A blog for job seekers and employers in the architectural, construction, engineering and real estate development industry

Commercial real estate bust?

Real Estate Econometrics Releases Fourth Quarter Default Projections for Bank-Held Commercial Mortgages

“Recent reports from a couple of research firms confirm that defaults on US commercial property loans are surging, standing at the worst level in 16 years. The reports also confirm it is going to get much worse going forward into 2010 and 2011, also as expected.”

Rising Default Rates

“The national default rate for commercial real estate mortgages held by depository institutions rose from 2.88 percent in the second quarter of 2009 to 3.40 percent in the third quarter. Over the same period, the multifamily mortgage default rate increased by 44 basis points, rising from 3.14 percent to 3.58 percent. These increases are consistent with reeconometrics’ projections for the commercial mortgage default trajectory in 2009.”

Via the always lovely and never-ever-depressing-to-read Real Estate Economics


Outlook? O.K.

Consensus Construction Forecast
2010 Projected as Another Weak Year for Nonresidential Construction

Improvement later in the year in the institutional sector will lead an overall nonresidential recovery in 2011
by Kermit Baker, PhD, Hon. AIA
Chief Economist

The long-awaited economic recovery seems to be well-underway, and even the residential construction sector looks like it has hit bottom and is moving back up after almost four years of deep declines. Nonresidential construction, unfortunately, is still mired in a steep downturn. Overall nonresidential construction spending declined over 10% between October 2008 and October 2009. The buildings portion of the nonresidential sector has performed even worse, given the federal stimulus program’s focus on infrastructure investment, which pushed up spending on streets and highways by 5% over this period, and conservation and development projects (such as dams, levees, and breakwaters) by 23%.

Via AIArchitect & Ohio Green Building Law.

Encore toutes mes excuses, AIA

So, I was thinking… Did I give AIA a bit of unfair attention? I couldn’t really say for certain either way.

That’s when I thought perhaps I should review some of the major professional organizations reports, opinions and guidance on the recession and the status of the workforce.

I’m unwilling to admit out fearing admitting guilt. I was wrong.

A look at the organizations:

Associated General Contractors of America. The AGC fully admits there is a problem in the industry. When it comes to their particular branch of the AEC pie, they not only have a separate newsletter, they also have an entire section of their website to what appears to be real Human Resources information.

American Society of Civil Engineers. Not so transparent really. Their main body of their website where the press releases are say only two relevant things; salaries have risen for 2009 and America needs to invest in $1.5 trillion dollars worth of public infrastructure. I like the irony in that.

Their publications, however, sing a different song about the status of their piece of the AEC pie. It’s not expressly stated that civil engineering firms are at economic breaking points by the ASCE. However, several articles in their publication on the matter say otherwise. This gem of an article talks about the financial stress and ways to discuss it {“Engineering Leadership and Management during Financial Crisis”. Leadersh. Manage. Eng. Volume 10, Issue 1, pp. 4-9 (January 2010.)}

The American Planning Association admits nothing. However, Planning magazine has some coverage over the economy, jobs and how these issues are shaping the practice. This includes what seem to be two lovely articles (I cannot see them because me membership has expired):  The ‘No News Is Good News’ Census by Chris Williamson and Creating Jobs Over Coffee where Kristen Carney describes a new business incubator model from Planning, Novermber 2009. Still Scant information though– at least they didn’t refer to it as a “Black Swan Event” like an article from ASCE did.

The American Society of Landscape Architects seems either to be conforming or denying the existence of financial problems. By not saying anything. But then again they don’t seem to say much of anything about managing a firm, growth or the economy. Their blog Dirt is super awesome– you should check it out.

While no one is holding conferences on these issues alone like the ACG does, some are making attempts… some great, some not-so-much.

Luckily, the AIA seems stellar in comparison than some other organizations do.

Job Postings #2

The slim pickings for entry-level jobs for architects.

Intern Architect
San Francisco
via Perkins + Will

Under supervision of a licensed architect, assist in all phases of healthcare, science & technology, higher education, civic, commercial, cultural, and multifamily and high rise residential international and domestic projects

Bachelor of Architecture (five year) degree or foreign equivalent plus five years of progressive experience (or Master of Architecture or foreign equivalent plus three years experience) to include all phases of healthcare, science & technology, education, commercial, and high rise residential projects

Architect Intern*
New York, New York
Via Archinect

Position requires ability to assume responsibility for all aspects of typical residential projects including project management, client contact, and contract administration.

