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IN THIS ISSUE: Office Market OutlookArizona
FEATURING:
February 2011
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4 I ARIZONA FACILITIES FEBRUARY 2011
Tough competition for occupancy and an absence of construction are
factors that are shaping the commercial real estate market across the
country, as well as in Arizona. Tenants are taking advantage of the
down economy, looking for and buying into higher quality space at
lesser lease rates. Construction is virtually nonexistent in the state as
builders and lenders wait for vacancies to drop. Experts are predicting
little change in 2011 but are hopeful that stabilization will occur in the
market within the year and through 2012.
Stagnancy may bring a sigh of relief to some building owners who
were expecting a crash in the commercial sector similar to the crash in
the residential sector. However, a dormant economy offers its own set
of challenges: high unemployment rates, excess inventory and lending
restrictions. Unemployment will continue to be a drain on the
economy in the upcoming year. The glut of vacant space will take
several years to absorb, with empty storefronts and offices continuing
to take a toll on the industry. And banks will continue to face
regulatory pressure in lending as they work to clean up the aftermath
of the Great Recession.
Building owners, property managers, builders and developers do have
some options while weathering this storm. More than arbitrarily
cutting budgets, property managers can create asset value by increasing
revenue, decreasing expenses, managing vacancies, retaining tenants
and improving their company’s performance. By implementing these
strategies, property managers may maintain and possibly increase their
net operating income despite the economy.
Hopefully, 2011 will mark the real end of the Great Recession, and
the economy will start to recover by 2012. And those who are left
standing will reap the benefits of strengthening their business during
these challenging times.
CONTACTPublisherTravis [email protected]
Managing EditorKelly [email protected]
Editorial AssistantBrooklyn [email protected]
Art DirectorDoug Conboy
Contributing Writers
Managing EditorArizona Facilities
The publisher is not responsible for the accuracy of the articles in Arizona Facilities. The information containedwithin has been obtained from sources believed to be reliable. Neither the publisher nor any other party assumesliability for loss or damage as a result of reliance on this material. Appropriate professional advice should besought before making decisions.
Copyright 2011 Arizona Facilities Magazine. Arizona Facilities is a Trademark owned by Jengo Media.
Arizona FacilitiesPO Box 970281Orem, Utah 84097Office: 801.224.5500Fax: 801.407.1602JengoMedia.com
EDITOR’S LETTER
Arizona Facilities is a proud member of BOMAGreater Phoenix and BOMA Greater Tucson.BOMA Arizona is a federation of both localassociations and serves as the collectivemembership’s legislative and regulatoryadvocate. Arizona Facilities is also aBOMA National Associate member.
Jacob FullmerNick DavisonMark StrahanDan RussellQuinton
Lamoreaux
Dean KashiwagiJacquie BrennanJustin HimelsteinChris WaltonAl O’ConnorRuth Darby
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6
14
26
Building Information ModelingSave on time, materials
Vendor RelationsPutting vendors in charge offacilities management
Office Market OutlookPhoenix will remain a tenant’s market
On the cover:Downtown Tucson. Courtesy Chance Agrella of TucsonRegional Economic Opportunities, Inc.
DEPARTMENTS
FEBRUARY 2011
FEATURES
2024
30
4
1822
28
1713
32
33
Editor’s LetterSmart options during the recession
Building MaintenanceLife cycle costs important in repairs, upgrades
BOMA Greater Tucson
Alternative EnergySolar tax incentives
BoilersNew technology enhancessustainable buildings
Healthcare FacilitiesNew emergency call and life safety technology
Building ControlsControl systems keep buildings green
Property ManagementStand out in a tenant’s market to fill vacancies
Sustainable pruning practicesfavor health, life of shrubs
Tucson Development: Commercial growthdriven by ‘game-changing’ projects
Phoenix International Raceway:It ain’t over ‘til the checkered flagcomes down
ARIZONA FACILITIES FEBRUARY 2011 I 5
Tucson Development: Commercial growthdriven by ‘game-changing’ projects
26
Sustainable pruning practicesfavor health, life of shrubs
Phoenix International Raceway:It ain’t over ‘til the checkered flagcomes down 14
6
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6 I ARIZONA FACILITIES FEBRUARY 2011
By Kelly Lux
Despite the slump in
the economy, Tucsonis seeing growth and
development within itscommercial real estate market,albeit slight. Occupancy ratesare holding steady. Absorptionis expected to remain positive.And a few major projects inthis southern Arizona city aredriving the majority of thedevelopment.
“The good news is that theworst is behind us and recoveryhas begun,” said Tim Prouty,managing director of CBRichard Ellis Tucson. “Yet, Tucson'scommercial real estate market isexpected to bounce along the bottomfor another year. Occupancies, ingeneral, will hold steady andabsorption, albeit nominal, will remain
positive. This stability leads Tucson's
commercial markets to a stronger
footing than many other cities.”
The major projects in Tucson, like
the construction of the UniSource
Energy Building and the extension of
the modern streetcar, areplaying a huge role in thedevelopment of the area,according to Michael Keith,CEO and executive directorof the Downtown TucsonPartnership.The four-mile modernstreetcar, which will extendwest of I-10, has a variety offunding sources, includingthe Regional TransportationAuthority and a $63 millionfederal TIGER. Thestreetcar will be co-managedby the RTA and the city of
Tucson. The project “will literally laythe groundwork for future developmenton the west side of downtown,” wroteTucson City Manager Mike Letcher.The streetcar will connect theUniversity of Arizona to the 4th
Vacancy RatesVacancy Rates Industrial Office Retail
YE2006 5.9% 11.9% 7.5%YE2009 11.7% 16.8% 11.9%3Q2010 11.6% 17.3% 12.2%
Asking Lease RatesAsking Lease Rates Industrial* Office** Retail*
YE2006 $6.96 $22.25 $18.08YE2009 $6.36 $20.57 $18.993Q2010 $6.41 $19.35 $17.93
*NNN **Full Service Gross
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ARIZONA FACILITIES FEBRUARY 2011 I 7
Photo courtesy of Chance Agrella/Tucson Regional Economic Opportunities, Inc.
Avenue commercial district, downtown
and the redevelopment area west of
downtown and become a big economic
driver in the city.
The UniSource Tower is the largest
project going on in downtown Tucson
and is expected to be complete by
November 2011. The $65 million
building will house Tucson Electric
Power and will also have retail and
conference space. The project will
increase the employee population of
downtown Tucson, bringing with it
economic revenue as employees lunch
and shop in downtown, said Jessie
Sanders, a project coordinator for
Tucson City.
Tucson's growing bioscience
industry has also spurred growth in
the commercial real estate market in
Southern Arizona. Sanofi-aventis
recently completed its 110,000
square-foot facility which houses its
new research center. The Roche
Group will boost the industrial market
with the recently announced $180
million, 500-job expansion of its
existing Ventana Medical Systems
operation in Oro Valley.
Other notable commercial projects
include the Mercado District of Menlo
Park, an urban residential
neighborhood with live-work homes
and retail and restaurant space, and the
Gadsden Development, which is
planned to include an 125-room
boutique hotel, 400 residential units,
office space, a market, restaurants and
other commercial development.
Retail is seeing the most activity inthe area, with a number of national retailand restaurant chains expanding in theTucson market, locating in mature,high-traffic areas at attractive rates,Prouty said. As one of the larger retailtransactions in Tucson, the MercedesDealership is relocating from its oldfacility to a new one, Sanders said.
These “game changers” are helpingproperty and building owners see abright future and are spurring otherpockets of development in the area, saidKeith, who believes that “Tucson isabsolutely booming despite the worsteconomic climate in 100 years.”
Commercial tenant improvementshave been on the upswing in Tucson.Businesses are looking for inexpensiveways to improve their spaces withouthaving to relocated, Sanders said. Morethan 64 commercial permits for tenantimprovements and new constructionprojects were issued by the city ofTucson Planning and DevelopmentServices Department in November2010, with a total project dollarvaluation at more than $24 million.
The tenant improvement projectswill be significant for the office marketwhere several major tenants areshopping for more quality space atequivalent lease rates, Prouty said.
“Tucson is going to be the next hotspot in the West,” Keith said. “Peoplewho live here aren't going to recognizetheir own town in two years.”
Industrial1. Highland Valley Partners, 6874 S.
Palo Verde Road, 162,478 SF2. Schletter, Inc., 3761 E. Farnum
Place, 65,000 SF3. TMI Acquisitions, 1625 S. Euclid
Ave., 42,500 SF4. Maracana Indoor Soccer, 555 E.
18th Street, 28,500 SF5. Lasertel North America, 7775 N.
Casa Grande Highway, 21,265 SFOffice1. Tucson Electric Power, One S.
Church Ave., 36,320 SF2. Drug Enforcement Administration,
3285 E. Hemisphere Loop,30,630 SF
3. Government ServiceAdministration, 2255 W. InaRoad,19,873 SF
4. Tucson Heart Hospital -Carondelet, 4892 N. StoneAve.,18,976 SF
5. Homeland Security/Customs &Border, 4720-4760 N. Oracle Road,12,580 SF
Retail1. Beaudry RV, 5120 S. Julian Drive,
55,000 SF2. Ross Dress For Less, 18705 S.
Frontage Road, 30,187 SF 3. Orangewood RV, 4710 S. Palo
Verde Blvd., 28,500 SF4. Big Lots!, 18705 S. Frontage
Road, 28,074 SF5. 99 Cent Only Store,4144 N. Oracle
Road, 20,040 SF Tables Source:CBRE Research and CoStar Group
Largest LeasingTransactions in 2010
More Tucson Storiescontinued on page 8
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8 I ARIZONA FACILITIES FEBRUARY 2011
Nearly a decade ago, bioscience
was recognized as an industry
that was poised to grow in
Arizona and benefit the state's economy.
