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Contractor Groups Slam Legislation Raising DOB Fines

Trade groups that represent both open-shop and union contractors are vocally opposing a package of City Council bills that aim to increase fines and create new ones for serious building code violations. The council passed two of the bills yesterday, but the most controversial of the proposals is still wending its way through the legislative process.

“The level of fines they’re talking about are arbitrary and capricious,” Louis Coletti, the head of the Building Trades Employers’ Association, a contractor group that represents companies using open-shop and unionized labor, told Commercial Observer. He added that the bills will be “ineffective” because there was “no discussion with the experts in the buildings department or the experts in the industry.”

The bills were first introduced among a package of 21 construction safety bills at a hearing in January. But since the focus of that hearing was the controversial “apprenticeship bill” signed into law this on Monday, trade groups didn’t have much opportunity to comment on the New York City Department of Buildings fine proposals at the time. The council only notified contractor groups on Oct. 2 that the bills were scheduled for a vote, giving them two weeks to offer feedback and objections before the full council voted on the bills.

One of the proposals passed Tuesday, Int. 1404-A, would raise the minimum civil penalty for a “major violation” of the site safety plan portion of the building code to $1,000 and the lowest amount for an “immediately hazardous violation” to $2,000 from $1,000. Contractors with major violations can get slapped with a $250 fine for each month that the violation isn’t fixed. And those with immediately hazardous violations can fined $1,000 per day for each day the violation isn’t corrected.

Another bill voted through yesterday, Int. 1437, creates the concept of a “violation ratio,” a term that the DOB refuses to comment on and that doesn’t exist in the current building code. The legislation defines the phrase as the number of major or immediately hazardous violations that have been issued at a site in the last six months (excluding violations going through an appeals process), divided by the square footage of the site’s footprint. It also opens the door for the DOB to develop its own ratio to determine projects that have ongoing, unsafe conditions.  

If a site exceeds the “violation ratio,” the DOB can issue contractors with double the fines for each infraction. Essentially, council members want to punish contractors who are racking up what the bill terms “excessive violations.”

These are just so blatantly a cash grab to bring in money,” said Diane Cahill, a lobbyist who works with the city on behalf of an open-shop group, the Associated Builders and Contractors. “They’re looking to bring in money to support the training initiatives created by 1447 [a newly passed law that requires new safety training for construction workers].”

Notably, residential developments would be exempt if they were financed with subsidies or loans from the New York City Department of Housing Preservation and Development or the city’s Housing Development Corporation

When CO contacted the DOB for comment on the bills, a spokesman only responded that the agency was “reviewing the legislation.”

During a January council hearing, the Real Estate Board of New York testified that it “generally supported” the bills that introduced higher fines, because “increased civil penalties are [an] effective means to discourage bad behavior.” But the group argued the ratio bill was unnecessary because existing regulations and policies already allowed the DOB to shut down troubled sites.   

Others worried that major, high-rise projects are more likely to be affected by the new violation ratio policy. Building inspectors typically monitor these sites more closely than small projects, meaning that smaller projects may ultimately avoid both the extra violations and safety monitoring.

“The projects that are more visible are going to get more attention and potentially greater impact in this regard,” said Joe Hogan, a vice president for the Associated General Contractors for New York State. “A lot of the problems that need fixing—on projects that are less than 10 stories—we’re not getting where we need to by just administering these fines.”

He also noted that the nebulous categories of immediately hazardous and major fines introduce “a lot of subjectivity and issues of potential abuse” into the code enforcement process.  

However, the piece of legislation that sparked the most controversy hasn’t been voted on yet. The bill known as Int. 1419 would levy fines ranging from $500,000 to $1.5 million for a violation that happens when a worker is seriously injured or dies on a construction site.

Some industry experts worried that the potential fines for construction fatalities would boost the cost of liability insurance, and by extension, the overall cost of construction in New York City.

“This kind of fine—some of that is going to come back to the insurance companies as well,” said Brian Sampson, the head of the Empire State Chapter of the Associated Builders and Contractors. “If you’re a bank, you’re going to make sure you’re getting your loan repaid. If you know there’s going to be all these fines, are you going to loan less? At a higher rate?”

In a legislative memo issued last week, REBNY expressed concern that the bill keeps contractors liable for worker fatalities and injuries, even if a court rules that the accident was caused by a worker’s mistake.

“REBNY reiterates its concern that the bill does not include any relief provision if said injury or death is the result of a worker’s negligence,” the organization notes. “Without such a relief provision, the bill would impose a de facto strict liability standard upon the owner and permit holder that could be used against them in other related litigation.”

Source: commercial

New York City Submits Bid for Amazon’s Second Headquarters

New York City lit up the Empire State Building and 1 World Trade Center “Amazon Orange” last night in an effort to attract the e-retailing giant. At the same time, it submitted a formal bid for Amazon’s second, $5 billion headquarters, according to a press release from the New York City Economic Development Corporation.

The proposal names four neighborhoods as potential destinations for the Seattle-based tech company: Midtown West, Long Island City, Lower Manhattan and the “Brooklyn Tech Triangle,” which includes Dumbo, the Brooklyn Navy Yard and Downtown Brooklyn.

After Amazon announced its search for a city to accommodate a new headquarters last month, New York launched its own mini-competition. Officials received 27 proposals. Borough Presidents Eric Adams and Ruben Diaz threw their respective hats for the Bronx and Brooklyn into the ring, and groups of developers and neighborhood organizations banded together for bids as well.

But only those four neighborhoods met the company’s requirements, which included a need for 500,000 square feet of commercial space by 2019 and up to 8 million square feet of commercial space beginning in 2027. The area would also have to accommodate up to 50,000 Amazon workers and offer mass transit options and easy access to highways and airports.

The city plans to offer Amazon the same subsidies and tax breaks that it would give any other corporation, according to The New York Times. The state is also assembling an incentive package, but it wouldn’t tell the paper exactly what it planned to include. Aetna, for example, scored $9.6 million in city tax benefits and $24 million in state tax credits for its planned 145,000-square-foot headquarters at 61 Ninth Avenue in Chelsea. The state is also submitting four bids for different regions of New York: Buffalo and Rochester, Syracuse, Albany, and the downstate area of Long Island, New York City and Westchester County.

“The brightest minds and innovators want to live in New York,” the mayor wrote in a letter addressed to Amazon Chief Executive Officer Jeff Bezos. “The people who live and come here experience a quality of life unlike anywhere else, from our incomparable public spaces and cultural institutions to our dynamic neighborhoods. This is the safest big city in America, an open city that welcomes people from every corner of the country and the globe.”

