The Quarterly Newsletter for Commercial Real Estate Women | San Francisco
Bounce Back to the Future
1ST Quarter 2013
Demographic, Economic Trends Will Spur Ongoing Demand for MOB Space © 2013 Vincent Schwab, Marcus & Millichap Real Estate Investment Services Reaction to the Supreme Court’s recent decision regarding the Patient Protection and Affordable Care Act (PPACA) has been mixed, and the issue will remain hotly debated even though the presidential election is over. Aside from the various positions on reform and ongoing controversy, many healthcare executives indicated relief that at least some of the uncertainty clouding the industry’s future has lifted. If fully implemented, the law could bring health coverage to roughly 35 million uninsured individuals, though the final tally will vary depending on Medicaid expansion, which the Supreme Court has left in the hands of individual states. The law, however, caps Medicare spending growth, which will likely result in additional reimbursement cuts at a time when the 65-plus population undergoes dramatic growth. Therefore, while demand for medical office space will receive a boost from increased healthcare demand, pressure on tenants’ revenues will hamper the pace of rent growth. Nonetheless, owners of better-quality, performing medical office properties should enjoy stable returns over an ex-
tended period, as tenants tend to make significant investments in improvements and on-site equipment, discouraging relocations. While demographic and economic trends will undoubtedly boost space demand in the years ahead, the strength of the correlation remains unclear. To start, adoption of electronic records will reduce in-office file storage, while telehealth systems curb office visits and extended hours allow for greater capacity without requiring additional space. In addition, a growing share of doctors will work directly for hospitals and health systems. Some systems will favor multipurpose ambulatory care centers over traditional multi-tenant properties, while others will look to well-located shopping centers for expansion into communities. The proliferation of in-store clinics will continue and could accelerate if a major retailer such as Walmart enters the game, and more vacant retail properties, such as a 300,000-square foot mall in Massachusetts, will be repositioned for medical use. Furthermore, indicators
point to a physician shortage within the next decade, as an estimated one-third of today’s doctors retire. While smaller, aging properties will be most negatively affected by this trend, physician attrition may also alter space needs and desired floor plans in newer assets, as large practices and health systems utilize more physician assistants and nurse practitioners to fill gaps. On a positive note, the multitude of questions surrounding healthcare and future space demand will limit purely speculative development over the next several years. Lenders will continue to cap leverage on construction loans well below prerecession levels, in addition to requiring strong preleasing prior to funding. With(continued on page 2)
ISSUE HIGHLIGHTS: warriors return to sf? {P3} spotlight, delegates corner {P5} thank you sponsors luncheon {P7} meet the leaders {P8} word from our president {P11}
(continued from page 1) out speculative development, much of the new space demand will be forced into existing properties. However, not all medical office properties will benefit to the same degree. Similar to the past 12 months, when newer properties accounted for nearly all net absorption, the majority of occupancy growth in the coming year will involve build-to-suit assets and speculative buildings delivered immediately before or during the downturn. In spite of dramatic tightening over the past year, properties that fall into the latter category continue to maintain sufficient availability to satisfy a sizable share of new demand in the near term.
Construction Trends 2009
2010
2011
YTD 2012
User/Other
15.1%
9.8%
10.8%
8.6%
Private
56.3%
37.3%
45.6%
41.3%
Public REITs
26.3%
42.8%
24.2%
39.0%
Foreign
0.0%
0.9%
11.1%
1.5%
Institutional
2.3%
9.2%
8.3%
9.7%
**data pulled in Aug 2012 Approximately 4.6 million square feet of medical office space was delivered in the first half, and another 4.4 million was slated for completion through the end of 2012. New supply in 2012 should exceed 2011’s total by a wide margin but will pale in comparison to 2007 to 2009 levels, when medical office inventory grew by nearly 60 million square feet. A substantial share of the new space brought to market during that time period was speculative, in sharp contrast to the development picture today. In recent quarters, heavily preleased and build-to-suit projects dominated the construction pipeline. As a result, combined occupancy across properties delivered as of the end of 2012 already rests at approximately 80 percent.
years ahead as healthcare providers exit the real estate business. By monetizing real estate, providers can re-deploy capital toward the acquisition of physician practices, equipment and increased community or specialty services. Dispositions could occur at an accelerated pace if state opt-outs to Medicaid expansion weigh on health systems’ and hospitals’ credit ratings, hampering their ability to tap bond markets. Although transaction velocity accelerated more than 20 percent during 2012, a sizable amount of investor demand went unmet due to a shortage of quality for-sale inventory. During this period, the combination of a supply/demand imbalance and historically low interest rates led to further capitalization rate compression, particularly for hospital-affiliated and/or credit-tenant deals. Such properties in primary metropolitan areas tend to change hands at capitalization rates in the 6.0 to 6.75 percent range, attracting a mix of institutional investors and REITs. In 2012, these two groups of buyers accounted for roughly half of all acquisitions by dollar volume, up from 32 percent during 2011. Demand for non-institutional-grade, but still high-quality, assets has intensified thanks to a growing pool of private investors and non-traded REITs circling the market for deals. Private investors tend to enjoy far more flexibility in deal selection than their public counterparts, and therefore can explore a wider array of opportunities. Earlier this year, for example, a single-tenant medical office building in a rural town generated multiple offers from mostly private investors, who were able to overlook its tertiary location to focus on its BBB+ rated tenant that recently signed a 20-year triple-net lease. On average, capitalization rates for performing off-campus assets average in the high-7 to 9 percent range, though they vary dramatically based on asset and tenantcredit quality, affiliations with hospitals and health systems, lease terms and location.
