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Design & Operation of Facilities Q1 2018 • $5

Buildings Technology Innovations How Products Boost Efficiency, Tenant Satisfaction

Solutions That Can Mitigate Urban Noise

Tax Cuts to Boost Real Estate

HVAC New Product Gallery

Contents 4 Lease More Office Space... Off-Site More Workers... Or Both?

Acoustics Solutions Can Mitigate Urban Noise


Coworking is Transforming CRE


One of the toughest decisions a company’s real estate managers have to make is whether to commit to more leased space for a workforce that’s often unpredictably elastic in a roller-coastal global economy that keeps getting “disrupted” by new technology, government actions or the world’s business climate. Is the company currently utilizing its space efficiently or are offices so crammed with people that productivity suffers? Is the company effectively utilizing its oceans of data with new software so it even has the foggiest idea of whether it is using space wisely? Those dilemmas trigger huge issues. Will committing to a lease in a high-cost area, funding a buildout and onboarding a staff unnecessarily knife into a company’s profit margins? How much carbon will be released into the atmosphere if the company requires on-site work from employees who can only afford housing 45 miles away? Will the employees perform better off-site or on-site? Should a combination of at-home and co-working sites be used instead? And how do you get a straight answer from the many “thought leaders” on this issue — most of whom are giving you information that primarily benefits their interests? Whew! Space utilization was one of the many issues addressed by some of the best and brightest minds at last fall’s CoreNet Global Summit in Seattle, and there were of course many viewpoints on that topic. Most seemed to think that decisions about space should be determined by what makes an employee more productive—since human costs are the highest for most companies. So—getting to the bottom line —what space configuration makes workers earn more for employers? No simple answer. Facilities experts say it depends on the type of work employees perform: manufacturing, sales, managerial, R&D, creative, etc. and a worker’s optimal space can also depend on whether he or she is an extrovert or an introvert or older or younger. Ultimately, there will be a mosaic of solutions, including coworking. For instance, one survey shared at CoreNet revealed that 65% of all major corporations polled say that is in their near-term portfolio strategy. (More on page 6.)

Is Your Company Futureproofing? Like that’s possible in our unpredictable world…but efforts were made by many of the senior commercial real estate executives who met at CoreNet Global to predict transformative future issues that impact the use of commercial buildings. In one brainstorming session that involved the active participation of more than 200 CRE execs, the most challenging issue that emerged was building security (cybercrime, violence, disasters). A lot of resources will be devoted to how we prepare for those inevitabilities. A second major issue was the more widespread use of artificial intelligence/automation and the prediction (Continued on page 42)

Tech Innovations for Property Management Boost Efficiency

Latest HVACR Innovations



Q&A with CoreNet SoCal Chair

PMs: How to Prep for Disasters


Housing Seniors: What’s Next?

Tax Cuts to Benefit Real Estate



Association News

Flooring Adds to Aesthetics




Hospital Tech Improves Care

Cover images: Main image and HVAC image: Getty Images. Tax and acoustics images: Adobe Stock.

California Buildings News Team Ellen Eason, Publisher Henry Eason, Editor Contributing Editors

Zachary Brown, CBRE Ken Cleaveland, Public Affairs Advocate Bob Eaton, Eaton Hotel Investments Jessica Handy, CodeGreen Solutions Rich Lerner, Construction Consultant Michael F. Malinowski, AIA, President, Applied Architecture Inc. Katherine A. Mattes, Real Estate Consultant Larry Morgan, Facilities, SAP Chris Rauber, Healthcare Writer Steven Ring, Fulcrum Real Estate Development Carlos Santamaria, CEES-Advisors

Advertising Information Ellen Eason, 415.596.9466 © Copyright 2018 Eason Communications LLC PO Box 225234 San Francisco, CA 94122-5234 Copyright © 2018 by Eason Communications LLC, publisher of California Buildings News. The publisher assumes no liability for opinions expressed in editorial contributions to the magazine or third-party quotations within articles. The publication is not responsible for claims in advertisements. Printed in the U.S.A.

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4 California Buildings News • Q1 2018

Downtown Living Is Exciting…But Can Be Too Noisy City Ordinances and Acoustics Solutions Can Make Living and Music Compatible By Jordan Roberts Metropolitan areas throughout California are becoming increasingly dense as some millennials and boomers are attracted to the many features of city centers, but noise has become a serious problem. As acoustical consultants, we here at Salter recommend noise abatement strategies and mitigation measures on a daily basis. The urban landscape provides unending noise challenges resulting from (but not limited to) mechanical equipment, traffic, construction, and yes, even neighbors. Some neighbors are less compatible than others, which has spurred some creative solutions to late-night music and crowd noise. In San Francisco many new residential developments are under construction or being planned. When existing entertainment uses (e.g., music venues, nightclubs, bars) are located near future residential developments, there is potential for noise to impact residents. The awareness of these potential impacts, and a history of land-use issues, motivated San Francisco’s Planning Department and Entertainment Commission

(EC) to develop a new noise assessment protocol. This Places of Entertainment (POE) study is separate from the acoustical mitigations needed for a residential project to meet California building code. Given the city’s high density, landuse planning is extremely important. There is an obvious need for new residential developments, but there is also limited space available for entertainment venues. Entertainment is one reason people are attracted to live in cities. However, a resident can enjoy going to a nightclub that is near their home, but no one wants to be awakened by noise emanating from that nightclub. Enacted in 2014, the city established noise goals to mitigate conflicts between these land uses. These guidelines authorize and empower the EC to make recommendations to the Planning Department before residential projects are entitled. This includes requirements that a residential developer obtain the POE study as well as disclose to future residents the potential for noise. Also, if a venue operates in compliance with its permits and appropriate laws, there are protections for entertainment businesses. The city has a separate procedure for investigating and enforcing noise complaints from existing residents. San Francisco’s noise ordinance includes a C-weighted (dBC) requirement for noise assessments to address the bass-heavy sounds of a music venue. While some other cities also use a dBC criterion, the real potency of the POE noise studies is that they are proactive rather than reactive. Entertainment businesses and future residents can both benefit by bringing attention to the acoustic objectives (sleep disturbance standards, etc.) in the early stages of a project. Increasing the sound transmission class (STC) of windows for a project is a common way to reduce indoor noise levels. In many cases, POE noise studies specify window STC ratings above those needed to meet the building code. If noise levels from a POE are predicted to be particularly loud, a developer could choose to increase the noise reduction provided by construction of the building facade, or re-orient the project so noise-sensitive rooms are not located along a facade exposed to entertainment sounds. I have worked on projects where developers choose (Continued on page 46)


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Coworking Spaces: Transforming Commercial Real Estate New Work Environments Are Cost-Effective… But Also Noisy and Not Secure

If you lease office space to tenants, you’re a commercial real estate company, right? Not necessarily. What if you call your company something like WeWork and position it as a technology “platform” for the sale of additional services to your tenants who are mostly risky startups that may only have enough funds to lease one desk in an open area for one month? That describes a hybrid commercial real estate company, one used by hundreds of thousands of small and large tenants who lease from firms like WeWork. That startup is now valued at over $20 billion, $1 billion more than the venerable real estate giant Boston Properties. WeWork is one of dozens of small and large coworking firms (like Regus) that provide millions of square feet of office space in California but prefer to think of themselves as enabling working and social “communities.” Coworking will have a highly transformative impact on commercial real estate, with winners and losers, but certainly with a lot of disruption. Numerous multinational companies which have traditionally leased or owned millions of square feet are now including coworking in their asset plans, resulting in fewer square feet required, as coworking tends to pack workers into spaces more tightly and reduces the number of days they actually spend in any sort of office in our more freewheeling work culture. Landlords are being pressured to provide more hip features for coworking spaces at the same time that facilities— from restrooms to HVAC systems —are having to cope with a greater number of tenants per square feet.

Major commercial real estate firms, recognizing the inevitable trend, are fast making deals to accommodate the many new coworking companies that are making appearances in every market. Some traditional firms like Blackstone Group LP are even joining the coworking movement, in addition to make big deals with firms like Regus, WeWork, Industrious and Convene. In downtown San Francisco, according to one major real estate company’s research, there is already more than 1 million square feet of coworking space in use, offered by more than two dozen coworking firms, from Regus (which has operated in California for decades) and WeWork to small startups. Small Business Labs, a company that tracks entrepreneurial trends, has projected that 3.8 million people globally will be making use of co-working space by 2020, a significant jump from 1.6 million for 2017.

Coworking in California Santa Barbara-based Yardi is a leading provider of high-performance software solutions for the real estate industry. Its recently published Yardi Matrix white paper reports that there is more than 3.7 million square feet of coworking space in Los Angeles, 1.4 million in San Francisco, 1 million in Orange County, 749,000 in San Diego and 375,000 in Sacramento. The study concludes: “Coworking as a model is likely in its beginning stages. The industry provides a service that is in line with the direction businesses are moving. It gives tenants flexibility and provides attractive space for young

7 California Buildings News • Q1 2018

workers and the growing number of self-employed and remote employees. The number of locations and total space dedicated to coworking is impressive, given the industry’s youth. Over time, the industry is likely to develop its model to be able to survive recessions and changes in business operational trends.”

CoreNet Survey Says Coworking is Global & Growing Coworking, the style of work marked by open shared spaces among workers of different companies and popularized by “solopreneurs” and tech workers, is quickly being embraced by those who manage real estate needs for large corporations, according to CoreNet Global. The association for corporate real estate professionals and Cushman & Wakefield published a whitepaper in November entitled “The Evolution of Co-working and Impact on CRE” during its recent annual conference. Coworking has become a global development. A majority of the corporate real estate executives surveyed by CoreNet Global and Cushman & Wakefield indicated that they would lease coworking space to manage their organizations’ real estate footprint. The breakdown was: North America (52 percent), Europe (56 percent), Central and South America (50 percent) and Asia Pacific (70 percent). Major corporate players like Microsoft, GE, Salesforce, HSBC and Nasdaq are already utilizing coworking spaces. Microsoft recently turned to WeWork to office nearly 300 salespeople in New York City. Those salespeople were based outside of Microsoft’s New York City’s offices and traveling to meet with clients. Microsoft’s arrangement allows them to use the facilities as needed. “When we talk to our businesses, their crystal ball is reasonably clear for three months, it starts getting cloudy in six months, and it is harder to forecast what the business will look like in five to seven years,” says Kevin Sauer, workplace strategy leader at GE. “So, from a traditional corporate real estate model, we’re sandbagging the business by signing them up for a long-term lease in space that may or may not suit their business needs after move-in.” The whitepaper lists additional examples. About 10% of Silicon Valley Bank’s 2,500-person workforce of bankers and consultants use coworking space on either a part- or full-time basis. However, the bank has learned that there are some challenges to the new format.