EDC’s pitch also highlights Amazon’s current footprint in New York City, which has grown rapidly over the past six months. The e-commerce behemoth recently inked deals for 360,000 square feet of office space at 5 Manhattan West, an 850,000-square-foot distribution center on Staten Island and a bookstore and offices spanning 470,000 square feet at 7 West 34th Street.

Source: commercial

City Planning Holds First Hearing On Fate of Gamma Real Estate’s Sutton Place Development

The New York City Planning Commission yesterday held its first hearing on a revised rezoning proposal that aims to limit the scope of Gamma Real Estate’s planned project at 3 Sutton Place.

On October 2, the city certified the new proposal, which allows Gamma to move forward with construction on its planned 67-story, 800-foot-tall residential tower now called Sutton 58—located at 430 East 58th Street between First Avenue and Sutton Place—without the need for an affordable housing component or height cap.

The proposal, brought forth by the East River Fifties Alliance (ERFA), would force Gamma to follow “tower-on-a-base” requirements, which mandates that 45 to 50 percent of the building must be built below 150 feet. The initial rezoning proposal the coalition introduced last June called for a 260-foot height restriction and the inclusion of a significant portion of the tower to affordable housing.

“In their previous proposal, they alleged an affordable housing element. They ended up taking that part out,” Gamma Principal Jonathan Kalikow told CO. “This new proposal really shows their true colors.”

kalikow rally pic City Planning Holds First Hearing On Fate of Gamma Real Estate’s Sutton Place Development
Gamma Principal Jonathan Kalikow speaks in front of construction workers at a rally prior to the hearing. Photo: Mack Burke for Commercial Observer

Prior to the hearing, Kalikow organized and led a small rally in front of City Hall and marched to the Department of City Planning’s offices at 22 Reade Street with labor activists and roughly 20 construction workers carrying signs with messages such as “Preserve Jobs, Not Views,” “No ERFA Backroom Deal” and “Stop Spot Zoning.”

“At the end of the day, people understand this is not the New York City way,” Kalikow told CO while he and his group of supporters were en route to the hearing. “We had a viable process. The fact that we were railroaded, you know, no citizen should want to see that.”

The ERFA wrote in its revised proposal that “the combination of these [new] rules would more closely align future construction with the existing built environment, while still accommodating reasonable growth.” The community coalition consists of 45 area buildings and roughly 2,600 individual supporters who live in approximately 500 buildings in and outside the proposed area of rezoning; it was formed in 2016, shortly after the first announcements of the development, to oppose and combat the construction of Sutton 58. 

Mayor Bill de Blasio’s administration has championed the expansion of affordable housing throughout all five boroughs, but he, as well as the City Planning Commission, opposed the ERFA’s original rezoning proposal, which was backed by several community representatives, including Manhattan Borough President Gale Brewer and Councilman Ben Kallos, who represents the residents of Sutton Place. New York State Senator Liz Krueger has backed the proposal, and recently, New York Congresswoman Carolyn Maloney signed on in support of the ERFA’s mission, having already written and voiced concerns to the CPC on the organization’s behalf, according to an ERFA spokeswoman.

Opponents of the ERFA’s new proposal who testified at the hearing included construction workers from the two companies tapped to build the property—Lendlease, to oversee the project, and Urban, for the building’s foundation—charged with building the project, representatives of New York’s real estate industry, Gamma’s legal counsel and even some residents of the Sutton Place area, who claimed that the bill simply doesn’t benefit the public and only sets a bad precedent for rezoning efforts going forward. They argued that the plan is an effort to spot zone this one property, that it goes directly against de Blasio’s plan to expand affordable housing throughout the five boroughs and that it will also take work away from construction companies as well as inhibit the growth of neighborhood economies.

“The Mayor was very clear about it when he attended a town hall on the Upper East Side a couple weeks ago: [this proposal] would provide an opportunity for people who have the means to mount a challenge to try this method of spot zoning to go forward… it becomes a tool for people to use against any undesirable development,” Real Estate Board of New York President John Banks told CO. “We’re concerned that there is no comprehensive planning that would take place if this becomes more of a norm.”

Members of the ERFA and Kallos said that their efforts don’t constitute an attempt to spot-zone the property and that their rezoning application addresses the entire zoning area. The ERFA, backed by Kallos, wants to take its fight city-wide to stop super tall residential skyscrapers.

The proposal’s supporters at the hearing included elected officials and spokespeople for elected officials, ERFA representatives and residents of Sutton Place. They argued that the community is the victim of what Kallos called an “accident of history” in his official testimony, meaning the nine-block area is the only  residential area of the city zoned R10 without a tower-on-a-base standard or any type of contextual protection. 

“The Sutton area is uniquely vulnerable to the development of super tall towers, a building form that was neither contemplated nor feasible when the R10 district was created in 1961,” Kallos said in his official testimony. “By implementing tower-on-a-base zoning, we would prevent the construction of super-skinny buildings that get to heights of 1,000 feet, by requiring new buildings to pack roughly half of the building into a  base under 150 feet, leaving limited [floor area ratio] for a tower, thus restricting its height.”

Source: commercial

Morningstar’s Lea Overby on the ABCs of CMBS

It’s been a busy year for commercial mortgage-backed securities. The wall of maturities may be behind us now, but there’s plenty of new issuance to keep those in the sector busy, including Lea Overby. Overby joined Morningstar Credit Ratings last August and was appointed head of CMBS research and analytics in June. In her new role, Overby is responsible for the ongoing management and development of the rating agency’s CMBS business, including new issue and surveillance ratings, research and analytical products. Overby may have fallen into CMBS “somewhat randomly,” by her own account, but she already has 15 years of experience under her belt. Before Morningstar, Overby was the head of CMBS and asset-backed securities (ABS) research at Nomura Securities and, before that, a CMBS portfolio manager for BNY Mellon Treasury.

Commercial Observer: Tell us about your new role.

Lea Overby: Well, I have two groups that report up to me now. We’re branding one group as research—it’s client focused and produces a for-sale product for the investor community. That team is 15 people. The other piece is the rating agency business, which has two parts: the new issuance business and the surveillance piece of it, which surveils things we’ve already put a rating on.

Will you be adding to your teams?

I certainly hope so. The deal flow has been so heavy that we need to staff up a bit.

How did you get into CMBS?

