Canadian Property Management

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VOL. 31 NO. 6 • OCTOBER 2016

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editor’snote FILM AND TELEVISION routinely inspire careers in law, health care, education and journalism (says a voice from the Lou Grant generation), but real estate rarely has an opportunity to entice recruits via dramatic portrayals of its professions. Since it's an industry axiom that most property managers have simply meandered unknowingly into the field and then discovered its possibilities, Hollywood can hardly be faulted for overlooking the allure. Yet, if anyone searching for a fresh concept was to take notice, commercial buildings house deep recesses of insight into how people interact and earn their livings in interesting times.

More nuanced than Downton Abbey's mere two-way class dynamic, Downtown Office would juggle the perspectives of the people who maintain, manage, occupy and garner the returns, or absorb the losses of a building, along with a few subplots involving regulators and tax collectors. The pressures inherent in guiding a fixed asset in step with volatile markets, steady technological innovation, threatening climatic conditions and rising customer expectations must surely be as compelling as any other depiction of how we learn to get along productively and establish our place in the whole – which, of course, are the underlying themes of almost every good story.

This issue's focus on staffing and service delivery looks at the key role of human capital in real estate management and investment decisions. As Rebecca Melnyk makes clear in her examination of the new generation entering the industry's workforce, property management is something of a renaissance career, requiring detail-oriented concentration, trouble-shooting quick-wittedness, people skills and a grasp on operational and asset management concerns.

Few careers are as consistently glamorous as they appear in tightly scripted fictional dramas so property management can probably boast a lower disillusionment rate than occupations that are more in the limelight. Ironically, though, while failing to capture much public imagination, the work itself is well suited for the imaginative. Concrete and steel structures filled with high-priced, long-lasting equipment and materials are certainly not the most flexible product in the marketplace, so the people who manage and maintain them must be.

Barbara Carss barbc@mediaedge.ca @BarbaraCarss

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contents

Focus: Staffing & Service Delivery 12 Finding Municipal Efficiencies: Cash-strapped and financially restrained local governments introduce cost-saving measures with environmental benefits.

15 Welcoming Young Professionals: Property management is a good fit for ambitious millennials seeking rewarding work in a sometimes challenging economy.

18 Urban-burbs Emerge: Generational shift in the workforce and urban population makes investment in the near suburbs a good bet.

20 Engendering Career Diversity: Addressing women's under-representation in STEM-related occupations.

24 Retail Facility Management: Traditional focus on operations is broadening to include more strategic skill sets.

Feature: 8 Project Delivery: Owners, managers and their contractors are looking through the sustainability lens to find ways to enhance asset value.

Department 4 Editor’s note

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77 Bloor Street West in midtown Toronto boasts a new 21st floor of office space after energy efficiency upgrades reduced the space required for the mechanical penthouse. Photo courtesy of Morguard.

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projectdelivery

PROJECT PLAYERS ON A LEARNING CURVE Seeing Asset Value Through the Sustainability Lens

By Barbara Carss A $2-MILLION PROJECT that snowballs into $20 million is rarely characterized as a triumph, which, green building proponents maintain, is precisely why a financial lens alone is inadequate for assessing the merits of capital spending. In recounting his company's role in the recent refurbishment of one of Morguard's class B office towers in midtown Toronto, Morgan McDonald, Director of Operations with Ledcor Renew, emphasized that the project team did not begin with a "pre-baked plan" of upgrades to be accomplished.

"What we did show up with was a prebaked process that we thought would get us there," he told attendees at the 2016 Canada Green Building Council (CaGBC) national conference earlier this year. "It turned into a large and substantial project, which wasn't necessarily what it was [seen as] going in."

The owners now boast a class A asset – including an entire new floor of rentable space created when requirements for the mechanical penthouse shrank down to just one storey – in a market currently enjoying some of the lowest vacancy rates in North America. A focus on overall building performance outcomes rather than payback on individual measures, along with a multidisciplinary project team given rein to be creative, are credited for the results.

"The really great thing about the project was that it recognized that we have so many different metrics that people are looking for," added Neil Pegram, Morguard's National Corporate Sustainability and Responsibility Manager, as he sketched out a rationale for embedding environmental, social and governance (ESG) considerations in capital investment decision-making.

In a panel discussion, Pegram, McDonald and Francisca Quinn, Managing Principal of the consulting firm, Quinn & Partners, tackled the topic of integrating sustainability into property planning with some sympathy for the constraints of convention that investors/owners, property/asset managers and suppliers/service providers typically bring to the exercise. These key project players can face obstacles and carry biases specific to their roles, but they all have a similar interest in a profitable result, whether that's defined by a return on investment, added asset value or enhanced reputation and opportunities for future contracts.

Quinn pointed to recent Boston Consulting study findings that 75% of surveyed institutional investors agreed ESG is important, but only 60% of property/asset managers believed that investors cared about the issues. That disconnect may partly explain what Pegram calls the "blame game"

in which each party ascribes reasons for inaction to the other's reluctance. Meanwhile, suppliers are often a step or more removed from top-level discussions about spending and are reliant on surrogates within prospective client companies to understand and represent their interests.

"Sometimes you're just selling to the wrong person or missing the budget cycle," McDonald noted.

METRICS MAKE THE CASE Panellists examined each stakeholder's perspective and offered examples, like Morguard's repositioning project, of successful ventures. All three underscored the importance of various industry benchmarks, such as the Global Real Estate Sustainability Benchmark (GRESB), REALpac's energy and water benchmark program or Energy Star Portfolio Manager, in providing information for target-setting and enabling consistent, standardized comparison of buildings' and companies' performance.

