March, 2020 - Sachse Construction

Personalizing a Hotel Room: How About a Movable Wall?

An established Swiss hospitality operator is about to take a sizable step into personalized hotel experiences. This summer, SV Hotel will open the first location of its new extended-stay brand, Stay KooooK, in Bern. The second will be opening in 2021 in Nürnberg, Germany, with reportedly “many more to come.”

Stay Kooook’s most prominent innovation is a “modular sliding element.” Roll it in one direction and a kitchen and closet-style storage appear, while turning the bed into a sofa. Roll it back and the full bed is usable again.

SV Hotel says the design is aimed at “contemporary travelers looking for a convenient place for longer stays at a fair price.”

Expect to see more ideas like this. “Personalization is really the biggest change that is coming along. You can go online and order a pair of sneakers at Nike.com that are unique and personal to you. Yet the hotel is still sending the same old room lists to everybody” said Ahmed Youssef, executive vice president of Corporate Development & Marketing, Hospitality, at Amadeus Hospitality, and co-author of “Drivers of Change in Hospitality,” a recent report from InterContinental Hotels Group, Amadeus Hospitality and the Cornell University School of Hotel Administration.

“At the margin, having a flexible room is kind of interesting,” said professor Chris Anderson of Cornell’s School of Hotel Administration, of Stay Kooook’s concept. He noted, however, that its appeal depends on how long a customer is actually in the room, which tends to disqualify the typical business traveler. That said, Anderson commented, “This is the kind of innovation that will be helpful for the industry.”

Will 3D Printing Be an Answer for Building More Affordable Homes?

California’s chronic shortage of affordable housing has been well documented. Conor Dougherty, an economics reporter for the New York Times, states, in his new book “Golden Gates: Fighting for Housing in America,” that 3.5 million housing units need to be built in California to ameliorate the state’s affordability and homelessness crises. What’s prevented that from happening so far, he points out, has been resistance among homeowners, municipalities, and environmentalists to rezoning that allows for more housing density that—the thinking goes—would devalue existing properties and/or minimize these constituencies’ political leverage.

Meanwhile, Californians and their lawmakers are finding it harder to avert their gazes from the ragged and destitute legions sleeping rough on sidewalks, in tent cities, inside cardboard boxes.

Late last year California Gov. Gavin Newsom boosted funding for housing and addressing homelessness by $3 billion. Nearly three fifths of California’s estimated 108,000 homeless are located in Los Angeles County, where officials are looking at various temporary and permanent solutions that would increase the availability of affordable and low-income for-sale and rental housing.

On January 14, the county’s Development Authority awarded Los Angeles-based Contour Crafting Corporation (CC Corp.) a project for using 3D printing to construct affordable housing. A major step toward that project occurred last June 4, when an evaluation committee of the International Code Commission approved acceptance criteria AC509 for 3D-printed construction-grade walls.

Berok Khoshnevis, an engineering professor at the University of Southern California who is founder and CEO of CC Corp., has been pushing 3D printing for housing construction for the past decade. In a TEDx talk he delivered in 2012, Khoshnevis claimed that a 2,500-sf house could be “printed” in 20 hours, using a computer-guided gantry that dispenses a concrete-like substance to form the house’s exterior shell. In that presentation, Khoshnevis said contour crafting could feasibly include robotic installation of rebar, plumbing, and electricals as the house was being printed.

He estimated then that contour crafting could reduce the financing needed for new construction by 20-25%, cut materials costs by 25-30%, and lower labor costs by 45-55%.

For the L.A. County project, CC Corp. is collaborating with AEC firm HDR and Volunteers of America, the latter acting as the developer as well as the provider of social services for the eventual occupants.

BD+C last week spoke with Kate Diamond, HDR’s civic design director and design principal; and Vartan Chilingaryan, director of structural engineering and associate vice president. Both work out of the firm’s studio in Los Angeles.