Capital Markets
Medical office development will remain focused on ambulatory facilities. These facilities ranges from freestanding emergency rooms, urgent care clinics and surgery centers to large multipurpose facilities, where providers can house specialists and other services, such as imaging, rehab and wellness clinics. Aside from catering to consumers’ preferences for convenient access to care, outpatient services carry substantially lower costs than those performed in hospital settings. The disparity in cost tends to become more evident for the elderly, who often encounter additional health issues once admitted to in-patient facilities. A handful of large, traditional multi-tenant medical office buildings are under way. Most of these projects have hospital or health system affiliations, and many also feature on-campus locations. As hospitals funnel available capital into upgrading and expanding their core operations, more on-campus medical office construction is likely to be developer-owned.
Investment Trends High-quality opportunities should become more plentiful in the
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In mid-September 2012, the Federal Reserve Board announced a new open-ended program of quantitative easing, along with an extension of “Operation Twist” through (continued on page 6)
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Warriors to Return to San Francisco? © 2013 Carol Horn The Golden State Warriors basketball team left its heart in San Francisco. Now it is planning to return and play in a premiere, waterfront sports arena to be built on historic Piers 30-32. The arena is scheduled to open for the 2017-18 NBA season. The proposed 17,000-19,000 seat arena would provide a new venue not only for NBA basketball, but also for major conventions, top-name concerts, and important cultural events. The waterfront arena will be located at the foot of the Bay Bridge, between the Ferry Building and AT&T Park. Under the proposal, the City will enter into a long-term lease with the Warriors. The team will pay the upfront costs to refurbish Piers 3032, and privately finance the construction of the state-of-the-art entertainment facility. The City plans to repair and seismically upgrade 13 acres of deteriorating piers and develop Seawall Lot 330 adjacent to Piers 30-32. At least 50% of the site will be public open space, including a public small-craft boat launch for kayaks, ferries and/or water taxis. According to a presentation on Fiscal Feasibility and Conception Framework made to the Piers 30-32 CAC Meeting in October by Jennifer Matz, Director of Waterfront Development, (www.sfgov.org/piers3032), the Warriors will privately finance all development, which is estimated at a cost of $1 billion. Hard costs of pier rehabilitation and improvements (including seawall improvements to Seawall Lot 330) are estimated at $700$750 million, with soft costs (architect, engineering, insurance, etc.) estimated at $175-$225 million. (This information is based on a report prepared by Economic & Planning Systems, Inc. of Berkeley for the City, issued in October, and posted with Ms. Matz’s presentation.) The City will reimburse the Warriors for certain agreed-upon improvements to City-owned infrastructure, to be capped at a cost of $120 million. The funds for this reimbursement are limited to three sources – rent credits from the Piers 30-32 lease ($1.97 billion per year), the sales price of Seawall Lot 330 (SWL 330,) ($30.4 million), and new property tax revenue generated by the development through the creation of an Infrastructure Finance District ($5.8 million per year). The Port will receive 1% of the proceeds on sales of SWL 330 condominiums, after the first sale, as a transfer fee. The report estimates annual income from the project, once completed, at $19.4 million, with one-time income of $53.8 million. Annual visitor spending is estimated at $60 million per year; direct construction jobs at 2,623 full-time equivalent positions (FTE); permanent jobs at 1,757 FTE direct and 787 FTE indirect.
The project will go to Port and Board of Supervisors hearings in January/February 2013. Construction is projected to start summer 2014 and to be completed by summer 2017. The Warriors came to San Francisco in 1962 from its founding city of Philadelphia. The team spent 10 years playing here, in both the Cow Palace and the Bill Graham Civic Auditorium. To secure a more permanent home, the Warriors then moved to the Oakland Oracle Arena in 1971, changing its name from the San Francisco Warriors to the Golden State Warriors. Piers 30-32, the location of the team’s new home, were the first pair of piers built in San Francisco 100 years ago, in 1912-1913. Owned by the Port of San Francisco, these piers handled ship freight, and in 1952 were joined by a connecting wharf to provide for trucks. The Port Commission directed the creation of the Piers 30-32 Citizens Advisory Committee (CAC) to guide the Port and the City in this development. The Piers 30-32 CAC will review the project to provide public input, including solutions and options to address community concerns, for consideration by the City decision-makers. The 16-member CAC represents a broad spectrum of residents and small business owners in nearby (continued on page 4)
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(continued from page 3) communities, as well as community stakeholders with expertise on a variety of citywide topics, including housing, open space, youth issues, workforce development, organized labor, access for people with disabilities, non-profit administration, maritime commerce, environmental protection and transportation. The Committee includes representatives from the Giants, South Beach, Rincon Hill, Mission Bay, Potrero Hill, South Park, SOMA, Local 261, Red’s Java House, SFMTA, Delancey Street Foundation, Public Bikes, and others. For those interested, more information on the Committee can be found at www.sfport.com/piers3032cac. In November 2012, Mayor Ed Lee announced agreements with the Warriors impacting jobs for local residents. These agreements include an agreement between the Warriors and local building trades unions and community groups for a commitment to hire 25% of the overall work force and 50% of apprentice-level workers from San Francisco for the waterfront construction. A “Helmets to Hardhats” program connecting returning veterans to construction jobs on the project was also announced.
