2010 October :: The Construction Management Pro

10-30 U.S. Existing Home Sales Rose 10% to 4.53 Million Rate

October 29, 2010

By Bob Willis – Oct 25, 2010

Sales of U.S. existing homes rose in September by the most on record, a sign cheaper borrowing costs are helping stabilize an industry that’s battling the headwinds of foreclosures and joblessness.

Purchases increased 10 percent to a 4.53 million annual rate from 4.12 million in August, the National Association of Realtors said today in Washington. Economists forecast sales would rise to a 4.3 million pace, according to the median projection in a Bloomberg News survey. The median price fell 2.4 percent from a year earlier.

The lowest mortgage rates on record and cheaper homes… Read more

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10-29 HUD & Affordable Housing Funding

October 29, 2010



HUD published proposed rules for the national affordable housing trust fund in today’s Federal Register, and comments are due December 28..  The rules include provisions on eligible activities, income targeting, project requirements, and program administration.  HUD published proposed regulations for the allocation formula last December, and there are no changes to that proposal in the new program rules. (For further information, contact Marcia Sigal, 202-402-3002.)


The Internal Revenue Service announced yesterday that there will be no low-income housing tax credit national pool for 2010.  Acccording to Notice 2010-74, which is scheduled for publication in the November 15 Internal Revenue Bulletin, there are no unused carryover credits available for redistribution

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10-25-10 HUD Extends Choice Neighborhoods NOFA Deadline

October 25, 2010

Assistant Secretary for Public and Indian Housing Sandra Henriquez announced on October 22 that HUD has extended the deadline for applications for Round 1 of the FY 2010 Choice Neighborhoods Initiative (CNI) Demonstration Notice of Funding Availability (NOFA). HUD is extending the deadline at least 30 days from the original deadline of October 26 in order to make changes to the mapping tool used to determine neighborhood eligibility. The final deadline will be announced in a subsequent notice.

There is an inconsistency between the methodology for determining neighborhood threshold eligibility prescribed by the NOFA and the mapping tool which HUD created. The NOFA defines eligible neighborhoods for Choice Neighborhoods grants as those in which, among other required characteristics, “at least 20 percent of the residents [are] estimated to be in poverty or have extremely low incomes based on the most recent data collected by the U.S. Census Bureau.” The NOFA goes on to state that, “for the purposes of establishing neighborhood eligibility, HUD will overlay the locally defined neighborhood boundaries with the smallest available statistical boundar(ies) associated with that area and estimate the target area’s poverty rate, extremely low-income rate, vacancy rate, and other measures of distress using a proportional allocation methodology to determine if the neighborhood meets eligibility criteria.”

In order to generate the data required to demonstrate neighborhood eligibility, HUD directed applicants to use a mapping tool created by HUD’s Office of Policy Development and Research. This mapping tool uses data aggregated at the Census tract level to calculate threshold indicators. For many neighborhoods, however, Census tracts are not the smallest available statistical boundaries. In small and rural areas, a Census tract often represents a large geographical area and Census tract data may obscure significant variations between and among the neighborhoods within the Census tract. Census Block Groups, which are subdivisions within Census tracts, are a much more precise level of analysis at which to describe demographic data for many potential target neighborhoods under Choice Neighborhoods. By correcting the data source for the mapping tool, HUD will be able to accurately assess whether applicants’ target neighborhoods meet the threshold criteria specified in the NOFA.

HUD’s Notice of Technical Correction and Extension of Deadline is online at http://www.hud.gov/offices/pih/programs/ph/cn/nofa_extension.pdf.

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10-25 Polluted caulk in windows and walls impact occupants

October 25, 2010

PCBs (Polychlorinated biphenyls) are being found at high levels in buildings  built or remodeled between 1950 and 1978;  in caulk  used in general construction and window frames, as well as gasket materials in some hvac equipment.  PCB levels in excess of 50 ppm are considered by EPA as being unacceptable.

Because PCBs can migrate from the caulk into air, dust, surrounding building materials, and soil, EPA is concerned about potential PCB exposure to building occupants.  They issued updated alerts in August, 2010 to confirm their continuing concern.

Building designers and maintenance management need to review the alerts to avoid contamination of occupants.

