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Empty Offices Can Be Converted To Apartments—New York’s Story

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Many urban downtowns hope converting empty and underused office buildings to apartments will mitigate the fiscal impacts of increased working from home. But can office districts and buildings be converted to residential, building new neighborhoods? A great exhibit at New York’s Skyscraper Museum, curated by Museum Founder and Director Carol Willis, says “yes” by documenting the history of actual conversions in lower Manhattan.

“Residential Rising: Lower Manhattan Since 9/11,” the Museum’s current exhibit, shows how lower Manhattan—the home of Wall Street and the finance sector—now has a strong residential presence. The Museum tells us “the population of lower Manhattan, which was 39,000 in 2000, now tops 82,000 residents.” The exhibit emphasizes this growth came even after the catastrophe of 9/11, when many observers had written downtown off.

When you think of “Wall Street,” you think of finance, the stock exchange, and busy offices and trading floors, right? So you’ll likely to be surprised (as I was) to learn that a good percentage of buildings on the actual Wall Street are now residential, not offices and financial exchanges.

Downtown got an initial residential boost from Battery Park City, built on landfill in the Hudson River from the original World Trade Center project. But that construction, and all downtown commercial and residential development, largely stopped after 9/11. (Federal funds eventually were directed to the area, which were significant in its overall recovery.)

A good deal of attention has gone to dramatic downtown luxury residential projects from famous architects like Rafael Viñoly and Frank Gehry. (Gehry’s shape-shifting building at 8 Spruce Street was recently purchased by Blackstone for $930 million.)

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But the Museum shows us converting older office buildings has provided more new residences downtown than new construction. Since 2000, “about 12,000 units had been converted to residential versus around 9,000 units added in new buildings.” Of the twelve largest residential buildings added since 2005, seven of them are conversions.

Willis is an architectural historian with a firm grasp of design and construction, but also economics. Her 1995 book, Form Follows Finance, details how building and zoning codes, technology, and especially financial considerations shaped development of modern skyscrapers, not just the aesthetic visions of architects.

So the current exhibit discusses not only the physical challenges of changing offices to residences (plumbing, building codes that require windows for residents, access) but the economics and regulations around conversion. While government post-9/11 funds were significant overall, private developers had to make money in order for conversions to happen. New York enabled that through a variety of “incentives for density, historic preservation tax credits, and new construction.”

Some commentators think big office buildings with large floor plates are too difficult and expensive to convert. But Willis is a historian, and the exhibit gives us the historical evidence. Conversions can happen if the finances are right—if the project “pencils out,” as they say in the business. Several of the largest successful conversions in lower Manhattan are indeed big postwar office buildings with large floor plates and other design features that some claim make conversions almost impossible.

The exhibit doesn’t prove (or suggest) office conversions are a magic solution to any city’s central business district problems. The unknown scale and permanence of working from home versus the office, the technical complexities of building conversion, political opposition to new housing and changes in regulations and zoning, and the higher costs of investment and construction as the Federal Reserve raises interest rates all present barriers to conversion.

The Museum also is worth a visit for its permanent exhibits about skyscrapers, urban density, city life, economics, and design. If you’re in New York, go see “Residential Rising” (it runs at least until next January.) If you’re not in the city, see the Museum’s great website. You’ll learn from history and real experience that significant conversions of offices to residences can happen, even in complex urban environments like New York City.

Finance

Planning An Estate: How A True Wealth Financial Binder Can Help

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Letitia Berbaum AIF is COO & Partner at The Zandbergen Group, specializing in wealth management for families, widowers, and entrepreneurs.

Recently, I’ve found myself and many of my clients watching our parents age. Along with that, we’ve seen the struggle that can ensue when they are trying to manage their affairs. If your parents are beginning to need a little more support around the house like mine are, you might also want to think about who is managing their finances and what support they may need around their financial estate.

For many people, finances can be a taboo topic that’s rarely discussed within the family or throughout childhood. This can lead to a lot of anxiety in adulthood if your aging parents need help managing their financial ecosystem but you don’t know how to talk to them about it. Helping your parents manage their finances becomes all the more difficult when you don’t know where to find bank statements, or how to access their electric account to pay the bill and ensure the lights stay on.

If starting this conversation is giving you anxiety, I have a few tips to slowly bridge the gap so you can open up the conversation about money and help those you care about to become as financially fit as possible.

