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?”

Q2 2013 Office Market Update by John McDermott

For the office market, the next few years should see a significant shift back to the private client marketplace and away from distressed commercial real estate.

In my 40 years of real estate and finance experience, I have identified several leading indicators that serve to predict changes in the market. These are:

  • Compression of cap rates on single tenant net leased investments;
  • The insatiable acquisition of “trophy projects” in all product verticals;
  • An apartment market on fire with the fuel of cheap long-term money and many sources for it;
  • Resurgence of demand for land, lots and subdivisions from the largest public home builders all the way down to some of the smaller in-fill local and regional players, also fueled by low interest rates.

It’s clear that the office market will benefit from these real estate and economic indicators. However, the office market does face some challenges, including a significant variance in the numbers being published on office vacancy and activity, and the varying pricing tiers based on quality and location. These challenges may spell an opportunity for the astute investor and commercial real estate advisor to provide added value.

Advisors should be careful with the sources they quote. For example, REIS reports the National Office Vacancy at 17.1% and .50 basis points below the recession high while CoStar reports National Office Vacancy at 11.9%, which would be 5.70% better than the recession high.

Following are some current statistics:

Vacancy levels for different classes of buildings:

  • Class- A projects are at 13.3%
  • Class-B projects are at 12.4%
  • Class-C projects are at 8.8%

(Obviously the discounts and concessions in the better buildings are going away and rents are firming. Tenants still seek affordability, especially until their business and the economy improve)

  • U.S. CBD vacancy is 10.9%
  • U.S. Suburban vacancy is 12.2%
  • There is still a lot of reported Class A sub-lease space at 27M s.f. or 58% of all sublease space. Still, a significant amount of excess and under-utilized space is not formally on the market.
  • Suburban markets make up 33M s.f. of the sublease inventory or 71% of the total.

Lastly, a significant number of office property owners want to get off the vertical, based not only on the property’s age, but their own age and where they are in their personal investment cycle (they may be older, want more freedom, want to lower management issues, tired of tenant issues and demands, etc.). This situation creates a new frontier of adaptive re-use, space design and modification for today’s virtual or hoteling tenant and their employees along with a significant shift back into the vibrant American CBDs.

In my opinion, the product that represents the greatest opportunity is Class A suburban office, as long as it is properly priced.

Today, the most important part of advising clients is being aware of your local competitive landscape. Additionally, you must know what the new tenancy needs, wants and demands plus  how the growing focus in space design on more “we” space instead of the “me” space of old (like law firms at 350 s.f. per person on average) will affect your client’s specific property.

As of Q2, I think the future is bright and the office market will continue to be at the core of commercial real estate.


Prepared by:

John McDermott Sperry Van Ness Industrial Practice Chair
John McDermott, Office Product Council Chair

John McDermott

Council Chair of Office Properties

Sperry Van Ness Chicago Commercial



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