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Irvine Co.'s San Diego Investment Strengthens with $450M Double Purchase
By Colleen Corley, News Writer

Two more San Diego's office towers now belong to The Irvine Co., after the company spent a reported $450 million to buy the city's One America Plaza and the Koll Center. The Irvine Co., which now owns six of the city's best-known downtown properties, has committed investments totaling nearly $1 billion there--a hefty concentration in a market with a relatively small central business district.

A spokesman for The Irvine Co. noted that San Diego's educated workforce, entrepreneurial spirit and similarity to the company's home-base of Orange County, justifies the level of investment. He would not confirm the price, however, the spokesman did refute another rumored reason for such concentration: to increase the market's rental rates.

Bill Flaherty, a senior vice president with fellow Southern California investor Maguire Properties, told CPN this afternoon that aggregation in one market is the modus operandi for firms like his and The Irvine Co., because it provides unequaled local knowledge and efficiency. Maguire Properties owns more than 40 percent of the downtown Los Angeles office market.

"It gives us the ability to literally see everything happening in the market and at times to influence the market," Flaherty explained. In San Diego, The Irvine Co.'s investment activity "is probably very important to that city."

What role The Irvine Co. will play in influencing the city's rents seems uncertain, at best. One America Plaza was not even on the market when The Irvine Co. set its sights on it, and decided to pay more than $500 per-square-foot for it, according to some reports. GE Pension Trust paid just more than half that when it acquired the building in 2002.

But Flaherty pointed out that San Diego has risen to the top of nearly every list for its performance and growth potential, even surpassing perennial favorite Washington, D.C. in the Urban Land Institute's Emerging Trends report. "It's a relatively small office market, but it has an incredible energy," he observed. "That creates greater barriers to creative office space, which probably leads to Irvine's interest."

Both the Irvine Co. spokesman and Flaherty added that Irvine Co. will keep a sharp focus on San Diego. "If history is any guide," Flaherty added," they (will) be there for the absolute foreseeable future."

The Irvine Co. buys 2 more downtown office towers
Real estate giant pays record prices to boost S.D. holdings

By Mike Freeman
UNION-TRIBUNE STAFF WRITER

The Irvine Co. has hardened its grip as downtown San Diego's dominant landlord, buying two marquee office towers this week at record prices.

The privately held Orange County real estate giant gobbled up One America Plaza, the iconic downtown high rise, and the nearby Koll Center. The combined purchase price totaled $450 million, including the assumption of debt.

The deals give The Irvine Co. ownership of six top-quality office towers downtown – making it by far the core's most powerful building owner.

Over the past 2½ years, the company has acquired Symphony Towers, Wells Fargo Plaza, the NBC Building and SBC Plaza.

With the addition of One America and the Koll Center, the company's investment in downtown San Diego is nearly $1 billion.

Two Marquee High-Rises Sold Downtown
One America, Koll Center Set to Land in Irvine Co. Portfolio

By PAT BRODERICK
SAN DIEGO BUSINESS JOURNAL STAFF

One America Plaza, considered Downtown San Diego’s premier office building, and the 21-story Koll Center are being sold to the Irvine Co. for a sum that could turn the Downtown market on its ear.

The Newport Beach-based company declined to comment on the pending sale. But Jason Hughes, principal of Irving Hughes — a San Diego-based tenant brokerage that has represented the majority of tenants in both buildings — confirmed that the properties are in escrow and are expected to close early next month.

Top of Their Class!

Correction: A story in the May 16 issue of the San Diego Business Journal on the best office space incorrectly identified Bruce Shepherd as the managing partner of Luce, Forward, Hamilton & Scripps LLP. Shepherd is the managing partner for the San Diego office of Latham & Watkins LLP, which also has offices in the One America Plaza building. Luce Forward's managing partner is Bob Bell.
The Business Journal regrets the error.

When it comes to finding the highest profile, and classiest offices in San Diego, there are plenty of candidates.

More than a few local commercial brokers mentioned several buildings nestled just above La Jolla Cove, with views to die for.

But the days when this part of La Jolla served as a dynamic business epicenter have long passed, many brokers say. Today, there are only a few neighborhoods that command top rents and offer the type of exclusivity desired by status-conscious tenants.

While parts of Carlsbad, Sorrento Valley, Mission Valley and even Kearny Mesa possess fine examples of Class A office buildings, commercial brokers say the region's most sought after office space is in three areas: Downtown San Diego, Del Mar Heights and University Towne Centre.

Coincidentally, vacancy rates for office space in these areas are below the county's average of about 11.5 percent, and rents are generally above average. For the first quarter of this year, the average for Class A space for the region was $2.66 per square foot, according to Cushman & Wakefield Alliance/CREA, a San Diego-based real estate services firm.

Of the three, Del Mar Heights/Carmel Valley has the priciest rents, with some buildings commanding rates well in excess of $3 per square foot. That's ecause more and more, it's become the choice spot for executives residing in North County.

"It's a function of the proximity to where the decision-makers and upper management lives, said Mark Wayne, principal at San Diego-based Burnham Real Estate and a specialist in office space. Bottom line is that it's close to their homes, and there's a big bog-down at the merge, and if they have a choice, it's a lot more convenient for them not to have to fight the merge.

The merge, or the confluence of Interstates 5 and 805 just south of Del Mar Heights, is notorious for its traffic congestion at nearly any hour of the day.

Within the three highest demand areas, possible choices of the absolute classiest edifice abound. A good case for the most desirable and prestigious Downtown building could be made for Symphony Towers, Wells Fargo Plaza or maybe even the Koll Center.

Yet the choice for the best by a quick poll of real estate pros was One America Plaza in Downtown; the Aventine in UTC; and Del Mar Gateway in Del Mar Heights.

One America Plaza

If location, amenities and spectacular views are the main elements of what make up a trophy office, few properties compare with the distinctive 34-story tower originally designed to house the headquarters for Great American Bank, which failed in 1992.

2005 - 35 People to Watch at the Intersection of Real Estate and Technology!

Realcomm is pleased to announce this year's 35 People To Watch in 2005 list. Last year, we struggled to keep the list to 25 and ended up with 30. For any organization that has ever attempted to compile such a list, it is easy to understand how difficult this task is. There are literally hundreds of people who deserve this type of recognition, but a list of that size is not practical. Based on our experience of last year and looking forward to the future, we decided to expand the list to 35.

The real goal of this exercise is to identify those people who are at the intersection of Commercial Real Estate and technology and have demonstrated a willingness to go the extra length. As the industry and topic continues to evolve and mature, this list will be even more difficult to create. We would like to thank everyone who participated in this year's selection process!

Every industry has a group of people who are dissatisfied with the status quo and are determined to push their industry forward. Because of these people, companies, industries and countries fluctuate in their competitive position. In many cases, these individuals sacrifice personal achievements in order to advance their cause. It is not always easy to stand up to people and systems that seem to be working and suggest change. In the end, these visionaries, innovators and change agents are at the center of the evolutionary process. Without their instinct, passion, determination and persistence we might still be living in caves.

The Commercial Real Estate industry, as with others, has the types of individuals just described. They come from all segments of the business, in many cases fighting over different issues. But in the long run they all have something very much in common, they are not satisfied with the way things are working.

Because Realcomm is about Technology, Business Solutions and Intelligent Buildings as they relate to innovation and the establishment of new best practices, our list of 35 will not necessarily include those who have leased the most space, sold the most expensive project or built the biggest building. The following represents the criteria from which we will select our 35 People to Watch in 2005!

21st Century Vision
It was easy to be the most successful buggy whip salesman when the automobile was in its first stages of development. When no one believed in the auto, buggies were still selling strong. We are looking for individuals like those who, despite the great short-term opportunities in buggy whip sales, saw, understood and believed in the potential of the auto. The same is true for our industry. You can still make a lot of money closing a transaction that involves four pounds of paper. We are looking for the person who looks beyond the great short-term opportunity and has a vision for a better transaction.

Persistence
The people on our list will not be fair weather fans. Over the last six years, we have seen a number of people become interested in the topic of technology and automation when the prospects of getting rich quick were at their highest point. These people did not truly understand the long-term fundamental benefits of technology and retreated to their previous livelihoods. The individuals we are talking about never stopped believing in the potential of rethinking this 4 trillion dollar industry. Despite the hardships presented by the collapse of the tech sector they just kept going. In many cases, they have the most scars and yet have never deviated from their vision.

Patience
Patience is intertwined with persistence in many ways. However, patience differs a bit in that it requires the individual to accept the fact that this will take longer than expected and that short term gains are most likely not in the game plan. In a business culture that demands results every 60 minutes, patience is not always easy to exercise. However, the individuals we are talking about understand the concept of pay me now or pay me later and are willing to wait it out. Yes, a paper-filled transaction will get the job done and parking attendants in every lot are collecting the money. However, these inefficient processes are costing us billions of dollars in hard cash and lost productivity.

Willingness To Fail
In any business culture, these words are almost unspeakable. >From the time you graduate college, you are told, don't fail or else. In a time of tremendous change there is no possible way to achieve success without failure. In many cases it is simply mathematics. Numerous iterations of failure produce success. Tiger Woods would not be the golfer he is unless he failed more than any one of us. Going from paper-based transactions and basic concrete buildings to a digital Commercial Real Estate industry will not be accomplished unless everyone is more open to the idea of failure. The dot.com implosion represented just one phase of this transformation, yet many retreated after their first failures. The people we are looking for just kept failing. The reality is that these people, since dot.bomb, have been having some tremendous success and have created extraordinary business systems that their competitors will find hard to duplicate.

Next, we will look at four very specific areas or categories that have been impacted by technology and automation. These categories cross all industry sectors -- from design through disposition - and will continue to influence our industry in ways never imagined.

An Enhanced Tenant Experience
Our top candidates are interested in using automation to create a new live, work and play environment which represents a 21st century lifestyle. The idea of building an office building with a marble lobby and rows of traditional cubes is not in their vision.

An Automated Building
The idea of plugging a building into the Internet and redefining every job position, including property managers, security guards and engineers, is a radical concept. Top leaders are people determined to rethink, redesign and reengineer everything we have come to know and feel comfortable with while operating a building.

A Paperless Transaction
Even today, very few people believe that all of our transactions can go paperless. If in doubt, look at how 95% of our industry handles a work order request or pays their rent. Our candidates have a clear disdain for paper and the inefficiencies paper systems represent. They believe that parking gates should electronically talk to accounting systems.

Efficient, Flexible, Sustainable, Reusable Design
The innovators of the next decade also understand that technology will not only impact our transaction or management of Commercial space but can also be used in the design concepts of future buildings. The idea of calling an electrician to install an outlet will be replaced with floor systems that have user maintained electrical systems.

With our criteria defined, Realcomm is please to announce the 35 People to Watch at the Intersection of Real Estate and Technology - 2005! In some cases, we needed to select groups of individuals as it is their combined efforts which will ultimately influence the industry.

INDIVIDUALS

Peter Altobelli, Vice President
Yardi

Dan Amedro, Chief Information Officer
Archstone Smith

Larry Barkley, Founder and President
Barkley Consulting

George Bouris, National Leader Corporate Real Estate Operations and Systems Consulting
Deloitte Consulting, LLP

Gary Brandeis, Chief Investment Officer/Chief Operating Officer
Sage Financial

Anto Budiardjo, President and CEO
Clasma

Jacklene Chesler, Senior Vice President
Coldwell Banker Commercial

Paul Ehrlich, Founder and President
Building Intelligence Group

Don Etheredge, Director of Finance
Wal-Mart Stores, Inc. - Real Estate Division

Mark Friedman, Chief Executive Officer
Accruent

Stan Gale, Chief Executive Officer
The Gale Company

Hari Guanasingham, Chief Executive Officer
EuTech Cybernetics

Mike Joroff, Senior Lecturer
Massachusetts Institute of Technology (MIT)

Kevin Kampshroer, Director of Research and Expert Services
GSA, Public Buildings Service (PBS)

Geoffrey Kasselman, President
Op2mize

Joel Manfredo, Chief Information Officer
The Irvine Company

James Marrelli, Vice President of Commercial Real Estate
National Association of REALTORS

Jay Reitz, Vice President Information Technology Corporate Properties
Wells Fargo

Dr. Albert T.P. So, Chairman
Asian Institute of Intelligent Buildings (AIIB)

Stephen Spooner, Property Director of The Business Group
British Land

Brian Stolar, Chief Executive Officer
Pinnicle Properties

Steve Sutherland, Chief Information Officer
CB Richard Ellis

David Verdouw, Vice President
Colliers Seeley

Jim Whalen, Chief Information Officer
Boston Properties

Ron Zimmer, President and CEO
CABA


TEAMS

Henry Chamberlain / Dave Hewett - Building Owners and Managers Association (BOMA)

Mark Golan / Dave Clute / Wolfgang Wagener - Cisco

Richard Kincaid / David Baruch - Equity Office Properties

Niraj Patel / Tom Gimpel - GMAC Commercial

Tom Lotito / Larry Aiken - Lee & Associates

Jeffrey Finn / Finn Johnson - New America International (NAI)

Andrew Raines / Dave Anderson / John Ryan - Oracle

Ian Cameron / Andy Fuhrman - OSCRE

David Stanford / Chris Shaida / Scott Morey - Real Foundations

Matt Spathas / Steve Williams - SENTRE Partners

This Week's Sponsor...
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San Diego Riding the Wave of Real Estate Prosperity Countywide
By THOR KAMBAN BIBERMAN

The 10th Avenue Marine Terminal is on land that is underutilized, new office buildings downtown should have little trouble luring tenants, and San Diego continues to be a popular investment market.

These were just a few of the discussions held during an Urban Land Institute conference at the Manchester Grand Hyatt Tuesday.

10th Avenue Marine Terminal

Port Commissioner Peter Q. Davis reiterated his position that the 99-acre 10th Avenue Marine Terminal is not an appropriate use of the property, which had been eyed as a possible new site for the Chargers stadium.

"It's about the same size as Qualcomm," Davis said. "The terminal only generates $6 million a year. That's not net, that's gross; so that's not the best use of real estate in my opinion."

