s future.” Now in its seventh year, the ranking assesses the total square feet of LEED-certified space per resident based on U.S. Census data and includes commercial and institutional green building projects certified during 2016. The Los Angeles Chapter has been a major force in ACCESS TO LEADERSHIP helping California become the fifth state in the U.S. to lead in LEED Green Building. The number of annual LEED certificaPUBLICATIONS OPPORTUNITIES tions in L.A. rose almost every year since 2003 up to a peak your marketing coordinator of 298 in 2013. After a nearly 50% drop in 2014, annual

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25 California Buildings News • Q1 2017

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Job-Killing Legislation Introduced in California Legislature BOMA Joins California Chamber To Protect State’s Economy A Building Owners and Managers Association of California communication warns that legislation has been introduced which will further discourage job creation. It says: Although early in the legislative session, the California Chamber of Commerce has already tagged four bills as “job killers”— the worst of the worst bills that would have a negative impact on California’s economy if they become law. As a CalChamber member and coalition partner in Sacramento we stand with them to help modify or defeat these bills. AB 5 (Gonzalez Fletcher; D-San Diego/ Kalra; D-San Jose) mandates small employers with as few as 10 employees to offer all employees who have the skills and experience to perform additional hours of work that become available before hiring a new employee, temporary employee, or contractor. SB 33 (Dodd; D-Napa) deals with arbitration agreements. The bill applies to any contract for goods or services that requires the individual to submit all disputes to arbitration, Image: Getty Images.

including those arising from claims alleging fraud, identity theft, or wrongful use of personal identifying information. SB 62 (Jackson; D-Santa Barbara) will significantly expand the list of individuals for which employees can take leave under the California Family Rights Act (CFRA), creating a lack of conformity with the federal Family Medical Leave Act (FMLA), and therefore creating an opportunity for California employees to take up to 24 weeks/ 6 months of protected leave in a 12-month period. Governor Brown vetoed a similar proposal in 2015. SB 63 (Jackson; D-Santa Barbara) requires a California employer who employs as few as 20 employees within a 75-mile radius to provide 12 weeks of protected parental leave. Governor Brown vetoed a similar, but narrower proposal just last year. This proposed mandate comes on top of the current requirement that employers with only five employees allow up to 16 weeks of protected pregnancy-related leave. The CalChamber will release the full list of job-killer bills in the spring after seeing all the bills that are introduced and receiving input from coalition partners such as ourselves.

26 California Buildings News • Q1 2017

Association News CoreNet Says Great Workplaces Help Win Talent War: Joint ISS Study Reveals Need to Provide More Engaging Work Environments

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In order to win the war for talent, one of the most pressing concerns for corporations globally, they will need to offer “best in class” workplace experiences based on the latest technology and services for employees, according to new research findings presented by CoreNet Global and ISS World Services. “As the nature of work is changing dramatically, employee attraction and retention are among the top concerns of corporate leaders,” said Peter Ankerstjerne, CMO/Head of Group Marketing, ISS World Services. “The interpersonal interface between company and employee, whether facilitated by technology, buildings or direct human contact—this is where it is possible to create a real and genuine emotional connection with workers and build long-lasting loyalty between your company and your employees. This is key in creating a workplace of the future and winning the war on talent.” Based on current trends, there is little doubt that corporations will have to think differently, engage technology and provide a human connection to their employees. Among the findings of the research presented: w 60% of decision-makers say that the need for office space is decreasing w Only 36% of employees are highly engaged w The number of mobile workers today is 1.3 billion globally; 37% of the total workforce “Office space is evolving to support changing business requirements,” said Tim Venable, Senior Vice President of CoreNet Global. “At times, for some companies, that will mean less space. But the office—both physical and virtual—will continue to play a crucial role in corporate success by helping attract the best and brightest talent and by providing the means for teamwork, creativity and innovation.” Ankerstjerne said that employers need to recognize that the “workplace” is now all encompassing, and it includes addressing multiple environments from arriving at work, being in the building, collaborating, office support and facilitating mobile work to leaving at the end of the day. “Corporations need alternative workspaces to promote corporate culture, foster collaboration, knowledge sharing, flexibility, speed, innovation and productivity,” he said. (Note: The ISS Group is one of the world’s leading Facility Services companies. CoreNet Global is a leading professional association for corporate real estate (CRE) and workplace executives, service providers and economic developers. CoreNet Global’s 10,000 members, who include 70 percent of the top 100 U.S. companies and nearly half of the Global 2000, meet locally, globally and virtually to develop networks, share knowledge, learn and thrive professionally. For more info:www.corenetglobal.org)

27 California Buildings News • Q1 2017

Quality is always in fashion…

28 California Buildings News • Q1 2017

New Beverly Center is Creating a Place to Shop, Engage and Converge, Light and Open Q&A with Ralph Barnes, General Manager at Beverly Center in Los Angeles

Q. The recent holiday season witnessed a continued surge of online shopping at the expense of in-store purchases. Some mall-based major chains have already announced closures in response. What was the experience of your retail center during 2016? A. At Beverly Center, we notice that customers are looking online first to find where they can purchase the product they’re searching for and then come into one of our retail stores to actually buy it. We have found that consumers prefer to physically see, touch or try on the merchandise and have the ability to make an easier return or exchange at an actual store, rather than take the chance on purchasing an item online and hassle with added shipping fees. Q. How does your retail center compete with cyber-shopping? A. We believe in the customer journey and providing a unique experience to everyone who visits. Beverly Center continues to ensure a seamless, convenient experience with special offerings for customers like same-day package delivery. Additionally, we offer guests that have traveled from more than 50 miles away our Passport to Shopping program, which gives exclusive retailer discounts and special privileges. This special program has been an integral part of the center’s visitor amenities for more than eight years. Last year, we announced a $500 million reimagination of Beverly Center and prior to the start of our renovation, we did extensive research to cater to the requests of our shoppers. The renovation project addresses their interests including creating a bright, contemporary and highly accessible exterior and interior, producing an effortless arrival, parking and departure experience, offering a perfectly curated retail lineup, superior destination dining and opening the center to engage it with the surrounding neighborhood. Q. Your mall, one of the largest in the state and one of the most successful, seems to be the exception to retail declines seen around the state. What’s your winning strategy?

A. Beverly Center has something for everyone. We have a great mix of luxury, contemporary and fast fashion retailers, and are continuously looking to provide unique experiences for our customers. We are currently undergoing a $500 million renovation that will touch every aspect of the center—inside and out. From a fresh new streetscape to eight new fast-casual and chef-driven restaurants, we look forward to providing visitors a place to shop, as well as engage and converge. To further enhance the customer experience during the center’s ongoing construction, we recently launched a new art program, where we’ve incorporated temporary interior and exterior art installations, exclusively from well-known Los Angeles artists. Q. Are there aspects of your success story that can be applied to less successful malls? A. Today more than ever, understanding the local neighborhood and communities that your shopping center serves is just as important as understanding your local customer. Having the right mix of stores and retailers is important, particularly restaurants and food offerings, as well as amenities that give the local residents and tourists a place to gather and be a part of the community. Q. Do you think that changes in architectural design of malls could improve performance? A. We’ve done a great deal of research and found that what customers are looking for in a shopping destination has changed, and it all goes back to the idea of the customer journey and experience. It’s important to us to provide an experience that meets the needs and wants of our shoppers, and the architectural changes we are undergoing will help us do that. We’re seeing a major desire for a shopping destination to feel contemporary, bright and open, so we’re installing a sweeping ribbon of new skylights that extend the length of the center, a flexible center court experience that will offer plenty of places to sit, relax and plug in, not to mention a fresh new streetscape that combines modern architecture and drought-resistant greenery for a pleasant walking experience. People (especially in Southern California) want an easy arrival and departure experience, so we’re adding a second valet off West Third Street to provide quick access to the street-level restaurants and retail, along with a state-ofthe-art smart parking system to dramatically improve the center’s experience.

