Mark Rauch's Tenant Rep Times February 4, 2010
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Greetings! Welcome to the "Tenant Rep Times". You are receiving this edition of my eNewsletter because you rent or own commercial office space and are either my client or a potential client. I trust you will enjoy this issue and get a "gem" or two out of it. Your email address will only be used to communicate with you and will NEVER be sold, shared, rented or otherwise provided to other entities. Thank you for taking the time to spend a few minutes with me.
Sincerely, Mark D. Rauch Senior Vice President Travers Realty Corporation Direct: 213-430-2469 Mobile: 818-943-2959 License # 01019455 mrauch@traversrealty.com LINKEDIN TWITTER TENANT REP TIMES BLOG
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California's Building Code Turns A Deeper Shade Of Green
By Greener Buildings
Presented By Mark D. Rauch
California's Green Building Standards Code, the first of its kind when placed on the books 18 months ago, moved toward a new phase this week with the adoption of mandatory measures that are aimed at curbing greenhouse gas emissions, energy consumption, water use and other environmental impacts of new construction. On a unanimous vote, the California Building Standards Commission approved provisions on Tuesday that revise the code adopted in July 2008. That rules package was a set of voluntary green building measures for new construction and took effect in August 2009 with a timetable for transitioning to mandatory standards.
Starting January 1, 2011, adherence to the rules adopted this week becomes a requirement for all new construction. Dubbed CALGREEN, the code:
- Sets a threshold of a 20 percent reduction in indoor water use and includes voluntary goals for reductions of 30 percent, 35 percent and 40 percent.
- Requires separate meters for indoor and outdoor water use at nonresidential buildings; and at those sites, irrigation systems for larger landscaped areas must be moisture-sensing.
- Calls for 50 percent of construction waste be diverted from the landfills and lists higher, voluntary diversion amounts of 65 percent to 75 percent for new homes, and 80 percent for commercial construction.
- Mandates inspections of energy systems -- such as the heat furnace, air condition and mechanical equipment -- for nonresidential buildings that are larger than 10,000 square feet to "ensure that all are working at their maximum capacity according to design efficiencies."
- Requires that paint, carpet, vinyl flooring, particle board and other interior finish materials be low-emitting in terms of pollutants.
"With this first-in-the nation mandatory green building standards code, California continues to pave the way in energy efficiency and environmental protection," Governor Arnold Schwarzenegger said in his announcement about the adoption of the code revisions.
Under the measures, after a new structure passes its building inspection, property owners can label their building as having complied with code.
The organizations, which lauded several of the mandatory and voluntary provisions in the code, raised concerns that the provisions also create a "quasi rating system," which -- albeit voluntary -- would likely create confusion in the marketplace and undermine tough green building ordinances adopted by cities. The groups said the system also does not provide for adequate verification.
The groups launched a letter-writing campaign to urge that the building standards commission adopt the code without the CALGREEN labeling element and the provisions supporting the quasi rating system that the organizations described.
In releasing material summarizing the building standard commission's actions this week, the state disputed the criticism and said the code requires builders to meet a green standard and enables them to do so "without having to pay costly fees for third-party programs."
The USGBC's LEED rating system, that of Build It Green and other recognized organizations offering green building certification in the U.S. and abroad base their assessments on third-party verification, considered an industry best practice.
And notwithstanding the statement about third-party programs, Calfornia requires its own new and existing buildings to conform to LEED, the dominant green building standard in the U.S. market.
Making buildings more environmentally friendly is a key component of the governor's "Green California" campaign for state facilities and operations, and in the broader efforts to achieve the targets for greenhouse gas emissions reduction that are required by the state's landmark legislation, AB 32. The 3-year-old law mandates reduction of California's GHG emissions to 1990 levels by 2020 and calls for an 80 percent reduction from 1990 levels by 2050.
The California Air Resources Board has estimated that the mandatory measures of CALGREEN will reduce GHG emissions by a CO2 equivalent of 3 million metric tons in 2020.
Nothing contained herein is to be considered legal advice. Always seek legal advice when evaluating any legal document. |
This Weeks Resource
The U.S. Green Building Council, Los Angeles Chapter (USGBC-LA) is a high-performing nonprofit organization incorporated in 2002 by a motivated and diverse group of individuals with a common interest in environmental conservation.
The USGBC-LA expresses a commitment to making the greater Los Angeles area a better place to live through smarter planning, better public policy, and environmental strategies. The USGBC is the nation's foremost environmental coalition and innovator of the LEED (Leadership in Energy and Environmental Design) sustainability assessment system, working to promote buildings and communities that are environmentally responsible and healthy places to live and work. LEED Green Building Rating System is a voluntary, consensus-based national rating system for developing high-performance, sustainable buildings. LEED addresses all building types and emphasizes state-of-the-art strategies in five areas: sustainable site development, water savings, energy efficiency, materials and resources selection, and indoor environmental quality
Check it out.
U.S. Green Building Council - Los Angeles Chapter |
Frequently Asked Questions
Question: Mark, how will LEED certification for office buildings impact me?
Answer: LEED is the new ADA.
Corporate America will shortly treat LEED or Energy Star ratings as they began to consider ADA in the late 1980s and early 1990s. Directors of Real Estate will soon screen for office buildings that are LEED or Energy Star rated. What does this mean? It means a couple of things. In the coming years, landlords will be able to charge a rental rate premium for LEED or Energy Star buildings and secondly, investors will pay a premium for LEED or Energy Star buildings. It is projected that LEED or Energy Star buildings will trade at capitilization rates that are 25 - 50 percent lower than non rated buildings.
A similar phenomenon occured with ADA. Investors realized that at some point in their investment hold period that they would need to upgrade or retrofit to comply with ADA to be able to attract a better quality tenant, which in turn increases the value of their asset. It is the same with LEED. An investor purchasing an office building realizes that at some point, the building will need to be retrofitted or upgraded to LEED or Energy Star. Therfore, moving forward, non LEED or Energy Star-rated buildings value will be discounted to account for the cost of retrofitting.
The clear message is that owners, some tenants and developers are embracing this phenomenon and the wave to become a LEED certified professional coupled with the rush to get older buildings retrofitted is in the early innings. |
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My focused speciality is solely driven to advocate the office space interests of Southern California-based corporations and professional services firms in leasing and purchasing negotiations of all types-renewals, relocations, renegotiations, recasting, subleasing, terminations and investments on a local, regional, national and international basis through a network of offices in 200+ markets around the world. Assignments range from single office lease transactions to national and multi-national real estate portfolios. It is my sincere desire to develop meaningful, long term relationships as your trusted
Tenant Rep Consultant and friend. Regards, Mark
Mark David Rauch Senior Vice President License # 01019455
550 South Hope Street, Suite 2600 Los Angeles, CA 90071 Direct: 213-430-2469 Mobile: 818-943-2959 mrauch@traversrealty.com LINKEDIN TWITTER TENANT REP TIMES BLOG
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