Home > CRE Brokerage

Category: CRE Brokerage

Your Competitive Edge: Reframing the Impact of Technology on CRE

Posted on by SVN

Change Is On the Horizon for Commercial Real Estate

The digital revolution of the last decade has left no industry untouched. Companies across all sectors are leveraging advanced technologies — artificial intelligence (AI), mobile platforms, data analytics — to engineer innovative products, services, and customer experiences. The rapid and continual advancement of technology has ensured that it plays an integral role in our lives. 

We are entering an era of “data ubiquity,” one in which a new generation of nimble, data-centric apps exploit massive data sets generated by both enterprises and consumers.1 In 2021, data is central to our existence — whether you’re a giant enterprise or an individual person.

These significant large-scale advancements have entirely reshaped consumer behavior. The proliferation of data sources, and the explosion of user data they generate, has created an environment in which consumers are more educated and savvy than ever before. As the table stakes rise across markets everywhere, consumer demands change, and service providers have to adapt in order to meet their expectations.

Adapting to ubiquitous digital connectivity is now essential to competitiveness in most sectors of our economy.2 Both established and start-up players in every industry are being forced to compete in new ways.

We hear it all the time: while the commercial real estate (CRE) industry has been slower than other industries to adapt to change, conditions are ripe for disruption. We’ve already seen the far-reaching impact of technology on residential real estate. Before the rise of IDX websites, home buyers relied on real estate agents to identify available properties. Today, 89% of people begin their search online.3 Database sites like Zillow and Trulia have enabled buyers and sellers to access market data instantly, with the click of a button.

The evolution of residential agents foreshadows the changes to come in CRE. Already, tenants and buyers are able to access commercial listings and data through free websites such as Crexi, and property owners can utilize these same websites to list properties without the help of a broker.

Although innovation has already begun to alter the role brokers play in CRE transactions, the ripples of change should not be feared. In fact, industry leaders are now face-to-face with immense opportunity: brokerages that choose to lean in and embrace technological advancement are sure to gain a sharp competitive edge through more efficient operating and delivering higher levels of client service.

Using Technology & Automation to Create Efficiencies

“Time is money,” they say, an old adage that certainly rings true for CRE.

Utilizing tech and automation streamlines operations and increasingly enables brokers and brokerage firms to eliminate the manual administrative tasks that typically slow processes down. Leveraging technology to work smarter, faster, and leaner allows brokers to focus their time on building strong client relationships, winning more listings, and maximizing their success. 

In order to understand how CRE tech can and will pull us into the future of the industry, let’s discuss some of the common inefficiencies found within brokerage models today.

On the marketing side, creating and maintaining multiple pieces of marketing collateral, listings, and websites fosters data duplication and increases the odds of human error. When listing data changes, each piece of collateral must be individually updated and possibly reformatted.

Ensuring cohesive branding across all collateral and platforms is another vital yet time-consuming task for brokers. Simply put, a consistent brand is a recognizable brand. Greater brand recognition boosts credibility, creates a sense of reliability, and improves client loyalty. Creating, implementing, and maintaining templates for property flyers, offering memorandums, and personalized proposals for potential clients often requires a dedicated staff member with specialized training. For brokers who produce their own materials, these administrative tasks cut down on the time they have available to spend building the essential one-on-one relationships that close deals.

Long recognized as an early tech adopter, SVN has positioned the brand to be on the bleeding edge of CRE technology for over 30 years. SVN co-developed the industry’s first online publishing platform, Buildout. Available to all SVN offices, Buildout’s best-in-class software technology provides database management, pipeline reporting, back-office tools and more, enhancing your entire deal cycle in a single platform.

Buildout eliminates redundant administrative processes and increases productivity by automating and updating listing data across all marketing channels with one single click. SVN Advisors are able to utilize professionally designed templates to generate a wide range of marketing pieces and proposals so they can secure a listing more quickly and sell faster. In short, efficient and cohesive marketing technology effectively streamlines backend work and, in turn, generates more listings.

Buildout also streamlines back-office operations. Advisors can efficiently generate commission vouchers and track payable/receivable invoices and deposits. The platform also features a deal pipeline management dashboard with the ability to share listing activity reports with clients directly.

Much of the technology being used in CRE today streamlines the tedious back-and-forth of buying and selling of commercial real estate. Models like SVN, which leverage tech and automation to streamline operations, are able to provide greater value for their clients than competing firms operating under traditional methods.

Tapping Into Tech for Advisor Insights

Commercial real estate data is an enormously powerful resource. Ownership, transaction details, and the financials surrounding a property listing offer an endless number of insights that brokers can leverage to advise clients and win listings. However, curating data into meaningful reports manually is a time-consuming endeavor.

Real Capital Analytics (RCA) is the leading supplier and authority on data that drives commercial real estate. All SVN Advisors have access to the entire U.S. Portal (including Canada) to use RCA’s unique knowledge and perspective coupled with timely transaction data. This includes access to their 100,000+ detailed investor bios and their valuable intelligence on marketing and pricing, capital flows, and investment trends. Additionally, RCA regularly provides informative newsletters and bulletins which can be used to support marketing efforts.

Collaborative data exchange services, such as CompStak, are quickly gaining popularity in CRE. Compstak is a free broker-focused platform that compiles lease comparables and allows users to filter by submarket, base and effective rent, asset class, transaction size, and more. Brokers are able to exchange comps for credits and redeem those credits for other comps when needed.

Ultimately, brokers who tap into the sophisticated data tools available in the market today will continue to differentiate themselves from the competition and bring greater value to their clients.

Staying Ahead of the Curve

Executives in every industry are keeping a close eye on emerging technologies and the correlation to their business, from impact to leverage. For CRE, evolving tech and automation trigger fundamental shifts in client demands, expectations, and behaviors. SVN is positioned on the forefront of these industry changes, continually adapting to remain ahead of the curve in order to provide value for our clients and communities.

Clients today expect a fast, seamless experience from start to finish — powerful search capabilities, a transparent brokerage process, on-demand flexibility at every stage. SVN utilizes emerging tech and automation in its platforms to provide clients with analyses of current market conditions, investments, future opportunities, and new projects. SVN uses new tools and technologies to analyze information from multiple data sources, inclusive of the valuable data clients already have, and then provide actionable insight to clients that goes way beyond the transaction.

The effects of tech and automation in the industry won’t negate the need for experienced and knowledgeable CRE professionals. Rather, brokerage models like SVN understand that technology could be a key enabler for talent transformation, allowing companies to streamline existing talent systems and processes, drive efficiencies, and make more informed and effective decisions.4

Models like SVN, which embrace automation, collaboration and cooperation, are uniquely positioned to take market share in this era of change, as client behaviors and expectations evolve.

For CRE professionals, leaning into the adoption of new technologies will enhance the selling and buying experience for clients now and in the future. Companies that move to embrace these changes in technology will find that both they and their clients benefit from it. Those who choose to embrace collaboration and harness innovative technologies are the ones who will bring the future forward, make real change, and help to redefine the CRE industry.

Endnotes

  1. https://www.informationweek.com/big-data/big-data-analytics/the-age-of-data-ubiquity-sensors-spread/d/d-id/1109327?
  2. https://hbr.org/2014/11/digital-ubiquity-how-connections-sensors-and-data-are-revolutionizing-business#:~:text=Adapting%20to%20ubiquitous%20digital%20connectivity,most%20sectors%20of%20our%20economy.&text=We%20have%20seen%20that%20digital,replacement%20but%20connectivity%20and%20recombination
  3. https://ipropertymanagement.com/research/zillow-statistics
  4. https://www2.deloitte.com/us/en/insights/industry/financial-services/future-of-commercial-real-estate-talent.html

Career Growth Is In Your Hands at SVN

Posted on by SVN

We all have moments in our lives that can be considered “defining moments” — times when a certain thing happens that changes our life trajectory completely. The funny thing about these life-altering moments?

We rarely see them coming.

The Origin

For me, it was October 2017 in Chicago, and I was being interviewed by a person who would not only later become my boss, but also my mentor, role model, and most importantly, my friend. This specific situation was not brand new to me — I’d had my fair share of job interviews — but as I heard more about about the new role I was pursuing at SVN, I couldn’t help but think, “this feels… different.”

As if cued by my thought, SVN’s Chief Development Officer said something that will stay with me forever:

“Whoever steps into this role will be responsible for the livelihood of the clients they oversee… and these clients are more than just clients. They’re people who have dedicated their lives to this business.”

As a 25-year old just a few years out of college, this level of responsibility both shocked and thrilled me. I’d never come across a company with as much sincere devotion for the people they worked with as SVN had. SVN’s enthusiasm for the work they do and for their clients matched a certain “fire” I had for years recognized in myself but had yet to harness in my professional life. I soon realized my spirited ambition, zealousness, and passion for serving others made me the perfect candidate for the job.

A Culture of Accelerated Development

As the new Business Development Manager for SVN, I was the single point of contact between SVN Corporate and our Franchisees. This was both a support role and a development role, as it was critical that I helped accelerate growth and expansion for our franchise offices.

As I grew in my role, I began to realize that my job was fulfilling in a way I never thought possible. I was having meaningful face-to-face interactions and building relationships with people who truly dedicated their lives to their businesses. I quickly realized that these people – our clients – were so much more than that. I started to see in each and every person values that continue to drive the SVN brand today. In my travels I collected invaluable wisdom, insight, and stories from all different corners of the country. Like a puzzle, I began piecing together the shared values and beliefs that make up the SVN Core Covenants.

It was immensely rewarding to see new places, hear new perspectives, and understand firsthand why SVN is so special. Getting personal time with our clients brought the SVN Difference to life for me.

Being out in the field was intensely educational. I learned something new every day, and I appreciated being encouraged to apply my new knowledge to not only increase my personal impact but also to help other departments across the organization.

Something worth emphasizing at this point in my story: in my entire SVN career, no two days have been the same. For someone who thrives in a dynamic and engaging environment, this is why I am truly excited to come to work every day. My enthusiasm today is just as genuine as it was on my first day with SVN.

In my three years as Business Development Manager, I personally helped support our 200+ global offices. I ran hundreds of demonstrations and trainings on our platform, educated our Advisors on the advanced tools and resources available to them, and supported our franchisee offices daily. I helped offices build their websites, assisted in structuring an internal SVN onboarding program, and worked directly with our Franchisees and the SVN Corporate Development team to build comprehensive business plans to help offices grow.

Opportunities for Growth

Deeply rooted in the SVN culture is an emphasis on professional growth and development. Unlike other brands in the commercial real estate industry, SVN takes a modern approach to talent acquisition, retention, and development, and it didn’t take me long to understand that SVN truly “walks the walk” in this area.

SVN does this in a number of ways. Here are a few:

  • Role autonomy and flexibility, allowing you the freedom to use your unique strengths to deliver your best work
  • Ownership and opportunities to grow within & outside of your role, giving you control over your professional future 
  • Exposure to new challenges and an environment of continued learning & stepping outside of your comfort zone

SVN encourages you to be the architect of your own career. Because of this, I felt (and still feel) empowered to bring my best self to work each day.

Now, in my fourth year with SVN, I am eager, honored, and proud to transition into my new role as Sales Director. This promotion is a significant development opportunity for my career growth and something that was both encouraged and enabled by leadership at SVN.

It’s amazing that the very people who hired me have had a hand in every aspect of helping me grow personally and professionally. And SVN’s Chief Development Officer was absolutely right during my interview in 2017 — our clients are so much more than clients; they’ve dedicated their lives to this business. And through the years of witnessing that firsthand, I realize that I’ve done the same.

After years of direct client support (often in-office), it is thrilling to jump to the other side of the organization and apply this knowledge to my work with prospective offices and partners. Anyone that knows me understands that I love the SVN brand and, more than anything, our clients.

We talk a lot about the SVN Difference at SVN. What the SVN Difference exemplifies to me, personally, is the audience reading this post today. The SVN Community, both the corporate team and our large ecosystem of offices, is truly a special group of professionals that care about the work they do and the people whom they work with.

I am thrilled for this next step in my career and grateful that SVN has opened so many doors for me, both personally and professionally. It’s an environment that fosters learning and growth and with this, I am both hopeful and confident that I can move swiftly from supporting our offices to expanding our footprint with more exceptional partners. This is what gets me so excited about the future of SVN, and our journey to building a billion-dollar brand together.

Something tells me this will be my next defining moment.

Planning for Post-Pandemic Success: Preparing for Commercial Real Estate’s “Next Normal”

Posted on by SVN

With the global vaccine rollout now underway, there are plenty of reasons to be optimistic about an economic rebound ahead. As lockdowns end, restrictions lift, and new COVID-19 cases continue on a downswing trend, the commercial real estate industry can certainly expect some relief as we enter into the “Next-Normal.”

The CDC COVID Data Tracker (below) tracks daily trends in the number of COVID-19 cases in the U.S. as reported to the CDC by state and territory. As the below Data Tracker illustrates, the COVID-19 surge trend appears to be behind us.

Source: CDC COVID Data Tracker

While we aren’t completely out of the woods yet, things are looking up for industry recovery. And although we still have many unanswered questions, we also now have the forward momentum we lacked for so long, which allows for the big-picture planning needed for success in a post-pandemic world.

The global pandemic upended daily life for more than a year. It has changed how we live, where we work, even what we wear on our faces. As a result, we are seeing major shifts in consumer behavior, consumption, and lifestyle, among other things. Data collected during 2020 and currently in 2021 shows that several sectors of the commercial real industry are certainly still feeling the weight of these shifts.

Sectoral Impact

RETAIL

The Retail sector took a significant blow as the pandemic made nonessential in-person shopping quite literally illegal for a period. As Americans sheltered indoors, everyday activities such as going to the grocery store were now weighed under a contagion risk analysis. Consumption that would have normally been completed in-person has quickly flowed into online orders. The e-commerce share of retail consumption has steadily risen for more than two decades, reaching 11.8% in Q1 20201, but as the full effect of the lockdown reached a fever pitch in Q2, the share ballooned to 16.1%. While the share came down to 14.0% through Q4 2020, reflecting some natural reversion, the familiarity gained by consumers cannot be undone, and the pandemic has permanently accelerated some retail activity away from brick-and-mortar.

At the same time, manufacturers don’t have the same options they once did: As governments enacted state-wide lockdowns and shelter-in-place orders to limit the spread of COVID-19, manufacturers across the globe — which typically operate with long lead times — were brought to a complete halt. The manufacturing sub-sector has since been fighting an uphill battle, but as market conditions continue to improve, there is hope that factories will have the capacity to gain back some of the productions they lost in 2020.

INDUSTRIAL

For the Industrial sector, particularly warehouse spaces, there was a period in 2020 just ahead of the pandemic and the rapid shift to record levels of online shopping when rent growth for the overall Industrial sector was pacing ahead of cold storage. (A cold storage warehouse is used to store fresh and/or frozen perishable fruits or vegetables, or any combination thereof, at the desired temperature to maintain the quality of the product.) Cold storage rent growth has been rising since the start of the pandemic in 2020. Prior to the pandemic, rent for cold storage space averaged around $10 per square foot; currently, that number could vault to as much as $30 per square foot.2

As of February 2021, the Industrial sector has seen production drop by nearly 5%, compared to a year prior, while retail sales have increased by over 6%.3

HOSPITALITY

Hospitality was, and continues to be, among the hardest-hit industries during the pandemic. Some research suggests that recovery to pre-COVID-19 levels for the industry could take until 2023 or later. However, things already seem to be looking up for Hospitality: For the week ending March 13, 2021, U.S. hotel industry RevPAR was $53.45 — a decline of only 15.8% from the same week in 2020, which is mostly a function of easier comparisons, according to data from STR, CoStar’s hospitality analytics firm.4

Looking Ahead: The Road To Recovery

Economic recovery in a post-pandemic world depends on several factors. The economic impact of COVID-19 is being felt on a global scale, and with specific sectors more severely impacted, some may experience a quicker rebound than others once the crisis is behind us. Given the universal lifestyle changes people have had to make, and their subsequent effects on the economy, the COVID-19 crisis has pushed many industries to adjust rapidly… and continuously.

The recovery rate of various sectors will have a massive impact regionally over the next two years, according to a report by KPMG. And not all industries are equally affected: certain sectors of the economy will thrive once the pandemic is over, while others will face a seemingly endless headwind.

The Industrial sector seems poised for post-pandemic growth. A few sub-sectors are already beginning to see significant recovery:

  • Warehouses underlying e-commerce, such as cold storage space
  • Big-box retail selling essential goods, such as Walmart and Target
  • Office space in certain locations, such as suburban areas

In the long run, the Retail sector is likely to be the biggest casualty as we exit the pandemic. This sector was already struggling before COVID-19, with vacant suburban shopping malls and big retailers shuttering stores across the country. Since the pandemic hit, many well-known brands have all filed for bankruptcy. The weakness of the retailers themselves, the accelerated growth of e-commerce, and questions about how quickly shoppers will head back to the stores all weigh against a strong recovery.

If the laws of physics extend to commercial real estate, then 2021 should be a year of recovery in the Retail sector, especially as restrictions on density are further relaxed and the resumption of normalcy gains steam. Notwithstanding the short-term recovery, Retail remains in a period of secular reorganization, and the sector remains open to disruption for the foreseeable future.5

Like so many industries, Hospitality will also see both subtle and substantial shifts in the post-pandemic era. Oxford Economics reports that gross domestic product grew by 9% in the first quarter of 2021, which has positive implications for the American travel industry. Jan Freitag, National Director for Hospitality Analytics at CoStar, reported that the March 2021 revenue per available room percentage change was “very positive” at 34%.6

We are still far off from “normal,” though an accelerating vaccination rollout brings the promise of a more rapid return to normalcy. As the economy recovers, leaders in the commercial real estate industry must begin to turn their attention to preparing for opportunities presented in the post-pandemic world.

Seizing Our Opportunity

The Census Bureau’s Small Business Pulse Survey (SBPS) measures the effect of changing business conditions during the COVID-19 pandemic on our nation’s small businesses. According to the SBPS, companies are consistently marking up when they expect conditions to normalize. As leaders in the industry, we now have clear opportunities to re-strategize asset attribution and ultimately redefine what post-pandemic success means for commercial real estate.

Source: CoStar7

Looking at history, other crises and external events show that generally, the CRE industry tends to lag the trajectory of the larger economy. But with the far-reaching effects of this pandemic, the CRE industry has felt the effects much earlier. In many ways, the pandemic has accelerated trends already occurring. While there is no specific answer or one-size-fits-all solution at this time, organizations that are able to move nimbly through the phases of recovery and embrace the “next normal” will thrive post-pandemic.

As the economy gains momentum, we will begin to see a split: organizations built to last, and those that are not. Those built to last, like SVN, are using this time to not only learn and emerge stronger, but also to prepare for and shape the future of commercial real estate.

Catalysts to Recovery: The SVN Difference

There are several components of SVN’s DNA working together to pull the future forward. For example:

  • A strong and established brand, foundation, and community backing Advisors, attracting new talent and supporting local independent ownership
  • Information & Fee Sharing: Every Monday, SVN Advisors present new and featured commercial real estate property listings on SVN | Live®. This live property broadcast is open to everyone in the industry.
  • Product Council meetings and collaboration tools for all asset classes such as Industrial, Office, Self Storage, and Healthcare
  • Online and scalable training to expand teams quickly, such as our SVN System for Growth courses and digital onboarding support
  • Advanced digital recruiting tools, such as Mike Lipsey’s System for Success online training for Advisors
  • Consultation support for asset attribution to establish team development

SVN was built to be future-proofed. That’s why, from 2019 through 2020, SVN’s gross commission income grew 3.1%… when everyone else was down. When all publicly traded CRE brokerages were up against double-digit declines — some facing 30% or more in lost revenue — SVN had its best year in company history. Models like SVN, which embrace automation, collaboration and cooperation, are uniquely positioned to take market share in this era of change, as client behaviors and expectations evolve.

The SVN brand offers something completely different from what any local, regional, or national firm is offering. This is the SVN Difference. And this difference is what ultimately creates 9.6% more value for our clients.

