China Snapshot

Market analysts report that China will be the world's largest construction market by 2018, at $2.4 trillion - 19.1% of global construction output. The new report by Global Construction Perspectives and Oxford Economics was issued last week in London.

The pace of development can still be seen and felt on the ground in the juxtaposition of old methods and new technology. Bamboo scaffolding spans between steel superstructures, and hand carts weave their way through tower crane supports. Construction sites turn into archaeological digs on development sites in the historic centers of ancient cultures, now the epicenters of modernizing cities.

Urbanization continues to fuel the development market, and business leaders here predict that trend continuing for the next 10 years. The scale of development is driving new innovations in all areas of the market as it continues to develop and stratify - in processes, materials, sustainability, and technology. We are seeing three major types of developers leading the market.

Mature developers drive efficient budgets and delivery processes for speed to market. Established proformas and programs require focus on blistering pace and lowering cost models. Keys to success for these developers are strong delivery and implementation disciplines, with tightly controlled costs.

Young entrepreneurial developers are thriving in new niche markets requiring great creativity and innovation strategies. Design quality is key for the success of these projects, along with unique programs and focused specialization.

Government sponsored developments invest time and money into highly visible and iconic projects. A symbolic connection to the culture, highest quality design and construction, and market leading firsts are key to the success of these projects.

The construction industry is going global - paying attention to the leading growth market is critical in understanding trends that will ultimately effect the more developed markets in the US and Europe - whether working in China or anywhere else on the planet.
 

RealTech with Peter Boritz: Get More Website Traffic

Your website speed can be a key indicator of how many visitors go to your website and spend time learning about your organization. In addition, potential and current clients who wait too long for web pages to load may be reluctant to return to your site.

It has been proven that as little as a five percent increase in your website speed can increase page views by as much as twenty-five percent. Below are some tips to increase the speed of your website:

1. When it comes to your homepage, use facts and keep the page clean and simple. Avoid using Flash videos or animations/graphics that take too much time and bandwidth to load. In the amount of time it takes one of these large files to load, you may have already lost a potential client.
2. Don’t place video links on your homepage. Links from video sites such as YouTube not only take time to load, but often make a web page look cluttered and distracts from the information you want visitors to see.
3. If you need to place video on your site, make certain that the host of the video is within a close proximity. The longer distance the information has to travel, the longer it will take for the page to load.
4. Measure the speed of your site to identify the areas which need improvement. There are various websites, both free and paid, that can check your site for browser compatibility, optimizes images and JavaScript and more.
   

Some useful sites are:

• Aptimize.com
• Google Website Optimizer (free)
• WebsiteOptimization.com (free)

In today’s market, having an informative and well-performing website is key for your business to succeed. Don’t lose opportunities and new customers because your website is too slow.

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Greenbuild 2009 - Main Street Green: Connect to the Conversation

 

Each year, the U.S. Green Building Council hosts its Greenbuild Conference & Expo, the world’s largest green building conference.  Greenbuild 2009 is heading to Phoenix.  The American Southwest is a region with unique environmental and social challenges and opportunities, and the imperative is clear: green building can and must come home to all people, boosting the quality of life on main streets across the country and the world.  Every year, Greenbuild attracts leading architects, building owners, developers, contractors, educators, students, service providers and manufacturers, providing education and networking opportunities for everyone connected to the building industry.

 

With its humble beginnings of 4,100 attendees in Austin, Texas seven years ago, Greenbuild 2009, held November 11-13, 2009 in Phoenix, AZ is expected to attract 25,000 people and boasts over 100 educational sessions and 1,800 exhibit booths on the tradeshow floor. Former Vice President Al Gore will be the keynote speaker at the Opening Keynote & Celebration, followed by a performance by Grammy Award winning musician and environmental activist Sheryl Crow.  While Greenbuild is known to engage the most progressive discussions of the day, it is good to note that Greenbuild is valuable for everyone, whether you’re a green guru or not. There are educational sessions on topics ranging from green leases and valuation to the business case and technical implementation methods of LEED for Existing Buildings.

 

With the economic downturn forcing more organizations to focus on the existing building stock, USGBC has seized the opportunity to deliver a host of existing building-specific educational sessions.  Sessions include:

 

“How the LEED for Existing Buildings Certification Process Transforms Your Operations and Engages People”

“The Value of ENERGY STAR®”

“Economics of Corporate Sustainability”

“Greenwashed or Green … Single or Triple Bottom Line?”

