Browse Tag: commercialsearch

Trends and Predictions for Industrial Real Estate from NAIOP I.CON Conference

NAIOP I.CON logo

Last week, more than 600 attendees attended the NAIOP I.CON Conference to learn more about the trends that will be impacting industrial real estate.  Topics included: the impact on possible changes in trade agreements, the development of supply chain management allowing for nearly instant delivery of products and the impact of cannabis legalization in many states. Key highlights from the panel discussions include:

  • There is a major focus on the last mile, a term used in supply chain management to describe delivering products to your home.
  • Last mile is giving new life to infill / older buildings.
  • Location trumps all for last mile buildings, and occupiers will pay premium rents for these buildings.
  • Last mile buildings are for moving product, not storing product, so many of the traditional amenities like 30-foot clear height are not important.
  • City leadership must recognize that last mile re-use is valuable to constituents and be welcoming to these uses.  
  • Last mile facilities are providing new life for 50,000 to 100,000 square foot older industrial buildings or vacant retail spaces.
  • Of Amazon’s 100 million square feet of logistics space, only 3 million is focused on last mile.
  • Developers like ProLogis are getting creative and developing Georgetown Crossroads, a 3 story, 414,000 s.f. logistics building on 9 acres in Seattle.
  • Multistory logistics facilities are also being discussed in gateway markets like San Francisco, Los Angeles, Northern New Jersey and Miami.  
  • Japan and Singapore utilize multistory distribution centers, even up to 11 stories, but use smaller trucks.
  • In California, marijuana operations and dispensaries will challenge last mile delivery for space and may be preferred by cities due to its tax generating capacity. 
  • Warehouses can be retrofitted to grow marijuana, but the capital expenditure is more than 5 times the cost of a green house.
  • The Gulf Coast markets will be the biggest beneficiary of the recently completed Panama Canal expansion. 

 

Telecommuting Turnaround: IBM Changes Its Tune On Remote Working

Home office

Telecommuting or remote working enabled by technology and online access has long been a commercial real estate market worry. The phenomenon of employees skipping on commutes and avoiding distant offices has raised fears of a softening national demand of office space since at least 1996. As reported by Global Workplace Analytics, regular remote working at home among the non-self-employed population has grown by 103% since 2005. From 2013 to 2014, the population of all employees grew 1.9% while the population of telecommuters grew 5.6%,  putting the growth in telecommuting employees at more than double the rate of all employees.

Anecdotally, the telecommuting trend has contributed to disruption of office space demand patterns over the years, depending on locality. Also, we’ve covered the telecommuting trend here at CRE Blog before.  While it is tough to put the effect of remote working into terms of a market’s absorption rate or development pipeline, the technology industry’s line about remote working has been more or less unchanging, touting reducing real estate costs and overhead as a boon to tenants and space consumers.

But now, one of remote working’s chief technological enablers has decided it won’t be “eating its own dog food” after all. IBM has taken the dimmest possible view on telecommuting for its own business, proclaiming that its employees must return to their offices or find work elsewhere. As reported by Ars Technica, the tech giant has nearly 40% of its workforce under remote work policy, and that policy is coming to a close.  This week is the deadline for those employees to return to their cubicles with Big Blue, or, alternatively, to leave the employ of the upstate NY-headquartered company.

Clients whose business operations include significant telecommuting might well take note about the distinct split in IBM’s very recent remote working advocacy vs. its practice. Will that mean a reclaiming of unused rented space, or will it mean a hunt for new digs?  Only great relationships with your clients will give you the business intelligence to know where the remote working saga is headed.

(Photo credit: Wikipedia)

CommercialSearch Integrates Realtors Property Resource

Logos of CommercialSearch and RPR

Transformational providers of commercial real estate data don’t often find ways to interoperate, but when they do, the user benefits pile up fast.  Starting tomorrow, a notable new integration arrives: REALTOR® users of CommercialSearch’s national marketplace in commercial real estate data will have one-click access to powerful new features driven by RPR Commercial, including tax information, transaction history, and more.  From RPR:

As of March 16, 2017, REALTORS® with CommercialSearch who hold RPR accounts can easily jump from a listing within CommercialSearch into RPR’s extensive commercial property and trade area data, investment analysis tools, business intel, and comprehensive reports.

“RPR’s mission is to serve the needs of our 1.2 million REALTORS®,” said Emily Line, RPR vice president of commercial services. “Through partnerships like the RPR / CommercialSearch integration, we are able to expand our service offerings and to ultimately save our members time and money previously spent on multiple applications and subscriptions.”

The integration offers REALTORS® on CommercialSearch one-click access to RPR data found on both the website and RPR Mobile™. Subscribers will find property and owner facts, mortgage and tax info, transaction history, maps and photos. Visual heat maps can be drawn down to the census block group level with 25+ variables including traffic counts and more than 20 million business points of interest. And RPR Commercial reports––which can be sent by way of email or text–– reveal data on consumer segmentation, population, age, marital status, economic conditions, and education comparisons, among other datasets.

David O’Rell, managing director of CommercialSearch, believes the partnership furthers Xceligent’s commitment to providing an open technology platform that combines researched content with leading workflow tools.

“We are excited to partner with Realtors Property Resource®,” said David. “We will now be able to provide RPR account holders an exclusive opportunity to analyze local dynamics surrounding properties actively listed for lease or sale in the CommercialSearch national marketplace.“

About RPR® Commercial

Realtors Property Resource® (RPR®) is a wholly owned subsidiary of the NATIONAL ASSOCIATION OF REALTORS®. RPR Commercial provides REALTORS® with persuasive, decision-making data and reports for all types of clients. From identifying site selection using data sets such as public records, traffic counts, business points of interest, demographic and psychographic insights, and consumer spending data, to presenting reports that accurately depict current market activity as well as future projections, this valuable members-only benefit truly helps to validate a practitioner’s expertise.