“Eventually, you don’t get the market presence that you really need to thrive in the banking industry,” says Tom Suro, workplace creation program director at Silicon Valley Bank. “There are some markets where if you are in a co-working facility it is actually difficult to gather clients, because you don’t have a permanent office. You’re seen as a ‘here today gone tomorrow’ kind of situation.” Still, coworking is driving change in the traditional commercial real estate market. Landlords are embracing some of the same co-working trends in terms of shared spaces and an active, social environment. Lobbies are being redesigned from places that people walk through to get to the elevator bank to a place where people can come and have a cup of coffee with their laptop or meet with colleagues. Landlords also are creating more shared conference rooms and training rooms that allow tenants to reserve those spaces rather than building them into their own footprints. While the specific applications are still unknown, experts say there is strong growth trajectory for coworking space and it appears that co-working is a viable alternative for traditional real estate. “We now have five generations in the workplace. One of the ways to address that is you have to provide variety and choice in the work settings,” said GE’s Sauer. Companies must think about the type of space they are providing, both within their own corporate footprint, as well as outside alternatives in order to attract fresh young talent, as well as retain existing talent, he adds.

Coworking Raises Many Issues The mushrooming of such quasi commercial real estate entities poses a number of issues and could somewhat transform the leased space business. And coworking is growing by leaps and bounds, multiplying the impact of these issues, as sole proprietors, small business and entrepreneurial ventures abound, especially in California. For instance, who is responsible for individual tenant satisfaction and building security? Many workers complain about lack of privacy, noise, constant distractions and— more seriously—intellectual property theft through WIFI insecurity and competitors’ snooping. Coworking is a work in progress. It promises great advantages and poses daunting challenges. n Photos: Adobe Stock.

8 California Buildings News • Q1 2018

Property Management Tech Innovations Boost Efficiencies Software, Apps & Devices Save Time, Money and Empower Managers

A recent survey by California Buildings News of technology used by commercial and multifamily property managers reveals that there are multiple products to solve a myriad of issues that arise each day. No one product or company dominates. For instance, global leader Cushman & Wakefield—one of California’s top management firms —uses an array of tools to meet its many demands. Some examples below...

Purpose Software Used Security Camera Monitoring Open Eye Access Control System Johnson Controls P2000 BMS Johnson Controls Metasys Capital Project Scheduling & Budget Tracking Honest Buildings Tenant Requests and Workorders Buildings Engines/Workspeed/Angus Anywhere Emergency Notifications Preparis City Requests SF311 App Accounting Software Yardi/MRI Budgeting Software Kardin Lease Activity Tracking View The Space Destination Dispatch on Elevators Schindler PORT/OTIS Lighting Controls Lutron Tenant Handbook & Building Website Host ETS Electric Meter Data Management Lucid/Aquacor Top image: EcoStruxure Building integrates key building systems that can be monitored and managed from one platform. Courtesy of EcoStruxure.

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Reviews from other management firms highlight yet additional products. Another California-based manager in San Francisco says his firm happily uses: • Building Engines for work orders, tenant notifications, security reports, preventative maintenance schedules. • Siemens Desigo for Apogee Building Automation System to control HVAC, lighting, security controls, communication systems. Landmark is the first Siemens “Smart Building” in San Francisco. • MRI for all of our financial information, documentation and accounting. At Jones Lang LaSalle, a manager says, “For Asset Managers and Landlord Leasing Brokers, VTS has been a game changer. In the past, we updated asset managers/ owners with Excel spreadsheets. VTS is web-based allowing multiple team members to input data. It allows users to view status 7/24. Ties into Argus, has deal calcs and terms, and multiple trend analysis. Importantly, you can group buildings for portfolio views.” A Newport Beach-based RiverRock Real Estate Group executive says his company uses “Citrix ShareFile to store our emergency profile information. In the event of an emergency, we can access the data from anywhere on our mobile devices. Citrix RightSignature is used to sign service contracts and lease files digitally. Scanbot lets you scan documents using your phone’s camera! Simply snap a photo of the document, and it converts it to PDF. DialMyCalls to send mass phone blasts out to tenants in the event of an emergency. Groups are set up beforehand, and in the event of an emergency, a message can be sent to 100’s of people within minutes. And we use MRI and Yardi for our main accounting platforms.” A small-firm East Bay manager says her firm uses “Yardi Voyager, and we love it.”

Quicken Home, Business & Rental Property helps you manage your personal, small business, or rental property from one place. This product includes all of our premium features (then link to Premier, since they have no context). In addition, you’ll have the ability to separate your personal and business transactions in one place, see how your business is doing with profit/loss projections and cash flow reports, as well as maximizing business deductions while simplifying your taxes. RentPost is a web-based property management solution that handles various priorities faced by property managers, including unit and tenant management, work orders, contact management, online rent collection, and accounting. The software can be accessed remotely on an iPhone or iPad. EcoStruxure Building is a collaborative smart building platform and open system architecture that allows developers and partners to interact, share data and develop apps, increasing efficiency up to 30 percent and ensuring optimal occupant comfort. EcoStruxure Building integrates key building systems such as energy, HVAC, lighting, safety and security so that they can be monitored and managed from one platform. (See image top left.) Rent Manager® is an advanced, completely selfcontained, software solution for your business, boasting a (Continued on page 20)

When Mother Nature Strikes Can You Reach Your Residents Quickly and Effectively?

Products That Boost Property Managers’ Effectiveness One Call Now’s automated calling system restores your confidence in knowing that everyone is in the loop. With a click of a mouse or a tap of key, you send instant alerts and notifications by phone, text, or email in any language to the people who need them. The system also provides feedback for all alerts and notifications you send. MRI’s Commercial Management suite of real estate software solutions simplifies property management by automating complex lease calculations, including lease clauses, breakpoints, offsets, estimated payments, and recoveries. Unlike vendors who take a limited, one-size-fits-all approach, MRI supports integrations with solutions from more than 120 providers, giving MRI clients the freedom to create a solution that best fits their own needs.


87 7.69 8 . 3262

10 California Buildings News • Q4 2017

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Product Gallery

California Buildings News • Q1 2018

Latest Innovative HVACR Products Innovations Can Improve Performance, Save Energy or Boost Comfort Couldn’t make it to this year’s Air-Conditioning, Heating, Refrigerating Exposition (AHR Expo), showcasing the latest and greatest HVAC products? Here are some highlights of the sort of products you would have seen on display in the exhibit hall. Many of the innovations go far toward increasing tenant comfort and health as well as reducing energy costs.

Some of the Innovation Award Winners...

Trade show floor at the 2018 AHR Expo. Photo credit: AHR Expo in Chicago

BUILDING AUTOMATION Company: Setra Systems, Inc. Innovation: Setra FLEX™ Setra FLEX™ is a complete room monitoring and control solution. Setra FLEX™ is used to ensure safe and energyefficient indoor environmental and ventilation control conditions for operating rooms, isolation rooms, bio-safety laboratories, clean rooms and all pressurized critical spaces. Visual and audible alarms are configurable and fully comply with ASHRAE Standard 170, as well as US Pharmacopeia 797 and 800. COOLING Company: Emerson Innovation: Copeland Scroll™ The latest generation of Copeland Scroll™ two-stage compressors from 1-10 tons has been redesigned for improved performance and reliability in residential and commercial air conditioning systems. The third generation technology is optimized for mid-tier comfort and efficiency rebates with improved full-load and part-load performance up to 5%. GREEN BUILDING Company: Danfoss Innovation: Danfoss Turbocor® TTH/TGH High Lift Compressor The Danfoss Turbocor® TTH/TGH High Lift Compressor is a compressor optimized for air-cooled chiller and heat recovery

applications. Engineered for high-lift applications, including air-cooled chillers and heat recovery, Danfoss Turbocor® TTH/TGH models feature oil-free, variable speed, magnetic bearing operation for outstanding full- and part-load efficiency, low vibration and sound, a small footprint, and reduced maintenance—while providing an expanded operating map suitable for air-cooled chiller and heat recovery applications. HEATING Company: Calefactio Innovation: The ONE, a 3-in-1 expansion tank, air separator and dirt separator. The ONE, a 3-in-1 expansion tank, air separator and dirt separator. The ONE innovates by: eliminating an important number of joints, thus limiting the leaking possibilities; using less space and taking less time to install compared to installing the three devices separately; reducing costs — it is much less costly to buy The ONE than to buy all the devices separately. INDOOR AIR QUALITY Company: Spartan Bioscience Innovation: Spartan Legionella Detection System The Spartan Legionella Detection System is the world’s first on-site Legionella DNA test to prevent outbreaks. Spartan’s Legionella Detection System fully integrates DNA collection, extraction and analysis in a compact format. Spartan’s technology enables unprecedented portability with no sample shipment to an outside laboratory and no technical expertise

13 California Buildings News • Q1 2018

requirements. In addition, the system provides results in 45 minutes. PLUMBING Company: AquaMotion Inc. Innovation: AquaMotion Aqua-Flash™ under-sink hot water recirculation system. The AquaMotion Aqua-Flash™ by-pass valve provides: an improved bypass design that prevents the hot water from entering the cold line when the hot water faucet is opened; A bi-metal coil element that closes the internal shuttle by-pass port in the valve when hot water reaches the valve; a bi-metal element that is calibrated to deliver the hot water temperature desired; and more than double the pipe diameter to prevent calcium buildup. REFRIGERATION Company: Chemours Innovation: Opteon™ XP44 Refrigerant (R-452A) Opteon™ XP44 Refrigerant (R-452A) is a non-ozone depleting, low GWP, HFO-based refrigerant replacement for R-404A/507. It offers an approximately 50 percent reduction in global warming potential compared to R-404A/R-507, while providing the closest match to the compressor discharge temperature of any other low GWP solution on the market. With the regulations addressing high GWP refrig-

erants such as R-404A/R-507 in commercial refrigeration applications, Opteon™ XP44 uniquely provides equipment manufacturers and end-users an option to cost effectively cut the environmental impact of their refrigerant choice in half, without sacrificing performance or equipment reliability. SOFTWARE Company: Regal Innovation: Browning® Toolbox Technician® Motor Efficiency Calculator The Browning® Toolbox Technician® Motor Efficiency Calculator is a mobile app for Apple and Android platforms. The app calculator module allows a user to identify efficiency differences between different generations of integral horsepower electric motors. This app not only identifies the potential efficiency gain, but it allows the user to tailor the motor usage parameters to mirror their application or overall facility usage so a projected Return On Investment (ROI) can be displayed. VENTILATION Company: Triatek Innovation: Stable Vortex® II Fume Hood The Stable Vortex® II Fume Hood is a dynamic, low flow, high performance fume hood that protects chemists from (Continued on page 14)


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14 California Buildings News

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otal Environmental Management, Inc. is a HVAC rental company and an industry leader in temporary cooling and heating solutions. Since 1985, we have kept our clients happy by turning their temporary HVAC challenges into workable, affordable, solutions. TEM is fully staffed with experienced technicians for turnkey installation. We can respond quickly, whether it’s a pre-planned project or an emergency at 2 o’clock in the morning. Our full-time welding and fabrication shop can design, build, and implement for all temperature control opportunities. TEM can customize anything for your specific application. For example, our five full-time welders can design any customized headers, manifolds, and even build our own skids. We’ll work around the clock to meet your lead times and provide versatility that no one can beat. As a rental company that puts service first, we treat every job as a top priority, whether it requires a 1-ton spot cooler or 2,000 tons of chilled water. We’re serious about great customer service and work closely with you at every stage of your job.

