Industry News Briefs

April 10, 2008 Headlines

Is Commercial Real Estate The Next to Suffer?
Aging Baby Boomers to Fuel Future Demand for Healthcare Facilities
New Data Shows Strong Labor Market for Scientists and Engineers
Wireless Sensors May Help Governments Monitor Health of Aging Infrastructure
Integrated Project Delivery Optimizes Project Results

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Is Commercial Real Estate The Next to Suffer?
New York Sun (04/07/08) Dorfman, Dan

Michael Larson, associate editor of the Safe Money Report newsletter, was one of the early voices to flash warnings of impending risks in the residential property sector. Now, he cautions that there are growing signs that the commercial sector will be the next one hardest hit, contending that investors who have put their money to work in such related areas as construction, REITs and financial companies involved in lending to commercial real estate businesses stand to face a new wave of losses. He remarks, "The downturn in commercial real estate shouldn't be as bad as what we've seen in residential real estate, but it should be bad enough." Joining him on the pessimistic bandwagon is the Federal Reserve, which reports that banks are beginning to take write-downs on commercial mortgage-backed securities. The Fed further notes that delinquencies on commercial property loans soared in the last three months of this past year to 2.71 percent--the highest level since 1996's fourth quarter and more than twice the year earlier's 1.32 percent. Larson points to a recent CoStar survey of more than 20 leading retailers that shows many are now closing or planning to close over 2,000 stores in the coming months. He advises that the best way "to profit from this mess" is the UltraShort Real Estate ProShares, an exchange-traded fund that is designed to increase 20 percent for each 10 percent decline in the Dow Jones U.S. Real Estate Index.

Aging Baby Boomers to Fuel Future Demand for Healthcare Facilities
PRNewswire (04/03/08)

According to new research by Grubb & Ellis Co., aging baby boomers and their increasing demand for medical services will fuel demand for healthcare properties for at least the next 10 yeas. Consequently, medical properties stand to outperform other commercial property types during that time span. Four states--California, Florida, Texas and Illinois--accounted for 33 percent of healthcare starts last year. By 2010, FMI Corp. reports that construction could top $60 billion. Venture capital spending for healthcare-related products and services, meanwhile, reached an all-time record high in 2007, both as a share of total venture capital spending at 32 percent and in absolute terms at $9.5 billion. Finally, Real Capital Analytics confirms that the dollar volume of investment transactions for medical office space reached a new peak of $4.7 billion last year despite ongoing turmoil in the credit markets.
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New Data Shows Strong Labor Market for Scientists and Engineers
National Science Foundation (04/03/08)

Newly published studies by the U.S. National Science Foundation (NSF) show that contrary to highly publicized reports, the U.S. engineer and scientist pipeline is robust, along with demand for their skills. Data shows that the number of workers in the science and engineering (S&E) occupations increased by 4.3 percent in 2006, while their unemployment rate fell to 2.5 percent, the lowest unemployment rate for such workers since the early 1990s; the overall unemployment rate in the United States in 2006 was 4.7 percent. "The current S&E labor force is expanding, new graduates are coming out, and people are able to find employment, or are continuing their education," says Nimmi Kannankutty, NSF program manager responsible for compiling the data.
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Wireless Sensors May Help Governments Monitor Health of Aging Infrastructure
Government Technology (03/08) Harris, Chandler

Structural health monitoring (SHM), a new engineering technology, is being devised to help deal with U.S. transportation infrastructure mandates. SHM employs sensors incorporated in structures to tell road crews about problems in vital structures before problems occur. The procedure utilizes wireless technology to track a structure's physical properties, including corrosion, humidity, and age. Experts view wireless sensors as an inexpensive, more dependable way to keep tabs on bridges and other important structures than traditional methods. A New York bridge stretching between Canton and Potsdam is functioning as a test site. Forty wireless channel sensors connected to the bridge provide real-time information to a base station. Every sensor is around the size of couple of playing-card decks and costs around $200. The battery-fueled sensors are linked to a computer that monitors sensor information and decides whether to inform inspectors. Information obtained by the sensors is kept in a main unit linked to the bridge that either sends the information to an adjacent laptop or to an office a couple of miles away. The $575,000 initiative is financed by the Federal Highway Administration Innovative Bridge Research and Construction Program and the New York State Energy Research and Development Authority.
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Integrated Project Delivery Optimizes Project Results
Journal of Commerce (03/19/08) Hobbs, Jon

