NAI Global Sustainability Solutions provides energy & sustainability services to property owners and users worldwide through NAI staff and a strategic alliance with GreenPoint Partners. NAI Global also is working with Environmental Resources Management (ERM), a leading global provider of environmental, health and safety, risk and social consulting services. The new unit is led by Fred Tuck, NAI Global’s head of Project Management.

“Sustainability Solutions is an important addition to our global service offering,” stated NAI Global President & CEO Jeffrey M. Finn. “This initiative provides a unique opportunity to help our clients save money and demonstrate corporate social responsibility.”

NAI Global Sustainability Solutions provides a broad array of services to commercial real estate clients throughout North America through a strategic alliance with GreenPoint Partners. Working together with local NAI offices in North America, GreenPoint helps clients achieve profitable sustainability by delivering energy audits, solar and wind renewable energy, efficiency retrofits and LEED certification.

“We are thrilled to work with NAI Global,” stated GreenPoint CEO Dustin Gellman. “With NAI’s powerful network and broad global footprint, we can deliver increased value to thousands of clients that occupy hundreds of millions of square feet.”

NAI Global is also working with ERM, which provides environmental due diligence, site investigation and remediation services to NAI clients worldwide as part of its core Sustainability Solutions offering. With 130 offices in 40 countries and approximately 3,600 staff, ERM helps business and government clients understand and manage their impacts on the world around them.

“ERM is extremely excited about our working relationship with NAI, and look forward to the opportunity to provide key environmental services on a wide variety of projects for NAI and their clients” stated Tim Strongman, Partner, ERM UK.

“Through our relationship with ERM we are able to deliver a global “turnkey” real estate solution to our clients, which enables them to optimize their physical assets while at the same time meet their corporate social responsibility objectives” stated Paul Danks, NAI Global’s Senior Vice President-Corporate Solutions with responsibility for the management of the relationship with ERM.

Headquartered in Princeton, New Jersey, NAI Global manages a network of 5,000 professionals and 350 offices in 55 countries. NAI firms complete over $45 billion in transactions in a typical year, and manage more than 300 million square feet of commercial space worldwide.

Other services under the NAI Global Sustainability Services umbrella include Optm, an initiative that brings NAI Global together with world renowned architectural firm Gensler and “Green” Guru John Picard to create a platform to transact “Green” buildings or undertake programs to create value by “greening” buildings and campuses.

 We also have formed a strategic alliance with Environmental Resources Management (ERM) to provide environmental due diligence, site investigation and remediation services to support clients around the world.

Adding solar panels to the rooftop, covered parking or unused landscape of a commercial property can net a property owner:

• Tax credits and financial incentives, from local, state and Federal sources
• Increased property resale value
• Reduced operating costs
• Leverage against rising energy costs

By using solar energy, a property owner can supply lighting, heat, hot water and other amenities to the building, at reduced costs. When coupled with other green-technology, from gray water recycling, water-free facilities, recycled flooring/building materials, among others, solar power can be truly beneficial to a property’s operation.

The US Green Building Council, the organization that sets the LEED standards, requires more than any one of these techniques before a building can become LEED-certified. Specifically, they measure: energy savings, water efficiency, CO2 emissions reduction, improved indoor environment quality and stewardship of resources and sensitivity to their impacts.

The initial expense to upgrade a property to LEED standards may seem undesirable, but the lifetime benefits for the property, both through cost savings and positive public perception, can be astounding.

The United States Green Building Council (USGBC) now boasts more than 19,000 members, and in March, the USGBC proclaimed that the 5,000^th project had been LEED certified. This number excludes certified new homes. Nearly half of these projects became certified in 2009, a particularly difficult year for the industry.

There are currently close to 20,000 projects that have been registered in over 90 countries. Altogether, commercial building space with LEED certification amounts to more than 5 billion square feet.

Within the United States, the states that have the most LEED certified buildings are as follows (in order):

1. California
2. Florida
3. Texas
4. New York
5. Illinois
6. Washington
7. Pennsylvania
8. Michigan
9. Colorado
10. Oregon

California has over 800 certified buildings, and number two Florida has just over 300.

