Don Tishman's Real Estate Development and Investing Solutions

At this year’s Consumer Electronic Show (CSE), the leading manufactures featured a showcase of green-oriented gadgets. These leading companies included Sony, Toshiba, Panasonic, Sanyo, Philips, Motorola, and LG.  A spokesman said” Consumer electronics is a fairly mature area and we need new areas of growth- energy fits into this category”.

It started with much of the environmental activity in electronics was driven by regulation. Global companies have to comply with a multitude of various hazardous material standards for various uses. . Many states have different recycling laws. There are many voluntary certification such as EnergyStar power efficiency label and EPEAT, a rating system that covers materials, energy, and recycling plans.

Although product designers have to make difficult decisions that balance eco-features, such as energy efficiency. against other improvements every day, the industry says sustainability is their overall strategy. They feel that the consumer demands such a system. They must maintain this system to be successful. Toshiba says, ” We need a sustainable world where people can keep buying products and living well and we can keep making products.”.

CSE showcased energy efficient tools and alternative energy devices. These included solar charges for charging gadgets on the go. Also home fuel cells and wind-powered devices. Another area was “smart plugs” that eliminate stand by power drawn from home electronics when they are not in use.

Home energy efficiency was a big theme. These tools help users to conserve energy and allow them to control electronics through a central console or a smartphone over the internet.

The size of the potential market was best described by Don Bartell, senior director of Motorola when he said, “Although there’s already an established market for eco-minded consumers, ever increasing energy prices make energy efficiency tools appealing to a much broader audience.“

Today, these huge companies have discovered the market potential of sustainability- Is this real?

U.S. Global Change Research Program (USGCRP) a multi- agency research effort set up under the George W. Bush administration, produced ” Global Climate Change Impacts in the United States” ( available at www.globalchange.gov) , a document that provides sobering projections about specific impacts for different regions of the country. The impacts in the U.S. of the “unequivocal” global warming that is occurring, according to the report, will include higher temperatures in every region of our country, greater incidence of intense rainfall events in the Northeast, droughts in the West, rising sea levels that will inundate roadways and ports along the Gulf Coast, increased crop pests and reduced crop production in the Midwest, and rising heat-related deaths in cities.

The bottom line is that we must redouble our efforts to mitigate (prevent or slow) climate change, but at he same time create buildings and communities that can adapt to a changing climate. The USGCRP report suggest an increase in temperature by the end of this century, if we mitigate global warning , of 4 to 6.5 degrees. If we do not, from 7 to 11 degrees.

Here is a sample of the USGCRP recommendations.

Our buildings will experience higher temperatures than most present energy modeling predicts, and they should be able to function well in those conditions. Incorporate more robust cooling-load -avoidance strategies into buildings. For example limit glazing areas, particularly on the east and west facades; increase insulation levels; landscape areas to provide vegetative shading; and specify only efficient lighting, appliances, and office equipment to limit internal gain.

Include in buildings  devices that incorporate passive survivability by designing for power outages. These devices aid in  designing buildings that will maintain livable conditions in the event of a power outages, which are likely to be more common with climate change. Strategies include high insulation levels, high performance glazing,  cooling load avoidance measures, natural ventilation, daylighting, and renewable energy systems. Raise the cooling design temperature when modeling buildings and sizing mechanical equipment.

The raising temperature levels means designing for more intense storms and rising sea levels. This will mean increased storm water capacity

Do not put your head in the sand- George W. said it’s coming! scary!

Knowing George Anselvicius was one the greatest events in my life. It was a once in a lifetime experience.  I would like to share a few of these experiences with you.

George was a fantastic architect. For many years before we would start a project, I asked George to look at the plans. Modestly, George would say “what can I add to the work of a world famous architect?”  But he always improved the design and found countless costly errors and omissions.. Many of these errors would have caused the development to incur huge additional costs while omitting essential elements of the buildings.

George was incomparable teacher of architecture. I first met George when he was head of architecture at Harvard. For twenty years, I worked with him teaching at the University of New Mexico School of Architecture. Observing Professor George teach was an unforgettable experience. As he reviewed a student’s work, he was always positive. Never talked down to a student. He asked each student, how can we make this an even better concept? It was a joint effort between student and teacher. They were equals not great authority  and student.   George’s approach enriched the student’s educational experience and inspired the student to be very enthusiastic and confident about architecture.