The 2013 Medicare Tax © 2013 Elizabeth Leet Jackson, Attorney, Downey Brand LLP Effective January 1, 2013, the Health Care and Education Reconciliation Act of 2010 subjects high-income individuals to a 3.8% Medicare contribution tax on unearned income, including investment income and capital gains. This article briefly explores the Medicare tax of 3.8% for high-income individuals and how it affects commercial real property owners. The former 2.9% Medicare tax increasesd on January 1, 2013 to 3.8% and is imposed on all wages and self-employment income. As of January 1, 2013, the Medicare tax expands to tax investment income at a rate of 3.8% of net investment income for individuals with incomes in excess of $250,000 for a joint return, $125,000 for a married taxpayer filing separately, and $200,000 for single individuals. These thresholds are not indexed for inflation, resulting in more people being affected over time. Net investment income includes gross income from interest, dividends, annuities, royalties, and rents. In addition, net gain attributable to the disposition of real property (other than real property held in a trade or business) is subject to this tax. The impact of the tax on income from investments as well as the disposition of real property is significant. Although Medicare tax assessed on self-employment income is deductible, the Medicare tax on net investment income is not deductible. Real property rents are subject to the Medicare tax unless the rent is derived in the ordinary course of a trade or business such as the operation of a hotel. Investors in real estate should review the active real estate investors’ rules to deter-
Mayor Lee also announced an agreement between the Warriors and UNITE HERE Local 2 to provide a fair process for workers to choose union representation at the food service/hospitality outlets at the arena. In addition, the agreement will ensure that workers at the Oracle Arena can preserve their jobs when the San Francisco facility opens. UNITE HERE Local 2 represents more than 12,000 food service and hotel employees in San Francisco and San Mateo. “We intend to work with our neighbors, and with the city, to put forward the best possible project,” said Warriors President and CEO Rick Welts. “We recognize the importance of the location. We look forward to creating the most beautiful sports and entertainment complex in the nation, and to bringing people closer to the Bay in this beautiful waterfront location.”
About the Author Carol Horn has been a member of CREW SF since 2006.
mine if they could avoid this tax by an active classification. Active real estate investors need to spend more than one-half of their time specifically in the real property trades or businesses (out of their total trades or businesses). In addition, the materially participating taxpayer needs to perform more than 750 hours of services in real property trades or businesses during the tax year. Real estate investors need to consider the possibility of making an election to treat all interest in real estate as one activity, thereby aggregating all real property interests into one trade or business. If the trade or business is a passive activity, the Medicare tax applies to income received by individuals meeting the income thresholds. Passive investors in a trade or business operated within a limited liability company, partnership, or S corporation is not subject to self-employment tax because the investors are not active in the business. However, if passive investors attempt to argue that they are not passive to avoid the Medicare tax, passive investors will be subject to the selfemployment tax if their interest is operated via a limited liability company or general partnership. Under present rules, investors of real property used in a trade or business by an S corporation can avoid the investors’ Medicare tax on their income if they can argue that they were actually active and not passive investors. Unlike partners in a partnership, the passive investor’s argument as an S Corporation shareholder will not subject the investors to the self-employment tax. It is important to note that the Medicare tax excludes from the definition of net investment income any item taken into account in determining self-employment income. Thus, a taxpayer should never pay both a self-employment tax and the new Medicare tax on the same stream of income. (continued on page 5)
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(continued from page 4) The Medicare tax applies not only to investment income, but also to income derived from the sale or exchange of capital assets. The sale of real property may produce capital gains for an investor. Capital gains are incurred if the investors of the real property sell the real property for more than they invested into the property (the property’s basis). Upon disposition of real property and if the income thresholds are met, the gain attributable to the disposition of the real property is subject to the Medicare tax. For the most part, high-income investors with investments that produce income either from operations or sale are subject to the Medicare tax. For investors continuing to hold real property for investment, they may wish to reassess the structure in which they hold the real property.
About the Author Elizabeth Leet Jackson is an attorney in the Corporate Practice Group of Downey Brand LLP. She specializes in business, tax, and real estate matters.
