2. Your NorCal Chapter Committee
Dr. Robert Herman
MRICS
Role: PropTech & CRE
Associations
Co-founder & CEO at
REscan
Stephanie Cichowska
MRICS
Role: Communications and
University Liaison
Project Controls Consultant
at Turner & Townsend
Silvana Curlo
RICS Chapter Manager
Julia Chesher
MRICS
Role: Communications
and University Liaison
Senior Consultant at
Turner & Townsend
Paul Fostun
MRICS
Role: Events and
Mentorship
Senior Consultant at
AECOM
Nevin Sood
MRICS
Role: Chair
Project Management
Services Lead - Americas
at Apple
Chris Adams
MRICS
Role: Training and
Development, MATRICS
Senior Consultant at
Turner & Townsend
RICS NorCal (Northern California) Chapter
RICS NORCAL CHAPTER
3. Professional standardsdrive market
confidence and demand for RICS professionals
RICS is the world’s leading professional body that promotes and
enforces the highest professional qualifications and standards in
the development and managementof land, real estate,
construction and infrastructure
rics.org
We accredit 125,000professionals and 67,000students in
148 countries
RICS NORCAL CHAPTER
4. Client confidence+ + =
• High entry standards
• Continuing Professional
Development (CPD)
Professionalism
• Rules of Conduct
• 10,000 firms regulated
by RICS globally
• Ethics are assessed on
entry to RICS
• Mandatoryethics test
every 3 years
Regulation Ethics
Our name promises the consistent delivery of professional standards –
bringing confidence to the markets we serve
RICS NORCAL CHAPTER
5. RICS Standardsinclude:
International Property Measurement Standards(IPMS) - Bring
transparency and consistency to global property markets, reducing
common market deviations of up to 25%.
International Ethics Standards(IES) - Enhance transparency and
value of the industry through creation of an over-arching standard
for professionals around the world.
International Construction Measurement Standards(ICMS) - Embed
a core international standard for cost measurement which RICS
professionals will lead on delivering.
The Red Book - Issued by RICS as part of our commitmentto
promote and support high standards in valuation delivery
worldwide.
Why standardsmatter
Standards are the foundation on which strong markets are built..
They provide:
• Confidence across the industry
• An assurance of professionalism
• A commonlanguage that crosses international borders
• Global economic security
RICS NORCAL CHAPTER
7. Routes to Qualification
Whether you are an experienced professional, recent graduate or industry leader,
the following are the routes to become RICS qualified:
• Direct Entry
• Senior Professional Assessment (SPA)
• Assessment of Professional Competence (APC)
RICS Qualifications
• AssocRICS
• MRICS
• FRICS
RICS NORCAL CHAPTER
8. rics.org/standards
Direct Entry: Membership of certain professional bodies around the world can provide a streamlined route to
membership. Some of the recognized professional bodies in the Americas -and the conditions- are:
Direct Entry and SPA Requirements
Organization Conditions RICS Designation
Counsellors of Real Estate (CRE) CRE Designation FRICS
The Appraisal Institute (AI) Senior Grade MAI & 10 years relevant experience MRICS
American Society of Appraisers (ASA) ASA & 5 years post designation experience OR FASA designation MRICS
The Appraisal Foundation Valid State cert, under grad degree and CRRPA
OR CGRPA des, 10 years exp with 5 years post designation
MRICS
CCIM Institute CCIM designation & 10 years relevant experience MRICS
American Institute of Certified Public Accountants (AICPA) ABV credential & 5 years’ relevant post designation experience MRICS
Canadian Institution of Quantity Surveyors (CIQS) PQS/ECA designation & 5 years post designation experience MRICS
The Appraisal Institute of Canada/ Institut Canadien des Evaluateurs Fully accredited members at the senior grade AACI & 5 years’ relevant post
designation experience
MRICS
International Facility Management Association (IFMA) CFM credential AssocRICS
Project Management Institute PMP certification, relevant experience, 2 referees AssocRICS
Senior Professional and Specialist Assessment requirements
- Minimum of 10 years relevant experience, reduced to 5 years with an MBA, MSc, or PhD
- No degree required with 10 years of relevant experience
- Current role must be determined either “senior” or “specialist” by a review panel
RICS NORCAL CHAPTER
9. rics.org/standards
The APC is suitable for individuals with a degree-level qualification and work-based experience
Eligibility: You must have at least a bachelor’s degree or approved professional qualification. Depending on your
qualification and length of work-based experience, you will progress as an APC candidate via structured training
or via preliminary review
Assessment of Professional Competence (APC)
Education/Qualification required Work experience and minimum structured training required
Already successfully completed an RICS accredited
degree (undergraduateor post graduate)
Or completing an RICS accredited part time
(undergraduateor post-graduate)
Less than 5 years’ experience - 24 months structured training
OR
If 5 - 9 years’ experience your choice of
- 12 months structured training
- Preliminary review (see below for more information)
OR
Over 10 years’ relevant work experience - No structured training
Non RICS accredited Bachelor’s degree A minimum of 5 years’ relevantexperience (1 year must be post
qualification experience) before your APC preliminaryreview
The qualification is available across 22 pathways. A pathway represents the area of the profession most relevant
to your experience. You need to demonstrate your experience against the competencies that are defined in your
chosen pathway guide.
