News and Notes on Trends, New Projects and Construction In the Commercial Real Estate Development Pipeline Around the U.S.
In The Pipeline
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Architecture Index Slips Back Into Decline
The Architecture Billings Index (ABI) reversed direction in September following the first positive score in four months, reflecting weak demand in most markets for the services of architects.
The September ABI was 46.9, following a score of 51.4 in August, according to the American Institute of Architects (AIA). The index, a leading indicator of future construction activity, reflects a lag of about 9 to 12 months between architecture billings and construction spending.
Scores above 50 indicate a rise in billing and demand for design services. The sharp September drop suggests that the previous month’s positive score was "more of an aberration," said Kermit Baker, AIA chief economist. The index measuring inquiries into new project was 54.3 in September, down from 56.9 the previous month.
"The economy is weak enough at present that design activity is bouncing around more than usual. One strong month can be followed by a weak one," Baker said. "The economy needs to be stronger to generate sustained growth in design activity."
Monument Sets Launch Date for Boeing Project
A 322,000-square-foot build-to-suit office project for The Boeing Co.by developer Monument Realty is set for takeoff after clearing a final series of hurdles last week.
Monument Realty and its investment partners have worked through a complex series of issues with Arlington County related to financing and site planning since CoStar News first reported the project back in February. The final pieces came together last week.
On Oct. 18, Monument and partners, New York-based Atlas Capital Group and Square Mile Capital Management, closed a $116.55 construction loan with RBS Citizens, N.A. and Sovereign Bank. The same day, the Arlington County Board unanimously approved a major site plan amendment permitting construction of the Gensler-designed Boeing project.
Also last week, Monument and Arlington County completed a long awaited exchange of Monument’s Boundary Channel Drive site -- the former location of the old Twin Bridges Marriott Hotel -- for the county’s Crystal City site.
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Howard Hughes Corp. Plans To Begin Work On 9-Story Office
The Howard Hughes Corp. (NYSE: HHC
) expects to start construction of 3 Waterway Square Place after landing a lead tenant. The 192,000-square-foot nine-story office building is proposed for the Waterway Square District of The Woodlands Town Center.
The Woodlands Development Company, acquired by Howard Hughes in June, expects to complete the building at Lake Robbins Drive and Woodloch Forest Drive in early 2013.
Nexeo Solutions, LLC, a global chemical and plastics distribution company, recently signed a lease for 64,026 square feet encompassing the top three floors of the building. Nexeo will occupy 45,000 square feet in temporary offices at 9303 New Trails Drive and 1400 Woodloch Forest Drive until construction is complete.
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Green Building Continues to Go Mainstream
By Anthony Guma
Attending Greenbuild 2011 in Toronto earlier this month, the U.S. Green Building Council’s annual conference proved itself once again to be the must-attend event for the green building movement. And while our industry at large continues to grapple with post-recession issues, including the lowest levels of new construction in decades, the significance of green building as a vibrant and growing force was affirmed shortly before the event when the number of LEED-certified commercial projects crossed the threshold of 10,000 this past August.
What was most apparent to me was how quickly we are moving from an era when green building was considered somewhat of a radical notion to a much more sophisticated and widely accepted approach redefining how we make and live in buildings. As one speaker put it, instead of our major focus being converting people to build green, we are moving more and more towards accepting the value of green building and joining discussions on the different genres and levels of green and the best practices for making them work in the real world.
This was made abundantly clear by Dan Winters, managing principal of Evolution Partners Real Estate Advisors, who provided an outtake to his thoughtful article on green buildings and their potential value for institutional investors set to be published in the third quarter 2011 edition of the PwC Korpacz Real Estate Investor Survey.
Winters noted that green buildings continue their market penetration as a result of persistent increases in energy and water costs, and continuing changes in regulatory requirements. He said for institutional investors, green building investment strategies present opportunities for greater asset-based financial returns and a reduced risk profile and said that investors who embrace a green building strategy with their private equity manager selections and fund allocations will be well-positioned to achieve superior returns from their real estate portfolio.
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GE to Redevelop $300M Solar Panel Factory In Aurora, CO
GE will open the nation's largest photovoltaic panel factory, a 200,000-square-foot plant in Aurora, CO, that will product panels using technology designed by PrimeStar Solar, a company acquired by GE earlier this year.
The $300 million retrofitted factory will employ 355 workers to produce thin-film photovoltaic panels, which will produce 400 megawatts worth of energy a year when the plant is running at full capacity -- enough to support the power demand of 80,000 homes. Colorado beat out 10 other states to land the investment, including New York.
Solar panels produced in GE's new Colorado factory will be more efficient, lighter weight and larger than conventional thin film panels, said Victor Abate, head of GE's renewable energy business, according to a release by the Metro Denver Economic Development Corporation.
In the past two years, more than 20 solar and wind companies, including industry giants Vestas and SMA Solar Technology, have announced they would expand or relocate to the state.
Design/Build Team Delivers $20M Public Health Care Center
The team of McCarthy and Taylor has finished construction of a $20 million public health center on the north end of the Martin Luther King, Jr. Medical Center campus in Los Angeles.
The new Martin Luther King, Jr. Center for Public Health replaces the existing South Health Center, originally built in the 1950s. The new center is the first project to kick off the community redevelopment plan in the Willowbrook area.
The health center project included construction of a two-level, 31,000-square-foot medical office building and 76-car parking lot.
A lobby, pharmacy, laboratory and clinical nursing station are on the first floor. The second level includes space for nurses, public health investigators and administrative offices. The new facility will augment the services offered at the MLK Multi-Service Ambulatory Care Center and the future MLK Hospital.
The new LEED-certified facility was funded with U.S. Dept. of Housing and Urban Development (HUD) grants through their Economic Development Initiative (EDI) and Section 108 Loan Guarantee Program.
Project consultants included KPFF for structural and civil engineering, GLUMAC for mechanical and electrical engineering and American Landscape as the landscape architect.
Griffin Land Starts Lehigh Valley Warehouse Project
Griffin Land & Nurseries, Inc. has broken ground on the Lehigh Valley Tradeport, a 531,000-square-foot warehouse and distribution park located on Fritch Drive in Lower Nazareth Township in the Lehigh Valley.
Though its name evokes images of plants and greenhouses, Griffin Land & Nurseries owns 2 million square feet of warehouse space
, including the New England Tradeport, said Michael Gamzon, executive director and COO of Griffin.
The company has a long history in real estate development, ownership and management and purchased a warehouse at 871 Nestle Way in Allentown, PA, and the 51 acres earmarked for the Lehigh Valley Tradeport. Site work began in August for the project that will include a spec warehouse of 228,000 square feet and a 303,000-square-foot warehouse to be built later.
See CoStar COMPs # 1891458 for more information on this transaction.