The Benefits of Being an Early Riser in Commercial Real Estate

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.

Broker Boot Camp | Setting Goals for Success

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 | Top 3 Rookie Mistakes about CRE Brokerage

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


The Millennial Effect on Business Communications

Each year, at our Sperry Van Ness® (SVN) National Conference, I talk to our commercial real estate advisors and business owners about game-changing trends. Game-changers occur when people are doing things (working, playing, living) differently than they used just a few years ago. This year, we have four categories. Communication, Design, Collaboration and Distribution.

Trends in Communication

The following video features the first portion of my 2015 talk on trends. Watch the video and read the takeaways below.

Main takeaways in communication trends:

  1. It’s here: the generational tipping point. The oldest Millennials are now 35, which means by 2020, they will be 40 and it will be their workplace in which we are working. This is already changing how we communicate in business.
  2. We have entered a time where generational expectations of response times in business are mismatched. Millennials expect immediacy while Boomers are more comfortable with an hour or even a day.
  3. Texting has become a standard and accepted form of communication in many businesses.
  4. Every new platform now emphasizes pictures. Facebook keeps making pictures bigger than words, Twitter had to adjust to this reality to remain relevant. Instagram and Snapchat put pictures front and center rather than any text. Even texts contain emoticons and emojis. If you don’t know the difference between the last two … watch the video!
  5. Millennials and Gen Z also use different platforms for different types of communications. It’s not about blending the platforms together into a superplatform; it’s about accepting that there are multiple systems and platforms for communication.

In summation, the way we communicate in business is going to change drastically within the next 5 years as the Millennials grow into leadership roles and Generation Z enters the workforce. We will see more and more communications platforms being used within single organizations, each with a different purpose. These will include document sharing platforms and visual conferencing apps that will not just replace in-person meetings, but one-on-one telephone conversations as well. Email itself needs reinvention to remain relevant. Programs like Google Inbox are already attempting to do so, because as soon as we can easily share documents via texts and visual conferencing apps, email will lose some of its luster.

At Sperry Van Ness International Corporation, we are watching these trends to see how they affect the commercial real estate industry. Our goal is to capitalize on these trends so that our advisors are using the most powerful tools to the benefit of their clients.

To view the rest of the speech please visit our YouTube page.

7 Signs Your Team is Functioning at Top Capacity

As COO of Sperry Van Ness International Corporation, my job is to make sure everyone in our company is working efficiently, effectively and creatively to exceed expectations and delight our franchisees. As businesses like ours expand around the globe, we’re all working longer hours and tackling more projects; yet sometimes the most productive thing a company can do is put down the work and have some fun.  The following article outlines a really fun way to check in with your commercial real estate  team to see if they are operating at top capacity.

Recently we had an operations summit in Atlanta. After a long day of meetings, my team took an evening off and spent it trying to find our way out of a “challenge room.” What was clear throughout this team-building activity was that we have a group of professionals who were not only smart but also high-functioning and very fun (even when locked in close quarters).

Faberge Egg
Our “Challenge Room” prize … a fake Faberge Egg. But the real prize was the teamwork that helped us beat the clock.

A challenge room is a new trend where you actually pay to be locked in a room where you have to work together to unlock Da Vinci Code type clues in order to accomplish a mission (ours was to find a Faberge egg) and then find your way out of the room within one hour. As a spoiler alert, we completed our task and escaped with 4 minutes to spare.

While I won’t go into details, because that would spoil the fun, it was clear that our team functions in a manner of which I couldn’t be more proud, and that I have confidence carries over with them into every workplace challenge.

This experience spotlighted the 7 things you need to have a finely-tuned, high-functioning team.

  1. A clearly articulated common goal.You need every single member of your team invested in and enthusiastic about your project. But they also need to understand the end goal and the bigger picture. In our challenge room, this was literally laid out for us; but if you are leading a team, you need to do the same.
  2. An overall strategic plan.As soon as we got in the room, one of our team members announced that when we hit 30 minutes, we would use our first “lifeline.” (We had a walkie-talkie where you could ask for hints.) We all agreed and that person temporarily became the project leader. She spoke up definitively with a strategic plan that made sense and didn’t wait for me or anyone else to take charge.
  3. Empowered team members ready to take leadership as needed.Throughout any project or challenge, whether it’s growing a company, or trying to find an object in a challenge room, different skills are required at different times. Some team members may excel at deciphering riddles, while others are better at running calculations in their head. Our team seamlessly passed the leadership torch from person to person as we moved through the challenge.
  4. No weak links. With the right team you can divide and conquer and never have to second-guess anyone or spend time micromanaging. At the start of our challenge, we quickly divided up the room and thoroughly searched our areas. With no weak links, no one was second-guessing anyone else. We may have doubled back over someone’s territory, but only to approach it from a different angle. Because we trusted everyone to handle their part of the challenge, morale stayed high and no one wasted valuable time and energy.
  5. Time management skills.With a literal clock ticking down in a challenge room, there is no time to waste and everyone has to be conscious of the deadline. On any project, wasted employee or management time is unproductive and costly to the entire organization. Team members who can’t manage their time wisely become weak links.
  6. No fear of asking for help.Asking for help is not a sign of weakness; it’s a function of time management and understanding that others might have different talents and experiences. It’s also a sign that I should remember my reading glasses so I don’t have to yell for help whenever I couldn’t read the numbers on some of the locks.
  7. A sense of humor. People like to work with fun people. In today’s corporate environments, there is constant pressure. A team that laughs together, bonds together. I can assure you that our challenge room team will be laughing about inside jokes from that challenge room task for years to come.

Diane Danielson is the COO of Sperry Van Ness International Corporation, a commercial real estate franchisor headquartered in Boston, MA with over 190 offices covering 500 commercial real estate markets. Find out how you can be part of our team by clicking here.

2014 SVN Specialty Award Winners

Congratulations to all of the SVN Specialty Award winners who were recognized for their outstanding efforts in 2014 during the Awards Banquet at last week’s National Conference in Orlando. We appreciate all that you’ve done over the past year as a part of the Sperry Van Ness organization and in your communities, and are proud to have you as part of our team. Your dedication to the Core Covenants and culture of collaboration make you some of the best in the commercial real estate industry!







Diana Parent – Humanitarian of the Year

Advisor who makes an extraordinary effort to give of themselves and to their community.








Doug Wilson – Collaborator of the Year

Advisor who takes the SVN dedication to collaboration to the next level.








Kurt Lord – Trainer of the Year

Advisor who most exemplifies the qualities of a high-caliber mentor.








David Wilk – Innovator of the Year

Advisor who embraces the latest CRE technology, including the SVN tools, to further his/her business/career.








Michael Thanasouras – Team Player of the Year

Advisor who collaborates in a significant way with either another SVN office(s) or Advisor(s).








Catherine House – Prospector of the Year

Advisor who consistently prospects and develops a strong foundation of contacts and a good pipeline for the future.








Tony Yousif – Ambassador of the Year

Advisor who embodies the Sperry Van Ness culture and helps contribute to the success of the company.

SVN Core Covenants – Bringing Values to CRE

Most commercial real estate companies talk about culture and their value system, but none exhibit the emphasis on culture and commitment to their core values in the way that the Sperry Van Ness organization does. The Sperry Van Ness platform was founded on the Core Covenants that guide our daily decisions and our actions, both in business and everyday life.

The first of these Core Covenants states that SVN team members are committed to “cooperating proactively with all brokers and agents and always placing our clients’ interests above our own.” We do this by sharing commissions equally with the entire CRE industry. In fact, we practice Compensated Cooperation, guaranteeing that equitable co-brokerage fees are paid on all properties, and not only to brokers within the same company, but to any and all outside brokers involved. When fees and buyer pools are shared, properties generate a higher demand and price, resulting in the most value for our clients.

We also offer complete transparency of information. The CRE industry sees our latest properties at the same time that we distribute the information internally through our weekly open National Sales Call. All outside brokers and buyers are invited to this call to view these opportunities and are equally rewarded for their efforts and relationships.

Through these practices, our actions speak to our Core Covenants. We are so committed to a culture of collaboration and putting the clients’ interests first, that I believe the SVN organization is the only national firm that actually includes Core Covenants as part of our franchise agreements.

Want to learn more about our values and the culture offered to you as a part of the Sperry Van Ness team? Read the full list of our Core Covenants here or email me at george.slusser@svn.com for more information.

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

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!

Why Gender Balanced Leadership is Good for Business

Sperry Van Ness International Corporation (SVNIC) CEO Kevin Maggiacomo recently sat down with the Young Presidents’ Organization (YPO) to discuss why closing the gender gap is so important in commercial real estate and beyond. This is not a new charge for Maggiacomo and SVNIC who not only are founding members of 50/50 by 2020, an organization promoting gender balanced leadership, but also leaders by example after restructuring their executive management team to include more women.

Below find the full interview as it appeared in YPO.


YPO New England Chapter member Kevin Maggiacomo is a man on a mission to create gender-balanced leadership in all organizations worldwide by the year 2020. He will be the first to tell you, however, that this is not exclusively his mission or his initiative.

He kicked off 50/50 by 2020, a grass roots, web-based movement which sprung out of a recent TEDx talk he delivered. It has evolved into an international conscious leadership in expanded areas, including Maggiacomo’s own company, Sperry Van Ness. He joined YPO in 2010.

Kevin_MaggiacomoQ: What inspired you to create the 5050 By 2020 movement?

A: The movement came about after going from the unconscious to a more conscious way of thinking about leadership and its positive effects on business. Within our own organization, Sperry Van Ness (SVN), there existed a disproportionate number of women who were high performers, yet we weren’t bringing any intentionality to recruiting and developing women. There was a pool of talent not being fully tapped into.

Q: How did you incorporate gender balance at your company?

A: My wake-up call came during one of our SVN executive meetings in 2013. Looking around the conference table I saw that nearly all of our execs were white, male baby boomers. In that meeting we were creating our second wave growth plan, which demanded not only high innovation and creativity, but also healthy debate. I saw the polar opposite. Individual concerns were being set aside for fear of upsetting the group’s balance … sort of a “don’t criticize my ideas and I won’t challenge yours” dynamic. We weren’t getting the job done. This was groupthink at its worst.

It was caused by imbalanced perspective born of a gender-imbalanced executive team. The price was high and obvious. In that moment I recognized that bigger results would follow once I put in place a program which caused our leadership balance to shift.

In the 18 months that followed, we restructured our executive team which is actually now imbalanced at 60 percent women but hitting on all cylinders. We operate as a think tank for new ideas, we aren’t striving for harmony in our meetings, our profitability has increased by more than 100 percent and we’re trending positive across all key performance indicators.

To take things a step further, we restructured our statutory board this past April and it, too, is now gender balanced. Diversity and gender balance are the engines of innovation, and we’re doing everything in our power to ensure that this structure remains in place.

In doing this, we realized that this isn’t just good for our company, but for the world. We wanted to open up the thinking to everyone in order achieve a wider ripple effect, and 5050×2020 was born.

Q: Why do you think it’s important?

A: First, this isn’t solely about giving back or doing the right thing. The business case for gender balance is rock solid. Our company’s category results aside, in the United States, women hold about 14 percent of executive officer positions and 17 percent of board seats. However, research by Catalyst found Fortune 500 companies with the highest percentage of female corporate officers reported, on average, a 35.1 percent higher return on equity and a 34 percent higher return to shareholders than companies with the lowest percentages of female corporate officers. So this is about generating better results as much as anything.

Second, striving for gender balance — and diversity for that matter — is the right thing to do. In 1970, American women were paid 59 cents for every dollar their male counterparts made. In 2010, compensation for women rose to a mere 77 cents for every dollar men made. And if change continues at the same slow pace as it has for the past 40 plus years, it will take almost another 50 (until 2056) for women to finally reach pay parity. It’s important that we work to change that.

Q: What role do men play in gender diversity?

A: Men remain an often untapped resource for affecting gender balance. Men simply haveto play a role if we’re to affect meaningful change. There exists a preponderance of men in leadership positions who have the power to make these changes and position their businesses for better financial results. Yet, there aren’t enough male ambassadors for this change.

The gender balance issue, as I see it, has historically been framed as a women’s problem or burden, but it’s not. It’s a problem which affects all stakeholders. It represents an opportunity which, if properly harnessed, will create better leaders, better products and better results for all involved.

Men have to become gender-balance champions for change, and much of their work has to be pointed towards other men who aren’t yet fully on board with the opportunity.

Lastly, men cannot sit idly on the sidelines waiting for change. The change is coming, and those companies that don’t bring a level of intentionality towards affecting gender balance in their own organizations will be relegated to mediocrity at best or obsolescence at worst.

The Women’s YPO Network brings together nearly 1,000 male and female members dedicated to connecting and empowering female chief executives. Photo from the February 2014 WYN Board Boot Camp in Los Angeles.

5050by2020Q: What are the barriers? How realistic is 50/50 by 2020?

A: It’s naive to think that people will change in six years. However, if you look at past movements in history, meaningful change occurred because there was a vision, an appetite for disruption and a plan to set the course for long-term change. We’ve reached the tipping point where people recognize the need and value.

Not all men will support or even give the movement attention, but I hope those who see the value in having a diverse leadership team will embrace it. The benefits are obvious: It raises value and draws IQ from 100 percent of the population versus 50 percent (of just men). It’s just good for business.

Q: What do you think of some countries’ quotas for women leadership on boards?

A: Legislated gender quotas are controversial and punitive by design. That route is more of a “checkbox effort” where people are assigned positions because of their anatomical differences. Gender quotas in Scandinavian countries have yielded marked growth in the percentage of women on boards. That said, I’m not certain that these companies are better built given their mandated path to gender balance.

I’m a proponent of the free market affecting change through awareness and a better understanding of the powerful business case for gender balance. Show CEOs the money, and action will follow. I’m a firm believer in that.

Q: What can YPO members — male and female — do?

A: Evangelize. Talk about the opportunities which gender balance will create. Discuss the movement inside and outside of your organization, and help people — through all ranks of employment — see that the change will yield a competitive advantage. Talk about the movement in forum. Focus the conversation more on the benefits as opposed to it being a noble cause. Call it conscious capitalism or growing business at a faster rate while simultaneously elevating humanity … but focus on the fact that gender balance is simply good for business.