Integrated Project Delivery (IPD) pulls together people, systems, business structures and practices into a process designed to optimize project results and maximize efficiency through all phases of design, fabrication and construction. An IPD team includes more than just the basic triad of owner, architect and contractor. Several of the nation's bigger architectural firms are creating new contractual agreements for use in IPD, with the American Institute of Architects (AIA) anticipating the launch of a new contract for use with IPD this spring. There is no doubt that the construction and design industry is changing. The AIA notes: "To be successful, an integrated project requires that the designer, constructor, owner and other participants in the enterprise take on new roles and competencies. This is a significant change in culture for all team members."
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DOD Funding for Infrastructure and Road Improvements Surrounding Growth Installations
U.S. Government Accountability Office (04/01/08)

As part of the Base Realignment and Closure (or BRAC) plan, the U.S. Department of Defense (DOD) plans to relocate over 123,000 personnel. As part of the effort, the DOD Office of Economic Adjustment has identified 20 locations where resulting growth will adversely impact surrounding communities. Among the issues needing addressing are off-base road improvements to accommodate growth in impacted communities. The U.S. Government Accountability Office conducted a study of 11 of these projects and found that state and local governments will be forced to fund most of the road improvements. DOD will fund some projects under the Defense Access Roads program, but most will not fulfill the program's requirements for funding. State and local governments, at the time of the review, were funding or were planning to fund over $657 million in growth related off-base road improvements around the 11 projects studied.
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Riding on the Future
Urban Land Magazine (03/08) Kirk, Patricia L.

Unlike many countries in the world, the United States is still auto-oriented for the vast majority of trips, with comparatively little in the way of sophisticated mass transportation--in fact, at least 50 percent of U.S. residents do not have access to a transit system. However, studies show that people will use mass transit that is reliable, convenient, and safe, according to Robert Puentes of the Brookings Institution’s Metropolitan Policy Program: "People will do whatever is easiest, so we need to make the right things easy to do." Several converging trends seem likely to change the car-oriented transportation scheme of the United States, however, including environmental concerns and population growth, which are making policymakers at all levels of government pay more attention to transit. The federal government, whose Surface Transportation Law has historically favored road construction over mass transit, is a big part of this shift, with the latest National Surface Transportation Policy and Revenue Commission report calling for a "new beginning" with a heavy focus on passenger rail among other metropolitan mobility improvements. The report seeks new regional rail networks in corridors with heavy growth as well as to link smaller cities and towns, to be paid for with new taxes and fees, of which the most controversial would be boosting the federal gasoline tax by 25 cents--controversy over which led to a minority report calling for public/private partnerships and tolls instead. The commission also calls for new user fees on freight movements, earmarking customs fees for transportation, taxes on rail passenger fares, the removal of barriers to tolls and congestion pricing on interstates, and use of public/private partnerships to build concessions facilities such as travel centers. Car sharing systems are growing in popularity in North America, while streetcars and elevated people movers are moving people from rail stations to final destinations, while California is looking at building a high-speed train connecting major cities from Sacramento to San Diego. One big idea for urban transportation is personal rapid transit (PRT), which uses individual cars on a track linking light- and heavy-rail stations with dense office and commercial districts, allowing users to push a button and have the car automatically move where it needs to go with no waiting or stops. Transit oriented development is heavily gaining favor among policymakers and ordinary people in many places, with residential areas adjacent to transit stations proving highly popular. Meanwhile, the UC Berkeley Center for Future Urban Transport is working with software models intended to find the limits of various transportation technologies to achieve desired mobility goals in the best way at the least cost.