About Xceligent™

Xceligent™ is a leading provider of verified commercial real estate information across the United States. Xceligent’s professional research team pro-actively collects: a comprehensive inventory of commercial properties, buildings available for lease and sale, tenant information, sales comparables, historical trends on lease rates and building occupancy, market analytics, and demographics. This information assists real estate professionals, appraisers, owners, investors, and developers that make strategic decisions to lease, sell, and develop commercial properties. Xceligent™, backed by dmg information, has launched an aggressive national expansion that will provide researched information in the 100 largest United States markets. Visit Xceligent.

Stadium Finance: Wins On The Field Can Mean Wins For Investors

Panorama of Dodger Stadium in Los Angeles (tak...
Panorama of Dodger Stadium in Los Angeles  (Photo credit: Wikipedia)

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.

That borrowing – typically performed by issuing municipal bonds – is rated by bond ratings agencies, allowing comparisons to be made in a bond market matching lenders and borrowers.  But which sport throws off the most data to use for investment comparisons?  It’s baseball.

Baseball Is The Handiest Test Case

Of the major sports, only Major League Baseball puts the “business fitness” argument behind stadium development to its greatest utilization test. Unlike football, basketball or hockey, (major league) baseball hosts a whopping 81 home games a season. From April to September, baseball stadium utilization when the team is in town is a nearly-every-day-of-the-week affair, whereas other sports make their home appearances only a handful of days of a season-week – or only one day, as in football.

It’s in part because of this high utilization that the finances of stadium development can be deeply affected by the performance of the team on the field.  In an amazing post at Commercial Observer by Terrence Cullen, exactly how on-field performance can affect financial performance underwriting a development is shown by a long look at the New York Mets and Citi Field. From “How Batting Averages Can Affect A Stadium’s Bond Rating”:

“There are two ways to argue for a new stadium,” he said. “One is, ‘Our team sucks, we need a new stadium so we can be good again.’ Which usually doesn’t work very well, because if your team sucks, nobody cares. Or, ‘Our team is great. If you don’t give us a new stadium, you’ll never see this again.’”

The latter option, he added, is often the better route. “This is very, very common,” he said. “If you’re trying to get a new stadium you compete that one year.”

[…]

Gerstner pointed to the instance in which the San Diego Padres leveraged its All-Star roster to secure financing in the late-1990s to build what is today Petco Park. The Padres boosted their roster for the 1998 season, making it all the way to the World Series that October (the Yankees swept the team). The following month, voters went to the polls to determine whether the team could build the stadium. The city invested $300 million into the project, while the Padres invested $115 million, according to news organization Voice of San Diego.  

Following the approval, however, the Padres traded away key players and lost others to free agency, Gerstner noted. The team finished fourth in its division with a 74-88 record.

Read the entire post at Commercial Observer here. And don’t forget to Play Ball!

 

Downtown Cleveland’s Key Center Sells For $268M: What’s The Market Like?

Key Tower in downtown Cleveland, Ohio
Key Tower in downtown Cleveland, Ohio (Photo credit: Wikipedia)

The cornerstone of Cleveland’s skyline has sold this week for $268M to a local owner.  What does it mean for the local office market?

The Key Center, a 1.3M SF office tower sporting 57 stories and Class A status has been sold by national office REIT Columbia Property Trust to a Cleveland-based multifamily property and development firm. Built in 1991, the Key Center anchors a deal that includes a nearly 1,000-space parking garage as well as a ten-story bank building.

The anchor tenant in the tower is a regional banking power. KeyCorp, a holding company that owns the 18th largest bank in the US, lends a significant chunk to the tower’s 95% occupancy at sale time. The new owner, Ohio’s Millennia Companies – a group of real estate operations and development firms – intends to move operations into the tower, further bolstering the Cleveland CBD strong net absorption numbers, reported in Xceligent’s 4Q2016  Cleveland Market Report as the city’s leading absorption submarket with over 75KSF absorbed.

A Peek Around The Neighborhood

The deal takes place against Cleveland’s backdrop of declining office vacancy and modest levels of new construction. From Xceligent’s most recent Market Report:

  • During the 4Q 2016 the Cleveland office market has absorbed 104,105 square feet (sf) of space.
  • At 12.0% the regional vacancy rate has continued to decline, showing improvements from the 4Q 2015 at 13.1%.
  • The Cleveland CBD submarket observed the greatest positive net absorption totaling 75,222 sf during the 4Q 2016.
  • The Cleveland Office development pipeline had 67,000 sf under construction during the fourth quarter

Cleveland, In Fact, Rocks

If nothing else, the Key Center deal is a strong show of local commercial confidence in the face of a city’s commercial history that has suffered from capital flight, at times resulting in “rust belt” perception. It’s the duty of CRE professionals to look past such cliches, however. Industry players who might shadow the principals in this deal — such as financial support services or real estate service companies who have or seek profiles in the Midwest — can indulge their interest in low-barrier office markets such as Cleveland’s with a quick and easy look at Cleveland CBD’s comparable and nearby office properties.  To view a live query at CommercialSearch of office properties listed for lease or sale in the shadow of the Key Center,  click here.

Get Xceligent’s 4Q Cleveland Office Market Report

To get your own copy of Xceligent’s latest (4Q2016) Market Report on the Cleveland Office Market, click here to drop us a note today.