Definitions of value that include a building's carbon footprint and the well-being of its occupants can still be something of a stretch for an industry that has long singularly focused on financial parameters, but a growing archive of data that demonstrates the connection between sustainability, operating www.REMInetwork.com | October 2016 9

projectdelivery costs and investment returns is convincing many owners/managers that sustainability has real if not always explicitly quantifiable paybacks.

"Accepting that ESG is part of the value chain, that's a big change that has really only happened in last 10 years," Pegram said.

That concept is steadily gaining adherents among institutional investors, many with mandated obligations for social responsibility and disclosure. As building owners and potential purchasers, it's simply prudent for them to weigh all relevant information.

"Looking at ESG is smart," Quinn asserted. "That's how you can typically make better decisions."

Nor does it preclude acquisitions that are less-than-stellar in their current state.

"Some people might think it's going to be limiting what they can do or what they can buy, but it's also a way of identifying bad performers that can be turned around. It's about having more information so you can make a better informed decision and you don't get a surprise at the end of the day," she said. "There's a lot of investor education that needs to be done in this process."

Pegram concurred that many asset managers could be more proactive about

highlighting ESG results in the vast reams of data reported to clients – reasoning that ESG indicators are an element of fiduciary duty.

He recommends creating a context for sustainability reporting, embedding it in property planning discussions, linking it to risk management and backing it up with measurement and verification to prove payback and build support for future investments.

"If you are an asset manager, your job is effectively to be an advisor," he reflected.

"What we are saying is that when you buy a building, we are going to require you to have insight into that building that's not only financial."

CREATING A COMFORT FACTOR Number crunchers may inherently endorse sustainability when it is expressed as operating cost savings or asset value, but Pegram acknowledges there is a learning curve with differing levels of comfort for what might be perceived as "crazy solar things" and other emergent technologies. Company-wide goals for LEED, BOMA BEST or other certifications are useful in motivating decision-makers to try new approaches, which then, ideally, prove their worth.

Again, data collection will be key to winning converts. However, less tangible benefits, such as boosting image or appealing to a type of employee whom tenants are seeking, can also come into play.

"At the end of the day, the work we are doing is really change management," Pegram mused. "We've got to meet them [other parties] where they are at."

Accordingly, the status quo still p r e s e nt s s o m e of t h e t o ug h e st competition for suppliers/ser vice providers. "The subtext is: I am really comfortable with what I am already doing," McDonald said.

Suppliers can be the acknowledged or even the lone technological experts for some kinds of innovative products and equipment, placing them in a delicate dual role of educator and entrepreneur.

McDonald counsels some business communication basics.

"I used to design crazy solar things," he quipped. "You have to anticipate that they [clients] are not going to understand and will have questions. Clarify cost, process and timing, and do that early.

You need to understand impact, good and bad, from the client's perspective.

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projectdelivery ACCRETION AND RISK MANAGEMENT UNDERPIN CAPITAL EXPENDITURE Prominent institutional investors affirmed their evolving approach to capital expenditure as they discussed results of the 2016 Global Real Estate Sustainability Benchmark (GRESB) survey, released in September. This year's results revealed that top environmental performers also tend to outperform the pack financially – an outcome that the top performers themselves suggest should be easy enough to foresee given current market trends.

"At 10 to 12% cap rates, we would talk about needing a three-year return on an energy efficiency improvement. Looking at how low cap rates have compressed, why are some of our colleagues still looking for a three to five-year payback?" queried Andrew McAllan, Senior Vice President & Managing Director with Oxford Properties, which ranked as the North American leader for diversified office/retail portfolios for a fourth consecutive year. "We are now looking at 10-, 12-, 14-year paybacks and it's still accretive."

Investment in energy efficiency can also be seen as proactive risk management as carbon pricing looms.

"We've changed the way we look at cap ex. We look at accretion. If it has accretion to the portfolio, we will make the investment," concurred Ted Willcocks, Global Head of Real Estate Asset Management with Manulife.

"We're managing this, front-running with the reality that a lot of this is going to be legislated at some point."

Similarly, as environmental consultant Francisca Quinn reported at the Canada Green Building Council's national conference earlier this year, the Healthcare of Ontario Pension Plan (HOOPP) set aside its conventional, piecemeal practice of upgrading lighting in its industrial holdings upon tenant turnover for an ambitious portfolio-wide effort. The pension fund, which is also one of 16 Canadian GRESB participants, offered all tenants the upfront funding for lighting retrofits, asking only for a share of the savings for a two to three-year period until its capital costs were reimbursed.

"At the end of the day, they really improved their return on investment," Quinn noted.

Canadian participants exhibited a disproportionate presence in North American GRESB results this year as they accounted for nearly 42% per cent of measured electricity savings and more than 22% of reductions in greenhouse gas emissions, while outnumbered more than tenfold by 162 American counterparts.

"It's impressive, and I wouldn't say it's because savings are more easily obtainable in Canada or that there are different driving factors here like higher electricity rates or more incentives," reflects Neal Bach, President of the energy data management and consulting firm, Energy Profiles Limited.

"I think it's that certain large and prominent owner-managers and real estate advisory firms have made sustainability leadership a key part of their business: their brand; their employee and tenant engagement strategy; and their risk management approach. They are doing more than just point-hunting. They are aligning their teams around doing the right thing and it shows."

