September, 2020 - Sachse Construction

Curbside Pickup is Great for Everyone, but It’s a Headache for Malls

Curbside pickup has exploded in popularity over the past few months and retailers and mall operators are rushing to catch up.

The service allows customers to place orders online with a store and then drive to the retailer’s location to pick up items at the curb or sidewalk. Demand for curbside pickup is surging in the pandemic as people look for safe ways to shop and retailers aim to lift sales.

But while big-box retailers like Walmart (WMT), Target (TGT) and Kroger (KR) operate free-standing stores and have the space to quickly ramp up the service, it’s not so easy for America’s malls.

“Think about the physical design of a conventional enclosed mall,” said Greg Portell, lead partner of Kearney’s global consumer practice. “It’s a large enclosed space whose very layout acts as a barrier to easy access.”

For some mall retailers, like department stores, sporting goods chains and mass merchant sellers, curbside pickup is less tricky. They tend to have an exterior facing entrance and ample parking space in front of it.

“It’s the retail tenants that are inside of the mall where it’s more complicated,” said Ami Ziff, director of national retail for Time Equities, which owns and manages more than 100 enclosed and open air malls in 25 states.

The stores that are typically inside the mall are specialty chains selling everything from clothing, shoes and jewelry to scented candles, bath products and home furnishings.

“If a mall has over 200 retail tenants and most are inside of the mall, you can’t have 200 spots for each of them for curbside pickup,” said Yaromir Steiner, founder & CEO of Steiner + Associates, a commercial real estate management and consulting firm in Columbus, Ohio with expertise in retail and mall development.

Lack of parking spots leads to more traffic congestion from curbside collections, and that’s an issue. Another issue, said Steiner, is available labor.

“You also need people to pick up customers’ purchases from the stores and then bring it to the customer at curbside. All this infrastructure has to be organized,” he said.

If malls haven’t already started to get a game plan ready, they have reason to do it soon.

“Our data shows four in 10 shoppers actually tried curbside pickup for the first time since March, and nearly two-thirds of shoppers say they plan to use curbside in the future,” said Rachel Dalton, director with Kantar consulting’s ecommerce team.

“Curbside pickup is absolutely here to say,” said Dalton. “There’s no question about that. So it’s important for malls and retailers to find creative solutions to offer it, especially as sales pick up for back-to-school followed by the holiday shopping period.”

Special signage and pickup stations

Brookfield Properties, a subsidiary of Brookfield Property Partners and the second largest mall operator in the country, launched its curbside pickup program about 60 days ago.

Currently, 115 malls are offering the service and list participating stores on their websites, said Scott Sutherland, vice president of asset management at Brookfield Properties.

The malls have placed special signage to guide shoppers to a designated parking area where store employees bring their ordered items to place them in the trunk or backseat.

“Retailers are responsible for collecting the ordered items and bringing them to customers. But the program will evolve,” Sutherland said.

Another option Brookfield is exploring for its malls is a valet service-like setup with different pickup stations for multiple retail brands. Customers can drive to the stations that list the stores where they made a purchase, said Sutherland.

Industry experts said malls could hire outside firms to run such a service. The service would have its own employees gather all of the purchases from the stores and have them ready for for pickup at a central location.

Academy of Warren’s New Building Will be an Academic and Athletic Showpiece

When Oronde Kearney became the Chief Academic Officer at Academy of Warren (AOW) three years ago, his first impression was simple: this is a wonderful school in a less-than-wonderful environment.

Back before it was a school, the AOW building used to be a supermarket, and it had an almost jail-like appearance, with few windows anywhere – it didn’t even have a gym. So the first thing Kearney realized is that there needed to be a large-scale needed to change the environment.”

“His first plan was just to build a gym to address the immediate need.Our students really needed a gym – but that gym plan ended up turning into a re-do of the entire campus.” – Orande Kearney

Fast-forward three years, and AOW is now in the process of building a $9.7 million expansion and renovation that will be the envy of every school in the state.

