A Nevada rancher skips on rent while offering a novel excuse, the National Science Foundation lays a new foundation, cheap natural gas lights up Red Stick, two tales of Denver — it’s all here at the Commercial Real Estate News Roundup for April 22, 2014.
- ULI panel: Commercial real estate still reflects ‘good ol’ boys club’, Triangle Business Journal, April 17, 2014 – UNC Chapel Hill business prof wonders out loud if this industry hasn’t left behind its least attractive traditions.
- Enhancing a commercial real estate career through reading, Commercial Observer, April 8, 2014 – Great, thoughtful piece on the role of reading in building a successful career. Spoiler alert: it helps. A lot.
- Forget Silicon Valley vs. San Francisco – here are the 6 commercial real estate trends to watch, Silicon Valley Business Journal, April 11, 2014 – Witness the epic Valley vs. San Fran battle over who’s prettier (to property portfolios).
- Real estate site targets underserved commercial sweet spot, CNBC, April 8, 2014 – Sub-4K sq. ft. office leasing: a huge market made out of modest space.
- Swift Real Estate Partners buying California Center, 1 million square feet of office in Pleasanton, for $160 million, San Francisco Business Journal, April 17, 2014 – What does $160 mil buy in the Bay Area office market?
- Real estate company rejuvenates Mt. Lebanon office building, Pittsburgh Post-Gazette, April 11, 2014 – Iron City redevelopers take a beautiful old property and turn it around with a preservationist’s touch.
- USAA Realco developing new HQ for National Science Foundation, San Antonio Business Journal, April 16, 2014 – National Science Foundation’s new HQ
- Realtors create new boom by flipping warehouses, Beaumont Enterprise, April 21, 2014 – Meanwhile in Texas, a trio of businesswomen are making bank meeting commercial space needs on a schedule.
- Denver’s industrial real estate market is on fire, Denver Business Journal, April 14, 2014 – Note: property is not actually burning.
- Industrial real estate demand growing for Baton Rouge area, trending upwards for 2014, The New Orleans Times-Picayune, April 10, 2014 – Driven by fracking-low natural gas prices, Baton Rouge
- Real estate won’t save Sears shareholders, Crains Chicago, April 14, 2014 – Investors looking for a happy ending to Sears need to keep looking.
- Denver’s retail construction lags with available space dwindling, Denver Business Journal, April 16, 2014 - Absorption plus declining construction starts equals rising prices.
- The federal government moved some cows and Nevada’s governor isn’t happy about it, Washington Post, April 9, 2014 – In the weekend that added the amusing term “welfare cowboy” to the national conversation, we find that the oft-decried ethos of entitlement shows up in the darndest places – sometimes under a stetson.
Once you start counting things, it can be hard to stop. Commercial property in operation presents a huge number of things to count, and it’s only with modern technology tools that we can handle that data on an ongoing basis.
Every type of commercial property from industrial to retail to office offers a universe of data to be collected. In order to find hidden value, areas for improvement, or to create comparative statistics to increase efficiency in property operation, we can count a property’s various dollar flows, square feet, degrees fahrenheit, kilowatt hours, air pressure psi — the list goes on and on. Unlike decades past, thanks to the sharp rise in automated building operations systems, these variables are increasingly being sucked into computers, where all huge piles of data belong.
If you’re counting new terms coined by our technology-infused times, it’s time to add one more. The marriage of new commercial property development and data collections aimed at ongoing improvement of property and community operation has taken on the name quantified community. It’s a holistic way of capturing the vital signs of a commercial property plus the community it’s embedded in.
If that sounds vaguely medical, it’s because the concept is an extension of the quantified self movement, where technology-enabled people are collecting information about their own bodies and diets in order to tweak themselves to maximum health. The simple bathroom scale isn’t enough any more — and in real estate, neither is the simple electricity bill. The new thinking says we need to know the reasons behind the numbers, and to know our properties as we know ourselves — as systems.