More coverage of 2016 GRESB results can be found on the REMI Network at www.REMInetwork.com.

T here a re probably some negatives that you should be honest and transparent about."

Clients come with varying needs, levels of sophistication and pressures of their own to juggle. Sometimes return on investment is the driving factor a nd somet i mes presu med corporate image benefits will seal the deal. Savvy suppliers

should be prepared for either likelihood.

"Have as many metrics as possible and they'll pick the ones that resonate the most," McDonald advised. "Some solutions are just not going to get past some clients because it's not a fit, but sometimes the boring stuff can be bundled with the sexier stuff." zz

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RESTRAINT INSPIRES OPERATIONAL INNOVATION Local Governments Try Cost-Cutting and Income-Generating Measures

By John Whittaker SOME OF THE MOST innovative and unique measures for finding efficiencies in the government sector are coming from municipalities – an outcome largely inspired by necessity given that local governments have restricted means to generate revenue and are typically prohibited from running operating deficits. At the same time, they provide key services that underpin daily civilized life and wellbeing.

Across Canada, there are no uniform responsibilities for municipalities, but the primary responsibilities generally include: garbage removal; supply of potable water; wastewater removal; community protective services; road maintenance; recreation; and land-use policies.

In terms of revenues, municipal income is derived through property taxes, user fees and grants from senior levels of government.

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On the spending side, many provinces prohibit municipalities from running operating deficits and have explicit limits on incurring long-term debt.

Statistics Canada data from 2008 presents the most recent macro breakdown of expenditure by function in municipalities across Canada. It is grossly generalizing but the largest expenditures include: roughly 21% spent on transportation (including road maintenance); 17% spent

staffing&servicedelivery on environment; 16% spent on the protection of persons and property; and 12% spent on recreation and culture.

Earlier this year, the Manning Centre asked Canadian municipalities to submit examples of initiatives they have introduced to cut costs and promote efficiencies. The resulting compendium of 290 strategies from 75 respondents nationwide can be broadly categorized as efficiencies pertaining purely to costs and those that involved productivity improvements and/or environmental cost savings. Some highlights follow.

SAVINGS WITH ENVIRONMENTAL BENEFITS Savings associated with electronic Council documents and e-payments for property tax bills, licensing and registration are common examples of combined environmental and hard cost savings, which reduce waste, conserve resources and cut civic expenditures related to paper and printing. Other municipalities – including Surrey, B.C.; Victoria, B.C.; Calgary, Alberta; and Markham, Ontario – have achieved dual cost and environmental savings by converting streetlights to energy-efficient and longerlasting LED bulbs or applying a less environmentally damaging brine solution in place of salt or gravel for winter road treatment.

Mount Pearl, Newfoundland has achieved a 25% reduction in water consumption through its leak detection program. Further costs and labour are saved because city crews now spend less time digging up affected areas.

Markham, Ontario registers upwards of 80% diversion from landfill – a threshold reached without having to hike fees or limit the number of allowable bags per household.

Instead, waste diversion strategies included mandating clear bags and banning electronics disposal.

Fredericton, New Brunswick demonstrated how effective small changes can be for environmental and hard cost reductions.

Buses previously had to wait ten minutes at hubs for mass transfers of passengers when the City trialed an “anti-idling policy” for their bus fleet.

The results were significant. Shutting down buses for those ten minutes of waittime eliminated 17,353 litres of fuel consumption, which translated into annual savings of $20,000. This particular efficiency would require very low administration to implement and although the cost savings may not be large relative to the municipal budget, that is not a compelling reason to forgo savings.

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staffing&servicedelivery CREATIVE PROGRAM DELIVERY & NEGOTIATION The City of Calgary’s Cut Red Tape Program, which has garnered $14.6 million in savings since it was implemented in 2010, represents one of the largest hard cost savings. It is not a single measure but rather a comprehensive plan intended to remove unnecessary procedures, forms, licences and regulations.

Regina's similar Core Services Review resulted in recommendations for 61 service area improvements that saved the city $8.5 million. The costs and resources to administer such programs still aren't well tracked, but the high-level approach to reducing unnecessary bureaucracy is nevertheless laudable.

Brandon, Manitoba's capital cost-sharing agreement with two private corporations gave it an ownership stake in a new water reclamation facility to replace two separate wastewater treatment facilities for industrial and municipal effluent.

The combined facility will save the city an estimated $23 to $29 million over 20 years, and gives it a share in an $81-million facility through only a $20 million contribution.

In other reported initiatives, Surrey, B.C. estimated that it was able to save $3 million annually by replacing copper wire from streetlights with aluminum wire. (Copper wire had been frequently stolen,) Finding time to train firefighters during their work shifts is a unique challenge when they are on call for an emergency at all times. The alternative of scheduling training for their days off has proven very costly in Kelowna, B.C. – and likely in other municipalities – as the collective agreement stipulated that firefighters were entitled to time-and-a-half pay when working (or in this case training) outside of their regular hours.

As a cost-reducing alternative, Kelowna offered firefighters an opportunity to bank the training time for vacations instead of taking a payout. Each hour of training they did could be taken at timeand-a-half in vacation days, and firefighters could bank up to 60 hours of this time. Further, if they wanted to take a payout for the training time it would be paid as straight time rather than overtime.

Victoria's online public tendering system, dubbed BIDS, is now used for virtually

everything that it purchases. Though, modestly billed as saving $20,000 annually in photocopy and courier costs, it's clear efficiency gains go far beyond saving paper.

