Browse Month: April 2012

Broker Lien Laws: Which States Have Them?


Ohio State Legislature - Photo by Eric Albrecht

Commercial broker lien laws are on the books in 26 of the 50 states.  These pieces of legislation speak to the right of commercial real estate brokers to attach a lien on a commercial property when a commission that is due goes unpaid.  Many of the states with such laws have seen recent passage or update of legislation.  Other states may be considering similar legislation.

Below, find a list, complete at press time, of the 26 states that have commercial broker lien laws on the books, along with a handy link to a Google search on each topic.  Please remember that nothing you read here constitutes legal advice and that you should always contact your attorney before making any decisions concerning law in your practice!


North Carolina
New Hampshire
New York
South Carolina

Going All The Way: Customizing Google Maps For Showings

Brokers and landlord reps know that anything that makes it easier for a prospect to view a property is probably worth doing.  When the property is a subdivided commercial space such as a mall or an industrial facility, giving a prospect the correct specific directions to the correct subdivision in the wider property is not easy.  Malls are confusing, and “east of the main entrance” or  “two over from the Pottery Barn” are too easily misunderstood as directions.

Google Maps certainly helps with this, but it’s largely based on street addresses.  As such it’s great for showing driving directions and routes for getting prospects from point A – say, their office or their hotel — to the mall, which has a single address often enough. But how can you use Google Maps to send a prospect the more specific directions to get to the store you want to show?

I’ll show you how, using a piece of commercial property near and dear to my heart: US Cellular Field,  home to the Chicago White Sox.

Just like a mall has many stores, the ballpark has many gates. Gate 4 is the one closest to home plate, located on the northwest corner of the park. If you wanted to guide a prospect to a meeting or showing at Gate 4, the last thing you should do is tell them “go to the northwest corner of the park”, because that leaves way too much to chance (what if they aren’t carrying a compass?) and needlessly leaves the door open for stress for the prospect.   Much better to send them a map with a route drawn all the way to Gate 4, not just to the ballpark.  Here’s how:

Step 1: Create the basic route map

Head over to and enter two addresses – the prospect’s origin and the destination for the mall — in the box in the upper left.  In this case, I picked NAR’s HQ building at 400 N. Michigan, entering “400 N Michigan Ave, Chicago, IL 60611 to Comiskey Park, Chicago”

Step 1: Establish basic directions


Step 2: Switch from Satellite images to Map images

This will produce a cleaner visual map and make the blue route line appear more clearly.  Make the switch by clicking the box in the upper right hand corner labeled “Map”.

Step 2: Lose the satellite images for a drawn map

Note that in Step 2, the route leads to the street address of US Cellular Field, and not to Gate 4 (which is at the NW corner of the park and is where we need to meet up).  This is exactly the same problem lots of showings in malls or other subdivided properties face — how to draw the route all the way to the specific location.   Let’s do it.

Step 3: Add a destination

We’re not going to do any drawing, but we are going to tell Google to draw for us.  In order to make our route go all the way, we have to add Gate 4 as our destination.  So we point to Gate 4, and right-click, selecting “Add A Destination” from the pop-up menu that appears:

Step 3: Add Gate 4 as a destination using the popup menu by right-clicking

Step 4: Save the route, and email away.

Once the new destination is established, Google Maps no longer directs to the street address of the ballpark, but to where we want — to Gate 4.  Use “Save To My Maps” at the bottom left of the Google Maps page to save this route and email it to your prospect.

Step 4: Now you've got them going all the way


Neat, huh?  Try it out and let us know how it has helped your showings!

Agriculture Land Sales: A Booming Market Where Cash Is King

GUNDER, IA - AUGUST 17: Weeds grow up around ...

It seems like most areas of commercial real estate are suffering from a financing drought.  Credit resources are at a premium thanks to banks cutting back on lending, a contracted market for securitized property deals have kept a cry for easier credit high on commercial practitioner want lists for three years.

Naturally all real estate is local, so it’s tough to make a claim for an entire sector.  Discussion in the wake of the Realtors Land Institute meeting in Denver is finding that one market not subject to credit crunch conditions is Iowa’s agricultural land.

