Migration Destinations and Commercial Expansion

Map of USA with Texas highlighted

Workers, shoppers and families are the engines of commerce. Learning to identify which points on the national map these population groups are headed can be a kind of shorthand leading indicator of commercial expansion. So if you’re wondering what US counties saw the greatest increases in population recently,  you can check out a compilation of this month’s IRS data published on that very topic.  The interactive page is after the jump.

US Population Not That Mobile

To learn about migration patterns across 2013-2014, the IRS used an interesting method that looks at federal tax returns and counts the total number of exemptions.  According to Governing Magazine, the only about 15 million Americans moved from one county to another during that time — only 4.7% of the population as a whole.

Texas A Prize Destination

Snagging the top spot as well as five of the top ten counties that grew in population is the Lone Star State of Texas:

The top ten counties in new population are:

How’d Your County Do?

The interactive display at Governing.Com has a drop-down that includes all US counties (maybe not all – there are over 3,000 and the list doesn’t appear that long to me).  You can pick any county and get a data-rich snapshot concerning migration into, inside and out of the county in question.

05. November 2015 by Wayne Grohl
Categories: Demographic Trends | Tags: , , , , , | Leave a comment

Commercial Real Estate News Roundup for Nov. 2, 2015

vertical forest in milan.jpg

A whole different kind of treehouse, Chinese mall boom might be hot air,  Denver’s latest business success needs more space, and matzo-making building may crumble under a new plan. It’s all here in the Commercial Real Estate News Roundup for November 2, 2015.





Photo: Curbed.com

02. November 2015 by Wayne Grohl
Categories: News | Tags: , , , , , , | 1 comment

Ten Ways To Benefit From A Live Dealmaking Event


Announcing a special event at the 2015 REALTORSⓇ Expo in San Diego: Deal Making In The Commercial MarketplaceHosted by Peter West, CCIM, ABR, CRS, this event brings together deal making professionals from around the country to pitch, showcase and review properties.  Register for the event here.

Peter has put together a list of Ten Ways To Benefit From Attending A Live Dealmaking Event!

1) Dispose of Property

This forum allows you to present your listing to brokers from all over the country gaining maximum exposure for your sellers.

2) Acquire Property/Project

Attending this meeting will expose you to a variety of properties that you might not have seen on the marketplace, thus gaining more opportunities to present to your buyers.

3) Solve a problem

Ever have a tough listing? At this event you will hear how others are handling the same type of tough listings. Maybe you can exchange out of it into something else.

4) Obtain Funding

Many times participants have contacts with lines of cash. Attending this forum may provide you with additional resources to close deals.

5) Networking

You will leave this event with a directory of all the participants and contact information. This will allow you to meet and network with other commercial practitioners from around the country.

6) Provide Funding

Do you have a client that has cash and isn’t making a great return at the bank? Do you have a client that would like to improve their return on their IRA? You can present your “cash” and find a suitable opportunity.

7) Obtain Expertise

There will be other practitioners at this event with the same situations that you have as well as practitioners that have a special expertise. Come meet with them and build your network!

8) Provide Expertise

Do you have a unique specialty? Offer up your specialty to other brokers that may need yourservices in the future.

9) Provide Services

Do you provide niche services? This is an ideal forum to let other commercial practitioners what you do.

10) Learn

You will always come away with a new idea or approach to handling a certain listing or how to help a buyer through a situation.

Peter West has been a Realtor since 1984. He is licensed in MA, NY, VT, and FL. Peter has been awarded the prestigious SEC designation from the Society of Exchange Counselors. He also has the CCIM, ABR, and CRS designations.

Peter is a former National Sales Trainer for Century 21 Real Estate Corp. Currently Peter trains real estate agents throughout all of North America. He is a frequent presenter of the National Association of Realtors buyer agency programs.

