Market Update

The broader economy is on the path to recovery, but economists have come to accept that the current recovery will be more muted than the previous ones. The nonresidential construction sector is closely linked to the overall economy. Consequently, growth expectation for the nonresidential buildings market needs to be moderated compared to the post-recession market recoveries in the past four decades.

Commercial construction drivers like manufacturing activity, consumer spending and corporate profits have fared better in recent months but without the conclusive evidence of a sustained recovery in these economic indicators, developers will find it difficult to justify spending on new construction. An uneven recovery in the residential market reinforces this status quo.

State and local governments, the primary drivers of institutional construction, continue to be plagued by budget constraints due to lower tax receipts and tight credit standards. Although state and local finances are gradually stabilizing, a quick recovery is unlikely as high unemployment rates are expected to keep tax receipts low in the medium term. Uncertainty over the funding of a range of government programs is also likely to adversely impact this segment.

Leading indicators of the nonresidential market like the Architectural Billings Index and construction starts also point towards slow recovery. The Architectural Billings Index turned positive during the fourth quarter of 2010 and first quarter of 2011 but the uptick was short-lived. In recent months, the index turned positive again but unless this is sustained through 2012, it is unlikely to translate into construction spending growth. The 12-month trailing average for nonresidential construction starts remained relatively flat for over a year now but it has stabilized at its lowest level in over 40 years.

Structural impediments like the large inventory of vacant houses, high levels of personal and federal debt, and rising energy and material costs will also restrict a rapid recovery in nonresidential construction. Further, project financing and refinancing in the commercial sector is still quite restrictive. Project delays and cancellations are down but fewer projects are getting started without full financing.

COMMERCIAL CONSTRUCTION
The retail segment still has a substantial number of distressed properties. The retail vacancy rate stabilized over the past year but remains high by historical standards. The regional mall vacancy rate is stagnant at its highest level in eleven years as high food and energy prices impact retail sales. Housing starts, a driver of retail construction, continues to be weaker than expected.

The office segment will continue to be impacted by an uncertain regulatory environment and high office vacancy rates. Office employment growth remains feeble as the market recovers from cyclical and structural issues. The large amount of unoccupied office space is expected to be a significant drag on new construction in the office market.

Hotel segment construction growth will be relatively modest as high unemployment levels persist and weak consumer confidence holds back leisure travel. Renovation work in the hotel segment is expected to spur growth in 2012 as hotel occupancy rates continue to rise. Financing of new hotel projects will continue to pose problems for developers.

The multifamily residential market, comprised of condominiums and rental units, has bottomed-out and is expected to grow at a rapid pace in 2012. However, securing financing for large projects will continue to be a challenge.

INSTITUTIONAL CONSTRUCTION
In the education segment, weak state and local government finances, the primary drivers of educational building construction, will continue to adversely impact school construction. Volatility in the stock market, where college and university endowments have significant investments, will affect college and university construction spending. The “American Jobs Act” proposes to invest $25 billion to modernize around 35,000 public schools across the country. This could provide some impetus to educational building construction but is unlikely to have an impact until 2013.

In the healthcare segment, escalating healthcare costs are expected to dampen investments in new healthcare facilities but market drivers like aging population and medical facilities will induce new projects in the medium term. As the economy improves, medical office building vacancy rates are expected to decline and provide further impetus to build new medical facilities.

The public building segment will be relatively weak with the impact of government stimulus funds waning. New spending in this segment will be moderated by improving but weak state treasuries and deteriorating federal funding.

Nonresidential building construction is expected to hit bottom in 2012, with the possibility of some growth in the commercial sector during the latter half of the year. Most leading indicators, however, seem to imply that the market will not experience any significant growth until 2013.

Window Alliance Program Update

In late 2011, we announced our Window Alliance Program and we welcome our new members. This new program was developed to encourage long-term partnerships and reward brand loyalty with benefits and opportunities that drive mutual growth and profitability. Some of the benefits include project partnering and market-competitive lead times throughout the year once a Request for Information (RFI) is complete and submitted.

