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coastal property, coastal property values, & flood risk

For those considering an investment in real property (residential or commercial) along the eastern seaboard of the United States, insights are offered in an article published in April by the New York Times, “When Rising Seas Transform Risk Into Certainty” (Brooke Jarvis, 18 April 2017).

Some highlights follow. The upshot? Conduct your discovery and due diligence carefully. Try to think long-ish term (what are your long-term investment investment horizons, when do you plan to exit, e.g., sell your house or property, etc.). Consider a  variety of numbers (not only interest rates, number of bedrooms and bathrooms, square footage, appraisals, etc., but also sea levels, projected sea levels, flood zones, insurance premiums, any projected rise of insurance premiums, etc.). Ask your lender (if you are financing), real estate professional, and insurance professional lots and lots of questions.

  • Economists aren’t sure if coastal property values will decline gradually, as the life expectancy of homes shrinks, or precipitously, “the first time a lender refuses to make a mortgage on a nearby house or an insurer refuses to issue a homeowner’s policy.” (Sean Becketti, chief economist, Freddie Mac)
  • “Hundred-year flood zone” | A hundred-year flood zone sounds like sounds like a factor of time, as if the land were expected to flood only once every 100 years. What it really means is the land has a one percent (1%) chance of flooding each year.
  • If the property that you are considering buying is in a “hundred-year flood zone,” then in order to get a federally backed mortgage, you will be required to pay for flood insurance through the National Flood Insurance Program (N.F.I.P.).
  • Congress created the N.F.I.P. (the National Flood Insurance Program) in the late 1960s
  • The N.F.I.P. was intended to encourage safer building practices
    • The N.F.I.P. offers insurance coverage, some of it subsidized, to communities that meet floodplain-management requirements;
    • People that want to buy a house in a flood-prone area are required to buy N.F.I.P. insurance coverage.
    • The N.F.I.P. provides grants for mitigation projects, like elevating houses, meant to reduce flooding damage.
  • Critics of the N.F.I.P. observe that N.F.I.P. flood insurance, by bailing people out repeatedly and by spreading the true costs of risk, incentivizes people to build, and stay, in flood-prone areas instead of encouraging safer building practices.
  • As storm damage becomes more costly, the N.F.I.P. is getting deeper and deeper (in the order of tens of billions of dollars) into debt. The expense of insuring coastal properties is increasing. Taxpayer-subsidized premiums are not able to meet the costs of insuring the coastal properties.
  • In 2012 and 2014, Congress responded to the N.F.I.P.’s troubles with bills known as Biggert-Waters and Grimm-Waters.
  • The Biggert-Waters bill of 2012 cut subsidies and phased out grandfathered rates so that premiums would start to reflect the true risk that properties face, achieving “actuarial soundness.”
  • Prospective buyers are disturbed less about the risk of high waters and more about the certainty of high premiums.
  • Insurance provides stability, both financial and mental, in an uncertain world, and implies “mastery of risk”.
    • As waters rise, flooding in low-lying places without sea walls will become more and more common.
    • The presence of water will become less about chance and more about certainty.
    • Few insurers are willing to bet against a certainty.
  • The math of the “collective hedge against helplessness” (insurance) in the face of climate insecurity will get harder.
  • AIR Worldwide models the risks of catastrophic events for insurance companies and governments.
  • According to AIR Worldwide, $1.1 trillion in property assets along the Eastern Seaboard lie within the path of a hundred-year storm surge.
    • $1.1 trillion represents only the risk on the East Coast under current sea levels.
  • According to a 2008 analysis by Risk Management Solutions (R.M.S.) and Lloyd’s of London, annual losses from storm surges in coastal areas globally could double by the 2030s.
  • In 2015, the N.F.I.P. asked R.M.S. and AIR Worldwide to update its modeling of financial exposure from possible storms to properties it insures across the country
  • In 2016 and 2017, the N.F.I.P. transferred some of its risk to large, private companies known as reinsurers (insurance for insurance companies)
  • A vote to reauthorize (or not) the N.F.I.P. is scheduled to take place in September of this year
  • Some believes it is time to start limiting coverage for properties that are flooded over and over.
    • Multiple losses “should force us to shift our position where we make an offer of mitigation to a homeowner, and if they do not choose to take it, we don’t renew their policy.”
  • Flooding is the most common, and most expensive, natural disaster in the United States.
  • Private insurers have long declined to cover flood risk.
  • Some private insurers are beginning to show an interest in covering flood insurance for the first time.
    • Again, prospective buyers are disturbed less about the risk of high waters and more about the certainty of high premiums.
    • The end of subsidized coverage and the possibility of higher premiums encourages private insurers
    • As flood insurance premiums increase,
    • private insurers have a greater incentive to compete.
    • Private insurers can seek and obtain private underwriting from companies such as Lloyd’s of London and A.I.G. subsidiaries.
  • More accurate risk analysis, with powerful computers running more simulations that include more variables, also incentivizes private insurers
    • Premiums from private insurers can now cost 30 to 35 percent less than those policies bought through FEMA
    • Yet, private companies issue such policies in the belief that the outcomes against which risk is covered will not occur
    • Private insurance is “of course” not interested in covering severe-repetitive-loss properties or buildings whose exposure is higher than what can be recouped in premiums.
  • Mike Vernon, an insurance agent in the Hampton Roads area of Norfolk/Virginia Beach, gets most of his business from referrals from real estate agents. He observes
    • “We’re often actually making the building worse to bring down premiums,” filling in basements, or preparing a house to let water flow through it instead of keeping it out (yes, the house may be damaged by moisture, but at least it won’t be pushed off its foundation). “Or we’re eliminating something good, like a sunroom on a slab.”
    • “People are getting killed. To an appraiser it’s still worth $300,000, but to the real world it ain’t worth nothing, because it’s not going to sell.”