The city’s Senior Buyer reports that the online BIDS system has resulted in a dramatic increase in responses to tenders, with bids now coming from as far as China or India. Several other B.C. municipalities have created similar systems to the BIDS model.

As a novel example, in the already picturesque city of Victoria, the city’s administration rents out its historic City Hall building for weddings. Many Canadian cities similarly boast beautiful and historic civic buildings so perhaps this could be an opportunity that, while not a major windfall in revenues for large cities, reflects an attitude towards maximizing the value of municipal assets. zz John Whittaker is a Policy Analyst with the Manning Centre. The complete text of Municipal Efficiencies: Examples of CostSaving Initiatives from Across Canada can be found on the Manning Centre website at http://manningcentre.ca

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ENGAGING NEXT GENERATION PROPERTY MANAGERS Employers Urged to Leverage the Appeal of a Multidisciplinary Career

By Rebecca Melnyk COLLEGE GRADUATES interested in property management careers have reason to be optimistic as the job outlook in the sector looks bright. Yet, future demand for this type of employment may not necessarily align with the goals of younger generations set on working in real estate.

As it stands, the average age of a building operator in Canada is more than 50 years old, and when this age group retires, they will leave behind opportunities for younger managers. Yet, some believe this complex

field doesn’t necessarily have a large pool of people to draw from.

“The problem with the field is there is no career path to it,” says Jim Preece, President of The Building Owners and Managers Institute (BOMI) of Canada. “No young person wakes up and says, ‘I’m going to be a property manager,’ because they don’t know it exists and also, there is no educational path to get there. Once you finish high school, there is no program for property management at university.”

What seems to happen is people “fall into the business,” either through asset management or working as an operator motivated to advance their career in the system. Awareness of those well-paying jobs available to run buildings that are becoming more high-tech is lacking.

DIVERSE ROLES Peter MacHardy, former BOMA Chair and Vice President, National Commercial Property Management at GWL Realty www.REMInetwork.com | October 2016 15

Advisors Inc., says that really incredible property managers are few and far between and the complexity of the industry is only escalating.

“The skills sets you’re going to require as technology advances are going to be more and more; we’re going to need technologysavvy operators to run buildings,” he says.

“The building automation systems and lighting automation systems today are much more advanced than when I started in the industry and they are only going to get more advanced.”

This sophistication, along with the scope of property management, has been evolving for some time, from setting controls and testing air quality to managing tenant issues and security risks. With these elements comes the level of reporting now required – from financial records to energy usage – to help satisfy a data-point-starved industry.

“One of the things that has really changed in my world is a property manager has to be a really effective communicator now, and be able to present information in a concise manner,” says Keith Major, Senior Vice President of Property Management at Bentall Kennedy. “In the past, that probably wasn’t as important as it is today.”

Major says one aspect of property management that is somewhat misunderstood is the level of diversity involved.

“The level of diversity you get from dayto-day activities in property management is

significantly greater than other careers in real estate,” he notes. “If you take a large building worth $100 million, that’s a significant enterprise you’re effectively running and responsible for.”

Real estate jobs that are more centred around driving top-line revenue don’t necessarily focus on other components that go into a balance sheet or the services provided in a building.

“You have a human resources aspect that doesn’t typically exist in other streams,” Major says. “You’re often managing construction one minute and coaching an employee the next, offering more diversity in terms of what you’re going to deal with in the course of a week.”

Yet, sometimes the intricate experiences inherent in property management don’t necessarily boost its reputation as a highprofile position.

“The one challenge in property

management is a lot of times people don’t recognize big milestones, so you don’t have the thrill you would have every time you close a transaction or a lease deal,” adds Major. “In property management, you don’t get that same level of satisfaction around the closure of specific events. You need to derive satisfaction around the ongoing maintenance and performance of an asset.”

However, he adds, different personalities attach themselves to different career paths, and not everyone wants to deal with acquisitions or leasing deals. Finding ways to attract those who are suited for such management positions becomes vital.

“The Canadian commercial real estate industry doesn’t necessarily promote itself at all,” adds MacHardy. “Property management certainly doesn’t either.

Getting people interested in property management is going to require a tremendous amount of awareness. There

“The level of diversity you get from day-to-day activities in property management is significantly greater than other careers in real estate.”

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staffing&servicedelivery needs to be some consistency across the country with regards to the different kinds of positions that are out there and what they involve. Right now a building operator can be called 15 different things across the country; that’s confusing.”

VALUES AND MOTIVATORS Along with attracting people down a management path, also comes acquiring knowledge on what future generations value and need from a workplace. While studies on millennials don’t necessarily brain-pick all components of this cohort or completely differentiate their needs from older groups, some in the real estate industry flag key values among millennials.

Dr. David Scofield, Assistant Professor in the Real Estate Management program at the Ted Rogers School of Management at Ryerson University, asked 70 of his students what they valued in the scope of their career paths. Among this small sample, income was a main priority, followed by job flexibility and lifestyle. Learning new skills also figured high on their list.

“They felt their ideal position would not only give them this great work-life balance, but expose them to lots of different opportunities to develop their skills,” Scofield says. “They know the market is tight and the global economy is not growing very quickly, that wages aren’t increasing tremendously and businesses aren’t investing as much.”

Companies need to foster and support professional development activities among new hires if they want to attract property managers, suggests Lesley Lucas, Director of Education and Business Development at the Real Estate Institute of Canada.