Gather Everything In One Place

An important early step to take on this journey is to gather all of the information that’s part of their financial ecosystem in one central location. Whether you’re doing this for your parents or yourself and future caregivers, the goal is to make it easy for someone to take over financial management and be prepared for the unexpected. I like to call this a “True Wealth Financial Binder.”

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A True Wealth Financial Binder should include everything within a person’s financial sphere and act as a complete and comprehensive resource covering their assets and liabilities.

This process allows you to be prepared now, instead of having to react later. For example, if your parents need medical assistance in order to remain in their home, how do they plan to pay for that care? Their True Wealth Financial Binder could provide that answer, whether it be a savings account or insurance.

Some of the items that you want to consider including in this binder are:

  • All current financial investment statements, such as:
  • End bank statements for checking and savings accounts
  • A list of any CDs or bonds
  • Individually held stocks
  • Year-end investment statements
  • Retirement account statements
  • Pension statements
  • Insurance statements
  • Any estate planning documents (will, trust information, powers of attorney)
  • End-of-life wishes
  • A list of all assets (This doesn’t have to include the value of the assets, just a list of what they are and where they’re located.)
  • Safety deposit box access instructions
  • Locations of passwords and other confidential information
  • List of key advisors’ names, including financial advisors, bankers, accountants and attorneys

Including liability statements for:

  • Mortgages
  • Lines of credit
  • Credit cards
  • Auto loans
  • Notes receivable and payable
  • Most recent tax return

This is a resource you and your parents can put together independently, and of course, it is a tool their financial planner can help with, as well. I recommend that the True Wealth Financial Binder is updated regularly, ideally annually, or when any significant change occurs with their finances.

While end-of-life and finances can be a sensitive subject, putting together this binder is an act of love. It makes the process of taking over someone else’s estate easier during what can be an emotionally and financially challenging time.

Use The True Wealth Financial Binder To Open Dialogue

Putting together a True Wealth Financial Binder is a great exercise for cataloging all assets and ensuring there’s a plan for each of those assets. If you’re working with your parents to create their True Wealth Financial Binder, focus on gathering information that will be useful later when they need support and not the value of the assets.

Use the idea of putting together the True Wealth Financial Binder as a way to open dialogue around the topic and how you can best support them as they age. Involving your parents in the binder preparation process can make the process feel collaborative instead of nosy or accusatory.

When discussing what should go into your parents’ True Wealth Financial Binder, be sure to ask about their insurance policies and check who is listed as the beneficiary on all financial assets. This includes insurance policies as well as bank and investment accounts. This information can get lost or change internally over time, so it’s good to regularly check or update account beneficiary information.

Having the correct account beneficiary information will simplify the process of settling their estate and ensuring that the account passes to the person or entity they want it to.

Get Acquainted With Your Loved Ones’ Financial Team

During the discovery process of putting together your parents’ True Wealth Financial Binder, you may find that their financial advisors have retired or will retire soon. This is an opportunity to work together to find new financial advisors that can support this process.

If you already have a financial team that you like, you can introduce your parents to your financial team during this process. No one has to share any numbers or specific information, but let your family get to know the financial people on your team and why you like working with them. Having everyone get to know each other can make the process smoother and easier when you have to take over making financial decisions about their assets.

Once it’s put together, make sure to review the binder with a financial team as soon as possible. Maybe they can provide your parents with some updated information or guidance to make sure that everything looks like it’s on track. Making decisions in the midst of grief is much harder when the information is new or unknown.

The conversations you have with your family now set the tone for how comfortable they’ll feel turning over the management of their money and assets to you when they no longer can. Introducing them to your financial team and putting together a True Wealth Financial Binder that you can review together makes it more likely that they’ll continue to involve you in financial decisions later on when they’re less able to make those decisions alone.

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

The Zandbergen Group is a DBA of Axxcess Wealth Management, LLC a Registered Investment Advisor with the SEC.


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Why The Plastics Circular Economy Is The Next Greenfield For Climate Investors

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The conclusion from COP27 is inescapable: it is “all hands-on deck” to fight climate change. Despite our best efforts, the United Nations says we are still careening towards disaster. The financial sector needs to step up.

Until now, investors have, understandably, focused on directing capital towards climate strategies focused largely on renewables. But a singular focus on energy transition alone won’t solve our climate crisis.

