An empty office building doesn’t have to remain an office building — and an old supermarket doesn’t have to continue to house groceries. As the needs of communities evolve, the way people use older buildings can also evolve. Repurposing commercial real estate gives you the opportunity to revitalize an older building and breathe new life into a neighborhood or town.
A recent report by IHL Group entitled Debunking the Retail Apocalypse included a recent chart showing the planned expansion for major restaurants for 2017. Demand appears to remain strong for fast food and quick serve restaurants. Restaurants continue to be popular commercial real estate investments as many restaurant leases are triple net (NNN) that more passive investments allowing the owner to receive a monthly rent check, while the tenant is responsible for taxes, insurance, and maintenance.
Amazon Joins Other Fortune 15 Companies in Building New Headquarters
Amazon recently announced the start of their selection process to find the location for a second headquarters that could employ as many as fifty thousand (50,000) new full-time employees with an average compensation exceeding one hundred thousand dollars ($100,000) over the next ten to fifteen years. This opportunity has communities scrambling to identify the incentive package and real estate site that can land this amazing deal. The initial requirement is for 500,000 square feet that will be open by 2019 that could grow up to 8 million square feet by 2027. The establishment of a second headquarters by Amazon will be the fifth company within the top 15 of the Fortune 500 to begin or complete a new headquarters project in 2017.
The purpose of formal due diligence is well known to all real estate professionals. We’ve all experienced either the first-hand hiring of experts to help mitigate risks or advising clients to do so. It takes time and money with results often bringing up more questions than answers.
In this age of technology, a new approach for gaining insight into important issues that can impact real estate deals quickly and efficiently is now a reality. It means leveraging technology assets to quickly and inexpensively ascertain initial answers to questions that would typically require extensive time and money during a formal due diligence process.
As Spring Training for the 2017 Major League Baseball season gets underway, our attention turns to stadium finance, a strange intersection of finance, athletics and real estate that leverages competition on-field and off.
Stadium development in the US is often subsidized by the public, meaning development risks are often shared by taxpayers in various ways, from tangible environmental impacts (parking availability, foot traffic) to the borrowing of already-strapped municipalities aiming to improve the business fitness of the areas surrounding the stadium.
The inauguration of President Donald Trump, titan of commercial real estate, marked the start of a great number of legal fights concerning his numerous undivested CRE holdings. One set of concerns raised by the political opposition centers on what it means legally for the sitting President to be doing business with foreign governments, something that appears to be happening routinely within the context of his ownership of Trump International Hotel in Washington, DC, just blocks from the White House. The broad argument from political opponents goes: with each hotel bill paid by a foreign government staying at the luxury hotel comes a potential conflict of interest as long as the President continues to own that hotel.
Commercial development without skilled construction workers is a recipe for no development whatsoever. Yet the country’s educational system appears to be failing the construction industry – along with commercial real estate.
The system seems content to allow millions of students at for-profit colleges to be simply fleeced and abandoned, no more employable than they were before going into debt for their education. This is the for-profit education industry’s choice: a grab for the short-term, subsidized buck over the long-term benefit to the student and to the country. Rather than orient itself toward trade education that actually meets the demands of the wider economy, the secondary educational system’s choice to turn away from the trades appears to have placed it on a direct collision course with the needs of the commercial development industry. Those needs are near all-time highs: the latest employment forecasts from the US Department of Labor say that the national need for these workers ranks higher than the needs for workers in all other categories save one (health care).
The national market for commercial real estate is a massive thing, a meta-market encompassing tens of thousands of localities, each with their own economies and histories, subject to their own internal logic — and illogic. When trying to take all of these in as a whole, it’s important to remember that the local stories always loom larger than might be apparent, and that effects are overwhelmingly driven by local needs, wants and preferences.
Like a lot of Chicagoans, I’m something of an architecture nerd. Being proud of this town’s skyline and the engineering that went into it is second nature to Windy City natives, but we don’t often slow down to take a close look at the stories behind the world-famous postwar modern styles. It’s an international story: the likes of Ludwig Mies van der Rohe, Bertrand Goldberg and Walter Netsch will not likely appear again, but their work as a whole forms the visual and functional vocabulary associated with modernism the world over.
Filmmaker Nathan Eddy’s documentary The Absent Column explores the story behind Chicago’s Prentice Women’s Hospital Building a 1975 Goldberg building in the brutalist style. Colleagues of the architect as well as preservationists have faced off over the fate of this half-bunker-half-flower structure, and Eddy captures the story. Definitely worth a look.
Brokers, property managers and landlords of Los Angeles: be aware that an updated list from the Los Angeles Department of Building and Safety (DBS) has arrived. The list identifies thousands of buildings that may potentially require earthquake retrofitting, including those sporting “tuck-under parking” designs and other popular constructions that are especially susceptible to collapse in earthquake conditions. The list contains over 23,000 addresses.