With over 135,000 LEED-credentialed professionals, green building represents an opportunity for job growth, particularly in the greenest states.

According to the Green Building Certification Institute, as of February 10, 2010, the largest numbers of LEED APs were Architects, with almost 39,904. Next was Construction Management professionals with 18,573.

As the demand for LEED certified buildings continues to spiral, the number of professionals needed to service this growth will likewise increase. Look for more and more real estate brokers, attorneys, and appraisers to become certified as demand for expertise in the industry extends to the professions that are tangentially related to design and construction.

-Jonathan Fischer, MAI

Jonathan Fischer, MAI, is a Managing Director in NAI Global’s New York City office and works with investors and financial institutions as a member of NAI’s Special Asset Solutions group.

Why is being green important for commercial real estate? Everyone is looking for ways to save money by lowering operational costs from the landlord to the homeowner. That means using less energy and water. A green work and home environment creates a higher quality of life for employees and family alike. Developers and owners are seeing the value in green building as a competitive differentiator.

Recession-racked owner’s looking to lower overhead and gain a competitive edge are turning to green retrofits of existing buildings to reduce energy bills. Chan Senephansiri, Maintenance Director for Becker Enterprises in Las Vegas indicated their company has implemented several retrofits to include LED lighting for the interior of all buildings and parking lot lighting, adding automatic timer’s to switches, upgraded insulation in ceilings and walls, and replaced toilets with newer more energy efficient versions. Simple retrofits have saved on operational costs for the Landlord and Tenants.

Secondly, new financing strategies are beginning to emerge. Los Angeles’ multi-million dollar program to retrofit existing city buildings, is financed through its public utility, which is lending the city the money to make buildings more efficient. The city will then pay that money back with the energy savings it realizes over time. But the reach of such a program is modest for now. LA is starting with 20 buildings – out of more than 1,000 existing city-owned structures. Fortunately, things are beginning to slot in place for green retrofits.

Where does the commercial real estate agent fit in with going green? As an example, such companies as Amonix, a manufacturer of solar power systems, recently signed a five-year lease for 214,000 square feet of space in North Las Vegas, thus creating over 300 jobs in a city with 15.6% unemployment. As with other industries the companies that support and produce components for the green industry will see a rise in needs for commercial and residential space.

-Art Carll

Based in Las Vegas, Nevada, Art Carll is Executive Managing Director of NAI Las Vegas and a regional director for the Special Asset Solutions team.

More practical definitions would be:

• Brownfield sites are abandoned or underused industrial and commercial facilities available for re-use. Expansion or redevelopment of such a facility may be complicated by real or perceived environmental contaminations. 
• In the United States city planning jargon, a brownfield site (or simply a brownfield) is land previously used for industrial purposes or certain commercial uses. The land may be contaminated by low concentrations of hazardous waste or pollution, and has the potential to be reused once it is cleaned up.

Generally, brownfield sites exist in a community’s industrial section, on locations with abandoned factories or commercial buildings, or other previously polluting operations.  By emphasizing the revitalization of depressed areas, the reuse of aging buildings, and the development of vacant and abandoned properties, environmental restoration is realized and the tax base is built for the benefit of the community.

Many contaminated brownfield sites sit unused for decades because the cost of cleaning them to safe standards is more than the land would be worth after redevelopment.  A number of innovative financial and remediation techniques have been used in the U.S. in recent years to expedite the cleanup of brownfield sites. For example, some environmental firms have teamed up with insurance companies to underwrite the cleanup of distressed brownfield properties and provide a guaranteed cleanup cost for a specific brownfield property, to limit land developers’ exposure to environmental remediation costs and pollution lawsuits. The environmental firm first performs an extensive investigation of the brownfield site to ensure that the guaranteed cleanup cost is reasonable and they will not wind up with any surprises.

Quick Facts*

• The USEPA estimates that over 500,000 Brownfields exist in the United States.
• Redeveloping Brownfield sites could lead to $2.2B in local tax revenue, annually.
• 1 acre of redeveloped Brownfield corresponds to 4.5 acres of greenfields “saved”.
• 50,000 completed Brownfield sites may have produced 1.9 million jobs and $703B in investments.