“The Green Lease: A Two-Way Street”

“A Revolution in Existing Buildings - LEED for Existing Buildings: Operations and Maintenance”

“Existing Buildings: Opportunities for Development”

“High Profile Green Operations – Marquee LEED for Existing Building Projects”

Greenbuild is a forum to engage professionals from various industries and sectors and listen to peers talk about their experiences The many networking and educational opportunities, along with a first-ever Greenbuild job fair, are among the top reasons to attend Greenbuild,where you can listen to otherswhile making connections with likeminded  businesses.  Greenbuild is where the industry collaborates on sustainability, finding ways to save money, improve performance and reduce environmental impact.

More information on Greenbuild is available at www.greenbuildexpo.organd I hope to see you in Phoenix! 

 

Retail Leaders Gather in Dallas

Challenging times, continued re-tuning, and celebrating the few successes. There were many key insights to learn from this group of industry leaders, gathered in Dallas recently for the International Retail Design Conference. New strategies for value and environmentally conscious consumers and brands, localization and regionalism, global retail development in markets like China, India, Middle East, Latin America, experience based retail design, and community connections were discussed in depth. Here is what some of them had to say during our 3 days in Dallas together.

From Burt Tansky, CEO of Neiman Marcus

“Once you acquire a taste for luxury it remains, it doesn’t disappear, though it may be dormant for a while”

Also “Trends come and go, quality and great design are always in style”

Keys to NM brand “Improve, Innovate, Improvise”

“Luxury never changes” – as part of a dialog that Neiman Marcus is not trading down (though they are broadening some of the merchandise ranges, and experimenting with midday dash sales)

He did admit “I can’t get out of Costco for less than 200$” and his fondness for shopping at Costco.. 

New Neiman Marcus Store at The Bravern, Bellevue 

John Mulliken, VP Store Planning and Development, Louis Vuitton

“Louis Vuitton never goes on sale” and “We must create the highest level of customer experience”

On keys to LV brand -- “Craftsmanship, Innovation and Technology”

Others, overheard

“Don’t plan 2010 budgets on today’s (20-25%) reduced construction costs – material and labor costs will rise”

"There is nothing like a good recession to get you to run a better business"

“Do more with less” – repeated by many…

On budgets "no renovations, new stores, travel - significant restrictions on all capital expenditures

James Smith, Director of Store Design, Anthropologie, on winning the retailer of the year award 

Anthropologie has been doing “local” since the 1980’s – the key is operational ownership at the store – merchandising, design, and visual display –

“Empower the people in the stores”  

“No two stores are the same”

“Create a canvas to build on but allow the opportunity for empowering local teams to interpret and create”

What will the industry look like next spring? Who will be thriving? Luxury retail numbers continue to slide.  Meanwhile, look at new innovations like Uniqlo’s ramp up of their global expansion on current same store sales increases of 30%++  Look at their new +J Jill Sander line, released October 1st – timeless design and detailing at a fraction of the cost of the full line label. 

The reflective trends such as pride in thrift related to post-great-recession values and re-localization of big brand rollout stores are strong indicators of a long term shift in the market.  It is true that great design and quality are always in style, but at what cost?  The value proposition is a foundational key to the new consumer mindset and bottom line. There is a new found pride in thrift rather than bling. There is also an interesting alignment of these values with new developments in sustainability and environmental consciousness. Re-use, re-cycle, re-purpose – all good for the environment and the pocketbook.

Postcard from Dallas - International Retail Design Conference

 

Today, here in Dallas, leading global retailers, strategists and designers will convene for the annual IRDC conference – beginning with a keynote opening by Burt Tansky, President and CEO of Neiman Marcus. 

 

Retail markets are over one year into plummeting sales figures, with recent results sliding along a slower decline. This cycle has caused a great deal of reflection and the development of new strategic directions for many industry leaders. 

 

I expect this creative and dynamic group will be brimming with new ideas and energy as they stride forward into the changed marketplace.  Change will be the key in moving forward, in regaining the lead, leading change. For three days, the best minds in the industry will share their insights and strategies.

 

Successful leading retailers have change in their DNA - it's how they live, and act every day. Retail must be a reflection of the moment, and on the pulse of the future to survive.

