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| Letter from the Executive Director |
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On Oct. 30, along with the city of San Diego, the San Diego Regional Economic Development Corporation and CleanTECH San Diego, the Burnham-Moores Center for Real Estate co-hosted a conference on sustainable community and economic development. It was a terrific program, headlined by Mayor Jerry Sanders' challenge to the audience to get involved in the public policy process of the city as it integrates sustainable development into the update of the city's general plan. Following the mayor's keynote address, two panels of experienced professionals addressed the hard facts of building green, going well beyond anecdotal evidence to present upfront investment costs vs. subsequent operating cost savings.
Two features of the audience at this conference struck me. First, I was pleasantly surprised to see a large number of new faces in the audience, many of whom had not attended one of our real estate programs in the past. In several cases, it was their first—and likely not last—visit to the University of San Diego campus. Their new faces, representing companies and sectors of the real estate profession that obviously are interested in sustainable real estate, have not been part of our traditional audience of brokers, lenders, investors, advisers, consultants and lawyers. In that we anticipate greening our curriculum and extracurricular programs, hat-in-hand with making them more global over time, we warmly welcome our new friends into the Burnham-Moores Center's family.
The second surprise was more perplexing. That is, our traditional audience was more obvious by their absence than their attendance. While we had a fantastic turnout, I was perplexed that many senior real estate executives in mainstream sectors perhaps do not yet appreciate the significance and long-term ramifications of the sustainable real estate movement for their businesses. I believe the same situation occurred at our Tenth Annual Real Estate Conference in January 2006, when we featured a panel on real estate investment and development in China. At that conference, I noticed the difference in audience composition and suspect that we missed seeing about 100 of our traditional audience members who did not understand the relevance of China to their personal careers and lives. Yet, for those 550 individuals who did take part, their attention was riveted on the speakers. You could have heard a pin drop in the Jenny Craig Pavilion. China is relevant.
Similarly, our building green audience learned a great deal and came away believers in the power of this movement. Several panelists pointed out that the real estate industry fails to understand the real economic benefits of building green because these benefits have not been communicated to them effectively. The Oct. 30 panelists did just that at the "Is It Easy Being Green?" event, and all of their presentations can be found at our web site.
Part of our role at the center is to present leading edge, objective, credible and substantive information and insights to the real estate profession. The China panel did that in 2006, and Leanne Lachman did that in her January 2007 coverage of the implications of global demographics on the real estate industry. Our building green program did that again on Oct. 30. We are part of an institution of higher education, for students and for the industry. The concept of lifelong learning lives and breathes at the Burnham-Moores Center for Real Estate. We invite our mainstream audience to come along for the ride as we expand the horizons of our offerings and the new friends we attract into our family.
Dr. Mark J. Riedy
Executive Director
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Oct. 30 Green Building Summit Provides Forum for Discussion
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More than 200 industry and civic leaders attended the "Is It Easy Being Green?" conference co-hosted by the Burnham-Moores Center for Real Estate and the city of San Diego, the San Diego Regional Economic Development Corporation and CleanTECH San Diego, held Oct. 30 at the University of San Diego.
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Panelists share their experience with the green building process.
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The conference began with an announcement by Mark Riedy, the center's executive director, that the university will soon be joining the San Diego Regional Sustainability Partnership, which is a collaborative organization aimed at reducing pollution, enacting energy savings and improving the quality of life in the San Diego region.
Taking a break from the aftermath of the previous week's wildfires, Mayor Jerry Sanders then addressed the need for balance between development and environment. "Very predictable things came out of the fire," Sanders said. "One group said, 'If we could just pave, if we could just cut back brush, then none on this would have happened. The other group said, 'If you hadn't been building in natural habitat, none of this would have happened. There's a balance in there—I'm absolutely certain of it."
Sanders said that the need for an integrated approach is particularly vital given the state's increasing population.
"We know that people are not going to leave California," Sanders said, citing a projection that the state will be home to 50 million people by 2025. "That is simply not going to happen."
Panelist Sandra Mendler, a sustainable design principal at HOK, said that another safe assumption is that energy use in the United States will continue to increase. "We are poised to see continuing increases in energy demand over the next 25 years," said Mendler, whose firm is one of the leaders in sustainable design in America. "We're looking in the United States at a predicted increase of 34 percent and worldwide at a projected increase of 62 percent."
Given that buildings are the largest consumers of electricity in the United States, Mendler said it's essential to look at areas of efficiency. "Energy generation in this country is less efficient today than it was in 1900," she said. "More than half of all energy use by buildings is due to electrical losses." Mendler said that builders have a huge opportunity for improvement, considering 75 percent of all U.S. buildings will be new or renovated by 2035.
