Illinois Real Estate Journal September October : Page 1

VOLUME 12, NUMBER 7 ©2009 Law Bulletin Publishing Co. September - October 2009 Avison Young evolves with industry ByMark Thomton A Turning Green to Gold The Aurora Police Headquarters and Branch Court is the largest full-service municipal police headquarters under construction in the United States. The developer, Leopardo Cos., has submitted the building for a LEED Gold rating. L eopardo Cos. has nearly com- pleted its work on the $91 mil- lion, 200,000-square-foot, LEED Gold seeking Aurora Police Head- quarters & Branch Court. The project that began in June 2007 will soon come to an end for Leopardo. The city of Aurora will have some fin- ishing work to do on the interiors and it will have to complete the 911 call centerwithin the facility, but the head- quarters should be operational by early 2010. Upon completion, the facility will use 27.5 percent less energy than a building of comparable size. The en- ergy savings alone are impressive, but the project also has numerous features that give it unique functionality and environmental benefits. The Aurora Police Headquarters will incorporate many different fea- tures—permeable pavement, photo- voltaic panels, liquid crystal glass among others—to meet its goal of being a LEEDGold rated facility. Itwill also be a multifunctional building, as it will house office space for the Au- rora police, a detention center, a branch court, and the area’s 911 call center. “A project like this has a lot of peo- ple involved including city staff, police officers, designers, engineers, and more all coming with different goals and perspectives,” says Leigh McMillen, project manager for Leop- ardo. “The whole team recognized early on that it would take all of us working together to build a police fa- cility of the highest quality.” Through many planning sessions that included the architects, Phoenix, Arizona-basedMcClarenWilson and Lawrie with Cordogan Clark & Asso- ciates as the architect-of-record, Leop- ardo, and city officials, the team was able to put together awish list of green features and attributes that the final product should include.Many of their ideas came to pass. The project relies on permeable pavement in its main public parking areas. The pavement is solid enough to handle 10,000 pounds per square inch, making it safe for large munici- pal vehicles, semi trucks or fire en- gines to drive on. The real benefit will be in the environmental improvements to the surrounding area and the resid- ual energy savings for the police head- quarters. Rather than having one solid slab of material asmost parking structures do, permeable pavement is made up of thousands of small l-shaped blocks of concretewith a 3/8 inch break separat- ing each one. Although it is not often standard to use permeable pavement, municipali- LEOPARDO continued on Page 20 vison Young has moved into the U.S. market from its Cana- dian stronghold with the mis- sion to compete internationally with legacy firms and bring to fruition the real estate service provider model of the future. It has been talked about for years, but it has never actually been done, says Michael McKiernan principal, managing director in Avison Young’s Northbrook office. “The expectation is that the industry will evolve from (multiple) advisory services into one entity capable of im- plementing an overall strategy,” says McKiernan. “Clients are looking for this. They will drive the demand be- cause it will be more cost effective for them.” If a corporation is attempting to apply a real estate strategy, the process generally involves hiring out multiple vendors such as consulting firms, bro- kerage service providers, property management and construction man- agement if necessary. The plan for Avison Young is to bring these services under one roof and build strong client relationships as a one-stop provider with integrated so- lutions. It won’t happen over night. Hiren Thakar, senior vice president corporate strategy, gives this “evolu- tion” a 10-12 year time frame. It’s an ambitious plan to be sure, but the man at the helm of this vision has proven himself in the past. Mark Rose, CEO of Avison Young, took over Grubb & Ellis in 2005 and successfully gained back the firm’s New York Stock Exchange listing and then merged it with NNN Realty Advi- sors in 2007. After a presentation at the annual meeting for Avison Young in January 2008, the principals of the firm offered him the job of heading up the firm’s ex- pansion, with Rose’s vision as the guide. One year later, the firm’s first U.S. of- fice opened in Chicago. Oddly enough, it is a down economy AVISON YOUNG continued on Page 26 PRSRT STD U.S. Postage PAID LANSING, MI PERMIT 224

