McGraw-Hill: January Construction Jumps 8%

   New construction starts increased 8% in January, to a seasonally adjusted annual rate of $551.3 billion, according to McGraw-Hill Construction, a division of The McGraw-Hill Companies. After a weak December, substantial gains were reported for nonresidential building and nonbuilding construction (public works and electric utilities), as both of these major sectors were lifted by the start of several very large projects.
   The latest month's data produced a reading of 117 for the Dodge Index (2000=100), up from a revised 108 for December, though still below the full year 2007 average for the Index at 130. According to McGraw-Hill, nonresidential building has been boosted in recent years by heightened contracting for offices, hotels, and schools, and each of these structure types had a strong January. On a cautionary note, the commercial categories are expected to see weaker construction as 2008 proceeds, given tighter lending standards for commercial real estate loans. Public works construction this year should continue to benefit from federal support for transportation projects.
   Nonresidential building in January climbed 20% to $221.4 billion (annual rate). A major push came from office construction, up 123%, boosted by the start of two massive projects at the World Trade Center site in lower Manhattan: the $1.4 billion, 71-story World Trade Center Tower 3; and the $1.1 billion, 61-story World Trade Center Tower 4. January also included groundbreaking for large office buildings in Richardson, TX ($195 million), Silver Spring, MD ($103 million), Owings Mills, MD ($83 million), and Providence, RI ($79 million). Hotel construction in January soared 126%, reflecting the start of the $1.0 billion Caesars Palace New Octavius Tower in Las Vegas, plus a $100 million renovation project at the Pierre Hotel in New York City. Rounding out the commercial categories, store construction in January advanced 4%, helped by the start of a $75 million shopping center in Winder, GA, but warehouses moved in the opposite direction with a 29% decline.
   On the institutional side of the nonresidential market, the educational building category climbed 15% in January. Healthcare facilities improved 7% in January, aided by large hospital projects in Oklahoma City, OK ($120 million) and Hartford, CT ($100 million). The other institutional categories showed declines in January.

Reed: Construction Starts Weaken Further in January

   Reed Construction Data announced that the value of construction starts in January 2008, excluding residential contracts, totaled $21.347 billion, down 13.1% from January 2007 and 8.0% below December. Monthly starts totals have been ebbing since October of last year, although starts increased 10.6% in full-year 2007 versus full-year 2006.
   Reed Construction Data expects starts to be slightly lower into the summer and then recover to keep the 2008 total close to the 2007 total. Commercial building starts will be most affected by the abrupt slowdown in Gross Domestic Product (GDP) in the first half of 2008.
   The starts estimates are a summary from Reed Construction Data's project database. Unreported contract values were estimated using RSMeans' building cost models.
   The only significant increases in January were for military facilities, parking garages, and hotels. These are not expected to be persistent trends. Monthly starts are quite volatile in these three small markets. The surge in hotel starts follows three weak monthly starts totals which are more indicative of 2008 trends. Both leisure and business travel are extremely sensitive to income and are expected to weaken more than the balance of the economy in the coming months.
   Commercial starts decreased 15% versus December, offsetting a large gain the previous month. January starts were marginally below the October-January average. However, office starts fell 34% from December to the lowest total in nearly two years. Developers have become nervous about 2008 space demand. The financial industry, entirely office-based, has shed 100,000 jobs since employment peaked in December 2006.
   Institutional building starts dropped 3% month to month in January, but remained 8% above last January. However, the year-to-year change is 6%, ignoring the volatile military facilities market. The large education and health care sectors are both weakening. Starts of public safety buildings and cultural/religious facilities have not declined.

Rising Costs Motivate Energy-Efficiency Investment, Study Says

   Fully 79% of North American business leaders expect energy prices to continue increasing--and are investing in energy efficiency measures to fight these rising costs. They anticipate an increase of 13.25%. Despite the trend toward sustainability, decreased energy expenditures is actually the greater motivator over environmental responsibility, according to a study by Johnson Controls and the International Facility Management Association (IFMA). Click here to download the report.

Commercial Real Estate Survey Results Mixed

   The 13th annual Vital Signs survey, conducted by the National Association of Industrial and Office Properties (NAIOP), Herndon, VA, generated some mixed results:

• Industrial markets remain strong and office rents have recovered from previous years. There is some concern about overbuilding.
• 62% indicated office rentals have increased during the past year, with 42% expecting increases for the coming year.
• Investment enthusiasm for medical office facilities was 62%, highest among all building types.
• Only 40% of respondents think the economy is growing and only 43% said that their business improved in the past year.

For the full report, go to www.naiop.org

Clinton Climate Initiative to Green Up Chicago

   The Clinton Climate Initiative (CCI) will partner with the City of Chicago to enable a green overhaul of privately-owned housing around the city, as well as two major landmarks, the Sears Tower and the Merchandise Mart--the country's tallest and largest buildings, respectively. Former President Clinton and Chicago Mayor Richard M. Daley announced the three joint projects between the City of Chicago and CCI's Energy Efficiency Building Retrofit Program at the GreenBuild show, Nov. 7 to 9, Chicago. "Chicago has always led by example when it comes to protecting the environment," said Mayor Daley. "The Clinton Climate Initiative will play a major role in helping us reach our goal of making Chicago the most environmentally friendly city in the country." For more information, visit www.usgbc.org.

Bill Clinton Selects Acuity Brands Lighting to promote Green Products

   At a recent ceremony in Seattle, former President Bill Clinton announced Acuity Brands Lighting, Conyers, GA, would be a major partner for lighting products in the Clinton Climate Initiative (CCI). The CCI is working with the U.S. Conference of Mayors (USCM) to assure U.S. cities use environmentally sustainable lighting products in their infrastructure and municipal-building applications. More than 40 of the world's largest cities are working with the CCI toward climate change. This program is believed to pool together the largest public-sector purchasing of green technologies in the world.
   Vernon J. Nagel, chairman, president & CEO of Acuity Brands expressed his agreement with the foundation's objectives. "We are extremely pleased to work with the Clinton Foundation. Acuity Brands Lighting is a longtime leader in the design and production of energy-efficient products. As an example, we've been designing products with LEDs for more than 15 years. We can provide immediate help to the mayors to meet their goals."

Armstrong Headquarters Earns LEED Platinum Status

   Armstrong World Industries has announced that the U.S. Green Building Council (USGBC) has awarded Leadership in Energy and Environmental Design (LEED) Platinum certification to the company's corporate headquarters building in Lancaster, PA. The Armstrong facility is only the sixth building in the country, and the first outside California, to earn the highest recognition possible under the LEED program.

Cree Announces Corporate Conversion to LED Lighting

   Cree Inc. has announced plans to convert all lighting at its Durham, NC, headquarters and manufacturing facility to LED lighting, and has released the results of the first phase of the conversion. The parking lots, entryways, lobby, and conference rooms at Cree's headquarters building are now 100% lit by XLamp LEDs.
   Cree's local utility, Duke Energy, is collaborating with Cree to explore the benefits of LED lighting. "Our customers are always interested in understanding how to save money through energy efficiency, so we make it our business to support innovative technologies such as LEDs," said Ted Schultz, Duke's vice president of energy efficiency.

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