#OfficeFutures: who wants to work, where?

With progress on the pandemic front due to successful public health interventions and the roll-out of the vaccines, people are starting to see the path back to “business as usual” and the return to offices. Our extended experience of work-from-home has altered the equation permanently. Various companies like Salesforce and even the Commonwealth of Massachusetts are planning to let people work from home in significant ways in the future. How will commercial real estate respond? CRE value depends on tenants paying for space!

JLL issued a report that describes the trends and “emerging user profiles” for office space. The takeaways are that 66% of workers want to work remotely following the pandemic, and about half the workforce will want to work half-time in offices. Does this mean an outright 25% reduction in demand? I think the types of enterprises matter, the type of work matters.

Reports like this are shaping the narrative around #ReturnToWork and the future value of #CRE. JLL fails to describe the real health benefits of a curated workplace experience and the economies of scale that such curation/management have on productivity. Of course, most workplaces skip this stuff, but it will be competitive advantage for tenant market share in the months and years to come.

Separately, I assert JLL’s report is quite a myth-maker and subject to confirmation bias: 2000 respondents? What 10 countries? Pray tell how a “representative” sample of worker types can truly be constructed. And of course, in such a limited market (office experience), can people really know what they want? For which purpose? Their satisfaction or the satisfaction of their employer paying for the space?

I believe there will continue to be a value proposition for office space, not just the “socialization” and corporate culture dimension highlighted by JLL, but also a fundamental focus on productivity for tenants through health and creativity curation. Regardless, observe the circus of these reports coming through from everyone scrambling to address the “shrinking” demand for office space!

Looking back one year ago, from the Gensler report of April, 2020: “Be open to new ways of working. The longer we work from home in large numbers, the more new habits and new ways of working will begin to take shape. We will have discovered different ways to collaborate virtually, which may likely continue when we return to the office. Workflows and communication might improve. We should embrace these changes and let them flourish.”

Impact Real Estate

We are entering a new era for real estate: impact investing is here.

For years, investors prioritized financial return and various social impact aspects of real estate were seen as “side effects” or otherwise not central to the investor.

Nowadays, it is hard to be distant from community relations and other effects of real estate development. Project proponents actually gain entitlements for doing more for the community – such as providing public access to green space, adding retail space to a multifamily development, supporting wildlife habitat and more.

The above project is an example of the work done by Placetailor, a design-build firm in Boston committed to sustainability and community regeneration.

Now, you are invited to support their work to address the triple bottom line. Investors are welcome to explore the opportunity to purchase shares in a new social impact investment fund. Placetailor will use the funds to secure sites, design, and build new net-zero, non-toxic, affordable housing in Boston.

Contact me if you are interested in reviewing the prospectus.

Mt Washington!

I made it up Mt. Washington over the weekend. It was a fine day but a chilly 5F at the top! My legs were jelly on the ski run down Sherburne Path to close out the day, though…

Supporting ESG in Real Estate

ESG: Environmental, Social, and Governance metrics are an important arena for real estate operators to engage with.

By using ESG metrics, a company can investigate aspects of the business that are not directly financial, but have impact on financial performance.

Nowadays, customers, investors, and other stakeholders are paying more and more attention to a company’s environmental issues, to the way they treat their employees, and even types of policies or protocols they honor.

If you have questions about ESG and want guidance to meet the needs of stakeholders who are asking you about it, I am happy to help.

I have supported ESG for a variety of companies and organizations. I can help set up a program for reporting, or provide guidance on implementing policies, or simply coach an executive to stay ahead of the topic.

I look forward to working with you!

Grey

Introducing Professor Lee [though not actually a professor!], Nice!

The semester is off to a great start. I’m am really excited and looking forward to the experience of being “the teacher.” Though really, I’ll be learning a lot more than I teach!

Here’s what I posted on LinkedIn: “Green Buildings, Urban Resilience, and Sustainability in Communities” is connecting a great student cohort at Harvard Extension and giving me a chance to share my subject matter expertise in a new way. I might post some of my readings here for you all, just so you can kind of follow along! hashtag#MoreGreenBuildings and hashtag#MoreResilientCities, hashtag#LetsGo!”