New Thinking, New Developments
New York City’s Hudson Yards project is flying the quantified community banner very conspicuously. It’s an eye-popping 16-skyscraper, 12 million sq. ft development on Manhattan’s west side. The details of the project are impressive and include a fully quantified data collections operation encompassing retail (750,000 sq. ft.) office, residential and public space.
The collaboration is being touted as producing the first “quantified community” in the U.S.—which has a rather creepy, 1950s social experiment ring to it, though Constantine Kontokosta, deputy director NYU’s Center for Urban Science and Progress, assured us that all participation will be opt-in. Mr. Kontokosta said that NYU had approached Related about participating in the collaboration, after surmising what a good data set the new development would provide.
“This is just an incredible research opportunity for us,” said Mr. Kontokosta. “We hope to make the data available to other researchers and programmers, to find ways to make it more sustainable, and to apply the findings across the city.”
Mr. Kontokosta added that this marks the center’s first collaboration with a real estate developer. Ideally, he hopes to convince the other Hudson Yards developers to participate as well.
Although what, precisely, the center will measure is still somewhat vague at the moment. Possibilities include pedestrian flows, air quality within buildings and across open space and the health, the activity of residents and workers using a custom-designed, opt-in mobile application as well as solid food and recyclable waste and energy usage.
Mr. Kontokosta said that he believes residents will be interested in participating, not only because the project will be “unprecedented in scale” but because there’s a lot of interest in the “quantified self” at the moment.The Center also hopes the collaboration will help advance its leadership in the emerging field of “Urban Informatics—the observation, analysis, and modeling of cities.”
“The ability to conceive of and develop an entirely new neighborhood creates tremendous opportunities,” Related Hudson Yards president Jay Cross wrote in a statement. “Through our partnership with CUSP we will harness big data to continually innovate, optimize and enhance the employee, resident and visitor experience.”
And presumably, assuming the data is public—which we would hope it will be (Mr. Kontokosta said that Center hopes to make things “as transparent as possible”)—it will also allow journalists like us to analyze how well the city’s investment in the new neighborhood has paid off in terms of creating a viable community. And how it should fund, aid and encourage future developments like Hudson Yards.
The Wisdom Of Opt-In
The success of such a data collection project (and the property operations improvements that could follow) all hinge on collecting sufficient amounts of data. Some of this collections capacity will be “baked in” to the development in the form of smart thermostats, water distribution and the like. But what’s most interesting, and potentially alarming, is the mobile application mentioned above.
Landlords or developers considering quantified community features should be wondering how to balance the successful collecting of data with the very real privacy concerns of American residents, customers, and public passers-by. It’s tempting to imagine that we have turned a corner technologically and that privacy is no longer a right. But that’s not only simplistic, it’s a great way to accentuate, not extinguish the “creepy” aspects of such applications. It may be a short hop technologically from keeping tabs on lighting efficiency in a commercial property to compiling a database of comings and goings of tenants and visitors, but it’s a giant leap in terms of civil liberties, and one that should be heeded.
I’ve been a fan of Michael Bull’s Commercial Real Estate show for more than a year. I spotted this clip last year and made a note to blog it here, but managed to not follow up sooner than now. What triggered my memory was the appearance on this episode of Brian Cardoza from Prologis, whose firm is dedicated to research on the industrial sector.
In this clip, you can get a sense of how focusing on value in industrial property can cause upward pressure on rents and absorption, and how such a shift works even as a buyer’s market persists.
Population trends in many major metro areas include a reversal of the traditional flow of adults from urban centers into suburban enclaves. Increasingly, these suburbs are greying demographically while thirtysomething workers and apartment dwellers prefer to stay close to the urban action.
Asking different demographers why this is happening will get you different answers. Some point to lows in tolerance for commuting, suggesting that the rise of electronic virtual workspaces have the effect of naturally avoiding the scourge of commuter traffic. Others suggest the lifestyle preferences of millennials aren’t well-served by postwar conceptions of suburban life. Still others claim the allure of the city is growing in attraction as national crime rates fall.
