Browse Tag: nar commmercial

Howard Tullman Of 1871 Talks Office Space, Workforce Mobility

howard-tullman

At RE/Journal CRE Forecast Conference this week at Chicago’s Hyatt Regency, the proceedings kicked off with a one-on-one with Howard Tullman, CEO of 1871, the non-profit startup hub located in Chicago’s Merchandise Mart.

1871’s reputation as a hotbed of technology startup innovation companies is for real, and Howard’s philosophies are apparent in all details down to the office layout, which became a topic of conversation naturally enough.

1871 currently sports 325 companies with nine unique incubators and accelerators that use markedly different floor plans reflecting in part key commonalities to the tenant companies, whose business lines exceed the boundaries of just high technology.

Visibility — particularly visibility of project leadership by the newest tenants plays a key role in 1871’s office layout.

Newer arrivals begin by climbing a kind of ladder, settling into a class of workspace that offers the least ameneties, but is still in full view of the nicer digs nearby.  The trick is that the nicer space is where tenants whose businesses pass success milestones are moved, producing a kind of conveyor belt of visible success that drives the “Leadership [means] that people need role models and so we live it every day.  We figure if they’re watching [mentor and more advanced businesses] and seeing how we are executing and what our responsibilities are, that’s the best way we can model the commitment that we expect from them.”

Workforce mobility

“I think where we’re headed is a new kind of community. When we talk to our workforce [aged 25 to 55] this idea of proximity [to the workplace] is really significant.  They don’t want to own a car — that was a popular talk at the auto show recently […]  the idea is that the workers want to be close to where they work.”

A return to focus

Tullman went on in the session to describe a real trend in office layout and work patterns toward focus and away from “openness”.

“Openness I think we’re going to see the next few years is going to go away. Kids today think they can multi-task, but multi-tasking means you’re doing a lot of things poorly. So what we’re discovering is […] they go away so they can focus and get something done. This idea of being in a n open area with constant disruption is going to change and it’s going to change pretty soon.”

Wall unit makers, take note.

 

Lost Chicago: Retail, Eateries And Industrial

kohls

There’s something nationally emblematic about the visual history of Chicago’s commercial real estate. Browsing a photo collection spanning the decades you can find a midwestern sensibility mixed with a gritty urban down-to-business look that speaks to a certain American outlook on business and enterprise. From the pre-WWII dawn of neon signage to elegant mid-century futurism to 1970s earth tones and softer typefaces, the look of American commerce in every era is about reaching and accommodating people.  Its’ a fascinating journey, and Craig’s Lost Chicago is ready to take you on a ride through the decades of Chicagoland’s restaurants, retail and industrial property history.

Sears CEO Downbeat On Its Property Portfolio

In a recent CNBC video, Sears CEO Eddie Lambert issues a shocking, yet apt comparison between Sears retail properties and those imposing telephone company central office buildings that house the landline telephone network. Both are windowless bunkers, and both are temples of the way things used to be instead of the shape of things to come. This clip captured some conversation following on this notable utterance from the bridge of a troubled retail ship.

Because I like a challenge, here are my thoughts for rescuing Sears and bringing crowds back into the stores. Two words: classic showcases. Restoration Hardware, the chain mentioned by Jim Cramer in the clip, employs throwback and vintage product design, but the irony with Sears is that what’s cool now at Restoration Hardware used to be Sears’ bread and butter inventory in past decades. If I was the turnaround consultant of record for Sears, I’d advise them to dig into catalogs past and reintroduce midcentury-modern merchandise styles using a series of in-store events across departments to create buzz.

Of course, not every vintage product works. They should skip the vintage landline telephones.

Commercial Real Estate News Roundup For Nov. 24, 2014

Map of Oregon highlighting Washington County
Map of Oregon highlighting Washington County (Photo credit: Wikipedia)

Multifamily values, investors reaching for the solidity of commercial real estate, and greater Portlandia (Washington County) embraces a new industrial development. It’s all here in the Commercial Real Estate News Roundup for November 24, 2014

General

Office

Industrial

Retail

Multifamily

 

 

Avoiding The Con In Construction: Kia Ricci At NAR Expo 2014

Developers and commercial property managers and owners faced with improvement and expansion projects rely upon general contractors to take on the project. But how do you separate the heroes from the zeroes in the construction arena? Ask Kia Ricci.

Ricci is a licensed general contractor, consultant and author of Avoiding The Con In Construction.  She’s also an engaging speaker with a mastery of the material and many years of hard-won experience. At Ricci’s address to NAR Expo 2014, she walked attendees through the ins and outs of identifying bad actors in construction contracting and subcontracting, from spotting problems in insurance, exploring state-registered complaints about work, to a catalog of scams and ripoffs in the construction trade.

