Driverless cars, beer at your desk, industrial vacancy falling, retail rents rising. It’s all here at the Commercial Real Estate national news roundup for June 29, 2015.
- How Driverless Cars Could Impact Real Estate, GlobeSt.com, June 26, 2015 – Enjoy your gas station snacks while you can, because driverless cars could mean fewer roadside convenience stores.
- High Net Worth Investors Hungry for Real Estate, Survey Finds, National Real Estate Investor, June 25, 2015 – Good news: 53% of wealth managers and private bankers expect clients to increase their investments in real estate in the next five years.
- Atlanta Near Top of Green Building List, GlobeSt.com, June 26, 2015 – 57.9% of office buildings in Atlanta are green certified – that’s 19.2% higher than national average.
- WeWork to Double Valuation to $10 Billion in New Round, Crain’s New York, June 25, 2015 – This fast-growing shared office space brand has $45 a month starter memberships, beer and neon signs and has become very popular in 32 locations from Seattle to Tel Aviv.
- Strongest Landlord Market for Ind. in 30 Yrs., GlobeSt.com, June 25, 2015 – National industrial vacancy rate falls for 21st straight quarter while developers add over 49 million square feet to their base.
- O’Hare Industrial Specs Filling Up, GlobeSt.com, June 24, 2015 – An across-the-board push on rental rates in Chicago’s main airport as the industrial market tightens up in Chicago.
- Retail Assets Appeal to Foreign Investors, National Real Estate Investor, June 25, 2015 – Even with retail cap rates at a new low, record foreign investors interest remains very strong.
- Perception Drives Anchor Rents Up, GlobeSt.com, June 23, 2015 – Good economic news boosts retail rent 20%, but perception of good market may not be sustainable.
- Fannie and Freddie Reward Affordable Housing Properties, National Real Estate Investor, June 23, 2015 – Growth in affordable housing will continue as those loans are not considered part of strict federal loan limits.
- What a ‘Culture of Care’ Can Create, GlobeSt.com, June 23, 2015 – Concept communities that focus on how the residents want to live, not what a developer wants to create.
CRE markets look strong for the near future, Google considers move to an abandoned shipyard, Fannie Mae helps low income families secure units in multifamily properties, retail struggling during tough Q1 and more. It’s all here at the Commercial Real Estate national news roundup for June 22, 2015.
- Commercial Real Estate Forecast after the Fed Tightens, Forbes, June 18, 2015 – CRE investments look strong for at least the next two years.
- RealtyMogul.com Transforms CRE Capital Markets, Commercial Property Executive, June 16, 2015 – Impressive–RealtyMogul.com reels in a quarter billion dollors in commitments in their first two years.
- Five Commercial Real Estate Market Trends You Can Bank On, National Real Estate Investor, June 15, 2015 – Find out if the bull will run away as the rates rise or will e-commerce drive away more retail outlets first.
- Investors Real Estate Trust (IRET) Agrees to Sell Nearly All of Office Property Portfolio, Street Insider, June 18, 2015 – IRET sells off 39 office properties and set its sites on a new mixed use project.
- EXCLUSIVE: Google Eyes S.F.’s Hunters Point Shipyard for Future Office Space, San Francisco Business Times, June 15, 2015 – Will Google take over former Candlestick Park site leaving Silicon Valley behind?
- Denver’s River North Real Estate Market in “Feeding Frenzy”, The Denver Post Business, June 16, 2015 – Record setting 40 million dollars in property change hands in past 90 days.
- 8 Best Markets For Industrial Real Estate, National Real Estate Investor, June 17, 2015 -Strong opportunities for growth across the U.S.
- Retail Sector Has a Tough First Quarter, Faces Longer-Term Obstacles, National Real Estate Investor, June 18, 2015 – Retail environment is ripe for vacancy compression and rent growth.
- “Living Services” Promises To Radically Change Retail-Consumer Interaction, Retail Customer Experience, June 19, 2015 – Deep dive into real time data aims to improve customer satisfaction.
- Freddie Mac Helps Preserve Low-Income Rental Housing by Purchasing $215 Million Loan for Harbor Point in Boston, CNN Money, June 19, 2015 – Here’s good news—roughly a third of the mixed income units will be available for low income families.