 

Along with industry experts on international retail trends from around the globe, I will be presenting a talk on the state of retail in Asia and India. That's just a little more than half of the population of the planet, and the engine of exponential change in retail culture. From luxury brands declining in Japan to new boutiques in India, to the Barbie flagship in Shanghai and global brands moving in to Vietnam, it's a lot of ground to cover. 

 

The range of countries and cultures will provide us all with new strategies for the future of retail. I'll keep you posted on what I hear and learn.

A Game of Musical Chairs

Or so those in the real estate investment management sector must be feeling.  As the music has stopped, are there sufficient chairs?

The extraordinary rise of the institutional investor in real estate for the past twenty plus years spawned an equivalent rise in the number of real estate investment managers of all sizes and types: equity, debt (whole loan and securitized), securities, international, sector specific, geography specific, etc.  Now we see a precipitous drop in the level of new capital to be provided by such institutions as they face issues of liquidity, and consequently we may well see a corresponding reduction in the sector that serves them.

We categorize today several classes of investment managers: those that are large, international and subject to foreign institution and government issues; those that are large/midsized domestic and international, but independent, owned either by private equity platforms or entrepreneurial participants; and finally, those that are small, independent and entrepreneurially owned.

We are entering a period of account transfers.  We are entering a period of “zombie” managers, i.e. those that cannot raise and invest capital on a go forward basis.  We are entering a period of consolidation, which will be a difficult process of transfer.  The landscape of providers may look materially different over the next five years (as it did after the commercial real estate breakdown of the early 1990s).

What will characterize the survivors? 

1.    Certainly a minimum “size” or Assets Under Management, allowing for financial flexibility and the ability to retain and hire the best human capital during these difficult portfolio times.
2.    The ability to fund future co-investment and therefore invest institutional capital, if raised.
3.    An enterprise that is managed with good, if not best practices versus simply serving as a “deal shop.”  We will see both the enterprise-based model and the deal-based model, but the latter will have core aspects of strong enterprise management.
4.    Teams of managers that are “rowing” together versus the stress that we see developing between teams of managers.  Breakdown in the leadership of managers is the surest way to bring down an enterprise.
5.    Leadership that can hold and motivate both senior and mid-level managers.
6.    Compensation programs that motivate appropriate behaviors relating to both the investor and the enterprise versus simply a participation in deal or fund pieces.
7.    Enterprises that are creative and willing to diversify and grow in order to gain market share (in a declining pie, the strategy of market share is imperative).
8.    The ability to bring on the best human capital that the market has to offer.
9.    For many who fundamentally understand the psychology of the investor and are able to shift/diversify into controlled accounts, club accounts and related structures that require a different style of management and investor interaction.  Organizations may require changes to their human capital, processes and procedures and rewards system to address such opportunities.

The game of musical chairs will be a stressful one and will result in a changed landscape, but those who understand how the game is changing and are prepared to manage an enterprise with strong practices will find a way not only to survive, but prosper.

— An Enterprise Perspective from FPL Associates

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Bravern Opening This Week

Two days from today, Neiman Marcus celebrates the opening of their new store in Bellevue with a black tie gala, followed by opening of the new luxury collection of shops, restaurants and clubs at The Bravern.

The Seattle region has had an up and down relationship with designer brands in the past, yet the demographics continue to show that this market is ready. The Bravern is strategically located in close proximity to the wealthiest zip codes in this region. Microsoft has already moved in to the 2 office towers, and the luxury residential towers designed by NBBJ are nearing completion.  

  

Residential towers, under construction this summer

The shop collection has been carefully curated with a mix of both first to the market and well-loved Seattle area establishments expanding to the east-side - like Wild Ginger, the Southeast Asian inspired restaurant, whose Seattle flagship we designed in 2000, along with the new Bravern location opening over this weekend.

 

Wild Ginger's Seattle location, photo by Eduardo Calderon

Bellevue Square, the highly successful regional retail center is just a few blocks down the road, offering a broad range of retail, entertainment and restaurant venues like Nordstrom, Macy's and more than 200 stores. We are about to discover if this market is ready for the next level up, in a limited edition - Hermes, Louis Vuitton, Piazza Sempione, Salvatore Ferragamo, Tory Burch, David Barton Gym, and more..