CREJ

Page 18 — Office Properties Quarterly — September 2020 www.crej.com Building Maintenance O ffice building owners are engaged in a perpetual game of follow the leader. They have to be, and it’s nothing new. Much of what tenants want in their building lob- bies and other common areas is what they’ve seen in other prop- erties. And what they see can be condensed into a series of cultural changes any particular market is experiencing at any given time. So, landlords must respond to those wants, and respond quickly. Follow the leader. For the better part of the last decade, office building owners have responded by investing heavily in amenities that promote collabora- tion, communication, wellness, entertainment and, ultimately, work-life balance. That was what the market demanded; that is what landlords had to do to remain com- petitive with other properties both existing and new. But that trend is over, or at least on indefinite pause, courtesy of COVID-19, and nobody can say when or if it again will be on the leading edge of how shared spaces are marketed to tenants. So, what do landlords do? Stay the course and continue improving common areas with prepandemic- like amenities? Or try to plan and execute new strategies that may be leading edge in six months or a year? One thing for certain is that metro Denver landlords, already feeling the fiscal pinch, are likely on the preci- pice of even more challenging times. Our overheated market already was beginning to level off when the mid- March shutdown plunged commer- cial real estate into upheaval, office buildings included. Coming out of the shutdown, landlords were forced to create new budgets for safety and security while closing off others allocated for ongoing amenity improvements. On top of that, besieged tenants stopped paying rent, many walking away from leases altogether, forc- ing a rush of sublease space into a freshly ailing market. “It’s still a bit early to say the mar- ket has shifted towards tenants, but that day is coming,” said Justin Rayburn, principal and co-owner of Fountainhead Commercial, a Den- ver-based commercial real estate firm. Rayburn believes metrics from the upcoming third and fourth quar- ters will reveal growing pressure on landlords to become more competi- tive in light of COVID-19’s impact on commercial real estate, not to mention the continual softening of the oil and gas market. “Rates aren’t falling yet, but they’re bound to soon, given the ongoing concerns of employees reentering commercial space,” he said. “Clearly, companies won’t make long-term real estate deci- sions unless they absolutely have to, which means shorter lease terms, even month-to-month terms if possible, in addition to other leas- ing concessions.” That’s the real estate story, and although it might not look pretty in the near term, many Denver-area landlords see things through more of an optimistic prism. “Tenants are still phasing back into the office,” said Heather Farley, senior real estate manager with Denver-based DPC Cos. “New leases are still coming in despite COVID- 19. It’s too early to settle on one strategy or another. Landlords are still improving amenities, mixing things up, especially outdoor spaces that can be more flexible, more adaptable.” Farley notes that tenants are more educated than ever before, espe- cially since the pandemic mandates how building common areas must function. While amenity spaces, especially in new buildings, may dazzle, it is the nuts and bolts that ultimately offer tenants safety, and comfort. Those nuts and bolts improve- Landlord improvements uncertain in current market Tia Jenkins President, Kieding Please see Jenkins, Page 25 David Budd Photography Landlords can maintain and upgrade COVID-19 safety standards while making quick, low-cost improvements to building common areas often without the necessity of build- ing permits. F rom River North to the Den- ver Tech Center, repositioning properties through renovation, retrofit or adaptation has prov- en a successful and necessary strategy for Denver’s growing popula- tion. Repositioning dislodges a static property by reinventing a place in response to changing market expec- tations, evolving workplace strategies and striding energy performance requirements. The American Institute of Architects’ report on building ret- rofit trends details the size of poten- tial retrofit sectors by construction spending. Together, office, education and health care sectors constitute 44% of construction spending over the past decade, totaling around $116 billion. In each of these three major sectors about half of the extant square footage was built between 1960 and 1990, which means these properties are young enough for con- tinued value but were designed for a different market of the past. Further, outdated thinking that new construc- tion flourishes in an up market while renovation takes over during eco- nomic slowdowns has not held true in the past decade. Tight design and construction schedules, high expecta- tions of aesthetic and technical qual- ity, and visible budgetary stewardship also establish implementation frame- works. In fact, work on existing build- ings has steadily increased due to the great potential of repositioning. n The facade at the intersection of design, comfort and performance. The influence of the building facade extends well beyond its thickness. Not only must the facade serve as the public face of the building, it impacts the comfort and health of occu- pants, and defines a large portion of the building loads and energy use. The facade is the building’s primary design element, influencing the first impression and defining the tone, culture and attitude of what’s within. It also mediates our interaction with the outside, permitting views, tempering the cold, resist- ing the wind and filtering the sun. This mediation is critical for deliver- ing comfort for occupants. Cold glass, glare on computer screens, and a view to the passing sun and clouds all contribute to occupants’ health, comfort and well-being. Among these responsibilities, the facade also must meet basic performance require- ments of keeping water out, insulat- ing against changes in temperature and blocking excessive sun. The multidimensional role of the facade means it is essential for transforming a property into a place with value. n Unlock existing potential. Estab- lishing a property’s current condi- tion is a crucial first step to inform planning, management and mod- ernization.While foundations and structures have significant service- able lifetimes, facades more often run out their usefulness at a faster pace. This is in addition to the speed at which facade technology, building sci- ence and energy codes have evolved, which has made envelopes even a few decades old no longer viable. An initial investigation helps form a detailed picture of the building’s existing state and potential of repo- sitioning strategies. Investigating the envelope for evidence of structural settling, water damage, efflorescence, mold or spalling, among other issues, is critical to establish the technical viability of paths forward. n Determining a mix of value and vision. What stays and what goes? Arriving at the balance between nec- essary alterations to reinvent place while keeping existing conditions with enduring or historic value is a challenge. The embodied carbon sunk into primary structure is most often a no brainer to preserve, but the facade is less obvious.While there also is sig- nificant embodied carbon in a facade, and particularly in aluminum, the performance and subsequent impact to occupant comfort has a wide range of variation depending on the vin- tage of the envelope, the quality of construction and prior dedication to preventative maintenance. Reglazing, recladding, overcladding or interior refinishing, these strategies all lever- age the performance or design value of existing facade elements while strategically replacing those that are underperforming or underwhelming. Underlying these decisions between existing value and a new vision are logistics and simple areas. Facade access on a high-rise versus a two- story office park will have different logistics of constructability. Ultimately the scope of the facade, the simple cost by area multiplier, is a funda- mental driver of what stays and what must make way for a new vision. n Modeling changes to moisture, ther- mal and energy performance. Modern- izing a building envelope can result in complex multi-physics interac- tions that are not normally present in standard new construction assem- blies. The uniqueness of the facade modernization, those details that are retained and the configuration of new elements requires considered analy- sis to check moisture and thermal performance. Bulk water, water vapor, heat and air all need to be managed to deliver a new design vision while improving comfort and reducing energy use. n Total carbon impact. Beyond the details of waterproofing, thermal bridging and even whole-building energy performance, one must con- sider the total carbon impact of both operational and embodied energy. A facade modernization to reposition a property should include a life cycle cost analysis to weigh energy cur- rently embodied in the materials of the building against energy embodied in new added materials with reduc- tions in future operational energy use through improved energy efficiency. n The value of an integrated team. A team of modernization specialists, building performance analysts and sustainability experts that embrace collaboration to help building owners achieve a new vision for their proper- ties is important. Having experts in all these disciplines engaged in the proj- ect from day one enables an integrate feedback from each discipline, incor- porates proposed design upgrades, and measure the total impact those changes will have on human comfort and energy performance. s Facade modernization’s role in repositioning assets Brandon Andow, PhD, RA Senior building performance analyst, EYP Architecture & Engineering