Relating “The Extra Mile” by Glenn Morshower to the SVN Core Covenants

How does “The Extra Mile” by Glenn Morshower correspond and relate to the SVN Core Covenants?

We had the distinct pleasure of being exposed to an outstanding keynote speaker, Glenn Morshower, recently at our SVN National conference in San Antonio. As always our Executive team, Advisory Board and conference team hit a home run in my opinion with Glenn; certainly entertaining, definitely memorable and hugely credible. I think he hit on all facets of our SVN life, our business and our sense of community. For fun, I overlaid his “Extra Mile” concept over our Core Covenants. See if you agree that they line up very well.

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Cooperating proactively with all brokers and agents and always placing my client’s interests above my own.

“Do unto others as you would have life do unto you”.

Showing respect and support to my clients and colleagues.

“Who I am anywhere is who I am everywhere”.

Honoring my commitments.

“There is no boundary on good or truth”.

Personifying and upholding the Sperry Van Ness® brand.

“We are winners by design”.

Creating tangible benefits for my clients, colleagues and community.

“It’s not I’ll believe it when I see it, but rather I will see it when I believe it”

Resolving conflicts quickly, positively and effectively.

“I am no longer disposed to be in conflict with myself or anyone”.

Taking personal responsibility for achieving my own potential.

Like the “Circle of Habit” for Gill in the Fish Bowl…we know how to find and fill a bathtub…no limits.

Excelling in my market area and specialty within the firm.

“What do I want to do most?”

Focusing on the positive and possible.

“Impossibilities become possibilities; possibilities become probabilities; probabilities become inevitabilities”; it is up to you.

Nurturing my career while valuing the importance of family, health and community.

The balance of life is Spiritual, Emotional, Financial and Physical. Is what you are doing a “contribution or a contamination?”

2Q Self Storage Market Update by Nick Malagisi, SIOR

Self storage fared better than every other commercial real estate sector during this past recession. However, the sector was not recession-proof, rather it was recession-resistant. After two years of losses (nine consecutive quarters), the four publicly traded REITS turned the corner and now have reported eight consecutive positive quarters. Occupancies are up; concessions are down; and rental rates are finally climbing back to pre-recession levels. REITS, in general, have outperformed the S & P and Dow Jones Industrial Average (DJIA) for all of 2011 and 2012.

The self storage industry has finally begun to consolidate as the number of new construction starts diminished each of the last five years from their peak in 2006. The industry doubled in size from one billion to two billion square feet from 1995 to 2006. The top twenty operators in the USA control less than 20% of the total market. That will change as the REITS, flush with investment cash, acquire and increase their market share in select markets. Similarly, other new sources of institutional monies have been watching the sector and have concluded that self storage returns are as dependable, or even more secure, than the other traditional commercial real estate asset classes. These new funds/buyers are very competitive with the REITS and have forced Cap Rates down to the 5.5-6.5% range for stabilized, class “A”-good quality facilities located in the top 10 markets. Cap rates in secondary and tertiary markets remain in the 7-10% range depending on the age of the facility, location of the property and its demographics.

In terms of financing, self storage continues to enjoy the lowest default rate of any other sector in the CMBS market.  While banks and life insurance companies are more conservative in their underwriting than they were pre-recession, interest rates for refinancing are in the 4.50% to 5.75% range, with an expected 30-35% equity contribution.

Banks and Special Servicers are beginning to foreclose on borrowers that can’t make their mortgage payments or  meet new debt/equity requirements. We should see more lender sales of under-performing assets and notes later on in 2013. Or, the lenders may decide to package their bad loans and sell them via auctions to get them off their books and leave the buyers of the notes to proceed to foreclosure and/or re-sell the notes to the original borrower or the open market. At the end of 2009, the Sperry Van Ness National Self Storage Team participated in a bulk sale when Key Bank was selling a construction loan portfolio with a face value of $32M.

As we look ahead to the remaining half of 2013, we should see industry performance continue to improve; increased consolidation from the larger operators; and financing from the CMBS market become an option for smaller deals; all factors which will narrow the spread between the amount buyers are willing to pay and the amount sellers are willing to accept.


Prepared by:

Nick Malagisi
Nick Malagisi, Self Storage Council ChairContributed by:

Nick Malagisi

Chair of  the Self Storage Product Council




*All Sperry Van Ness® offices are independently owned and operated.


Sperry Van Ness® CREW Network Spotlight

Sperry Van Ness International Corp. is a proud supporter of CREW Network, the premiere network for women in commercial real estate.  In an earlier blog post we included a great group photo of all the CREW members at our 2014 SVN national conference, where some of these high-achieving CREW Members were also SVN award recipients.  Below is more information about the various CREW Network members in our organization. They are CREW Past Presidents, CREW Committee Members, innovators, leaders, collaborators and known in their markets for their achievements and contributions.

If you are interested in finding out about CREW Network or about Sperry Van Ness franchise opportunities, please contact Karen.hurd@SVN.com.

Catherine House, CCIM
Catherine House, CCIM

Catherine House, CCIM     
Sperry Van Ness / SV Advisors (San Francisco, CA)

  • Catherine is the Sperry Van Ness® National Co-Chair for the Medical Office Product Council.
  • In 2010, San Francisco Business Times named her one of the “Most Influential Women in Business in the Bay Area.” She is a past CREW SF President.
  • At Sperry Van Ness she is one of the top-producing brokers, ranked in the top 10% of over 1,000 brokers nationally in 2013.


Karlin Conklin
Managing Director
Sperry Van Ness / Bluestone & Hockley (Portland, OR)

  • Karlin is a managing Principal Broker in Oregon and Washington. She oversees their office’s brokerage activities and is responsible for its marketing, recruiting, and training efforts.
  • Prior to joining Sperry Van Ness/Bluestone & Hockley, Karlin raised $234 million in acquisition equity and directed a team that closed 5,800 multifamily units.
  • On the brokerage side, Karlin led the company’s multi-state brokerage efforts, which included commercial real estate, REO, and note sales.


Mary Ridberg
Director of Leasing
Sperry Van Ness, LLC (Phoenix, AZ)

    • Mary has experience in retail tenant representation, trade area feasibility, brand development, public relations, media relations, and marketing consulting.
    • She has organized a Retail Networking Group with members from the most active retail brokerage teams in the Phoenix market.
    • Mary serves in the business mentorship program at A.S.U. and is a host at the college of business events.


Judy Jones
Judy Jones

Judy Jones
Senior Advisor
Sperry Van Ness, LLC (Phoenix, AZ)

      • Judy specializes in the sale of retail land, freestanding buildings and shopping centers in the Phoenix Metropolitan area of Maricopa County, Arizona.
      • She has been active in commercial/investment real estate for more than 20 years as an investor and broker.
      • Judy has completed more than 400 transactions totally in excess of one billion dollars.


Maria Agon McCarthy, CCIM
Senior Advisor
Sperry Van Ness / South Commercial Real Estate Advisors (Miami, FL)

      • Maria brings over 18 years of experience in commercial real estate brokerage and corporate real estate, with extensive knowledge of both leasing and sales.
      • Prior to joining SVN South, she worked as the Senior Vice President for Citigroup where she managed a portfolio of 215 office and retail buildings, representing 4.6 million square feet throughout the US and Caribbean.
      • Mary has been recognized as a “Top Broker” and received numerous awards for revenue production.


Shari A. Tucker-Gasser
Shari Tucker-Gasser

Shari Tucker-Gasser
Sperry Van Ness, LLC (Phoenix, AZ)

      • Shari A. Tucker-Gasser is the National Council Chair of Multi-Tenant Retail for Sperry Van Ness International and  Real Estate Forum named Shari ‘Women of Influence’ among top ‘Women of Influence’ in the commercial real estate industry for 2013.
      • Shari specializes in the acquisitions, disposition and leasing of multi-tenant retail properties throughout the Phoenix Metro, Arizona market.
      • With over fifteen years of commercial real estate experience, Shari has completed well over $2 billion dollars in retail sales transactions.


Diana Peterson

Diana Peterson
Sperry Van Ness / AuctionWorks (Chicago, IL)

      • Diana has more than 19 years of experience in law, real estate brokerage and auctions.
      • Recognized by the Chicago Association of Realtors as one of the top 5 producing realtors, having closed more than $130 million in residential sales and negotiated more than 500,000 square feet of commercial lease and sale transactions.
      • Known for her exceptional negotiation and legal skills, honed during years of practice as an attorney, Diana will be leading the Chicago AuctionWorks team.


Debby Skeans
Deborah Skeans

Deborah Skeans
CCIM, MAI, Senior Advisor/Co-Owner
Sperry Van Ness / Imperial Realty (Allentown, PA / Lehigh Valley)

      • Debby specializes in the sale of land and commercial property valued at over $350+ million and helps clients build value, strong CRE portfolios.
      • Licensed to sell at 19 and as a broker at 22, she has nearly 40 years working and investing in new construction, commercial appraisal, sales and consulting.
      • Career highlights: 470 acres of prime interchange land sold to St. Luke’s Hospital for $38.6 million in two transactions over the past five years; personally responsible for the disposition of 3,000+ acres (over 50 parcels) to various buyers for a wide variety of users; consultation regarding disposition of a key New York City property for redevelopment (transaction closed for over $200 million).


Laurie Ramirez
Laurie Ramirez

Laurie Ramirez
Sperry Van Ness Chicago Commercial (Chicago, IL)

      • Laurie has 5 experience years in the CRE industry and specializes in the sales and leasing and tenant representation  of retail property in the Chicago Market
      • She is a member of the International Council of Shopping Centers (ICSC), Lakeview Chamber of Commerce, Women’s Council of Realtors (WCR), Commercial Real Estate Executive Women (CREW) and the Chicago Association of Realtors.
      • Laurie is a relationship-focused CRE professional focused on creating value for her clients.  She is also involved in the committees, Commercial Forum and the Chicago Association of Realtors Government Affairs Committee.


Krista Berger
Krista Berger

Krista Berger
Senior Advisor
Sperry Van Ness / Finest City Commercial (San Diego, CA)

      • Krista has 6 years of CRE industry experience and has listed and sold properties valuing in excess of $20 million.
      • She specializes in the sale of commercial properties, including in multifamily, mobile home parks and land development.
      • In the past few years, Krista has been an integral part of the special assets team. With multiple financial institutions throughout the nation, she facilitated the site assessments and analysis of properties with most resulting in the list and sale of the asset.


Rita Meehan
Rita Meehan

Rita Meehan
Sperry Van Ness / SV Advisors (San Francisco, CA)

      • Rita has 17+ years of experience in the commercial real estate industry, specializing in the sale of investment properties throughout the San Francisco Bay Area.
      • She has closed more than $1.7 billion in commercial real estate assets comprised of over 6 million square feet of property.
      • Rita was recognized as a Top Individual Broker in 2008 and listed as a CoStar Power Broker in 2007 & 2008.


Barbara Brown
Senior Advisor
Sperry Van Ness / Commercial Real Estate Advisors (Charlotte, NC)

      • Barbara has been active in commercial real estate since 1986, with extensive knowledge and expertise in office/medical sales, leasing, retail and warehouse.
      • She was a founding member of the Commercial Real Estate Women (CREW).
      • Received the Commercial Board’s “Multi-Million Dollar Club” award for 10 consecutive years and in 1999, she was the recipient of its President’s Award.


Karen Hurd
Karen Hurd

Karen Hurd
Vice President, National Franchise Sales & Development
Sperry Van Ness International Corporation (Irvine, CA and Boston, MA)

      • Karen has over 18 years of experience in commercial real estate and financial services, and has been actively involved in sales transactions (across all asset classes) totaling in excess of $550 million.
      • She specializes in Section 1031 Tax Deferred Exchanges for Institutional, Corporate and Private Capital Markets and Real Estate limited partnerships and syndications.
      • Deal Connector and Networking Guru who identifies new business opportunities for the Sperry Van Ness® organization, and contributes to brand development and growth nationally playing key role in managing the continued expansion of franchise ownership.


Diane Danielson
Diane Danielson

Diane Danielson
Chief Operating Officer
Sperry Van Ness International Corporation (Irvine, CA and Boston, MA)

      • Diane serves is Chief Operating Officer at SVN and oversees all operations of SVNIC.  Diane is responsible for overall planning and executing strategic growth initiatives for franchise development and the rollout of technological platforms to optimize SVN services globally.
      • She is a former attorney, accomplished speaker, published author, and widely recognized online marketing expert.  She launched the first Social Network for businesswomen in the US in 2006.
      • In 2013, Diane was named to the 40 over 40 Women to Watch list published in Forbes.com.


*All Sperry Van Ness offices are independently owned and operated.

What a Deal … SVN Chicago Commercial Closes Largest Sale in Sperry Van Ness History

A huge congratulations to Jerry Goldner, Vice President of Investment Sales at SVN Chicago Commercial, for recently closing the largest single deal in Sperry Van Ness history.

The property, Walton on the Park South, is located in Chicago’s Gold Coast at 2 West Delaware Street. The sale consisted of 160 units of the 201-unit high-rise rental condominium tower and an adjacent 17,180 square-foot development site zoned for 261 residential units. It was purchased by Miami developer, Crescent Heights, Inc.

Not only is this the largest deal in SVN history, but the largest for Goldner who, acting as sole broker, closed the deal with an unsolicited offer. Goldner has over 34-years of commercial real estate experience in the Chicago market and proved that when you work hard and offer the SVN Difference, you can do anything you set your mind to. Click here for full transaction details.

“This transaction started over 4 years ago when I represented the previous owners. It has been the most challenging and rewarding experience of my 34- years as an investment Advisor.”


The Broker List

*All Sperry Van Ness offices are independently owned and operated.

2014 CRE Market Outlook


*All Sperry Van Ness® offices are independently owned and operated.

Office Spotlight: Coast/Sperry Van Ness in Seattle & Everett, WA

This week, we turn the spotlight on Coast/Sperry Van Ness with offices in Everett and Seattle, Washington.

