COVER STORY FEATURES
RICS' Goal: Making Buildings Mid-Year Perform for People Worldwide Recap/Report/Trends By Debra Hazel By Michael Nourmand Michael Nourmand Michael Nourmand is president of Nourmand & Associates Realtors, a family-owned residential brokerage with offices in Beverly Hills, Brentwood and Hollywood, California.
R
eal estate, like politics, may be local — but there are a number of issues that have become a global concern, including sustainability,
supply and labor issues and returning people to the office a#er COVID-19. Ann Gray, CEO of Gray Real Estate Advisors, now serves as president of RICS (formerly the Royal Institute of Chartered Surveyors), which recently launched the International Building Operation Standard (IBOS), a new, data-based approach to measuring and managing how buildings perform for people, especially in a new era when flexibility is key. It builds upon traditional building performance assessments to include user experience to satisfy the needs of occupiers, investors, advisors and end-users. “There’s a real recognition now that sustainable investing has a higher return,” Gray said. “All of our surveys are showing that a
I
and best practices.”
t was off to the races right from the start of 2022 for the real That was one factor behind the creation of estate market. One week before the new year, the market briefIBOS, which was intended to support organily slowed down for the holidays. Immediately a"erward, during zations in a!racting people back to the workthe first week of the year, I was negotiating two deals while overplace, by delivering confidence for end-users seas on vacation. Normally, deals start to pick up during the second or that the building they’re in is supporting third week of January. their wellness, and benchmarking success against driving down the commercial sector’s What was driving this? Strong demand, limited inventory and low carbon footprint. interest rates. It seemed that 2022 would be another record-break-
ing year; all that was holding back sales was the availability of The standard, which is supported by comhomes to purchase. However, the situation changed as interest mercial and public sector organizations as Ann Gray to increase, rates continued and high inflation, the war in Ukraine, well as service providers and existing certipersistent supply chain issues and other headwinds started to cre“You can start to measure the impact you’re fications such as Well and Wired, is the first ate some economic uncertainty. having on carbon before you put a shovel of its kind globally to deliver a consistent in the ground,” she said. “These are huge approach to help organizations assess and While interest rates started rising early in the year, pushback from trends and they’re not going away.” improve their building’s performance in such buyers started in March. There was a noticeable trend that some a broad way, RICS said. It will provide data on buyers were lowering their budgets and even exiting the market In fact, she observed, climate change is buildings with people at the center of future due to higher interest rates. Some buyers decided to stay in the posing an existential threat to the survival of decision-making and help embed ESG into home they owned rather than looking for a move-up purchase, entire nations. real estate strategy. allowing them to keep their low interest rate and monthly pay-
organizations worldwide that have a created
ments. One client wrote an offer for $4.5 million based on interest “One of the things that excites me is what’s Many organizations already monitor their rates from 90 days prior. When he called his mortgage broker, he growing out of COP 26 [the 2021 United Naproperties’ performance, including how realized that interest rates had gone up over one percent and he tions Climate Change Conference]. It started sustainable a building is. But according to could not afford this property. He had to revise his budget and is as governments ge!ing together to discuss respondents to the RICS Global Commercial now looking for homes up to $4 million. As of today, he is frustrated fighting emissions and climate with some Property Monitor, only 79% of America’s reand will most likely stay in his current home, which he owns but kind of consistency,” she said. “What’s really spondents believed that there are currently has outgrown. emerged from that is a body of shared global techniques and practices in place to measure
carbon standard for embedded and emi!ing
thinking about how we tackle these issues.
the environmental impact of buildings. Those
carbon, she said.
It’s thrilling to see that sharing of knowledge
that are in place need further development.
majority of people in our profession are considering sustainability when they participate in a project. That’s a positive trend. The data is there.” That’s why RICS is among 50 professional
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