Davis is in the minority on this one. The other commissioners argue that while there are plenty of places for a new stadium, the current site is the only one for the terminal, which continues to be upgraded. The Dole Fruit Co. opened a large refrigerated complex about two years ago that is a cornerstone of the facility.

Davis noted that the port has many other issues, including the cleanup of the former Campbell Shipyard site. Davis explained that Campbell has been battling the port because it doesn't believe the cleanup was adequate, and that is just the land portion.

Cleaning up the water portion is another story. The port took the controversial move to cap, rather than clean up, the offshore portion of the Campbell site due to expense, but Davis warns that this decision may come back to haunt the port at some future date.

He explained that after the water site is capped, it will be planted with eelgrass. Unfortunately, he doesn't expect the eelgrass will stay put.

"Ships' propwash will put this eelgrass in Point Loma," he said.

Davis is pleased with the progress of the bay-front plan including the Old Police Headquarters that is now expected to include a new Bazaar del Mundo, along with a public market.

He is less pleased that many port properties are in a state of disrepair. "An awful lot of properties have deferred maintenance that's pretty offensive. We haven't worked with tenants in a way we should have done," he said.

 Office space

Turning to San Diego County's office market, Rob Lankford of Lankford & Associates, which is developing the Broadway 655 office tower, worries that sites are being gobbled up so quickly for residential that there's a danger prospective office properties might be crowded out.

"We have to figure out a way to preserve these sites. If we don't, we're going to get overridden with residential," he said.

Lankford noted that downtown has roughly 10 million square feet of office space, and claims it could support as much as 30 million square feet if a place were found to build it.

Lankford's building will have about 360,000 square feet of office space, and DiamondView Tower will have 264,000 square feet.

As Lynn LaChapelle, a Burnham Real Estate Services senior vice president, and others have noted, San Diego's office market didn't fall as far as most other office markets around the country. This is because this region has a much more diversified economy than when General Dynamics left the scene a decade ago.

Defense, which all but evaporated then, has come back to satisfy new war demands. High-technology in Del Mar Heights in Sorrento Mesa, and biotechnology in Torrey Pines and its environs have kept the region strong, LaChapelle notes. Business services functions have helped as well.

Readily developable land is in short supply from Otay Mesa to Oceanside, and price levels are being pushed to record highs.

"The high land prices are forcing increased density and pushing industrial projects to North and South County," LaChapelle said. "Look forward to speculative office developments in select submarkets such as Del Mar Heights, the I-15 Corridor and Mission Valley."

The rates as of August were 10.9 percent downtown, 9.4 percent in Mission Valley, 11.7 percent in the Interstate-15 Corridor, 13.3 percent in UTC, 14.2 percent in Del Mar Heights and 22.2 percent in Sorrento Mesa.

LaChapelle said although the countywide office market had a 12 percent vacancy factor as of August, "it can recover very quickly."

He also said all but one notable building (701 B St.) in downtown San Diego will have sold over an 18-month period ending in December. The average price was $295 per square foot, and the Wells Fargo building sale is projected to exceed $310 per square foot.

The prices are even higher in the suburban markets where Class A buildings have averaged $315 per square foot, and have climbed as high as $350 per square foot in markets such as Del Mar Heights.

LaChapelle said year-to-date office sales volume has topped $1.4 billion through September, compared to $1.32 billion in the like period in 2003, and $1.33 billion in the like period in 2002.

John Kilroy, president and chief executive officer of Kilroy Realty, whose Los Angeles firm is another active player in San Diego's office market, said about 25 percent, or roughly 1.1 million square feet of Kilroy's office space is in San Diego County. He said about another 300,000 square feet are in the pipeline here.

"We have about $500 million to $600 million in the works overall," Kilroy said.

Kilroy said he is seeing a broad cross section of users, and has been trying to provide larger, more efficient floorplates to accommodate them.

Kilroy, who is putting fiber optics in all his new buildings, said tenants are now expecting a wide range of amenities, from conference rooms to foosball games.

"In some buildings we even have tropical rain forests," Kilroy said.

Matt Spathas , a partner in Sentre Partners, said any developer who isn't developing "smart" buildings with high-speed access built in is behind the curve. He said Asia is leading the way in this regard.

"They don't only have digital buildings, they are building digital cities," Spathas said. "We're entering an age where your IP (Internet Protocol) address is as important as your street address."

 Real estate investment

Dwight Merriman, a partner in San Francisco-based Rreef Funds LLC, a large pension fund active here, said San Diego is one of his firm's favorite markets in which to invest.

Merriman predicted that the Sorrento Mesa, with its 22 percent vacancy rate, will be one of the great comeback stories of 2005.

As for investment, Merriman said "everyone's flush with capital," and suggested the greatest problem may be finding sufficient properties in which to invest.

Many have expressed concerns that San Diego's high cost of housing may be driving businesses away, and making for emptier office buildings, but Merriman said "looking from where I come from, your housing prices could be significantly more expensive."

He even said that while traffic has gotten worse here, it is not as bad as other parts of the country such as nearby Los Angeles where multiple-hour delays are not uncommon on major freeways.

Realcomm 2004 "Digie" Award Winners

The Realcomm "Digie" Awards are designed to provide recognition for those companies and individuals who have demonstrated the vision and willingness to pursue the benefits of automation and technology within the Commercial Real Estate industry. Their efforts continue to move our industry forward and for that we are grateful.

The award nomination process begins in January of each year when an invitation to nominate is sent to over 100,000 industry professionals. In May, the nominations are reviewed, discussed and debated by a group of industry experts. Through the course of this process, many websites are reviewed, products demonstrated and discussions generated regarding the products and services being offered to the industry. These organizations and individuals represent the risk takers, innovators and leaders who are not content with status quo, and who are determined to raise the bar within the Commercial Real Estate industry. For their vision, commitment, persistence and tenacity we congratulate them on winning the Realcomm 2004 "Digie" Award.

BEST USE OF AUTOMATION
Commercial Real Estate companies that are in the forefront of thought leadership and innovation understand that it is not technology that creates positive results but rather a combination of various technologies that facilitate automation. It could be a new work order management system that allows tenants to get the leak fixed faster, or integrated transaction systems that allow for more efficient and accurate transactions. Automation is central to the future of our industry. Whether it is a brokerage company or an owner/operator, those firms who understand the benefits of streamlining business processes will surely be the leaders of tomorrow. We selected firms that have used the six technologies -- Inexpensive Computers, Broadband, Wireless, Internet Appliances, a Standard Wide Area Network (The Internet) and Internet Based Integrated Information Systems (IBIIS) -- to create new business solutions and experiences for their employees, associates, tenants and business partners!

Best Use Of Automation - Academia
Carnegie Mellon University - Department of Architecture
www.arc.cmu.edu

• Continues to play a visionary role in the development of efficient and effective NextGen buildings
• Leader in establishing international relationships in respect to NextGen building projects
• Has designed and developed leading edge concepts which will impact Real Estate industry

Best Use Of Automation - Architecture & Design
Standard
www.standardsite.com

• Represents some of the most advanced and sophisticated work in the field of 3-D animation
• Exceptional ability to communicate complex building concepts using animation tools
• Fully understands relationship between visually representing business drivers and decisions

Best Use Of Automation - Brokerage
New America International (NAI)
www.naidirect.com

• Represents one of the most aggressive and visionary digital strategies in the industry
• Consistently reaches beyond the status quo for better operating models
• Has made technology, automation and efficiency an integral part of the firm's culture

Best Use Of Automation - Commercial Boards
Washington State Commercial Association of REALTORS(R)
www.wscar.com

• Was one of the first Commercial Associations to offer an organized data exchange
• Aggressively and consistently educates its members on the benefits of automation
• Takes a leadership role in the local Commercial Real Estate industry in respect to technology

Best Use Of Automation - Commercial Lending
C-Loans Commercial Lender Data Bank
www.c-loans.com

• One of the earliest adopters of technology in the Commercial Lending community
• Has continued to perfect practical Internet based lending applications for its market
• Aggressively and consistently promotes the benefits of automation to the Lending industry

Best Use Of Automation - Commercial Real Estate Law
Proskauer Rose LLP
www.proskauer.com

• Represents some of the most innovative thinking in respect to next generation leasing concepts
• Continues to push the industry in respect to the automation of traditional Real Estate contracts
• Is tireless in its continuous promotion of the benefits of automation to the industry

Best Use Of Automation - Corporate Real Estate
Sun Microsystems
www.sun.com

• Was one of the earliest promoters of aggressive automation in the Corporate Real Estate sector
• Is an integral part in a number of initiatives focused on standardization of data in the industry
• Continues to expend an inordinate amount of time to promote the benefits of automation

Best Use Of Automation - Development
The Gale Company
www.thegalecompany.com

• Is a leader in the development of NextGen Real Estate projects
• Has consistently taken risks against the advice of mainstream Real Estate in respect to innovation
• Has taken great measures to understand emerging new technologies that will impact Real Estate

Best Use Of Automation - Facility Management
Johnson Controls
www.jci.com

• Is one of the most consistent in respect to the application of technology to Facilities Management
• Despite their market leadership position continuously makes an effort to move technology forward
• Has demonstrated a desire to strategically partner in order to offer better solutions to the market

Best Use Of Automation - Real Estate Media
Smart Brief - IREM, SIOR, CCIM, CRE
www.smartbrief.com

• Represents four organizations coming together for the benefit of the Commercial Real Estate industry
• Through coordination, brings the most timely information to the industry in a very effective manner
• Demonstrates the benefits of cooperation among different organizations in our industry

Best Use Of Automation - Property Management
Equity Office Properties
www.equityoffice.com

• Has and continues to rethink every aspect of traditional Property Management
• Has used automation to create extreme operating efficiencies and enhanced tenant experiences
• Continues to reach out to many industries in search of innovation for the Real Estate industry

Best Use Of Automation - Owners/REITs
SENTRE Partners
www.sentre.com
* Clearly one of, if not the leader in vision and innovation in the Commercial Real Estate industry
* Has consistently implemented new technologies and systems to improve overall project operations
* Is passionate about providing next generation services to tenants through the use of technology

MOST DIGITAL REAL ESTATE
Digital Real Estate, Intelligent Cities, NextGen Buildings, there are many names to describe these next generation projects. There are basically four different ways a project can aggressively apply technology in order to facilitate a more digital life style: 1) Tenant Experience, 2) Building Automation, 3) Paperless Property Operations and 4) Flexible, Efficient, Sustainable Design. The ultimate goal of this technology application is not simply for the sake of technology, but rather to create an environment where tenants are happy, higher occupancy and retention occurs, rents are higher, new revenue sources are discovered and where operating expenses are lower. The accomplishment of these Real Estate goals can potentially lead to improved cash flow and subsequently, higher valuation.

Digital Real Estate - "Extreme" City
City of Seoul, South Korea
english.seoul.go.kr

• Clearly demonstrates a distinct "Digital" vision for the 21st city
• Has created, supported and facilitated next generation buildings and cities
• Has aggressively implemented broadband as the foundation for a "Digital" culture

Digital Real Estate - "Extreme" Office Building
Time Warner Center - New York City, New York
www.related.com

• Represents one of the most engaging and advanced "Digital" hotel tenant experiences
• Has implemented one of the most sophisticated broadband and wireless infrastructures
• Has implemented one of the most advanced IP based media distribution systems

Digital Real Estate - "Extreme" Retail Complex
COEX Mall - Seoul, Korea
www.coexmall.com/foreign/english/

• Through their vision they have set the new standard for the next generation retail experience
• Worked to aggregate like thinking NextGen tenants who implemented advanced retail models
• Has made broadband and digital signage an integral part of the overall retail experience

Digital Real Estate - "Extreme" Multifamily Complex
Tower Palace III - Seoul, Korea
www.emporis.com/en/wm/bu/?id=101854

• Has worked closely with SAMSUNG Home Vita to implement advanced home automation
• Utilizes a state-of-the-art broadband network to provide high-speed access to all tenants
• Have installed an advanced network infrastructure to support future applications

Digital Real Estate - "Extreme" Mixed Use Project
Cyberport - Hong Kong, China
www.cyberport.com.hk

• Represents one of the most comprehensive next generation Real Estate projects in the world
• Has aggregated like thinking, digitally orientated tenants and requires a strict selection process
• Implemented high-speed Internet and wireless access as a basic tenant amenity

MOST INNOVATIVE TECHNOLOGY
Finding fast changing, exciting, yet tactical new technology is not difficult. After visiting many industry technology conferences it becomes apparent that we often invent technology for the sake of technology. However, every once in a while a new idea, technology, concept, comes along that has industry changing potential. It will change the way we work and play dramatically and possibly without us even noticing. The Commercial Real Estate Technology sector over the last couple of years has grown to new heights and is beginning to understand what technology can mean to an inefficient industry. This category will focus on those technologies, which will dramatically change the way we live, work and play and ultimately the way we use space.

Most Innovative Technology - Real Estate Transaction
Marcus & Millichap - "iMpact"
www.marcusmillichap.com

• Has developed a state-of-the-art automated property marketing system
• This new solution has greatly improved overall Broker productivity
• iMpact is also seamlessly integrated with all the back-end operations systems

Most Innovative Technology - General Technology
Interactive Multimedia Artists - "Virtual Concierge"
www.imavideo.com

• Has been a consistent developer and promoter of next generation virtual applications
• Provides a low-cost solution which meets the needs of virtual concierge and property managers
• Has studied and perfected the human aspects of deploying virtual customer service solutions

Most Innovative Technology - Building Infrastructure Automation
InnerWireless - "In-Building Wireless"
www.innerwireless.com

• Has consistently demonstrated a distinct and comprehensive vision for wireless applications
• Is involved in some of the most sophisticated wireless implementations throughout the world
• Continues to broaden its overall vision with strategic relationships such as Johnson Controls

COMMERCIAL REAL ESTATE - "DIGITAL" IMPACT AWARD
Changing the Commercial Real Estate industry into a digital model is not an easy task. For years, the innovators have struggled to get acceptance by an industry that has been doing things the same way for a very long time. However, given the size and scope of the impact our business has on the US and International economy, combined with the fact that our systems are terribly inefficient, these visionaries have not given up. This award is designed to acknowledge those individuals who saw things ahead of their associates, had the courage to leave the mainstream and the tenacity to keep standing up after many failed attempts. History proves that we cannot accomplish major socio-economic change without these innovators and for this they need to be recognized.