1. What has been your strategy for growing your firm and also your market share?
We’re structured a little differently that most SVN firms as we have a sizable property management sister company and a private equity investment arm associated with us. A full 30%  to 40% of our twelve Advisors’ leads come from house referrals due to these and other linkages. That level of consistent referrals allows us to offer them what is effectively a base salary, so it’s a big advantage in our advisor recruiting efforts. We love the culture of cooperation, tools, and network with SVN, but driving business to our Advisors and then supporting them as they work on their business plans is how we recruit effectively. Growing this business, after all, is about building on “same store sales” (helping our advisors keep increasing their gross commission incomes) as well as growing by head count (recruiting).

2. What are some of the unique activities you do to motivate your team? 
None. If I have to motivate them, they’re in the wrong shop. We only bring in people who can write a strong business plan, stick to it, be accountable, and are hungry. If they have an off year, we work with them but if they string a few together, we are intentional about helping them find another career. Like a football team, we have a “next man in” mentality and if a player is off his/her game and not making plays, we bring in someone who can.  Fortunately, nearly all of the people we’ve recruited have stayed.

 3. What’s been the biggest challenge in how you run your business over the last few years?
Time. I’d like more time to meet more prospective Advisors, recruit them, and work more closely with my Advisors. We’d like to get to 18 Advisors and hold there. I’m four away from that target today.

4. How many Advisors/Staff did you have when you joined SVN? How many (in total) do you have now? 
We started with eight in 2007  when we joined SVN. I terminated anyone who couldn’t produce a business plan six months later that showed they wanted to earn at least $150K gross commissions the next year. That policy brought us down to three very good ones and since then I have been steadily growing it to our current size of twelve. I couldn’t be prouder of the quality of Advisors we have in our firm– each one of them.


Tom Hoban, Managing Director
Coast/Sperry Van Ness
Email: tom.hoban@svn.com
Phone: 425.339.3638

*All Sperry Van Ness® offices are independently owned and operated.

Commercial Real Estate Valuation by Matthew Rotolante

Matthew Rotolante, CCIM, SIOR, Managing Director, Sperry Van Ness/South Commercial Real Estate Advisors
Matthew Rotolante, CCIM, SIOR, Managing Director, Sperry Van Ness/South Commercial Real Estate Advisors

Matthew Rotolante, CCIM, SIOR, Managing Director of Sperry Van Ness/South Commercial Real Estate Advisors, recently authored an article for The Bankruptcy Bar Association–Southern District of Florida. In the article, Matthew explains how to create a model for valuing commercial real estate.

“In essence, appraisals are necessary to determine value, but when combined with the testimony of a credible broker, a more accurate valuation may be obtained. This is especially important when attempting to prove the legitimacy of a reorganization plan, or deciding whether a 363 sale strategy is feasible.”

To view Matthew’s article in its entirety, click here.


*All Sperry Van Ness® offices are independently owned and operated.

Sperry Van Ness Western Regional Conference 2013

Portland, Oregon–More than 70 advisors, managing directors and operational staff came together September 11 and12 for an insightful Regional Training session. The event was produced by regional franchisees and organized by Curt Arthur, SIOR, Managing Director Sperry Van Ness, Salem, Oregon and his amazing team Meghan Salinas and Christy Bailey.

The corporate team was pleased to be in attendance and kicking off the events was Sperry Van Ness CEO and President, Kevin Maggiacomo. Other speakers included–Diane Danielson, Chief Platform Officer, who revealed exciting new technology advances that the company will be using in the near future. Bo Barron, Vice President of Development, spoke to using key performance indicators and using peer accountability for improved performance and profitability. From specialized break out sessions (delivered by regional managing directors, including: Karlin Conklin, Tom Hoban, Neil Sherman and Steve Kawulok and Vice President, Tony Yousif) to guest speakers and market updates, this training session covered it all.

A special thanks to Curt Arthur, and his team for producing a topnotch event enjoyed by all in attendance.

*All Sperry Van Ness offices are independently owned and operated.

Mid-year review of apartment market

According to the 2013 mid-year report from US Capital Trends (a division of REAL Capital Analytics) on the apartment market, the commercial real estate apartment market is doing well as of the end of Q2 2013, with strong sales, including fewer distressed properties on the market.

Apartment sales are strong—$17 billion in Q2—but slowing in comparison to the steep rise experienced since Q4 2009. Transaction volume has moderated due in part to interest rate hikes that started in May. Mid/high-rise properties are appreciating at a slightly higher rate than garden properties.

Sales of distressed properties fell below $1 billion for the first time in more than three years. Because of improving prices, lenders have less pressure to liquidate troubled properties. More than a quarter of distressed properties are located in the Southeast (Miami, Atlanta) and in tertiary markets.

Investors are looking to lagging markets “where fundamentals may outperform over the near term” such as Orlando, Northern New Jersey, Minneapolis and Jacksonville. Volume in major metropolitan areas declined by 6% and grew by 12% in non-major markets. Secondary and tertiary markets are experiencing activity spikes whereas primary markets such as Manhattan and Houston have seen flat or declining volumes. A very active area appears to be the Washington, DC suburbs, where activity increased 118% in the first half of 2013, making it second only to Manhattan.

The top apartment buyers buy investment volume are Equity Residential and Avalon Bay Communities. The top apartment brokers (for all types of apartments) are CBRE and HFF.

To read the complete report, including breakdowns by region, selected sales transactions, sales summaries by type, please download the US Capital Trends Apartment 2013 Mid-Year Review.

*All Sperry Van Ness offices are independently owned and operated.

Smart social media moves for commercial real estate professionals by Diane Danielson

Diane Danielson
Diane Danielson, Chief Platform Officer at Sperry Van Ness International Corporation

Diane Danielson, Chief Platform Officer at Sperry Van Ness International Corporation, recently shared her top (and smartest) social media tips for commercial real estate professionals in a guest blog post on GlobeSt.com (the website dedicated to all things real estate).

Diane recommends several smart social media moves, among them:

1. Use Twitter like a pro and search for relevant hashtags like #CRE and other industry terms.

2. Create customized lists of people so you can make sure to read their tweets and add that stream to a Twitter client such as Hootsuite.

3. Make the most of LinkedIn’s beefed up company pages by following important companies in your area (including your competitors).

Read Diane’s smart social media insights in the Globest.com article here.

*All Sperry Van Ness offices are independently owned and operated.

SVNIC Adds SVN/Motley's Franchise in Richmond, VA

Sperry Van Ness/Motley’s in Richmond, Virginia  is the newest Sperry Van Ness International Corporation (SVNIC) franchise office. Known simply as “Motley’s” to many in the Richmond area since 1968, the full-service auction and realty group now joins SVNIC as it looks to further advance its success – and expose its listings to an even wider audience of potential buyers.

Mark Motley, CAI, AARE, Managing Director, SVN/Motley's
Mark Motley, CAI, AARE, Managing Director

Managing Director Mark Motley, CAI, AARE has more than 30 years of experience with commercial real estate appraisals and dispositions. He was first exposed to real estate auctions at the age of 13, learning the business from his father. In 1988, Mark led the expansion of Motley’s to include an industrial division, providing liquidations and appraisals for the assets of brokerage corporations like SVNIC. A decade later, he entered the online auction market as a co-founder of the Auction Online Network. And in 2008, he added turnkey foreclosure and trustee services as an offshoot of Motley’s. Now in 2013, the company will grow yet again, with the support of SVNIC’s nationwide platform.

“We’ve really embraced the things that make SVNIC different from other commercial real estate companies,” said Motley. “SVNIC’s culture of collaboration allows us to further accelerate our auction services by reaching potential buyers from all around the country. Additionally, the social media support and transparency in promoting listings – even to competitors – will allow us to increase sales when it comes to marketing more traditional properties.”   

SVNIC is the only commercial real estate firm that markets all of its properties nationally to a 100,000-member brokerage and investment community. From 2010 to 2012, SVNIC gave more than $200 million in shared commissions to its own competitors for bringing the highest bidder to the table, allowing advisors to see gains from closing more deals in less time. Advisors also reap the benefits of SVNIC’s cloud-based enterprise system that enables easy, on-the-go access to property listings and client contacts; real-time data sharing; and software that allows for the assembly of professional proposals and marketing materials.

Learn more about becoming an SVNIC business owner here.

*All Sperry Van Ness offices are independently owned and operated.

Bo Barron’s advice for success featured in Commercial Investment Real Estate

What skills, knowledge and tools does a commercial real estate adviser need to succeed?   That is what Commercial Investment Real Estate (the magazine of the CCIM institute) wanted to learn from Bo Barron, CCIM, vice president for organization development at Sperry Van Ness International Corporation (SVNIC).

Tenacity, systemization and accountability

Bo Barron, VP of Organization Development
Bo Barron, Vice President of Organization Development at Sperry Van Ness International Corporation

Bo, who served in the U.S. Marine Corps before pursuing his real estate career, discusses how tenacity and the other skills he learned in the service, such as systematization and accountability, have helped him to succeed. He says: “I am convinced that tenacity is the most important trait required to succeed in commercial real estate.”

Prospect on a daily basis

Bo, who works with SVNIC’s advisers to raise their productivity and profitability, also shares what sets top producers apart: “My experience has also taught me that top producers must systematically prospect on a daily basis,” because “those who consistently prospected throughout the downturn [in 2008] have continued to succeed.”

Embrace new technologies

“Social media platforms such as Twitter and LinkedIn as well as blogs have made it possible  for CCIMs to become known as market experts and thought leaders faster than ever,” said Bo, who blogs at www.bobarron.com, and who joined SVNIC because of its emphasis on technological innovation, among other things.

Read the entire interview in the July/August 2013 issue of Commercial Investment Real Estate magazine.


*All Sperry Van Ness offices are independently owned and operated.

New franchisee SVN/Renaissance Commercial brings vision for major growth in the OC

Sperry Van Ness/Renaissance Commercial, which serves the fast-growing Orange County and the “Inland Empire,” is SVN’s newest franchise office. The group, which is headquartered in Irvine, CA, has plans for additional locations in Palm Springs, Riverside, Ontario, and Temecula/Murrietta.

SVN/Renaissance Commercial is led by Darrell Hoover and Michael Gustafson. After six years in the National Football League, Darrell Hoover began his ascent in real estate in 1975, with the creation of Hoover Advertising, an advertising, marketing, and PR firm that included some of the largest residential home builders in the country. He later became a direct leader in the homebuilding industry, as president of Beazer Homes’ Southern California division from 1991 to 1996. During that time, Beazer Homes went public (NYSE: BZH) and became the sixth largest homebuilder in the United States. Following the economic downturn in 2008, Hoover founded CrissCross Solutions, bringing together real estate veterans to help banks and other investors with property repositioning, work-out situations, and asset protection.

With an already well-established presence in Southern California, Hoover and his team of top brokers at SVN/Renaissance Commercial are now poised to seize a major piece of the region’s exploding growth in commercial real estate, including the retail, industrial, high-end apartment, office, and recreational markets. Hoover’s fellow Managing Director, Michael Gustafson, will serve as a leader on many of the property types. The 28-year industry veteran will also help direct all franchise operations, asset services, and property management. An accomplished broker, developer, and contractor, Gustafson previously directed numerous companies including VP Commercial, Vision Offices, and Victoria Properties where his talent resonated through his properties winning numerous national and local awards.  Michael was voted developer of the year three consecutive times by AZ Business Magazine.

 “I’m continually blown away by the smart tools, the knowledge base and the entrepreneurial and collaborative spirit of SVNIC,” said Darrell Hoover. “I like to say that SVNIC is high tech – but also high touch. The passion and commitment for doing what’s best for the client exists at all levels.”

 “SVN/Renaissance Commercial brings a unique combination of experience and fresh perspective to the next generation of Sperry Van Ness® leadership in Southern California,” said SVNIC President and CEO Kevin Maggiacomo. “We’re thrilled to have the enthusiasm of Darrell Hoover and his team, as they look to build a Sperry Van Ness brokerage presence that’s stronger than it’s ever been in this part of the country.”

For information on becoming a Sperry Van Ness franchisee, click here.


*All Sperry Van Ness offices are independently owned and operated.


SVNIC Among Top Ten in 2013 Best of the Best Top Brokers List

Midwest Real Estate News, a leading journal for commercial real estate news, has named Sperry Van Ness International (SVNIC) in its 2013 Best of the Best issue, where it is listed as the number eight in the list of the Top Brokers nationwide. The magazine lists a total of 51 top brokers. With total leasing and investment sales of $1,678,260,000, SVNIC is included with other large national brokers such as CBRE, Cushman and Wakefield, Jones Lang LaSalle and Colliers.

SVNIC has offices throughout the Midwest, including in Chicago, Fort Wayne, Indianapolis, St. Louis, Missouri and Madison, Wisconsin.

Midwest Real Estate News also lists the top owners, top property managers and top lenders among the best companies in the issue. To read the entire 2013 Best of the Best issue, click here.


*All Sperry Van Ness offices are independently owned and operated.

How the Northern Colorado CRE Market is Doing–a Q2 Report

Steve Kawulok, managing director, SVN The Group Commercial, Fort Collins, CO

Recession recovery is continuing at a higher pace in the Northern Colorado commercial real estate market, says Steve Kawulok, managing director of Sperry Van Ness The Group Commercial in Fort Collins, Colorado.

The Northern Colorado market, which encompasses the three counties of Boulder, Larimer and Weld, had an improving outlook for the second quarter of 2013. Among the signs of recovery and strength were:

  • Market sales of property went up ;
  • Retail properties  did the best;
  • Office properties gained momentum with the vacancy rates going down and rental rates on the uptick;
  • Investors are still active in this market.

For a complete picture of the Q2 activity in Northern Colorado, including significant commercial real estate transactions, read Steve’s Q2 report here.

*All Sperry Van Ness offices are independently owned and operated.

Central Florida Commercial Real Estate is Jumping

The Central Florida commercial real estate industry is recovering nicely from the recession reports The Orlando Business Journal in its June 28 edition. Some sectors are doing better than others, with industrial and retail leading the way. The office sector continues to struggle with high vacancy rates, however.

Miguel de Arcos, Managing Director, Sperry Van Ness Florida Commercial Real Estate Advisors
Miguel de Arcos, Managing Director, Sperry Van Ness Florida Commercial Real Estate Advisors

The article reports there are five game-changers for the Central Florida commercial real estate market:

  1. Office market has changed for the good, since companies are doing more with less.
  2. Financing is available from different sources to fund to new projects.
  3. Industrial real estate will see an improvement.
  4. Orlando is attractive to national firms.
  5. The SunRail will help boost the region’s attractiveness.

