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Commercial Real Estate, International Real Estate

Future of Target’s 133 soon-to-be Vacant Stores in Canada

On Thursday, January 15, 2015, Target Corp. announced that it will exit the Canadian market by closing its 133 stores due to disappointing financial results from this past holiday season. Target Corp. CEO Brian Cornell described it as a failure to seduce Canadian consumers since the company’s 2013 expansion. He added that this market exit decision also came after concluding that the company would not become profitable until 2021.

Source: Nathan Denette / THE CANADIAN PRESS

Source: Nathan Denette / THE CANADIAN PRESS

From a real-estate perspective, the question now is “What will happen to Target’s 133 soon-to-be vacant stores in Canada?” The Toronto Star just reported that Canada-based GoodLife Fitness and New Hampshire-based Planet Fitness are both interested in some of the spaces that will be vacated by Target Canada as it’s expecting to complete its stores shut down by May or June of this year.

Architecture & Design, Commercial Real Estate, Development, Industry News, International Real Estate, Think Outside The Box, Urban Planning

Rising Towers Escalate Need for Faster Lifts

 The following article by  was reposted from the current issue of Urban Land Magazine

December 1, 2014

Shanghai-tower_800

When Shanghai Tower opens as China’s tallest building next year, the 2,073-foot (632 m) tower will feature elevators capable of traveling 40.3 miles (64.8 km) per hour, or 59 feet (18 m) per second, a new milestone. That bests the 55.1 feet (16.8 m) per second achieved by the elevators in the current record holder, Taipei 101 in Taiwan, which was completed in 2004.

But Shanghai Tower likely will not hold the title as world’s fastest for long. Builders of the Guangzhou CTF Finance Centre, which is scheduled to open in 2016 in Guangzhou, China, have promised elevators capable of traveling 66 feet (20 m) per second, or 45 miles (72 km) per hour. The elevators will take passengers from the first floor to the 95th floor in about 43 seconds.

The question facing the industry today: how fast can elevators go without sacrificing comfort?

“This is a new day,” says Steve Edgett, partner in Edgett Williams Consulting Groups, which works on elevator designs. “We’re in uncharted territory.” Some analysts believe mankind may be close to the limits of elevator speeds using modern technology. “I think there is a limit, not to building, but what we can do efficiently,” says Johannes de Jong, head of technology for Finland-based Kone Elevators.

Kingdom_Tower_360

Saudi Arabia’s Kingdom Tower will feature the longest single elevator ride in a building, about 2,165 feet (660 m). (Kone Corporation)

The biggest obstacle for faster speeds is the variance in air pressure from the bottom to the top of tall buildings. A superfast elevator leaves no time for the body to adjust to the changes in pressure, similar to the effect experienced by divers surfacing too quickly in the ocean.

For elevators to go faster, something will have to be done to accommodate the human ear, which is extremely sensitive to pressure changes. Commercial jets typically take 20 to 30 minutes to descend from their highest altitude and help passengers adjust, yet earaches and complaints are still common. “One thing we cannot do is change the laws of physics,” de Jong says.

For the Guangzhou tower, Japanese tech firm Hitachi, which is building the elevators, will use a sophisticated control panel that can respond to “changes in atmospheric pressure correctly” to smooth the acceleration and deceleration process and “relieve the feeling of fullness in the ear as a result,” a company spokesperson says. This adjustment technology will reduce the abrupt pressure changes inside the elevator car, while special “active guide rollers” will compensate for even tiny lateral vibrations, Hitachi says.

But there is no guarantee the measures will provide a comfortable ride. Every person’s physiology is different; people with colds or earaches may be more susceptible to ear problems. At 66 feet (20 m) per second, even the slightest vibration will create a shock for passengers.

In Taipei 101 and other existing tall buildings, the elevators are usually set to descend much slower than they ascend in order to ease the ride. Nevertheless, passenger complaints are common. “At nine meters [30 feet] a second, I felt my ears pop,” Edgett says.

In the one-kilometer-tall (0.6 mi) Kingdom Tower under construction in Saudi Arabia—which likely will become the next “tallest building in the world”—Kone expects elevator speeds to peak at 33 to 41 feet (10 to 12.5 m) per second. “It’s up to the client,” de Jong says. “We have to show him how it feels.”

However, Kingdom Tower will feature the longest single elevator ride in a building, about 2,165 feet (660 m), using a new carbon fiber cable designed by Kone called UltraRope, which is dramatically lighter and stronger than steel cables.

Read the entire article at http://urbanland.uli.org/planning-design/rising-towers-escalate-need-faster-lifts/?utm_source=uli&utm_medium=eblast&utm_campaign=120114

 

 

Affordable Housing, Architecture & Design, International Real Estate, Real Estate Trends, Think Outside The Box

Could 3D Printing Revolutionize Building Construction?

