Browse Tag: Commercial property

BOMA Updates Best Practices For Sustainability Through BEPC Contract Model

The Building Owners and Managers Assocation (BOMA) International has just announced the updated version of their groundbreaking BOMA Energy Performance Contracting (BEPC) Model to incorporate new best practices into building maintenance. BEPC was originally created in 2008 by BOMA International in a partnership with the Clinton Climate Initiative (CCI), several major real estate companies and energy service companies (ESCOs).

BEPC Is Updated For Today’s Best Practices

Unfortunately, since the initiative started in 2008 there was not much market emphasis on retro-fitting buildings with new energy-saving technology during the crisis of ’07-’09.  Now that the market has vastly improved and recovery is well underway,  BOMA is updating and sharing their program more broadly with the commercial real estate world.

A standout for best practice from BPEC: investors are well-advised to be proactive in managing their assets so they can make strategic investments to drive rents and occupancy.  Exhaustive management of utility expenses has become a best practice, but many of the older buildings have infrastructure that is approaching or at the end of its useful life, limiting potential to get a handle on all the utility usage information that true best practice calls for.

Gear To The Ground

You can’t manage what you can’t measure, and when it comes to sustainable ant truly controllable energy usage, that means extra equipment. Technology upgrades will be necessary in order for the buildings to remain competitive in today’s market.  Such refits can be large capital projects tending toward the complex, carrying a variety of risks. However, the risk of doing nothing is very real, causing rising maintenance costs, utility costs, increasing complaints from tenants and potential tenants.  Left unaddressed – especially in a competitive environment, these costs will negatively impact the owner’s bottom line sooner than later.

BOMA International Chair-Elect, Kent C. Gibson, BOMA Fellow, president of Capstone Property Management, LC. was quoted in BOMA’s press release, “BOMA International is pleased to provide building owners with a valuable resource that can help them increase asset value, improve operational efficiency and demonstrate to tenants a commitment to sustainability.”  Among these are investigations into technology applications that will help understand what’s really called for to improve building performance and reap the true benefits.

BEPC Designed To Enhance Performance and Efficiency

The BOMA BEPC was designed to manage risk performance, facilitate projects that enhance building’s performance and efficiency and aid in delivering predictable returns on capital projects. BEPC provides a conceptual framework and supporting template documents to help private building operators develop and execute investment-grade retrofits to enhance the value of their properties. BEPC also provides transparency on performance expectations, pricing and a clear guidelines for managing their retrofit project so that the owners meet their goals and finish their projects within their desired timeline.

Since its beginning, BEPC has facilitated projects in more than twenty cities across five continents. The BEPC Model works with a variety of funding models including ESCO or third party, Property Assessed Clean Energy (PACE) programs and self-financing.

Read all about the BEPC Model from BOMA here.

 

Commercial Real Estate News Roundup For June 15, 2015

General

 

Office

 

Industrial

 

Retail

  • Malls Are Adapting, Not Dying, BISNOW, June 9, 2015 – Vacancies flattened in 2014 while at least some shoppers tend to prefer brick and mortar.

 

Multifamily

  • The Top 10 Multi-Family Markets, Commercial Property Executive, June 10, 2015 – Southern states dominate growth in multi-family building’s construction.

Commercial Real Estate News Roundup For June 8, 2015

Multi-family drives market nationally, 65 percent increase in loan origination nationally, industrial is industrial-strength and top multifamily amenities capture the imagination – it’s all here in the Commercial Real Estate News Roundup for June 8, 2015.

General

The commercial real estate industry continues to grow at a very healthy pace, and we have been extremely active in this recovery period. Part of our growth in activity is a result of some growth initiatives we undertook a couple of years ago. We have added a significant number of professionals to our origination staff. – See more at: http://www.rejournals.com/2015/06/05/recovering-cre-market-keeping-commercial-lenders-busy/#sthash.F0SGbWwE.dpuf
The commercial real estate industry continues to grow at a very healthy pace, and we have been extremely active in this recovery period. Part of our growth in activity is a result of some growth initiatives we undertook a couple of years ago. We have added a significant number of professionals to our origination staff. – See more at: http://www.rejournals.com/2015/06/05/recovering-cre-market-keeping-commercial-lenders-busy/#sthash.F0SGbWwE.dpuf
The commercial real estate industry continues to grow at a very healthy pace, and we have been extremely active in this recovery period. Part of our growth in activity is a result of some growth initiatives we undertook a couple of years ago. We have added a significant number of professionals to our origination staff. – See more at: http://www.rejournals.com/2015/06/05/recovering-cre-market-keeping-commercial-lenders-busy/#sthash.F0SGbWwE.dpuf
commercial real estate industry continues to grow at a very healthy pace, and we have been extremely active in this recovery period. Part of our growth in activity is a result of some growth initiatives we undertook a couple of years ago. We have added a significant number of professionals to our origination staff. But some of that in – See more at: http://www.rejournals.com/2015/06/05/recovering-cre-market-keeping-commercial-lenders-busy/#sthash.F0SGbWwE.dpuf
  • How Low Oil Prices Could Benefit CRE GlobeSt.com, June 4,2015 – Low prices will affect various property segments, especially energy dependent locations over the next several years. Not all the news is great.