Somewhat randomly, to be perfectly frank. I did graduate work out of Vanderbilt [University] with this idea that I wanted to teach, and after teaching for a couple of years I realized I didn’t. I took a job at Bank of America Securities and pitched myself as someone who knew how to program—which was not entirely true. This was back in the days when you were able to fake being able to program. I realized, fairly quickly, that wasn’t for me either, and then an opening on the CMBS desk popped up [in 2000]. They were looking for a database person to develop queries and write reports. I got started there, and I loved it.

What appealed to you about CMBS? 

My major is math, and CMBS is a nice combination of the qualitative and the quantitative. You can create a model that projects out default rates and prepayment rates that can be fairly accurate on the aggregate, however CMBS loans—each and every one of them—have unique characteristics that can make them fall off the model. It’s a mix of my analytical skills, and at the same time, there’s always a judgmental component to it.

As my career has developed, I’ve found there is an interesting dichotomy with commercial real estate being fixed assets in an ever-changing world. So, as our preferences for urban versus suburban living change, or online versus brick-and-mortar retail or even fashions change, the tenants in these locations also change while the structures themselves don’t. It’s fascinating to me how landlords and developers and tenants work together to figure out how commercial real estate works best.

 There seem to have been a lot of hotel special servicing transfers lately.

Hotels are always volatile because the rents reset every single night. If there is any change in the local economy, it is immediately reflected in the hotel market. We see it all the time—hotel developers look at the market, they all decide, “Oh, look, we’re undersupplied,” and start building. Then there’s oversupply. There’s this constant cycle of build, overbuild, stop, reassess and invariably something will happen that will trigger a hotel to be transferred. The default rates on hotels are higher, the loss severity on hotels are higher, and it’s a difficult asset class.

Is retail still experiencing the most pain as an asset class?

Yes, but we’re also seeing a decent amount of office stress. The office story flies under the radar, but I remember when I was buying bonds in early 2007 it was pitched as credit-positive if the main tenant had a lease that rolled near maturity of the loan—with the idea that in 10 years’ time you’d be able to up the tenant’s rent by X percent, making the loan an easy refi story. Which sounded great in 2007—when everything sounded great—but now that we’re in 2017, a lot of those tenants that were surefire “gonna stay” aren’t. We see a lot of office buildings where a tenant that took 50 percent and has decided to downsize or relocate or gone bankrupt and doesn’t need the same amount of space that it did 10 years ago. That’s decidedly a problem.

What was your experience through the crisis?

I bought bonds for a number of years through the credit crisis. That in and of itself was a fascinating experience, and I’m glad to have done it. When the market eased up, I realized I needed a little more of a challenge, and so I started at Nomura in 2010 to head up their CMBS and ABS research platform. I was at Nomura for six years until it closed down its CMBS and ABS trading desk.

Why did the move to Morningstar appeal?

I was looking for a place where I could continue to contribute to a research effort with my knowledge of CMBS but step away from a constant publishing regimen, which I found too restrictive. I joined Morningstar because working at a rating agency, from a researcher’s perspective, is a really great fit. You’ve got the resources you need to come up with great ideas, and you also have the flexibility to write whatever you want.

What was your biggest lesson from the crisis?

I think one of the things that I learned from it is that there are many more connections than you think. To say that a crisis is “contained” is foolish. There is no such thing as containment in this day and age. There are way too many links between nations and banks and financial institutions and the system is way too complex to be able to get a handle on what the fallout may or may not be. It bothers me when people start talking about containment because I don’t think that is something that can be properly defined.

But underwriting and loan origination standards have improved?

Definitely. The loans that were being securitized in CMBS [during the boom] were built on some very aggressive assumptions for continued growth, and at the time I don’t think any of us realized how aggressive those assumptions were. It didn’t take long after the wheels came off to see that they weren’t attainable. It’s interesting now, looking at some of the loans that are maturing—they never hit those projections. It’s been 10 years, and they’re still falling short.

I was as guilty as anyone else was at the time. I can remember looking at loans and saying “Okay, yes this is aggressive, but I think over the next two years the economy will be stable and they can hit these projections.” I applied that exact logic in 2007 and quite obviously I was wrong.

You weren’t alone.

No. But now, things are underwritten pretty much to how they’ve been performing historically. We see some upside but there’s nowhere near the level of pro forma aggressive underwriting that we saw back then.

Would you say that we’re in a healthy real estate market right now?

I think so. There are indications with certain property types that the cycle has started to turn in the wrong direction. The underwriting we’re seeing is still strong, but there is certainly this sense that even projecting that cash flows are going to stay flat might be a little more aggressive than it should be. It’s always a problem when you’re near the top of the cycle: You can feel it shift, but there are some indications that if it does shift it may be a shallow downturn. It’s hard to say.

Has issuance volume been what you expected?

I’ve been pleasantly surprised by how strong it is. I had concerns about the second half of this year, particularly about transaction volume, because there is considerably less that has to get refinanced. But there is every indication that we’re doing fine.

What’s driving the pipeline of deals?

The economy is still strong. There is still money to put to work, there’s foreign capital coming into the country, and there are still deals to be done. A lot of the deals we see are these large single asset-single borrower deals. That money is less prone to taking a breather than the guy who’s looking to buy a $50 million shopping center.

Why is the CMBS market the right place for these huge single assets?

If a loan gets large enough, the CMBS market is a more efficient way to move risk. That’s the long and short of it: CMBS is designed to transfer risk and for large assets in particular it makes sense to chop up that risk and transfer it as appropriate.

What trends are you seeing?

The retail percentage has dropped off a cliff. Of course, if one thing drops off, everything else has to increase, so now we’re seeing a good amount of office properties come into deals. We are also seeing an increase in interest-only loans, especially recently as interest rates tick up. An interest-only loan is an affordability product, and so my guess is that lenders are offering more interest-only loans because as interest rates tick up they can still keep the payment flat.

Source: commercial

UKan’t Ignore Multifamily

In 2016, more U.K. lenders were willing to finance hotel properties than multifamily properties. This may come as a surprise, since multifamily has long been an investment darling and an important part of U.S. institutional core commercial real estate portfolios. In the U.K., however, investors view the country’s multifamily sector—commonly referred to as the “private rental sector” (PRS)—as a relatively untested asset class unfit for inclusion in an institutional portfolio.

Over the past few years, a handful of institutional players have entered the U.K. market with the goal of changing that view. They’ve had some successes, but headwinds remain.

