CREW DC: News-Program Summary

PROGRAM SUMMARY

November Program:
Media Frenzy!

In November, the program topic was ‘Media Frenzy!' Elaine Gray, Vice President-Corporate Marketing/Communications at Cassidy & Pinkard Colliers moderated a panel featuring Mark Bisnow, founder of Bisnow on Business, Doug Fruehling, editor of OnSite and Washington Business Journal, Amanda Marsh, writer for Commercial Property News, Susan Nixon, publisher for Washington Spaces and Nadine Post, editor at Large for Engineering News Record.

Introductions

Each panelist gave a brief overview of his or her publication.

Mark Bisnow

Bisnow on Business is an all-electronic publication which is a “slice and dice” of Washington business by industry and geography. Its focus is short and punchy articles about people you know. Its goal is “info-tainment” with topical articles that are easy to read and entertaining.

Doug Fruehling

The Washington Business Journal publishes news oriented to leasing and buying, with articles that help you do your job. The articles are trend stories or personality profiles. The goal is to provide access to the inner circle. OnSite magazine is published quarterly and comes with a subscription to the Washington Business Journal.

Susan Nixon

Washington Spaces is two years old. The magazine shows the diversity of style in Washington. Its goal is to showcase D.C. Interiors, big and small, residential and commercial.

Nadine Post

Engineering Records Magazine is based in New York. It is about construction, planning, development, design, as well as, engineering. The magazine covers the world. It focuses on issued affecting the construction industry with trend stories, project stories and profiles on individuals or companies.

Amanda Marsh

Commercial Property News covers all aspects of the industry and all the US market. In addition to the magazine, they have a web site, newsletters, and a conference series.

Question 1 – Who decides what makes cover and what criteria will never be covered?

Mark noted that news that is dry would not be covered.

Doug stated the editor's meet as a group to review potential articles. What will be covered is something you don't know or something no one else knows. What will never make the cover is anything well known that has been reported everywhere else. The selection of articles does not depend on the advertising.

Susan noted that everyday people bring stories to the magazine. Susan and other editors visit the spaces and decide what is the best fit. It is always a difficult decision. Though they have good relationships with their advertisers, they do not influence them. What won't appear in the magazine is any space not in the DC area.

Nadine stated that no preferential treatment is given to advertisers. Sometimes the source does try to influence what is in the magazine by requesting screening before the article is published. Each of the editors pitches their story to the chief. Finding a slot for the article also influences its publication.

Amanda stated that movers and shakers at the national interest level are prime candidates for articles. They want to be at the front of the trends and stories. Old news won't be published. She also noted that advertisers are not an influence.

Question 2 - Do you hear from enough sources or are you looking for more contacts?

Mark said that he is always looking for more information.

Doug said he is open to hearing from everyone.

Susan stated that she is not hearing from enough people soon enough. There is a three-month lead-time to get an article published.

Amanda stated that in a weekly publication the news should be timely. The magazine however has a one and a half month lead-time to publication.

Question 3 - Do you report mid-level involvement?

Doug said that though they generally quote Senior people, they would quote anyone who has knowledge of the project. They need background information. They balance the known with the not so well known.

Amanda said they would cover mid-level people as well.

Nadine noted that they do not discriminate.

Mark stated that he often writes about the stars because that is what people want to hear about.

Susan noted that mid-level people bring many stories to them.

Question 4 - What is the best way to approach and editor, email, standard mail or some other method?

Doug said some editor's read all their mail and others don't.

Nadine said it is best to be direct.

Susan noted that she often reads the first three lines. If she doesn't get the point she tosses.

Amanda said to be concise but informative. In an email have a subject line or header.

Question 5 - What does “off the record” mean to you?

Nadine says that you should always say it should be off the record before you say it. She asks the source to clarify what they mean by the term, and then they can work it out.

Amanda agreed and noted that a discussion of what it means is always needed. An anonymous source should be general information not specific.

Mark likes to keep his interviews positive and encourages everyone to let their hair down. He shares the information before publishing and always clears direct quotes with the individual before publishing to screen for errors.