Eligibility for this program includes a customer commitment to maintaining window sales volumes of at least $1 million per calendar year and maintaining loyalty across all our market segments – windows, storefront/framing, entrances and curtain walls. In addition, Window Alliance customers support and promote the Kawneer/Traco bundle.

Providing differentiated customer service is a critical component of our business and we strive to deliver on that commitment through products, tools, resources and programs such as this one. We are working to build on this program to include the complete portfolio of products and systems from both trusted brands and expect to introduce more enhancements later this year.

We value your business and encourage you to discuss the guidelines and application process with your sales representative. We will continue to provide you with updates as we expand this program and look forward to the many possibilities ahead.

NX-4000 Series Thermal Window Offers the Distinctive and Historic Look of a Hung Window with High Energy Efficiency

To maintain the historic look of a building while also providing high energy efficiency, we recently introduced the NX-4000 Series Thermal Window. By incorporating the benefits of the proven NX-3000 projected window series, the new NX-4000 Series Thermal Window offers the performance of a projecting window with the distinctive look of a hung window making it an ideal solution for many retrofit applications. The energy-efficient window features the NexGen Thermal Barrier System™, NexGen Energy Spacer™ and 1-inch insulating glass. The NX-4000 offers outstanding air and water performance and was tested to a design pressure of 80 psf and water performance level of 15 psf. Additionally, the NX-4000 Series Thermal Window provides increased durability, trouble-free operation and flexibility while maintaining the hung window aesthetic. For increased resilience, the window uses hollow extrusion profiles with Euro-groove construction for reliable hardware attachment, which are proven to be stronger than traditional mechanical fastener methods.
	The ability to triple-glaze, using the combination of 1-inch insulating glass, access panel and internal blinds keeps things quieter, adds privacy and makes the NX-4000 Series Thermal Window ideal for schools and medical facilities. Designed with a master frame depth of 4-5/8 inches and a 3-1/8 inches operable vent depth, the projecting window has an exaggerated offset of 1-1/4 inch minimum between the upper and lower exterior glass surfaces. Bevel edge framing on the vents and fixed lites replicate the look of a putty glazed window while optional exterior profile muntin grids can simulate divided lites and offer several additional pleasing design options.
For more information on the NX-4000 Series Thermal Window or any of Kawneer and Traco’s range of window products, please visit Kawneer.com. We encourage you to contact your sales representative to learn how this product could be the right solution for your next project.

Kawneer Adds Impact Option to its Proven 350/500 Heavy Wall™ Entrance Line Offering More Protection From the Storm

Kawneer has expanded its line of trusted 350/500 Heavy Wall™ Entrances to include hurricane resistant 350/500 Heavy Wall™ IR Entrances, which have been tested to meet the highest level of impact protection in the industry for entrances. Originally developed for heavy traffic applications such as schools, universities or stadiums, the entrances have been proven to go beyond their original design parameters and now meet the stringent ASTM E 1996 Level E requirements for enhanced facilities. As the demand for hurricane resistant products continues to grow, building codes, many in coastal areas, are changing to require enhanced safety for occupants. To meet these needs, and add to its growing and comprehensive line of impact resistant products, we put our 350/500 Heavy Wall™ IR Entrances under rigorous testing to achieve the strict requirements of ASTM E 1996 Level E (Enhanced Facilities). Testing encompassed various design pressures, door sizes, glazing infills and hardware configurations (see chart).

Our 350/500 Heavy Wall™ Entrances have a long-standing reputation for reliability and strength and now include protection from violent weather. Features include: Corner construction with four Sigma deep penetration and fillet welds plus mechanical fastening at each corner Each door corner comes with a limited lifetime warranty, good for the life of the door under normal-use operation 3-1/2-inch (88.9 mm) vertical stiles for the 350 Heavy Wall™ Entrance 5-inch (127 mm) vertical stiles for the 500 Heavy Wall™ Entrance. For additional durability, the door and frame have 3/16-inch (4.8 mm) walls throughout. Like all Kawneer entrances, 350/500 Heavy Wall™ IR Entrances offer classic lines and clean aesthetics and can blend into any type of architecture. You know how these tough entrances stand up against heavy traffic abuse areas, now see how they stand up against severe weather. To learn more about Kawneer’s 350/500 Heavy Wall™ IR Entrances and see how these may be right for your next project, please visit Kawneer.com or contact your sales representative.

