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"Between 2010 and 2014, about $1.4 trillion in commercial real estate loans will reach the end of their terms. Nearly half are at present “underwater” – that is, the borrower owes more than the underlying property is currently worth."
– Congressional Oversight Panel
 
 

 
A $1.4 Trillion Meltdown Underway
and...
The CRE Solution
First, we had the housing crisis. Now, we have a $1.4 trillion commercial real estate (CRE) meltdown just underway in the U.S. Without swift intervention, the CRE crisis will cripple the economic recovery, raise unemployment, and lead to scores of small business and community bank failures. To avert this crisis, Architecture 2030 recommends that Congress implement the ‘CRE Solution’, providing a tax deduction tied to specific energy reduction targets that will create 1.3 million jobs while restoring credit capacity and liquidity in the CRE market. The CRE Solution
 
The Problem
Commercial Real Estate transactions have dropped a staggering 90% since 2007. Between now and 2014, $1.4 trillion in CRE loans will be coming due; half of these currently are underwater. Commercial property values have plummeted by more than 40%, and commercial vacancies continue to increase. In addition, the construction industry has lost over two million jobs, including 35,000 last month, mostly in the commercial sector.
 
Construction Job Losses  
The CRE Solution
To restore credit capacity and liquidity in the CRE market and create 1.3 million construction-related jobs, Architecture 2030 recommends implementing the CRE Solution, a three-year commercial building tax deduction for meeting the energy reduction targets of the 2030 Challenge, as follows:
 
Existing Building RenovationsNew Building Construction

3-Year
Minimum Energy
Reduction Target
Maximum annual tax
deduction per square foot
of floor area
Percentage
better than
ASHRAE 90.1-2004
$4.50 30%
$6.00 50%
$7.50 75%
$9.00 Zero-Net-Energy

3-Year
Minimum Energy
Reduction Target
Maximum annual tax
deduction per square foot
of floor area
Percentage
better than
ASHRAE 90.1-2004
$3.00 30%
$4.50 50%
$6.00 75%
$7.50 Zero-Net-Energy
 
The CRE Solution Impact
  • Creates 1.3 million jobs, quickly and cost-effectively,
  • Increases after-tax cash flow and property values, and reduces loan defaults,
  • Increases CRE desirability and investment value,
  • Increases new CRE sales (narrows the gap between the bid
    and ask price of CRE property),
  • Decreases building energy consumption, greenhouse gas emissions,
    and operating costs, and
  • Generates billions of dollars in federal, state, and local tax revenue.
To learn more, download the CRE Solution, here (.pdf).
For a comprehensive online summary, click here.



The Commercial Sector...
Not What You Think
 
There are over 4.7 million commercial buildings containing 78 billion square feet of space in the U.S. today. These properties are commonly assumed to be large multi-story, multi-tenant-occupied buildings; however, as these three graphs illustrate, this is clearly not the case (click on images to enlarge):

 Commercial Buildings: Percentage by Size
 Source: U.S. Energy Information Administration
CRE - Percentage by Size













 Commercial Buildings: Percentage by Stories
 Source: U.S. Energy Information Administration
CRE - Percentage by Stories













 Commercial Buildings: Percentage by
 Number of Establishments
 Source: U.S. Energy Information Administration
CRE - Percentage by Establishments













 
The majority of the CRE market consists of smaller one- and two-story buildings, many of which are either owner-occupied or single-tenant occupied. This category of buildings is easier, less expensive, and faster to renovate than the big box stores and skyscrapers more typically associated with commercial real estate.
 
To learn more, download the CRE Solution, here (.pdf).
For a comprehensive online summary, click here.


   


Building Sector Intervention Points
A New White Paper
from Architecture 2030 identifies the critical intervention points for major transformation in the Building Sector.
Learn more. / Read it now.

. . .

 
Seattle's 2030 District
Seattle's 2030 District
A movement is underway in Seattle to help commercial buildings meet the 2030 Challenge targets.
Learn More.

. . .

Offshore Drilling: Is it Worth it?
Is it Worth it?
Find out here.

. . .

 
Just the Facts
Just the Facts
The latest climate science from
our top scientific organizations:

 
 
Earth May be More
Sensitive to CO2
Than Thought

NASA (MAY 2010)
 
Three New Reports
Emphasize Need for
Immediate Action

NRC (MAY 2010)
 
Climate Change
Indicators in the U.S.

EPA (APR 2010)
 
"Missing" Heat May
Affect Climate Change

NSF (APR 2010)
 
How Will Sea Level
Respond by 2100?

GRL (FEB 2010)
 
Ice Mass Loss Spreads
Into NW Greenland

GRL and NASA (MAR 2010)
 
Is Antarctica Melting?
NASA (JAN 2010)
 
2009: Second Warmest
Year on Record; End of
Warmest Decade

NASA (JAN 2010)
 
Atlantic 'Conveyor Belt'
Not Slowing

NASA (MAR 2010)
 
New Report Provides
Update on Recent
Climate Changes

NASA JPL (NOV 2009)
 
Greenland Ice Cap
Melting Faster Than Ever

NASA Earth Observatory
(NOV 2009)

 
Global Climate Change Impacts in the U.S.
U.S. Global Change
Research Forum

(JUN 2009)

 
Click here for more Facts.
 

. . .

 
Adopt the 2030 Challenge
Sign up here

Adopt the 2010 Imperative
Sign up here
 

. . .

 
Go to the News/Resources section of our website to get the latest news updates on issues regarding climate change and the Building Sector.

. . .

Comments and suggestions for future Architecture 2030 E–News issues should be sent to:

info@architecture2030.org
Architecture 2030
607 Cerrillos Road
Santa Fe, NM 87505

www.architecture2030.org


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