He  participated in my classes critiquing the student drawings. While the class watched, George and the student would transform an unimpressive sketch to a masterful building. Both the class and I were transfixed. When the class would applaud what the student and George had done. George would modestly give all the credit to the student.

When I failed to explain a point, George would very softly ask me a question, that told me what I had not done.

Shortly before Hitler invaded Lithuania, George was sent to  school in England. After WWII, George was hired by England’s top architectural firm. He left and came to America where he was immediately hired by Skidmore, Owens and Merrill. After several successful years at Skidmore, George became one of the original members of HOK in St. Louis. While at HOK, he was asked to teach an architectural course at Washington University in St. Louis. George was a instant success at teaching, The Dean of the Architecture begged George to become a full time professor. This meant a substantial reduction in income for George and Evelyn. They thought long and hard about the change in lifestyle this reduction would mean. Finally, George accepted the offer and became Professor Anselevicius. Soon he was Dean Anselvicius. Under his tutelage, Washington University Architectural Department became more famous. Many other schools sought George to take over their Architectural Schools. George turned them all down, until Harvard asked him. He went to Harvard. Then the Great State of New York decided that they needed a State School of Architecture. They asked George to write his own ticket. George could not turn the opportunity to create a new School of Architecture with his own concepts of what an Architectural School could do for the students and community. But alas, George had a problem he could not solve- Evelyn, who was born in Oklahoma , could not take the severe Buffalo winter weather and she had a very successful career as a weaver. George and world famous architect, Henry Moore, had a conducted a summer school for architectural students in San Miguel de Allende, Mexico for several years. There Evelyn did her weaving that made her one of the most celebrated weavers with exhibitions at many museums including the Museum of Modern Art in New York City. Evelyn insisted on leaving this cold climate plus wanted to be nearer to San Miguel de Allende. When word was out that Dean Anselvicius would soon be available, George was again besieged by offers of Deanship. After considering all these offers, The Anselevicious’s decided on the University of New Mexico. There George changed the School of Architecture from barely getting accreditation to one of the premier architectural schools in the US.

Many of the top architects in the world were invited to a celebration of the 50th Anniversary of Chandigarh. I attended and met many of the these world famous architects. I was flabbergasted  when almost all asked about George. George Anselevicius was world  renown for his writings on architecture. The Indian architects that worked with Corbusier were among George’s best friends. Each year at the University of New Mexico, Dean Anselevicius brought in several international architects to teach for short periods of time.

Because of George, there were students from all over the world in my classes.

George waxed eloquently on the one subject Architecture Schools never mentioned – money. The students are NOT told that as architects they must meet a building budget.

George felt that the design and  building process must be improved. He was a predictor of Building Information Modeling.

I sure miss George.

In most every industry before a new product is built, a computer model is created. The new product must pass numerous computer generated tests before the product will be actually produced. Except in the design and construction of buildings. This explains why a recent statistics study shows that construction alone, out of all non-farm industries, as decreasing in productivity since 1964, while all other non-farm industries have increased productivity by over 200% during the same period. Can you imagin a new car or airplane being built before being computer tested?

The construction industry developed “fast track” building permits( starting construction before all the drawings are completed). This was get the buildings in service quicker. Many of these buildings were a financial disaster.

How can we drag the design and construction of buildings from the 19th century to the 21st century?

The process of design, bid, and build is fraught with inconsistencies, lack of available knowledge, and constant confrontations.

A new process called Integrated Project Delivery(IPD) is being developed.  The demand for more effective processes that result in better, faster, less costly and less adversarial construction projects are driving significant and rapid change in the construction industry. Envision a new world where  facilities managers, end users, contractors and suppliers are all involved at the start of the design process … processes are outcome-driven and decisions are not made solely on a first cost basis.

The great expectations of Computer Aided Design(CAD) was that it would solve these same problems.  This never happened. But today a new process in starting to solve these problems. Building Information Modeling (BIM) is an emerging approach to the design, analysis, and documentation of buildings. At its core, BIM is about the management of information throughout the entire life cycle of the building from early conceptual design through construction and into facility management. By information I mean all the inputs that go into a building design: number of doors and windows, cost of materials, the size of the heating and cooling equipment. the total energy footprint of the building, and everything else.  This information is presented in a digital 3D mode that is shared across disciplines, and serve as a centralized design management tool. Working in a model based framework guarantees that a change in one view will make changes in all other views of the model. If you remove a door from your model, it simultaneously is removed from all views and your door schedule is updated. Three dimensional design visualization improves understanding of the building and its spaces.