“Millennials have grown up in an environment that has required them to further their academic activities over and above the typical B.A. and in doing so, they have honed in, at an earlier age and stage, as to what they want from their careers,” she says. “Given the trend in ‘rightsizing’ and increased use of technology, millennials have faced stiff competition for positions that they are wanting. As such, they have had to find ways to make themselves stand out, either through specialization or advanced graduate degrees.”

Lucas adds that property management companies looking to attract the best talent need to be responsive and open in assisting new hires to gain the experience they need, with the support of the organization.

“Millennials, in coming to the workforce with considerable book knowledge but less

“They felt their ideal position would not only give them this great worklife balance, but expose them to lots of different opportunities to develop their skills.” practical experience, will need mentoring opportunities in order to develop the skills that are necessary to succeed in this industry,” she notes.

This is also a generation that wants to advance quickly and be promoted in their careers. Often, Scofield hears from his industry peers that one of the main issues they are having with new hires is how to manage their expectations for promotion.

“That seems to be an issue with them,” he relays. “On one hand, they talk about developing a skill set; on the other hand, they acknowledge they don’t have the patience to put in their time.”

This is a generation that craves quick advancement, so offering them the opportunity to partake in advanced education is going to be critical, adds Lucas.

TRAINING FOR THE FUTURE “The Certified Property Manager designation from the Institute of Real Estate Management or the EMBA/MBA with a speciality track in Real Estate Leadership offered through the Sandermoen School of Business are both excellent examples of programs that can help new hires move into positions that will allow them the opportunity to become tomorrow’s leaders,” Lucas says. “They get the intrinsic value of learning and developing their own skills, they get the extrinsic value of having their employers and colleagues know that they are working towards a higher goal, and if it is possible for the company to provide resources for the millennials (tuition costs, time away from work to study, mentoring etc.), it is a win-win-win situation.”

Scofield also suggests companies offer more programs where new hires experience different parts of the business – “to feel as though they are learning and developing, rather than just putting in their time in the hopes of a promotion that may or may not come.”

There is also room for further development within a school’s co-op program for students to take on internships and co-op placements.

“That might be a way to capture a larger group of potential graduates looking at property management as a potential career option,” he says. “If companies could provide more opportunities for students to experience the firm and organization prior to graduation that would be a very positive thing.”

At the moment, a lack of programs that deal with the full scope of property management, along with minimal company training funds, is pushing industry to address this lack of career path. For instance, BOMA Canada is developing a broad based certification process to train building operators to do that job.

“There is a transition that needs to take place that shows this is a skilled job, and there needs to be a process by which those individuals become trained to be able to manage the building,” says Preece. “These buildings are multimillion-dollar structures that need to have a sophisticated approach to being managed properly. Their systems are complex as soon as you start dealing with energy consumption and air quality and security. It’s not just the guy who pulls out the ladder and changes a light bulb. There’s more to it now.” zz Rebecca Melnyk is an Online Editor with the REMI Network. The preceding article has been nominated for a 2016 Canadian Online Publishing Award in the best feature article category. To read more of Rebecca's work, see www.REMInetwork.com.

Keeping it realty at

www.REMInetwork.com | October 2016 17

URBAN-BURBS PLACED TO PROSPER Ascendant Workforce Prizes Commuting Ease, Density and Diversity

By Mike Kennedy and Andrew Alizzi Anecdotal evidence and real census data confirms that young adults in their 20s and early 30s are leading urban in-migration patterns. Avison Young's Mike Kennedy and Andrew Alizzi brainstorm on the potential implications for the real estate industry as a provider of workspace, housing and social venues – Editor.

THE NET GENERATION has witnessed and influenced the ability of today’s technology to overcome geographic limitations, allowing people to work and collaborate from anywhere in the world.

Yet, instead of the rural or remote settings such capabilities could favour, millennials are migrating to where the job opportunities are concentrated – the city. As young adults increasingly enter the modern workforce, they are influencing development patterns.

Robust growth and increased urbanization were recorded in many American cities in the 2000s in conjunction with the arrival of the millennial generation. Delays in starting a family, a tougher home-buying market and dislike of long commutes underlie the choices.

“Location, location, location” for this generation means being close to an urban core with easy access to work, amenities and transit. Studies show a fondness for living near service amenities like music venues, theatres, bars, gyms, etc., indicating a broad cultural shift that could make the urban revival underway more long-lasting.

Innovation requires an ecosystem in order

to thrive, while cities offer a diverse pool of individuals in increasingly connected environments that allow for and embrace new ideas. University of California, Berkeley, economist Enrico Moretti notes that “by clustering near each other, innovators foster each other’s creative spirit and become more successful.”

Age aside, innovators’ desire to surround themselves with others naturally induces them to create or move to dense and diverse environments. In the book, Where Good Ideas Come From, Steven Johnson writes that “more connections create exponentially more ideas, and that leads to cities.”

The recent rise of co-working spaces led by companies such as WeWork, TechSpace, Industrious and Galvanize that are now expanding into multiple North American cities demonstrates this concept. Workers can rent a desk, or a space for two or more people, with no commitment beyond 30 days. Even traditional companies are using such space for temporary housing of staff during transition periods or fixed longerterm locations as an alternative to typical lease space.