See:

“When Rising Seas Transform Risk Into Certainty” | Brooke Jarvis, The New York Times, 18 April 2017

The National Flood Insurance Program (N.F.I.P.) | FEMA

“Biggert-Waters Flood Insurance Reform Act of 2012 Timeline” | FEMA

“H.R. 3370 – Homeowner Flood Insurance Affordability Act of 2014” | 113th Congress, Congress.gov

#realestate #risk #riskmanagement #propertyvalues #floodrisk #insurance #NFIP #FEMA #resilience #smartluxury #art #collections #collectionsmanagement

 

 

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CO2 vibrates, that’s just what it does

The CO2 molecule vibrates. As a matter of fact, it vibrates in three different ways. As it vibrates, it absorbs and emits the radiant heat (energy) of our sun as it reaches our earth, and it does so very well and very efficiently … That’s just what it does.

The CO2 molecule is composed of three atoms: one atom of carbon (C) and two atoms of oxygen (O). Hence CO2, carbon dioxide (“di” refers to “two”).

The carbon and oxygen atoms move around each other and interact with each other at different frequencies. Each different way of moving around constitutes a vibration mode.

In one vibration mode, with the oxygen and carbon atoms interacting at a certain frequency, the CO2 molecule attracts and absorbs the energy (radiant heat) of the sun. Just the way a magnet might attract a paper clip.

As the molecule absorbs the energy of the sun, it switches into another vibration mode, moving faster. In this faster vibration mode, with the carbon and oxygen atoms interacting at another frequency, the energy of the sun is emitted. Think of two magnets, repulsing each other.

This is a very good thing. Without the presence of these little CO2 factories doing their work day in and day out, absorbing and emitting the radiant heat (energy) of our sun, our planet would be a frozen ball of ice.

These little CO2 factories do their work well and efficiently. That’s just what they do. The more of them there are in the atmosphere, the more radiant heat is absorbed and emitted into the air all around all of us.

See:

“What is Infrared?” | Jim Lucas, Live Science, 26 March 2015

“Carbon Dioxide Absorbs and Re-emits Infrared Radiation” | UCAR Center for Science Education

“Molecules Vibrate” | UCAR Center for Science Education

“John Tyndall” | Wikipedia

“Introduction to Structure Determination; Infrared: Introduction” | Prof. Adam Bridgeman, School of Chemistry, The University of Sydney, 2017.

