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How Redundancy In Industrial Development Can Ease The Strain

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Worker pushing hand truck in warehouse

David L. Welch is CEO and President of Robinson Weeks Partners.

One boat, one canal and one fragile global supply chain commanded the news cycle in late March as the Suez Canal blockage by the container ship the Ever Given laid bare an inefficient international logistics network that relied too heavily on optimal conditions. Due to the 220,000-ton stuck ship, vessels carrying thousands of shipping containers filled with important goods faced substantial delays in reaching their destinations in Europe, Africa and elsewhere. Although the Ever Given was finally dislodged after a six-day ordeal, questions remain about the long-term impact the blockage may inflict on the supply chain at large. 

Already, labor shortages throughout supply chain networks made it difficult for logistics providers to keep up with the rise in demand of e-commerce orders, leaving millions of dollars worth of goods stranded on the high seas in shipping containers with nowhere to go, whether in floating traffic jams outside ports, or left unpacked on land for weeks or even longer. According to data from Lloyd’s List, the Suez Canal blockage alone held up approximately $9.7 billion of products each day, further delaying already strained retailer inventory restocks. Increasing shipping container costs are another bottleneck in the process, with Freightos Baltic reporting that the cost of shipping a container has tripled since last year. 

The issue calls into question the general laissez-faire approach many logistics providers and manufacturers tend to hold towards redundancy, or the layering in of preventative measures such as back stocking inventory, diversifying markets and increasing labor supply in the event of an unexpected supply chain slowdown. Despite optimistic long-term forecasts for industrial real estate, the chance of a supply chain snag is always looming, and the pandemic has further highlighted the associated risks. 

While most disasters will not be on as large a scale as the Suez Canal crisis, the ensuing mess exposed the overwhelming fragility of our global supply chain and magnified the importance of taking action through redundancy before the unpredictable strikes. Here are three strategies to build redundancies in industrial real estate development that will serve to lighten the load on our worldwide supply chain. 

1. Increase supply of warehouse space to enhance back stocking capabilities.

A key tenet of effective redundancy strategies is to improve resiliency across the supply chain. One way to achieve this is to make sure there is an adequate number of facilities and amount of warehouse space within logistics systems that are able to store an elevated reserve of backstock. Over the last year, the industrial sector has seen an uptick in consumer demand, but the current supply of warehouses has not been sufficient to facilitate this rise. 

Put simply, the sector needs more space, particularly as growth estimates for e-commerce activity outpace production efforts. Prologis forecasts that through 2025 the national industrial market needs to add 125 million square feet of warehousing space each year to meet demand. By expanding warehouse development in critical markets, companies can build a well-connected and efficient network of properties that work together to fulfill inventory and production needs. More supply also necessitates a larger skilled workforce, which comes in handy when demand spikes during peak seasons. 

With redundancies like higher inventory levels and a larger workforce, occupiers and users that invest in a network of facilities across established and emerging industrial hubs stand a better chance at remaining resilient in a fast-moving and unpredictable logistics cycle. 

2. Focus on land and development opportunities with multiple power sources.

Industrial facilities require a reliable power source to keep warehouses running smoothly and at efficient rates of speed. According to the U.S. Department of Energy, power outages cost American businesses around $150 billion annually. Industrial operators bear much of that burden, with more than 26% of manufacturers losing power at least once a month, according to one report, and one hour of power loss can cost major manufacturers more than $5 million. A downed power line caused by a storm or construction mishap can shut down the entire operation for days at a time, posing risks to production line outputs and revenue streams while also triggering a domino effect that can shut down supply chains altogether. 

To get ahead of cases of extreme weather or other unforeseen circumstances, manufacturers and occupiers should locate in development sites that offer easy access to a variety of power options. The land slated for warehouse facilities should be amenable to alternative power supplies in the case of the stoppage of one or more power sources. In doing so, industrial users will be better prepared to manage a shutdown and will be able to quickly bounce back to pre-outage production levels once power returns in full. 

3. Develop logistics hubs that provide transport diversity.

What’s better than a well-located logistics hub near easily navigable interstates with access to key trucking routes? A logistics hub that also offers access to rail and international maritime shipping options, such as those found in burgeoning markets like Charleston, Savannah and Houston. 

