Development Magazine Winter 2010

Development - Ownership

Strategically Green - NAIOP Sustainable Development Award Honors Vulcan Real Estate and Pacific Plaza Development LLC

Vulcan Real Estate and Pacific Plaza Development LLC were named as recipients of NAIOP’s annual Sustainable Development Award, presented during a special ceremony at Development ’10: The Annual Meeting for Commercial Real Estate.

Receiving honors for a new construction project was Vulcan Real Estate’s Alley24 in Seattle, Wash. For the first time, NAIOP honored a building renovation project, naming Pacific Plaza Development LLC’s Pacific Plaza, Tacoma, Wash., as the recipient.

2010 Marks Sixth Annual Award for NAIOP

NAIOP established the Sustainable Development Award in 2005 to recognize the growing number of firms engaged in green development. NAIOP and its member companies are committed to developing model properties adhering to the highest standards in the industry and believe that socially conscious development is essential to the economic vitality of the industry.

Applicants were judged on a number of criteria, including company commitment to sustainability, project history, economic analysis, water efficiency, energy efficiency, accessibility, innovation and other sustainable attributes. Entries for the award were reviewed by industry leaders.

In 2010, the Sustainable Development Award was sponsored by NorthMarq Capital.

Previous recipients of the award include: (2009) ProLogis and Forest City Covington; (2008) Aardex LLC and Hamilton Partners; (2007) Georgetown Company and Liberty Property Trust; (2006) Hines; and (2005) Corporate Office Properties Trust.

Vulcan Real Estate’s Alley24: Building a Sustainable Community through Cooperation and Consensus

Alley 24

Alley24 is located on a two-acre urban infill site spanning a full city block in Seattle. The 362,000-square-foot project converted dilapidated buildings and contaminated soils on a brownfield site into a pedestrian-oriented urban environment. Separated by a public alley, the West block contains 172 apartments and two restaurants that incorporate a City landmark designated historic building, and the East block contains 180,000 square feet of office space, 23,000 square feet of retail space and a shared parking structure serving both sides of the block.

Alley24 East’s office space was 90 percent pre-leased when it opened in February 2006, and the project’s office and retail space is currently fully leased. More than 1,000 employees work onsite.

Alley24’s sustainability measures are providing a much healthier environment for the building’s tenants, increasing employee productivity and satisfaction, as well as significantly reducing operating and utility costs throughout the project’s entire lifecycle. Skanska, one of the two largest office tenants, reported a 30 percent decrease in sick days in their first year of occupancy, and anchor tenant NBBJ reported a 10.3 percent increase in net fee revenue per FTE (productivity per person) after moving into the space.

Alley24 East met its goal of diverting 80 percent of demolition and construction materials that would otherwise have ended up in landfills. Wherever possible, materials were salvaged and reused elsewhere on the site. Project materials were selected for cost-effectiveness, local sourcing, low maintenance and authenticity, with at least 20 percent of the building materials utilized in the development manufactured in the Northwest region.

The combination of modern design and sustainable systems at Alley24 has helped set a green development standard for the City of Seattle and the country, including achieving greater than 50 percent energy savings over the national baseline average for office buildings. Alley24 East achieved an ENERGY STAR score of 97 in its first year of operations, placing it in the top three percent of the national building stock in terms of energy efficiency.

Seattle-based Vulcan Real Estate offers a full range of services including development, urban planning, portfolio management, marketing and leasing, market research and appraisal, and financing. With 10 LEED Certified projects totaling 1.8 million square feet in its portfolio, Vulcan has developed more known New Construction and Core & Shell LEED Certified buildings than any other private developer in Washington State, according to Ada Healey, vice president, real estate.

Pacific Plaza Development LLC’s Pacific Plaza: A Successful Public/Private Partnership

Pacific Plaza building

Photographer: Dan Tyrpak

Pacific Plaza has set a new benchmark of achievement for office and retail properties in downtown Tacoma. The nature of the public/private partnership between the City of Tacoma and Pacific Plaza Development LLC allowed for an overall development cost of $163 per square foot ($42 million total project cost), which includes renovation of a parking garage.

The project began in 2005 when the City of Tacoma solicited proposals from developer-led teams to revitalize the two garage parcels. Dubbed the "Tombstones of Tacoma" the two decaying parking structures were broadly considered civic eyesores. Pacific Plaza Development’s proposal was selected as the only scheme that intended to adaptively reuse, rather than demolish, the existing structures.

Pacific Plaza added 35,000 square feet of high-end retail-ready street frontage, a completely renovated garage and three floors of new construction above the existing garage. The top two floors provide a combined 74,000 square feet of Class-A office space – the first infusion of such office space in the Tacoma market in a decade. The complete project is fully leased with a tenant mix of non-profit and private sector tenants, as well as state and federal agencies.

Pacific Plaza has obtained LEED Platinum certification from the U.S. Green Building Council. The company estimates that more than $2 million in sustainable expenditures was invested by Pacific Plaza and the City of Tacoma toward achievement of this certification, comprising five percent of the total development cost.

The company utilized the expertise of the entire design and build team and choosing mechanical, electrical, envelope and structural strategies that minimized the project’s reliance on energy, materials and water. Product decisions were made with the intent on maximizing value and using recycled content and regional materials as appropriate, while minimizing waste and resource consumption.

All products used at Pacific Plaza meet LEED thresholds for low-emitting materials, with the primary focus on carpets and flooring, paint, sealants and adhesives and composite woods, with the value of recycled products at 36 percent of total construction value. Twelve percent of construction value was harvested, manufactured and transported within 500 miles of Tacoma.

The integrated disciplines and approach of the Pacific Plaza team resulted in an innovative building and a cost-effective solution for Washington State’s first LEED Platinum Core and Shell project. Pacific Plaza Development LLC made a commitment to environmental stewardship and civic leadership from its inception.

Rooftop Revenue: Making Underutilized Space Profitable Through Energy Harvesting

Energy harvesting has only recently become financially viable for commercial property owners due to new tax incentives and lower cost of materials. Investors outside of real estate are interested in investing their funds into energy harvesting opportunities, and the most efficient plane for reduced-impact installation is on large-span rooftops such as warehouses, commercial office complexes and mixed-use properties. A recent white paper funded by the NAIOP Research Foundation examines ownership models, installation considerations, maintenance issues, effects of these devices on roof integrity, reliability of power generation and expected financial returns. It also provides a balanced, non-biased report to help owners/developers make a decision about which devices to install on their properties, and generally whether or not to pursue energy harvesting on their properties at all.

For More Information

Rooftop Revenue: Making Underutilized Space Profitable Through Energy Harvesting NAIOP Research Foundation Report

 

From the Archives: Development Ownership Articles from the Previous Issue

lobby of 3314 Peachtree

3314 Peachtree - Distinction Amid the High-Rises 

Atlanta’s Buckhead district is a mix of high-end retail, offices and hotels, as well as a strong nightlife component. While the Buckhead skyline has filled over the last decade with high-rise projects of all types, the new branch office for Charles Schwab is notable for its unassuming size and its distinctive architectural style.

Harrison Metro Center under construction

Bad Site + Good Location = Win Win 

In a sputtering, job-lagging recovery, redevelopment of a brownfield site into a 24/7 environment can have an impact far beyond the the municipality’s location. This is what Advance Realty and the New Jersey town of Harrison are finding as that town’s Riverbend District is transformed into a dynamic environment for living, working and recreation.