Q. What’s on the horizon for mall operations in the U.S.? And how is California shopping distinct from other states? A. I think you’ll continue to see a great deal of emphasis on creating a unique and well-rounded customer experience in shopping center operations across the country. I do think that California shopping has a unique point of difference. We’re currently seeing a lot of focus and attention on fashion in LA. There are a number of major fashion trends happening not only on runways, but on red carpets. Since Beverly Center is in the epicenter of entertainment and is where Hollywood shops, these trends have a great impact on what our consumers are buying. Q. What are the most challenging aspects of mall plant operations, such as energy use, security, etc…and how do you manage these? A. All aspects of mall operations (marketing, security, operations) are critical to ensuring a superior shopping experience. To ensure an enjoyable customer journey, we keep the shopping center safe, clean, and friendly. We constantly reinvest in the maintenance and preservation of the shopping center’s critical systems and infrastructure. This, combined with hiring the right experts and partners, is the most effective way to manage mall plant operations. n

Opposite page top left: rendering of Macy’s men’s store exterior. Lower left: Ralph Barnes. Renderings this page — top right: grand court. Lower right: interior corridor. Image and renderings courtesy of Beverly Center.

30 California Buildings News • Q1 2017

Near Future:

Robots Work with Humans at Your Hotel By Bob Eaton

Image: Adobe Stock.

In the world of “buildings,” the application of technology to specific physical spaces varies greatly. In manufacturing, distribution and the industrial world, technology has vastly changed businesses and led to increased productivity. Here, robots can replace people with greater efficiency, more reliability, and don’t need family leaves. The products being constructed, assembled or distributed are not offended by being handled by a machine. The delivery of service is a different matter. Technology is applied differently to the benefit of different businesses. In hotels, most of today’s customers don’t mind using machines for making reservations or accepting payments, but still look for some human being to provide hospitality. This is because hotels have evolved not only for function (a place to stay while travelling) but an “experience.” This experience can be greatly enhanced by a personal touch; a human being connecting with another human being. There are two primary users of hotels, business and

At year end each year, we all customarily take stock of where we have been and where we are going. This assessment is done at the personal level, but importantly at the business and enterprise levels. Where have we been and where might the future lead us? What is changing in our business and what outside forces or variables must we account for as we plan for the future? We all largely accept that by developing insight into the future of our businesses, we can be better prepared to address likely trends, events and disruptions coming at us at an increasing pace aided greatly by technology. Most all businesses and the physical spaces they occupy have continued to embrace newer technologies in varying degrees with each passing year. leisure travel. Functionality and experience vary greatly; from the business traveler, largely intent on location and price versus leisure travelers seeking access to entertainment, enrichment, and a variety of other cultural and social amenities. In its basic form, hotels provide accommodations for people travelling away from their homes. This a functional purpose that technology has enhanced for the consumer on the front end with “trip advisors” and “reservation” systems and other forms of social media. Once in the hotel, technology has been upgraded regularly to remain relevant in the guest’s mind. While attending the recent ALIS (America’s Lodging Investment Symposium) in Los Angeles, we saw the future in the form of a room service delivery robot. After a demonstration, we can imagine these devices will be knocking on the human resources director’s door and in addition to needing a change in that department’s name, will begin to take

formerly human positions in the hotel’s operation. Hotels are going the way of the airlines with check-in almost 100% by machines. Hotels will increasingly “employ” machines for not just room service but luggage handling, concierge services, and just about everything else. Instead of the inefficiency of a room service waiter hanging around the kitchen waiting for the next order, earning hourly wages and benefits, hitting on the young waitress from the coffee shop, getting sick leave, needing a vacation, personal time off, our new robot simply requires AC power. It will work 24 hours, 365 days a year and never complain, want to join a union, and will leave the waitresses alone. Meanwhile room service sales will increase based on the novelty and then increase because it will deliver hot or cold foods and beverages to guest rooms consistently. Recently, the Airbnb disruption has impacted the lodging industry in a variety of ways. It’s specific short- and (Continued next page)

31 California Buildings News â&#x20AC;˘ Q1 2017

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long-term impact is still being debated, however there are a large number of travelers who have been hooked on the service provided, the varied nature of the accommodations offered, and its general price parity. A single host can actually research an incoming guest and learn about their specific interests. For instance, if the host has learned that his arriving guest loves craft brewing, they can put some local brew versions in the refrigerator and provide a list of local craft breweries. This is pure hospitality. This is what hotels really want to do, but by scale they havenâ&#x20AC;&#x2122;t been able to figure out how to do this. There may or may not be a personal interaction with your host, but you have only one human connection. Hotels have only one advantage over the Airbnb model; many people who are hospitality professionals. So the hotel industry will continue to add technology that consumers will increasingly accept. The Airbnb model will continue to appeal to a wider number of travelers. To remain competitive, hotels and hotel brands will need to marshal their human resources to appeal to the human in all travelers by providing friendship and generosity to their guests. It should be a while before we have robot friends. n Eaton (shown at left) is Broker/Founder of Eaton Hotel Investments in Arroyo Grande. He can be reached at www.eatonhi.com

32 California Buildings News • Q1 2017

2017’s Buildings Industry: Legislative Issues to Watch By Kathy Mattes The times are changing … and it is hard to know profits to incentivwhat changes will result in the commercial real estate ize its successful world with our newly elected government. There are many management of the issues, however, that carry over from year to year, and those project. There is issues are still at the forefront in the minds of our industry no guarantee to the representatives at BOMA (Building Owners and Managers managing partner Association), IREM (Institute of Real Estate Management) that the incentive and NAIOP (National Association for Industrial and (carried interest) Office Parks). will be earned and paid, and when it is paid, it is currently I compared the national 2017 advocacy agendas for taxed at the lower capital gains rate, rather than the higher these organizations and found a great deal in common, ordinary income rate. Many tax reformers believe it should as shown in the chart below. be taxed as ordinary income, viewing it as payment for The common services. Doing so issues that they would take expeIssues BOMA IREM NAIOP will be focused rienced real estate on include: managers out of the ADA Reform 4 4 picture and reduce Tax Reform Fair Housing and Disparate Impact 4 overall incentives All three Carried Interest 4 4 4 for new developadvocacy groups ment in our comMarketplace Fairness Act 4 are in favor of munities. All three (Online Sales Tax) simplifying the organizations will tax code in a 1031 Like-Kind Exchanges 4 4 4 be seeking a carveway that leads Federally Assisted Housing 4 out for real estate if to “increased this issue surfaces Lead-Based Paint in 4 economic growth again. Commercial Properties and productivity 1031 Like-Kind National Flood Insurance across all eco 4 Exchanges— nomic sectors” Tax Reform 4 4 4 These tax-deferred (NAIOP). But exchanges allow 15 Year Depreciation Schedule 4 4 they are also investors to roll Energy Efficient Building Deduction concerned that 4 4 their profits forward doing so could Capital and Credit Availability 4 4 into a new project, result in uninthereby increasing tended negative the liquidity of real estate. Since 2013 three high-profile consequences to our industry. The process of streamlining proposals have been put forward to eliminate this investthe tax code could result in elimination of several important ment incentive. At present there are no bills in Congress tax advantages that stimulate investment in real estate: regarding 1031 Like-Kind Exchanges, but the new governCarried Interest—When a real estate manager wants ment is likely to raise the issue again. BOMA, IREM and to pursue a new project and does not have the necessary NAIOP will continue to lobby with our national leadership funds, he or she will reach out to a funding source, often a on this issue. passive investor. The real estate manager, acting as general Cost Recovery and Depreciation Rules— Efforts have partner, will be offered a set salary plus a percentage of the been made to increase the depreciation schedule for (Continued on page 48)

33 California Buildings News • Q1 2017

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34 California Buildings News • Q1 2017

CRE Changes

(Continued from page 4)

The author Arthur Burt said, “Nothing happens until the pain of remaining the same outweighs the pain of change.” We, the real estate industry, are on the “Threshold of New,” where innovation, creativity, change and disruption are a part of rather than apart from long-term success and prosperity. Cadence in the New Normal is more about momentum, the quality of the execution engine, passionate leadership, aligned stakeholders, and a willingness to do different things and not doing the same things differently. It is hard to believe that the first cell phone call was made in 1973. Over 40+ years later, cell phones connect nearly every person in developed countries around the world. Within a few years, the cell phone will become the remote-control device for our lives, and in some situations, it will guide decisions, priorities and desired outcomes. Then shortly after, cell phones will begin to disappear as artificial intelligence, wearables and virtual reality usher in a host of lifestyle alternatives. Work is wherever you are. Who would have imagined that Uber would have a market cap of $68 billion, or that General Motors would have invested $500 million in Lyft? Who would have envisioned Airbnb would have a $30 billion market cap or that e-commerce sales would be nearly 9% of all retail sales? Or, by 2020, 30 billion devices will be connected to the