Ground was broken last month, and the new facility is scheduled to open in September 2021. The project is being done in partnership with Equity Schools and Sachse Construction.

“When we started thinking about the concept, my partner and I looked at Country Day,” Kearney said. “Their campus is amazing, and that’s really what we were looking to emulate.”

When it’s finished, AOW’s new facility will be an academic and athletic showpiece that will include a number of innovative features, including:

Learning Streets, where students will be able to learn not just inside the classroom, but in the hallway area, as well. “Learning Street is a concept where there will be cubbies and trees outside the classroom, and things like podiums and different levels,” Kearney said. “It’s like an open library. There will be windows so that the teachers can see the students when they’re out there.”

Each Learning Street will be individually designed for each grade level. “The kindergarten and early elementary Learning Street will be catered to their needs, and the seventh- and eighth-grade Learning Street will feel almost like a college campus,” Kearney said.

An Athletic Dome that will include a basketball court and indoor soccer field. “We’re going to introduce soccer and lacrosse, and we’re going to field teams in those sports,” Kearney said. “This will be something the community will be able to use, as well. We really want to be able to give back to the community.”

Full technology upgrades throughout the school, including smartboards and new furniture in all 36 classrooms.

A state-of-the-art library, which will include an audio-visual studio, computer lab, tutoring rooms, business center and a family lounge.

A Black Box Theater that will allow students to put on dramatic productions and other shows.

Discovery Park, a two-acre student garden and student-designed playground that will serve as the entrance to the building.

“We can’t wait until this new facility is open – we feel it’s going to be such a great addition to the community. The only ones who aren’t excited about it are the students who’ve already graduated!” – Orande Kearney

Apartment Communities Optimize Services, Amenities for Life Under a Pandemic

Common areas remain silent at many apartment buildings—emptied out to avoid spreading the coronavirus. But residents still need services and amenities, especially as they spend more time on site than normal. That’s forcing innovation and adaptation on the part of apartment owners and managers.

Parents need activities for children home from school. People forced to work out of home need co-working space. Others would like a place to exercise other than their living room rugs.

Apartments companies have found ways to provide services while continuing to follow best practices and regulations to protect their residents from the coronavirus. Sometimes that means livestreaming content that in a pre-COVID-19 world was normally part of in-person programming. In other jurisdictions, residents have been allowed to return to common areas—at reduced levels of occupancy set by local health officials.

“People are craving feeling connected,” says Devin Wirt, CEO of TFLiving, a company based in Pawley, S.C., that arranges amenities and services at more than 180,000 rental apartments.

Residents gather over the Internet or outdoors

In many communities, property managers have tried to create opportunities to connect via the Internet.

“Many properties are doing creative events virtually like tastings, craft events and virtual happy hours,” says Marcia Bollinger, senior vice president of multifamily for Apartments.com.

Residents can also take fitness classes online. TFLiving’s instructors film their classes in their own homes. The video from each of these classes is shared with the renters at 10 to 15 apartment properties. The residents who attend these virtual classes can send messages to instructors to ask questions or share comments. The cost of instructors’ time is also shared between those communities—so it’s less expensive than live instruction for each property.

“Budgets for resident experiences have gone down,” says TFLiving’s Wirt.

However, residents are eager to return to in-person events, wherever local health regulations allow it. “They want to see their old fitness instructor back and be able to talk to them,” says Wirt. In all, Wirt estimates that between 5 percent and 10 percent of the communities TFLiving serves have been able to resume in-person programming.

In some jurisdictions, local rules allow apartment companies to hold events like fitness classes outdoors. “A lot of these places had an open public park or rooftop space,” says Wirt.

And outdoor spaces in general are a big selling point both for individual units and apartment communities in general.

“Balconies and patios are really important right now, as people want to ‘get outside’ for a bit with the shelter in place situations,” says Bollinger. “A breath of fresh air on a patio is refreshing… Common area amenities are still important to residents so they can enjoy a swimming pool, walk their dog in the pet park or cook on the BBQ grill.”