Office

Industrial

  • The Recession-Proof Sector, Commercial Property Executive, June 3, 2015 – Self-storage real estate investment trusts (REITs) do well in an up economy and a down economy.

Retail

ell and lease back more of its major stores, a strategy that has been employed by other major retailers.Read more at: https://www.bisnow.com/national/news/retail/investors-pressure-macys-to-sell-real-estate-46498?utm_source=CopyShare&utm_medium=Browser

ell and lease back more of its major stores, a strategy that has been employed by other major retailers.Read more at: https://www.bisnow.com/national/news/retail/investors-pressure-macys-to-sell-real-estate-46498?utm_source=CopyShare&utm_medium=Browser
  • “Perfect Storm” Driving Up Retail Assets, GlobeSt.com, June 1, 2015 – An aggressive market driven by retail that is anchored by grocery stores such as Trader Joes’s and Mariano’s is driving prices up and cap rates down per driving prices up and cap rates down whenever well-located product hits the market. (Requires registration).

 

Multifamily

  • City Needs More Multifamily Development, GlobeSt.com, June 3, 2015 – Urban Land Institute’s recent presentation in Los Angeles sites more multifamily development needed with affordable housing and creative use of densely populated spaces.
  • This Firm is Winning Emerging Multifamily Markets, GlobeSt.com, June 3, 2015 – Indoor-outdoor space, rooftop decks, pet-friendly amenities top the list among the elements desirable in apartment development during “Multifamily Momentum” panel at RealShare San Diego.

Latest NAR Commercial Real Estate Outlook

 

NAR’s latest Commercial Real Estate Outlook offers overall projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas is provided by REIS Inc., a source of commercial real estate performance information.

Office Markets

Office vacancy rates are forecast to slightly decline from 15.7 percent in the fourth quarter to 15.6 percent through the fourth quarter of 2015.

The markets with the lowest office vacancy rates in the fourth quarter are Washington, D.C., at 9.3 percent; New York City, 9.6 percent; Little Rock, Ark., 11.6 percent; San Francisco, 12.2 percent; and Seattle, at 12.8 percent.

Office rents are projected to increase 2.4 percent in 2014 and 3.3 percent next year. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is likely to total 35.6 million square feet this year and 48.8 million in 2015.

Industrial Markets 

Industrial vacancy rates are expected to fall from 8.8 percent in the fourth quarter to 8.4 percent in the fourth quarter of 2015.

The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 3.6 percent; Los Angeles, 3.7 percent; Seattle, 5.8 percent; Miami, 6.0; and Palm Beach, Fla., at 6.5 percent.

Annual industrial rents should rise 2.4 percent this year and 2.9 percent in 2015. Net absorption of industrial space nationally is expected to total 110.7 million square feet in 2014 and 102.5 million square feet next year.

Retail Markets

Vacancy rates in the retail market are expected to decline from 9.7 percent currently to 9.5 percent in the fourth quarter of 2015.

Currently, the markets with the lowest retail vacancy rates include San Francisco, at 3.5 percent; Fairfield County, Conn., 3.9 percent; San Jose, Calif., 4.6 percent; Orange County, Calif., 5.2 percent; and Long Island, N.Y., at 5.3 percent.

Average retail rents are forecast to rise 2.0 percent in 2014 and 2.5 percent next year. Net absorption of retail space is likely to total 11.4 million square feet this year and jump to 18.9 million in 2015.

Multifamily Markets

The apartment rental market – multifamily housing – should see vacancy rates slightly increase from 4.0 percent currently to 4.3 percent in the fourth quarter of 2015. Vacancy rates below 5 percent are generally considered a landlord’s market, with demand justifying higher rent.

Areas with the lowest multifamily vacancy rates currently are Orange County, Calif., and Sacramento, Calif., at 2.2 percent; Providence, R.I., and New Haven, Conn., at 2.3 percent; and Hartford, Conn., at 2.5 percent.