Central Shops

Florida-based Ricci started her career as a Disney World employee in its Central Shops, Disney’s in-house fabrication division responsible for modeling, structuring and building props and structures for the Florida theme park as well as California’s.  She spoke of falling in love with construction when working on the Disney Swan and Dolphin resorts, with their 60-foot art adornments. Her making the leap from fantasy-driven projects to more ground-level undertakings was informed by years of working alongside craftspeople in all construction and structural disciplines.

Dotting I’s, Crossing T’s

Of construction contracting, Ricci said “Before any job begins, 50% of it has been done – in contracting, the business of construction.  If you don’t get this right, you’e going to probably have problems as construction gets underway.”  She listed the various aspects of contracting: project feasibility, scope of work, contractor qualifications, proposals, contracts, estimates, schedules, permits, inspections, contract obtaining and liens.

The talk focused mainly on the two critical areas of licensing and insurance, with Ricci exploring signs of insurance fraud and how to obtain lists of complaints against licensed contractors.

“[License complaints listings] are a gold mine,” said Ricci, while showing a screenshot of Florida’s website dedicated to publishing the complaints against contractors. “If you click in and find out that they have problems with their government licensing agency, you want to know.”  She was also careful to point out that not every complaint represents legal action taken – meaning contractor research on state complaint lists produces a different picture than a search in court records for the same contractor’s appearances on paperwork such as lawsuits.

To obtain a full recording of Kia Ricci’s presentation “Avoiding The Con In Construction” head over to PlaybackNAR.

Understanding The Top Ten Issues Affecting Real Estate

Photo of David Lynn addressing NAR Expo 2014

Bringing an objective, research-oriented approach to issues in commercial and residential real estate is Counselors Of Real Estate (CRE), a group whose advisors deliver unbiased and trusted advice to clients and employers. Sporting a CRE designation before the NAR Expo 2014 this morning was David Lynn, CEO of Everest High Income Property who sought to sum up the entire coming year in a list of ten issues affecting the real estate marketplace for commercial as well as residential.

Issue #10: Agriculture

Lynn noted that even though agriculture historically goes through cyclical changes and volatile demand, the past two decades in farming have by contrast produced little in the way of complaint from the sector.  Efficiencies in farming equipment and processes have steadily goosed output while rising world populations have and will continue to drive demand from the world’s #1 food producer, the United States.  One major impact Lynn sees coming in tertiary and smaller real estate markets is rising demand for location in these places.  This idea made me think of yesterday’s session with Craig Lindvahl and his efforts to educate small-town youth in the opportunity present in their own back yard.  There’s a lot of synergy between these two outlooks.

Issue #9: Manufacturing

The US decline in manufacturing is over, and domestic output is on the rise, foretelling a robust market for industrial property. That said, Lynn pointed out that manufacturing in the early 21st century, similar to farming, is greatly automated and geared toward customization, which will tend to not drive job growth.

Issue #8: Housing

The housing market bottom came in 2012 and Lynn sees growth in housing commensurate with that event.

Issue #7: Capital Markets

A much-feared wave of maturity of commercial mortgage-backed securities has come and gone, said Lynn, resulting in a non-event.  The majority of CMBS maturities simply extended their terms “kicking the can down the road” and cleared the way through the market fear to allow a resurgence in CMBS financing.  Lynn sees $360 billion in CMBS financing maturing by 2017 and touted improved underwriting of the instruments.

Issue #6: Water

There is a shortage of fresh water in the world and millions die each year due to lack of access to clean water. This reality along with that of climate change adds up, according to Lynn, to a decline in suburban development.

Issue #5: Globalization

With more and more of US GDP tied up with imports and global transactions, a development Lynn sees as by and large positive, real estate values in cities best connected to global flows of goods are in the main expected to rise.  Additionally, the US has become the world’s leading exporter of oil and natural gas, which speaks to rising land values in producing areas.

Issue #4: Health Care

The Affordable Care Act served to add 40 million people to the health care system, which in turn has produced a wider range of health care delivery formats and locations convenient to general populations.  Lynn sees this trend, along with the prolonged life spans of the US population as a driver for retail and office property.

Issue #3: Millennials

The youngest generation of adults prefers urban living and mass transit, and Lynn pointed out this age cohort numbers the same size as baby boomers. While it’s not clear if the behavioral trends of millennials will hold out, Lynn sees improved values for urban space and declining demand for housing in suburban enclaves.

Issue #2:  Jobs

The great recession cost millions and millions of jobs, recovering to 2008 levels only this year. But persistent trends in underemployment make the unofficial unemployment rate closer to 9% according to Lynn. He spelled out that a decline in office space per employee has halved on average to 150 sq. ft. per worker.  Retail and office property values aligning with millennial lifestyle preferences for more collaborative and nontraditional working arrangements will tend to produce downward pressure on demand.