These property prices have been on the steady rise, and it’s one market, according to This Week In Agribusiness, that is driven not by debt, but by cash purchases. Sales are split between expansion farmers  — farmers reinvesting healthy crop profits into new land acquisitions — and investors.

So where’s the cash coming from? Agricultural business as usual. An uptrend in crop prices haven’t hurt the pocketbooks of ag landowners.  These prices have followed a fall in supply across a range of staple grains, says the USDA.

Max Armstrong of the syndicated television show, This Week in Agribusiness,  interviewed Accredited Land Consultants (ALCS) and speakers at the 2012 National Land Conference held on March 26-28. Chuck Wingert, ALC, President Elect; George Clift, ALC, Vice President; Kirk Weih, ALC, and Bob Turner, ALC were interviewed along with presenters Dr. Mark Dotzour, Chief Economist and Director of Research at Texas A&M, and K.C. Conway, CRE, MAI. They discussed the economic outlook, lending and land values. Watch the first of these interviews here.

Entertainment Industry REITS: Where Hollywood And Main Street Meet

Variety (magazine)

What’s interesting about real estate investment trusts (REITs) is they provide a way to invest in a sector through a portfolio of commercial properties doing business in that sector. Publicly traded REITs number about 200 and touch on many vital commercial RE sectors from self-storage to multifamily to office and every other CRE specialty.

So when Hollywood’s Variety writes about REITs, it’s a bit of a surprise at first.  At least it’s a surprise until you remember that the movie business consumes a lot of commercial property in the form of the production studio.  They don’t call it a “backlot” for nothing.

Joseph Lisanti’s piece on entertainment industry REITs  spells out that the intersection of showbiz and square footage forms a small number of investment opportunities – he identified two although there are more – that match properties with investment capital.

Hudson Pacific Properties owns office buildings in Northern and Southern California as well as the Sunset Bronson Studios (the original Warner Bros. Studios) and Sunset Gower Studios (Columbia Pictures’ headquarters through 1972). The studios represent about 20% of HPP’s revenues, but some of its office properties, including the Technicolor Building in Hollywood, also have a biz connection.

Taking a different tack is Entertainment Properties Trust (ticker symbol EPR), which owns 112 multiplex venues and close to 2,000 screens. The company also owns metropolitan ski parks and properties used for public charter schools, but 77% of its revenue comes from theater properties and associated retail operations.

We’d blogged about Entertainment Properties Trust before – a CNBC clip featuring EPT’s CEO David Brain talks about the formation of portfolios, which should be of interest to any broker.  Theater as economic driver and keystone for nearby commercial property value is a common story in primary, secondary and tertiary markets alike.




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BIM: Toward Smarter Commercial Real Estate

I was taking a closer look at the medical center property market when I came across Carrie Rossenfeld’s very interesting piece about a 500,000 sq. ft. project breaking ground last week.  The UC San Diego Jacobs Medical Center in La Jolla, CA is a big project with a big idea driving the development and the management of the property afterward.

The idea is Building Information Modeling, a design, construction and property management discipline enabled by high technology.  Described as a “flight simulator for building”, BIM is a virtual construction tool/software-enabled technique that generates and manages data about the building throughout its entire life cycle, from design to property management.

The value proposition of every commercial property is anchored in the decisions made in design and construction.  The effects of these decisions have always been left to commercial property brokers, reps and managers to wrestle with using partitioning, improvement and other expensive change techniques.  BIM might put an end to that.  BIM looks into the future of the property and marries its design and construction to the future fitness for tenants.  It smoothes out and eliminates change orders both at construction time and in post-construction, unlocking maximum value for decades following.

One vendor of several bringing BIM to the market is Virtual Build, who produced this clip explaining the approach.


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Your Voice On The Hill: NAR Commercial Advocacy Timeline

The western front of the United States Capitol...
The Hill (Photo credit: Wikipedia)

Not to toot our own horn (well, okay, maybe a little)  but before and since the 2008 financial crisis unfolded, commercial REALTORS®  have been proud to bring a loud and consistent voice to Washington, advocating for Congressional support on the issues that affect our commercial practitioner membership.