Whatever the true reason(s) for any changes in your market, the shift in demand for work and apartment space is something you have to stay on top of. Servicing clients with the right solution means understanding and anticipating what is on their minds. When it comes to suburban-urban choices, recent selected market news on reverse suburban migration might help get a picture:
- Reverse migration from North Jersey to New York City signals a new challenge.
- Suburbs Try to Prevent an Exodus as Young Adults Move to Cities and Stay
- More Americans Moving to Cities, Reversing the Suburban Exodus
- Has The Great Migration From The Suburbs Begun [In Atlanta]?
- Downtown resurgence giving new life to Cleveland
- Millennials are Saving St. Louis, and Why We Need More of Them
(Photo credit: Mark Nye, ClubofHumanBeings.com)
Accredited Land Consultants (ALCs) are more than just land professionals, they are the most accomplished, experienced, and highest performing land experts across the country. They specialize in agricultural land, timberland, ranch, and recreational properties, or vacant land for developments. More information.
The REALTORS® Land Institute named the award winners for the 2013 Outstanding Chapter of the Year, the 2013 Excellence in Instruction awards, and the 2013 ALC-to-ALC Networking awards, at the 2014 National Land Conference in Charleston, SC, on March 12-14. The awards are an honor among the REALTORS® Land Institute and prestigious Accredited Land Consultant (ALC) professional community.
And The Award For Outstanding Chapter Of The Year Goes To…
The Institute recognized the Iowa Chapter #2 of the REALTORS® Land Institute as the recipient of the 2013 Outstanding Chapter of the Year award. This honor recognizes a chapter that has demonstrated excellence and creativity in member retention, education, volunteering, technology, outreach, and collaboration. The Iowa Chapter is known for “doing it all” and “doing it well.” The award was accepted by Kyle Hansen, ALC, 2013 Chapter President; Terry Pauling, 2014 Chapter President, and Molly Suarez, Chapter Administrator.
The Excellence In Instruction Award Goes To…
The 2013 Excellence in Instruction awards honored Randy Hertz, ALC Advanced, and Jim Miller, Esq. Both LANDU instructors bring quality, timely, and accurate information to their students. By updating courses and providing up-to-date technology and discussion on current industry laws, they capture the true spirit of businessmen who share and believe in the importance of knowledge and professional development.
The ALC-To-ALC Networking Awards Go To….
The ALC-to-ALC Networking awards recognized Accredited Land Consultants (ALCs) with the most lucrative peer collaboration during 2013. The deals are a clear indication of increased productivity and business expansion from networking among ALCs. Murray Wise, ALC, and Ben Crosby, ALC, won both the 2013 Largest In-State ALC-to-ALC Transaction by Sales Volume, and the 2013 Largest In-State ALC-to-ALC Transaction by Total Acreage. The Largest National Referral for an ALC-to-ALC Transaction by Sales Volume was awarded to Randy Hertz, ALC Advanced; Terry Rupp, ALC, and Troy Louwagie, ALC. The final award, the ALC-to-ALC Networking Award for Overall Collaboration, was presented to Ben Crosby, ALC; Squire Smith, ALC; Clay Taylor, ALC; and David Hitchcock, ALC Advanced.
We offer congratulations to the winners and look forward to coming years of top-notch work from the RLI members.
(Photo credit: wangkai)
Would-be Excel jockeys, take a peek at this. It’s a 40-minute clip detailing the analysis of leases from the tenant and the landlord perspectives. Veterans and rookies alike can learn a thing or two about detailing a lease deal for either side of the table.
Learn about the major variables, learn about how tenants and landlords see these variables differently, and how the math differs between the two. When costs are shared through various means, the numbers jiggle around, and this clip shows how to stay on top of exactly that.
(The video producer is the publisher of a toolkit called REFM.com. This post is presented as an educational item and is not an endorsement of this offering.)
- Modeled after Airbnb, online service aims to disrupt commercial real estate, Washington Post, April 3, 2014 – Jones Lang launches a online platform aiming to do to sub-5K sq. ft. leasing what AirBnB is doing to apartments: disrupt the market.
