Features

LOS ANGELES — The 2014 Green Building Adoption Index, a joint project between CBRE Group Inc. (NYSE: CBG) and Maastricht University, has named Minneapolis as the greenest city in the nation, with 77 percent of the city’s commercial real estate certified as green. The term green is in reference to buildings that are either certified by the EPA’s Energy Star rating or the U.S. Green Building Council’s LEED program. Rounding out the top 10 green cities are: 2. San Francisco (67.2 percent) 3. Chicago (62.1 percent) 4. Houston (54.8 percent) 5. Atlanta (54.1 percent) 6. Los Angeles (49.7 percent) 7. Denver (49.3 percent) 8. Seattle (46.6 percent) 9. Miami (46 percent) 10. Washington, D.C. (42.4 percent) The study also emphasizes the dramatic increase in the number of green commercial real estate properties in the United States since 2005. During that time frame, the amount of Energy Star-labeled buildings has increased 600 percent, and the proportion of buildings that are LEED certified has jumped up 1,000 percent. LEED-certified space now totals 19.4 percent of the total building stock in the 30 office markets reviewed in the study when measured by floor area. The study is the first project in CBRE’s Real …

By John Nelson WASHINGTON, D.C. — Following a negative posting in both March and April, the Architecture Billings Index (ABI) posted a score of 52.6, a three-point jump from April’s 49.6 score. The score reflects an increase in design activity, with any score above 50 indicating an increase in billings. A barometer of future non-residential construction activity, the ABI reflects the roughly nine- to 12-month lead time between architecture billings and construction spending. The index is produced by The American Institute of Architects (AIA) Economics & Market Research Group. The score is tabulated based on a monthly survey sent to a panel of AIA member-owned architecture firms. “Volatility continues to be the watchword in the design and construction markets, with firms in some regions of the country reporting strong growth, while others are indicating continued weakness,” says Kermit Baker, AIA’s chief economist. “However, overall, it appears that activity has recovered from the winter slump, and design professions should see more positive than negative numbers in the coming months.” The South region posted the highest three-month average ABI score (58.1) nationally, followed by the Midwest (51.3), Northeast (47.6) and West (46.9). Among property types, multifamily posted the highest three-month ABI score …

ARLINGTON, VA. — Total construction spending rose modestly for the third straight month in April as a mix of increases and declines in public and private categories showed the sector’s recovery remains fragile and fragmented, according to an analysis of new Census Bureau data by the Associated General Contractors of America (AGC). Association officials say the industry could benefit from new federal investments in infrastructure to offset declining public sector demand. “Residential, private nonresidential and public construction spending all have areas of strength but also pockets of weakness,” said Ken Simonson, chief economist for the association based in Arlington, Va. “While the overall trend remains more positive than last year, growth is likely to be spotty for the foreseeable future.” Construction put in place totaled $954 billion in April, 0.2 percent above the revised February total and 8.6 percent higher than in April 2013. The year-over-year growth so far in 2014 has exceeded the full-year increase of 5 percent recorded from 2012 to 2013. Private residential construction spending inched up 0.1 percent in April to a six-year high. The latest total exceeded the year-ago level by 17 percent. Single-family construction rose 1.3 percent in April and 14 percent year-over-year. Multifamily …

By Scott Reid Manhattan Software, a provider of Integrated Workplace Management Systems (IWMS), recently released Manhattan Analytics (MA), making it available to over 500 corporate clients in the industrial, financial, technology, media, healthcare and energy sectors in 140 countries on five continents. Nearly half of the company’s client base resides within the Fortune 1000. CIO Review ranked Manhattan Analytics among the top 100 data-analytics advances of 2014 for all industries. Craig Gillespie, CEO of Manhattan Software, explains that Manhattan Analytics is the first CRE enterprise system to offer comparative analytical capabilities. “Manhattan Analytics solves a long-running need where we allow all opt-in clients to benchmark against a database of peer organizations in real time on an aggregated level,” he says. “The benchmarking is tied to multinational organizations that are already Manhattan Software clients, so they can leverage higher ROI on their Computer Aided Facilities Management (CAFM) and IWMS investments with Manhattan Analytics.” Without platforms like MA, companies would be severely hampered by a lack of transparency that is critical for well-informed management of their real estate portfolios. That’s because IWMS- and CAFM-based systems that drive MA in real time have information detailing location, occupancy, space utilization, lease terms, size, total …

