Raleigh and Regional News

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  The United States’ electrical grid is severely outdated so the government has created the Smart Grid Investment Grant (SGIG) program.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.

Office Space Landscape is Changing

Office Vacancy Rate

According to Randyl Drummer, in an article from the CoStar Group, “strong absortion and very limited construction, combined with a significant number of demolitions/removals of antiquated buildings helped to push the U.S. office vacancy rate down 50 basis points over the past year to 12.3% at the end of fourth-quarter 2012”.

Vacancy rates fell across the country, and according to Walter Page, director of research, “a lot of markets are now in that 11%-12% vacancy rate range.  That’s the long-term average vacancy rate, and when markets drop below that level, you are moving into the territory of rent growth”.  Also, the office sector is expected to experience more than a 1 percentage point improvement in average occupancy rates going forward.  These lower vacancy and higher occupancy rates will cause rent to rise, so not surprisingly, “rent growth rose 1.7% year over year in 2012 and is still moving upward…but most importantly rising rents will spread to more markets as limited supply is absorbed”, according to Drummer.

Since the primary markets are experiencing such rapid absorption, develops will move into “the nation’s long suffering secondary and tertiary markets”, so they will be able to reap the benefits as well. These absorption levels and vacancy rates are good signs for investors, particularly office investors, since they are causing rent to rise, which means higher values and returns going forward.

A Culture of Workplace Safety and Innovation

A&K Painting Company Safety Culture

According to Paula Moore, in an article in the Engineering News Record, “Savvy contractors have significantly cut jobsite injuries in the past few decades by transforming safety practices into a science. Recent innovations include using more statistics as well as the latest technology”. Companies can retrieve statistical data from OSHA and the Construction Industry Institute or they can choose to compile their own. By having this data that tracks recordable injuries, medical treatments and lost-time cases, companies can analyze the data to prevent future injuries. Companies are also decreasing their incidence ratings for nonfatal injuries and illnesses in American construction by using these statistics.

In the past, contractors relied on “lagging indicators” such as Total Recordable Incident Rate (TRIR) and Experience Modification Rate (EMR) which measure historical safety performance. But since these indicators aren’t as useful for prevention, companies are choosing to be more proactive by studying workers’ behavior and investigating jobsite conditions before incidents occur. Other strategies include pre-planning, targeting high-risk activities and performing job-safety analysis. Along with those strategies, new technology is also playing a role in reducing jobsite injuries. Perhaps most importantly, regardless of which strategy they use, companies are investigating the causes and making changes to prevent incidents from happening in the future.

These new prevention methods we’re seeing from construction companies are showing us that the culture of safety doesn’t happen by chance; companies have to make every effort to create safe work environments for their employees in advance and not wait until injuries have already occurred to make a change. At A&K Painting Company, we work to maintain a culture of safety that keeps the well-being, health and safety of our team members top priority. We’re blessed with and actively work to maintain our excellent safety record.

We set the standard for safety through careful monitoring and active safety management. A&K Painting Company continues to be the safety leader you can rely on. Learn more about our Culture of Safety.

2013 Economic Outlook for North Carolina

2013 Slight Economic Uptick

Dr. John Connaughton, a Babson Capital professor of financial economics, reports quarterly forecasts for North Carolina. In December, according to the Belk College of Business’s webpage, “he presented his quarterly forecast to more than 130 members of the Charlotte business community and the media at a luncheon held at UNC Charlotte’s Center City Campus”.

Connaughton discussed his 2013 projections, which included an expectation that North Carolina’s economy will expand “by an inflation-adjusted rate of 1.8 percent”. He also expects 14 of North Carolina’s 15 economic sectors to experience output increases, with the strongest growth expected in the business and professional services sector and the transportation, warehousing and utilities sectors. The agriculture, retail trade, and information sectors and the durable goods manufacturing sector are also expected to experience strong growth at approximately 2.3 and 1.9 percent respectively. He also expects employment increases in 10 of North Carolina’s 14 nonagricultural sectors of the economy, during 2013.

According to Connaughton, “for 2013, the economy is expected to continue the 2012 pattern of modest GSP growth”. Overall, he reports the state “will have its fourth year of slow, but uninterrupted economic growth in 2013”.

Most Family Friendly Ranking: Great for Business

 

Raleigh and Charlotte Rankings Good for CRE and Construction IndustryRaleigh and Charlotte Top Rankings Good for CRE and Construction

The Human Life Project is a nonprofit organization that encourages cities to invest in families and to identify and reverse negative trends before they become even bigger issues. Every year, this organization takes the 50 largest cities in the U.S. and ranks them according to how family friendly they are; one being the most family friendly, fifty being the least. The rankings are based on a variety of factors including marital status, age demographics, available housing and home prices, unemployment, crime rates, median income, and availability of parks, museums and places of worship. Well, the results are in, and this year, Charlotte was ranked #4 and Raleigh was ranked #1!

This could be great for North Carolina’s state and local economies; since people generally like to feel safe in their environment and secure in their jobs, they might feel more comfortable moving to Raleigh and Charlotte, rather than cities with lower rankings. So, more people means a larger economy, more jobs, more shopping, more housing, more services, more everything! Having these rankings is not only good for families, but it’s good for commercial real estate, retail, construction, and business in general. If you’re a company looking to expand, this might be your opportunity to find some highly qualified employees to grow with you!