Contact us to learn more about our services: 1415 N. Burton Place z Anaheim, CA 92806 z Phone: 800.876.0096 z HVAC Innovations (Continued from page 13) harmful dusts and vapors during experiments. It delivers a safer environment for the user than the average fume hood, while also providing substantial energy savings. The Stable Vortex II passes the ASHRAE 110 test as manufactured, as installed and as used because the superior design accounts for how people actually use fume hoods, in order to truly keep them safe. TOOLS Company: Fluke Corporation Innovation: Fluke T6 Electrical Tester The Fluke T6 Electrical Tester is an electrical tester that takes simultaneous voltage and current measurements without test leads. The T6 testers now make it possible to take reliable true-rms measurements in crowded junction boxes or along conductors with inaccessible endpoints, saving time, minimizing potential errors and greatly reducing the possibility of arc flash.

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Argosy Buffer Tanks by Flexcon Industries are the industry’s first buffer tanks that are constructed with only composite materials. Not only do these tanks have an R-value of 14 and (Continued next page)

Product Gallery

(Continued from previous page)

heat loss of less than .5 degrees per hour, they also eliminate the possibility of corrosion, weigh almost 40 percent less than steel buffer tanks, and are NSF 61 approved for use with potable water. The Caleffi LEGIOMIX® is an electronically controlled point-of-distribution Electronic Mixing Valve for commercial domestic hot water systems. It maintains the temperature of the domestic hot water delivered to the user when there are variations in the temperature and pressure of the hot and cold water at the inlet or in Flexcon’s Argosy the draw-off flow rate. The LEGIOMIX® Buffer Tank electronic mixing valve provides precise temperature control over very low and very high flow rate demand, minimal pressure drop with a ball valve control element, automatic self-cleaning to prevent scale formation and easy-to-use digital interface with data logging, alarming and status indication. LG is making it easy for all users to connect and interact with its air conditioners now that Wi-Fi is built into virtually all of its 2018 appliances. With its sleek, charcoal mirror finish and redesigned chassis, the new Art Cool Mirror packs more punch with built-in Wi-Fi capability and Smart

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15 California Buildings News • Q1 2018

Diagnosis for easy control and maintenance. Panasonic’s VRF Smart Connectivity Controller technology developed in collaboration with Schneider Electric. This solution offers an enhanced user-friendly interface that dynamically manages comfort, controllability and costs for the end user. With this solution, building managers benefit from Panasonic’s VRF Smart a sense of controllability that Connectivity Controller allows them to manage equipment, lighting, security, electrical distribution and power from a single interface, anytime and anywhere. Smart Service time tracking recently got a complete overhaul, making it easier for HVAC companies to track time for billing and payroll purposes. Using the Smart Service mobile app, technicians can clock in/out from the field, as well as log travel, production, and break time. All this data travels directly to QuickBooks, making time tracking a breeze. (Continued on page 44)

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Real Estate Professionals Must Support a Company’s Business


With Elise Luckham

Chair of CoreNet Southern California and vice president, director of corporate real estate at First American Corporation in Orange County Q. What is the most challenging issue – or issues – for property managers in Southern California 2018? A. From a corporate real estate and facilities perspective, our constant focus is on supporting the business of the company. For example, in today’s competitive labor market, attracting and retaining key talent is an important priority. Real estate and facilities can play a role in supporting talent retention and acquisition. Whether it’s helping design a collaborative work environment with an open floor plan or creating alternative work spaces, workplace design can support a variety of business priorities.

A. The Southern California Chapter has created a great program called CRE 101, where we created a four-part educational series for our young leaders. Q As cyber security threats increase, Topics were things like “How to Read “ today’s competitive what can property managers in Construction Drawings” or “How to Southern California do to better labor market, attracting Negotiate a Lease.” The program was safeguard their facilities? very successful, so much so that we’ve and retaining key talent is A. Our information security group is created an additional program this year, focused on cyber security threats, but an important priority. Real called +Level Up, for more seasoned certainly a thoughtful and well-prepared corporate real estate professionals. estate and facilities can play physical security plan and team play a The topics are all important topics that role in preventing unauthorized access a role in supporting talent professionals may not be exposed to to sensitive facilities. in their day-to-day jobs, so CoreNet retention and acquisition” Q. What role will various types of autofills that void. Plus, it creates a netmation play in managing buildings in working environment for these young the near future? professionals where they can reach out to peers for assistance. CoreNet Global offers a mentorship program for new A. I can only speak from a financial services company permembers, which many of our members participate in as well. spective. There are some really innovative technologies out there, including artificial intelligence and robotic technology. Q. What unique challenges are associated with the It’s important to stay abreast of the latest innovations. Our Southern California Chapter? emphasis is on tracking real-time, meaningful data. We cerA. The biggest challenge is geography. We have four distinct tainly measure our utilization rates for energy, etc. I’m a big areas within our region, San Diego, Inland Empire, Orange fan of app technology instead of dashboards. I’m fascinated County and Los Angeles. So, we have members from the by virtual reality technologies in corporate real estate. When Mexican border clear up to the valley north of Los Angeles. the technology becomes more cost effective, I’d love to use With California traffic, it makes it almost impossible to virtual reality technology to collaborate with a customer to engage the entire membership with a single event or program. build out and furnish an office. It means we have to plan more events and programs and hold Q. What is CoreNet doing to recruit and train property managers at various levels as we lose talented people to retirement in the coming years?

them in the various locations to provide our membership with convenient access. Unfortunately, it makes a large, chapter-wide event really difficult to execute. We have an annual chapter-wide golf tournament and the REmmys gala,

17 California Buildings News • Q1 2018

Knowledge is Power. HARBRO knows restoration but our clients know their business priorities. By educating them on the restoration process they are better prepared to deal with smaller emergencies internally as well as recognizing quickly when something is beyond their control and calling for help.

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which provide opportunities for all our members to interact and network with peers. However, depending on where the golf tournament or REmmys gala is held, it is still very difficult for members to travel to these signature events. Q. What initiatives are you implementing to grow chapter membership and engagement? A. Two years ago, we made a concerted effort to grow and retain members who were under-represented; specifically our young leaders and San Diego area members. The young leaders were a great group and starting to grow, but were siloed and created their own events. The CRE101 events and other efforts brought them into mixed environments with other members, and now I’m happy to see a great cross section of members at our events. San Diego is a smaller market, but we sought out some key leaders in that area to create meaningful programs, and those leaders are represented with more board-level positions now than in the past. Additionally, we have always had good retention of members through outreach calls to upcoming expiring members from a board member. Our VP Ambassadors’ efforts to welcome new and returning members into committees and events, and creating a succession plan for board positions from the committees has also been beneficial. n


18 California Buildings News • Q1 2018

How Property Managers Can Better Prepare For Disasters 2017 was the costliest year ever for weather and climate disasters in the United States, totaling $306 billion. The previous record year, 2005, saw $215 billion in disasters. Hurricane Harvey was by far the costliest, at $125 billion, with Maria following behind at $90 billion and Irma at $50 billion. By comparison the California Wildfires account for $18 b with the North Bay wildfires being $1.5 billion of that. These troubling statistics were presented at the IREM San Francisco Risk Management Panel discussion on February 28 in Walnut Creek and laid the groundwork for a detailed discussion of how property managers can better prepare themselves and their tenants for and respond to a large disaster. The discussion ranged from pre-disaster planning with your local fire department and insurance company, to protecting your property in advance with properly drafted agreements, to property tax relief after a disaster. The panel consisted of Lewis Broschard, Deputy Fire Chief of Contra Costa County, Napa County Assessor-Recorder John Tuteur, Christopher O’Shell Property Specialist Risk Engineering Service with Chubb Insurance, and Steven Melhman, Managing Partner of the Northern California Business Real Estate Group of Kimball, Tirey & St. John. This well-informed group of experts covered a wide range of information helpful to a property manager, and I want to focus on one of those areas here, as discussed by Tuteur. Reduction in Assessed Value California Revenue and Taxation Code section 170 provides that if a calamity such as fire, earthquake or flooding damages or destroys a property, the owner may be eligible for property tax relief. It then depends on what policies have been adapted by the county in which the property is located. The assessor in that county would then reappraise the property to reflect its damaged condition. In addition, when the property is rebuilt in a like or similar manner, the property will retain its prior value (Proposition 13) for tax purposes. In other words, the cost of the new construction will not be added to the assessed value. Most counties require that you file a claim with the

By Katherine Mattes

county assessor within the time specified in that county’s ordinance, or 12 months from the date of damage or destruction, whichever is later. However, there are some counties where the assessor has the authority to grant relief without a claim. This was the case in Napa County, where about 80% of the damaged property owners filed a claim, but the relief was given to all the damaged properties automatically, and retroactively, as of first day of the month in which the damage occurred. (My research indicates that Sonoma County implemented the same policy.) The property is reassessed according to its damaged state, and property taxes are adjusted accordingly (minimum damage is $10,000). In Napa County, a total reduction in property taxes of $750 million resulted from the fires, but that represents only 2% of total tax revenue for the county. Deferral of Next Payment Due If your property has been substantially damaged or destroyed (in a governor-proclaimed disaster) and you have been granted disaster relief, you may file a claim to postpone the next installment of property taxes that occurs immediately after the disaster. If you file a “property tax deferral claim” with the county assessor before the next property tax installment payment date, that payment will be postponed without penalty or interest until the county assessor has reassessed the property, and you receive a corrected tax bill. There are other qualifications that may apply, so check with your assessor’s office. Transfer of Tax Base In addition, if your building was damaged in a declared disaster area and you don’t want to rebuild in that same location, you can purchase another property in the same county and transfer the base year value of my damaged property to a new property. There are comparability tests that must be met for this, so your specific county should be consulted. Some counties allow intercounty transfers for personal residences and my research shows that the following counties offer this additional benefit: Contra Costa, Los Angeles, Modoc, Orange, San Francisco, Santa Clara, Solano, Sonoma, Sutter and Ventura. While property tax relief this may be a small consolation, it is a benefit that property and business owners should take advantage of. You can get more information from the Board of Equalization website faqs/disaster.htm#1

Katherine A. Mattes is a real estate consultant and can be reached at

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Identify essential employees and other critical inputs required to maintain business operations. Anticipate and plan for reductions in workforce and/or supply chain resources. Contract with key suppliers to ensure service levels during pandemic period. Establish an emergency communications plan. Stay abreast of media and health service resources for the latest updates. Test your pandemic plans and revise as needed. Make certain employees are aware of procedures, policies, and expectations during the pandemic period. Plan for potential employee absences due to factors other than illness, such as community containment measures or school or pubic transport closures. Cross train and prepare ancillary workforce (e.g. contractors, retirees, cross-training employees in backup duties). Encourage employees to receive seasonal and pandemic flu shots if available.

w Identify employees and customers with special needs and ensure they are incorporated into all pandemic and pre paredness planning.

During a Pandemic w Create policies for employee compensation, flexible working conditions and sick-leave. w Institute strict policy requir ing sick employees to return home until fully recovered. w Limit the spread of the illness at the workplace by Image: Adobe Stock. encouraging hand-washing and good cough/sneeze etiquette, and limiting large meeting and gatherings. w Establish travel guidelines prohibiting or limiting travel to areas known to be affected by the pandemic. w Provide personal hygiene and cleaning supplies, including alcohol-based hand gels, tissues, disinfecting wipes and surgical masks w Provide up-to-date, reliable pandemic information for employees including symptoms and vaccine availability. w Create channels (emergency numbers, websites, or e-mail) for communicating business response actions to employees, vendors and customers in a timely manner.