In Southern Arizona alone, 130
bioscience companies have been recently
identified, ranging from small to large
businesses in a variety of bioscience
areas. The University of Arizona, a top
15 research University, played a
significant role in “driving innovation
and discovery,” said Leslie Tolbert, vice
president for research graduate studies
and economic development for the
University of Arizona.
In 2008, Roche, a pharmaceutical
giant, bought Ventana Medical
Systems, a Tucson-based company.
Before that, sanofi-aventis, another
pharmaceutical giant, had purchased
Selectide. Both of the young
companies were spin out of the
University of Arizona by faculty, said
Tolbert.
“Now two of the world's largest
pharmaceutical companies have
facilities right here in Arizona,
employing many hundreds of people.
That's an amazing accomplishment for
Tucson,” Tolbert said. “We clearly are
developing an eco-system for bio
innovation and serious research and
development. ”
Bioscience remains a growing
industry in the Tucson region with the
announcement of a $180 million-
expansion of Ventana Medical
Systems, the recent relocation of the
sanofi-aventis research center to a new
facility and the expansion of the
University of Arizona's BIO5 Institute
into a new BIO5-Oro Valley Facility.
All of these three major bioscience
entities are now located in Oro Valley,
a suburb of Tucson.
The recent addition of bioscience
realty to Innovation Park in Oro
Valley, a biotech hub for Pima County,
will significantly impact Tucson's
economy with Ventana alone bringing
in 500 jobs and $640 million in
economic impact, said Laura Shaw,
senior vice president of marketing and
communications for Tucson Regional
Economic Opportunities, Inc.
“Because of Tucson's strengths in
scientific research, coupled with a
healthy, growing presence of the
industry, we are an emerging
bioscience center and a global hub for
bioscience innovation,” said Shaw.
“The Tucson region has much to offer
any company looking to excel in the
bioscience industry.”
More than $6 billion is produced
annually from the bioscience com-
panies in the area. The University of
Arizona has $600 million in research
dollars, said Tolbert. The University
and Pima Community College, with
more than 20 academic and technical
life science programs, generate a
young, educated workforce and first-
rate training opportunities, she said.
Cutting-edge facilities, such as the
Critical Path Institute, a unique
collaborative whose mission is to
create innovative partnerships in
regulatory science that enable faster
and safer medical product
development, also contribute to
Tucson's standing in the bioscience
industry.
sanofi-aventisSanofi-aventis relocated to its new,
110,000 square-foot facility in
Innovation Park in June 2009. The
growing company, which had been
present in Oro Valley for two decades,
decided to purchase land and
construct a new research center since
no laboratory space was available in
the area. The 11.54 acres for the
facility were purchased in 2006, and
construction began in 2008. DPR
Construction, Kling Stubbins/RSP/
WLB Design Consultants, Genesis
Engineers, Sun Mechanical and
Commonwealth Electric were all
instrumental in the construction of
the facility.
“The facility enables our local
scientific team to enhance the center's
impact on the early stages of the
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sanofi-aventis drug discovery pipeline
by laying down the foundation for
bringing new, effective medicines to
patients around the world,” said Early
to Candidate Biologist Mark Pincus.
With nearly 48,000 square feet of
laboratories, and more than 25,000
square feet of office space, the state-of-
the-art facility is nearly double the
company's former building on Hanley
Boulevard. The energy-efficient
research and development facility
promotes interdisciplinary and
scientific exchange and utilizes
operational efficiencies. With offices
on one side of the building,
laboratories on the other side and
common space in the middle, the
building and its systems are easy to
maintain, said Pincus. A chilled beam
system, the first in a sanofi-aventis
building in the United States, was
installed to cool the building
efficiently, one of many energy-
efficient measures taken in the
construction of the building.
The building was designed to
achieve Leadership in Energy and
Environmental Design Gold from the
U.S. Green Building Council and will
likely receive the recognition in
January 2011, said Pincus. The
laboratory consumes 21.5 percent less
energy than a conventional lab
building. The site lighting
reduces the effect of light
pollution. The landscape
irrigation system was designed to
reduce water use by 50 percent. The
urinals are all waterless. Heat recovery
was used on the laboratory exhaust to
reduce energy consumption.
Evaporative cooling was installed,
taking advantage of Tucson's dry
climate. A solar hot water preheat
system was installed on the mechanical
heating hot water system. Low-
emitting products were used
throughout the construction. Overall,
sanofi-aventis reduced the facility's
carbon footprint by approximately 2.3
million pounds.
The BIO5 Institute-Oro ValleyWhen sanofi-aventis moved to its
new facility, the company vacated a
fully-operational research facility. The
BIO5 Institute, a thriving research
institute at the University of Arizona,
recognized an opportunity to expand
their operations to Oro Valley and
collaborate with other bioscience
companies in the area and purchased
the 23-year-old building. BIO5, which
brings together faculty from
agriculture, medicine, pharmacy,
science and engineering, had been
running out of lab space on campus
and needed a place to move some of its
projects, particularly the project led by
professor Chris Hulme who is working
continued on page 10
ARIZONA FACILITIES FEBRUARY 2011 I 9
sanofi-aventis’ new facility in Oro Valley. Photo by Mark Pincus.
Ventana Medical Systems will be expanding its facilities in Oro Valley.
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10 I ARIZONA FACILITIES FEBRUARY 2011
to find chemical compounds for the
treatment of illnesses including cancer,
Alzheimer's and heart disease.
“When sanofi-aventis built their
new facility, they left behind a smaller
building that was beautifully outfitted
for drug discovery,” said Tolbert. The
University of Arizona purchased the
building for $3 million, well below the
actual worth of the facility. “It wouldn't
have sold for $3 million if the Tucson
and Arizona economies were doing
well. And we probably wouldn't have
been able to afford it.”
The 27,000 square-foot facility at
1580 E. Hanley Blvd. comes fully-
equipped with laboratory facilities,
office space and equipment needed for
chemistry labs. The University had to
make only a few minor upgrades and
renovations, totaling $800,00, before
moving two BIO5 teams to the facility,
Tolbert said.
“It was so well outfitted for this
kind of research that what we had to
do was quite minor,” she said. “We
spruced it up with a few renovations in
the laboratory.”
The University of Arizona, which
manages numerous research facilities
across Arizona, is well-equipped to
manage the new facility, Tolbert said.
BIO5 will be providing administrative
support for grants and managing the
operations and maintenance of the
building. Rather than having a
maintenance crew, maintenance issues
will be handled by University staff as
they arise.
BIO5-Oro Valley will concentrate
and streamline the University's drug
research efforts, according to Tolbert.
The Arizona Drug Discovery Center,
the College of Pharmacy, Arizona
Cancer Center and researchers from
the College of Science will all be
housed in the building. The facility
will also have incubator space available
for start-up companies. Initially, the
building will be home to 50-75
researchers, but has potential to grow
to 150 researchers.
“Having a lab presence so close to
major pharmaceutical facilities at
Roche/Ventana Medical Systems and
sanofi-aventis will offer the UA
enhanced research and collaboration
opportunities, as well as a potential
springboard for new business
incubator and technology transfer
programs,” Shaw said.
Ventana Medical SystemsIn October 2010, drug giant
Roche announced it would be
expanding Ventana Medical Systems,
its cancer tissue diagnostic operations,
in Southern Arizona. The expansion is
planned to take place over the next five
years with the construction of new
facilities and a capital investment of
$180 million in Oro Valley. Nearly 500
jobs will be created at Ventana due to
the expansion.
“These new employees will have a
huge ripple effect on services and
retail, in addition to Ventana
purchasing more local goods and
supplies,” Shaw said.
Roche was encouraged to expand in
Pima County through incentives from
Pima county, Oro Valley and the state
of Arizona, totaling nearly $14
million. More than $8 million were
made available through property tax
waivers, $2 million in stimulus funds
and a waiver of development fees.
Other driving factors for the expansion
included workforce quality, available
real estate, timely planning and zoning
approvals, available infrastructure and
property tax rates, Shaw said.
“This decision by Ventana Medical
Systems to expand their U.S.
Headquarters in Oro Valley is a
testament to the strong relationship
Oro Valley has shared with the
company for many years,” said Oro
Valley Mayor Satish Hiremant in a
press release. “The bioscience industry
is a key target growth area for Oro
Valley's economic development
efforts.”
As Tucson continues to grow its
bioscience industry, these companies
will be at the forefront of development
in the area, developing along Tucson's
“bioscience corridor,” Tolbert said.
“It is becoming clear that bioscience
and biotechnology are doing well in
the state,” she said. “What we are
trying to do now is strategically build
on the strengths we have so far so that
we can maximize our impact.”
Photo courtesy of Bob Davis of Grubb and Ellis Realty.
continued from page 9
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ARIZONA FACILITIES FEBRUARY 2011 I 11
Tucson secured a $63 million
federal grant for its modernstreetcar during the last week of
2010.The 4-mile modern streetcar
project will steer development inTucson by connecting major activitycenters like the University of Arizona,Arizona Health Sciences Center,University Main Gate BusinessDistrict, 4th Avenue Business District,Congress Avenue Shopping andEntertainment District and theMercado District. The project isexpected to trigger retail, office andresidential development andredevelopment along the route.
“This is a big deal for Tucson,” saidMicheal Keith, CEO and executivedirector of the Downtown TucsonPartnership. “This was the gamechanger in other municipalities. Otherlight rail systems have spurredenormous amounts of privateinvestment. This will be a bigeconomic driver.”
Building owners will likely seeproperty values increase along thestreetcar route as people work, play and
shop along the line. The increasedtraffic will also ignite interest in publicand private development for newbusinesses and mixed-use housing.
Construction of the streetcar isprojected to create 1,200 new jobs,with an additional 1,650 jobs createdas a result of construction activities.Research also suggests that 1,480long-term jobs will be created as aresult of the streetcar.
The streetcar system will be a fixed-guideway electric rail with sevenADA-compliant vehicles that willaccommodate bicycles and have easyroll-on access for wheelchairs andstrollers. The all-electric streetcar willhelp reduce air pollution andgreenhouse gas emissions. Holdingapproximately 130 people per vehicle,the streetcar will reduce trips by busand personal vehicle, reducingcongestion and pollution.
