The Quarterly Newsletter for Commercial Real Estate Women | San Francisco
The Golden Years by the Golden Gate
3rd Quarter 2013
With Reimbursement Cuts on the Way, Seniors Housing Owners Evaluate Positions Š 2013 Rob Reis, Marcus & Millichap Real Estate Investment Services After several years of ambiguity surrounding the state and federal roles in supporting the cost of seniors housing, some certainty surrounding its future is emerging and will help define the next generation of seniors housing facilities. Although the long-term care component of the Affordable Care Act (ACA) was deemed untenable and dropped from the Act, the Supreme Court’s ruling to keep the overall package in place will enable states to opt into the ACA or forego inclusion. Additional deals to avoid the fiscal cliff and a lack of a compromise on the sequester provides seniors housing operators with shrinking reimbursement schedules. Skilled nursing operators will feel the brunt of the budget cuts because a higher percentage of their revenue comes from Medicaid. Overall, tightening budgets will continue to push the market toward a pay-for-performance model. Operators will need to track patient outcomes more closely and maintain medical records that can be accessed across the industry. Cash-heavy owners will have a considerable advantage when upgrading to the new standards, encouraging some smaller operators to consider exiting the market. Consolidation has been the overriding movement in the market since the real estate boom in the middle of the last decade, a trend that will continue this year as the overall industry moves toward efficiency. Operators with just one or two properties that need significant technology upgrades may find the current environment an optimal time to exit. Cap rates are sell-side favorable and buyers with plenty of capital are scouring the country for the right deals, especially value-add opportunities centered on improving the cost side of the business. Cuts to Medicaid accompanying the sequester will be felt immediately, and future cuts are anticipated over the next 10 years. States that opted into the ACA will have 100 percent of the increase in
Medicaid costs reimbursed initially, and that rate will decline to 90 percent as the program is phased in over time. Outcome-based reimbursements, high entry costs, and available capital create a strong divest environment for small operators. Other owners may consider expanding their portfolios to achieve economies of scale and scope. Operators with a healthy mix of assisted living and skilled nursing assets will be less susceptible to fluctuations in government spending. Seniors Housing Market Highlights Independent Living These age-restricted multifamily rental properties include central dining facilities that provide residents with access to meals and other services such as housekeeping, linen service, transportation, and social and recreational activities. According to the National Investment Center for the Seniors Housing & Care Industry, demand for independent living units will remain healthy in the coming months as more seniors can afford to retire. Occupancy will tick up to 90.2 percent, an annual increase of 70 basis points. This rising occupancy will support an annual rent increase of 2.4 percent to an average of $2,879 per month. During 2012, the number of independent living property sales jumped
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ISSUE HIGHLIGHTS: Point of VIEW - Future of Seniors Housing and Services {P2} meet our new crew sf members {P4} Senior Housing - Recession Tested; Poised for Growth {P6} CREW SF Chocolate Party Photo feature {P7} member success {P11}
(senior Housing continued from page 1) 26 percent, as traditional apartment buyers ventured in search of listings while interest rates were low. So far this year, deal flow has been modest as the major REIT’s sat on the sidelines. The median price in 2012 was $129,500 per unit, down 8 percent from 2011. Assisted Living These state-regulated rental properties provide the same services as independent living facilities, but also include supportive care from trained employees to residents who are unable to live independently and require assistance with activities of daily living. Construction of assisted living facilities will accelerate this year, limiting the pace of occupancy gains. By year-end 2013, average occupancy will climb to 90.4 percent, an annual rise of 30 basis points. Average rents will advance 2.6 percent this year to $3,728 per month. The number of assisted living facilities that changed hands during 2012 retreated by 40 percent, although an abundance of major REIT transactions recorded in 2011 led to the decline. Last year, the median sales price was $162,700 per unit, up 6 percent from the previous year. Skilled Nursing These licensed daily rate or rental properties are designed for individuals requiring 24-hour nursing and/or medical care. In most cases, these properties are licensed for Medicaid and/or Medicare reimbursement. Overall per-day rents in the skilled nursing sector will tick up to $281 per bed this year, 2.2 percent higher than at the end of 2012. Meanwhile, occupancy will inch up 30 basis points this year to 88.5 percent. During 2012, investors in skilled nursing facilities paid a median price of $62,300 per bed, down from $90,200 during 2011. Several large trans-
actions skewed the figures in 2011, so comparisons to 2010 are more realistic in determining trends. Prices are up 18 percent since 2010, when the median price was $52,900. Continuing Care Retirement Communities (CCRCs) These age-restricted properties include a combination of independent living, assisted living, and skilled nursing services available to residents all on one campus. A stronger housing market has yet to yield improving occupancy at CCRC’s, though some traction is anticipated this year. Average entrance fees climbed more than 8 percent last year to $280,000. Occupancy in the sector ticked up to 89.3 percent by year end, a 40-basis-point rise. Development activity in CCRC’s is at a new low as builders wait on the sidelines for operations to improve. At the end of last year, approximately 1,800 units were under way according to NIC MAP, representing just 0.8 percent of inventory. Taken together, these dynamics in the seniors housing industry are leading to greater certainty on the part of many owners when it comes to making hold-or-sell decisions. In general, larger operators have a distinct advantage due to economies of scale in this changing market, and we expect many smaller operators to sell their facilities.