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agement system for investors and property managers. Key features of Rentec Direct include general ledger accounting and financial reporting; online portals for tenants and owners; a custom website; tracking of work orders; automated ACH and credit card payment processing; Quickbooks export tool; electronic signatures with DocuSign; electronic 1099 filing; and utility billing integration. The Hemlane management platform tracks the rental lifecycle for small multifamily housing portfolios. The leasing software advertises rentals on over 40 listing websites, responds to inquiries, sets up showings, sends out the applications, and screens tenants. The management software sends rent reminders, collects payments online, initiates automatic late fees, records service professionals, and tracks maintenance. n


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23 California Buildings News • Q1 2018

Housing Seniors in California: By Steven Ring Challenge & Opportunity Beginning in 2010, Americans started retiring at 10,000 In America, we are blessed with options. These options people per day. Let me rephrase that, 3.6 million baby can range from in-home care to independent and assisted boomers are turning 65 years old per year and by 2020, and memory care communities. Options include very spenearly 36 million people will have reached 65 in one cific needs to “aging in place” models whereas a senior’s decade! By 2030, one in every five Americas will be over needs are accommodated as their age required needs change. the age of 65 and by 2050, one in every four. This is almost This option can also be a solution for aging couples that double the rate of years past. In other words, the “silver are aging at a different rate from one another. It allows one tsunami” has hit shore! spouse to not be the As the baby boomsole caretaker on a daily ers reach 65, the averbasis. age age of America is The past five years slowly increasing and have been the largest their needs must be building boom in nearaddressed. One of the ly 30 years. Primarily largest priorities is focused on multi-family, the need for housing office and warehouse, that can accommodate the building boom is seniors and their physmissing a societal need, ical and mental needs. seniors. Yes, there are Unfortunately, aging is senior homes being not linear and, currently, built, but the rate is far over 50% of seniors over below the demand that the age of 65 have a limis before us, especially iting physical disability in the Bay Area and rising to over 90% by the other urban areas of age of 80. The disability California. So why isn’t Many seniors are more active than their could be as minor as everyone building senior the ability to walk up housing? parents and looking for an urban lifestyle a set of stairs or as major with medical facilities and often family nearby. Senior Housing: as the memory loss Beyond Real Estate identified with diseases Senior housing is more such as Alzheimer’s. than real estate. Similar to hospitality, the key to a successHistorically, seniors have been able to age in place using ful project is the operator. After all, this is your mother family members for assistance. Culturally, America, and most and father they are taking care of and safety is a priority to of the modern world for that matter, has changed. The idea of operators. Where the similarity to hospitality stops is that growing up and living within 25 miles of your parent’s home the residents are long term and have medical needs that has changed over the last 30 years, with more children moving required proper staffing. Trained staff is becoming more further away from their parents. Furthermore, many families scarce in the industry and has been recognized by the senior have dual working spouses and are not able to be home to housing associations as a deterrent to building more comtake care of an ailing parent, a stressful, full-time job with no munities. Compounded by the scarcity of urban land, the breaks or vacations in some cases. senior housing sector has recognized the need to be creative. So where are the seniors going to go when they can no longer live in their own homes without consistent care? (Continued on page 42) Photo: Adobe Stock.

24 California Buildings News • Q1 2018

New Tax Law to Benefit Commercial Real Estate Across-the-Board Impacts to Boost the Whole Buildings Sector nature of commercial real estate investment,” said Thomas J. Bisacquino, NAIOP president and CEO.


he broad commercial buildings industry sector will benefit significantly from passage of the 2017 Tax Cuts and Jobs Act in a number of ways. The impact will include every player in the real estate sector, from developers to building management and brokerage firms to contractors, architects and engineers and product and service suppliers, companies large and small. The macroeconomic impact across the entire economy will likely be highly stimulative. Corporations and small businesses will use their tax cuts to reinvest in many endeavors, and real estate investors will get new tax breaks that will boost that sector. Repatriating offshore capital will also infuse the whole economy with a gush of new cash. New money will generate the need for new offices, factories, hotels and multifamily facilities. More specific benefits are articulated by major industry players, as follows.

Real Estate Developers Say New Tax Law Will Spur Growth NAIOP, the commercial real estate development association representing more than 19,000 developers, owners, investors and practitioners, welcomed the new tax bill, saying it “is expected to boost economic growth by reducing tax rates and simplifying the tax code.” “This legislation represents an important victory for NAIOP members and the commercial real estate industry. The first major tax reform in more than three decades, the act recognizes the important contribution that commercial real estate is making to the economy by supporting pro-growth initiatives and acknowledging the long-term Illustrations: Adobe Stock.

Bisacquino notes that this reform will: w Preserve Section 1031 like-kind exchanges for real estate. w Continue taxing real estate carried interests held for three years as capital gains. w Preserve the deductibility of business interest expense for real estate trades or businesses. w Reduce the tax rate for many pass-through businesses, including many in real estate. w Lower the tax rate for corporations to 21 percent. w Double the estate tax exemption. w Retain in part the historic preservation and rehabilitation tax credit, the New Markets Tax Credit, and the tax exemption for private activity bonds (PABs). “A landlord can only do as well as his or her tenants,” Bisacquino adds. “Our expectation is that this tax reform legislation will result in long-term economic growth and job creation for our nation.” The Urban Land Institute, the oldest and largest network of cross-disciplinary real estate and land use experts in the world, also applauded the new law, listing these beneficial features: w The increase in the standard deduction, combined with the limits on mortgage interest and state and local property tax deductibility, will affect demand for for-sale housing at the margins, and will likely slow the growth of prices at the high end. w The reduction in the corporate tax rate reduces the marketability of Low Income Housing Tax Credits, one of the primary remaining tools for creating affordable housing. w On balance, the commercial real estate sector is favored by the bill, particularly by the treatment of pass-through income. The interaction of supply and demand factors will take some time to play out, and the bill fell well short of the comprehensive reform once envisioned, but on the whole the real estate industry will welcome the changes.

25 California Buildings News • Q1 2018

Property Management Firms Mostly Applaud the Tax Reform The new tax law aligns with the legislative priorities of the Institute for Real Estate Management, an international force of 20,000 individuals involved in the profession of real estate management as managers and suppliers. In its statement following enactment of tax reform, IREM said, “When the Tax Cuts and Jobs Act was signed into law in December, it was the first significant reform of the U.S. tax code since 1986. Although the tax reform legislation was not without its controversies, it lined up favorably with issues for which IREM had long been advocating. In particular: w Like-Kind Exchanges: The law retains the current Section 1031 Like-Kind Exchange rules for real property, while repealing the use of Section 1031 for personal property. The exclusion of real estate from the repeal of Section 1031 was a major victory for IREM, which had long fought to preserve this provision. w Carried Interest: Carried interest is retained, with the final bill including language requiring a three-year holding period to qualify for current-law (capital gains) treatment. Once again, IREM’s efforts paid off to preserve capital gains treatment for carried interest in the final legislation.” Los Angeles-based CBRE, one of the world’s largest real estate companies, said in a statement after the new law was passed, “We anticipate it will stimulate the U.S. economy through the combination of greater liquidity for large corporations and a lower cost of capital through accelerated depreciation. From a commercial real estate perspective, we are neutral to positive on the proposed bills, since they maintain the ‘big things’ (1031x, commercial mortgage tax deduction). We believe that overall occupier demand will improve, particularly for the office and multifamily sectors, but are cautious on the ramifications of potentially eliminating the state and local tax (SALT) deductions for high earners.” The firm summarized key provisions, as follows: Macro Highlights: w Lower corporate taxes (down to 20% from the current 35%). w Repatriation of corporate profits currently held in overseas accounts (some estimate as much as $3 trillion) by imposing a one-time tax rate of as low as 10%. w Accelerated depreciation for new capital expenditures to stimulate spending. Impact: This should stimulate economic growth in the near term by increasing liquidity and lowering the cost of

capital. Accelerated depreciation should increase the demand for property, plant and equipment (some estimate by 12% to 19%) and incrementally improve GDP and productivity through capital expenditure. Some estimate that this new spending will increase GDP by 0.3% to 0.4% per year, with a total increase of 3% to 5% of additional GDP over the next decade. Highlights: (1) 1031 “like-kind” exchange remains intact; (2) Commercial mortgage interest deduction maintained; (3) Depreciation rules changed marginally and not materially (39/27.5 years to 25 years); (4) Carried interest still receives capital gains treatment under a three-year hold window; (5) Pass-through rules benefit REIT dividends by dropping the top marginal tax rate to 25% to 31% from 39.6%. Absent faster growth, the federal deficit is expected to rise by $1 trillion to $1.5 trillion because of this bill. Faster growth would mitigate the impact by increasing tax receipts. Fiscal hawks are still lurking until this bill is passed, so don’t be surprised to see more revenue increases, which may impact CRE. The tax reform package may delay the onset of an economic slowdown, which we are predicting for 2019, if tax benefits kick in immediately. Cushman & Wakefield, another global real estate giant, was similarly pleased with the overall new law. Revathi Greenwood, Americas head of research for the firm, outlined the following impacts on these sectors: w Investment and capital markets: Overall, CRE is a winner. The majority of direct U.S. CRE investment, 61%, is held by pass-through entities — only 9% is held by corporations. Another 29% is held via direct or indirect tax — exempt entities. Passive investors in pass-through entities are likely to benefit substantially from lower rates under the House plan, but their eligibility for tax deductions is limited under the Senate proposal by wage provisions. REITs and publicly-traded partnerships, however, would be eligible for the full deduction without regard to the wage limitation. Should the Senate proposal be enacted, expect to see a shift over time towards REITs, as well as conversions to corporate structures. w Office: Corporations will be big beneficiaries, likely seeing a net tax cut of $400 billion over 10 years. But we anticipate that the tax cut will be preferentially used to return capital to shareholders or reduce debt, rather than to increase corporate spending. There may be a modest pick-up in M&A activity leading to real estate consolidations. As currently constructed, the legislation likely will mitigate inversion and relocation risk for multinationals, which may boost office demand in the U.S. (Continued on page 41)

26 California Buildings News • Q1 2018

Association News

Bay Area BOMAs Celebrate Outstanding Buildings of the Year at Fourth Annual Gala Members of BOMA San Francisco and BOMA Oakland/East Bay (OEB)come together each year to honor the teams behind The Outstanding Buildings of the Year (TOBYs), as well as principal, associate and engineer members of the year at the BOMA Bay Area Awards Gala. This year BOMA San Francisco played host, welcoming gala guests to the opulent California Spanish Revival-style Marines’ Memorial Club. The rivalry was spirited. “A record number of building teams from both sides of the Bay entered the competition,” said Cortney Shadel, Cushman & Wakefield, who chairs the Awards Committee, a joint committee of BOMA SF and BOMA OEB that oversees entries and judging. BOMA SF President Marc Gille and BOMA OEB President Warren Mead co-emceed the event, announcing the sought-after awards to an enthusiastic crowd. Hines’ Pleasanton Corporate Commons team took home the BOMA OEB TOBY Award in the largest category (500,0001 million square feet). Another East Bay winBest Office Building ner was the Cushman & 500,000 – 1 million SF Wakefield team at KBSIII Pleasanton Corporate Commons, Towers at Emeryville (250,000Pleasanton • Managed by Hines • 499,999 square feet category). Owned by UBS Management teams in San Francisco scooped up honors for BOMA SF buildings in these categories: w 330 Townsend, managed by CIM Group, under 100,000 square-feet category w 88 Kearny, managed by CBRE, 100,000-249,999 square-feet category w 55 Second Street, managed by Hines Interests Limited Partnership, 250,000-499,999 square-feet category w The Cove at Oyster Point, managed by CBRE, mixed-use category

Renovated Building • 360 Third Street, San Francisco • Managed by Kilroy Realty Corporation • Owned by Kilroy Realty Finance Partnership

w 360 Third Street, managed by Kilroy Realty Corporation, renovated building category w Central Tower (703 Market Street), managed by CIM Group, historical building category Bay Area TOBY winners advance to the Pacific Southwest Region to compete for the honor of moving on to the international competition, with winners announced at the BOMA International Conference in June. The Outstanding Building of the Year “TOBY®” Awards were developed in 1985 by BOMA International to honor and recognize quality in office building operations and award excellence in buildings management. All building photos provided by BOMA for their members’ buildings.