The market’s recovery can be evidenced in the spectacular increase in total dollar volume experienced by Sperry Van Ness Florida Commercial Real Estate Advisors. With $73.2 million in total dollar volume in 2012, Sperry Van Ness Florida jumped from the number 16 position to number 8 position on the Orlando Business Journal’s  List of Top Commercial Real Estate Brokerage Firms.

In discussing the current commercial real estate environment with the Orlando Business Journal, Miguel de Arcos, managing director of SVN Florida, says he likes the long term prospects in the Central Florida area due to the booming entertainment, biomedical and high-tech markets in the region.  Miguel says “We have land and reasonable costs for real estate….Once folks realize we’re not a just a Mickey Mouse economy down here, it’s going to help.”


*All Sperry Van Ness Offices are independently owned and operated.


Office Spotlight: Sperry Van Ness, LLC in Phoenix

This week, we turn the spotlight on Sperry Van Ness, LLC in Phoenix, Arizona.

1. What has been your strategy for growing your firm and also your market share?

By combining teams of experienced sales and leasing agents specializing in all commercial real estate product types; multifamily, retail, office, industrial and land, the Sperry Van Ness Phoenix office offers full service brokerage to investors, landlords, and tenants in Arizona.

Our sales and leasing agents provide or participate in mentorship and training programs to help build stronger leasing and negotiating skills and work ethic. Our teams pride themselves in working together on all deals, as well as sharing market knowledge and updates on tenants and landlords currently active in the marketplace.

Monthly meetings are held with the entire office to share “Haves and Wants” as well as other leads and relevant market trends. We have recently added a “Best Practices” portion to our meetings in which one of the agents in our office will share and teach a specific strength that they have found to be beneficial to their business (e.g. building and utilizing a CRM database, implementation of marketing through Buildout, cold calling techniques).

We added a marketing and PR support person that has given our office some recent recognition both locally and nationally. We are already working on expanding our market presence and branding via networking events, social media, PR and other digital marketing efforts.  We also take a very active role in civic groups and charitable organizations, and believe this will also play a significant role in our recruiting efforts.

2. What are some of the unique activities you do to motivate your team? 

Sponsorships are one of the best ways to bring the team together, as well as get our name out there and help brand our office. Whenever we sponsor an event,  most of our staff comes out to support and share in the experience. So far in 2013, some notable charitable events we have sponsoredhave been the AZCREW Golfiesta Charity Golf Tournament (benefiting Fresh Start and Arizona Commercial Real Estate Women), AWEE Cocktails and Clothes (benefiting Arizona Women’s Education & Employment), and Brokers For Kids (benefiting Boys Hope Girls Hope).

Also, every month, we celebrate office birthdays by inviting the entire office to a casual event, such as a baseball game or happy hour. Since we have such a good group of people, these events are a fun way to get everyone together outside of work in a non business-related environment.

 3. What’s been the biggest challenge in how you run your business over the last few years?

Our biggest challenge was rebuilding the SVN brand in the Phoenix market after taking over from the previous franchise owner. Our partners were able to start fresh by strengthening relationships that had been deteriorating over the previous couple of years. SVN has a proud history in Phoenix going back to the early 1990’s as one of the original corporate offices, and we have been able to re-establish the office as one of the top-producing commercial real estate offices locally.

4. How many Advisors/Staff did you have when you joined SVN? How many (in total) do you have now? 

We had 16 in 2009 and we have 23 in 2013


Sperry Van Ness, LLC   Phoenix, AZ


*All Sperry Van Ness® offices are independently owned and operated.

New Franchise Focus: Sperry Van Ness/The Founders Group in Myrtle Beach

Sperry Van Ness International Corporation (SVNIC) is proud to announce the addition of its newest franchise office, Sperry Van Ness/The Founders Group in Myrtle Beach, S.C.

One of the most popular destinations along the eastern seaboard for tourists and investors alike, Myrtle Beach features a wide array of commercial real estate property types including beachfront resorts, apartments, shops, restaurants, and more. With a deep knowledge of this diverse market, Managing Directors Van Watts and Jay Smith will employ SVNIC’s innovative marketing tools to skillfully serve clients from South Carolina and beyond.

Watts brings more than 28 years of real estate experience to SVN/The Founders Group, having previously covered major sales and development projects as founder and president of South Carolina’s Pace Realty. A 25-year veteran of the industry, Smith most recently served as a principal with nFusion, a real estate consultancy providing REO evaluation and disposition, loan sales, asset repositioning, and other services. In joining forces, Watts and Smith present a unique understanding of the needs of both investors and lenders.

Discussing the decision, Van Watts said:

 When we decided to form a brokerage, Jay and I were initially drawn to the culture of collaboration at SVNIC. What solidified our decision to join the company was the repeated enthusiasm we heard from franchisees in markets across the United States. Here in our corner of the country, we’re confident the marketing platform will help us reach a wider audience with our listings, as we continue to see more buyers and sellers from across the state lines.

To learn more about becoming an SVNIC business owner, click here.

*All Sperry Van Ness offices are independently owned and operated.


ICSC #REcon2013, 10 Consumer Trends and my New Blue Suede Shoes

The Sperry Van Ness® booth at the International Council of Shopping Centers (ICSC) annual real estate conference (RECon2013) was busy during the annual retail conference held every year in Las Vegas. We had over 80 of our advisors at the conference doing deals and getting the job done.

Randi Zuckerberg gave a great keynote (yes, she is the sister of Mark and the former marketing director for Facebook).  Zuckerberg outlined the 10 trends that define the life of the modern consumers in mobile, social and tech. In case you missed it, I took copious notes and here is the summary:

1. Luxury on demand. Luxury is neither exclusive nor elusive. With sites like http://www.renttherunway.com/, anyone can borrow a red carpet outfit. In addition, we have personal assistants on demand and even corporate jets that we can rent.

2. Mobile everything and everywhere. Now we have cars and homes interacting with phones. We even pay for Starbucks with our phones. Other retailers need to follow.

3. Rise of “entre-ployees” creates challenges and more competition. Keeping good employees will remain difficult, as they will be in demand and looking to “do their own thing.”  Companies who are doing well will try to create an entrepreneurial culture.  They may even have entrepreneurs in residence.  According to recent surveys, evangelist and community manager are two of the fastest growing titles.  Retail can even take this a step further and not just empower their employees, but also empower consumers to be entrepreneurial. For example, consumers on Nike can design their own shoes.

4. Big data in the cloud. Big data sounds so off-putting, but it really is the key to personalization. Some examples of where folks can have personalized experiences are on Tripadvisor, or Netflix and Amazon as these sites make recommendations personal to you. Going forward, your local mall should know who you are when you arrive and be able to personalize the experience for you.

5. Fast, fun & easy retail. There’s been a huge increase of subscription shopping. In addition to Groupon, there are sites you have to join like Gilt, Hautelook and RueLaLa. Gilt takes it to a new level by giving Facebook fans early access to sales. Another change is that retail brands are becoming media companies. Mod Cloth adds product every day. Bonobos has a showroom order online.

6. Your car is the new phone. The latest apps (GPS, weather, music etc.)  are being developed specifically for your car, and you can expect to see more.

7. The gamification of everything. Shopkick.com is one of several apps that give you bonuses and points for shopping.

8. Now everyone can have a second job online. If someone is looking for ways to make a little extra money online, they are not limited to affiliate marketing. Sites like Task Rabbit provide folks with time on their hands an opportunity to get paid to run errands and 99designs.com gives graphic designers a place to freelance.

9. Etiquette and digital detox.  With all this digital and mobile developments, there is also a counterswing where folks are going to retreats looking for a digital detox.

10. Socially conscious retail. Consumers care about the backstory and with the web, they are able to find it.

What about the blue suede shoes? Approximately two weeks before the conference, while scrolling through Pinterest, I noticed a pair of shoes posted from a popular office fashion blog. The author raved about their comfort. This sparked my interest as anyone who has walked the Las Vegas Convention Center, you know it’s tough on your feet. I read all the online reviews, asked my friends on Facebook, and then decided to buy them.

So, I found the blue suede shoes by accident on a social network. I then crowdsourced opinions, and had a personalized shopping experience (as the store made other recommendations I might like). As for gamification – I’ve become the master of Googling for discounts and rebates and never paying full price–it’s like a game for me. There you have it:, a real life modern consumer in action at ICSC. The bonus? The shoes came in Sperry Van Ness® blue!

Diane K. Danielson is the Chief Platform Officer of Sperry Van Ness International Corp.


*All Sperry Van Ness® Offices are Independently Owned and Operated.

New Franchise Focus: Sperry Van Ness/MG Property Advisors in San Rafael, CA.

Gary Gustafson, Managing Director
Gary Gustafson, Managing Director, Sperry Van Ness/MG Property Advisors, Inc.

Sperry Van Ness/MG Property Advisors, Inc. in San Rafael, California is the newest franchisee of the Sperry Van Ness  International Corporation. Led by Managing Director Gary Gustafson and Senior Advisor Martin Perlmutter, SVN/MG Property Advisors will focus on a strong national net leased property sales program, as well as local office and industrial sales in California’s North Bay, just north of San Francisco.

Gustafson and Perlmutter have assembled a team of top advisors with a shared background in closing large deals, including the recent sale of $15 million in net leased properties. The staff at SVN/MG Property Advisors is now looking to SVNIC’s innovative technology platform and transparency in listings to become a recognized leader in the area’s highly-competitive brokerage industry.

“For many years, I’ve admired the Sperry Van Ness® philosophy that a transparent commercial real estate market is better for both brokers and clients,” said Gustafson. “That mission, combined with marketing tools that make the sales job more efficient and productive, made joining SVNIC the easiest and best choice.”

To learn more about becoming an SVNIC business owner, click here.

*All Sperry Van Ness Offices are independently owned and operated.

New Franchise Focus: Sperry Van Ness/Reagan Asset Management

Sperry Van Ness International Corporation is proud to announce the addition of Sperry Van Ness/Reagan Asset Management in Sarasota, Florida as its newest franchise office.  SVN/Reagan Asset Management is a property management office, offering its clients a full range of solutions from strategic financial consulting to turn-key facility maintenance analysis and execution.

Founded in 2009, SVN/Reagan Asset Management currently serves investors in both central and southwest Florida in both private and institutional markets. Led by managing directors David Matthes, Larry Starr, and Tony Veldkamp, the office focuses on assisting clients through asset management, tenant retention, and operating expense reduction.

In consistently achieving operating expense reductions between 15 and 20 percent for its clients, SVN/Reagan Asset Management offers complete knowledge of building systems, value-added green technologies, debt restructurings, operating cost containment solutions, NOI enhancement strategies, and tenant retention solutions.

“Now more than ever, real estate investors are focused on the management of their assets to secure short-term viability and long-term appreciation,” says SVNIC’s President and CEO Kevin Maggiacomo. “Investors demand that their asset manager has complete vertical knowledge of everything that goes into a well-performing property. The team at SVN/Reagan Asset Management delivers that each and every day.”

Click here for more information on Sperry Van Ness® franchises.


*All Sperry Van Ness® Offices are Independently Owned and Operated.


New Franchise Focus: Sperry Van Ness/KD Lanclos & Associates LLC

Damien Lanclos, Managing Director of Sperry Van Ness/KD Lanclos & Associates, LLC
Damien Lanclos, Managing Director of Sperry Van Ness/KD Lanclos & Associates, LLC

Sperry Van Ness International Corporation is proud to announce the addition of Sperry Van Ness/KD Lanclos & Associates, LLC in Augusta, Ga. Led by Managing Director Damien Lanclos, the organization specializes in the sale and leasing of a diverse range of product types including office, retail, land, and multifamily properties in both Georgia and South Carolina.

After many years in the pharmaceutical industry, Lanclos first entered the commercial real estate industry with the Sperry Van Ness organization in 2007, as an advisor based in Sarasota, Fla. In his first year with SVN, he closed several large deals, including a more than 18,000 square foot retail transaction at $2.85 million. He opened his current Sperry Van Ness office in his native Augusta, Ga. in 2013. Lanclos credits the innovative marketing tools and Monday Morning National Sales Call program with helping him to quickly advance his business.

Says Lanclos, “I was recently able to bring in multiple offers on a $5.9 million multifamily listing, thanks in part to the SVN tools that have allowed me to broadcast all of my properties to a national audience.”

Lanclos’ office assists clients in the second largest market services area in the state of Georgia. In line with the findings of SVNIC’s Top Markets to Watch Report for 2013, Lanclos says he’s seen a strong demand for multifamily investments, due to a rise in occupancy and rent gains.

Lanclos was recently accepted into the 2013 class of Leadership Columbia County, a program of the Columbia County Chamber of Commerce. The 10-month membership exposes business and community leaders to the opportunities and challenges facing the area, including economic development.

Lanclos received his Bachelor of Arts degree in English from the University of Georgia and holds real estate licenses in Georgia, South Carolina, and Florida.


Damien Lanclos

Sperry Van Ness/KD Lanclos & Associates, LLC

Augusta, GA


Click here for more information on Sperry Van Ness franchises.

*All Sperry Van Ness® offices are independently owned and operated.


1Q 2013 Northern Colorado CRE Market Sets Stage for a Strong Year by Steve Kawulok

Steve Kawulok
Steve Kawulok, Managing Director, SVN/The Group Commercial

In a detailed Northern Colorado commercial real estate market report and analysis, Steve Kawulok, Managing Director of Sperry Van Ness/The Group Commercial says the first quarter sales volume of 2013 was less than 4Q 2012, but with high activity levels, foretelling a strong year ahead.

Other key findings about the Northern Colorado market in this report are:

  • Retail properties were sought after although investors paid slightly less for investment properties in general.
  • Vacancy rates continued to decline, particularly in the industrial category.
  • Rents are projected to increase in 2013.
  • Land meant for residential development has started to sell if located in an infill area, and oriented to smaller lot, affordable homes.
  • Medical office and clinical properties are in high demand from investors.
  • Industrial properties, especially those with yard space, are in high demand from the energy industry.