The nearly $200 million modernstreetcar project will be funded withlocal and federal funds. The RegionalTransportation Plan will contribute$88 million for capital and operationscosts. More than $60 million will come
from the federal Transportation
Investment Generating Economic
Recovery Grant funds. The Gadsden
Development Co. will contribute more
than $3 million for improvements in
the Mercado District.
In December, Transportation
Director Jim Glock electronically signed
the paperwork that officially obligates a
$63 million federal grant for the modern
streetcar. The Federal Transportation
Administration announced the
potential funding in February 2010.
By securing the grant agreement
the money is now obligated to the
project, Glock said. Although congress
could attempt to take away any
unspent funding, that is unlikely since
they would be more likely to take away
funds that are not obligated.
"Basically we’re now protected from
any sweeps from the new Congress,"
he said. "It was a long haul to get here."
The streetcar remains in the design
process. Early project scheduling
suggests streetcar service will begin in
2013.
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12 I ARIZONA FACILITIES FEBRUARY 2011
The construction of the $65
million UniSource EnergyBuilding on the southwest
corner of Broadway and 6th Avenue,will be a catalyst for development inTucson. The new headquarters forUniSource Energy Corporation, whichwill own and manage the building, willprovide 170,000 square feet of officespace for more than 400 employees ofTucson Electric Power. The groundfloor of the nine-story office buildingwill have nearly 11,000 square feet ofretail space. The new building will alsohave a conference center, meetingrooms and close to 600 parking spaces,some of which will have electricvehicle charging stations.
“It is the kind of project that createsthe momentum for smaller projects tocome in from behind,” said MichaelKeith, CEO and executive director ofthe Downtown Tucson Partnership.
While most of the space will beused by TEP, the retail space will allowfor new businesses to operate indowntown Tucson. The conferencecenter will be available for communitygroups, especially non-profits. Thewhole project will be an asset toTucson, said Tucson Mayor Bob
Walkup in a press release.“This is going to be a great building
with a magnificent design that showsoff the best of what we hope toaccomplish downtown through strongpartnerships with private investors,”Walkup said. “The timely review andcompletion of this project will help usshow this community that downtownTucson is open for business.”
The UniSource Building, which iscurrently under construction, will becomplete by November 2011. Thestructure will be one of the mostenergy efficient buildings in Tucson,said Joe Salkowski, media contact forTEP. The long, rectangular footprintof the building will minimize itsexposure to direct sunlight. Thewestern side of the building will beequipped with a shade structure,shielding it from the sun. High-efficiency glass and energy-savinglights, HVAC units and othermechanical systems will also be used inthe structure.
As a leader in renewable energythat is at the forefront of solar powerdevelopment, TEP will be installing aphotovoltaic array that will help powerthe UniSource building. The number
of panels and how much energywill be produced from the arrayhas yet to be determined.“We thought it appropriate tohave such a system on our
corporate home since we have been
encouraging our customers to put solar
photovoltaic arrays on their own
homes,” said Salkowski.
A rainwater harvesting system that
will ensure all landscaping needs are
met with recycled water will also be
incorporated into the project. All of
these energy-efficient designs will be
essential in securing Leadership in
Energy and Environmental Design
(LEED) Certification for the new
building from the U.S. Green Building
Council.
Not only will the new building
allow UniSource to demonstrate its
commitment to the environment, but
it will also allow TEP to consolidate its
employees into one building.
“We really do need the space now,”
Salkowski said, explaining that the site
was chosen for its downtown location
and the value of the property. “Our
desire to improve the efficiency of our
operations really drove this process
forward.”
DAVIS is the principal design firm
on the project, assisted by Tucson-
based Swaim Associates. Ryan
Companies is the developer and
general contractor of the UniSource
building. Ryan Companies is using its
in-house design/build services in
conjunction with subcontractors to
build the shell and interiors of the
building. AF
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ARIZONA FACILITIES FEBRUARY 2011 I 13
In the green world in which many
facilities and operations managersnow function, the meaning of
“sustainability” has been slightly alteredto include environmental issues andimpacts. Although this has been longoverdue, the meaning of “maintain orpreserve in existence” still includesgetting the longest, cost-effective lifeout of every component of your facility.
While most corporate goals nowaim to reduce consumption ofresources, improve efficiency and movetoward environmentally-responsibleproducts and systems, money for theseimprovements is hard to come by andmust be used wisely. The past serves asa reminder of what the challenges areand how forethought and considerationcan help fight them off into the future.
AgeMany of the building components,
parts and equipment manufacturedtoday, although often superior inefficiency, cost and design, are just notbuilt to last.Time has had its chance towear out even well-maintainedroofing, plumbing, mechanical andelectrical systems on many buildingsbuilt during the commercial real estateboom of the 1980s.
Obsolescence Facility managers and engineers
know how difficult it can be to findrepair parts and components for anyvariety of aged building components.Systems like card access, buildingautomation and fire life safety, to namea few, continue to advance at such arapid pace that support for systemseven five years old can become costlyand difficult.
Labor Costs Labor costs for many specialized
vendors have easily doubled and even
tripled in two decades. Strongcompetition and technologies aremoving so quickly that many companieshave little time or money for employeetraining. Even skilled and seasonedtrades have a hard time keeping currenton systems only a few years old.
Lower BudgetsAs newer facilities that were
designed for sustainability come online, they feature energy advantages aswell as lower maintenance costs onnewer equipment. These properties canshow operating costs that are difficultfor older properties to benchmarkagainst.With the commercial real estateslowdown taking place during the pastfew years, many owners also do notwant to spend capital improvementdollars. When they do, they expect tosee an improvement on NOI.
Each of the above four categoriesoffers lessons on what to consider whenmaking a decision. Getting the biggestbang for your buck can be as easy asusing tools that have always been atyour disposal. Before you make the nextrepair, replacement, improvement orupgrade consider several simple itemsin addition to life cycle costing and timevalue of money.
Talk to others in your industrynetwork. How has their support beenfrom a specific company? Was thecompany overly expensive? Questionyour vendors about products they use.What’s good and bad? And what newtechnology is on the horizon? A fieldtechnician can be the best reporterregarding any product.
Do research as to the quality of pastproducts and service from themanufacturer and servicing company.Have they been around long? Will theybe around when you need them? Makesure more than one company can serviceany installation you consider. Request
more warranty than may be offered
prior to making a capital decision.
Purchase extra or support
components. Many manufacturers and
vendors are taxed on inventory items
they have in stock, because of this, they
are reluctant to keep a large stock of
older equipment on hand. When you
require an urgent repair, this can add
lead time and expense. If you intend a
long life for a VFD, BAS, EMS, FLS or
any other system or component, find
out from a field tech what is likely to go
bad and buy extra (within reason of
course). If it is cost effective, having this
part on hand in the event of future
failure could be invaluable.wh
When trying to get money from an
owner or asset manager for a repair or
upgrade,be sure to calculate in the cost of
maintaining the troublesome or failing
system being replaced. Also represent the
potential loss or damage that could occur
if the improvement is not made. Explain
the long-term benefit of a higher-cost,
sustainable improvement as opposed to
the least expensive option. In the end,
improving a project long term always
increases its value more than a patch or a
short-lived repair.
Reward quality manufacturers and
vendors with repeat business. Let them
know the reason for your loyalty. Learn
from the past decisions you have made
and try not to repeat the bad ones.
Consider any oversight made and focus
greater attention to that aspect of the
decision this time.
Al O’Connor, chief engineer at the Great
American Tower in Phoenix, has worked
in commercial real estate as a facility and
property manager for 17 years. He teaches
building design and operation classes for
BOMA Greater Phoenix and BOMA
International. He can be reached at
602.358.2085. AF
Life Cycle Costs Important Considerationsin Repairs, Upgrades By Al O'Connor
building maintenance
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14 I ARIZONA FACILITIES FEBRUARY 2011
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During PIR’s two annual
NASCAR Sprint Cup week-
ends, more than 65,000
seated ticket holders descend upon this
desert oasis – 20,000 of which put on
the brakes and set up RVs and trailers
for an entire week. So running an
operation like this takes more than
turning the lights off at night. There’s
traffic control for upwards of 37,000
cars, a full-service BASHAS’
Supermarket to feed temporary
residents and fans and training of
1,300 seasonal employees. With three-
and four-day events, management puts
in days of planning to be ready for the
checkered flag to come down.
A New Approach toTemporary Labor
To handle the increased employee
base demanded by the large patron
population, Lee Baumgarten, director
of operations, said his company shifted
away from “untrained contractors”
about six years ago. He saw the
benefits of having return employees. “If
you do that, it gets better year after
year.”
To accomplish this, PIR reached
out to nearby military units and
community organizations. Many non-
profit organizations now use race days
as a fund raiser with their members
donating their wages to the group.The
result is a reliable, temporary
workforce that provides a better
experience for the patron. “Here you’ve
got an officer in the Air Force selling
you a hot dog with a smile. We just
don’t order 20 people and put them
here and there,” Baumgarten said.
The process has been so effective
that 80 percent of their seasonal staff
returns for subsequent events.The idea
has also taken root outside the track.
The parking company PIR hires
follows suit in their hiring process.
Keep Your Arms and HandsInside the Ride
To ensure the safety of the more
than 100,000 patrons who attend the
races, PIR starts preparations early.
The Department of Homeland
Security and FBI provide a
vulnerability assessment on nearby
areas of concern, such as a nuclear
power station 20 miles away and a
chemical treatment plant.
PIR has their own 24-hour, 150-
person fire department, a full-time
sheriff ’s department, an ambulance
service and four doctors and multiple
nurses ready in three on-site medical
centers. An emergency line allows fans
to text message a 12-person command
center where people are ready to
respond to problems.
“We can handle anything from a
leaky toilet to a bomb threat,”
Baumgarten said.