About the Authors Rob Reis is Associate Vice President Investment and Associate Director, National Seniors Housing Group at Marcus & Millichap Real Estate Investment Services.
Point of VIEW - Future of Seniors Housing and Services On June 8, 2013, CREW SF hosted a luncheon focusing on issues regarding seniors housing and services in San Francisco. A distinguished panel of speakers presented different facets of this complex problem. CREW SF member, Julie Jacobson, gives you her point of view regarding the content of this timely topic.
Julie (Frankel) Jacobson My father turns 75 this year, and I could easily tell you 75 things I love about him. But along with all of those great things comes concern as he continues to age. He is single, healthy, wildly independent, middle class, and lives alone in our childhood home in Boulder, Colorado. He taught at a local college until reaching retirement in his late 60s, and although it never occurred to me in previous years, the future of seniors living in this country is now something that occupies my thoughts quite regularly. With celebrities like Dustin Hoffman and Bill Crosby also in their 75th year, my dad is not alone in celebrating this milestone. More and more seniors are living longer today, many until over 100. Although there are many low-income options available to the less fortunate, and beautiful luxury options available for the more affluent community, there seems to be a gap in the midincome range level. Even for those in the upper middle-class, like my dad, rising health care costs will inevitably take a large portion of seniors’ income at some point in their lives, leaving less and less funds for housing suitable to fit their needs. He won’t be able to afford the luxury seniors housing options, and he certainly won’t qualify for any affordable housing. This predicament will mean he needs to take a deeper look at the
exact needs and wants he will require in the next stage of his life. Not all amenities or locations will be available to him, so choices and sacrifices will need to be made accordingly. To help plan for growing seniors living needs in San Francisco and the Bay Area, many developers are studying these gaps and realizing these opportunities. Each new facility seems to have a long waiting list of seniors, and the seniors housing market as a whole is booming. Facilities can’t seem to be built fast enough to accommodate these urgent needs. In the next ten years, I would be willing to bet the supply will better match the demand, and hopefully it comes in time for those who need it most. Especially in the Bay Area, where real estate costs are extremely high compared to the rest of the country, seniors and their families need to plan for the next step in their lives. Organizations like the Institute on Aging, Mercy Housing, On Lok Lifeways, and the Sequoias are all preparing for this influx of seniors. They are serving the Bay Area and beyond, with special attention focused on facility expansion and amenities seniors are seeking. For my dad, right now he’s pretty content living in his small townhouse along the foothills of the Rocky Mountains. We’ll cross the housing dilemma when we come to it, and continue to hope that he has a long, healthy, independent life.
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Bay Lights Ignite: One Part Business, Two Parts Pleasure © 2013 Donna Schumacher, Donna Schumacher Architecture
Perched on a bar stool at Sinbad’s Pier 2 Restaurant with a friend, I sipped a glass of white wine on a warm spring night. Sinbad’s is definitely a touristy establishment with its wonderful view of the Bay Bridge. And that is precisely why I was there— to take in the recently ignited “Bay Lights” project on the Bridge’s western span. Commissioned by Illuminate the Arts and created by Leo Villareal, the “digital campfire” of 25,000 computer-controlled LED lights stretches a staggering 1.8 miles across the Bay Bridge’s western span. Touted as the world’s largest LED light sculpture, Villareal’s abstract light mural of movement and pattern pulses and glides across the span’s north-facing suspension cables. As I lingered in my chair taking in this display, the flickering lights did indeed mesmerize in a way not dissimilar to staring at the dancing flames of a fire. But what does it mean? Is it art, and, if so, is it “good”?