Health impacts of PCB exposure

PCBs are man-made toxic chemicals that persist in the environment and bioaccumulate in animals and humans. PCBs were manufactured in the United States between 1950 and 1978, before their manufacture was banned by Congress due to concerns about their potential for adverse effects on human health and the environment. Exposure to PCBs can affect the immune system, reproductive system, nervous system, and endocrine system. In humans, PCBs are potentially cancer-causing.

Protect building occupants

The preventive steps described below can be provided by building management to help reduce exposure to PCBs in caulk until it can be removed.

Improve ventilation and add exhaust fans.

Clean air ducts.

Clean frequently to reduce dust and residue inside buildings.

Use a wet or damp cloth or mop to clean surfaces.

Use vacuums with high-efficiency particulate air (HEPA) filters.

Do not sweep with dry brooms and minimize the use of dusters.

Wash hands with soap and water after cleaning and before eating or drinking, and wash children’s toys often.

Test for PCBs in buildings built between 1950 and 1978

If building management and owners are concerned about exposure to PCBs and wish to supplement the noted steps, EPA recommends testing to determine if PCB levels in the air exceed EPA’s suggested public health levels. If testing reveals PCB levels above these levels, building managers should be especially vigilant in implementing and monitoring practices to minimize exposures.

Caulk that is peeling or deteriorating may be tested to determine its PCB content. If PCBs are found in the air, EPA will assist in developing a plan to reduce exposure and manage the caulk. Your EPA regional PCB coordinator can direct you to a PCB testing lab; see the back cover for more information.

Caulk that is peeling, brittle, cracking, or deteriorating visibly in some way may have the highest potential for creating dust. In addition to inhalation from PCBs in the air or dust, exposure may occur when a person comes in contact with the caulk and any surrounding porous materials into which the PCBs may have been released (e.g., brick, concrete, wood).

Exposure may also occur through contact with PCB-contaminated soil adjacent to buildings. Soil may become contaminated with PCBs when caulk weathers.

Protections during removals, renovations

Building owners and managers need to follow PCB-safe renovation practices to minimize potential exposures resulting from renovations to workers or occupants.

It is important that construction management arrange removal in a way that minimizes workers’ exposure to the PCBs (e.g., use protective clothing such as facemasks, gloves, etc.) and prevents the release of PCBs into the environment. These additional work practices  can help reduce exposure to PCBs in caulk:

Wear appropriate protective clothing when conducting cleanup activities.

Dispose of all cleanup materials (mops, rags, filters, water, etc.) in accordance with all federal, state, and county regulations.

For caulk used on windows, walls, columns, and other vertical structures that people may come into contact with, use heavy-duty plastic and tape to contain the area so that caulk or dust and debris from the surrounding masonry do not escape. The plastic should cover the caulk and surrounding areas of masonry.

Keep unprotected persons out of areas where cracked or peeling caulk is evident such as in playgrounds and near steps.


The environmental consulting group Environmental Health and Engineering has participated in a number of studies and abatement evaluations since this issue became an EPA Priority.  They recommend:

PCB-containing building materials represent a newly discovered and significant liability for building owners and contractors. The regulation-driven remediation efforts can dramatically impact the cost of renovation or demolition, easily costing millions of dollars for a single project and have major impacts on the scheduling of projects.

Building owners must educate themselves on both the legal implications and on the best ways to minimize their risk and the overall costs to remediate.

When remediation of PCB–contaminated materials is warranted, EH&E recommends a knowledgeable review of the remediation approach prior to implementation. Regulatory requirements call for removal of all PCB–containing materials and the removal or encapsulation of PCB-contaminated materials. Building masonry that comes in contact with caulking will often become contaminated to various degrees based on the porosity of the material. Carefully analyzing the extent of the contamination can often make a significant difference in removal or encapsulation effort and cost. Wholesale removal of sections of a façade may be avoided by accurately determining the extent of PCB penetration, which can significantly reduce the cost of remediation. Furthermore, alternative project designs, that still comply with regulatory guidance, may then be negotiated with major savings of time and project costs.

An  EH&E  white paper is available through this link:


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PCB-containing building materials represent a newly discovered and significant liability for building owners and contractors. The regulation-driven remediation efforts can dramatically impact the cost of renovation or demolition, easily costing millions of dollars for a single project and have major impacts on the scheduling of projects.An  EH&E  white paper is available through this link:

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10-22 Lean, Green Development

October 22, 2010

by Roger Harper

As new project development opportunities emerge, one of the primary considerations is sustainable design. Personal experience over the past several months proves to me that owners are not opting for green building certification unless zoning or permitting requirements force them to; further, some design firms and construction managers are becoming wary of, or are shying away from, achieving higher levels of certification rather than facing a potential breach of contract claim if the certifying entity differs in final interpretation of the certification requirements. Most owners in-stead are opting for the design and use of economically desirable sustainable measures.

