Browse Tag: nar expo 2014

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.

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.