28. October 2015 by Wayne Grohl
Categories: NAR 2015 Annual Convention, Property | Tags: , , , , , | Leave a comment

Commercial Real Estate News Roundup For October 26, 2015

A extra-large refi at a nice low rate, a warehouse developer doubles down, how to pick the best spot for the next store, and the world’s oldest toy shop is on the block.  It’s all here in the Commercial Real Estate News Roundup for October 26, 2015





26. October 2015 by Wayne Grohl
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Commercial Real Estate News Roundup for October 19, 2015

Celebrity investor likes Cincinnati mall, be bubble-wary but not bubble-paranoid, troubled Helmut Jahn atrium in Chicago heads to the block, and the recuperative power of Bass Pro Shops.  It’s all here in the Commercial Real Estate News Roundup for October 19, 2015








19. October 2015 by Wayne Grohl
Categories: News | Tags: , , , , , , | 1 comment

The State Of The Smart City

Because infrastructure quality and property value growth so often go hand in hand, it stands to reason that improved infrastructure including energy, water, transportation and communications technology, is an economic challenge the commercial property industry has a great interest in. But rolling out new technologies without testing can cause chaos of all kinds.  How can new ideas in infrastructure be tested without putting life, limb and property value at risk?

Across the globe, the tricky problem of testing new infrastructure outside of computer simulations has been attacked from a few different angles, producing three giant projects that will amaze anyone familiar with the real estate development process. Catch up with the state of the “smart city”:

CITE City, Lea County, NM

To facilitate end-to-end testing of technologies such as smart cars, you can always put hundreds of millions into building a testing laboratory the size of a small city. That’s exactly what an investment group is planning in the desert outside of Hobbs, New Mexico.  Conceived as a laboratory modeled somewhat on Rock Hill, SC (the state’s fifth largest city), CITE City is a smart city project that leaves out the population on purpose. The design can hold 35,000 people, but by design, never will.

PlanIT Valley, Portugal

Technology CEO Steve Lewis has taken a page from legendary Chicago developer Daniel Burnham’s book.  “Make no small plans,” intoned Burnham, and Lewis has obliged. Moving a step beyond CITE City’s laboratory-at-scale, zero population approach, Lewis envisions PlanIT Valley as a bona fide city.  The venture included major technology vendors including internetworking giant Cisco, Microsoft and Phillips. Located outside of Porto in northern Portugal, the built-from-scratch smart city project is aimed at housing a population between 150,000 and 225,000 people.

Masdar City, United Arab Emirates

The eldest and most-built of the three projects, Masdar City is named for its developer, a sustainable energy company based in Abu Dhabi. Sporting a population in the thousands, Masdar City’s expansion plan has as its cornerstone attraction of business, promising immediately available office space and “nonexistent import tariffs and taxes”.  Striking architecture that finds harmony with the harsh desert conditions rises above a fully modern smart transportation grid and vibrant, if modest in size, urban fabric.


These megaprojects are here to be studied as economic, technologic and social laboratories.  It’s up to the commercial real estate industry to update its best practices by including what these projects can teach.

Learn about smart growth and infrastructure by attending selected sessions at Urban Land Institute’s (ULI) Spring Meeting, CCIM Thrive Conference October 27-28  or IREM Fall Leadership Conference.


16. October 2015 by Wayne Grohl
Categories: New Technology | Tags: , , , , , , , , , | Leave a comment

One Perspective On Complexity In Commercial Appraisal

When making the leap from residential to commercial real estate, one thing that becomes clear is that assigning a price to commercial property uses a very different process than is used in residential. While reading up on appraisal techniques, I had the thought that the difference between commercial and residential appraisal can be well described as similar to the difference between a snapshot and a movie.

Putting a dollar value onto a residential property generally places a lot of emphasis on comparitive valuation. Appraisals or pricing talks referencing “comps” are very common in residential because location, size and amenities can be somewhat easy to compare.

Commercial is more complex in part because it deals in cash flows. One of the reasons you can compare residential properties more easily is because the sale of that property is like a single, well-understood cash flow from the buyer to the seller. And that single flow – the purchase – can be likened to a snapshot of that property’s history.