3D printing has been around since the 1980’s, but in the last few years the technology has become much more affordable and accessible. Many are now speculating on the ways 3D printing could revolutionize the global manufacturing landscape. But could the technology have a similar disruptive impact on how buildings are constructed? Innovators and entrepreneurs across the globe are already trying to find out.

Last week, a Chinese company demonstrated the capabilities of a giant house-building 3D printer it has been researching for 10 years. The machine has the capacity to construct 10 houses in less than 24 hours, using predominantly recycled materials. The homes cost less than $5,000 to build, which means the technology could have a huge impact on improving housing conditions in the country. Despite rampant skyscraper construction in major cities across China, the country still has a massive need for quick, cheap housing, particularly outside of the major urban areas.

Workers in China assemble a house built by Winsun with a 3D Printer

Rather than printing the homes in one go, Winsun’s 3D printer creates building blocks by layering up a cement/glass mix in structural patterns (watch the process here). The diagonally reinforced print pattern leaves air gaps to act as insulation. The blocks are printed in a central factory and then assembled on site, with comparatively little labor required.

Back in the U.S., a University of Southern California professor is testing its own giant 3D printer. Unlike the Chinese technology, this printer would complete the entire construction process on-site. Professor Behrokh Khoshnevis’s design replaces construction workers with a nozzle on a gantry that squirts out concrete and can quickly build a home according to a computer pattern. It is “basically scaling up 3D printing to the scale of building,” says Khoshnevis, who labels the technology “Contour Crafting.”

Rendering of Contour Crafting technology being used to build a home

The Contour Crafting system is essentially a robot that automates age-old building tools normally used by hand. Once a site is prepared, the contour crafter system would be laid down on two parallel rails just beyond the eventual width of the building. From there, the computer-controlled system would take over, laying down concrete in layers with a gantry-type crane and a hanging nozzle. Once the frame is built, construction workers would hang doors and insert windows.

Contour Crafting could potentially slash the cost of home construction. It could also be a major help in responding to housing crises related to emergencies like natural disasters, where thousands can be left without shelter. Khoshnevis is particularly hopeful that the technology could be used to improve housing for the nearly one billion people across the globe currently living in slum conditions.

3D printing could reduce the labor required for building construction

It seems that it will only be a matter of time as to when 3D printing will begin to make a major impact in building construction. As Khoshnevis points out, “if you look around you pretty much everything is made automatically these days – your shoes, your clothes, home appliances, your car. The only thing that is still built by hand are these buildings.”

 

Architecture & Design, Economics, Housing, International Real Estate, Residential Real Estate

In Japan’s Housing, Adventurous Architecture Through Unusual Real Estate Economics

Japan has become known for its adventurous, even radical residential architecture. Unlke in many other countries where rigid codes and conventions translate to the predominance of conservative, traditional home designs, in Japan it almost seems as though anything goes. The country has the most architects per capita in the world, and the whimsical, experimental, extreme homes they imagine are a common feature on architectural design sites like Arch Daily.

914sf house by Sou Fujimoto Architects in Tokyo

914sf house by Sou Fujimoto Architects in Tokyo

But why is this the case? A recent article in Arch Daily delved into this issue and found that the penchant towards avant-garde design may be due to unusual real estate economics more than anything else. In the West, deviation from design norms tends to create risk for a home’s value, because future buyers may be turned off by the “unique” aesthetics or experimental features that could require above average maintenance. Avant-garde home design is thus typically limited to unconventional clients who can afford to ignore the potential impact on resale value.

House in Saijo by Suppose Design Partners

House in Saijo by Suppose Design Partners

In Japan though, experimental homes enjoy a broader, mass-market appeal. And that may be due in part because there, homes are almost universally expected to rapidly depreciate in value, similar to a consumer durable good such as a car. Homes are commonly demolished a mere 30 years after being built. Japanese home-buyers (and home-builders) are thus less concerned about future resale values, allowing them more freedom to let their home designs break from convention.

House in Kohoku by Torafu

House in Kohoku by Torafu

This characteristic of the Japanese residential real estate market is a boon to architects and developers. Despite a shrinking population, house building remains steady, and 87% of Japan’s home sales are new homes (compared with only 11-34% in Western countries). This puts the total volume of new houses built in Japan on par with the US, despite having only a third of the population. But the depreciation of home values is also a major obstacle to wealth-building for many Japanese, and the depreciation in home values amounts to an annual loss of 4% of Japan’s total GDP.