Commercial Real Estate Industry - "Digital" Impact Award
Dave Clute, Manager eSolutions - Cisco Systems
www.cisco.com

• Tirelessly researches, studies and promotes new technology and operating models for RE
• Contributes an enormous amount of time and energy to industry initiatives such as data standards
• Represents global thought leadership through work at world networking leader Cisco Systems

Scott Morey, Partner - RealFoundations
www.realfoundations.net

• Consistently involved in leading edge projects; at the forefront of industry thought leadership
• Has demonstrated a constant willingness to share knowledge and vision with the industr
• An industry pioneer in respect to elevating the CIO position to that of a respected executive peer

John Gilbert, Executive Vice President, Chief Operations Officer - Rudin Management
www.rudin.com

• Truly the first NextGen building visionary with the introduction of 55 Broad Street
• Consistently and tirelessly promoting the advancement of Real Estate through technology
• Is an influential and inspirational leader in the creation of a "Digital" 21st Century New York City

Anant Yardi, Founder & CEO - Yardi Systems
www.yardi.com

• One of the early pioneers in the Commercial Real Estate automation industry
• A visionary in respect to automation systems and the resultant benefits in property operations
• Steadily, consistently built Yardi from a small company to a world-class Real Estate software firm

Again, we would like to thank these individuals and organizations that have worked so long and hard to help understand, implement and promote technologies that will continue to impact the Commercial Real Estate industry.

This Week's Sponsor...
Oracle Corporation (NASDAQ: ORCL) is the world's largest enterprise software company, providing enterprise software to the world's largest and most successful businesses. With annual revenues of more than $9.5 billion, the company offers its database, tools and application products, along with related consulting, education, and support services. Within our applications offering, Oracle provides a complete solution for Real Estate Management covering transaction/deal management, construction management, lease administration, space management, and facilities management for the Commercial, Corporate, and Retail Real Estate Markets. For more information about Oracle's Real Estate Management solution visit our website at www.oracle.com/solutions/real_estate

The Sunny City Where It All Began
SAN DIEGO, CALIF.

Population: 1.2 million
Why: In the third unwired generation
Fact: Employs the highest concentration of workers in the wireless field in the United States
If wireless technology has a birthplace, it's San Diego. In 1968, University of California, San Diego, professor Irwin Jacobs founded a company called Linkabit to create the world's first digital wireless-communications network. Today, spinoffs like Qualcomm and Leap Wireless, as well as the U.S. branches of international giants like Nokia and Sony Electronics, popu-late the region. San Diego has about 150 wireless firms and the highest concentration of wireless workers in the country. A special program at UCSD even offers a degree in wireless communications.

So it's not surprising to see the city on the cutting edge. Last year Verizon chose San Diego as the second city (with Washington, D.C.) to deploy its new, third-generation "EV-DO" high-speed wireless network. A 250-member community group called SoCalFreeNet is trying to make wireless Internet access available for free, installing a dozen public nodes around the city and in the suburbs. Some of the most interesting action is downtown. In One America Plaza, an office building that opened last year, tenants on all 36 floors get free wireless Web access. And atop the building, a company called XO Communications has installed a base station that blasts wireless broadband at speeds up to 20 mega-bits per second to subscribers.

101 W. Broadway office high-rise sold for $123 million

The 20-story, 401,625-square-foot office high-rise at 101 W. Broadway in downtown San Diego 92101, has been sold for $123 million.

The buyers were Broadway 101 Sorrento Holdings LLC (62 percent) and Broadway 101 Stonecrest Holdings LLC (38 percent). FAEC California Holdings LLC is the sole member of both new owners. The new ownership is also affiliated with American Assets Inc., a San Diego-based retail and real estate investment company.

The acquisition was financed with four loans totaling $92.8 million from Morgan Stanley Mortgage Capital Inc.

The seller of the property (assessor's parcel 533-561-08) was San Diego 101 RPF III Limited Liability Co. with SD RPFIII Holding Corp. as its general member. The seller is an affiliation of GE Capital and Sentre Partners.

The building is approximately 95 percent leased with SBC, Morgan Stanley Dean Witter, Washington Mutual Bank, Gordon & Rees LLP, Pillsbury Winthrop LLP, Baker & McKenzie, and federal offices of the probation, marshals, pretrial services, and the U.S. attorney departments.

SBC, which has its name on the building, occupies space under two leases from early 1998: Pacific Telesis Group with 7,850 square feet for 96 months and $1,417,710, full service; and Pacific Bell with 19,511 square feet for 72 months and $2,090,408, full service.

In the fall of 1999, Frontier Insurance Group leased 19,511 square feet for 90 months at $3,167,199, full service.

The building was formerly the regional headquarters for Wells Fargo Bank. General Electric's pension trust and Sentre Partners acquired 101 W. Broadway and the 22-story, 330,000-square-foot Home Savings Tower at 225 Broadway in 1996 for a total of approximately $72 million.

When an IP address is as important as a street address
By SARAH IANTOSCA, BOMA San Diego

Once a vision for the future, intelligent buildings are now a reality. Buildings that offer next generation technologies have a competitive edge in today's leasing market. More and more, tenants are shopping around to see if the building next door might offer technology that their current office space does not. In order to retain and attract tenants, owners and managers of commercial high-rises are working to integrate an array of new and innovative technologies into their building infrastructure.

"Sentre Partners' objective is to add technology and purpose to real estate," said Rob Jones, building manager of One America Plaza. "This ultimately adds value for both the building owners and tenants. Bandwidth, which measures the amount of data that can be transmitted over a network at any given time, is a utility in today's business environment. As with other utilities, such as electricity and water, it is hard to imagine conducting busin! ess today without the free flow of data via the Internet."

One America Plaza

According to Jones, One America Plaza was the first office building in the country to install a wireless network from top to bottom. The building received Centrino certification through Intel for enabling occupants to become truly mobile. This amenity gives all tenants, clients and visitors the ability to access their e-mail or virtual private network, otherwise known as a VPN, from anywhere in the building. This provides tenants with unlimited flexibility and greatly enhances productivity.

Wireless systems can also be used to enhance the ability to provide services to tenants. Building engineers can take advantage of wireless technology by carrying tablet PCs and PDAs with them while they work. Work orders from the Web-based tenant services system are instantly dispatched to the tablet PCs and PDAs devices.

"Not only does using wireless technology improve response time for service requests, but it also gives engineers the ability to close out work orders while they are waiting for an elevator," Jones said. "This enables staff to spend more time completing tasks and less time completing paperwork. Security personnel are also able to use the wireless system to pull up remote cameras or visitor lists on PDAs while making rounds."

Southwest Value Partners is preparing to launch and test TSRPlus, a new system for receiving and processing service requests, at Golden Eagle Plaza. TSRPlus is an automated office system, which sends tenant work orders to an en! gineer or technician via wireless handheld devices or e-mail. The program automatically sorts tenant requests into predetermined categories and routes the request to the appropriate service technician or engineer.

"With the launch of TSRPlus, tenants will enjoy faster, more efficient turnaround time for requests," said Ed Muna of Southwest Value Partners. "If the test program is a success, we look forward to bringing it to Comerica Bank Building and Emerald Plaza."

With a standardized broadband infrastructure in place, property managers are able to reduce costs by aggregating bandwidth, automating IT, integrating building systems and providing WiFi to all their tenants. A common building network can reduce the amount of servers and phone systems to just one for the entire building, all the while maintaining the privacy of each company's information and minimizing both burden and cost on the property manager and tena! nts. Soon companies are going to expect these amenities and property owners may miss out on leasing opportunities because of technologically outdated buildings.

Next generation building technology is not a question of if, but when. As quickly as the Internet has changed our lives, new technologies will evolve and preparing buildings to be compatible with the new technologies is of the utmost importance. The only way to keep up with evolving technology is to stay one step ahead.

Will Technology Links Attract Better Tenants?
By SHEILA MUTO
Special to RealEstateJournal.com

Ask Bruce Shepherd what convinced him to move his 200-employee law firm to four floors in One America Plaza in downtown San Diego from a nearby building, and he'll say the location, the amount and price of the square footage, the option to expand and the building's modern look top his list.

But when it was time to narrow the choices to house law firm Latham & Watkins LLP's 72,000-square-foot office, it was the 34-story building's technology that won over Mr. Shepherd, the managing partner of the firm's San Diego office. The firm relocated its office to One America Plaza last month.

Sentre Partners Inc., a San Diego real-estate investment and management firm, and General Electric Co.'s GE Asset Management, which own the 580,000-square-foot One America Plaza, offer broadband connections at a fraction of what it would cost most companies to purchase them on their own. They also provide free high-speed wireless Internet access -- or Wi-Fi -- in an effort to attract and retain tenants. The Wi-Fi connection also enables Sentre Partners, which manages the building, to control the lighting and security systems from anywhere in the building using hand-held devices.

Wireless access is available to law-firm employees, but it also "gives us an immediate way for visiting attorneys to use their computers without having to get into our network," says Mr. Shepherd. "We used to have tech people whose time was consumed with setting up visitors, so that's a nice benefit." But more importantly, the broadband offering and wireless capability convinced Mr. Shepherd that "the landlord team was forward thinking and committed to being at the cutting edge of technology," he says. "We have confidence that they will be assessing technology that works efficiently and economically in the building, and if it makes sense, they'll bring it to tenants in the building."

Despite a surge of interest in broadband and wireless Internet access, few owners of multi-tenant properties, such as office buildings and shopping malls, have followed in the footsteps of Sentre Partners and GE Asset Management. Some landlords are skeptical that such offerings will attract better tenants and enable them to charge premium rents. Others, recalling ill-fated attempts by landlords in the late 1990s to outfit their buildings with broadband access and take a cut of the proceeds, remain skeptical that tenants will buy into such offerings.
But attitudes may be changing. Divco West Properties LLC, which owns office properties primarily on the West Coast, is considering installing and offering broadband and Wi-Fi access in some of its office buildings.

Rather than have each tenant install their own wireless systems, Macerich Co., the owner of Los Cerritos Center, a shopping mall in Cerritos, Calif., about 20 miles southeast of downtown Los Angeles, is moving to install a single system that will also enable it to operate the facility using wireless devices, according to Byron Hill, director of marketing for systems technology at Johnson Controls Inc.

Milwaukee-based Johnson Controls, a maker of automotive interiors and facilities-management control systems, and InnerWireless, a Richardson, Texas, company that provides and installs wireless voice and data service systems, recently joined forces to sell to property owners a single system that can host a number of wireless services, from wireless Internet access to cellphone signals to security and other building management systems. Macerich Co. is one of the first to sign up for the system. The system "is part of the amenities owners can provide and it will add more value to facilities," says Mr. Hill. What's more, the system will eliminate the cost of moving wires if, for example, a store or office space is reconfigured, he adds.

GE Asset Management is installing the same high-tech offerings available at One America Plaza at its office complex in Phoenix, says Matthew Spathas, a partner at Sentre Partners. Mr. Spathas is also co-founder of Bandwidth Now, a San Diego-based company that installs the broadband systems. San Diego-based Wireless Facilities Inc. designs and installs the Wi-Fi systems.
Bandwidth Now and Wireless Facilities, which installed the systems in One America Plaza and two other office properties in San Diego, are currently installing the same offerings at GE Asset Management's 500,000-square-foot Phoenix property. Mr. Spathas says the broadband and Wi-Fi offerings cost about 75 cents to $1 per square foot to install.

Mr. Spathas says that almost all of the new tenants in the San Diego buildings purchase the $250 a month broadband-service package, which is about $650 a month less than most tenants would pay on their own for broadband service. He estimates that between 80% to 90% of their properties' existing tenants have purchased the broadband package after their contracts with other carriers expired.

The offerings enable "our tenants to become more productive at lower costs," says Mr. Spathas. Eventually, in return, the owners will get "higher rents and better tenants."

-- Ms. Muto is a national real-estate writer for The Wall Street Journal. Her "Bricks & Mortar" column appears most Wednesdays exclusively on RealEstateJournal. She is based in the Journal's San Francisco bureau.

The Vision Thing
The few who have guideded San Diego's future
By Herbert G. Klein

San Diego has many qualities which are unique, and most of them bode well for our future.

Unfortunately, our population also includes "pit bulls" who seem to take a bite out of anyone involved in a major new project. One has to wonder where we would be if we had not had leaders who patched up their wounds after being attacked and moved forward to complete their projects.

We are about to witness another success story of a man who persisted. Respected and generous leader. Villain or bum. Admired citizen. That is not an easy route to follow. It takes courage and belief in principle, but all too often that is how it has happened here.

Three years ago, I wrote an article about John Moores and the downtown ballpark that concluded: "If the critics will just give the East Village and ballpark project a few months out of the courtroom, San Diegans will be hailing their downtown as the pride of an already proud city."

At the time, Moores had been exonerated by the U.S. attorney of any wrongdoing in the
Valerie Stallings case, but ballpark opponents still seemed after his scalp. It was as if the pit bulls would never stop biting.

Moores, who quietly had become one of the city's most generous philanthropists and who always approached a ballgame with unwavering optimism, suddenly grew a beard almost like a disguise. It appeared that he had lost much of the sense of fun as a baseball owner.

Meanwhile, the critics roared on, and Arlington, Va., became a suitor for the professional baseball franchise.
Somehow, despite everything, Moores weathered the storm. The support he received from Mayor Dick Murphy was important, as was the driving force of partner Larry Lucchino. But it was Moores who never allowed himself to lose his focus. And the kudos he receives in the next few months will be well deserved.

The habit of the pit bull critics dates back through much of San Diego's history. Alonzo E. Horton, who envisioned San Diego as a city on the bay, had major opponents as he took the lead moving the center of activity from "old town" to "new town," the area where a plaza and shopping center now is named for him.

The city leaders who set aside land for Balboa Park had to fight off those who thought the expanse was too large for a city in its infancy.
s
The Panama-California Exposition opened in Balboa Park in 1915 and brought San Diego some of its present park buildings, but the most lasting of the features San Diego loves are the Laurel Street Bridge and the beginnings of the zoo.