of the Bay Area’s family of bridges, as recognizable as cable cars and the Trans America pyramid. The Bay Bridge, by contrast, has always been the unappreciated child, toiling daily to get the job done with unsung pragmatism. Admittedly, the naughty eastern span of the Bay Bridge has the future on its side, having failed miserably enough in Loma Prieta to require a seismic facelift which may raise its rank in the family beauty contest. But the western span has simply taken us home without fanfare or complaint, and it is, perhaps this very difference that elevates the Bay Lights project beyond mere decoration. Ben Davis, the founder of Illuminate the Arts and self proclaimed “catalyst” for the Bay Lights project, has a day job as the founder of Words Pictures Ideas, a branding and communications firm whose client base includes Cal Trans, and more specifically, the Bay Bridge retrofit. In Ben Davis’s words, upon acceptance of the Webbie awards for Word Pictures Ideas’ work for the Bridge, “Making infrastructure sexy, oh yeah!” Cynics of the Bay Lights project thus might argue that it’s not art, but rather communications and branding meant to market the retrofit that Ben Davis has been hired to promote. (continued on page 9)
As The New Yorker art critic Peter Schjeldahl once quipped in response to disbelievers of Gates, the celebrated Christo and Jean-Claude monumental installation of 2005 in Central Park, “Of course,... it is art,... what else would it be?” Well, for one, it could be theatrical lighting of the sort encountered on countless civic monuments across the world. The website for the Bay Lights project makes a comparison to the 100th anniversary lighting of the Eiffel Tower. Former San Francisco mayor Gavin Newsom proudly boasted that our Bay Bridge installation has more lights than the Parisian display. Touché! But light up the Golden Gate Bridge and one would be hard pressed to consider it art. Pretty, yes, but in the tradition of famous architectural illuminations around the world, it would be a celebration of the monument itself—a spotlight, if you will— making more spectacular an already recognizable icon. Indeed, the top of the Trans America building has a tiny spot of light that changes color and is a constant source of personal entertainment from my balcony. I enjoy it, but I would not call it art. The Golden Gate Bridge is the glamorous and adored beauty
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meet OUR
Janet Burch Vice President, Leasing, Transwestern Janet heads Agency Leasing for Transwestern in San Francisco, specializing in the marketing and leasing of office property on behalf of institutional, corporate, and private owners. She has over 27 years of commercial real estate experience both in the U.S. and Asia Pacific. Sherry Chaumpluke, P.E. Design Engineer / Lead Energy Modeler, ACCO Engineered Systems Sherry is a mechanical design engineer involved in all aspects of the heating, ventilation, and airconditioning design/build process, from project conception through the details of design and field coordination. As the Engineering Department’s Lead Energy Modeler, she has worked on many energy-efficient and innovative projects, and has assisted in obtaining LEED certification for more than 30 buildings in the San Francisco Bay Area. Paula S. Crow Of Counsel, Stein & Lubin LLP Paula has a broad real estate transaction practice which spans more than 30 years and includes acquisitions, financing, and leasing, and public law related to economic development. She brings good legal and business sense to getting deals done, and enjoys all the many personalities she meets in her negotiations.
new members
Mirjam Link Project Manager / Development, Four Embarcadero Center, Boston Properties Mirjam is the Project Manager for Transbay Tower in Boston Properties’ development team. In partnership with Hines, they are developing a state-of-the-art, 1.4 million square foot office tower adjacent to the Transit Center. This new San Francisco landmark will be the tallest tower west of the Mississippi River. They anticipate construction on this LEED Gold Certified project will start this summer and be completed by the summer of 2016. Aislin O’Connor Business Development Associate, US Bank Aislin has been with US Bank SBA Division for the past two years on the business development team. She provides financing for owner-occupied commercial real estate throughout San Francisco and the Bay Area. Karin Schroeter, CIH, LEED AP Senior Project Manager, RGA Environmental, Inc. Karin is a certified industrial hygienist (CIH) specializing in indoor air quality, subsurface investigations, soil vapor intrusion, asbestos, lead, microbial, and any other environmental consulting needs.
Nicole Y. Franklin Business Development Manager, Turner Construction Company Nicole is an ambassador for Turner Construction to the local construction and real estate development community. Her primary role is to develop and cultivate new and existing relationships in core markets, leveraging Turners’ global resources to provide better value to their clients. Jennifer Leung Of Counsel, Stein & Lubin LLP Jennifer is a transactional attorney who has a broad practice handling a wide variety of commercial real estate matters, including financing, acquisition, disposition, and leasing of all types of commercial real estate for lenders, investors, developers, and owners. Before joining Stein and Lubin, she practiced with the law firms of Gibson, Dunn & Crutcher, LLP in Los Angeles and DLA Piper LLP in San Francisco. She also has a Certified Public Accountant license.