The Future Is Now

There is significant hope that 2021 will be a year of earnest recovery. As of the March WSJ Economic Forecasting Survey, on average, leading economists expect the US economy to grow by 6.0%. If reality ends up matching expectations, 2021 will mark the fastest annual growth since 1984.

SVN Advisors are leading the way into the “Next-Normal,” pulling the future forward, enacting change where and when it matters most.

The future is here. Are you ready?

 

 

Endnotes

  1. Census Bureau; through Q4 2020
  2. https://product.costar.com/home/news/19461
  3. https://product.costar.com/home/news/848506453
  4. https://product.costar.com/home/news/1802437521
  5. SVN Asset Class Report, Retail, 2021
  6. https://www.costar.com/article/1537124142/recovery-of-us-hotel-industry-is-firmly-underway
  7. https://product.costar.com/home/news/848506453

Dean Saunders Named Highest-Producing Land Broker in the Nation for 2020 Performance

Posted on by SVN

APEX Top National Producer Awarded by NAR’s Realtors Land Institute (RLI) for Saunders’ Transactions Totaling More Than $126 Million Last Year

LAKELAND, FL, March 29, 2021 – Dean Saunders, ALC, CCIM, founder, managing director & senior advisor of SVN | Saunders Ralston Dantzler in Lakeland, FL, received the REALTORS Land Institute (RLI) APEX Awards program’s most coveted and prestigious award, the APEX 2020 Top National Producer.

The award recognizes the applicant with the highest overall qualifying transaction volume across the nation. This is the second time Saunders earned the top honor among national land brokers, winning the award in 2018. The awards program is four years old.

The APEX Awards Program administrators reviewed 2020 sales by RLI-affiliated land agents totaling a combined $3.5 billion in qualifying transaction volume from 140 applicants. Saunders earned the honors based on transactions totaling more than $126 million in 2020.

Saunders was also recognized as an APEX 2020 Top 20 Producer. He received awards from RLI CEO Aubrie Kobernus, MBA, RCE, as well as The Land Report’s Co-founder Eric O’Keefe on Wednesday, March 17, during RLI’s 2021 Virtual National Land Conference.

“We are proud of Dean and all of our members that were recognized for their accomplishments in 2020,” Kobernus said. “They truly are the crème of the crop when it comes to land real estate professionals.”

Saunders was also recently received other professional recognitions, including:

  • For performance in 2020, he was the #2 advisor in SVN® among 1,620 advisors and #1 advisor in Florida among 198 advisors, earning the SVN® Partners Circle award.
  • Dean received the 2020 National Association of Realtors (NAR) National Commercial Award for exceptional service and contributions to the industry.
  • In 2020, Dean was named to the Florida Trend Florida 500 list for the second year in a row.

 

About SVN International Corp.

The SVN organization is a globally recognized commercial real estate entity united by a shared vision of creating value with clients, colleagues, and our communities. The SVN brand is comprised of over 1,600 advisors and staff in more than 200 offices across the globe in six countries. Our brand pillars represent the transparency, innovation, and inclusivity that enables all our advisors to collaborate with the entire real estate industry on behalf of our clients. SVN’s unique Shared Value Network® is just one of the many ways that SVN advisors create amazing value with our clients, colleagues, and communities. For more information, visit www.svn.com.

All SVN offices are independently owned and operated. To learn more about becoming an SVN commercial real estate business owner, visit svn.com/franchising-opportunities/.

Looking to the Future: The Disruption of COVID-19 and the Transition into the Next-Normal

Posted on by SVN

Exactly one year ago, eight governors across the US took the initial move to close bars and restaurants, and the Dow Jones posted its largest one-day drop ever, finishing down a record 2,997 points. The world as we knew it was hitting the proverbial fan. New incoming information —none of which was encouraging — came across our screens at a frantic pace, causing our stomachs and portfolios to drop in tandem. 

With a full year now passed by in the COVID economy, the universe of uncertainty has thankfully compressed. While it was not an advanced degree that any of us had applied for, the pandemic has imparted a lifetime of lessons, offering clear clues about the future of commercial space demand and the ways we as humans interact with the built environment.   

Macroeconomy

Starting first with the economy as a whole, I know we have all become a bit numb to sideways numbers during the past year, but to dig ourselves out of this hole, it is important to understand just how deep we are. Early last year, while we were all still finishing our champagne and settling in after the holiday season, the Congressional Budget Office released its estimates of 2020 economic growth, serving as a reliable benchmark of where the economy would have stood without the pandemic. Actual output last year fell short of the CBO’s early 2020 forecast by $1.2 Trillion Dollars, good for an average loss of $3,560.06 for every American.

More workers filed for initial unemployment claims in the first nine weeks of this crisis than during the entirety of the 2007-2009 recession, and the unemployment rate hit a stratospheric high of 14.8% last April. Through the most recent Jobs report, it looks like we are once again starting to see some positive momentum toward an eventual recovery. The civilian unemployment rate ticked down 6.2% through February as the economy added back 379,000 jobs. We remain a long way to go, but between vaccination rollout and the onset of warmer weather, the W-shaped recession we have seen so far should have enough fuel in the tank to prevent another near-term downturn.   

Multifamily

An often-peddled refrain during the early days of the pandemic was that the multifamily, and apartment sector as a whole, would maintain its stability by the simple fact that people will always need somewhere to live. If anything, the same optimists argued that the resiliency of cashflows could actually improve as renters were spending more time in their homes due to involuntary quarantines. With a year of data available now supplanting conjecture, we find that residential rentals have indeed performed up to expectations. No, conditions have not been ideal, and distress is not too hard to find, especially in gateway markets. However, compared to worst-case scenarios, the apartment sector has lived up to its reliable bedrock status. According to the National Multifamily Housing Council’s rent tracker, which follows the performance of more than 11 million professionally managed apartments, 93.5% of renter households paid rent in February— only a 1.6% drop off from the same month last year. These data may, however, likely understate some sector-level underperformance, as they do not include vacant units or self-managed “mom-and-pop” properties. According to Freddie Mac’s latest forbearance report, we know that small balance originations, which tend to cater to the “mom-and-pop” investor class, make up 75% of loans in forbearance.1 

The CDC’s eviction moratorium remains a pressing challenge for the industry and an impediment to its return to pre-pandemic health. The market for rental housing is a circular flowing ecosystem between lenders, investors, and renters. There is no net-positive corrective policy that achieves more benefit than harm by breaking the symbiotic process, much as the moratoriums have.  The NMHC offers that moratoriums “fail in their purpose of addressing renters’ underlying financial distress” and “jeopardize the stability of housing providers and the broader housing market.” Despite two different federal judges ruling against the CDC policy in the past month, the ban remains in place. There are, however, green shoots forming, which could signal a return to more normal conditions in the near future. At the end of this month, the moratorium is scheduled to expire— a deadline that we should accept with a coarse-grained piece of salt. Nevertheless, the appropriations bill passed at the end of the year, and the American Rescue Plan of 2021 passed last week collectively set aside $46.6B for rental assistance programs. A CPPB analysis of Census Bureau survey data finds that roughly one-in-five renter households are behind on rent— a crisis that should see meaningful relief as funds are released.2

The permanence of COVID-induced migration will be a hot-button topic as more jabs land in arms. Taken together, the trifecta of New York, California, and Illinois, the states that are home to the three largest US cities, collectively lost more than 275,000 residents in 2020. The human density that has historically attracted demand toward superstar cities has had the complete opposite effect in the past year. Without accessible cultural amenities or the need to be in an office Monday through Friday, a significant share of the workforce became untethered to their home cities and have made their way toward the exit. According to CoStar, New York, LA, San Francisco, Chicago, Seattle, Boston, and Washington DC are all among the list of cities to post year-over-year declines in asking rents through Q4 2020. 

While the outgoing flow of residents has been lumped together as one homogenous cohort, there appear to be at least two major groups leaving. The first group of COVID-nomads is defined by those that already had eyes towards more affordable and spacious housing options over the next couple of years. Given the urban context in 2020 and the attractively low borrowing costs, many of these renters simply said, “Hey, why not now?” and moved up their progression timeline. These are the types of households that are more likely to be buying baby carriages before the next time they step on a subway, and their transition out of major metros is probabilistically permanent. The second group contains those who are transient, often early into their careers, working remotely, and still seeking the lifestyle amenities they had enjoyed pre-covid. Watching how this group behaves as large companies start calling workers back into the Office and cities look more like their pre-pandemic selves will be telling.   

Office

Today, there is no property type subject to more speculation than the Office.

Unlike multifamily, Retail, and industrial, where COVID has mostly magnified pre-existing trends, the pandemic has led to rampant reimagination in the office sector. Our understanding of how both firms and workers interact with physical office space to optimize productivity is permanently changed. According to the Census Bureau’s Household Pulse Survey, an estimated 38% of working American adults have transitioned to remote work in some capacity due to COVID. The share is even higher in large office markets like New York and Los Angeles, rising to 47% and 45%, respectively. En Masse, The American Workforce traded morning commutes for Zoom links, an illuminating natural experiment that has challenged the Office sector’s core-assumptions. When PwC launched its remote work survey in June, 44% of employers thought that the transition to remote work has allowed their teams to be more productive than before the pandemic.3 When the same employers were polled again in December, the share climbed to 52%, indicating that not only has a consensus emerged, but that efficiency has improved following the initial learning curve. The realization that companies can not only maintain but actually improve performance through a remote infrastructure is a ‘no turning back,’ Pandora’s box type of moment. It should therefore come as no surprise that, according to the same survey, only 21% Of US executives think that a full five days in the office every single week is the best setup to maintain a strong corporate culture. 

The likelihood that total office space demand will have a smaller footprint in the post-pandemic world is a consideration that we cannot afford to take lightly. A Fitch research report released just last week estimates that an additional 1.5 work-from-home days per worker would lead to a 15% reduction in property-level net cash flow— a development that would meaningfully recalibrate our understanding of risk and value. Given the long-dated lease structure common throughout the sector, it will take a few years for emerging preferences to filter through fully. Moody’s Analytics REIS forecasts that vacancy rates are likely to rise to near-record levels through 2023 before beginning a gradual recovery in 2024. 

Of course, not all metro-level office markets will move as one. Some of the migratory demand that is leaving large cities and contributing to localized weakness ahead will also lead to strength in other markets, particularly in major Metro adjacent suburbs. According to Real Capital Analytics, Central Business District-located Office properties posted a 0.2% decline in value for the year. On the other hand, suburban located office assets saw valuations continuing to grow at a healthy 6.6%.

Industrial

The industrial sector remained the undisputed top performer of commercial real estate through an otherwise challenging 2020. Secular tailwinds, such as e-commerce adoption, grew from a healthy gust to a sustained hurricane force. Over the past decade, online retail sales have increased by an average of 15.2% annually. Brick and mortar retail sales over the same period have only grown by an average of 3.4% per year. The share of total Retail sales satisfied by online orders has steadily risen, entering 2020 At 11.3%. In the second quarter, as nonessential retailers across the country closed their doors, this share skyrocketed above 16%. While the share has reverted down to 14%, the pandemic has permanently transitioned some in-person retailing onto online platforms. Online grocery delivery services, a concept that had faced greater consumer resistance than other E-platforms before 2020, stood uniquely positioned to benefit from the demands of a lockdown economy. According to grocery e-commerce specialist Mercatus and research firm Incisiv Projects, online grocers accounted for 3.4% of all US grocer sales in 2019, before swelling to 10.2% in 2020.4 Further, the same study estimates that online groceries will satisfy 21.5% of domestic demand by 2025. Surging demand for E-grocers also means an increased demand for distribution and fulfillment facilities in close proximity to consumers. In the most recent Emerging Trends in Real Estate report, fulfillment facilities ranked as the subsector with the best prospects for future investment and development opportunities. 

Another source of new industrial demand can be traced to the supply chain disruptions experienced this last year. The pandemic exposed critical sensitivities, and e-commerce retailers are looking to better safeguard their ability to match inventory supply with order demand. Doing so has meant a transition away from “just in time” distribution models in favor of “just in case” models instead. The latter requires excess warehousing space to stock contingent inventory. 

Retail

There was no shortage of pessimism surrounding the retail sector heading into 2020, even before there was a pandemic to contend with. Pre-pandemic, Retail was in the midst of what was widely expected to be a 10-year shakeout and a painful rightsizing process. As noted in the 2021 ULI / PwC Emerging Trends Report, the US retail sector had three major headwinds going into last year: the US has more retail square footage per capita than any other country in the world, an increasing share of core-retail activity has transitioned online, and domestic consumers have experienced a long-term stagnation of wages. Concepts that were on the path towards obsolescence, with hopes of maybe squeezing out a few more years of economic solvency, are those that have struggled the most during COVID— none more so than department store retailers.

While the outgoing companies will argue otherwise, a case can be made that 2020’s pain will help the retail sector pave a quicker path back to recovery. The sector has gone from Darwinism to ‘Darwinism on steroids.’ Though, before we can imagine a radical future where physical retail demand sits just a bit higher than supply, the existing glut of obsolescent space needs to find adaptive reuse. After all, not every struggling mall will be turned into an Amazon distribution center. Lifestyle centers, where fitness centers, housing units, and mixed Retail are blended together, are one of the leading concepts to aid in re-positioning and re-absorption. According to Real Capital Analytics, Lifestyle Centers have an average price per square foot that is almost three times higher than average assessed for Mall assets, reflecting some of the value that can be recaptured through re-positioning.  

As Retail continues to match physical footprints with the forward-looking consumer behavior, the short-term reversion back to normalcy will at least provide some much-needed relief. Cabin-fever-consumers armed with unspent stimulus checks should give Retailers a potent shot in the arm, even if the upside effects are only temporary.

Outlook

Whether it be the public health front, the economy, commercial real estate, our lives in general, or how all the above are inexorably linked, 2021 has all the makings of a year defined by recovery. The Federal government’s push to have vaccine availability for every US adult by May 1st means that herd immunity is not too far behind. 

Between the safe resumption of our pre-pandemic lives, the commitment by the Federal Reserve to maintain low interest rates even as inflation pressures rise, and the unprecedented level of stimulus in the hands of consumers, a perfect storm of economic momentum is brewing just offshore. If anything, there is increasing concern that the economy has the potential to overheat in the year ahead as too much fuel enters the fire all at once. According to the February and March iterations of the Wall Street Journal’s Economic Forecasting Survey, a majority of leading economists believe that this year will have more upside risk than downside risk, and more than 80% think that the newly passed stimulus will generate inflation higher than the Fed’s 2% target.

In many ways, we as an industry remain in wait-and-see mode, with questions over a return to the office timing and rightsizing are still swirling overhead. Although, overly conservative and reactive strategies rarely make winning formulas in Real Estate. Now is the time for landlords to engage tenants and companies to engage employees about emerging preferences, then execute on a strategy. If 2020 has taught us nothing else, it’s that the pace of change can accelerate quickly, and falling behind the curve of innovation is a costly and often un-correctable mistake.

 

Endnotes
1. https://mf.freddiemac.com/docs/January_forbearance_report.pdf
2. https://www.cbpp.org/research/housing/housing-assistance-in-american-rescue-plan-act-will-prevent-millions-of-evictions
3. https://www.pwc.com/us/en/library/covid-19/us-remote-work-survey.html
4. https://www.supermarketnews.com/online-retail/online-grocery-more-double-market-share-2025

Two Questions Every CRE Advisor Must Always Ask

Posted on by SVN

Some things in commercial real estate really are simple, and this is one of them. Here are two simple questions that you need absolutely no industry expertise to ask, but that you absolutely need to be asking your clients.

Our business doesn’t always seem like an easy one. After all, we deal with extremely valuable assets or with complicated legal arrangements that can last for years. Those of us who are in property management are responsible for countless parts of a building’s operations and for managing scores of relationships.

You’d probably think that the most important question in the commercial real estate industry is like the Accounting oral test question in the movie Back to School – one question, with 27 parts. In actuality, the two best questions in a savvy commercial real estate advisor’s arsenal contain a combined total of just five words. When asked at the right times, these five words will help you better understand your clients’ motivations, wants, and needs — and in turn, how you can best help them achieve their goals.

Question 1: Why
For a single, simple word, “why” is amazingly powerful. When you’re a new-to-the-business advisor, you can use it to keep a prospect talking while you’re figuring out what to say next. The most senior advisors in the industry, on the other hand, use it to gain deeper insights. Just about any response from a client can be met with “why,” and in just about every case, “why” will get you closer to the information you need to help a client take the appropriate actions to achieve his or her investment goals. Here are some examples:

  • I bought this asset to hold it long-term… Why?
  • I manage this asset myself… Why?
  • It might be time to 1031 to a new property… Why?
  • I usually like to put my tenants on short-term leases… Why?

As long as the answer to the question isn’t completely obvious (and sometimes if it is, too!), “why” is one of the most powerful questions that you can ask. It can also be a good follow-up and, with the addition of a few words here and there, can even be used a few times in a row. Here’s an example:

“I manage this asset myself.”
Why?
“Because property managers are too expensive and don’t do a very good job.”
Why do you say that?
“I’ve worked with three different ones and that’s been my experience.”

Question 2: What If You Don’t…
“What if you don’t…” is the second important question. It is extremely powerful because it strips away artifice and leaves true motivation behind. How many times have you had a client tell you that he was going to sell a building and then turn out not to do a transaction? To avoid this problem, consider asking “What if you don’t sell your building?” Sometimes, the client will tell you that she is fine holding onto it. In other cases, she’ll tell you that she has no other option or that the other options are too unattractive to stop her from selling.

Some commercial advisors are scared to ask a client about not taking action. However, just as it’s almost impossible to talk a client into doing something that she doesn’t really want to do; it’s equally hard to talk her out of doing something that fits her strategy. In either case, what you really want to do is to find out the truth of what the client actually will do so that you can begin making plans to help her.

These two questions are both easy and difficult to ask. Though simple, they are powerful. And in addition to helping you uncover which prospects need your help, they’ll lead you closer to how you can help them.

Re-thinking Talent & Recruiting In Commercial Real Estate — And How To Do More Than Just Talk About It

Posted on by SVN

SVN’s Leslie Bateman discusses how the talent and recruiting landscape in commercial real estate is changing, and how we can seize the opportunity it presents.

Rapid and continual advances in technology have been disrupting many of the sectors that anchor the U.S. economy, including the commercial real estate industry. However, the commercial real estate (CRE) industry has long been known to be slow to adapt, often “lagging behind” others when it comes to large-scale industry transformations. While other industries blaze forward to embrace technology and digital disruption, for the most part, CRE has only budged.

Experts suggest that this industry-wide delay in advancement is due in part to the age imbalance of the industry. This isn’t new information, as aging of the CRE industry is known and well documented: According to CIRE Reader Surveys and NAR Commercial Member Profiles, the average age of a CCIM member is 54 and the median age of a commercial Realtor is 60.1

In addition to age diversity, another area ripe for improvement lies in the adoption of new technologies. Much of the commercial real estate industry still relies on traditional methods of doing business, preferring the experienced and familiar over the new and risky. As a cyclical result, the industry has become less attractive to younger people, who often prefer organizations and job roles with a high degree of technology integration and support.2

What the CRE industry has now is an incredible opportunity — to harness new technologies, redefine its talent processes, and alter the trajectory for future success.

Digital Disruption, COVID-19, and CRE
Today, digital disruption is all-pervasive, leaving no industry untouched. Digital innovation has the power to change markets and economies, accelerate business operating models, and wholly reinvent the way business is done across the globe. While certain industries feel the profound influence of this digital transformation immediately, others – such as commercial real estate – are a little late to the game. With the surge of CREtech over the past two decades, CRE companies have begun building momentum by integrating technology with the built world and associated systems. However, at its slower pace and with nothing forcing it to move any faster, commercial real estate still largely remains behind.

Until the COVID-19 pandemic.

The global pandemic has changed the nature of office and work culture considerably, forcing all industries to adapt to remote work and rely on new methods and tools for virtual engagement and operations. Some companies (such as Spotify and Facebook) experienced cost-cutting epiphanies early in the pandemic, taking action after recognizing that the in-office concept simply won’t be necessary into the future.