International Real Estate, Urban Planning

In Crowded Singapore, Real Estate Development Moves Underground

Singapore is running out of room for its rapidly growing population, leading real estate developers to look underground for opportunities to build new space. The population of the Southeast Asian city-state has grown rapidly, buoyed by decades of strong economic growth. Originally founded as a trading post of the British East India Company, the country has seen a massive increase in wealth and economic development since gaining independence in the 1960’s. Known as one of the four “Asian Tigers,” Singapore is now the among world’s 5 largest financial centers and is the fifth busiest port.

In order to accommodate its current population of 5.4 million, the island nation has already built high with skyscrapers and out by filling in coastline (as much as 1/5 of Singapore’s land is from ocean fill). But with projected growth of 1.5 million more people by 2030, the already crowded city is looking for new ways to accommodate demand for real estate. One strategy appears to be (quite literally) going underground.

In a recent blog post, Singapore’s National Development Minister Khaw Boon Wan highlighted the intent to increasingly explore subterranean real estate opportunities. Mr. Khaw noted that many cities in Canada, Japan, and Scandinavia have exploited underground space to create extensive pedestrian passages with retail, offices, and entertainment uses. Mr. Khaw advocated for “pushing the boundary of usage – to experiment, to learn and to evolve practical innovative solutions – so as to prepare for the future.”

Jurong Rock Caverns in Singapore (photo credit: CNN)

Much of Singapore’s highway, public transit, and utility infrastructure is already located underground, but additional underground uses are starting to appear as well. One such project is the Jurong Rock Caverns, an underground fuel storage facility that will free up approximately 150 acres of developable land by moving the equivalent of six petrochemical plants underground.

Proposed Underground Science City (image: Singapore Business Times)

Another proposed project is for an underground “science city,” which was the subject of a recent feasibility study.  If built, the project would include 40 linked rock caverns for research & development facilities and data centers, with over 2 million sq. ft. of rentable space. Because the caverns would be free of noise and vibration, as well as easily sealed off, they would be ideal spaces for IT, biotechnology, and life sciences R&D. However, the space would be about four times more expensive to build than equivalent surface projects, a significant challenge even in land-deprived Singapore.

Development, International Real Estate

A Look Inside Shanghai Tower, Now the World’s 2nd Tallest Building

Shanghai Tower

Shanghai Tower, now the second tallest building in the world, will officially be topped-out later this week. The 127-story structure is being built in Shanghai’s Pudong district, where several other skyscrapers have gone up in recent years, such as the Shanghai World Financial Center and Jin Mao Tower.

When completed in 2014, Shanghai Tower will boast over 4 million s.f. of above grade space and an additional 1.5 million s.f. below grade. The tower was designed by U.S. architecture firm Gensler, which beat out eight other firms in an international design competition. The developer is the Shanghai Tower Construction & Development Co., a consortium made up of a government-based developer, a public landowner, and a construction group. CBRE has been selected to provide property management services for the tower.

106 elevators made by Mitsubishi will help funnel visitors to the many office, hotel, retail, and entertainment venues that will be housed within the tower. The elevators in the building will include some of the world’s fastest, traveling at a speed of 59 ft. per second. There will be four sets of double-deck elevators traveling between the ground floor and the hotel lobby on the 101st floor (these will also travel at a world record speed for their type). Rounding out the tower’s impressive elevator system will be an emergency elevator which will become the world’s longest-traveling elevator, operating between the 121st floor all the way down to the 3rd basement level (a distance of almost 1,900 feet).

The tower features a unique “dual-skin” exterior, with the circular building wrapped in a second, exterior skin, which spirals around it. The varying angles of the second skin create 21 landscaped public atriums, each 12 to 14 stories high, which will feature retail and meeting spaces with sweeping views of the city (see image below). The dual-skin feature of the structure is important not only aesthetically but also environmentally and financially. According to Gensler regional managing principal Dan Winey, the outer skin acts like a coat, tempering the space; warm air will be drawn from the occupied spaces into the atrium, where a chimney effect allows the heat to escape. Additionally, the aerodynamics of the spiral shape significantly reduce the wind load on the building, allowing designers to use about one-third less structural steel than in a conventional building.

Other environmental features at Shanghai Tower include wind turbines at the upper levels of the building that will generate 54,000 kWh of energy per year, enough to power Continue Reading

International Real Estate

Could China’s Real Estate Bubble Dwarf the U.S. 2008 Crash?