Issue #1: Energy

Lynn referenced a sea change in energy markets over the past five years.  Driven by fracking technology, the “whole equation has been changed” were the US produces the cheapest energy of any country in the world.  California, Dakotas, Montana, Pennsylvania and other energy-producing areas have added up to rising values for commercial and residential real estate close by, making former “flyover” areas far more generally desirable.

 

 

REachⓇ Technology Accelerator: SendHub

Photo of slide at REach technology Accelerator

Business phone systems are expensive, physical and made to support one thing that fewer and fewer professionals rely upon every day: a fixed desk. The image of a real estate professional shackled to a cubicle is increasingly outdated as mobile and internet technology allows users ever-increasing power and range. It’s only natural that commercial real estate professionals would take advantage of any tools that allow them to meet clients, tenants, landlords and managers at key locations to make the face to face arrangements, showings and negotiations that all portfolios demand.

That said, smartphones alone don’t have the features that office phone systems do: auto-attendant, call transfer, and hunt, just to name a few. Agents and brokers work on teams, after all, and too often smart phones alone don’t support teams as well as fixed business phone systems do.

Send In SendHub

In the 2014 class of REachⓇ companies who show best in breed technology solutions for the real estate industry, one company stood out as an ideal solution in this problem space: SendHub.  It’s a virtual business phone system that requires no hardware, can be configured in mere minutes,  and brings business phone system features to the Android and iPhone in your pocket.

Addressing the NAR Expo 2014 with this offering was SendHub co-founder John Fallone .

“Traditional phone systems don’t work in real estate,” began Fallone.  “94% of agents end up using their mobile phone.  65% of calls to agents go to voice mail and 70% of clients are unhappy with the way their agent communicates with them. ”

The reason: traditional phone systems are built for a desk and don’t give the tools and features that agents need to do business.

“We bring a business phone to your cellphone,” explained Fallone.  SendHub works as an app installed onto your smartphone. Fallone illustrated a customer story where an agent had three phone lines that go to one phone: his personal line, his business line and a marketing line.

“When a call comes in on his business line, his SendHub app pops up so he knows he has a business call coming in.  But on his third line, he uses it to create text message marketing campaigns that he can manage straight from his phone or from the computer.”  In this way, one phone serves three purposes elegantly.

SendHub also sports collaboration features that keep track of constantly flowing information – updates to contracts, floor plans and the like, for example.  File transfer is supported, as is threading of conversations/calls so that who got what when is clearly viewable on the phone itself or on a web browser.  The features of SendHub are too many to get into here, but a look at the company website will be a rewarding exercise.

Finally!

In another life, I was what they call a “phone phreak” — I built, repaired and installed telephone systems for small business. Knowing what I know about those hardware products and about voice over internet (VOIP) applications, I have for years wondered when someone would develop a VOIP application that brought PBX (business phone) services to smart phones.  After my visit to NAR Expo 2014, I’m not wondering any longer: SendHub is here.

Economic Issues In Commercial Real Estate with Lawrence Yun

Photo of slide from Lawrence Yun's presentation

NAR Chief Economist Lawrence Yun addressed the NAR Expo 2014 with a talk on the specific of commercial real estate. Before a crowd of attendees and international translators sending the talk around the world, Lawrence spelled out his projections for 2015 and a bit beyond in areas of indication for the commercial property market.

2.5 Million Jobs Predicted

With unemployment dipping below 6%, Yun did announce that “jobs are coming around,” which would be news to most of the US electorate, having handed a shellacking to in-power Democrats over the matter of the economy earlier in the week. Nonetheless, on the matter of job growth, Yun predicted 2.5 million new jobs to appear in 2015.

“More jobs means more demand for office spaces, more demand for warehouse spaces, more demand for  rental housing and retail spaces.  With the economy expanding, commercial activity should be rising.”

Household Net Worth

The chart Dr. Yun put up showing record high household net worth was explained as being sourced “from the stock market.” Because “there’s no other place to put your money,” he explained, comparing poor or zero returns as compared to bank deposits or other places to stash cash. Driving the stock market according to Yun is the past six years of zero interest rate policy at the Federal Reserve, which led to another prediction for 2015 that wasn’t as rosy.

Raising Fed Funds Rates In 2015?  Spring, Says Yun

“The federal Reserve has indicated that they will be raising the [interest] rate, and this is a big deal for commercial practitioners.  Why?   Cap rates are dependent upon interest rates and if the Federal Reserve raises the Fed funds rate, the only wa to get a higher cap rate is to raise the rents or the price of the property needs to come down.”