Some indoor common areas are open

Other indoor building amenities are partially open. Spaces like lobbies, laundry rooms and mail rooms never closed, though property managers applied rules set by local health officials to the letter to manage occupancies and enforce mask-wearing where those mandates exist.

“Their hands are tied in many cases by state and local regulations that tell you what you can and cannot do,” says Rick Haughey, vice president of industry technology initiatives for the National Multifamily Housing Council (NMHC).

Experts now largely agree that the coronavirus often spreads through the air, especially indoors in spaces with poor ventilation in which viral particles can hang in the air for more than an hour and spread widely. For safety in the pandemic, health experts recommend a tough standard of six to nine air changes per hour in rooms where people gather—at least twice the standard required by many building codes.

 Regulations often limit how many people can be in a space at one time.

With that in mind, exercise classes are conducted in person in very few places. Of all the communities TFLiving serves, only three have attempted to hold fitness classes indoors, in well-ventilated rooms with relatively few participants—typically just two or three in a room at least 200 sq. ft. in size, says Wirt.

Many managers had to remove equipment from fitness centers or furniture from building lobbies to discourage people from crowding too close or staying too long. Communities that provided fast, wireless Internet service to co-working areas have often turned it off, in addition to removing coffee machines.

In some jurisdictions, managers even had to bolt furniture to the floor around swimming pools to keep residents from moving chairs too close together, says Sarah Yaussi, vice president of business strategy for NMHC.

Building for the future, sometime in the future

Living through the pandemic is likely to increase the value that renters put on certain amenities. For example, they are likely to value common areas designed for co-working, now that so many people have gotten used to working from home.

“You’re going to have an onslaught of demand for co-working spaces,” says Wirt.

But developers are not rushing to build more of these spaces while the coronavirus continues to spread. Little construction is happening today that wasn’t already planned before the pandemic, says Haughey.

Residents are able to sit down and work at the formal co-working spaces at 10K and One Hill South, which are two new apartment buildings located next to each other in Washington, D.C. Related Companies built out these spaces with conference rooms and quiet desk space to make phone calls. However, in many places access to co-working spaces like these is currently limited to slow the spread of the coronavirus.

No Ease of Lumber Price Spikes in Sight

It’s been a wild ride in 2020 for the U.S. timber industry, and the run up in prices shows no sign of easing.

First, mills temporarily shut down in March due to the COVID-19 pandemic. Then, in September in the timber nexus of the Northwest, wildfires have burned out of control threatening some timber plants.

After the COVID shutdown, homebuilders embarked on a surge of new house starts, while many homeowners took on home repairs and remodeling jobs during quarantine. The result has been a dramatic spike in demand accompanied by a supply shortage.

Lumber futures have climbed 50% this year, with prices on pace for the largest gain since 1993. The fires have prompted logging bans, closed railroad lines, and shuttered mills. Lumber commodity prices are expected to continue to be high well into 2021.

The average price of a new multifamily home has increased by $6,107 from mid-April to August due to higher material costs.

Sachse Construction, Broder & Sachse Moving from Downtown Detroit to Midtown

A prominent construction firm and development company are moving from downtown Detroit to the city’s Midtown neighborhood.

Detroit-based construction contractor Sachse Construction as well as Detroit-based developer Broder & Sachse Real Estate Services Inc. are taking 33,000 square feet in the Orchestra Place building an affiliate of Broder & Sachse owns at 3663 Woodward Ave. at Martin Luther King Jr. Boulevard.

Sachse Construction CEO Todd Sachse said the move is spurred by efficiency and company growth, noting that the firm started looking for new space two years ago and is moving in Sept. 28.

In their previous 25,000-square-foot headquarters at the Dan Gilbert-owned building at 1528 Woodward Ave., the companies were spread across five floors, whereas in the new building, they take just one, Sachse said.