I was asked by my colleague in green building, Tom Gloria (who runs the Sustainability Masters program at the Extension School), to think about teaching, earlier this summer. One thing led to another and I jumped in. I did a lot of reading and sorting of my files to find good stuff to use – on green buildings, on resilience, on urban sustainability, and on change management and systems thinking. I am looking forward to bringing in some of the leadership, communications, and behavioral science that I gained while at the Kennedy School. This has been a big push but so far it is already rewarding.

The course link is here, and here is a link directly to the syllabus. The class meets online each Tuesday night this fall, from 7:20-9:20 through Zoom. I am looking for guest lecturers, so if something on the syllabus seems like your favorite topic to talk about, drop me a line. Thanks!

Taking E+ Buildings Mainstream

The City of Boston has a great program to lead the charge in the transformation of the residential sector toward sustainability & resilience. The E+ Program is led by my former Board Vice Chair and mentor, John Dalzell, Sr. Architect for Sustainable Development at the Boston Planning & Development Agency (BDPA). The program demonstrates the real possibility of energy positive buildings & technologies, it creates affordable housing, it opens up new concepts for urban design, and raises awareness for climate-responsive buildings. I love checking out these projects and learn more about the nitty-gritty of getting these things to happen.

The E+ Program has helped bring net positive residential development forward for the city. Boston has taken odd lots and partnered with community organizations to bring developers in who want to build exemplary buildings. The RFP process stipulates affordability, community-responsive design, and the creation of an net positive energy building – where it generates more power than it uses! These projects are contributing to Boston’s championship attainment as the #1 city for energy efficiency and in achieving the Boston 2050 Carbon Neutrality goal.

On Friday, July 26, the City hosted a “behind the walls” tour and open house of the E+ project at 65 Colonial Ave in Dorchester – in the Codman Square neighborhood. Various project partners were there – the BPDA, the development team, and various vendors of technologies used at the building. The program is sponsored by USGBC MA (my former organization), the Boston Society of Architects, and the local utilities – Eversource and National Grid. I went to visit, assuming I’d probably bump into some pretty cool people who are into this sort of thing.

On the site of what had been a bad old triple decker, the project was creating four units of premium housing in an ~8000sf structure, one affordable (at 80% AMI). It is about a 15 minute walk from the Shawmut red line station and a five minute walk to all the shops of Codman Square. It is going to be a great place for a few families to live. The units are either 2 or 3-bedroom and are all-electric. The building envelope has a HERS rating of 38, and with solar installed it gets down to 19. It’s insulated to R-50 and has triple-glazed windows of R-5. It is going to be a LEED Platinum structure. This is the right stuff!

You can read more about the city’s program here.

I did bump into Nikhil Nadkarni, Energy Planner for my City of Cambridge, and we got to catch up a bit about Cambridge policy progress. John Dalzell was also there and I was able to tag into a tour with him and the project architect, Scott Payette, who I have known through USGBC for many years. I also met and was able to talk shop about developing E+ buildings with the developer, Charles Aggouras, and a separate E+ project developer, Jeffrey Dubard. It’s tricky to get these things to come together, even with the support of the City. Below is the best pic I have of John, walking up into the building tour:

You can read more about the project at 65 Colonial Ave here – lots of great info. I didn’t get to learn enough about the community engagement side of the equation, with Codman Square Neighborhood Development Corporation but I did see my colleague who works there, David Queeley, on the site. You can click on the renderings or inspect the schematic of the environmental features.

One thing I didn’t totally understand about the design was the rear sunken courtyard grottoes – how would you get out of it? A pool ladder or some other egress must be in the works…

Overall, a great project and a great event on a great day. Thank you BPDA, City of Boston and the E+ Program. Shout out to The Green Engineer who are doing the sustainable design consulting for the project, and Studio 2112 who is doing the landscape architecture. It will all balance out and they will call it Cygnus, right? [sorry non-Rush fans!]

Update: Real Estate Crowdfunding

I wanted to revisit the real estate crowdfunding options out there, seeing as I have my own at MoreGreenBuildings.net, and I want everyone to be monitoring the competition.