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art storage & protection @ $1+ billion globally

The global art market generated sales of about $65 billion in 2016 according to the TEFAF Art Market Report 2017.

The growing, global network of facilities to store art now generates revenues of over $1 billion a year. Many of these spaces serve multiple objectives – including security, environmental protections, and trade: Sto

  • security
    • video surveillance
    • retinal scanning
  • space | collectors have too much to keep at home
  • protection
    • climate-controlled environments
    • fire-resistant walls
    • air-filtration
    • flood control
    • LEED and BREEAM building certifications
  • investment purchases
  • tax benefits
  • tax-suspended transport to and from galleries | as long as works of art return to storage no duty is payable, even if ownership of the art has changed
  • “1031 exchange” friendly
  • gallery inventory between shows and art fairs
  • storage of art taken by banks as collateral against loans
  • viewing rooms that can be rented on a more permanent basis | in-house, private sales and transfers of ownership
  • passport free access (freeports within airport perimeters)

Simon Hornby, the president of Crozier Fine Arts, estimates that 80% or even more of all the world’s art is in storage at any one time.

The art storage business has doubled in size in eight years and continues to grow.

“Until about ten years ago, Modern and contemporary art collectors were mainly made up of art enthusiasts and amateurs, they had a real passion, spending their money on what they liked; they collected in order to simply enjoy the work in their home environment. Today you have to work with an increasing number of art funds or speculators buying art for investment. Art buying has become accessible to a much larger audience than before and is considered an asset. The result of this is that more work sleeps in warehouses rather than hanging in collectors’ homes.”

Stephane Custot, Waddington Custot Gallery, London

“In the last year, I only physically saw one piece of art that I negotiated. Everything else was bought and sold via jpegs and remained in storage. It was all for investment.”

New York dealer and appraiser

In order to protect the assets, moreover, built environment investment is attempting to keep up with the evolution of demand, including security and environmental protections.

A state-of-the-art storage facility with “foreign trade zone” (FTZ) status (a freeport), ARCIS Fine Art & Collection Care, is under construction on Manhattan’s West 146th Street. Developed by Cayre Equities, the project has taken two years and over $40 million. Executive Director Tom Sapienza and Tom Lay, both formerly with Crozier Fine Arts, were recruited by art collector, real estate developer, and Crozier founder Ken Cayre to manage the project.

The five-story, 110,000 square foot is scheduled to open next month (July 2017).  ARCIS is Latin for “fortress”. The facility is designed and engineered to provide and enhance both environmental and security protections.

With the objective of constructing a museum-quality, sustainable, state-of-the-art secure building, Sapienza and Lay took crash courses in thermal dynamics and consulted with the professional services branch of the Van Gogh Museum in Amsterdam. Works of art will be scanned as they move through the building. State-of-the-art air filters are installed; air will change three to six times an hour.  LEED and BREEAM certifications are to be achieved for the building.

See:

“TEFAF’s 2017 Art Market Report” | Marion Maneker, Art Market Monitor, 6 March 2017

“TEFAF Art Market Report 2017” | Prof. Dr. Rachel A.J. Pownall, TEFAF Chair in Art Markets, The European Fine Art Foundation, March 2017

“Where does all the art go after a fair?” | Georgina Adam, The Art Newspaper, 16 June 2017

“Picasso Finds Possible Digs in Harlem $2.5 Billion Art Port” | Katya Kazakina, Bloomberg, 2 March 2017

“Will New York Get Its Own Freeport for Art? ARCIS Plans a Tax Haven in Harlem” | Eileen Kinsella, Artnet, 2 March 2017

“One of the World’s Greatest Art Collections Hides Behind This Fence” | Graham Bowley & Doreen Carvajal, The New York Times, 28 May 2016

“About Foreign-Trade Zones and Contact Info” | U.S. Customs and Border Protection, U.S. Department of Homeland Security

