Archive for the ‘Student Housing’ Category

Student Housing Breathes Relief

Tuesday, July 24th, 2012

On June 29, Congress avoided doubling interest rates for new federal student loans. Republicans and Democrats came together to keep interest rates on new Stafford loans, which are subsidized by the federal government, at 3.4 percent. The rates were set to double in July. It’s good news not just for matriculating freshmen but also for the student housing sector, including developers and REITs which rely on a funded student population.

The news comes at a time when the student housing sector is thriving. Budget shortfalls coupled with lengthy procurement and contracting processes within public and private universities have created a need for real estate firms that can own and operate residential facilities (usually under a long-term ground lease if the facility is on campus) so schools can keep their cash for core functions.  The largest student housing REIT, American Campus Communities (ACC), with a market cap of around $3.36 billion, acquired seven properties worth a total of approximately $250 million in the last 12 months. At Arizona State University, the company has already invested $350 million and privately owns the school’s honors college, an on-campus dormitory and a student apartment complex.

Other players are Education Realty Trust (EDR) with a market valuation of about one billion dollars, and Campus Crest Communities worth $322 million. According to National Real Estate Investor, Nashville-based EdR is in discussions with the University of Kentucky to completely revamp the school’s student housing portfolio. “The entire industry is buzzing about the implications this one deal might have on other projects,” according the report.  Charlotte, N.C.-based Campus Crest, meantime, has six new student housing properties under development, three of which are wholly owned by the REIT and three of which are owned by a joint venture. The six projects have a price tag of nearly $157 million.

It’s the Jobs, Stupid.

Wednesday, February 16th, 2011

President Obama recently took a short stroll from the White House and through Lafayette Park to give a speech in what might be termed enemy territory – the U.S. Chamber of Commerce. The subject was jobs and what the Chamber can do to jump start hiring by the companies that form its membership.  Noting that American companies are sitting on approximately $2 trillion in cash, the president challenged the Chamber to invest some of that money by hiring Americans who are out of work.

“Many of your own economists and salespeople are now forecasting a healthy increase in demand.  So I want to encourage you to get in the game,” Obama said, referencing the tax credits his administration negotiated to spur new investments.  “As you all know, it is investments made now that will pay off as the economy rebounds.  And as you hire, you know that more Americans working means more sales, greater demand and higher profits for your companies.  We can create a virtuous cycle.  Not every regulation is bad; not every regulation is burdensome on business,” he said.  “Moreover, the perils of too much regulation are matched by the dangers of too little.”

Relations between the president and the Chamber – one of the nation’s most powerful lobbying groups — have been chilly and the speech was an effort to find common ground.  Since the Democrats’ defeat in the November mid-term election, Obama has been trying to mend fences with big business.  One part of that strategy was to hire Bill Daley, a former Chamber board member and JP Morgan Chase executive, as his new chief of staff to replace Rahm Emanuel.  Additionally, he named General Electric CEO Jeffrey Immelt to head an economic advisory panel dedicated to job creation.  According to the president, “I will go anywhere anytime to be a booster for American business, American workers and American products, and I don’t charge a commission.”  

The Chamber gave the president a warm welcome, with the organization’s president Thomas Donohue expressing the body’s “absolute commitment” to working with the White House on turning around the economy and creating new jobs.  “Our focus is finding common ground to ensure America’s greatness in the 21st century,” he said.  “America works best when we work together.”

The president’s remarks came on a day when several Illinois firms warned that they are planning to lay off employees or close facilities. For example, Kmart is planning to close several stores in Illinois.  Gold Standard Baking, Inc., will close a commercial bakery in Chicago, slashing 73 jobs.  Another 67 employees are likely to be laid off at Itasca-based C. D. Listening Bar Inc., which sells DVDs, CDs, books and video games online at  AGI North America, LLC, a paperboard box manufacturing company in Jacksonville, is closing at the end of March, putting 70 employees out of work.  Gray Interplant Systems, Inc. – a warehousing and storage company in Peoria and Mossville – is planning to lay off 167 employees in April.