While there are no hard and fast rules with respect to life cycle costs vs. first costs or other methods of measuring economic impacts, generally the owners with whom I am working are looking at three-year payback periods, or five years at the outside. Another factor is the extent to which sustainable design and construction are embraced by the end users – most importantly, the value they may attach to specific “green” or sustainable features. Both residential and commercial customers ultimately evaluate the purchase price against other comparable products; the market is the final judge of sustainable building requirements’ value.

The challenge here is achieving a balance between sustainability and perceived value. Over time, the portfolio of sustainable elements that achieve these targets of perceived value vs. cost is growing. Consider the wide acceptance in just a few years of compact fluorescent lights, low VOC finish products, green roofs, and Energy Star appliances; clearly, the market has accepted these products as providing value commensurate with higher marginal costs, and as the volume has increased, the marginal costs have dropped substantially, In most cases these are hardly premium choices any longer.

In contrast, I have recently gone through the process of studying a major rehabilitation on an existing residential multi-family property, where we evaluated replacing individual heat pumps in the units with geothermal systems, water source heat pumps, or another more energy-efficient system. For a number of reasons, all eventually having to do with capital costs, we opted to replace the existing systems with more efficient individual heat pumps. The capital out-lay and disruption to existing residents involved with using one of the other alternatives was simply economically infeasible. The most cost-effective, energy-efficient, and sustainable upgrades we have undertaken on the project are improvements to the building envelope. Replacement of existing windows with more efficient thermal properties, replacement of the roof system with energy-efficient roofing and increased insulation, new exterior door systems, and installation of a co-generation system are all “no brainers.” We are also strongly considering solar hot water electricity systems, as well as green roofs in certain areas.

In today’s economy, new construction and substantial rehabilitation projects have much higher return and equity hurdles to overcome. Choosing the leanest, most cost-effective systems and material choices is simply good business practice. Sustainability should be considered a process, and not a goal in and of itself.

Make it lean and green, please!

For more information please contact: Roger Harper 615-218-4102 rharper@rharperconsulting.com www.rharperconsulting.com

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10-19 WGBC Says Buildings Can Lead the Way to Reduced Carbon Emissions

October 19, 2010

A new report published by the World Green Building Council (WGBC) asserts that the building sector presents the biggest opportunity to reduce carbon emissions, construction waste, and energy use worldwide while creating jobs, improving local economies, and producing affordable housing. The report, “Tackling Global Climate Change: Meeting Local Priorities,” illustrates how countries within four major world regions are using green building to fulfill local needs like disaster recovery, affordable housing, job creation, and improving the economy—all while reducing carbon output. According to WGBC, globally building construction uses 32% of the world’s resources and 40% of the world’s energy—generating up to 30% of the world’s greenhouse gas (GHG) emissions. WGBC is developing a “Common Carbon Metric Protocol” to address the vast disparities in global GHG assessment and reporting; this standardization protocol will be useful for countries when developing GHG thresholds. The report can be found at www.worldgbc.org.

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10-15-10 USGBC, LEED Targeted by Class-Action Suit

October 15, 2010

The U.S. Green Building Council (USGBC) and its founders have been named as defendants in a class action lawsuit filed in federal court. Filed on behalf of mechanical systems designer Henry Gifford, owner of Gifford Fuel Saving, the lawsuit was stamped on October 8, 2010 at the U.S. District Court for the Southern District of New York. Among other allegations, the suit argues that USGBC is fraudulently misleading consumers and fraudulently misrepresenting energy performance of buildings certified under its LEED rating systems, and that LEED is harming the environment by leading consumers away from using proven energy-saving strategies.