This is a demonstration project to gauge whether 3D printing is viable as a construction solution on a larger scale. The county will also be assessing two other construction modes, to be built on the same parcel of land: tiny houses, constructed onsite; and prefabricated houses manufactured in factories and assembled onsite.

There are still some unanswered questions about this project: Diamond says that the demo would be on a 5,000-sf lot, but she didn’t know where yet. The general contractor that would complete the interior finishes has yet to be hired. And while Volunteers of America put together a pro forma to pencil out this project, its actual cost has not been disclosed.

The proposed design consists of four 3D-printed housing units: one micro unit under 350 sf, and three one-bedroom units of around 450 sf each. The units will have their own private patios, and cluster around a common courtyard. The residents will have access to a laundry facility on the premises. While the units won’t have individual driveways or garages, they will be located near mass transit. The collaborators expect this project—which will include a smattering of photovoltaic roof panels—to achieve net-zero energy and earn at least LEED Gold certification.

CC Corp.’s customizable 3D printer allows each unit’s exterior to be unique in form and color, while maintaining the efficiency and modularity of the interior elements like the kitchen and bathroom layouts. Insulated thermal mass of the 3D-printed building envelope should deliver high levels of human comfort.

COVID 19 puts start date in question

The county is going through the permitting process. But with California on lockdown because of the coronavirus, it’s impossible to say when construction—which was scheduled to begin later this year—might get started.

Neither of HDR’s executives wanted to estimate how long it would take to complete these houses, from groundbreaking to occupancy. The printing part should take only a few days for all four units combined, says Chilingaryan.

Diamond elaborates that the time-consuming elements of the project are still its conventional construction methods: pouring the foundation, installing the finishes like kitchen cabinets, molding, and plumbing fixtures, putting the roof on, and installing the floor, which she says might be made from cross-laminated timber.

The Los Angeles County project won’t be a full demonstration of contour crafting, says Khoshnevis, CC Corp.’s chief executive, in an interview with BD+C this morning. He says his machines will print the shells of the houses, but rebar, plumbing, and electrical will all be installed by contractors, not robots.

An investment in CC Corp. in 2017 by Austria-based Umdasch Group Ventures provided the capital needed to begin production on 3D printers for construction from a 34,000-sf factory in El Segundo, Calif. Khoshnevis says his company has three machines in the field currently, and is gearing up for mass production to meet market demand for single- or multifamily houses or other building type. But CC Corp. is still a small company and doesn’t have the capacity yet to provide the equipment needed for contour crafting services.

The biggest challenge that 3D printing still encounters as a construction method, he says, is competing with conventional construction on cost. He points out that the shell of a house only accounts for somewhere between 20-30% of total construction costs. This cost disparity, he says, explains why most of the 3D printed houses worldwide rarely have gotten beyond their demonstration stages.

What Khoshnevis hopes is that the L.A. County demo project will prove itself worthwhile and eventually lead to a broader application of his company’s contour crafting method in order to achieve greater cost savings. Over the past few years, he says his company has refined its printing technology so it can handle larger aggregates—gravel, in combination with cement and sand—to produce stronger concrete.

Is Marijuana Real Estate Pandemic-Proof?

While many bricks-and-mortar stores have temporarily shut down recently because they were deemed as “non-essential” in a time of a pandemic, the debate has not been settled when it comes to marijuana stores. For example, in California, Governor Gavin Newsom’s administration has designated marijuana businesses as “essential” because of pot’s health benefits, though that designation has come under criticism. Florida and Oklahoma have also designated marijuana stores as “essential.” Meanwhile, Massachusetts Governor Charlie Baker is facing pressure to allow the state’s marijuana businesses to re-open.

One thing that has been clear is that demand for marijuana has only shot up in recent weeks. A survey of 990 marijuana consumers conducted recently by online resource American Marijuana found that more than 48 percent stocked up on marijuana products amid the pandemic. Of those, more than half (55.39 percent) said they were stocking up specifically to calm themselves down. Another 23.03 percent said they feared pot might eventually become scarce.