While the pandemic has forced some CREtech innovations to flourish, it has also placed a magnifying glass on industry problems and shortcomings. For CRE, an industry still reliant on handshakes, years of experience and Rolodexes, the immediate shift to virtual work hasn’t been easy. The industry-wide disillusionment has accelerated the need for CRE companies to acknowledge, accept, and lean into major change. It’s not the catalyst we expected, but the pandemic has opened a large window of opportunity for the industry to make big strides toward a more prosperous future.

 

The Pre-Pandemic Talent Landscape
It’s becoming increasingly evident that, as CRE companies figure out the technologies required to support digitization shifts, they need to secure the right “talent” in order to accelerate the pace of adoption and implementation.

Prior to the pandemic, the talent landscape in CRE skewed heavily toward the Baby Boomer generation. There was little to no focus on recruiting Millennial and Gen-Z talent. In 2019, 45% of CRE employees were 55 or older compared to 4% in the 19–24 age range. In comparison, 24% of the workforce across all industries and 22% of the banking and insurance workforce were 55 years old or older.”2

This imbalance is both emphasized and continued as the industry prefers experienced hires, over-indexing on industry experience and comfort with traditional job roles. The outcome here is compounding: firms continue to contribute to the rift by favoring experienced hires and maintaining conventional practices; meanwhile, the industry becomes less attractive and less accessible to younger generations.

Preparing for the Workforce of the Future
To help companies attract and retain up-and-coming talent, reduce the demographic gap, and create a more fulfilling work environment, leaders will likely need to reexamine the talent function and its processes.2

As Deloitte Insights states: “The pandemic is expected to force a paradigm shift in the way the industry operates and how work is done. Digital transformation could play an important role as companies wrestle with liquidity and profitability in the near term and prepare for the post-crisis world. And so CRE companies should look at digital and talent transformation in tandem.”

While change is not easy and certainly not always comfortable, the sooner CRE companies understand and embrace the shifts they need to make, the better off they will be. Clearly, digital advancement is critical for CRE organizations’ success and relevance. The talent implications are vast.

CRE leaders must work to balance the talent landscape by rethinking and adapting to the way their employees work, embedding technology into their decision-making, and redefining skills, talent processes, and practices to meet new demands. The bottom line: Hiring younger talent is no longer optional, it’s essential.

At SVN, we often talk about “pulling the future forward.” This concept is so much more than a tagline. We live, breathe and practice this mentality daily through promoting a culture of learning, embracing remote work flexibility, hiring for location-agnostic roles, providing remote/online systematic training for new hires, and by believing in the powerful data on workplace diversity.

Diversity has long been a hallmark of the SVN brand and business model, and we strongly believe in the research proving that workplace diversity (e.g., gender, age, ethnic, cultural) leads to smarter teams and greater company success.3

Studies show that the most diverse companies are now more likely than ever to outperform less diverse peers on profitability4, and we’ve seen this firsthand at SVN.

To further underscore our company-wide belief in the power of diversity, here’s an inside look at SVN’s employee base:
· 73% women
· 40% minorities
· 53% under the age of 45

 

The Opportunity of a Lifetime
The COVID-19 pandemic has exposed unsustainable truths about the CRE industry’s approach to recruiting and retaining talent.

So now what?

If CRE firms want to find success in the future, many will need to step back to analyze and upgrade their current talent processes. Digitization, remote flexibility, and diversity should hold more weight in the talent landscape, and it’s time for us to do more than just acknowledge the known lags, more than just talk about where we can improve. It’s time for us to take action… to really make change.

In this challenge lies immense opportunity. For those in leadership positions, I challenge you to think about your own recruiting strategies, open roles, and growth goals. What adjustments can you make? Are some required skills now irrelevant with technology, and years of experience an arbitrary line in the sand? Are you willing to place your trust in the positive research on workplace diversity and prioritize it in your next hires? If these initiatives seem daunting, scary, overwhelming… you’re not alone. But just as we must trust in the data on diversity, we must also trust that great things rarely come from comfort zones.

As Virginia Rometty so eloquently states: “Growth and comfort do not coexist.”

 

Endnotes
1. CCIM Institute, “The Millennial Way,” accessed March 4, 2021
2. Deloitte Insights, “Preparing for the future of commercial real estate,” accessed March 4, 2021
3. Harvard Business Review, “Why Diverse Teams Are Smarter,” accessed March 4, 2021
4. McKinsey & Company, “Diversity wins: How inclusion matters,” accessed March 4, 2021

SVN® | Capital West Partners Closes On Sale Of Silicon Valley Office Building For $16.55 Million

Posted on by SVN

SVN | Capital West Partners, one of the nation’s premier investment real estate brokerage firms, has closed on the sale of Cooley Commercial Building, a 42,363 SF office building located at 1922 The Alameda in San Jose, CA. Robin Santiago, CCIM of SVN | Capital West Partners represented the seller in this transaction.

Momentum for Mental Health, the largest private nonprofit provider of adult mental health services in Santa Clara County, acquired the Cooley Commercial Building for $16.55 million. This will be a long-term hold for Momentum, who plans to occupy the building over time. The property is located near a large, notable development project proposed by Google, which consists of office, retail, and up to 4,000 new housing units. The property is also situated near downtown San Jose, which has been the center of major new developments over the last few years.

Transaction sale volume for office properties in San Jose declined by 42% in 2020, a statistic that highlights the ongoing pandemic-induced challenges the industry faces. “The property was introduced to the market during one of the most challenging periods for office investment sale transactions in recent history,” said Santiago. “Despite the challenges, we received multiple offers and ultimately chose a qualified buyer that owned other assets nearby. They were the logical choice among the various groups that pursued the property. The buyer saw the long-term value of the site and acted quickly to put the building in contract. They were excellent to work with throughout the entire transaction.”

About SVN | Capital West Partners:

SVN | Capital West Partners is an independently owned and operated SVN® office located in San Jose, CA. Capital West Partners specializes in the brokerage of investment properties located in the Silicon Valley market and throughout the Bay Area region. The firm also provides leasing services for office, industrial, and retail properties on behalf of landlords and tenants. For more information regarding SVN | Capital West Partners, please go to: https://www.svncapwest.com/.

About SVN:

The SVN organization is a globally recognized commercial real estate entity united by a shared vision of creating value with clients, colleagues, and our communities. The SVN brand is comprised of over 1,600 advisors and staff in more than 200 offices across the globe in six countries. Our brand pillars represent the transparency, innovation, and inclusivity that enables all our advisors to collaborate with the entire real estate industry on behalf of our clients.  SVN’s unique Shared Value Network® is just one of the many ways that SVN advisors create amazing value with our clients, colleagues, and communities.  For more information, visit www.svn.com. 

All SVN offices are independently owned and operated. To learn more about becoming an SVN commercial real estate business owner, visit http://www.svn.com/franchising-opportunities/.

SVN® | Doug Carter LLC Completes Sale Of The Park At Whispering Pines Apartments In Colorado Springs For $26.47 Million

Posted on by SVN

SVN | Doug Carter LLC one of the nation’s premier investment real estate brokerage firms, has completed the sale of the Park at Whispering Pines, a 207 unit apartment community built in 1974, at 3030 E. Fountain Boulevard in Colorado Springs, Colorado for $26.47 million.

Doug Carter of SVN | Doug Carter LLC represented the seller in this transaction. He also represented the family when they acquired the investment in 1987. The Park at Whispering Pines is a “best of class” community that attracted multiple buyers. Competing buyers resulted in a sale price above the asking price and a short five-week period from list to close. The Park at Whispering Pines is well situated to benefit from the emerging economic growth in Southeast Colorado Springs related to the new U.S Space Force and support companies. Other military commands at Peterson AFB and the Colorado Springs Airport are also nearby.

SVN is the only major commercial real estate brand that proactively markets all of its qualified properties to the entire brokerage and investment community. Participating in approximately $12.1 billion in sales and leasing transactions in 2020, SVN Advisors shared commission fees with co-operating brokers in order to close more deals in less time and at the right value for clients. Advisors also reap the benefits of our SVN Live® Weekly Property Broadcast, cloud-based leading-edge technology, and national product councils. This open, transparent and collaborative approach to real estate is the SVN Difference.

About SVN | Doug Carter LLC:

SVN | Doug Carter LLC is an independently owned and operated SVN® office located in Colorado Springs, Colorado. Doug Carter is the apartment market expert with nearly 40 years of experience in multi-family brokerage, market research, apartment management, and ownership services. Carter has sold over 1/3 of all 10+ unit apartment complexes in the Colorado Springs market.

For over 35 years, Carter has surveyed and reported the city’s rents, vacancies, and sales trends. Now published as APARTMENT INSIGHTS, this quarterly report is the most thorough and reliable multi-family research on the Colorado Springs apartment market. Contributions to his community and industry include twice being elected board president of the Apartment Association of Southern Colorado. He is also a past board president of Partners in Housing, a transitional housing program for homeless families. Additionally, Carter was treasurer of the Trails, Open Space and Parks Political Action Committee.

About SVN:

The SVN organization is a globally recognized commercial real estate entity united by a shared vision of creating value with clients, colleagues, and our communities. The SVN brand is comprised of over 1,600 advisors and staff in more than 200 offices across the globe in six countries. Our brand pillars represent the transparency, innovation, and inclusivity that enables all our advisors to collaborate with the entire real estate industry on behalf of our clients.  SVN’s unique Shared Value Network® is just one of the many ways that SVN advisors create amazing value with our clients, colleagues, and communities.  For more information, visit www.svn.com.

All SVN offices are independently owned and operated. To learn more about becoming an SVN commercial real estate business owner, visit http://www.svn.com/franchising-opportunities/

Saunders brokers $43 million Bluffs land deal

Posted on by SVN

SVN | Saunders Ralston Dantzler Real Estate founder negotiated Florida’s largest conservation property purchase in more than a decade.

Dean Saunders, the managing director and founder of Lakeland-based SVN | Saunders Ralston Dantzler Real Estate, last month negotiated the state’s largest purchase of conservation land in more than a decade.

Florida’s Department of Environmental Protection acquired the Bluffs of St. Teresa property for $43 million. The 17,080-acre tract on the Gulf of Mexico, in the state’s Panhandle, features 17 miles of waterfront land and borders the state-owned Bald Point State Park and Tate’s Hell State Forest.

The property also represents one of the largest tracts of undeveloped land in Florida on the Gulf Coast.

As part of the purchase, The Nature Conservancy chipped in $2.25 million and the U.S. Department of Defense, which operates several Air Force bases in the region, contributed $2.19 million.

For the state, the Department of Environmental Protection (DEP) and Gov. Ron DeSantis’ former deputy chief of staff played key roles, Saunders notes.

“This was a rare opportunity to preserve an absolute gem of a property for posterity for the citizens of Florida,” says Saunders, who was a top aide to former Florida Gov. Lawton Chiles and also served in the Florida House of Representatives from 1992 until 1996.

“The state owns the land on either side of this tract, which is also known as St. James Island, so it just made sense for them to buy this piece, as well.”

Saunders represented Ochlockonee Timberlands LLC, an affiliate of Salt Lake City-based AgReserves, in the transaction. AgReserves is a for-profit arm of the Church of Jesus Christ of Latter-day Saints, which is more commonly known as the Mormon Church.

AgReserves affiliates acquired a total of 382,000 acres in the panhandle — including the Bluffs of St. Teresa —in early 2014 from The St. Joe Co. for $565 million, according to reports at the time. The land is spread across eight Florida counties.

Florida’s DEP notes in a statement that the “milestone” purchase provides “benefits to climate resilience,” preserves rivers and lakes that are “critical to water quality, quantity and the health of the region’s aquaculture” and safeguards animals’ habitat.

The Bluffs’ deal isn’t the only conservation-rated deal that Saunders, who has been recognized as one of the top land brokers nationwide by the Realtors Land Institute, has done of late. In Polk County, in the 560,000-acre Green Swamp area, he negotiated a conservation easement for 713 acres known as AVT Ranch for $1.1 million.

Since its formation in 1996, Saunders Ralston Dantzler has completed transactions valued in excess of $3 billion.

Click here to read the original Business Observer article.

 

About SVN International Corp.

The SVN organization is a globally recognized commercial real estate entity united by a shared vision of creating value with clients, colleagues, and our communities. The SVN brand is comprised of over 1,600 advisors and staff in more than 200 offices across the globe in six countries. Our brand pillars represent the transparency, innovation, and inclusivity that enables all our advisors to collaborate with the entire real estate industry on behalf of our clients. SVN’s unique Shared Value Network® is just one of the many ways that SVN advisors create amazing value with our clients, colleagues, and communities. For more information, visit www.svn.com.

All SVN offices are independently owned and operated. To learn more about becoming an SVN commercial real estate business owner, visit svn.com/franchising-opportunities/.

Finding Success In Commercial Real Estate: The SVN Difference

Posted on by SVN

Transparency and openness have long been hallmarks of the SVN culture and business model. Embracing and fostering inclusivity drives our approach to practicing commercial real estate, which is rooted in proactively cooperating and collaborating with our colleagues, communities, and even our competitors. It is this shared vision that enables SVN to create more value for our clients — 9.6% more value, to be exact.

We recently held our quarterly “JumpIN” event, which is designed to acclimate and welcome new-to-SVN advisors to the systems, tools, resources and culture inherent in the organization. Today, we’re pulling back the curtain and inviting you in to one of our internal JumpIN training sessions. And in the open and transparent manner in which SVN operates on all fronts,  we’re giving you a closer look at how we train and develop our SVN advisors and staff.

The commercial real estate industry is rapidly growing and constantly evolving, driven by powerful, transformative trends in technology, consumer behavior, culture and more. In such a dynamic, mercurial and competitive industry, it’s critical now more than ever to build a strong point of differentiation that helps an SVN advisor stand out as the advisor of choice.

So, what makes one commercial real estate advisor stand out from another? As a CRE broker, what can you offer that your competition can’t (or won’t)? How do you become truly different? And, ultimately, how do you leverage your point of differentiation to create more value for your clients, colleagues, and communities?

These were some of the questions that led to the creation of what we call The SVN Difference.  

  One of the most profitable commitments SVN advisors can make is to become a champion of understanding and articulating all components of the SVN Difference. Just as its name implies, The SVN Difference is the strongest differentiating value proposition that SVN advisors have — it’s the sharpest tool in the toolkit.

Democratizing commercial real estate information to bring greater transparency to the marketplace is receiving an abundance of attention today – our company and the SVN Difference were built on this idea in 1987.

Our forward-thinking, innovative approach early on positioned SVN to be on the bleeding edge of technology in CRE. For 30 years we have pioneered the development of online collaboration platforms, allowing us to deliver better results for our clients. In fact, SVN was the first firm in the industry to connect our offices in the southwest via a local area network. Later, SVN developed the industry’s first online publishing platform, known today as Buildout. Today, we’ve opened up our weekly in-house sales meeting, SVN Live, to anyone who wishes to participate.

So, what does all of this mean?  

  It means that SVN was built to be future-proofed.

It means that SVN was built to deliver better results.

It means that SVN was built to last.

The commercial real estate brands with whom SVN competes are all themselves competing on size and breadth. Whether it’s the highest number of brokers, greatest number of markets served, or the most access to data — they are all issuing the same narratives. It is therefore our job as SVN advisors to effectively articulate our compelling point of difference and demonstrate what we can do that the competition cannot.

It’s important to keep in mind that the SVN business model is  rooted in openness and transparency in conjunction with a fee sharing model, which ensures that we’re putting our money where our mouths are.

Unfortunately, SVN is the exception — not the rule. But it’s our mission to change that.

It’s rare for the industry to step back and question the soundness and integrity of industry business models of which they are a part and ask, Why do things work this way?, Why do other industry brokerage models fly in the face of fundamental economics? For instance, today, more than 80% of investment sales transactions are double ended (e.g., the same broker who lists the property also finds the buyer). This happens in an environment where more than 65% of all buyers come from out of state, and more than half the buyers can be categorized as new or unlikely buyers. These buyers are not in any one broker or brokerage firm’s database.

This begs the question: Are the seller’s interests placed first, or are the broker’s (and his/her quest to earn twice the fee)?  

  Upon close inspection of the commercial real estate industry, you’ll see clear points of differentiation between SVN and its global competitors. Exemplary SVN advisors understand that the key to success is mastering these differences and leveraging them to offer clients something the competition is unwilling or unable to offer.

Models like SVN, which embrace automation, collaboration and cooperation, are uniquely positioned to take market share in this era of change, as client behaviors and expectations evolve. SVN advisors have a tremendously powerful competitive differentiating value proposition to bring to the table.

SVN advisors are part of a brand that offers something completely different from what any local, regional, or national firm is offering. This is the SVN Difference. And this difference is what ultimately creates 9.6% more value for our clients.

Now that’s a tremendously powerful competitive advantage.

 

About SVN:

The SVN organization is a globally recognized commercial real estate entity united by a shared vision of creating value with clients, colleagues, and our communities. The SVN brand is comprised of over 1,600 advisors and staff in more than 200 offices across the globe in six countries. Our brand pillars represent the transparency, innovation, and inclusivity that enables all our advisors to collaborate with the entire real estate industry on behalf of our clients.  SVN’s unique Shared Value Network® is just one of the many ways that SVN advisors create amazing value with our clients, colleagues, and communities. For more information, visit www.svn.com. All SVN offices are independently owned and operated. To learn more about becoming an SVN commercial real estate business owner, visit http://www.svn.com/franchising-opportunities/

The Future of Brokerage: Opportunities for those who Advise and Adapt

Posted on by SVN

The following article appeared in the digital version of the National Real Estate Investor 2019 Market Outlook. 

 

 

Technology advancements and changes in consumer behavior are impacting and disrupting the commercial real estate (CRE) industry as we know it. The digitization of the workplace, the growing role of robotics, the Internet of everything, our gig economy, the introduction of automation and AI are all creating a biosphere of promise and challenge. On the brokerage side, access to information will make it easier for buyers and sellers to make more informed decisions. As a result, brokers will no longer control the conversation.

 

The reality is that a broker’s role will never truly go away, but there will be radical changes. While we won’t see an AirBnB or Uber-like company disintermediate CRE soon, technological enhancements will disrupt the traditional brokerage model that has already minimized much of the need for human touch. By revolutionizing data ubiquity and transparency, whether it’s through the blockchain or other means, brokers will need to provide more advisory information to clients.

 

What does this mean for brokers? Three things:

 

  1. There will be no room for “C” players who hoard information and simply serve as connectors. In the future, information will be more readily available to clients and transparency will rule the day. We will see that the matching of a particular property in a particular asset class to a particular client can and will be done by AI.  In fact, we are already seeing this being tested in CRE tech companies. In short, the obvious will be automated, whereas specialization and adding cerebral value to a transaction in an advisory capacity will be demanded and rewarded.
  2. Double-ending deals with a finite group of clients will be rendered obsolete. Every day new and unlikely buyers are entering the market. In the past this meant international buyers in Gateway markets. Today we see not just international buyers entering into secondary markets, but we also see family offices, previously local investors expanding out of market, and even crowdfunding. These new investors are more sophisticated, expect real-time information and access to all data. As a result, landlords are going to demand that their brokers make their properties available to the entire brokerage industry in order to drive value.
  3. There will be no more secrets in CRE. As real estate becomes more commoditized, data more readily available, clients more sophisticated, and the basics automated, the industry will be forced to operate with an open playbook. Fees will need to be clearly stated and they will be earned through creativity and adding value to the process. Those who built their businesses through obfuscation will no longer have an advantage and may in fact be relegated to “C” player status.

 

The reality is that the service that too many brokers in our industry offer clients today is simply not good enough.  Changes in CRE client behavior, coupled with emerging technologies will radically change both the way in which transactions are facilitated, and the industry functions as a whole.  This creates new opportunities for skilled participants. Those who lead and adapt today will sit in the pole position; those who seek to maintain the status quo are at risk of being disintermediated.

 

Kevin Maggiacomo is the CEO and President of SVN International Corp., a commercial real estate franchisor with over 200 offices and 1600 advisors and staff, located in 8 countries and expanding.