“It’s going to be a very different environment,” Sachse said, adding that construction began in January and was paused for a couple of months due to the COVID-19 pandemic that halted most nonessential commercial real estate construction in Michigan.

He declined to reveal the cost of the buildout, on which Sachse Construction was the contractor and Detroit-based Neumann/Smith Architecture was the project architect.

Sachse Construction moved into 1528 Woodward in the summer of 2013 when there were 55 employees in its office and another 45 at other locations; today that figure is about 115 in the office and another 85 employees elsewhere.

Broder & Sachse affiliate 3663 Woodward Owner LLC purchased Orchestra Place in the summer of 2017 for $21 million from the Detroit Symphony Orchestra, according to CoStar Group Inc., a Washington, D.C.-based real estate information service. That’s about $127.13 per square foot.

CoStar says the approximately 165,000-square-foot building leases for $20 per square foot per year.

Manhattan’s Newest Skyscraper Is Opening Up to a Dead Midtown

SL Green Realty Corp. is opening its new $3.1 billion office skyscraper Monday, in a neighborhood that’s among Manhattan’s busiest — but is now still unusually quiet.

The first tenants at One Vanderbilt, across from Grand Central Terminal, will start moving in by year’s end, SL Green President Marc Holliday said in an interview with Bloomberg Television.

SL Green has about 900 tenants across the city who “all want to be back in the buildings,” said Holliday, whose company is one of Manhattan’s biggest office owners. “A lot of our tenants are in already or telling us they’re coming in the next month or two.”

Still, demand for space in Manhattan has dropped off dramatically since the pandemic hit, with many companies reassessing their needs for physical offices. On a July conference call, SL Green projected 72% leasing for One Vanderbilt by year-end, short of its initial goal of 82%.

TD Bank, private equity firm Carlyle Group and SL Green itself will be among the first tenants to move into One Vanderbilt, in December or January. Construction started in 2016, with plans calling for a 1,401-foot skyscraper that would be one of New York’s tallest.

As part of the project, SL Green agreed to make upgrades to the area, including a new transit hall at the base of the tower, a pedestrian plaza on Vanderbilt Avenue and enhanced access to and from Grand Central from the city subway system.

The tower’s location right near the busy transit hub is one advantage SL Green may have in finding tenants for the remaining space. Also, companies in the market for new offices have been favoring new construction, such as the Hudson Yards project on the far west side. Barclays Plc is exploring a move to that development to replace its old Times Square headquarters, Bloomberg reported.

Infection Control Measures for Airport Terminals

The airport “experience” of hurry up and wait leaves passengers often standing virtually on top of their fellow travelers in processing, security, and boarding queues, or at baggage carousels on their way out. And unless a person is sweating profusely or coughing violently, there’s no way to know by sight the physical condition of the person next to you.

Not exactly an ideal setting for infection control. Making airports healthier for passengers and workers is daunting, and will require more than some design reconfigurations, say AEC aviation experts. And don’t expect airports to get bigger, or stay open for 24 hours, either, because neither would relieve the problem of pushing thousands of people through narrow checkpoints every couple of hours.

This situation isn’t hopeless, though. In fact, door-less restroom entrances and exits in airports are now seen as a model for many building types to reduce touching surfaces. But airports, and the AEC firms they consult with, will need to get creative about streamlining chokepoints where people gang up.

“We need to be agile and pivot our design to provide a passenger experience that aligns with new expectations for the level of service,” says Scott Gorenc, AIA, LEED AP, Experiential Design Director with Corgan’s Aviation Group in Dallas. “The ultimate goal will be to eliminate physical touch points and create a touchless process that enables passengers to take control of their experiences.”

The Aviation Group has been working with HUGO, Corgan’s R&D group, to identify design solutions within the context of the coronavirus’ spread. Gorenc says this effort is data driven, as it is relying on input from focus groups, clients, and airport users. The research, he said, is focusing on three areas where airports need to make adjustments: social distancing, touchless processing, and wellness.