Doug said that he always assumes a conversation is on the record. If a source states that the information is off the record, then he asks them to clarify since he would not want to hurt a relationship

EVENT SUMMARIES

Roundtable: TDRs and CLDs

The Networking Committee hosted a round table discussion on maximizing development potential in Washington DC through TDRs (Tranferable Development Rights) and CLDs (Combined Lot Development Rights) transactions. Allison Prince, Partner, Pillsbury Winthrop Shaw Pittman, moderated the panel featuring Jayne Shister of Cassidy & Pinkard Colliers; Andy Rollman of the Smith Group; and Howard Riker of Hines Interests.

As the supply of development and redevelopment opportunities decreases and the development cost of projects increases, the pressure mounts for higher yields to investors. By increasing density on sites, the deal can support more area to lease and more residential units to rent or sell, thereby offsetting the high fixed cost of development with higher net operating income.

Allison Prince, Partner, Pillsbury Winthrop Shaw Pittman

Allison prepared a thorough handout with the terminology and process of TDR and CLD transactions. When the District of Columbia's zoning was overhauled in the early 1990s, the Downtown Development District (‘DD') was created to encourage preferred land uses. The DD is divided into the Downtown Shopping District, Downtown Arts District, Chinatown, Residential and Mixed Use Development, and Historic Preservation. Overlays were created to provide additional incentives to developers to combine these uses in return for additional density measured by Floor Area Ratio (FAR).

Two tools, TDRs and CLDs, are permitted by the city and used by developers to achieve higher density and more flexibility on their sites. By creating TDRs on a site that is at least 50% completed, developers can put bonus density on their sites and transfer required uses to another parcel. Most often, developers add more FAR for an office project and transfer the residential required use off site. A CLD is used to relieve the developer of zoning requirements by combining their site with an adjacent lot so long as together they meet the DD requirement. The permitted gross floor areas for the two buildings are calculated as if the combined lots were one lot.

Jayne Shister, Senior Vice-President of Capital Markets Group, Cassidy & Pinkard Colliers

As an investment broker, Jayne has participated in TDR transaction over the last 15 years and CLD transactions over the last 5 years. In the early 1990s, transactions were executed at about $40/TDR. Over time as more TDRs were generated and later flooded the market, the price of TDRs dropped to $20/TDR and most recently to $3/TDR. Looking ahead, Jayne projects 4.5 million TDRs to be generated by planned developments. Therefore, the cost of generating TDRs may not be sufficiently recovered in their sale.

Jayne recommended that developers plan on taking about a year to move through the legal and city approval process, which is a quirky process. A Letter of Intent can take about two months. Another four months are needed to complete legal work and receive city approvals. The TDRs need to be in place when the developer pulls the building permit or at least by the time the permit is issued. To generate the TDRs, the project must be at least 50% complete. If not, the seller can put the value of the TDRs into an escrow account. The city is about sold out of CLDs which have traded at $13 to $25.

Andy Rollman, Vice President, Smith Group Architects

Andy was the project architect on 2020 K Street, NW, a project where the developer wanted to reposition the building by renovating and expanding it by adding three floors or about 100,000 SF, increasing the FAR from 6.5 to nearly a 9 FAR. The building has originally been built in the 1960s and renovated in the 1990s. The project was economically feasible because the building was located in a receiving zone for TDRs. The project was physically feasible because the original concrete construction could support the additional area and the parking garage was large enough to meet city requirements with the additional three floors.

These projects are complicated in coordinating design and construction activities as well as maintaining close communication with existing tenants. A steel frame was used for the top three floors because it is lighter than concrete and enabled higher ceiling heights ranging from 8'4” to 9'4”. The general contractor prepared detailed sequencing schedules for phased construction mindful of the tenants occupying the building and adjacent buildings which included the Lombardy Hotel. Dealing with temporary waterproofing, power outages, noise, parking access and code issues were just some of the challenges. The project took 2.5 years, 6 months longer than the original schedule.