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Spotlight on CREW Network Foundation Did you know that we have a charitable arm of CREW Network? Our CREW Network Foundation was founded in 1998 to further support our mission of advancing women in commercial real estate. It is recognized by the IRS as a 501(c) (3) tax-deductible organization. Did you know CREW Network Foundation donations support leading research on women in commercial real estate – reliable statistics that bring to light important facts regarding compensation, diversity, and advancement of women in our industry? CREW Network’s annual white papers and benchmark studies are enlightening and valuable to you and your firm. Take a look at www.crewnetwork.com under “Member Center” and then “Research.” Did you know our goals of career outreach and bringing more women into our industry are facilitated by programs such as UCREW, CREW Careers, and eMentoring? Donations to CREW Network Foundation allow for continued operation and improvement to these programs, which educate women on the career opportunities available in the commercial real estate industry.
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Support is also possible by donating to our Golf Tournament and Holiday Auction events by participating, sponsoring, donating auction items, or bidding high! Point of fact: CREW Network Foundation is the only foundation dedicating its resources solely to advancing women in the commercial real estate industry.
About the Author Gabrielle Tierney, Tierney Consulting Group, Strategic Real Estate Solutions has over 20 years of experience in retail real estate development with McDonald’s and Starbucks, most recently leading the Starbucks store development function in Greater China (which included Taiwan, Hong Kong, and South Korea). She founded Tierney Consulting Group in 2011 to help retailers, new and established, local and global, improve profit while optimally growing their brand through applied strategy, well-tested best practices, and training in real estate development. She loves what she does.
Did you know that we have a scholarship program? The CREW Network Foundation Scholarship Endowment is designed to encourage women to pursue an education that will lead to a career in commercial real estate. The scholarships are awarded to junior, senior, or graduate full-time female college students; and are based on academic excellence. The amount of each scholarship awarded is never less than $5,000. Each scholarship recipient will also be provided with a paid internship at CBRE, Inc., a long-time, major sponsor of CREW Network. Our CREW SF chapter has always been a significant supporter of CREW Network Foundation. Many of our members, including Tina Essegian, Gabrielle Tierney, and Ginger Bryant served as CREW Network Foundation trustees who helped shaped the mission, goals, and programs, and our chapter is usually a significant donor. Please continue the tradition! We’d like our members to be vested in our mission and to give individually to the foundation. Please use this link to make your donation: https://www.crewnetwork.org/Foundation.aspx
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Senior Housing - Recession Tested; Poised for Growth Š 2011 Kathryn Sweeney, Great Point Investors LLC The performance of senior housing properties has been challenged by the worst recession in 70 years and has come out of the ring without a broken bone or black eye. The senior housing properties referenced in this article are the private pay, rental independent living, and assisted living and memory care communities. The typical resident profile in these community settings is an 83-year-old widowed female. While the recent recession (from which we are still recovering) had a major impact on the operating fundamentals of the traditional real estate properties of office, industrial, retail, and multi-family, senior housing remained relatively unscathed. As Chart 1 depicts, occupancy-weighted revenue declined for all real estate types with the exception of senior housing.
necessary insights to promote capital formation. In October 2010, NIC published an Investment Guide for the Senior Housing industry. This comprehensive guide provides any interested stakeholder or those considering entering the sector, with a single source of information to begin their knowledge journey. Assisted living property values, as measured by cap rates, have been less volatile than other real estate types since the recession began. As depicted in Chart 3, the more needdriven assisted living product displays a cap rate trend similar to apartments, maintaining an approximate 300 basis point spread. Cap rate trends for independent living properties, on the other hand, reflected some volatility during the recession. Since the decision to move into independent living is a discretionary one, the move-in pace slowed as seniors decided to remain in their own homes rather than sell into a soft real estate market.