Read the entire Tri-County Northern Colorado 1Q 2013 Commercial Real Estate Market Trends and Commentary.


Steve Kawulok

Sperry Van Ness/The Group Commercial 

Fort Collins, CO


*All Sperry Van Ness® offices are independently owned and operated.


Join Sperry Van Ness at ICSC RECon 2013 in Vegas

Visit Sperry Van Ness at ICSC REcon Booth C at 162 F Street.



*All Sperry Van Ness® offices are independently owned and operated.


Office Spotlight with Sperry Van Ness | Rich Investment Real Estate Partners

This week, our Office Spotlight focuses on Sperry Van Ness | Rich Investment Real Estate Partners based out of Los Angeles, CA.

1. What has been your strategy for growing your firm and also your market share?

Like any brokerage company, recruiting is the key to both organizational and market share growth and I spend most of my time doing that.  There are three types of agents I target:

  • New-to-the-business. The new-to-the-business advisors are easiest to hire, but require sufficient training and mentoring and, in general, are “lower-probability” producers. I source leads for these types of agents through newspaper ads, local campus recruiting, and intern programs. While they’re typically more challenging to manage, they tend to more easily adapt and adhere to our work standards and the SVN culture.
  • Seasoned (or senior level). Mid-level and senior lever producers have been far more challenging to recruit, but often begin producing within a their first few months with the company.  I try to target agents that will complement our existing advisors. Thus far, I have agents that specialize in 5 of the major asset categories so we’re aggressively searching for a hospitality specialist who can round out the team. I also try to choose agents that are a fit to both our franchise’s and Sperry Van Ness’ culture.
  • Satellite.  Hiring satellite agents has enabled us to penetrate into territories where there is insufficient transaction volume to support a brick and mortar office. I often find little to no competition from national brokerage companies in these areas. And given that these locations are in outlying secondary and tertiary areas to our primary market, we are able to access higher yielding investment opportunities without having to go out of state.

2. What are some of the unique activities you do to motivate your team?

I provide the training, resources and support while setting challenging performance expectations then try to take a hands-off approach and let agents find their own system that works for them in accomplishing their goals. So I’m there when they need me but not there when they don’t need me.  I conduct quarterly and annual business plan meetings and try and connect on daily basis with the agents in the office and on a bi-weekly basis with my satellite advisors.

3. What’s been the biggest challenge on how you run your business over the last few years?

Fortunately, we’re past most of the branding issues we struggled with initially and are now gaining traction  in our market once again.  Recently, our challenges have been mostly market related: seller’s hesitant to sell for lack of viable uplegs, cap rates approaching sub-5 levels, and political and economic uncertainties on the horizon

4. How many Advisors/Staff did you have when you joined SVN? How many (in total) do you have now?

When I started the office in May 2010 we had 4. Today we have 37 and growing!



Sperry Van Ness | Rich Investment Real Estate Partners

David Rich, Managing Director of Sperry Van Ness | Rich Investment Real Estate Partners
David Rich, Managing Director of Sperry Van Ness | Rich Investment Real Estate Partners

David Rich

Managing Director

Sperry Van Ness | Rich Investment Real Estate Partners

Los Angeles, CA






*All Sperry Van Ness® offices are independently owned and operated.

Why We Collaborate

Kevin Maggiacomo, President & CEO of Sperry Van Ness Internationa
Kevin Maggiacomo, President & CEO of Sperry Van Ness International Corp.

I’m often asked why we give away some of the (otherwise proprietary) Sperry Van Ness®  systems, tools and resources. I’m further asked why SVN is investing in the development of new tools if only to hand some of them out to the brokerage community at large. “Aren’t we aiding our competitors?” “Are we losing pieces of our differentiated value proposition in doing so?” These are a few of the questions often posed to me. 

While losing market share and eroding gross margin are obviously not the extirpative goals of the aforementioned strategy, in this post I’ll attempt to clarify why we have taken our culture of collaboration up a notch, and how doing so is facilitating growth across all key performance indicators while helping to improve the fractured state of the commercial real estate (CRE) industry. 

By way of background, SVN was founded on the premise that proactively cooperating and collaborating with our brokerage brethren – sharing our fees 50/50 in the process – is the right thing to do for the client and is the only way to ensure maximum value for a property.  Debating the merits of that ethos is a topic for another day, and last month we released the SVN Difference Video, which scrutinized the CRE industry and its asset disposition practices, and was met with strong emotional reaction. 

In terms of opening-up and creating new SVN products for the benefit of the brokerage community, we’ve rolled out the following in the past 12 months, which can be categorized and described as follows:

  • Compensated Cooperation:  The SVN Monday Morning Sales call is now open to the public.  There, we showcase new listings procured by our SVN Advisors over the previous 7 days.  Every listing includes a buy-side commission which is always ½ of what the SVN Advisor stands to earn as a matter of policy.

  • Education:  We collaborated with more than 10 commercial real estate firms and industry organizations to launch www.CREvine.com, an open resource platform for CRE professionals to acquire new skills, gain knowledge, and “level-up” their practices.

  • Marketing:  Lastly, and as a BETA test, we’ve opened up a good portion of our (now retired) OnlinePublisherTM system.  Called CRElaunch, owners and brokers alike can use the tool to create brochures and market their properties (a word of caution here – the product is in BETA and has a long way to go).

But back to the topic at hand.

We collaborate not to merely suggest that “we’re the good guys,” but because we truly believe that making the otherwise dysfunctional commercial real estate market more efficient will benefit all stakeholders, including Sperry Van Ness.

Simply put, collaborating – harnessing the power of broad horizontal networks of participants to achieve a better outcome – will drive market efficiency and liquidity, while simultaneously increasing revenue and profitability to those who collaborate.  At SVN, we’ve aggressively grown our business by subscribing to this ethos and receive direct benefit in the following manner:

  • Recruiting:  As a CRE advisory, one of our biggest economic generators is recruiting talented, ethical and productive advisors.  Our opening-up certain components of SVN has allowed us to create relationships with thousands of brokers and we’ve recruited or awarded a brokerage position or SVN franchise to a small percentage of this new constituency.

  • Retention:  Just as strong as recruiting is a vital key performance indicator of growth, attrition (of producing Advisors) can have devastating consequences for an organization.  Through thought leadership, the contemporary nature of our collaborative growth strategy, and via a transparent business model, our attrition rate is at a 5-year low.

  • Sales:  When one harnesses the power of the entire brokerage community to market a for sale asset, organized competition is generated, multiple offers are posited, the market speaks, and the highest price is achieved.  Our compensated cooperation strategy, coupled with our core covenants, define SVN while moving inventory faster and at a higher price.

  • New Business Development:  It’s tough to argue against the growth strategies of the likes of Google, Skype, and Innocentive in suggesting that their “Freemium” business models don’t create raving fans, loyal customers, and a myriad of cross-selling opportunities (each of these companies offer a free “attraction” product while simultaneously offering paid premium products).  As described above, the SVN story – rooted in harnessing the power of collaboration to affect a better outcome – has been kicked-up a notch, shared with clients/prospects, has enhanced our point of differentiation, increased our “batting average,” and reduced the cost of sales.  We are winning new listings, doing more business – all while putting the clients interests’ first.

Mass collaboration, while not ubiquitous in CRE brokerage, is now a staple of the new economy and it’s here to stay.  As the members of Generation X & Y grow to positions of increasing power and control, collaboration and Freemium business strategies will become the norm in CRE as well.  Until then, I’ll continue to invest in the creation of new products and to share some of those we previously created.

Kevin Maggiacomo is the President and CEO of Sperry Van Ness International Corp.

*All Sperry Van Ness® offices are independently owned and operated.


2013 Hospitality: Q1 Review & Q2 Outlook by Tom Hamm

Hotel occupancy rates

Nationally, hotel occupancy is currently running about 64%, up from 62% last year, while Average Daily Rates (ADR) continue to climb: $110 versus $105 last year.

Viewed from a chain scale perspective, Luxury is the most robust both in terms of absolute numbers and the rate of increase. In this segment, occupancy stands at 79% versus last year’s 76% and ADR is at $297 versus $278.  Luxury is followed  by Upper Upscale, Upscale, Upper Midscale and Independents. Midscale and Economy are at the bottom, with occupancy for economy properties of only 55% versus 54% and ADR of $53 versus $51 last year.

The strongest locations  are urban and resort, followed by airport. Among the top 25 markets, Miami is a standout with more than 89% occupancy presently and a $235 ADR (no doubt contributed to by the Sperry Van Ness 2013 National Conference). Other markets enjoying more than 80% occupancy include: New Orleans, New York, Oahu, Orlando Phoenix and Tampa.

Norfolk was at the bottom with only 48% occupancy, representing a 3% decline.  San Diego lost 3.2% occupancy points, down to a still healthy 71%. These markets  are heavily influenced by military and defense contract business,  and thus, are beginning to feel the effects of sequestration.  Sequestration also mean automatic spending cuts, including all non-essential government travel,  making the pinch felt in places like San Antonio, where the September National Defense Forum and Expo was cancelled, and in Northern Virginia and Washington, DC, where more than 30% of the market is government and government contractor business.


From a transactional viewpoint, 2013 looks promising. Smith Travel Research (STR) projects hotel transactions of between $15 and $20 billion, up from about $12.5 billion last year but down from 2011’s $19 billion, which was driven by major hedge fund and REIT transactions. To give some perspective, five of the last ten years’ volume was under $15 billion.

Until now transactions were powered by cheap debt and commensurately low cap rates. This was coupled with very limited lending for new hotel construction that kept supply growth at only about 0.3%, which in the face of increasing demand, allowed hotels to increase their average rates. However, according to STR’s latest numbers, hotels in construction are up 39.9% year-over-year. The active pipeline includes  more than 320,000 new hotel rooms, equal  to a whopping 10% increase. Nevertheless, STR predicts that demand growth will continue to outpace supply growth through 2014, with RevPar increasing between 5.7% and 6%  through next year.

The bottom line is that hotel owners who have enjoyed a rebound, even if not to the extent of 2007 peak levels, should consider the opportunity to sell in the near term on the strength of improved revenue before the effects of sequestration, supply growth and inflation bring down hotel values.


Prepared by:

Tom Hamm
Tom Hamm, Council Chair of Hospitality Properties

Tom Hamm

Council Chair of Hospitality Properties

Sperry Van Ness/Hamm & Company



*All Sperry Van Ness® offices are independently owned and operated.

Office Spotlight with Sperry Van Ness | Property Investment Advisors, LLC

This week, our Office Spotlight focuses on Sperry Van Ness | Property Investment Advisors, LLC based in Birmingham, MI (Detroit metropolitan area).

1. What has been your strategy for growing your firm and also your market share?

A few of our key strategies that allow us to be strongly poised for future growth and should assist other SVN offices include:

  • Knowledge: We feel knowledge is power!  We have probably the best access to information in our Detroit and Michigan market than most of our local competitors.  Not only do we have data supplied by the normal informational sources as Real Capital Analytics, CoStar, LoopNet, SVN market updates and SVN training, but this knowledge is supplemented by over 25 trained local area product type specialists connected nationally with 60 other offices.  This is through our adjacent office “partner” Integra Realty Resources, one of the largest appraisal firms in our local market and the country.
  • Technology: We have a great toolbox of all the latest technology in commercial real estate – Tablets/Smartphones, commercial property apps, databases, BuildOut ™ (SVNIC is an enterprise user of BuildOut’s single point of entry online marketing and tracking system), SVN app (SVN Connect), etc.  With this technology, we can operate from anywhere and effectively market our services to and for our client.
  • Website: We have a highly active local Detroit metro and Michigan website with blogs, news and listings supplemented by online/real time Twitter feeds.
  • Social Media: We are active in social media with thousands of followers on LinkedIn, Twitter and Facebook (currently more than 8,000 connections). This provides the added advantages of  keeping us instantly updated with current market trends; providing great search engine optimization; and giving us an exceptional marketing tool for maintaining high visibility and close relationships.
  • Individual Visibility: We are highly visible both locally and nationally not only on the internet but on a personal one-on-one basis. We are members of  numerous local and national boards and committees, including individuals on our team serving as president of the Commercial Board of Realtors, as committee members with the Counselors of Real Estate of the National Association of Realtors, on the  boards of local and national CEO/business groups and the boards/committees of many non-profit groups. All this is supplemented with speaking engagements, publications, articles, press releases, and other outreach.
  • Connections: Our 40 years of strategic networking have led to us being connected to most of the movers and shakers on the local and national levels.  
  • National and International Access: We achieve national and international access through our association with Sperry Van Ness International Corporation (175 locations nationwide), Integra Realty Resources (60 locations nationwide), the Counselors of Real Estate (1,100 high level executives in most markets) and our national CEO group (80 locations nationwide).
  • Location: We are located in Birmingham, Michigan, which is a north-central suburb of the Detroit metropolitan area. Our strategic and central location allows us to reach most of the  Detroit metropolitan area in 20 minutes. That’s easy access to more than 4.5 million people!
  • Demographics: Being in the Birmingham/Bloomfield market allows us to be near the wealthiest individuals in Michigan. These are the people that can purchase real estate on an investment basis or CEOs and high level executives that can lease or purchase properties for their companies.


2. What are some of the unique activities you do to motivate your team?

Enthusiasm! Motivation for us comes from liking what we do and liking the people we do it with. It has been said that if you love what you do, you don’t have to work a day in your life.  It is always exciting, for example, to deal with the top ½% of wealth in the population and work with them to achieve their goals, whether it is for investment purposes or helping them with their companies.  We have access to all the credentials and people needed to solve our clients’ problems and properly market their properties (e.g.:  Counselors of Real Estate (CRE’s) , CCIM’s, MAI’s, CPA’s, CPM’s, MBA’s, SIORs, etc.).  We pride ourselves on working and “playing” with our clients to achieve together what we consider the four key elements of a successful great life:  family, faith, business and social.