* Source: U.S. Environmental Protection Agency

-Rick Leighton

Rick Leighton is Senior Vice President-Corporate Services at NAI Global.

With over 200 state and local government initiatives supporting “high performance” green building, one of the biggest challenges faced by owners and tenants alike is overcoming the issue as to who pays for, and who benefits from, these green improvements. While no single solution exists for every problem, strategies are emerging to manage many landlord/tenant issues.

In response to the complex legal and practical landlord/tenant issues, BOMA (The Building Owners and Managers Association) has published BOMA’s Guide to Writing a Commercial Real Estate Lease, Including Green Lease Language. A link to the book can be found here.

Since the financial implications for tenanted properties are quite significant, green lease language will likely become more and more commonplace and standardized as the industry matures.

-Jonathan Fischer, MAI

Jonathan Fischer, MAI, is a Managing Director in NAI Global’s New York City office and works with investors and financial institutions as a member of NAI’s Special Asset Solutions group.

By 2013, McGraw-Hill Construction estimates today’s overall green building market to more than double, reaching between $96 -$140 billion for residential and nonresidential buildings. Booz Allen Hamilton projects that green building will support 7.9 million U.S. jobs, and pump $554 million into the American economy from 2009-2013.

Factors that have been driving the growth of green building include a substantial increase in the level of government incentives, heightened awareness and demand for green construction, and improvements in sustainable materials.

Look for green building growth in education, government, industrial, office, healthcare, hospitality and retail sectors.

To effectively market a green building, brokers can identify how the building’s energy efficient system can benefit a prospective purchaser. If the target market is an owner-occupant for a retail or industrial building, the analysis may include a discounted cash flow analysis of potential electrical cost savings over the expected occupancy of the building. If the target market is an investor in a multi-tenanted office building, the analysis may include the concept that the occupancy rate for these properties can be expected to be higher over time, as prospective tenants would look favorably upon decreased electrical costs.

“Leadership in Energy & Environmental Design” (LEED) is a green building certification program developed by the U.S. Green Building Council (USGBC). It provides third-party verification that a building was designed and built using strategies intended to improve performance in metrics such as energy savings, water efficiency, CO2 emissions reduction, improved indoor environmental quality, and the stewardship of resources and sensitivity to their impacts.

The Green Building Certification Institute (GBCI) was established by USGBC to provide a series of exams whereby individuals become accredited for their knowledge of the LEED rating system. The two designations are the LEED Accredited Professional (LEED AP) and the LEED Green Associate (LEED GA) designation. The LEED GA certification helps to demonstrate dedication to building practices in line with green standards, but it does not obligate the holder to have direct involvement in LEED projects. This title could be useful in marketing the green expertise of professionals such as real estate brokers.

-Jonathan Fischer, MAI

Jonathan Fischer, MAI, is a Managing Director in NAI Global’s New York City office and works with investors and financial institutions as a member of NAI’s Special Asset Solutions group.

Whilst attendance and the number of Exhibitors superficially appeared disappointing at Real Vienna – besides NAI Global, only CBRE and Colliers from the major international service provider groups had Stands – the mood of the investors present was more positive than in the previous year.

The CEE region is slowly showing signs of recovery and, in the investment market, this is most marked in Poland followed by the Czech Republic.  With industrial production up 12.3% and 10.2%, respectively, in the year to March 2010, GDP growth for these two countries in 2010 is forecast at 2.6% and 0.9%. The relatively few international investors which are active are focusing on security and are therefore looking for very well located, high specification property leased to first class covenants for long periods. There is also a preference for newly completed buildings with contractors’ guarantees against building defects. Several reasonably large transactions have recently been reported in the 7-7.50% range.

The more eastern markets such as Ukraine are still suffering the combined effects of the recession and, to a degree, concerns about country risk. Just as the effects of the recession initially moved from west to east across the region, the recovery appears set to take the same course. Most investors are expecting gradual improvement in 2010 with stronger recovery in 2011 and 2012.

-David Perry

Based in London, UK, David Perry is Vice President of the EMEA region at NAI Global.