Best Office Building 250,000 – 499,999 SF 55 Second Street, San Francisco Managed by Hines • Owned by T-C 55 Second Street LLC

44 California Buildings News • Q1 2018

27 California Buildings News • Q1 2018

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Association News

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State Green-Certified 475 Projects Still Lags Behind 7 Other States in Rankings California certified 475 LEED projects in 2017. That’s a total of 37,253,956 square feet of space, or 2.40 square feet per resident. Still that only earned California an 8th-place standing among states with the highest number of green square feet per capita, according to the U.S. Green Building Council. “Despite a changing climate within federal leadership, California continues to live its dream of sustainable buildings driving economic growth,” said Brenden McEneaney, regional director, USGBC. “LEED project teams across the state work hard to make green buildings accessible to everyone. The fact that California is in the 2017 Top 10 States for LEED proves that the efforts of our members and our partners are paying off. LEED is a proven tool for economic development, and it supports state and local strategies to mitigate climate change. I could not be more proud of this achievement.”

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Association News

California Buildings News • Q1 2018

California Multifamily Firm Wins Top IREM Achievement Award Woodmont Credited With Effective Actions During Wine Country Wildfires performance. To earn the certificaWoodmont Real Estate Services tion, a property must first meet key was awarded the Accredited Managebaseline requirements, and then earn ment Organization (AMO) Firm of additional necessary points across the Year for the company’s leadership energy, water, health, recycling, and in sustainability and its management purchasing categories. response to the North Bay wildfires in During the October North Bay October by the San Francisco chapter Wildfires, five of the eight apartment of IREM, the Institute of Real Estate communities managed by Woodmont Management. Real Estate Services in the Santa Rosa Woodmont earned the very first area required mandatory evacuation IREM Certified Sustainable Property The Boulders at Fountaingrove. Photo credit: Woodmont. by all residents and Woodmont staff. credential in the U.S. in June 2016 The evacuations affected approximately 750 apartment homes and has since added seven more multifamily properties that and temporarily displaced some 2,000 people. Fortunately received IREM’s sustainability credential—more than any none of the residents or Woodmont employees were injured apartment owner or manager in California and among the by the wildfires, though one community lost a building of leading companies in the U.S. to have achieved IREM’s eight apartments to the fire. During the evacuation period certification credential. Woodmont worked to communicate with residents to keep The multifamily communities are located in the South Bay, them updated as information was released by authorities. near Sacramento, the wine country and on the San Francisco When the evacuation orders were lifted Woodmont hired Peninsula. By February of 2018, Woodmont expects to have a specialized restoration company to clean the exteriors and 15 apartment communities or more certified by IREM. interiors of apartment buildings impacted by smoke and ash The IREM Certified Sustainable Property focuses on the to facilitate resident return to their apartments. role of exceptional real estate management in green building

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31 California Buildings News • Q1 2018

IREM-SF Expanding Reach, Programs

Q& A

With Richard Lee, IREM-SF President

Q: We understand that the IREM San Francisco chapter is expanding to serve the greater Bay Area. Can you tell us more about that? Freeway traffic is not very enjoyable nor friendly, therefore we must think, work and live differently while delivering chapter services efficiently to as many as possible. In a perfect world, we would have IREM chapters in the South, East and North Bay areas but this chapter is the resource for all of the Bay Area and actually beyond. Beyond? Yes, our members predominantly live and work across a large region, involving at least 12 counties and our way of keeping in touch with them will be to host events in select cities closer to our members.

Q: Will your IREM offer additional and varied programing in 2018? Absolutely. The days of IREM lunches only in downtown San Francisco are essentially over. We are taking some “baby” steps launching our “Speaker Series—breakfast, lunch or mixers” in cities outside of San Francisco. For example, we have plans and venues scheduled for Contra Costa, Santa Clara, Alameda and Marin County; as a result, we will continue to host events in San Francisco, just fewer. By going down this new path, I am very convinced that our Industry Partners will benefit also by meeting new property managers from outside of the familiar San Francisco financial district; actually property managers and owners will also benefit.

Q: How is your IREM addressing the looming workplace shortages? Your readers are sophisticated business people and well aware that according to statistics and trends, we will have significant amounts of retiring industry veterans and coupled with a major construction boom throughout this region, these new buildings will soon require employees therefore it goes without saying, it is prime time to step up the game of attracting new talent into this industry right now. IREM, both nationally and locally, has been proactive in attracting new employees and cultivating them into leaders and offering student scholarship opportunities to attend courses towards an ARM or CPM designation, through the IREM Foundation. In fact, this chapter has one or two board/committee members making annual visits to Bay Area universities and

colleges to share about IREM and the industry. This is one of our outreach initiatives I am very proud of. Going above and beyond the IREM Foundation, IREM-SF partners with BOMA San Francisco, BOMA Oakland/East Bay and NAIOP in the CREATE (Commercial Real Estate Alliance for Tomorrow’s Employees) program. Both the IREM Foundation and BOMA-SF Foundation/ CREATE are 501 (c) (3) charitable organizations dedicated to addressing employment and training in this industry.

Q: Do you foresee IREM better involving companies that serve building managers? Very good topic to bring up. We will refer to them as “Industry Partners” who are important to us and vice versa, creating a “win-win.” Who are these Industry Partners? Well, everyday service providers ranging from attorneys, janitorial companies, pest control experts, emergency restoration companies, security firms, painters, HVAC mechanical contractors, and the like. Let’s face it, we need each other and by developing trusting relationships, property managers can better perform their business with confidence. Nevertheless, we have an exciting and new opportunity for any new and renewing Industry Partners this year. We modified our annual commitments to join, so instead of tiered membership levels, our chapter now offers one flat rate for $1,200 per year; what an incredible offer.

Q: Is IREM helping efforts to expand housing in the Bay Area? It is consistently in the news and one of the hottest topic we cannot ignore. Involvement in expanding housing? Certainly. In fact, several IREM members are successful housing developers with a vested interest in this arena. Essentially and we can all agree that if California continues to excel in higher education, attract others to the state and churn out well-paying jobs, where are the employees going to live? If this continues, there will be losers and must leave California to a more affordable state to live and work if this continues. Builders want to build but can’t anymore. Legislatively, it is critical to remain involved at all levels of government therefore we as members owe it to each other to participate. Our chapter leadership includes the appointment of a Legislative Chairperson who takes interest in matters affecting the industry and provides updates regularly and arranges to meet with local senators and assembly members to champion high priority matters that IREM is confronted with. n

(More Association News on page 40.)

32 California Buildings News • Q1 2018

Attractive Flooring Boosts Buildings’ Aesthetics “Flooring sets the stage. Quite simply, it ties together all of the other elements in a project,” says Misael Tagle, CEO and co-founder of San Diego-based DuChâteau. “Engineered hardwood flooring, including the European-inspired styles of DuChâteau, creates a perfect pairing of real wood elegance with ease of installation and maintenance. The warmth, luxury and distinction that wood flooring brings to commercial projects sets them apart, and provides enhanced value both to end users and the company or organization’s bottom line.” At The International Surface Event recently held in Las Vegas, a variety of attractive — and practical — flooring products and solutions were showcased. A few are featured below.

Dur-A-Flex, Inc. offers seamless, resinous floor systems. Seamless floors qualify for LEED credits (low VOCs), are durable and simple-to-maintain and eliminate seams and lines where bacteria and dirt can hide. Bring style and flair to indoor or outdoor applications with endless options for custom colors, designs and patterns. Dur-A-Flex offers a wide range of floor systems to fit any need. (Photo courtesy of Dur-A-Flex, Inc.)

s Floor Folio’s Verona Marble LVT collection. This is a commercial grade tile, size 18” x 36,” with 3mm thickness and 22 mil wear layer. This can also be made with its commercial grade EnviroQuiet rubber backing for an ergonomic and acoustic flooring solution. (Photo courtesy of Floor Folio Industries.)

33 California Buildings News • Q1 2018


Metroflor American Plank by Metroflor is designed specifically to meet the needs of the multi-family segment in the dryback category. Metroflor American plank consists of 6 popular designs that are stocked by Metroflor distributors nationwide, allowing distributors to service property management specs that span multiple regions throughout the US. Metroflor American Plank is a 2mm gauge product in a 6” x 36” plank construction with a 6 mil residential wear layer and a durable, scuff- and stain-resistant ceramic bead finish. Metroflor American Plank is backed by a 10 Year Residential Warranty and a 5 Year Light Commercial Warranty. (Photo courtesy of Metroflor Corporation.)

With Super SAM 125 your neighbors aren’t that LOUD. ®

Sound Abatement Membrane Super SAM® 125 is a premium sound deadening sheet membrane for use on surfaces that require impact and airborne sound reduction.

s DuChâteau’s Olde Dutch, which is part of The Vernal


Collection, is ideal for lobbies or other commercial interior spaces, such as the Harbor Distributing Headquarters in Huntington Beach, Calif. (Project designer: Gensler, Inc. Photo courtesy of Gensler.) Opposite left: Emser Tile’s Porch, a new wood-look tile collection, features subtle wood grain movement that flows across tile panels. An understated satin finish completes the glazed porcelain tile for enhanced visual depth. (Photo courtesy of Emser Tile.)

(More on flooring innovations on next page.)

6” concrete substrate with a tile finished floor: IIC: 51 STC:54 ΔIIC: 22 6” concrete substrate with engineered hardwood finished floor: IIC: 51 STC: 52 ΔIIC: 23 Wood joist substrate with tile finished floor: IIC: 56 STC: 61 Super SAM® 125 provides up to 3/8” of crack isolation protection. The perfect solution for apartments, condominiums, hotels, classrooms, high-rise office buildings and any other area needing sound reduction.