To understand the size of the senior housing industry, Chart 2 illustrates that senior housing (including skilled nursing facilities) is a $240 billion industry, nearly the same size as the hospitality industry. Senior housing, however, is poised to grow quite rapidly given the looming demographics referred to later. We are fortunate to be able to look at senior housing in this way because it wasn’t long ago that there was no data or transparency on the performance of senior housing. Since 2004, the National Investment Center for the Seniors Housing and Care Industries (NIC) has been collecting and reporting rent, occupancy and construction data on the top 31 metropolitan statistical areas (MSAs) in the country. In 2009, NIC expanded its coverage to MSAs numbers 32 to 100. This product, known as the NIC MAP Data and Analysis service is available to subscribers from the NIC organization (www.nic.org) NIC’s mission includes facilitating informed decision making and the NIC MAP service provides the
The private equity real estate index published by National Council of Real Estate Investment Fiduciaries (NCREIF) has shown senior housing properties owned by institutional (continued on page 10
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1 Caroll Moya of Dome Construction and Debra Leifer of Page & Turnbull 2 Krista Mollion of Transparent House 3 Chocolate provided by XOX Truffles 4 Samantha Low of Hathaway Dinwiddie Construction Company and Andrien Dupitier of Nespresso USA 5 Melissa Holmes of Holmes & Associates and CREW SF audience 6 Tunde Munz of Guttmann & Blavoet and Michelle Jones of RIM Architects
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CREW SF Chocolate Party The evening before Valentine’s Day was the picture-perfect night to have the Chocolate and Champagne Tasting, a sold-out event at Transparent House. Located in the charming Jackson Square, Transparent House provided an intimate, impeccable venue, with high ceilings and two stories of intriguing architectural details. The guests, attired with hints of pink and red (as if there were a dress code), had an opportunity to try three different types of XOX truffles and two selections of champagne. Nespresso Americas, the event sponsor, also arranged a tasting of 20 varieties of espresso, including a delicious decaffeinated variety. Every cup was made to order. In the midst of the tasting, photographer Laura Kudritzki was on hand to update professional head shots for the guests. The event was sensational and sweet (literally). It was an absolutely ideal night to unwind from the work-day stress, catch up with friends, and network with colleagues. Who could ask for more?
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The Delegates Corner As an organization completely run by dedicated volunteers, CREW SF is always looking for ways to show appreciation to those who spend their valuable time making the organization a success. This year, the Delegates have implemented a new program for our leadership team - i.e., our Board Members, Team Leads and Team Chairs. Specifically, we are presenting a series of trainings focused on helping our leaders grow, professionally and personally. On March 18, we had a workshop on “Mistakes to Avoid as a Leader,” which involved some role playing and a lot of brainstorming on challenges that are commonly faced as a leader in a volunteer organization. On May 6, Social Fluency, an organization focused on “The Art and Science of Communication,” trained 12 CREW SF leaders in “Body Language for Leading Change, Negotiations and Building Rapport and Team Building.” Attendees learned, among other things, the best way to build rapport using body language, such as the conversational canvas stance, an open body posture and hand movement and placement. Social Fluency is a pioneering social skills training program that helps people develop rewarding relationships that lead to success in life and business. Their team of trainers and coaches include psychologists, highly credentialed executive and life coaches, as well as training and organizational development experts. The program offers individual classes for those interested in learning and growing their social skills. Participants in the May 6 workshop had a fun time and came away with some very practical tools. The focus of the third training in the series, to be held in the fall, will be public speaking, something we all do and many of us find challenging. The training will be designed to help people give effective presentations and manage the nerves associated with public speaking.
Pankow Builders Completes the First Building at any University to Be Certified Net Zero Energy under the Living Building Challenge Jess S. Jackson Sustainable Winery Building at UC Davis Showcases Sustainable Building Technologies and Practices © 2013 Kristina Owyoung, Charles Pankow Builders Pankow Builders and Siegel & Strain Architects recently completed the 8,500-square-foot Jess S. Jackson Sustainable Winery Building (the “JSWB”) at UC Davis. The JSWB is expected to be the first building at any university to be certified Net Zero Energy under the Living Building Challenge and only the second such building in California. This building will use various green services to provide sustainable resources, such as water harvesting and filtration and power production, to the adjacent Teaching and Research winery and August A. Busch III Brewery and Food Science Laboratory. The JSWB will house equipment and systems that will allow the winery, brewery, and food-processing facility to be the world’s first self-sustaining, near zero-carbon footprint teaching and research facility. Together, Pankow Builders and Siegel & Strain Architects delivered proven passive design strategies—with first-ofits kind sustainable design and construction practices and products—to deliver a high-performance, completely passive building. “One key to a building’s long-term value is its ability to adapt to future uses,” said Chik Brenneman, Winemaker and Winery manager with UC Davis. “The JSWB was designed and built to be a living building, leading by example as one of the lowestenergy buildings in the UC system.” (continued on page 11)
If you’re interested in learning more about any of these programs, contact me at tara@themarketingmethod.