18 Canadian Property Management | Part of the REMI Network

PROMPT FOR REVITALIZATION Looking to examples in the United States, millennials are playing a role in the revitalization of long-dormant urban areas in Detroit, downtown Los Angeles, Brooklyn, downtown Houston and uptown Dallas among other locales. Millennials also factor into the rapid urbanization of smaller and less dense, but growing metropolitan areas like Austin and Nashville. Additionally, resolutely urban cities such as San Francisco, Boston and Seattle are seeing further densification and transformation of their urban core neighbourhoods.

Housing supply and transportation tend to be equally influential factors in settlement choices. In Austin, for example, it has spurred nodal growth and the creation of “urban-burb” areas with increasing occurrence of mixed-use real estate developments.

Given New York's housing costs – where even the lowest priced of two-bedroom apartments in Manhattan typically rent for USD $5,000 per month – older surrounding suburbs like Hoboken, Brooklyn and Queens are a popular compromise with more space, affordability and picturewindow views of Manhattan’s skyline.

Millennials are even shifting Silicon Valley's culture, as the renowned but

staffing&servicedelivery THE STRESS OF THE CITY Urbanist and transportation policy analyst Todd Litman poses the question: Do cities stress us out? in a recent discussion paper examining the mental health risks of urban life. He addresses some common assumptions and reviews an extensive array of sociological studies to draw the conclusion that conditions associated with urban life may undermine mental health, but cities are not the root cause of depression, addictions or personality disorders. The following is an excerpt of his argument – Editor.

irrefutably suburban innovation hub show signs of fraying. “Silicon Valley region’s office parks now seem like tired old Searsanchored malls, while superstar companies move into urban clusters in San Francisco,” journalist Kevin Maney recently reported.

Traditional forces continue to have sway, however. Will the attraction of people and place still be strong enough to work within the institution of marriage and raising a family? Will the space required for such a life be affordable or more desirable than the suburban life in which many millennials were raised?

Some fund managers are investing in single-home builders and car manufacturers, betting that millennials will eventually follow in the footsteps of their parents by adopting suburban lifestyles as they age.

Some speculate that the urban lifestyle, largely rental, is merely an outgrowth of the recession’s impact on employment opportunities and higher down payment requirements for homeownership.

Millennials marrying and having children later in life have an influence as well.

AFFORDABLE ALTERNATIVES THRIVE The outcome of Millennial preferences will no doubt be better seen around 2022 as the eldest of this age cohort approaches 40, with the median near age 30. (Currently, the

The human experience is increasingly urban; we are in the middle of the transition from 80% of the world’s population living in rural to 80% in urban areas. Decision-makers and individuals need practical guidance on how to maximize sanity and happiness when planning cities and choosing where to live.

Defining what constitutes urban is a challenge in itself. The term conjures up images of skyscrapers, crowded sidewalks, subways and concentrated poverty, but these conditions do not reflect the total urban experience. Urban includes a variety of community types, ranging from city centres to suburban villages.

Most urban residents live in moderatedensity neighbourhoods that contain a mixture of single-family and low-rise apartments and rely on a mixture of walking, cycling, bus and rail transit, as well as automobile transport.

Most cities have a mixture of low-, middle- and high-income households.

It is important to keep in mind people’s tremendous diversity and adaptability. Humans live successfully in a wide range of environments from frozen tundra to dry deserts, and from single-family houses in sprawled suburbs to highrises in dense city centres. Many people live in and adapt to a variety of environments during their lifetimes. Personal preferences are neither universal nor unchangeable.

Credible research suggests that urban residency can increase psychosis and mood

largest sub-group of millennials is aged 23 to 24.) Today's urban-suburban discordance may offer explanation for millennials' livework-play decisions.

Millennials tend to prioritize density, transit proximity and commuting opportunities, but in some areas, housing costs are unaffordable. In fact, according to research conducted by Trulia chief economist Jed Kolko, who analyzed data from the U.S. Census Bureau covering the years 2000 to 2013, “the two-thirds of millennials aged 25 to 34 who lack a Bachelor’s degree are becoming less likely to live in urban neighbourhoods (-8 per cent) and even less likely to reside in hyper-urban neighbourhoods (-10 per cent).”

Alternatively, they are choosing to locate where they can access the city centre and live in neighbourhoods that offer an urban experience that most closely resembles the

disorder risks, addiction to some drugs and some people’s unhappiness, but reduces dementia, some substance abuse and suicide rates, and increases happiness for some people. Urban living also tends to improve mental health by increasing economic and social opportunities, fitness and health, and access to mental health services. Higher urban mental illness rates may partly reflect better reporting in cities.

The association between cities and mental illness does not necessarily indicate that cities cause these problems, or that a typical person will become less sane or happy by moving to an urban neighbourhood. In fact, many people are better off overall in cities than in smaller communities that offer less opportunity and support.

Much of the evidence that consumers dislike cities and that cities increase mental illness and unhappiness is specific to North American conditions where public policies are anti-urban and cities have severe social problems. Such evidence does not apply to economically successful, well-designed urban neighbourhoods.

The complete text of Urban Sanity, Understanding Urban Mental Health Impacts and How to Create Saner, Happier Cities, can be found on the Victoria Transport Policy Institute website at www.vtpi.org.

denser downtown. A desire for diverse and innovative environments begins to transform suburbs into urban-burbs – diverse environments with abundant amenities but without the high price of downtown luxury high-rises.

