The commercial real estate sectors are showing greater optimism, and investment activity is starting to come to life again.

The latest National Multi Housing Council (NMHC) Quarterly Survey of Market Conditions released in May showed “widespread improvement” in the apartment sector. The apartment sales volume index even increased to a record, of 72 from 56.

In the midst of the newfound optimism, we have news this week that the national economic recovery is slowing. Some experts even say the consumer spending slowdown will last through 2011.

Will this economic reversal continue into future months, and take a bite out of recent improvements in commercial real estate industry conditions, or at least, sentiments?

Ok, so I have a new goal. By the time I’m 55, my home will generate enough electricity to not only re-charge my electric vehicle, but also to sell the excess back to my local utility. Please understand that I’m well on my way already—there’s a photovoltaic system on my roof that was designed to provide about 85 percent of my annual demand. Why stop at 85 percent? Well, at the time, the theory went that since any energy generated at my place in excess of what I could use would flow back into the grid—from where my utility company could essentially sell it to my neighbors—there was no financial motive to produce more than I could use.

In the three years my system has been operating, this is pretty much how it has performed. Then an interesting phenomenon occurred. This spring, my wife, who operates a home-based business, was away for several months. In the first 30 days, my energy consumption matched, almost to the kilowatt-hour, the amount produced, resulting in a zero power bill. This happened again in the next month. In the third month, that meter must really have been spinning backwards, because I posted a credit! This became quite a motivator—sport almost—and I tried to double down on my conservation efforts to see how long I could stay in the black.

This week in Los Angeles, the City Council agreed to consider a feed-in tariff program for the Department of Water and Power. If approved, it could foment a large move into “distributed infrastructure,” which is very much a harbinger of the future. Roofs of buildings, large and small, could be retrofitted with solar arrays that generate many more watts than the facilities need, with the overage being sold back to DWP. In the cases of large warehouses with low power demand, this could add a nice little punch to the bottom line. It will help stimulate “green” business and manufacturing, too, and will inevitably push us closer to a massive paradigm shift.\

Expect the utilities to squeal. After all, this will cut into their revenue stream. However, the potential of credit back for the PV systems will make the cost of their installation defensible for many more people, even some single family homeowners.

Like me. If DWP goes for this, our other California energy providers will follow. I have already reduced my electric bill dramatically; I would love to eliminate it completely, and have it instead become a modest revenue stream for me. (It probably won’t hurt re-sale value, either.) There’s 4.5 years left to accomplish this goal. Let’s get cracking!

(Daniel Gehman is principal at Thomas Cox Architects. He can be reached at DanielG@tca-arch.com)


So this week President Obama signs into law the financial reform bill, the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The new set of laws supposedly provides for: increased regulation of the financial industries–tightening oversight of the derivatives market–and consumer protections in the use of financial products. It is purported to put into place procedures to help avoid future tax-payer-funded bank bailouts. And it increases capital requirements for banks.

Read some comments about the bills here. And our sister publication Commercial Property Executives earlier discussed (“Upward Climb,” p. 30) the bill’s possible effects on the commercial real estate market specifically. In particular, lenders were required in the House bill to have more “skin in the game” in CMBS, which could mean more careful lending.

Like many industries, the apartment sector relies ultimately on job growth to drive demand for its products.  

In its recent white paper, NAI Global points to a projection that by mid-2013, the U.S. will see the same number of jobs as at the beginning of September 2008.

That does not appear exactly to be good news, when you think that every year new people also enter the labor force. (The U.S. population continues to grow every year and is projected to reach almost half a billion in 30 years’ time.)

Can the trend of weak job creation be sufficiently reversed given the continued loss of jobs due to outsourcing and factory relocations overseas?

The unemployment rate would still be an “anemic” 7 percent by mid-2013, says NAI Chief Economist Peter Linneman. Hence the title of NAI’s white paper, “A Robust Rebound to Mediocrity?”

By Keat Foong, Executive Editor

Colliers held its first annual Global Leadership Summit in Manhattan recently.

The three-day meeting, which  brought together clients and Colliers brokers from all over the world, concluded with a talk by best-selling author Malcolm Gladwell at the Jazz at Lincoln Center theater.

Collier’s recent Global Leadership Summit consisted of high-level strategy sessions and client meetings. Douglas Frye, global CEO of Colliers International, said, when introducing Gladwell, that the investment sales industry would need a different approach in the next three years.

My excellent colleague Natasha Selhi passed along some interesting information from the Environmental Protection Agency (EPA) this morning.

The EPA wants renters to know that, much like single family homeowners, they do have control over how green their apartment homes are; in fact, they can express their dissatisfaction with a current apartment community by moving to another.

According to EPA, “A common misconception is that renters have little control over the environmental impacts of their homes. The truth is that renters can influence many environmental aspects of their housing, from choosing where they live to adopting everyday practices that save energy and water.”

EPA has devised a checklist to help select a greener rental house or apartment, as well as to reduce bills and have a healthier and more comfortable indoor environment.

EPA suggests that “before you sign a lease, investigate its green features and quality of its indoor environment. Discuss the considerations [on the checklist] as well as any of your own, with your landlord. If the unit does not meet some of the criteria, use your bargaining power and inquire with the landlord about making some updates.”

How is your apartment community doing with green? And will this EPA checklist help—or hurt—your leasing effort?

© 2011 MHN Blog Suffusion theme by Sayontan Sinha

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