Prior experience with residential, small-scale commercial, and/or renovation work strongly preferred. Proficiency in both Revit and AutoCAD a must; familiarity with Sketchup a plus.

UNPAID Urban Design Technology Intern
Boston, MA
Via Intern Jobs

Under the direction of the Urban Design Technology Manager and the Sr. Architect, assist with Urban Design Technology tasks and Database image management.

Work requires Graduate School level coursework in Planning and Urban Design Studies. Must have knowledge and proficiency with Microsoft Office, Adobe Suite, Sketchup and Revit and with 3 D. Modeling

Architect (entry-level)
Fort Worth, TX
Via Huitt-Zollars

Ft. Worth office seeks degreed Architect or pursuit of registration in process of becoming registered in general design and production of architectural drawings, including preliminary through final construction drawings. Using AutoCADD, MicroStation and PhotoShop. Will work under direct supervision of Sr. Architect.

Architect 1
Oakland, CA
Via America’s Job Exchange

TranSystems’ Oakland, California, office is looking for an Architect 1. This entry-level position consists of design and plan preparation for a variety of projects, including commercial, industrial and government facilities. Day-to-day assignments and technical guidance will be provided by current staff Project Managers.

The preferred candidate will be a college graduate with a Bachelor of Arts degree in architecture or higher, expertise in use of AutoCAD 2005 and BIM/Revit, working knowledge of SketchUp, Adobe Photoshop and Illustrator programs, and experience with putting together sets of design drawings.

*This job ad is published exclusively on Archinect.com.
(Note: I won’t ever publish advertisements for unpaid internships as I am highly against the unfair labor practice of “free” work. This, however, was one of those exceptions where the company hiring is a legitimate place to “work-for-free.”)

Job Postings #1

Urban Designer
Chicago, IL

Under the supervision of the Planning and Urban Design leader, assist and participate in all phases of large scale projects, including international and domestic urban design, master planning, community planning, multistory mixed use, corporate/commercial, retail, entertainment, education, and transportation enhancement projects

Master’s degree in Urban Planning, Urban Design or Architecture with emphasis in Urban Design or foreign equivalent plus LEED AP and 3 years experience to include all phases of international urban design

Associate Planner
City of San Marcos
December 17, 2009
Via Planetizen

Under general supervision of the Principal and/or Senior Planner, performs a variety of professional, current and advanced planning work of above-average difficulty; assists with training of Assistant Planners and other lower-level staff relative to major current and advanced planning projects and special studies; responsible for project management of case processing; and performs other related work as assigned.

Graduation from an accredited four-year college or university with a major in Urban Planning or closely-related field and three years of increasingly responsible current and advanced planning experience; supervisory experience/local government experience desirable.

Planner II
Boston, MA
Via JobFox

Primary responsibilities will include preparation of Environmental Assessments, Environmental Impact Statements and planning studies for transportation projects. Knowledge in one or more of the following areas is important: NEPA/MEPA, transportation, transit, land use, or natural resources

AECOM Transportation is seeking a Planner with 4 to 7 years of experience for its Boston, MA office. A Bachelors Degree in Planning or a related environmental or transportation field is required. A Masters Degree is preferred, with education considered in lieu of experience. AICP certification is a plus.

Assistant Professor (Urban/Regional Planning)
University of Wisconsin
Oshkosh, Wisconsin
Via NationJob

To teach courses in Urban/Regional Planning and other undergraduate courses that reflect departmental needs and professional expertise of the candidate. To maintain active research program, pursue extramural funding, and provide student advising

Urban/Regional Planner with strong background in Geography or alternatively Geographer with strong background in Urban/Regional Planning. Ph.D. in Urban/Regional Planning, Geography, or related discipline. Evidence of excellence in teaching and scholarship. Ability to teach courses in Urban/Regional Planning. Research interests in Urban/Regional Planning.


Really… AIA… Really?

Before I get too much into rehashing every piece of economic data I can find, I’m trying to do a basic survey of what kind of advice is being given across the board from various professional organizations and major consulting firms.

