Construction Industry

CRE Sales Pricing Recovery Coming to Your Market?

Uptick to CRE Sales?

According to Randyl Drummer, in a CoStar Group article, “sales of U.S. commercial real estate reached nearly $64 billion in 2012, jumping 22% from the previous year to the highest annual total since 2004”.  These signs of recovery in CRE pricing also extended past the apartment market, spreading into office, industrial and retail property, however; what really stands out is the pricing gains in apartments.  Drummer wrote, “The multifamily property index advanced by 11.2% in 2012, with the 10 markets in the prime multifamily index again hitting pre-recession peak pricing well ahead of the other major property types”.  This shows that many consumers are still apprehensive about purchasing a home, so they are choosing to rent for now.  This is excellent news for the CRE construction industry, because demand for apartments is outpacing supply, so there is money to be made in building apartment complexes at the present time.  There is even further proof of this, because, according to Drummer, “developers delivered double the number of new multifamily units in 2012 than in the previous year, and construction in 2013 is on pace to bring an [even] bigger increase”.  Even though retail investors remain cautious, commercial, retail and hospitality are showing positive growth, which point to an increase in consumer confidence in the market overall.

 

The Need for More Green Buildings

Green Sustainable World picture

According to an article from Green Building Elements, “In developed countries, about 40 percent of total energy generation is consumed by the building sector”.  Developed countries have a much higher standard quality of living than undeveloped or developing countries do, so they require more energy in their homes and offices for heating, cooling, lighting and electrical appliances.  We all know that in turn, this naturally creates an increased consumption of fossil fuels and the accompanying environmental challenges and a need for even more green buildings.

According to Green Building Elements, “to combat this environmental challenge, we need a holistic, integrated approach towards reducing the energy consumption in buildings yet maintaining a high standard of building services, internal comfort and quality of living”.  This type of approach requires that every stage, from the brainstorming stage to the end building usage stage be focused on reducing net energy needs.  A legislative, economic and social structure has been developed “that will make the construction and buildings sector economically and environmentally sustainable” through this holistic approach.  Also, now that there are measurements and standards for “energy efficient buildings, net-zero-energy buildings, energy audits and energy certification of buildings”, it is possible to assess the energy performance of all buildings with the same specifications.

With the progress that has been made on making buildings green, it is now economically feasible for the majority of construction companies and property owners to make the “green” transition and this holistic approach will help raise awareness of this change.  Regardless of how energy efficient a building is, the “green concept is reality and it is here to stay”.

A&K Painting Company’s leadership with Green Painting, years completing LEED projects, along with our Green Advantage Certified team member provides our customers with increased value and benefit.

Raleigh, Durham and Charlotte – Great Business Vitality Rankings

 

Great News! Raleigh, Durham and Charlotte hold the 4th, 6th and 11th rankings, respectively, in The Business Journal’s 2013 rankings of America’s 102 major markets for small-business vitality. The recent study covered the nation’s 102 major metropolitan areas with Durham, N.C. having the smallest population of all metro areas, with 513,000 residents. The objective was to identify metropolitan areas that rate the most conducive to the creation and development of small businesses, according to the most recent data available from the U.S. Census Bureau and U.S. Bureau of Labor Statistics.

According to The Business Journal’s G. Scott Thomas, The Business Journals used a six-part formula to rate the vitality of each market’s small-business sector. The following are the six factors. Each is listed with its formula weight in brackets:

  1. Concentration of small businesses, expressed as a ratio per 1,000 residents [30 percent]
  2. One-year (2009-2010) percentage change in concentration [10 percent]
  3. One-year (2009-2010) percentage change in the number of small businesses [10 percent]
  4. Five-year (2006-2011) percentage change in population [12.5 percent]
  5. Five-year (2007-2012) percentage change in private-sector employment [12.5 percent]
  6. One-year (2011-2012) percentage change in private-sector employment [25 percent]

Mr. Thomas continued with an explanation of how the 102 major metropolitan areas were scored, writing “Each market’s final score is based on a comparison of its performances in the six components against the corresponding averages for all 102 markets. Above-average performances receive positive scores, while below-average results are given negative scores.”

Working in Raleigh, Durham, Charlotte and throughout the East Coast of the United States, Charlotte painting contractor, A&K Painting Company is a small-business with vitality.  We’re known for delivering exceptional customer service and award-winning safety management.  We make our customer’s projects more successful and safe.  We are strategically positioned to continually deliver our exceptional service to existing customers and new customers.  A&K Painting Company exceeds expectations.