Membrane Systems That Protect Your Flooring Investment



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California Buildings News

rethane topcoats and Ardex topping slabs are popular options for sealing epoxy floors and are ideal for large commercial spaces, retail spaces, office buildings, garages and may be applied over a decorative flooring system. “When you apply a urethane topcoat to epoxy flooring, you’ll experience both instant and longterm benefits,” says Baker’s Floor and Surface President Chris Baker. There are many advantages to urethane topcoats. They are: u Scratch resistant and abrasion resistant u Chemical resistant, including acid and corrosives spills u UV stable—will not turn yellow when exposed to direct sunlight u Aesthetically appealing u Perfect for indoor and outdoor applications u Available in clear and custom-tinted solid colors u Available in matte or high-gloss finishes u Heat-resistant and slip-resistant A urethane topcoat applied to epoxy adds a protective layer that increases the longevity of a floor. The coating will also help protect the floor’s color, make it easier to clean and help hide scratches. Baker’s Floor and Surface recently completed a urethane topcoat job at a large office building in San Francisco. “For this 3,200 square-foot job, we taped out the job area, tested concrete density to determine the proper media and prepped the surface area. We then applied a urethane topcoat to the epoxy flooring,” Baker said. “Finally, we applied a wax and polish.” Businesses throughout the Bay Area turn to Baker’s Floor and Surface for commercial flooring projects. Have an upcoming flooring project? We’d be happy to visit your property to discuss solutions.

Polished concrete floor with Ardex PC-T topping applied by Baker’s Floor and Surface.


To learn more about Baker’s flooring solutions: 650.652.9440 u

Solutions That Improve Flooring NAC Products’ Super SAM® 125 sound membrane is specifically designed to be installed under a variety of hard surface flooring to reduce airborne (STC) and impact (IIC) sound transmission. Super SAM® 125 has been tested in an accredited laboratory and contains no VOCs in compliance with Prop 65. Super SAM® 125 can be installed over concrete (IIC 51 and STC 54) or wood (IIC of 56 and STC 61) substrates and is the perfect solution for apartments, condominiums, multi-level hotels, high-rise office buildings and other areas needing sound reduction. Ecore offers the AttainSilence collection that consists of two products—Attain and ECOsilence—that can be sold separately or together to reduce structure-borne sound transmission and vibration in hospitality and multi-family applications. AttainSilence is an attractive resilient flooring system available in wood and texture visuals and five configurations.

Photo credit: Alyssa Tomfohrde.


Topcoats Enhance Epoxy Floors’ Look and Safety

NAC Products’ Super SAM® 125 Sound Abatement Membrane. Image courtesy of NAC Products.

35 California Buildings News • Q1 2018

Napa’s Meadowood Earns Rare Five-Star Award Meadowood earned a rare triple Five-Star award from Forbes Travel Guide, the world’s only independent global rating system for luxury hotels, restaurants and spas. Through the thoughtful and professional dedication of the Meadowood team, the estate has joined an elite group of only 13 hotels in the world to have all three Five-Star designations (hotel, restaurant and spa) at the same property. Forbes judged more than 1,000 hotels in 50 countries. Gerard J. Inzerillo, Chief Executive Officer of Forbes Travel Guide, credits the honbor to the resort’s “unwavering dedication to deliver the best guest experience at every turn.” “Our vision,” says Meadowood Founding Partner H. William “Bill” Harlan, “was to create a fine country resort; perhaps among the best in the world. Central to our values have always been an appreciation for nature, wellness and traditional pastimes, including the enjoyment of conversation, food and wine.” Guests of Meadowood are surrounded by nature and privacy on a Top photo: Oakview Room. Lower photo: Meadowood Spa. 250-acre wine country estate. Accommodations and gathering areas Photos courtesy of Meadowood. are designed to be enjoyed both indoors and outdoors. Wellness opportunities are found property-wide through recreation: golf, tennis, croquet, hiking, swimming and fitness; as well as in the many restorative aspects of the all-suite spa. Wine and culinary experiences, central to life in Napa Valley, are also a highlight of the Meadowood experience.

CRE Future: Growth, Cyberterror, 3-D and the Amazon Effect RICS Conference Yielded Challenging Insights, Solutions Image: Adobe Stock.

By Ken Cleaveland When I entered the field of commercial real estate over two decades ago, almost no one had ever heard of something called “cyberterrorism,” so it was a bit shocking to learn from a battery of experts at a recent RICs conference in San Francisco that a digital attack on a national economy like ours—and even our very buildings—may be our most serious challenge in the future, almost as damaging as a nuclear strike. The revelation came at this year’s Summits of the Americas—Exploring the Future of Cities, sponsored by the Royal Institute of Chartered Surveyors (RICS). It pulled together some of the foremost authorities in commercial real estate, and their insights were very disturbing. For instance, the future of traditional brokers and architects could be challenged with the development of new internet-based all-inclusive realty services and the growth of virtual reality in design work. Construction is also an industry that is set to have massive changes with the development of new building materials, the use of 3-D printing and growth of such firms as Building Connected that specialize in connecting and coordinating all aspects of a project including the general contractor and all subcontractors. Drones will also grow in importance in future site and building evaluations, particularly as they relate to risks. One speaker, Joe Lee, CEO of the San Franciscobased firm LocateAI, described his firm that tracks where people live, work, dine, and shop calling those “points of interest” that are then used to determine the best location for a future tenant, even to the point of predicting future revenue or business for that prospective tenant at the given location. Can many current CRE brokers do that?

No CRE Bubble in Sight

The Valuations of CRE Panel was particularly interesting in that everyone predicted 2018 to be a good year and

did not see the current market as being “in a bubble.” In fact, foreign investment is still a major driver in the U.S. commercial real estate market, and only interest rate hikes could slow down growth. No speaker thought the Bay Area was over-leveraged as our tech-based economy was seen as only growing, fueled in part by our demographics of a diverse, educated workforce. It was interesting to hear the participants answer when asked if “Amazon was taking over the world?” Lee said Jeff Bezos is definitely a threat to brick-andmortar stores and that more stores closed in 2017 than in the last 20 years, but that an equal number of new stores opened that same year. He predicted “experiential retail” will remain strong, particularly in the food and beverage industry. Dustin DeVan, CEO of Building Connected, predicted that Amazon would be the first internet company to be “broken up by the government.” All agreed that Amazon was definitely having a profound impact on commercial real estate. Cindy Ma, Managing Director at Houlihan Lokey, predicted that a global valuation standard would eventually be developed to accurately benchmark any site or property in the world on a variety of measures including the physical site, structure, financial debt, equity and political environment. A final exercise at the conference debated the value of the Golden Gate Bridge. With the input from Adam Finkin of Arup, and Denis Mulligan, General Manager of the GGBridge Highway & Transportation District, it was determined the tangible costs alone would be nearly $7.5 billion, but that the unparalleled site, plus the revenue the bridge already generates, would bring the total value of the bridge to $80 billion, a value that far exceeded either the Brooklyn Bridge ($8 billion) or the White House (a puny $250 million).

Cleaveland is a San Francisco-based public affairs advocate. He can be reached at

37 California Buildings News • Q1 2018

Hospitals’ Tech Innovations Improve Care, Cut Costs By Chris Rauber

Experts in hospital design are integrating Center, a few miles away in the Grantville neighborhood, high technology into many aspects of along with its Palomar Medical Center in North County. how an acute care facility is designed, The technological aspects of the new facility don’t structured and operated, but much of replace important elements of care such as face to face that ultimately focuses contact with doctors on a single spot: and nurses, including The patient room. “in-room rounding,” And at Kaiser Stasney stresses, when Permanente’s new hosphysicians make their pital facilities much of rounds to check on their that focus lands on a individual patients. prime piece of inter“The technology, nal real estate located while wonderful, doesn’t across from the foot of replace” the human the patient’s bed, says touch, but it gives physiJoe Stasney, the giant cians greater access to the Oakland-based system’s patient when the doctor national director of can’t be there in person, hospital design and “and can facilitate conconstruction. sults with additional Mounted on the physicians and expertise, Large-screen TV monitor integrates patient care system in new Kaiser wall there is a largeand potentially the famiPermanente hospital rooms. Photo courtesy of Kaiser Permanente. screen TV monitor that ly as well,” Stasney said. “integrates our patient care system,” and gives Kaiser the In Northern California, Sutter Health is incorporating chance to display videos of an educational nature — to help similar approaches into its new California Pacific Medical the patient and family and friends understand the health Center campus at Van Ness and Geary in downtown San situation they’re facing, and what steps are being taken to Francisco. The new $2 billion+ CPMC hospital, slated to address it—along with movies, Internet sites, TV shows open in early 2019, will be a “smart hospital” that includes and other entertainment offerings. It’s also designed to meld more hands-free communications technology than any “into the patient’s daily activity,” whether that involves other Sutter facility, creating “a huge operational savings,” ordering food, controlling lighting, talking to a remote according to Sean Franklin, a senior Sutter project manager. physician or “care team” via a “video visit” platform built “A very extensive deployment” of Vocera wireless into the system, or giving nurses the ability to monitor the communications and RFID technology at the new hospipatient from other parts of the floor. tal will allow care givers to communicate with colleagues “Now you know who’s coming and going into the room,” without leaving the patient’s bedside, obtain lab results as Stasney says, since the system identifies the care givers who quickly as possible, order supplies, and account for physical parade through the space, mitigating a patient’s or family’s assets, such as wheel chairs and other mobile equipment, sense of being surrounded by strangers much of the time. he said. One of the most recent examples is located in San Diego’s “Due to the high cost of workers (in the hospital Kearney Mesa community, where Kaiser opened a new $850 setting) it eats up a lot of money just for an employee to million hospital about a year ago, in late April 2017. The walk down the hall and wait for an elevator,” Franklin seven-story, 617,000-square-foot hospital helps provide care explains. And RFID technology allows the facility to observe to nearly 610,000 Kaiser enrollees in San Diego, nearly one “chain of command” regulations when medications are in five of the sprawling city’s residents. The new hospital comordered and sent to patient rooms via pneumatic tubes, plements an existing Kaiser hospital, known as Zion Medical another operational savings opportunity. (Continued on page 42)

38 California Buildings News • Q1 2018

Industry News

The U.S. Environmental Protection Agency recognized the prevention and diversion accomplishments of the Presidio Trust, one of 16 WasteWise national award winners. The award recipients collectively prevented and recycled over 355,801 tons of waste, saving $17.7 million in avoided landfill fees. “This is yet another excellent example of the EPA partnering with communities and organizations to achieve environmental and economic benefits through waste prevention and management. The WasteWise award winners have exemplified tremendous environmental stewardship and fiscal responsibility, and we commend their efforts,” said EPA Administrator Scott Pruitt. This is the fifth consecutive year that the Presidio Trust has received the WasteWise program’s Federal Government Partner of the Year award. The Presidio Trust manages the Presidio of San Francisco, a 1,492-acre innovative urban national park site. The Presidio Trust’s waste reduction program oversees all of its waste and diversion activities, and consistently reaches a diversion rate of 64 percent or higher. Highlights of the Presidio Trust’s efforts include an in-house yard waste compost program that recovers the majority of the green debris generated in the park and composts the debris on-site. The finished compost is used in the park for landscaping and reforestation projects. The compost program saves the Presidio more than $75,000 annually, largely from avoided transit and disposal fees. For 23 years, EPA’s WasteWise has helped organizations and businesses apply sustainable materials management practices to prevent and reduce municipal and select industrial wastes, saving them resources and money. WasteWise partners reported preventing and diverting 8.5 million tons of waste that would otherwise have been disposed in landfills or incinerators. These actions—which include waste prevention, recycling, composting and donation — saved participants over $400 million in avoided landfill fees. WasteWise partners who report the best overall improvement in waste prevention and recycling activities—when compared to the previous year— receive awards in various categories.