 

Why Women Should Consider Commercial Real Estate Brokerage as a Career

Posted on by SVN

Recently, we sat down with the three Managing Directors of SVN | QAV – Deborah Quok, Ann-Margaret Vann and Catherine House, CCIM, FRICS to discuss why more women should consider commercial real estate brokerage as a career.  SVN | QAV is located in San Francisco and is one of several women-owned offices operating under the SVN® brand and benefitting from our platform.

From left to right: Managing Directors of SVN | QAV – Catherine House, CCIM, FRICS; Deborah Quok; Ann-Margaret Vann

 

 

One of the biggest deterrent’s women have when entering the commercial real estate world is the time that it takes to establish yourself. Like any new career, it will take time to get up to speed with the industry and to make a name for yourself.  The short-term income may also be a bit lower than you initially anticipated, but with some patience, perseverance and stick-to-itiveness, the long-term upside will be tremendous. Reason being there is no upward limit on earnings. You are not on salary and you get paid based on your performance. In brokerage, you are measured by results which is completely in your control. In other words, the more you put into to the position, the more you will get out of it. Also, you act as your own boss. You determine when and where you work and you can structure your day around your lifestyle.

Another concern women have about working in commercial real estate is that there are so few of them who are currently in the industry. However, you can use this to your advantage by making yourself stand out. The type of women that succeed in this industry are often the ones who stand up when people say they “can’t” do something. If you are the only women pitching the business to a client that has women at the table, do something or say something that others will remember you by. This will help other at the table get a sense of who you are and may make them want to work with you again the future.

The skillset needed to be successful in this industry may be different than you’d anticipate. It’s not just about sales; it’s attention to detail, understanding your market, problem-solving and your power of persuasion. Successful brokers in the past have always been great at talking with new people and would always be striving to become a leader. Other skills that typically make up a successful broker include:

  • Strong personality
  • Confidence
  • Sense of curiosity
  • Willingness to learn

Commercial real estate brokerage is much more dynamic and exciting than a typical 9-5 job. You control your own destiny. If you are interested in working in an innovative and collaborative commercial real estate company where you can manage your own company, be sure to check out the current opening on SVN’s careers page.

About SVN International Corp.
The SVN organization is a globally recognized commercial real estate entity united by a shared vision of creating value for clients, colleagues and communities. Currently, SVN comprises over 1,600 advisors and staff working in more than 200 offices across the globe. SVN’s brand pillars represent the transparency, innovation and inclusivity that enable all our advisors to collaborate effectively with the entire real estate industry on behalf of our clients. SVN’s unique Shared Value Network®is just one of the many ways that SVN advisors create outsize value for all stakeholders. For more information, visit www.svn.com.

SVN® Expands National Presence with the Addition of NH-based SVN | Real Estate Solutions

Posted on by SVN

SVN opens first NH franchise office in Bedford, New Hampshire

 

Boston, Mass. (July 10, 2018) — SVN International Corp. (SVN), a full-service commercial real estate franchisor of the SVN® brand, announced today the addition of its newest franchise, SVN | Real Estate Solutions, based in Bedford, New Hampshire. Led by industry veteran Larry Pelletier, the firm specializes in assisting family offices, investors and developers nationwide in identifying commercial real estate opportunities and procuring targeted asset classes, as well as helping owners and operators to optimize investment returns on existing assets through repositioning or dispositioning.

Prior to joining the more than 200 global offices of SVN this year, Pelletier spent 18 years as a Principal with T-Rex Capital Group, a private investment firm, where he was responsible for acquiring, financing, managing and disposing over five million square feet of commercial assets nationwide. Prior to T-Rex, Pelletier was the founder and principal of Real Estate Solutions, Inc., a boutique consulting, brokerage and appraisal practice based in Boston and New York. Pelletier led valuation consulting assignments totaling over $25 billion of assets world-wide including such notable assets as the World Trade Center, Mall of the Americas, Rockefeller Center and a portfolio of 20 malls in Australia. Pelletier also created and conducted training seminars on the industry leading real estate valuation software, Argus, Pro-Ject and Dynamis and trained over 5,000 people nationwide.

Pelletier’s ownership and investment experience includes office, retail, apartment complexes, data centers, resorts and development. Previously held positions include acquisition manager for Boston-based Leggat McCall Properties and as real estate syndication associate for the public accounting firm of Kenneth Leventhal & Co.in New York.

“I am excited about joining SVN and taking a lead role in increasing our national engagements in the region. By combining my ownership experience and the networks I have built with SVN’s diverse portfolio that includes more than 500 domestic and international markets, I intend to provide increased visibility and new investment opportunities for the clients I serve. Additionally, the resources and flexibility that are built into the SVN model is truly unparalleled. I feel privileged to be a member of the SVN team.”

Combining SVN specialized product counsels which include office, retail, multifamily, hospitality, industrial, self-storage, marinas, golf courses and resorts along with property management, Pelletier and his team at SVN | Real Estate Solutions intends to utilize the SVN extended network and culture of collaboration to enhance its suite of real estate services.

Pelletier holds a Master’s degree in Finance and a Bachelor’s degree in Accountancy. He continues his educational pursuits in the Master’s in Financial Planning program at Bentley University. He is a licensed real estate broker in New Hampshire, Massachusetts and Rhode Island.

 

 

September 2016 Commercial Real Estate Update

Posted on by SVN

Commercial Real Estate, Interest Rates, and the Federal Reserve

On September 20-21st the Federal Open Market Committee will meet and announce their decision on the target Federal Funds Rate and issue guidance on future changes. Given that the unemployment rate has remained stable and below 5% (4.9% as of the latest August report), hiring averaging above 200k per month for the long term, and inflation starting to read above 2% (2.1% annualized rate according to the Price Index of Personal Consumption Expenditures in the second quarter of ’16) it is widely believed that the Fed will resume raising its rate this September if economic conditions remain stable. The current target rate is 0.25-0.50% and any raise in this month is not likely to be more than 0.25%; however, the recent jobs report of only 151,000 (below the hypothetical 200k target to sustain growth) has led some to believe the rate hike will be paused to November.

A quarter point increase in and of itself is not likely to have any real significance to commercial real estate or other long-term assets; what will be impactful is the perceived stance of the Fed going forward with regard to the timing and magnitude of future rate increases. If the Fed postures that it must be aggressive in fighting inflation, then long-term interests will likely rise as could cap rates on investment real estate. This is not a very likely outcome of this FOMC meeting; the more likely outcome is a slight raise, or even deferment to the November meeting, with continued guarded measures to watch conditions unfold. With GDP growth averaging around 1%, it is hard to envision great fears about an “overheated” economy. Thus, it is not logical to expect much to change in the near term for commercial real estate, whatever the Fed may decide.

The Federal Reserve: Promoting Full Employment and Price Stability

To understand what the Fed is attempting to do, one must remember that they are said to operate on a “dual mandate” to promote full employment and price stability (i.e., keep inflation in check). At 4.9%, the US economy is theoretically at “full employment”, but given the slow rate of wage growth, small gains in productivity, and seemingly tenuous inconsistencies in hiring (May added only 24k new jobs) there is not a widely held view that the employment situation is healthy enough to sustain new economic shocks. Further, the unemployment rate that includes discouraged, marginally attached, and part-time workers who would prefer full-time employment stands at 9.7% (this is known as the U6 measure) which is above its hypothetical target of around 8% but drastically improved from its recessionary peak of 17.1% in December of ’09. Thus, the Fed has little motivation to “pump the breaks” and risk moving away from full employment.

Inflation and price stability is much trickier to assess. The Bureau of Economic Analysis produces the Price Index of Personal Consumption; as stated above its most recent reading is above 2%. The more commonly cited Census Bureau Consumer Price Index (CPI) is currently reading 0.8% annualized for all-items and 2.2% for all-items excluding food and energy. Overall, prices do not appear to be rising in totality, but certain areas such as Shelter, Transportation Services, and Medical Care are all growing at rates above 3%. If energy prices were to move upward, overall inflation could spike well above 3%. Thus, the Fed is pressured to “not wait too long”.

Impact on Commercial Real Estate

Commercial real estate has been in the winner’s circle for quite a few years, benefiting from high rent growth and simultaneously low interest rates and capital costs. Even low energy prices have a direct boost to net operating incomes of many commercial landlords. This dynamic is not poised to reverse itself in the short or even medium term. In fact, as fixed-income securities are much more at risk to interest rate spikes, more investment capital could move to CRE assets as a result of the Fed decision. In summation, real estate investors have little to worry about this round; but, it would be foolish to believe this low interest rate, high rent growth environment will last forever.

To learn more about the current CRE market and economic conditions throughout the U.S., read the 2016 Market Outlook Reports here.

CRE Market Outlook

[bctt tweet=”Real estate investors have little to worry about this round #CRE” username=”svnic”]

Late Summer 2016 Commercial Real Estate Update

Posted on by SVN

2016 Continues to be a Year of Strong Performance in Commercial Real Estate

While macro-economic uncertainty and global instability may grab headlines, commercial real estate fundamentals and pricing continues to grow and expand according to second quarter results of major real estate data providers REIS, Inc. and CoStar Group. Overall with limited exceptions, all major sectors of commercial real estate experienced positive net absorption, declining vacancies, and positive rent growth in the second quarter of 2016, continuing a growth trend that has been in place for several years now according to REIS, Inc. The leading sector, in terms of rent growth, was multifamily with an approximate 1% growth in effective rents while office, industrial, and retail all experienced rates around 0.5%, which is just above estimated inflation. The improvements come as a result of sustained, stable new demand and limited new supply. In fact, REIS, Inc. reports that in the second quarter, completions of new apartment units, office space, and retail space fell in year over year measures as the overall pace of new construction slowed slightly. Census Bureau data also showed an overall rate of decline in volume for construction spending in all categories as well.

Slow and Steady Growth Through 2Q ’16

Thus, the markets are facing a continued dynamic of slow, but meaningful demand growth with relatively slower rates of new supply expansion; thus the result of higher rents and lower vacancies is entirely logical. Further, this condition of relative undersupply is only likely to get worse before getting better as capital markets remain constrained in financing new developments. So for now, tenants will be the losers and landlords the winners. Of course, the lack of quality, available vacant space in some markets is actually forcing firms to move markets to expand and thus causing some pain in some municipalities’ economic development initiates. Enterprising developers in certain markets may find great reward in speculative development at this stage of the cycle.

Pricing of commercial real estate assets also showed growth in the second quarter of 2016. CoStar Group reported a quarterly gain in pricing of 2% which represents a reversal from the first quarter which saw modest declines. CoStar’s value-weighted US Composite Index, which is more representative of large institutional grade assets, was up 3.3% quarter over quarter; while the equal-weighted US Composite Index, more inclusive of smaller properties, rose by only 2.1% in the second quarter. All property types were positive with apartments being the year over year leader at 8.5%. While all pricing results were positive, the rate of growth for 2016 is slower than 2015, but still pointing to the potential for 2016 to be a record-setting year.

Supply, Demand, and the Strengthening Job Market

The most recent quarterly results highlight the fact that supply and demand fundamentals are driving the commercial real estate markets despite turbulence in the capital markets, tightness in the lending environment, and even macro-economic slowdowns. Thus, it is logical to expect most markets to show resilience in the face of continued uncertainty. Of course, national job growth, which showed the initial signs of a slowdown, has rebounded back to strong positive growth in the past two months which is a positive indicator of real estate demand increasing in the near future. Overall, investors should be most concerned with monitoring localized oversupply or idiosyncratic demand pullbacks as the nation appears very stable and relatively healthy.

The next shoe to drop could be the Federal Reserve resuming their planned interest rate hikes given the positive hiring results of June and July. This could of course impact commercial real estate by raising cap rates and increasing the index rates of new loans. Since today’s cap rate spreads to treasury rates remain relatively wide, there need not be significant impact from such events but are nonetheless a source of risk, especially to pricing.

To learn more about the current CRE market and economic conditions throughout the US, read the 2016 Market Outlook Reports here.

CRE Market Outlook

Mid Summer 2016 Commercial Real Estate Update

Posted on by SVN

Discerning Solid Demand Drivers from Fads in Commercial Real Estate

As economic data suggest the US macro economy is just slowly growing, 1.2% annualized GDP growth for the second quarter of 2016 as a prime example, it is worthy to question the source of sustained demand growth for commercial real estate. Overall, commercial real estate prices are at or near all-time highs according to Real Capital Analytics and occupancies are generally near normal peaks. Thus, it is anticipated that many investors and market participants will begin or have begun to question where commercial real estate is in the proverbial “cycle” and if some form of a downturn is probable for the future. While it is difficult to forecast the future, determining whether present property fundamentals and pricing is a result of solid demand drivers or just potentially fleeting “fads” is highly worthwhile and more important for long-term investment decisions.

Demographic Waves Driving Commercial Real Estate Demand

In real estate, demand trends are ultimately governed by demographics. There are two major demographic waves that will persist for years to come. First, the rising of the Millennials and second, the aging of the population (also known as the Baby Boomer bust). While this is hardly a new topic of conversation in the real estate industry, some of its most primary implications to core demand seem lost during said “cycle” discussions. To illustrate why these discussions must be merged, a simple snapshot of 30-year-olds in America is presented courtesy of data from the US Census Bureau. In 1975, 71% of 30-year-olds had married, had a child, completed schooling, and had moved out of their parents’ house; as of 2015 the number of 30-year-olds meeting all four criteria had fallen to 32%. Further, this trend is worsening and not likely to reverse anytime soon. Now, given that data, consider where a rational person who is unmarried, childless, and potentially in school is going to live when they finally move out of their family home – clearly the answer is in rental housing. Thus, those analyzing the apartment sector without considering the impact of such changing demographics are more likely to see oversupply, when in fact the actual condition for some markets is undersupply.

Demand drivers - apartment buildingsA similar story regarding the aging of America can also be made using Census data which shows that the percentage of the population over 65 will go from less than 14% in 2010 to almost 22% by 2030. Now, consider the prototypical 65-year-old household; it will likely be childless (at least under the age of 18) with just one to two adults with potentially limited income. With a little creative analysis, it is apparent that the prototypical Millennial household (i.e., a single person or two adult individuals with limited income) is actually quite economically similar to the Baby Boomer household. Further, while not identical, both will have somewhat similar demands for real estate. Thus, the ever insatiable demand for multifamily, certain types of retail, and other properties seems far more logical when all sources of demand are considered. In short, apartments are doing well today, in both fundamentals and pricing, because they benefit from solid demand drivers; meaning those not likely to deteriorate in the short term and most likely to persist for the long term.

Finding True Demand Drivers Across Product Types

When analyzing all other sectors such as office, industrial, retail, and hospitality, it is equally important to assess how “solid” the demand drivers are for those sectors’ product. E-commerce appears very “solid” and thus its impacts on retail and industrial are likely to persist as well. For the contrarian example, consider trends in co-working, clustered work spaces, and other trends in office space; they may all end up being a “fad”, as they are not backed by a solid demand driver. Thus, savvy investors do not spend time assessing “cycles”, they spend time discerning true demand drivers from fads. Most, if not all, “bubbles” that burst are fads being discontinued. This includes the housing “bubble” of the 2000’s; the “fad” was mom and pop investors buying multiple houses just to flip, even though they could never live in or afford them as rentals.

To learn more about the current CRE market and economic conditions throughout the US, read the 2016 Market Outlook Reports here.

CRE Market Outlook

[bctt tweet=”Overall, commercial real estate prices are at or near all-time highs #CRE” username=”svnic”]

Early Summer 2016 Commercial Real Estate Update

Posted on by SVN

Investing in Commercial Real Estate for Stability

Present economic conditions are teetering on the edge of flat to very slow growth causing rising fears of a sustained slowdown. The catalysts of these issues are reductions in employment and investment in energy production and a general tapering of demand from overseas. The result to the United States as of June 2016 has been three months of below 200,000 hiring (only 38,000 in May), below 1% GDP growth (0.8% annualized in latest first quarter estimates), and flat growth of corporate profits. Not surprisingly, some investors are worried.

Charlotte - July Economic Update
Charlotte, NC

Those making the jump to say that slow economic growth equals a real estate downturn, or even the feared “bubble” should stop and take stock of the fundamentals. Occupancy rates for all major categories of commercial real estate, even apartments, are stable and improving nationwide. In fact, a recent Yardi Matrix report even states that the “worst” major metro it tracks is Houston, and its apartment occupancy rate is still 94.7% where energy price pains are the worst. Rents are generally still growing for all property types as well, even apartments. This point was also made clear by the same Yardi Matrix report stated that nationwide rents hit another all-time record high in May of $1,204 per month. If rents are rising and so are occupancies, then there is one simple conclusion; demand is still outpacing supply. That is a buying sign, not a selling sign, all else equal.

Supply Not Matching Increasing Demand

New supply, which has increased in the past few years, especially in the multifamily sector, may have trouble expanding in the future. Lenders appear increasingly stringent in providing development financing and labor and construction costs are not predicted to slow their perpetual increases. In fact, the internal, less discussed measures from the government jobs report show that hourly labor costs rose 3.9% in the first quarter. Thus, it appears that a part of the slowing pace of hiring is a cost constraint; not necessarily a falling demand issue. Developers of real estate have known this pain for years; they repeatedly tell stories of projects delayed and slowed due to labor shortages. For the commercial real estate market, this means that the supply and demand balance is likely to remain in favor of landlords, even if user demand cools moderately.

Those considering investing in real estate should look at these facts; solid fundamentals, low levels of new supply, and low interest rates when analyzing the next acquisition. Yes, it should be noted, that one great benefit of tepid economic indicators is remaining low interest and borrowing costs. The Federal Reserve is far less likely to push interest rate increases in 2016 than earlier thought and borrowers should take advantage of this. Plus, the real return to bonds and stocks is likely to drag lower compared to real estate, especially when considering the global exposure of many publicly traded companies. Real estate can provide a real income yield, supply and demand suggests that it can grow, and best yet, it can grow with inflation when and if it starts back up. Real estate offers income and stability in these types of economic climates; even REITs have outperformed the general stock market in 2016 to prove the point.

Investors Seeking Affordable Stability

Austin - Economic Update
Austin, TX

There is one theme that investors should keep mind, that is “affordability.” Rents can only rise as high as incomes (personal or business) can support. Growth patterns show people and firms moving from high-rent “24 hour” cities (New York, San Francisco, Los Angles for example) to lower rent “18 hour” cities (Nashville, Charlotte, Orlando, Phoenix, Austin for example). Thus, while the major markets have been the leaders in the past few years, it’s logical to expect the “secondary” markets to be the relative winners for the next several years. If a property provides great value and utility at a relative “affordable” price point; then it is best positioned to provide stability in all economic environments.

In conclusion, it would be a mistake to equate minor economic jitters with impending doom, as many on television like to do. The United States went through a significant downturn from 2008 through 2012, but frankly hasn’t grown that fast since. Thus, the economy really is not possibly “overheated” as it was last time. Since commercial real estate is undersupplied on a relative basis, it may actually be one of the best investment categories in the near to long term; a totally different starting point than in 2008.

To learn more about the current CRE market and economic conditions, read the SVN Commercial Real Estate Cooperation Report here.