The Delegates Corner Welcome to a new year and a new section in The View – The Delegates Corner. As our chapter delegates, Nancy Lundeen and I will be bringing you news and information from CREW Network with every issue of The View. We will be the liaisons between CREW Network and CREW SF members. Our primary goal is to expand awareness of the resources, opportunities and leadership provided by CREW Network. While many of you may know that we are part of an organization with over 8,000 members and 76 chapters, you may not know that CREW Network offers a wide variety of tools and resources to members nationwide. For example, CREWbiz is not only where you renew your membership, but it is also a database that can be used to search for CREW members nationwide. Looking for a new job? Visit the Career Center on the CREW Network website to search a national and local database and to find current tips and perspectives for job seekers. CREW Network has many resources designed to advance your career in commercial real estate. So check back here each quarter; we’ll keep you up to date on CREW Network news and ways to get the most from your membership.
About the Author Tara Hardesty has been a business owner since 2005 and is currently the co-owner of The Marketing Method Group, a firm providing strategic marketing programs for real estate and related companies in the Bay Area.
Spotlight on Community Affairs Team After attending a CREW SF luncheon and meeting some of the members, I was excited to join CREW this past January. Not only was I welcomed with open arms, but I also was highly encouraged to participate in committees. I jumped right in and joined the Membership Committee and Community Affairs Team, and I serve as the liaison between the two committees. My interest in joining the Community Affairs Team was to help other women in commercial real estate develop by broadening their careers through mentorship and community outreach, and that’s just what we do. We help the community, such as the Habitat for Humanity project in Daly City where we took time from a work day to assist in constructing 36 affordable homes. We help students expose themselves to the different aspects of commercial real estate through our UCREW program. It’s important for students, especially women, to know about the world of commercial real estate and what CREW can offer them with regard to networking and resources. And, most importantly, we help each other become more knowledgeable and successful by providing a Scholarship Program to our members. Professional development is fundamental to CREW’s mission. We understand this, and therefore provide an opportunity to our members to receive a scholarship for course training and certification to further their careers. As Chair of the 2012 Holiday Auction, I’ve had the opportunity to reach out to key members and other supporters of CREW SF within our industry. Proceeds of the auction go to the CREW Foundation, a unit of CREW Network focused on building opportunities for women and girls in commercial real estate through educational outreach, scholarship and mentoring programs nationwide. I experienced what CREW Foundation can do first-hand when I attended my first convention this year in Chicago. The Foundation provided scholarships for several students to attend the convention. The mentoring program was also highlighted. Joining CREW has been so rewarding in just the first year that I’ve participated. I am proud to be a member of the Community Affairs Team and CREW SF, and look forward to continuing my commitment to the organization and working with a great group of industry leaders About the Author Christine Cruz is a Property Manager at Crocker Plaza Company. She has managed the McKesson Plaza Building at One Post Street for Crocker Plaza Company for seven of the past 10 years she has worked for the firm.
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Recent MOB Sale Transactions
the end of 2012. The Federal Reserve Board added that it would undertake further measures if necessary until the economy strengthens and labor market conditions improve. The Federal Open Market Committee issued interest rate guidance as well, maintaining a zero to one-fourth point federal funds rate at least until mid-2015.
Property Name
City, State
Sq Ft
Sales Price
$/Sq Ft
East-West Medical Center
Austell, GA
41,402
$9,400,000
$227
Centre Medical Plaza
Chula Vista, CA
74,894
$24,600,000
$328
Tempe St. Luke’s Medical Building
Tempe, AZ
59,808
$8,690,000
$145
Financing will remain abundant over the next year for institutional-grade medical office buildings in primary markets. This segment is dominated by life insurance companies, which, as of late August 2012, were pricing new seven- to 10-year loans in the high-3 to mid-4 percent range. Life companies, however, maintain strict lending criteria, limiting their scope almost entirely to top-tier, on-campus deals.
Facey Medical Building
Santa Clarita, CA
20,576
$4,700,000
$228
La Palma Medical Buildings
La Palma, CA
58,812
$7,855,000
$134
Wellmont Health System
Abingdon, VA
30,000
$9,100,000
$303
COPC Medical Building
Columbus, OH
28,770
$5,225,000
$182
Boynton Beach Medical Pavilion
Boynton Beach, FL
28,286
$6,420,000
$227
Emerson Medical Plaza Building 2
Jacksonville, FL
34,000
$13,260,000
$390
Bellwood General Hospital Med. Ctr.
Bellflower, CA
36,827
$4,840,000
$131
MedExpress Portfolio
Morgantown, WV
42,001
$12,987,000
$309
Okatie Outpatient Center
Okatie, SC
47,114
$9,290,000
$197
National banks and large private sources have stepped up financing of high-quality properties that fall just outside of the institutional arena. Maximum leverage for these deals tops out around 70 to 75 percent, while all-in lending rates fall between 4.25 and 5.5 percent, depending on tenantcredit characteristics and lease terms. CMBS debt has reemerged as an alternative in the medical office market, with interest rates starting around 4.5 percent and possibly going as high as 5 percent.