3. What’s been the biggest challenge on how you run your business over the last few years?

Our biggest challenge was the difficulties faced by the  Detroit market from 2008 to 2011. The auto industry was in the worst shape it had ever been in, impacting the health of  local businesses.  This was compounded by one of the worst real estate markets nationally.  Since then, there has been a tremendous turnaround in the auto industry and the area, causing a large potential of new business and many outstanding opportunities both for us as an office, and for our clients.  Now our challenge will be to close new business, which can take some time to finalize, and replenish what was previously a deteriorated cash flow.


4. How many Advisors/Staff did you have when you joined SVN? How many (in total) do you have now?

Our SVN office’s intent has been to maintain quality not quantity.  We may not be the biggest but we are one of the best! As mentioned above, we use everything possible, including the latest technology,  to give the best service to our clients.  We subcontract out to specialists when necessary to reduce unnecessary overhead. We have adjacent office space with Integra Realty, which not only provides quality information and synergy, but great conference facilities, audio visual, printers, administration, copy machines, distribution services and a great professional office setting.


Sperry Van Ness | Property Investment Advisors, LLC    Birmingham, MI

Robert Pliska, Managing Director of Sperry Van Ness/Property Investment Advisors, LLC
Robert Pliska, Managing Director of Sperry Van Ness/Property Investment Advisors, LLC

Robert Pliska

Managing Director

Sperry Van Ness | Property Investment Advisors, LLC




*All Sperry Van Ness® offices are independently owned and operated. 

SVN State of the Company: Change or Die by Kevin Maggiacomo

Kevin Maggiacomo, President & CEO of Sperry Van Ness Internationa
Kevin Maggiacomo, President & Chief Executive Officer of Sperry Van Ness International Corporation

As President and CEO of Sperry Van Ness International Corporation, my role, aside from addressing the perennially evolving needs of the organization, is to spend a good percentage of my time on strategy and “second wave growth.” Creating a real estate services platform, scaling-up new offerings like property management and auction, but also on expanding upon the disruption that our compensated cooperation model has had on the industry is where I spent a considerable amount of my time. In this post I’ll share with you why we’ve funded and embraced such an “innovation lab” at SVN, and describe why it’s an important cause.

Inspired by the Motley Fool, whose two founders I recently spent time with at the Conscious Capitalism conference, let us consider the following notion: Becoming a leading company in an industry requires the right people, and I’m not talking about at the executive level, but at every level. An appetite for change has to be in a company’s DNA.  But being an industry leader also requires a tremendous amount of imagination… imagining a different world. A world almost like the one we live in now, but more efficient.  Becoming a laggard in an industry requires a lack of imagination. And just like any industry on the planet, there are forces that will disrupt commercial real estate brokerage and we are not immune.

Change happens to industries. Just ask a newspaper publisher, or anyone who invested in that industry in recent years. We still read newspapers – in fact we read them more today than in previous generations – but we don’t read them in quite the same way. And without a bridge loan from the then richest man on the planet, even the patriarch of the publishers – The New York Times – would have filed for bankruptcy protection. Were there warnings this would happen? You bet.

Back in 1993, a man named Gordy Thompson worked for The New York Times, and his job title was “Internet Services Manager.” Rest assured that in the C-Suite at The Times, no one knew what the role included, much less understood that it was arguably the most important position at the newspaper. As the story goes, Thompson tried – and failed to deliver the following message to The Times execs: “When a 14-year old kid can blow up your business in his spare time, not because he hates you but because he loves you, then you’ve got a problem.”

Thompson was in the habit of hanging out on Internet message boards, if you remember those from back in the day. There, Thompson noticed that fans of the Miami Herald columnist Dave Barry were re-posting Barry’s columns on the 2,000 person strong Usenet so that people who couldn’t read the Herald now could. In other words, the greatest competitive threat for newspapers was the popularity of their own content.  People wanted more of it where and when they wanted – on their terms.

This same trend has occurred in the financial industry when we began facilitating our own trades online – and the list goes on. Did people stop traveling? No, they stopped paying travel agents. And you better believe there was a Gordy Thompson every time, sounding the alarm, telling the corporate executives to use a little imagination. Saying “people want what they want, when they want it, where they want it and how they want it.  And if we don’t figure out a way to give it to them, they are going to get it somewhere else.”

Innovating to develop new methods of providing Commercial Real Estate (CRE) advisory services, working towards making the opaque and antiquated CRE industry more transparent and efficient are a few of the causes which drive the SVN innovation lab’s purpose – embracing the disruptive economic forces inherent in other industries is a big focus of our leadership team. When we talk about opening up parts of SVN – our Monday Morning Sales Calls to anyone who wants to listen or the previous version of our OnlinePublisherTM (www.crelaunch.com) – we’re focusing on increasing our productivity through collaboration with the entire industry, making it more efficient in the process.  This is the Sperry Van Ness® Difference. To learn more check out our SVN Difference Video.

Kevin Maggiacomo is the President and CEO of Sperry Van Ness International Corp.

*All Sperry Van Ness® offices are independently owned and operated.


Multifamily #CRE Focus on Houston/Harris County, Texas

More Expansion in All Sectors

The Houston, Texas apartment market is the fourth largest in the country with nearly 600,000 units. Looking at the real estate drivers, it’s easy see why there’s so much demand. More than 90,000 jobs were added in 2012. New construction of offices in the energy corridor, a new Exxon campus in Harris County, and new apartment construction throughout the Houston area has created a large employment demand that’s expected to be strong for at least the next two years. The Houston Consolidated Metropolitan Statistical Area (CMSA) has gained about 90,000 jobs per year since 2011 which creates a demand for 18,000 new apartment units per year.blog1

Average Class A cap rates have continued to decrease since mid-2010, from 7% to a low of 5.5% in 2012. During the same time average sales prices increased from $50,000 to $66,000/unit. Cap rates for 2013 are projected to stay about the same for Class A properties at about 5.4% to 5.6%. Values will tend to increase as much as 10% due to new demand from job growth and the lagging supply of new product which should cause rents to increase. Class B cap rates should range from 7.0% to 7.5% and Class Cs at 8% to 8.5%. Now is the time to sell before we go into “hypersupply” foreseen in about 18 months.

Vacancy Trend Shows 0.8% Improvement in 2012

Decreasing vacancy rates is one characteristic of the “expansion cycle.” Overall occupancy for all classes has improved 0.8% from year end 2011 to year end 2012. Based on the projected job growth for 2013, net occupancy should increase 1.0% in 2013. A projected 13,000+ units will come on the market in 2013.


High Absorption/Low Construction

While the characteristic of  the expansion phase is high absorption, Houston saw an absorption in 2012 of about 12,250 units. The first half  of 2012 was a positive 7,141 units with a positive 5,112 units absorbed in the second half. This year, we should see an increase in absorption to as much as 16,000 units. Construction remained moderate in 2012 with 5,457 units constructed. Construction for the past 3 years (2010-2012) has averaged 5,222 units. In 2009 construction peaked at 19,330 units. Construction projections for 2013 anticipate as many as 13,000 units to be completed. At year end 2012 there were 12,785 units under construction and an additional 7,792 units proposed.


Employment Growth

Our fourth characteristic in defining the expansion cycle is a market that shows moderate to high employment growth. As you can see from the Employment Growth chart, Houston has seen a large increase in employment growth in the last three years with last year increasing to 90,000 net new jobs after a negative 102.8 thousand lost in 2009. Basically, we have recovered the 2009 losses in the last three years. Jobs are projected to increase in 2013 to about 91,000. Historically Houston absorbs 1 new unit for every 5 new jobs.
About 16,000 units are expected to be absorbed in 2013. In 2012 there were 198 garden apartment sales in the Houston CMSA – up 13% from 2011. Projections for 2013 are 250 properties based on Houston’s peak years.



Rental Rates and Rent Concessions…

As seen from the Rental Rate chart, in the last two years rental rates in the Houston area have increased about 9.4% or 4.7% per year.
Rental rates are expected to rise in 2013 for Class A & B apartments 4.7% above that of the 2012 levels. Rent concessions are almost non-existent except in the low end Class C & D properties.



Top 6 Lenders of Garden Apartments in 2011-2012

 1. Holliday Fenoglio Fowler

880 units

$161,266,000  Total Volume

2. Wells Fargo Bank

2,207 units

$118,095,000 Total Volume

3. CBRE Multifamily Capital

1,832 units

$114,537,111 Total Volume

4. Jones Lang LaSalle

2,822 units

$105,663 Total Volume

5. Berkadia Commercial Mortgage

1,208 units

$84,100,000 Total Volume

6. Metropolitan Life Insurance

960 units

$72,090,000 Total Volume

Is it Time to Buy or Sell?

The best time to buy in Houston was the fourth quarter of 2010 to the 4th quarter of 2012 if you had money to rehab and could wait for the upside.  Well the upside is here and expected to continue in the Houston CMSA through 2017 based on job growth and a 3-year lull in new construction.  It is definitely a seller’s market and good properties are hard to find.  If you are looking for an increasing income in a dynamic market, it is time to buy or build.  As an owner it is time to think about selling in the next 12 months.

Prepared by:

Bill Forrest, Sperry Van Ness® Forrest Group
Bill Forrest, Sperry Van Ness® Forrest Group

Bill Forrest

MAI, Managing Director

Sperry Van Ness | W Forrest Group

Houston, Texas

*All Sperry Van Ness® offices are independently owned and operated.

Leasing Market Outlook for 2013

Leasing covers a diversified territory categorized by product type, geography, size and quality. Most categories in major markets have seen steady absorption during the past 12 months and this should continue through 2013.

The lack of access to capital and financing has compelled businesses to lease rather than to buy. The lending environment and vacancy-driven low rent rates have made it a tenant’s market for several years. However, steady absorption is giving confidence to landlords that the market is gaining strength. This may mean that deal terms may not be as favorable for tenants in 2013. The strongest activity remains in smaller spaces, in quality properties, located in better markets.

As residential markets improve, homeowners will once again see equity that may be used to start businesses, restaurants and stores.  This could spell a higher demand for smaller retail space.  As consumers continue to spend more online, big box retailers have closed stores and have had to retool their business models to maintain profitability. As a result, developers are getting creative about re-leasing the empty big box locations.

The economy has forced many talented people to start their own consulting, professional or technology-based companies.  This will continue in 2013, creating more absorption in primary and secondary office markets.

The general outlook for leasing in 2013 will be steady absorption and increasing rental rates. As confidence builds, vacancy rates drop and the housing market improves, we will see new product deliveries. A new cycle is starting, and it is opening up new opportunities for tenants and landlords to make deals.

Prepared by:

Rich Vaaler, Sperry Van Ness/SVNMA
Rich Vaaler, Sperry Van Ness/SVNMA

Rich Vaaler


Leasing Product Council Chair

Sperry Van Ness/SVNMA

Leesburg, VA



*All Sperry Van Ness® offices are independently owned and operated.


Multifamily Market Outlook for 2013

It’s a great time to be in the multifamily commercial real estate business.

The 2008-2011 downturn in the economy caused fundamental changes in all product types but none more significant than it the multifamily business.  The multifamily business ground to a halt with the glut of foreclosed homes and with the stagnation in mortgage lending brought on by the demise of the CMBS market.  As lending started to thaw the GSA’s stepped up to fill the gap.  FNMA and FHLMC have started lending again. HUD has really never been out of the market, although it may seems that way since getting a new HUD loan can take 18 months or longer.

As rents dropped and vacancies increased with the rising unemployment rate, apartments took a beating.  Values dropped precipitously due to deteriorating fundamentals leaving most owners underwater with their mortgages.  Lenders initially were in shock and not interested in either working out the loans or foreclosing on the loans.

The downturn caused developers to stop building both apartments and single-family homes.  As home foreclosures rose, the market was spooked by “shadow inventory,” but that excess inventory did not materialize.

At present, nationally, the picture continues to brighten for multifamily.  Lenders are loosening up lending standards for multifamily and FANNIE MAE and FREDDIE MAC are lending again.

Multifamily fundamentals continue to improve and lenders are clearing their shelves of product, although very slowly.  As the economy continues to improve, vacancies and concessions are improving.  Rents in many markets are increasing due to lack of new product and the absorption of single family homes.  Cap rates are returning to 2005/2006/2007 levels although at lower income levels.

The outlook for 2013 is that it is a good time to buy multifamily (if you can find the product).

Prepared by:

David Baird
David Baird, Sperry Van Ness Nevada, LLC.

David Baird

Multifamily Product Council Chair

Sperry Van Ness Nevada, LLC

Las Vegas, NV


*All Sperry Van Ness® offices are independently owned and operated.

Single Tenant Market Outlook for 2013

Many are predicting another big year as low interest rates combine with aggressive 1031 buyers to keep the market moving. Many investors see 2013 as the chance to claim their prize assets and lock into incredible loan rates to insure long term cash flow that outperforms stocks, CD’s and other savings vehicles. Based on a survey completed by the Boulder Group, over 53% of the investors polled predicted that the transaction volume will increase this year by 5-15%.


  • 1031’s From Apartments:  Many of the current single-tenant investment buyers are coming out of 1031’s from the sale of multi-family. These investors have traded active management for passive and are thrilled to have a monthly check arrive with no headaches or responsibilities. These buyers depend on their advisors to find, screen and secure the best possible 1031 replacements.
  • Cap Rates: We have seen a steady decline in cap rates in most market segments over the past year.  Many asset classes are demanding record high sale prices. Based on the Calkain Net Lease Trend Report of Dec 2012, the reported cap rate averages are:

Banks at 6.01 cap +/-
Convenience Stores at 6.35 +/-
Pharmacy at 6.61 +/-
QSR at 7.05 +/-
Restaurants at 7.10 +/-
Automotive at 7.27 +/-
Dollar Stores at 7.45 +-
All Retail at 6.97 +/-

  • Creative Buying: Many buyers are getting more creative to separate themselves from the pack. Some are looking for higher cap rates associated with shorter lease terms and will trade some risk for higher reward.
  • Financing: Many investors are enjoying non-recourse financing on investment grade credit tenants.  Recent non-recourse loans include WAG, CVS, DG and FDO.  We have seen LTV as high as 90% on some of these assets.  The average LTV seems to be 70% as investors are willing to invest real dollars (or have to if they are in a 1031).
  • Hottest markets:  There are hot markets all over the country. The DC area continues to command high prices as the west coast heats up too.  However, very high prices are being paid for assets like Dollar Generals in markets as small as 1000 people.  It seems that the credit is more important than the location for many buyers, especially ones with short 1031 deadlines.