In the 1930s, leaders of the Chamber of Commerce decided that if Chicago could have a World's Fair, so could San Diego, and thus was born the California Pacific International Exposition of 1935-36. The fair had a nudist colony in a canyon, but more importantly, it provided the Balboa Park buildings which house many of the city's museums of today. The exposition gave the city the start of its big-time tourist industry.

Both expositions were great successes, but civic leaders such as G. Aubrey Davidson, Oscar W. Cotton and Ed Fletcher were widely criticized as they raised $1 million to launch the 1915 and 1935 projects. Even then the pit bulls were snarling.

One of San Diego's most visionary mayors, Harley Knox, joined Glenn C. Rick in helping turn shallow False Bay into Mission Bay, but he too met defeat when he proposed the Cedar Street Mall, which was to lead a parade of civic buildings down Cedar Street to what now is the County Administration Building.

Even the development of the Wild Animal Park was contested by those who felt that the zoo's resources should be concentrated in Balboa Park.

The development of Mission Valley as a shopping center was led by the May Company and was followed quickly in the 1960s by other malls and lead stores. The battles there did not focus on individuals but on business interests; still, as predicted by George Scott, Hamilton Marston and Guilford Whitney, the malls led to the demise of downtown shopping.

It took the vision of Mayor Pete Wilson to ignite the redevelopment of downtown. Wilson escaped the pit bulls as he found a way to gain the developers' help with downtown housing while he carefully created a plan for contained growth in the suburbs. The Pardee brothers were among his first allies.

Appropriately, on the initiative of Steve Williams, downtown now has a "walk of fame" which soon will honor Wilson and already has statues for Father Horton and the late Ernie Hahn.
Hahn was the key to making the Wilson vision work. A highly respected Los Angeles shopping center developer, Hahn began work on the idea of a downtown mall in 1974 with the brilliant Jon Jerde as his architect.

Initially, Hahn was feted as the man who would regenerate a new and modern downtown. Financing was difficult in the 1970s, however, and when the project was delayed, Hahn became the major target of the pit bulls who labeled him everything from a city slicker to the town goat.

Quietly, Hahn, with Wilson's strong support, persisted. When ground was broken for Horton Plaza, the critics soon were saying they had believed in the project all along; and that is what is happening today with East Village and the ballpark. It may someday happen with Alex and Dean Spanos and their plans for redevelopment and a stadium.

Hahn built numerous shopping centers and helped develop many future plans for the San Diego region, but the opening day of Horton Plaza probably was the happiest day of his civic and commercial life. The New York Times called the shopping center "One of the most ambitious structures ever built in a single stroke in an American city."

Similar words will be heard with the opening of Petco Park. Like one of the slogans Moores and Lucchino used to promote their vision of downtown redevelopment, Petco is "more than a ballpark." Anyone who drives downtown today is overwhelmed by the building projects that carry an estimated value of $3 billion. What once was one of the most downtrodden parts of San Diego is being transformed into a mixed-use area surrounding the ballpark with sparkling beauty.

East Village was not Moores' first choice for a ballpark location, but once the city's ballpark committee recommended the area with its redevelopment potential, he became an advocate. Without the ballpark as a prime anchor, it might have taken 25 years before it was economically feasible to develop East Village.

So, as the Padres take to the field on opening night, let the bells ring out for the names of Hahn and Moores and others who, hopefully, will follow their lead.

Klein is former editor in chief of the Copley Newspapers. He was the first White House director of communications, from 1969 to 1973.

SENTRE's Next Gen Buildings Profiled By Cisco

"We continue to define and refineÔnext gen buildings'," said Matthew T. Spathas, Partner of SENTRE Partners.   A world class team has been working on this "paradigm changing" concept ....which was initially launched by SENTRE, Bandwidth Now, and Intel, with input from Corning and Cisco." 

"Our concept is really simple ...provide our tenants bandwidth as the 4th utility and Wi-Fi (wireless internet) as an amenity," says Spathas. "

Wireless in San Diego
From: Fast Company
For a view of how wireless telecom will change the way we work and live, head to San Diego--where everyone from pharmacists to real-estate brokers is now coming unplugged.

From: Issue 78 |January 2004
Page 84 By: Alison Overholt Illustrations by: Todd Watson

When Ken Berger accepted a transfer from Palm Springs, California, to the San Diego offices of Thermo Electron Corp., he promptly landed in house-hunting hell. Over the course of six months, working with two different realtors, Berger lost four separate bidding wars on homes in the area. Meanwhile, the 41-year-old business-unit president and his family were camped out in a temporary apartment. Then he found a new agent, Rick Rothman. In just one week, Berger had his new house--2,600 square feet, three bedrooms, and a den in an upscale, gated community just a quarter mile from the ocean.

This time around, there was no bidding war. Rothman had spotted the newly listed house on his laptop, thanks to its high-speed wireless connection, and used his wireless printer to take care of the paperwork. "It was a last-minute decision to swing by and see the place when we saw the listing," he says. "Ken decided he liked it and was preapproved for a mortgage, so I printed the contract on the spot and had him sign it right there--and the transaction was done. It was amazing!"

Welcome to the new wireless world. It's not just about checking your email mid-Frappuccino at Starbucks, or even about surfing the Web via Wi-Fi in the lobby of your hotel. Here in San Diego, wireless technology is already changing daily life and work in all sorts of ways for all sorts of people, from real-estate agents to doctors and pharmacists, office-building managers to hotel housekeepers.

In part, that's because the telecom and wireless industries have been woven into the life of this city for decades. One key event was the founding of an early wireless outfit called Linkabit by two pioneering University of California at San Diego professors in 1968. A generation later, spin-offs of Linkabit, such as Qualcomm, litter the local landscape, alongside the wireless divisions of larger companies such as Nokia and Siemens. As a result, San Diego has the highest concentration of wireless employment in the country. Add 75,000 miles of underground fiber- optic cable--more than in any other region of the country--and you have a picture of a very connected city. "People here see this stuff at work every day," says Berger. "It gives them higher expectations than most for seeing it put to use in their everyday lives." So take a close look at wireless San Diego, because what is now on the cutting edge here will soon set the standard for the rest of the country.

So how did Rothman actually get that house for Berger? The story starts with a Verizon service based on a nifty new technology produced by Qualcomm called EV-DO, or evolution data-optimized. Using a simple PC card, users can immediately connect to the Internet at speeds up to 2.4 MBPS (about as fast as a cable modem) from anywhere in the Verizon network where the service is offered. This kind of system is known as a wireless WAN, or wide-area network, because it includes vast swaths of geographic area in its coverage zone. By contrast, Wi-Fi, which more people are familiar with, is a wireless LAN, or local-area network, technology. Its data connections are lightning-fast but concentrated in a very small coverage area--usually a radius of just 100 to 300 feet from a base station--so it's not much use to, say, a real-estate agent showing houses scattered across the greater San Diego region. Wireless WAN data connections have been available on the nation's various cell networks for several years now, but mostly at speeds even slower than dial-up. The new Qualcomm/Verizon EV-DO network is the country's first metropolitan wireless WAN service that approaches broadband speeds.

Using a wireless Gateway laptop hooked up to the Verizon network, Rothman checked the online real estate MLS, or multiple listing service, which showed him that a new house had just gone on the market. Immediately, Rothman drove Berger to see it. Rothman filled in the contracts on his computer and sent the documents to his HP wireless printer. Seconds later, the contracts were signed by Berger and the seller of his new home.

Rothman, who, with his wife, co-owns a real-estate agency called HomeBuyer Agents, says that the technology has transformed business for him and the 15 agents who work for him, nearly all of whom are EV-DO-equipped. "We work in very competitive markets. This kind of real-time access makes the difference between you getting a house or getting into a bidding war the next day that ultimately costs you the property," he says. Verizon rolled EV-DO out in San Diego and Washington, DC, last October and, if it likes what it sees, should take it nationwide in the near future.

High-Tech Housekeeping
Across town, executive housekeeper Irma Simental is seated at a computer screen in her basement office looking over the day's workload. It's a pretty slow day at the 73-room Pacific Terrace Hotel, in Pacific Beach, a Wednesday after the high season is over. Still, there will be a few new check-ins this afternoon, and several current guests have declined housekeeping service this morning or are checking out late. It's creating a backlog for the housekeepers who were assigned to turn over those rooms for new guests, and the front desk needs to be notified about which rooms will be ready and when. Worse yet, Pacific Terrace's 13 housekeepers are from Mexico and El Salvador and speak only Spanish. Although Simental is bilingual, her assistant manager, who is from Australia, can't speak Spanish, and most of the front-desk employees don't, either.

A year ago, situations like these caused big delays and staff frustration, but today, Simental is unfazed. She glances at the flashing blocks of color on her screen and calls Faye Cooper, the Australian assistant manager, on a push-to-talk wireless phone: "Gloria is backed up on the first floor--her rooms have Do Not Disturbs on them. Switch her over to help get the check-ins ready." From the other side of the hotel, Cooper answers, "Got it," and taps a series of commands onto a wireless-enabled Compaq iPaq handheld. Scarcely a minute later, the blocks on Simental's computer screen change colors, showing that Gloria De La Fuente has "logged out" of the first floor and is headed to a different floor to help get newly vacated rooms ready for the next guests.

Cooper's and De La Fuente's iPaqs, Simental's office computer, and the Pacific Terrace front-desk computers are all connected to a program called Just-in-Time Housekeeping Integrated, or JiHi, which is made by a Quebec City, Canada-based company called Palm Hospitality Technologies, and runs on a basic Wi-Fi network installed at the hotel. When De La Fuente arrives at work each morning, she logs on to her iPaq and sees her workload for the day in Spanish. As she works through each room, De La Fuente clicks through a series of screens prompting her to tidy the room, check the minibar, enter maintenance requests, and note if the guest has refused service or still has a Do Not Disturb sign on the door. Any messages that she receives en route from Cooper appear on her screen in Spanish, while De La Fuente's own entries are immediately uploaded to the main system in English. Once she finishes a room, it appears on Cooper's iPaq as an inspection reminder. When Cooper is finished inspecting, the room appears on the front desk's computer screen as either occupied or ready for a new guest. Simental monitors the entire process from her office, or from her own iPaq as she supervises other activities around the hotel. With the built-in language translation and the always-on network of JiHi, the staff can seamlessly shift the workload around; maintenance and inventory requests are entered directly into the system, eliminating lots of data entry and paperwork. As an extra perk, hotel guests with wireless laptops can use the Wi-Fi network free of charge.

With her housekeeping staff the first in the United States to test the JiHi system, Simental was nervous about being a guinea pig. "When they told me they were bringing this in, I said, 'Ay! Why me?' But the girls caught on really fast--especially the ones I thought would be afraid of it." Now Simental says she would never go back. "I've worked everything from 250- to 1,400-room places and I can tell you, if we had this system then--wow!" Pacific Terrace's owner, Bartell Hotels, is now considering expanding JiHi to its six other hotels in the San Diego area. "I felt the biggest problem would be the fact that the housekeeping and maintenance staffs are not typically the most computer literate," says Pacific Terrace's general manager, J. Robert Kingery. "I have been floored by how the housekeeping staff took to it here." Simental smiles. "See? I told you."

Pharmacists On the Fly
Not knowing which guest rooms are ready for check-in is frustrating, to be sure. But that's nothing compared to trying to find ways to control spiraling health-care costs, improve hospital efficiency, and ensure that no sick patient ever experiences a bad drug interaction because of a data-entry mistake or delay. It's problems like these that San Diego's Sharp Healthcare is trying to address with its foray into wireless technology.

About a year ago, the managed health-care system began installing Cisco Systems Wi-Fi networks in all of its seven San Diego-area hospitals. The first efforts--the introduction of rolling, wireless computer carts in intensive care and the emergency room--were a way to save space by eliminating large, fixed computer stations and clearing away cumbersome coils of cables. They were also an effort to improve efficiency and reduce mistakes--wireless-networked devices allowed hospital staff to track and update patient care and billing information while on the move, rather than storing up handwritten notes until the end of the day, then performing time-consuming and mistake-prone manual data entry. "This way, nurses can complete charting in the ICU, or track care decisions made in the ER, on the spot," explains Sharp's chief information officer and senior vice president William A. Spooner.

At Sharp Memorial Hospital, a 330-bed hospital in the north end of San Diego, practicing pharmacist and resident "computer guy" S. John Johnson is leading Sharp's latest wireless pilot program, which tests tablet PCs with the hospital's pharmacy staff. Today's hospital pharmacists often make rounds in the wards to check prescriptions written by doctors, watching for allergies or drug interactions. In the past, Johnson would make his rounds, then either hunt for a free computer terminal at the nurse's station or return to his desk in the first-floor pharmacy to input information into the computer and approve the medicines. Only then could a nurse collect the drugs and administer them to the patient.

Now, Johnson does everything in real time on his wireless Toshiba Tablet PC. "We can approve in-house prescriptions from wherever we are," he says. As the pharmacist moves from ward to ward, his prescription approvals register on the hospital's computer network. Most of the hospital's drugs are stored in large automated dispensing machines in each of the 14 nursing stations at the hospital. The networked machines, which are manufactured by San Diego-based Pyxis Corp., resemble overgrown ATMs. Once prescription approvals are uploaded to the network by the pharmacist, attending nurses can log on to the nearest Pyxis machine with a user name and a fingerprint scan and receive the drugs.

Next on Johnson's wish list is making the approval process for outpatient prescriptions similarly efficient. Most of those still arrive as faxes, which quickly pile up. A new fax server will take the faxes electronically, then redirect them to pharmacists' tablet PCs for wireless approval. Patients may now regularly wait as long as two hours for a prescription; Johnson predicts that the new system should cut that to 45 minutes. But the real impact will be felt in rural clinics that can't afford full-time pharmacists. Using a Pyxis machine at the clinic and the server at Sharp, a hospital-based pharmacist could help review off-site prescriptions and the medicine would automatically dispense at the clinic.

With the success of the pharmacy pilot program, and with mobile computer terminals already a fixture throughout the hospital system, Spooner is already looking for other ways to deploy wireless technology at Sharp, including outfitting some doctors with wireless iPaqs to track patient care and ensure proper billing. "Health care is a no-brainer industry that needs it," he says.

