Commercial Real Estate Finance

Posts Tagged ‘tenants’

This ranking is drawn from Business Insider’s Top 17 “Coolest” Co-Working Spaces.  Even though co-working and other business innovations have been discussed in the real estate community for some time now, it’s worth looking at how these unusual spaces (or collectives) can fit into the strategy of office real estate investors and operators. Here are my picks for Top 10 Co-Working Spaces in the U.S.: 

• Ace Hotel
• Citizen Space
• CoLab
• The Coop
• Green Spaces
• Indy Hall
• Jellyfish Cartel
• Link Coworking
•  Parisoma
• Officio

I found the Business Insider article through The Tenant Advisor, an excellent blog focused on workplace trends and office real estate. I’ve been quite interested in this subject as well, and have dedicated a number of posts to the open-space office layout that’s fundamental to most co-working setups. Let’s pause for a brief definition of Co-working, courtesy of you-know-who:

Coworking is a style of work that involves a shared working environment, often an office, and independent activity. Unlike in a typical office environment, those coworking are usually not employed by the same organization. Typically it is attractive to work-at-home professionals, independent contractors, or people who travel frequently who end up working in relative isolation Read the rest of this entry »

Looks like the results for our newest survey can be summed up with “all of the above.” Personally, I prefer the air hockey tables…

See our previous polls here.

Greetings readers, and welcome back to Cost Cutting in 2011.  Today I will focus on different ways to lower your property insurance premiums while highlighting different opportunities and pitfalls when purchasing a policy. Read the rest of this entry »

With the holiday season knocking at our door, both ShopperTrak Inc. and Thompson Reuters have taken new measure to monitor consumers’ shopping habits.  While their plans of attack differ, ShopperTrak implementing on the ground measures while Thompson Reuters charts activity from above, both methods promise greater market transparency.

For the past nine year ShopperTrak used cameras installed in malls’ common areas to track the number of customers at a given mall on a given day.  This year they are taking things a step further using cameras to count the number of customers visiting individual stores in 225 US malls in 22 markets.  Based on data collected this month ShopperTrak is predicting retailers will be visited by 695 million individual consumers over this coming three day holiday weekend.
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Not long ago, we wrote about the concept of flight to quality, where tenants with lease expiration during a difficult economic climate are able to leverage deflating asking rents into more premium office space for the same amount of rent they were previously paying. Generally speaking, this left landlords of the lowest quality space scrounging for tenants and slashing their asking rents precipitously. Yet, this isn’t always the case as evidenced by what is going on currently in the office market. But why? Read the rest of this entry »

You have the ideal location. Big name tenants are primed to pre-lease the space. Its a home run.  All you have to worry about, of course, is your construction budget. And worry you should. In construction, the developer does not always have a choice.  It always seems to costs more and always takes longer than you originally anticipated. And if there are shortfalls or mistakes, the developer is going to pay up if they want their building finished. So what to do about such a dilemma? Read the rest of this entry »

With supply out pacing demand, property owners are finding themselves pandering more and more to tenants needs.  Since building new is not a viable option at this time, owners are choosing to make existing properties more competitive by reposition their office and multifamily assets while construction costs are still low.  In a renters market, owners are having to reassess their product and place the tenant in control.  As Thomas Vecchione of Gensler points out, “tenants are ultimately the catalyst for the transformation,” and these days tenants are looking to do more with less.
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Commercial real estate is not a commodity.  Yet from 2004-2007, it was treated like one.  Like a popular stock whose underlying financials do not support an increase in demand, but whose price rises anyway, commercial real estate prices shot up dramatically during this period. Unlike gold, whose value is artificially predicated on whatever the market determines it is worth at a given point in time, commercial real estate has intrinsic value because it produces income through cash flow.  The speculative and competition driven aspects of the asset class’ popularity is measured through cap rates. But whether you value a property at a 10 cap or a 6 cap, the NOI remains the same. Read the rest of this entry »

If you don’t know what a bullet train is, this scene from “Mission:Impossible” should give you a pretty good idea of its speed. And according to this article from CNN, bullet trains might finally be coming to the United States. The Department of Transportation awarded $8 billion among 31 states to begin developing America’s first nationwide high-speed intercity passenger rail service. Read the rest of this entry »

For years, the place where I got my start in the business, Marcus & Millichap, made a killing on single tenant net lease deals.  Most often, these deals were being sold by merchant developers who had great relationships with a particular retailer, be it Walgreens (WAG), CVS or Advanced Auto Parts (AAP).  In other cases, there were sale leaseback transactions.  Either way, Marcus’ ability to shift capital across geographic boundaries was unmatched because of the timing and financial pressure of 1031 tax-deferred exchanges.  Investors would buy deals well outside their geographic comfort area so long as the credit of the single tenant was good, the return was OK, the lease was long, and they could defer their capital gains.  But with the new accounting regulations in the financial reform we have seen of late, the onus for companies to do sale leasebacks is changing in a big way. Read the rest of this entry »