Browse Month: March 2012

National Real Estate Investor Android App

National Real Estate Investment app logoNote: no software reviews here at The Source constitute a recommendation of any product or service by NAR.

The Android Market website has gotten a facelift.  It’s now called Google Play, and if you ask me, it bears more than a passing resemblance to a certain “App Store” run by a company whose name rhymes with chapel.

I prefer the Android platform for the phone.  Why? Better hardware, roughly the same software offerings for business use, and all without an insulting price tag.  But that’s me. What about the commercial property pro on the hunt for news on industry trends?

NREI Android App

I’ve follow National Real Estate Investor as part of my daily research and was interested to see they had published an NREI Android app.  After a bit of a test, I can recommend it if you’re in the market for a bunch of high-quality CRE content at your fingertips.  It’s nice to have an icon devoted to a quick update on the industry.

One nice feature of this app is the button for Retail Traffic that allows quick focus on retail.  Another button brings you headlines and posts from various blogs.  Items can be easily shared with a share button located along the bottom.  The app works well and earns a couple of punches of the icon a week on my HTC EVO.

My only complaints are minor: a shortage of content under the blogs category – our industry’s corner of the blogosphere updates more often that this app might suggest.  The other is a senseless number of permissions.  In my opinion, a news aggregator application doesn’t need and shouldn’t want to be able to read your phone’s state and identity, but that is the default with NREI’s Android app.  (Android users can always check what an app is doing under the hood by clicking the “Permissions” tab on any app’s download page.

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“LIVE” from the REALTORS(R) Land Institute National Land Conference!

We’re here in Denver at the 2012 National Land Conference of the REALTORS(R) Land Institute, with approximately 200 land real estate professionals and a beautiful backdrop of the Colorado mountains.

This morning things are kicking off shortly, with our REALTORS(R) Signature Series Speaker Andre van Rensburg serving as the emcee for the event – up shortly we’ll here from Dr. Mark Dotzour, Chief Economist & Director of Research at Texas A & M University.

Stay tuned as we live blog!

9:22 am:  Dotzour on stage now.

9:23 am:  Dotzour “The Good – claims for unemployment dropping, unemployment benefits dropping, consumer spending is increasing, consumer debt is increasing, car sales are strong, car lending is getting agressive, manufacturing is rebounding, corporate profits at record levels, farm land prices rocketing, apartment prices rocketing”

9:39 am:   Dotzour “US Economy is a Massive Botox Operation”

9:44 am:  Dotzour “we are exactly on the same road as Greece”

9:48 am:  Dotzour “what happens if long rates increase?  Fed Reserve takes huge loss on trillion dollar portfolio of mortgages and treasuries”

9:53 am:  Dotzour “reason America, our farm land and our stock market looks good is because Europe is on life support”

9:55am:  Dotzour “2012 will be a year of slow growth, but we need to watch out for 2013”

9:56am:  Dotzour “Outlook for 2012: businesses continue to postpone decisions, job growth slow but positive, interest rates stay low, high gas prices punish retailers, threats of budget crisis will scare the public, uncertainty of 2013 will stifle growth, Europe and China will continue to lose steam”

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Up Next:  “Where’s the Money?”  with KC Conway, CRE,MAI, Executive  Managing Director of Real Estate Analytics – Colliers International

10:02 am   Conway “Start of 2012 is eerily similar to the start of 2011”

10:04 am   Conway “modest or no growth (<1.5% GDP) while government can’t act”

10:14 am  Conway “look at GDP outside the US for key indicators, as bell-weathers for the US”

10:22 am    Conway “2012 and 2013 are peak years with more than $350 billion each year in CRE debt maturities.  Banks have 45% of outstanding $3.0 trillion in CRE debt”

10:31 am  Conway “it’s time to re-examine our market perceptions”

Data Centers: Not Just For The West Coast Anymore

Inside one of Switch and Data's facilities.
Inside one of Switch and Data's facilities. (Photo credit: Wikipedia)

Eric Hawthorn’s summary of  Grubb & Ellis’s research on the top 10 data center transactions of 2011 serves as another reminder of the massive changes transforming the national market for office and retail space.  The data center is the physical home of e-commerce, which grows its slice of the retail pie every year, displacing nationwide demand for brick and mortar.  It’s also the home of the cloud, or the virtual IT infrastructure that is displacing traditional office space needs almost wherever business is done.