Real estate analysts are warning that China may have created the largest real estate bubble in history, and that it could crash soon. China’s real estate boom has been fueled by government infrastructure spending and speculative investing by the emerging Chinese middle class. Chinese citizens have been able to purchase real estate since the 90’s but have  few other options for investing. 60 Minutes recently profiled the resulting phenomenon of massive ghost cities in China, with block after block of skyscrapers sitting completely empty:

YouTube Preview Image

http://www.cbsnews.com/video/watch/?id=50142079n

Affordable Housing, Commercial Real Estate, Development, International Real Estate, Multifamily, Real Estate Trends, Retail Real Estate, Think Outside The Box, Urban Planning

IKEA expands into new territory: International property development

This post was written by Dan Jackson, a 2012 UST MBA graduate. Dan completed many of his electives in real estate including participation in the spring 2012 REAL 714 International Real Estate Development course in the Cayman Islands.

Photo credit: IKEA

The Big Blue Box… furniture products that are easy to assemble… cheap and affordable, yet chic items… Swedish meatballs and cheap meals are all items that remind people of the retail giant IKEA.  But the retailer now wants to get you to think outside of the big blue box.

The popular Swedish home furniture products company IKEA has its sights set on expanding its well-known footprint.  The next endeavor for the company, which already has a large international presence, revolves around building entire communities where people will be able to live, work, stay and play.  According to the Globe and Mail  IKEA is “launching a bold push into the business of designing, building and operating entire urban neighbourhoods.”  The Globe continues to state that while this is a new and bold endeavor for the furniture icon they still want these new neighborhoods to have an emphasis on the traditional affordability concept that IKEA is well-known for with its furniture products model.  One of IKEA’s current slogans is “Affordable solutions for living better,” and this is the type of slogan that the property development division anticipates as they move forward into the first phase of development of these new communities.  The property development team wants to create communities that are beautiful, well-maintained and allow for a maximum lifestyle benefit, but yet still affordable for families and individuals. Continue Reading

Commercial Real Estate, Industry News, International Real Estate, Investment Real Estate, Real Estate Trends

Miami, Minneapolis, Phoenix Emerge as New Target Markets for Foreign Investors

U.S. Benefiting from ‘Being a Safe Haven’

Minneapolis has been attracting international attention from foreign investors who are looking for attractive commercial real estate assets.  CoStar’s Mark Heschmeyer writes in a recent article(see below) that while New York, Washington, and San Francisco have traditionally been that first choice for foreign investors, cities like Minneapolis are now  being viewed as attractive alternatives.

By  August 1, 2012

Global investor commercial real estate purchasing activity picked up in the second quarter with total market volumes increasing 24% from the first quarter to $108 billion, according to data collected from more than 60 countries by Jones Lang LaSalle Capital Markets Research in London.

This level of investment reverses the slight dip in activity recorded in the first quarter when volumes reached $87 billion.

REITs and unlisted funds were the second quarter’s biggest net buyers of property.

London remains the world’s most sought-after location, according to the report, with the United States moving back towards the $40 billion transactions mark in the second quarter, with 35% of deals involving cross-border parties.

While New York, San Francisco and Washington DC have long topped the target list for foreign investors, a number of second-tier U.S. cities have entered the Top 10 list for cross-border purchases into the United States, including Miami, Minneapolis and Phoenix.

Read the entire article: http://www.costar.com/News/Article/Miami-Minneapolis-Phoenix-Emerge-as-New-Target-Markets-for-Foreign-Investors/140390?ref=100&iid=291&cid=FC4C5ECBFF14BCA42CFC3FCF0353A739

Development, Economics, International Real Estate, Real Estate Trends

London Summer Olympics 2012 – Redefining the urban experience

This post was written by Dan Jackson, a 2012 UST MBA graduate. Dan completed many of his electives in real estate including participation in the spring 2012 REAL 714 International Real Estate Development course in the Cayman Islands.

The marathon is a popular Olympic sport.  The official distance of the marathon is 26.2 miles or 26 miles, 385 yards.  Have you ever wondered why this particular distance?  Olympic Fun Facts  explains, “It was decided at the1908 Olympic Games in London that the royal family needed a better view of the finish line, so Olympic organizers added an extra 385 yards (0.2 miles) so the finish line would be right in front of the royal box.”

Every four years, several hundred million people across the world tune in to the Summer Olympic Games to check out their favorite athletes and to show support and solidarity for their country.  A little over 100 years later, London has been selected again as the host city for this world event.

While many spectators enjoy the great athleticism and sportsmanship that takes place during the Olympic Games, it can be easy to overlook the economic and real estate development that the Olympic Games can provide for the host city.  A study by Locate in Kent , found there is much evidence that Olympic Games have an immediate short-term impact on the host city and region in terms of local investment and regeneration. Benefits arise from the level of economic activity around staging the Games, to upgrade sporting, entertainment and general urban infrastructure. This also can lead to additional permanent employment after the games and may lead to longer-term impacts.  I’d like to provide a brief snapshot of the real estate development that was part of the preparation for the 2012 London Olympics Games. Continue Reading