DOT Seeks Business Models for Vehicle-Infrastructure Communications Network
U.S. Department of Transportation (04/04/08)

The U.S. Department of Transportation Research and Innovative Technology Administration (RITA) has issued a Request for Information (RFI) to private industry and state and local governments on potential business models for funding and operating a proposed nationwide communications network between vehicles and road infrastructure under the Vehicle Infrastructure Integration (VII) project. VII will enable innovation of crash avoidance technologies in vehicles, real-time traffic information to reduce congestion, and other technologies that will boost road safety and efficiency. Under the effort, RITA will conduct an operational field test of technologies ready for deployment at the November Intelligent Transportation Systems World Congress in New York City.
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New Model Simulates Ground Water and Surface Water Interactions
U.S. Geological Survey Press Relesae (04/02/2008)

The U.S. Geological Survey (USGS) has released the Ground-water and Surface-water FLOW (GSFLOW) model to simulate ground water and surface water interactions, taking into account climatic conditions, runoff across the land surface, subsurface flow and storage, and the links among terrestrial systems, streams, lakes, wetlands, and ground water. "GSFLOW can be used to analyze many complex water-resource questions faced by society that increasingly involve understanding the connectivity of surface water and ground water," says Robert M. Hirsch, USGS associate director for water. It can be used to examine the impact of water-resource development on streamflow, wetlands, or ground-water resources of a watershed and how ground-water recharge and streamflow conditions will react to changing land use throughout a watershed. The model will play a vital part of USGS' proposed Water for American Initiative, which will include a comprehensive survey of U.S. water resources over the next decade. GSFLOW is already being used in Pennsylvania, Wisconsin, California, and Nevada through the USGS Cooperative Water Program.
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From the Ground Up: Elevation for the Nation
POB (04/08) Meade, Mark E.

The U.S. Geological Survey's (USGS) national LiDAR initiative seeks to create seamless, high resolution and accurate elevation data for the entire country, a plan now referred to as "Elevation for the Nation." The first meeting for the initiative was held in February, and another is planned for May 21-22 at USGS headquarters in Reston, Va. LiDAR sensors have become more powerful, fast, and accurate over the past decade, with pulses per second growing to the point where as many as 167,000 points per second can be collected, while flight altitudes are also growing. The sensors have become much more accurate in the past few years, and LiDAR processing software has also improved a great deal, making it easier to do things like classify non-ground features such as buildings and vegetation. In the end, the product of this effort will be a seamless elevation model much more useful than the currently available elevation database, with a huge number of potential applications such as development, transportation planning, emergency response, and hydraulic modeling. A recent National Research Council report on Elevation for the Nation had several recommendations, including the use of LiDAR as the primary technology for digital elevation data acquisition, and recognition that this model can be used beyond the FEMA Map Modernization program. The new data collected should be disseminated to the public, the report said, and should have the original LiDAR mass points and edited bare-earth surface along with necessary breaklines. In addition, the report called for the creation of such secondary products as triangulated irregular networks, hydrologically corrected digital elevation models, and hydrologically corrected stream networks.
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'Occupied Campus' Projects Require Special Care
Associated Construction Publications (04/03/08) Touchstone, Ricky