Conditions are ripe for the PRS market to attain the size necessary to justify inclusion in institutional portfolios. But will scale be achieved? If it is, investors who avoid PRS will miss an opportunity to add an asset class that, in more mature markets such as the U.S., has proven to be a core portfolio diversifier.

Market Growth Despite Institutional Reluctance

U.S. investors view multifamily as a low volatility, highly liquid, stable income-producing portfolio diversifier. In the U.K., however, where institutional portfolios are dominated by office and retail, investors eye multifamily with skepticism. To date, the U.K. multifamily market has largely operated as a cottage industry in which the majority of landlords own just one unit. This approach has not allowed for the economies of scale, data or liquidity necessary to create an institutional asset class.

Despite this, PRS has proven itself to be a viable asset class. The size of the £1.4 trillion PRS market has doubled over the last 15 years and now makes up roughly 20 percent of the overall housing stock, compared to 37 percent in the U.S. Mainstream investor PRS ownership is low but grew by over 30 percent in 2016.

Going Pro

The U.K. government has been vocal about the importance multifamily will play in addressing the severe housing shortage, estimated to be 90,000 homes per year. It would like to shift away from the mom-and-pop rental model, which it views as driving up prices for first-time home buyers, toward an institutional multifamily market, referred to as “build-to-rent” (BTR).

Large-scale multifamily operators bring the expertise necessary to build new housing supply that offers tenants what they need: the comfort of long-term tenancy while they save up to buy a home, landlord professionalism, prime locations, and—important to a growing renter segment—common spaces and amenities that create a sense of community.

Over the last few years, several major players have moved into the U.K. with the hopes of creating a U.S.-style multifamily product. A recent study suggests that BTR could deliver 240,000 new homes by 2030. To date, over 15,000 units have been delivered, and more than 68,000 are under construction or in planning.

Planting the Seeds for Growth

For PRS to achieve an institutional scale, an accommodative national policy framework will be vital. In the U.S., for example, dedicated public agencies provide multifamily financing and liquidity. This has helped lower volatility for both multifamily value and borrowing costs, allowing the asset class to grow beyond where it might have without the presence of such support.

Currently in the U.K., converting existing housing stock into rentals is difficult. Limited land is available for new development, and new projects often get delayed. Unlike the U.S., the U.K. doesn’t differentiate zoning between multifamily and residential, and market dynamics favor developers building units for sale.

Fortunately, the U.K. government has recently taken steps toward a more accommodative policy. Going forward, local authorities will be required to plan for realistic housing needs, including multifamily rentals. Approval processes will be streamlined, and once approved, projects will commit to faster delivery timelines. New developers will be encouraged to enter the market. This is a good start, but more may need to be done.

Home Sweet Home

Multifamily has long been an important component of any institutional U.S. real estate portfolio. Will U.K. housing policy be successful? If it is, U.K. investors should take advantage of the shift toward institutional sponsorship and diversify their portfolios. After all, in a downturn, office tenants may downsize and consumers may stop spending, but everyone needs a home.

Alison Jacobs is a director of research for PGIM Real Estate Finance (REF); she can be reached at alison.jacobs@pgim.com. Bryan McDonnell is a principal and head of the U.K. office; he can be reached at bryan.mcdonnell@pgim.com.

Source: commercial

Maxx Properties Nabs $41M Acquisition Loan for Arizona Multifamily Property

KeyBank Real Estate Capital has secured a $41.3 million Fannie Mae first mortgage loan for Maxx Properties’ acquisition of The Station on Central apartments in Phoenix, Ariz., Commercial Observer can first report.

Tom Peloquin, a vice president in KeyBank’s commercial mortgage group, arranged the loan, which has a 10-year term, five-year interest only period and 30-year amortization schedule.

Harrison, N.Y.-based Maxx acquired The Station on Central last month. According to a release, the company applied proceeds from its sale of a portfolio of six apartment communities located in Omaha, Neb. to the purchase.

The Station on Central is a 414-unit gated community that was built in 2000 and renovated in 2015. Its amenities include two swimming pools, a spa, a fitness center, a clubhouse and picnic areas. The development also includes a 508-space parking garage.

“We are pleased to have acquired an outstanding apartment community in a highly attractive submarket of Phoenix,” Ed Lange, the chief executive officer of Maxx Properties, said in an announcement regarding the acquisition earlier this month. “The community represents an attractive value-add, renovation opportunity. We are pleased to capture this opportunity to expand our operations and efficiencies in Phoenix, and expect The Stations on Central to generate attractive investment returns.”

Maxx Properties’ portfolio includes 82 properties comprising 9,446 owned units and 13,000 managed units in six states.

Officials at Maxx Properties declined to comment on the acquisition financing.

Source: commercial

Under Construction: Inside the New Edible Academy at the New York Botanical Garden

The Ruth Rea Howell Family Garden at the New York Botanical Garden in the Bronx has provided New Yorkers a place to learn about plant-based nutrition for three decades—but the outdoor green space was only open half the year.

However, thanks to a $28 million expansion its programming will be around all year, and incorporated into the new Edible Academy—a three-ace property with a classroom building, a 350-seat terraced lawn amphitheater, a greenhouse, a new equipment shed and multiple gardens.

The new site (double what it was) will allow for twice the number of visitors per year to 100,000. (Some programs will be run by celebrity chef Mario Batali, an honorary chairman of the Edible Academy.)

The project broke ground last year on Oct. 27 in the 126-year-old New York Botanical Garden, which is located in the city-owned Bronx Park, and a grand opening ceremony is expected on June 14, 2018.

As one might expect, Edible Academy will be built with sustainable and eco-friendly features. The Cooper Robertson-designed project is being constructed to Leadership in Energy and Environmental Design (LEED) Gold specifications.

There will be a leaching galley, which traps wastewater and sends it into the ground so it doesn’t overburden the sewer system. And EW Howell Construction Group workers have drilled eight holes for geothermal wells, which can collect heat and cool energy from 465 feet under the surface, and bring it back up to heat or cool the 3,500-square-foot Edible Academy classroom building. Also, there will be a solar panel pavilion.

In addition, workers have installed a stormwater detention system, which collects rainwater to help prevent flooding.

“We are next to the Bronx River so we have to control the runoff,” Robert Zirkel, a vice president at EW Howell’s arts and culture division, told Commercial Observer. “This stormwater system slows the water volume into the Bronx River. It could stop potential flooding.”