To capitalize on an expected surge in investment in these markets, the Georgia Ports Authority recently approved a $205 million infrastructure improvement plan in the Port of Savannah that will enhance container capacity by 20%. South Carolina Ports has committed to a $3 billion investment strategy for the Port of Charleston, focused on improving cargo movement, port-to-rail connectivity and other infrastructure advancements. 

As online orders take over the global retail industry, companies are finding value in regions where goods can come and go by truck, train or boat, enhancing the flow of the supply chain and ensuring quick delivery speeds. Building industrial developments in these well-connected logistics hotspots will prove to yield operational efficiencies that positively impact profit margins. 

With the industrial market continuing to benefit from e-commerce tailwinds, investing in redundancies is a key strategy to avoid supply chain jams and keep business on track. Users of industrial space and industrial developers must work hand-in-hand to keep our fragile global supply chain network well-oiled and ready to tackle all the inevitable logistics conundrums to come.


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Real Estate

As Workplace Health Becomes Job No. 1, Respirators Lean High-Tech

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The image deconstructs a respirator mask to illustrate the features and functionality of its design and engineering.

Following the latest Centers of Disease Control guidance, mass confusion reigns about the role of mask-wearing.

As summer seasonal activity opens up after a full year in limbo, and as corporate and commercial America take on the challenge of rebooting normalized workplaces as an anchor of economic dynamism in the period known as “learning to live with Covid,” confusion is likely asking for trouble.

The bottom line – mask or no mask, work, play, or anywhere in between – comes down to fresh air flow, which happens naturally outdoors, and may or may not happen mechanically in indoor or otherwise closed in working environments. As firms press “go” on plans to bring some perhaps new modicum of workplace operations up to full strength, it may be that construction job sites offer a template for occupational health and safety in this latest patch of pandemic time.

“As what we call ‘Act 2’ of living-with-Covid gets underway – and particularly as the season brings warmer weather into play – the most important factor we now know about that wasn’t clear when the CDC was giving guidance a year ago is that Covid is an atmospheric virus,” says Dan Carlin, M.D., CEO and founder of JobSiteCare and CEO of WorldClinic, a Boston, New York, and Washington, D.C.-base occupational health and safety consultancy. “As capacity restrictions relax and case rates decline, the important go-forward area to focus on is on ventilation, air flow, and indoor air exchange – inside, or in tight working conditions where the air exchange is low – we’d recommend wearing a mask.”

That advice – whether it’s a window installer, a subflooring contractor, a crew member whose job involves ascending 30 floors in a buck hoist, or any other indoor employee – applies to workplaces generally. This McKinsey & Company analysis of PPE industry prospects notes: “Tailwinds and headwinds will continue to have a divergent effect on the $13.5 billion US PPE business for the next several years, both for end-user industries and specific product segments.”

There’s even a mask challenge, an initiative from the Department of Health and Human Services – Biomedical Advanced Research and Development Authority, partnering with The CDC’s – National Institute for Occupational Safety and Health (NIOSH). Its aim? To develop better designs, materials, and technologies that are more acceptable to wearers and that ensure quantified measures of performance.

Still, who should, who will, and who does wear a mask as personal protection in the days, weeks, and months ahead, as well as when, and where are questions open to intense and material debate, on a personal, workaday, and societal level. The issue’s contentiousness has been prompted in part by the timing of the White House-supported CDC guidance – which advises that fully vaccinated individuals may now go fully-unmasked, both outdoors and indoors.

Many experts contend that the timing is odd, citing three big reasons for worry.

  • As of mid-May, 40% of US citizens – 270 million doses of vaccines – are at least partially vaccinated against Covid’s – meaning that two of every five Americans, including young children for whom safety and efficacy trials continue, remain unvaccinated.
  • While daily infection rates and the number of hospitalizations have declined in the U.S., what many experts and clinicians worry about now is that Covid variants, especially more transmissible and likely more fatal ones raging in India have yet to be fully appreciated as a presence in North America.
  • As more and more businesses – corporate, operational, retail, restaurants, entertainment, and other commercial activity – reopen, bringing large numbers of people out of the relative protection of their homes and back into circulation, many of them in indoor environment, accessed via elevators, etc.

This last consideration is particularly meaningful in occupations – such as construction, where skilled workers are already in crisis-level undersupply nearly everywhere in the country – where there’s a strong correlation between country of origin and heritage of workforce members and a reluctance to vaccinate, for any number of reasons.