- Chinese investments in US commercial real estate surges, Bloomberg, April 1, 2014 – I bet you thought getting to Greenland meant heading to the Atlantic Ocean. It turns out Greenland is in Shanghai, and is coming toward you.
- Dallas’ Victory Park takes new direction with apartment, office rebirth, Dallas Morning News, April 3, 2014 – 15 years, 75 acres of downtown land tells a tale of Dallas downtown like no other.
- Blackstone said in talks for a $2.5 billion sale of offices, Bloomberg, April 2, 2014 – Say what you will about Blackstone, but wether they’re buying southern apartments or selling Boston office inventory, they do it big.
- Sacramento developer plans 700,000 square feet of new industrial space in Richmond, SF Business Times, March 31, 2014 – Spec warehouse space is the new craze, Part I.
- Another spec warehouse taking off near O’Hare, Crain’s Chicago Business, April 4, 2014 – Spec warehouse space is the new craze, Part II.
- Long Island Index releases downtown retail map, Newsday, April 2, 2014 – This is how a community chamber of commerce (or similar organization) gooses leasing interest: start counting properties and economic date and publish the results.
- In Voorhees, reinventing the mall, Philadelphia Inquirer, April 6, 2014 -When a REIT takes over a retail space, changes can be afoot. Here’s a Pennsylvania success story.
- Crow Holdings sells large US real estate portfolio, Dallas Business Journal, April 1, 2014 – A twelve-property multistate deal encompassing over 4,000 luxury apartments.
- Cleveland’s thriving theater hub lures residents, New York Times, April 1, 2014 – Never underestimate the power of theater to renew commercial real estate values.
- Portland’s apartment titan PNC Real Estate on the rise, Portland Business Journal, April 3, 2014 – The fourth largest owner of US apartments calls the Pacific Northwest home.
- Airbnb agrees to pay hotel tax in San Francisco, AOL Real Estate, April 2, 2014 – The taxman catches up to the upstart online space dealer
- Texas transportation agency’s land deals under federal grand jury investigation, Dallas Morning News, April 7, 2014 – Does eminent domain in Texas mean enriching insiders at taxpayer expense?
- Smart development of state land requires a new approach to selling it, reformers say, Arizona Central, April 4, 2014 – Deregulation touted in Arizona as the means to more development. No mention of the state’s scads of half-completed projects / housing-crisis casualties.
The Economic Census is the U.S. Government’s official five-year measure of American business and the economy. It is conducted by the U.S. Census Bureau, with responses required by law.
In latter 2012, 4 million businesses were sent response forms by the Census Bureau — to large, medium and small companies representing the statistical entirety of US business locations and industry sectors.
The data set is enormous, and the rollout of the data is staggered over the next two years.
What sectors are important to you? Look up the date below and keep an eye on business.census.gov to jump on the data as soon as it shows up.
|Publication Series||Report Title||Release Date Range|
|Core Business Statistics||Advance Report||March ’14|
|Industry Series||Utilities and Finance||June ’14 – Feb ’15|
|Wholesale||July ’14 – Feb ’15|
|Services||July ’14 – Feb ’15|
|Retail||July ’14 – Jan ’15|
|Manufacturing||July ’14 – Dec ’14|
|Mining||July ’14 – Dec ’14|
|Construction||July ’14 – Dec ’14|
|Geographic Area Series||Utilities and Finance||Feb ’15 – Nov ’15|
|Wholesale||Feb ’15 – Oct ’15|
|Services||May ’15 – Dec ’15|
|Retail||Feb ’15 – Oct ’15|
|Manufacturing||April ’15 – Aug ’15|
|Mining||Feb ’15 – April ’15|
|Construction||Feb ’15 – Oct ’15|
|Subjects/Summary Series||Industry/Product Analysis (Min & Mfg)||May ’15|
|Subject/Summary – Construction||May ’15 – July ’15|
|Subject/Summary Series – Manufacturing||June ’15 – Oct ’15|
|Subject/Summary Series – Mining||June ’15 – Sept ’15|
|Core Business Statistics||Enterprise Statistics||Feb ’16|
|Subjects/Summary Series||Product Lines – Retail||Jan ’16|