Investors in marijuana real estate are trying to figure out how today’s altered landscape might impact their business.

The pandemic and the shelter-in-place response has “created concerns in the investors’ minds in the near term from a liquidity perspective in the business,” says Richard Acosta, CEO of Subversive REIT, an acquisition corporation focused on cannabis real estate opportunities. “So, we are in a bit of a data gathering mode. We are looking to ascertain where the consumer trends settle on the retail side, which is obviously the most important part of the cannabis supply chain.”

Although it’s too early to have a clear view of where valuations on marijuana-related real estate might be right now, Acosta expects to see a “bit of a pullback of some degree on valuations, given what’s happening in commercial real estate financial markets.”

In addition, some construction starts are being put on pause because of COVID-19.

“Where we’re being affected is where states and municipalities have shut down and are not allowing any inspections to be had,” says Chuck Taylor, director of operations with Englewood Construction. “We’ve had states that have said ‘cease construction’ because they don’t consider it essential. But in states like Illinois, where we’re from, construction is still considered essential, so we’re continuing to work.”

Another impact that the pandemic might be having on the marijuana industry is that it’s creating new retail channels out of necessity, notes Acosta. “You think about delivery businesses, you think about curbside pick-up functions, those are two relatively new and novel retail practices that are being pushed forward and are now very prolific.”

However, the pandemic also means a disruption to business in states where marijuana is not considered “essential” business. Cancellations of marijuana-related real estate conferences will also likely negatively affect the industry. The recently passed $2 trillion stimulus package does not cover marijuana-related businesses.

“I think there is a school of thought there was a bit of hoarding up front, stockpiling effect. It remains to be seen what consumer behavior looks like as we settle further into the crisis,” says Acosta.

Designing Public Health Laboratories to Safeguard Researchers During Pandemics

Written gratitude does not feel like enough at this moment, but we want to start this piece just by saying THANK YOU to the research teams around the world. You are true heroes in a time when we need you most.

Many of the researchers who work in disease testing, prevention and treatment within the U.S. work at institutions like the Centers for Disease Control (CDC), the National Institutes of Health (NIH), and state-, county- and city-run public health laboratories. The U.S. is fortunate to have some of the best biocontainment laboratories in the world.

For those unfamiliar, biocontainment laboratories are where various pathogenic organisms and agents (i.e., viruses, bacteria or toxins that produce a disease) are held and studied in a highly controlled and isolated environment. A “biosafety level” (BSL) is the level of the biocontainment precautions required to isolate dangerous biological agents in an enclosed laboratory facility. The levels of containment range from the lowest biosafety level 1 (BSL-1) to the highest level 4 (BSL-4). In the U.S., the CDC specifies these levels. BSL-1 and -2 laboratories often house research with low-to-moderate risk, while BSL-3 and -4 laboratories handle pathogens with serious or lethal risk.

To keep researchers safe and performing at their best in the midst of pandemics like COVID-19, these laboratories focus on optimizing three key elements: primary containment, such as personal protective equipment and equipment housing infectious materials; secondary containment, such as the overall quality of the laboratory facility; and a relentless adherence to safe microbiological procedures that align with the design of the laboratory.

Thankfully, specialized biocontainment facilities are designed to support very intricate processes and to reduce the potential for errors and accidents that could jeopardize progress. The following are a few elements you will find in many biocontainment laboratories that allow public health researchers to work effectively, efficiently and safely in times of crisis.

Risk Assessment and Reliable and Redundant Solutions

During a crisis, outbreak, or natural disaster, public health laboratories are critically important to our communities and must remain operational. To ensure that facilities can sustain operations in such an event, risk assessments of the primary building systems and structures are routinely conducted. A good risk assessment includes an evaluation of these systems beyond the first potential mode of failure.

