How Seven Cities are Reinventing Mobility

How do transportation choices help make a city livable? “Sharing the City,” a new report by Xerox, describes how seven cities have “massively improved urban life by re-thinking their transport options.” Those seven cities’ solutions include the following:

  1. Portland, Oregon, has implemented multimodal planning to beat suburban sprawl. The result: Portlanders drive 20 percent less than residents of other U.S. cities, reducing carbon dioxide emissions and attracting a big influx in young professionals.
  2. Copenhagen, Denmark, has used bike-train intermodality to keep cycling popular. The result: 45 percent of Copenhagen’s workers and students now commute by bike each day, cutting down auto traffic and the need for parking.
  3. Bogota, Colombia, is prioritizing mobility in the developing world. TransMilenio, the world’s largest bus rapid transit (BRT) system, is part of an ambitious program to “distribute limited road and sidewalk space democratically between pedestrians, cyclists, bus passengers and car drivers.”
  4. New York City is proving that people-centered mobility doesn’t have to be expensive by turning 50 streets into pedestrian plazas, introducing a bike-share program, building 350 miles of on-street bike lanes and creating 57 BRT lanes. As a result, retail activity in pedestrian-focused areas has soared, while cyclist-related and pedestrian injuries have been reduced and travel times have improved.
  5. Amsterdam, Netherlands, has instituted cycle- and pedestrian-friendly policies, introducing a network of “woonerfs,” traffic-calmed, shared-space streets where vehicle traffic is deprioritized, and building almost 250 miles of bike paths. The result: Amsterdam is one of the most bicycle-friendly cities in the world, and the Netherlands has one of the best traffic safety records in Europe.
  6. Singapore has had to manage its growth carefully; as an island city-nation, it is unable to expand its boundaries. It has done so, in part, by focusing on cycling and walking, building 143 miles of walkways and bike paths, and managing car traffic by congestion pricing. The result: Cycling popularity is growing, even in Singapore’s tropical climate (the city now plans to install shower facilities at popular cycle destinations).
  7. Leipzig, Germany, has a vibrant sharing economy – including successful bike- and car-share schemes – that is attracting millennials who think very differently about urban mobility. Now nicknamed “Hypezig,” the city has become a magnet for young people.

Click here to view the article.


Proof that Green Building Strategies Pay Off

A 10-year study of nearly 300 North American office buildings has demonstrated the positive impacts of green certification on commercial building performance. Researchers examined both tangible and intangible measures between 2004 and 2013 at Bentall Kennedy-managed properties, which included 24 million square feet of Canadian buildings and 34 million square feet of U.S. properties.

According to Commercial Property Executive, in the U.S., “LEED certified properties enjoy an average of 3.7 percent rent premium and a 4 percent gain in occupancy over comparable non-certified properties, while ENERGY STAR certified buildings averaged 2.7 percent higher rents and 9.5 percent higher occupancy than non-certified buildings.”

In Canada, “LEED-certified properties saw 10.2 percent higher rental rates and 8.5 percent higher occupancy, while buildings with both LEED and BOMA BEST certification achieved 18.7 percent higher occupancy than the control group. BOMA BEST, a Canadian program that focuses on sustainable management and tenant engagement, was shown to be lighter on tangible benefits, but proved its value on intangible measures: 7 percent higher tenant satisfaction scores in Canadian buildings with BOMA BEST Level 3 and 4 certification, and 5.6 percent higher lease renewal rates in BOMA BEST Level 3 properties. These metrics are significant because it costs far more to backfill vacated spaces than it does to keep tenants in place.”

The article concludes that “the findings of this study validate the financial case for prioritizing strategies that lead to green building certifications.”

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E-commerce Boosts Industrial REITs

Wall Street is taking notice as online shopping continues to increase. The Wall Street Journal reports that shares in industrial REITs – which underperformed the real estate market by 0.6 and 9. 1 percent in 2015 and 2014 – have risen 17.6 percent this year. “Analysts believe that internet retail accounts for much of the increase in demand for industrial space,” the outlet notes, adding that, “At the end of 2015, tenants in the top 47 markets occupied 101.7 million more square feet than they did at the beginning of the year, according to data firm Reis Inc. That is up from 93 million in 2014.”

Investors are betting that trends like the movement of inventories from stores to giant e-commerce fulfillment centers and the increasing complexity of omnichannel distribution networks will continue to drive the demand for industrial real estate. While an economic slowdown could push vacancy rates up and rents down, many investors still see more room for their holdings to rise in value, as long as online consumer spending continues to increase.

Click here to view the article.

Economic Flattening Points to Declining Demand for US Office Space Through 2017

The national office market is forecast to absorb approximately 34.6 million square feet of space in 2016, down from 62.1 million square feet in 2015, as economic growth flattens in the U.S., according to Dr. Hany Guirguis, Manhattan College, and Dr. Joshua Harris, University of Central Florida. Gross domestic product (GDP) growth, which slowed to 0.5 percent in the first quarter of 2016, is forecast by the model to remain low, near 1 to 2 percent annualized growth, with the lower boundary of the GDP forecast dipping into slightly negative territory. The current forecast projects net absorption of office space to regain some strength in 2017, totaling approximately 46.2 million square feet. However, this figure could change, depending on how the economy fares throughout the rest of 2016.