[bctt tweet=”There is one theme that investors should keep mind, that is affordability #CRE” username=”svnic”]

US Commercial Real Estate Markets After BREXIT

Posted on by SVN

Analysis for SVN CRE Colleagues and Clients

Last week the world woke up to the implausible, the United Kingdom voting to leave the European Union. Immediately global and domestic equity markets have been volatile with rapid downside moves while perceived “safe” assets such as gold and US Treasury bonds soared in price. REIT stocks, perhaps a leading indicator of the market reaction and a flight towards the tangibility of commercial real estate, have fallen less than the market averages in the days since the BREXIT. All of these reactions, and most that will occur in the coming weeks, are simply reactions to the uncertainty; as nothing has really happened yet. Here is what is known so far:

  1. The UK will suffer from the uncertainty in the short term and probably the long term, assuming Parliament moves forward with the voters’ wishes. Local and especially multinational firms are undoubtedly going to curtail plans for investments in the UK and may even scale back workforces – or at a minimum – rethink future hiring decisions. This alone can and probably will put the UK into a recession, the severity of which could be high if the uncertainty persists. The main unknown factor is how the European Union will react; if they seek to be punitive and harsh to serve as a warning to other countries considering defection, then this could be an ugly “divorce”. Since the UK did not adopt the Euro, this “divorce” is somewhat analogous to a couple separating who never joined finances – still chaotic but not as bad as it could be.
  2. The British Pound will remain low and the US Dollar high. The currency moves, mainly a flight to Dollars from Pounds and Euros, should persist for some time, with higher volatility of course. This will harm the UK the most, and the US will see some benefits in terms of lower fuel costs and prices of import goods. Conversely, US exports will be more expensive so trade flows could become more imbalanced. According to the Wall Street Journal, the UK only accounted for less than 5% of US export volume, so the direct effect should be minimal. Nevertheless, the commercial real estate sectors serving trade and manufacturing could see decreased demand in some instances.
  3. Interest rates in the US are likely to remain low. The “flight to safety” has made US Treasury bonds of all maturities very popular and thus yields are likely to stay low for some time. Further, it is far less likely that the Federal Reserve will move rates up or take other tightening measures this year. This has broad reaching benefits for the domestic real estate markets all around.

BREXIT May Benefit the US Commercial Real Estate Industry

While the jury is still out on the final impacts to the US economy and real estate markets, most noted economists believe that BREXIT will have relatively minimal impacts directly on the US macroeconomy. Further, the flood of capital will actually provide some benefits and firms may direct investment dollars and expansion plans to the US and away from the UK and Europe. To the downside, the strong dollar will hurt export trade and possibly tourism, which has been facing headwinds from overseas for several quarters already. The large multinational corporations with international revenue could see weaker revenue and profit forecasts in the coming years without question. Still, overall “Mainstreet USA” is not likely to see immediate direct effects. When watching the moves of the stock indices it is important to remember that those firms derive anywhere from 30% to 70% of their revenue from outside the country on average; thus a stock market “crash” does not necessarily mean a domestic calamity.

Commercial real estate in the US is most likely to benefit based on what seems probable at this time. Investors seeking yield and safety will find that our real estate assets are a relatively safe place to park capital. The tangibility and low volatility of commercial real estate – even in low cap rate markets – stands to attract investment into the US property markets. This likely flood of capital and lower interest rates could actually cause prices to increase in many markets, especially the major “24-hour” hubs that foreign investors historically prefer. While the long term is far less certain – and there is undeniable risk that the BREXIT could serve as catalyst for a global recession – US commercial real estate looks to be an attractive investment even in those scenarios.

Follow Kevin Maggiacomo on Twitter: @Maggiacomo.

[bctt tweet=”Commercial real estate in the US is most likely to benefit based on what seems probable at this time. #CRE” username=”svnic”]

The Summer Season: Setting Yourself Up For Success

Posted on by SVN

Summertime… and the Earning is Easy

When I picked up my kids from preschool, I noticed that just about every pair of snow boots was gone. (That’s right, in Minnesota, we keep snow boots handy well into May!). Summer is upon us. And, soon, you’ll hear people making the usual excuses for taking it easy:

  • No one does business
  • All of the clients are on vacation
  • I can’t make money

And they’re all untrue.

Now, let me be clear. If you want to take it easy this summer and can afford to, go for it. It’s your business and your choice. However, if you want to solidify your year and maximize your chances of going to Partners Circle, it’s time to buckle down. Think it won’t work? Well, let’s work backwards….

  1. December is, by far, the busiest month of the year for sales.
  2. Deals that close in December go under contract in September or October.
  3. Deals that go under contract in September and October usually get listed somewhere between July and September.
  4. Deals that get listed between July and September usually come from client contacts between June and September.

What does this mean? In brief, summer sets up the best month of the year.

Making the Most of the Summer Months

So what do we do about it? First, let’s face the facts. Yes, people are more likely to take vacation in summer. Yes, they’re more likely to kick off early on Friday. And, yes, some even spend the whole summer at a vacation home or cabin. So what?

If your client is someone who works for a living, they probably aren’t as flaky as you think. Call them any time other than Friday afternoon, and understand that they could be gone for a week or two out of the season. The rest of the time, it’s business as usual, especially if you have something good to talk about. Summer’s a great time for lunches at outdoor restaurants, playing golf with clients and the like. And if you have their cell phone, Friday afternoons can be a great time to reach them. If they’re heading to their cabins, odds are that they’re sitting in traffic and have nothing better to do than talk to you. While New York city traffic to the Hamptons is legendary, this happens everywhere – try taking the Golden Gate Bridge on Friday afternoon to leave San Francisco and get to Wine Country or going out I-94 or US 169 into the lake and cabin area in Minnesota north of the Twin Cities.

Clients who have more free time can be a little bit more challenging, but they’re still reachable. Believe it or not, cabins have phones, computers, and Internet connections. Furthermore, if you’re willing to make the drive to meet a couple of clients in their cabins, you might find that they’re completely different people. Wouldn’t you like to meet prospects that are more laid back, more open and more engaged?

In other words… Business gets done in summer. You just have to do it!

[bctt tweet=”In brief, summer sets up the best month of the year. #CRE” username=”svnic”]

The SVN Commercial Real Estate Cooperation Report

Posted on by SVN

The Commercial Real Estate Cooperation Report Changes Everything

SVN CRE Cooperation ReportIf you read National Real Estate Investor, or follow the SVN Twitter feed (@SVNIC ), you may have noticed a recent piece that I wrote entitled, “When Brokers Cooperate, Sellers Net More.” The NREI article made a bold claim:

Deals sold through broker cooperation achieve a 9.6 percent higher price per square foot, on average, than deals that are double-ended.

In other words, everything we say about the SVN Difference, about Compensated Cooperation and about our Shared Value Network… It’s true. 100% true. Furthermore, SVN has been right about it for almost 30 years.

The NREI article gives you a taste of the argument. If you want to see the whole report that lays out the full analysis, including the stories, end notes, charts and graphs, click the image to the right.

The Best Way of Doing Brokerage

I think the most important part of this report is that the industry has proof to support that cooperation is the best way of doing brokerage... which just so happens is the way that about every other efficient market outside of the commercial real estate world works.

Believe it or not, it’s the first time that anyone has ever done this. We worked with an economics professor to check our numbers, and he did a review of the academic literature. No one has analyzed thousands of commercial deals to see if cooperation works. They’ve done it on the residential side, but never on our side, the commercial side of the business. So, at least for now, this is it.

The CRE (Not So) Secret Weapon

The Cooperation Report is a powerful tool for brokers to use when competing for listings. It provides an arrow in your quiver to support the argument that you, a cooperation driven real estate professional, the way you do brokerage, is proven to earn a higher sale price per square foot. Bottomline. There is no arguing with that. Happy hunting.

[bctt tweet=”Win that listing with this (not so) secret #CRE weapon. ” username=”svnic”]

Have Five Real Conversations a Day for CRE Success

Posted on by SVN

Conversations Drive Commercial Real Estate Sales

Last night, I had to turn on my electric snow melting mats. Again. In March. So you’ll understand why I’m spending a lot of time this morning thinking about our Annual Conference in San Diego.

And what I’m thinking about is the challenge that our CEO, Kevin Maggiacomo, issued to everyone in the room: Have five real conversations a day, every day.

real conversations - lady on the phoneMany of you are reading this and thinking that this isn’t a challenge. After all, you talk to 10, 20, 30 people every day, right? As I write this, it isn’t even 7:30 am, I’ve already spoken to 3 people, and I’m not even in a direct sales position anymore!

Let’s look at what Kevin said one more time… “Have five REAL conversations a day, every day.” That one word – real – makes a big difference. A real conversation is one that you have with a person who is truly in a position to sign a listing, lease, or purchase agreement. Real landlords, real owners, real tenants or truly real buyers. To be clear, I define a real buyer as someone who already owns or leases commercial real estate.

And here’s another kicker… If you’re already doing a deal with someone and you have to talk to them anyways, they don’t count.

Now that we’ve narrowed down “real,” THOSE conversations are usually a bit more few and far between. So, if you aren’t talking to five of those people a day, starting to do that will revolutionize your business. And if you can talk to more than five (when I brokered, my goal was 10 and my average was 8!), you’ll do even better.

How to Have Five Real Conversations a Day

If you aren’t having five real conversations a day, you probably have two questions at this point:

  1. How do I find these real people?
  2. What do I talk about when I get them on the phone or in front of me?

First question… The real people are in your database. Anyone that you aren’t working with today is someone that you need to talk to today. And if you don’t have a database, there’s no time like now to get started (take a look at the first couple of lessons in the SVN System for Growth course on “Encyclopedic Market Knowledge” for help getting started). We can give you all kinds of strategies for how to strategically segment your database and build smart call lists.  But for now, here’s a simple three-step rule:

  1. Find someone in your database that you haven’t spoken to in a while.
  2. Call him or her.
  3. Repeat until you’ve spoken to five different people.

Second question… What do you talk about? Dr. Dotzour nailed it at the conference… Owners and landlords care about two things – will my building stay full and will my value go up. Anything that can impact values (or net operating incomes) or occupancy is fair game, and a great way to start a conversation. It’s that simple.

To learn more about how SVN can boost your brokerage skills and business, click here.

[bctt tweet=”Have five real conversations a day, every day. #CRE”]

SVN CRE Franchise Opportunities: Find the SVN Difference

Posted on by SVN

SVN Franchise Opportunities in Various U.S. Locations

Des Moines Franchise Opportunities

Sperry Van Ness International Corporation (SVNIC) is pleased to announce opportunities for SVN® Franchises in: Des Moines, IA, Northern New Jersey, the State of Connecticut, and Westchester County, NY.

SVNIC is the 6th most recognized commercial real estate brokerage brand according to the Annual Lipsey Brand Recognition Survey. Unlike most national commercial real estate service firms, the SVN® organization is seeking individuals, teams and firms who want the freedom to be their own boss and to grow their existing business.

Experience The SVN® Difference.

With an SVN® Franchise, we provide you with the training, resources and tools you need to run an independently owned office. We also provide you with a real estate community spanning 200 locations serving 500 markets. Every member of our SVN® organization is familiar with our core covenants and our unique culture. To find out more about our culture of compensated cooperation and putting clients’ interests first, you can join us on our SVN Live™ Open Sales Meeting, which is open to the industry.

If you would like further information about opening a franchise, please contact:

SVN CREA - color esignature sizeKaren Hurd
Senior Vice President – Franchise Development
Karen.Hurd@SVN.com
781.812.4272

[bctt tweet=”SVN is seeking individuals, teams and firms who want the freedom to be their own boss. #CRE”]

 

2016 Commercial Real Estate Market Outlook

Posted on by SVN

As we progress through the start of a new year, I am pleased to share my thoughts on the robust 12 months past and to offer my outlook for the commercial real estate market in 2016. Before I do, I would be remiss if I did not thank the SVN Advisors, staff, and fellow brokers for their contributions to driving our market forward in spite of changing times. I know that I speak for all SVN Advisors and staff when I wish you a prosperous year ahead.

The Year Ahead in the Commercial Real Estate Market

Uncertainty Breeding Opportunity

After several years of increasing domestic economic expansion and an ever-recovering and ever-growing real estate market, 2016 opens with the return of global economic uncertainty as China’s economic growth moderates, energy prices decline significantly, and geopolitical threats such as ISIS, pose a consistent threat to Europe and the rest of the world. While it remains unclear how today’s macroeconomic conditions will impact commercial real estate markets, there are two scenarios. The first is that global market weakness will impact domestic financial markets, the second is that market impacts remain moderate and commercial real estate remains stable and continues to grow due to strengths in core fundamentals. We believe that the second scenario is more probable given the unique opportunities being posed by forces – like demographic shifts – that are proceeding independently of macroeconomic trends.

Manhattan - commercial real estate market
Manhattan, NY

As for the commercial real estate markets themselves, 2015 was an amazing year. Real Capital Analytics reported a total of $533 billion in sales representing a 23% gain over 2014, and the second highest level of investment volume over time behind the peak $573 billion in activity seen in 2007. Further, the Moody’s/RCA CPPI has given an initial estimate of 12% year over year price appreciation in 2015. These trends are more likely than not to persist throughout 2016 for several reasons. First, global pressures will have two effects:  One, keeping interest rates low (despite the best intentions of the Federal Reserve) and keeping foreign money flowing to the United States, a decent amount of which will flow to real estate. Second, fundamentals are strong – in fact, many markets in almost all property type segments experienced rising lease rates and falling occupancies for most of 2015 and are forecast to continue such growth. Third, new supply remains balanced with demand growth and thus oversupply seems unlikely. The lack of increasing new supply given the growth of rental rates amidst falling vacancies can largely be attributed to rising construction costs and relatively tight lending standards for new development.

What happens in the broader United States macro economy is far more difficult to predict. First, the decline in oil and energy prices is absolutely going to cause highly localized and specific harm to those sectors and in turn cause some level of harm to the real estate markets dependent on energy production, such as those in Texas and the Midwest. Historically, oil price declines acted like a tax break or stimulus package for consumers and businesses and the overall economy thus prospered; since the United States has significantly increased its production of oil and energy following the pre-recession oil price spikes, the effect is less certain today. High price markets like those found in the Northeast and California and parts of Florida are likely to benefit the most from energy price declines as it lowers transit and utilities costs and could boost employment via the stimulus effect.

Overall, we expect that the United States economy will grow more slowly in 2016 than 2015 while still remaining positive and thus avoiding recession. Therefore, we do not see any major risks to the commercial real estate markets as long as fundamentals remain relatively strong.

Investment Outlook

commercial real estate market - chicago
Chicago, IL

Commercial real estate investors who made acquisitions during the downturn are now reaping the benefits of taking such risks. Despite, or in fact, because of these significant gains, many investors and market participants are now openly opining on the possibility of a new downturn in the real estate asset cycle. We do not find such arguments to be very compelling for several reasons. First, many of the causal conditions present before the 2008 economic turmoil are not present in 2016 and are not likely to appear in the near-term horizon. The most meaningful indicator of a potential bubble or overpricing of commercial real estate is the spread between cap rates and underlying treasury rates. According to RCA, cap rates averaged 6.5% nationwide during 2015, while the 10-year treasury rate averaged in the low 2% range for most of 2015 and early 2016. This implies a spread of over 4% (or 400 basis points). Today’s spreads are significantly higher than those observed pre-crash where they averaged slightly below 200 basis points and even below 100 basis points for class A assets in top markets according to the commercial real estate economics researchers at the Lakemont Group. In summary, the market is not presenting the same risk/return profile observed before the 2007 peak of pricing. Further, debt availability is far more constrained post crisis with total leverage utilization down significantly (in fact, the percentage of all equity transactions in many markets is staggering) and therefore the risk of default is relatively low for most investors and deals. Thus, we believe pricing in commercial real estate markets does not represent a new bubble or other significant source of risk.

This conclusion is further strengthened by our belief that interest rates will not experience significant upward pressure in 2016. The energy sector declines and overall global pressures will likely start impacting GDP and employment statistics by the end of the first quarter of 2016.  The likely result will be the Federal Reserve slowing or even pausing further rate increases in 2016. Debt markets should remain open and active in 2016 as they did in 2015. If debt costs do not rise and fundamentals remain stable or growing (even if at slower rates than in 2015), it is not logical to expect price declines. In fact, we expect modest price appreciation for most markets.

Top Markets for Property Sales in 2015

(Ranked in terms of total dollar volume)

  1. Manhattan – $55.9B
  2. Los Angeles -$27.6B
  3. Chicago – $22.6B
  4. Dallas – $19.5B
  5. Atlanta – $16.9B
  6. Boston – $16.4B
  7. Seattle – $14.9B
  8. San Francisco – $14.3B
  9. San Jose – $12.5B
  10. Phoenix – $12.1B
Source: Real Capital Analytics

The list of top markets for commercial real estate sales in 2015 appears relatively similar to lists for the past 5 years with the new additions of Phoenix and San Jose. These markets attract institutional capital from private equity, REITs, and foreign buyers and have been the most competitive to find deals, especially with attractive yields. Overall, given the increasing level of global macroeconomic uncertainty, we expect these and related top tier markets to gather an increasing share of commercial real estate investment activity in 2016 as money moves to areas of perceived lowest risk.

Top Growth Markets for Property Sales in 2015

(Ranked in terms of YOY percentage increase in sales volume)

  1. DC/Virginia Burbs – 121%
  2. Baltimore – 71%
  3. Orange County – 70%
  4. Northern New Jersey – 69%
  5. Seattle – 68%
  6. Orlando – 68%
  7. Portland – 61%
  8. Central California – 60%
  9. Inland Empire – 58%
  10. Phoenix – 54%
Source: Real Capital Analytics

The above list of markets may present some of the best opportunities for growth and price appreciation given their relative strength. Capital is starting to rotate to these markets and further price increases may potentially follow. There will likely be expansion in cap rate spreads between primary and secondary markets in 2016, especially if foreign capital flows increase as predicted and those funds seek assets predominantly in only the largest markets. Thus, yield-seeking investors will likely find the best opportunities in the non-top tier markets (such as most of those on the list above).

Miami - commercial real estate market
Miami, FL

Beyond market, property sector is equally important in terms of forecasting investment performance. According to RCA, the apartment sector has been the top performer, up 38% from the peak (defined as Q4 ’07), followed by office, up 18% from the peak. Retail and industrial have lagged at -1% from peak and up 3% from peak respectively but performed well in recent years. We find it impractical to give overall guidance for property sectors on a nationwide basis and encourage investors to work with Advisors who are knowledgeable about each sector in their respective market as finding the best performer can be challenging. Industrial properties offer a prime example of such quandaries – industrial real estate in energy markets should face decreased space demand as that sector contracts in 2016. By contrast, industrial distribution facilities in areas of high population growth (like Florida) may over-perform as retailers shift distribution from stores to warehouses as online sales continue to dominate.

Trends to Watch

Perhaps the most discussed trend in commercial real estate in recent years has been the Millennials, the age cohort who are changing work and living arrangements across the nation. A relatively less covered demographic trend of greater size and perhaps importance is the aging population. According to data from the U.S. Census Bureau and analyses by the Lakemont Group, the overall population in the United States is forecast to grow by 11.55% in the next 15 years while the population above the age of 75 is forecast to grow 69.21%. In fact, those over 75 years old will represent almost 10% of the population by 2030 (those above 65 will be over 20% as well). While many real estate market participants correctly use these statistics to justify the need for more senior housing, there are actually many other real estate  opportunities to service this growing segment of the population. Market rate apartments with features and locations this demographic wants, can use, and can afford is one such example. Properties to house medical services and activity retail is another. We encourage investors to think long-term when making acquisition, disposition, and asset management decisions. This is one long-term trend that could shape demand for many property types for decades into the future.

Concluding Thoughts

2016 has started with higher levels of volatility in United States equity markets as a result of justifiably significant fears of global economic pressures causing falling demand domestically. While some investors are taking a fearful stance, we see a different outcome. It is probable that global uncertainty will serve to keep interest rates low and allow for growth of fundamentals in the commercial real estate markets and in the broader domestic economy. Furthermore, even in the event of a domestic economic slowdown, the global uncertainty could lead to lower interest rates and even greater inflows of foreign capital, supporting the domestic commercial real estate market (the current risk / reward proposition of U.S. investment is unbeatable).

Commercial Real Estate Market - Los Angeles
Los Angeles, CA

If such occurs, it is likely for 2016 to be another strong year for commercial real estate transaction volume, net operating income growth, and even price appreciation; however, expect all to grow at a slower rate in 2016 than in 2015. Investors and property owners should be aware that today’s commercial real estate economy has little in common with previous downturns. As such, we believe that the risk and return profile of commercial real estate is still attractive in 2016 and is likely to remain so for at least the near-term horizon.

 

Follow Kevin Maggiacomo on Twitter: @Maggiacomo.

[bctt tweet=”We believe that the risk and return profile of commercial real estate is still attractive in 2016. #CRE “]

CRE Brokerage Firms: Should You Stay Independent?