For example, a back-up generator is extremely valuable when there is a loss of power distribution. What if, however, the generator fails or runs out of fuel? The secondary evaluation would include consideration of multiple generators, prioritization of laboratory facility electrical loads and a reliable source of fuel. For one state’s public health laboratory design, we enlisted the support of that state’s National Guard to deliver diesel fuel to the laboratory as a back-up if normal fuel delivery were suspended.

Optimizing Quantity and quality of Primary and Secondary Containment

Primary containment consists of biosafety cabinets, centrifuges (a machine with a rapidly rotating container that applies centrifugal force to its contents, typically to separate fluids of different densities), and in some cases, personal protective equipment. These elements act as the first line of defense between the infectious materials researchers work with and their own personal safety. It is essential for every laboratory to have an adequate quantity and quality of primary containment equipment to handle routine procedures and to accommodate operation at surge capacity in the event of an outbreak.

The laboratory itself and associated utility systems provide the secondary containment, which contributes significantly to laboratory workers’ protection and safety. A few secondary containment design strategies follow:

Automating Wherever Possible 

One way to foster safety and reduce human error in laboratories is to automate processes. Robotics support material washing, high-throughput screening, sample storage and solvent distribution. Another process that has highly effective automated solutions is decontamination. Portable and built-in vaporization systems decontaminate containment suites, thereby supplementing more labor-intensive decontamination processes.

Selecting Appropriate Materials

Finishes for walls, floors and ceilings are critical materials in the design of containment laboratories. All of these finishes must be non-porous to prevent contamination, as well as to promote effective cleaning. This also applies to the numerous devices and fixtures, including fire alarms, monitoring devices, and trim around light fixtures, that come in contact with decontamination vapors and solutions. These critical components are thoroughly evaluated for compatibility with decontamination procedures.

Optimizing Flexibility to Accommodate a Surge

When a public health crisis occurs, having the ability to reconfigure laboratory spaces into the most responsive and effective layout for the task at hand is critical. Laboratory designers plan for flexibility and adaptability by incorporating mobile casework and overhead utilities that are easily rearranged to accommodate new testing equipment, additional benches or biosafety cabinets.

Another important consideration is planning for surges in demand that often accompany a crisis. Laboratories planned for lower-level containment, such as BSL-2 operations, can be designed to operate at a higher BSL-3 level and converted to that higher-hazard operation when necessary. Additionally, training laboratories in public health laboratories can be designed as fully functioning BSL-3 laboratories and converted when necessary.

Again, we want to thank all of the public health professionals working around the clock to keep us safe by developing methods to fight not only COVID-19, but many other diseases impacting public health. Ensuring the health and wellness of researchers working in public health laboratories benefits all of us.

How Medical Offices Fuse With Mixed-Use Projects

HSA PrimeCare Executive Vice President Robert Titzer points out that while the era of academic medical centers is not over, demand for smaller medical offices located in sites with good visibility and ample parking is expected to rise. What’s more, given that medical offices are considered safer investments in times of economic slowdown than retail and hospitality assets, adding a health-care component to a larger development ensures its stability on the long run.

What type of mixed-use developments is incorporating medical office spaces and do you think luxury projects are benefiting more from this addition?

Titzer: Medical offices can be incorporated into a wide variety of mixed-use developments. Everyone needs health-care services, at all income levels, and essentially wherever people live and work. So, whether the project is deemed a luxury product or otherwise, there is often a health-care application that can make sense in the overall development.

What criteria does your company apply when choosing a location for a new MOB project that will be part of a mixed-use?

Titzer: Our company’s decision-making closely follows that of the designated health-care provider. That is, we attempt to align the provider’s ambulatory care strategy with location and site selection on the macro level. On the micro level, we look for sites that have good visibility, intuitive wayfinding, ample parking and/or transit access.

Accessibility is a great advantage of health-care projects. Are there any disadvantages that mixed-use property managers could address better?

Titzer: The challenge that many owners find is dealing with the mix and volume of patient and customer flow in and out of mixed-use sites. Medical facilities operate best when their patients do not have to compete for parking or access with other component users of the development, because oftentimes the patient population is not as physically mobile as a shopper, for instance. They need drop-off areas and protected parking close to their destinations.