Howard Riker, Vice President of Development, Hines Interests LP

Howard Riker of Hines is undertaking a similar project at 1200 Nineteenth Street, NW, a 330,000 RSF Class A office building with ground floor retail at the corner of 19 th and M streets. During its acquisition due diligence on the property, a zoning analysis was done by Allison Prince as well as physical and financial feasibility analyses. The results of the zoning analysis pointed to the opportunity to add height to the existing building, which is 232,000 RSF, because it was located in a receiving zone (19 th Street and west). Hines also considered selling the building and doing a more modest renovation. Even the modest renovation, which would have included replacing the HVAC and electrical systems, upgrading the interior finishes and complying with ADA, would have attracted more price sensitive tenants such as the GSA, associations and smaller tenants.

Hines concluded that the option to renovate and expand the building could be supported by the strong DC market. In addition to the property's strong location, it featured efficient floor plates and glass perimeter. To support the additional FAR, Hines hired Jayne Shister to request proposals from TDR owners. Howard reasoned that the price of the TDRs was far below the theoretical cost of acquiring land to have supported the additional FAR. They discovered that the supply of TDRs is restricted by TDR owners who are banking their TDRs because the price was too low. They did purchase the necessary TDRs and bought a surplus to ensure that they do not fall short.

The property's major tenants', including DLA Piper Rudnick which occupies 165,000 SF, lease terms expire in 2007. The project will commence when those tenants depart and deliver in 2009.

Jubilee Housing Gala

If baseball is America 's pastime, the Jubilee Gala was certainly a Washingtonian pastime for many of the 500+ attendees at this year's event, including many CREW members. With baseball's return to America 's capital city, it was apt that baseball was the theme of this year's annual Jubilee Housing fundraiser gala. Attendees donned a mix of cummerbunds and cleats, ball gowns and ball caps.

Event organizers stretched the theme to its fullest, with volunteers wearing specialty jerseys, a banner touting “Jubilee Field”, a speed-pitch game, a live Jeopardy-style baseball trivia game, floral vases hand-decorated to mimic baseballs and the silent auction broken into four “bases”. Signed jerseys from major league baseball players were highlighted items.

As guests sat down to dinner (kicked off by the National Anthem, of course), Jubilee Support Alliance President (and long-time CREW member) Susan Longstreet delivered a message that maintained the crowd's energy, but brought to focus the matter at hand: DC's affordable housing crisis. Two Jubilee Housing residents shared their touching stories via a short film, and highlights of major renovations to certain Jubilee properties were highlighted. Myra Peabody Gossens was awarded the Jim and Patty Rouse Award, and Carr America was awarded the Jubilee Corporate Community service Award.

Just to be sure they hit this one out of the park, Jubilee Support Alliance called on the services of an animated Scotsman to preside over the live auction.

After selling such items as a signed baseball helmet and a pearl necklace to the highest bidder, the auctioneer auctioned off “support bids”. Numerous attendees raised their number to purchase housing support for a resident for one year, one month and one week. Overall, the event was a huge success for team JSA and for the cause of affordable housing in Washington . Next year's theme? Monopoly!

All photos courtesy of Rodney Choice www.choicephotography.com

Academy of Hope Breakfast for Literacy

Attended by a core group of about 200 supporters, with Davis Construction as lead sponsor, the Academy of Hope breakfast for literacy was in inspirational event. Teachers and students alike exuded a deep appreciation for the custom-tailored and goal-oriented learning provided by the Academy. Clearly, this institution is living up to its vision:

“Academy of Hope will be a school in which the main subject for everyone, teachers and students alike, is not reading, writing, or math – but hope. Hope comes only when we care and care cared for. In this academy, all of us are teachers because all of us can care for one another. And in this academy, all of us are students, since all of us need to be cared for.”

Many AOH students are striving for their high school diploma. Francisco de la Rosa, a recent graduate and a speaker at the morning program, said that he was particularly inspired to return to school when his daughter was born. Other graduates echoed this sentiment, reporting that their desire to be good role models, combined with the compassion and encouragement from AOH, helped pave the road to success. In addition to the GED program, Academy of Hope offers programs in Adult Basic Education, External Diploma Program, Career Counseling, Computer Training and Workplace Literacy. Students pay just $10 per month to attend classes, or they may opt to contribute through volunteer work at the Academy. It currently costs about $25 for a student to attend one week of classes at the Academy.