Edible Academy’s main building will be built using Douglas Fir wood for posts, beams and walls, and it will have a green roof. That building is under construction now.

The greenhouse, which has already been erected, is an aluminum-framed glass building. Contractors are currently putting in the electrical systems, lighting, and heating, ventilation and air conditioning.

Getting in and out of the construction site is a challenge for EW Howell, as trucks have to be cleaned and vacated before the New York Botanical Garden opens to the public at 10 a.m.—and it is not in a convenient spot.

“It’s located on the far side of the garden away from all of the entrances,” Zirkel said. “And trucks can’t bring any mud into the roadways, so we have a stone tracking pad and washing stations.”

Source: commercial

Need for Speed: MTA’s Waking Nightmare Could Be Fixed if the Agency Focused on Tempo

Maybe the reason the Metropolitan Transportation Authority has been so late in handing in recommendations about how to deal with poor service is because they’ve been stuck in their own tunnels.

For months, the MTA has been dithering and avoiding publicly addressing its “summer of hell,” and now, another public agency has beat the MTA to the punch and identified the extent of the problem—though, with a few major oversights.

A report last week by the city’s Independent Budget Office (IBO) found that the number of subway delays has tripled since 2012 and that the annual cost to the city in commuters’ lost time was $307 million. It attributed most of the delays to overcrowding.

The report falls short in diagnosing the extent of the MTA’s problems. For one thing, its estimate of the cost of subway slowdowns is far too low. An internal New York City Transit report from last year, made available to Commercial Observer, says that the average delay per passenger trip is three minutes. This may not seem like a lot, but, according to 2015 data by the National Transit Database, the average subway trip is only 21 minutes, making the three-minute delay about 14 percent of total travel time. Based on this information from the leaked document, the total cost of delays on the subway, not just at rush hour—the IBO’s report looks only at rush-hour delays—is $3 billion per year.

Another miss—and a major one—in the report is blaming overcrowding for most of the delays. An operations planner within NYCT, the agency within the MTA that runs the subways and most buses, who spoke to Commercial Observer on condition of anonymity, explained that internal rules require the agency to log a cause for every delay, and when the cause is unknown, the agency enters “crowding.”

If the problem, then, is not overcrowding, what is it? In one word: speed.

Average train speed has decreased in the last few years, while the scheduled trip times have not changed. CO’s source in operations planning said the schedules did not change because management was afraid of embarrassing itself: Slower official schedules would invite more scrutiny from the MTA board.

Why are trains running slower than they used to? NYCT began deemphasizing speed as a goal. The New York Daily News reported that as soon as Ronnie Hakim (who became head of the MTA earlier this year) became the head of NYCT in 2015, she expressed concern over a poster that read “Safety, Service, Speed and Smiles,” asking “Why is speed on there?”

The worst of the causes for the recent slowdowns came from a decision regarding punctuality. Traditionally, American transit operators, ranging from Amtrak’s multiday trains to local bus agencies, have measured timekeeping by whether the train or bus arrived at the end station on time with a small fudge factor (the MTA adds five minutes). This is known as on-time performance.

Recently, NYCT switched to prioritizing a measure called wait assessment. The MTA’s public data explains that wait assessment measures whether trains or buses arrive at each station at the scheduled intervals. As previously reported by this writer for Vox, wait assessment led dispatchers to hold trains ahead of each delayed train. For example, if one A train were delayed by 10 minutes, they would hold several A trains ahead of it to smooth out the delay for passengers who have not yet boarded. Instead of making some passengers wait 10 more minutes for their A train, they would make many more passengers wait two minutes.

The result was a disaster. Trains became slower, delays propagated between lines, and on-time performance fell from 85.4 percent in 2011 to 63.2 percent this year. An A train delayed by two minutes might enter a shared section of track too close to the D train, delaying either train another two or three minutes; the D might then be delayed entering a section shared with the B, creating cascading delays. Until last summer, senior management swept the problem under the rug, forbidding junior planners from using the word “delays.”

Shams Tarek, a spokesman for the MTA, told CO that the agency is not indifferent to the speed of its service, but is rather prioritizing safety as “absolutely essential.” He added that wait assessment is not the MTA’s main metric for evaluating punctuality, but rather one measure supplemented by other metrics.

One potential solution to the subway system’s problems could be adopting best industry practices from abroad. TransitCenter is a New York-based think tank dedicated to promoting good transit practices. Senior program analyst Zak Accuardi spoke to CO at length about a new measure of punctuality, called “excess journey time.”

Excess journey time is the sum of delays caused by waits longer than the scheduled frequency (“excess wait time”) and delays caused by train travel times longer than the scheduled timetable (“excess travel time”). It’s this measure where, per the leaked NYCT report, the average is three minutes per passenger trip, split evenly between excess wait time and excess travel time.

Accuardi explained that London and Singapore already use excess journey time as their primary punctuality measure on trains and on buses that run every 12 minutes or less. 

“Our general approach to the MTA is to be cautiously optimistic,” Accuardi said. His optimism was rewarded at the end of last month, when the MTA announced that it would begin using excess journey time as a punctuality metric for the subway (but not for buses).

More careful data analysis is required, Accuardi added, tracking each delay backward in time to see what caused it. This is especially important because of the highly branched nature of the subway. For example, a major delay on the Q may turn out to have started on the C, leading to a chain reaction of trains waiting for another train to clear a shared track segment. But doing this analysis requires a culture of accountability for delays within the MTA, and its top management has created the exact opposite culture, to the frustration of both of CO’s inside sources.

Accuardi also added that computing excess journey time requires access to data about where passengers get on and off the train. Analysts within NYCT can estimate this, using MetroCard data. If they notice that a passenger swipes a MetroCard at one station in the morning and then at another station in the afternoon, they can assume the passenger travels between those two stations. With this information, planners can know which delays affect the most passengers and take necessary precautions to avoid them.

But not everyone is satisfied with the adoption of excess journey time as a metric. Adam Rahbee was a planner and manager at multiple transit agencies for many years, including NYCT, Transport for London and the Chicago Transit Authority. He oversaw changes on the London Underground that improved punctuality. And he had harsh words about excess journey time, or any other single reliability metric. Rahbee argued to CO that the managers who try to influence the metric have no power, and instead other departments make decisions about operations planning and scheduling without any interdepartmental coordination. Schedulers blame train operators for driving more slowly than the timetable tells them to, while train operators blame the schedulers for writing unrealistic timetables. As a result, in London, excess journey time has not improved in the almost 20 years it has been the preferred reliability metric.