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internet? As the 2016 Nobel Poet Laureate Bob Dylan wrote, “the times they are a changin’.” Indeed, they are, and disruptors have an increasing role in that accelerated change. For hundreds of years, the real estate industry has been an asset-centric industry focused on buying, selling, developing, leasing and managing “buildings.” Today, and clearly for the next 10-20 years or more, “buildings” will no longer be fixed assets, but will become launch pads for connectivity, interaction consumerism and business fulfillment. In the future, every building (office buildings, retail centers, apartment communities and industrial facilities) will be dynamic, data will become currency, public-private partnerships will flourish and buildings will define the fabric of a community’s or region’s success. In the not too distant future, the real estate industry will be a web of connectivity, linking culture, work, innovation, education, wellness, communications, experiences and relationships. Purpose, social impact and entrepreneurship will be integral to creating asset value as well as community value. Services will be customized solutions…not commodity offerings. Disruptors will continue to play a critical role in the shaping of the real estate industry. We are moving toward a business model and society in which information and accessibility are available to everyone. Traditional analytical tools, market studies, supply/demand analyses and pricing methodologies are becoming outdated and may no longer be applicable and/or compatible with newer technologies. Materials are being created that will render traditional building design and functionality obsolete. Google Now is an attempt to manage the information that surrounds all of us. Amazon has just been awarded a patent for a flying warehouse. The real estate industry today is too often a passive partner in the race to automation. Disruption and disruptors are here to stay. To quote Lyndon B. Johnson, “Yesterday is not ours to recover, but tomorrow is ours to win or lose.” How are you and your company prepared to compete in this transformative world? Six primary disruptor categories currently are within and impacting the real estate industry: Trends, Talent, Technology, Transition, Timing and Transactions. People cannot often identify a disruptive technology until it has become an established disruptor, so the six categories highlighted are intended to draw awareness to and create conversation around the impacts of these disruptors. Interestingly, all six disruptor categories begin with the letter “T.” It is appropriate that in times of transformation (a “T” word), the contributors to that transformation also begin with the letter “T.” n Lee is CEO and Founder of Los Angeles–based CEL & Associates, Inc. He may be reached at chris@celassociates.com

35 California Buildings News • Q1 2017

Q&A

with Jana Itzen President of the American Institute of Architects California Council and principal architect of Itzen in Santa Ana

Designs Must Make World Healthier, More Productive Q: What will be your foremost goals during your tenure?

A: (1) Increase transparency and communication with the membership; (2) Engage the profession to consider new ways of practice; and (3) Explore new models for the delivery of architecture. Q: You are a principal of a small firm with a general practice. As such, you have much in common with most of AIA’s members. What are the biggest challenges running a small firm? Opportunities?

A: I feel very fortunate in the opportunities that I’ve been given over the years, but I also know that with much opportunity comes much responsibility. With every opportunity that has been presented, I’ve worked diligently to move towards the next goal. Today I feel a tremendous responsibility to help mentor and train emerging leaders within our profession. I want to make a way for others just as many have made a way for me. Q: Many sectors of the economy are seeing Baby Boomers retire, leaving gaps in service providing. Do you foresee a shortage of architects serving the commercial sector?

A: As many small firm owners know, there are no shortage of challenges in A: The future of architecoperating and running a tural practice in the next design studio. One of the 20-to-30 years will look very biggest challenges is also different than it does today. one of the greatest opporOne of the byproducts of the Architecture and Interiors: ITZEN Architects. tunities. In a small design Project: Lojistic. Photography: Snapmotive recent recession was the shift of studio, you wear many hats firm organizational structures to that cover a vast array of job both ends of the spectrum — increasing the numbers of both descriptions—marketing, training, design, IT, public relasmall firms and mega firms. I believe the profession will tions, accounting, etc. Though covering each of these aspects respond to the changing demographic trends by embracing can seem a bit overwhelming at times, they make me a better collaborations and finding new business models that do not more well-rounded architect. I can relate and identify with require a huge investment in infrastructure to deliver archimany of the issues my clients, as entrepreneurs, are facing tecture. Technology which enables these collaborations will on a daily basis. Understanding each of these parts of the continue to evolve and support these new models and will puzzle helps our team take a closer look at the story behind free architects to truly be designer leaders again. the story for each of our clients, to see how design thinking can help to inform better processes along the way. As both the designer and the facilitator of the process, the architect will lead by organizing collaborative teams, Q: A recent AIA study described the architectural enabling communication over vast distances, and structurprofession as one that still compensates women ing interactions and activities to produce desired results. less than men and gives them fewer opportunities Empowered by technology to develop a model, analyze it, for advancement. What can you do to improve the and reevaluate its design in hours, architects will be able status of women in the profession? (Continued on page 50)

36 California Buildings News • Q1 2017

Latest Hotel Design: More About Experience Than Stay …and Increasingly Guests Want Their Experience to Be Sustainable

ith California often called America’s most beautiful state, why not open up hotels to the glory around them…forests, beaches, lakes, mountains, wine country? That’s just what California designers are doing by incorporating features of their surroundings into the overall hospitality experience, from locally sourced food to partnering with area businesses to make it easier to enjoy their time away from home.

37 California Buildings News • Q1 2017

SB Architects President Scott Lee of San Francisco says, “Of all of the innovations and trends we see, the most pervasive is the drive to create immersive experiences of place— no matter where they are—for a new generation of traveler. In our work in California, we are increasingly immersed in the design of resorts focused on wine and food. Wine tourism has been increasing around the world for the past decade. What is new is the wish to be fully immersed in the lifestyle—in the making of wine, the growing of wonderful food—and directly connected to the area’s seasons and natural bounty. “In a large and complex world, this is a micro-experience of place at its best. Two of our on-the-boards projects— wine resorts in Temecula and Sonoma County—will directly integrate the art of wine-making into the resort experience. Our recently completed expansion of the Farmhouse Inn in the Russian River Valley and our current work on the renovations of the Vintage Inn and Villagio Hotel properties in the heart of Yountville, are excellent examples of the type of authentic, immersive resort experiences that are the new definition of luxury,” he continued. And designers want their projects to reflect the sustainable values for which California is most noted. David Baker Architects Associate Brett Randall Jones, says, “From the user’s perspective, technology has helped facilitate a more streamlined guest experience—from digital concierges to smartphone keyless access. But more importantly, we are seeing guests spur hotel development to become more environmentally responsible. Energy use and production, water collection and reuse, materials selection, and the desire for green transportation have all been important factors for us in the creation of hotels that are more ecologically sustainable. We’ve also been seeing a push for hotels to become socially responsible—to engage and support the surrounding community and people to build a more kind and healthy society—an idea with which we fully agree.”

This page: exterior of h2hotel in Healdsburg (top photo) and the hotel’s green roof, a project of David Baker Architects. Photo credits: Bruce Damonte (exterior) and Brian Rose (green roof).

Opposite page: guestroom at The Farmhouse Inn in Sonoma County (top photo) and spa (lower photo), a project of SB Architects. Photo credit: Jay Graham.

38 California Buildings News • Q1 2017

Use Energy More Strategically, Edison Energy Exec Says Complex Array of Energy-Saving Solutions Bewilders Building Managers

Q&A with Dan Weeden Q

Energy use and conservation is one of the most challenging aspects of running an office building, hotel, factory or large apartment complex. How can a company like Edison Energy help property managers and facility engineers conserve energy?

I think the challenge that energy introduces for buildings, hotels, factories, and really any other large energy user is the fact that energy is not core to their operations. As a result, it is managed with a limited understanding (and limited resources) for what can be done to improve cost performance while ensuring prudent decisions are being made to mitigate future risks for cost increases. With knowledge comes power and at Edison Energy, we are all about giving our clients the knowledge they need to make wise, strategic decisions where energy savings is optimized today, and preserved over time.

What should be done at the California state government and federal level to achieve greener energy goals without sacrificing economic productivity?