RICS NORCAL CHAPTER
10. rics.org/standards
The Associate qualification is suitable for you if you have work-based experience or vocational qualifications
Eligibility: You must have a minimum of 4 years’ relevant work experience. However, certain qualifications can
reduce the number of years’ experience required, as indicated in the table below
Associate Assessment (AssocRICS)
Education Work experience RICS Assessment
No qualifications 4 years’ relevantexperience Associate assessment+ online ethics
module
Approved HND, HNC, NVQ3,
BTEC or foundation degree
2 years’ relevantexperience Associate assessment+ online ethics
module
Relevant bachelor’s degree 12 months’ relevant experience Associate assessment+ online ethics
moduleRICS NORCAL CHAPTER
11. 2019 RICS Summit Series and
World Built Environment
Forum (WBEF)
RICS NORCAL CHAPTER
13. Future of the Profession
A consultation led by RICS Governing Council
We asked industry professionals the following questions:
1. What new business models are emerging within the industry?
2. What opportunities will new technology create for professionals within the built
and natural environment?
3. What skills and competencies are essential now and into the future for an
RICS-qualified professional?
4. What will be required in terms of education to ensure the profession attracts and
retains the best talent? What can professionals/employers/RICS do now in
response to the need for new skillsets?
5. What else can RICS do to support professionals in adapting to the changing
market?
The insight gathered will feed into recommendations and guidance that
will be published in January 2019.
RICS NORCAL CHAPTER
25. RICS’s role & Further reading
Further reading:
• RICS Insight Paper - The Future of Valuations
• KPMG - Real Estate in the digital age
• McKinsey and Co: Imagining Construction’s Digital
Future
• HBS: Data-drive work spaces
RICS is committed to help its membership:
• Dedicated focus on Technological Innovation
• Events:
• RICS Summit Series – special focus on
PropTech
• 02/27 – Los Angeles
• 03/20 – Miami
• 04/24 - Vancouver
• World Built Environment Forum:
• 05/13-14 – New York
• Numerous NorCal events
• TAP – Technology Affiliate Program
• PropTech Q&A series
RICS NORCAL CHAPTER
26. Managing Escalation
Peter Morris – AECOM | PCC North America Lead
Paul Fostun – AECOM | Senior Cost Consultant
RICS NORCAL CHAPTER
27. Managing Escalation
2 Managing Escalation: September 20, 2018
Escalation Drivers
• What makes up the cost of a project
• Why do costs change, and how do we forecast?
Current Markets and Prospects
• What’s happening now – and where are we going?
Strategic Escalation Management
• What can I do about it?
Why?
To keep every dollar working as hard as it can
and to deliver as much as we can
RICS NORCAL CHAPTER
28. Escalation Drivers
Why do costs change, and how do we forecast?
Presentation Title3
RICS NORCAL CHAPTER
29. Project Definition over Time
Managing Escalation: November 15, 20184
Concept BidDesign
Complete
Approval/
ROM
LevelofDefinition
Defined
Scope
Scope
Uncertainty
Market
Uncertainty
RICS NORCAL CHAPTER
30. Cost Push Inflation
• Labor
• Direct wages
• Benefit costs
• Productivity Changes/Regulation
• Materials
• Material Costs
• Transportation
• Regulation
• Code and Practice
• Changes in Code
• Changes in Practice
• Financial
• Taxes
• Interest Rates
5 Managing Escalation: November 15, 2018
RICS NORCAL CHAPTER
31. Cost Push Inflation
• “Normal” Inflation
• Prevails in “normal” markets
• Usually driven by demand elsewhere
• (Think steel)
• Easy to Measure
• ENR/Means/Marshall & Swift
• Usually relatively stable
• Usually relatively predictable
• Lots of charts showing “trends”
6 Managing Escalation: November 15, 2018
RICS NORCAL CHAPTER
32. Demand Pull Inflation
• Supply/Demand Balance
• Total Construction Demand
• School Specific Capacity
• Capacity of Individual Trades
• Market Elasticity
• Size of market
• Ability to expand/pull in capacity
• Owner Profile
• Ease of doing business
• Payment record
7 Managing Escalation: November 15, 2018
RICS NORCAL CHAPTER
33. Demand Pull Inflation
• “Excess” Inflation
• Prevails in “stressed” markets
• Driven by demand locally
• Very hard to measure
• No systematic indexes
• Very volatile/non-linear
• Very un-predictable
• Employment activity a useful proxy
8 Managing Escalation: November 15, 2018
RICS NORCAL CHAPTER
34. Risk Inflation
• Total Risk Assigned
• How much risk is transferred
• What is risk profile (long tail?)