CREW Connections
CREW connections prove to be as vital as ever with business being referred directly between members. San Francisco optometrist Amy Tran enlisted the help of CREW SF President-Elect, Helen Duong of Boston Properties, when she was ready to open her own office in Mission Bay. Investors seeking financing for smaller Class B/C deals in non-core locations generally rely on regional and community banks. Within this segment, borrowers may be able to leverage existing bank relationships to secure three- to five-year loans at all-in rates between 4.5 and 5.5 percent. While investor demand for small, aging medical office properties has softened, more owner-users, who can often secure SBA loans, have stepped up to the plate.
About the Author Vince Schwab is a Senior Vice President of Investments in the San Francisco office of Marcus & Millichap Real Estate Investment Services. Coauthor, Kirsten Fletcher is an Associate on the Schwab Investment Sales Team at Marcus and Millichap Real Estate Investment Services.
CREW SF members Michelle Jones of RIM Architects and Lora Estabrook of CB2 Builders were both contacted by Duong for the 800 square foot tenant improvement project. Collaborating with Estabrook on cost modeling for the project, Jones shares that, “Referrals through CREW members have been a tremendous asset to our business. Not only have personal and professional relationships developed, but client referrals have provided us with opportunities for new projects that may not have occurred without the introduction...CREW members are truly supportive of each other.” Tran is currently negotiating her lease and will definitely be in good hands once the project moves forward.
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CREW SF Thank You Sponsors 2012 Luncheon Without our sponsors’ support, CREW SF would not be as successful as it has been in 2012! To demonstrate our “from-thebottom-of-our-hearts” appreciation to our sponsors, we invited all 2012 sponsors and committed 2013 sponsors to join us for a fun and relaxing lunch at the Waterbar on the Embarcadero. Thank you very much to all 2012 sponsors, and we look forward to garnering your support in 2013!
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1 Helen Duong (Boston Properties) & Lora Anderson (Anderson AV) 2 Siobhan Vignoles (Swig Company) & LuAnn Lane (Pivot Group) 3 Gina Pieroni (The Mohawk Group) & Samantha Low (Hathaway 4 5 6 7 8
Dinwiddie Construction Company) Sponsor Lunch at the Waterbar Debra Leifer (Page & Turnbull), Heather Bosanac (The Registry) & Nancy Lundeen (Allen Matkins) Jeff McDonald (Andersen AV) & Helen Duong (Boston Properties) Peter Back (Boston Properties), Debra Leifer (Page & Turnbull) & Chris Snyder (The Mohawk Group) Peter Back (Boston Properties) & Valerie Concello (Mohr Partners, Inc)
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director OF communications
meet THE
BOARD
president Helen Duong | Lease Administration Manager Boston Properties, LP Helen has worked in the commercial real estate industry for over 30 years. She works for Boston Properties as a Lease Administration Manager and is responsible for administering leases for approximately 5 million square feet of office and retail space throughout the SF Bay Area. president-elect CREW NETWORK delegate Nancy Lundeen | Partner Allen Matkins Leck Gamble Mallory & Natsis LLP Nancy is a partner in the law firm of Allen Matkins Leck Gamble Mallory & Natsis, LLP. She is skilled in the full range of real estate transactions, including the purchase and sale of real estate, real estate finance, commercial leasing (including office, retail and industrial leasing), and loan workouts. past president Valerie Concello | Managing Partner Mohr Partners, Inc. Valerie is the managing Partner of the new San Francisco office of the national tenant brokerage firm Mohr Partners. Formerly the owner of her own firm, Ronin Commercial Real Estate, she has over 20 years of experience representing tenants in all aspects of commercial real estate. treasurer, cfo Jeanne Madden | Regional Controller Boston Properties, LP Jeanne has worked in the commercial real estate industry for over 15 years. She is currently the Regional Controller for Boston Properties and was previously the CFO for Mission Bay Development Group and VP of Operations at Catellus Development. secretary DIRECTOR OF MEMBERSHIP Laurie Gustafson | Stein & Lubin LLP Laurie practices law with Stein & Lubin LLP, specializing in commercial real estate, including real property acquisitions and dispositions, leasing, financing and development. Laurie has over 25 years of experience in complex local, multi-state and international real estate and finance transactions, including office, retail, restaurant, shopping centers, industrial, rural, infrastructure and mixed-use projects.