NAR’s Commercial Real Estate Advocacy Timeline 2008-Present is a great read to catch up on what the commercial professional has seen done and promises to see in the future in terms of advocacy.

Dealing with the folks on the Hill is not a cakewalk.  Washington is legendary for gridlock, and making a case for our industry is not a job to take lightly. But the principles of the commercial real estate market speak directly to the unique narrative of opportunity and growth that our country will always be known for.  Making sure that isn’t forgotten on Capitol Hill is why we’ve been able to consistently bring home a series of advances for our industry, including these highlights and more:

  • Loudly registering concerns about FASB‘s lease accounting proposals
  • Urging Senate leadership to include statutory framework for a US covered bond market, which could provide the industry with new credit sources
  • Supporting Internet Sales Tax fairness, assisting states to collect an estimated $23 billion in uncollected sales taxes while helping brick-and-mortar retail businesses face fair competition
  • Achieving Congressional extension of flood insurance to provide certainty and avoid disruption in real estate markets
  • Advocating for REIT and other asset-backed issuers in the face of SEC review
  • Supporting extension of key SBA programs, aiding credit availability in office, retail and industrial sectors.

And so much more.  Take a look at the full timeline here and follow along as we fight the good fight for our members and our industry.

What’s up in your neck of the woods in terms of these proposals?  What would you tweak? What would you like to see us take up in Washington?

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Research: 1Q 2012 Cap Rates Flat

Boulder Group Chart: Cap rates flat

The Net Lease Market Report from Chicago-based Boulder Group says the asking cap rates around the country are more or less flat versus the previous quarter. Retail sector cap rates rose 3 points, industrial sector cap rates dipped 6 points and office cap rates fell 15 basis points according to the company’s investment research.

Interviewed at Globe Street, Boulder Group President Randy Blankstein said low availability of lease financing was part of the reason why cap rates were flat.

“There just isn’t much core available, it’s a bifurcated market. Investors are going to move into shorter term properties with secondary credit, with higher risk.”

Higher interest rates may already be forcing investors into higher return territory, such as the 10-Year Treasury Rate going up to 2.39% in March. If interest rates continue to increase, cap rate compression could suffer worse than since Q2 2011.

New development will remain limited throughout 2012, he says. “While there may be some new dollar stores and banks, there’s just too much need to fill vacant boxes such as Borders,” Blankstein says.

Long an attraction to investors for their high and steady rates of return against low interest rates, net lease deals provide that the tenant pays not only rent, but a range of costs associated with the property including taxes, maintenance, utilities and others.

Since many net lease players expect the market to slow, the outlook for brokers could mean a return to a more traditional, less securitized commercial property market, constrained both by limited availability of financing and by the turning away of investment capital from such deals.  While cap rates will always vary by location, by expense structure and lease term, don’t be surprised to see reminders that cash — even in commercial real estate — is king.


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10 Predictions for the New Age of Real Estate*

Today’s guest post comes to us from the Institute of Real Estate Management, one of the commercial affiliate organizations of the National Association of REALTORS(R).

*Out of 100 contained in
Transformational Leadership in the New Age of Real Estate, by Christopher Lee, IREM 2012.  Mr. Lee will also be speaking on the topic at the IREM Leadership and Legislative Summit on April 16, 2012.