Posted on by SVN

Independent vs. National Commercial Real Estate Firms

“To be, or not to be, that is the question…” goes the famous opening line of an act from the Shakespeare play, Hamlet.

That very same question is what a lot of CRE Principals ask themselves every day. “To Be Independent or not to Be Independent… and Be with a National Firm.”

The decision is not an easy one, especially for an Independent who may feel as though his/her niche in the marketplace would be disruptive to current business if they were to align themselves with a national platform.

If you’re someone who wants to buy and sell for their own gain and possible syndication, well, a national platform may not be the choice for you. However, if you are an independent CRE brokerage or property management firm that wants to step up their game and compete with the national players, then looking at a national platform definitely behooves you to take a little time to gather information so you can make a knowledgeable decision.

5 Factors to Consider When It Comes to Independent vs. National Firms

Let’s first consider the information that would allow you and your firm to make that informed decision:

  1. Technology: I know, I know. It’s always changing and it’s one of the biggest expenses an independent firm incurs. If not in hardware and software, in people or outside services. A few questions to ask are: “Does this national platform have the technology I will need today and position me for future growth without a seismic shift in how I do business or in training? Is it cloud-based or on premise technology? Will the firm help train, accelerate my transition to its platform? Is what I currently have working?”
  2. Financial: As Bill Clinton once said, “It’s about the economy, stupid.” Well, in our business some would argue it’s “Show me the money!” A few things to consider: “Do I see how this move to a national firm would enhance my bottom line? Will it allow me to reduce marketing expenses or greatly enhance my marketing efforts? Is my market demanding or is it asking for more of a national presence to be competitive? How can it help me with existing and new relationships? Can it help me do more deals? Can it help me recruit and retain top talent? And last but not least, what are the commission splits and what are the fees?”
  3. Personal: What will ultimately suit my business, my people, my family and my clients? What do the next 3-5 years look like in my business?
  4. Intangibles: What are the Unknown Unknowns? I like to call them the “unk unks.” To get this perspective, it is very important to talk to the current principals of the national platform you are considering and get a mix of their experience. Do your due diligence and spend a little time with principals who have been affiliated from 1 year to 5 years with the national platform you are considering. This is imperative before making your final decision. This will allow you to see what the “real deal’ is without all the marketing hype. “Looking under the hood to make sure there is an engine there” is necessary before your final decision.
  5. Why not you, why not now? – Only you have that answer…

Brand Identity and SVN® Commercial Real Estate Advisors

Last week I was asked by a prospective SVN principal: “I am concerned my brand identity will be compromised and I will lose the local flair with a national platform. What should I do about my brand?” My response: “I don’t know about that, we can talk about it; however what I do know is what I hear from owners of independent firms who were asking the same questions before they joined forces with SVN…”

SVNHere’s how SVN can address the Independent vs. National Firm concern, from the words of various members of the SVN community:

“With a national platform, we now harness the power of one of the industry’s 6th most-recognized names with the expanded reach of an international network of over 1,300 Advisors in over 500 markets. The brand has definitely given my firm the opportunity to grow my business and client base. I now sit at the table to compete with the other nationals in my market.”

“We now have unlimited access to industry leading-edge commercial real estate tools and technology that helps maximize our clients’ returns and saves us time and money.”

“We now have expanded visibility and marketing to reach the widest possible investor audience and access to a broader array of asset classes and so much more as part of a global network. It is the SVN Advisors that make up the difference…this is a global network where each person is committed to putting their clients’ interests first.”

If you are looking to “step up your game” – now is the time to gain information to help you make a knowledgeable decision so you are ready for growth in 2016. The best of luck to you with your “to be or not to be” decision!

Read more about Karen Hurd here.

[bctt tweet=”If you’re looking to step up your game – now is the time to gain information to help you make a knowledgeable decision so you are ready for growth in 2016! #CRE”]

Project REAP Promotes Diversity in the CRE Industry

Posted on by SVN

Diane Danielson REAP advertisement
@DianeDanielson appears in Project REAP ad. Photo courtesy of @ReidBennettCCIM

Project REAP (Real Estate Associates Program) provides underrepresented minorities with access to the commercial real estate industry through classes and connections to sponsor firms and supporters. Each year, several of our SVN® Advisors and Experts participate as instructors and even recruit Project REAP talent. When Project REAP President and Executive Director, Gregg McCort asked if I could say a few words about why we support the program for an ad campaign, it was simple. Diversity is good business.

“The Sperry Van Ness (SVN) organization has always taken an innovative approach to separate itself in the brokerage business. As COO, I knew that repeating past hiring practices would not serve us in the future where our clients would demand greater multicultural representation. Sperry Van Ness International Corp. (SVNIC) supports REAP because it gives us access to diverse talent that more fully represents our prospective clients. More than promoting diversity and inclusion, REAP introduces our brand to accomplished professionals who can solve problems, create opportunities and open new doors. Investigate the benefits REAP can bring to your company. Because great talent leads to greater success.”

Diane Danielson, COO, Sperry Van Ness International Corp.

[bctt tweet=”SVN supports REAP because it gives us access to diverse talent that more fully represents prospective clients. @dianedanielson of @SVNIC #CRE” via=”no”]

I caught up with Gregg earlier this week for a brief interview. As a longtime supporter of Project REAP, the SVN organization stands to benefit from learning more about the initiative.

Gregg Mccort Project REAP
Gregg McCort, President and Executive Director of REAP.

1. What is Project REAP?  

REAP is a talent delivery system that links accomplished professionals who just happen to be minorities to the commercial real estate industry.

2. Why do you feel the Commercial Real Estate Industry needs programs like Project REAP?

Same as any other industry—the necessity to tap into talent resources that are outside the normal conduits of procurement. A broadening of the search yielding more productive results.

  3. Has the program attained the desired results?  

Very qualified success. For students and companies willing to dig deeper, to make the connection, to truly explore the possibilities of a CRE careers, yes. In terms of creating a significant change in the workforce profile of CRE, no. That is a longer term effort that will eventually require a sea of change in  thinking within the industry.

4. When and where are your 2016 programs taking place?  

New York and Atlanta in the spring; Dallas-Ft. Worth, Washington and Chicago in the fall.

5. SVN has been a corporate partner with Project REAP, but what can SVN Advisors and other members of the commercial real estate community do to support Project REAP?  

Promotion—of both the entity and the cause.  Increased awareness through the efforts of our supporters/sponsors can go a long way in helping REAP gain more traction and accomplish greater things.

Click here to learn more about REAP on their website.

2016: Making a Difference in YOUR Business

Posted on by SVN

It’s Almost 2016…

Which Means It’s Time to Start Planning!

If you were at SVN, you’d hear me present my tactical business planning call. And you’d hear our CEO, Kevin Maggiacomo, teach you how to do a strategic plan in 60 minutes.

I love business plans and I think they’re important. When I brokered, I created one, reviewed it at least once a week, stuck to it and measured results quarterly.

In fact, that’s the secret to having a business plan. It isn’t that you have it. It’s that you stick to it and measure your ability to stick to it. That’s hard to do. I know. You’re busy. Sometimes you get lost doing deals. And you might even forget about your business plan.

If this sounds like you, don’t worry. I’m going to make it easy on you. Go ahead and print this email out, because you’re going to fill in some blanks. Do it now. We’ll wait.

Welcome back! Now, please write what you need more of in 2016 here:  

  1. ________________________

Now, write what you need to do to get it: 

  1. ____________________________

For instance, you might have written “more closings” on line 1 and “more listings” on line 2.

Go back and add some numbers to what you wrote (or print this out again). For instance, you might want “8 more closings” and “11 more listings.”  Now put them together as follows:

To get the (1)_____________ I need, I will do/take (2)_______________.

For instance: To get the 8 more closings I need, I will take 11 more listings.

Now, run that one-sentence business plan by someone that you can count on – like a coach or your Managing Director. He or she can help you make sure that the goal is a reasonable one and that it can actually help you move your business forward.

Once you get it blessed, execute on it.

Here’s what I mean by “execute on it.” Every day, first thing in the morning, look at that goal and think about it. Then, do tasks that directly relate to that goal first and spend as much time as possible on those tasks – at least half of your day.  It’s that simple.

In a perfect world, you’d be at SVN and you’d create a big-picture strategic plan with Kevin. You’d also create a nuts-and-bolts tactical plan with me. And you’d create a one-sentence must-do goal. All three working in concert — with you at SVN — will give you the best results in 2016.

But, at a minimum, I know that you can do – and stick to – this super-simple one sentence business plan.

To your success in 2016!

See you in San Diego at the conference!

Millennials Perspective on the CRE Dinosaur

Posted on by SVN

Millennials and CRE

The current CRE workforce is aging and it’s important to not only recruit young talent, but to listen to what they have to say about the current state of our industry. The oldest Millennials, also called Generation Y (those born 1980 to 2000), are now 35 years-old, and in five years many of them will be in leadership positions. We at Sperry Van Ness are dedicated to a collaborative culture, and feel it’s of the utmost importance to share new viewpoints among the CRE industry.

Millennial Advisor Kathryn Juneau with SVN/Graham, Langlois and Legendre in Baton Rouge, LA recently shared her views as a Gen Y-er on common CRE practices and how we can make them better, stronger and more efficient. We encourage you to take a read by clicking the image below, as you will definitely walk away with food for thought for your CRE business.

millennials

CLICK HERE

[bctt tweet=”#CRE is a dinosaur industry. Time to evolve. The #Millennial Perspective by @KatJuneau”]

 

How to Make Sure You Are Always Making More Money at SVN

Posted on by SVN

The following blog post is intended for Sperry Van Ness Commercial Real Estate Advisors® and Managing Directors. It aims to highlight the multiple internal resources available to those within the Sperry Van Ness System that can be utilized to help grow income.

In the Sperry Van Ness Business of Making More Money

You have two routes to make more money:

  1. You can do more productive work, since more input equals more output.
  2. You can get better at what you do and earn more by doing the same amount of work.

We talk a lot about doing more, and it is an extremely effective way to grow your income. It’s also something that we can all be doing…

…but it isn’t the only way.

Make More Money by Investing in Yourself

Investing in skills improvement pays real dividends. Learning how to negotiate fees more effectively increases your earnings on every deal without much more work. 10% more up front (by getting 5% instead of 4.5%) and another 5% saved on the back-end by holding firm at the closing table is like doing 7 deals a year instead of 6. (By the way… There’s a video to help you do this – go to the Dashboard, click the S4G button, click “Brokerage Best Practices” and look for “Defending Your Fee.”)

Increasing your hit rates on listings from 50 to 60% adds another deal for every five you do. Need help doing that? Find the videos on “Stuck Listing Analysis” and “Is Your Seller Motivated.” You can also review “The Perfect Proposal” in S4G (since good proposals turn into good packages). And you can come to Boot Camp in San Diego where we have a new session on “Marketing with SVN” to show you a more effective way to get your listings sold.

[bctt tweet=”Investing in skills improvement pays real dividends.”]

Not sure about your negotiating skills? Getting to Yes  is still a classic – and still very worth reading. It was a seed change in how everyone thought about negotiations and can help you find true win-win solutions through principled negotiation instead of positional negotiation. We have a video on “Negotiating From Your Best Position,” too.

These are a few examples, but there are many ways in which each of us can sharpen our saws and get better at what we do. If you can’t make it to Boot Camp in San Diego in December, or can’t wait to get to the Annual Conference in San Diego in February, might as well get started now!

Interested in learning how you can access exclusive CRE tools and training to take your business to the next level? Contact us today.

SVN Annual Conference - Making More Money

Leave the Marketing to Us

Posted on by SVN

The SVN Platform Simplifies Marketing

Earlier this week, I got a copy of an interesting post from the CRE Outsider blog on whether or not Advisors should do their own marketing (see the article here).

The short of it is that you should and shouldn’t do your own marketing. Yes, you should set the direction and have the knowledge to ensure that you’re going in the right direction. But, no, you shouldn’t be doing the actual work to execute on the marketing campaign. Like I’ve told many of you in person, your clients care that you show up with a perfectly prepared proposal book, but they don’t care who filled in the fields or who stood at the machine and bound the book.

And that’s one of the many reasons that, after almost 18 months, I’m still obsessively jazzed about being here at SVN. If you really think about our platform, what it does is give you the tools to get your activity and your brand out there without a lot of effort on your part. You set the direction (and we even help you do that!) and our tools and other features help you make the marketing happen. Here are just a few examples…

  • You can get your listings in front of buyers and brokers on a call, YouTube and SlideShare through our National Sales Call on Monday mornings
  • Qualifying deals can be shared with Advisors across SVN through the SVN National Blast system
  • The SVN 5 Minute Marketer will print – and mail – “Just Listed” postcards for you
  • Real Capital Analytics helps you generate buyer lists
  • BuildOut syndicates deals to multiple websites, getting your listing exposed to thousands or millions of users

Sure, you might have to click a few buttons, but the system is doing the heavy lifting of the marketing work for you. You get deals, and leave the driving – or is that marketing – to us!

To learn more about how you can spend more time making deals and less time making flyers, check out our Careers page here.

[bctt tweet=”Like I’ve told many of you in person, your clients care that you show up with a perfectly prepared proposal book, but they don’t care who filled in the fields or who stood at the machine and bound the book.”]

Getting Your Real Estate License Is Easier than You Think

Posted on by SVN

Step 1: Get Your Real Estate License

So you think you have what it takes to be a CRE Brokerage Superstar. You’re tenacious, you’re a self-starter, you’re self-motivated, and you know how to make connections with the right people. That’s great! But first things first — you need to get your real estate salesperson license before you can start selling properties.

The first thing you need to do it look up your state’s real estate salesperson licensing requirements. Regulations vary state by state. Texas requires 180 hours of classroom training, but we have it pretty easy here in Massachusetts. The state requires only 40 hours of pre-licensing instruction through a state-approved real estate school before you are allowed to sit for the exam. This means that you can become a Massachusetts-certified real estate agent in as little as 4 days, depending on the program.

Every real estate school is different, so you need to do your research to find the right program for you. Many real estate schools offer 4-day “crash courses” as well as night and weekend classes for added flexibility. Certain programs can set you back as little as $250 — an affordable career investment for most.

Although a college degree is not necessary for pursuing a real estate license, the classes are considered college-level. The textbook-style coursework typically includes reading passages, workbook questions and problems, practice tests, quizzes, and the final exam. Course topics cover concepts such as property valuation, contracts, property conditions and disclosures, risk management, real estate laws, and financing.

Following the class final exam, you must take the official state licensing exam. In Massachusetts, test takers must pass the 4-hour exam with a scaled score of at least 70 out of 100. The general portion of the exam is made up of 80 multiple choice questions, about 10% of which involve mathematical computations. The exam’s two sections cover national and state-specific real estate concepts.

The process for getting your broker’s license is fairly similar to getting your salesperson’s license. You have to be affiliated with a broker for 3 years before completing the 40 hours of broker pre-license training in Massachusetts.

It doesn’t take much to get your real estate license. As long as you’re at least 18, you could become a licensed real estate salesperson in a matter of days.

If you’re ready to launch your commercial real estate career, visit our Careers page here.

[bctt tweet=”It doesn’t take much to get your real estate license. As long as you’re at least 18, you could become a licensed real estate salesperson in a matter of days.”]

The Benefit of Listing Commercial Real Estate Properties

Posted on by SVN

What’s the Benefit of Listing Commercial Real Estate Properties?

Let me start with some full disclosure… Every commercial real estate transaction that I have done was at a large, national real estate brokerage. The firm I worked with emphasized the value of listing commercial real estate properties and generally did an excellent job of adding value to its clients. So I’m biased, but for a good reason.

When they’re done the right way, commercial real estate listings work.

That being said, if you’re hiring a Broker that’s just going to talk to the same “usual suspects” then put your deal on LoopNet, I would say do it yourself. LoopNet memberships are cheap, and the “usual suspects” will take your call if you have a deal to sell them. Really. I promise.

So what’s so great about a well-executed commercial real estate listing? Here are a few things to keep in mind.

The Value of Listing Commercial Real Estate Properties with a Broker

  • A professional CRE Broker will value your property and tell you where it will sell. You might not like it, but it will be the truth. Actually, make sure it is the truth. Ask him what his average list price to closing price ratio is. Mine was 99% way back when.
  • If only the “usual suspects” see the listing, they’ll usually low ball you.
  • Good commercial Brokers track people in 1031 exchanges. If yours does, she should be able to get you good offers from great buyers.
  • There are lots of buyers that don’t do a lot of deals but, when they do, they pay good prices. They typically aren’t on the internet a lot and aren’t well-known enough to be in your database, unless you’re very active. A commercial real estate Broker with a good database should know them, though. Listing with THAT Broker will give you access to THOSE buyers.
  • A listing Broker will do a lot of work for you. They can run tours, coordinate advertising, and even do walk-throughs, letting you not only maintain a buffer from the buyer, but also save time.
  • Listing your property shouldn’t cost you much. When a buyer brings you an offer through a Broker, you’re either going to pay that Broker, or the buyer’s going to lower her offer to pay the Broker. If you have a Broker, you know what you’re paying and he/she takes care of paying the other Broker.

Ready to list your property? Find your nearest Sperry Van Ness® Advisor, who will always bring value to your commercial real estate listing, by searching our directory here.

Broker Boot Camp | 4 Traits of a CRE Brokerage Superstar

Posted on by SVN

Do You Have What It Takes to Be a Brokerage Superstar?

Having attended the Sperry Van Ness® Broker Boot Camp in Chicago three weeks ago, I now know a little bit about what it takes to “make it” in the commercial real estate brokerage business. Full disclosure: I’m a marketing intern, so my experience as a broker is non-existent. However, since I had the opportunity to sit in on the first day of the Boot Camp, led by industry veteran John McDermott, I now have a pretty good idea of some of the qualities that differentiate a brokerage “superstar” from the rest.

To be clear, even being just a “good” broker isn’t as easy as you may think. (See my first Boot Camp blog post for some elaboration). To be a “superstar” in any field you need to set measurable goals, as my second Boot Camp blog post discussed. But for commercial real estate brokerage in particular, you must possess 4 specific traits to become a top performer.

The Intern’s Take on the 4 Traits of a Brokerage Superstar

1. You must be tenacious. As a broker, there are few times when it’s acceptable to simply take “no” for an answer. Brokerage superstars are relentless — when appropriate, they prod further with clients who seem to be shutting them down. Instead of calling it a day, a brokerage superstar asks questions when she is slammed with a “no.” For example, rather than ending the conversation when a potential client says he has no interest in giving you an exclusive listing, ask what his reservations are and listen to his response.

2. You must be a self-starter. As I already mentioned, brokerage isn’t easy. Perhaps the hardest part of commercial real estate brokerage is starting out as a brand-new broker. A budding brokerage superstar will jump on the opportunity as soon as she is hired by a brokerage firm by immediately starting to build her database, accumulate contacts, and practice key skills. This brokerage superstar doesn’t wait to receive help or direction. Instead, she takes initiative by doing everything in her power to succeed from the Day 1.

3. You must be self-motivated. From what I understand, brokerage can be a lonely business at times, because it is ultimately up to you as a broker to close your deals and earn paychecks. While it seems scary (in my opinion) to be relying only on commission for your income, a brokerage superstar sees this as an advantage. A brokerage superstar is fearless and confident in her own abilities to bring home the bacon, and doesn’t need outside motivation to stay fired up.

4. You must be able to make connections with the right people. This doesn’t mean you can just say “oh, I’m a social butterfly!” and spend your week chatting with your friends. A brokerage superstar doesn’t just work the room — she works the room with a purpose. She goes out of her way to introduce herself to industry leaders and research the local movers and shakers. Following any meeting or casual encounter, a brokerage superstar takes notes and catalogues this experience for future reference. As a broker, your business is built on knowing the right people, so you must be professional, likeable, and strategic in order to make worthwhile connections.

If you think you have what it takes to be a brokerage superstar, visit our Careers page by clicking here. 

To learn more about the SVN Broker Boot Camp, click here. 

broker-boot-camp-homenew

 

The Benefits of Being an Early Riser in Commercial Real Estate

Posted on by SVN

Early To Rise….