There still is no other specifically green building real estate crowdfunding site. But here are the big ones that people pay attention to:

Fundrise:

This group continues to make progress and evolve. According to their website, they have cumulative total returns at the end of 2018 of about $65M and last year their funds averaged 9.1%. An investor can put money (as low as $500) into different vehicles to focus on dividend income, asset appreciation, or a mix of both. Based in DC, they have about 80 people on staff and are growing.

This is for non-accredited investors, looks at both commercial and residential, but doesn’t have a particular screen for social responsibility or green features. A lot of their investments seem to be multi-family projects, both ground-up and repositionings. They now have put $2.5B in investments into property and are continuing to innovate their product mix. They have offered shares of Fundrise itself to user-investors which is sort of a social responsibility-aligned play.

I have enjoyed tracking them but I have not invested in them. The basics are they create a low threshold for investment, solicit funds from anyone and everyone, and put the money into a few different portfolios that invest in small real estate projects throughout the US. You can cash out by giving them notice (there is a 60-day waiting period and up to a 3% penalty), but it is supposed to be pretty liquid.

I’m impressed with their operations – they have managed the reporting and communications efficiencies they need, and seem to be choosing the right projects to go after. I’m not sure if it’s because of the access to capital from the crowd or the diminished feedback loop from the crowd (investors are not opposing any given investment) which makes Fundrise faster on the draw to pick up properties, or if there’s just a lot of junky property out there that this entity is just lucky enough to pick up and arbitrage to their favor.

A Patch of Land

Rich Uncles

Realty Mogul

Other crowdfunding sites with higher bars include:

  • CrowdStreet
  • Origin Investments
  • AlphaFlow
  • EquityMultiple

Togetherment: Pitch Contest Winner!*

We won second place!*

At my Entrepreneurial Finance course (taught by the excellent Carl Byers (former CFO of Athena Health)), during the final class of the semester, we held a pitch contest. Throughout the course, each student has been working on a venture. I’ve been using the opportunity to improve on Civekos, now called Togetherment, which has been a great opportunity (as you have seen in these pages).

You can read more about the Civekos/Togetherment project on its dedicated pages here. Full website forthcoming!

Here’s the deck I used. Imagine what could happen if I had a graphic designer on my team!

There were seven ventures: lots of great business concepts. It was tough competition – some of these are already signing up customers and bringing in grant funding. We heard about:

  • Jetset Offset – carbon offsets for fliers
  • Vertical Farms in Nigeria
  • Electronic legal contract management
  • Refugee tech education
  • A cross-cultural social/political engagement web platform
  • Ending sexual violence in India
  • and Togetherment of course

Here’s a picture of Jean Guo with her pitch for Konexio (facilitating digital education for refugees in France) (I was not quite as good looking but in the same place in the front of Land Hall). I had actually met Jean this summer at the Global Harvard Alumni Meetup when we were both in Paris in June. It has been great to be in a class with her. She was a Fullbright while in France 2015-2016 and now at Kennedy.

Here’s Carl at the end of the class with key questions about connecting with funders (I was sitting in the front row the whole semester):

  1. Are you doing important work?
  2. Are you well managed?
  3. Will the gift make a difference?
  4. Will the experience be satisfying to me?

If you know someone who might be interested in a new approach to housing, facilitating group living for social purpose professionals, let me know!

*Yes: classmates: there were two first places and two second place finishers if you are really counting! But hey, feedback is good when you can get it. And facing the crowd is important for fine-tuning the message. Thank you MLD-829!

Togetherment: Co-living with a purpose

The venture is getting going.

NEW: slides of a draft pitch deck. Check it out!

I am passionate about the benefits of people living together in groups. Key features are interacting with others, sharing resources and being a part of a bigger project. Group living is an antidote to social isolation, digital engrossment and consumerist wastefulness.