  1. The best long-term, value-appreciating opportunities in real estate will be found at or adjacent to: (1) major colleges and universities; (2) hospitals; (3) coastal and capital cities; (4) corridor or string cities; (5) 24/7 knowledge cities and financial centers; (6) edge cities; (7) areas surrounding ports and transportation hubs; (8) locations proximate to the growing populations of Hispanics, retirees and Generation Y adults; and (9) niche markets serving growing industries.
  2. Successful real estate companies will generate as much or more revenues from selling knowledge, access to customer bases and non-asset services as they now receive from management fees. A “tenant multiple” metric will emerge in valuation methodologies.
  3. Watch for a rating system to emerge for buildings based on the level of safety and security provided, on the energy efficiency and greening attributes of the building, and on the level of tenant satisfaction.
  4. The talent shortage will continue for years to come as the real estate industry transforms itself from a supplier of services to a provider of knowledge and asset solutions for multiple stakeholders. Watch for a greater reliance on technology, temporary employees, contingent workers, leased employees, specialists, job-share employees, near-shoring and the off-shoring of select functions.
  5. Telecommuting (now an option in 44% of U.S. businesses) will create a generation of “nomadic offices.” Fixed office space is no longer a necessity.
  6. External factors will shift the role of the property manager to the more expansive role of a business manager as building operations increasingly prioritize matters of resource management, energy conservation, asset management, commodities coordination, workplace environment, tenant relationships, safety and security.
  7. $1.1 trillion of new apartment buildings will be needed by 2030.
  8. An abundance of capital will likely keep cap rates low through 2017.
  9. Of the regional/local real estate service firms which existed in 2010, 30% will disappear by 2020.
  10. Look for the creation of a global eBay look-alike for the real estate industry.
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Ground Leases: An Overview From CCIM

From the raw land, development and investment side of things: CCIM Institute’s newest podcast is a discussion with Philip “Fred” Himovitz, CCIM, all about the ins and outs of the ground lease.  The advantages and considerations of ground leases over fee simple ownership are explored, as well as seniority, management, financing and tenant issues. Even though the podcast is under nine minutes, a solid summation of ground lease structures and purposes is covered.

Popular in the development of raw land, ground leases are also instrumental in the development market for alternative energy. In some states, temporary interest in land is obtained by wind farm builders using a ground lease.  This frees up the builder from taking title or committing the planned use to an indefinite term, which is instrumental in attracting investment in these early days of such important technologies.

Current market conditions have led to ground leases being more widely accepted and understood. They provide opportunities to reduce capital requirements and allow ideal platforms for joint ventures.  These deals are usually of a long term and let developers and landowners partner in the development, creating the opportunity to shape a deal’s risk profile and more readily allow securitization to spread risk – and returns – around.

To listen to the CCIM podcast on ground leases, click here. 

For a more in-depth treatment of ground leases, check out’s Field Guide To Ground Leases.  NAR members can find ebooks, books, videos and research reports detailing the topic.

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Best Buy Rethinks Square Footage

Logo of Best Buy, US-based retail chain

Big box giant Best Buy’s announcement of a $1.7 billion loss in its most recent quarter came with a planned wave of store closures.  50 stores are set to shutter and 400 jobs will be lost.  As grim as that news is, it comes with a bright spot: the chain plans to open 100 standalone Best Buy Mobile stores centered on its technology product offerings.

A chain devoting as much square footage as Best Buy has to CD and DVD media was a chain destined for an adjustment. Competing with downloadable titles was a losing proposition and had to have dragged down returns per square foot to the point that the “big” in “big box” began to look less like a selling point than an albatross around the neck.

“In order to help make technology work for every one of our customers and transform our business as the consumer electronics industry continues to evolve, we are taking major actions to improve our operating performance,” said Brian J. Dunn, CEO of Best Buy.

“As part of our multi-channel strategy, we intend to strengthen our portfolio of store formats and footprints — closing some big box stores, modifying others to our enhanced Connected Store format, and adding Best Buy Mobile stand-alone locations — all to provide a better shopping environment for our customers across multiple channels while increasing points of presence, and to improve performance and profitability.

“These changes will also help lower our overall cost structure. We intend to invest some of these cost savings into offering new and improved customer experiences and competitive prices — which will help drive revenue. And, over time, we expect some of the savings will fall to the bottom line. At the same time, we will continue to accelerate our key initiatives — growing connections and services, expanding our digital capabilities and growing our business in China.

“As a result, we believe these actions will position us to grow earnings, improve ROIC, and increase value to our shareholders in the years ahead.”

The move to focus on the devices rather than the content downloaded upon them is part of a wider, multi-dimensional trend pitting digital reality against tangible space. Brokers and reps are well-advised to understand that a business’s decline in raw physical space requirements carries with it new opportunity.  Small might be the new big.


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