I once heard a saying that went; “As California goes with efficiency and conservation, so goes the rest of the U.S.” While I’m not 100% sure I agree with that (LOL), California has always been a pioneering state in sustainability and energy/environmental stewardship. What I love about being part of a company with Californian DNA is that the triple bottom line of environmental, social, and financial sustainability forms a backdrop for many of the decisions we make as a company. Achieving greener energy goals does not have to be at the cost of economic productivity. In fact, many environmentally beneficial initiatives can be undertaken at a net positive financial benefit to the owner. Being green has long been associated with a negative financial cost impact for clients. We believe there are myriads of opportunities to improve the environmental footprint of our clients that create a robust and beneficial ROI for those with the savvy and

patience to learn what the opportunities are and to implement them with care and attention. The U.S. has lacked a robust energy policy for quite a long time. While tax incentives and other federal programs have helped promote green and renewable energy, the individual states have been more instrumental in providing incentives, rebates, and other programs that forward the deployment of new energy technologies for green energy goals. The more states that can adopt that strategy, the better! Hopefully, the rest of the states will indeed go as California has when it comes to policies and programs to promote a more sustainable world.

Q Many companies promise that their products or services can improve energy use, but given their complexity, how is a building manager to know which claims are best?

A The noise and complexity for products and technology

within the energy industry is at an all-time high. Never has it been more confusing for clients to make smart decisions for how to best manage their energy needs. Companies that are product-driven will always find a reason to show how (Continued next page)

39 California Buildings News • Q1 2017

that product will deliver value. While many products and new technology do indeed deliver value, the Achilles heel in employing them is not becoming fully aware of the other options or practices that can better address the concerns and bring elevated levels of value to a building manager’s operation. Again, energy is not core to these businesses so the complexity of decision-making for new approaches, equipment, technology, and procurement practices are best left to a trusted confidant that can ensure the manager is informed and options have been vetted, with a clear recommended course of action, that is aligned to their corporate financial, environmental, and social goals.

employees or other building occupants educated and aware of how best to participate as an active member in how to live sustainably, a building operator can know he has the best possible opportunity for success in having a highly efficient, environmentally sensitive performance.

Can you cite examples of how Edison Energy has made a significant difference in building energy use in California?

Q What build-

ing designs help architects and building operators achieve more sustainable goals?

Edison Energy is not even a year old from our launch in March 2016. In that time, we have been helping clients, nationwide, to become more competitive in their operations by creating energy cost savings results today, and arranging tremendous energy price exposure risk management practices for optimization tomorrow and well into the future.

Specific to California, we are pleased to be “By having employees or other building occupants educated working with clients The design and aware of how best to participate as an active member in to create world-class of buildings has performance for enerhow to live sustainably, a building operator can know he has so many nuances gy optimization and and influencing the best possible opportunity for success in having a highly sustainability. We curfactors that I look rently are working with efficient, environmentally sensitive performance.” at this question clients across multiple more about, how markets, developing can we make sure a building design is as optimized as strategies and plans for how to develop net zero communipossible. There are many techniques that can be employed ties, how to simultaneously maximize efficiency and resilto enhance sustainability goals for any building. Some of iency, how to hedge millions upon millions of dollars in these include passive solar design, high R insulation use energy price risk exposure, and how to tailor building data with ultra-low E glass, building controls with integrated analytics to optimize energy performance in facilities. monitoring and building performance analytics, geothermal We exist at a very exciting time in the energy industry. or other highly efficiency HVAC technologies (which are Our core credo of being an independent, client aligned highly dependent upon geography), which are all examples advisor is helping bring clarity and confidence to those we of how to improve design for buildings. serve. We filter the noise of what is confusing energy manOne important note is that buildings are occupied by agers and building operators and help them achieve the humans who have more discretion over energy use than highest levels of performance possible. n any method of control or high efficient system. By having

Weeden is CEO of Eneractive, an Edison Energy company.

Photo: Adobe Stock.

Association News

California Buildings News • Q1 2017

AIA San Diego Announces 2016 Design Awards Winners The American Institute of Architects (AIA) San Diego chapter’s 2016 winners of its annual Design Awards were announced last fall at the annual Design Awards reception at The Auditorium at The Scripps Research Institute. ARCHITECTURE

LEGACY AWARDS

Honor Award – Mr. Robinson Firm: Jonathan Segal Architects

Salomon Apartments (The project is now called 3200 Sixth Avenue) Architect: Henry Hester, AIA Owner: 3200 Sixth Avenue Homeowners Association

Honor Award – Pacific Center Campus Development, R&D Building Firm: BNIM Merit Award – Bee Squared Apiaries Firm: Rinehart Herbst

Qualcomm Stadium/San Diego Stadium Architect: Frank Hope Jr., FAIA Designer: Gary Allen, AIA Owner: City of San Diego

Merit Award – Central Plant Club Firm: DES Architects + Engineers Merit Award – LA Valley Monarch Student Center Firm: LPA, Inc.

INTERIOR ARCHITECTURE Honor Award – MOPA (Museum of Photographic Arts) Firm: Gensler

UNBUILT Merit Award – The Press Firm: LPA, Inc.

PRESIDENT’S AWARDS President’s Award for Urban Design San Diego Port Integrated Master Plan Firm: HKS, Inc.

DIVINE DETAIL Mission Beach Boardwalk Firm: IS Architecture

President’s Award – Christian Rice, AIA

MOPA Firm: Gensler

YOUNG ARCHITECT OF THE YEAR

ENERGY EFFICIENCY INTEGRATION AWARDS

COMMITTEE ON THE ENVIRONMENT

Petco National Service Center Firm: Smith Consulting Architects

Merit Award – Architectural Office Firm: LPA, Inc.

Design 39 Firm: Baker Nowicki Design Studio

Matthew Geaman, AIA, LEED AP Associate Principal, JWDA

PATRON OF THE YEAR Alexandria Real Estate Equities, Inc. Shown above: Architecture Honor Award winner: Mr. Robinson. Firm: Jonathan Segal, FAIA. Photographer: Matthew Segal

IREM: Lines Blur Between Property—and Asset—Management The property management and asset management disciplines are clearly different today than they were 10 to 20 years ago. Competitive pressures have forced real estate practitioners working in these closely aligned fields to expand their service offerings and collaborate closely with each other in order to achieve the investment objectives of sophisticated real estate ownership groups. This has contributed to what many call a “blurring of the lines” between property management and asset management functions that can make it difficult to differentiate between the two in practice. While their roles are distinct, property managers and asset managers share common goals. Both seek to drive value—property managers, primarily through hands-on, day-today operational activities, and asset managers, by being keenly focused on the strategic and financial aspects of the investment. Frequently, these two roles overlap. The Institute for Real Estate Management (IREM) funded a new research study to gain a better understanding of the core responsibilities of asset managers and the skills required for success in the profession. The study consisted of in-depth interviews with 92 individuals working in asset management or

in conjunction with asset managers. This group includes executives from many of the largest real estate owners and service providers by product type, as well as executive search firms engaging in real estate placements. The project complements the substantial amount of research IREM has undertaken in the past examining the evolving job requirements of both property managers and asset managers and the tasks they commonly perform. The final report provides new insights into the roles, responsibilities and requirements of asset managers working in different types of real estate companies. It also presents a typology that can be used to better understand alternative approaches to asset management and a discussion of the factors that frequently contribute to an individual’s success in the field. The analysis will serve as a starting point for future study of the asset management process, as well as a means of stimulating conversation about the steps that can be taken to support the ongoing growth and development of asset management as an attractive and rewarding career option. A copy of the final report, Real Estate Asset Management: A Process and A Profession, is now available from IREM at www.irem.org

41 California Buildings News • Q1 2017

BOMA East Bay and BOMA SF Honor Outstanding Building Teams The Bay Area’s commercial real estate community celebrated the winners of the TOBY (The Outstanding Building of the Year) Awards at the 2017 BOMA Bay Area Annual Awards Gala on February 9. The event, a joint endeavor of BOMA San Francisco and BOMA Oakland/East Bay, recognizes prestigious BOMA member buildings. The Ordway in Oakland, Historical Building 140 New Montgomery, managed by the CIM San Francisco Group, won Cushman & Wakefield the TOBY in the largest category (500,000–1 million square foot). Other East Bay awardees: Treat Towers in Walnut Creek won in the 250,000–499,000 square foot space, which is managed by CBRE. RiverRock Real Estate Group won in the suburban office park/low-rise category for the Dublin Corporate Center in Dublin. Building winners in San Francisco included: 140 New Montgomery (Cushman & Wakefield) for the historical building category. CBRE was also victorious in the 100,000–249,000 square foot category (500 Washington) and in the government building category (180 Howard). Kilroy Realty’s teams

scored two TOBYs. 301 Brannan won in the under 100,000 square foot category, and 201 Third Street was honored in the renovated building category. After bringing home a TOBY, winning teams advance to the Pacific Southwest Region to compete against other buildings for the honor of moving on to international competition. The Outstanding Building of the Year “TOBY” Awards were developed in 1985 by BOMA International to honor and recBest Office Building ognize the 500,000 –1 million SF quality in The Ordway, Oakland office buildCIM Group ing operations and award excellence in buildings management. The TOBY mission is: “recognizing operational efficiency, tenant retention, emergency planning and committee impact.” ®

Renovated Building 201 Third Street, San Francisco Kilroy Realty

Photos provided by BOMA for its member buildings.