Corrective measures could be as straightforward as providing passengers with more access to sanitizing products. Gorenc believes the “time has come to deliver on the promise that biometric technology and automation will have on passenger processing.” Corgan is also working with outside consultants on issues like improving airports’ indoor air quality

WHO’S HOLDING THE BAG?

A number of AEC firms, including ZGF Architects and HOK, would like to see more airports in the U.S. adopt the European model for baggage handling that significantly reduces the number of people besides the passenger that touches bags. Sharron van der Meulen, Partner and Interior Design Practice Leader with ZGF, is convinced that RFID tags for baggage tracking will become far more common, and lead to more self-checking of luggage, which airports in Asia and Europe already allow.

Van der Meulen is a fan of automated systems at security points that speed up the process of checking carry-on bags and other personal items, where passengers don’t touch the bins for those items that go through scanners. She also spoke of “matrix screening,” where a security person would screen bags electronically from a location remote from the security point. The advantage of this, she explains, would be less distractions for scanning personnel.

At the service of a touchless experience, mobile check-in could become more widespread, even mandatory, posits van der Meulen. Another necessary measure—taking passengers’ temperatures before they enter the airport—would be difficult at first to execute, she concedes, and might best be conducted as people debark from their rides to the airport, in the parking garage or Uber stand.

“Better utilization of the curb” to decentralize passenger processing, wrote Ty Osbaugh, AIA, LEED AP, Gensler’s Aviation Leader last March. Airports’ “new reality,” he stated, limits queuing and congregation spaces through better processing that includes “premapping” a passenger’s experience, a la Disney FastPass+ for its theme parks. Other measures for infection control—like rethinking seating layouts in boarding areas to include standing rails with charging stations and other flex options—could take more time to gain acceptance.

Osbaugh saw the “holy grail of airport safety and security” in the integration of security and biometric screening that would mostly take place in designated vestibules at the building’s entrance.

Airports will need to rely more on technology to quicken passenger movement. Matt Needham, Principal and Regional Aviation-Transportation Leader with HOK in San Francisco, says that some airports are already experimenting with facial recognition software to both hasten and bolster security. He also believes that, eventually, thermal scanners that gauge whether a passenger is feverish would be incorporated into the human screening process.

As for moving people through checkpoints, Wilson Rayfield, AIA, LEED AP, Executive Vice President–Aviation Market with Gresham Smith, suggests that rather than having areas like ticket counters or TSA checkpoints, where throngs of people gather in tight spaces, airports might consider taking a facilities-wide approach to security, similar to how casinos monitor customers at their properties via extension video surveillance.

Rayfield also believes a relaxation of security checkpoints could start with broader enrollment in the government pre-TSA program. Infection control will also be abetted, he says, by far greater use of disinfectants, sanitizers, and antimicrobial materials.

All of these measures could be good news for airport retailers because, when passengers need less time to check in, they’ll have more time to shop, says Rayfield. That’s not a trifling consideration, says HOK’s Needham, “when the airlines are talking about coming out of this crisis 25% smaller.”

Air Cleaners, Chemical and UV Treatments Among Tools to Safeguard Indoor Air Amid Pandemic

Designers, engineers, and commercial building owners have several ways to safeguard indoor air during the COVID-19 pandemic.

Office buildings can slow the spread by spacing desks at least six feet apart and by implementing a few ventilation measures including increasing outdoor air flow. Installing Minimum Efficiency Rating Value (MERV) 13 and above filters—commonly used in hospitals—in air handlers can also have an impact. Indoor air cleaners with high-efficiency particulate air filters will remove even more particulates including pathogens.

Lesser-known strategies include CASPR (Continuous Air and Surface Pathogen Reduction) devices that spray trace amounts of hydrogen peroxide into indoor air that kills pathogens in the air and on surfaces. Short-wave ultraviolet light is also effective in neutralizing pathogens.

This technology can be employed by installing Ultraviolet Germicidal Irradiation [UVGI] in high-room [9-feet or higher] lighting applications in mechanical units and heating ducts.

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