Tell us about how you succeeded in attracting Froedtert & the Medical College of Wisconsin to Drexel Town Square and how do health-care providers usually see the concept of a MOB as part of a mixed-use development.

Titzer: Drexel Town Square is an exciting new “front door” for Oak Creek, Wis., and having a health-care component dovetailed perfectly with the development’s mix of community, retail and residential uses. Its location made perfect sense for Froedtert & the Medical College of Wisconsin. As part of a larger 85-acre mixed-use project that includes a new city hall, public library, shopping, restaurants, service-oriented businesses, hotel and apartments, a MOB fits into this modern, master-planned development.

HSA PrimeCare worked hard to ensure the development addressed the access issues mentioned above. We also programmed flexibility into the design by approaching it as a mini-campus that could adapt and grow with the health-care system’s needs over time.

What are your expectations from the medical office sector going forward?

Titzer: We see continued strong demand for ambulatory care facilities in a wide variety of locations, as health-care providers strive to reach their patients more effectively by providing easier access, and to serve their patients more economically in ambulatory care settings versus in-hospital care. Consolidation of sites of care is also a driver in the establishment of newer, more modern and efficient buildings that can drive operating efficiencies for health-care systems.

What should health-care property managers focus on more at this late point in the economic cycle?

Titzer: At HSA PrimeCare, we always strive to stay ahead of the game. That means being prepared for what your building needs to be five years from now, not simply what it is today. That also means keeping the property in A-plus condition and anticipating tenant needs as uses evolve with the change in health-care delivery. This could encompass improvements such as common-area renovations, or services and amenities like enhanced on-site dining and snack options.

Today, we’re seeing a lot of focus on wellness rather than just getting treatment. Is the era of mega hospitals and medical campuses coming to an end?

Titzer: We see the large academic medical centers taking on increased importance in our society as places where groundbreaking research takes place and extremely complicated care is delivered to the most challenged patients. These centers will continue to grow in importance as it is an exciting time for medicine.

Medical professionals now have vast troves of medical data at their disposal that can be used to tackle these mega-challenges. Academic medical centers are uniquely positioned to take on this task, which makes their existence all the more important in today’s world.

CPWR Provides Steps Construction Employers, Workers Should Take in Response to Coronavirus

While the spread of COVID-19 is having a major impact on the economy and the lives of people across the world, certain industries such as construction are being particularly hard-hit.

CPWR has been working closely with NABTU and its research, government and other industry partners to respond to questions about the spread of this disease and to provide the latest information on protecting construction workers on the job. To make this information readily accessible, CPWR has developed a COVID-19 resource page on cpwr.com, including a one-page guidance document, and is regularly updating these materials as new information becomes available.

For now, CPWR shares the following key information to help prevent the spread of COVID-19 in the construction industry:

Construction employers:

  • Create at least six feet between workers by staging/staggering crews to prevent droplet spread.
  • Plan for office staff to have the ability to work from home.
  • Provide soap and running water on all jobsites for frequent handwashing. If that is impossible, provide hand sanitizer.
  • If you work in healthcare facilities, train your workers in Infection Control Risk Assessment. For information on CPWR’s ICRA training program, visit: https://www.cpwr.com/training/infection-control-risk-assessment-icra
  • Clean and disinfect high-touch surfaces on jobsites and in offices frequently—such as hand rails, door knobs and portable toilets—per CDC guidelines: https://www.cdc.gov/coronavirus/2019-ncov/community/organizations/cleaning-disinfection.html

Construction workers:

  • Do not go to work if you are feeling sick.
  • Do not shake hands when greeting others.
  • Try to stay six feet away from others on the jobsite, including during morning gatherings, meetings and training sessions.
  • Avoid contact with sick people.
  • Avoid touching your eyes, nose or mouth with unwashed hands.
  • Cover your mouth and nose with tissues if you cough or sneeze or do so into your elbow.
  • Clean your hands often by washing them with soap and water for at least 20 seconds or using an alcohol-based hand sanitizer that contains 60%-95% alcohol. Soap and water should be used if hands are visibly dirty.
  • Clean hands after going to the bathroom, before eating and after coughing, sneezing or blowing your nose.