- MacArthur Impact Investments Help Advance Energy Efficiency Financing for Multifamily Housing, RealEstateRama, June 16, 2015 – $31 million dollars on the way for energy efficient improvements for the multifamily market
There’s something of a trend war going on today in office layout. Tenants of course want the most from their expensive space, but what does “most” really mean? Before the rise of the Silicon Valley-style open floor plan layout craze inspired by Google and the like, getting the most from office square footage meant cramming as many cubicles as possible near traditional conference rooms and corner offices with doors.
But cubicles are no longer vogue and doors are often enough seen as hindrances to “collaboration”. Some workflows in some industries do benefit from a layout that encourages semi-random encounters between teams, but others — perhaps those not quite as high-tech — suffer. In a digitally-enabled world where even law offices are rethinking what it means to have floor space — and taking up less of it with giant law libraries of “dead tree” (paper) — to where do all these rethink sessions point?
I’m pretty sure it’s not in this direction…thankfully!. Enjoy this satire of an announcement memo from an office re-layout project gone awry, courtesy of Kelsey Rexroat at upscale humor site McSweeney’s. NOTE: Don’t drink coffee while reading. It’s funny enough that you might accidentally spew on your monitor.
- You will no longer have access to instant messaging, which leads to private, non-collaborative conversations. If you need to communicate with another employee without leaving your workstation, stand up and address them with your supplied megaphone.
Read the whole thing at McSweeney’s Internet Tendency: Let’s Take This Open Floor Plan to the Next Level..
REALTORS® Property Resource (RPR), the NAR member exclusive benefit that provides commercial market intelligence tools par excellence, is asking for member feedback on RPR’s future. They’ve announced a very short online survey that aims to help RPR more finely tailor benefits, features and training to you, the NAR member.
Participate in the survey here and help RPR continue its reign as best-in-breed for commercial real estate intelligence.
The Institute for Market Transformation (IMT) and the U.S. Department of Energy’s (DOE) Better Buildings Alliance recently announced the 2015 Green Lease Leaders. Established in 2013 with support from leading real estate practitioners, the recognition program distinguishes property owners, tenants, and brokers who are effectively using the lease as a vehicle to drive energy and water savings in commercial buildings.
The brokers recognized are market leaders who successfully add value for clients on major sustainability and energy issues, providing crucial guidance as the demand for green buildings grows.
This year’s recipients are:
- Meade Boutwell (CBRE)
- Randy Harrell (CBRE)
- Laurie McMahon (DTZ)
- Greta Garner, REALTORⓇ (Green Coast Realty)
- Brant Smith, REALTORⓇ (NEO Realty Group)
- Sally Wilson (NGKF)
“In addition to so many forward-thinking property owners and tenants this year, we’re excited to be celebrating commercial brokers too as they play such a vital role in real estate transactions,” said Adam Sledd, Director for IMT’s commercial real estate engagement program. “Brokers facilitate many interactions between landlords and tenants, and are relied on to identify and add sustainable best practices into the lease—this year’s Green Lease Leaders show a clear sign of the mastery of proven measures to reduce operating expenses and lessen the impact of buildings on the environment.”
A green lease encourages collaboration to take action to improve efficiency, saving tenants and building owners on average, 10-20 percent each month on a building’s energy and water bills. Since brokers are central to all aspects of a commercial transaction, their knowledge and expertise in clauses and addendums that cut energy waste is crucial for savings to be realized. A study released by IMT last week showed that green leases could deliver nearly $3 billion in annual savings for the U.S. office sector alone.
Historically, real estate owners and tenants have had difficulty integrating sustainability into the lease process due to tension between owners and tenants over responsibilities and cost-sharing arrangements.
The Green Lease Leaders program is helping to define green leasing and shine a light on replicable solutions that can be employed by others to get past split incentives.
“Today I’m pleased to announce the continued success of the Green Lease Leaders program,” said Dr. Kathleen Hogan, Deputy Assistant Secretary for Energy Efficiency at DOE, during a presentation at the
Better Buildings Summit. “This effort is showing that cooperation on energy efficiency is no longer just a niche practice.”
ABOUT THE INSTITUTE FOR MARKET TRANSFORMATION
The Institute for Market Transformation (IMT) is a Washington, D.C.-based nonprofit organization promoting energy efficiency, green building, and environmental protection in the United States and abroad. IMT’s work addresses market failures that inhibit investment in energy efficiency and sustainability in the building sector. For more information, visit imt.org and follow us on Twitter at @IMT_speaks.