Planning, Commitment and Vision
Matt Reid, vice president of development at the Ryan Companies, says his company has been integrating sustainable principles for the past seven years through the U.S. Green Building Council's LEED certification process. His advice to those thinking about incorporating green development is to be aware that it's a significant undertaking. "You can't just go out one day and say, 'I'm going to be a LEED developer,'" he told the audience. "It takes planning, commitment and vision."
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Mayor Jerry Sanders offered his thoughts on building green, just days after the region's wildfires.
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Reid said that, despite the common industry belief that green building is cost-prohibitive, his company has actually discovered cost savings in sustainable design.
Other developers said that the incremental costs of building green were worth the investment, given the impact that energy-efficient buildings had on employee recruitment, retention and productivity.
Michael Gion, site development manager at Intuit, says his company spent about 2 percent more to build its new Carmel Valley campus according to LEED standards. Gion says that the company was uncertain of what the additional costs would be going into the project, but went down the path anyway because of the positive impact it would have on the software developer's human resources. "In the tech world, there's a big sensitivity to attracting and retaining employees," Gion said. "Our people are everything we have. The real benefit is how our employees embraced this new facility and how they feel about it."
Norm Miller, director of academic programs at the Burnham-Moores Center for Real Estate, offered hard cost calculations for building green.
Research conducted by Miller and Jay Spivey, research director at CoStar, compared 435 "green" and 238,808 "other" Class A Office Buildings across the country. They found, as announced by Miller at the conference, that:
- Green buildings have higher occupancy rates and lower operating expenses than non-green buildings.
- Green buildings observed higher rental rates by almost $2 per square foot per year net in the second quarter of 2007 and $2.65 higher in the third quarter of 2007.
- Green buildings command sales prices of 30 percent more on average when compared with other buildings.
Miller said that while the cost factors are increasingly persuasive for building green, the greatest challenges are effecting a change in culture.
"The big hurdles are mental," he said. "Just think about what it takes to get the typical American construction worker to use three or four different bins to throw away their trash. That's a big hurdle."
All presentations from the Oct. 30 conference can be found on the Burnham-Moores Center's Web site, www.usdrealestate.com.
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Second Class of Continuing Education Students
Graduates
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Continuing education students and their family and friends attended the program's annual graduation ceremony, held Nov. 6 in USD's Joan B. Kroc Institute for Peace and Justice. Burnham Real Estate president and CEO Stath Karras presented an "interactive" graduation speech to the students, who each received a Certificate in Real Estate Finance, Investments and Development that evening.
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Burnham Real Estate CEO Stath Karras delivers his "interactive" graduation speech.
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Karras asked students to imagine that they were the CEO of a company and searching for a senior level employee. "What attributes are you looking for?" Karras asked. The students called out criteria such as "experience," "integrity," "loyalty" and "passion" among a range of others that Karras recorded on a flipchart.
The responses received, he said, were in line with his company's mantra to: "Interview for skills, but hire for behavior."
"No one mentioned a skill, did you? Karras said. "Everything you mentioned was behavior, which can't be taught."
Karras said that the lesson for the students was to: "Continue to learn and expand your knowledge, but really focus on your behavior. It's not about the skill set that you have as you go through life."
Panel of Industry Experts Offers Career Advice
The graduation ceremony was followed by a "Retooling Your Real Estate Career" panel, which was a joint event of the Real Estate Alumni Association and ULI's Young Leaders group. The panel was moderated by Gary London, president of the London Group Realty Advisors, and featured Stath Karras, Sherm Harmer, president of Urban Housing Partners, Ian Gill, principal at Highland Partnership, and Elizabeth Bluhm, managing director at Red Capital Group.
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Most of the second class of continuing education students completed the program in less than one year.
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Bluhm said that the current challenges in the industry are forcing first-time job hunters to go the extra mile since those entering the market are competing with many who just lost their jobs. "I think there needs to be a humble recognition for hard work and dues-paying," she told those in attendance. "Particularly in this type of market, as an entry-level employee you're not going to be doing the sexy stuff. It may feel like grunt work, but it's how you learn the business."
Gill recalled a time in his own career when he changed positions and took a significant salary cut to gain a stronger foothold in the industry, which was in a recession at the time. "In downtimes, there are always opportunities, whether it's getting an MSRE degree or taking a job that broadens your skill set," he said. "Those who have the patience are the ones who are going to be successful."
Karras also recounted an experience in a down economy when he worked for a company at night for free after his day job ended, just to gain experience. "Your ability to change and adjust to change is going to determine how successful you'll be," he said.
Harmer agreed. "Right now, what we're seeing is that to be successful, people are having to be flexible," he said. "We're in very dynamic times."