Remember, individuals over 60 and those with underlying health conditions like heart disease, diabetes and lung disease are more at risk of becoming very sick from COVID-19.

Additional links/resources from CPWR’s federal government partners:

  • From OSHA: https://www.osha.gov/SLTC/covid-19/
  • From NIOSH: https://www.cdc.gov/niosh/emres/2019_ncov.html
  • From CDC: https://www.cdc.gov/coronavirus/2019-ncov/index.html
  • From CDC for employers about getting their businesses ready: https://www.cdc.gov/coronavirus/2019-ncov/specific-groups/guidance-business-response.html

Out of Office: How Workplaces Evolved from Cubicles to Coffee Shops

The year is 1985, you’re packing your briefcase to head to the office, where you’ll sit behind a desk to do some paperwork. Fast forward to 2020, and you’re having a conference call with the entire team from the coffee shop across the street. Relatively, not much has changed; work is still being completed by the end of the day, it’s just with a different scenery.

Employees nowadays are looking for something more than just a job behind a desk. They want to work in a dynamic, inspiring space that adds value to their knowledge and promotes their mental and physical well-being. But this wasn’t the case a century ago. Take a look at how offices evolved throughout the years, and what we can look forward to in the future.

It all began around 3 centuries ago…

Long before we had the internet or computers, the British Royal Navy wanted to oversee all the logistics going on with their international trade routes in one central place. To be able to do so, they opened the Old Admirability Building in London – which is often considered the first-ever office building – in 1726. Soon after that, they began branching out all over the English city.

Open Plans

While some consider open plans to be a 21st century design trend, they have been a dominant office trend all the way through the mid-20th century. Architects used “Taylorism” to study the mechanics of movements and a means of optimizing productivity, implementing open layouts with organized rows of desks for optimum efficiency and ease of administration.

Office Landscape

In the 1950’s, German interior designers began implementing “Burolandschaft” (which translates to “office landscape”), a concept which takes a more organic approach to office layouts by having larger floor plans for group work, curved screens, and greenery instead of partitions. In comparison to Taylorism, ‘Office Landscape’ is less systematic or rigid, allowing employees to “flow around” the space. After it became remarkably popular in Northern Europe, the style began spreading all around the world.

Action Office I

A few years after ‘Burolandschaft’, Herman Miller’s research team deduced that open offices needed to be liberated, allowing workers to move around and interact with each other. The ‘Action Office’ was their first attempt at improving workplaces, which involved multiple furniture pieces with different heights and functions. However, the furniture pieces were too expensive and difficult to assemble, so the solution did not gain a huge attraction.

Action Office II

Following Action Office I, Action Office II was developed to fix the former’s mistakes, such as creating easy-to-assemble and standardized furniture elements. Perhaps the most prominent invention was the ‘mobile wall system / cubicles’ which was a rectilinear version of the “office landscape”, but with more privacy and ability to customize. Herman Miller expanded this strategy into other industries, such as hospitals and laboratories. Action Office II cubicles became a global success and were imitated by other furniture companies, leading to the trend of the overcrowded and static “cubicle farms”.

Cubicle Farm

Throughout the 1980’s, there was a complete shift in office designs due to the rising demand on cheap and effective modular workplaces. It is said that back then, offices adopted the mindset of ‘stack them highly; sell them cheap’, which is why standardized cubicles dominated the entire industry, resulting in monotonous, systematic workplaces.