Frank L. Blum Construction of Winston-Salem, N.C., has accumulated extensive experience in "occupied campus" projects where the onus is on the firm to proceed with the project while keeping disruption of the occupants' normal activities to a minimum, writes Blum project manager Ricky Touchstone. Recurring elements of Blum's successful occupied campus projects include rigorous pre-planning, unwavering attention to detail, and persistent, continuous, clear communication with the client. One such project the company has worked on involves renovations at Wake Forest University Baptist Medical Center, in which patient rooms continue to be occupied and surgery proceeds in treatment rooms a short distance from active construction sites. Blum's work there is preceded by extensive planning meetings in order to properly phase the work to lower disruption, while close dialogue with nurses and doctors is required to ascertain when patients must be transferred to different areas. It is required at the facility that safety rules be strictly followed and that electrical, sprinkler, and HVAC systems be deactivated only for the minimum amount of time necessary. Another project of Blum's was an assignment to build an extension to High Point University's student center during the 2007 academic year, with the proviso that the center remain open during construction. A plywood tunnel was erected to allow access through the site and the rest of the site was walled off with chain link fence panels to ensure students' safety, while the campus graphics department helped provide signs to keep students out of hazardous areas. Touchstone writes that occupied campus projects often require the company to satisfy curiosity among residents about the construction going on, especially in retirement communities. He concludes that "any inconveniences Blum experiences in the short run are far outweighed by the long-term rewards, with many satisfied customers asking the company to return again and again."
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Material Matters: Refining the Requirements of Metal Building Systems
Structural Engineer (04/08) Shoemaker, W. Lee

The publication of several specifications has brought some stability to changing welding requirements for buildings designed to resist seismically induced energy. The seismic load-resisting system's (SLRS) welding requirements depend on whether or not the weld is demand-critical, which in turn is influenced by the type of seismic system--ordinary moment frame (OMF), intermediate moment frame (IMF), or special moment frame, for example. In the contract documents, the engineer must specify the classification of the weld in addition to other applicable criteria in Section 5.1 of AISC 341. Another issue is weld filler metal requirements, which are different for welds that are part of the seismic load-resisting system but not demand critical, welds that are part of the seismic load-resisting system and are demand critical, and all other welds not in those two categories. Meanwhile, AISC 341, AISC 358, and AWS D1.8 all use the concept of a "protected zone," in which welds are not required to meet the demand-critical requirements; OMFs do not have a protected zone, but IMFs do. Other relevant requirements are welding procedure specifications, filler metal atmospheric exposure, and welder qualification. IMFs also have additional requirements, such as those in AISC 358 Section 6.4. There are also quality assurance plan requirements to be found in AISC 341 and the 2006 IBC, while AWS D1.1 does not require quality insurance inspection, although it does have other inspection requirements.
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Diverting Construction Waste
Buildings (03/08) Vol. 102, No. 3, P. 24; Monroe, Linda K.

In an effort to reduce the amount of scrap from construction and demolition projects that ends up in landfills every year, several construction and development companies, industry organizations, and government agencies are actively promoting C&D scrap reduction and recycling programs. In Massachusetts, for example, an amendment to the Massachusetts Construction and Demolition Materials Waste Ban law was adopted to prohibit C&D materials such as asphalt, pavement, and brick from being disposed of at solid waste facilities in the state. Other states could follow Massachusetts' lead and adopt similar regulations. Meanwhile, some construction companies are choosing to take a proactive role to increase the amount of C&D scrap that is recycled. Milford, Mass.-based Consigli Construction, for example, adopted a mandatory source-separation policy for all of its job sites in 2002. The company later adopted a company-wide source separation and recycling program. Since the programs began, Consigli has achieved an overall waste-reduction rate of more than 79 percent, though some individual projects have been able to achieve even higher rates. The company's Harvard Blackstone Office renovation project, for example, was able to achieve a 99.5 percent waste-reduction rate. Jobsite waste reduction and diversion of materials from the landfill can yield a cost-neutral benefit for the developer/owner/builder, according to Consigli's Vance Freymann. "What is accurate is that on-site C&D waste management and recycling do not cost additional money," he says. "At the same time, there has been very good buy-in from owners looking for actionable green processes and ways to obtain LEED points."
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The Cost of Clean Streams
American City & County (03/01/08) Vol. 123, No. 3, P. 42; Preston, Meredith