EPA Recognizes Presidio Trust for 2017 Waste Efforts

Photo: Adobe Stock.

LA, Other California Metros Adding Multifamily Inventory Los Angeles is one of the top five markets in the nation with the most apartment units under construction with nearly 30,000 units—and 5,600 units in new inventory delivered in 2017. conducted an analysis of what is driving this new construction of apartments in Los Angeles. w Developers are primarily focusing on Downtown LA, with a lesser emphasis on Hollywood and “Silicon Beach” submarkets. w Los Angeles’s diverse economy, young population, and severe housing shortage continues to drive multi family development.

w Developers seem to be banking on millennials pref erence to live near work and stay mobile (prolonging homeownership). w

Inward migration of workers in tech and entertainment/digital media is unique to Los Angeles as many want to live near places of inspiration, trendy restaurants, and other aspects more often associated with leisure/tourism.

New inventory delivered in other major California metro areas: 4,700 in Orange County, 3,600 units in San Francisco and 2,800 in San Diego. Inventory still lags far below demand throughout the state.

39 California Buildings News • Q1 2018

MAY 2 & 3, 2018

Anaheim Convention Center Anaheim CA

FACILITY SOLUTIONS TO HELP YOU SUCCEED Don’t miss this opportunity to discover new products and technologies, gain knowledge from industry experts, and share ideas with local facilities professionals who face the same challenges that you do – all for FREE!

For more information or to register, visit To exhibit, contact:

George Runckel 800-827-8009 x4405 •

MAY 23, 2018 | HYATT REGENCY ORANGE COUNTY “Invest in Success” is IREM Orange County’s annual conference and tradeshow that serves property managers from both residential and commercial sectors. The conference offers timely and interactive forums on leadership, trends and issues targeted specifically for today’s dynamic market. The popular tradeshow provides the opportunity to stay current with new products and services while networking with current and potential clients. Keynote speaker and CNN Hero for the Project Athena Foundation Robyn Benincasa, will inspire people to grab life with one hand, grab their teammates with the other, and create that special magic that allows each of us to become better and stronger together than we would ever be alone.

____________________________________________________ To purchase a booth or learn about our sponsorship opportunities, please visit, or contact the IREM OC Chapter office at (714) 258-8377

40 California Buildings News • Q1 2018

Association News

San Diego/Palomar Architects Address Complex Border Wall Issue Say Extending Physical Barriers Be Justified Before Diverting Funding For Infrastructure move back and forth between the two regions, with countless The San Diego and Palomar Chapters of the American people connected by family, culture, language and business, Institute of Architects issued a statement on the nation’s immileading to a robust and gration issue in which economically beneficial it said the architects bilateral relationship. “are deeply interested “When considering in the topic of border ways to reduce the entry security and the effective to the U.S. of persons regulation of the fronwithout legal status, we tier between the United assert that care must States of America and be taken to ensure that Mexico. We embrace far-reaching, long offerthe idea that rule-based, ing cures that are worse transparent, and effithan the problem. A plan cient management of the to spend $20 to $50 bilmovement of people and lion on greatly extending goods between Mexico existing physical barriers, and the U.S. is vital to such as walls, to deter our shared well-being. undocumented entry from “The international Mexico, should be justiborder the long history Border patrol vehicle along San Diego/Tiajuana border. Adobe Stock. fied by evidence that these of settlement, migration and investments will offer significant benefits. commerce in the region and its emergence as a global economic “Most who arrive in the U.S. across the southern border center. Large, diverse populations on both sides of the border without authorization do so where Mexico/U.S. urban areas interface. In limited circumstances, at key paired-city locations, walls and heavy fencing can be useful and contribute to preventing unauthorized entry. However, along much of the rural border, existing fencing, sensing technologies and physical patrolling appear to be vastly more cost-effective. Recently reported steep declines in undocumented entry (as much as 80%) have occurred despite almost no new barrier-building. “At a time when the need for public investment in infrastructure is acute nation-wide, applying many billions of tax dollars April 19th, 2018, 8:00 AM - 4:00 PM to unneeded wall construction is unwise. Dollars should be invested in public bricks and mortar projects such as parks, recreation facilities, libraries, schools and mass transit. For example, an expenditure of $20 billion can create 1,000 elementary schools or 2,500 branch libraries to enhance our local communities. “We urge those considering how to better limit the unauthorized entry of people to the United States along the border with Mexico to weigh carefully the actual extent and cost of the current problem against the significant cultural, political and economic benefits we now derive from our relationship with Morning Keynote Speaker Afternoon Keynote Speaker an important ally. We urge a thoughtful, measured approach Seleta J. Reynolds Gary Gero General Manager to enhancing security along our border with Mexico that is Chief Sustainability Officer Los Angeles Department of Transportation County of Los Angeles evidence-based and we advocate for infrastructure projects that will enhance our communities and natural environment.”


41 California Buildings News • Q1 2018

New Tax Law (Continued from page 25) w Industrial: We expect similar, modest positive impact

on eCommerce, perhaps industrial’s key driver. Apart from benefiting from the corporate tax rate reduction, eCommerce also benefits from full expensing that is geared towards industrial business/capital goods/manufacturing. Greenwood added, “Some proponents claim that proposed tax cuts will lift real, annual GDP growth closer to 3% from the approximately 2% that has prevailed during the current expansion. However, most of their analyses do not consider the likely effects of tax reform on a higher-than-expected trajectory for interest rates or the impact of higher levels of debt that deficit-financed tax cuts will entail. When these are factored in, estimates of the GDP growth boost range from 3 to 9 basis points per year over the next decade.

Commercial Real Estate Service Providers See Benefits in New Law

Associated General Contractors of America CEO Stephen E. Sandherr said the new tax laws “will lower rates, spur economic growth and impact construction businesses for years to come. Initially, the tax reform bill provided little relief for many construction firms organized as pass-throughs, such as S-corps, limited liability corporations and partnerships; eliminated Private Activity Bonds, essential to the financing of transportation infrastructure, low-income housing and other public construction and public-private partnership projects; and repealed the Historic Tax Credit, critical to the private construction market for the rehabilitation and renovation of historic buildings. “AGC continued to fight for a better outcome for the construction industry by undertaking a rigorous direct lobbying campaign. Our efforts included connecting construction company CFOs and CPAs with tax writers, and generating thousands of pro-construction messages from members to key legislators. Our efforts helped convince members of Congress to ultimately reduce the corporate rate by 14 points; lower individual and pass through rates; double the estate and gift tax exclusion to $11 million; ensure the tax-exempt status of Private Activity Bonds remained untouched; and prevent full repeal of the Historic Tax Credit.” The American Institute of Architects (AIA) was also encouraged by changes made to the tax reform legislation, particularly the feature that allows for a 20 percent deduction for businesses organized as “pass-through” entities like S-corps, sole proprietors and Limited Liability Partnerships, subject to income limitations. The final conference package now contains specific language stating that

architecture and engineering firms are not subject to the limiting provision that applies to other service businesses. AIA President Carl Elefante, said, “This is a massive, complex piece of legislation that will affect each and every architect and architecture firm differently, depending on how they do business. The AIA lobbied hard and successfully to improve this bill, and to ensure that architects continue to be major job creators in the American economy. Gaining tax relief for architects who organize as pass through companie s— which includes the majority of U.S. architecture firms — is a significant improvement over earlier drafts. So is preserving at least in part the Historic Tax Credit, which was totally abolished by the original House tax reform bill. “We owe a deep debt of gratitude to our members for their efforts in reaching out to their elected representatives to make our views known and to make this legislation better for architects and the country. It’s clear that the conferees listened to our members, who showed the power of our profession to effect change even when the obstacles to change are huge.”

Fairness for Architecture Firms

In order to provide tax relief for pass-through businesses which are taxed at individual rates, the Tax Cuts and Jobs Act creates a new 20 percent deduction for these businesses to reduce their tax liability. However, both the initial House and Senate’s bills prevented architects from taking advantage of this provision. Instead it lumped them in with other service industries, ostensibly in an attempt to prevent tax avoidance. Since 57% of architecture firms are organized as pass-through entities, AIA argued to lawmakers that excluding architects from tax relief would treat them unfairly, putting them at a competitive disadvantage to other industries. Thanks to intense lobbying by AIA members, architects and engineers were removed from the list of professions prevented from taking the new deduction in the final version of the bill. This means that architects will now be able to take full advantage of the tax relief being offered to other industries. The Institute has also worked over the past year to see the 179D Deduction for energy efficiency in commercial buildings extended beyond its December 31, 2016 expiration date. This critical tax provision encourages investment in high-performing buildings, which is better for the environment and building owners’ pocketbooks, and serves as a lifeline for many architecture firms. Although 179D and other important energy incentives were left out of the final tax reform bill, the AIA is still working with our allies to extend 179D by other means. n

42 California Buildings News • Q1 2018

Seniors Housing (Continued from page 23) As partner in one of the fastest growing senior housing development groups in the Bay, I’ve had the unique ability to apply my commercial real estate experience to the senior housing sector. What I see is that the past is not the future and, in fact, many seniors are more active than their parents and looking for an urban lifestyle. Statistically, over 80% of centurions live in an urban environment to take advantage of nearby medical facilities and, more importantly, have family nearby. The days of living out in the desert still exist, but most seniors end up coming back to be near their children after one spouse passes away, the “halfback” theory. To find urban sites requires creativity. Repositioning or re-looking at a prior use and thinking outside the proverbial box is required to fill the needed gap. Gone are the “old folks homes” and in are the hospitality driven models. It is a shift in thinking that is similar to the way we look at office space today versus 20 years ago. Being exposed to some of the best architects and designers in the world has allowed our firm to re-look at a site and see the potential of what the future of senior housing can become. So why not get rid of the nursing station and have a grand check-in desk? Why not have chef-inspired menus and a wine bar? There is no limit to the potential for this industry. It only requires being able to have a fresh perspective and a willingness for change. n

Ring is senior executive vice president/partner at San Francisco Bay Area-based Fulcrum Real Estate and Development Inc.

Leasing Office Space (Continued from page 2) that as many as 35% of all knowledge workers may be replaced as early as 2020. Many also felt that the “war for talent” will continue to transform workspaces, especially since a study aired showing that 69% of millennials prefer a good workspace to any other employee benefit. Consumerization of the workplace was a term heard around the conference. “You can no longer have a crappy environment, since everything anymore is on social media,” said one speaker. Major takeaways: stay flexible and listen to the future (that would be the kid who just went to work for you). n — Henry Eason

Hospitals’ Tech Innovations (Continued from page 37)

The hands-free, voice-controlled Vocera Badge empowers highly-mobile care team members to connect, communicate and collaborate quickly. Photo provided by Vocera.