Alleged fraud and deceptive practices

The suit alleges that USGBC’s claim that it verifies efficient design and construction is “false and intended to mislead the consumer and monopolize the market for energy-efficient building design.” To support this allegation Gifford relies heavily on his critique of a 2008 study from New Buildings Institute (NBI) and USGBC that is, to date, the most comprehensive look at the actual energy performance of buildings certified under LEED for New Construction and Major Renovations (LEED-NC). While the NBI study makes the case that LEED buildings are, on average, 25%–30% more efficient than the national average, Gifford published his own analysis in 2008 concluding that LEED buildings are, on average, 29% less efficient. A subsequent analysis of the NBI data by National Research Council Canada supported NBI’s findings, if not its methods. (Commentary questioning the respective statistical approaches of both the original study and Gifford’s analysis appears in this BuildingGreen.com blog post by Nadav Malin, president of EBN’s publisher BuildingGreen.) Using that study and USGBC’s promotion of it, the suit alleges fraud under the Sherman Anti-Trust Act, among other statutes. Gifford’s suit demands that USGBC cease deceptive practices and pay $100 million in compensation to victims, in addition to legal fees. Under the Lanham Act, the suit repeats the same concerns in alleging deceptive marketing and unfair competition. Other allegations include deceptive business practices and false advertising under New York State law, as well as wire fraud and unjust enrichment.

Class-action suit

By having his lawyer, Norah Hart of Treuhaft and Zakarin, file a class-action lawsuit, Gifford is not only claiming that he has been harmed by USGBC, but that he is one of a class of plaintiffs that have been harmed. According to the suit, those plaintiffs include owners who paid for LEED certification on false premises, professionals like Gifford whose livelihoods have allegedly been harmed by LEED, and taxpayers whose money has subsidized LEED buildings. The class action approach may be technically difficult to pursue in this case, says lawyer Shari Shapiro in an article on her green building law blog. Among other things, Shapiro notes that in a class action suit it is relevant whether, among other things, “the plaintiffs are enough alike so that their claims can be adjudicated together” and “whether the lead plaintiffs adequately represent members of the class.” Given the variety of plaintiffs Gifford is trying to represent, that may be hard, she says. Shapiro, assuming that Gifford has benefited from the green building wave, even questions whether Gifford has even been harmed, as he would have to be to take part in the lawsuit. However, Gifford told EBN that there’s no question about that. “Nobody hires me to fix their buildings,” he said. Though not an engineer, Gifford is respected in energy efficiency circles for his technical knowledge. He told EBN that he has lost out because owners are fixated on earning LEED points, and he doesn’t participate: “Unless you’re a LEED AP you’re not going to get work.” That’s unfair, he claims, because while USGBC says that its product saves energy, it doesn’t. Gifford says that his services actually save energy, and he’s prepared to prove it by sharing energy bills from buildings he has worked on. Whether many other building professionals feel the way Gifford does, and whether they’re willing to go on the record, will be one aspect of this case to watch. Gifford indicated that the response so far has been mixed. As he told EBN, “Everybody has the same response: thank you, thank you… let me know how it goes.”

Was there fraud?

If the case does move ahead, Stephen Del Percio, a lawyer and author of the blog GreenRealEstateLaw.com, told EBN that it will be challenging to litigate. “You can’t prove fraud just by circumstantial evidence,” he said. Even if the NBI study is false, that may not be enough. “You have to intend to mislead people,” he said. Gifford told EBN that he doesn’t have evidence that anyone at USGBC tried to mislead the public, but if the suit proceeds the discovery process could, in theory, turn up emails or other communications that support Gifford’s case.

USGBC performance initatives

Gifford’s complaints focus on the 2008 study and how USGBC publicized it, but they don’t appear to account for other aspects of LEED. Gifford focuses on buildings certified under LEED for New Construction (LEED-NC), but the scope of LEED-NC and other LEED rating systems is clearly distinct. LEED for Existing Buildings, launched in 2004, looks at actual building performance, and in 2006, USGBC announced that buildings certified under LEED-NC would have the option of being enrolled at no charge in LEED for Existing Buildings. In 2007 USGBC launched LEED for Homes. While that system focuses on design and construction of new homes, it requires on-site verification including blower-door testing during construction, helping ensure that construction practices follow the design intent. Although this final piece may be too late for Gifford and the contentions of his lawsuit, in 2009 USGBC began requiring reporting of energy and water data for new buildings certified under the newer LEED 2009, and it set up infrastructure to invite sharing of information from all LEED-certified buildings (see “USGBC Expands Data Collection from LEED Buildings,” EBN Aug. 2010). Through this effort, the Building Performance Partnership, USGBC hopes to offer special help to LEED-certified buildings that are not living up to expected performance, according to Brendan Owens, P.E., vice president for LEED technical development at USGBC. Although USGBC has generally played down the possibility because it doesn’t want to discourage participation in LEED, and energy reporting, CEO Rick Fedrizzi has suggested that non-performing buildings may lose LEED certification in one form or another. Despite these efforts, Gifford complained to EBN that “the green label gives the designer, the developer, the contractor and the owner the right to hold a press conference staying that their building is energy-efficient, while the LEED system guarantees anonymity” when it comes to reporting actual energy use.