ABOUT THE BETTER BUILDINGS ALLIANCE
The Better Buildings Alliance is a U.S. Department of Energy (DOE) effort to promote energy efficiency in U.S. commercial buildings through collaboration with building owners, operators, and managers. Members of the Better Buildings Alliance commit to addressing energy efficiency needs in their buildings by setting energy savings goals, developing innovative energy efficiency resources, and adopting advanced cost-effective technologies and market practices
- Lenders Hungry for Commercial Real Estate Deals, Investors.com, June 11, 2015 – Vacancies are down and rents are rising which could mean high returns.
- What’s Really Driving Sustainability?, Commercial Property Executive, June 9, 2015 – Rosier outlook from Q1 to Q2 due to unexpected boost in corporate responsibility.
- Could This Project Transform the Industry?, GlobeSt.com, June 9,2015 – Ambitious project in Atlanta heavily factors in the human experience – not just the building’s aesthetics and function
- The $5 billion question: Will WeWork survive the next downturn?, The Real Deal, June 10, 2015 – Is their current valuation of five billion dollars and trendy business model sustainable?
- Trophy Offices Open Up Historic Rent Gap, GlobeSt.com, June 9, 2015 – Most costly and desirable office space costs 77% more than market rate.
- Builders Debate Merits of Raising Ceilings for Warehouses, The Wall Street Journal, June 10, 2015 – Ceilings soar to 40′ to satisfy market, but is the extra space being use?
- On Leasing to Unconventional Tenants, GlobeSt.com, June 8, 2015 – Creative use of industrial space could require zoning changes.
- Fast-Casual Restaurants Take Over Retail, GlobeSt.com, June 12, 2015 – Restaurants are anchoring shopping centers due to a rise in people dining out more.
- Malls Are Adapting, Not Dying, BISNOW, June 9, 2015 – Vacancies flattened in 2014 while at least some shoppers tend to prefer brick and mortar.
- In Orlando, Keyword is Urbanization, GlobeSt.com, June 12, 2015 – The need to be more connected drives shift to residences in urban settings.
- The Top 10 Multi-Family Markets, Commercial Property Executive, June 10, 2015 – Southern states dominate growth in multi-family building’s construction.
According to Chicago’s award winning Leopardo Companies annual industry report Construction and Economics Report and Outlook, the low price of oil is reducing the cost of construction. Unfortunately at the same time, a lack of skilled labor and heightened demand is increasing construction costs.
Leopardo reports that nearly 25% of the skilled construction workforce has left the industry since 2008. Older workers are retiring and fewer younger workers are entering the trades than in the past. Several contractors and subcontractors have closed since the downturn, too. This leaves fewer skilled laborers to handle the level of work, which is at pre-recession levels currently.
Current, historically low interest rates are helping to fuel an increase in construction activity. In Chicago, large-scale projects in the office, retail and multifamily sectors are leading the boom. Chicago examples include the expansion of McCormick Place, 3,000 new residential units in the downtown area are to be built in 2015 (that’s up from 5,000 over the last two years) and the redevelopment of the Fulton Market Cold Storage building for Google. All are taking advantage of lowered costs and all are challenged in general by the crunch in skilled labor at the same time.
Is the construction cavalry coming?
Contrasting the downbeat labor news are national numbers for the sector. Even though the costs are increasing and staffing is a challenge, the US Bureau of Labor Statistics said in their April 2015 report that, “Construction added 45,000 jobs over the month. Employment in construction has grown by 280,000 or 4.6 percent over the year. Specialty trade contractors added 41,000 over the month. This growth split between residential and non residential specialty trades.”
This is great news for the new commercial development industry because the increased costs and scarce labor resources don’t seem to add up to a dampening of the the ongoing growth in the commercial real estate sector.
The United States Census Bureau reported that commercial construction projects in New York, N.Y. hit $20 billion dollars in 2014. Dallas and Houston are right behind New York with over $11 billion in commercial construction projects during 2014. Even with its challenges, the future is looking bright.
Multi-family drives market nationally, 65 percent increase in loan origination nationally, industrial is industrial-strength and top multifamily amenities capture the imagination – it’s all here in the Commercial Real Estate News Roundup for June 8, 2015.
- Recovering CRE Market Keeping Commercial Lenders Busy REJournals.com, June 5, 2015 – Multi-family financing is driving the midwest commercial real estate market with more renters plus rents on the rise.
- How Low Oil Prices Could Benefit CRE GlobeSt.com, June 4,2015 – Low prices will affect various property segments, especially energy dependent locations over the next several years. Not all the news is great.