By Scott Reid The U.S. labor market has been remarkably consistent in its unremarkable performance, observes Robert Bach, director of research for the Americas with Newmark Grubb Knight Frank, following last Friday’s announcement by the Bureau of Labor Statistics (BLS) that total nonfarm payroll employment rose by 217,000 in May. “Growth has been strong enough to chip away at the slack in the supply of labor, but not strong enough to reverse the cautious psychology that persists among households and some businesses,” wrote Bach in a June 6 research note titled “Back in the Black.” With the 217,000 net new payroll jobs created in May, the U.S. labor market finally recovered all of the 8.7 million jobs lost to the Great Recession. The national unemployment rate remained unchanged at 6.3 percent, the lowest level since September 2008. “A welcome milestone, it is also a sobering reminder that the labor force has grown by 1.7 million workers since the recession began with virtually no new jobs created for them to fill, which has kept the unemployment rate above the long-term equilibrium rate of 5.5 percent,” said Bach. “These totals do not count millions more who have dropped out of the labor …

By Matt Valley The second half of May was an especially busy time for DDR Corp., the Beachwood, Ohio-based real estate investment trust (REIT) that owns and manages a portfolio of primarily large-format power centers in 39 states and Puerto Rico. DDR hosted more than 1,000 meetings with retail real estate executives and assorted shopping center industry professionals at the Bellagio Hotel in Las Vegas during RECon 2014. The three-day convention, which took place May 19-21 at the Las Vegas Convention Center, attracted more than 33,000 attendees from across the globe. “The overriding theme for me coming out of RECon was the continued robust demand [for space] we’re seeing from the best-in-class retailers, specifically in the power center format,” said Paul Freddo, senior executive vice president of leasing and development for DDR Corp. during an investor presentation at REITWeek 2014 in New York City in early June. Added Freddo: “The question we get from these retailers who obviously we are dealing with on a daily basis is, ‘How can you help me grow? How are you going to find me space in your centers, the centers I want to be in, and how do you get creative in doing it?’” …

ATLANTA — The U.S. lodging industry is expected to achieve an occupancy level of 63.6 percent in 2014, topping the pre-recession peak of 63.1 percent reported by STR Inc. in 2006. That’s the latest forecast from Atlanta-based PKF Hospitality Research. Given this favorable balance between supply and demand, Mark Woodworth, president of PKF Hospitality Research, predicts that hotel owners and operators will begin to see a real (inflation-adjusted) recovery in average daily rate (ADR) and net operating income (NOI). “The domestic hotel industry is operating at peak performance. We can stop using the term ‘recovery,’” emphasizes Woodworth. “The U.S. lodging industry is at a place in the business cycle where a confluence of market and operational factors will lead to impressive performance on both the top and bottom line. In 2014 and 2015, our firm is forecasting several all-time highs for some of the most important metrics in the hotel business.” By year-end 2015, PKF projects that the U.S. lodging industry will have achieved the following milestones: • A fourth year of accommodated demand in excess of the pre-recession peak of 11.3 million room nights • Six consecutive years of increasing occupancy, the longest such streak since 1988 • An …

By Matt Valley LAS VEGAS — Sprouts Farmers Market Inc., the publicly traded Phoenix-based specialty grocer with an ambitious growth plan, is coming to the Peach State. The first of four Sprouts stores in metro Atlanta will open June 18 in Snellville, followed by more openings later this summer in Dunwoody, Norcross and John’s Creek. “We’re a chain of 172 units. We’ll be at 191 at the end of this year, but our long-term [goal] is 1,200 units,” said Ted Frumkin, the company’s senior vice president of business development. “We have our work cut out for us.” Frumkin’s comment came Monday evening during “Retail Trends 2014,” a panel discussion moderated by Bill Rose, vice president and national director of the retail group at Marcus & Millichap. Hessam Nadji, senior vice president and chief strategy officer for Marcus & Millichap, provided a largely upbeat outlook for the U.S. economy and retail real estate. The panel discussion took place at the Renaissance Hotel during RECon 2014, the International Council of Shopping Centers’ annual global trade show that attracts more than 33,000 industry professionals. Sprouts (NASDAQ: SFM) provides high-quality natural and organic products at prices the everyday grocery shopper can afford, according to …