Browse Month: October 2012

Commercial Real Estate 3Q 2012 Market Survey

The national commercial real estate market is still stabilizing, according to NAR’s 2012 third quarter market survey.  You can download a copy of the entire report or browse below.

Especially interesting is a 6% bump in national sales volume over 2011.  This comes against a persistent and apparently growing difficulty with financing, with respondents reporting a somewhat higher dissatisfaction level with obtaining financing over the previous 2012 quarter.  Does this mean the direct and indirect capital costs are weighing down a more robust volume rebound, or does it mean that commercial practitioners are learning to “do more with less” assistance from our pinstriped friends at the banks?

Let us know what your local market is telling you – leave a comment and tell us your story.

Commercial Real Estate Market Survey 2012-10-25


Enhanced by Zemanta

Sharing Links In Email: Still Social After All These Years

In a social media landscape dominated by Facebook, LinkedIn and Twitter, it’s easy to come to the conclusion that these networks define social media, and that efforts to network among stakeholders and professionals in the traditional, offline business sense — an activity that is utterly key to the commercial real estate business — should be centered on these three social media giants just because that’s where all the action is.

That conclusion would be wrong.

When trying to put the web into perspective, it’s important to remember that the web is young.  Without the benefit of many decades of history to draw from, the web in many ways doesn’t know things about itself.  Basic things.  Like who is coming to your website and why.

We’re not entirely in the dark about this — the area of marketing is called web analytics, and we learn much when we study it.

But because of the way the basic web technology works, we can’t learn everything we need to learn.

A recent article in Atlantic by Alexis Madrigal underscores how little we know by pointing out that a giant category of web traffic called direct traffic adds up to far more web traffic to your website than all the focus on the big social media networks would have us believe.    Below, he refers to it as “dark social”:

And then one day, we had a meeting with the real-time web analytics firm, Chartbeat. Like many media nerds, I love Chartbeat. It lets you know exactly what’s happening with your stories, most especially where your readers are coming from. Recently, they made an accounting change that they showed to us. They took visitors who showed up without referrer data and split them into two categories. The first was people who were going to a homepage ( or a subject landing page ( The second were people going to any other page, that is to say, all of our articles. These people, they figured, were following some sort of link because no one actually types “” They started counting these people as what they call direct social. 
The second I saw this measure, my heart actually leapt (yes, I am that much of a data nerd). This was it! They’d found a way to quantify dark social, even if they’d given it a lamer name! 
On the first day I saw it, this is how big of an impact dark social was having on The Atlantic. 
The web marketing world more often than not overlooks dark traffic, shrugging that the visitors must have gotten there by typing a whole URL or by clicking a bookmark.  But the far more compelling explanation is this: much of that web traffic is generated by the sharing of links by email.
Email, that business staple that we keep hearing is “dead”.  That our kids look at us funny for using.  That relatively boring, ancient application that calls for your attention for longer than a tweet or a “like” ever could.
What this means is if the listings, the research, the news we need to do our jobs appear to you to not lend themselves necessarily to Twitter or Facebook, or that your email distribution lists just seem to work — it’s not that you’re wrong.  It’s that Twitter and Facebook aren’t the only networking game in town.  Once you start counting properly, it turns out that good old email is just as social as they are.

Multifamily Affordability: H Without T Doesn’t Tell The Story

The Center for Neighborhood Technology

Commercial practitioners in the multifamily space have special challenges communicating benefit. Dense urban areas present so many different factors that go into valuation to tenants and prospective investors that finding and highlighting the most important ones becomes critical.

At this month’s NAR Workforce Housing Forums, an interesting presentation by Center For Neighborhood Technology’s Jacky Grimshaw discussed the notion of affordability in a new way.  CNT’s work over the past ten years has invented defined and refined the science of location efficiency.  Centers of commerce and employment have seen over decades the migration of population to surrounding suburbs.  What has allowed this to happen has been one thing above all others: transportation.  It then follows that the links between work and home are key drivers of value for multifamily housing.

To allow the creation of objective measurements of value driven by transportation proximity, CNT has developed the H+T Affordability IndexH+T defines housing affordability in a new way that includes transportation costs.  What this tends to do is radically reduce a metro area’s claim to affordability, as the “T” in “H&T” counts the costs of commuting to jobs from the traditional suburban evirons of what most think of when the concept of “affordable housing” is raised.

Mapping this true affordability exposes a great number of interesting scenarios related to transportation, smart growth and sustainability.  Under H+T, higher cap rate buildings situated near transportation corridors move toward affordable status.  Land use gets a closer look as land zoned for industrial due to its being situated near rail stops has a distinctly different future under development that aims at affordability.  The opportunities for re-scoring of government-sponsored enterprises only grows as the index becomes more widely adopted.