So why are American companies not hiring – or not hiring on their home turf?  According to the Chamber’s Donohue, it’s a variety of reasons, including new regulations contained in the Patient Protection and Affordable Care Act and the Dodd-Frank financial reform bill. Additionally, companies are holding onto their cash to fund future acquisitions.  Consolidation makes new regulatory burdens easier to bear.  Once companies’ regulatory costs are clear and under control, they can begin hiring, he said.  Finally, demand remains relatively low.  Once spending improves, the Chamber believes that companies will have no choice but to invest in additional personnel to meet that demand.  As consumer and business spending grows, so should jobs.

And, the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies created 1.4 million jobs abroad in 2010, compared with less than 1 million in the United States. The additional 1.4 million jobs would have cut the unemployment rate to 8.9 percent, according to Robert Scott, the institute’s senior international economist.

Michael Lee Stallard and Jason Pankau on Happiness in the Workplace

Tuesday, January 18th, 2011

Michael Lee Stallard and Jason Pankau on Happiness in the Workplace“The life you live trains you for the life you’re going to lead.”  This is the opinion of Michael Lee Stallard and Jason Pankau, partners in E Pluribus Partners, the world’s leading experts on how rational and emotional connections can boost productivity, innovation and organizational performance in the workplace.

In a recent interview for the Alter NOW Podcasts, Stallard and Pankau cited a Gallup Poll that ranked 132 countries in terms of happiness.  The United States ranked 12th, which was lower than the Scandinavian nations of Denmark and Finland and even Costa Rica.  According to Stallard and Pankau, “If you look at what’s happening, people are working longer and harder days.  We spend the bulk of our waking lives in certain kinds of relational environments – this has an enormous impact on our happiness and ability to connect with others.”

Using a number of systems, including humanist psychologist Abraham Maslow’s hierarchy of needs,  Stallard and Pankau have created a list of six universal human needs that people want to experience in the workplace.  They include:

  • Respect – When we are with people who are condescending, patronizing, passive-aggressive or who look down on us in some relational way, there is a negative emotional impact. No one can thrive in that kind of environment, because humans need a basic level of respect in the workplace.
  • Recognition – We rely on the interactions of people around us to recharge our internal batteries. Authentic, positive affirmation – not false – is the most effective. Otherwise, employees are drained of energy.
  • Sense of belonging – Everyone needs people who have our backs and who are trustworthy. These people help us live up to the values that we aspire to, support us and are with us through the ups and downs of life.
  • Autonomy, which is a task-mastering need – This gives us the freedom and flexibility to do our work free of bureaucratic red tape and without the presence of over-controlling personalities. People cannot thrive in that kind of environment. Additionally, autonomy assists with personal growth.
  • A challenging environments – When people are over challenged, they are stressed; conversely, people are bored when they are not challenged. When work provides the right degree of challenge, people are so immersed in the task at hand that time flies and it is energizing.
  • Need for meaning – People typically derive meaning from work that is consistent with a mission that is important to them. Additionally, they find meaning in the relational connections they have in the workplace; this provides a connection with their personal life.

To listen to Michael Lee Stallard’s and Jason Pankau’s full interview on happiness in the workplace, click here.  To sign up for Michael Lee Stallard’s and Jason Pankau’s newsletter and receive a free digital download of their book, click here

Will Mayor Daley’s Successor Be Hit With Economic Reality When Contemplating Landmark Public Improvements?

Wednesday, January 12th, 2011

Will Mayor Daley’s Successor Be Hit With Economic Reality When Contemplating Landmark Public Improvements?As Chicago’s longest serving mayor leaves his post in May of 2011, Richard M. Daley leaves a legacy that includes the iconic Bean in Millennium Park to the flower-filled planters that ornament 85 miles of the city’s streets.  Whoever fills his post will find that budget shortfalls resulting from the Great Recession will collide with reality; the bottom line is that it will be difficult for whoever succeeds Mayor Daley to extend his vision to beautify Chicago.