#realestate #resilience #smartluxury #art #LEED #BREEAM #finance #investments #artcollections #artmarket #VanGoghMuseum #museums

 

 

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climate risk, credit, bonds, & real estate: AAA is AAA? … or, move to high ground

For more than a century, rating companies have published information helping investors gauge the likelihood that companies and governments will be able to pay back the money they borrow. Investors use those ratings to decide which bonds to buy and gauge the risk of their portfolio. For most of that time, the determinants of creditworthiness were fairly constant, including revenue, debt levels and financial management. And municipal defaults are rare: Moody’s reports fewer than 100 defaults by municipal borrowers it rated between 1970 and 2014.

Climate change introduces a new risk, especially for coastal cities, as storms and floods increase in frequency and intensity, threatening to destroy property and push out residents. That, in turn, can reduce economic activity and tax revenue. Rising seas exacerbate those threats and pose new ones, as expensive property along the water becomes more costly to protect — and, in some cases, may get swallowed up by the ocean and disappear from the property-tax rolls entirely.

When asked by Bloomberg, none of the big three bond raters could cite an example of climate risk affecting the rating of a city’s bonds.

This is climate risk: risk to fundamental variables such as economic activity, property values, and tax bases caused by natural factors (such as storms and floods)  that may be exacerbated by our changing climate.

Climate risk has yet to be fully and sytematically incorporated into investigations into municipal creditworthiness.

Will your municipality will be be able to make timely and full payments on its then current debt load after a storm or flood, or repeated storms or floods, negatively influences economic activity?

What happens when the storms or floods are so severe that they “wipe out the taxation ability? I think this is a real risk” observes Bob Buhr, a former vice president at Moody’s who recently retired as a director at Societe Generale SA.

Predictions are imperfect, especially about the future; no one, no algorithm, no model can perfectly predict the future. The pace of climate change remains uncertain. What climate change, and concomitant effects on communities, community tax revenues, and the likelihood of any community being able to pay back bonds “is not a simple calculation.”

To date, the major ratings agencies are not asking questions about the expected effect of climate change on the economic activity and future tax revenues of US municipalities that look to “cheap money” (municipal bonds) to finance government.

Last September, when Hilton Head Island in South Carolina issued bonds that mature over 20 years, Moody’s gave the debt a triple-A rating. In January 2016, all three major bond companies gave triple-A ratings to long-term bonds issued by the city of Virginia Beach, which the U.S. Navy has said faces severe threats from climate change.

Investors, including 117 investors with $19 trillion in assets, say it would be prudent to include “systematic and transparent consideration” of environmental and other factors in order to identify systemic ESG risks in debt capital markets.

In other words, bond buyers should be warned. If storms and floods decrease property values and tax revenues while increasing spending on mitigating infrastructure such as sea walls, storm drains and flood-resistant buildings, pay back to bond buyers may be impacted.

Property owners – both residential and commercial – might take note.

Should your municipality meet a storm or flood that significantly impacts economic activity and the ability to collect tax revenues, it might be stressed and its ability to make scheduled payments on its municipal debt obligations might be impacted.

This will influence the municipality’s credit. If the credit is downgraded, the municipality will have to pay greater interest on its debt. To pay higher interest, it will have to collect more tax revenues. That means greater economic activity and/or higher taxes.

And/or, the municipality might have to reduce services. Municipal services include physical infrastructure (such as roads, bridges, water) and civic benefits such as fire departments and schools.

If such services are reduced, how prepared are you in your private capacity to initiate efforts and implement necessary steps towards the robust resilience (basically the ability to bounce back after a shock  or multiple shocks to the system) and operability of your real estate holdings (residential, commercial, …)?

Do you have the means (financial, intellectual, technical, etc.) and the time to “do it yourself” (e.g., water, energy, transportation)? How do you use your real estate holdings? How long do you expect to own them? What are your expectations of resale value?

Moving to high ground might help manage the risk.

Food for thought.