One of the great things about being an entrepreneur is that you get to choose when you come to work, what you do and when you leave. Especially in Silicon Valley, tales abound of people working wacky hours, pulling all-nighters and doing just about anything other than a nine-to-five day.

When I visit offices, I’m frequently the first one there. It’s not uncommon for me to hand the newspaper to the staff member as he or she walks in to unlock the door. Here’s the funny thing: I’m not a morning person. Really. When I was a college student, I had a knack for still being asleep for my 4 pm classes.

So, what happened? What happened was that I became a broker and I learned that, while I was free to choose my own hours, my clients and prospects were going to dictate the choices that I made.

One of the great things about commercial real estate is that our jobs generally track the business day. Clients are either business people or individual investors that have earned the luxury of not having to think about their buildings outside of typical business hours. Furthermore, many of them are more likely to answer their phones and have time to talk in the morning.

You’d think that this means that if your clients are ready to rock and roll at 8:30 am, you should be too.

But that’s too late.

Think about it. When you get into the office, you need to take off your overcoat (assuming you live where they have winter), boot up your computer, get coffee, touch base with co-workers, check your email and do all of those other things that are a natural part of starting your day. Usually, it’s at least a half-hour until you’re able to do anything productive.

And, in that half-hour, your competitors – many of whom ARE up and running early – have already gotten ahead of you.

The solution? Ben Franklin nailed it… “Early to bed and early to rise makes a [person] healthy, wealthy and wise.”

Manhattan: Early to Rise

To learn how you can get involved in the commercial real estate industry, visit our Careers page here.

How to Effectively Market Properties

Posted on by SVN

The Two Things You Must Do to Effectively Market Properties

2015 is well underway. You clients should be back in the swing of things, which means that you are doing more proposals and taking more exclusive listings. Great!

Now, it’s time to get those listings sold, and to turn them into paychecks. In order to get them closed, you need to market. Here’s the two things you have to do in order to effectively market your properties:

  1. Call every buyer you should know.
  2. Work the entire brokerage community to get them to do #1.

Let’s get down to the details because it’s important to completely do both steps if you want to increase your closing rate.

Call Every Buyer You Should Know

There’s an extra word in this heading – should – but it’s there for a good reason. Right now, most Brokers (and possibly a few SVN® Advisors), get a listing and immediately call their top buyers. Some even call a few more. What most brokers don’t do is to call every possible buyer that they can reasonably find.

I’m not talking about finding every possible buyer in the country – we’ll cover that in the next paragraph. I’m talking about calling the person two blocks down the street that no one else calls, but that buys a building once every 25 years. If you cover them, you’ll get access to qualified buyers that no one else will touch. And, really, isn’t that what your client is paying you to do?

Work the Entire Brokerage Community

In addition to doing your best to find buyers that no one else can find, it’s also your job to make sure that every Broker in the country finds the buyers that you can’t find. That way, your best pool competes with everyone else’s likely pools to find the best possible offer for your seller.

Syndication through our online marketing tools and through electronic mail blasts are also a part of the process, but they’re only a small part.

If you want to know what you can do to energize both the SVN community and the rest of the industry, take a look at the attached infographic. It’s a how-to of everything you need to do to get your deals sold. In fact, don’t just look at it. Print it out, tape it to your wall, and keep it handy to remind you how to get ALL of your listings sold.

To learn more about the Sperry Van Ness® marketing systems and tools, click here.

SVN Value Prop

Broker Boot Camp | Setting Goals for Success

Posted on by SVN

Intern Insights: Setting Goals in Your Personal and Professional Life

If you’ve read my previous blog post, then you know that I learned a lot about the commercial real estate industry by attending the Sperry Van Ness® Broker Boot Camp in Chicago. However, the Broker Boot Camp was not strictly about the brokerage business. In fact, one of the most interesting parts of the training for me was when speaker John McDermott talked to us about setting goals. We’ve all heard it before — setting goals is a good thing. But not many of us actually do it. As author Brian Tracy states in his book Goals!, going through the process of writing out your goals on paper can make all the difference. By writing down your specific aspirations with measurable standards, you have already committed to something tangible.

Don’t know where to start? Not to worry! I’m going to share with you 3 out of my 10 goals that I wrote down during the Broker Boot Camp to give you some ideas.

The Intern’s Top 3 Goals for Success in Life

1. Work out at least 4 times a week. In my opinion (and John McDermott’s), health should always be your number one priority. Whether you’re a high-profile Advisor working on multi-million-dollar deals or a college student like me, finding time to take care of yourself can be difficult. But maintaining good health is crucial, because without your health you can’t perform at your best in all aspects of life. Let’s be real — I probably won’t work out 4 times a week every week. Other things always seem to get in the way, such as my best friend Netflix. But having written this goal down, I now feel accountable for meeting my own expectations. (Now I have to go on a run after publishing this.)

2. Call my dad at least twice a week. Family is also incredibly important — it’s a built-in support system that no one should neglect. But like exercise, family time is often forgotten, as we tend to prioritize working hard and making money over our personal lives. Let me be clear — working hard is awesome. That’s how you get places in life. But at the end of the day, your family is all you have. Using my example, my dad is literally the smartest person I know. I would be missing out on receiving advice, motivation, and support by continuing to work through the evening instead of calling my dad.

3. Graduate magna cum laude in 2017. Since I’m going to be a junior in college, my academics are a huge priority. In the brokerage business, a similar goal could be something like “earn my CCIM designation by 2017” or “make the National Top 10 Advisors list by 2017.” Since school is my “work” at this point in my life, I’m committed to performing at my maximum potential. Hey, I might not graduate magna cum laude. Although it’s not impossible, I know it’s super hard. But now that I have this goal written down in front of me, I have something tangible that I can strive for over the next two years.

I know — my top 3 goals don’t really relate to the commercial real estate business. But that’s sort of the point. No matter where you are professionally, it’s important to keep your personal goals in mind along with your professional ones. If you’re at work, then work. But if you’re off the clock, take time to focus on your health, your family, and whatever else is important to you personally. So grab a pen and paper and write down your top 10 life goals. You never know — all 10 of them might come true.

To find out more about the SVN Broker Boot Camp, click here.

broker-boot-camp-homenew

Is New Development Good or Bad for CRE?

Posted on by SVN

New Development – Good or Bad?

New DevelopmentOne of the most disruptive things in commercial real estate is new development. Just about any new project, other than the smallest and most inconspicuous new buildings, in an area can change everything. At times, it can help and at other times it can hurt. Don’t worry, though…. With good strategy, you can turn someone else’s project into a windfall profit!

Upsides

There are a lot of good things that come from new commercial real estate developments:

  • Increased traffic, making your property more desirable
  • A freshening effect for the whole area
  • The potential for a new, higher, rent standard having a trickle-up effect on every other property
  • Increased land values

Downsides

Of course, a new development can also royally screw things up….

  • Increased traffic makes it harder for customers or tenants to get to your property
  • New buildings make your property look tired
  • Aggressive discounting to fill the new building depresses rents and occupancies in the existing stock
  • The area’s standard for building or tenant quality gets adjusted upward, transitioning your property from an A to a B or C

Positioning Yourself to Take Advantage of New Commercial Real Estate Development

So what’s a landlord to do? The first thing is to research a market before you buy. Although its is impossible to predict what will happen on an unlimited timeline, you can usually get a good sense of what will be happening in an area in the coming five to ten years. After that point, you should be ready to sell the asset and move to your next investment.

Once you know what is likely to come to the area, acquire either a competing property in a different class or a property that will coordinate nicely with the next development. I’ll give more detail on exactly what to look for in a follow-up blog post.

How have new developments impacted your real estate holdings? Let us know below!

To read more on property management issues, download our Top Five Things That Keep Property Management Executives up at Night report here. 

SVN-5Reasons

Broker Boot Camp | Top 3 Rookie Mistakes about CRE Brokerage

Posted on by SVN

Intern Insights: Rookie Mistakes about CRE Brokerage

As a marketing intern at Sperry Van Ness International Corporation I had the opportunity to attend last week’s Broker Boot Camp in Chicago. Now, let me be honest — I knew next to nothing about commercial real estate brokerage going into this training. Since I’m just about as “rookie” as it gets, speaker John McDermott’s “Top 10 Rookie Misconceptions” about the brokerage business provided me with a much-needed wakeup call about the industry.

I’ll admit it — I was guilty of falling for each of the CRE brokerage myths John mentioned, so I’m going to share my 3 favorites with you. It’s time to dispel some rumors…

The Intern’s Take on the Top 3 Rookie Mistakes

1. “It looks easy.” Well, it’s not. If CRE brokerage were easy, everyone would be doing it. Good brokers can often work up to 80 hours a week building their businesses. Since brokers rely on the commission-only “results economy,” the pressure is always on and the work is never done. You can always be making more cold calls, setting up more meetings, adding more information to your database… the list goes on.

2. “I can do it online.” Perhaps you can, but you won’t be making any money. It’s impossible to “do” brokerage well if you’re sitting at your computer, because the majority of the job involves going out and meeting prospects and surveying properties in person. To all my fellow millennials out there: nothing replaces face-to-face interactions, especially in the brokerage business. Sorry, but no one is going to tweet you your paycheck.

3. “I don’t need to cold call.” Oh, yes you do. Although cold calling is intimidating, especially for avid texters like me and my generation, it’s proven to be the single most effective way of reaching a prospective buyer or seller. Look at it this way: you only need to cold call each contact once. After that first time, the person already knows you, so that awkwardness of cold calling subsides. By the way, as a broker you should aim to make 250-300 cold calls a week. So hop on that phone and get calling.

Clearly, you don’t have to know much about commercial real estate brokerage to get something out of the Sperry Van Ness® Broker Boot Camp. Anyone can learn something useful, especially complete rookies like me.

To see how you can break into the brokerage business, visit our Careers page here. 

To find out more about the SVN Broker Boot Camp, click here. 

broker-boot-camp-homenew

Choosing a Commercial Real Estate Advisor: What to Look for Beyond Experience

Posted on by SVN

When you start looking for a commercial real estate advisor, everyone will tell you to work with an extremely experienced person. Many of the names that you get as referrals will be some of your community’s leading brokers. They are extremely skilled and extremely busy.

The Truth About The “Best” Commercial Real Estate Advisors

While it may seem like commercial real estate advisors are everywhere, the fact is that when you get to the top echelon of advisors, there are very few of them and they are in a great deal of demand. Because of this, many of them are very selective with how they spend their time. Their time management skills are one of the reasons that they are so successful.

If you have a very large transaction, they will give it a great deal of attention and, in most cases, do an excellent job for you. However, if your transaction is small they will probably hand it off to a junior member of their team. When you gauge the size of what you are offering them, bear in mind that what you think is a large transaction is likely a small transaction for them.

Another Option

Work with an established firm like your local Sperry Van Ness® office, and if you can’t engage a senior commercial real estate broker, find a junior Choosing a Commercial Real Estate Advisoradvisor who may lack in years in the business, but does not lack in tools, resources and initiative. Note that in commercial real estate, the term “junior” doesn’t necessarily refer to the age of the broker or advisor, but more likely the years in the industry. Many of our own top SVN advisors already had successful careers in completely different industries. Why work with a less experienced advisor? First of all, most established firms are relatively selective about who they recruit, so the odds are that you’ll get someone pretty good. Second of all, that advisor should be desperate to do a good job so that they can build their resume. They will give your deal much more attention than a more experienced advisor will. (We note this also works when selecting attorneys!)

At this point, you’re probably asking “What if they’re incompetent?” Here’s the beautiful thing about young advisors at good firms: they aren’t left alone. When you work with them, they will typically have a senior advisor or an experienced manager watching everything you do. This gives you the benefit of working with a top-of-the-line senior advisor while also giving you a very high level of personal service.

Working hard is what I did for my clients when I was a young advisor, and providing expert oversight is what I did for my advisors’ clients when I was a senior advisor and broker/manager. Now you can take advantage of this trick!

What types of commercial real estate advisors do you like to work with? Please tell us below!

The Sperry Van Ness® team is committed to always putting the client first. Visit our advisor directory to find your nearest Sperry Van Ness Commercial Real Estate Advisor®.

 

Racing to the Finish Line with Your NNN Investment

Posted on by SVN

It is Thoroughbred racing season, one of my favorite times of the year. It was a great Kentucky Derby and Preakness with the favorite, American Pharaoh, prevailing down the stretch for both races. There are some real similarities between horse racing and commercial real estate investing. In the next few paragraphs, I’ll talk about horse racing, and share my views on how it parallels NNN investing.

1. Distance of the Track – Length of Lease TermNNN Investment and Horse Racing

Commercial Real Estate Insight – The distances of the track for the three races is different: the Kentucky Derby is 1 ¼ miles, the Preakness is 1 3/16 miles and the Belmont is 1 ½ miles. This correlates well to a NNN investment lease term. If you have a longer term lease, then location is not as big of a concern. If you are buying, for example, a cell phone or mattress store that will typically have 10 year initial terms, then there needs to be a high barrier to entry and a strong corner location with great visibility and access.

Horse Racing Insight – Given that American Pharaoh had drawn the first door on the race track (one in which it is easy to get bottled up and stuck in the back) and the Preakness is the shortest of the three races (a sprint), I was not surprised to see that Bob Baffert instructed his jockey, Victor Espinoza, to take American Pharaoh right to the front from the start of the race. Otherwise he may have ended up in the back in a “bad location” and lost the race (not get his lease renewed).

 

2. The Jockey Really Matters – Carefully Time Your Investment

Horse Racing Insight – A Thoroughbred race horse weighs over 1,200 pounds. It is very important that the jockey has a strategy about where to position the horse on the race track and to regulate the speed of the horse. The jockey will only get one chance to “ask” (or kick) the horse up to full speed. I will never forget the 2004 Belmont Stakes where Smarty Jones was going for the Triple Crown. Smarty Jones was clearly the best horse, but the Belmont is the longest race at 1.5 miles – a full ¼ of a mile (one time around a standard high school track) longer than the Kentucky Derby, so it is crucial to manage distance in this race. Smarty Jones was in the front and pulling away, but his jockey may have “asked” him to sprint too soon, and Birdstone came out of nowhere. Smarty Jones never saw him, and Birdstone passed Smarty Jones at the end to take the Belmont.

Commercial Real Estate Insight – You have to manage your lease term for a NNN investment. If you NNN Investment Commercial Real Estateplan to sell, it is best to sell with ten years left or a minimum of five years. If you have less than five years remaining, you may need to hold until the renewal or be prepared to take a significant discount. It’s important to have a plan in place when you purchase a NNN investment as to how long you will hold and when to exit the investment.  A real estate investment professional can help you evaluate the best time to dispose of an investment in light of the market conditions.

 

3. Horses Have Personalities – Know Your NNN Investment Assets

Horse Racing Insight – If Smarty Jones had been eye-to-eye with Birdstone as the jockeys “asked” their horses to sprint, there is no way Smarty Jones would have lost. Horses know if they are winning or losing, and if Smarty Jones had been head-to-head with Birdstone, his heart would have pushed him for the win.

Commercial Real Estate Insight – Tenants have personalities, and there are some store managers and district managers who have livelihood riding on your real estate. With today’s technology, they know day in and day out whether they are winning or losing. Make sure you know how the store is doing and get to know the manager. They will share a wealth of information that will help with your long-term planning.

 

Click here to view my bio/listings and click here to view my other blog posts. 

DTZ/CW merger highlights the need for the SVN Difference

Posted on by SVN

The Cushman & Wakefield/DTZ merger has dominated international commercial real estate headlines since its announcement on May 11th.  During that time, debates around the water cooler have centered on its impact and relevance to competitive firms and individual practitioners.  My staff and I have understandably been asked questions like, “What does this mean?” and “Does this matter to us?”

While the dust is far from settling on this massive merger, and while there exists a multitude of differing opinions on the topic, in the post that follows, I’ll clarify my position on the deal and share what I think it means for the SVN brand and its Advisors.

First, this consolidation is following the “Rule of 3” – over the past several years, the world economy (particularly in the developed, free market economies of Europe and North America), has been characterized by a unique economic phenomena of mergers & acquisitions at unprecedented levels.  As a result, the landscape of just about every major industry has changed in a significant way, moving inexorably toward a block of three companies that enjoy a large market presence, while still leaving a great deal of opportunity for smaller, more nimble and more client focused organizations to continue profiting in the market.  This is now in play in the business of servicing commercial real estate and comes as no surprise to many.

Second, it matters.  It matters because while the CRE brokerage industry remains remarkably fragmented, there are now fewer, bigger players.  This can prove to be tremendously advantageous to those outside of this circle, but will also send a wake-up call to many:

  • The Big 3 are increasing their revenue & profitability through market share growth and by providing a generalized “one stop shop” offering.  The growth models of the Big 3 are rooted in geographic-based market share growth and are backed by private equity or public equity giants. This can make for a disadvantage when compared to smaller firms in their ability to innovate. Much like trying to turn an aircraft carrier, these mega firms are not as nimble and swift as their smaller competitors.
  • The multi-layered firms who comprise the Big 3 will stand in sharp contrast to the more entrepreneurial firms outside of the ring.  As an SVN Managing Director said to me “Remember the commercial brokerage business when YOU determined how much you could earn; not a corporation, public entity or the stockholders?”  “That’s SVN!”  I agree – and while SVN is certainly not the only beneficiary of this dynamic, our point of differentiation just got more distinct.
  • As many have already opined, there will be considerable fallout.  Given the above, meshing the two firm’s corporate cultures is a formidable challenge for the executives involved and a strong recruiting opportunity for competitors.  You will see people moving around and significant attrition within the industry.  This is proving to be the case at SVN with our Managing Directors reporting a flurry of meeting requests from the players involved.
  • The day of the generalist is over. These larger firms are better positioned to provide more highly specialized services in every market they serve.  Regional firm and independent generalists best take heed of their better-resourced, specialized competitors.  Now is the time to focus.
  • The industry just became even more opaque. Collaborating and cooperating on investment sales and leasing transactions has not exactly been a hallmark of the big nationals.  Look for their percentage of “double-ended” deals to increase in the year ahead.

This merger matters to companies and brokerages and at both the local and national levels. Here at home, it makes the SVN Difference more stark — and even more important.  And while the opportunities stemming from the above are significant to us, what’s even more significant is that our clients need the SVN Difference more than ever.

I’ll close by sharing excerpts from an email I sent to the SVN corporate team late last week:

Our industry just went from X firms that don’t collaborate with each other to do the best for their clients to X minus one.  If you’re a seller looking to get the best price — or a tenant looking to be shown everyone’s inventory to find the right site — you won’t get better service than at SVN.

There is still only one firm that practices compensated cooperation – 50% of the fee, 100% of the time.  Only one firm that opens up all of their listings on their website and on an internationally known Monday National Sales Call — SVN. They might have gotten bigger. But, when it comes to representing our clients’ interests, we’re still better.

You can experience an alternate SVN Difference. With the mergers and the movements towards more corporate firms answering to stock markets and large equity investors, entrepreneurs are finding it harder and harder to control their own destinies in Commercial Real Estate. Here at SVN, remember that as an Advisor, you can rise as far as your talent and determination can take you with no one to stop you.

I congratulate DTZ and Cushman on their merger. But I’m even happier for our clients and for all of us.

Invest Like the Big Dogs by Carlton Dean

Posted on by SVN

Strategies for Small to Medium Size CRE Investments and Portfolio Growth

One of the niches that Sperry Van Ness®  advisors typically focus on is being very active in the investment property sale market for assets within the $1,000,000 – $10,000,000 range. Of course, we have talented advisors who regularly complete larger, institutional, >$100MM size deals in the larger cities and core markets, but the “bread and butter” of many of our advisors is working in the trenches, in primary (non-core), secondary, and tertiary markets across the United States.

If you are a real estate investor, or you are considering getting started in real estate investing, I would like to offer you the following concepts, tips, and suggestions for creating a successful plan that mirrors what many of the larger public and private real estate investment groups do. It’s not rocket science, you can do it too!