About the Author With over 20 years of experience in creating, implementing and overseeing strategic marketing programs that deliver measurable and sustainable results, Tara Harding started Monnig Marketing, a consulting firm, in 2004 and now runs The Marketing Method Group with partner Darren Iverson. The Marketing Method Group specializes in strategic marketing planning and implementation for clients in the real estate industry. A partial client list includes TMG Partners, Colliers International, Whole Foods Market, CBL, Cushman & Wakefield, Ellis Partners, and City Center Realty Partners.
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Word from our President Helen Duong, Boston Properties, LP I am happy to report that CREW SF has a new mission statement: “To Advance and Develop Women as Leaders in the Commercial Real Estate Industry”. Our new mission statement and strategic plan will set a course for our chapter for the next three to five years. Although the committees are already working towards accomplishing these goals and objectives, we will need to be diligent to continue on this course. Our strategic plan is aligned with the objectives of a Gold Standard Chapter set by CREW Network. There are many opportunities to get the most out of your CREW SF membership and also to accomplish our strategic goals: •
Attend the CREW Network Convention and Marketplace in Dallas, TX on October 9-12. I cannot reiterate enough the benefits of attending the convention. You’ll get to meet over 1,000 fellow CREW members from all over the United States and Canada. The energy, the connections, the networking, and the well-known speakers are amazing!! I encourage you to sign up today for the CREW Network Convention.
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Attend wonderful CREW SF events such as the Public Utilities tour in June and the America’s Cup event and the golf tournament at The Claremont Country Club, both in August.
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Participate and provide your ideas for the 2014 Programs brainstorming session scheduled for September 18, 2013.
I encourage you to participate in these events that your board, team leaders, and committee members have worked so hard to plan for our chapter. I am so proud and ever appreciative of all the hard work that they do to make our chapter a Gold Standard Chapter. Have a great summer and continue to support your CREW SF chapter. (Bay Lights continued from page 3) The privately funded Illuminate the Arts (the organization’s name has a definite specificity) raised a whopping $6 million for this project and has $2 million more to go. By capitalizing on a blurring between art and spectacle, between art and design, and between art and investment, they have created a work that is accessible, practical, and, dare I say, sexy, too. The revenue generated for the City from increased tourism will be impressive, and more than one patron of the piece has used the word “investment” in describing this installation that will be on view for two years. Like the elite condominiums in Manhattan, where art is incorporated into high end developments to lend an air of caché, is it so wrong-minded to disseminate the fine arts to a broader audience by making it financially feasible? Let’s face it, what is not to love about twinkling lights over the Bay, particularly with the America’s Cup on the way? In the tradition of the public artworks of Christo and Jeanne-Claude, it is the orchestration of the event that is as important as the work itself. The grand, and often exhaustingly protracted, effort of obtaining approvals, securing funds,
fabricating the work, and, ultimately, public viewing of the piece is what lends an air of social practice to the work, and is a large part of what makes it so successful and inspiring. The execution of Davis’s catalyzing idea to conceive the bridge as a canvas is perhaps even more multi-dimensional than Davis could have imagined. The verticality of the suspension cables and the horizontality of the waves in the water weave together the man-made and the natural, the kinetic and the static. That is what mesmerizes. The light mural itself is a means to that end, and as such is important, but secondary to the effect. This is not to undermine the beauty of Villareal’s imagery, which is most powerful when kept minimal, morphing form onto the architectural scale to create an elegant filmic abstraction. What makes the Bay Lights authentic to San Francisco is not its allusions to banks of fog and schools of fish (which border on the sentimental), but the unique combination of electronic media skills, artistic vision, budget generosity, and creative entrepreneurship that are the region’s hallmarks. In this epicenter of
business innovation, where traditional boundaries between creativity and commerce intertwine, the Bay Lights seem a natural manifestation of what we do well. Certainly, the project walks the precarious (and assumed-to-be-at-odds) line between art and business, but does so free of charge, every night until 2:00 a.m., for the next two years. Rather than questioning the project outright, go grab a slow drink at the Americano and allow yourself the time to see what it’s all about.
About the Author Donna Schumacher is the founder and creative director of Donna Schumacher Architecture, which specializes in commercial, residential and community interiors incorporating expressive “signature” elements. This article was originally posted on TraceSF.org, an online blog featuring the arts and design of the Bay Area.