See:

“Rising Seas May Wipe Out These Jersey Towns, But They’re Still Rated AAA” | Christopher Flavelle, Bloomberg, 25 May 2017

“Credit ratings agencies embrace more systemic consideration of ESG” | PRI, Principles for Responsible Investment, 26 May 2016

#climatechange #climaterisk #creditrisk #risk #finance #municipalfinance #bonds #credit #realestate #resilience #luxury #smartluxury #urbanluxury

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Amazon expanding into physical stores, agrees to acquire Whole Foods Market

Amazon announced today that it has agreed to purchase Whole Foods Market.

Amazon (NASDAQ:AMZN) and Whole Foods Market, Inc. (NASDAQ:WFM) today announced that they have entered into a definitive merger agreement under which Amazon will acquire Whole Foods Market for $42 per share in an all-cash transaction valued at approximately $13.7 billion, including Whole Foods Market’s net debt.

Amazon to Acquire Whole Foods Market, BusinessWire, 16 June 2017

The New York Times reports that Amazon wishes to expand beyond online retail into physical stores.

The company is experimenting with physical stores. The Atlantic reports that “Amazon needs food and urban real estate.” The company has opened a small chain of book stores across the country. In Seattle, Amazon has opened two drive-through grocery pickup locations;  customers order their items online.

With Whole Foods, Amazon will acquire more than 460 stores in the United States, Canada and Britain.

“’The Whole Foods acquisition provides them more physical locations. They’re going to be within an hour or 30 minutes of as many people as possible.’”

Mikey Vu, partner (retail), Bain & Company

Whole Foods’ urban and suburban locations are extremely valuable for Amazon’s delivery business.

“’Amazon did not just buy Whole Foods grocery stores. It bought 431 upper-income, prime-location distribution nodes for everything it does.’”

Dennis Berman, financial editor, the Wall Street Journal, via Twitter

Whole Foods, The Atlantic reports, “needs help.” While Whole Food Market sales were approximately $16 billion in the 2016 fiscal year and while the United States grocery industry produces approximately $700 to $800 billion in annual sales, the grocery business is low-margin. Whole Foods revenue growth has fallen every year since 2012. Whole Foods investors have been encouraging the company to sell itself to a larger grocer like Kroger.

Under the terms of the proposed deal, Amazon would pay $42 a share for Whole Foods, a 27 percent premium to Thursday’s closing price.

Completion of the transaction is subject to approval by Whole Foods Market’s shareholders, regulatory approvals and other customary closing conditions. The parties expect to close the transaction during the second half of 2017.

Amazon to Acquire Whole Foods Market, BusinessWire, 16 June 2017

Whole Foods was founded in 1978 in Austin, Texas.

See:

“Amazon to Buy Whole Foods in $13.4 Billion Deal” | Michael J. de la Merced & Nick Wingfield, The New York Times, 16 June 2017

“Amazon to Acquire Whole Foods Market” | BusinessWire, 16 June 2017

“Why Amazon Bought Whole Foods” | Derek Thompson, The Atlantic, 16 June 2017

#Amazon #WholeFoods #WholeFoodsMarket #organic #retail #groceries #grocery #food #smartluxury #urbanluxury #urbanliving #realestate #resilience

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real estate investment & climate change futures ・ the next dry neighborhood

If there’s anything more complicated than the global forces of thermal expansion, ice sheet melt and ocean circulation that contribute to worldwide sea-level rise, it might be the forces of real estate speculation.

Real estate investment may no longer be just about the next hot neighborhood, it may also now be about the next dry neighborhood.

“‘That’s it, it’s that simple. To be on the beach and to be on the water costs a lot more money, and the cheaper parts of town were furthest from the beach — but it just turns out that the cheapest parts of town farthest from the beach are the highest elevation, and now they’re worth a lot more than they used to be.'”

Jesse M. Keenan, Harvard Graduate School of Design

“‘The real issue is: Are people making real estate decisions based on climate change futures, rather than sort of normal speculation?'” observes Hugh Gladwin, an anthropologist at Florida International University in Miami. Gladwin’s specialty is using geographic information system mapping to understand large, diverse urban settings.