Trish Kuo Beckman | Senior Associate Field Paoli Architects Trish is a Senior Designer and Project Manager with Field Paoli, a San Francisco based architectural design practice with specialties in retail center design, mixed-use developments and community facilities, as well as urban and transitoriented design. In her 10th year with the firm, Trish is responsible for many of the firm’s largest projects. Prior to Field Paoli, Trish was a designer at Heller Manus Architects. In addition to her participation in CREW, Trish is an active member of International Council of Shopping Centers (ICSC), having lead roundtable discussions at the annual CenterBuild conference for the past three years focusing on issues relevant to the retail industry. director of sponsorship Lora Estabrook | Director of Business Development CB2 Builders With over 35 years in the commercial real estate and related industries, Lora brings a wealth of knowledge and expertise. She has been a business development consultant for premiere general construction firms in the San Francisco Bay Area for many years. Her dedication, honesty and integrity are integral parts of her personal and professional mantra. director of community affairs Alaine Ravens | Business Development Manager First American Exchange Company Alaine Raven is the Business Development manager at First American Exchange Company. Alaine has significant experience in complex 1031 exchange transactions, including deferred, reverse, build to suit, and personal property transaction, working on deals up to $100 million+. Alaine’s exchange expertise has spanned 20 years and thousands of closed transactions. Her focus is helping clients strategically build and maintain wealth through real estate. director of programs Lisa Bottom | Principal Gensler Lisa is a Principal in the Workplace 1 Studio of the Gensler San Francisco Office. With 34 years of experience in commercial design, Lisa was a founding Principal of Bottom Duvivier Architecture and Design for 13 years prior to joining Gensler in 2005. Her current responsibilities at Gensler include serving as the Firmwide Co-
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(continued from page 8) Leader of the Workplace (Office Interiors) Practice, and as the Regional Leader for the Product Design Practice. She is also the regional sponsor for G-Serve, a Gensler initiative to give back to the communities where Gensler offices are located. She lives and works in San Francisco. CREW NETWORK delegate Tara Hardesty | Principal The Marketing Method Group Tara has been involved with strategic marketing for shopping center developers for over 18 years. An entrepreneur at heart, Tara has been a business owner since 2005 and is currently the co-owner of The Marketing Method Group, a firm providing strategic marketing programs for real estate and related companies in the Bay Area. Prior to becoming an entrepreneur, Tara was the VP of Marketing, West Coast at Madison Marquette. CREW NETWORK FOUNDATION CHAPTER CHAMPION Gabrielle Tierney | President Tierney Consulting Group Gabrielle consults globally with retailers on expansion strategy, development process improvement and multi-unit asset management. She also serves as a part-time executive for early stage retail companies. Gabrielle was formerly with McDonald’s and Starbucks Coffee, most recently heading up store development for Starbucks Greater China (including work in Taiwan, Hong Kong and South Korea).
meet THE
leads
membership team lead Stacie Goeddel | Partner Holland & Knight LLP Stacie is a partner in the law firm Holland & Knight LLP. Stacie’s practice involves transactional commercial real estate, including acquisition and disposition, financing and development of real property, with a specialty in domestic and international mixed-use developments. communications team lead Laura Scripture | Project Manager Broadmoor Partners, LLC Laura is a third-party commercial construction manager for Broadmoor Partners. Her responsibilities include coordinating contractors, managing budgets and holding everyone to a
schedule to ensure client happiness. Laura has seven years of experience in construction project management. programs team lead Lada Kocherovsky | Associate Principal Page & Turnbull An Associate Principal and architect with Page & Turnbull, Lada leads projects focused on innovative integration of new architecture into existing historic structures. Lada’s work includes projects at the University of California Berkeley and Stanford University, restoration of Julia Morgan’s Hearst Social Hall at Asilomar Conference Grounds in Pacific Grove, and the $110 million adaptive reuse of several historic buildings at the Presidio of San Francisco for the Walt Disney Family Museum. sponsorship team lead Samantha Low | Project Manager Hathaway Dinwiddie Construction Company Samantha is a project manager at Hathaway Dinwiddie Construction Company, a Californiabased construction company with its headquarters in San Francisco. With over 13 years of experience in commercial construction practice, she has worked on many types and sizes of projects, such as the Philadelphia Eagles Football Stadium, law firms, financial firms, lobby renovations and technology firms. She is dedicated and committed to every project she works on and understands every project is unique and has its sensitive requirements. That is why she loves what she does! In addition to her volunteering efforts at SPCA and Glide Memorial Church, Samantha enjoys British riding and golfing.. community affairs team lead Andrea Tobias | Marketing Communications Manager BCCI Construction Company With over 11 years of industry experience, Andrea has developed a thriving career as a marketing and business development professional within the world of commercial real estate. Her passion for public relations, advertising and business development strategies are directed towards helping companies establish brand recognition and cultivate key relationships in the marketplace. Andrea currently works for BCCI Construction Company, a leading commercial general contractor serving the Greater Bay Area. In addition to her professional responsibilities, Andrea enjoys golf, wine tasting, Giants games, geeking out on social media and volunteering at the San Francisco Food Bank.
