flexiblefullpage
billboard
interstitial1
catfish1
Currently Reading

THOUGHT LEADER: Samuel S. Unger, RA, MCR, SLCR, MBA, is the Americas Real Estate Leader for Ernst & Young, LLP

THOUGHT LEADER: Samuel S. Unger, RA, MCR, SLCR, MBA, is the Americas Real Estate Leader for Ernst & Young, LLP


By By BD+C Staff | October 19, 2011
Samuel S. Unger, RA, MCR, SLCR, MBA, is the Americas Real Estate Leader for Ernst & Young, LLP
This article first appeared in the October 2011 issue of BD+C.

BD&C: What is happening with your corporate portfolio? Are there any strong commercial markets right now?

Samuel S. Unger: Most U.S. markets are still soft. There is some perceived bottoming in some very local submarkets in San Francisco, San Jose, and certain New York City submarkets. Downtown Seattle is tightening. Other markets have limited inventory in given classes of buildings, so there is better control over those segments. I am also surprised by how tight some of the smaller Canadian cities are. Researching the brokerage house reports looking for consensus is still helpful, as are ongoing discussions with trusted brokers. We always try to stay ahead of the requirement by trying to understand forward momentum in given markets. It’s also important to note that markets can be quite local, varying by view and size of requirement, so generalities need to be closely tempered by the requirement you are presenting to the market.

BD+C: Where is the best place to invest in real estate right now?

SU: There has been competition for trophy assets in commercial real estate, and a fair amount of money chasing discounted retail assets, according to what I hear. Unfortunately, real estate assets are very difficult to dispose of in weak markets, as too many have discovered to their chagrin. Diversification still rules.

‘Try to understand forward momentum in given markets’

BD+C: When is the commercial real estate market going to rebound?

SU: When you see three or four quarters of positive white collar job growth, you might be tempted to get out of your foxhole. But a critical caution is the fact that all markets and submarkets are local, and impacted by the movement of major companies or particular industry segments.

BD+C: In regard to commercial properties, are owners upgrading or reconstructing these properties? How long does it take for an owner to see a return on their investment after upgrading or reconstructing a property? How is this impacting their portfolio?

SU: This is a thesis question. It all depends on an owner’s portfolio, competitive pressure, leverage, and access to capital. We’ve seen a number of owners of Class A property begin to do reasonable upgrades to comply with the lower tiers of LEED certification because they believe they need this to remain competitive in the market, and we welcome that.

BD+C: Is it more advantageous to construct a new building, or upgrade an existing structure?

SU: I stress that we as an organization are not owners of buildings for reasons specific to the Ernst & Young partnership. We have a very competent advisory services business that assists owners with questions like this. As with any complex question, it all depends on the specific market and the arbitrage available in making a conversion.

BD+C: Are there particular mistakes or errors that you see BD+C readers making in regard to commercial real estate?

SU: If you are talking ownership, the first law is that real estate is volatile and illiquid, and keeps absorbing capital.  The second law is to remember the first.

BD+C: How can BD+C readers—architects, MEP engineers, and contractors—work more effectively with a firm like Ernst & Young and other CoreNet members?

SU: We encourage contact with design professionals and contractors. We mandate that members of our real estate group get involved with national and local organizations, and we’re not shy about it. I encourage professionals to get involved with CoreNet. It’s important to realize that the organization encourages mutual long-term benefit—no quick sells, no heavy marketing, but a great opportunity to let people understand both the type of individual you are and something of your business over time. The people of CoreNet are also a tremendous resource, with literally hundreds of years of collective experience in the allied professions.

BD+C: What do architecture, engineering, and construction firms continually do wrong in their dealings with organizations that are CoreNet members? What mistakes do you see them making? What advice would you have for AEC firms to work more effectively?

SU: Great question, and another thesis topic. Approach CoreNet members as a long-term investment. Share experiences and understand the pressures and questions of your potential clients. Don’t talk consultant speak—if asked, talk solutions. Otherwise, grab a beer and share war stories.

BD+C: What is the most important thing you can take away from your involvement with CoreNet on both a personal and professional level?