LA Fire Marshal Updates BOMA/GLA Members BOMA/GLA Codes Committee hosted Fire Marshal Kristin Crowley brought members up-to-date on operations in the development services unit. Currently, owners are experiencing six-week wait times for plan check while an expedited plan check takes about nine days. She reminded owners that the Fire Department launched their online payment system on December 15, and that Chief Warden is now handling the Reg. IV unit. Finally, with the continued flow of projects, the Department is requesting two additional engineering positions in next year’s budget, which begins July first. BOMA’s members intend to work closely with the Fire Marshal in 2017.

42 California Buildings News • Q1 2017

Association News

Bright Future Seen for Commercial Real Estate in the East Bay What’s on the horizon for commercial real estate in the East Bay? The future looks bright, with strong demand and rent growth, robust logistics activity, and competition for available medical offices, according to CoStar Marketing Analyst Katerina Cheok. Lots of companies are looking to move from San Francisco, and “companies like Uber are inspiring people to look at the East Bay differently.” Cheok presented at a recent BOMA Oakland/East Bay luncheon program, “State of the East Bay Market.” Steve Ring, Fulcrum Development, followed her presentation with an informative panel discussion with brokers about trends in industrial, industrial retail and medical office buildings. Here are some key take-aways from the program: w CoStar’s data shows lots of demand for office space with not much increase in supply. Demand is expected to continue. Submarkets with the most construction are Pleasanton and Emeryville, with most space pre-leased. w Rent growth continues, with the East Bay being one of the top markets in the nation (12.6% growth last year). w Logistics providers have been leasing up space, so there are not a lot of available blocks, especially large ones. Oakland Port activity is strong.

w There is a softening of supply for city versus suburban markets. Suburban markets are expected to out-perform urban markets. w Projections are for higher rents in the Tri-Valley, with a decline in vacancy. However, Concord is weak. w Labor trends are key. Back office jobs can move anywhere, and many companies are moving such jobs to Texas or Arizona rather than expand or relocate within the expensive Bay Area. w Cannibas tenants are locating to Oakland and Richmond and are a good fit for industrial buildings. w Landlords and tenants struggle with “last-mile” commute. w Mall sales are down due to e-commerce. However, retail centers are retooling by incorporating food and entertainment venues like Dave and Busters, which Millennials desire. Restaurants are leasing smaller spaces. Retail is expected to perk up in Oakland and in other select areas. It helps to have residents living nearby. w Medical office buildings are evolving due to the Affordable Care Act. There is more decentralization—and more uncertainty in the space. Hospitals are opening clinics for non-urgent care, as it is less expensive.

43 California Buildings News • Q1 2017

Time to Share Buildings’ Data... To Get Buildings’ Data No two commercial properties are exactly alike, which means your building’s data has a unique story to tell. And when your building’s story joins the stories of thousands of other properties, it combines to create the commercial real estate industry’s most comprehensive resources for benchmarking office and industrial properties—the Office EER and Industrial EER. Do your part to complete the narrative. Share your data with BOMA International’s annual Office EER and Industrial EER surveys. Completing a survey is fast and easy to do— the intuitive and interactive online submission form allows most respondents to finish in about 30 minutes, but there’s no need to complete an entire survey at once. Save your answers as you go and return to the form as many times as needed before the March 31 deadline. Visit: eer.boma.org

Association News

California Buildings News • Q1 2017

Are You a Real Estate Curry, Curry or Curry? How Basketball Analogy Can Drive CRE Performance By Wes Powell, BOMA San Francisco President I write to you with a BOMA and Golden State Warriors–themed article. Are you a real estate Curry, Curry, or Curry? You may know that there are three talented basketball players named Curry: Steph Curry of the Warriors, his father Dell Curry — a talented NBA shooting guard from 1986 to 2002, and brother Seth Curry who is a point guard for the Sacramento Kings. All are talented individuals in professional basketball — but there is only one Curry whose statistics have separated him from his brother and father— Steph Curry. Am I going to compare real estate ownership and management to basketball stars? You bet! As we all spend our workdays among a group of successful real estate professionals, have you ever wondered what separates good from great? Ever look around and wonder why someone is so good at what they do? It’s often simple: practice and training. Look at the statistics for your company, team and yourself. As either an owner or manager, I’ll challenge us all to think of our team and company relative to the practice and training available at BOMA. With the following 10 questions, give yourself 2 points (3 pointer if specified) if you, your team, or your company does the following: Please note the hints at the end of each question on how to improve your statistic. 1) At least 75% of the team has a professional designa tion (such as a BOMA RPA) or is currently ‘in training.’ 3 Pointer. 2) Either I or the team has at least 35% of professionals actively participating in industry organizations (BOMA, CREW, IREM, NAIOP, ULI). 3 pointer. 3) I or at least 10% of the team are in an industry leadership position (committee leadership). 3 Pointer. 4) Most of our young professionals are in an industry networking group (Young Professionals or Careers Committee). 5) I/we have people actively doing something about the talent shortage (The BOMA SF Foundation and CREATE). 6) I/We have over 85% of the team current with ‘best practice’ emergency preparedness training this year (Emergency Preparedness Committee).

7) Someone on the team knows which code issues are changing (Codes Committee). 8) I/we are at the forefront regarding public policy and legislation affecting real estate and can report on the status of just about any topic (Government Affairs Policy Advisory Committee). 9) Building ownership regularly encourages property managers to participate toward achieving #’s 1 through 8. 10) Building ownership budgets its team’s participation in #’s 1 through 8. Scoring: 0 to 4: You will likely get left out of the next draft (AKA— a new sport is in your future) 5 to 10: A player; but you’ll likely get minimal playing time (but a serious opportunity for improved scoring achievement) 11 to 15: Strong Franchise Player; they’ll keep you around (new contract coming your way) 15 to 20: Star Player; A huge contract and new sneaker named after you is part of your daily life (your real estate talents are top tier as well) 21 to 25: Super Star; You could be a Curry! You and/or your company will be rewarded beyond your wildest imagination. (Congratulations for being involved, a leader and supporting yourself, your company, clients and the commercial real estate industry). 26 to 30: Shame! Like professional-level sports, this arithmetically, systematically, scientifically developed questionnaire is not designed to be scored so perfectly. (You will be investigated for cheating, drug tested, and asked to come to the BOMA office—not for psychoanalysis, but to learn how to really get involved and score correctly!). I encourage us all to evaluate ourselves, teams, and organizations; and find ways to improve our scores. Betterment in our business is a process and a journey. Importantly, opportunities to improve our scores abounds in our BOMA organization. So, the question is: Are you a Real Estate Curry, Curry or Curry? Wes Powell is president of the Building Owners and Managers Association (BOMA) of San Francisco and International Director of Jones Lang LaSalle. Reprinted with permission of BOMA SF Views.