According to the Ellen Macarthur Foundation, moving to renewable energy can only address 55% of global greenhouse gas (GHG) emissions. It is necessary, but insufficient. The circular economy offers the potential to tackle the remaining 45%. Adopting a circular economy framework in five key areas – steel, plastic, aluminum, cement, and food could achieve a reduction totaling 9.3 billion tonnes of greenhouse gasses in 2050.

Yet the need to develop a circular economy in these critical areas is still not getting the attention it deserves. With respect to plastics, COP27 only addressed this topic through the lens of multilateral cooperation and the need to reduce plastic pollution. But as I have written previously (and often!), we need to be attacking the problem on multiple fronts if we have any hope of attaining the UN Sustainable Development Goals by 2030.

Consensus is building to prioritize the development of a circular economy for plastic waste

With mounting pressure to limit global warming to 1.5C as urged in the 2021 Sixth Assessment Report from the UN Intergovernmental Panel on Climate Change, improving waste management systems appears as the new frontier to drastically curb emissions.

In a November 2022 report by Delterra, “The Promising Climate Solution That No One Is Talking About: Waste and its Role in Climate Change, plastic use and waste is expected to triple by 2060, contributing to climate change as well as other environmental issues.” Delterra further found that emissions from plastic waste are projected to reach 2.6 billion tons CO2 in the coming decades, equivalent to the annual energy use of 325 million homes. Based on current disposal habits, the full life cycle of plastic could contribute up to 15% of global GHG emissions by 2050.

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Fortunately, we now also know that the circular economy represents a still largely untapped opportunity to solve this important contributor to climate change. Thanks to a new tool called PLACES – Plastic Lifecycle Assessment Calculator for the Environment and Society, developed by The Circulate Initiative and inspired by the US EPA’s WARM tool, we can also, for the first time, quantify the positive climate impacts of plastic mitigation solutions in high growth markets. PLACES is designed specifically for use in Asia and offers the ability to assess the climate impact of current waste management practices in Asia, from open burning to recycling.

The positive climate impacts of this new tool could be enormous. It is estimated that transitioning to a circular economy can reduce GHG emissions globally by 10 billion tons a year by 2050. Using the underlying analysis behind PLACES, my firm found that almost 150 million tons of GHG would be avoided if 100 percent of plastic leakage in India and Indonesia was prevented by 2030. This is equivalent to shutting down 40 coal-fired power plants.

The Case for Accelerating Investment at the Nexus of Plastic Waste and Climate Change

Developing the circular economy for plastic waste calls for massive investment in solutions to address the problem. The good news is that investors are starting to take notice of the causal effects of plastic waste on climate change.

I recently spent a couple of days at EnVest, a convening of environmental-focused investors, and was heartened to see that climate investors are currently taking a more intersectional lens to climate investing. This group of the most sophisticated investors in the space is thinking beyond renewables (for reasons I just stated) and becoming more aware of the opportunities related to other areas, including advancing the circular economy for plastics.

But how do we get more investors into this space? A common challenge for climate investors is that waste management and recycling are complex sectors that remain pretty far outside their wheelhouse. My own sense from conversations with these types of investors is that they need specialists and experts to help them get comfortable with how to proceed. So, we need more funds and investment firms with this knowledge to help close these gaps of uncertainty for climate investors so we can crowd in more capital to existing and new solutions.

Overall, this should be encouraging news for those working to solve the plastic waste crisis. I believe we are at a new inflection point when it comes to climate investing, one where we can finally turn our attention towards investing in solutions that target plastic waste as a significant driver of climate pollution.

The bottom line is that to solve climate change, we need to make plastic waste a bigger part of the climate conversation among impact investors. And this means that climate finance and circular plastic investing are going to need to come together to address the climate crisis in a comprehensive way. Only by looking beyond renewables and closing the gaps and improving the production of materials like plastics, aluminum and so on can we develop the kind of circular economy we need to solve both the climate and plastic pollution problems.

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The Great Resignation: How To Engage Talent From The Next Generation

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JC Abusaid is the CEO and President of Halbert Hargrove, a wealth advisory firm headquartered in Long Beach, California.

The “great resignation” was a reckoning for companies: If you don’t find ways to encourage your employees’ engagement, they won’t stick around. Like any hit to their companies’ futures, this exodus is prompting leaders to come up with better answers.