• Level of Control
• How manageable is risk
• Is management and impact
aligned
• Asymmetry of Risk
• Are the upside and downsides
balanced
9 Managing Escalation: November 15, 2018
RICS NORCAL CHAPTER
35. Risk Inflation
• “Excess” Inflation
• Prevails in “risky” markets
• Amplified by uncertainty and poor
risk allocation
• (Think tariffs)
• Very hard to measure
• No systematic indexes
• Very volatile/non-linear
Non-linear: can spike erratically
10 Managing Escalation: November 15, 2018
RICS NORCAL CHAPTER
36. Demand Pull/Risk Inflation
Normal Busy Market CCCI Content
Excess Profit
Risk Profit
Normal Profit
General Conditions
Labor
Material
11 Managing Escalation: November 15, 2018
RICS NORCAL CHAPTER
39. North
Bay Area
East/Sierra
LA Sac-NCV
Coast
Central Valley
Inland Empire
San Diego
-4%
-2%
0%
2%
4%
6%
8%
10%
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0%
California MarketsAnnualGrowthRate(%)
Annualized 5 Year Growth Rate (%)
14 Managing Escalation: November 15, 2018
RICS NORCAL CHAPTER
40. California Markets
North
Colusa, Del Norte, Glenn, Humboldt, Lake, Lassen, Mendocino, Modoc,
Plumas, Shasta, Sierra, Siskiyou, Tehama, Trinity
• Low growth short and long term
• Elasticity
• Very small market
• Lower labor rates
• Hard to attract labor
• Largely Cost Push, except for large/complex projects.
Escalation: Cost Push
RICS NORCAL CHAPTER
41. California Markets
Sacramento/Northern Central Valley
Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo, Yuba
• Low short term growth after lengthy strong growth
• Elasticity
• Mid-size market
• Lower labor rates than Bay Area
• Hard to attract labor
• Demand Pull due to strength of Bay Area
• Escalation highest on large/complex projects
Escalation: Demand Pull
RICS NORCAL CHAPTER
42. California Markets
Bay Area
Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa
Clara, Solano, Sonoma
• Moderate short term growth after lengthy strong growth
• Elasticity
• Very large market
• Very high labor rates
• Can pull labor from other markets, but limited capacity elsewhere
• High level of Demand Pull
• Escalation high across the market
• Poor bid coverage / Occasional bid spikes
Escalation: Demand Pull, with spikes
RICS NORCAL CHAPTER
43. California Markets
Central Coast
Monterey, San Benito, San Luis Obispo, Santa Barbara, Santa Cruz
• Strong short term growth after lengthy strong growth
• Elasticity
• Small market
• Lower labor rates
• Hard to attract labor
• Demand Pull due to strength of Bay Area
• Escalation highest on large/complex projects
• Poor bid coverage / Occasional bid spikes
Escalation: Demand Pull, with spikes
RICS NORCAL CHAPTER
44. California Markets
San Joaquin Valley
Fresno, Kern, Kings, Madera, Merced, San Joaquin, Stanislaus, Tulare
• Strong short term growth after lengthy moderate growth
• Elasticity
• Mid-size market
• Lower labor rates than Bay Area and LA
• Hard to attract labor
• Demand Pull due to strength of Bay Area
• Escalation highest on large/complex projects
• Poor bid coverage / Occasional bid spikes
Escalation: Demand Pull, with spikes
RICS NORCAL CHAPTER
45. California Markets
Sierra/East
Alpine, Calaveras, Inyo, Mariposa, Mono, Tuolumne
• Strong growth short after very weak long term
• Elasticity
• Very small market
• Lower labor rates
• Hard to attract labor
• Largely Cost Push, except for large/complex projects.
Escalation: Cost Push
RICS NORCAL CHAPTER
46. California Markets
Los Angeles
Los Angeles, Orange, Ventura
• Strong short term growth after lengthy strong growth
• Elasticity
• Very large market
• High labor rates
• Can pull labor from other markets, but limited capacity elsewhere
• Very high level of Demand Pull and Risk Inflation
• Escalation high across the market
• Poor bid coverage / Occasional bid spikes
Escalation: Demand Pull, with spikes
RICS NORCAL CHAPTER
47. California Markets
Inland Empire
Imperial, Riverside, San Bernardino
• Extremely strong short and long term growth
• Elasticity
• Mid-sized market
• Lower labor rates
• Hard to attract labor
• Very high level of Demand Pull and Risk Inflation
• Escalation high across the market
• Poor bid coverage / Occasional bid spikes
Escalation: Demand Pull, with spikes
RICS NORCAL CHAPTER
48. California Markets
San Diego
San Diego
• Moderate short term growth after lengthy strong growth
• Elasticity
• Mid-size market
• Lower labor rates than LA
• Hard to attract labor
• Demand Pull due to strength of Los Angeles
• Escalation highest on large/complex projects
• Poor bid coverage / Occasional bid spikes
Escalation: Demand Pull, with spikes
RICS NORCAL CHAPTER