Writing in the Chicago Tribune, architectural columnist Blair Kamin says that “This was a mayor with a passion to build.  By combining the roles of chief politician and chief planner, Daley became the ultimate shaper of Chicago’s cityscape.  There was no denying his authority over the cityscape — just as there is no denying the deep anxiety his departure has spawned among the city’s architects and builders.  Chicago, they worry, will go from being a city in overdrive to a city on hold.”

“I hope the intensity remains,” said Chicago developer Dan McCaffery, who is planning to turn the 580-acre former U.S. Steel plant on the southeast lakefront into a mixed-use community. “People in City Hall knew that when the mayor had endorsed something, it was aggressively pursued. You could feel the difference.  It was palpable.”  “Any new mayor has got to realize that being a green city has become a part of Chicago as much as hot dogs,” said Ben Helphand, president of the Friends of the Bloomingdale Trail, which is pushing to develop an elevated park, nearly three miles long, on a long-disused railroad spur on the city’s Northwest Side.

A 2010 survey conducted by the Trust for Public Land revealed that Chicago has a mere 4.2 acres of parkland per every 1,000 residents, according to Erma Tranter, president of the advocacy group Friends of the Parks.  “We do not have sufficient park space for a healthy community,” Tranter said.  “It’s an absolutely critical issue in neighborhoods where children don’t have places to play.  That correlates to obesity, health problems and higher costs for future health issues.  There are children who are bombarded with all these electronic games.  They don’t have land anywhere near for them to go to.”

“Daley’s done a great job and he led the city very strongly. But if we’re going to move where we need to be, we need to engage the community in a different way,” said Peter Nicholson, executive director of the Foresight Design Initiative, a nonprofit devoted to sustainability issues. “It can’t be command and control.”

“Less Is More” the Right Direction for Navy Pier Renovation

Tuesday, November 23rd, 2010

Noted Chicago architect Ludwig Mies Navy Pier revamp needs some architectural originality.  van der Rohe’s famous maxim “Less is more” should apply to ambitious plans for revamping Chicago’s Navy Pier, the city’s top tourist destination.  Writing in the Chicago Tribune, architectural critic Blair Kamin says “The good news about the latest vision for the pier is that it discards the excesses of a 2006 plan that would have layered a roller coaster and an indoor water park onto an attraction that already resembles a shopping mall or a carnival midway.  But it is one thing to ditch a bad plan and another thing to find the creative spark necessary to bring order and élan to Navy Pier’s architectural mishmash.”

A bold design framework is needed for the 3,300-foot-long pier, which was a vision of Daniel Burnham and was completed in 1916.  The Urban Land Institute has issued a 40-page report with recommendations  that address the ways in which the Metropolitan Pier and Exposition Authority could enhance the Pier, which has seen a fall in attendance to 8,000,000 annually from a high of 9,000,000 in 2000.  According to Kamin, “The report’s principal recommendations lack flashes of insight about the great public work, which originally consisted of classically inspired buildings framing freight and passenger sheds.  The sheds disappeared as part of the pier’s $225 million makeover, completed in 1995.  Still, the Urban Land Institute is offering a few promising ideas that could refresh the pier’s identity as a public pleasure ground and replace its once-graceful appearance.”

Among the recommendations are replacing the white fabric-roofed Skyline Stage with a 950-seat venue that would expand the Chicago Shakespeare Theater.  This has the potential to restore the pier’s clean-lined silhouette.  Another is to replace the current Ferris wheel with a larger one similar to the London Eye.   Some of the elevated pier’s edges might be redesigned, giving visitors access to Lake Michigan.