Just as important as guest safety,
Baumgarten’s team is responsible for
ensuring visiting celebrities can make
it around the track safely.
“We have to be able to tackle any
challenge the facility throws at us that
may cause a delay or cancellation of
event,” he said. Equipment is on hand
to patch asphalt or rebuild a fence. In
the event of a power outage, the track
and visiting media providers are
prepared to work entirely off the main
electric grid with their own back-up
systems.
Keeping a Clean SlateCleaning crews stay up all night in
between race days to gather and sort
through trash for recyclables. In 2010,
62 tons of waste, or 846 cubic yards,
were recycled. That’s 733,000 drink
containers, 100 cases of plastic bags
and 24 tons of cardboard.
“It’s $20,000 per year savings on
waste fees, but more importantly,
removal of tons of items from the
waste stream,” Baumgarten pointed
out.
PIR uses approximately one
million gallons of water just to keep
down dust in their dirt parking lot.
Nearly 270,000 gallons of human
waste and 18,000 gallons of cooking
grease circulate through the facility
annually. The raceway is currently
connected to a series of water wells and
septic tanks but is making plans to
switch to city services. The switch will
move them off a septic system that
costs $100,000 to empty twice
annually and will allow them to
provide better water for guest services.
With 80 percent of their half-
million dollar energy bill accumulating
ARIZONA FACILITIES FEBRUARY 2011 I 15
Carl Edwards doing his signature backflip at Phoenix InternationalRaceway after his Nov. 14 Sprint Cup victory. continued on page 16
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16 I ARIZONA FACILITIES FEBRUARY 2011
during just more than 4 percent of the
year, Baumgarten is looking for new
approaches to cut energy costs
throughout the off season. “We joined
a program that we can voluntarily offer
to shut down areas of our facility (in
the summer) so (the power company
doesn’t) get a brown out. It’s a new
program we haven’t tried yet.”
Making the TripGetting to and from the facility
presents unique challenges. For the
possible 37,000 cars headed to PIR on
big race weekends, creating traffic
plans and obtaining government
approval is a year-round process. With
only two major roads and seven lanes
of switchable in-bound/out-bound
traffic, Baumgarten said they create a
“well-orchestrated event by every
government agency you can imagine.”
For the past 10 years, PIR has also
operated a park-and-ride program out
of Cricket Wireless Pavilion, located
12 miles away. With about 10 percent
of guests opting for the nominal $7
fee, a car load can park and ride one of
the 70 buses to take them to their own
express entrance gate. The operation
runs at a loss but keeps another three
or four thousand cars from clogging
the lanes.
A Photo FinishTo exceed the expectations of the
fans who support the facility, PIR is
working with Avondale City on a
long-term development agreement
that will improve on their
infrastructure delivery and create a
new zoning standard that better meets
their needs. The move could be helpful
for all players involved: A recent
Arizona State University study
indicated PIR’s activities bring more
than $400 million into the area each
year. And although it may take only
29.5 seconds to make it around the
one-mile track, that level of economic
impact takes careful planning and
effective delivery on behalf of the
facilities managers.
“I think there’s a monumental
difference between a stick-and-ball
event and NASCAR. This is more of a
lifestyle,” Baumgarten said. “An NFL
game gets 65,000 attendees, but they do
so for only three or four hours. Our
event is alive and well for five days.” AF
By the Numbers• 50 full-time employees• 1,300 part-time event staff• 15,000 – 20,000 fans camping
during races• 7,500 RV parking stations• 37,000 parking capacity• 65,000 reserved seating capacity• Tickets from $25 to $117• 50 corporate suites• 80% of annual energy bill
accumulated in two weeks• 1 million gallons of water used
annually for dust control• $500,000 annual energy bill• 25 restrooms• 1,000 portable toilets rented
for big events
continued from page 15
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ARIZONA FACILITIES FEBRUARY 2011 I 1717 I ARIZONA FACILITIES FEBRUARY 2011
Mission Statement:To actively and responsiblyrepresent and promote theinterests of the commercialreal estate industry througheffective leadership andadvocacy, through thecollection, analysis anddissemination ofinformation, and throughprofessional development.
2011 Schedule
Jan. 18: BOMA GreaterTucson and IREM jointeconomic forecast
Feb. 22: BOMA GreaterTucson and IFMA SouthernArizona joint meeting
March 29: BOMA GreaterTucson meeting
April 26: BOMA GreaterTucson annual trade show
All events will be held at theSheraton Tucson Hotel,5151 E. Grant Road, Tucson,Ariz.
Membership BenefitsMembership in BOMA Greater Tucson is all about opportunity to learn, to grow andto affect positive change in the building ownership and commercial propertymanagement industry. BOMA Greater Tucson links real estate professionals to theinformation, networking and education they need to succeed. Here are a few of thebenefits members enjoy:
• Be part of apowerful team
• Build ImportantRelationships
• Boost Your Knowledgeand Skills
• Stay Up-to-Dateon the Industry
• Enjoy ExclusiveNetworkingOpportunities
• Access a WorldwideIndustry Network
• Advance YourCareer and Hirethe Right People
• BOMA MembershipSaves You Money
2010 Officers:Gay Jarvis, President
Dana Elcess, Secretary
Andrea Krug, Treasurer
Mona Deane, Past President
October 26: Halloween Family Mixer and Trade Show
I am proud and excited to be leading our association in 2011. BOMA ofGreater Tucson has quite a few exciting events planned for the firstquarter of the year. We kick off on Tuesday, Jan. 18, with the annualBOMA/IREM joint economic forecast. Our keynote will give anoverview of the national economy and how it affects Tucson, along withlending and development in today’s real estate climate.
In February, we always look forward to our joint luncheon with IFMA. This should bean informative meeting with speakers on the new Tucson Certificate of OccupancyOrdinance and emergency preparedness tips.
The March luncheon meeting will focus on HR liabilities for small businesses. Our annualtrade show in April will showcase BOMA associate members and their services.
And, of course, we have a full schedule of education classes planned. I invite everyoneto join us. Check the BOMA Greater Tucson website (www.bomagt.org) for a fullschedule and to register for any of these events.
Gay Jarvis
BOMA of Greater TucsonPMB #140; 3305 N. Swan Rd #109Tucson, AZ 85712Office: (520)299-4956Fax: (520)[email protected]
BOMA Greater Tucson RECENT EVENTS:
PRESIDENT’S MESSAGE
October 31: BOMATeam for AmericanCancer “Making
Strides”
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18 I ARIZONA FACILITIES FEBRUARY 2011
In today’s economy, building
owners and facility managers are
always looking for new ways to
reduce their company’s tax liability,
increase their monthly cash flow,
protect their building against rising
energy costs and increase their
building’s value to prospective buyers.
The good news for Arizona
building owners is that installing a
solar power array on their rooftop will
allow them to take advantage of
federal and state investment tax
credits, utility solar incentive
programs, solar capital equipment
depreciation and Sec. 179 expensing to
offset tax liabilities.
The federal government is currently
offering commercial businesses a 30
percent investment tax credit on the
entire cost of installing a solar power
array on a building’s rooftop. Arizona
provides a 10 percent solar tax
incentive up to $25,000. Utility
companies offer an upfront rebate
incentive for small commercial solar
systems under 30 kilowatts and a
performance-based incentive for larger
solar power arrays.
On Sept. 27, 2010, President
Obama signed the Small Business Jobs
Act (H.R. 5297) into law, reinstating
the 50 percent depreciation bonus for
2010 (retroactive to the beginning of
the year) and increasing Sec. 179
expensing levels to $500,000 for 2010
and 2011.
In addition, the Senate version of
the "Tax Relief, Unemployment
Insurance Reauthorization, and Jobs
Creation Act of 2010" (the "Bill")
contains a one-year extension of the
Section 1603 Treasury Grant program.
Though the maze of solar tax
incentives, utility solar incentives
programs and depreciation schedules
may seem complicated, with the right
financial spreadsheet, a building owner
and their certified public accountant
(CPA) can enter their last 12 months
of electric billing information and
determine whether or not investing in
a solar power array provides a good
return-on-investment in less than 20
minutes.
Most building owners with a tax
liability are surprised to learn that with
the incentives available the total cost of
installing a solar power array on their
rooftop can be completely paid off
within four to seven years, and the
improved cash flow resulting from the
lower energy costs can be reinvested in
their business.
Producing free solar energy
provides a competitive advantage as
Building Owners take Advantage of Tax Credits with Solar Power ArraysBy Nick Davison
Photo courtesy of Ameri-Skills Solar Training
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ARIZONA FACILITIES FEBRUARY 2011 I 19
the competition’s energy prices
continue to rise. A company’s solar
power array energy production remains
free for 25-30 years. Additionally, the
benefits of “going green” can be
leveraged to generate free, positive
publicity that will attract new
customers.
For example, if an Arizona car
dealership installed a $500,000 solar
power array, the dealership would
receive a $150,000 federal investment
tax credit, a $25,000 Arizona tax credit
and $171,700 worth of expense and
depreciation tax benefits. The energy
savings of the 100-kilowatt system for
the first six years would be $146,242.
The solar system would pay for itself in
less than five years. The side benefit
would be enabling them to market
their car dealership as a “green
business” to the local community,
which could be tied in nicely with their
hybrid car marketing campaigns.
Nick Davison is the CEO and president
of Smart Solar Solutions. Smart Solar
Solutions is an Arizona-based, full-
service design and solar installation f irm
specializing in turnkey solar photovoltaic
electric power systems for commercial
rooftops and parking lots. AF
alternative energy
FFrreeee SSoollaarr TTaaxx SSeemmiinnaarrThe Solar Tax Strategies for Building Owners Seminar, hosted by Arizona Solar
Power Society, will be held from 6:30 to 7:30 p.m. on Thursday, Feb. 3 at the
Wyndam Hotel, 50 E. Adams Street, Phoenix. Dan Hoskin, Smart Solar Solutions
VP of sales and marketing, will explain solar tax incentive and utility solar rebate
programs and answer questions for building owners. RSVP at 602.326.0940.