In the 50s and 60s, we were basically lining people up and giving them a task. They were an assembly line for information. Work was repetitive and process-driven, and the factory was the model. Today, innovation is important, along with new ideas and creativity. The way you manage people is very different. You foster freedom, change and variety – Greg Parsons, Herman Miller’s creative director for Global Work

Contemporary Offices: Design Meets Technology

Office design trends went full circle, as designers found themselves creating open spaces again, but with slight modifications. Recently, a lot of light has been shed on the importance of having “user-oriented” workplaces. When employees are working in a space that does not offer the opportunity to collaborate or engage, business is less likely to thrive. This led to the ‘re-implementation’ of open layouts, collaborative areas, and an overall sense of transparency. “People get a sense of purpose when leaders are visible and accessible and when the leaders reinforce the importance of the individuals’ work and connection to that of the team and the organisation,” says Herman Miller’s Tracy Brower, director of Human Dynamics + Work who supervised a study on workplaces. The “transparency” in open spaces blurred the hierarchy between employers/employees, finding new subtle ways to represent status. “The freedom to come and go as I please, being able to choose where I want to sit, getting assigned to a key account, posting to social media about the free organic Thai food in the cafeteria – these are all ways that people sense status now,” Brower says.

Current social and lifestyle trends, along with technology, have helped employees become more mobile, working wherever they want, whenever they want. This “nomadic” lifestyle launched “hot desking”, where employees weren’t fixed to one office, but rather settled in any available space to work from. They are no longer required to be attached to their personal desks; instead, they are working in coffee shops, shared working spaces, or quite simply from home.

As office designs continue to evolve, contemporary workplaces are no longer limited to just work, but rather draw inspiration from homes and the outdoors. Pinball machines, board games, table tennis, and video games have become crucial parts of offices. Due to its numerous health benefits, there has also been a significant rise in biophilic designs, bringing a little of the outdoors inside.

We realized it’s pointless always trying to predict the next trend, so we turned to something that doesn’t change—human experience. We’re designing for the human operating system. We used to have closed offices, and those were ineffective too. What we need is the right mix, and it’s not just a question of open versus closed. We need to balance things such as formality and informality, consistency and adaptability, and uniformity and diversity – Greg Parsons, Herman Miller’s creative director for Global Work

What does the future hold for office designs?

With the increase of work mobility and the unfortunate Coronavirus pandemic, industries have been undergoing drastic changes. Millions of people around the world are now forced to work from home as a result of strict quarantine decisions. While the resolution of this pandemic remains uncertain, a question arises: is this the beginning of the end of the traditional office typologies?

Self Storage Trending Toward Secondary and Tertiary Markets

In February, the self storage business was still defined by elevated development and declining street rates. Over the past 12 months, street-rate rents fell 0.9 percent for the standard 10×10 non-climate-controlled and 2.3 percent for climate-controlled units of similar size. Compared to February 2019, street rates declined in about 60 percent of the markets tracked by Yardi Matrix. Heavy development activity put the most pressure on Charleston, where street rates were down 8.1 percent annually. Charleston was followed by Nashville, where street rates contracted by 7.5 percent.

As most of the top markets are becoming oversaturated and offer limited opportunities for new development and rent growth, self storage players are shifting their focus to secondary and tertiary markets. Jacksonville was one of the metros that showed significant growth—year-over-year, street-rate rents increased 8 percent for the standard 10×10 non-climate-controlled and 10.7 percent for climate-controlled units of similar size.

Notable population growth and employment gains—up 3.1 percent year-over-year as of December—have attracted developers to Jacksonville, boosting the new-supply pipeline, which currently accounts for 12.3 percent of existing stock. Another market with potential for growth includes New Orleans, where rent rates increased by 13.5 percent for non-climate-controlled units over the past 12 months. The metro’s development pipeline represents 6.5 percent of total inventory.

Nationally, projects under construction or in the planning stages accounted for 9.1 percent, a 10-basis-point increase month-over-month. Conversion projects picked up pace in February—redevelopments planned or under construction represented 12 percent of the national pipeline. This trend of converting vacant retail or industrial buildings provides developers a lower-cost option over ground-up projects.

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