Profile | Avison Young

Mark Thomton

Avison Young evolves with industry<br /> <br /> Avison Young has moved into the U.S. market from its Canadian stronghold with the mission to compete internationally with legacy firms and bring to fruition the real estate service provider model of the future.<br /> <br /> It has been talked about for years, but it has never actually been done, says Michael McKiernan principal, managing director in Avison Young’s Northbrook office.<br /> <br /> “The expectation is that the industry will evolve from (multiple) advisory services into one entity capable of implementing an overall strategy,” says McKiernan. “Clients are looking for this. They will drive the demand because it will be more cost effective for them.” If a corporation is attempting to apply a real estate strategy, the process generally involves hiring out multiple vendors such as consulting firms, brokerage service providers, property management and construction management if necessary.<br /> <br /> The plan for Avison Young is to bring these services under one roof and build strong client relationships as a one-stop provider with integrated solutions.<br /> <br /> It won’t happen over night.<br /> <br /> Hiren Thakar, senior vice president corporate strategy, gives this “evolution” a 10-12 year time frame.<br /> <br /> It’s an ambitious plan to be sure, but the man at the helm of this vision has proven himself in the past.<br /> <br /> Mark Rose, CEO of Avison Young, took over Grubb & Ellis in 2005 and successfully gained back the firm’s New York Stock Exchange listing and then merged it with NNN Realty Advisors in 2007.<br /> <br /> After a presentation at the annual meeting for Avison Young in January 2008, the principals of the firm offered him the job of heading up the firm’s expansion, with Rose’s vision as the guide.<br /> <br /> One year later, the firm’s first U.S. office opened in Chicago.<br /> <br /> Oddly enough, it is a down economy Such as this one that will provide Avison Young with the opportunity to morph into the real estate provider it envisions.<br /> <br /> “We feel like we are the only firm on the offensive right now,” says McKiernan.<br /> <br /> This is not viewed as the creation or expansion of a new brokerage firm, but as a consolidation of services, says McKiernan.<br /> <br /> In a down market as deals dwindle and firms feel pressure, mergers become a way of survival. Firms that may have been reluctant to do so in the past could have little choice now.<br /> <br /> “It is the ideal time to buy,” says McKiernan.<br /> <br /> The firm is still cautious about what firms and what financers it will partner with. The idea is to make this happen without accumulating extremely high levels of debt.<br /> <br /> “Some debt is good and we do want outside equity, but a service provider should not have a high proportion of debt,” says Thakar. “The benefit of a market that is not as robust as 2006 or 2007 is that you can take the time to choose partners that are more aligned with your business and your goals. You are not just thinking about the next deal.” Thakar says that the firm has secured “well-funded capital partners” within the last year that will allow the initial implementation of the business plan.<br /> <br /> It is a long-term plan, but firm principals are confident it will work because it will be driven by client demand.<br /> <br /> As a private firm, Avison Young can be completely devoted to client services and satisfaction and not adhere to the demands of public shareholders.<br /> <br /> “We can align ourselves around client goals,” says Thakar. “We think it is better to be privately owned and principally led. That is a challenge for some of the legacy companies.” The only shareholders in the firm will technically be the principals, who will benefit directly from contributing to the firm’s growth. Upon retirement, the firm will purchase the shares back.<br /> <br /> “It is very exciting right now,” says Jonathan Malm, principal in the Northbrook office. “If you are not a builder, you don’t want to be here. We are building a new company culture.” The firm does have a five-year plan for its initial expansion into the U.S. market. Currently, the only office is in Chicago, but it does have 15 Canadian offices.<br /> <br /> Avison Young provides services to all platforms, but the plan now is to use the industrial sector as a springboard into the U.S. as principals believe it will be the first sector to rebound.<br /> <br /> “The industrial market took the economic news badly early,” says McKiernan.<br /> <br /> “Industrial property owners have gotten very aggressive early in reducing rental rates. They are at or very close to the bottom already. Activity levels in industrial are already picking up and you are seeing the general economic recovery in the slight increase in production line utilization and a slight growth in inventory growth.” The office market would not provide ample activity while unemployment remains high, which should be for some time, says McKiernan.