“But as the report itself acknowledges, the next step is for architects to translate these vague notions into a reality that is both user friendly and visually striking,” Kamin says.  “Fortunately, pier officials say they will consider asking Chicago’s architects to submit redesign proposals based on the report.  And well they should, given that the city has a mother lode of design talent that’s been sidelined by the construction downturn.  It’s time to use that talent – and to use this fresh opportunity to make Navy Pier the great public space it ought to be.”

Is It Hot Enough for You?

Thursday, September 30th, 2010

Global warming is already impacting Chicago-area weather, foliage and wildlife.It’s not your imagination.  Chicago’s weather is getting warmer and climate scientists, botanists and zoologists have collected evidence that show real-time changes in seasonal timing and weather patterns that are altering the region’s ecosystems.   Writing in the Chicago Tribune, reporter William Mullen says “This is what experts say we should expect in the future:  Shorter, warmer winters with fewer but more severe snowstorms; longer, more intense summers with fewer rainfalls and more drought, but also an increase in sporadic, intense, basement-flooding downpours; lower lake- and river-water levels; and less winter ice cover on Lake Michigan and area streams.”

Chicago Wilderness, a regional alliance dedicated to protecting nature and enriching life, has issued the “Chicago Wilderness Climate Action Plan for Nature”, a far-reaching plan designed to guide local governments, companies and conservation groups on coping with environmental change.  “We’re in for warming regardless of what we do now,” said Robert Moseley, director of conservation with the Illinois Nature Conservancy and the plan’s lead author.  As an example, the Arbor Day Foundation’s 1990 national “U.S. Hardiness Zone” map put Chicago in Zone 5, where winter temperatures can fall as low as 20 degrees below zero.  By contrast, the 2006 map placed Chicago in Zone 6, where the coldest winter temperatures register at 10 below zero.

According to Mullen, “Too much CO2 can warm the planet too much, and in the last 240 years, the fossil fuel-powered Industrial Revolution raised atmospheric levels from 280 parts per million (ppm) to more than 380 ppm, raising worldwide temperatures at an alarming rate.  As countries like China and India industrialize, the increase in CO2 levels is accelerating, and so is global warming, climate scientists warn.”

Field Museum bird expert Doug Stotz notes that “chronology mismatches” are already occurring.  “We see oaks leafing out two or three weeks earlier than they used to in the Chicago area.”  Climate change means that some native bird species will disappear while others currently common in the South will move north.  Called “invasives” and “exotics”, these birds can act as predators towards native species.  And, there are other consequences.  Kudzu, the fast-growing vine that chokes trees in the Southeastern United States, has been found in Evanston.  Armadillos, which once weren’t seen north of Texas, have been sighted in downstate Illinois.

Support the National Alzheimer’s Project Act in Congress

Wednesday, July 14th, 2010

Legislation to create the National Alzheimer’s Project Act is quietly working its way through Congress.  By 2050 – just 40 years from now — nearly 16 million Americans will be afflicted with Alzheimer’s Disease.  Surprisingly, there is not yet a national plan to deal with this looming crisis, although one has been proposed on Capitol Hill.  The National Alzheimer’s Project Act (NAPA) would establish an inter-agency advisory council to address the government’s efforts on Alzheimer’s research, care, institutional services, and home- and community-based programs.  S.B. 3036 and H.R. 4689 would create a government agency to exclusively deal with Alzheimer’s issues.

Co-sponsored by Senators Michael Bennet (D-CO), Birch Bayh (D-IN), Susan Collins (R-ME), Russ Feingold (D-WI) and Jon Tester (D-MT), the proposal would create a special office within the White House to coordinate research, clinical care and services with the goal of preventing, caring for and curing Alzheimer’s Disease.

“Alzheimer’s takes a tremendous emotional and financial toll on over 75,000 Coloradans and their families,” according to Bennet.  “Yet our nation’s healthcare system is not set up to appropriately coordinate and share the research we’re doing to prevent, cure and care for our patients.  This bill will streamline the country’s research efforts so that we can better find ways to combat this disease while also making much better use of our taxpayer dollars.”