Define your Investment Parameters

mark-516277_1280One of the mistakes I often see both new and seasoned investors make is to not properly define their investment parameters before getting started. This is important because it sets the course for the strategy and allows you to execute the plan more efficiently; and ultimately be more successful, because you have a baseline to which you can compare your investment portfolio.

You could write pages on many of these concepts, but for this post, I will provide a brief outline.

  • Niche: Do you like apartments, office space, self-storage, retail space, etc.? The reason this is critical, is because you can get lost quickly, without a plan. Consider this: If you like retail, do you like single tenant, multi-tenant, big box anchored centers, smaller shadow centers (i.e. think small strip center in front of Wal-Marts, etc.), If you like single tenant investments, because of the typically limited landlord responsibilities, then in which industry sectors would you want to focus? Food/beverage retailers? Tire retailers? Drug stores, or all of the above? As you can see, each individual niche has many potential decisions that need to be considered and evaluated.

Tip: My recommendation is that you consider investing in product types that have a basic appeal to you. For instance, if you just despise the idea of warehouse or industrial properties, for whatever reason, that might not be the best personal choice for you as an investment property (however industrial property investments can be very lucrative in certain markets).

  • Financial Criteria: An important part of this first step is to define realistic expectations and goals for the investment criteria of your defined niche. This step helps you expedite deal reviews by being able to quickly determine if a potential deal fits within your criteria or not. It makes the decision less emotional, and allows you to cover more of a larger geographic area by focusing on deals that fit within your criteria. Keep in mind, your individual criteria will differ from that of someone else, based on your goals, your cash on hand, your financing sources, location, product type and timing.

Educate Yourself

glasses-272399_1280Once you have defined investment parameters, the next step is to educate yourself. You need to study your respective market, in the particular product type niche or niches you have chosen. Research sale comparables and what properties are on the market for sale. This is where teaming with a trusted real estate advisor, like those at a Sperry Van Ness office, can greatly enhance the success of implementing your strategy. Picking a great commercial real estate advisor who specializes in the niche product type is critical to being able to quickly get up to speed and accomplish your goals (see our other post “3 Tips to Finding a Good Commercial Real Estate Broker”).

Develop an Action Plan and Execute it

Part of being successful after you have defined your niche and educated yourself, is to formulate a plan of action to acquire properties. Perhaps part of your plan is to rehabilitate C-class multifamily properties and attempt to raise the rents after renovations. Whatever it is, you need to write it down and review it often and tweak as needed. It’s easy to get distracted, especially as the real estate market continues to heat up and the velocity of deal flow continues to improve. Having a solid action plan and a commercial real estate advisor to assist you with the plan will minimize your wasted time and increase your chances for success.

Exit Strategy

sign-575715_1280Every commercial real estate deal needs to have an exit strategy. It’s important to think about this exit strategy early on; in fact, before the purchase is even made. Granted there will be times when the exit strategy will change, due to rising or falling market conditions, or supply and demand, and you will have to adjust your exit strategy. The main point here is that an exit strategy needs to contemplated in the beginning, not the end of a commercial real estate transaction. If you buy an office building at an 8% cap rate that is 70% occupied and your plan is to spruce it up, apply aggressive leasing tactics with a CRE advisor, and increase the revenues, only to find out later that the market for those types of investments are trading at 8.75% cap rates, due to the smaller tertiary market the property is in and the smaller, shorter term leases, then your exit strategy is flawed because the market will not pay you for the work you have done. Of course, this is a simplified example. The point is, have a defined strategy to exit the investment at the proper time, and always be willing and able to review your exit strategy and make adjustments. In the words of a favorite Kenny Rogers song, sometimes “you got to know when to hold ‘em and know when to fold ‘em, know when to walk away, know when to run!” Hope is NOT an exit strategy.

Summary

This is a very brief overview of some of the basic tactics and format that individual and small to medium size group commercial real estate investors can apply to model their CRE investment strategy after the larger, institutional players in the industry. Employing the use of a qualified CRE advisor as a resource in your toolkit will serve you well. The Sperry Van Ness organization has over 1,000 advisors in scores of markets across the United States, specializing in all niches of commercial real estate. Contact one of our advisors today to answer any questions or to get started investing today.

************************************

About Carlton Dean – Carlton has nearly 20 years of experience in the commercial real estate industry, with a special focus in the retail and multifamily sectors. Carlton is based in Tallahassee, Florida, but serves clients throughout the entire Southeastern US. Click here to view his full profile and listings, or if you would like to contact him, you can call him at 850-877-6000 ext. 101, or email him at cdean@svn.com

 

3 Reasons To Be Excited About SVN Connect App

Posted on by SVN

3 Reasons To Be Excited About The SVN Connect App

Sperry Van Ness has created a commercial real estate app that I am positively excited about. This app, called SVN Connect, is free and has excellent functionality for agents, tenants and investors. I don’t think it’s necessary to elaborate on the value of something being free, but I do want to take a moment to explain why the functionality of this app is so exciting.

Excitement #1 – It automatically shows results based on user location!

When I open this commercial real estate app, I am shown listings for my immediate area. This is a great feature because it saves me the time of having to punch in a certain city or address and trying to navigate to search for listings in a manual way. I can even zoom in and out to look for listings further away, with the swipe of my fingers. …

– See more by clicking here.

– See SVN | SouthLand Commercial here.

Five Mistakes Great CRE Advisors Don’t Make

Posted on by SVN

Truly exemplary commercial real estate Advisors can be sales or leasing brokers specializing in everything from parcels of raw land to CBD office buildings. While their businesses might be different, they all share common business practices. They also avoid making these five fundamental mistakes:

1. Letting the Hopper Empty

When you get busy with commercial real estate deals, it can be easy to let the work you have to do on them distract you from the crucial business development activity that will keep you busy for the future. Exemplary Advisors are very aware of this and always make time to build their pipelines. Whether they are cold calling, keeping up relationships, or tending to a lead generating team or system, leading brokers always have new opportunities filling their sales hoppers so that they can continue earning and growing.

2. Ceding Their Knowledge Advantage

While brokerage is a relationship business, exemplary Advisors know that the relationships turn into transactions based on information. Knowledge solidifies ties to clients, makes pricing more accurate, and enables brokers to find the right spaces for their tenants (or to set the right rents for their landlords).

The best CRE brokers have a knowledge advantage because they are truly experts in their markets. Along with this advantage, though, comes the realization that they can’t know everything. This means that when they get an opportunity outside of their comfort zone, they don’t make the mistake of working it by themselves. Instead, they bring in another expert to give them and their client the knowledge they need to successfully consummate the deal.

3. Avoiding Tough Conversations

The best commercial real estate brokers don’t shy away from tough conversations and situations. They aren’t afraid to ask tough questions of clients as a part of assessing that client’s desire to do a transaction and as a part of figuring out what the client really needs. At the same time, they also don’t hide behind emails or assistants when a problem comes up. Instead, exemplary Advisors get on the phone or get in their cars and work the situation out with their clients.

4. Going it Alone

Successful Advisors know what their time is worth. With this knowledge, they build teams that allow lower-cost people to do their lower-value work, freeing them up to do more of what they do best. This approach may cost these leaders a little bit of money, but it gives them the time to make a whole lot more of it.

5. Failing to Engage

Finally, leaders in our industry are who they are because they are leaders. What this means is that they don’t make the mistake of just doing their jobs and servicing their clients and prospects. Instead, they are fully engaged with the CRE industry, with their companies, and with their communities. Having these ties isn’t only the right thing to do, it’s also the smart thing to do. It puts them in position for referrals and increases their credibility and visibility, making it easier to develop new business.

At the Sperry Van Ness organization, our Advisors work hard to avoid these mistakes, going above and beyond for their clients. Here is a list of some of our recent top offices, Advisors, and staff. Winners from this past year will be revealed at the 2015 SVN National Conference February 25-27, where many more CRE tips such as these will be shared.

Four Essential Qualities of a Highly Successful CRE Advisor

Posted on by SVN

There’s a lot more to being a successful commercial real estate Advisor than just having a few good suits and spending a lot of time with a cell phone glued to your ear. While it starts with thinking of yourself as an Advisor instead of just a broker that gets a deal done and moves onto the next one, after closing thousands of transactions, we’ve identified four must-have qualities that set the best Advisors apart.

1. An Allergy to No

To a large extent, commercial real estate Advisors make their living by being told “no.” It can take hundreds or thousands of unsuccessful cold calls to get to a single paycheck. For most people, “no” is an ending. Successful Advisors, on the other hand, take a “no” as a reason to go ask another question – or ask another prospect. And they keep going until they hear “yes.”

2. An Add-Value Attitude

We deal with highly sophisticated clients. Traditional sales tricks won’t work on them, while transactions are rare enough that you also can’t simply show up and hope that business will fall in your pocket. With this in mind, exemplary Advisors know that the key to building relationships that turn into transactions is to continually add value to prospects. Great Advisors earn relationships and loyalty by continually helping their clients. Whether they’re sharing a great piece of information to open up a prospecting call, sharing important market information, or helping a client to better manage their operating expenses, they put in the work in the near term to earn the fees in the long term.

3. An Ability to Find Wins

CRE negotiations are some of the most complex in the business world. Good Advisors keep their client’s interests at heart. The best Advisors also understand what the other side in the negotiation needs. That way, they can find issues that will allow that party to win while still giving their client what he or she needs to successfully consummate the transaction.

4. An Absolute Sense of Integrity

Here’s a shocker. You don’t need integrity to get into commercial real estate. You don’t even need it to make money in the field. Where you need it is if you want to stay in the industry.

Above and beyond simply being the right thing to do, integrity serves two important business purposes. The first is that it keeps you out of court. In a business where everyone can afford legal representation, it makes no sense to play fast and loose. The second is that real integrity is the most powerful brand-building tool you have. As clients see proof of your ethics over a period of years, you earn their loyalty and their referral business. If they learn that you lack it, on the other hand, your brand becomes irreparably tarnished.

Want to learn more about Sperry Van Ness Advisors’ commitment to integrity? Read through the SVN Core Covenants.

Do you think we missed anything? Let us know what you think makes a great commercial real estate Advisor below by leaving a comment!

CRE Tech Talk – 3 Tips on How to Stay Ahead of the Tech Curve

Posted on by SVN

At the SVN® organization, our commercial real estate Advisors have access to some of the most advanced tech tools available in the industry today. “So what?,” you may say. Technology is not a differentiator anymore, it is the “price of admission” and it is constantly evolving. Whether you are a broker in an independent firm, looking to switch shops, or caught up in one of the consolidations or merging of CRE firms in our industry, you are impacted. How do you navigate through the tech tools or apps that will help you the most in your business?

Every week I dedicate a little extra time to read about technology and social media best practices in an effort to learn more and share something new. I’m a big believer in leveraging relationships for knowledge. I spend time sharing information and talking with colleagues and centers of influence about what they are hearing and using. We all want to “stay ahead of the curve” and “be in the know” when it comes to the CRE tech revolution, but how?

Here are my top 3 tips:

  1. Staying connected daily on social media by reading and asking questions on these channels will keep you in the buzz of what’s going on.
  2. Aligning yourself with the right CRE organizations that push out current, innovative tech trends that you can apply to your business.
  3. Being a part of a national commercial real estate brand that provides the most cutting-edge technology tools and training helps save you time, money, and can keep you at the top of your game. Sometimes it is a simple as going back to basics.

Today, I went back to some simple basics for CRE sales professionals using Google Apps – one of the suites of tools provided to SVN team members. Referencing Google Apps Documentation and Support 101 is a great place to begin if you want to work more efficiently, especially if you are new to using a cloud based enterprise system. I read the Top 10 Google Apps tips for Sales and Marketing Users to gain insights on tools that I can be using to “work faster and collaborate better.” Here is the link if you would like to learn more. Taking the time to research quick, simple tips such as these will equip you with the tech knowledge you need to take your business to the next level.

Is it your goal to be more tech savvy and efficient in your business in 2015?
Email me at karen.hurd@svn.com or call 781.812.4272 and let’s talk about tech and the new SVN online tool “System for Growth.” No talk about the Boston weather (because it is super cold and cloudy here). At the SVN organization, our technology offerings keep advancing to assist our franchisees. However, technology can only take you so far – our Culture is where the real differentiator lies. Come see how we put it all together.

Good luck with making CRE Technology a major tool in your business in 2015. Happy New Year!

Portland, OR | 2014 Top CRE Markets to Watch : Apartment

Posted on by SVN

Sperry Van Ness International Corporation’s (SVNIC) 2014 Top Markets to Watch Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2014. Today we are delving into the 2014 Top Apartment Markets to Watch. Not the largest, or the most actively contested markets, the 2014 Apartment Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

TOP APARTMENT MARKET TO WATCH : Portland, Oregon

portland-415957_1280Multifamily construction has ramped up gradually in Portland, enabling landlords to grow rents even as new supply comes closer to matching the demand for apartments. After two years of adding some 2,000 multifamily units annually to the local inventory, and with a vacancy rate falling to near 3 percent, developers have stepped up the pace and will likely deliver 3,000 apartments in 2014. That accelerated construction activity will be enough to stabilize the vacancy rate and slow rent growth at existing properties. Portland’s enviable quality of life, including outdoor attractions and an expanding cluster of amenities catering to an urban lifestyle, continues to support outpaced job growth. Technology employers, and the service industry jobs that grow around the technology workforce, will help Portland to add about 30,000 jobs in 2014, similar to 2013’s employment growth. With only modest rent growth likely as apartment construction gains momentum, Portland offers opportunities for income investors, and some value-add plays remain for investors willing to invest in significant property upgrades.

To read more on Portland, and other top multifamily markets, download the full version of the Top Apartment Markets to Watch report below.

It’s a different world out there.

It requires a different kind of commercial real estate firm working on your behalf in order to be successful. The Lipsey Company has ranked the Sperry Van Ness® organization as one of the most recognized commercial real estate brands in the US for a reason—we know how to deliver a certainty of execution for our clients. Sperry Van Ness International Corporation is one of the largest commercial real estate franchisers with more than 180 locations in 200 markets.

Download the Top Trends and Markets to Watch Reports

Chandan-Apartment-CoverApartment Trends and Markets to Watch
Office Trends and Markets to Watch
Industrial Trends and Markets to Watch
Retail Trends and Markets to Watch
Commercial Real Estate Trends and Markets to Watch

Las Vegas, NV | 2014 Top CRE Markets to Watch : Apartment

Posted on by SVN

Sperry Van Ness International Corporation’s (SVNIC) 2014 Top Markets to Watch Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2014. Today we are delving into the 2014 Top Apartment Markets to Watch. Not the largest, or the most actively contested markets, the 2014 Apartment Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

TOP APARTMENT MARKET TO WATCH : Las Vegas, Nevada

las-vegas-411190_1280Apartment developers are playing a game of chance in Las Vegas. Encouraged by the first increase in average rents since the Great Recession and a recent improvement in the vacancy rate, projects in the pipeline could deliver as many as 3,000 multifamily units in 2014, a tenfold increase from the previous year. Granted, the local population will increase by 2.7 percent this year alone, making it one of the fastest growing U.S. cities. Yet this market must dig itself out of a deeper housing hole than most, and still has a ways to go. The apartment vacancy rate of 9 percent is more than 10 basis points above the historical average. Average rents have only recovered to 80 percent of the pre-recession peak, and thousands of single-family homes remain on the rental market. The nascent recovery merits some development but is unlikely to float all boats in 2014.

To read more on Las Vegas, and other top multifamily markets, download the full version of the Top Apartment Markets to Watch report below.

It’s a different world out there.

It requires a different kind of commercial real estate firm working on your behalf in order to be successful. The Lipsey Company has ranked the Sperry Van Ness® organization as one of the most recognized commercial real estate brands in the US for a reason—we know how to deliver a certainty of execution for our clients. Sperry Van Ness International Corporation is one of the largest commercial real estate franchisers with more than 180 locations in 200 markets.

Download the Top Trends and Markets to Watch Reports

Chandan-Apartment-CoverApartment Trends and Markets to Watch
Office Trends and Markets to Watch
Industrial Trends and Markets to Watch
Retail Trends and Markets to Watch
Commercial Real Estate Trends and Markets to Watch

Salt Lake City, UT | 2014 Top CRE Markets to Watch : Office

Posted on by SVN

Sperry Van Ness International Corporation’s (SVNIC) 2014 Top Markets to Watch Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2014. Today we are delving into the 2014 Top Office Markets to Watch. Not the largest, or the most actively contested markets, the 2014 Office Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

TOP OFFICE MARKET TO WATCH : Salt Lake City, Utah

salt-lake-city-485867_1280One of the nation’s job-growth leaders since the end of the recession, Salt Lake City boasts a diverse economy with rapid hiring in high tech, finance and other office-using jobs. The unemployment rate of 3.5 percent is one of the lowest in the nation. In 2013, the expanding economy resulted in more than 1 million square feet of net office absorption. A 12 percent vacancy rate at the start of 2014 was the lowest point since 2007, and although rental rates haven’t found a bottom, landlords have gained sufficient pricing power to slash concessions in recent months. Developers appear confident of future demand, however: A 144,000-square-foot tower is already under construction in downtown and a project breaking ground later this year will measure 450,000 square feet. All told, Salt Lake has roughly 1.7 million square feet in the pipeline for the CBD alone, equivalent to a quarter of the downtown inventory. That volume of additional space should raise a red flag among investors, especially since the vacancy rate is already higher downtown than in outlying submarkets.

To read more on Salt Lake City, and other top office markets, download the full version of the Top Office Markets to Watch report below.

It’s a different world out there.

It requires a different kind of commercial real estate firm working on your behalf in order to be successful. The Lipsey Company has ranked the Sperry Van Ness® organization as one of the most recognized commercial real estate brands in the US for a reason—we know how to deliver a certainty of execution for our clients. Sperry Van Ness International Corporation is one of the largest commercial real estate franchisers with more than 180 locations in 200 markets.

Download the Top Trends and Markets to Watch Reports

Chandon-Office-CoverOffice Trends and Markets to Watch
Industrial Trends and Markets to Watch
Retail Trends and Markets to Watch
Apartment Trends and Markets to Watch
Commercial Real Estate Trends to Watch

Indianapolis, IN | 2014 Top CRE Markets to Watch : Office

Posted on by SVN

Sperry Van Ness International Corporation’s (SVNIC) 2014 Top Markets to Watch Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2014. Today we are delving into the 2014 Top Office Markets to Watch. Not the largest, or the most actively contested markets, the 2014 Office Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

TOP OFFICE MARKET TO WATCH : Indianapolis, Indiana

IndianapolisA growing technology cluster has put Indianapolis on many investors’ watch lists. Employment growth is occurring in key office-using sectors, with professional and business services jobs expanding by 5.5 percent year-over-year in 2013, and financial services growing 1.9 percent over the same period. Unemployment stood at 5.8 percent at the end of the year, slightly better than Boston’s jobless rate and on a par with San Jose. That employment growth hasn’t translated into significant office absorption for Indianapolis, however. Occupancy gains in the suburbs in 2013 were largely offset by a contraction in occupied space downtown, and downtown properties will likely lose more tenants before tightening in the suburbs drives users into the CBD. Submarkets enjoying the greatest demand are the Keystone and North/Carmel suburbs. Those neighborhoods have seen their vacancy rates drop into the middle to lower teens while West Indianapolis grapples with a vacancy rate well over 30 percent.

To read more on Indianapolis, and other top office markets, download the full version of the Top Office Markets to Watch report below.

It’s a different world out there.

It requires a different kind of commercial real estate firm working on your behalf in order to be successful. The Lipsey Company has ranked the Sperry Van Ness® organization as one of the most recognized commercial real estate brands in the US for a reason—we know how to deliver a certainty of execution for our clients. Sperry Van Ness International Corporation is one of the largest commercial real estate franchisers with more than 180 locations in 200 markets.

Download the Top Trends and Markets to Watch Reports

Chandon-Office-CoverOffice Trends and Markets to Watch
Industrial Trends and Markets to Watch
Retail Trends and Markets to Watch
Apartment Trends and Markets to Watch
Commercial Real Estate Trends to Watch