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20 I ARIZONA FACILITIES FEBRUARY 2011
Building Information Modeling can Saveon Time and MaterialsBy Dan Russell
Building Information Modeling
(BIM) is a design and construc-
tion application that replaces
standard 2D construction drawings with
multi-dimensional computer models.
These models allow project teams to
identify and resolve issues before a
construction project begins, ultimately
decreasing time, material and cost
inefficiencies caused by change orders,
construction delays, equipment
fabrication and more. Because the
program is electronic, BIM allows for
changes in real-time, thereby eliminating
waste and conserving paper and materials
for drawing and table-top models.
BIM’s additional benefits include
cheaper equipment prefabrication
(shop built and field installed) and a
completed design, offering a clear
picture of the finished product, which
gives clients and owners the
opportunity to virtually tour their
projects before they build.
Here’s a closer look at how BIM
works and benefits the building process
as well as project owners:
Here to StayThere is a perceived notion that
BIM is only for the big leagues. Some
smaller subcontractors have been
reticent or unable to invest in the
technology. But BIM is only in its
infancy and will be around for a while.
Consider CAD’s role in the early 1980s.
By the 1990s, every major project built
was designed and fabricated using
CAD software. By 2020, BIM will be
the standard by which projects — even
single-family homes — are designed
and delivered to maximize resources,
minimize waste and employ a
sustainable construction approach.
Productivity and EfficiencyDuring Construction
BIM’s application goes well beyond
the completion of the model. In the
field, superintendents have the
opportunity to be involved in trade
coordination and to integrate the
CPM schedule with the BIM model,
which provides a visual of how and
when multiple trades are working in
the same area at the same time. This
visual schedule makes it easier to solve
field issues and ensure proper
installation and sequencing of
building components. This also avoids
clashes and maximizes the
productivity of trades.
BIM minimizes field changes and
decreases costly change orders. In the
event an unforeseen incident arises in
the field, models can and must be
updated to reflect the field change.
Each discipline affected by the change
should then update its model to reflect
current field conditions. Keeping
models updated diminishes the impact
of the change on the project timeline,
providing a real-time electronic visual
of the new layout and schedule for a
work sequence in a given area.
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ARIZONA FACILITIES FEBRUARY 2011 I 21
Streamline Coordination Trade coordination clashes are
common in the building industry. The
most common clashes happen among
mechanical, electrical, plumbing and
fire protection in the space between the
ceiling and the structure above, such as
piping hitting ductwork, ductwork
hitting structural beams, or mechanical
shafts being too small to accommodate
the amount of equipment set to run
through them. Using BIM for trade
coordination involves checking the
geometry in each disciplines model
against the geometry in other
disciplines' models. Doing this shows
superintendents where different
components are hitting each other and
helps the disciplines in question shift
equipment to avoid each other and
keep the project running smoothly.
BIM also helps avoid clashes related
to scheduling. A BIM model can be
used to ensure proper task sequencing,
such as seeing whether the underground
conduit has been completed in an area
prior to laying the foundation system, or
to see whether the mechanical
subcontractor has finished installing
ductwork above the fire protection
system so the fire protection
subcontractor can begin work. This is
always useful, and particularly so when a
project is on a tight timeline.
Used in As-Built ModelsMost projects are still doing as-
builts or record drawings. However,
some progressive facilities owners are
asking for as-built models because they
want accurate 3D representations.
When considering the as-built model,
it’s important for clients and owners to
be aware that each designer and
subcontractor may be utilizing
different modeling software. Software
tools that work well for design and
engineering are not necessarily the best
tools for creating the fabrication-type
models subcontractors need to run
fabrication equipment. To get a true
as-built model, it’s best for one
company to combine all of the
information from each disciplines
model into a single software platform
at the end of the project.
Facilities Management and O&MIn summary, BIM has become a
valuable tool that makes facility design
and construction more efficient. The
big question then is, how can this tool
be used after construction for the
lifecycle of the facility? These models
inherently contain a wealth of data,
and facility owners and managers can
tap into this data and link it to FM
and O&M tools. Essentially, the
model becomes a web-based graphical
interface between a central database
and existing management tools. This
use of technology can allow facilities
staff to use tablet PCs and PDAs to
access facilities data from the field.
For example, you could right click on
a chiller in the model and select from
a menu of choices such as commis-
sioning documents, O&M manuals,
building control system or main-
tenance records. Selecting the
maintenance records option would
take you to data specific to that piece
of equipment in another application
like IBM's Maximo.
All told, BIM is a tool that
streamlines the construction process
from start to finish and beyond, allowing
clients, owners and project and
management teams to maximize
productivity and collaboration. The
application's impact on the industry is
expected to increase in the years to come.
Dan Russell, LEED AP, is the director of
construction technology at Sundt
Construction, Inc. He has been with
Sundt for 15 years. He can be reached at
480.293.3000 or [email protected].
For more information on BIM, visit
www.sundt.com/building-information-
modeling-bim. AF
building information modeling
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22 I ARIZONA FACILITIES FEBRUARY 2011
T he “go green” concept aimed at
minimizing the negativeenvironmental impact of society
has permeated nearly every industry inthe United States. Changes in theeconomy, such as the rise of gas andutility prices, have caused the averageconsumer to think outside the box interms of energy consumption.Increased environmental awareness andfocus on energy efficiency have driventhe marketplace toward moresustainable construction practices.High performance building has pavedthe way for new adaptive technologiesin the world of plumbing and HVAC.
Over the last several years, the boilerindustry has caught on to this conceptand is now riding the wave of energy-efficient, low-emission products. Boilermanufacturers are finding innovativesolutions to meet the demands of anation determined to go green. One suchsolution is known as condensing boilertechnology. Condensing boilers haveevolved from a once mysterious creatureinto a widely recognized and field-proventechnology dedicated to increasingenergy efficiency and sustainability.
Technology OverviewCondensing technology is based on
the theory of recovering lost heat whichescapes out of the flue exhaust in aboiler system. During the combustionprocess, water vapor is created that inturn captures heat from the flue gases.These hot flue gases are then vented outthe boiler flue and into the atmosphere.
Traditional, non-condensing boilersmight see exhaust temperaturesupwards of 400 degrees Fahrenheit. Acondensing boiler system seeks to lowerthe exhaust temperature by recoveringthe latent heat of vaporization. This isachieved by lowering the entering watertemperature (EWT) to the boiler. Asthe EWT drops below 130 degreesFahrenheit, the water vapor in the stackbegins to condense out, and stacktemperatures begin to drop. Lowerstack temperature means less heat loss,which translates into higher thermalefficiencies at the boiler. Although theconcept seems simple, the properapplication of available products is keyto a successful condensing boiler systemthat is both energy efficient andsustainable.
Adequate attention must be givento all vital components of thecondensing boiler design, includingmetallurgy, burner modulation andcombustion controls. Material usedfor construction of the heat exchangeris of utmost importance, since thecondensate forms a highly corrosivesubstance known as carbonic acid.Theheat exchanger comes in direct contactwith the condensate and must bedesigned to resist the acidity.Although stainless steel is the weaponof choice for a variety ofmanufacturers, cast aluminum alloyholds a much better track recordworldwide in terms of durability andmore efficient heat transfer.
Burner modulation and combustioncontrol strategies also play animportant role in the overall systemperformance. A throttling gas valve andforced draft fan with a variablefrequency drive (VFD) facilitateburner modulation; the ability to varythe firing rate based on watertemperature. This capability allows theboiler to reduce its net heat outputduring periods of lower demand, as
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ARIZONA FACILITIES FEBRUARY 2011 I 23
opposed to on-off firing whichemploys an “all or nothing” approach.
Burner modulation is critical whenoperating a boiler in condensing modebecause lower firing rates yield higherefficiencies. In addition, condensingboilers are often installed in what iscalled a modular system. This meansthat in place of one large boiler, severalsmaller boilers are staged in a series toaccommodate the overall systemdemand. The master boiler controlcommunicates to other units in thecascade and determines when to firethe boilers and at what firing rate. Inthe boiler industry, this is called loadmatching. Load matching ensures thatthe boiler system is outputting justenough energy to satisfy the load.Excess BTUs or waste heat is kept toa minimum.
When burner modulation iscoupled with condensing boilers in amodular array, facility owners can becertain they are getting the most out ofevery dollar spent in energy.
Real World Application The Tucson Marriott University
Park Hotel, located at The Universityof Arizona’s main gate, was confrontedwith a challenge common to a myriadof other hotels and resorts throughoutArizona.The introduction of extremely
hard water into the domestic hot watersystem was causing the build-up ofscale in the boilers. This led toinefficient operation and shortenedequipment life. These damaging effectsof scale ultimately resulted inadditional spending on fuel bills andmaintenance. Mathematics of this sortdoes not add up to a green orsustainable design.
A clear solution was to apply theprinciple of indirect heating to acondensing boiler system design. Twoaluminum-alloy condensing boilersmanufactured by Patterson-Kelley wereinstalled, along with a plate-and-frameheat exchanger package. The heatexchanger served to isolate the boilerwater from the domestic hot water loop.This allowed for indirect heating of thedomestic water through the plate-and-frame, which eliminated the risk ofproducing scale inside the boilers.
Low operating temperatures of thedomestic hot water system also provedto be a perfect match for the condensingboilers.Return temperatures around 100degrees Fahrenheit have yielded thermalefficiencies as high as 96 percent. Inaddition, the boilers were equipped withultra-low emission burners, whichproduce less than 9 ppm NOx at highfire. In this case, the low emissionfeature was a fringe benefit to go along
with the more obvious perks of energy
savings: lower maintenance costs and a
longer life span.