Though the residential market is already feeling the impact, the long-term effects of the oil spill are still unclear. The hotels industry in beach towns along the Gulf may suffer with the perception that those beaches are contaminated. And the fishing and shipping industry so dependent on that waterway are already feeling the impact, but may be able to return to ‘business as usual’ if the spill is effectively cleaned up.

A major commercial and residential developer in the Florida Panhandle with hundreds of thousands of acres of land noted on their website: “We will continue to collaborate with governmental agencies to monitor and manage the situation while also taking significant steps of our own to protect our assets. We are also working closely with environmental experts and have deployed resources to monitor, evaluate, document and take immediate actions. As of this time, we have not experienced any direct impact from the oil spill but we are in a position to execute an expedited clean-up of our beaches in the event it is necessary.”

On May 19 the heavy oil hit the Louisiana shore. On the same date, it was announced by the U.S. government’s top weather forecaster that a “small portion” of light sheen from the giant oil slick has already entered the Loop Current, which could carry the oil down the Florida Keys, to Cuba and even up the U.S. East Coast. While the oil giant has to date drilled two relief wells, each of these wells is estimated to take some three months to complete from the commencement of drilling. The latest plan is to develop a “top kill” operation where heavy drilling fluids are injected into the well to stem the flow of oil and gas and ultimately kill the well.

Rich Stone, CCIM, and senior sales and leasing associate at NAI Latter & Blum in New Orleans, indicates that right now the greatest impact has been on the fishing industry and the environment. “We’re waiting to see when it will stop spewing oil and where the oil currently in the Gulf ends up. It’s just too early to tell, but so far we haven’t seen any immediate adverse effects on property values.  New Orleans doesn’t have the beachfront property and resorts found in other Gulf Coast cities. In addition to impacting the fishing industries, we could also see more serious impact on local oil sector employment due to possible migration of the BP oil into the area of other platforms, causing further interruptions or shutdowns.”

Bernie Heggeman, SIOR, Principal of NAI Heggeman Realty Company in Mobile, AL echoes Stone’s comments on New Orleans. “The whole estuary and marsh system in Louisiana is the most priceless nursery for seafood in the entire Gulf Coast region. It is easier to clean up sandy beaches than the tremendous marsh system that produces so much of the regions’ seafood. That system simply can not be replaced. As for Mobile, the oil is still 30 miles off the coastline and based on current trends of wind and tidal movements, it is staying away from our area. Equipment has been put in place on our coastline in preparation for the worst. In my opinion, before the summer is over, the commercial and residential resort markets are going to feel a negative impact on values. Even if our area is spared for the time being, the possibility of a hurricane coming into the Gulf of Mexico this summer could potentially cause a disaster dispersing the oil contamination over the entire Gulf Coast from Florida to Texas. This season’s hurricane forecast indicates an increased probability for storms.  Aside from what might occur, there has been a temporary economic stimulus as BP has pumped a lot of money into the area by hiring local fisherman, those impacted the most, to assist in the cleanup.”

In Pensacola, John Griffing, SIOR, President of NAI Halford, said they have seen no oil on their coast. “BP has a big presence in Pensacola and is staging cleanup equipment here. They have also relied on our local charter fisherman to help them in their clean up efforts. The spill has really had the greatest impact on the local resort industry but it boils down to a perception problem. People perceive that oil will affect the area and are therefore canceling their plans and going to other southeast beaches, such as Myrtle Beach. As President of an upcoming SIOR chapter conference scheduled to be held in June at the Villages at Baytowne Resort, in Sandestin, FL, it is disturbing to see that attendance has been impacted due to this perception.”

Far too many variables play a role in predicting the coastline(s) that will be affected by the spill. I have read that the Loop Current is so strong that it could pull the oil from its current path and bring it up the East Coast, to as far north as the Carolinas. One thing is for sure, this is not a passing problem. I urge anyone in the real estate industry witnessing the effects of the oil spill on property values to comment and share what they are seeing. This is a relevant topic today and may be for months or years ahead if a solution is not found immediately.

-Patricia Faulkner

Patricia Faulkner is a Senior Vice President and auction specialist on NAI Global’s Special Asset Solutions team.