The Dirt Lawyer's Blog Archive

Things have been crazy, so I've been remiss in not posting daily. I'll try to improve that. A few items from other blogs caught my eye this morning. One is the passage of a green building code in California, voluntary until 2010 and mandatory thereafter. My take? The private sector is usually, in my opinion, the better way to go about making changes in how things are done. But then, California was the leader in the anti-smoking movement and I'm not sure those bans would ever have come into place without government intervention. We'll see whether this is a folly or a harbinger of things to come. I can already see the potential litigation coming out of this. Commercial property prices are continuing their adjustment downward . Some of that may also have to do with the sales being predominantly in smaller properties where sellers are willing to take haircuts. People who can are holding on to their trophies. Still more pressure on the retail side with Mervyn's...

You end up working twice as hard when you get back. Some random Monday thoughts: Lisa Michelle Galley has some thoughtful comments on green lending in a post from yesterday . (P.S. -- Lisa, I agree with you --- seems like underwriting spin to me.) Calgary -- yes, Calgary??? has the second most expensive office space in North America according to CBRE. (Courtesy of Deal Junkie.) Four major title companies are being hit with class action lawsuits alleging they are "charging customers for services performed by other companies involved in the residential real estate settlement process." (Note that River West's underwriter, LandAmerica , is not a party.) Big shopping centers in Will County (including some I believe I've written about here before) are being delayed due to economic conditions. While I was gone I missed this excellent interview with Barry Sternlicht. No more shopping at Sharper Image, at least not the brick-and-mortar version. All of the 86 remaini...

Let's forget all the politics here. As I have said before, green practices can have a positive impact on your bottom line. Ask Lee Scott , who says Wal-Mart isn't green but undertakes green practices to make more money. Case in point: TIAA-CREF wants to reduce energy consumption by 10%. Is that green? Yup. But it can also improve the bottom line, which makes your properties more valuable. Now, as Ellen Sinreich (one of the go-to people in the biz) says acceptance is not universal, but everyone knows it is the way the industry is going. So what would make the industry go green faster? Incentives. Some tenants will pay more to be in a green building but others will not. Mandates can also help (as Lisa Michelle Galley points out in SF, which is moving toward mandatory LEED), but I prefer carrots to sticks. Things like what Chicago is doing (some requirements, but expediting permits and the like which can be a HUGE plus) and other incentives would move developers in tha...

Lisa Michelle Galley has forgotten more about green loans than most of us (guess I'd better start learning now given the trend and the demand for the product), so I can without hesitation recommend part 1 of her projected two-parter on the topic. The key? Don't just assume that LEED = green (or at least I think that's what she is saying); rather, set certain performance targets that will reduce a carbon footprint and use that as the basis for measurement, because actual performance will, down the road, really matter.

Lisa Michelle Galley, a thankfully regular commenter here, has a superb piece about the ULI Emerging Trends conference in San Francisco. I'm not going to try to analyze it or summarize it. Just click here and you will NOT be disappointed. (And then bookmark or favorite her blog; it is worth it.) In addition to all the other prognosticating and a shortlist of ideas to consider in the current market (all of which I need to digest), the one thing I had to comment on is this comment: "Two years from now, a Class A non-green building will not be considered Class A." That says something to me. That may be a bit over the top, but if it did happen I would not be shocked, because it'll be tenant-driven.

To follow up on a previous post here regarding LEED and green buildings, here's some evidence (courtesy of Jordan Crouch) that building green buildings should pay off because of long-term cost savings and tenant demand. This is the wave of the future, folks, so catch it now or be late to the party.

Here's a couple of noteworthy posts from my blogging colleagues that I heartily recommend: Trafic Court found a story about Kohl's green initiative on all its newly-built stores. I was at an ICSC talk this morning and the presenters gave evidence from Wal-Mart that retail sales increase significantly in green buildings. Global warming aside, that's a good incentive for any retailer. So, it is not just the usual suspects at work here; you should expect to see green initiatives in all sectors of the market now. If GE Cap and Bill Clinton are behind it (lenders are apparently liking green because it represents a better investment in the event they have to take the property), more will follow. And Jacob Cynamon has a well-reasoned post on data centers. Apparently the "glut" of several years ago has caught up to the demand and we now need more data center space. And old otherwise obsolete industrial buildings are candidates for such space. Pretty cool, if you ask me...

Work is getting the best of me, so just a few quick items of note this morning: The Tribune has two recent stories on green initiatives that caught my eye. One is about buildings being built or renovated (the Merchandise Mart -- that's big!) with green in mind. The other is about Mayor Daley's own city-wide green initiative that will be published next year. Some of it seems a little pie-in-the-sky at first glance (wind turbines at Sears Tower?), but hey, this is the city of wrought iron too. And, as promised, here's more on the carried interest debacle and some estimated impact on the market. Read it and weep .

You have to give Frank Gehry credit. He wanted to invest in a building and even when his partners decided to bail he found a way to stay. And thus the Inland Steel building changed hands . The new owners are also saying that they intend to green up the building and will submit their plan to the City tomorrow. I don't know whether that means seeking some form of LEED certification, but I think it is cool regardless.

As I mentioned previously , one of my clients is working on a building that is expects to receive LEED certification. There are sometimes certain land use or other reasons behind such a certification (including getting City money or receive permit expediting or density bonuses here in Chicago), but let's face it: developers will probably build LEED-certified buildings when tenants demand it. According to this CPN story , corporations want sustainabilty and are willing to pay a premium for it. But tenants are having a hard time finding sustainable real estate solutions. Will that change? You would think. After all supply...demand. The amazing building at 111 South Wacker received a Gold certification and is hugely profitable. Yet, according to this interesting piece by the incomparable Blair Kamin, there are only 27 LEED-certified buildings in town and 1,100 around the country (albeit with many under development). While programs such as Chicago's helps, tenants can play ...

I am working on a project with Structured Development, LLC at Blackhawk and Halsted Streets in Chicago that is seeking a green building , or LEED ( Leadership in Energy and Environmental Design) , certification from the US Green Building Council. I have been trying to learn about how one goes about obtaining a LEED certification. As I understand it, you have to earn "points" based on about a zillion factors, including proximity to mass transit, green roofs, energy-efficient design and so on. If you want to learn more, read about it with me at this site . I find it all quite interesting and I hope to write more about this in the future.