ConclusionThe Marriott University Park project
in Tucson is evidence that condensing
technology can be the source of greater
energy efficiency and sustainability by
design. Appropriate metallurgy, fully
modulating burners and modern
combustion control strategies are the
means by which condensing boilers
achieve such sustainability. Reducing
fuel consumption and emissions, while
providing a longer lasting, more durable
product is the goal of manufacturers in
the boiler industry today. Proper
utilization of available technologies is
necessary in furthering the
developments of high performance
building, and will result in a society
more capable of meeting the demands
of an ever-changing world.
Quinton Lamoreaux is the engineered
products manager for McCook Boiler &
Pump Co. He has a bachelor’s degree in
civil and environmental engineering
from Brigham Young University. He can
be reached at 520.623.5788. AF
boilers
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24 I ARIZONA FACILITIES FEBRUARY 2011
T he Performance Based Studies
Research Group (PBSRG)
has been studying the delivery
of services to owners/clients/buyers
since 1994. The technology is called
the best value Performance
Information Procurement System
(PIPS) and the Performance
Information Risk Management
System (PIRMS) and is based on the
Information Measurement Theory
(IMT).
The majority of testing occurred in
the construction industry. Since 2007,
Arizona State University, under the
direction of Ray Jensen and
procurement director John Riley,
allowed the testing of best value PIPS
on non-construction services. From
2007, ASU, proceeded to use PIPS on
the delivery of their food services, the
sports marketing, their document
control, the outsourcing of their IT
networking services, long distance
education and help desk services. From
the first three contracts, the vendors
identified the value of the new best
value processes at $100 million over
the next 10 years (difference in the
revenues that ASU will receive over
the next 10 years that is written into
the best value contracts).
Another dominant test has been
with the General Services
Administration (GSA) in the
heartland region (Kansas City). They
have a four-year plan ($800,000 grant)
to implement the best value PIPS
system into the GSA system. Their
interest is peaked by the:
• Measurement of performance and
deviations on every project.
• The ability to accurately measure
their entire organization’s
performance using vendor risk
information.
• The ability to minimize project
cost and time deviation.
• The potential to increase their
delivery of projects with 10 times
the efficiency.
The University of Minnesota has
been using best value PIPS for the
past five years. As a result of their
performance, Minnesota changed
their law to deliver construction using
the best value PIPS methodology. Five
other government entities in
Minnesota are now testing the
process.
A federal organization has been
testing best value PIPS for the longest
period of time. Without addressing
the procurement of the service, it has
used the deductive logic to motivate
contractors to do the following:
• Pre-plan to manage and minimize
risk.
• Assist the government participants
in the project to be accountable,
doing the right things at the right
time.
• Have a plan (in terms of
performance and time), help the
government to do things in the
right order and time and
document the source of any cost
and time deviations on the project.
• Project cost deviation has been
minimized by 50 percent by
knowing the 10 riskiest projects
weekly, of 300 projects at 26
Putting Vendors in Charge ofFacilities ManagementThe Facilities Manager Model Implements Logic-based Processin Building Management By Dean Kashiwagi
Performance InformationProcurement System:
What makes the technology lucrativeto owners/buyers of services?
• Minimizes up to 90 percent ofthe client project and riskmanagement transactions.
• Vendors make up to 100percent more profit, butdeliver it at a lower cost.
• Value and performanceincrease, and cost and riskdecrease.
• 98 percent of more than 700 tests(1994-2010) have high customersatisfaction, no vendor createdcost or time deviation, and aredelivered at a low cost.
• Client does not need to know theexact product/system/ solutionthey are looking for, they justneed to know what they thinkthey want.
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ARIZONA FACILITIES FEBRUARY 2011 I 25
different sites, with a budget of
more than $300 million.
The Western States Contracting
Association (WSCA), of which
Arizona is a member, has sponsored
tests with the states of Idaho, Alaska
and Oregon. They include a $200
million ERP system procurement, a
$30 million DMV system for the
Idaho Department of Transportation
(IDT) and a test to purchase a
software package for the Oregon
facilities group.
PBSRG has also had an
international reach as the Dutch
national government is running the
largest best value PIPS test (delivering
one billion Euro value critical highway
renovations). Best value PIPS tests in
all industries has resulted in huge
efficiencies and value for the
buyer/clients. PBSRG is also ready to
assist the largest and most influential
contractor/developer entity in
Malaysia, who wants to integrate their
entire supply chain, from the
development to the maintaining of the
properties. PBSRG has also run tests
in Gaborone, Botswana, in the
southern section of Africa. The next
country which will test PIPS/PIRMS
is Canada, as the University of Alberta
will be implementing and testing
PIPS.
The PIPS/PIRMS technology
(processes, use of performance
information and deductive logic) is
licensed through AZ Tech, the
technology licensing arm of Arizona
State University. PIPS and PIRMS is
different from all traditional project
delivery systems due to the following:
• It minimizes the management,
direction and control of the buyer’s
organization on the vendors.
• It minimizes the communication,
documentation and paperwork.
• It proposes that the vendor is the
expert and should know what the
end product is, why it is required
and how it will be delivered.
• It proposes that expert vendors can
see the delivery of the service from
beginning to the end, regardless of
the perceived technical complexity,
and can break it down into simple
tasks that the client can
understand.
• Creates transparency so the client
can quickly identify which vendors
can perform and which cannot.
PIPS/PIRMS works because it
aligns expert resources against
requirements. It motivates the vendor
to think in the best interest of the
client, and at the same time maximizes
the vendor’s profits. Lessons learned
from 16 years of testing best value
PIPS include: buying on price is a
“blind man’s game,” a high performer
can always deliver a better value and
the client is his own worst enemy
because they cannot tell the difference
between good and bad vendors, and
they try to bring the high performing
vendors risk by arbitrarily trying to get
them to reduce their price.
Dean T. Kashiwagi,
professor and director
of Performance Based
Studies Research
Group at Arizona
State University, is an
expert in optimizing
the delivery of construction and other
services using performance information.
His structures/processes simultaneously
minimize project/risk management
functions up to 90 percent, increased
vendor prof it as much as 100 percent,
increased performance to 98 percent and
decrease costs. AF
vendor relations
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26 I ARIZONA FACILITIES FEBRUARY 2011
A tremendous amount of
attention within the landscape
industry is being given to the
benefits of applying practices and
methods that promote sustainability.
As defined for landscape applications,
sustainability employs practices which
strive to preserve limited and valuable
natural resources such as water and
plant materials, reduce waste
generation, strive for longevity and
maturity of plant materials, promote
re-use and practices which regenerate
natural systems, reduce and prevent air,
water and soil pollution.
Landscape is nature and should be
treated naturally. Sustainable main-
tenance is not about letting the
landscape take over; it is about
properly managing the landscape using
the plants natural form and growing
patterns according to the designer’s
intent. Landscape professionals do
their best to use flowers, groundcover,
shrubs and trees that will live in
harmony with their environment.
Although ever evolving, it has taken
years of trial and error to develop apalette of native and non-native plantsthat are aesthetically pleasing and thatwill thrive in the local environment.
Few topics in landscaping generatemore discussion than how to prune ashrub. Past practices have dictatedshearing and shaping of shrubs. Societyhas forced the perception in thelandscape industry into thinking that ifyou don’t follow the practices of themeparks and create shapes out of theplants and trees, the job is not doneproperly. In order for sheared plantsand trees to survive, irrigationprinciples must switch supplementalwatering systems into primarywatering systems to help compensatefor the damage done by these practices.
In addition, using the shearingmethod to control growth continuallyrobs the plant of leaves, hindering itsability to convert nutrients into food.Lack of shade at the core of the plantallows more moisture evaporation,creating a need for more supplementalwater. In turn, this increases growth,requiring even more shearing. As the
plant grows faster to replenish shearedfoliage, the diameter of branchesincrease over time and become“woody.” Eventually the shrubbecomes unhealthy, is more prone todisease and the life span is shortened.
Possibly the most abused shrub isthe sage species because it is commonand easily sheared into shapes. Manyneatly trimmed sage bushes are nearlysee through due to shearing. Considerthe colorful alternative of properpruning techniques so you can see thegreen or silver leaves accentuating thebrilliant purple blooms.
Improper maintenance in the desertsouthwest, including portions ofArizona, California and Nevada, can bethe most damaging.Plants in these areastolerate difficult circumstances such aslimited irrigation water supplies (whichhave high mineral and PH content),high temperatures and minimal rainfall.Misguided maintenance practicesfurther compound the impact of theseconditions and create unnecessarydamage to plant materials, diminishingthe value of the investment.
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landscapingThe more natural method of
pruning favor the health and longevityof the plant. The intention of mostlandscape designs is to achieve a morenatural, less structured look whichcontributes to the long-term goal ofachieving a landscape that can bemanaged with less water requirements,reduce waste generation, better wildliferefuge and better aesthetics, resultingin sustainability.
Renovation style pruning appliesprinciples to promote an aestheticappearance of shrubs and groundcoversin a designed urban landscape.Typically, this consists of pruning theshrub approximately 1/2 to 1/3 of itsintended size. This type of pruningpermits plants to grow back into thespace throughout the followinggrowing season. Shrub renovationallows people to enjoy the seasonalcolor provided by a variety of plantingsused in open spaces and landscapeareas. No pruning is required whenplants are in bloom and shouldcertainly not be dictated by a monthlyor bi-monthly schedule. Pruning isnecessary for safety related issues, suchas plant materials that encroach oversidewalks, obstruct lines of sight atintersections and driveways or thatblock signage.
For instance, an Orange Jubilee cangrow in excess of 8 feet by 5 feet in aslittle as two growing seasons. When
the shrub exceeds the intended heightfor the location, it can be selectivelypruned prior to exceeding the height,or if it is the proper season for thisspecies, renovation style pruning isrecommended. Use of this method willallow the plant to grow, bloom andprotect itself from the sun naturallywith its leaves.
Sustainable landscape managementis not only about shrub and treepruning methods. It encompassestesting and treating various soilconditions, turf management,irrigation repair and maintenance,water runoff, fertilization and pesticideand herbicide applications. Combininga good sustainable landscape designwith proper landscape and watermanagement can create anaesthetically pleasing atmosphere thatenhances its surroundings.