Ultimately, this will benefit communities that can offer a lower cost of living as a new resident base becomes engaged and begins to prosper. Real estate developers would be wise to see opportunities in the diverging lifestyle choices of this highly innovative generation. zz Mike Kennedy is a Principal and Managing Director and Andrew Alizzi is an Associate with Avison Young in Austin, Texas. The complete text of the topical report, Millennials and Re-urbanization of the City, can be found at www.avisonyoung.com/research/whitepapers-and-topical-reports-0. www.REMInetwork.com | October 2016 19

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CAREER PATH CAN BE THORNY FOR WOMEN Occupational Desegregation Brings Economy-wide Benefits

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The Human Resources Professionals Association (HRPA) has offered recommendations for addressing Canada's current wage disparity, which results in women, on average, earning 12 to 31.5% less than men in the workforce. The following is an excerpt from HRPA's CLOSING THE GENDER WAGE GAP whitepaper, released in April 2016 – Editor.

SOME OF THE ROOT causes of the gender wage gap can begin early on in life, starting with education and career path choices. One of the main issues is occupational segregation, where some jobs are primarily male dominated, and others are primarily dominated by women.

This segregation can often produce a gender wage gap, when the types of jobs primarily filled by women are paid less than those filled by men. For example, careers in the science, technology, engineering and mathematics fields (STEM) in Ontario are not equally

20 Canadian Property Management | Part of the REMI Network

r e p r e s e nt e d by wom e n , h av i ng approximately 2.5 times more men.

Those sectors with the largest number of women include sales and service occupations, business, finance and ad m i n ist rat ion occupat ions, a nd occupations in education, law and social community and government services.

Ontario women make up at least half of any given education level. The exception is that of skilled trades and apprenticeships, where women make up only 32.5% of this category. This exception, in and of itself, is telling. Men make up the remaining 67.5% of people in this educational category, and when

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staffing&servicedelivery QUÉBÉCOISE NAMED 2016 LEED FELLOW Josée Lupien, a specialist in the certification of materials and products for the green building sector, is one of 24 LEED Fellows named for 2016. The Quebec based founder and President of Vertima received the honour at the Greenbuild International Conference in Los Angeles earlier this fall.

The special designation is bestowed to LEED accredited professionals of at least eight years standing deemed to have made a significant regional, national or international contribution to sustainability. Candidates, who have been nominated by their LEED AP peers, are considered for their technical proficiency, mentoring, leadership, advocacy and commitment.

“LEED would not have grown from an idea to a movement that spans more than 160 countries without the leadership and innovative thinking of professionals like our 2016 LEED Fellows,” says Mahesh Ramanujam, President of the Green Building Certification Institute and Chief Operating Officer of the U.S. Green Building Council. “This group’s work is a clear reminder of the significant progress we’ve made to create a sustainable built environment, and it is the ideas and contributions that these individuals make that will continue to advance our mission of a green building for all within this generation.”

Lupien is a founding member of the Quebec chapter of the Canada Green Building Council (CaGBC). Beginning in the industry as a paint specification manager, her company, Vertima, is widely recognized for its service to the green building sector in managing third-party validation and certification of ecological materials for manufacturers.

“Josée Lupien has been a pioneer in educating the industry on sustainable building principles, and her tireless efforts have greatly advanced the green building industry and LEED in Quebec,” says CaGBC President and CEO Thomas Mueller.

“It is rewarding to have all these years of effort recognized with this title, but it is by moving forward and inspiring women and the young generation that it will be really useful,” Lupien observed.

we look at those actually working in the trades, transport, equipment operators and relevant occupations category, it is comprised of 93.5% men. In contrast, the workforce in health occupations is 80.1% women.

Women are very well educated, but choose to stay away from certain types of jobs. This is not unique to Ontario.

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show that this issue also ties back to multiple factors including underlying stereotypes that are passed along, a lack of proper career information and a lack of industry promotion.

Studies show that girls do as well as boys, but, in certain fields, they can lose confidence throughout their progress in the education system.

According to some studies, one reason for this loss has been attributed to stereotyping. Research has found a stereotype threat in math and science, that may make young women “attempt to reduce the likelihood that they will be judged through the lens of negative stereotypes by saying they are not interested and by avoiding these fields” altogether.

However, when girls push past this stereotype, they can encounter others.

A randomized double-blind research study found science faculty can have an unconscious bias that favours men.

In the study, the faculty rated male applicants as “significantly more competent a nd h irable tha n the (identical) female applicants [and also

22 Canadian Property Management | Part of the REMI Network Seeback_CPM_October_2016.indd 1

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offered] a higher starting salary and offered more career mentoring to the male applicants.” The impact of these stereotypes needs to be addressed early on to ensure more women participate in f ields where t hey a re cu r rent ly underrepresented.

Research has shown that self-imposed stereotypes can be counteracted by exposing young women to positive female role models. Boston’s Girls MAKE the City event is a technology focused festival aimed at middle school girls that features prominent women from their STEM sectors, while its Change-MAKER event consists of a series of workshops and speakers aimed at highlighting female role models. (In Canada, the Society for Canadian Women in Science and Technology sponsors the Ms. Infinity program, offering interactive workshops for girls in elementary and secondary school.)

Students often lack the proper guidance about what careers are possible and where the greatest labour force demand will be when they graduate.

While this is a challenge regardless of gender, it does present an opportunity to address two problems at once. Skills shortages, particularly in the STEMbased occupations as well as the trades, have been identified by the Canadian Chamber of Commerce as one of the top barriers to competitiveness. With improved labour market information, and a system to match skills with labour market needs, governments could improve the career guidance it provides students regardless of gender, and could steer them towards wellpaying sectors that are in particular need of workers.