SU: CoreNet has been a tremendously valuable resource for me. I have established friendships and had the opportunity to go beyond professional relationships with a number of our members. I have also realized that many of the issues I faced, both personally and professionally, are shared problems, with shared solutions. On a professional level, deeper discussion of the issues we face as an organization, and the similarities to the issues faced by my colleagues in CoreNet, help generate more thoughtful solutions. The opportunity to review strategies and tactics for these issues is valuable, as is the review of resources available through service providers, contractors, and suppliers. BD+C

Related Stories

| Dec 2, 2010

GKV Architects wins best guest room design award for Park Hyatt Istanbul

Gerner Kronick + Valcarcel, Architects, PC won the prestigious Gold Key Award for Excellence in Hospitality Design for best guest room, Park Hyatt Macka Palas, Istanbul, Turkey. Park Hyatt Maçka Palace marries historic and exotic elements with modern and luxurious, creating a unique space perpetuating Istanbul’s current culture. In addition to the façade restoration, GKV Architects designed 85  guestrooms, five penthouse suites, an ultra-hip rooftop bar, and a first-of-its-kind for Istanbul – a steakhouse, for the luxury  hotel.

| Dec 2, 2010

U.S Energy Secretary Chu announces $21 Million to improve energy use in commercial buildings

U.S. Energy Secretary Steven Chu announced that 24 projects are receiving a total of $21 million in technical assistance to dramatically reduce the energy used in their commercial buildings. This initiative will connect commercial building owners and operators with multidisciplinary teams including researchers at DOE's National Laboratories and private sector building experts. The teams will design, construct, measure, and test low-energy building plans, and will help accelerate the deployment of cost-effective energy-saving measures in commercial buildings across the United States.

| Nov 29, 2010

Data Centers: Keeping Energy, Security in Check

Power consumption for data centers doubled from 2000 and 2006, and it is anticipated to double again by 2011, making these mission-critical facilities the nation’s largest commercial user of electric power. Major technology companies, notably Hewlett-Packard, Cisco Systems, and International Business Machines, are investing heavily in new data centers. HP, which acquired technology services provider EDS in 2008, announced in June that it would be closing many of its older data centers and would be building new, more highly optimized centers around the world.

| Nov 29, 2010

New Design Concepts for Elementary and Secondary Schools

Hard hit by the economy, new construction in the K-12 sector has slowed considerably over the past year. Yet innovation has continued, along with renovations and expansions. Today, Building Teams are showing a keener focus on sustainable design, as well as ways to improve indoor environmental quality (IEQ), daylighting, and low-maintenance finishes such as flooring.

| Nov 29, 2010

Renovating for Sustainability

Motivated by the prospect of increased property values, reduced utility bills, and an interest in jumping on the sustainability bandwagon, a noted upturn in green building upgrades is helping designers and real estate developers stay busy while waiting for the economy to recover. In fact, many of the larger property management outfits have set up teams to undertake projects seeking LEED for Existing Buildings: Operations & Maintenance (LEED-EBOM, also referred to as LEED-EB), a certification by the U.S. Green Building Council.

| Nov 23, 2010

The George W. Bush Presidential Center, which will house the former president’s library

The George W. Bush Presidential Center, which will house the former president’s library and museum, plus the Bush Institute, is aiming for LEED Platinum. The 226,565-sf center, located at Southern Methodist University, in Dallas, was designed by architect Robert A.M. Stern and landscape architect Michael Van Valkenburgh.

| Nov 23, 2010

Honeywell's School Energy and Environment Survey: 68% of districts delayed or eliminated improvements because of economy

Results of Honeywell's second annual “School Energy and Environment Survey” reveal that almost 90% of school leaders see a direct link between the quality and performance of school facilities, and student achievement. However, districts face several obstacles when it comes to keeping their buildings up to date and well maintained. For example, 68% of school districts have either delayed or eliminated building improvements in response to the economic downturn.

| Nov 16, 2010

Architecture Billings Index: inquiries for new projects remain extremely high

The new projects inquiry index was 61.7, down slightly from a nearly three-year high mark of 62.3 in September, according to the Architecture Billings Index (ABI). However, the ABI dropped nearly two points in October; the October ABI score was 48.7, down from a reading of 50.4 the previous month. The ABI reflects the approximate nine to 12 month lag time between architecture billings and construction spending.

boombox1
boombox2
native1

More In Category




halfpage1

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021