Approximately half of Americans who live to 85 will suffer from Alzheimer’s.  Once the legislation is passed by the House of Representatives and the Senate, the Office of the National Alzheimer’s director would be named to the Domestic Policy Council and the Office of Science and Technology.  This director would have input into all policy aspects of the disease, as well as focus on high-risk groups and those underserved by existing Alzheimer’s programs.

The China Syndrome

Tuesday, July 6th, 2010

The unwinding of global imbalances signals the end of China's unfair advantage.  As global financial disparities start to wind down, China is likely to end up a winner because emerging-market economies have a definite advantage rooted in the way the global economy functions. Writing in the McKinsey Quarterly, Lowell Bryan, a director with McKinsey & Company, notes that “Saber-rattling Western trade negotiators frequently focus their attention on the ‘unnaturally’ depressed exchange rate of countries such as China, and this is a component of the structural advantage to which I refer.  But its roots run far deeper – all the way down to the fundamental issue that labor can’t be freely traded on a single global market, while capital and commodities can.  Any company sourcing its production or service operations in a lower-wage emerging market-country therefore can save enormously on labor costs.”

China’s recent decision to relax the informal peg of its currency, the yuan, to the U.S. dollar proves that the world must come to grips with a set of economic relationships that are currently unsustainable.  According to Lowell, “Their unwinding will have serious long-term implications for those executives’ strategic priorities, including where they locate operations and what customers they serve in which markets.  Equally important is the need for preparedness in case the unwinding process is sudden and abrupt.  While we surely seem to be headed toward a new global equilibrium, the transition to that future may not be smooth and gradual.”

The cost of labor in China and India is less than one-third of what it is in developed nations.  Additionally, Chinese and Indian productivity are at extremely high levels and tend to be in highly specialized fields – high-tech assembly in China and software development in India.  To take advantage of the cost savings, many multinational firms are locating production facilities in emerging markets.

PIGS Financial Uncertainty Good News for U.S. Homebuyers

Tuesday, June 8th, 2010

Troubles in Greece sending your mortgage interest rates to historic low levels.  If you’ve noticed a recent drop in mortgage interest rates, thank the PIGS’ (Portugal, Italy, Greece and Spain) troubles, which are causing jitters in the globe’s equity markets.  Seeking a safe haven, investors are putting their money into U.S. Treasury notes.  Because mortgage interest rates tend to rise and fall with 10-year U.S. Treasury note yields, this translates to good news for people contemplating a home purchase.  Freddie Mac noted that the typical 30-year fixed-rate mortgage fell to 4.78 percent recently, down from 4.84 percent just a week earlier.  The record low of 4.71 percent occurred in 2009.

According to the Mortgage Bankers Association, homeowners are refinancing at a rate not seen since last fall.

London’s Strata Tower Design Incorporates Wind Turbines

Thursday, May 6th, 2010

Strata Tower in London incorporates wind turbines to generate some of the building’s own energy.  A 43-story residential tower in south London’s Elephant & Castle neighborhood will receive eight percent of its power from three wind turbines  installed at the top of the structure.  The Strata Tower – nicknamed the Electric Razor – is being developed by Brookfield Europe and eventually will be home to 1,000 residents.

The Strata is a £13 million milestone in the £1.5 billion project to revitalize the Elephant and Castle area.  The Strata’s 408 studio, one-, two- and three-bedroom apartments range from £230,000 to £2.5 million, with the first residents expected to move in this summer.  As well as generating an estimated 50MWh annually, the turbines will earn approximately £16,000-£17,000 per year through the British government’s new feed-in-tariff, a payment per kilowatt-hour for electricity generated by a renewable resource.

Each turbine has 15 blades with a 9m-diameter rotor plane.  The wind turbines – which will meet energy demand for 33 two-bedroom apartments – were chosen because they had the best potential, given the building’s height and shape.  Although other buildings have wind turbines mounted on their roofs, the Strata Tower is the first to incorporate them into the original design.