Kawneer introduces its new InLighten® Light Shelf. By utilizing minimalist design principles, Kawneer has rewritten the energy saving value equation for its architectural light shelf. The result is a flexible and versatile solution that helps reduce the need for artificial lighting and increase energy savings in a building. At the core of their functionality, architectural light shelves are designed to reflect sunlight deeper into the interior of a building by “bouncing” natural light up to the ceiling and have been proven to reduce perimeter lighting requirements. Read on to see how the Kawneer redesign took this fundamental concept one step further by applying minimalist design principles.

The new design leverages minimal material content, sightlines, weight, installation and maintenance efforts, all while maximizing value, daylighting and design options.

InLighten® features an extruded aluminum chassis system and offers several panel choices. Since light shelves are used to reduce artificial lighting requirements and also balance the light profile within the building space, translucent polycarbonate panels are now a standard offering in addition to the traditional opaque aluminum composite material (ACM) panels. The availability of depths of up to 30 inches (762 mm) allows you to maximize the overall reflective surface area.

Keeping a clean reflective top surface is paramount to the performance of architectural light shelves. InLighten® Light Shelf’s new design makes access to the top panel surface easy by incorporating a mounting bracket design that allows the panel to be effortlessly tilted for care and cleaning.

The ability to attach the minimal sightline light shelf to multiple Kawneer curtain wall systems (e.g. 1600 Wall System® curtain wall products) and storefront framing systems (e.g. Trifab® framing system products) makes it a perfect candidate for either new or existing projects.

InLighten®’s modular design and panel options provide several fabrication and assembly advantages. The attachment bracket permits the panels to be assembled separately from anchor installation, which allows the panel assembly to be fabricated and assembled in the shop. This can significantly reduce the time spent in the field prior to installation. The bracket also simplifies site installation and hanging of the panels. And, the lightweight polycarbonate panel option makes handling and lifting of the panel assemblies an even easier task.

With superior aesthetics, enhanced performance, tilt feature and fabrication and assembly advantages, InLighten® Light Shelf is sure to impress.

Environmental Advantages Architectural light shelves have become an integral part of the daylighting strategy for sustainable building design. Strategically placing InLighten® Light Shelf can allow for maximum daylighting and reflect natural light deeper into occupied spaces. Light shelves have been proven to reduce requirements for artificial perimeter lighting, thereby conserving electrical energy costs. In addition to increased sun control and energy savings, InLighten® Light Shelf can help earn Leadership in Energy and Environmental Design (LEED®*) credits in three categories: Materials & Resources – Recycled Content, Energy & Atmosphere – Optimize Energy Performance and Indoor Environmental Quality – Daylight and Views. For more information on the InLighten® Light Shelf, visit Kawneer.com or contact your sales representative. *LEED is a registered trademark for the U.S. Green Building Council (USGBC).

Continuing our tradition of offering innovative, high-performing products and systems, we recently released OptiQ™ Ultra Thermal Windows – the industry’s smartest window. Developed as a result of a pioneering partnership with the U.S. Department of Energy, the AA®4325 series – the first OptiQ™ Window – reaches a new level in thermal performance due to the unique groundbreaking features integrated into its design. With assistance from the U.S. Department of Energy, we were able to improve the product design and manufacturing processes, which has enabled more efficient production of the AA®4325 series, thereby assisting in the development of a window with best-in-class thermal performance. When it comes to aesthetics, the AA®4325 series is the perfect combination of brains and beauty. The 3-1/4-inch frame depth delivers high thermal performance while its minimal sightlines offer superior aesthetics and are ideal for new or retrofit commercial construction. This versatile window is available in several configurations including, fixed, projecting and casement. Additionally, the AA®4325 series offers the flexibility to add or remove thermal options based on performance and cost requirements.

To learn more about OptiQ™ Ultra Thermal Windows, visit Kawneer.com or contact your sales representative.