Average apartment rents are projected to rise 4.0 this year and 3.9 percent in 2015. Multifamily net absorption is expected to total 216,300 units in 2014 and 171,200 next year.

 

 

 

Commercial Real Estate News Roundup for Sept 17, 2014

Centre ville d'Atlanta, Géorgie, Etats-Unis

An Atlanta transit landlord goes vertical, avoiding the perils of studying the wrong thing, and Chicago’s River North celebrates its fifth decade of renewal.  Its’ all here in the Commercial Real Estate News Roundup for Sept. 17, 2014

General

Survey Finds Commercial Real Estate Executives Overwhelmingly Optimistic About Next Year, REIT.com, Sept. 12, 2014 –  Law firm asks its commercial real estate clients what the coming year will bring, explosion of exuberance results.

Commercial real estate professionals cite pension reform and taxes among Illinois’ most critical issues, REJournals, Sept. 9, 2014 – Even though the commercial real estate industry in Illinois gets pretty favorable treatment from tax set-asides like TIFs, tax cuts named near the top of critical issues in the state.

The Rise of Real Estate Tech, CityLab, Sept. 11, 2014 – Bits and bytes reach dizzying heights in Gotham.

Banks shed bad loans, but Chicago delinquencies highest in U.S., Crain’s Chicago Business, Sept. 8, 2014 – Chicago lags behind in the unwinding of troubled loans.

Office

Tech Turns Chicago Skid Row Into Top Market, BusinessWeek, Sept. 11, 2014 – Chicago’s River North renaissance since the 1970s era of post industrial blight is really something to behold.

Start-up looks to solve start-ups’ real estate problem, Baltimore Sun, Sept. 8, 2014 – Start-up starts up, stalls as it searches for office space, the turns its experience in to a solution.

Amazon files plans to build two more office towers downtown, The Seattle Times, Sept. 11, 2014 – Emerald City orders up two more downtown office towers from Amazon. No word if the free shipping option was used.

The victims of open offices are pushing back, BBC, Sept. 12, 2014 – A backlash is forming against the wall-free notions recently popularized in office layout trends. As it turns out, there’s benefit to focus and concentration.  Who knew?

Industrial

Tulsa’s available industrial space continues to decrease, Tulsa World, Sept. 9, 2014 – The 1963 Gene Pitney hit recording of Burt Bacharach’s “24 Hours From Tulsa” notwithstanding, the trip downtown is seeing a little more commercial traffic.

E-retailing Boosts Industrial Demand, National Real Estate Investor, Sept. 10, 2014 – One more bit of evidence of the seesaw where online retail’s disrupting of traditional retail means heightened warehousing and logistics demand.

Retail

How Gentrification Impacts Retail Development, GlobeSt, Sept. 12, 2014 – When the neighborhood heightens, the same old retail solutions just don’t cut it.

Broker eats up data on New York City’s ever-evolving restaurant, retail scene, Real Estate Weekly, Sept. 15, 2014  – Wherein a young man is rescued from a diplomatic career to become an expert on Manhattan’s retail property scene.

MARTA moves forward to build atop rail stations, Atlanta Business Chronicle, Sept. 15, 2014 – Air rights in Atlanta are the topic as a transit giant decides to go vertical.

Multifamily

Developers warn of multifamily glut in NJ real estate, North Jersey Record, Sept. 12, 2014 – Is New Jersey building too many apartments?  Some developers think so.

Apartments on the rise? Applications for multifamily projects jump 86 percent in Oregon, Portland Business Journal, Sept. 10, 2014 – Oregon’s residential real estate picture has lots of room for multifamily, says recent report.

Even with rising rents, apartment living dominates Omaha housing landscape, Omaha World-Herald, Sept 13, 2014 – Raising the rent in a market like Omaha isn’t the most common local trend among the secondary markets, but it sure is a welcome one for landlords.

Commercial Real Estate News Roundup: June 5, 2014

 

The commercial real estate crowdfunding space gets…crowded, prime office space in Chicago fetches prices high enough that some are using the dreaded “b”-word, and speaking of high, what’s above your retail ceiling?  It’s all here in today’s commercial real estate news roundup.

General

Office

 

Industrial

 

Retail

 

 

 

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All Commercial Real Estate Sectors Up: NAR Commercial Forecast

lawrence-yun
NAR Chief Economist Dr. Lawrence Yun

The NAR Commercial Forecast is out, and the news is good.  With multifamily leading the pack, all sectors of commercial real estate have seen improvement in growth, lending  and starts.  The NAR news release reads:

The outlook for all of the major commercial real estate sectors is slightly improving despite disappointing economic growth during the first quarter of 2014, according to the National Association of Realtors® quarterly commercial real estate forecast.