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investors to have out-performed the NCREIF Property Index (NPI) and the apartment component of the NPI in the threeand five- year time periods. The one-year time period shows apartments yielding higher returns than senior housing due to the attraction of apartments by core institutional investors. Of particular interest is that the income component of the total return for senior housing has outperformed, which doesn’t always hold true in other “niche” investments. (See Chart 4) Some wonder what the demand drivers are for senior housing properties and how demand may change in the future. For independent living residents the decision to move is typically a lifestyle decision made by the senior. Decision factors typically include: 1) loss of a spouse, 2) desire for easier lifestyle, 3) one spouse’s health is diminishing, 4) a desire for more social connections among peers.
the future? (With the number of 75+-year-old seniors soon projected to grow by 3x the growth rate of the overall population (Chart 5), the looming demand for the product poses exciting opportunities for investors. (Chart 6) While liquidity was severely impaired during the recession, new construction declined to 2 percent of current inventory vs. 4.4 percent at its peak in 2008. The looming increase in demand combined with the decline in new supply should provide for strong income growth for owners and development opportunities for developers.
For assisted living and memory care the decision to move is typically influenced by the adult children for one or more of the following reasons: 1) living at home is becoming increasingly unsafe, 2) the senior is forgetting to take medications at the prescribed intervals, 3) the senior is having difficulty bathing, dressing, ambulating, 4) the senior is finding it more challenging to cook, perform household chores and is living an increasingly isolated life. In order to meet the needs of seniors in the future, senior living operators will need to adjust to a more custom approach to providing services. A focus on wellness and vitality will be key to attracting residents; likewise look for more affinity groups living together. Religious organizations have been successful affinity groups in the past, but these will expand to alumni associations, career organizations (i.e., retired teachers, military, etc.) and will include a focus on aging well and improving the quality of life. All of this is quite impressive, but what does it mean about
About the Author Kathryn Sweeney is Principal with Great Point Investors LLC. Together with her partners, Joe Versaggi and Gary Schwandt, Kathryn is raising capital for a comingled senior housing fund. In addition to her senior housing role with Great Point, she also serves on the firm’s Investment Committee. Kathryn has more than 15 years of experience in developing and executing senior housing investment strategies. She is a member of NEWiRE Boston.
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Member Success SF CREW member Carol Horn has been managing commercial real estate properties for over 30 years, prior to which she was on the development side. After 16 years serving as General Manager for Amerimar Hamm’s Management Co., Inc. this spring, she joined PMI Management, LLC. Horn now manages about 296,000 gross square feet, which is 100,000 more than she managed previously. When Amerimar sold the Hamm’s Building in 2012, the purchaser brought in its own staff. Horn took some time off, and it was CREW Holiday Party that brought Horn to PMI. “Subsequently, my new boss, Asset Manager Chris Economou, mentioned to Kathy [Mattes] what he was looking for in a manager. She referred him to me, and things worked out from there.” As the sole property management employee in PMI’s San Francisco commercial building portfolio, Horn manages six buildings, four of which are in the SOMA area near the ballpark, and two of which are in the Jackson Square area. CREW SF members Jenny McNulty and Kathy Mattes received quite an honor during San Francisco Small Business Week earlier this May. Urban Solutions, a San Francisco-based non-profit organization, was awarded The San Francisco Small Business Network’s 2013 Outstanding Achievement Award in the category of Small Business Advocate. As cited by The Registry, Jenny McNulty, who just concluded 11 years at Urban Solutions (includeing the last eight as executive director), reminds us that “Small businesses bring character to our neighborhoods.” Urban Solutions’ Board Chair, Kathy Mattes, director of asset services at CBRE, has also been named one of “The Most Influential Women in Bay Area Business” by the San Francisco Business Times. Founded in 1992, Urban Solutions has helped nearly 5,000 small businesses with business development, job creation, loan packaging, leasing, marketing, and environmental sustainability services throughout the Bay Area. It is best known for its work in organizing small businesses to revitalize San Francisco’s Sixth Street area in the South of Market area and Fillmore Street in the Western Addition. CREW SF member Tracy Everwine assumes the role of interim executive director of the organization on July 15. CREW SF member and VIEW Editor-in-Chief on the Communications Committee, Donna Schumacher has been awarded a CREW SF Scholarship Award of $1,200. She plans to use the funds to complete her LEED AP Prescriptive Credentialing for Interior Design and Construction (ID+C), as well as to to attend the AIA Design Conference in Monterey in September. The LEED AP (ID+C) certification will complement the direction of her architecture practice, Donna Schumacher Architecture, as it continues to steer toward commercial interiors with a focus on expressive “signature” elements. The Monterey
AIA Conference is praised as the most prestigious architectural design conference in the United States. Donna will use the conference as a platform to expand on her architecture writing, something she has been exploring during her tenure as the Editor-in-Chief of the VIEW. Donna exclaims a hearty “Thank You!” to CREW SF Scholarship for this assistance on these next steps for her career. The Scholarship Committee wants everyone to keep an eye out for updates about the CREW SF Scholarship opportunity. What next step would you like to take? Let CREW SF help you, too!