45 California Buildings News • Q1 2017

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46 California Buildings News • Q1 2017

Industry News

LA Leads Commercial and Multifamily Construction in U.S. San Francisco Scored at Even Higher Rate in 2016, Most Other Metros Lagged Los Angeles led the nation in commercial and multifamily construction starts in 2016, with a whopping $9.8 billion in spending, up 44%, with San Francisco even doubling LA’s rate of growth up 96% with $5.0 billion in spending, according to Dodge Data & Analytics. Rates of other major metro areas in the U.S. were: Chicago IL, $8.3 billion, up 34%; Washington DC, $8.1 billion, up 35%; and Dallas-Ft. Worth TX, $8.0 billion, up 16%. Miami FL, $7.5 billion, up 14%; Boston MA, $7.1 billion, up 50; Atlanta GA, $4.8 billion, up 60%; and Seattle WA, $4.3 billion, down 4%. The commercial and multifamily total is comprised of office buildings, stores, hotels, warehouses, commercial garages, and multifamily housing. At the U.S. level, the 7% increase for the commercial and multifamily total in 2016 was the result of an 11% advance for commercial building and a 3% gain for multifamily housing. Compared to its 7% rise in 2015, commercial building at the U.S. level was able to pick up the pace in 2016, while multifamily housing

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witnessed substantially slower growth compared to its 22% jump in 2015. “What stands out about 2016 is that growth for commercial and multifamily construction starts became broader geographically,” stated Robert A. Murray, chief economist for Dodge Data & Analytics. “Back in 2015, the New York NY metropolitan area led the upturn by soaring 67%, while the next 9 markets combined grew 8%. In 2016, the 15% downturn in the New York NY market was countered by a 33% hike for the next 9 markets. As a result, the New York NY share of the U.S. total for commercial and multifamily construction starts settled back from 20% in 2015 to 16% in 2016, which was still relatively high compared to the 13% share during the 2010-2014 period.” “Both commercial building and multifamily housing have benefited from a number of positive factors in recent years,” Murray continued. “These included declining vacancies, rising rents, low interest rates, and some easing of bank lending standards for commercial real estate loans. That supportive environment began to shift during 2016, with vacancies leveling off, interest rates edging up at year’s end, and bank lending standards for commercial real estate loans beginning to tighten, especially for multifamily projects.” The Los Angeles metropolitan area in 2016 registered a 44% increase, moving up to the nation’s second largest market for commercial and multifamily construction starts after ranking number three in 2015. Multifamily housing in 2016 soared 50% while commercial building advanced 36%. There were 14 multifamily projects valued at $100 million or more that reached groundbreaking in 2016, compared to 10 such projects in 2015. The three largest multifamily projects in 2016 were the $493 million multifamily portion of the $600 million Century Plaza mixed-use complex in Century City, the $344 million multifamily portion of the $375 million 1120 South Grand Avenue mixed-use building in Los Angeles, and the $275 million multifamily portion of the $300 million Omni mixed-use building in Los Angeles. Substantial percentage growth was reported for offices, up 67%, with the lift coming from the $178 million office portion of the $390 million Broadcom Research and Development Campus in Irvine. Hotel construction starts were also up considerably, rising 77%, with the lift coming from the $93 million hotel portion of the $135 million Edition hotel and condominiums in West Hollywood. Commercial garages increased 42% in 2016, while warehouses grew 9%. Store construction improved 7% on top of its 96% advance in 2015, boosted by the $500 million renovation of the Beverly Center in Los Angeles. (See article on page 28.)

47 California Buildings News • Q1 2017

The Only Association Dedicated to the Success of the Corporate Real Estate Professional Our success is due to our members and industry-leading chapter sponsors.

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First American

Jacobs

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C O R P O R AT E : Irvine Company Office Properties

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LA Mayor Promotes Building Energy Efficiency Mayor Eric Garcetti has signed bold measures to improve building energy and water efficiency and to bring more clean energy vehicles to disadvantaged communities. The Existing Building Energy and Water Efficiency ordinance, approved by a unanimous City Council vote on Dec. 13, makes good on Mayor Garcetti’s pledge early in his term to sharply reduce the carbon footprint of L.A. buildings. Los Angeles was among the original 10 members in the City Energy Project, a national initiative to create healthier and more prosperous American cities by improving the energy efficiency of buildings. “Reducing L.A.’s carbon footprint means looking at all angles, and buildings are the single greatest source of greenhouse gases in Los Angeles —which is why I set targets in my Sustainable City Plan to reduce

energy use in existing buildings by 14% by 2025 and 30% by 2030,” said Garcetti. “Today, we have accelerated the progress toward these goals by helping property owners cut consumption and costs. I thank Councilmembers Huizar and Blumenfield for leading on the issue and showing that cities can be a powerful force against climate change.” “With four percent of the City of Los Angeles buildings responsible for half of the total building energy use in the City, this program is crucial to our goal to reduce energy use by 15 percent by 2020,” said Councilmember José Huizar, whose Planning Committee approved the item last week before sending it to City Council. “While the City has been a leader in establishing efficiency standards for new buildings, there is a great need to reduce energy use in thousands of older, existing buildings.”

48 California Buildings News • Q1 2017

Editor’s Column

(Continued from page 2)

“Regardless of who is in the White House, since 1993 we have been showing the world that better buildings are a critical solution for our economic, energy and climate challenges. The nearly 90,000 commercial buildings and 120,000

residential projects participating in LEED (http://www. usgbc.org/leed) across the country are saving energy and water, improving indoor air quality, saving businesses and homeowners money, working toward energy independence and helping communities create jobs — every day.” Efforts to green buildings and their supporting industries also generate U.S. massive employment, a widely touted Trump goal. Holowka added, “The green building industry already plays a significant role in the U.S. construction sector, and it is outpacing conventional construction in its growth. It contributes more than $134.3 billion in labor income to working Americans. By 2018, green construction will account for more than 3.3 million U.S. jobs—more than one-third of the entire U.S. construction sector—while generating $190.3 billion in labor earnings.

Architects Are Designing Our Future There’s never been a time when architects have been more greatly needed in our economy and culture. It is a

Legislative Issues

fairly accurate oversimplification to say that workplaces of the past were focused more on broad organizational objectives and less on empowering workers, residents, students or patients with space design. With increasing emphasis on higher goals for all these building dwellers, architects are charged with coming up with novel, creative ways of making people more productive — and enhancing organizational success, as well. There are some shining examples of this— particularly in California — but most buildings fall far short of achieving their strategic potential. In fact, according to a recent Sodexo-sponsored report, 74% of employees rate their workplace environment as complex or highly complex. And 40% of workers say it is not possible to succeed at work, make a good living and have enough time left for family and community service. The good news is that 79% of corporate executives now rate “design thinking” as very important. To get an idea of how inspired architects can make a difference in our lives, check out the Q&A article in this issue with Jana Itzen, new president of the American Institute of Architects California Council on page 35. We look forward to continuing to report on building designs that enhance economic, social, health and cultural aspirations. — Henry Eason

(Continued from page 32)

leasehold improvements to 40 years, thereby decreasing the amount of depreciation deduction and discouraging capital investment in real estate. BOMA and NAIOP lobbied hard to maintain a 15-year qualified leasehold improvement depreciation schedule, which better reflects the usable economic life of building components. There was success in 2015 and the effort continues to ensure that the 15-year schedule is permanent.

ADA Reform There have been numerous stories told about “drive by” predators suing property owners for (sometimes small) violations of the ADA and the local codes that address the intent of the ADA. The lawsuits are filed without providing notice to the owner and an opportunity to address the issue. Money is spent on attorneys that should be spent on improving access. California, Arizona and Minnesota have taken action to curb these lawsuits, which has resulted in some of these suits being taken to federal court. Both IREM and BOMA support the “ADA Education and Reform Act,” introduced by Rep Ted Poe (R-Texas). This legislation provides a “notice and cure” provision, similar to the laws enacted by California. While this is currently a bipartisan

effort, Republicans represent the strongest support, and therefore our new government may be in a position to pass this needed legislation.

Capital and Credit Availability According to NAIOP, the U.S. market of commercial and multifamily real estate is valued at more than $6 trillion, and is supported by $3.6 trillion of debt. Over the next three years, $1 trillion of this debt will mature. In its efforts to reduce regulations, it is feared that the government will reduce assurances that financial markets and lending institutions will maintain future capacity to meet the needs of our industry. NAIOP is advocating for Congress to exercise its oversight role over banking regulation to ensure that credit is reasonably available for real estate development and maturing debt. This is a small sampling of the hard work that is being done by our industry leaders at BOMA, IREM and NAIOP. Each organization is also working at the state level and local levels. I encourage all of you to get involved with those efforts and to donate to them on the organization websites. n

Katherine A. Mattes, Real Estate Consultant, can be found at www.kathymattes.com

49 California Buildings News • Q1 2017

SoCalGas to Fund Refueling Solutions Demo New Technology Allows Refueling Without Driving to a Retail Refueling Station Southern California Gas Co. (SoCalGas) has announced it has signed a contract with Onboard Dynamics, Inc. (ObDI) to fund the demonstration and testing of a new mobile natural gas compressor that can be used to re-fuel compressed natural gas (CNG) vehicles no matter where they are. The mobile natural gas compressor is made in the U.S. and reduces the need for CNG cars and trucks to travel to public CNG stations and instead brings clean-burning natural gas refueling to the vehicles. “This mobile technology provides a cost-effective and convenient refueling solution for smaller CNG operators,” said Lisa Alexander, vice president of customer solutions and communications for SoCalGas. “This, in turn, may lead to an accelerated adoption of CNG, which would contribute to improved air quality and a reduction of greenhouse gas emissions, compared to petroleum-based fuels.” CNG is projected to emit less nitrogen oxide (NOx) and other greenhouse gas emissions and can be more affordable than gasoline or diesel. Since there are fewer than 2,000