Board members from the ArizonaLandscape Contractors Association(www.azlca.com), Matthew Johnson ofAsset Landscaping, Will Periera of BlueStar Resort & Golf, Dave Spector ofTLC and Judy Gausman of ALCA,contributed to this article. Allparticipated in the review and editing of“Sustainable Landscape Management”and are involved in the day-to-dayoperations of their respective landscapemanagement f irms. AF
Standards for Landscape
Care Outlined in Book
The Arizona Landscape
Contractors Association
(ALCA) recently adopted the
“Sustainable Landscape
Management; Standards for
Landscape Care in the Desert
Southwest,” written by Janet
Waibel, a licensed landscape
architect and certified
arborist. The publication
contains information about
the best recommended practices
that are known to achieve
high-quality results when
properly applied to typical
situations. A committee
consisting of ALCA members,
representing landscape
management and landscape
supply firms, worked
extensively to edit and advise
the book with regard to
content and efficiency for
practical use. The book is
suitable for industry
professionals, property
managers, homeowners
associations and others who
care for or invest in
landscaping.
“It is our desire for every
professional involved with
landscape management to read
and understand these
principles and standards in an
effort to elevate the quality
and professionalism within
the communities and cities we
live and work,” said Will
Pereira, ALCA board member.Improper pruning techniques
ARIZONA FACILITIES FEBRUARY 2011 I 27
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28 I ARIZONA FACILITIES FEBRUARY 2011
Wireless technology is not
new. Starting with the
earliest commercial radios
in the 1920s to the introduction of cell
phones in the early 1980s, wireless
technologies have been used for years
in our homes, cars and work places.
Now, advancements in wireless
technologies have made installing
emergency call and life safety systems
an easier undertaking.
At its basic level, an emergency call
system uses a button to alert the
appropriate people that a user needs
help. For years, alerts were simply a
light switch with a hole drilled for a
string that, when pulled, turned on a
light and a siren to notify that
assistance was needed. Today,
computer-based systems can track a
person’s movement and send an email
to an iPhone.
Before wireless became the “must
have” technology, the introduction of
computers was the biggest thing to hit
the emergency call market. Now, the
computer is the most common link
between monitoring devices and the
pagers or telephones used for
notification. Computers allow data
recording and reporting, provide more
flexibility in changing settings, enable
tracking of login and personnel and
offer some types of redundancy.
However, they also have limitations,
requiring security updates, patches,
being subject to failure and having a
limited lifespan. Computers greatly
enhanced functionality but also made
choosing the right system more
complex.
Similarly, the advent of wireless has
added another layer of complexity.
Wireless has become the hot product,
offering many benefits. Some things
that should be explored before
purchasing a wireless system for your
building. This may be as simple as
checking with state regulations. While
regulations are catching up with the
available technology, hardwired
systems are still required in some states
due to limitations of some of the
earlier wireless technology.
There are three main advantages to
wireless:
1. It is hard to beat both in terms of
actual cost and time to install;
2. It provides flexibility by allowing
you to move devices more easily;
and
3. It offers greater expandability,
enabling you to add on to your
current system with greater ease.
These features have resulted in the
widespread popularity of wireless but
should be weighed against some of the
constraints of the technology. While
installation is almost always cheaper,
operating costs can be higher. In
comparison to their hardwired
counterparts, the wireless devices
themselves are more expensive and
tend to have a shorter lifespan,
reflecting the more rapidly changing
technology.
Once installed, a wireless system
will require more maintenance and
incur greater recurring expense.
Without a hardwired power source,
devices will use batteries, and batteries
need to be changed. Wireless systems
tend to offer a lower level of
supervision than the hardwired
alternatives, since battery constraints
limit the ability to constantly monitor
the devices.
When it comes to reliability, the
nature of wireless makes it susceptible
to interference. Cell phones drop
calls. Radios make a squawking sound
when cell phones are next to them.
Wireless might not be an appropriate
choice if your facility’s physical
structure or location is such that
interference is always going to be an
issue. Concrete and steel buildings
will find wireless signals are more
limited and may require additional
infrastructure to ensure reliability.
Commercial kitchens, microwaves,
elevators, mirrors and large fishtanks
are also known to interfere with
wireless signals.
If you do choose a wireless system,
a number of frequencies are available
and the best for your facility will
depend on your requirements and
preferences. Lower frequency bands
have been around the longest and are
more established. This equates to
lower costs and a greater availability of
parts. The bandwidth dictates how fast
data can be transmitted, but typically,
the higher the bandwidth the more
power is needed, requiring more
battery maintenance.
Many paging systems fall into the
456-460MHz land mobile category.
902-928MHz is reserved for
radiolocation, which is what many call
systems fall into. Cordless phones are
now available in the 2.4 GHz and
Wireless vs. Hardwired for Healthcare FacilitiesNew Technologies in Emergency Call and Life SafetyMake Installation EasierBy Jacquie Brennan
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ARIZONA FACILITIES FEBRUARY 2011 I 29
5.0GHz range. Does it make them
better because they are on a higher
frequency? Not necessarily, part of it is
just that the band may be less crowded
because it was recently released and
fewer manufacturers produce in that
range. Higher frequency are generally
faster but have a shorter range, while
the lower frequency, as a rule, have the
best range.
For many facilities a hybrid option,
including hardwired call stations and a
wireless backbone that enables you to
add devices and pendants, might be
the best choice. This does increase
installation costs but provides the
reliability and lower operating costs
with the flexibility and expandability
of a wireless system.
Prior to selecting a system, an
analysis of the needs and
infrastructure of your building in
comparison to the pros and cons of
the technology needs to be
completed. The location, structure
and purpose of your facility, your
capital budget and operating budget
constraints, your tolerances on
reliability versus flexibility or
expandability and how long you
expect your system to last will all
influence your decision when
choosing between hybrid, wireless or
hardwired options. When choosing
an emergency call system remember
not all technologies are created equal,
and just as important, no two
facilities’ requirements are the same.
Jacquie Brennan has been active in the
design, implementation and operation of
hardwired and wireless nurse call and
emergency call systems during the last 13
years. Brennan is currently vice president
of operations for Vigil Health Solutions,
Inc., which specializes in providing call
and monitoring solutions for long-term
care facilities. AF
healthcare facilities
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30 I ARIZONA FACILITIES FEBRUARY 2011
OfficeMarket
OutlookSteady RecoveryBringing Activity
Back GraduallyBy Ruth Darby
Phoenix Forecast
The office market started to heal
in 2010. While slow, it was an
improvement. Building on
gradual quarterly gains, 2010 finished
with positive net absorption of less
than 500,000 square feet for the first
time in more than eight quarters as the
market leveled out and stayed there.
Absorption will increase in 2011 due to
many economic factors such as job
growth, interest from out-of-state
companies and the surplus of
foreclosures that are currently in
somewhat of a holding pattern. This
will give the market the boost it has so
desperately needed.
Phoenix will remain a tenant’s
market throughout 2011 and into
2012. Rates will continue to fall
through third quarter 2011 when rents
will start to level out. Vacancy will start
to decrease slightly and out-of-state
tenants will come back to Phoenix for
its business-friendly environment and
declining real estate prices. An increase
in jobs will follow as a precursor to
positive absorption gains.
New construction will be
nonexistent through at least 2012 as
the market rebounds and spaces are
absorbed. This could take several years
due to the glut of vacant space. With
more than 12 million square feet of
new speculative completions added
during the last five years, in addition to
the challenging real estate market, it
will take some time for the market to
bounce back.
In 2011, tenants will have the
opportunity to make attractive deals on
space by taking advantage of lower
rents and more concessions. Out-of-
state tenants will continue to migrate
to Phoenix as they did in the past for
the business-friendly atmosphere,
lower real estate costs and affordable,
educated employment base. This will
breathe new life into the Phoenix
economy.
Landlords will renew tenants for
OfficeMarket
OutlookSteady RecoveryBringing Activity
Back GraduallyBy Ruth Darby
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ARIZONA FACILITIES FEBRUARY 2011 I 31
the short-term, enabling them to
increase rents when the market rates
trend back up in early 2012 and
beyond. Landlords will remain
aggressive with low rental rates and
more concessions through 2011 to
win new business. The scales will
start to tip slowly back in their favor
later in the year, creating more of a
balance between their expectations
and those of tenants.
Tucson Forecast
A diversified economy makes
Tucson a prime growth area as the
market continues to improve.
Tucson has a good economic
foundation that will serve as a
catalyst when the market
returns. The city is an emerging
world leader in solar
technology, home to the fastest
growing privately held
aerospace company, as well as a
successful technology hub. The
University of Arizona, situated
in the center of the city,
provides a well-educated
employment base for companies
looking to relocate here.
The commercial real estate
market was comparatively
steady through 2010 with no
major ups or downs in
absorption or vacancy overall. The
market will show improvement in
vacancy and absorption numbers as
2011 progresses. Construction will
remain at low levels with the largest
project being the 235,000-square-
foot UniSource Energy Services/
Tucson Electric Power Tower,
scheduled for completion in the
fourth quarter of 2011.
The unemployment rate was 8.8
percent during October 2010, and is
expected to creep up one more basis
point in 2011, where it will level out
by year-end. Job growth will come
from the healthcare, tourism and
high-tech industries, which will
come back to life as consumer
confidence improves.
Economic indicators such as retail
sales are expected to increase, nearly
doubling from the 4.6 percent
annual increase in 2010 to 9.6
percent in 2011. Housing continues
to struggle, as Tucson ranks first in
the state of Arizona and 41st in the
nation for foreclosures. The number
of home foreclosures was cut in half
during 2010 and will continue to fall
through 2011 as the economy heals
and banks work with homeowners
via short sales or loan modifications.
The region’s low cost of living will
help offset other economic concerns
until the market fully recovers.