Why sue?

Asked by EBN why he was motivated to go to court, Gifford said, “I’m afraid that in a few years somebody really evil will publicize the fact that green buildings don’t save energy and argue that the only solution [to resource constraints] is more guns to shoot at the people who have oil underneath their sand.” In other words, he says he’s hoping to make the green building movement more honest so that it’s not embarrassed down the road. USGBC told EBN that it was reviewing the litigation and would respond in due course. In addition to USGBC, other named defendants are David Gottfried, a USGBC founder; Rob Watson, who helped start LEED in the 1990s while working for the Natural Resources Defense Council; and Rick Fedrizzi, a co-founder and currently CEO. Responding to EBN’s request for comment, Watson said, “I can’t comment on ongoing litigation except to say that USGBC is examining the complaint. USGBC has confidence in LEED and in our role in stimulating positive market change.” Michael Italiano, the only key USGBC founder not named as a defendant, told EBN that while he hadn’t reviewed the case, “To me it sounds frivolous and it doesn’t have much chance.” He noted, “LEED doesn’t guarantee anything, and I think LEED gives people the tools to understand that.” Owners who want to verify performance can enroll in LEED for Existing Buildings, monitor their energy bills, and take other actions, he noted. A lawyer and currently CEO of Market Transformation to Sustainability, a nonprofit behind green standards, Italiano said that lawsuits targeting standards that have allegedly constrained trade typically focus on lack of a bona fide consensus process of standard-setting. In the case of LEED, he said, a broad array of stakeholders has been involved in writing and reviewing LEED standards. Russell Perry, FAIA, of SmithGroup, agreed that if anyone thinks LEED for New Construction guarantees higher energy performance, they have the wrong idea. “LEED-NC is saying that a building has been designed to meet a certain standard, but there are many variables that go into the actual performance, only one of which is design.” Perry also noted that LEED includes a broad array of topics, only one of which is energy. Referring to climate change and other environmental and health issues, Perry added, “I don’t think that this kind of distraction helps us move the ball down the field.”

– Tristan Roberts

October 14, 2010
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10-8-10 Builders Move Beyond McMansions in New Jersey

October 9, 2010

Published: October 5, 2010

Faced with the prospect that New Jersey’s buildable open space could be gone by mid-century, developers are turning to projects that tap into existing infrastructure, use vacant buildings and emphasize the vertical over the horizontal.

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Ozier Muhammad/The New York Times

Maxwell Place is built on a 24-acre site of a former Maxwell House coffee factory on the Hoboken waterfront.

The Golden Swan, a row of early 19th-century buildings in Trenton, has been redeveloped.

A report released in July by Rowan and Rutgers Universities found that, after comparing aerial photos of the state, the years from 1986 to 2007 were New Jersey’s most sprawling period, when unprotected land was developed most rapidly.

When development ground to a halt in mid-2007 as the housing market collapsed, New Jersey had more acres of subdivisions and shopping malls than it had of upland forests and was down to its last million acres of developable land, according to the report, called “Changing Landscapes in the Garden State.”

Two-thirds of the land developed in New Jersey from 2002 to 2007 became “low-density, large-lot” residential properties, swallowing farmland, wetlands and unprotected forest, the report found. Preservationists and some developers say that the building of large single-family homes on oversize lots cannot continue at that rate, even if the housing market recovers.

“You have to build not simply for the market we’ve experienced in the past, but for where the country is headed. Energy prices could soar. The price of the little remaining open space is unattainable,” Robert G. Torricelli, a former senator who now has a development company, said in a telephone interview.

“What will trigger denser development is that there’s no space left, and what is left no one can build on,” said David Henderson, a principal at HHG Development Associates, a Trenton company that focuses on sustainable building practices. According to the Rowan and Rutgers report, New Jersey is poised to become the first state to develop every acre of unprotected land, a milestone researchers predict will happen “sometime within the middle of the century.” But whatever the imperative, a number of untraditional projects seem to be finding acceptance with home buyers.