Accuardi emphasized the importance of accountability in measuring punctuality. Someone needs to be responsible for making sure trains run on time, and it can’t be individual train operators. NYCT’s line manager program makes individual line managers accountable, but it is difficult to assign blame for problems given that most lines share tracks with multiple other lines.

The MTA already has all the tools it needs to improve train trip times and reduce delays, and many employees are aware of the issues they are facing; Accuardi learned of the excess journey time from low-level planners within NYCT. The problem is political and institutional dysfunction. Planners who figure out ways to improve service cannot share them with their bosses for fear of inviting political backlash; while some midlevel planners long pushed for excess journey time as the focus and for more attention to speed, it took last summer’s bad press and the recommendations of TransitCenter for management to adopt the new metric. It still remains to be seen if NYCT follows through on TransitCenter’s recommendations for more accountability and better analysis of which delays affect the most passengers—in other words, if it’s using the full power of excess journey time, or if it just wants to be seen as doing something.

Source: commercial

Meet Anthony Rinaldi, the Contractor Building the World’s Tallest Modular Hotel

On a bitterly cold day in January, contractor Anthony Rinaldi helped organize a 500-strong rally against a City Council bill that mandated apprenticeship programs for construction workers on buildings of 10 stories or taller.

Anticipating a fight, he had hired eight armed guards to help protect the nonunion hardhats who were protesting next to City Hall. Across the street, hundreds of union construction workers were demonstrating in favor of the bill, known as Intro 1447.

“The next thing I know, the union was around the block, and they literally left their site, brought all their people and really came nose to nose with us,” he said, “and were trying to antagonize us into a riot.”

He had also given a heads up to the New York City Police Department, which dispatched a few dozen officers to quell the crowd. “It got so crazy that there were over 50 cops on the street,” he explained. “It got that dicey.”

The moment was a symbolic one for Rinaldi, who recently became chair of New York City leadership committee for the Associated Builders and Contractors, an open-shop construction trade association. It was one of his first major political fights with the group, but it certainly won’t be his last.

Even with fierce opposition from open-shop groups, the City Council passed the apprenticeship bill last month, and Mayor Bill Blasio signed it into law this week. The latest version requires construction workers to have 40 hours of safety training by September 2020.

Rinaldi’s 14-year-old construction management business, the Rinaldi Group, is open shop (meaning he can employ both union and nonunion workers) because more than 70 percent of the building permits issued in the private sector go to nonunion projects, he said. That tracks with data from the Real Estate Board of New York, which found that among residential projects with 100 or more units, only 14 percent were union sites, according to an analysis of New York City Department of Buildings permits conducted in 2015. Another open-shop group, New York Construction Alliance, told Commercial Observer in June that its seven member companies employ 75 to 80 percent nonunion workers.

It’s a little ironic that the 52-year-old Elizabeth, N.J. native spent months pushing back against the unions, after he cut his teeth working at big union construction companies in the 1980s and 1990s.

After he graduated with a mechanical engineering degree from Lehigh University—where he played Division 1 baseball—he landed his first job at HRH Construction, a subsidiary of Starrett Corporation. Starrett has built a host of well-known New York City projects, including the Empire State Building, Stuyvesant Town and Trump Tower. Rinaldi also spent several years as the chief operations officer of Crain Construction Company in Jersey City, N.J., and did a stint in the early 2000s at George A. Fuller Company, a 130-year-old, Valhalla, N.Y.-based building contractor.

Despite his rising star in the open-shop, or merit shop, world, “we have the ability to go union as well,” he explained. “I come from union backgrounds. My father-in-law was a Local 79 laborer. My father was a cop. If there was a project where the developer wanted to do the job union, under a project labor agreement we could do the project union. But when you’re union, you can’t go the other way.”

Besides his foray into industry politics, Rinaldi is working on several interesting construction projects. On Bowery between Spring and Delancey Streets, his firm is building the tallest modular hotel in the world for Dutch hotel developer Citizen M.

To build the 20-story, 300-room hotel, Polish modular manufacturer Polcom shipped 220 pre-assembled pods, complete with fixtures, plumbing and electricity, across the Atlantic Ocean. Now Rinaldi’s workers are stacking them on top of a concrete foundation, connecting the plumbing and electrical to the building’s mechanical systems, and fitting the facade pieces together.

Developers tend to assume that modular construction is cheaper, but the hard construction costs are typically the same, “dollar for dollar,” he noted. “Where it does get cheaper is in the timing.” While workers excavate and lay the foundation—a process that usually takes four to eight months—the modular units are being manufactured.

“So you’re actually able to make the rest of the building somewhere else and not having to wait for linear progression of the construction after you come out of the ground,” he said. “Those units are now there and you can stack them. It will take anywhere from four to six months off your schedule.”

Developers get to pay off their construction and property loans faster than they would be able to with a conventional construction project, and their building begins producing income sooner. There are also fewer months of disruptive construction for the neighborhood.

A little further uptown, Rinaldi is helping Empire Management redevelop a landmarked bank at 250 Fifth Avenue at the corner of West 28th Street. The bank is being expanded from eight to nine stories and converted to retail and office space. Then a 23-story, high-end Thompson Hotel will sprout behind it on West 28th Street.

He also recently topped out a 38-story hotel developed by the Lam Group at 215 Pearl Street in the Financial District. And over the past year and a half, Rinaldi Group has wrapped up construction on two major hotels, a 30-story, 150-key Hyatt House at 101 West 28th Street and the 31-story, 641-key Riu Hotel at 301 West 46th Street in Times Square.

Outside of the tristate area, he’s working on the redevelopment of the historic Collins Park Hotel in Miami Beach for Chetrit Group. Before that, his firm finished a 36-bed retirement home in Lake Worth, Fla.

The one black mark on Rinaldi’s long career as a construction manager happened at the Riu Hotel site two years ago. On May 5, 2015, a worker named Christian Ginesi and a colleague were installing elevator doorframes when the temporary hoist Ginesi was working on stalled between the 24th and 25th floors, the New York Daily News reported. The other construction worker was able to successfully jump to the 24th floor below. But Ginesi unclipped his harness, which was supposed to be attached to a steel beam or to a cable system at the top of the shaft but wasn’t, and then tried to jump down, Rinaldi said. The 25-year-old Jersey City resident ultimately slipped and fell down the shaft, dropping 26 stories to the basement. He was rushed to Bellevue Hospital, where he died an hour later.