- 10 Markets with Biggest Increases in Construction Loans National Real Estate Investor, June 4, 2015 – There’s been anywhere from 10 to 65 percent increases in loans originated in the ten strongest construction loan markets across in the U.S.
- Assemble Shared Office Growing Nationwide GlobeSt.com, June 4, 2015 – Roughly 20,000 square feet of flex rental office space to be opened at Assemble’s new Minneapolis location in the north end of downtown.
- US Office Costs Increase Amid Global Decline, GlobeSt.com, June 2, 2015 – DTZ’s “18th Annual Global Office Thermometer”shows a 4.8 percent increase in cost of occupancy in the U.S.
- Industrial Shows No Danger Signs Ahead, GlobeSt.com, June 4, 2015 – “No danger signs on the horizon.” says Jim Carpenter, Executive Director at Cushman & Wakefield.
- The Recession-Proof Sector, Commercial Property Executive, June 3, 2015 – Self-storage real estate investment trusts (REITs) do well in an up economy and a down economy.
- Investors Pressure Macy’s to Sell Real Estate, BISNOW, June 4, 2015 – Macy’s could sell and lease back some of the 447 stores Macy’s owns across the U.S. stores.
ell and lease back more of its major stores, a strategy that has been employed by other major retailers.Read more at: https://www.bisnow.com/national/news/retail/investors-pressure-macys-to-sell-real-estate-46498?utm_source=CopyShare&utm_medium=Browser
- “Perfect Storm” Driving Up Retail Assets, GlobeSt.com, June 1, 2015 – An aggressive market driven by retail that is anchored by grocery stores such as Trader Joes’s and Mariano’s is driving prices up and cap rates down per driving prices up and cap rates down whenever well-located product hits the market. (Requires registration).
- City Needs More Multifamily Development, GlobeSt.com, June 3, 2015 – Urban Land Institute’s recent presentation in Los Angeles sites more multifamily development needed with affordable housing and creative use of densely populated spaces.
- This Firm is Winning Emerging Multifamily Markets, GlobeSt.com, June 3, 2015 – Indoor-outdoor space, rooftop decks, pet-friendly amenities top the list among the elements desirable in apartment development during “Multifamily Momentum” panel at RealShare San Diego.
NAR members are always encouraged to take advantage of the professional development courses that NAR and their affiliates offer for a broad range of commercial real estate disciplines. Did you know that today it’s easier than ever to take courses from NAR and our partners both online and in-person?
Classes are being offered across the county from a variety of organizations and associations whom we are proud to call our partners. Some of the organizations who we partner with to bring you quality continuing education: CCIM Institute, Council of Real Estate Brokerage Managers,Council of Residential Specialists, The Counselors of Real Estate, Institute of Real Estate Management, Real Estate Buyers’s Agent Council and others along with the classes that NAR offers.
Designation or certification courses offered by NAR range from “Discovering Commercial Real Estate” which offers a big picture view of the industry to “Commercial Real Estate Investment and Analysis”-an advanced course to help brokers and their agents understand the details that inspire the hustle and bustle of their everyday business.
NAR affiliates, such as CCIM who offers seventeen courses offer “Technology and Social Networking Tools for Today’s Real Estate Professional” to keep you competitive to “Prepare To Negotiate” offered to help ensure that you win.
You can find most of the classes offered by NAR and their affiliates at the NAR Education Matrix
Today real estate professional is able stay on top of the latest innovations in the commercial real estate industry by joining NAR. We hope you take advantage of these opportunities.
What would it look like if your local MLS or CIX offered property financing? Can listing and financing services peacefully coexist on the same software platform?
We may soon find out – at least if you consider Auction.com a listing site.
Auction.com will now offer financing on qualified assets via their new Commercial Real Estate Financing Portal. Financing options will be provided directly by Auction.com’s preferred lenders. All approvals will count toward a buyer’s proof of funds which is a requirement for all bidding for all property on the Auction.com site.
Real estate investors can go to Auction.com’s secure portal to complete financing applications, upload pertinent documents, view the progress of their application status in real time, and communicate directly with their lenders about all aspects of the process.
According to Gordon Smith, general manager of Auction.com’s commerical real estate division, approximately 50 percent of investors using Auction.com’s platform tend to finance their purchases. “Financing is in high demand among commercial buyers. By directly connecting investors with trusted commercial real estate lenders that understand the auction process and closing timeline requirements, we’re enabling buyers to make winning bids on properties that previously may have been out of reach due to cash restrictions. And, by increasing buyer liquidity, we’re improving our ability to get sellers the highest price for their assets.”