In 2006, Mr. Henderson and his partners bought some dilapidated 19th-century buildings in the Trenton Ferry Historic District in Trenton, including row houses and a former oyster cracker factory. They bought the properties for just under $470,000 and then spent $6.94 million, partly financed with a $2.27 million state subsidy, to restore the buildings using recycled materials and energy-efficient products.

The resulting residential development, called Trenton Ferry, went on the market in 2008 with 30 units, a combination of single-family homes, small condominium buildings and loft apartments. Prices ranged from under $49,000 for one of the affordable housing units to $325,000 for a four-bedroom town house. All but one unit has sold. The neighborhood, which is just a few blocks from the Mill Hill district of restored row houses, still lacks some amenities, but it is close to the train lines and within walking distance of shops.

Signs of a neighborhood rebirth are beginning to emerge: one of the new town house owners planted flowers in his sidewalk box, inspiring another new resident to join him. Now the block is lined with marigolds. The second phase of the Trenton Ferry project — a renovation of several other abandoned properties and a new structure on an empty lot — is awaiting city approval.

In 2005, Mr. Torricelli’s development company, Woodrose Properties, paid the City of Trenton $1 for the Golden Swan, a row of early 19th-century buildings in the bustling State House district. After a $3.76 million restoration project that included $204,000 in city grants, there are now three loft rental apartments, offices and ground-floor retail space. Woodrose also bought an empty lot across the street and, with the Communication Workers of America and $100,000 in city grants, built the union a $3.48 million headquarters with space for retail businesses.

One answer to sprawl is to build up rather than out. In 2004, Toll Brothers and Pinnacle paid $76 million for a 24-acre former Maxwell House coffee factory on the Hoboken waterfront and razed the 11 original buildings. In their place rose two 12-story luxury condos with ground-floor retail shops and a new street grid that connected the public to the waterfront, which includes a park and a waterfront walkway.

About a block from the ferry dock and two blocks from Hoboken shopping, the development, Maxwell Place, has sweeping views of the Hudson River and Manhattan; interiors designed by Michael Graves; and amenities like a child’s playroom, a rooftop pool, a yoga studio and ample garden space.

The second building, which started selling in mid-2005, is about 75 percent sold, and of the 10 town houses, which start at $1.9 million, four remain on the market. Toll Brothers has no immediate plans to build the second half of the project — two parcels that don’t offer the same unobstructed waterfront views.

With prices for Maxwell condos starting at around $550,000, buyers are paying a premium when they could spend the same money on a house with a yard elsewhere in New Jersey. But even as the last 20 years of sprawl show the appeal of large-lot homes in New Jersey, other trends suggest a growing hunger for the conveniences of developments like Maxwell Place.

Residential building permits in urban and suburban town centers in 15 regions across the country more than doubled from 1990 to 2008, particularly in the New York metropolitan area, where redevelopment in urban areas made up half of all new residential construction, according to a study, “Residential Construction Trends in America’s Metropolitan Regions,” released by the Environmental Protection Agency in January. The increases were particularly sharp in the last five years, with the trend continuing even in 2008, as the residential housing market weakened.

“I don’t see that McMansions are going to be the way of the future,” said Jacqueline Urgo, president of the Marketing Directors, a marketing and residential sales agency. “Opulence is out. It’s smart living that people are looking for.”

In Robbinsville, a suburb of Trenton in Mercer County, for example, buyers flocked to Washington Town Center, a 400-acre development that first broke ground on sweeping cornfields in 2000. But rather than parcel out large, open lots, the development was focused on an entirely new downtown with modest single-family homes, town houses, loft condos, and central shopping built from the ground up. A decade after the project started, the developer, the Sharbell Development Corporation, is building out the remaining loft condos, many of which have already been sold, and has plans to build a final block of 39 condos for senior citizens.

“That thing sold out like it was going out of style because no one had built anything like it in decades,” said B. Timothy Evans, research director at New Jersey Future, a public planning group.

In 2007, New Jersey Transit gave Roseland Property Company three acres near the Morristown train station in exchange for the developer’s building a new parking lot along with a luxury rental apartment building. As part of the deal, the transit agency reserved ownership of 415 of the 722 parking spaces. The project, the Highlands at Morristown Station, a 217-unit rental building marketed to young professionals, opened last year.