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Secrets to a Successful Project: Let’s Build a Few Hospitals © 2013 Theresa Ashby, Consultant, Theresa M. Ashby, LLC When an organization has grown to the point that it decides to invest money into a project, like a hospital, it is important to understand there are big challenges—but even bigger opportunities. The organization should always look to gain a competitive advantage through the planning and execution phases of any project. The way to accomplish this goal is through managing the scope, costs, schedule and quality of the project. Without properly managing these four components, the project will deteriorate into a nightmare and cost the organization millions of dollars. Fundamentals Prior to any building project, certain steps must be taken: finding the best location, securing a funding source, and getting those wicked, critical governmental approvals. For the planning of a hospital, there are four integrated components: Design, Construction, Licensing, and Opening. Integrating these four components requires a collaborative enterprise among and between the architects, contractors, vendors, hospital leadership and staff, and physicians – a notable difference between building hospitals and other types of buildings. When each of these components is managed as integrated work, there is a greater chance of accomplishing the goal: licensing by the Department of Public Health. Leading a hospital project is more than designing wonderful architectural aesthetics and constructing the brick and mortar; it is about people. There are literally hundreds of people involved throughout the entire spectrum of the project, from beginning to end. And while at times it may feel like “herding cats,” it is really more like being a conductor of a symphony – getting the right people in the right chairs and playing the right note, and when it all comes together it makes beautiful music. No one instrument can have the power of many. Even when the wrong note is played, the trust and collaboration that people have helps overcome it and the next bar is played perfectly. When designing, constructing, and planning operations of a hospital, there is a long crescendo and then the grand finale — opening day. Design Hospitals are required to provide a wide range of medical services to assist in the diagnosis and treatment of patients. It must also have areas of respite and food services for patients and visitors. A hospital should be designed in a manner that is patient-centric and takes into consideration the needs of the patient’s caregiver. The way a hospital is designed directly impacts safety, operations, and clinical outcomes, all of which cannot be underestimated. Hospitals today are designed with expansion in mind, particularly regarding state-of-the-art equipment and technology. The environment should have warm colors and inviting art with a lot of natural light. Construction Putting the design into action can be as simple as putting the first shovel in the ground or as difficult as preparing to build on an exist-
ing hospital site. On an existing hospital campus, every movement must be a calculated one. The timing of delivery trucks, concrete pours, tractor movement and pounding in the ground must all be highly managed – each step can be an event in and of itself. Vibration tests must be completed so that the eye surgery taking place next door is not affected, the smell of diesel fuel is not blowing into hospital exhaust fans, and water and power are not disrupted. As the hospital begins to take shape, user groups understand their specific areas and responsibilities. Blue prints have been reviewed and are a nice tool to have, but nothing replaces walking through the finished product. At the earliest possible moment, groups are taken through the building so that some adjustments can be made. Most adjustments are made to ensure that areas meet all regulatory and compliance standards, and operational functionality. These groups include: Imaging, Pharmacy, Laboratory, Emergency, Food and Nutrition, Engineering, Surgical Services, Woman & Child Health Departments, and other physicians, nurses, and technicians. Licensing By the time the hospital is ready for licensing, the developer/owner has worked with hundreds of people and walked the building three times a week for six months checking every square inch. The more that potential negative issues are explored, the easier it is to resolve them prior to the all-important licensing visit. In preparation for the licensing visit, every operational issue and building function has been reviewed and tested for feasibility. There is a review of the clinical requirements, patient flow, information technology, path of travel, equipment and testing, disaster planning, and, of course, the food must be sampled. When the surveyors from the Department of Public Health arrive onsite, there is an unbelievable amount of nervousness, the pressure is on, and it is the second most exciting moment in the project (the most exciting soon to follow). This is the moment everyone works toward: with all of the hard work being rewarded with a license to operate. This is a time when everyone gets to show off their dedication and demonstrate how they are going to serve those who need hospital services. The End of the Beginning: Opening Day This is the most exciting part of the project for everyone. Opening day is truly when the building now has a purpose as all of the planning and preparation comes to fruition. On the first day of hospital operation, staff and doctors will save lives, deliver babies, and help families make tough decisions for their loved ones. What other real estate project can make that statement?
About the Author Theresa M. Ashby, Ph.D. has been instrumental in orchestrating and directing operations, and planning and collaborating with the architects and contractors for the opening of three medical centers representing a combined $1.7 billion capital investment. Leading these mega-projects and the teams has allowed Theresa to be a consultant who coaches more than directs and allows people to grow from the insights that they glean from working alongside her. Theresa is a member of CREW Inland Empire.
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Word from our President Helen Duong, Boston Properties, LP
Mark Your Calendar Evening Networking Creative Abstractions! Champagne, Chocolate and Art February 13 | 5:30 PM - 7:30 PM Transparent House, Art Gallery
CREW SF Luncheon Panel Discussion on History of San Francisco Development March 13 | 11:30 AM - 1:30 PM San Francisco City Club
CREW SF Brown Bag Series Real Estate for Dummies April 10 | 11:30 PM - 1:00 PM Schiff Hardin (conference room)
CREW SF UCREW Event University Outreach Program April 11
CREW California Conference State-wide CREW Event April 18 - April 19
Membership Madness April 24 | 5:30 PM - 7:30 PM TBA
CREW SF Luncheon Senior Housing in San Francisco May 8 | 11:30 AM - 1:30 PM San Francisco City Club
Networking Event Bowling May 22 | TBA
J.K. Rowling once wrote in Harry Potter and the Chamber of Secrets: “It is our choices, Harry, that show us what we truly are, far more than our abilities. Our choices make us who we are.” Last October at the CREW Network Convention in Chicago the theme was about “choices”. This theme resonates with me because all of us here at CREW SF chose to be part of this organization. • We chose to become a member of CREW SF to expand our personal and professional networks in a community of women who are leaders in their field. We are so fortunate to have such amazing volunteers as part of our organization... 64% of our members have between 11 to 30 years in the industry. Pretty impressive! • Our sponsors, such as Mariak Industries, Mohawk Group, Anderson AV, Grosvenor, BCCI Construction, RN Field and Golden State Carpet, all Gold sponsors for 2013, chose to monetarily support CREW SF so that we can have excellent programs. Shaunti Fehlhahn, a veteran of Capitol Hill and Wall Street and a best-selling author, will kick off the year with a discussion in January about Leadership: The Unwritten EVENING NETWORKING Rule of Navigating the Workplace. Wednesday, February 13chosen me to be your leader for 2013. And while I may • Lastly, you have elected me, 5:00 pm 7:00 pm be the bus driver, you are all my passengers who will help me steer the course for Champagne and Chocolate where we want CREW SF to go, and what we want to accomplish in 2013.