Visit the Office Space Demand Forecast online or download the Q2 2016 report.

Overall, the U.S. economic condition is more tenuous in mid-2016 than it has been in recent years. Low energy prices and a declining global economic outlook — due, in part, to European debt crises and a slowing Chinese economy — have finally had a measurable impact on the domestic situation. The biggest drag on the forecast comes from lower GDP expectations going forward and falling rates of nonresidential private fixed investment, which measures the willingness of private businesses to expand their productive capacity. The second most significant driver of the forecast relates to declining corporate profits, which have been falling since the fourth quarter of 2015, a reversal of a trend that bears watching and is a cause for concern, especially for the office sector.

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Eight of the World’s Greenest Office Buildings

To celebrate World Environmental Day on Sunday, June 5, office supply store Euroffice put together an infographic showcasing eight of the world’s most environmentally friendly office buildings. All of the structures combine modern design principles and aesthetics with “almost futuristic levels of technology to create office buildings that are helping make the world a greener place.”

  1. Amsterdam’s The Edge is currently occupied by Deloitte. It has achieved the highest-ever sustainability score, 98.4 percent, from BREEAM; it has also been called the smartest building in the world.
  2. Bahrain World Trade Center in Manama, Bahrain, features two towers joined by skybridges, each of which holds a 225 kW wind turbine, which can provide up to 15 percent of the structure’s power needs.
  3. Bullitt Center in Seattle was designed to be carbon and energy neutral, and has a self-sufficient water and sewage processing system as well as photovoltaic panels.
  4. Pixel’s Melbourne Headquarters is Australia’s first carbon neutral office building.
  5. Acros Building in Fukuoka, Japan, is an example of “eco-architecture,” with a huge atrium that provides ample natural light.
  6. The Crystal is an all-electric smart building in London that automatically controls lighting, heating and other building features.
  7. One Angel Square in Manchester, U.K., has a passive solar heating system as well as its own biofuel power plant.
  8. Powerhouse Kjørbo in Oslo, Norway, will generate as much power as was used to construct it while producing only one sixth the greenhouse gas emissions of a traditional office building.

Adopting Bitcoin and Blockchain Technology for CRE

When you consider the vast potential of blockchain technology, the commercial real estate industry may seem like it is stuck in the Dark Ages. Otherwise known as the underlying “railroad” powering bitcoin, a digital currency created in 2009 that has no transaction fees, blockchain technology provides an open or permissible registry of all transactions on the network.

Each “block,” or record of transactions, is stored in a permanent database, all linked together in chronological order. The blockchain is like a full history of banking transactions, while each block is like a bank statement. Blockchain technology is starting to change the way in which companies approach security, supply chain and the ownership of assets, and can do the same for commercial real estate.

Ownership: One way that blockchain technology could influence real estate is with regard to titles and land ownership. Enterprise-level blockchains could provide secure registries for titles, eliminating many causes of fraud within commercial real estate. When everything is stored in a permanent database, old-fashioned methods of recordkeeping – like paper files, spreadsheets and unsecure databases – become obsolete. Blockchains can establish an irrefutable record of ownership, which can also unlock tremendous amounts of value in developing nations where people do not have legal titles to real estate, so-called “dead capital” that is estimated to be $20 trillion worldwide.

Investment: Investing in commercial real estate generally requires a large amount of capital. That’s an obvious barrier for many individuals aiming to increase their wealth and diversify their assets through real estate investments. Blockchain technology can eliminate that barrier. Secure asset fractionalization can be made possible with blockchains, and could enable an individual to finance and own a small share of commercial real estate. Most people on Main Street can’t afford to own a shopping mall, but fractionalization would allow you to directly own 1/10,000th of a shopping mall. This can be a small yet powerful (at scale) step toward growing an investment portfolio.

Supply Chain: Blockchain technology can aid in managing construction costs as well, since that shopping mall needs to be built before you can really own any of it. Advanced blockchain workflows and smart contracts could allow for performance-based payments that unlock based on construction milestones. Therefore, an owner or property developer could create a secure and fully-established system for paying a construction company based on the progress they make. Those performance-based payments would be fully documented and transparent through the blockchain in a permanent database, serving as a comprehensive record of progress towards completion of a commercial real estate project.

Blockchain technology holds vast potential for the commercial real estate industry. Adopting this technology will help make property owners more confident in their investments. By advancing the industry’s standards for ownership, security and supply chains, blockchain technology can help bring commercial real estate into the next era.

Click here to view the article written by Matthew Roszak.

Take a Virtual Tour of the Tesla Factory

Experience how 3,000 workers and 160 robots turn raw materials into electric cars with a virtual look at the Tesla Factory and assess the broader ramifications a U.S. manufacturing renaissance on industrial CRE in Development magazine’s spring cover story, “The US Manufacturing Renaissance: Driving a Resurgence in Industrial Real Estate.”