Since nature — and the commercial RE broker — abhors a vacuum, the good news is demand is not disappearing outright.   Some displaced demand is simply “condensing” and moving into data centers.  Notably, no single region can claim the lead in this growing market.  The physical locations of these specialized commercial spaces are now just as likely to be found in the midwest or the south than on the west coast.  So physical location means less than development and connectivity opportunity.  That means the drivers of data center demand are on the whole likely to touch your local market.

Popular and growing uses for data centers:

  • To host web applications (Facebook, Twitter, Salesforce). Odds are you’re using these applications today.
  • To resell hosting capacity (GoDaddy, Linode, Network Solutions)  There is a 100% chance you’re using one of these companies, because our blog The Source is hosted at GoDaddy.
  • To host corporate IT applications (Microsoft Azure, nScaled)  The “cloud” offers vastly reduced capital expenditures and infrastrcture requirements to business, which impacts the market for commercial property space in two ways.  First, going forward, a business tenant is net less likely to lease physical back-office space to support her business IT requirements, opting instead for cloud hosting.   Second, the millennial generation, who never knew a world without telecommuting and wireless access to applications, is increasingly unwilling to work in front offices laid out around the PC/phone/cubicle concept.
  • To house backup (disaster recovery, business continuity)  Demand for data centers is driven even by those corporate tenants who retain the physical hosting of their primary IT applications.   Having offsite backup and  storage of corporate data and transactions is now a hard requirement.
  • To provide telecom interchange (“carrier hotels”, colocation facilities)  Providing metered power here, less strict layout policies and more flexibility, less superficial amenities, these traditional homes of telecom infrastructure are an expanding class of commercial property.

US, EU Sue Over Bank Corruption, LIBOR Interest Rate Fixing

Interest Rates
Interest Rates (Photo credit: 401Kcalculator.org)

When financing commercial real estate deals, interest rates are key points of negotiation.   Veteran brokers know that few basis points in one direction or the other on a sale negotiation over an office building or shopping center can make the difference between iced champagne buckets and cold feet.

Where do these rates come from?  Interest rates are the price of money.  So who determines how much money costs?  To some degree, the holder of that money does.  But in a wider sense, the job falls to a global market set up by the planet’s top exchangers of money. Of course, these entities are called banks.

Determining the price of money in a free market for money is the least banks can do for our commercial real estate industry.  It’s literally the least they can do, because the historic purpose of banks — providing financing for our CRE deals  — should be, by most research, much easier than it has been lately.

But are we getting even that much from our pinstriped friends?  Unfortunately, like so many “free markets” we hear about but never quite get to participate in, the market for interest rates is effectively a private, nontransparent arrangement between banks.  As such, sometimes even the small favor of honest price determination proves too much for the largest banks to grant our industry.

This is the core of a criminal case filed three days ago by US and EU governments against the giant Deutsche Bank.  The claim is that Deutsche Bank violated commodities trading and SEC laws to fix a very widely-used interest rate named LIBOR – short for London Interbank Offered Rate.

(Reuters) – Deutsche Bank (DBKGn.DE) said it received subpoenas and requests for information from U.S. and European Union agencies as part of a global probe into interbank offered rates and that it was also being sued over alleged dollar interbank rate manipulation.

The requests came from entities including the U.S. Department of Justice, the U.S. Securities and Exchange Commission, the Commodity Futures Trading Commission, and the European Commission, Deutsche Bank said on Tuesday.

The inquiries relate to periods between 2005 and 2011, the bank said, adding it was cooperating with the investigations.

What could this mean for you as a broker, an investor, a manager?  If this probe, (as well as similar probes against Citi, HSBC, UBS and others) find that banks have been colluding to fix the LIBOR rate, it means, in short, that they have been ripping you off.  How much of the $360 Trillion worth of financial contracts tied to LIBOR contain your deals?  Your REIT plays?  Your lease calculations?

More than that, what deals might you have ultimately lost because of a fixed LIBOR?

