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August 2008 |
Bogue Miller, David Rubenstein
Julie Pollak & April Farner
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T.O.D.s Are Good for Communities, and Business.
 Transit Oriented Development, or T.O.D., is an urban
planning effort that has been re-born as cities across America have encouraged denser, mixed-use communities. These areas offer high-density, walkable neighborhoods typically no more than a half-mile from a mass transit hub. As the cost of
gas makes your employees' daily trip to work all the more financially difficult, T.O.D. projects are quickly making their mark as valuable locations for relocating companies.
Attaching your business to a T.O.D. project will, at the very least, make it very accessible. However, the benefits such a location can bring to business partners, employees, vendors and even your brand, could be endless.
For example, T.O.D. projects tend to attract affluent consumers and residents because of the eclectic retail mix and highly desirable residential alternatives that branch out from their core. Professional service firms, such as
accountants, law practices and marketing agencies, would be hard pressed to find locations that offer so much convenience in conjunction with the perpetual streams of potential new customers.
From a staffing perspective, companies within T.O.D.'s offer employees non-compensatory benefits. Any professional recruiter or staffing firm will tell you the importance of transportation to an individual's work choices. When offering
employment to a competitive workforce, location and ease of commute can make all the difference, not to mention, the adjacent dining and entertainment venues just outside the office door.
With living, working and mass transit options all within a walkable radius, T.O.D.'s significantly contribute to the reduction of carbon emissions by encouraging short, mass-transit-centered commutes. In turn, this helps further a tenant's
commitment to the environment, strengthening its brand among like-minded industry peers and more importantly, potential customers.
Many cities and states are just now recognizing the need for this type of construction and have started to offer tax incentives to developers and potential tenants. Non-profit groups and multi-national urban planning organizations are also
rallying around the cause. The national gas price crisis should make all the more evident the need for a widespread mass transit plan in many of our mid-size, rapidly growing metropolitan areas.
Ending exhausting commutes, eliminating the need for everyone to own a vehicle and demonstrating that it's once again okay to take the bus or train should become a national endeavor. Transit Oriented Developments are certainly not the only
solution. But they are one of the best options out there.
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Subleases Offer Benefits but Require Careful Consideration
 Part one of a two month series
"Sublease" became a popular term in the leasing malaise that followed the tech melt-down in the early 2000s. Thankfully, the chances of the market ever seeing as much sublease space as the dot.com crash provided are remarkably slim. Slowly
though, the word is creeping back into commercial agents' marketing vernacular. And if you're listening closely to the market, you may hear about some really affordable space.
Moving into a sublease isn't as simple as taking advantage of below-market rates. In fact, a sublease can be more complicated than a direct lease because of the additional layers of approval and agreement inherent to negotiations that
involve three parties. Add to this the very real possibility that the original tenant will not be in good standing with the landlord, and discussions about sublease terms could get uncomfortable in a hurry. Know going in that a sublease
carries with it the risk of the original tenant defaulting, which would trigger the cancellation of your sublease as well.
Relative to costs, understand completely how utilities and other operating cost pass-throughs are handled. A full service lease is easier to deal with from an operating cost perspective but be sure to understand your obligations to
reimburse the landlord for operating costs, if any.
There is rarely a tenant improvement allowance granted to a sub-tenant, so it's critical that your employees can function in the office or cubicle plan already in place. Given that most sublease terms are shorter than direct leases, some
companies try to "make-do" until the sublease expires. If you're in that camp, give serious thought to that compromise. Your business depends on it.
If you decide to accept equipment or furniture as part of a sublease, be sure you know who is responsible for its upkeep during the sublease and who gets possession when the term expires. What about telecom equipment and mission-critical
technology? If facilities are shared, make sure that all parties are in agreement in terms of access, maintenance and possession during and after the expiration of the sublease.
To many companies, an attractive rent can be a powerful driver of occupancy decisions. Subleases, however, can have several additional layers of complexity. In next month's newsletter, we'll expand even more on this critical subject.
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Audubon Society Sets Green Standard for Second-Generation Space
 Founded in 1905, the 700-employee (100 in its headquarters)
bird-loving Audubon Society seems a little out of place amidst the steel, glass and bustle of Manhattan. An environmental organization at its core, it boasts 500 chapters nationwide and is considered one of the preeminent nature advocates
in the world. So, its leaders decided to make sure their new headquarters reflected their members' principles.
The 27,000 square foot space was built almost entirely out of sustainable and recycled materials, such as reclaimed barn siding, cork and compressed paper. And, none of the materials were delivered from more than 500 miles away. Ambient
light is prevalent throughout the office, with adjustable office and workstation partitions to take advantage of shifting light sources and a five-foot-wide walkway around the entire central core to enable as much as light as possible to
enter from the bordering windows.
The floor was raised eleven inches to allow for cables and networking equipment and even a separate heating and cooling system. This way, the Audubon Society can establish its own energy use policies disparate from the rest of the
building. Each office occupant has control of his or her own floor vent and the ceiling is clear of obtrusive ductwork.
Conference rooms are entered through pivoting doors that create larger openings to emphasize the space and are built around tables carved from fallen chestnut trees reclaimed from the Bronx Zoo. Break room cabinets are made from bamboo
plywood.
In terms of sustainability, the new space is considered superior to even the highest LEED standard (Leadership in Energy and Environmental Design). The success of this project can be credited to the team effort of the Audubon Society,
their architect and the landlord.
Unfortunately, only in rare cases will a triumvirate of this magnitude come together so seamlessly. That shouldn't be the case. If you are driven by this cause, work with your tenant representative to make it happen. Plan further in
advance, seek buildings that embrace only the strictest energy policies and find vendors that share your vision.
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