Forecast for retail types:

  • Dollar Stores: More Dollar Stores are being built and new investors continue to enter the market realizing that these may be the best value for their investment.  Large funds have purchase offers into developers to buy everything they build at a fixed cap rate, so they compete with the smaller investors.
  • Drug Stores: New Walgreen’s stores are popping up all over again so the supply seems to be greater than it has been for the last several years. This should keep cap rates from going much lower in the near future. Many investors prefer the rent increases paid by CVS stores.  However many CVS offer $0 cash flow that investors often can’t afford.  Many lenders have a lot of WAG’s on their books presently, so they are requiring more equity invested from the buyers in some cases.
  • Auto Parts: O’Reilly’s and Advance Auto continue to attract investors seeking a reasonably priced asset in busy locations. This segment will most likely stay strong for 2013.
  • Big Box:  There are lots of changes going on as Best Buy, Office Depot and others change their preferred store size to smaller footprints. This could turn some single tenant assets into multi-tenant assets and possibly raise the overall cap rate on the finished product, lowering their value slightly. Landlords should factor some remodeling money into their budget if they have short leases with those tenants.
  • Fast Food:  Fast food stores seem to be more attractive to investors since the economy has picked up and store sales are going up.  Many brands are expanding to new locations.
  • Restaurants: The big sale/leasebacks of 2008 and 2009 like Applebee’s and Macaroni Grill resulted in some investors getting excellent buys on those assets back then due to the large supply available. Many are re-selling those now for a nice profit and exchanging into other types of assets. They are selling to 1031 buyers that are thrilled to get an attractive brand that offers a decent return.
  • Sale Leasebacks: Many QSR Franchisees are taking advantage of the high real estate values to sell their buildings and lease them back, freeing up important capital to use for expansion and remodeling
  • Ground Leases: There seems to be a trend towards buying ground leases by some investors. Those that seek future upside will accept a smaller return upfront.  Most ground leases have generous rent bumps every five years and if the tenant does not renew, most ground lease holders get the building for free if they leave. It is a simple way to lock into long term cash flow if set up properly.  McDonalds and AAA Rated banks lead the way with the lowest cap rates.

Prepared by:

Peter Colvin, Sperry Van Ness Silveri, Grand Rapids Michigan
Peter Colvin, Sperry Van Ness® Single Tenant Product Council Chair

Peter Colvin, Chair of the Sperry Van Ness® Single Tenant Product Council
Sperry Van Ness/ Silveri Company
Grand Rapids, MI

*All Sperry Van Ness® offices are independently owned and operated.

Retail market outlook: Increase in sales

Happy New Year!  While we wait for the official Fourth Quarter 2012 results to be compiled, I can attest to (and almost guarantee) that sales activity in the retail shopping centers sector flourished as sellers rushed to complete sales by the year’s end. Special servicers, lenders and distressed property owners were the primary sellers; users and opportunistic buyers were the primary buyers.  Annual figures are expected to show an overall increase of total sales in terms of dollar volume compared to 2012.

Distressed retail assets sold not on cash flow, but the demographic markets price per square foot comparables. Traditional sales (that of non-distressed properties) were primarily Class A anchored assets. These properties traded almost exclusively among the private and publicly traded REITS. Lack of inventory of stable retail centers in core markets demanded cap-rates not seen since 2005.

The expectation for 2013 is more of the same, as billions of dollars in loans become due and property owners find themselves unable to replace existing debt because of shrinking property values resulting from reduced rents and/or loss of tenants. In addition, the economic and governmental debt crisis uncertainty will play havoc on tenant expansion, job growth and lender motivation.  These conditions will once again drive sales as investors look to commercial real estate for yield and the belief that real estate values have reached bottom.


Shari Tucker-Gasser, National Director of Retail, Sperry Van Ness
Shari Tucker-Gasser, National Director of Retail, Sperry Van Ness

Shari A. Tucker-Gasser
National Director of Retail

Sperry Van Ness/dba Sperry Van Ness, LLC




*All Sperry Van Ness® offices are independently owned and operated.


Industrial Market Outlook: Market Stabilizes

As Chair of the Sperry Van Ness Industrial Product Council, I am pleased to forecast that we are poised to move forward into 2013 in a far more positive and optimistic environment than what has been the norm for the past four years.

Industrial market has stabilized

  At the core of my positive outlook is my belief that the market has stabilized. For the past four years, the industrial market has been in a downward slide.  We saw many manufacturers and industrial employers in the automotive, recreational boating, and residential-construction related industries collapse. Industries have pulled back, many shrinking and many going out of business.

Now it seems that industries that were shrinking have stabilized, and many are looking forward with plans for expansion.  Prices of existing industrial buildings are at a seven-year low interest rates continue to be low, which puts the industrial user is in a very strong position to move forward.

Industrial users are facing decisions such as whether to enlarge existing space, relocate to available empty space, or build new. In most geographical areas, existing facilities are priced below replacement costs, making them more attractive and more cost-effective than building a new facility.  However, there has been no new construction in the last four or five years, so supply in some markets may be tightening up.  At this point I have not yet begun to see an increase in the price of existing industrial facilities, but that will change as the market improves.


The SVN Industrial Advisor will find that working with Business Development / Economic Development professionals at both the local and state level will be an important resource to develop.  These professionals are in a very unique position to be able to encourage existing industrial businesses in their expansion goals.  They have access to financial and other incentives to help the industrial user.  We are seeing some growth in industrial sectors related to health care, pharmaceuticals, food processing and light manufacturing.   The automotive and related industry has seen not only stabilization, but significant turnaround growth.

Forecast for 2013

Looking forward I think the first six months of 2013 will see modest improvement, and I hope that by the second half of the year we will really notice increased activity and perhaps increased prices in the market.  While resurgence is not evident in many markets at this point, moderate improvement should begin to be seen in the latter half of the year.  There will be many opportunities as the economy begins to turn around.  SVN Advisors in secondary and tertiary markets, who know their inventory, and are working with the Development Professionals working in their area, are well positioned to help their industrial clients.


Henry Hanna, CCIM, SIOR

Henry Hanna
Henry Hanna, Product Chair, Industrial Market

Product Council Chair for Industrial Properties

Salisbury, MD



*All Sperry Van Ness® offices are independently owned and operated.


ACA Will Boost Medical Office Real Estate: Outlook for 2013

Mark Alexander
Mark Alexander, CCIM, Sperry Van Ness Product Council Chair for Medical Office Properties

Now that the Affordable Care Act (ACA) has become law upheld by the Supreme Court, the cloud of uncertainty has been removed. This new direction for health care will ensure dramatic change in demand for real estate used by hospitals and doctors.

The ACA will add millions of individuals to the rolls of the medically insured, and this will create higher future demand for health care services. This, in turn, will create higher future demand for medical office space for doctors to treat patients.  There are strong, long-term, underlying business fundamentals for medical office building investments.

This is especially true in my home state of Florida, given the large number of elderly Americans that retire in the state, combined with a large proportion of poor, uninsured and under-insured individuals who will soon be able to obtain health insurance.

There are two main segments of medical office real estate: hospital-controlled buildings and doctor-controlled buildings.

 Hospital-controlled buildings

Health care (HC) systems have been more proactive regarding their real estate needs than doctors over the past three years while the debate raged. While not knowing for sure how reform was going to shake out, most hospitals systems believed change was inevitable, and would lead to more Americans becoming medically insured. Many HC systems have already taken steps to expand their real estate needs to accommodate this anticipated increased demand for care.

Now that the presidential election is over, eliminating speculation about an ACA repeal, many hospital systems across the U.S. are accelerating their expansion plans. HC systems are partnering with developers to construct new projects while others are using sale/lease-back transactions involving existing facilities to self-fund their expansion.

 Doctor-controlled buildings

Most private practice physicians adopted a status quo attitude over the past three years while hoping for an eventual repeal of ACA. This uncertainty fueled today’s pent-up demand for medical real estate that is now being released. This is a new environment for doctors and is causing them to change the way they manage their businesses.

Over the past twenty years, it became common for doctors who owned their own medical buildings to have their medical practices pay rent to themselves as landlords. This was a popular way for doctors to create exceptional “in-house investments” where their medical office building (MOB) investment returns where often remarkable. However, this meant their practices often paid rent that sometimes exceeded fair market rental rates by as much as 200%. When many of these doctor/MOB owner’s decided to sell their buildings prior to retirement, they quickly learned that a sale/lease back to an investor created much higher sale prices than selling to another doctor or even to their own practice.

The reason for this phenomenon is that owner-occupied MOB’s get appraised as though vacant because the appraiser is not allowed to use the existing lease (that would normally drive value higher) because the lease is between related parties and not deemed “arm’s length.” This is good for the acquiring practice but it causes the seller to leave a lot of money on the table.

On the flip side, when the MOB is sold in an arm’s length transaction to an investor and the MOB is then leased back by the medical practice, the appraiser must use the lease to calculate value. The market rent lease steers price much higher and in some cases by as much as 40% higher compared to selling the same MOB to another doctor.

Doctors who understood these advantages employed the sale/lease back approach, often choosing the highest rental rate possible to set the highest possible sales price. This created some eye-popping sale prices and saddled medical practice tenants with very high future rents. Now that ACA is anticipated to bring lower reimbursement rates to doctors in the future, doctors are seeking to keep their overhead as low as possible.

In 2013, I predict that doctors will either choose a moderate rental rate for their lease back future; or they will pick a below market rent sufficient to retire debt so they can lock in the lowest possible rent to maximize future practice profitability. This is the fiscally responsible approach, in my view, and it is one example where ACA is helping to reduce the overall cost of health care in America.

There will also be an increasing trend to make larger medical groups more prevalent. Since ACA rewards doctors who work in bigger groups or alliances, there is an incentive for single practice doctors to merge with larger medical practices or switch employment to hospital systems.

Mark Alexander, CCIM, is the Sperry Van Ness® Product Council Chair for Medical Office Properties. He bases out of Fort Myers, FL.

*All Sperry Van Ness® Offices are individually owned and operated.

Hospitality Real Estate Market: Q4 Analysis and Outlook for 2013

Tom Hamm Sperry Van Ness Commercial Real Estate Advisor
Tom Hamm, Hospitality Council Chair, Sperry Van Ness/Hamm & Co.

Hotels are operating businesses housed within commercial real estate boxes. As such, their value is based on the revenue and profit earned by the business, and fluctuates accordingly.

Hotel values dropped precipitously following the start of the recession in Q4 2008 with cutbacks in corporate, group and leisure travel. Hotels responded by slashing their rates in order to compete for what little business was available.

Since 2010,  recovery has been steady but slow, driven first by occupancy improvements, followed by room rate increases. Initially, the greatest improvements in both occupancy and average daily room rates (ADR)  was seen in the luxury segment.  In 2012, upper mid-scale and upscale enjoyed the greatest increase in rooms sold. Regionally, the West South Central and Pacific had the highest growth in rooms sold, year over year. Some markets, notably Manhattan, have seen dramatic demand improvements, which has spurred a hotel building boom there.

In most markets, supply growth has been constrained by limited  availability of financing. According to Smith Travel Research, for the trailing 12 months through November 2012 supply is up  0.4% while demand increased by 3%. That’s a great dynamic for the industry that has translated into an increased Revenue Per Available Room (RevPAR) of 6.8%.

For the 2012 year to date through November, performance for in the hospitality market in the United States was as follows:



Average room rate


2012 2011 2012 2011 2012 2011
62.6% 61.1% $106.23 $101.98 $66.47 $62.27


Hotel transaction volume was down 25% in Q3 but looks to be up 25% in Q4 compared to last year, driven by large portfolio transactions. On an individual property  basis, sales volume was flat, according to Real Capital Analytics.

Cap rates for hotels have held around 7.6%, down from 9.5% in 2009. Full service hotels traded on average at 7.2%, while limited service hotels traded at 8.6% cap rates.

Average price per room was $164,015 for full service and $64,233 for limited service. There continues to be strong buyer demand for deeply discounted distress opportunities, while publicly  traded REITs focus on major markets: seeing acquisitions in non-core markets as diluting the value.

In their 2013 outlook, hoteliers are less optimistic than in 2012. They see top line growth slowing with resistance to rate increases, while operating costs will increase at a faster rate than revenue, thereby putting pressure on profitability. In addition, the brands, which have shown patience and flexibility during the recession, are expected to tighten up on Quality Assurance standards and Property Improvement Plans (PIPs) associated with license renewals and hotel sales.

We expect that many hotel owners who struggled to hold on through the recession and benefited during recovery, will decide to sell in 2013 in light of anticipated slowing profits and before pent up buyer demand abates. This should bode well for brokered transactions in the hospitality arena.

Report submitted by:

Tom Hamm, Hospitality Council Chair, Sperry Van Ness/Hamm & Co., Stamford, CT

*All Sperry Van Ness offices are independently owned and operated.


Bo Barron's Tips to Build Better Business Relationships

Bo Barron, Vice President of Organizational Development at Sperry Van Ness International Corp.
Bo Barron, Vice President of Organizational Development at Sperry Van Ness International Corp.

Commercial Real Estate is all about relationships. Getting face to face with prospects and clients is the most effective way to build relationships and to find and win business.

With the onset of new technologies, there’s a growing trend to use these advancements to replace this face to face interaction. I think this is a mistake. Social media like Twitter, LinkedIn and others cannot replace the effectiveness of face to face meetings. Social media can, however, enhance your ability to build relationships to be able to get those in person meetings.

I write about these issues on my professional coaching blog, theBarronBlog, on a regular basis and it’s a snippet of how I’m working with our team of Sperry Van Ness Commercial Real Estate Advisors across the country. Below are links to three recent posts that can help any real estate professional Level Up your practice.

The 17 Rules of Email Etiquette – Many of us work with or for large companies. We have access to large email lists.  Understanding email etiquette is so important to protecting the culture of an organization as well as guarding productivity.

My biggest beef with email is its ability to interrupt me.  The nature of my business requires me to be doing multiple things. I am not a natural multi-tasker. I much prefer to hone in on a task and focus all my energy on it. I rarely get to do this and am also easily distracted. The ding and notification that announces every email can cost me 5 – 60 minutes if I let it. I routinely get 200+ emails a day. That equates to 200+ opportunities to be distracted from what is important to what is less important but potentially urgent.