But in the commercial property world, the flow of cash into and out of a building is usually a monthly event at least. Rent is one such example, but maintenance and other flows exist in a series of payments or debits.

This string of events can be thought of as frames in a movie, telling the story of value of the property with more detail, more variables, and less capacity for easy comparison among properties. Another way of imagining the difference is to see residential property as stationary pricing target and commercial property as a moving target. It’s harder to hit a moving target.

Formal Approaches To Commercial Appraisal Include Business Valuation

When the broker opportunity touches a small business, business valuation techniques can loom large in commercial property appraisals. The techniques vary as much as the spectrum of different enterprises does. To access an excellent library of titles on the topic of business valuation, REALTORS® can access the NAR Field Guide To Business Value, after the link.  It’s packed with books, audio books, videos, reports and research that will deliver perspectives on commercial appraisal.

(Note that the inclusion of links on an NAR field guide does not imply endorsement by the National Association of REALTORS®. NAR makes no representations about whether the content of any external sites which may be linked in this field guide complies with state or federal laws or regulations or with applicable NAR policies. These links are provided for your convenience only and you rely on them at your own risk.)

15. October 2015 by Wayne Grohl
Categories: Appraisal | Tags: , , , | Leave a comment

Commercial Real Estate News Roundup For October 12, 2015

Most rents rise, growth turns inland, retailers rush for location, and senior housing is just like every other kind of investment: contains risk. It’s all here in the Commercial Real Estate News Roundup for October 11, 2015.









12. October 2015 by Wayne Grohl
Categories: News | Tags: , , , , , , | 1 comment

Can Having The Wrong Facebook Friends Interfere With Your Financing?

In commercial real estate, as with most commercial financing, a borrower’s personal credit rating looms large in the eyes of “A” list lenders offering the most attractive interest rates.

A recent patent filed by Facebook has raised eyebrows, suggesting that the credit ratings of your Facebook friends could possibly affect decisions made by lenders about you — or by extension, about any entity doing any borrowing where your personal liability is a factor.

As reported in The Atlantic by Robinson Meyer, the online giant Facebook recently made a patent filing totaling many pages, saving the best for last. Nestled toward the tail of Facebook’s US Patent And Trademark Office filing, under a heading “Summary Of The Invention,” (a list containing technologies they seek to patent) Facebook included the following paragraph:

When an individual applies for a loan, the lender examines the credit ratings of members of the individual’s social network who are connected to the individual […]. If the average credit rating of these members is at least a minimum credit score, the lender continues to process the loan application. Otherwise, the loan application is rejected.

The suggestion is that Facebook seeks a patent on the ability to speak to your creditworthiness by allowing analysis of the creditworthiness of your Facebook friends.  Conspicuously missing from the above wording: any mention of a fair analysis of your own hard-earned credit rating.

A Return Of Redlining?

Critics of the practice of amassing Big Data from every corner of the lives of consumers, tenants, or users of a social media platform like Facebook have warned for years about future unintended consequences. It doesn’t take much imagination to see Facebook’s proposal as one such problem. What’s more, the future isn’t the only place where data about borrower’s surroundings have been unethically treated as conclusions about a borrower’s creditworthiness. In the context of the real estate industry, the notion of making credit decisions based upon one’s “neighborhood” has a specific and sad social-legal history, called redlining.

Decades-Old Legal Framing

The recent shifting picture of technology innovation having its way with the credit scoring industry — itself worth its own post — runs up against the legal barriers set down in 1970 under the Fair Credit Reporting Act and, in the case of any loans issued on the basis of such reporting, the Equal Credit Opportunity Act of 1974.  Any classification of Facebook as a credit reporting agency akin to TransUnion or Experian would be a application of laws written decades before social media information began to voluntarily flow from all of us, a troublesome and awkward legal situation to say the least.