London said there was an upside to the current market conditions: "If you learn your practice during a down market, you can do it anytime."
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Alumni Profile
USD Real Estate Alum Studies Urban Design at Harvard
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By: Meghan Bokath, Communications Coordinator
When it came to expanding her knowledge of urban design, USD alum Liz DiLorenzo went straight to the top academic institution in the country. She ended up at Harvard University, and defined her career path in the process.
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Liz DiLorenzo (left) and classmates enjoy a lunch break on campus at Harvard University.
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DiLorenzo, who graduated from USD with a bachelor's degree in business administration with emphases in real estate and finance, recently completed the Career Discovery program at Harvard, where she studied urban planning. DiLorenzo initially joined the program because she was interested in becoming a sustainable commercial developer, and saw urban design and architecture as a conduit to a career in green and sustainable design.
Her summer at Harvard consisted of six weeks of intense studio work, seminars, lectures, workshops and fieldtrips aimed to help young professionals define and clarify their career plans and goals. DiLorenzo spent on average 15 to18 hours a day, five days a week, engaged in some form of coursework. As a student in the Urban Planning concentration of the program, she traveled extensively throughout Boston, visiting job sites and meeting real estate professionals in the city. A typical day included lectures from distinguished guest speakers in the morning, followed by a lunch lecture of industry professionals, and then classroom and studio time for the remainder of the day. Many of the speakers highlighted green and sustainable development.
DiLorenzo started her career on the development side of the industry, where she was initially a real estate and market research analyst at The Corky McMillin Companies. "Coming from the developer perspective, we were always focused on profit, profit, profit," she says. Yet, through the Career Discovery program, DiLorenzo was able to gain insight into the bigger picture of real estate, seeing the field through the eyes of city planners, designers, architects, green enthusiasts and financiers. She says she now has a greater appreciation for all the stakeholders involved in real estate development and sees projects with a new perspective—a perspective not solely motivated by profit. Her final project was an analysis of the South Boston Waterfront, where she and a partner researched practical uses for the site and created numerous prospective drawings, charts and written plans to explain their ideas for the best use for the site. She defended her proposal before a panel of Harvard professors, Harvard alumni and current Harvard students, where her efforts were evaluated. Her critique ended with one Harvard professor saying DiLorenzo's project was one she would have expected to see from a much more experienced student.
Since completing the program, DiLorenzo has decided to focus her career on green and sustainable commercial real estate. The program confirmed her passion for green development, which she will pursue through real estate, rather than architecture or design work. She plans on taking what she learned about green practices and using them in the 11 commercial properties she currently manages for SD Commercial as East Coast divisional asset manager.
At the second annual MSRE dinner, more than 30 current MSRE students, MSRE alumni and USD faculty enjoyed Thai food at Rama in San Diego's Gaslamp District on Oct. 16. The location was chosen in honor of current Thai MSRE student Chaiwat Ngamasakthaweechai. Included in the festivities were current MSRE students Victoria Crown and Joe Phair.
Norm Miller, Ph.D., director of academic programs, was quoted in "Keen on Building Green," which appeared in the business section of the Oct. 13 edition of the San Diego Union-Tribune.
Miller was interviewed for the Oct. 27 broadcast of NPR's "Weekend Edition" program with Scott Simon. The program, which airs nationwide, focused on the economic effects of the San Diego wildfires.
Miller was quoted in the San Diego Union-Tribune's Nov. 1 article on the Center's "Is It Easy Being Green?" conference, held Oct. 30 in the Joan B. Kroc Institute for Peace and Justice.
Miller appeared on KPBS radio's "These Days" program, which aired Nov. 7. The discussion focused on the current state of the mortgage market. He also was interviewed for Envision San Diego, a special report by KPBS TV on the economic effects of San Diego's recent wildfires. The program is scheduled to air on KPBS TV Nov. 14 at 9 p.m.
Miller was the solo guest on the San Diego Union-Tribune's Sign-On Radio program Nov. 12. He was interviewed by business editor Carl Larson on a range of real estate topics.
Lou Galuppo, residential real estate director, was the featured interview in Scotsman Guide's Q&A for the December residential edition.
| Calendar |
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Eighth Annual Residential Real Estate Outlook Conference
· Wednesday, Dec. 12, 2007, 7:30 a.m. to 11:45 a.m., Hahn University Center, University of San Diego
· To register, contact Jodi Waterhouse, or register online
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12th Annual Real Estate Conference
· Tuesday, January 22, 2008, Jenny Craig Pavilion, University of San Diego
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Visit us online at www.USDRealEstate.com
The Burnham-Moores Center for Real Estate is committed to delivering outstanding education, industry outreach, career placement, and research services to advance socially responsible leadership in real estate.
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