Scotsman Guide - April 2009 Commercial Edition

By Tony Stasiek, editor

earth Day turns 40 this coming april 22. and say what you will about it being “over the hill”: With even pawnshops peddling green cloth shopping bags to customers, the fad of environmentalism has only grown with age.

Making a business case for green practices, however, is another story.

in the past few weeks, the National association of industrial and Office Properties joined other groups in stating that current energy-efficient codes might not lead to a financial return for developers in today’s economy. a Constructive Technologies Group study also showed that fewer construction and building professionals considered the U.S. Green Building Council’s Leadership in energy and environmental Design certification worthwhile in 2008 than in ’07.

But more often, brokers — especially those who deal in specialty properties — are finding that

historically difficult funding scenarios are gaining increased traction via green practices on site. examples:

■■ Dry cleaners: The toxic solvents that have plagued these properties are falling to the wayside, in favor of less-harmful solutions such as pressurized carbon dioxide and silicone.

■■ Carwashes: across the country, operators are turning to nontoxic soaps and strategic water use, with an eye on runoff. it’s less about keeping a clean property than being a good neighbor — and watching competitive advantages grow even as car use shrinks.

■■ Gas stations: it’s tough to get away from having a gas tank in the ground. But BP found ways to spruce up other parts of one Los angeles site ( tinyurl.com/lagasstation), from reusing rainwater via a special canopy to incorporating recycled materials throughout the building.

■■ Restaurants: Organic food has people’s attention. So follow organic eateries, with a nudge from the National restaurant association ( conserve.restaurant.org). The group’s initiatives include using biodegradable materials as well as cutting down on the waste and residue that sully restaurants’ conversion to other property types. in this issue, you’ll find many other ways to ripen your green knowledge — from environmental site assessments (Page 19) to carbon-offset trading (Page 30).

■■■■■

Also: This month marks randy Fuchs’ final installment of inside Small-Balance, the Boxwood Means inc. co-founder’s online column on commercial loans of less than $5 million. Check it out at scotsmanguide.com/3507, and visit his column archive at scotsmanguide.com/isbalance.

Illustration: Keith Negley

tony@scotsmanguide.com

Loan Post Snapshot

Top average lender replies per post on Scotsman Guide’s Loan Post in February:

23%

48%

ProPerty tyPe Category rePLieS

1. Office........................ Commercial............... 7. 6

2. Hospitality ................. Construction............... 7

3. Multifamily................. Multifamily ................ 6.1

4. Industrial ................... Commercial.............. 5. 9

5. Apartment ................. Commercial.............. 5. 5

— Garre TT GeiGer

29%

CoMMerCiaL Loan aMount

■ $1 million or less ■ $1 million to $5 million ■ $5 million or more

More inforMation avaiLabLe at our Mortgage MetriCS: CoMMerCiaL bLog Scotsman Guide now presents data from our award-winning lender-search engines and Scotsman Guide Loan Post — plus analysis of trends we’re seeing in the industry. Check it out: scotsmanguide.com/CoMmetrics.

scotsmanguide.com

2009

in the Past Month

News from the industry and abroad

Obama administration begins
securities-purchase program

WASHINGTON, D.C. — On March 17, the Obama administration launched a program to support purchases of aaa-rated securities, which the government called critical to U.S. lending.

The Term asset-Backed Securities Loan Facility will operate as a component of the Consumer and Business Lending initiative and “has the potential to generate up to $1 trillion of lending for businesses and households,” according to a statement from the U.S. Department of Treasury and the Federal reserve.

The program is designed to provide as much as $200 billion to investors in securities backed by recent “auto loans; credit card loans; student loans; and [Small Business administration]-guaranteed, small-business loans,” through the Federal reserve Bank of New York, the government said.

Surprise: Consumer spending beats
economists’ predictions in January

WASHINGTON, D.C. — U.S. consumer spending exceeded expectations in January by climbing 0.6 percent, the U.S. Commerce Department reported on March 2.

economists predicted spending would increase 0.4 percent, following this past December’s fall of 1 percent from November.

in the month, incomes increased 0.4 percent, following a 0.2-percent drop in December. From January 2008, incomes are up 1.9 percent, a faster annual growth rate than December’s 1.6 percent.

inflation figures turned away from December’s negative number. The price index increased 0.2 percent, compared to the November to December shift of minus 0.5 percent.

Manufacturing falls across
the board in February

TEMPE, Ariz. — None of the 18 manufacturing sectors reported increased business activity in February, the institute for Supply Management announced on March 2.

The Purchasing Managers index increased 0.2 points in the month to 35. 8, meaning the contraction in February slowed marginally compared to January. But indexes must increase to more than 50 to indicate growth, and that hasn’t happened in 13 months, the institute reported.

Report: Recession could tail
off by end of the year

WASHINGTON, D.C. — The recession is forecast to end during the second half of this year, and modest economic growth is expected for 2010, a U.S. economic forecasting group reported.

The National association for Business economics said in a report that the economy would experience large declines in the gross domestic product during the first two quarters of 2009. But it added: “2010 is expected to see modestly above-trend growth of 3.1 percent.”