Union officials slammed Rinaldi and the elevator subcontractor that employed Ginesi, G-Tech, for not offering the proper training.

“The young man had just got back from [serving five years with the Air Force in] Afghanistan, and he had no training whatsoever,” said Gary LaBarbera, the head of the Building and Construction Trades Council of Greater New York. “They take advantage of unskilled workers, and that’s the kind of company Rinaldi Group is.”

Six months later, the DOB suspended Rinaldi’s contractor license, halting work on all 17 of his sites across the city. He claimed it happened without any prior notice.

A spokesman for the DOB stated that the agency “suspended Rinaldi’s license because he had 55 serious safety lapses at 8 sites over two years.”

Rinaldi argues that the city’s decision to pull his license was politically motivated. “The unions and self-interested bodies took advantage of it to try and smear me every which way they could,” he recounted. “I was being classified in the papers as a troubled contractor. The truth was that I had an impeccable safety record up until that time.”

A month later, the city’s Environmental Control Board, an administrative court that hears building violations, reversed the suspension and ruled that Ginesi’s death had occurred because of human error (unclipping his harness).

In spite of the scandal, Rinaldi is generally well liked in the construction industry.

Marshall Adams, a lawyer who represents Rinaldi in Florida and a close friend, called him a “warm, engaging, funny guy” and “the most brutally honest client I have.” The pair met six or seven years ago when Rinaldi brought him a case involving a subcontractor.

“I analyzed his case and said the subcontractor did all these bad things, but you’re going to have to make good on them,” Adams explained. “And he said, ‘I brought this guy to the table, I have to make good on all the things he did.’ It makes it easy to represent a client when they listen to you and are willing to do the right thing, [when] they’re not just trying to find a way out.”

Rinaldi has a wife, Joan, of 28 years, and three kids, 15-year-old Julia, 19-year-old Frankie and 22-year-old Anthony. The family often visits Adams and his children in South Florida over the holidays. “My kids love him, and they love his wife,” Adams said. “And we try to make it a point to see each other when I’m in New York.”

Danny Khazai, a stone importer who heads NYC Worldwide Marble, echoed those sentiments. He met Rinaldi in 2003 when they were both working on a Ritz Carlton in White Plains, N.Y. In a city full of shady contractors, Khazai described him as honest and reliable.

“He’s one of the only people who makes sure that the job gets done on time, and that all of the subcontractors get paid on every job,” Khazai said. “In our industry, what happens is, 90 percent of general contractors, they end up not paying you. That’s how this industry is.”

But Rinaldi still holds his subcontractors to high standards and pushes them to finish work on time. “When it comes down to business and his projects, you have to get done on time,” Khazai said. “If you’re behind, he’s hard on you.”

In many ways, it’s clear that Rinaldi was shaped by his father, who served on Hoboken’s police force for 33 years (and in classic Italian fashion, was also named Anthony Rinaldi). He retired in 1982 as the highest-ranking captain in the small city’s police department. Two years later, during Rinaldi’s freshman year at college, he died of colon cancer.

One of the contractor’s early memories involves his mother, who panicked after not being able to reach his father and drove into the middle of a race riot in Hoboken in 1970.

“They were still having some of the residual riots going on that were coming from Newark and Jersey City,” he remembered. “My mother was worried, couldn’t get him, so she puts me in the car—I had to be 4 or 5—and drives right into one of the riots. I saw my dad in riot gear, the helmet with the shield. And they were shooting at [the cops] from the rooftops. This was Hoboken. It was like crazy. My father actually saw my mother drive by. And my father went nuts; he was crazed. That’s how rough Hoboken got.”

Later that year, their family decamped to Secaucus, N.J., where Rinaldi has lived ever since.

Source: commercial

Why Big Data Companies Are Building Server Farms in Middle America

When Apple Inc. picked a Des Moines, Iowa, suburb for its next high-end data center over the summer, only its sixth in the U.S., it wasn’t playing its typical tech-industry-pioneer role. It was following Google, Microsoft and Facebook, all of which have already planted data-center flags in the Hawkeye state.

It’s somewhat surprising, but rapidly getting less so, to see technology giants of Silicon Valley or Seattle turning from industry power hubs on the coasts to second-tier markets to establish new data centers. States like Iowa, Ohio, Nevada and North Carolina have steadily built their infrastructure and business cases, and industry watchers say they have gained momentum amid surging demand for digital storage space and shifting corporate data management trends that might just blow the barn doors off.

Many factors contribute to the wider geographic play, but big data center operators such as Amazon, IBM, Google and SalesForce are hungry for core ingredients of land, power and water, which can be plentiful and cheaper off the coasts, according to Sean Brady, a managing director and co-founder of the global data center advisory group at Cushman & Wakefield.

“They’re going to go for a campus,” Brady said. “They’re typically going to buy a tract of land and build it.”

The main players are tech or software companies adding capacity for their own storage needs, such as Apple and Facebook; cloud computing giants and co-location providers running data for others, like IBM’s SoftLayer and Microsoft’s Azure; and some—Amazon, for one—operating in multiple camps. While today’s push has a cloud-computing flavor, the whole market is hot, Brady said.

“The cloud providers are going into these remote areas and taking down 100-acre tracts of land and 100 megawatts of power,” he said. “The appetite for data is going to absolutely grow exponentially.”

That’s keeping real estate, design and construction firms very busy, said Ben Kaplan, a vice president at Turner Construction in its data center division.

“The scale of what we’re building is unprecedented,” he said.

Go East, or West

The heart of data-center country remains on the coasts with the Washington, D.C., and Northern Virginia region still a key hub, thanks to an established co-location industry, and core pockets around Silicon Valley and New York, said Mason Mularoni, a senior research analyst in the professional development industries unit at JLL. Dallas and Chicago are also major markets.

“They still are major contenders—a lot of those are operating on very slim vacancies,” Mularoni said. “But other traditionally midtier markets have made some big expansions forward.”

Iowa’s ascendance started a decade ago when Google made plans to build a huge complex in Council Bluffs, Iowa, in the western part of the state, right around the time state officials introduced tax and business incentives similar to what manufacturing firms had long received, according to Tina Hoffman, the marketing director at the Iowa Economic Development Authority. The state also aided in the development of an advanced fiber cable network, which has helped spark data center projects in the Des Moines area, and even touts itself as a haven from hurricanes or earthquakes, she added.

“We do also have affordable electricity and available water, and we lead the nation in renewable energy access, which was significant for Facebook and Apple,” Hoffman said.

