Class 2: June 17, 2010

We started our discussion today with three questions.
1. How do we become more efficient, effective & equitable from this point foward?

2. What are the challenges we face and how do we overcome?

3. What are the rewards if we succeed? The penalties if we do not?

We then defined the difference between being efficient, effective and equitable. A good quote to help illustrate this is "There is doing things right and there is doing the right thing." Doing the right thing would be being effective. You may have set a goal for yourself and you have either effectively achieved that goal or effectively working on achieving that goal. The other part of doing things right is being efficient. Being efficient is in simple terms doing more with less. By putting out maximum output with minimun input is the means of being efficient. When you are equitable you are minimizing negative externalities and creating a win-win situation for everyone involved.

We then talked about briefly about how suburbia is not sustainable at all. By nature suburban areas were created to be consumed and used up. Houses were built to last for about twenty years and anything else in "suburbia hell" could never really be used for any other purpose.

That led us into our next discussion of office space and the creation of flexible space. There is a trend going away from the cubicle and partitioned off office space to a more open layout as to encourage more interaction. With this offices need to be more flexible in how they can change their layouts and constantly adapt to growing trends. Also, in the case of foreclosure or even if an owner sees a shift in demand he may want to change the space from office to residential or retail.
With regards to office space we also talked about worker satisfaction. Things that could directly impact a worker's mood are exposure to natural light, better air quality, or just the amenities that the building has to offer. Bosses are constantly looking for ways to increase productivity out of their workers but while keeping them happy at the same time.

Next topic discussed was the whole idea of these big regional malls that are seen everywhere. We discussed the difference between the big retail lifestyle centers, the malls, and the central business district street level retail shops. Personally, the only difference I see in malls and lifestyle centers is air conditioning as you walk from store to store. If I were to go shopping I would want something that is convenient and also where I can possibly go to many shops in the same visit.

We then switched gears and began talking about LEED certifications and green development. I am honestly not completely sold on this topic but Dr. Forgey is trying to get me to be more forward thinking and show me that I should care about it.

We discussed how being LEED certified can be used as a major marketing tool. This could be important as a company is trying to get a better reputation by saying they built or are about to occupy a LEED building. China is actually becoming one of the leaders in green development, buth they really had no where to go but up as their pollution and smog etc. has been so horrific in the past. We discussed the other benefits of being LEED certified and lower OPEX costs on a building would definitely benefit a landlord's utility costs or the tenants depending on who is paying them. Being LEED could also affect the money you would be able to borrow for a project because if your OPEX comes down drastically then your cash flows become less risky so maybe could borrow more money and at a lower interest rate.

One of the questions that was asked to us was should the government give any incentives to become LEED certified and go green? I am of a small government belief system so I believe the government should not be involved and if LEED develops into the norm then it would just be good business sense to become LEED certified and therefore one would not need any incentives.