  • Mental Health: you have people who care about you, check in with you, sharing (which is caring!) you day-to-day life. In some group settings, these relationships can last a long time.
  • Spontaneity: having random interaction and unplanned engagement stimulates the brain and helps keep the heart healthy. Too much of our lives are programmed, planned and platformed.
  • Constant Learning: living with a bunch of people means learning about their lives and livelihoods, in addition to how to negotiate sharing resources and becoming okay with things not exactly the way you think you want them to be.
  • Cultivating Patience: related to being flexible (above), patience is a virtue. Not just in terms of being able to abide in time but also in the sense of forbearance – being able to hold judgement, release others from urgency, and “rolling with it…”
  • Resource Efficiency: you take up less space and share common spaces better, and you share resources like food and domestic items. You can also coordinate to share less-often used items like tools, sports equipment, and art supplies.
  • Connecting with Purpose: many group living situations enable people to connect with like-minded people to share efforts toward a common goal. This could be (and has historically been) for a religious or philosophical end, but also for public service like military or park ranger. Sometimes group living is a temporary thing like a summer camp, crisis intervention, or festival setting. Having a common connection can provide meaning and guidance to a person’s life. Sharing it with others can make it more meaningful.

There are a lot of ways living in community (living in a group) can benefit a person. The network of facilities I’m creating will enable many people to find this option. It is hard to find this type of arrangement in the US. Many group living situations are strongly tied to an employer or religious institution. Some are in the vein of communes as “intentional communities” which demand a lot of engagement and democratic participation.

Our project will enable and accommodate participation but strike a balance so it’s not too much. We will set up the systems, the technology, and the processes so people can come together without too much of a load to design systems from scratch. This is a new platform for an emerging market.

Join us and let’s see where this goes!

Contact me at greylee@gmail.com to learn more, or take a look at these pages.

NEW: slides of a draft pitch deck. Check it out!

Above is an image from a co-living in Silicon Valley called Rainbow House. I like all the books!

Civekos Outline – Class Exercise #4

MLD-836 Class 8 Workshop Questions Grey Lee 9/26/17

Questions:

  1. How do you operationalize your value proposition and unique attributes into your service delivery chain?

 

Our value proposition is meeting a gap in a niche market of housing. Two spectrums are intersecting: One is related to recognizing and rewarding people who are devoted to social benefit work through subsidizing their housing. The other is creating new and dynamic synergies and connections for these professionals through a new (old) model of group living where people internalize deep learning about communication, patience, service and compassion.

We operationalize it by performing some market research, some philanthropy testing (which could involve finding an in-kind facility contribution/licensing), then implement the prototype. From that we learn how to better manage a given node and learn ways we could scale.

I am trying to determine how my concept fits with issues around privilege, affordability, gentrification, and interventionism in general. While there may be a lot to debate, I am going to side-step a lot of it. I believe that right now, there are a variety of social problems that can be ameliorated by social work and social benefit professionals. Again, while there may be a debate about how much to pay these people, like teachers and health care professionals, regardless of how to influence take-home pay, reducing rent for these people will benefit them, and potentially lengthen the duration in their life that they want to do this type of work. Further, while people of any means make choices around housing, and people have traditionally “doubled up” or lived with groups of others in an effort to reduce their housing cost, I think it is reasonable to build this out for people who “could” choose otherwise. Many people choose to work for social benefit who come from places of economic privilege. There may be a way to seek a type of social finance bond from networks of privilege to directly support a scion of privilege who chooses to work in this realm and who chooses to live in one of our nodes.

We have to procure the nodes in our network of “social benefit lodges” and identify the main partners who will underwrite the real estate side of the equation. There will also need to be partners on the social structure – the governance, the selection/attraction of residents, and general facility and node operation.

Another part of the service delivery chain will be to engage residents as part of the marketing and sales team – to recruit subsequent residents and/or new node groups.

 

  1. Can you think of ways to innovate and make it better?

One thing that we may want to do is look at a replicable design, for instance, some kind of pre-fab structure that could scale like some of the “shipping container” housing that has been developed. One model is Bjarke Ingels’ (Danish architect of the firm BIG) “Urban Rigger” floating dorms. This may be appropriate in some locations – for instance, to locate a node in a place like San Juan, Puerto Rico in the aftermath of a disaster – but this is a departure from the expected priority location targets of repurposable group living facilities like old fraternity houses, religious community housing or otherwise.