In the 15th century, drawings were an idea of what the building would look like. The architect was always also the builder. So the drawings were for the sponsor’s eyes to communicate the architects visions. I remember an 1960′s  article in Progressive Architect warning architects that “construction managers” were taking architectural work from the master builder, the architect. The architectural industry ignored this warning. The building process became what it is today.  An Economist article from 2000 identifies 30% waste in the US construction industry; a NIST study from 2004 targets lack of AEC software interoperability as costing the industry $15.8B annually.

Each new buildings has three restraints from the start:

1. The business expectations of the owner.

2. Existing building codes and zoning

3. The budget.

The longer it takes to make decisions concerning these three, the more expensive the process becomes.

Most developers begin the process with the architect and contractor. There is no great incentive for the contractor to invest heavily in this process. The early drawings do not have sufficient detail for a careful estimate. By the time this detail is available, the owner has made a major investment in the process. They are past the point of no return. If the project is over budget, in come value engineering. All this is is less for less. The original concept is no longer controlling. Will this enfeebled substitute have the ability to be marketed at the same price as the originally conceived building?

A sidelight, in considering the sub-prime market, remember 90% of houses built in the US do not use architects.

What arer the benefits of this computer 3D modeling of a proposed building?

The benefit to Owners—Early and open sharing of project knowledge streamlines project communications and allows owners to effectively balance project options to meet their business enterprise goals. Integrated delivery strengthens the project team’s understanding of the owner’s desired outcomes, thus improving the team’s ability to control costs and manage the budget, all of which increase the likelihood that project goals, including schedule, life cycle costs, quality and sustainability, will be achieved.

The benefit to Constructors—

The integrated delivery process allows constructors to contribute their expertise in construction techniques early in the design process resulting in improved project quality and financial performance during the construction phase. The constructor’s participation during the design phase provides the opportunity for strong pre-construction planning, more timely and informed understanding of the design, anticipating and resolving design-related issues, visualizing construction sequencing prior to construction start, and improving cost control and budget management, all of which increase the likelihood that project goals, including schedule, life cycle costs, quality and sustainability, will be achieved. Architects and contractors look at buildings differently. The architect pictures the finished product. The contractor looks at all the parts behind the finshed product.

Through early collaboration and the use of Building Information Modeling (BIM) technology, a more integrated, interactive, virtual approach to building design, construction and operation is emerging. To embrace, master and influence this emerging method of project delivery and to seize the new business and cultural opportunities it offers to the industry, the American Institute of Architects (AIA) is working with other construction industry stakeholders in  related activities to:

1. Collaborate with industry leaders to facilitate the dialogue, share knowledge, and accelerate the rate of change for all those seeking to improve the industry’s current practices by utilizing integrated approaches to the design, construction, and operation processes;

2. Communicate the benefits of collaborative approaches to public and private sector clients, and promote changes to the design and construction procurement process to allow early information sharing;

3. Promote the benefits of developing a virtual model of a project using available technologies, built with interaction and input from an integrated and collaborative team of project stakeholders – owners, designers, consultants, constructors, subcontractors and suppliers;

4. Develop and promote the integration of collaboration techniques and technology into education curricula for architects and architectural students to enhance their design and team collaborative skills;

5. Engage the legal profession and the insurance industry in preparing contracts that support the integration of collaborative models and technology into the design and build industry and offering insurance coverages responsive to IPD; and,

6. Promote documentation of the measurable contributions resulting from implemented integrated project delivery approaches to stakeholders and promote the value and achievements of increased use of integrated project delivery methods.

Designers—

The integrated delivery process allows the designer to benefit from the early contribution of constructors’ expertise during the design phase, such as accurate budget estimates to inform design decisions and the pre-construction resolution of design-related issues resulting in improved project quality and financial performance. The IPD process increases the level of effort during early design phases, resulting in reduced documentation time, and improved cost control and budget management, all of which increase the likelihood that project goals, including schedule, life cycle costs, quality and sustainability, will be achieved.