Better Office Buildings
Back downtown, commercial real-estate developer Matthew Spathas is surveying the city from one of the highest vantage points in San Diego: the rooftop of One America Plaza, a newly opened commercial office building managed by Sentre Partners, of which Spathas is one. The roof offers a view of two other Sentre Partners properties: the NBC building and the SBC building, both with bold logos that proclaim their identities across the skyline. These three buildings are the start of what Spathas hopes will be a revolution in the way businesses look at bandwidth and wireless access.

The NBC and SBC buildings are fully wired office spaces where new tenants have plug-and-play 100 MBPS Internet access the instant they move in. The lobbies and plaza areas are popular free Wi-Fi hot spots. But it is One America Plaza that is Sentre's crown jewel: a 600,000-square-foot office building with the trademark ready-to-use broadband access, but also featuring Wi-Fi access on all 34 floors, (not to mention the four below-ground parking levels). The wireless service, which offers connection speeds up to 54 MBPS over a Cisco Systems Wi-Fi network, is free to all tenants, while jacking into the 100 MBPS wired network costs just $250 per month. That compares to the typical cost of about $900 per month that an individual commercial tenant normally pays in order to receive T-1 service (60 times slower) from a local ISP--and that's not including installation, or the subsequent costs of deploying a private Wi-Fi network.

Spathas contends that sky-high broadband prices are the result of inefficient installation. Imagine, he says, if each tenant had to install his own electrical service on moving into a building. "Of course it's expensive to run 34 different lines into the building, sending out teams to rip things up 34 different times," he says. Sentre offers broadband as a standard part of the building's infrastructure, just like water and electricity--and it is priced accordingly. Spathas sees this shift as an inevitable step toward meeting rising customer expectations for full-service corporate real estate. Free Wi-Fi is just icing on the cake. "Broadband is a utility; Wi-Fi is an amenity," he says. "You don't get charged for every extra ride on the elevator or every drink at the water fountain."

The strategy seems to be working. One America Plaza, which started offering the new service in June 2003, is at 95% occupancy with 35 tenants. Bruce Shepherd, a partner at law firm Latham & Watkins, decided to move 200 employees into the building in February 2004, largely on the strength of Sentre's broadband and Wi-Fi strategy. "This service and what it evidenced about their management style was a big part of that decision," he says. "If they're forward thinking about this, we figure they will probably continue to think ahead about other issues as they come up."

Spathas believes that over the next decade, commercial developers everywhere will move toward providing bandwidth according to his utility model. To that end, he has cofounded a broadband utility company called Bandwidth Now, hoping to capitalize on the trend. In the meantime, he is sure that San Diego is riding a very important wave of the future. Taking in the view from the top of One America Plaza one last time, he pauses, then says, "We're going to be the wireless capital of the world."

Dressing up McDonald's
Downtown outlet adopts makeover more befitting its business clientele

The room seems like the perfect place for the ultimate power lunch.

A long conference table ringed by executive chairs is alongside the far wall.

The lithographs on display are tastefully arty, the potted plants tall and lush and the sofa and other furniture invitingly overstuffed.

In the middle of it all, a $61,000 Yamaha Disklavier piano plays classical sonatas.

Warren Buffett's inner sanctum? Try Ronald McDonald's.

The McDonald's on Broadway Circle in downtown San Diego just got a major McMakeover that largely eschews the company's familiar look of golden arches and clown mascot for a bright, boardroom setting.

It seems that the fast-food outlet – which is in the heart of the area's business district – wasn't snagging enough professional types, who make up the bulk of downtown's restaurant clientele, and even fewer children.

"We sell very, very few Happy Meals here," said Bob Sutherland, who bought the store in September.

Thus, the veteran franchisee, – who operates 13 McDonald's in the region, decided to spend $350,000 to lend the 160-seat eatery a subtly adult ambience.

"We wanted to create a real place where businesspeople could sit down and have lunch," Sutherland said.

It's all part of a strategy by the country's top fast-food chain to allow its franchisees to remake their stores to better reflect surrounding neighborhoods, instead of relying on cookie-cutter designs that aim at the industry's traditional audience of youngsters and men between 15 and 35.

Indeed, several other McDonald's outlets in the county have recently been themed with wall murals and similar design innovations saluting everything from the heroes of the 9/11 disaster to Olympic athletes.

In another marketing twist, McDonald's has opened several upscale McCafe coffee houses in the Bay Area and other parts of the country, challenging Starbucks with a menu of low-priced lattes and pastries.

The re-imaging of the McDonald's brand, however modest so far, parallels menu renovations the firm has initiated in the last year to counter the defection of fickle customers to the burgeoning fast-casual sector, which includes companies like Baja Fresh and San Diego-based Rubio's.

For instance, McDonald's said in September that it would test-market healthy "Go Active" meals for adults that include salads, exercise booklets and pedometers to encourage walking.

Burger King likewise recently introduced a new line of low-fat, baguette-style chicken sandwiches, and San Diego-based Jack in the Box has been selling a wide range of salad entrees and healthy fare.

Analysts said that specially designed stores like the "Executive McDonald's" downtown aren't necessarily for everybody and that they probably won't become a model for the chain.

"This will be a very small part of the system that will only be seen in upscale urban locations," said Dick Adams, president of the San Diego-based Franchise Equity Group, which represents 600 McDonald's franchisees.

For one thing, most operators can't afford major interior decorations on their outlets "because they have already taken on tremendous debt," Adams said.
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Sutherland sat the other day in the restaurant's new executive dining room, which is situated off the main floor behind a locked gate.

"The lock is to protect the piano," explained Sutherland, noting that the use of the room is restricted to business clientele who must first call for reservations.

However, customers who book the space shouldn't expect gourmet dishes instead of Big Macs and fries. Like everybody else, they will have to order meals off the regular menu board.

Sutherland bought his first McDonald's in Bonita more than 20 years ago after having passed on an offer to purchase the downtown outlet he finally acquired in September.

"The store needed a new image," he said in explaining his reasons for the large out-of-pocket decorating expenses.

Sutherland said he expects the restaurant to greatly expand its customer base as the entire fast-food industry regains the glory it enjoyed in previous decades.

"I feel strongly that our best years are ahead of us," he said.

Koll Center San Diego’s Next “Next Gen Building”

SENTRE Partners announced today that the 382,000 square foot Koll Center San Diego will be the next “next gen” building in San Diego.

Koll Center will follow the innovative lead of other SENTRE projects including One America Plaza, the NBC Building, SBC Building and the San Diego Tech Center. K

"We continue to define a ‘next gen building’," said Matthew T. Spathas, Partner of SENTRE Partners, whose firm teamed up with GE Asset Management in October of last to purchase the building. A world class team has been working on this "paradigm changing" concept ....which was initially launched by SENTRE, Bandwidth Now, and Intel, with input from Corning and Cisco. 

"Our concept is really simple ...provide tenants bandwidth as the 4th utility and Wi-Fi (wireless internet) as an amenity," says Spathas. "By installing a common, agnostic network, called a ‘Building Optical Network’ (BON) which is paid for and owned by the building owner, Koll Center can deliver up to gigabit network speeds at a fraction of the cost. Additionally, and as important, Wi-Fi will be provided throughout the entire building as an amenity," adds Spathas.

Koll Center will be the third building in the SENTRE portfolio to obtain Intel® Centrinoª mobile technology certification.   Centrino is Intel's new technology designed specifically for mobile computing with integrated wireless LAN capability and breakthrough mobile performance.

SENTRE is exploring a host of other new services to provide it's tenants including video conferencing to the PC, Managed IP Telephony and Managed IT Services in an effort to increase tenant productivity and drive down tenant IT costs.

"The real estate industry needs to help set the agenda," Spathas says. "This is really no different than the move from kerosene to electricity or stairs to elevators. Owners did not rely on third parties to pay for, install, and own the electrical network or the elevator system. We would be crazy to let a third party own this essential building infrastructure. Optical wires and switches should be treated like electrical wires and the transformer…owned by the building, managed by a third party for the benefit of our tenants. Bandwidth is purchased in bulk off the bandwidth grid in the same manner power is purchased off the power grid."

Tenants of Koll Center will enjoy "wired" plug and play connectivity to the Internet which will burst up to 100 Mbps for only $250 per month. This is approximately 60 times faster and 1/5th the cost of a typical T-1 (1.5 Mbps) connection. Additionally, the entire building (21 floors will be Wi-Fi (wireless) enabled. Wi-Fi use will be offered at no charge to Koll Center tenants, guests, and visitors. "We believe this is the second building in the US to deploy wireless in every square inch of the building (One America Plaza was the first). We have moved from the concept of ‘Hot Spot’ to ‘Hot Building’. Our tenants thought free Wi-Fi was cool in the public places, but they really wanted it in their office space," Spathas added.

Utilizing the deployment, tenants, guests, and visitors will be able to turn on a laptop, PDA or web tablet and immediately be on the net. If you can get on the net, you likely can get on your network. "Our tenants, their clients, and visitors won’t be crawling behind credenzas looking for a dial up connection", adds Jennifer Renfro, building manager at Koll Center.

Making the system even more unique, SENTRE will deploy numerous back end uses to better serve its tenants. One example includes a web based work order system, utilizing the wireless infrastructure. "Our engineers will carry web tablets and Pocket PC’s, opening and closing tenant work orders on the spot", adds Renfro.

SENTRE Partners is a San Diego based real estate investment and services company who manages, leases, and / or owns assets in excess of $500 million. SENTRE’s value added strategy is simple ...putting purpose and technology into real estate.

Wireless Facilities Inc. is responsible for the installation, deployment, and network management. WFI is the leading independent provider of network outsourcing solutions for the wireless telecommunications industry.

San Diego based Bandwidth Now, a market leader in Next Gen building networks, will handle front end provisioning for the network. Other Bandwidth Now buildings in San Diego include the San Diego Tech Center, the NBC Building, and the SBC Building.

For more information, see www.bandwidthnow.com and Cisco News.

Planning for Renovation -- How one 20-year-old office building was transformed into a Class: A Property Real Estate Journal

By: JACKIE JENNINGS

Renovating an existing building can be more challenging than new construction. The renovation of 225 Broadway in downtown San Diego was achieved by developing a cohesive vision, setting project goals and communicating with the project team, building representatives and tenants.

In 1996, 225 Broadway, located adjacent to Horton Plaza in downtown San Diego, was in need of a face-lift. The 22-story, 330,451-square-foot corporate office building had reached its 20th birthday. Although 225 Broadway had remained in fair condition since its first tenant arrived in 1976, its age was starting to show.

Seven years and $7 million in renovations later, 225 Broadway has been transformed into a premier Class A property. The building serves as the new San Diego home of NBC-owned-and-operated television station NBC 7/39 and more than 30 other companies.

Defining Project Goals

In a renovation's preplanning stages, the project owner needs to develop an enduring vision of just what the facility should be after the renovation, then develop project goals to fulfill that vision. Questions to ask include:

• What factors are driving the renovation - upgrading systems, installing new technology, upgrading finishes, new tenants, changes in space function, the desire to enhance aesthetic appeal?

• Is the goal to upgrade the building to reposition it in the market and command higher rents?

• What are the quality expectations for various aspects of the build-out?

• Can the budget realistically support those expectations?

For 225 Broadway, one overriding goal was to revitalize the building to give it a more defined market presence downtown. To achieve this goal, Sentre Partners Inc., which manages and leases the building, decided to transform 225 Broadway into a showcase for the latest in digital telecommunications, multimedia and personal computing technology in order to attract progressive, high-quality tenants.

The building thus underwent numerous technology upgrades, including installation of bandwidth or wireless communications infrastructure; a state-of-the-art enterprise technology center; a completely "wired" media center with capabilities for videoconferencing, PowerPoint presentations and Internet access; a new fire-life safety system; and a new security and surveillance system with 26 video cameras and a tenant-access card system for garages and elevators.

Other improvements to 225 Broadway included aesthetic upgrades to the building's ground-floor lobby and common areas; a retrofit of the building's parking garage; new window tinting throughout the building; new energy-efficient heating, ventilating and air conditioning systems on several floors; and refurbishing Horton Square, the building's outdoor plaza. Also, 18 of the building's 22 sets of restrooms received $1.2 million in upgrades.

In addition, 26,000 square feet of space was built out to house new offices, a broadcast studio and production facilities for the NBC affiliate's television station.

Johnson & Jennings General Contracting served as the general contractor for the build-out. Jossy+Carrier Design Group was the interior designer and space planner for the station's 14,859-square-foot business office and conference center located on the third floor of the building. Rock Architects was the architect for the ground-floor studio and newsroom space.

Maintaining Communication

To achieve desired goals for any renovation, communication among all parties is critical. To help minimize the impact of renovation work on office operations and tenant nerves, facility managers and the renovation's project team should work collaboratively to develop strategies that address potential headaches.

What issues will affect the schedule of the project? Will work take place while the building is occupied, or will it involve phased moves? Gathering input from all relevant parties goes a long way in enhancing communication and preparing for any challenges ahead.

Communication also should extend to those affected by but not directly involved in the renovation work: for example, tenants and visitors. A clear communications strategy can help explain why the renovation is necessary, when it will happen, what the new layout will be and how the company plans to deal with the renovation.

Tenants want to know that the renovation team has considered how a project might affect them and that steps are being taken to minimize any disruption to their work environment.

A recent example was the tenant-improvement construction for the 19,000-square-foot law offices of Pillsbury Winthrop in downtown San Diego. The renovation was completed in 11 phases to minimize disruption to the law firm's employees and operations.

For many renovations, the general contractor leads the effort to develop a communicative and collaborative relationship between the project team and facility executive. The general contractor's on-site superintendent, in particular, plays a vital role. The superintendent should communicate on a regular basis with all involved parties to keep them apprised of any project delays, challenges or milestones.

Executing a Realistic Schedule

Because many renovations are performed while most buildings remain at full tenant occupancy, painstaking attention to the logistics and scheduling of the renovation becomes critical.

Key to an effective project schedule for a renovation is to keep it realistic. Some people think that because renovation work involves an existing building it should be quicker than new construction. A schedule should be developed after careful evaluation of all issues - weather concerns and tenant disruption - that drive the timing of a specific project.