Photo credit: 401kcalculator.org

Mall Is Well: Retailer Optimism Up In February

Forgive the corny headline, but there’s more than a couple of indicators that the long-sagging national retail sector is gaining even more strength this quarter.  Let’s take a peek at a few:

RBC Capital National Retailer Demand Monthly (NRDM): This collection of positive indicators comes from north of the border (RBC being Royal Bank of Canada) but focuses on US retailers.  “Our database has about 1/4 of the 150,000 US retailers”, said analyst and report author Rich Moore.  Report highlights:

  • The view from the floor: According to the data collected, retail management teams “appear to have grown generally more upbeat about sales prospects going forward”.
  • Retail employment statistics show increases, with sharp rises in retail hiring and average hours worked.  The average work week for retail workers rose to 2006 levels.
  • The analysts “look for store opening plans to accelerate further in the coming months”.
  • Leading retailers in expansion of new stores: Subway, Dollar General, Quizno’s, Five Guys Famous Burgers, and Spirit Halloween Superstores
  • On the rise in planned store openings: gift specialties, package stores, pawn shops, family restaurants.  On the decline: books, salons.spas, housewares, and women’s apparel

Download a full copy of the RBC Capital Markets report here. 

 

 

 

 

 

 

 

 

 

 

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Top 5 Questions of CommercialSource.com

Today’s post comes from of an article just published in Commercial Connections, NAR’s commercial real estate publication.

 

#5 “My firm is interested in having its commercial real estate listings displayed on your site. How do we make that happen?”

ANSWER: Data content provider (DCP) agreements are available without a fee to assist commercial real estate firms, commercial information exchanges (CIEs), and multiple listings services (MLS) in aggregating and uploading active listing data to CommercialSource.com.  If you are a commercial real estate firm, CIE or MLS, email [email protected] to request a data content provider agreement.

#4 “I don’t want to spend time looking at property that’s either under agreement or sold. How up-to-date are CommercialSource.com listings?”

ANSWER: CommercialSource.com data is refreshed by data content providers throughout the day keeping listings fresh every few hours.  CommercialSource.com also offers individual accounts for brokers to load their listings manually. Brokers with these individual accounts are expected to maintain the accuracy of those listings.  If you are operating an individual account on CommercialSource.com and would like to have your listings uploaded through a feed, contact us at [email protected] for a consultation.

 #3 “I created an account but I am unable to enter my listing data. What do I do now?”

ANSWER: In this case, it is likely that the user already has their listings on the site via a data feed.  When creating an account on CommercialSource.com, users are asked to specify a CIE, MLS or firm from the dropdown list of data content providers IF they are a client of one of those entities (if you are not you simply specify ‘other’.)  If the user is a client of one of the data content providers they will not be able to upload listings manually.  By doing this, CommercialSource.com avoids the possibility of duplication of active listings data.

#2 “I would like more photos/marketing tools/printable demographic reports/page hits for my listings on CommercialSource.com. When will those be made available?”

ANSWER: In its current form, CommercialSource.com provides the search and display of commercial real estate listings at no cost to REALTORS®.  In order to provide additional enhancements on the site,CommercialSource.com should reach a tipping point of active listings.  We’re almost there!  The greater the participation on the site, the faster we all reach our goal of a cost effective, fully-enhanced national platform formarketing commercial listings.

#1 “How do I get my listings on CommercialSource.com?”

ANSWER: There are two ways to get your active listings on CommercialSource.com.   1) Check the CommercialSource list of data content providers at commercialsource.com/DataProviders. Ifyour CIE or MLS is listed, your commercial real estate listings are already aggregated and fed to CommercialSource.com for search and display.  Or you can 2) Go to CommercialSource.com and click on‘Create an Account’.  Once your account is approved you will be able to create a broker-load account where you can upload and manage your listings as well as create a broker profile.

 

 

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Roger Altman: Fed Bank Stress Tests “Unmitigated Good News”

Most CRE pros say the banks aren’t where they want them in terms of extending credit.  Financing in all its forms remains high on the want list for the industry as a whole.  But how healthy are banks?   In what state is their capital and liquidity health?  A quick look at a CNBC video in the wake of the Federal Reserve accounting “stress tests”  of the largest banks show a clean bill of health for enough of them that former Deputy Scretary of the Treasury Roger Altman spoke of “unmitigated good news”.