Those seeds bore fruit in billion-dollar complexes for Google and Microsoft, and now Apple is next with plans for a new $1.3 billion 2,000-acre campus in Waukee, Iowa, on which it is starting with two 400,000-square-foot data centers to serve domestic users of its Siri service, its App Store and more. Construction and land account for more than half of the current budget with hardware and equipment as most of the rest. The facility—breaking ground next year with the first center online in 2020—will run on 100 percent renewable energy.

Apple’s facility will have “the latest and greatest in terms of various technologies, especially around energy and efficiency,” said Rachel Wolf Tulley, an Apple spokeswoman. It is getting more than $200 million in incentives from state and local entities.

Ohio is gunning for data center facilities with its own pitch of “safe and central”—free of most natural disasters and a day’s drive to major Midwest and East Coast markets—and a strong fiber network, said Ted Griffith, a managing director for information technology at JobsOhio, a nonprofit economic development group. The state hosts various data centers for non-tech corporations, such as Citibank, won a center for Amazon Web Services in 2014 and recently landed Facebook, which is investing $750 million in a new complex, he said.

“Ohio is in the center, and in terms of access, your speed and distance matters,” Griffith said. “If you are far from the server, there is data latency—[a lag in] the time to travel from point to point.”

The state also has its share of large co-location data providers such as CyrusOne and Cologix that offer services to corporations, which are increasingly outsourcing data management, he added.

Shifting Data Trends

Establishing data centers in remote locations alone is not a new trend: Operators in the past often aimed to hide these massive complexes from potential security threats, Brady said. Today, there are different drivers for the trend, however, as many factors align well with the rising popularity of the less traditional states.

“They’re going to states that have cheap power, that have large tracts of land and access to water for cooling systems,” he said, with rural Oregon and Washington State also competing in such searches. “When you build large data centers and you’re bringing in 25 megawatts or more of power to a particular location; that’s a sunk cost.”

Advanced communications systems, higher data speeds and redundant fiber options are critical pieces today, said Brian Martin, the senior electrical engineer in the mission critical group at design and engineering firm AECOM.

“That is a huge siting consideration—trying to make sure these big center operators have multiple pathways of fiber going in and out, and with redundant rings encircling the entire campus,” Martin said.

Demographic factors also are at play when tech firms look at new markets with higher education centers such as Northern Virginia and Ohio, or younger, more affordable cities such as Denver, offering an edge.

“It’s about the workforce that you need—and is it [in a particular market] and at what price,” said Kenneth McCarthy, a principal economist and senior managing director at Cushman & Wakefield.

Cloud computing’s growth is bolstering the move to nontraditional regions as corporations increasingly shift to outsourcers—pushing these providers to open new data centers either by leasing existing commercial facilities or pursuing development of new complexes, Mularoni said.

“The second-tier markets are picking up that capacity,” he said. “The cloud front has driven a significant amount of the absorption in the U.S. the last 12 months.”

It doesn’t hurt that all states are offering generous incentive packages, according to McCarthy. “It’s definitely part of the entire negotiating process now,” he said.

Another development wave may soon spread even further as the “internet of things”—which controls everything from smart refrigerators to self-driving cars—drives demand for multiple smaller data centers closer to end users that can quickly and accurately process the vast volume of information these technologies need to function safely and properly, Brady said. The demand for such faster, real-time data flow will likely spur development of many smaller centers around population hubs, he said. (See story on self-driving cars on page 24.)

Efficiency Rules

The vast demand for more data-handling capacity doesn’t necessarily mean new construction will be outsized. Data managers don’t want to bet too much on today’s technology, Brady said.

“There has been more change in the technology of data centers in the past five years than there has been in 20,” he said. “We are able to cool a greater amount of heat in a smaller space, and so we’re able to run these things more efficiently.”

Fifteen years ago, data centers brought in two to three kilowatts of power to get one kilowatt out, and now it’s much closer to one to one. “The equipment keeps getting better, the designs get better and costs are coming down across the board,” Kaplan said.

Power generation and cooling system trends move fast as data center operators are always on the hunt for even more energy efficiency and cost savings, said Ben Rasmussen, a senior mechanical engineer in AECOM’s mission critical group. Chiller plants and cooling systems are big capital expenditures, and not having them online all day can significantly reduce power use, he said.

“A lot of the clients we work with…are moving away from chilled water-based cooling solutions to direct evaporative-cooled air-economizing solutions,” Rasmussen said.

Another energy systems trend now gaining attention from data center developers is finding ways to use less uninterruptible battery power for backup needs, said Matt Treat, a vice president for the mission critical and advanced technologies practice at AECOM. “One of the newer technologies that we’re seeing the last two years is natural gas-based emergency power generation,” he said.

Natural gas facility manufacturers have made big advancements in recent years, bringing plant startup times down from 10 minutes in past decades to as little as 40 seconds today, making them a viable source of backup power supply, AECOM’s Martin said.

Systems redundancy also remains a big design focus of data centers—a concept that isn’t new but is getting far more sophisticated in implementation as efforts today aim to build multiple pathways for a utility’s output to flow to and from source and usage points  instead of adding or reducing equipment, Rasmussen said.

In some cases, redundancy simply means a standalone piece of a larger campus separated physically from other facilities to reduce common points of failure, Martin said. There are competing views on how to execute such ideas. Some create fully isolated blocks, and others simply have multiple utility sources connected to multiple facilities but with enough flexibility to dedicate supply to specific zones as needed. And most of the manufacturers of power supply equipment—generators, air handlers and more—now build their systems for redundancy purposes, he added.

With technology evolving quickly, many data center operators are planning new campuses strategically. “Most of the large clients in particular making significant capital investments [are] requesting a phased approach to the facility design and installation,” Treat said.

That will encourage more nimble planning. “The Amazon Web Services and Googles are not going to build a 500,000-square-foot building, but they’re going to build a 100,000- to 200,000-square-foot building,” Brady said. “They know technology is changing—a better mousetrap is in our future.”

Facilities today must also plan for greater physical site security requirements and cybersecurity defenses that use massive routers and switches, Griffith said. Such needs—and fast-growing demand from users for technologies with advanced capabilities—will drive even further high-end design and outsourcing trends.

“It’s not your FitBit anymore” driving on-the-spot data-processing trends, Griffith said. “Entire factories are going to operate or not based on the quality of the sensors gathering data. This whole digital ecosystem is just exploding.”

Source: commercial