While this patent application is preliminary and comes with no evidence Facebook is actually using or marketing credit data on its users, at least one overseas company is claiming to aggregate Facebook and other social media data to provide lending decision support.  From the Atlantic piece:

Which isn’t to say that social-network-based credit is an irreparably bad idea. In countries that do not have America’s financial system, friend scores can help extend credit to those who need it. In Mexico, Columbia, and the Philippines, a company called Lenddo already analyzes someone’s Facebook, LinkedIn, and Twitter to gauge their creditworthiness.

Newest Warning From The East

As if on cue, we find a very recent announcement by China’s government, saying that it will be holding certain online actions of its citizens and their social media friends in bad light credit rating-wise. This news, taken seriously by the ACLU  serves as yet another warning among many:

These days, it’s worth keeping in mind that online, we’re all a small part of Big Data.

09. October 2015 by Wayne Grohl
Categories: Credit | Tags: , , , , , , , | Leave a comment

Drone Hopefuls Still Getting Mixed Messages From Lawmakers

When National Association of RealtorsⓇ President Chris Polychron recently testified before Congress on the topic of unmanned aerial systems (UAS), he called for a commitment to privacy and personal safety to go hand in hand with the responsible use of drones by the commercial property industry.  But the legislative climate around the topic of drones shows anything but clear skies.  Federal and state efforts to make rules have been uneven, leading to a bumpy legislative ride.

Take the case of California, whose governor recently came down on the side of drone use and FAA approved commercial users.  It was days ago that Governor Jerry Brown vetoed legislation that would have stopped the flying of drones at altitudes lower than 350 feet, sending a somewhat garbled message to potential drone users, including the real estate industry seeking to legally use the aircraft for survey and inspection of commercial property.

As law blog JD Supra writes, the governor’s reasoning was to avoid exposing “the occasional hobbyist and the FAA-approved commercial user alike to burdensome litigation.”

The life and death of the California flight-level restriction legislation is an example of a legislative process being played out in several states across the nation. In light of the rapid expansion of the drone industry, lawmakers, at both state and Federal levels, are scrambling to enact legislation governing the use of drones. But as we just learned from Governor Brown’s veto, there is considerable controversy about what to do about flight-level restrictions. Why? Privacy considerations suggest that drones should be as far away as possible, for obvious reasons. Nobody wants to see a drone equipped with high-definition cameras hovering outside one’s window or lurking above what would otherwise be a secluded back yard or vacation spot. Privacy considerations are what motivated the authors of the California bill.

Business Applications vs. Privacy And Safety Concerns

Equally burdensome to real estate business plans that hinge on legal operation of drones is the question of jurisdiction. Does state or federal law apply first?  The answer appears confusing even though the FAA seems pretty clear on who’s got the regulatory muscle. The FAA web page “Busting Myths About The FAA And Unmanned Aircraft” says airspace at any height is the domain of the FAA and that any aircraft looking to fly in US airspace needs some form of FAA approval.   From the link:

Myth #1: The FAA doesn’t control airspace below 400 feet

Fact—The FAA is responsible for the safety of U.S. airspace from the ground up. This misperception may originate with the idea that manned aircraft generally must stay at least 500 feet above the ground

Section 333 Waivers

The FAA may be petitioned by aspiring drone operators for a waiver called Section 333, which grants authorization for certain unmanned aircraft to perform operations on a case-by-case basis.  An FAA pilot’s license is a required piece of such an application.  The FAA page for Section 333 exemption applications is here.

Missed Deadlines

August 2014 is the latest self-imposed deadline the FAA has missed in developing comprehensive rules for small commercial UAS.  While permission to operate lies in regulatory limbo, a set of industries, including real estate, that could use inexpensive and comprehensive surveys and inspections of property are biding their time while the bureaucratic wheels turn.

“We all agree that the project is taking too long,” Peggy Gilligan, a top FAA safety official, told a congressional House panel in 2014.  Here’s hoping the balance between safety, privacy and commercial use is found soon.

08. October 2015 by Wayne Grohl
Categories: New Technology | Tags: , , , , , , | Leave a comment

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