The market will strengthen in
2011 due to residential population
growth and several established and
growing industries such as aerospace,
solar and healthcare, supporting the
recovering Sun Corridor.
Ruth N. Darby is the director of
research services for Grubb & Ellis
Company Phoenix. She has more than
10 years of experience in the
commercial real estate industry. She
can be reached at 602.343.7426. AF
office market forecast
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32 I ARIZONA FACILITIES FEBRUARY 2011
One well-known benefit of an
Energy Management System(EMS) or a Building
Automation System (BAS) is the abilityto help control energy costs. When abuilding without an energymanagement system is retrofitted, it isnot unusual to save 10 to 15 percent ofthe total energy required to operate thebuilding prior to the retrofit. Withutility rebates of up to 50 percent of theproject cost available in most areas it is ano-brainer to consider retrofitting anexisting building.
EMS control systems in existingbuildings must be maintained tocontinue realizing energy savingsbecause individual components inolder systems fail as they age. As thishappens, the building will inevitablydrift out of control and energy usageincreases. In worst case scenarios,mechanical yards and other airconditioning equipment may beoperating 24/7 just as if an EMScontrol system were never in place.
If energy costs have increased andmaintenance dollars are tight, it may betempting to replace some componentsof the EMS control system withcheaper parts as they fail. This is seenmost often in water source heat pump(WSHP) applications, where an EMScontrol board has been replaced with aprogrammable thermostat attemptingto achieve similar results at a reducedcost. This approach is notrecommended because it disables otherbenefits received by maintaining theintegrity of the EMS control system.Consider the following benefits.
Integrated control of the entireHVAC system helps avoid tenantcomplaints and unnecessary servicecalls while maximizing energy savings.
WSHPs controlled by standaloneprogrammable thermostats do notcommunicate with the EMS controlsystem. This may result in locking out
the compressor in the WSHP if there isever a heating or cooling call from thethermostat and the central plant hasbeen turned off by the EMS.If a lockoutoccurs, a service call will likely berequired to restart the water source heatpump. Now what? This condition willonly repeat if the situation is left as it is.
One alternative is to bypass themechanical yard controls so the coolingtower and condenser water pumpsoperate 24/7. This choice negativelyimpacts energy costs and increases wearon the mechanical system. A betterchoice is to replace failed EMS controlswith ones that communicate with theEMS. Keeping the EMS controlsystem intact allows all WSHPsoperate in conjunction with themechanical yard, avoiding unnecessaryservice calls and tenant complaints.
Remote access allows checking asystem to determine what level ofresponse is required. With stand-alonecontrols, someone must physically goto the unit and determine if it isoperational. An EMS control systemwith temperature sensors in thedischarge air of each WSHP unitallows remote checking. With internetaccess, you can log on and checkwithout leaving your office or home,even if it is after hours. If an area iscalling for cooling or heating, thedischarge air temperature of thecorresponding unit will indicate if it isworking correctly or not. Thiscapability saves an incredible amountof time. It will also eliminate servicecalls to your HVAC vendor to checkunits that are functioning normally.
Temperature trending allows you toevaluate and respond to tenant comfortcomplaints. When a tenant commentsabout comfort in the space, it isrelatively easy to trend the temperaturein the space to determine if the tenantsconcerns are justified. The ability toknow if and when temperatures are
outside of the lease requirements willhelp bring a speedy resolution to anycomfort concerns. You can’t do thatwith a programmable thermostat.
Scheduling and temperature setpoint changes are much simpler andfar less labor intense with an EMScontrol system. Global temperature orschedule changes are murderous withstandalone controls. Imagine the laborinvolved to reprogram 100 thermostats(100X15min/60 = 25 hours). An EMScontrols system with global overridecapability would take about 15minutes to reprogram the entirebuilding and is far less mind numbing.
EMS control systems aresignificantly more resistant to tenanttinkering. Standalone controls requireconstant oversight to be sure theprograms and set points have not beentampered with. In one buildingsurveyed, 23 of the 26 programmablethermostats were overridden to run 24hours per day at the tenant desiredtemperature set point. When thebuilding was retrofitted, the ownerrealized a 10 percent decrease in energyusage, even while allowing significantafter hours timed override of thesetback temperatures. Since EMScontrols use a zone sensor withoutprogramming capability, temperatureset points and allowable offsets canonly be changed through the EMScontrols system. This eliminates tenanttinkering with the “thermostat.”
Mark Strahan is a35-year veteran of theHVAC industry andis currently anaccount manager withBurt-Burnett, Inc.,an HVAC mechanicalservice and digital
controls contractor. Mark can be reachedat 480.695.4168 or [email protected]. AF
A Fully-Functional EMS Control SystemKeeps Buildings Green By Mark Strahan
building controls
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ARIZONA FACILITIES FEBRUARY 2011 I 33
Filling VacanciesStanding Out in a Tenants’ Market By Justin Himelstein and Chris Walton
Valley Commerce Center, a Fenway Properties building in Phoenix, at 4745-4747 N. 7th Street.Photo courtesy Dale Hameister Photography.
One look at the numbers con-
firms it’s a tenant’s market
when it comes to leasing
office space in Arizona. The amount of
available office square footage in metro
Phoenix is at an all time high, with an
overall vacancy rate of more than 27
percent. Rental rates continue to drop,
with overall rates in the Valley around
$25 per square foot for Class A space
and $19 per square foot for Class B
space. These rates are expected to dip
further, with rental rates bottoming out
sometime in 2011 or early 2012. The
biggest challenge comes in the
continuing lack of demand for space as
net absorption was negative for six of
the first nine months in 2010, and
overall net absorption was only at
30,700 square feet through the first
nine months of 2010.
For building owners, those numbers
may seem insurmountable. But before
you lock the front door and walk away,
you need to know there are tenants
actively looking for office space in
Arizona. However, tenants who are
shopping for office space in today’s
market are smart. They understand
they can upgrade to newer, nicer
locations at prices that are below what
they are currently paying in older,
second-generation buildings. The
trend of tenants looking to upgrade
their address is known as “flight to
quality,” and it is driving the majority
of the deals in today’s market.
While there are plenty of new, never
occupied buildings to pick from, tenants
are not necessarily only shopping these
buildings, but they are using them as a
baseline when they are comparing
properties. As a landlord, you have to
position your vacant office space to
compete with new, first-generation
space if you want to have a chance of
tenants signing leases in your property.
Invest in Spec SuitesInvest in spec suites by turning a
second- or third-generation, 10,000
square-foot space into four or five
smaller suites. “Spec suites” typically
range from 1,200 to 5,000 square feet
and offer a clean, modern office space
for tenants to immediately occupy.
Focus on the details: new paint,
flooring, lighting and common areas
such as lobbies, hallways and
bathrooms. Tenants are looking at all
aspects of a building. They want to see
great landscaping, clean common areas
and buildings with great “curb appeal.”
If your building has a monument sign,
offer sign space as a concession for
tenants whose overall square footage
wouldn’t have been considered in the
past. Other concessions, including free
rent, free covered, reserved parking and
ample tenant improvement monies, are
a reality in today’s market.
Be AvailableOwners who make themselves or a
representative available to meet with
potential tenants during a showing
provide a level of confidence for
potential tenants. California-based
continued on page 34
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34 I ARIZONA FACILITIES FEBRUARY 2011
Fenway Properties, which owns
multiple office properties in Arizona, is
a great example of availability.
Company Owner Larry Jackel makes
it a point to meet new tenants in
person, joining potential tenants in
meetings and tours whenever possible.
He goes above and beyond to work
with brokers and tenants to get a deal
done and make tenants feel
comfortable during the entire process.
Jackel understands the challenges of
today’s economy and offers tenants the
appropriate market concessions.
Show Financial StabilityThe market challenges have created
a new scenario where tenants want to
look at an owner’s financial stability.
Landlords have always required
financial statements from tenants, but
today’s tenants need to know their
property owner is financially strong
and more than capable to cover their
tenant improvements and fully
compensate their real estate advisors.
Rely on Industry Experts Hire the right real estate landlord
brokers to market your property. They
are going to be your best marketing
asset. Their knowledge, industry
connections and market expertise will
get more lease transactions completed
for you. Be sure to also develop
relationships with tenant representation
brokers and make them aware that you
will pay market commissions if they can
bring you a viable tenant. Tenants
actively looking for office space,
whether it’s relocation, renewal or “re-
cast” of their current lease, are going to
look to tenant representation brokers as
the expert for office space needs.Tenant
rep brokers schedule property tours,
analyze lease proposals, lease
documents, provide financial analysis
and guide their clients in making
important real estate decisions.
With large blocks of office space
available and lower rental rates, a
desirable climate and a well-educated
and available workforce, metro
Phoenix is positioned to attract
companies looking to relocate or add
to their current operations. These
factors should improve leasing as the
Valley looks to 2011 and beyond.
Justin Himelstein is vice president and
Chris Walton is senior vice president of
the Office Services Group of Cassidey
Turley BRE Commercial. They can be
reached at 602.954.9000. AF
property managementcontinued from page 33
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h o r i z o n t a l l i f e l i n e s
Q U A L I T Y FA L L P R O T E C T I O N
r o o f a n c h o r sw a l l a n c h o r s
Work safe. Stay anchored.Creating a safe workplace for suspended work on the outside of your facility is a critical requirement. It is imperative that your property meet OSHA regulations and ANSI guidelines for fall-protection.
American Anchor staff is uniquely qualified to assist you in meeting today’s demanding and often confusing OSHA and ANSI fall protec-tion regulations. With over 700 completed projects across the county we have the experience you want. American Anchor will work closely with you to insure your property and your contractors are protected from harm.
The finest quality fall prevention equipment in the country
Stainless steel and hot dipped galvanized construction
Inspections and Certifications of existing systems
Professionally engineered and installed during constructionor retrofit to any existing rooftop
Call us for a free evaluation of your current project andavoid costly liability
www.american-anchor.com
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Arizona FacilitiesP. O. Box 970281Orem, UT 84097-0281