Tasting
My vision and goals for 2013 are to set a road map for the next 3-5 years for making CREW SF a Gold Standard CREW Network Chapter. There are four milestones on the way to reach that destination: 1. Quality Membership Our chapter is as strong as its members, and therefore, I am committed to work with our Membership Team to recruit, develop and retain a diverse group of members who are well-regarded in the commercial real estate industry. 2. Membership Opportunities Every chance I get, I will strive to bring people together and allow them to make connections. I will work with our Programs Team to share information and resources to help our members do business locally as well as throughout the U.S. and Canada, including offering high-quality programs on current topics and recruiting engaging speakers, providing professional leadership and development training and promoting networking opportunities. 3. Financial Stability The financial stability of our chapter is the foundation on which its activities and efforts are anchored. We are a strong chapter financially and I will continue to work with our Sponsorship Team to expand that footing in 2013. 4. Stature & Recognition in the Community To reach this Gold Standard, our chapter must have credibility in the community and demonstrate to nonmembers that we are the leading organization for real estate education and programming. I will work diligently with our Communications team to increase our media coverage and with our Community Affairs Team to continue with UCREW, the golf tournament and community volunteer programs to accomplish this goal. These are all goals that we will set on our road map to making CREW SF a Gold Standard chapter. In his book The 7 Habits of Highly Effective People, Stephen Covey wrote: “But until a person can say deeply and honestly, ‘I am what I am today because of the choices I made yesterday,’ that person cannot say, ‘I choose otherwise.’” I look forward to working with all of you in 2013.
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A WORD FROM OUR SPONSOR AND THAT WORD IS... 2013 SPONSORS platinum
gold
EXCELLENCE Boston Properties, a self-administered and self-managed real estate investment trust, is one of the largest owners, managers, and developers of first-class office properties in the United States, with a significant presence in four core markets: Boston, Washington, D.C., Midtown Manhattan and San Francisco. The Company acquires, develops, and manages its properties through full-service regional offices in Boston, New York City, Washington, D.C., San Francisco and Princeton, New Jersey. Boston Properties is well-known for its in-house building management expertise and responsiveness to tenants’ needs. The Company has a superior track record in developing Class-A, Central Business District office buildings, suburban office centers and build-to-suit projects for the U.S. Government and a diverse array of high-credit tenants
COLLABORATATION Silver
Cardno ATC CB2 Builders DFS Green, Inc. GCI General Contractors Gensler Hathaway Dinwiddie Construction Company Hudson Pacific Properties Page & Turnbull Sheppard Mullin Richter & Hampton LLP SSL Law Firm LLP Stein & Lubin LLP The Swig Company Swinerton Builders WRA, Inc.
MEDIA
Anderson Audio Visual is a locally owned and operated business with California offices in Berkeley, San Diego, Costa Mesa, Irvine and Sacramento providing expertise in the areas of video conferencing, audio conferencing, projection systems, plasma screens, overall systems design, architectural support, project management, service and training. Our focus is on design and design/build system integration, from the initial schematic phase to the maintenance of the finished product. We are a reputable and recognized audio visual industry leader, handling the Western United States. Anderson has been providing these services for over a decade in the Bay Area. Last year, Anderson Audio Visual was the largest systems integrator in California proving once again that we are truly a leader in the field. Our clients include corporations, government departments, educational institutions, developers, contractors, architects, engineers and interior designers with a broad spectrum of audiovisual technology requirements. You can visit our website for further information at www.andersonav.com.
The CREW SF Communications Team is looking for: •
Points of VIEW writers: Attend luncheons and let us know what you think.
•
CREW Connection stories: job leads, collaborations, referrals
All submissions are subject to editing for clarity and brevity, unless otherwise noted. ©2013 CREW SF Please send all ideas and articles to The View editorial staff at news@crewsf.org.
THe view editorial staff: Editor Donna Schumacher Editorial Review Winnifred Ward Amy Teutemacher Contributers Vincent Schwab Kirsten Fletcher Donna Schumacher Valerie Concello Carol Horn Tara Hardesty Christine Cruz Elizabeth Leet Jackson Samantha Low Helen Duong
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