Review:  Platform – Get noticed in a Noisy World – This is the book that started it for me. This past May, Michael Hyatt published his New York Times bestseller Platform:  Get Noticed in a Noisy World. My professional coaching blog was built on what I learned in this book. (Note that Michael Hyatt will be one of our featured speakers at our National Conference in Miami this February!).

As I write this post, I have 2,677 followers on Twitter; 1,502 business connections on LinkedIn; and 2,698 ‘friends’ on Facebook.  I don’t share this to boast. I simply want you to know what is possible. I am certainly not a celebrity. What I have done is execute a plan, and it has worked.

My Tools to Manage Twitter in 15 Minutes a Day – One of the most frequent questions that I get as I speak to groups is how I manage twitter. No one believes that it only takes 15 minutes or less a day.

There is so much developing in the world of technology that there is no way that I can keep up with it all.  What are some of the tools and technology that you use to connect most effectively with your clients and prospects?

Bo Barron, a former Sperry Van Ness franchisee, is our new Vice President of Organizational Development.


*All Sperry Van Ness® offices are independently owned and operated.


Self storage: Q4 2012 Report and Outlook for 2013 by Nick Malagisi

Nick Malagisi
Nick Malagisi, Self Storage Council Chair

As chair of the Sperry Van Ness® Self Storage Product Council, I am pleased to provide this quarterly report on the self storage industry. This report is intended for owners, operators, vendors who service the self storage industry, investors in this particular product sector and the over 800 Sperry Van Ness advisors serving clients in 175 markets across the country.

As most of you already know, this investment product sector is a niche industry with the real estate value dependent on the operating business component. The stronger the management, the better results one should see to the bottom line. In that regard, our industry is very similar to the hospitality industry.  However, the self storage industry has not yet found a way to “flag” the facilities and create brand awareness. Its time will come.

This past year has seen a continued and  healthy improvement in the sector, led by the four public REIT’s that have had seven consecutive quarters of increased occupancies and revenue after nine consecutive quarters of losses beginning in 4Q 2008.  Public Storage remains the industry leader in  number of facilities across the country including its European division bought from the absorption of Shurgard operations some six years ago. Public Storage is also the leader in stock price at a high value this year at $130 price per share or three times the value of the next competitor, Extra Space. Public Storage stock was included in the S&P 500 and Dow Jones Industrial Average a few years ago, replacing such household names as Sears & Roebuck.  The 3Q earnings reports have just been announced and all four of the self storage REIT’s continue to perform well.

New development of the product has been at a virtual standstill these past four years, which has helped supply catch up with demand in most markets as the industry doubled in size from one billion to two billion square feet from 1995 through 2006.  The dearth of new construction has created an opportunity for the larger operators to gain market share by having the capital to purchase existing facilities, especially in the top tier markets.

Cap Rates in the top tier markets are in the 6.5-7.5% range while the rest of the country is seeing 7.5-9.0% Cap Rates. The coming year should be very interesting as those facilities that were financed with 10 year debt in 2003 will be coming to the market for either refinance or sale.  It remains to be seen how many of those properties have retained their value and will qualify for refinancing without a recapitalization.

The Sperry Van Ness organization has self storage specialists located across the country who can become a valued resource for you.  If you are interested in the investment opportunities in this area, reach out to the SVN advisor in your market and watch for opportunities to buy and sell as they become available.

Nick Magilisi,  Self Storage Council Chair, Sperry Van Ness/Commercial Realty


*All Sperry Van Ness® offices are independently owned and operated.



Commercial Real Estate Office Properties Q4 2012 and Beyond

John McDermott Sperry Van Ness
John McDermott, Office Product Council Chair, Capital Partners | SVN

Going forward, there are a lot of reasons to be excited about the commercial real estate brokerage opportunities in the office property arena. Of the leading property types, office property by its very nature requires those dedicated to the product to be true advisors to their clients. Whether pursuing landlord representation or tenant representation on the leasing side or traditional investment brokerage of the asset class; the extreme “added value” role has never been more critical to the process and valuable to the client.

The Sperry Van Ness® difference and our competitive advantage in smaller secondary and tertiary markets as well as our suburban footprint coincide perfectly with the shift of investor interest to those markets and sub-markets for office properties; both for tenancy (less commuting with $4 and $5 gas prices) and investments (suburban office sales volume YTD 2012 are up 29%). Improving financing options, low interest rates and the on-going hunt for trophy assets outside the CBD continue to be fueling the office marketplace. The sale prices for office product in tertiary markets saw a 30% surge so far in 2012 and are likely to remain strong in 2013 and beyond.

On the brokerage side, it comes back to the most fundamental realities of our business and that is clients only become active when they either have a problem or see an opportunity. Office is a product that has both in a very big way.

Understanding these factors, identifying them and acting upon them will provide significant earning opportunities for you at SVN, particularly in the next two to five years.

Problems in this market include:

  • Vacancy
  • Shifting demographics
  • Lingering rent rollover risk
  • Weak health and financial well-being of many tenants
  • Lack of demand for traditional space
  • Lack of funds for tenant improvements and leasing commissions to fill vacancy

Additionally there may be a lack of reserves to stay competitive and improve a property to increase tenant retention; too often a capital stack on the property that is either burdensome or unable to be refinanced without a significant cash infusion; and the competition of bank owned or distressed product in the marketplace.

Opportunities in this market include:

  • Lack of any significant construction in more than three years
  • Suburban and main street office investments in secondary and tertiary markets are offering 120 bp to a full 200 bp return advantage over the major or gateway markets
  • Price per foot acquisitions are well below replacement cost without the costly lead time of construction and absorption

Additionally, many investments offer vacancy upside where the investor can be the “low cost provider” in a region or sub-market and capture more than their fair share of tenants who are looking and tenants who perceive they are getting a bargain, are taking space “as is” or with minimal improvements, often at their own expense in exchange for a small rent abatement or deferral.

In the end, the advisor who is aware of these problems and opportunities will be able to get “in the middle of deals” in 2013 and beyond. Whether helping clients to reposition their existing assets, add value to a newly acquired asset or dispose of an existing asset; commissions, property management fees and asset management fees will be earned. Pay special attention to medical office space, open and first generation space and in fill spaces, particularly the smaller spaces.

– John P. McDermott, Product Council Chair | Office Properties, November 2012


*All Sperry Van Ness® offices are independently owned and operated.


The Year Ahead – 2012 by Kevin Maggiacomo

As we look forward to a new year, I am pleased to share my thoughts on the very memorable 12 months past, and to offer my outlook for the commercial real estate market in 2012. Before I do, I would be remiss if I did not thank the Sperry Van Ness clients, Advisors, staff, and fellow brokers for their contributions in driving us forward in spite of the unpredictable times. I know that I speak for all SVN Advisors and staff when I wish you a prosperous New Year.


A Year of Fits and Starts for Commercial Real Estate


During a year of extraordinary economic and political uncertainties, commercial real estate held its position as a crucial safe haven for investors in 2011. Investment into the sector reached a peak in the second quarter, supported by CMBS conduit originators and more active life company and bank lenders. Even as economic and employment trends fell short, leasing activity for well-positioned assets strengthened. During this period, investment into segments of the market that had lagged during 2010, including commercial properties in secondary and tertiary markets and value-add opportunities, showed signs of firming, as well.


In spite of the rising momentum, commercial real estate investors revealed they were not entirely immune to the obstacles facing the wider recovery in business confidence. As I suggested in my New Year’s message one year ago, this has been a period of fits and starts. Over the summer, renewed disruptions of capital and credit that were largely unrelated to the property sector threw the conduit into disarray and slowed the pace of transaction activity more broadly. For many borrowers, lending sources pulled back once again, with the result that a larger share of pending sales has struggled to reach closing.


While sales volume in the third and fourth quarters will not match the spring’s flurry of trades, the shifts in the market must be understood in the context of a turbulent economic and political environment. Where investors have retrenched, it is often under the force of external pressures. It nonetheless remains clear from the current diversity of investors and lenders that commercial real estate is high on the investment hierarchy. In fact, many of the last twelve months’ most notable and most visible deals only came to fruition as the year drew to a close. The fundraising activities of the major REITs support this assessment, as well. US REITs raised $37.5 billion in equity in 2011, a new record that easily surpasses the previous high of $32.7 billion set in 1997. They raised another $13.8 billion in unsecured debt.



A Persistent Imbalance


In the final tally, investment sales in 2011 will easily surpass the $120 billion benchmark set in 2010 and will roughly triple the record lows set in 2009. As a wider range of buyers and sellers have reengaged, pricing in the most actively traded markets has exhibited the sharpest improvements. In the extreme, some highly coveted trophy properties have prompted aggressive bidding by domestic and cross-border buyers and have ultimately sold at higher prices than during the market peak in 2006 and 2007.


While the most visible investments affirm institutional investors’ confidence in the sector, they offer only one perspective on the market. As I pointed out at this time last year, the headline statistics do not fully convey the unevenness of the recovery or the diversity of its investors. The market for assets that do not dominate their respective cities’ skylines is necessarily recovering along its own trajectory. In the current market, that has meant a balance of tailwinds and headwinds that has weighed in favor of the latter.


Core investors whose scope may be limited to a subset of metropolitan areas have argued that rising prices and falling cap rates will inevitably spill over into other segments of the market. In one respect, this is correct. Yields on mid-cap investments are higher than for any trophy property. But that assessment also overlooks the uniqueness of the market for small- and mid-cap commercial properties and the very different makeup of the investor and lender base. Understanding these differences is crucial to assessments of what the next year will hold for commercial real estate.


The Economy, Jobs, and the Political Deadlock


As in previous cycles, the recovery in small- and mid-cap property investment is proving more sensitive to underlying drivers of cash flow than the market for the largest properties. This inevitably means that a strong economic recovery will be one of the requisites for more robust investment. While companies have seen their profits rebound, surpassing their previous peaks from 2007, an environment of extraordinary economic and political uncertainty has constrained decision-making and investment in new tools and people.



In the first days of 2012, the employment outlook looks brighter. For commercial real estate – and for millions of families across the country that have struggled with unemployment – this is the critical missing link to a more balanced recovery. Although the data on job creation in 2011 only shows a modest improvement over the prior year, leading indicators of firm hiring have turned more positive. Job openings have been trending up consistently over the last year. More recently, first-time applications for unemployment insurance have fallen back to their lowest levels since early 2009. Further, employment gains in temporary help services have picked-up over the past 5 months, which lends well to permanent job creation. Even though single-family housing shows no definitive signs of an inflexion, other metrics indicate that marginally stronger growth in 2012 will support a healthier pace of private sector job creation.



Regrettably, an environment of political dysfunction qualifies the outlook, both at home and in Europe. In fact, the latter presents one of the most credible threats to global growth. In the United States, the uncertainties presented by unusually intrusive policymaking may resolve over the next year, given the need for all parties to clarify their political positions and objectives as Election Day approaches. Needless to say, a business environment where the rules of the game are more predictable is more conducive to growth and job creation.


Investment Sales and Financing


As much as it depends on a stronger economic trajectory, the outlook for small- and mid-cap investment also relies on buyers’ access to financing. In financing their investments, large REITs may offer shares or issue unsecured bonds; trophy investments have also been supported by favorable lending terms from life companies and large international banks. These scenarios are not reflective of the market for smaller assets where the sources of risk and its mitigating factors can be very different. Given the historically dominant role of regional banks and CMBS lenders in facilitating this segment of the market, these lenders figure prominently in the assessment of what the next year will hold.


Although the CMBS market has struggled to reassert itself since last summer’s interruption, plans for new issuance in the first quarter of 2012 indicate a gradual increase in conduit origination activity. Surprising as it may seem, stability in global bond markets is an important condition for well-functioning CMBS markets, since the spreads on the latter’s bond yields are influenced by corporate bond market trends, as well. In the first half of 2011, more than half the CMBS loans securitized had origination balances of less the $10 million. It remains the case that a more active CMBS market is required for the small and mid-cap segments to flourish, in particular, as a large number of seasoned CMBS loans mature over the coming year.


Outside of the apartment sector, where generally improving fundamentals and the contributions of Fannie Mae and Freddie Mac are facilitating both sales and new development, commercial property investors are dependent on bank financing given an absence of other debt sources. For the last several years, that has presented a problem. Banks have been preoccupied with the management of their distress portfolios and have hesitated to extend new credit, even in the best of cases. The most recent data show those priorities changing. Banks’ default rates on their commercial and apartment loans have fallen consistently over the last year. Coinciding with the stronger performance of the legacy balance sheets, many banks are accelerating the liquidation of bad loans and real estate-owned. A growing minority are lending again, increasing their exposure in segments of the market where an absence of competition and low interest rates are affording opportunities to extend credit. Improvements in bank lending and CMBS issuance will have a disproportionately positive impact on the mid-cap market. Access to historically low-cost credit in 2012 and the likelihood of higher interest rates in 2013 signal an unmatched window of opportunity for acquisitions over the next 12 months.





The economic and jobs outlook is improving. With so many of the underpinnings of a stronger recovery in place, we can afford a degree of optimism. Politics and the possibility of external shocks, primarily from Europe, still qualify that optimism.


While prices in the largest markets have recaptured a significant share of their lost value, other assets have lagged the headline measures. Combined with historically low borrowing costs, there is tremendous upside potential for borrowers with access to financing who can identify well-positioned assets.


While the process has been frustratingly slow, more banks are moving distress off their balance sheets. This process has the potential to accelerate in 2012, given banks’ stronger positions generally, an evolving regulatory environment, and the potential for distress from maturing CMBS. That will create some pressures on the market, but it should also deepen the pool of distressed assets and notes for sale.


Attention will necessarily turn to the small and mid-cap market as the economy improves and financing options broaden. Given our experience in this arena, we are anticipating a high volume of advisory work to identify and market investment opportunities before consensus firms. Timing will be the crucial differentiator in this market – the intersection of low-cost financing and first-mover advantage demands that we act deliberately.

Kevin Maggiacomo, CEO & President, Sperry Van Ness International Corporation


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