Lawrence Yun, NAR chief economist, said the sluggish growth experienced in the first quarter is not indicative of the actual health of the economy. “Gross Domestic Product should expand closer to 3 percent for the remainder of the year. The improved lending for commercial loans and continuing job gains we’ve seen this spring bode well for modest progress in commercial real estate leases and purchases of properties.”

However, Yun cautions that with rising long-term interest rates on the horizon, consistent economic growth is imperative to solid commercial real estate investment in the years ahead.

National vacancy rates in the office market are forecast to decline 0.2 percentage point over the coming year, while international trade gains continue to boost use for industrial space, which forecasts a decline of 0.3 point. The outlook for personal income and consumer spending is favorable for the retail market, likely leading to a vacancy decline of 0.2 percent.

“The multifamily sector continues to be the top-performer in commercial real estate with the lowest vacancy rates. However, tight availability – despite new construction – is causing rents to currently rise near 4 percent annually in many markets,” said Yun. “Many renters who are getting squeezed may begin to view homeownership as a more favorable, long-term option.”

NAR reported earlier this month in its annual Commercial Member Profile that despite subpar economic expansion, Realtors® who practice commercial real estate saw an increase in sales transaction volume and medium gross annual income in 2013.

NAR’s latest Commercial Real Estate Outlook1 offers overall projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS Inc., a source of commercial real estate performance information.

Office Markets

Office vacancy rates should decline from an expected 15.8 percent in the second quarter of this year to 15.6 percent in the second quarter of 2015.

Currently, the markets with the lowest office vacancy rates in the second quarter are New York City and Washington, D.C., at 9.4 percent; Little Rock, Ark., 11.5 percent; San Francisco, 12.6 percent; and New Orleans, at 12.8 percent.

Office rents are projected to increase 2.5 percent in 2014 and 3.2 percent next year. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is likely to total 39.7 million square feet this year and 49.8 million in 2015.

Industrial Markets

Industrial vacancy rates are anticipated to fall from 9.0 percent in the second quarter to 8.7 percent in the second quarter of 2015.

The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 3.5 percent; Los Angeles, 3.9 percent; Miami and Seattle, 6.0 percent, and Palm Beach, Fla., at 6.5 percent.

Annual industrial rents should rise 2.4 percent this year and 2.6 percent in 2015. Net absorption of industrial space nationally is seen at 107.8 million square feet in 2014 and 107.1 million next year.

Retail Markets

Vacancy rates in the retail market are expected to decline from 10.0 percent currently to 9.8 percent in the second quarter of 2015.

Presently, markets with the lowest retail vacancy rates include San Francisco, at 3.2 percent; Fairfield County, Conn., 3.8 percent; and San Jose, Calif., at 4.7 percent. Northern New Jersey; Long Island, N.Y.; and Orange County, Calif., all have a vacancy rate of 5.3 percent.

Average retail rents are forecast to rise 2.0 percent in 2014 and 2.3 percent next year. Net absorption of retail space is likely to total 11.5 million square feet this year and 19.6 million in 2015.

Multifamily Markets

The apartment rental market – multifamily housing – should see vacancy rates edge up from 4.0 percent in the second quarter to 4.1 percent in the second quarter of 2015, with added supply helping to meet growing demand. Vacancy rates below 5 percent are generally considered a landlord’s market, with demand justifying higher rent.

Areas with the lowest multifamily vacancy rates currently are New Haven, Conn., at 2.3 percent; Ventura County, Calif., 2.4 percent; and New York City; San Diego; Hartford, Conn.; Oakland-East Bay, Calif., and San Diego, at 2.5 percent each.

Average apartment rents are projected to rise 4.0 this year and in 2015. Multifamily net absorption is expected to total 221,400 units in 2014 and 173,100 next year.

The Commercial Real Estate Outlook is published by the NAR Research Division. NAR’s Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR.

The NAR commercial community includes commercial members; commercial real estate boards; commercial committees, subcommittees and forums; and the NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, Realtors® Land Institute, Society of Industrial and Office Realtors®, and Counselors of Real Estate.

Approximately 70,000 NAR and institute affiliate members specialize in commercial brokerage and related services, and an additional 283,000 members offer commercial real estate services as a secondary business.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1million members involved in all aspects of the residential and commercial real estate industries.

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Crowdfunder Vets Partners, Participates In $3.7M Shopping Center Deal

I’ve written here before about the phenomenon of crowdfunding in the commercial real estate market. A fast-growing new source of investment capital enabled by a last year’s relaxation of SEC regulations, crowdfunding in commercial property might conjure up images of a “wild west”-style marketplace, where dubious solicitations sent to any Tom, Dick or Harriet hide giant risks, buried in promises of glittering payoffs announced over a bullhorn to whoever shows up to participate.

