HOUSTON – (Realty News Report) – With lumber prices going through the roof, one might think that Hines would scale back construction of its mass timber boutique office buildings. Knot exactly.
Hines has two of T3 (Timber, Transit and Technology) buildings under construction, two completed, and about 20 of the wood-built projects in the pipeline in North America and overseas.
The new Hines buildings are patterned after the redeveloped century-old brick and timber-framed warehouses that have been transformed into trendy loft apartments or new-fangled office space for companies striving for a “creative” vibe. Those old converted warehouse buildings feature interior wooden columns that are essentially trees with the roundness cut off.
But the old brick warehouses are indeed old. And functionality is not always up-to-snuff. (Ever been stuck in rickety elevator with wooden-slat doors?)
So enter Hines, a global Houston development firm, that has been innovating with a new breed of mid-rise office buildings with vertical support beams and other elements made of wood. And tenants are buying into the concept.
“I think that they’re getting this old school feel that evokes a creative mentality, richness, a feel of space and ability to use a space differently. But they’re getting it with this new technology and with all of the amenities and comforts of a brand new building and all of the technology that comes with it, and so to me, that intersection is exactly what appeals to both tenants and to our investors,” says Laura Hines-Pierce, Senior Managing Director – Office of the CEO at Hines.
Laura Hines-Pierce, granddaughter of the company’s founder, Mr. Gerald D. Hines, was commenting on CBRE’s Weekly Take podcast hosted by CBRE’s Spencer Levy.
The Weekly Take
Levy asked a question about the construct costs in the timber project.
“In terms of the cost, if you just were to compare a mass timber building with a concrete or steel building, generally you would find that the construction costs alone for mass timber versus concrete or steel would generally be about 10 percent higher for mass timber. That’s just construction costs,” said Hines’ Steve Luthman, Senior Managing Director based in Chicago. But when you figure in other costs, the timber buildings are cost-effective.
“So overall, net, net, we believe that mass timber buildings are equivalent in cost. And in fact, with the recent run up in steel prices, mass timber maybe actually more affordable than building with steel, and the last thing I’ll raise is lumber pricing has gone through the roof and we all know that it’s gone up 300 percent since the pandemic. But lumber is different than mass timber and the actual commodity itself, the log prices have not increased. They’ve stayed flat basically for the last decade,” Luthman said.
And when you are developing, buildings in today’s world where carbon emissions are a major concern, building green is a priority.
With mass timber construction, instead of concrete and steel, the savings can be significant. In the construction process, timber generates around 50 percent lower CO2 emissions than concrete. In addition, timber delivers a higher insulation value.
“In North America, we grow enough timber to build one of these seven story buildings every 20 minutes,” Luthman said. And so these are young trees that are easily replaced. And so we’re not impacting at all the forest volumes that we have in North America through the construction of these buildings. And in fact, these buildings are far more environmentally sustainable than any other building typology in the world.”
CBRE, one of the largest commercial real estate firms in the world, is also strategizing to reduce carbon emissions, said CBRE’s global president of Property Management Emma Buckland.
“This is something important that CBRE as a group has recently committed to, is a science-based target around carbon emissions,” Buckland said. “And so what that means for property management is we’re going to reduce our emissions by 67 percent by 2035.”
CBRE has committed to transitioning to electric vehicles around the world, Buckland said.
The Next Timber Project
Hines recently announced plans for another timber building in Florida in a joint venture with Fort Lauderdale-based Urban Street Development.
Its Fort Lauderdale mass timber office building will be part of FAT (Food Art Technology) Village, a 5.6-acre, 835,000-SF, mixed-use office, retail and residential urban village in Fort Lauderdale’s Flagler Village neighborhood. Located along North Andrews Avenue between 5th and 6thStreets, this four-block creative enclave will serve as the reimagined epicenter of the city’s art-centric environment.
The 180,000-SF T3 FAT Village is expected to be completed in 2024.
June 1, 2021 Realty News Report Copyright 2021
For more about Texas development, check out the book Houston 2020: America’s Boom Town – An Extreme Close Up by Ralph Bivins. Available on Amazon http://tiny.cc/4a2g6y
Images: Courtesy Hines, CBRE (Timber Buildings Grow Amid Carbon Concerns)
File: HinesTimber Buildings Grow Amid Carbon Concerns.
File: CBRE. Timber Buildings Grow Amid Carbon Concerns. Weekly Take. Spencer Levy. T3, Laura Hines-Pierce