Another innovation to improve/expand this model is focusing on the software for improving small learning communities. Slack is an obvious model to create spaces for communication and project management. There are other platforms like WeSpire (corporate employee community engagement gamification) and Habitica (to-do list gamification which can be linked across different people) which can link small teams who may have a common purpose.

There are circular economy platforms for sharing resources and time banks like Neighborrow and Yerdle which don’t quite work because the parties are too unrelated. Within the bounds of the pre-qualified community in each node or even throughout the nodes in this network, a sharing platform could be more successful for sharing tools and other seldom-used but useful items.

The peer-to-peer education platform E-180 (“Brain Dates for Learning Humans”) could see a materialized “in situ” option in the nodes in the network of sobene (social benefit professional) housing [pronounced “sobenny”]

There are a few places to go with just the real estate – scaling to different sizes, repurposing specific challenging properties, tweaking the level of quality/amenities offered. A lot depends on the early engaged philanthropy or partners and what they want to see/who they most want to support.  

  1. Are you truly “delighting” your beneficiaries/stakeholders and solving their pain points?

One of my major challenges is trying to determine a true “pain point” for my target customer. Over time I am seeing that my customer is the individual resident, not the employing agency. The party motivated to find housing is that sobene. As we create a highly differentiated product, we will delight that specific customer. They will have a subsidized housing option, which has superior features and connects them to a social network of similarly socially committed people.

  1. How do your staff and volunteers contribute to your service delivery excellence?

The staff for the central organization will be mostly involved with network organization and the build-out/project management of the nodes. We will recruit residents with some form of vetting for expected in-kind contributions of time and wisdom. Each node will have individuals in certain roles to support that community – a “house government” as it were. Central office staff will design models and guidelines and facilitate (train the trainers) to get nodes up and running. There may be ways for local supporting philanthropies or hosting employer agencies to supply guidance into nodes to ensure they are executing on the intentions around smooth group functioning, strong peer synergies and community engagement.

…and

Questions:

  1. What are the core elements of your solution and delivery model that will fit together to create your high impact enterprise?

Core elements include the acquisition process, and the modeled house node governance process – the systems around resident communication, role & responsibility management, and community engagement. We will have to find the right balance between a centrally-planned and administered real estate operation and a locally-focused community engagement process. The nodes will have to have significant autonomy to meet the local resident market and best connect with sponsoring employer agencies/organizations. The definition of social benefit, and the selection process for residents, will have to be managed by local parties to ensure the best fit with that locality.

 

  1. Are there others in your eco-system whom you can draw in to create or sustain value?

Indeed, these nodes for social benefit professionals will connect with employing social agencies and other service entities who have already engaged with the housing question. We are different in that we will house people from a variety of employers – that cross-fertilization is part of our value proposition. But entities like the Episcopal “Life Alive” and Catholic Worker Houses will be allies. They may even host a node. The cooperative community will also be a strong partner – the Cooperative Fund of New England and North American Students of Cooperation (NASCO) Real Estate fund residential cooperatives and we may be an attractive investment for them. The Slow Money community and entities like RSF Finance may also see the cash flow of residents as a good “patient capital” investment. Community Development Corporations which have built affordable housing may be able to see this model as a useful type of asset to have in their service realms (perhaps even to house their employees), although they generally produce housing for a different type of selection criteria.  

  1. Can you create a virtuous circle of benefits based upon your value proposition(s)?

There will certainly be an emergent virtuous circle of benefits as the nodes multiply and the overhead per node diminishes. Each node will be a marketing tool to encourage more funders, more employer agencies and more residents to join. Over a few years, an age stratification may emerge where longer-term, “lifers” become more permanent house residents (within the bounds of the management structure and governance processes (no curmudgeons allowed!)) will manifest social capital more strongly to guide each node and to engage with new and shorter-cycle residents. There may eventually be nodes designed for families and groups of people who will plan to live long-term in the social benefit professional space. The nodes could each create relationships with academic institutions, municipal and state agencies, and even become their own type of community development entity or social enterprise incubators. People living together, working toward a common purpose of social betterment, will evolve new patterns and solution processes. It will be exciting to watch.