As it turns out, that would be the wrong image, at least in one case. Reaching out to the crowd for capital can go hand in hand with prudence, caution and expertise, as exemplified by a recent equity deal financing a 62,000 sq. ft. shopping center outside of Kansas City.

Wait, “crowdfunding”?

First a quick video describing crowdfunding in general terms.

Not Just Banging A Drum, Vetting A Partner

One implication of crowdfunding is a new kind of direct relationship between investor and solicitor. No longer bound by regulation governing the qualifications of investors, crowdfunding solicitors and investors now face, it might seem, a lower bar of caution and diligence than before.

But that isn’t the way the above shopping center deal went.  Instead, the crowdfunding website that raised a portion of the capital for the South Greystone Center equity deal, Realty Mogul, brought not only the crowd and its wallets to the table, it brought its own business acumen and diligence.

In Emily Behlman’s piece at Wichita Business Journal, we find diligence was baked into the shopping center deal through vetting and partnering.

A group of 23 investors came together on the real estate crowdfunding website Realty Mogul, which got started in late 2012, to invest in the property. The shopping center was acquired by Block Real Estate Services of Kansas City for just under $4 million, with Realty Mogul providing a portion of the equity capital.

wrote earlier this month about crowdfunding’s potential as a source of capital for entrepreneurs, but at the time, I didn’t consider the financing mechanism as a way to fund real estate deals.

I talked today with Realty Mogul co-founder and CEO Jilliene Helman about the concept.

Her site and a couple others like it allow accredited investors (people with $1 million in net worth or $200,000 in income generally qualify) to join together and invest in real estate deals through loans or equity. The company says its online platform makes investment opportunities more accessible, and the minimum investment, $5,000 on some deals, is much lower than in many traditional real estate investment scenarios.

The company vets partner businesses and properties before making deals available to investors.

In the case of Greystone Shopping Center, the partner business was Block Real Estate. Helman says Realty Mogul ran background checks on all Block principals and studied the company’s track record, among other things. Then, Realty Mogul staff studied the property itself, looking for things like diversification — the center has 18 tenants so it’s not reliant on one — and neighborhood — Lenexa is relatively affluent and growing.

Realty Mogul has invested in 55 properties so far, and it’s done about $12 million in transactions.

An Evolution In Crowdfunding

When I compare the above details to other high-traffic crowdfunding sites such as Kickstarter, what sticks out in this case is that Realty Mogul’s practice here outstrips other crowdfunding models in terms of diligence.

When, for example, an artist or software developer goes to crowdfunding giant Kickstarter to fund a project, there is no similar vetting of the project nor the solicitor’s ability to deliver a completed project. Kickstarter currently stays mum on that issue, and hands all the risk of donation to the donor.

By stepping forward and addressing, rather than ignoring, the risks of deregulated solicitation, Realty Mogul may be showing the way forward for this new commercial real estate capital source to mature — fast.

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Commercial Real Estate News Roundup: January 9, 2014

A building under construction in downtown San ...

General



Office
Industrial
Retail

Multifamily

Land

 

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REALTORS® Conference And Expo 2013: Commercial Property Auctions

Jon Hjelm, ALC

Once again the 2013 REALTORS® Conference and Expo is right around the corner.  November 8-11 in San Francisco’s Moscone Center is where this year’s commercial real estate practice program is running to keep you up to date on the sector’s many trends, tools and tactics for success.

This year includes a session on auctions featuring a very unique pair of perspectives.  It can pay off to go beyond the usual listings and put in the work to find jaw-dropping bargains on all kinds of commercial property in all its sectors – land, office, retail, industrial, multifamily and specialty.  All find themselves on the auction block, and most are priced to move.  But finding the information about auctions in the commercial sectors is comparatively more difficult than in residential real estate.  Unique processes, customs and law apply, and all the  complicating factors that come with commercial property transactions aren’t any less prevalent in the auction arena.

Quentin Killian

Tapped to talk about this at the Expo are Jon Hjelm , ALC and Quentin Kilian in their talk “Real Estate Auctions: The Real Deal”.

Real Estate Auctions: The Real Deal

11/09/2013   |  09:00 AM – 10:00 AM
Location: Moscone Center, Rom 305

Property packaging and target marketing are key to both sides of the auction deal table, and Jon and Quentin have been there.  Don’t miss this unique and global perspective (Jon’s firm is based in Iowa and Quentin’s in Australia) at the Expo!

 

Register Now for the Expo

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