CNG refueling stations in the U.S., innovative technology, such as this mobile CNG compressor, could help to fuel smaller CNG fleets like school buses in a more cost-effective manner. The compressor will allow customers to refuel without driving to a retail refueling station or incurring the significant upfront investment of building a conventional CNG refueling station. Larger heavy-duty fleet operators who are considering converting to CNG vehicles may also find the compressor beneficial in the early phases of transitioning their fleets to alternative fuels. Designed to be compact, affordable, simple to install and easily transportable, the mobile compressor will be powered by natural gas, unlike other technologies that require an external electric power source for operation. Thus, it can also act as a capacity boost for existing CNG compressor stations or as a reliable backup source during emergency events in which electrical generators are offline.

Water Reuse Guide Available Soon Shows Architects and Contractors How to Conserve Precious Resource The Collaborative, a San Francisco-based nonprofit, will soon publish its non-potable water reuse guide for design professionals, an effort conceived by the group’s recently deceased president, Bill Worthen, a passionate advocate for buildings sustainability. His work will be carried on. The guide is designed to help AEC professionals and building managers better understand what types of non-potable water reuse systems are appropriate, how to plan a water budget, jurisdiction regs affecting water and how to use graywater and blackwater systems. For more info: https://www.collaborativedesign.org/

Your passion, our purpose Our global community shares a passion for design, a conviction it matters and a commitment to improving lives through the built environment. Wherever you live, wherever you practice and wherever you are in your career, an AIA membership is a necessity.

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50 California Buildings News • Q1 2017

Itzen Q&A

(Continued from page 35)

to create challenging, innovative spaces. They will be able to expand the use and worth of their knowledge and data beyond construction documents to efficiency and value of the total project. Although some in the industry forecast an eventual blurring of roles as collaborative teams integrate activities, often at a predesign stage, and are held accountable for the success of a common goal, others see the role of the architect expanding. Owners today are increasing their demand for specialization and look beyond design to services such as facility management, restoration, programming and strategic space consultants. Q: What types of projects/sectors do you see as growth areas?

A: Public sector projects will continue to experience robust growth, especially in the public schools’ market. Last November, voters approved $9 Billion in new bonding capacity to fill the demand in response to the state’s continued growth in the education sector alone. Another area will be in transportation-related projects. With the continued expansion of high speed rail, the transit-oriented development projects will increase. Finally, growth in the housing market, especially in multi-family and urban infill projects poises the profession to make significant impacts in these communities. Q: What are the primarily legislative/regulatory challenges facing architects in California?

A: There is one issue that affects design professionals’ firms more than any other issue: the “duty-to-defend” contractual requirement. California law allows clients to require design professionals to be financially responsible for the clients’ defense costs, even when the design professional has done nothing wrong. This is an uninsurable obligation to design professionals, thus the risk becomes a very personal one. The AIACC has and will continue to vigorously support efforts in the Legislature to replace this unjust law with one that is reasonable, fair, and for the benefit of design professionals and our clients, insurable.

A major regulatory challenge for architects is achieving access code compliance on their projects. Not so much in the planning, design and permitting phases, but rather in the construction phase. Adding to this challenge is that many architects do not have Construction Administration as a part of their PSA. The consequence of this is at fault or not, the architect is named in an access code violation related lawsuit and must then prove and pay their way out of it. Q: How are generational preferences shaping architectural design?

A: Live/work spaces are fairly common in urban settings, but the separation between work and home is diminishing and will eventually demand a different model for residential projects in outlying communities. Research suggests that by 2020, 40 percent of the U.S. workforce may be self-employed. With the rise of online marketplaces, people are turning their homes into mini-factories, and delivering goods directly to the customer. What this means to the architectural profession is an opportunity to use design to help envision new types of spaces that are responsive, flexible and multi-functional. There has been much written about the Millennial generation and their desire to re-engage cities in a different way. What’s also interesting is the retiring boomer generation is seeking similar types of communities, moving from their large-lot single-family homes to more intentional communities. The intersection between these two large groups and how architects can use the power of design to meet these larger, societal needs will be an interesting challenge for our profession. Q: What motivates you as an architect taking on a new project?

A: With each project our team takes on, we hope to leave the client better informed with each step we take together in the decision making process. Ultimately, we hope our designs leave this world a bit healthier and more productive, all while engaging in meaningful relationships. n

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51 California Buildings News • Q1 2017

Intelligent HVAC (Continued from page 11) The LG MultiSITETM Remote Controller features a highly intuitive, customizable user interface that allows system managers to configure functionality and home screen appearance to meet the needs of a specific zone. The LG MultiSITE Communications Manager integrates the power of LG VRF technology into an existing third-party building management system, directly integrating with a VRF system and eliminating the need for a gateway. The LG MultiSITE VM3 building management solution maximizes the sophistication of control in each building system for cohesive building operation and synergistic performance. Midea is offering a variety of new air conditioning solutions, including its Premier Quattro and Premier Super air conditioners. Midea air conditioners provide comfort for all kinds of weather, at any temperature range, with a complete set of ductless systems and unique features. The new Midea Premier Quattro line-up of mini-splits and light commercial units brings comfort to a new level with the most advanced inverter system on the market, using four unique technologies as well as Wi-Fi connectivity with the MideaAir app. First is the Genetic Algorithm Stepless Inverter that enables the system to shift frequencies seamlessly and adjust to outdoor and indoor temperatures in real time to enhance comfort and efficiency in partial loads. Adding to its EcoSmart intelligent automation platform, Telkonet is introducing the EcoTouch+ Battery wireless therTelkonet’s EcoSmart Suite Touch mostat. It also recently introduced its new EcoSmart VRF Controller, one of the first devices able to control newer variable refrigerant flow (VRF) HVAC systems. The EcoSmart intelligent automation platform helps multi-room properties better manage energy costs by providing in-depth energy usage analysis that allows facilities managers to develop and deploy targeted solutions to reduce energy consumption and improve operational efficiency. Friedrich just introduced its VRP system, which gives the company the ability to offer the widest range of HVAC solutions designed for the lodging industry — from top-tier, full-service hotels to mid-tier and more modest facilities. Designed for full- and select-service properties where maximum comfort, quiet and interior design are top priorities, VRP is a total HVAC solution. It promises bestin-class heating and cooling efficiency, exceptional sound levels, easy installation, conditioned fresh air and true humidity control, all while maintaining low upfront and operational costs.

Ruskin models ABD and ABD-SEA (with grille) dampers automatically regulate damper positioning for precise and automatic airflow in both supply and exhaust applications. The result is energy-saving performance that mitigates Ruskin’s dampers’ design saves energy. stack effect in high-rise buildings and improves comfort for building occupants. RobertShaw’s new Ranco® RTC Series Temperature Controller and AKO® 1510 Series Temperature Controller are engineered to manage various refrigeration applications. With a wide temperature range, NTC and PTC probe inputs, and ambient storage humidity range they can be used in commercial refrigeration display cases, coolers and chillers. Each has intelligent menus and easy browsing for quick and intuitive configurations. Key shortcuts (Continued on page 52)

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52 California Buildings News • Q1 2017