Commercial RRP Expansion – Significant Changes Ahead – Comments Requested

A&K Painting Co. Commercial RRP Infographic

Significant changes are ahead for maintenance and up-fit/remodel work on pre-1978 Commercial and Public buildings.  The EPA is working to expand the existing Residential & Child Care – Lead Safe Renovation, Repair and Painting (RRP) Rule to include Commercial and Public Buildings.

Go to our Commercial RRP Infographic

The expansion of RRP Rules to Commercial and Public buildings will increase owner’s risk and liability, increase costs for maintenance and up-fit work in pre-1978 buildings.  There is no question that we all want to protect our children from the hazards or exposure to lead paint dust.  For Public Building and Commercial Buildings that are not child occupied, the EPA has yet to provide scientific proof that there is a hazard.  This expansion or RRP Rules would impact every building in the United States that was built prior to 1978.  State managed RRP programs, such as those in North Carolina eleven other States will be required to adopt these changes.

As reported in our January 5th blog post announcing the EPA’s comment period and request for comments from interested parties, we are interested in activating building owners and managers, facility managers and contractors to participate by adding their comments either directly or through engaging and participating with their industry association to submit comments.

Your comments are needed.  To help the EPA determine if there is a health hazard in none child occupied commercial buildings when renovation is completed, submit your comments before April 1st, 2013. Learn more and submit your comments to the EPA

Learn more about existing Residential – Child Care related RRP Rules and the expansion of RRP to Commercial & Public Buildings.

 

Sustainability in 2013 for CRE, Facilities and Construction

Green Building & Sustainability

The United States has become extremely interested in the sustainability of our future and public and private sectors are continuously progressing on policies that support these ecological goals.  “This is evident in the commercial sector.  More than 28 billion square feet- about 40 percent of the country’s inventory- now use ENERGY STAR Portfolio Manager to monitor and report energy performance. [Also], LEED-certified properties in the U.S. and 130 other countries topped the 2 billion-square-foot mark…and the U.S. Green Building Council notes that another 2 million square feet is certified each day ”, according to Dan Probst in an GreenBiz.com article.

Along with increasing LEED-certified properties and using the ENERGY STAR Portfolio Manager, there are five specific trends that will help CRE and construction companies, facility managers, and property owners take “energy and sustainability to the next level”.  The first trend is a renewed interest in resilience.  Companies are “re-examining their ability to bounce back after disaster”.  By adopting strategies that focus on minimizing environmental threats, companies will require less money and time spent on recovery contingencies.

Next is energy measurement and disclosure.  Many cities in the U.S. are requiring large buildings to use Portfolio Manager, “the EPA’s energy management tool, to measure and report energy performance.”  This requirement doesn’t cost building owners anything, and utilization of the tool has shown a reduction in energy by an average of 7 percent.  New York City made their energy performance data public and this may be a requirement for all cities in the future.  This type of transparency will make CRE and construction companies and property owners highly motivated to increase their scores.

Third is smart grid investment.  The United States’ electrical grid is severely outdated so the government has created the Smart Grid Investment Grant (SGIG) program.  This program’s purpose is to update our electrical grid, decrease frequency and duration of power outages and create more efficient power management.  A smart grid will benefit all property owners, by lowering costs associated with power outages.

Then there is smart building investment.  Companies are investing in cloud computing and “technology that can translate data from many different automated systems, allowing a facility manager team to remotely monitor entire portfolios”, according to Drummer.  These automated systems and smart buildings benefit property owners by decreasing energy costs by 15 to 20 percent and giving them the ability to find faulty equipment before it fails, resulting in no delay in operations.

And last is acceptance of renewable energy.  Solar, wind, and tidal power and biomass energy are all types of renewable energy that companies are beginning to convert to, but the adoption rate will depend on the availability of tax incentives and local support of resilience.

In the long run, following any of these trends will reduce costs for CRE and construction companies, facility managers and property owners and increase our country’s sustainability.  Bring A&K’s sustainability expertise to your project. A&K Painting is the leader in the “Green Painting” world, serving General Contractors, CRE Pros and National Accounts. We became fully involved with this major growth area of the construction world well before many companies started researching what it involved.  Learn more about our sustainability program now.