|Establishment and Firms Size – Retail||Jan ’16|
|Product Lines – Services||Jan ’16 – March ’16|
|Establishment and Firms Size – Services||Feb ’16 – March ’16|
|Product Lines – Wholesale||Feb ’16|
|Establishment and Firms Size – Wholesale||Feb ’16|
|Product Lines – Utilities & Finance||March ’16|
|Establishment and Firm Size – Utilities & Finance||March ’16|
|Misc Subjects – Retail||March ’16|
|Misc Subjects – Wholesale||March ’16|
|Misc Subjects – Utilities & Finance||June ’16|
|Misc Subjects – Services||June ’16|
|Core Business Statistics||Bridge||June ’16|
|ZIP Codes||Retail||June ’16|
|Annual Survey of Manufactures||ASM 2013||Feb ’15|
|ASM 2014||Nov ’15|
|ASM 2015||Nov ’16|
|Commodity Flow Survey||Preliminary||Dec ’13|
|GAS, Hazardous Materials, and Exports||Dec ’14|
|Economic Census of Island Areas||Northern Marianas Islands||April ’14|
|American Samoa||May ’14|
|Virgin Islands||July ’14|
|Puerto Rico Manufacturing||Feb ’15|
|Puerto Rico GAS||July ’15|
|Puerto Rico Construction||Sept ’15|
|Survey of Business Owners||Women-Owned Businesses||June ’15|
|Hispanic-Owned Businesses||July ’15|
|Black-Owned Businesses||Aug ’15|
|American-Indian and Alsak Native Owned Businesses||Sept ’15|
|Asian-Owned Businesesses||Oct ’15|
|Native Hawaiians and Other Pacific Islander-Owned Businesses||Oct ’15|
|Veteran-Owned Businesses||Nov ’15|
|Company Summary||Dec ’15|
|Characteristics of Business & Business Owners||Dec ’15|
Only available to REALTORS®, RPR (REALTORS Property Resource) was created by NAR exclusively for its members — a source of comprehensive data about commercial property along with state-of-the-art analytics.
A commercial professional with over 40 years in the industry, Syd Machat shows how RPR puts the critical information clients need in the right place at the right time.
Check out this short clip and see how Syd makes RPR work for him in his rural Maryland marketplace — from producing snappy pro formas to accessing accurate plat and tax boundary map overlays and everything in between.
Frederik Heller, our manager of Library and Archives here at NAR is an invaluable resource for answers about just about every historical aspect of the real estate business. I’m happy to say Mr. Heller has contributed a fascinating article about the REALTORS® Land Institute and I’ll be posting it here at The Source in a mini-series. Here’s the second and last installment of “70 Years Of The REALTORS® Land Institute — Plus 24 More”. Check out the first piece here.- WG
In the years following World War I, demand for farmland was high, and values of farmland were on the rise. As interest in farm property increased and more brokers began to market themselves as farmland specialists, organizations for farm brokers began to form in Ohio, Minnesota, Missouri, and other states. By the end of the decade, farm brokers were ready to set themselves apart and establish their own national organization.
In 1920, the National Association of REALTORS® was preparing to meet in Kansas City in June for their annual convention. A farm broker from Kansas City, Wilbur J. Mansfield, met with the leaders of the NAR to present the farm brokers’ ideas. The National Association was intrigued and approved a special session focused on farm real estate issues to take place at the Kansas City convention.
Mansfield took it upon himself to send out invitations to nearly 7,000 farm & land brokers throughout the country, telling them to meet in Kansas City to explore the possibility of creating a national farm brokers’ organization. Several hundred farm brokers responded and travelled to the convention.
At the Kansas City meeting, the assembled farm brokers spelled out exactly what it was that made farm brokerage different from residential brokerage, or “lot sales”, as the farm brokers called it. C. E. Southwick, secretary of the Minnesota farm brokers’ association, explained the difference this way: “The responsibility of the farm land dealer was even greater than that of the city dealer. The latter sold a man a home but the farm dealer sold, not only a home but also a business.”