Right now I am currently browsing the Navigating the Economy and Managing a Practice features on the AIA website. Not to single out the AIA as a lame duck, I find that a lot of their advice and the sites they link to are sufficient. Other than the scale of time, there isn’t a lot about strictly architectural firms that really makes them patently special. To say it another way, there isn’t much to an architectural firm that you couldn’t say about any other professional office environment.

Well, the only thing special about architectural firms is that they seem to have an abundance of highly educated people… yet no one can seem to figure out how to stay solvent. Haha, sorry.

But to the point, some of the recommendations given in these sections is pure unadulterated crap. I’m really trying to be civil with this blog. This is one of those instances, however, where I really have to call a spade a spade.

To anyone who has read an article or two in bdonline.co.uk, Arch Record, Metropolis, archinect.com or even archdaily.com knows at least two things— the first being that governmental contracts are holding over the bulk of the ‘industry’ for at least the next year and that single-function offices aren’t going to survive unless they diversify their offerings.

Unsubstantiated facts Rumors put this amount of money the government is willing to dump into construction at around $400 billion over the course of the next few years. Assuming that every project in that delicious pie will have an architect, we can assume that architects will get 4-8% (about the same rate that firms bill). That’s approximately $32 billion in billable hours— assuming no overhead, that’s ~580,000 salaries worth of pay based on national averages.

So, what does the AIA do to help firm owners tap this hot socialist mess? They link you to an business-equivalent about.com article about ‘Winning government contracts.’ No lie.

While everyone knows the AIA is hurting and short on staff, no one could even be bothered to spend 15 minutes writing a decently thought-out half-right article about what you should be doing. Perhaps there’s better information side of the members’ section? I don’t know I’m not a member.

(Bias Alert!— because I so desperately want to be an employed planner, this advice might come off as being self-referential.)

Perhaps the AIA should be writing an article about cross-disciplinary hiring practices. If architecture firms want to play in the arena of government contracts, they should be hiring people educated to take part in such arenas. Many schools across the US teach several facets of architectural practices (planning, economic development, urban design) within their Public Administration colleges. These, in turn, have a heavy tone that most of your employment will be outside of private practice. Simply spelled out, there are many people capable of practicing both architecture and public policy.

While writing RFPs and RFIs may be complicated, it really isn’t a full-time job. However, that doesn’t mean a planner or an economist isn’t completely worthless for the other 20 hours a week not working on proposals. These dual roles would better suit architectural firms for both broadening the skills of the office, giving the client more information about the commission and allow firms to more competently pursue government contracts.

If said person can put pictures into bounding boxes on inDesign and make a few PowerPoint slides, well then you have a government-contracting genius. Of course, this is the article that the AIA should have written to get firms hiring the right people and inflate billings with governmental work.

(/Bias Alert!)

But what do I know? According to the AIA… I’m just some idealistic civic-minded conservative idealist ADHD millennial who plays soccer and requires participation trophies.

WSJ— ‘Uncertainty and the Slow Recovery’

From the Wall Street Journal:

Uncertainty and the Slow Recovery

A recession is a terrible time to make major changes in the economic rules of the game.

“Several pieces of evidence point to extreme caution by businesses and households. A regular survey by the National Federation of Independent Businesses (NFIB) shows that recent capital expenditures and near-term plans for new capital investments remain stuck at 35-year lows. The same survey reveals that only 7% of small businesses see the next few months as a good time to expand. Only 8% of small businesses report job openings, as compared to 14%-24% in 2008, depending on month, and 19%-26% in 2007.”

I’m intentionally skirting the political tidbits of this opinion piece. I did, however, find that statistic most troubling. A ~21% to ~35% reduction of jobs in small businesses is a big deal. If one uses the words local and small interchangeably, that’s a devastating blow to local markets. Whatever defines what a small business might be, I’m not particularly thrilled about the outlook.

For now, I’m over looking the rest of the article because meta analysis, especially in an op. ed. piece, is wholly unfair when dealing about subjects with a vast amount of factors and stakeholders at play. Looking at trends on commercial real estate prices over the last two decades, I hardly think you can sum up business performance with some politically fueled brief about this administration or that administration.