Property owners should be “not overly concerned” said Yun, but should be monitoring what will happen to prices [as] a chain reaction to rising interest rates.”

To obtain a full recording of Dr. Yun’s session at NAR Expo 2014, click here to PlaybackNAR.

Craig Lindvahl At The Commercial Caffeinated Breakfast

Photo of author and trainer Craig Lindvahl

(Above: Author and trainer Craig Lindvahl)

One of the more storied traditions at the NAR Expo is the Commercial Caffeinated Breakfast, a bright and early gathering of NAR Commercial members to meet, network and learn while the coffee and carbs flow freely. This morning was no exception as commercial folks from around the country closed in on the Rivergate Room at the Morial Convention Center to hear the good news.

The preliminaries included a shout-out to Jean Maday, ‎NAR’s Director of Commercial Real Estate Development & Services on her recent RCE certification. Always a fixture at the Breakfast along with NAR Commercial VP Jan HopeJean took a well-deserved bow for this key milestone in her service to NAR and its commercial membership.

Craig Lindvahl: Things You Wish You Knew Yesterday

Breakfast speaker Craig Lindvahl is an educator, author, filmmaker and passionate advocate for the development of local communities. In his talk to the commercial membership, he laid out the classic problem of talent drain from small towns as younger people (we’ll call them millennials here) look around their communities and conclude that no opportunity for them exists, that any chance to grow lies elsewhere.

In Lindvahl’s view, this isn’t because no local opportunity exists. It’s because it’s hidden to kids.

“Kids aren’t stupid.  They’re ignorant,” quipped Lindvahl to a laugh in the room.  Clarifying, he pointed out that being ignorant is just not knowing, where being stupid is being ignorant on purpose.  And kids, he said, tend to be ignorant about business and economic development going on locally, and about the people that work and build these businesses.

This is to be expected, he said, because schools don’t teach about local business at all, let alone provide any hands-on experience in those businesses that leads to real understanding about the responsibilities that go with entrepreneurship. So Lindvahl stepped up to do just that.  He created CEO, for Creating Entrepreneurial Opportunities, a program of the Midland Institute for Entrepreneurship, at which Craig serves as Executive Director.

In a fascinating run-down of the CEO program, Lindvahl described the process of working with high school juniors and seniors on and in real businesses. Meeting for 90 minutes each day on the site of a real operating business, kids do real work, and make real connections  with real business mentors.  They develop their own business plans — each write two to three plans a year, says Lindvahl — and all for one reason:

“[The kids] come to see their local town as a place of opportunity, not a dead end.”

At the close of the session, NAR Commercial handed out free copies of Craig’s book “Things You Wish You Knew Yesterday” and left the assembled with a lot to think about concerning the role of education, opportunity and business in home-town settings.

(Photo: IndianaEconomicDigest.net)

REachⓇ Technology Accelerator Session At NAR Expo

Photo of Constance Freeman of Second Century Ventures

When Constance Freeman of NAR’s strategic investment arm Second Century Ventures convened this morning’s session showcasing the hottest technology companies in the real estate sector, she had a game plan.  First was to talk about the REachⓇ program, and next to talk about innovation more generally. The panel, made up of major players in the market space, was glad to oblige, bringing unique perspectives on the present and future of technology in the property business. They were:

Because technology is transforming the business of real estate, the goal of REach and Second Century Ventures is to ensure that REALTORSⓇ stay in the center of the transaction. And each of the showcased companies hit that mark with a variety of offerings and tools that worked to make the practice of real estate more convenient and give professionals greater reach.

The Commercial Entries: Desktime and FundWell

While a large grouping of real estate technologies were shown off (and will be covered in later posts here at The Source,) here are the two enterprises that squarely face the commercial market space: Desktime and FundWell.

Desktime

Desktime is another in a series of “matchmaker” plays in the technology space where a marketplace is created by finding sellers and buyers and connecting them with a web application.  In the case of Desktime, the buyers and sellers are the small leads in the commercial real estate space – 500 square feet or smaller.

Desktime cofounder and partner Sam Rosen presented the business and its plan, targeting the 30 million (very) small businesses and 40 million freelancers who he shaped his company to serve — small operators, typically computer-based, who are in need of modest desk space.  The listings for these aren’t found in CoStar or Loopnet – while the inventory is huge, the lead is too small to monetize and manage.

Desktime works by turning empty space into cash as a commercial coworking space – even residential.  This idea grew from Sam’s own background building a digital agency in his own Chicago home.  When the time came to expand, Sam created unused short-term space, which effectively left that space off the market due to its being too small to handle.  Desktime makes that match and allows formal commercial brokers to stay close to leads that are too small to handle otherwise.

Check out Desktime at DesktimeApp.com

Watch for more coverage of FundWell here at the Source!