Jesse M. Keenan is a lawyer who teaches climate change adaptation at Harvard University’s Graduate School of Design. Mr. Keenan formerly served as the co-founder and research director of Columbia University’s Center for Urban Real Estate (CURE). His family roots are in Miami and he owns a house and has an office and parking space in Miami. He thinks people are making real estate decisions based on climate change futures.

Using survey data, Mr. Keenan is beginning to see see evidence that middle-income people are leaving Miami Beach and other places with nuisance flooding. Such flooding makes  it difficult to get around at high tides or insure a car.

Mr. Keenan observes, “‘Everybody I know that is a small owner of real estate that isn’t within the billionaire class — average middle-class, upper-middle-class Miamians who have real estate on the beach — is in the process of selling their properties and moving to the mainland.'”

Sea-level rise is exacerbating the effects of coastal flooding in South Florida. A 2016 University of Miami study finds that coastal flooding is accelerating. The coastal flooding is coinciding with an accelerated rate of sea-level rise in South Florida. The average rate of sea-level rise jumped from an increase of 3 millimeters a year before 2006 to an increase of 9 millimeters a year on average after 2006. Over the course of one decade, from 2006 to 2016, that’s about 3.5 inches of sea-level rise.

Sam Purkis, a marine geologist at the University of Miami, observes,

“‘What will happen, more than likely, is that you’ll have one big hurricane, and you’ll get a big inundation into the city. And that will serve to rot out the infrastructure — the sewer lines, the electricity, the telecoms. Everything that’s under the road. That becomes very costly to keep replacing every time this happens.'”

“‘That’s it, it’s that simple,'” says Harvard’s Jesse Keenan.

“‘To be on the beach and to be on the water costs a lot more money, and the cheaper parts of town were furthest from the beach — but it just turns out that the cheapest parts of town farthest from the beach are the highest elevation, and now they’re worth a lot more than they used to be.'”

Local governments are considering  what sea-level rise means for all those mortgage holders who pay taxes.

Coral Gables released an analysis of how it would pay for infrastructure investment in the face of a shrinking tax base if people leave.

“We’re concerned about it, we’re planning for it, we’re spending money on vulnerability studies trying to know what our vulnerabilities are in terms of our essential infrastructure, and planning to build up and save our communities as long as we can,” Jim Cason, Mayor of Coral Gables, said.

See:

“High Ground Is Becoming Hot Property As Sea Level Rises” | Erika Bolstad, ClimateWire, 1 May 2017, re-printed from ClimateWire by Scientific American with permission from E&E News

Hugh Gladwin, Steven J. Green School of International & Public Affairs, Florida International University

Jesse M. Keenan, Harvard University Graduate School of Design

Center for Urban Real Estate, Columbia University GSAPP

Sam Purkis, Professor & Chair, Department of Marine Geosciences, Rosenstiel School of Marine & Atmospheric Science, University of Miami

#realestate #realestatedevelopment #realestatespeculation #art  #ArtBaselMiamiBeach #Miami #MiamiBeach #climatechange #sealevelrise #resilience #Harvard #Columbia #FloridaInternationalUniversity #UniversityofMiami

 

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climate change as opportunity・developing economic value through investments in resilience

From a Dutch mind-set, climate change is neither a hypothetical , nor a drag on the economy, nor an ideology. For the people of the Netherlands climate change is an opportunity – to let water in, where possible, to live with water rather than struggle to defeat it – with added economic value developed through investing in resilience.

People in the Netherlands believe that the places with the most people and the most to lose economically should get the most protection.

To the Dutch, what’s truly incomprehensible is New York after Hurricane Sandy, where too little has been done to prepare for the next disaster.

The idea that a global economic hub like Lower Manhattan flooded during Hurricane Sandy, costing the public billions of dollars, yet still has so few protections, dumbfounds climate experts in the Netherlands.