Occasion for anxiety about these three X factors centers not only on the public health risks – both to individuals and to groups of people in circulation who may be exposed to Covid infection by unwitting, asymptomatic Covid spreaders, some percentage of whom may or may not have been vaccinated for protection against the disease’s most harmful effects.

What’s more, that anxiety could itself work at odds with public sentiment and consumer confidence at a moment an economy navigating a delicate passage from triage damage-control to normalcy can least afford it, if people – teachers, nurses, check-out clerks, grocers, and other front-line workers – take ill in the weeks and months ahead.

For that reason, societal common sense may work as a more reliable beacon of return-to-normal behavior regarding mask-wearing than any current public health sector proclamation can. At the same time, at least one of the reasons people give as to why they’d rather not mask – even if it reduces their risk of either contracting or unintentionally spreading Covid is comfort. Although N-95s are the standard of construction jobsite performance at filtering contaminants – whether it be silica dust, other airborne particulate matter like asbestos, lead, carbon monoxide, or welding fumes, or aerosolized virus – anyone who’s had to wear one for an extended period of time, especially when it’s hot, has experienced pain enough to make one question as to whether the mask is necessary or worth it.

Technology, in design and comfort as well as in performance, durability, and usability, now figures into choices can make – taking at least some of the sources of resistance to common sense effort to keep oneself and others protected from Covid spread off the table.

For instance, Miami-based Octo Respirator Masks, created a year-plus before many of us heard of the novel coronavirus, and designed for people who work long shifts (8-12 hours) in fields where access to clean breathing air is can be difficult. Once – only about 18 months ago – that specifically applied to workplaces for construction, mining, healthcare, first responders, people living in wildfire or earthquake zones.

Now, especially amid mask-confusion, unknowns about indoor air exchange both where we work and in our means of commuting to our jobs, that means almost all of us.

Here’s where technology and design have changed the game in masks, and why that may matter more than ever as the economy tries to kickstart into high-gear and as infection rates remain a little high for comfort.

Construction workers historically use N95s or P100s, which tend to be disposable or require replacement parts – and involve throwaway filters. That’s problematic environmentally and economically, and it’s difficult to keep up with. The Octo mask tested to – and surpassed – N95 standards. Further, it’s reusable, lasting for regular use for up to a year.

Octo mask developers Natasha Duwin and Tobias Franoszek recognize that performance efficacy is only part of the equation needed for adoption and traction for their respirator device.

“N95s are usually not worn properly,” Natasha Duwin said. “Even healthcare workers misuse N95s, because they need to be fit-tested and they need to train on how to wear them cupping and sealing the face properly, which affects their breathability. But with the Octo mask, there’s minimal learning curve, because the seal fits on the face perfectly and it’s comfortable.”

Duwin notes that the genesis of the Octo technology traces back to a viral epidemic past, the 2003 outbreak of Severe Acute Respiratory Syndrome, which in turn led to global standards for workplace air and personal protection safety, the 2009 Breathe Report.

This federal government report called for 28 improvements needed in respirator masks and the Octo Respirator mask is the only one, to date, to meet the report’s 28 improvements requirements.

So, while who, when, and where to wear masks may remain open to contention as local, national and global economies reignite their engines, it’s clear that if common sense prevails, and people choose to wear a mask as they work indoors, technology has improved the comfort and performance of masking options.

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Housing Concept Honored As Finalist In Fast Company’s World Changing Ideas Awards

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render of ARCspace two-story home with solar panels.

California is extremely challenged by the nation’s ongoing housing crisis. Developers there are pressured by these challenges, so are coming up with innovative ideas that can go to scale, reducing the need in California and beyond.

One such solution also is one of this year’s finalists in Fast Company’s World Changing Ideas Awards for Spaces, Places and Cities: ARCspace, ARC standing for affordable, relocatable, community.

Christian Johnston is the founder and CEO at ARCspace and says, “What we need more than just architectural designs and renderings is actual physical building solutions that can go to scale affordably. This current housing crisis needs carbon world solutions that are ready now.”

ARCspace’s innovation is housing at a completely new level, bringing together the expertise of the construction professionals from its parent company, Sustainable Building Council. Those experts have created the ARCspace homes to be power and water grid-independent, with temporary foundations that support relocation, using smart building technologies, energy-efficient materials, and climate-proof elements such as hurricane impact glass and fire-retardant materials.