Typically, the project team's first step is to develop a building sequence or schedule of how construction should progress through the facility. The team must determine when and how project work will be performed: floor by floor horizontally, in detailed phases or randomly as space becomes available.

The design-review process, the time necessary to order materials and the contracting relationship on the project also need to be calculated into the final schedule.

A well-thought-out schedule can serve as an important tool not only in controlling construction but also in communicating the details of the project plan to the facility executives and tenants. The goal is to keep the renovation flowing smoothly without sacrificing quality of construction work or going over budget.

The recent $9 million build-out of new shell space for the San Diego law offices of Cooley Godward in the University Town Center area of San Diego exemplifies this notion. The project team, which included Howard-Sneed Architecture and Design, Johnson & Jennings and the Irving Hughes Group, collaborated to ensure that project goals were achieved while maximizing time- and cost-efficiency.

Preparing for the Unexpected

Once the project sequence is in place, the project team should develop plans to handle potential disruptions. The contractor should coordinate all subcontractor activity and communicate daily with the facility executive. Interruptions and system shutdowns should be scheduled well in advance. Affected areas and services must be identified and contingency plans established in the event that a system shutdown is prolonged unexpectedly.

Further, it is wise to set aside a contingency budget of 15 percent to 20 percent because even the most carefully planned project can be hit with a few surprises. A contingency fund should be developed above and beyond the allocated budget for the project. That way, any unexpected costs can be handled while staying within formal budget parameters.

Jackie Jennings is president of Johnson & Jennings General Contracting, a San Diego-based general contracting firm specializing in corporate office, retail, health care and industrial facility tenant improvements.

Low Vacancy Rates a Catalyst Behind Area Buying Spree Investor’s Kearny Mesa Deal Quadruples in Value
NEWS & TRENDS
by Mandy Jackson, Staff Writer

Low vacancy is resulting in big investments around the county.

In markets (Downtown San Diego and Kearny Mesa) and property types (apartments) with low vacancy, investors are scrambling for good buys.

Of course the foresight of these investments remains to be seen. As some have noted over the last year or so, aggressive investors paying top dollar may not be able to get the high rents they need to justify big buys.

On the first day of October, GE Asset Management and San Diego-based SENTRE Partners, for an affiliate of GE Pension Trust, teamed up to acquire the Koll Center in Downtown San Diego.

In December, the partners bought nearby 570,000-square-foot One America Plaza for $166.3 million.

The 20-story, 373,000-square-foot Koll Center was built at 501 W. Broadway in 1989. The property is 90 percent leased.

The developer, the Koll Co. of Newport Beach, was the seller. Kraig Kristofferson, Robert Smith, Michael McMenomy, Michael Kane, and Nelson Ackerly of CB Richard Ellis represented the Koll Co. in the sale.

The buyers did not release the sales price.

“It’s a great building. Koll is a great developer of great spaces,” said Steve Williams, president of SENTRE.

Big Buy
GE Asset Management and San Diego-based SENTRE Partners, for an affiliate of GE Pension Trust, acquired the 373,000-square-foot Koll Center in Downtown San Diego from the 1989 developer, the Koll Co. of Newport Beach.

SENTRE and GE will add a building optical network to add bandwidth and Wi-Fi accessibility to the property. The bandwidth will be an optional utility for Koll Center’s tenants. Wi-Fi, which allows wireless Internet access, will be a free amenity.

When the property was put on the market, there was no selling price, Kristofferson said. There were several institutional investors offering bids for the property, he noted.

SENTRE will take over leasing and management duties from CB Richard Ellis.

However, CB recently gained the marketing assignment for San Diego-based Cisterra Partners’ $80 million office tower behind right field at Petco Park.

Kristofferson, Ackerly, Joel Mayne, and John Gross of CB are pre-leasing the 14-story, 300,000-square-foot office building, which the developer is calling DiamondView Tower and expects to open in 2006.

Before joining CB, Mayne was a vice president for San Francisco-based Catellus Urban Development, which has been planning One Santa Fe Place, a 26-story office tower on Pacific Highway for the last few years.

A Diamond View
San Diego-based developer Cisterra Partners recently unveiled renderings for its 300,000-square-foot office building, DiamondView Terrace, which will be constructed behind the right field of Petco Park in Downtown San Diego.

• • •

Investment Quadrupled: Newport Beach investor Layton-Belling & Associates turned a $10 million Kearny Mesa investment into $46 million worth of dispositions.

Rick Sparks of CB Richard Ellis represented the investor in the long series of transactions.
LBA originally purchased the three-building, 120,000-square-foot Balboa Corporate Center for $10 million in 1998.

At the time, the main tenant, Overland Storage, was contemplating its need for more space, Sparks said.

LBA bought 9 acres for $7.3 million in Miami-based Lennar Partners’ Spectrum development in Kearny Mesa and built a 158,000-square-foot building for Overland.

Last year, W.P. Carey of New York bought the new building for $28.5 million.

Back at the Balboa Corporate Center, LBA leased a 26,000-square-foot building to San Diego County and sold it for $4.8 million.

Last month, LBA sold the final two buildings totaling 96,646 square feet, and vacated by Overland about a year ago, to Jack Henry & Associates Inc. for $12.85 million.

The buyer, represented by Tim Fisher of Glaze Commercial Real Estate Advisors, will use the property for its San Diego-based affiliate, Symitar Systems Inc.

• • •
Kearny Mesa Selling High: According to Sparks’ colleagues at CB Richard Ellis, office and industrial sales dropped off in Kearny Mesa in the first half of the year.

However, for buildings that did sell, prices were high. The area’s vacancy rate reversed the trend of the last few quarters and dropped, ending the second quarter at 5.7 percent.

Bradley Black, Robert Merkin, Patrick Collins, and Larry Jackel of CB reported that only seven properties sold in the first half of 2003, but they totaled $75 million. In the same period last year, 23 properties sold. However, the average sales price of $133 per square foot this year is much higher than in 2002.

If recent transactions are any indication, investment activity may be heating up.

In addition to LBA’s recent sale in the Balboa Corporate Center, a 55,450-square-foot industrial building sold for $10.25 million.

Mickey Morera, Mark Wayne, and Lynn LaChapelle of Burnham Real Estate Services represented the buyer, Aardema Family Trust, and seller, W9/PC Real Estate LP, in the industrial sale at 4255 Ruffin Rd.

However, as the guys at CB Richard Ellis report, few Kearny Mesa buildings are for sale. Owners are holding their properties since they can’t find replacement investments.

• • •

On the Apartment Side: As the county’s vacancy remains below 5 percent, Pacific Property Co., a subsidiary of Encino-based Marcus & Millichap Co., continues to nab local apartment complexes.
Pacific Property bought the 324-unit Bay View Summit complex east of Mission Bay for $32 million, and the 86-unit Home Park Village in City Heights for $8.5 million.

Kevin Mulhern and Dick Schneider of CB Richard Ellis represented both parties in the Bay View Summit transaction at 3103 Clairemont Drive. The seller was Stoneridge Investment Corp. of Palm Springs.

The company’s acquisition manager, Rory Gardner, said in a press statement, “San Diego will continue to be an area targeted for investment; housing remains in short supply and San Diego’s economy continues to demonstrate diverse growth.”

Pacific Property has spent $132 million in San Diego County in the past year.

Send residential and commercial real estate news to Mandy Jackson via fax at (858) 571-3628 or via e-mail at mjackson@sdbj.com. Call her at (858) 277-6359, Ext. 114. County Water Authority’s.

Partnership Forum Seeks to Recruit Contractors
The San Diego County Water Authority is taking reservations for its fifth annual Creating Paths to Partnerships Networking Forum to recruit local contractors for upcoming construction projects.

The event connects new and existing general contractors, subcontractors, engineers, and consulting firms with the water authority and its member agencies, including cities and municipal water districts. It also provides various sessions on bidding for projects, contracting laws, and other topics.

The event is set for 8 a.m. to 4: 30 p.m. on Nov. 13 at the DoubleTree Hotel at 7450 Hazard Center Drive in Mission Valley.

Registration, which includes lunch, costs $50 per person before Oct. 17 and $60 after that. It supports the water authority’s Paths to Partnerships Scholarship Program.

Deal of the Week Commercial/Sale - Koll Center on Broadway!

  The 20-story, 372,828-square-foot Koll Center at 501 West Broadway in downtown San Diego has undergone something of a change in ownership.

According to recorded documents, title to the office high-rise passed from KCSDI, a California limited partnership with Koll Broadway Associates as its general partner, to 501 West Broadway SD PT LLC.

The deed noted that KCSDI is the sole member of 501 West Broadway PT, and that "beneficial ownership interest in the real property has not changed (merely a change in the method of holding title in which the proportional ownership interests in the real property, directly or indirectly, remain the same immediately after the transfer)."

KCSDI was represented by Robert Smith and Michael Kane of CB Richard Ellis' Newport Beach office, and Kraig Kristofferson and Nelson Ackerly of CB's San Diego office.

MetLife provided a loan of $61 million.

The building was constructed in 1989. A distinctive feature is a 32-foot glass atrium lobby filled with palm trees, an aviary and two saltwater aquariums. Atop the building's seven-level partially subterranean parking structure is an athletic club with outdoor swimming pool.

The building is reportedly currently 90 percent leased. Major tenants include Ernst & Young, Allen Matkins Leck Gamble & Mallory and Sheppard Mullin Richter & Hampton.

A statement from CB Richard Ellis said 501 West Broadway PT is a partnership of GE Asset Management and Sentre Partners. GE Asset Management was reported to have other downtown San Diego holdings: One America Plaza, the NBC Building and the SBC Building. Sentre is an acronym for Stewards and Entrepreneurs of Real Estate. Its partners include Steve Williams, Mike Peckham, Matt Spathas, John Brand and Matthew Belshin. Sentre will manage and lease the building.

KCSDI is a partnership that includes an affiliate of the Koll Co. of Newport Beach, Shapell Industries and Goldrich & Kest.

Latham & Watkins LLP said it advised GE on the Koll Center transaction. The buyer was a limited liability company controlled by a Latham & Watkins client.

The Latham team for GE from the San Diego office included Bruce Shepherd, finance and real estate partner; Christopher Isaac, finance and real estate associate; David Boatwright, tax partner; and Tiffany Barzal, associate.

Ownership changes in Koll Center, a downtown Broadway office high-rise

The 20-story, 372,828-square-foot Koll Center at 501 West Broadway in downtown San Diego has undergone something of a change in ownership.

According to recorded documents, title to the office high-rise passed from KCSDI, a California limited partnership with Koll Broadway Associates as its general partner, to 501 West Broadway SD PT LLC. The deed noted that KCSDI is the sole member of 501 West Broadway PT, and that "beneficial ownership interest in the real property has not changed (merely a change in the method of holding title in which the proportional ownership interests in the real property, directly or indirectly, remain the same immediately after the transfer)."

KCSDI was represented by Robert Smith and Michael Kane of CB Richard Ellis' Newport Beach office, and Kraig Kristofferson and Nelson Ackerly of CB's San Diego office.

The building was constructed in 1989. A distinctive feature is a 32-foot glass atrium lobby filled with palm trees, an aviary, and two saltwater aquariums. Atop the building's seven-level partially subterranean parking structure is an athletic club with outdoor swimming pool.

The building is reportedly currently 90 percent leased. Major tenants include Ernst & Young, Allen Matkins Leck Gamble & Mallory and Sheppard Mullin Richter & Hampton.

A statement from CB Richard Ellis said 501 West Broadway PT is a partnership of GE Asset Management and SENTRE Partners. GE Asset Management was reported to have other downtown San Diego holdings: One America Plaza, the NBC Building and the SBC Building. SENTRE is an acronym for Stewards and Entrepreneurs of Real Estate. Its partners include Steve Williams, Mike Peckham, Matt Spathas, John Brand and Matthew Belshin. SENTRE will manage and lease the building.

KCSDI is a partnership that includes an affiliate of the Koll Co. of Newport Beach, Shapell Industries and Goldrich & Kest.

The Koll Building transaction is the latest in a series of ownership changes in major downtown San Diego office properties.

Most recently, the 18-story, 186,977-square-foot Washington Mutual Tower at 707 Broadway, a ground lease on a portion of the block the building occupies, and an adjacent 12-story parking structure at 901 Seventh Ave., were sold for a total consideration of $35 million to entities controlled by The Shidler Group.

The seller purchased the property in December 2000 for $19,257,000. The 95-year ground lease expires in 2089. In early 2002, the seller said he was spending nearly $11 million to improve the building and parking structure.

Other sales of major downtown San Diego high-rise office buildings in late 2002 and 2003 include the 27-story, 547,488-square-foot First National Bank Center at 401 West A St. for approximately $111.52 million; the 18-story, 320,000-square-foot 110 Plaza building at 110 West A St. for $55 million; the 570,000-square-foot, 34-story One America Plaza at 600 West Broadway for $166.2 million; the 570,383-square-foot Symphony Towers at 750 B St. for $134 million; and the 13-story, approximately 186,494-square-foot former Bank of America building at 625 Broadway for $20.5 million. Also changing hands this year was the 23-story, 173,682-square-foot Chamber Building at 110 West C St.

Koll Center goes for at least $88 million!

The Koll Center, a 20-story downtown San Diego office tower overlooking the bay, has sold for at least $88 million to a partnership made up of GE Asset Management and SENTRE Partners.

The building, at 501 W. Broadway, is one of several downtown towers that have sold in the past 12 months, including One America Plaza, Symphony Towers, the First National Bank Building and the Washington Mutual Building.

Investors have been attracted to downtown San Diego because of the relatively low vacancy rates compared with other cities.

In the second quarter, the office vacancy rate downtown was about 11 percent, according to CB Richard Ellis. That compares with about 19 percent in downtown San Francisco and 15.6 percent in downtown Denver.

"We believe downtown San Diego represents a good long-term investment, and Koll Center fits into that strategy," GE Asset's Roland Siegl said in a written statement.

GE Asset, an institutional real estate buyer representing the pension fund of General Electric employees, now owns four buildings in downtown San Diego. It purchased One American Plaza, 600 W. Broadway, for $166.2 million last winter, and it also owns the NBC Building and the SBC Plaza.