See:

“The Dutch Have Solutions to Rising Seas. The World is Watching” | Michael Kimmelman, The New York Times, 15 June 2017

#climatechange #realestate #resilience #Rotterdam #investments #economicvalue

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Market Solutions for Environmental Challenges

Goldman Sachs today signed a long-term Power Purchase Agreement (PPA) with a subsidiary of NextEra Energy Resources, LLC.

The agreement will enable the investment and development of a new 68 megawatt wind project in Pennsylvania. The wind project is expected to facilitate up to 150 construction jobs and, once operational, result in the reduction of more than 200,000 tons of greenhouse gas emissions every year.

Goldman Sachs reiterates its commitment to market solutions for environmental challenges.

 “We are committed to being a leader in the development of renewable energy. By enabling this new wind project to come online, the agreement will help grow the renewable grid and contribute to the momentum behind a lower carbon economy.”

Lloyd C. Blankfein, chairman and chief executive officer of Goldman Sachs

The PPA with NextEra Energy Resources is a collaborative effort between Goldman Sachs’ commodities trading group (J. Aron) and its Corporate Services and Real Estate department.

Goldman Sachs has achieved its carbon neutrality commitment. The company is working towards achieving its goal of 100 percent power for its global electricity needs by the year 2020.

Goldman Sachs is a member of the RE100 initiative, “the world’s most influential companies, committed to 100% renewable power.”

See:

“Goldman Sachs Signs Long-Term Power Purchase Agreement to Spur Renewable Energy Growth and Jobs” | Press Release, 12 June 2017

“Our Operational Impact” | Goldman Sachs Environmental Stewardship

RE100

#realestate #resilience #cleanpower #renewableenergy #windenergy #PPA #GoldmanSachs #tech #greenhousegasemissions #climatechange #market #marketsolutions

 

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Downtown San Diego | early morning vistas

Early morning vistas.

San Diego is, indeed, beautiful and has what is widely acknowledged as one of the best, if not the best, micro-climate in the United States. Very Mediterranean.

Why “tech”, that I appear to mention so often and that is taking root in the downtown San Diego economic eco-system?

“Tech,” in my mind, is no more than information gathering, processing, analyzing, reporting, and using, with certain questions asked (by people), the questions usually having to do with certain industries (art, finance, transport, design, building and construction, chemistry, physics, aerospace engineering, entertainment, etc.).

Sort of like groups of individual Marines gathering, processing and using information, on steroids.

Why pay attention to tech in downtown San Diego? Some of these companies have just appeared downtown, willy nilly, not according to the city plan. People in the tech industry generally speaking make more money than those working in the hospitality industry (housekeeping, serving tables, etc.). It is money generated here rather than earned elsewhere and brought here by visitors, tourists, and buyers of second or third homes.

 

#SanDiego #downtownSanDiego #realestate #resilience #art #tech #technology #finance #urbanliving #urbanluxury

 

 

 

 

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a ‘mainstream’ approach to ESG | finding the “metrics that matter”

Goldman Sachs highlights “the metrics that matter, a ‘mainstream’ approach to ESG.”

Seeking to identify companies with long-term growth potential, Derek Bingham of Goldman Sachs Research’s GS SUSTAIN team and his colleagues study which sustainability measures most closely align with returns over time.

Investors can improve their risk analysis and returns, he says, by identifying sustainability metrics that offer hard data (e.g., resource efficiency for a metals company, employee turnover for an investment bank) that correlate with a company’s long-term stock performance.

There is an opportunity for portfolio managers to identify which ESG metrics matter most and invest accordingly.

Bingham recommends a “holistic view” and discourages the “silo” effect.

Listen to the Goldman Sachs podcast Episode 63: The Metrics that Matter – A ‘Mainstream’ Approach to ESG”

#GoldmanSachs #ESG #riskanalysis #investmentreturns #resilience #data #metrics #finance #longtermgrowth

“Episode 63: The Metrics that Matter – A ‘Mainstream’ Approach to ESG” | Derek Bingham, GS SUSTAIN, Goldman Sachs Research, & Jake Siewert, Global Head of Corporate Communications, Podcast: ‘Exchanges at Goldman Sachs,’ recorded 2 May 2017