Of course, as he said this, some mitigation in fact appeared on the bottom of the screen, mentioning that four of the nineteen tested banks — Citigroup, Aimtrust, Ally Financial and Metlife — failed the Fed’s testing for a record of 15 out of 19.  In baseball terms, a .789 average is great, maybe not so much in terms of accounting solvency.  More discussion about timing and the politics surrounding the testing follow in the clip.

 

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How To Read The Source (Or Any Blog) In Outlook

Image representing Outlook as depicted in Crun...

When it comes to desktop operating systems in the financial and real estate space, Microsoft Windows remains king.  In commercial real estate’s many businesses, contact and email management more often than not means Outlook.  And there’s great value in getting feeds of the business news you need piped right into the same environment you have open on your desktop to handle your communications and schedule.

Blogs have feeds of their content available — it’s one of the features that makes a blog a blog.  Sometimes they’re called RSS feeds, mainly because without using lots of three-letter acronyms, your company’s computer people wouldn’t feel as superior.  No matter the name, think of a feed as a conversation between machines.  And what runs on machines? Software.  So feeds are a way for different pieces of software to have a conversation.

It’s really a one-way conversation when it comes to blog feeds.  Through its feed, the blog is announcing what’s already on it as well as what just got added to the blog.

So how do we get The Source — or any blog — to announce to Outlook?  That is, how do we get Outlook to display the content and new items in a blog we need to follow for our business?

Easy, once we hop a small hurdle Outlook puts in front of us for absolutely no good reason.  (Outlook users, I feel your pain.)

Blogs have feeds… 

We’re a blog.  So we’ve got a feed.  The plain old RSS feed at The Source is here:

https://www.commercialsearch.com/feed/

Click this and you won’t get far — just get the raw feed data on your screen.  That click causes our blog to labor under the mistaken presumption that you’re a machine,  and so tries to talk to you like a machine.  Most software that can read a feed can read this stuff. But not Outlook, as far as I can tell.

…But Outlook needs special blog feeds

One of our readers asked today what was up with Outlook ’07 and getting our feed. It turns out that Outlook doesn’t like plain RSS feeds, it likes Feedburner feeds.

What’s Feedburner?  Think of it as a thing Google bought for a lot of money, because that’s what it is.  It’s a big collection of blog feeds formatted a special way.

And Outlook is so very special it needs a special formatting to be able to read a feed.

Our Feedburner feed

This is our blog’s Feedburner feed:

http://feeds.feedburner.com/commercialsource/BWpe

If you copy this link, then paste it into the Feed menu of Outlook (help with this can be found in this video) you will have our content delivered right into Outlook.

If you use the other, plain-vanilla RSS feed, that won’t work. At least with Outlook ’07.

This holds true for other blogs

If you have a Gmail or other Google account, you can easily do this conversion of a plain feed to a Feedburner feed with any blog feed you find. They call it “burning” a feed. Head over to feedburner.google.com to start.

So if you’ve got any questions, leave a comment.

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CAM vs. Operating Expenses vs Capital Expenses: Drawing The Lines

One of the more entertaining, enlightening and lively commercial property conversations going is Howard Kline’s CRE Radio. I’m a fan of nearly anything that kicks off, as this show does, with a disclaimer that “what follows is specifically not legal advice” and warns to “consult your own counsel”.  This is usually a signal that what follows is going to get very interesting, and Howard’s show delivers on the premise.

A recent topic was CAM Charges And Operating Expenses – An Open Forum.  (CAM means common area maintenance charges, provisions in a commercial lease that charge tenants for shared aspects of a property such as building lobbies or parking lots).  Speaking to the issue of lease negotiations from both sides of the table, the discussion tackled the eternal issue of landlords and commercial tenants dividing up the various costs of doing business and maintaining property.  Anybody who ever wondered how maintenance costs and capital improvements can overlap and why will appreciate hearing where the lines get drawn sometimes.  Again, never take anecdotal input like this as legal advice applicable to your own deals, but I dare you to not be interested in the conversation.  It’s not every day you get to listen in as the hairs are split.  When a parking lot is repaved, as opposed to topcoated, are these different?  How might one classify them, as CAM or as capital?  In whose interests might lie such characterization?

Reminder: Nothing you read here constitutes legal advice in any way, shape or form!