Data from the Academy's annual report gave a good snapshot of the organization's success. Last year, 384 at-risk adults living in the District were served by the Academy; 63% female and 37% male. Last year twenty-five students earned high school credentials; 111 increased their math or reading test scores by at least one grade level; 59 received a new job or promotion; and 24 entered vocational training or postsecondary education. After earning high school credentials, 77% of students enroll in college, certificate programs or vocational training. 33% of graduates read to their children more often, and 15% buy their own home.

Anecdotes from students themselves brought life to the hope encapsulated by these report numbers. Across the board, students replied that their self-confidence and sense of worth increased, warming the hearts of those in the audience.

After Academy of Hope Board President unveiled the new AOH DVD, attendees were invited to take home any one of dozens of free books stacked on the dining tables. These takeaways symbolized well that new beginnings are within reach for motivated District citizens, and that their success is a success for the city of Washington .

Academy of Hope is one of the charities actively supported by CREW DC and its members. http://www.aohdc.org

CREW DC Golf Outing

CREW Careers Day 2006 -- Real Estate 101

hough dismal weather kept attendance from being perfect, twenty dedicated girl scouts and their troop leaders attended the 2006 CREW DC Careers – Real Estate 101 workshop. Several influential women of the DC real estate scene also attended to speak with the girls about the realities of real estate, and to impart knowledge through hands-on activities.

The day opened with a testimonial from developer Pam Bundy, followed by a break-out session in which participants filled out worksheets to learn more about each aspect of the business: development, legal work, brokerage, marketing, etc. To gain appreciation for the complexity of building, the scouts (many were seniors in high school) attempted to build structures from spaghetti and gumdrops. After lunch, it was off to H&M, not for shopping, but to complete a scavenger hunt of building elements. On the walk back to Ventana, the meeting's headquarters, many girls remarked they had never before considered the intricacies of a retail space.

After regrouping, the young ladies played a tailored version of “Wheel of Fortune”. Descriptions of various positions in real estate and their respective pay rates replaced the normal location of cash prizes and exotic trips. This underscored the unique tone of the day, which allowed girls to have practical conversations about real estate careers with the frank women who were working in them, rather than merely reading a summary on a web page. The interaction also allowed the young ladies to envision themselves as real estate professionals, a path that remains underrepresented by women.

In the sizeable binders handed to every participant were specific sections about career-wear, dress code and business etiquette. The day closed with a reading about attitude, and how controlling one's outlook can sometimes be 90% of success. As each workshop “graduate” received her diploma and goodies bag, it was clear that these were not the only takeaways. Thanks to the dedication of CREW members, the day was one of encouragement, honesty, challenge and opportunity.

Networking Roundtable: REITs

The CREW Washington DC Networking Committee organized a program on Real Estate Investment Trusts (REITs) in DC. The event took place on Thursday, October 27 th at the Function Room at the Chevy Chase Bank in Bethesda. The panelists included Roger Waesche, CFO of Corporate Office Properties Trust (OFC), Douglas Donatelli; CEO of First Potomac Realty Trust (FPO) and John Schissel, CFO of Columbia Equity Trust (COE). All three REITs are publicly traded on the NYSE. The moderator for the panel was Eric Lawrence, SVP Real Estate Banking at the Chevy Chase Bank.

The panel discussion focused on the growing participation of REITs in the dynamic Washington, DC. market and the company strategies for succeeding in this competitive environment. There was emphasis on the private versus public format of REITs and discussion about the number of public REIT's that are currently going private as a result of the excess capital in the market.

The program was very well attended and the audience included a mix of CREW members, developers, attorneys and others interested in the topic. It is interesting to note that about 50% of the audience was comprised of men. Approximately 70 people attended the event. The program started promptly at 8:30AM and concluded at 9:30AM, networking breakfast was served from 8:15 to 8:30AM.

This event had the most attendance of any Networking Event held to date. It was a very informative program. Thank you to Chevy Chase Bank for hosting this event.

Networking Event: Wine Tasting

Networking Event: Concert at the Hirshorn Museum and Sculpture Gallery

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