*LEED is a registered trademark for the U.S. Green Building Council (USGBC).

Located in the heart of downtown Chicago, the Montgomery Ward Building of Northwestern University, more commonly known as the Ward Building, houses the school’s medical and dental divisions as well as several high-profile research labs. Constructed of Indiana limestone over a concrete and steel framework, the building stands at 14 stories tall and incorporates many modernized Gothic-style features, similar to those used throughout the main Northwestern University campus. In 1927, a journalist for the American Architect commented that, “Despite the huge size of the building, the architect had provided ample light, air and ease of access.”

Originally built in the mid-1920’s, the University wanted to upgrade the building’s original wood windows with a high-performing thermal solution that required minimal maintenance and would also help retain the classic historic appearance of the university’s campus. The building still needed to provide ample light, air and ease of access, but with a more current solution.

Being the location for much of the school’s top-level research, the renovation was unlike a typical university building project. The construction process for this facility was subject to high-security and strict deadline requirements that wouldn’t disturb the student and faculty residents of the building. Additionally, matching the building’s aesthetic was a prime concern for the university and the project’s architects, Chicago-based architecture and engineering firm Wiss, Janney, Elstner Associates, Inc.

“During the initial design phase, we considered replacing the entire window – frame, sash, etc. – but after a campus survey and assessment, we determined that would have greatly disrupted the occupants and decided the best approach was to leave the frame and install the TR-9460 over the original frame,” said Anthony Cinnamon, project architect with Wiss, Janney, Elstner Associates, Inc.

To meet these, and the many other specific aesthetic needs, the two-year project featured Traco’s TR-9460 4" Fixed over Fixed Architectural Thermal Aluminum Windows in the nearly 1,000 openings throughout the building.

“The TR-9460 windows were the best ones on the market to really fit the needs of this project,” said David Arcand, who worked with Rich Ross as Project Manager with the Orland Park, Illinois-based Auburn Corporation, the project’s installer. “Not only were they fixed windows that offered superior thermal protection, but they gave the appearance of double hung windows and were able to match the look of the other windows on the building.”

Company representatives worked closely with architects and installers to help the project stay on schedule. “It came down to who would be able to meet the project’s performance and aesthetic demands while also committing to their schedule,” said Scott Baker, Traco Window Sales Manager, Central Region. “We were able to provide limited distractions with maximum output, and the result was a great partnership.”

The customization capabilities of the TR-9460 windows were also a factor in their utilization. To accommodate the building’s unique shape while maintaining design consistency, profiled muntins as well as several custom panning profiles and curved corners were created. The unique fixed double-hung appearance of the TR-9460 windows provided enhanced thermal performance while maintaining the building’s historic look and matching the surrounding university structures. “There were very few punch-list items for this project,” said Arcand. “As a long-time customer of Traco, we knew they would accommodate the complicated items and multi-story looks that we wanted and still stay on schedule throughout the process.”

Because the temperature in Chicago can drop well below zero Fahrenheit, thermal performance was of the utmost importance. The TR-9460 4" Fixed over Fixed Architectural Thermal Aluminum Window has been tested for air infiltration and water resistance and offers thermal performance that met the standards required by the project.

Enforcing security measures and limiting distractions to the professors and researchers inside the building was also critical to the project’s success. The TR-9460 window allowed architects to leave the original frame and install the new windows in the existing space. Throughout the installation, the contractors went to great lengths not to disturb any of the sensitive machines or research being conducted in the building during the replacement process by agreeing to be inside each floor for only one day, with the rest of the installation being conducted by exterior climbers.

“We needed a product that could easily be installed from the exterior that also matched the building’s design,” said Cinnamon. “The TR-9460 matched so well with the existing design, and the engineering quality of the product was just what a building of this importance needed. Everyone was pleased with the results and we couldn’t have asked for a more smooth process.”

Once completed, the project featured nearly $2 million of Traco’s TR-9460 4" Fixed over Fixed Architectural Aluminum Windows. The entirety of the Ward Building renovation project spanned a period of two seasons and was completed in August 2011.