Will the H+T index become second nature to CIEs and MLSs?  Will the efforts of technology partners to introduce greater accuracy in cost and market analysis gin wide adoption?  For the answer, check back in a year to take a look at the results pages of the popular property websites.  When Realtor.Org, RPR Commercial,, CoStar and Zillow are factoring in transportation, then you know that truer costs and valuations are on the table.


Enhanced by Zemanta

Multifamily Development And State Housing Authorities

Street with midrise multifamily housing in Gle...

Over two days at the NAR Worforce Housing Conference held in Chicago, a roster of experts gave a range of presentations and educational sessions looking at the special considerations of workforce housing.   We’re going to take a look at a few of these sessions this week with an eye toward the topic’s relevance to the commercial real estate practitioner.

Workforce Housing and Multifamily

Looking at the issue of workforce housing from the standpoint of commercial property marketing, management and valuation, we’re reminded that the commercial property aspects focus first on multifamily.  What’s more, the orientation toward renters as opposed to homeowners means the definition of “housing” in “workforce housing” comes up somewhat at odds with the topic’s default focus on home ownership.  But numerous overlaps exist, from affordability metrics to tax credits to area or regional initiatives to drive economic development.

State Housing Authorities And Multifamily Property

In his appearance at the conference’s round table discussion, Kim Herman, Executive Director, Washington State Housing Finance Commission reminded attendees about the less-than-forefront role of state housing authorities with regard to multifamily. “HFAs have lots of authority to work multifamily property,”

To take one example, Herman’s own HFA provides a range of bond financing and tax credit options for the multifamily market in Washington State.  “Check with your state HFA,” agreed Illinois Housing Development Authority‘s executive director Mary Kenney to the conference.   Senior housing, nonprofit facilities, multifamily, farmer and rancher programs are on the table to make deals happen and spur economic development outside of the traditional homeowning model.

State Housing Agencies Directory

A comprehensive directory of state housing finance authorities is published online by the National Council of State Housing Agencies.  Practitioners in multifamily, assisted living and other areas not covered by simple homeownership are encouraged to look at the programs in their own backyards.

Presentations at the NAR Workforce Housing Conference will be posted on October 22nd at



Enhanced by Zemanta

Successful Team Development Using Competencies

by Cindy Wozny-Carl, Vision3100 Consulting

Cindy Wozny-Carl Vision3100 Consulting Chicago, IL

Watching this year’s summer Olympics made me think of what makes a successful team. It seems like each team member knew their role and trusted that everyone else on the team did too.   We in Real Estate know all the pieces needed to build buildings and manage them to add value.  Can we apply this to people?  When I worked for a large real estate developer and manager, I was amazed by how everyone knew their top five strengths and appreciated them.  “I am a realtor, arranger, maximizer, learner, communicator.”  Everyone would be excited to think that if we know our strengths, we can use that to build a balanced team.  But is it the right team for that organization?  Until we understand what the organization’s needs are, we won’t be able to understand what behaviors contribute to the organization’s success.  Understanding and then identifying these “competencies” is a great debate among the human resources research community.  The common thread is that a company can obtain a competitive advantage if it possesses a unique bundle of skills and behaviors.  Successfully developing them should be the focus of defining and building your company’s competencies.


What is a competency?  The most common competency building tool uses sixty seven of them. They define competency as a “measurable characteristic of a person that is related to success at work”. Anther definition is “the skills and personal characteristics that contribute to superior performance”.

Identifying competencies can be a complex process.  Through the use of competency models, some providers suggest identifying three to five behaviors that capture how the company competitively differentiates itself.  These can be chosen from among hundreds of possible choices.  Others may use a framework of several components, such as behaviors dealing with people, business, individual attributes and develop multiple levels of competencies within each component.  The key is to create a highly tailored, actionable set of behaviors that align employees with the values or strategy of the company.

Once these behaviors are understood, they then can be translated to the skills, knowledge, attitudes and motives that characterize exceptional performance. They must be understood at all levels of the organization in order to be integrated into how you select, develop, assess and reward people.

That certainly helps me appreciate the performance of any successful team, whether at the Olympics or in our day-to-day work lives.

Hear Ms. Wozny-Carl speak more about building organizational performance at the IREM Fall Leadership Conference in New Orleans, October 16-20.  

Focus On 2012 Commercial Innovation Grants: Acadiana Commercial Outlook

NAR’s Innovation Grant Program provides financial resources for new commercial programming at REALTOR® associations that have an active commercial structure. Proposals must demonstrate an impact on the REALTOR® association; new products, programs, processes, or services that improve an organization’s commercial real estate presence.