Cities and counties often face the burden of implementing and keeping up with best management practices (BMPs), especially when it comes to funding measures. Under the National Pollutant Discharge Elimination System (NPDES) program, an amendment to the Clean Water Act, communities and some industrial sites are required to have permits for discharges of pollutants from stormwater runoff. Though the U.S. Environmental Protection Agency (EPA) approves the permits, it is usually up to the states to issue them and to decide what BMPs they will put in place to reduce as much stormwater discharge as possible. In a recent survey of 71 utilities, 40 percent of utilities reported that their revenues are sufficient in meeting their most pressing needs, 8 percent said they have enough funds to meet all their needs, and 14 said complying with NPDES has greatly affected them over the past two years. Some cities are taking steps to keep costs down, such as Norwalk, Conn., which started using stormwater filters because they can be cleaned in less time and do not require streets to be dug up. Educating the public on stormwater management in hopes that they will fund the projects is also important, cited by 74 percent of utilities in the survey. To pay for a retention facility, Lenexa, Kan., passed a one-eighth-cent sales tax increase and increased its user fee to $5.50 each month after a local survey found that 80 percent of residents, whom officials included in stormwater management discussions, put water quality on the same level as quality of life. Even communities with enough funding, however, face the challenge of keeping up with BMPs as the EPA frequently makes new recommendations, one of the newest being Low-Impact Development (LID), which advocates using natural systems for stormwater infiltration, evapotranspiration, and reuse rather than traditional methods, such as curbs and gutters. Adopting LID practices can be cost-effective. The city of Germantown, Wis., for example, saved 40 percent on project costs when they used them to develop a subdivision.

Pipeline Integrity Monitoring By Wireless
Pipeline & Gas Journal (03/08) Vol. 235, No. 3, P. 38; Southern, David J.

Reliable and timely wireless monitoring is the key to building a pipeline integrity, corrosion protection program without spending a lot of money. Many pipeline companies operate their own Supervisory Control and Data Acquisition (SCADA) system, and therefore can afford to add cathodic protection equipment to their data communication network. Those that do not own a SCADA system can install small-scale cathodic protection systems instead without busting their budgets. Like SCADA, pipeline integrity automation enhances public, company and operator safety, and lowers operator windshield time, vehicle maintenance, risk exposure and general liability. It also reduces operating costs, ensures automated and timely regulatory reporting, and enhanced cathodic protection performance. By extending their existing SCADA and radio infrastructure, pipeline companies can extend the life of their investment and buried pipeline facilities.

Centering Safety
Roads & Bridges (03/08) Vol. 46, No. 3, P. 60; Rys, Margaret

Sixty percent of all fatal crashes in the United States take place on rural roads, and about 90 percent of these take place on two-lane roads. Centerline rumble strips (CLRS) are designed to make motorists aware of their roadway position in order to avoid potential collisions with opposing traffic, and 22 states and two Canadian provinces reported they had CLRS in a 2004 survey. Although this was not a big increase over the number of states and provinces with CLRS in 2000, there has been major expansion in the number of lane-miles of CLRS, and it seems that most of the states reporting CLRS use consider them to be an effective safeguard against head-on and opposite-direction-sideswipe, cross-over crashes. The best argument for the use of CLRS is the decrease of crashes and loss of life, and several states reported substantial progress in this regard through CLRS deployment. For example, a test of the effects of CLRS in no-passing zones performed by the California Department of Transportation found that the incidence of crashes fell by 11 percent while fatalities were reduced by 77 percent. A study by the Insurance Institute for Highway Safety involving the collection and analysis of all data in the United States considered to be reliable and the employment of the Empirical Bayes method and data from seven states with 210 miles of CLRS found that overall motor vehicle crashes at sites treated with CLRS fell 14 percent, while injury crashes dropped approximately 15 percent, frontal and opposing-direction-sideswipe crashes declined roughly 21 percent, and front and opposing-direction-sideswipe crashes involving injuries decreased by about 25 percent. Concerns about CLRS reported in the survey include external noise and reduced visibility of the centerline striping material, along with deterioration of pavement, ice buildup in the grooves, negative effects on emergency vehicles, and safety of bicyclists.
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