Plus, the ARCspace project is a modular build to address California’s issues with material and labor. The efficiencies of modular will allow the company to dramatically cut down the longer timeline of stick built.

“The pandemic is pushing the cost of materials up,” Johnston said. “There aren’t a lot of trades; there’s a huge lack of labor. It’s a crunch to build at scale. Plus, we’re approaching the eviction crisis, with 40 million people with threats of eviction. It’s a huge number that might be on the streets. Modular has speed and the accessibility to have prefab elements come together much quicker.”

Those material and labor issues are pushing the cost of construction of most affordable housing units to price out at more than $500,000 in Los Angeles where the company is located. Developers like ARCspace are trying to make all price reduction innovations possible. Johnston believes that ARCspace will make a very consequential impact on development costs, coming in at about 50% less than the average affordable housing.

Andre Champagne serves as the chief sustainability consultant for ARCspace and brings his expertise from the movie industry where he built on-set RVs to be off-grid, a process that led to several patents, including the off-grid mobile capsulation that allows the units to be energy self-contained. On the Avatar and Avengers set, he provided trailers that were there for a year, used daily and never plugged in, and that never required secondary generator backup power. He now uses his expertise to bring the technology to mobile and residential properties.

Champagne worked with a team of engineers from battery manufacturer Lithionics to specifically design and utilize lithium-ion batteries configured to 51 volts versus the standard 120 volts for home use to be more efficient and effective.

He also collaborated with global energy specialist Schneider Electric to transform commercial-grade, off-grid inverters to be the complete accompaniment of the rest of the energy products in the home. Their commercial grade inverters were the right size at 7,000 watts each to handle everything else the home needed to get to net zero, including the incredibly efficient photovoltaic panels and ultra-efficient thermally charged variable refrigerant flow DC inverter HVAC systems that Champagne selected.

Champagne took an auditor’s approach to building the HVAC, since it consumes so much energy.

“A standard home can have an energy draw anywhere from 3,000 to upwards of 15,000 watts with all appliances running simultaneously,” Champagne said. “Our averages were 800 to 4,000 watts, which is a 65% reduction of the standard energy consumption. When you reduce the heating and cooling draw that substantially, the PV and the other energy generating applications on the home become that much more efficient. If I had a 3-bedroom, 3-bath home, and it was running consistently at 5,000 or 6,000 watts and had an array with 4,000 watts, it wouldn’t achieve maximum energy efficiency. You need to start at the interior of the unit and reduce the use power consumption internally, regulate refrigerant value and then set the array to be more than the consumption.”

The system uses Freon that is charged on the roof by running in photovoltaic wrapped copper lines, so it only takes about 20 to 30% of the power to heat the Freon to run the AC. Plus, it’s married with a hyper-efficient, thermally-charged, variable refrigerant flow DC invertor compressor. Champagne says that the greater the sunlight gets outside, the more efficient the HVAC system runs.

These radical energy saving technologies marry with other sustainable solutions designed in the home, such as Hydraloop, a greywater reuse system within the building envelope, which recycles water to then be used for irrigation.

Fresh water is critical now in many parts of the world and will be even more important moving forward, so ARCspace uses low flow water systems, atmospheric water generation units, and hydro-panels that generate two liters of water per day.

If ARCspace can produce homes at this price point and with these technologies, home owners will save hundreds in utilities every year. But, it’s expensive to have these systems for every house, so Johnston envisions a plan to connect four homes and create a microgrid that creates a shared economy with costs shared across the community.

Regardless, these self-sustaining technologies can alleviate the multi-thousand-dollar fees associated with setting up utilities. Plus, the ARCspace homes are relocatable, so if the home has to move, the in-ground cost for putting in utilities isn’t wasted.

Several groups are noticing the innovation that ARCspace offers and are working with the builder now on concepts and prototypes.

Seth Wachtel is an associate professor and the program director of the architecture and community design program at the University of San Francisco and leads the Youth Spirit Artworks Empowerment Village project that offers youth from foster care temporary housing with life and job skills training.

The project just launched 28 homes, but the conventional construction required a lot of time and volunteer labor, which was a strain. So, Wachtel started looking for other ways to do it more rapidly and efficiently. Plus, half of the cost of the project was infrastructure, lines, plumbing, utility, and sewer, which were costs that could be eliminated with a product like ARCspace.