Intelligent HVAC (Continued from page 51) static pressures. However, they require frequent belt tightprovide direct access to the most common functions to ening, inspection, and replacement. To combat this, in tanspeed up typical operations. dem with rising energy costs, International Environmental Daikin’s new Wireless Interface Adapter and Comfort Corporation (IEC), the market leader in fan coil solutions, Control App for Daikin mini-split systems allows users to introduced its new Horizontal and Vertical (HDY/VDY) adjust Daikin mini-split systems from anywhere, simply Direct Drive Blower Coil Series at AHR with a mobile device and internet 2017. Accommodating a variety of appliconnection. Purchased as a kit, cations, these models are equipped with the Wireless Interface Adapter a direct-drive EC motor, eliminating requires field installation to combelt-drive slips and other concerns patible indoor mini-split systems. associated with belt-drive systems. By installing the Wireless Interface Wilo USA, a provider of pumps and Adapter to the system, and downpump solutions for building services, loading the free Comfort Control water management, and groundwaApp to a mobile device, you can ter, launched its new boosters which control your home’s temperaincludes the Wilo CO-Helix, the Wilo ture from anywhere. Whether in Si-Boost EXCEL, and the Wilo Helix another room of your home, or on EXCEL Complete, which are available the other side of the world. in single to four-pump configurations. The tool’s adjustable head The multi-pump systems feature realaccommodates flare nuts from time diagnostics and remote monitoring, 1/4” to 11/16”, eliminating the with variable speed control and balanced need to carry multiple heads. Wilo USA’s new boosters run time for each pump. The EXCEL Additional features include an Complete single-pump system offers the highest efficiency ergonomic grip and nine memory settings motor-drive combination on the market, as well as up to 50% for common torque valves. energy savings over standard pump-motor assemblies. The Eaton’s innovations include: Variable frequency drive new boosters feature NSF/ (VFD) motor protection solutions providing energy savANSI 61 certified pumps and ings of up to 10 percent compared to standard drives, with have full 304 Stainless Steel built-in multi-pump control and integrated logic for faster construction. startup. The VFDs also feature redundant packages designed Titus HVAC, the leadto enhance control and communications to help maximize er in air management is uptime and advanced protections to help improve proacoffering VENTUS LUX, an tive maintenance. Its range of intuitive Human Machine integrated chilled beam Interfaces (HMIs) provide real-time fault alerts and troublesystem that combines the shooting guides via email or text message, while identifying efficiency of chilled beams and communicating faults for quicker system recovery time. Titus HVAC’s VENTUS LUX systems with that of LED lighting. Marley Engineered Products, a leader in high-perforfeature LED lighting. The compact system is 30 mance, reliable heating and ventilation equipment recogpercent more energy efficient than conventional overhead nized by contractors, engineers and HVAC professionals, Variable Air Volume (VAV) systems, and buildings that introduces advanced programmable heating with the Artisan incorporate VENTUS LUX into their designs are built faster, SmartSeries® Architectural Digital Wall Heater. The new reducing fixed construction costs. The premium system’s wall heater automatically adjusts wattage output and blower integration means architects and engineers deal with fewer speed resulting in whisper quiet operation and energy effiinstalled components, not only simplifying installation, but ciencies. The slim, stylish unit features 5 day/2 day programalso enabling a more visually appealing design—a necessimability with four daily program periods to respond to a ty for high-profile projects. Future VENTUS LUX product variety of environment needs and an easy-to-use LED touch enhancements will include other services and components screen thermostat. such as smoke detectors and lighting controls, further In recent years, belt-driven blower coils have been streamlining the service installation process. n the standard for ducted applications that require greater All product photos are courtesy of their companies.

53 California Buildings News • Q1 2017

Q&A With Chief Engineer Tim Danz Q: We understand that tenants’ biggest complaint in any commercial building is temperature. How can this be optimally resolved? A: In buildings with central air handling systems that serve multiple floors it is important to establish temperature set-point standards across all zones. Utilizing ‘dual-band’ thermostats allows the operating team to set occupied zones to a 4-degree span of 70f to 74f such that the space will be heated if room temperatures are below 70f and cool the space when room temperatures are above 74f. This 4-degree dual-band allows for small adjustments above or below the limits in an effort to tailor the zone to the individual’s personal climate sensibility. All tenant requests or complaints should be validated and air flow into a space should be balanced. Q: HVAC manufacturers are producing a wide array of products to make HVAC systems more efficient. Which product types have the most promise for buildings like yours with already established systems? Tim Danz oversees HVAC systems at The California Center. A: HVAC system controls have evolved a great deal in the last 30+ years. Programmable logic controllers or PLC’s have vastly improved cooling, heating, and air handling system set-point control and tuning. PLC’s allow for easier control strategy revisions and have a self-tuning capability that aids in control loop calibration. Q: How do you maintain quality indoor air in your building? A: Quality IAQ is a product of multiple measures undertaken by the buildings operating team. Regular monitoring and timely replacement of air handling system high-efficiency filters is vital to optimum IAQ. The air handling system damper banks, aka air-side economizer systems must be regularly inspected, adjusted, and calibrated to insure optimum outside air infusion and return air ejection. Periodic IAQ assessments should be performed to monitor and validate the program and systems performance. Q: With so many building engineers retiring and so many new “smart” products coming on line, how can the industry meet its human resources challenge? A: The industry must improve its career awareness and outreach efforts so as to promote the building operations career path. Continuous and ongoing educational training must be primary to an operations talent development and retention in a competitive market. Individuals entering the trade, labor unions, and trade organizations need to collaborate to better develop and retain good talent. Tim Danz is Able Services’ chief engineer at The California Center at 345 California Street in San Francisco (shown above).

54 California Buildings News • Q1 2017

EPA Recognizes Cradle to Cradle Certified Eco-Standards Oakland-Based Institute Says Will Boost Green-Style Manufacturers The Cradle to Cradle Certified Product Standard has been recognized by the United States Environmental Protection Agency (EPA) in its new recommendations of standards and ecolabels for federal sustainable purchasing, the Cradle to Cradle Products Innovation Institute has announced. Cradle to Cradle Certified is recommended at the highest level across seven building materials and construction product categories, including: adhesives, carpet, ceiling tiles (acoustical), fiberboard and wallboard, flooring, insulation and interior latex paint. Cradle to Cradle Certified is also recommended at the highest level for furniture. “EPA recognition of Cradle to Cradle Certified as a rigorous multi-attribute third-party standard for product sustainability is a tremendous vote of confidence in the significance and value of both the Cradle to Cradle® product design methodology and the product certification itself,” said Cradle to Cradle Products Innovation Institute President Lewis Perkins. “70% of Cradle to Cradle Certified products fall under the built environment and furnishings categories. We believe the new EPA recommendation of Cradle to Cradle Certified as a preferred standard for greener purchasing within those product categories stands to create additional competitive advantage for those manufacturers should they seek to provide their products to federal agencies,” Perkins said. Approximately 350 building materials, construction and furnishings products from 159 manufacturers have achieved Cradle to Cradle product certification to date. (To see the full list, visit c2ccertified.org/products/registry). The recommendation comes as part of the EPA’s newly released guidelines for identifying which private sector standards and ecolabels federal purchasers should use when buying greener products. The guidelines are intended to establish a cross-sector framework for use in recognizing non-governmental multi-attribute environmental standards and ecolabels, and consequently environmentally preferable products meeting those standards for use in federal procurement. The guidelines recognize environmental performance that is better than standard industry practice and provide

a framework that filters out standards or ecolabels that are not appropriate for federal procurement, do not support environmentally preferable purchasing, or do not address the key environmental or health impacts of a particular product category. “The federal government’s ability to sort through the myriad numbers of products with private eco labels can provide a critical roadmap for how the public sector can do this,” said Jim Jones, Assistant Administrator, Office of Chemical Safety and Pollution Prevention, U.S. EPA. “By allowing federal buyers to make more informed decisions on environmentally preferable products and services, federal agencies are leading by example, stimulating the supply of greener products and services, and protecting our health and the environment.” The EPA recommendations give preference to multi-attribute (life-cycle based) standards and ecolabels, with specific regard for standards that address environmental ‘hotspots’ (areas of high environmental impact) across a product’s life cycle. In addition, for the highest tier of preference, the EPA must also have been able to confirm the availability of a competent certification body that is either a signatory to the International Accreditation Forum Multilateral Recognition Arrangement (IAF MLA), or otherwise meets Section III of the EPA’s guidelines. Cradle to Cradle product design methodology focuses upon the development of products using safe, healthy materials that can remain in a perpetual cycle of use and reuse across multiple product life cycles. The Cradle to Cradle Certified Product Standard offers third-party verification for products developed in accordance with Cradle to Cradle product design principles. Cradle to Cradle Certified products are assessed for potential human and environmental impacts across five key sustainability characteristics: material health, material reuse, renewable energy, water stewardship and social fairness. Certification is based upon compliance with the standard and awarded at the Basic, Bronze, Silver, Gold or Platinum levels. Certification must be renewed every two years by the product’s manufacturer. n

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