Roseland has been investing heavily in the downtown Morristown market. This spring, it opened the Metropolitan, a luxury rental apartment building in the city. And in 2007 and 2008, the company opened two condo projects, Vail Mansion and 40 Park.

Sharbell recently built similar versions of the Washington Town Center model in Eastampton Township in Burlington County and in Plainsboro Township in Middlesex County.

“This is the way things are heading. It’s all about affordability and sustainability today,” said Thomas Troy, a principal of Sharbell. “A lot of the shine around the McMansion is gone.”

A version of this article appeared in print on October 6, 2010, on page B5 of the New York edition.
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10-6-10 Signs of Recovery For Office Market

October 7, 2010


In a sign that the country’s commercial real-estate market is finally turning the corner, new statistics show that office rents that have been falling throughout the economic downturn are beginning to stabilize.

The industry’s recovery is likely to be a slow one. Many businesses are continuing to give up office space as new hiring stays sluggish, the timing of the economy’s recovery remains uncertain and companies figure out how to fit more workers into less space.

Bloomberg NewsStatistics show office rents that had been falling in the economic downturn, such as those in Midtown Manhattan, are beginning to stabilize.

Investors are taking action. In the latest deal, publicly traded landlord Boston Properties Inc., run by real-estate and media mogul Mortimer Zuckerman, on Monday said it would buy Boston’s tallest skyscraper, the John Hancock Tower, for $930 million.

Commercial real estate, an enormous sector with some $1.4 trillion of debt coming due by the end of 2014, has been closely watched by regulators and financial companies because it could act as an anchor on the economy as it struggles to recover. For months the news has been bad, with declining rents and rising vacancies pushing more properties into default, foreclosure and bankruptcy. Thousands of landlords are struggling with properties valued at less than their mortgages, like millions of “underwater” homeowners.

The pressure on rents now seems to be easing. Average effective rents—taking into account concessions such as a few months of free rent—for some 4 billion square feet of office space tracked by research firm Reis Inc. fell by just a penny in the last three months, the smallest quarterly decline since 2008. At $22.05 per square foot per year, effective rents are 12% below the 2008 high of $25.07.

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10-6-10 How To Use Your 401k to Invest in Real Estate

October 6, 2010

When people think about their 401K they consider a lump sum of money that has been put away for retirement.

In fact most people completely forget about their 401K until income tax time. Which is a shame because this can be a great source for funding real estate investing.

Creative real estate investors have figured out that 401K and real estate investing have a mutually beneficial relationship. By now you are probably wondering what 401K and real estate investing could possibly have in common. The answer is that the two have several things in common. Each of these should be of interest to you if you are a current real estate investor or you are considering becoming involved with real estate investing.

The easiest way that 401K and real estate investing can work together is through the ability to take out a loan against a 401K. The primary objective with real estate investing is to use little or none of your personal money to fund the investment.

Since you are allowed to borrow against your 401K, you can use this to finance part of your investment into real estate. When the deal closes, you will receive back the amount you borrowed plus more. You can easily pay back the loan without affecting your 401K.

There are some things to note about this method of 401K and real estate investing. First, you should know that there is a cap on the amount you can borrow against your 401K. This amount is usually $50,000. However, it can be less, depending on the amount of money you have in your 401K. Another thing to note about 401K and real estate investing is that the real estate you purchase through this means is not eligible for the mortgage-interest tax deduction. There are no tax benefits when you use 401K and real estate investing together.

Another option for using 401K and real estate investing together is to put the money into an IRA, or individual retirement account.  A Self Directed IRA gives you more flexibility on what you can do with the money. You need to use an intermediary and special rules apply. Consult your tax adviser before proceeding.

If you are weary of the risks involved with 401K and real estate investing there is a safer way to invest in real estate with your 401K. Some plans offer the option to invest in real estate investment trusts. These trusts consist of companies that buy and sell real estate.

This is less risk way of using 401K and real estate investing. It also requires less work on the part of the investor since the trust companies are the ones actually doing the real estate investing.

Most people are unaware of the possibilities that exist with 401K and real estate investing. It is a creative way for investors to make a profit in real estate without actually using their own money. The good thing about 401K and real estate investing is that there are both safe and risky ways of investing to yield a profit. The decision you make is one entirely of personal preference.

Did you know there are an estimated 8 million plots of unclaimed land and real estate in this country? Download a free ebook, that shows you how to claim your share here:
http:Claim Free Land & Property Ebook

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