About the Author Jennique Mason is Director of Property Management at Cardiff Mason Development Inc.
(continued from page 8) Davis has a cooling-dominated climate with extreme summer temperatures that can reach 110° F. Design strategies for making the JSWB a self-sustaining structure encompassed building orientation, building form, and a super-insulated envelope to minimize heat gain, plus the use of thermal mass to help cool the building throughout the day and natural ventilation to flush the building at night. The building used a super-insulated envelope consisting of R-59.5 walls and an R-76 roof. “Form and materials are used in the JSWB to help the building fit into the campus context as well as to enhance performance,” said Nancy Malone, Principal and Lead Designer with Siegel & Strain. “It includes a number of forward-thinking features and technologies that highlight what’s possible with sustainable, passive building design.” “The building’s combination of good basic design, the integration of advanced technologies and a well-thought-out plan for the future have laid a path toward achieving Net Zero Energy Building Certification over the next year,” said Jim Coyle, senior project manager, Pankow Builders. “Pankow appreciates the opportunity to be a part of UC Davis’s vision of sustainability. We commend UC Davis for building a new facility that reaches a new level in conservation of water, energy, and natural resources for an institutional building.” The $4 million, one-story JSWB was made possible by a $3 million pledge from the late Jess Jackson and his wife, Barbara Banke, proprietor of Jackson Family Wines. The project has been submitted for the Living Building Challenge—Net-Zero Energy Building Certification—which will verify that the building is truly operating as claimed: harnessing energy from the sun, wind, and earth to exceed net annual demand. For more information visit: http://www.pankow.com/engage/media.aspx About the Author Kristina Owyoung, Marketing Manager, LEED® AP BD+C, Charles Pankow Builders
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Mariak’s attention to the end-user experience is something you do not come across every day. From product design to post sales service, we provide customers with a “can do” attitude, fast lead times, and quality products. These very qualities have made Mariak a leading manufacturer of commercial window coverings since 1986. Based in Rancho Dominguez, California, we have close to 400 employees in two state-of-the-art 100,000 square foot plants. Thus, we are perfectly positioned just 350 miles from the heart of the Bay Area and well-equipped to serve it. Because of Mariak’s unmatched on-time delivery standards, we have become the fastest growing window manufacturer servicing the Bay Area. Our clients have grown to depend on us for those extremely tight deadlines often encountered in the highend tenant improvement projects. Mariak understands that on-time delivery in the construction industry is a prerequisite to respecting the budget...time is money. Mariak knows. Mariak’s product lines include sun control roller shades, image printed roller shades, mini blinds, vertical blinds, fire retardant cellular shades, cubicle curtain tracks, horizontal blinds, and automation.Through the years of manufacturing experience, Mariak has developed shading solutions for every application, whether your project requires the simplicity of a chain-operated clutch shade or the intergraded sophistication of a motorized network shade management system. Mariak Window Coverings offers a solution that will protect interior furnishings from UV damage, reduce heating and air conditioning expenses, and manage glare by using sustainable materials. Mariak is your ideal choice when addressing the bioclimatic façade challenges experienced with modern building materials. Appropriate products, for appropriate solutions. Featured Project: United Nations Secretariat Building, United Nations Plaza, New York, NY 10017 Architect: HLW Architects Contractor: Skanska Product Used: Mariak excelled at designing a unique pattern of 2” aluminum perforated blinds accompanied by 350 motor control panels and 1,000 smart switches to achieve perfect light control and energy savings. Many window covering solutions from one source: Mariak Window Coverings The CREW SF Communications Team is looking for: •
Feature articles of all CREW related topics: law, real estate, and architecture. Upcoming issues of the 2014 VIEW will focus on the following topics: First Quarter- Retail, Second Quarter- Art and Real Estate, Third QuarterAdaptive Re-use, Fourth Quarter- suggestions happily accepted! If you have an idea, even a little gem of one, please send an email to our editor at ds@donnaschumacher.com to start the conversation. We are here to help you launch your voice into the real estate community.
THe view editorial staff: Editor Donna Schumacher Editorial Review Winnifred Ward Amy Teutemacher Contributers Helen Duong Tara Harding Julie Jacobson Jennique Mason Kristina Owyoung Rob Reis Donna Schumacher Kathryn Sweeney Gabrielle Tierney All submissions are subject to editing for clarity and brevity, unless otherwise noted. ©2013 CREW SF. Please send all ideas and articles to news@crewsf.org.
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