The ultimate benefits of BIM are still emerging in the market and will radically change the way buildings are designed and built. The focus is shifting from traditional 2D abstractions to on demand simulations of building performance, usage, and cost. This is no longer a futuristic concept

The AIA offers  an excellent Guide to Integrated Project Delivery @ aia.org.

more later

The other day I attended a new movie, Sherlock Holmes. As a youth, I had seen many Sherlock Holmes movies based on the Conan Doyle’s characters staring Basil Rathbone and Nigel Bruce. I was excited to see a movie  based on these characters. Seeing this recent movie was an appalling and atrocious  experience. First, there was no connection to Conan Doyle”s characters. The character portrayed as Sherlock Holmes was the exact opposite of the character described by Conan Doyle. In addition, there was no story.

I should have been warned by  the many previews I sat through before the “feature” film. The previewed movies were an insult to anyone over 8 years old. All these movies featured their version of “car chases”. I left the theater asking myself why I wasted 2 hours to sit through this horrible motion picture.

Then I thought, why would any rational person spend millions of dollars to produce this worthless trash. Obviously, the producers deduced that their was a huge market for this level of entertainment.

The 2009 estimate of US population is about 315,000,000. The median age is 37 years old. So half our population is over 36. The  population 15 to 30 years old is only 20% of the total US population. This 20% of the population has a major impact of the other 80%.

My only conclusion was this youthful segment of the population was the lucrative market the producers of these junk are seeking.  Apparently, much of the Billions of dollars spent on producing entertainment is dictated by the tastes of this 20%.

No wonder George Bernard Shaw wrote about youth being wasted on youth. This is a sad commentary on our education system and the mental health of this “lucrative” market.

Incidently, as I was leaving the theater, most of the comments I heard , were similar to what I have written about this “movie”. When I arrived home, my wife reminded me that she had told me that all the reviews of this movie said it was horrible. I should have listened.

The more I observed pets the more I am astounded by the extent of what they do.

In junior high school, I had newspaper delivery route. Each day this puppy would follow me home and then I would return the dog to the family he lived with.  Finally, after weeks of this, the family gave me their German Shepherd puppy.  Now several years later, I had given my German Shepherd to a farm family when I went off to college. Several months after giving Scrappy away, I felt Scrappy was in great danger, but I was 180 miles from home.  I then hitched hiked home. The next day I went to visit Scrappy and learned he died after he was poisoned the night before.

We had a very private cat for18 years, Hunter never played with any other cat or dog. When she became ill, my Rottweiler took care of her- bathing her and letting her cuddle with him..This same dog had killed coyotes, skunks and chased bears. He weighed 125 pounds and the cat at her best weighed 12 pounds.

My daughter, Victoria, has a female German Shepherd /Coyote mix. This dog, named Coyote, has the instincts of a animal raised in the wild. She is aware of any new sound and can run for hours in high mountains.  My dogs have  run with Coyote for as long as 10 hours.  My Rottweillers come home exhausted, while Coyote is fresh and is ready for another mountain run.  Victoria’s toddler SOFIA, aged 18 month, and Coyote are constant companions. After Sofia spends a morning chasing Coyote, Coyote takes a nap, while Sofia is still raring to go. While Sofia “reads” her book to Coyote, Coyote sits listening attentively. Coyote weighs 70 pounds, Sofia weighs 35 pounds. At this age Sofia has her own language and Coyote seems to understand what Sofia is telling her.  Sofia calls Coyote Yoyo.  Yoyo seems to respond to Sofia’s commands.

Recently, I have listening to the various sounds my dogs make. They have many different tones and volumes. One dog will ask the other-where are you? Another dog communication is let us go for a run. If one of the dogs is not feeling well, the well dog is very caring to the other.  I have observed that one  of the dogs is a watch dog, while the other is a guard dog. The watch dog will only bark at something strange. The guard dog will crouch and emit a low growl warning when he feels something is threatening. Otherwise, the guard dog is quiet and friendly to all. The watch dog wants to kiss anyone welcomed to our home. Rottweillers have large heads. This large head with teeth to match, not their conduct, scares some folks.

It seems to me that cats are much more independent than dogs. Cats seem to require much less attention. We can go on a trip and leave the cats at home. They have food that they will need for several days. They use the cat litter and can come and go outside as they please. Our dogs need a baby sitter when we are gone.

Dogs and cats have a hierarchy among themselves. The order of who eats when does not seem to change. Who is the Apha, etc. stays the same until the Alpha ages enough.

There is nothing beyond belief of what our non-human friends are observed doing. . The other day a friend sent my a you tube short film of a dog that responded to numbers- the woman would say a number and the dog would bark the same times as the number spoken. For example, the woman said three- the dog barked three times.

What experiences have you had with pets? I am anxious to read and learn about your experiences.