Gen Zs and Millennials have adjusted their expectations, partly in response to the pandemic’s breakdown of working norms. So, what can you do to attract talent from younger generations and avoid high turnover?

While my firm thankfully didn’t experience a “great resignation,” many years of investing in our company culture helped ensure that our staff knows that we value them. Here are some thoughts on how businesses can source talent and protect against turnover.

Working From Home: Rewards And Reasons

For many companies, working from home is here to stay. With this new paradigm, you must support your employees’ preferences to work remotely while offering positive encouragement when they do come in. Of course, if people abuse your trust or slack off, then requiring them to come back to the office is the obvious consequence. Strategies to help make WFH work:

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• Trust, but verify. Use CRM data and natural measurables such as meetings scheduled or tasks completed. Your customers may start complaining if the services they’ve come to expect head south.

• Reinforce the office-centric responses you want. Offer to take an employee out to lunch or happy hour when they come in, or provide team breakfasts or lunch on specific days. Get creative in providing culture-building experiences, and give employees a reason to come into the office.

Make sure your employees’ WFH space is appropriate. If it’s not, give them the tools they need. Have managers check in with their team to ensure they are set up to successfully work from home, such as having screens, stable Wi-Fi, a keyboard and mouse.

• Lead by example. Your C-suite should be coming in with aligned expectations and connecting with employees in the office. Engaging with the other employees who are in the office that day promotes camaraderie and emphasizes to workers who come in that they are seen, which might encourage them to come in more often.

• Be honest about the benefits of working from the office. Show employees that it’s beneficial to come into the office and spend time together there. Whenever I’m in the office, I’ll spontaneously invite an employee who’s also in to lunch. Ultimately, your employees have to see the value of being there for themselves.

Double Down On Communicating And Connecting With Your People

Maintaining a remote workplace demands a lot of energy and intensity to support engagement. If you used to meet one-on-one with an employee once a month, you might try doubling that to every two weeks.

It’s important to ensure that your people feel like they’re being heard—and for management to be able to respond to issues quickly to avoid blowups or disengagement. If you can find out where your people might be struggling, you can work with them to find solutions. If your staff is struggling personally, you might be able to find helpful solutions such as increased child care reimbursement or allowing them to bring their dog into the office.

Provide Growth Opportunities Beyond Skills

We’ve recognized the importance of listening to our team members to spur their own growth. If you can help them figure out what feeds them in their work, even if it isn’t an exact match with their job description, chances are their engagement will deepen.

It’s about professional and personal development. Investing in your staff by offering them reimbursement or time off to further their education and acquire skills doesn’t mean they’ll leave for greener pastures. If you’re willing to support your people by evolving their roles and contributions to your firm, they’re more likely to stay and continue to grow with you.

Keys To Hiring New Talent

From the start, look for signs that a candidate will fit in well with your firm’s culture. Include multiple staff members in the interview and hiring process and take their feedback seriously. Ask specific, engaging questions about their values to ensure they align with your company’s.

Previous work experience with many transitions can be a red flag, but that shouldn’t automatically be a disqualifier. It’s useful to gain an understanding of a candidate’s work experience and goals beyond what is written on their resume. If they’re fresh out of college with a limited work history, look at extracurriculars. Team sports and group activities reflect an ability to contribute in a team environment.

We think mentoring is a big, big deal. Every new hire at our firm has a mentor. These relationships can help your new people troubleshoot challenges, build skills and knowledge, and bond with your firm. Importantly, you should monitor those mentorships and make changes when called for.

We also go all-in on celebrating our new hires. Think of it as a campaign of commitment. We host a lunch to help them meet the entire team, decorate their desk and provide an in-depth training program. I personally take them out to lunch so they know their executives are involved and care about them. In truth, the celebrations should never end: Showing your appreciation of your employees throughout their tenure will help prolong it.

Engagement Works Both Ways

The next generation of workers has different demands. The old business models are gathering dust. If your policies and benefits aren’t flexible, you should expect high turnover.

When you invest in listening to what employees are looking for and demonstrate your commitment to their career, they will be more likely to choose to stick around for the long term. And if you do experience an exodus of employees leaving, take that as an opportunity for your company to learn, adjust and grow.


Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?


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