"GE is playing a little Monopoly" in downtown San Diego, said Craig Irving, a principal in the tenant brokerage Irving Hughes. "They have Boardwark and Park Place."

Koll Co., Shapell Industries and Goldrich & Kest sold the 372,828-square-foot high-rise, which has a 10 percent vacancy rate, said Kraig Kristofferson, one of four brokers from CB Richard Ellis who worked on the deal.

Kristofferson wouldn't provide an exact price for the building, which was built in 1989. But he said it sold for less than One America Plaza's $285 a square foot and for more than Symphony Tower's $236 a square foot.

Based on that calculation, the building's minimum sales price was $88 million.

Irving, the tenant broker, said it makes sense that the Koll Center would sell for less than One America, the marquee office building downtown with top-quality tenants taking up several floors.

Koll's tenants tend to rent smaller amounts of space or are local companies, said Irving.

"It's a little more of a risky investment with a rent roll like that," he said.

Major tenants in Koll Center include the Ernst & Young accounting firm and the law firms of Sheppard Mullin and Allen Matkins.

SENTRE Partners will manage and lease the building.

Wireless Net firm bets timing is right
By Jennifer Davies
UNION-TRIBUNE STAFF WRITER

Stop if you've heard this one before.

Building high-speed Internet networks in cities is too expensive and too cumbersome. The answer: Do it wirelessly.

That was the pitch during the New Economy craze, with companies large and small promising to provide super-fast wireless Internet connections to office buildings at a fraction of the cost of installing fiber in the ground.

The results weren't pretty. High-profile companies such as Teligent and Winstar raised billions of dollars only to go belly up as demand failed to materialize and technological glitches called into question the wisdom of using that method.

Bill Stensrud, chief executive of Ensemble Communications, a San Diego company that makes wireless Internet networking equipment, understands the cynicism. In a Powerpoint presentation explaining Ensemble's prospects, one slide sums it up: "It's been tried. It failed. What's different?"

The answer: "Timing."

Unlike three years ago, when wireless Internet access was too expensive and too questionable to compete with wired networks, Stensrud said that Ensemble can now offer a real alternative to the wired Internet.

While it can cost as much as $250,000 to install the fiber needed to offer high-speed Internet to a large office building, Ensemble's equipment costs only $10,000.

Ensemble does it by attaching its equipment to the rooftop of an office building that already has a connection to the fiber network. It then can provide high-speed Internet service, also known as broadband, to any office building within a 5-mile radius.

The market is ready for this low-cost option, Stensrud said. Unlike during the technology boom, when companies had a "build it and they will come" mentality, businesses now will only install equipment if they can make money immediately, he said.

"Everyone is being a lot more intelligent about how they spend money," Stensrud said. "They are saying, 'I'm not going to dig up streets and put fiber in until I know I can make money – right away.' "

The result, Stensrud said, is that those who want high-speed Internet access can't get it.

"The biggest problem in the industry is that the fiber footprint is frozen," he said. "As a result, businesses who want broadband access can't get it.

According to Vertical Systems Group, a technology consulting firm, only about 10 percent of the commercial buildings in the United States with 20 or more employees have access to the fiber-optic networks that deliver high-speed Internet access.

XO Communications, an upstart company that focuses on providing a variety of telecommunications services to businesses, is betting that companies desperate for broadband access are willing to try out Ensemble's technology. The company has mounted Ensemble's equipment atop One America Plaza in downtown San Diego and the Tech Center in Sorrento Mesa and has signed up 10 customers for its service.

Ken MacDonald, general manager of XO's San Diego operations, said by using Ensemble's technology his company can bypass the local phone company and provide faster Internet service.
"Essentially what it does in this tough telecommunications market is provide higher bandwidth at lower costs," MacDonald said.

XO is so sold on the technology that the company plans to roll out the service nationwide next year.

But some analysts question if the time is right for the type of service Ensemble and XO are offering.

Peter Jarich, a wireless infrastructure analyst with Current Analysis, a Virginia market research firm, said many businesses are still skittish about wireless Internet service despite the potential cost breaks.

"If I had to choose between wireless and wireline, wireline still is considered a lot more reliable," Jarich said.

Stan Schatt, an industry analyst for Forrester Research, said what Ensemble and other fixed wireless companies need is a standard before the market for their services can really take off. Currently, there is work on a WiMAX standard that could provide wireless broadband service in as much as a 30-mile radius. Ensemble joined the WiMAX standard alliance in June.

"They can tell you now is the time that the market is going to explode," Schatt said. "But it's probably a year before it becomes a standard."

He likened the adoption of WiMAX services to that of Wi-Fi, which provides super-fast Internet access in select locations for up to 300 square feet. It wasn't until the Wi-Fi standard was approved that the technology took off.

Still, Stensrud said Ensemble's time is coming. The company has been through more than its share of turmoil as the telecommunications market imploded in the past few years. Ensemble, which had as many as 200 employees, is now down to about 50 and has nearly an entirely new management team including Stensrud.

That the company has survived the tough telecom market so far is a testament to Stensrud's belief in the company. Stensrud, who also is managing partner of Enterprise Partners, a San Diego venture capital firm, said his firm has invested $125 million into Ensemble because it believes in the technology and the market for it. The backing is even more impressive considering Enterprise Partners shut down more than half of the telecommunications companies it was investing in the past few years.

"We made a bet that it would make sense to finance this company through the valley of the shadow of death because at the end there would be pie in the sky," Stensrud said.

The Hopeful Look of an Expanding City Glimmers from Downtown Office Tower
NEIL MORGAN

After a corkscrew climb into the service tower of One America Plaza, a few inches shy of 500 feet high (abiding by FAA law), I stared down and out at a San Diego I hadn't met before.

From up there, ours seems a sun-splattered, cloudless community with hills and waterfronts where anyone of right mind would choose to end his wanderings.

Yet every day now, downtown looks different.

On this bright morning, it's studded with see-through silhouettes of rising towers; and with deepening holes, in most of which the Vancouver contractor Natale Bosa is pouring concrete for yet more condo towers. Somehow, these days, their price is rarely the buyers' primary consideration.
My climbing companion, Steve Williams, seemed to be salivating as he rotated in our snug cage. I assumed he was enraptured by 360-degree, postcard views from Point Loma to the Tijuana hills, up the coast past La Jolla, eastward beyond the slopes of Balboa Park and the hazier dinge of East Village.

It may be, instead, that he lusted for all that empty real estate down below. Downtown San Diego is far from finished. It is still changing shape and form. Williams deals, as a partner in Sentre, with commercial properties. He grows evangelical about loading buildings with bandwidth and any other threshold technology he finds.

Intel attorneys made him and his partners stop advertising San Diego office buildings as having Bandwidth Inside. Williams got even. He ended up as a consultant to the Intel Inside people on wiring office properties.

We hadn't made that climb because his business needed a puff. One America is 93 percent leased. Two other downtown buildings are NBC (95 percent) and SBC (86 percent). Suites with water views, he says, disappear like popcorn.

We stood up there staring out at the towers of 92122, variously known as University City, University Towne Centre, La Jolla and who knows what else (you 92122 people are not trapping me again in your feuds over no man's land).

"With all these new buildings in this city," I asked Williams, "and with all these builders, why did it take an out-of-town developer like Bosa to sense that the next big San Diego bonanza was in downtown living?"

"Because he's from out of town," Williams snapped. "People from somewhere else always see these opportunities before the locals." Williams seemed annoyed by the question. He has been in San Diego 20 years. The condo boom surprised him.

During a far too short hour in that tower, we looked out close below us on what might become North Embarcadero, what might come to celebrate Dead Men's Point, what could become a historic police station, what increasingly becomes a cruise ship port, what blighted upper Broadway should become as quickly as possible. We saw the blur that should become a verdant East Village adjoining the ballpark. We looked at all the waterfront blocks of parked cars (mostly Navy and port properties) that might become almost anything.

From anywhere up high over downtown, you stare down at San Diego's missed opportunities. There's the ingenious Cedar Street Mall that was planned from the County Administration Building to Cortez Hill and Balboa Park - but never built. You can look up to 12th Avenue and follow its course from Balboa Park and San Diego High down toward ballpark and railroad and bay, and wonder if Mayor Murphy's splendid plan for an avenue from park to bay will survive the furor over how it gets over or under the railroad tracks.

You can see the now barren stretches of bayfront that North Embarcadero planners envision. Our downtown bayfront has a hungry, unfinished look about it. You can trace the route of a sky rail that would encircle downtown, giving visitors a showpiece scenic loop and, finally, providing travelers a short transit connection to Lindbergh Field.

Those blocks of parked cars near the waterfront are astonishing to see from above.
They include Navy parking and the port's precious old Lane Field ballpark square at Broadway and Pacific Highway, long ogled for an opera house, music hall, library, and more.

But none of these blocks will continue long to serve as parking lots. They glisten down there below like bridesmaids waiting to catch their bouquets. Location, location, location. The blue bay is magic; it laps at a downtown that's dressing up for another fresh chance.

Please keep sharing your ideas for a more livable San Diego. Or, if you prefer, for a city worthy of our affection.

We have plenty of mottos, from America's Finest City on, but they begin to ring hollow. We have stacks of outside consultants' plans, including a few splendid ones that we have failed to give a chance.

What we need are earnest people with specific ideas – like North Embarcadero, for instance – people who have the energy and the nerve to ask: "How many ideas for improving San Diego have come from within our communities, instead of from outside developers? Why can't we start building support ourselves for a more handsome city?"
We can, with the old cry: Aim higher.

Neil Morgan can be reached by e-mail at neil.morgan@uniontrib.com.
Copyright 2003 Union-Tribune Publishing Co.

San Diego’s One America Plaza announces bandwidth as a utility and Wi-Fi as an amenity!

The 600,000 square foot One America Plaza, which stands out as a symbol of the San Diego skyline, announced today what is believed to be the first "building owned" wired and wireless network in a multi-tenant building in the United States.

"This is truly a ‘next gen building’," said Matthew T. Spathas, partner of SENTRE Partners, whose firm teamed up with GE Asset Management in November of last year to purchase the building. A world class team has been working on this "paradigm changing" concept.....which was initially launched by SENTRE, Bandwidth Now, and Intel, with input from Corning and Cisco.

"Our concept is really simple...provide bandwidth as the 4th utility and Wi-Fi (wireless internet) as an amenity," says Spathas. "By installing a common, agnostic network, called a ‘Building Optical Network’ (BON) which is paid for and owned by the building owner, One America Plaza can deliver up to gigabit network speeds at a fraction of the cost. Additionally, and as important, Wi-Fi will be provided throughout the entire building as an amenity," adds Spathas.

"The real estate industry needs to help set the agenda," Spathas says. "This is really no different than the move from kerosene to electricity or stairs to elevators. Owners did not rely on third parties to pay for, install, and own the electrical network or the elevator system. We would be crazy to let a third party own this essential building infrastructure. Optical wires and switches should be treated like electrical wires and the transformer…owned by the building, managed by a third party for the benefit of our tenants. Bandwidth is purchased in bulk off the bandwidth grid in the same manner power is purchased off the power grid."

Tenants of One America Plaza will enjoy "wired" plug and play connectivity to the Internet which will burst up to 100 Mbps for only $250 per month. This is approximately 60 times faster and 1/5th the cost of a typical T-1 (1.5 Mbps) connection. Additionally, the entire building (34 floors and all 4 levels of below grade parking) will be Wi-Fi (wireless) enabled. Wi-Fi use will be offered at no charge to One America Plaza tenants, guests, and visitors. "We believe this is the first building in the US to deploy wireless in every square inch of the building and parking garage. We have moved from the concept of ‘Hot Spot’ to ‘Hot Building’. Our tenants thought free Wi-Fi was cool in the public places, but they really wanted it in their office space," Spathas added.

Utilizing the deployment, tenants, guests, and visitors will be able to turn on a laptop, PDA or web tablet and immediately be on the net. If you can get on the net, you likely can get on your network. "Our tenants, their clients, and visitors won’t be crawling behind credenzas looking for a dial up connection", adds Rob Jones, building manager at One America Plaza.

Making the system even more unique, SENTRE will deploy numerous back end uses to better serve its tenants. One example includes a web based work order system, utilizing the wireless infrastructure. "Our engineers will carry web tablets and Pocket PC’s, opening and closing tenant work orders on the spot. No more forms in triplicate," says lead building engineer Reese Layton. "We will also use the wireless infrastructure in the deployment of wireless web enabled security cameras and voice over IP communication," adds Layton.

SENTRE Partners is a San Diego based real estate investment and services company who manages, leases, and / or owns assets in excess of $500 million. SENTRE’s value added strategy is simple...putting purpose and technology into real estate.

Wireless Facilities Inc. is responsible for the installation, deployment, and network management. WFI is the leading independent provider of network outsourcing solutions for the wireless telecommunications industry.

San Diego based Bandwidth Now, a market leader in Next Gen building networks, will handle front end provisioning for the network. Other Bandwidth Now buildings in San Diego include the San Diego Tech Center, the NBC Building, and the SBC Building.

Middle Eastern Investors Buy U.S. Properties Despite Tension

Middle Eastern investors are pouring more money into U.S. commercial real estate, even as anti-American sentiment runs high in the region and the U.S. commercial real-estate industry has hit a low point.

During the first four months of this year, Middle Eastern investors spent $579.1 million on U.S. real estate, up 34% from the year-earlier period, according to Real Capital Analytics Inc., a New York-based real-estate research firm. For all of last year, Middle Eastern investors bought more than $1.2 billion in U.S. commercial real estate, compared with just $263 million in 2001.

Isam Salah, New York-based co-chairman of the Middle East and Islamic finance group for the law firm King & Spalding LLP, expressed some surprise at the figures. That's because in recent months he has seen a "diversification away from U.S. real estate" by the firm's clients, which have been investing more heavily in Europe.

But the increase in investing may simply reflect the type of properties Middle Eastern investors are going after. Compared with German investors -- the largest source of foreign investment in commercial real estate in the U.S. last year at $4.3 billion -- Middle Eastern investors "are much more entrepreneurial in their investments and are willing to take on a bit more risk or off-base investments," says Robert White, Real Capital's president. As a result, many Middle Eastern investors are finding less competition for properties, he says.