While Innovation Grant proposals are currently closed for submission, let’s take a look at some of the winning proposals in the various submission areas, starting in Louisiana with the REALTOR® Association of Acadiana.  Their REALTORS® Commercial Alliance winning proposal is called the Arcadiana Commercial Outlook (ACO).

REALTORS® Commercial Alliance of the REALTOR® Association of Acadiana

Innovation Name:
Acadiana Commercial Outlook (ACO)

Association Name:
REALTORS® Commercial Alliance of the REALTOR® Association of Acadiana

Project Summary:

The Acadiana Commercial Outlook seminar was designed to give our members as well as  industry and community leaders a yearly update on what has been happening in the  commercial real estate industry over the past year and an outlook on the year to come. The  4 hour seminar features a keynote address along with presentations on the different  aspects of commercial real estate including Retail, Office, Multi-Family and Industrial. Also  on the agenda were presentations on residential real estate and the finance/banking  industry.

The keynote address each year focuses on a hot topic that is current in the Acadiana area  affecting the commercial real estate industry. Lafayette is in the process of developing its Comprehensive Plan so the ACO committee invited the Mayor as well as the Comprehensive Planning committee chair to give the keynote presentation. In addition, the President of the University of Louisiana at Lafayette presented the University’s Comprehensive Plan.

How Did You Get Started?:

The REALTORS® Commercial Alliance Board of Directors is a very pro-active group that is always looking for ways to improve the community awareness of the REALTORS® Commercial Alliance. Already they were building a presence in the community’s leadership by meeting with several of them on a regular basis and building solid relationships. In order to continue building these relationships with other community players, the Board felt it important to begin gathering the industry information for the Lafayette area and share this with those leaders.

In addition to building this community presence, the REALTORS® Commercial Alliance decided it was relevant to create a data-sharing seminar similar to other CIDs in Louisiana in order to make this valuable information available to those in the Acadiana area. In the past, statistics, such as occupancy rates, average rental rates, etc., may have been gathered by individuals for their own use, but no group has ever gathered this data for the entire Lafayette parish and shared it with others like the RCA is doing through the Acadiana Commercial Outlook. In addition, commercial practitioners throughout the state have been requesting this type of information for our area. The REALTORS® Commercial Alliance believes the Acadiana Commercial Outlook has given them recognition as the “leading advocate of the commercial real estate industry” in our region.

Project Funding:

The Acadiana Commercial Outlook seminar is funded through sponsorships as well as a $35 registration fee. This year we were fortunate to receive a grant through the NAR Innovation Grant Program.

Read the entire report on the Commercial Innovation here. 


Enhanced by Zemanta

Office Space Classes: How Do You Know What Class Your Property Is?

Class A?  Class B?  When it comes to office space, what’s the difference?

Turns out it’s pretty informal, inconsistent, and has more to do with market reporting than characterizing individual properties.  It’s an old problem in real estate information handling: when you’re describing a single property, you aren’t describing a wider area, trend or factor.  It also holds in the reverse: information about markets by its nature depends on summaries, means and averages when being put together; these summaries don’t often work well as ways to differentiate properties.

That said, office buildings are generally classified by brokers and landlords as being either a Class A, Class B, or a Class C buildings. But differences between each of these classifications varies widely by market.  Class B and C buildings are generally classified relative to Class A buildings, meaning that comparing across markets using these categorizations can lead to dangerous misinformation.

While the industry lacks a definitive formula for classifying a building, we get by (or don’t get by) on three sets of  general property characteristics:

  • Class A. The highest quality buildings in their market. Generally they look the best, use the best construction, their infrastructure is high quality and are professionally managed.   Location and access is premium.  Class A office buildings attract the top quality tenants and the highest rents that go with them.
  • Class B. Typically a Class B property is older than a Class A, yet still has quality management and tenants.  One aspect the distinguishes a Class B from a Class C is its “upward mobility”.  Does the building’s location and circumstance allow the possibility of restoration to Class A status through common area improvement, renovation or facade?  If yes, then it’s a solidly Class B office property.
  • Class C. Usually older than 20 years, a Class C office property needs extensive renovation and/or is located in a less desirable location.  Marked by out-dated technologies and infrastructure, and low architectural appeal,  Class C buildings have the lowest rental rates, take the longest time to lease, and are often targeted as re-development opportunities.

No formal international standards exist for office building classification, which is another way of saying that office buildings should be viewed in context and relative to other buildings within the sub-market; a Class A building in one market may not be a Class A building in another.


Enhanced by Zemanta