Feature | Green

Turning Green to Gold<br /> <br /> Leopardo Cos. Has nearly completed its work on the $91 million, 200,000-square-foot, LEED Gold seeking Aurora Police Headquarters & Branch Court.<br /> <br /> The project that began in June 2007 will soon come to an end for Leopardo.<br /> <br /> The city of Aurora will have some finishing work to do on the interiors and it will have to complete the 911 call center within the facility, but the headquarters should be operational by early 2010.<br /> <br /> Upon completion, the facility will use 27.5 percent less energy than a building of comparable size. The energy savings alone are impressive, but the project also has numerous features that give it unique functionality and environmental benefits.<br /> <br /> The Aurora Police Headquarters will incorporate many different features— permeable pavement, photovoltaic panels, liquid crystal glass among others—to meet its goal of being a LEED Gold rated facility. It will also be a multifunctional building, as it will house office space for the Aurora police, a detention center, a branch court, and the area’s 911 call center.<br /> <br /> “A project like this has a lot of people involved including city staff, police officers, designers, engineers, and more all coming with different goals and perspectives,” says Leigh McMillen, project manager for Leopardo.<br /> <br /> “The whole team recognized early on that it would take all of us working together to build a police facility of the highest quality.” Through many planning sessions that included the architects, Phoenix, Arizona-based McClaren Wilson and Lawrie with Cordogan Clark & Associates as the architect-of-record, Leopardo, and city officials, the team was able to put together a wish list of green features and attributes that the final product should include. Many of their ideas came to pass.<br /> <br /> The project relies on permeable pavement in its main public parking areas. The pavement is solid enough to handle 10,000 pounds per square inch, making it safe for large municipal vehicles, semi trucks or fire engines to drive on. The real benefit will be in the environmental improvements to the surrounding area and the residual energy savings for the police headquarters.<br /> <br /> Rather than having one solid slab of material asmost parking structures do, permeable pavement is made up of thousands of small l-shaped blocks of concrete with a 3/8 inch break separating each one.<br /> <br /> Although it is not often standard to use permeable pavement, municipaliTies favor this type of material because it allows for a natural water drainage system that avoids flooding and standing water.<br /> <br /> Rainwater can seep through the open spaces in the pavement and drain into the soil where the natural sediments in the ground will cleanse the water. The parking lot is built on a slight slope, which should drain all of the water in the same direction and then flow into the development’s retention pond.<br /> <br /> The permeable pavement not only provides preferable waste water management options, but depending on the color of the material, it also helps reduce the heat island effect that blacktop traditionally creates. The pavement at the Aurora facility is a lighter color, chardonnay in this case, which results in more light reflection.<br /> <br /> “The pavement can reduce the heat load on the facility,” says Jay Rients, manager with Unilock, the Aurorabased manufacture of the pavement used at the site. “Black surfaces collect the heat, creating an island effect that requires a facility to use more air conditioning energy.” Traditional asphalt has a solar reflective index ability of .12, yet the permeable pavement has a SRI ability of .36, which can result in a 15 degree difference within the facility, says Rients.<br /> <br /> Perhaps one of the greenest features of the new facility does not involve any green products or design per se, but instead relies on clever problem solving to eliminate excess square footage, thus lowering the development’s foot print and impact, while saving the municipality and the taxpayers thousands of dollars.<br /> <br /> The state of Illinois mandates that detention centers must keep male, female and juvenile detainees separate at all times. Traditionally, this results in the construction of three different detention areas so these groups never come into contact with one another.<br /> <br /> In Aurora, the developers and the architect implemented a unique solution to this problem that would not require them to build three separate areas, but instead, create flex dorms to allow female, male and juvenile detainees to be side-by-side.<br /> <br /> However, the parties involved would be completely unaware of this.<br /> <br /> Liquid crystal glass, or smart glass as it is often dubbed, is a type of glass that can change from transparent to opaque with an electric charge. This is a process known as glazing. It can be used for such purposes as limiting UV rays into an interior space.<br /> <br /> At the Aurora detention center the glass will not receive any sunlight.<br /> <br /> There, the facility will draw benefits from its ability to glaze and become opaque, obscuring views. This way, male detainees could presumably be housed in the same detention area as females. When detainees are all secured in their cells, the glass will be clear so guards can observe them.<br /> <br /> However, when a new detainee enters the facility, the glass will be charged and turn opaque. Detainees will not know who is walking the hallways.<br /> <br /> Thomas Cook of Valley Security Company in Oswego was charged with completing this task. He had never worked with this kind of glass before, but after seeing its benefits, he believes that it will become more popular in the future.<br /> <br /> The glass costs $200 a square-foot for purchase and installation, but the cost is more than offset by the savings in the reduction of square-footage.<br /> <br /> “I’ve been doing this for many years and nothing compares to reducing the cost of square-footage,” says Michael Behm, vice president with Leopardo.<br /> <br /> The facility is also designed to take advantage of daylight. The Aurora police headquarters will house office space for all of the department’s detectives.<br /> <br /> Eventually, the city will consolidate all of its branches at this location.<br /> <br /> The building has been constructed with passive solar design techniques.<br /> <br /> The majority of offices have a southern exposure, which at this location allows for the most access to direct sunlight.<br /> <br /> The designers took the idea one step further and installed light shelves.<br /> <br /> These are reflective boards that act as an overhang next to windows and allow for deeper penetration of daylight into the facility. They can be adjusted to capture the sun at its different heights, depending on the time of the year or the time day.<br /> <br /> “An important portion of this facility is the ability to bring daylight in,” says Behm. “This is not a very deep building.<br /> <br /> We wanted to cut down on artificial light.” The Aurora project is the first to achieve many milestones for Illinois. It is the first municipal jail in Illinois to use flex dorms. It is the first seismically/ wind-strengthened first-responder building in Illinois. It is also receiving national attention because of the scope of the project.<br /> <br /> “There are a lot of ‘firsts’ associated with this project,” says Behm. “This is the largest full-service municipal police headquarters under construction in the country. It’s very exciting.”

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