Staying Fresh
Joie de Vivre Hospitality Inc., a San Francisco-based owner and operator of boutique hotels, is making changes at two of its 24 properties.

Later this week, the four-year-old Costanoa Coastal Lodge & Camp, a camping resort in Pescadero, Calif., a coastal area about 50 miles south of San Francisco, will unveil nine tents with redesigned interiors and one completely new outdoor-living structure -- a prefabricated modular dwelling created by local designer Edgar Blazona.

Sporting names like "The Tree House," "Erotic Whimsy" and "The Little Grass Shack by the Beach," the new accommodations are the result of what will become an annual effort whereby Joie de Vivre will invite artists and designers to "redefine how to live outdoors" by revamping a handful of Costanoa's 100 tents. This year's redesigned tents, which cost about $30,000 to renovate, will be available to visitors through Nov. 10.

Then this weekend at the flagship Phoenix Hotel in San Francisco -- a favorite with touring rock bands -- a new restaurant and bar will open, replacing Backflip, the retro bar the company opened 51⁄2 years ago. The laid-back feel and earthy tones of Bambuddha Lounge replaced the high-strung energy and shimmery decor of Backflip. Bambuddha's decor and Southeast Asian menu also will change with the seasons, says Christina Deeb, one of its owners.

A five-year renovation plan is the standard within the hotel industry, says Rob Delamater, a Joie de Vivre vice president. "You want to stay looking new and fresh so there's no fatigue about the product."

Getting Connected
In an effort to attract and retain tenants, the owners of a 34-story office tower in downtown San Diego are offering free wireless Internet connections and broadband connections at a fraction of what it would cost most companies to purchase them on their own.

"We're offering Wi-Fi [the wireless Internet service] as an amenity" to tenants, and "broadband as a utility, like electricity," says Matthew Spathas, a partner at San Diego-based Sentre Partners Inc., a San Diego real-estate investment and management firm that purchased the 580,000-square-foot office tower, known as One America Plaza, with GE Asset Management, last November. The building is 94% leased.

The Wi-Fi and broadband offerings, which cost about 50 cents per square foot to install, will enable "our tenants to become more productive at lower costs," says Mr. Spathas. In return, the owners will get "higher rents and better tenants."

Next month, the law firm International Practice Group will move to One America Plaza. While the landlord's $250-a-month broadband package didn't factor into his decision to lease space there, Guillermo Marrero, the partner in charge of the firm, says he plans on buying it because the least-expensive equivalent he could find costs $800 a month. "It is a significant savings, particularly for a smaller company like ours," which has 10 employees, he says.

Tenants Tune Into Free Wi-Fi
By: boston.internet.com Staff

The owners the America Plaza office building in San Diego believe they're the first to offer free wireless (define) Internet access to tenants, guests and visitors.

"We have moved from the concept of 'Hot Spot' to 'Hot Building,'" Matt Spathas, of SENTRE Partners said. "Our tenants thought free Wi-Fi was cool in the public places, but they really wanted it in their office space."

Spathas said Wi-Fi will give his company an edge over competitors. Occupancy rates in downtown San Diego still hover around 90 percent despite the economy.

The project was completed in two months for approximately $300,000 - $130,000 for switches; $110,000 for fiber-optic cabling, pull boxes and patch panels; $40,000 for installation; and $20,000 for wireless access points, Spathas said.

Because the costs of the wireless access points is relatively minor, SENTRE does not boost lease rates. SENTRE received advice from Intel, Corning and Cisco Systems. Wireless Facilities handled network installation and Bandwidth Now the network provisioning.

Wi-Fi access in America Plaza covers all 34 floors and all four levels of the underground parking garage. Anyone with a laptop, PDA or web tablet will be able to get onto the Internet.

Tenants can also access wired connectivity at speeds up to 100 Mbps for $250 per month. That's approximately 60 times faster and 80 percent cheaper a T-1.

But the wireless network isn't only for tenants. SENTRE will use it as a building management network. Tenant will be able to place work orders using the wireless infrastructure that will be sent to staff carrying Web tablets and Pocket PCs.

The network will also be used for security cameras and Voice-over Internet protocol systems.

Two more Wi-Fi hotspots to be deployed
By JENNIFER McENTEE
San Diego Daily Transcript

 
The Reuben H. Fleet Science Center and the One America Plaza building will soon be involved in a project intended to make wireless Internet access one of San Diego's business and tourist attractions.

As part of the Bandwidth Bay initiative, the two facilities will in the next several weeks become free Wi-Fi access points, called "hotspots." Inside the buildings and in lobbies and courtyards, typically within at least 1,000 feet, wireless device users can tap into a Wi-Fi network. Wi-Fi is a term short for wireless fidelity.

They join hotspot locations already in use at the Santa Fe Depot, the NBC building and the 101 W. Broadway building in downtown San Diego.

Bandwidth Bay is a joint effort of private and public organizations including the city of San Diego, the Centre City Development Corp., the San Diego Economic Development Corp., Ensemble Communications, Wireless Facilities Inc. (Nasdaq: WFII), Sentre Partners and XO Communications (OTC: XOCM.OB).

Organizers say Wi-Fi networks are a low-cost way to promote business and tourism in the downtown area; establishing a network typically runs about $20,000, and costs a few hundred dollars a month to maintain. Lawyers could meet in a boardroom without scurrying back to their desktop computers for a file. Doctors attending a medical convention could check e-mails without tracking down a modem.

"This is a tool for business development downtown," said Derek Danziger, communications manager with the Centre City Development Corp. "This keeps San Diego at the forefront of technology savvy cities."

The idea isn't exclusively San Diego's. San Francisco has experimented with free Wi-Fi hotspots for several years, and New York City's nonprofit Downtown Alliance intends to deploy seven hotspots in lower Manhattan during the month of May.

These free, city-sponsored programs are considered among the first of their kind, as compared to the fee-based approach taken by corporations including Starbucks (Nasdaq: SBUX).

Downtown San Diego's hotspots were first made public in October 2002. Bandwidth Bay officials said usage numbers are not yet available.

Jordan Silbert, director of rebuilding initiatives for the Downtown Alliance in New York, said his organization saw Wi-Fi as "one more piece in the puzzle" of economic development.

The various hot spot sites will be an asset to New York businesspeople, drive commercial office space leases, attract tourists who will go on to patronize local restaurants and stores, and show the rest of the nation that lower Manhattan is "open for business" post-Sept. 11, Silbert said.

Matt Spathas, a partner with Sentre Partners, said Tuesday the Wi-Fi network set up at downtown San Diego's One America Plaza will be unique in that the entire building -- all 34 floors, four parking levels, an outdoor plaza and trolley station -- will be Wi-Fi-enabled. Wi-Fi access at the ground floor level will be made possible by Bandwidth Bay, while the rest of the building was set up with wireless Internet access by his other venture, a bandwidth business called Bandwidth Now.

The Reuben H. Fleet Science Center network is distinctive because it will expand the Bandwidth Bay project out of the immediate downtown area and into Balboa Park, Spathas said.

Ultimately, San Diego must compete with other big U.S. cities for business and tourism, he said.
"San Diego may be the wireless capital as it refers to cellular (technology), ... but we're not the Wi-Fi capital yet," Spathas said.

He said San Diego needs more people interested in making wireless Internet widely available in the region, and to educate more people about how user-friendly the technology can be.

To that end, Bandwidth Bay organizers are planning a "connect event" at the Santa Fe Depot for sometime this summer. They intend to invite people to bring their wireless devices to the station, log on to the Internet and get any help they might need from on-hand tech support.

Though some newer computers come pre-installed with the components to tap into a wireless network, most laptops and other wireless devices require that a Wi-Fi network card and certain software be installed.

Intel nominates SENTRE for Computerworld Honors Program
Herndon, VA.

  SENTRE Partners has been nominated has nominated by Intel for its paradigm changing BITS (Building IT Services) concept in commercial real estate. A committee of leading IT industry chairmen serves as the nominators for inclusion in the archive. The original 32-member chairmen’s committee now includes almost 100 IT leaders from around the world.

SENTRE’s work will become part of the global archive and be available in more than 125 of the leading museums, archives, libraries and other academic institutions around the world. Archives can be viewed at www.cwheroes.org/globalarchive.pdf.

Included in the 2003 collection are 313 case studies originating from 33 countries, ranging from Australia to Venezuela, and include notable entries from the Czech Republic, New Zealand, Nigeria and Russia.
The Computerworld Honors Program brings together the Chairmen or Chief Executive Officers of the foremost information technology companies in the world and the world's leading universities, libraries and research institutions to document a revolution in progress: the global information technology revolution.

Established in 1988, the Program is dedicated to identifying the men and women, organizations and institutions, that are leading this revolution and to recording the impact of their achievements on society.

Primary source materials, such as case studies, oral histories, conference proceedings, publications, video tapes, and other records generated by this on-going "search for new heroes" are preserved, protected, and made available to both scholars and the general public, on line but also through a program of source and license donations to affiliated universities, libraries, and research institutions around the world.

Who Is Pushing The Envelope?

In any business there are leaders and followers. There are always some companies that, by their very nature, take more initiative, greater risk and push the envelope. This is especially true when it comes to technology, automation and the re-engineering of business processes. The results are not always guaranteed, yet these innovators move forward and ultimately forge the path that others will someday follow.

Last week, we speculated that the owners of Commercial Real Estate are investing more on automation than any other segment in the industry. Although there is no official study to substantiate this claim, discussions with various owners made it apparent that some where much more serious than others, about their investments in technology and their vision to re-invent the business.
In preparation for Realcomm 2003, we have been trying to get a better understanding of what these owners are thinking and why. What they have told us is that it is not about technology at all, but rather about improving the performance of their properties. The goal is quite simple, improve the tenant experience, which positively impacts retention/occupancy, and drive down operating expenses. The following represent some of the different applications of technology and automation being considered and in some cases implemented by Commercial Real Estate owners:

Tenant Experience

• Broadband as an additional utility - provided free of charge
• Wireless Hotspots and Wireless High-Speed Internet Access available throughout the property
• Digital Signage, acting as a bi-directional communication medium
• Advanced Phone Communications Options, IP Telephony offered to all tenants
  

Web-Based Applications

• Automated Lease Submission (beginning with Multi-Tenant)
• Portfolio Management
• Security Management
• Work Order Maintenance
• Procurement
• Parking Automation
• Automated Payment - Electronic Funds Transfer (EFT)
• IP-Based Controls, Automated Facilities Management
• Energy Management

New Business Models Emerging - Centralized Call Centers for Property Operations

• Reduction of On-Site Personnel
• Automation of Tenant Communications
• Standardization of Protocols
• Faster Response Time
• Higher Tenant Satisfaction
• Lower Operating Costs

Each of these automation initiatives is a project unto itself. However, the real results occur when all of the potential automation prospects are considered as part of a larger strategic vision. Owners in the US have different perspectives on this topic, some extremely conservative and some very aggressive. Those owners who are "leading the way" are not only having great results, they are helping to improve the overall performance and productivity of our industry. The following represent the owners who believe in technology and the benefits of automation and are considered to be "Pushing The Envelope"!

Equity Office
Lincoln Property Company
Sentre Partners

These three companies are leading the charge to redefine every aspect of how a building is used and operated. The ideas and concepts that today are considered leading edge, will someday soon become mainstream. Business is about change and those who "Push the Envelope" will lead us into a new way of operating buildings in the 21st Century!

The technology is changing fast; the new ideas are coming even faster. Join us at Realcomm 2003 in June as Richard Kincaid, CEO of Equity Office, shares what this innovative giant is doing to transform their company into a "Digital" model. Also, don't miss the Owner/REIT MegaSession that will focus on other companies that are leading the way and achieving great success with innovative new approaches to a very traditional business.

SENTRE named one of the "Top 3 Most Innovative" In the US by Realcomm!

Who Is Pushing The Envelope?

In any business there are leaders and followers. There are always some companies that, by their very nature, take more initiative, greater risk and push the envelope. This is especially true when it comes to technology, automation and the re-engineering of business processes. The results are not always guaranteed, yet these innovators move forward and ultimately forge the path that others will someday follow.

Last week, we speculated that the owners of Commercial Real Estate are investing more on automation than any other segment in the industry. Although there is no official study to substantiate this claim, discussions with various owners made it apparent that some where much more serious than others, about their investments in technology and their vision to re-invent the business.

In preparation for Realcomm 2003, we have been trying to get a better understanding of what these owners are thinking and why. What they have told us is that it is not about technology at all, but rather about improving the performance of their properties. The goal is quite simple, improve the tenant experience, which positively impacts retention/occupancy, and drive down operating expenses. The following represent some of the different applications of technology and automation being considered and in some cases implemented by Commercial Real Estate owners:

Tenant Experience
- Broadband as an additional utility -- provided free of charge
- Wireless Hotspots and Wireless High-Speed Internet Access available throughout the property
- Digital Signage, acting as a bi-directional communication medium
- Advanced Phone Communications Options, IP Telephony offered to all tenants

Web-Based Applications
- Automated Lease Submission (beginning with Multi-Tenant)
- Portfolio Management
- Security Management
- Work Order Maintenance
- Procurement
- Parking Automation
- Automated Payment - Electronic Funds Transfer (EFT)
- IP-Based Controls, Automated Facilities Management
- Energy Management

New Business Models Emerging - Centralized Call Centers for Property Operations
- Reduction of On-Site Personnel
- Automation of Tenant Communications
- Standardization of Protocols
- Faster Response Time
- Higher Tenant Satisfaction
- Lower Operating Costs

Each of these automation initiatives is a project unto itself. However, the real results occur when all of the potential automation prospects are considered as part of a larger strategic vision. Owners in the US have different perspectives on this topic, some extremely conservative and some very aggressive. Those owners who are "leading the way" are not only having great results, they are helping to improve the overall performance and productivity of our industry. The following represent the owners who believe in technology and the benefits of automation and are considered to be "Pushing The Envelope"!

- SENTRE Partners

- Equity Office

- Lincoln Property Company

These three companies are leading the charge to redefine every aspect of how a building is used and operated. The ideas and concepts that today are considered leading edge, will someday soon become mainstream. Business is about change and those who "Push the Envelope" will lead us into a new way of operating buildings in the 21st Century!