A study by Catalyst (an organization committed to accelerating progress for women through workplace inclusion) revea led that over ha lf of those interviewed were given little or no information about industrial science careers. This is just one example of how industries and companies need to do better at marketing themselves towards women. The report recommends various promotional actions such as funding i nter nsh ips a nd fel lowsh ips a nd increasing the visibility of careers. zz The complete text of Closing the Gender Wage Gap can be found on the Human Resources Professionals Association website at www.hrpa.ca

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STORE OF SKILLS Facility Managers Quarterback Retail Transformation

Industry benchmarks and metrics at

FACILITIES MANAGERS in today's retail sector have moved away from a traditional focus on operations and maintenance of physical space toward an expanded menu of strategic services for the shopping environment. The newly released 2017 Trends Report from the Professional Retail Store Maintenance Association (PRSM) highlights the roles retail facilities managers increasingly play in human resources, marketing, technological integration, regulatory compliance and strategic business planning.

24 Canadian Property Management | Part of the REMI Network

"The retail industry has seen and cont i nues to exp er ience rapid evolutionary changes," observes Leigh P e a r s o n , D i r e c t o r o f Fa c i l i t y, E nv i r o n m e n t a l & P r o c u r e m e n t Services with Staples Canada and Chair of the PRSM Board of Directors. " T hese cha nges prov ide a g reat p l a t fo r m fo r t o d ay 's f a c i l i t i e s management professionals to help move retail towards an even brighter, more exciting future."

The report identifies five critical skills:

staffing&servicedelivery • Financial literacy to inform capital spending decisions; • Employment of technology to drive efficiencies; • Energy management knowledge: • Communications skills to engage everyone from the frontline to the C-suite: and • Long-range vision to see beyond current problems to tomorrow’s solutions.

Once primarily tactical, demanding supervision of skilled trades, facilities managers have taken on more strategic functions which may entail working with data and financial analysts, design, const r uction a nd leasing teams, IT and cybersecurity experts.

This also calls for coordination with Human Resources to hire, train and retain necessary expertise.

With big data replacing spreadsheets, t h e g r ow i ng t a ke - up of e n e rg y management, building management and ma intenance management systems and arrival of the Internet of Things (IoT), the report portends: "FMs of the future will not need to

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“The retail industry has seen and continues to experience rapid evolutionary changes. These changes provide a great platform for today's facilities management professionals to help move retail towards an even brighter, more exciting future.” know how the technology works.

However, they will have to understand how technology can be integrated and used to create the most efficient, safe retail operation possible."

The rise of smaller urban spaces, pop-up kiosks and store-within-a-

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store formats in place of formerly prevalent cookie-cutter designs brings t he ch a l lenge of m a nag i ng a nd procuring for a diversity of uses.

"FMs are also being called upon to manage space that has been leased inside their stores, often to

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staffing&servicedelivery complementa r y retailers, but sometimes to non-retail companies for office space. This type of arrangement t ra nsfor ms t he ret a i l F M i nto a la ndlord wit h a new set of r e sp on sibi l it ie s, r isk s a nd lega l requirements," the Trends Repor t states.

Suppliers will likewise need to understand the changing needs of their retail clients. While cost and service are always important, retail facilities managers expect expertise and an understanding of their market demands.

The Trends Report commends suppliers with the following qualities: • Business Acumen to demonstrate value to the retail FM and offer customized proposals, tailored to fit the retailer’s financial objectives; • Technological Acumen including an understa nding of computer ized maintenance management systems (CMMS), energy management systems (EMS) and building management systems (BMS) and, more importantly, an understanding of how technology can help customers; • Co-opetition or the willingness to provide advice on products and

services they don’t sell, knowing it will build trust, enhance relationships and pay off in the long run; and • Swipe & Deploy Skills to identify new practices in other areas of retail, or even other industries, that might have potential in retail FM – understanding that innovation prevents extinction.

Consumer and political activism can drive new regulatory requirements as governments introduce new rules and/ or update existing ones, and retailers can be pressed to stay ahead of the compliance curve. Given the current trend toward more regulations and stiffer fines, they are advised to consider the broader reputational and brand risks at play.

The Trends Report points to four particular concerns in the retail environment: health and sanitation; risks related to construction projects; elevator/escalator risks; and fire and life safety. Facilities managers must also ensure that contractors and suppliers comply. Plans and documentation are central to due diligence.

All these pressures are unfolding within a business environment that challenges retailers to stay competitive

and is driving some of them to reinvent themselves. The Trends Report recounts facilities ma nagers' str uggles a nd creative adaptation in an era of rising mall vacancies and emerging digital competition for market share.

A dramatic change in tenancy such as conversions to office space will br i ng new k i nd s of op e r at iona l demands, while the arrival of tenants accustomed to their own stand-alone premises could inspire some culture clashes. However, change can be highly lucrative.

"Redeveloping anchor space comes at a cost to landlords, but holds the promise of hefty returns as department stores paying as little as $2 a square foot in rent are replaced by new anchors paying $15 to $20 a square foot," the Trends Report states. "If the space is carved into smaller parcels for sp e cia lt y r et a i ler s, r ent ca n approach $100 a square foot." zz The complete text of the 2017 Trends Report can be found on Professional Retail Store Maintenance Association website at www.prsm.com/p/cm/ld/fid=222.

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