The technology can also monitor whether clinicians use a soap dispenser and wash their hands when entering and leaving a patient’s room, a critical element of hospital hygiene that is sometimes forgotten by busy doctors, nurses and technicians —“and hand hygiene is one of the easiest ways to reduce infection,” Franklin said. Currently, he said, hand-washing is monitored by roving workers armed with clipboards to chart adherence to cleanliness standards. Placement of computers in every room for in-room charting is another key way to make sure clinicians are in or near patient rooms more frequently, rather than down the hall at nursing stations, for example. Sutter and CPMC are moving down the road to an “Internet of things” environment, as officials recognize there will be “more and more digital devices,” which will continue to get smaller and smaller, Franklin said. Already, portable X-ray machines are wireless, as are bedside glucose meters and other devices. Although it’s hard to quantify the savings from such implementations, he said, it’s clear that the financial savings will be significant, and Sutter expects bedside care to benefit as well. n Rauber is a veteran healthcare journalist and can be reached at

43 California Buildings News • Q1 2018

Why Commercial Building Owners Should Use SMC Motors By Richard Almini Did you know that California is the only state in the nation energy efficiency and simultaneously protects compressors that has not experienced an increase in per capita energy when rooftop units are operating at less than 100 percent consumption over the past 25 years? The Golden State has of the rated RPM. bragging rights on this due largely to its comprehensive and The motors can be monitored and controlled using rigorous energy regulations in the form of Title 24. any web-enabled device such as a cell phone or personal In addition to state-mandated conservation, California is computer. The big bang for the buck comes from the motor a world-renowned center of innovation where entrepreneurs being connected to a dedicated SMC Smart Motor Drive and and global companies alike market products that significantsmart logic controller that enables two-way communication ly reduce energy use and emissions while cutting costs on and provides actionable performance data. monthly utility bills. Customer Benefits In my 40 years of doing business When Legacy started evaluating in the commercial HVAC industry, SMC motor technology, we had conthere is one innovative and breakcerns that its “smarts” could make through technology that stands out the system too expensive to provide from all of the others I have seen and an attractive customer payback. introduced to my customer base: the What we found was the exact opposmart Switched Reluctance Motor by site. “We calculated very short paySoftware Motor Company (SMC). back periods. One project for a Bay (See image at right.) The motor is so Area city had a 1.37-year return on advanced, it has won awards from investment payback,” said Mark Switched Reluctance Motor by SMC. federal and state agencies, as well as Calonico, vice president of energy industry groups. services at Legacy. While the Switched Reluctance Motor has been around The payback is even more attractive when adding in the for decades and is typically used in high-reliability applications rebates that Pacific Gas & Electric and Southern California such as nuclear power plants and chemical facilities, it wasn’t Edison offer for the motors. Small businesses can also write smart until the PhDs at SMC in Silicon Valley redesigned it to off motor capital costs in the first year—instead of over 39 work with the technology found in cell phones and electric years—under a provision in the Tax Cuts and Jobs Act for all vehicles. We are now entering the age of motors with a brain. HVAC system components.

Proven Results

The Secret Sauce

These savings are significant: companies collectively spend billions of dollars on energy. HVAC and refrigeration systems are the biggest sources of building electricity use—roughly 45 percent. Managing energy to achieve costs savings and reduce emissions benefits the bottom line and the environment, which is of growing importance to customers, partners, employees, and shareholders in light of the changing climate. California set the bar on energy efficiency standards that have kept energy consumption flat and saved ratepayers billions of dollars. SMC is setting the bar when it comes to electric motors that deliver unparalleled savings and real-time intelligence on system performance. Commercial building owners and Legacy customers looking for competitive advantages—including operating more sustainably—can start by looking at this stand out product.

The premise is simple: you do not need the full RPM of a motor to adequately heat, cool, and ventilate a building while maintaining desired comfort levels. The SMC system automatically regulates the fan motor speed to achieve optimal

Almini is president & CEO, Legacy Mechanical & Energy Services, Inc. in San Ramon. He can be reached at

Today, Legacy is increasingly replacing standard and premium induction motors in rooftop A/C units with SMC smart motors. The results have been remarkable. We completed eight SMC pilot projects on packaged rooftop unit air handlers. In each project, the energy savings during the heating and cooling mode averaged 54 percent, and a whopping 90 percent during the ventilation/economizer mode. The SMC motor and its intelligent controls are delivering up to 75 percent annualized energy savings when compared to conventional fan motors, the vast majority of which are oversized to accommodate load uncertainty and, therefore, inefficient. Findings similar to these have been certified by the federal government and two national labs.

44 California Buildings News • Q1 2018

HVAC Innovations (Continued from page 15) With Diamond Controls® and Solutions, building Product indoor air qualmanagers have comprehensive control of systems, ity easily and Gallery including VRF, from almost any manufacturer efficiently. As across multiple spaces and sites. This technology the only PTAC and services package includes real-time insight into with a MERV performance and trends plus VRF-specific programming and 8 filter to help greatly support from Mitsubishi Electric’s Solutions Group. reduce outdoor air parti® Weil-McLain added three smaller sizes cles, allergens and other to its advanced high-efficiency air impurities, it’s a Evergreen™ condensing boiler game-changer for being Schneider Electric Modicon M172 line to accommodate small to able to meet ASHRAE average size residential applica62.1-2013 standards. tions. The 95% AFUE boiler is Schneider Electric has launched the new Modicon M172 available in 70, 110 and 155K programmable logic controllers (PLCs) for HVAC/R and BTUH input sizes, joining the pumping applications. The new line includes the Modicon existing 220, 299 and 399 sizes. M172 Optimized series—developed to provide optimum The line of Evergreen performance and control for HVAC/R applications at minunits are ideal for both small imum cost where network communication is not required, and large residential, and light and the Modicon M172 Performance series—designed Weil-McLain Evergreen boiler commercial applications. with Native BACnet and Modbus network communications TM Friedrich FreshAire PTAC is the first to combine embedded, ideal for modular and distributed architectures. an energy-efficient inverter compressor with the ability to Armstrong Fluid Technology’s Stainless Steel Vertical bring in conditioned make-up air, delivering outstanding In-Line pumps for plumbing applications feature superior

Product Gallery energy saving performance and space-saving features. The Armstrong Design Envelope Vertical In-Line design, the new stainless steel models are ideal for potable water or residential dewater applications. Building owners can now benefit from exact flow and pressure output without throttling. The ECO from Hunter Industrial is among the most Armstrong Fluid Technology lightweight and economical Vertical pump industrial fans on the market. With blades ranging in diameter from 8 feet to 24 feet, this superior HVLS solution utilizes a custom direct drive motor specifically engineered for the industrial fan market and blades designed by aerospace engineers. The ECO includes Hunter Industrial’s standard 1:1 analog control and touchscreen controls. The SRP ACCU-RATE® PRO controller’s ‘brainpower’ gathers data to anticipate and respond to requirements, giving facility managers access to real time monitoring and control of actual temperature conditions; trending, graphing, diagnostics and alarm notifications from any web-enabled device. It is BACnet IP; BACnet MS/TP; compatible with any existing BACnet control system; and expandable accommodate any size or type of equipment; all within an intuitive, fully customized interface. TZOA’s Haven is a new professionally-installed device that makes existing HVAC systems smarter, longer-lasting and better at ensuring air quality within the home. It is the only duct-mounted air quality monitor that detects individual Particulate Matter (PM) and calculates the remaining lifetime of a filter. It delivers filter status and data UV Resources’ UV-Clamp Hour Meter to users via an app for iOS and Android. The UV Resources Ultraviolet-C germicidal (UV-C) Lamp Hour Meter from UV Resources alerts building engineers to potential disruptions to the efficiency-boosting technology’s benefits, which include decreasing HVAC/R energy costs by an average of 10-25 percent. The meter monitors the lamps’ All product photos courtesy of their companies.

45 California Buildings News • Q1 2018

total run time against industry standard data and signals when lamp replacement is needed. The ClearFire®-CE (CFC-E) condensing boiler from Cleaver-Brooks is a compact, high-mass firetube design that achieves up to 99% efficiency. It features dual temperature returns, enabling maximum operating efficiencies in a variety of system applications. There are no flow limitations to consider and no need to satisfy multiple-boiler design constraints, allowing for system engineering flexibility and maximum boiler efficiency.

Marley MD Everest Colling Tower from SPX Cooling Technologies

The new Marley® MD Everest™ Cooling Tower from SPX Cooling Technologies takes cooling to a new altitude, delivering over 85 percent more cooling capacity compared with other preassembled counterflow towers available in the HVAC market. At 2500 tons, it is an ideal one-to-one match for many large chillers. Daikin Applied’s Navigator® is a variable speed screw compressor water-cooled chiller engineered with awardwinning Variable Volume Ratio (VVR™) technology, available in capacities from 120-300 tons. Navigator’s VVR and variable speed technology provide the power of efficiencies to meet or exceed ASHRAE 90.1-2016 levels and IPLV as low as 0.36. Navigator’s performance is optimized for every condition and at every hour of the day, sensing the precise amount of load and lift needed while adjusting the speed and compression ratio to deliver optimal efficiency. Rinnai America Corporation introduces the next-generation Sensei™ Tankless Water Heater. Offering the most flexible venting solutions, including up to a 65-foot vent run with 2-inch PVC, it is designed for optimal performance. The Sensei is wi-fi ready with the Control-R® module, which enables enhanced recirculation and temperature changing capabilities. The Sensei Tankless Water Heater is defined by its improved ease of installation, performance enhancements and serviceability. n

46 California Buildings News • Q1 2018

Sound and Vibration Instrumentation

Scantek, Inc.

Sound Level Meters

Vibration Meters

Prediction Software

Selection of sound level meters from simple noise level measurements to advanced acoustical analysis

Meters for measuring overall vibration levels, simple to advanced analysis and human exposure to vibration

Software for prediction of environmental noise, building insulation and room acoustics using the latest standards

Building Acoustics

Alert Systems


Systems for airborne sound transmission, impact insulation, STIPA, reverberation and other room acoustics measurements

Noise alert systems for facility noise monitoring or noise measurements in open office space

Temporary or permanent remote monitoring of noise or vibration levels with notifications of exceeded limits |

Downtown Living (Continued from page 4) to go beyond the EC criteria to improve the acoustic environment. For some projects, entertainment noise levels are predicted to meet indoor criteria without any upgrades in window STC ratings (e.g., for projects near busy roadways where code already requires high STC ratings). Each project is unique and the results of POE noise studies vary with circumstances. For instance, a proposed high-rise development might expose residents to noise emanating through a venue’s roof, so exposure at higher elevations needs to be considered. Or, weekend afternoon measurements could be necessary to capture crowd noise from a neighboring sports bar. If entertainment noise is not managed properly, cities lose valued nightlife and music venues and bars will be put out of business. Appropriate consideration of bass-heavy sound sources provides a means to reduce annoyance. This, combined with the POE studies made during the design phase of a given project, offers a comprehensive effort to “keep the peace” regarding noise. While nightlife activity will likely be audible inside residential units, noise levels can be significantly reduced. The conversations between

residential developers, nightlife operators, and the EC have led to better understanding of nighttime noise levels, building regulations, and building materials. This innovative “good neighbor” policy seems to have caught on in other large cities. In fact, Sydney, Australia has just proposed an “Agent of Change” principle to protect venues from noise complaints by new residential developments. The mayor of London has also invoked the Agent of Change principle and has vowed to protect pubs via a very similar prescriptive policy. When residences are proposed near an existing entertainment use, a similar set of guidelines would reduce the potential conflict and limit indoor noise impacts to residents. Having worked on projects throughout California, I can see how larger cities, such as Los Angeles and San Diego, would benefit from the implementation of noise standards that proactively manage entertainment noise at proposed residences. Jordan Roberts is an acoustical consultant at Charles M. Salter Associates. He received advisement from Jocelyn Kane, former executive director of the San Francisco Entertainment Commission.

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