The secretary of the Ohio group also put in his opinion, saying that farm brokerage is much more involved: “When selling farm property, it involves the complete investment usually of all our prospect’s money, a move among strangers, severing of family ties and they very often have to barter their future for many, many years to complete their obligation, or purchase…”
The farm brokers argued that they were ethically obligated to increase their knowledge of their business and provide the best possible levels of service to their clients, and believed that the best way to do that was through a national organization focused on the needs of farm property specialists.
From that 1920 meeting came RLI’s ancestor, of sorts: The Farm Lands Division of the National Association of Real Estate Boards, effectively making farm and land brokerage the first recognized professional specialty in the real estate industry. The Farm Land Division was in place and fully active within a couple of years. It was considered such a success that the National Association soon decided to take the idea to the next level, creating similar divisions for other new real estate specialties, including appraisers, property managers, industrial brokers, home builders, and others.
Within a few decades, NAR’s specialty divisions evolved into independent organizations: the Appraisal Division is now the Appraisal Institute, the property managers division became the Institute of Real Estate Management (IREM), the Industrial Division is now the Society of Industrial & Office REALTORS® (SIOR), and so on. Many of the real estate specialties and related services we see today, along with the national organizations that serve and represent them, might not be there were it not for the groundwork laid by the land professionals in 1920.
But despite its influence and initial success, the National Association’s Farm Lands Division didn’t have the same happy ending as the other specialty divisions. By 1925, the Farm Division had over 1100 members, representing almost every state, but after 1925, membership began to take a nosedive. Part of the reason for that was a new policy from NAR, which required that all REALTORS® be members of their local real estate boards; many of the Farm Division’s members operated in rural areas outside the jurisdiction of local real estate boards, and this policy change, instituted in 1923, effectively disqualified them as members. Another reason for the Farm Division’s decline, of course, was economic. Decreasing farmland values, the Dust Bowl, the Great Depression all conspired to drive many farm & land brokers out of the business entirely. The Farm Lands Division pulled just about every trick it could come up with to recruit new members, but no matter what they did, their membership kept going down instead of up. By 1940, the Division had only 9 members left, and the National Association finally made the decision to shut it down.
Even though the Farm & Land Division’s story had taken a wrong turn, the ideas and concepts that started it were still strong. Farm brokerage was now an established specialty in the real estate world, and farm brokers had already experienced some of the advantages of a national organization, and they just were not ready to give it all up.
So it was only three years later that the farm brokers decided to do it all again, and they would create a stronger organization this second time around. And it all came together in almost the same way as it did in 1920. The United States was once again involved in a world war, and the demand for farm property was again on the rise. A few successful state organizations of farm brokers were in operation, most notably in Michigan, which was run by a broker from Flint named George L. Domm. Just as Wilbur Mansfield did in 1920, George Domm almost single-handedly took it upon himself to gather farm brokers from around the country to convince NAR to support their efforts in building a new national organization for farm brokers.
He showed the NAR leadership what he had done with his Michigan farm brokers organization, and how those successes could be applied nationally. The National Association was again intrigued by the possibilities, and set aside time to discuss farmland issues at its 1943 annual convention in Cleveland. Farm property specialists gathered there and passed a resolution demanding that a new national organization be formed to serve their needs.
NAR responded in January 1944 with the formation of the Agricultural Institute, installing George Domm as its first president. The Agricultural Institute went through many name changes over the years before becoming the REALTORS® Land Institute in 1985.
In his welcoming remarks at the recent RLI Land Conference in Charleston, SC, Trident Association of REALTORS® CEO Wil Riley pointed to RLI’s adaptability in serving the ever-changing needs of its members over the years. That adaptability is one of the keys to how the Institute has evolved since 1944, and an element that might have been missing in 1920. The achievements of Wilbur Mansfield and George Domm and all of the men and women who have joined RLI over the years have built a strong, resilient, and truly member-driven organization.