“ARCspace contacted us and it seemed clear that its approach addressed all these issues,” Wachtel said. “A prefabricated system that designs in windows and doors from the beginning, that can be outfitted on the site, and be done relatively quickly would be a perfect solution to add more youth housing.”

Another ARCspace project is currently in the middle of construction to be delivered and to be on display this month in downtown Los Angeles. The display will run six months and will allow the city to have a rapid affordable housing solution as a living lab to understand water and energy use as an ongoing opportunity to test clean technology.

“With ARCSpace, they have thought of the delivery of utilities and innovative ways to do that,” said Elizabeth Selby, who serves as housing innovation, senior project manager at Los Angeles’s Office of Mayor Garcetti. “They are thoughtful and creative. They are putting a prototype up and then we will do a virtual tour of it. When we look at prototypes like this, it allows us to have a conversation about how to scale it.”

While Selby is attracted to innovative ideas, she admits that there are challenges when they get into the details. However, if the concept is a success, there is the opportunity to get more support from the city.

But the bottom line is that California needs housing and needs it now. So, the self-sustaining and temporary elements of the ARCspace solution are critical to bring it online fast.

Johnston and the ARCspace team are working on getting private funding, along with unused property owned by the city, to provide 480-square-foot homes that demonstrate rapid density. There are 600 unused sites currently identified across the city, where he can spend the next couple years delivering four-unit communities.

“Now that we are fully operational with many projects in the pipeline and ready to scale, we have begun conversations with investors about a seed round to accelerate our expansion and meet this critical need faced by our nation,” said An De Vooght, co-founder and global advisor overseeing investor relations and partnerships at ARCspace. “The pandemic has changed the face of housing worldwide, creating a massive market opportunity for social entrepreneurs willing to tackle this issue. I am excited that we can bring a triple-bottom line solution, and that we can do it now.”

The bottom line is that there is a huge, urgent demand for housing across the country. The self-sustaining and temporary elements of the ARCspace solution could bring affordable housing solutions online fast.

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Bette Davis Lived Here And Now You Can, Too

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Oceanfront half-timbered house.

Few Hollywood stars achieved the stature of Bette Davis. With a career spanning more than 50 years and 100 acting credits, she was noted for playing unsympathetic characters and was famous for her performances in a range of films. A recipient of two Oscars, she was the first actor to be nominated ten times. Her career went through several periods of eclipse, but despite professional and health setbacks, she continued acting in film and on television until shortly before her death in 1989.

Now her Laguna Beach home is for sale for $19,995,000. While she has not lived in this oceanfront French Normandy estate since 1950, locals still refer to it as The Bette Davis House.

Local lore holds that the house was built in 1929 as a summer home for Charles H. Prisk, a wealthy newspaper publisher and owner of the influential Pasadena Star-News and Long Beach Press-Telegram. It was designed by Laguna Beach artist and architect Aubrey St. Clair, who was responsible for a number of grand waterfront homes designed for area A-listers. Past owners of the three-story, white stucco house have preserved many of the original features from when the actress lived here.

Located on a bluff overlooking rocky Woods Cove, a short distance from the shops, restaurants, and art galleries of Laguna Beach, the 5,400 square foot, six bedroom house perches high above the cove, with private-access steps leading to a sandy beach.

The main house, anchored by a baronial great room, leads guests to the Lookout Room and adjoining family room and dining room, all with stunning views of crashing waves and sea. With solid oak floors and updated styling throughout, the home encircles a central spiral staircase topped with a conical roof and spire.

A large, updated kitchen (one of two) has the appliances, space and finishes sought by passionate home chefs and caterers; the adjoining breakfast room’s vaulted ceiling hints at the house’s European style antecedents. Besides the four en-suite bedrooms in the main house, there is a two bedroom guest house with its own kitchen and a breezy, beach-house feel.

The vast main house butler’s pantry wears a charming, retro color scheme that is contemporary and sophisticated while evoking the 1940s, when Bette Davis’s career was at its peak.

The upper floor bar area has an ornate stained-glass ceiling. On this level there’s also a wine cellar and a fitness room. The estate boasts 5 full and 3 partial bathrooms.

This extraordinary house is listed by agent John Cain, of Pacific Sotheby’s International Realty. 

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