Industry Hiring Mirrors Slow-Growth Economy
LOS ANGELES—The news is filled daily with
reports of deteriorating consumer confidence, Wall Street chaos and layoffs across
the board. Earlier this year, the nation’s
labor markets showed a slow and spotty
recovery, and Christopher Thornberg, a
locally based economist, pointed out that
the post-recession job growth left much
to be desired. So has anything really
changed in the past seven months? The
answer is definitely yes in terms of economic concerns. But how will those concerns translate for commercial real estate
According to Plano, TX-based Sayres
Dudley, a founding partner of executive
search firm Dudley & Associates, there is
some hiring from REITs, though it’s no
frenzy by any measure, and mortgage
banking is also expanding somewhat.
Dudley points out that uncertainty is
the bane of expansion, especially in hiring. While the typical real estate employer
may not grasp all the ramifications of the
European debt crisis, “that person does
understand that it’s not good news, and
thus it creates just one more level of
angst,” he says.
The picture is somewhat brighter to
Anthony LoPinto, global sector leader of
real estate and managing director of
Korn/Ferry International’s New York
regional office. LoPinto says that instead
of slow and spotty, job growth is now slow
and steady. “There has been increased
activity,” he says. “I expect hiring will get
stronger over time, but it will be a slow-
LoPinto points out that the increased
activity—especially in New York City and
London—has been relatively steady on
the investment side. He cites platform
investors, global life insurance companies,
private equity firms and investment man-
agers as the most active.
On the brokerage side, Los Angeles-based Chris Cooper, chief executive officer of Charles Dunn Co., says his firm is
growing its service capability and aggressively expanding its entrepreneurial brokerage operations. “We are in the midst
of a trend as companies realize there is a
new economy and new dynamic in the
real estate industry,” he says.
Rich Chichester, chief operating officer
of Irvine, CA-based Faris Lee Investments,
sees opportunities “if one is ambitious, cre-
ative, innovative and willing to view the
market today as different from the past.
Within the real estate service sector, the
opportunities transcend geography and
focus on skills, discipline and
S.1000 Creates Useful Energy Code
Commercial real estate scored a victory with a bill recently passed by the Senate Energy
and Natural Resources Committee that calls on the US Department of Energy to set
efficiency targets through a formal rulemaking process. In a departure from previous
bills that would force states to update their building codes to reach arbitrary efficiency
targets, S.1000, The Energy Savings and Industrial Competitiveness Act of 2011, creates new
standards and efficiency targets for new construction of residential and commercial
buildings. Most importantly, it allows affected parties, including the development community, to comment on the proposed changes before they are enacted.
NAIOP led an industry coalition to negotiate several changes to the original proposal
before it received committee action. These provisions considerably modified the direc-
tion of the bill—a joint victory for real estate developers who are
seeking to develop energy-efficient properties, and also for the com-
munities that the industry serves. Significant changes included:
Zero-Net-Energy. Creating ZNE build-
ings by 2030 was the original under-
lying goal of the bill and the basis
for setting efficiency targets for all new codes. Because this standard
is not attainable in the foreseeable future, especially without defin-
ing the role of on-site power generation, commercial real estate
successfully lobbied to have the goal omitted from the legislation.
Separation of commercial and residential targets. DOE can now recognize the significant differences in commercial and residential buildings and establish specific targets for each, instead of setting one goal that applies to all property types. This
acknowledges that certain efficiencies may be practical for residences but not for
commercial, and vice versa.
Economic considerations. DOE must consider the economic feasibility of achieving new
targets for building codes, including costs and savings for consumers and building
owners and a return on investment analysis.
Rulemaking to determine targets. DOE will establish a formal rulemaking policy that
allows for comment by interested and infected parties in lieu of enshrining specific
code targets in legislation.
Inclusion of retrofit loan guarantees. DOE will be authorized to create a loan-guarantee
program for existing building retrofits, where it is assumed that the majority of energy
is consumed and the most energy efficiency gains can be achieved.
Consideration of plug loads and other strategies. Plug loads account for a significant
amount of the energy used and attributed to buildings, are typically not controllable
by a developer and fall outside the scope of building codes. Not all efficiencies can be
achieved during the development process and plug loads must be considered before
code targets are developed.
The bill, co-sponsored by Sens. Jeanne Shaheen (D-NH) and Rob Portman (R-OH),
is now cleared for a full Senate vote, though further action has not yet been scheduled.
NAIOP and its real estate peers are committed to helping develop practical energy
policies and building codes and will continue to work closely with the Senate and the
House of Representatives to achieve these goals.
By Thomas J. Bisacquino
Thomas J. Bisacquino is president and CEO of NAIOP in Herndon, VA. He may be contacted at
firstname.lastname@example.org. The views expressed here are the author’s own.
Vital Signs... The Dow Jones All Equity REIT Index posted a negative 13.3% return for Q3 after several positive quarters.—NAREIT