Archives for August 2014

The right space for your business can make or break your success. It’s not easy to balance pragmatism with your pocketbook and picking the perfect pad, but it’s crucial to make the right choice for your business.
Keep in mind that small businesses should allow at least six to eight months for the search process, and don’t forget to consult your attorney and commercial real estate broker before selecting your new space.
Here’s a checklist of six considerations to review before embarking upon the hunt for a new space.
1. Location
Do your research. Talk to other potential co-tenants, local business owners, and the small business community to help narrow down your decision.
When selecting a location for your business, things to consider are: Will this attract customers and employees? Does the location make sense — is it convenient, in a good neighborhood, and is competition nearby? Does it make financial sense?
A business owner must also determine if it makes sense to sign a lease by asking questions such as:
Are there any tax incentives in the state, town, or city you are considering? Check what programs your state government and local community offer to small businesses.
Due to zoning laws, will your business be prohibited from performing any activities in the area that are important to your success?
2. Mind your budget
It’s critical to understand what your base rent includes when reviewing and negotiating a commercial lease with a property manager. Determine who is responsible for maintenance and repair fees, utilities, taxes, and insurance. A “gross lease” includes those costs in the rent and a “net lease” leaves the tenant responsible for the expenses.
Also, be sure to determine whether your lease includes an annual rent hike. If so, consider requesting a flat lease with no built-in increase or negotiating for a grace period before an annual rent hike kicks in. Many underestimate the cost of rent cutting into profit margins, so make sure you can afford it.
3. Be ready for commitment
Consider the terms of your lease. Commercial leases typically run from five to 20 years, so tailor your lease to the needs of your company.
Short-term leases are a safer bet for a new business as they provide flexibility and allow you to switch properties if you find a better location. On the other hand, a landlord may provide concessions in long-term leases, such as lower rent or waived utilities fees, that would not be provided in a short-term lease.
4. The extras
Look for leases that contain subleasing and exclusivity or co-tenancy clauses.
If possible, negotiate the right to sublease your space to another tenant. Subleasing allows you to lease part or all of the property during a portion of the unexpired balance of the term of occupancy. If you must move locations earlier than expected, a sublease will give you the ability to operate within your landlord-tenant agreement without breaching the contract.
Exclusivity clauses prevent the landlord from leasing nearby spaces to one of your direct competitors and co-tenancy clauses provide a reduction in rent if a key tenant, or large number of tenants, leaves the development. For example, Macy’s is considered a key tenant. Customers who shop at Macy’s tend to shop at surrounding stores as well, such as your small business. If Macy’s leaves, it’s reasonable to assume that you might lose business. A co-tenancy clause serves to make up for the loss in revenue in this instance.
5. Room to grow
The last thing to look for in a new business location is room to grow. Can you expand within or renovate the existing space? Are other floors available for lease in the same building? Don’t limit your evaluation to this single property. Make sure there are different-sized, affordable spaces available nearby in case you want to expand or downsize but remain in the area.
By: Lisa Honey (Albuquerque Business First)
Click here to view source article.

Trend to Urbanization According to Maria Sicola, Head of Research, Americas, Cushman and Wakefield
Maria discusses, among other things:

• How the central business districts, (“CBD’s”) are seeing strong activity and weakening in the suburbs;
  • Leasing is up in the CBD’s as well as absorption;
  • “This urban phenomena is now beginning to take shape”;
  • CBD’s is where the workers are telling their companies, this is where they want to be. The workers are forcing the shift;
  • Demographics, in general, are effecting a lot of the trends towards urbanization;
  • This looks like a sustainable trend
• We are now seeing a growth in individual income, which we haven’t seen over the last few years
• It’s quality of life that the millennials are seeking as part of the trend to urbanization, not necessarily transportation cost savings.
• How is transportation effecting the CBD’s even though not every city has great transportation
  • Transportation will be critical to urban growth
• Technology and energy is driving the recovery;
  • The recovery is beginning to expand more broadly beyond tech and energy and now includes a mix professional services, including:
    • Media
    • Advertising
    • Information
  • We are beginning to move away from a service oriented economy and more to a technology driven economy
• How is the home worker going to effect office consumption
• Trends in the design of office space
  • Open & collaborative
• Move toward efficiency of space
  • Technology is decreasing space requirements, per employee
  • Mobility is there where it wasn’t a few years ago.
• We are in the midst of a full economic recovery.

By: Maria Sicola and Howard Kline (Commercial Real Estate Radio)
Click here to view source article.

• There is an all-time high in commercial property prices, according to Green Street Advisors. The price index in July was unchanged from the record-high set in June. It is up 6.0 percent from one year ago and up a whopping 76 percent from the cyclical low five years ago.
• For those who took the plunge to buy during the scary times in 2009, the returns on their investments have been quite spectacular. Warren Buffet’s adage – “buy when others are fearful and sell when others are greedy” – appears right-on regarding recent cycle of commercial real estate. But given the likely rising interest rate environment, the opportunities for further price gains could be limited. That is, there will be less chasing of yields and chasing after commercial real estate if alternative investments like the U.S. Treasury offer higher interest rates.
• This Green Street Advisors index is should be taken with a grain of salt. First, it captures the information of contracts and appraisal data, and not the final transacted prices. Second, it only tracks properties that are very expensive in cities like New York and San Francisco. It misses out on commercial property prices of local bakeries in Indianapolis or warehouse building across the railroad tracks in Chattanooga, for example.
• Another index from the Federal Reserve shows recovering prices but not at record highs.
• Commercial REALTOR® members are active in all markets and have indicated that commercial property prices have only turned positive in the past year. The prices are nowhere near record highs. This also means there could be a reallocation of investment money away from Green Street-type properties to smaller-sized commercial buildings in mid-sized cities.

By: Lawrence Yun, Ph.D (Economists’ Outlook)
Click here to view source article.

The 2014 U.S. Clean Tech Leadership Index from research firm Clean Edge tracks clean tech progress by state, and in the 50 largest metro areas and determined 2014s greenest cities and states.
STATE INDEX
The report’s state index identifies the top markets and states for clean tech by comparing 70+ indicators in three main categories: Technology, Policy, and Capital.
Clean-energy generation, energy storage installations, green building deployment, energy efficiency expenditures, VC investments, and clean-energy patents data are among the many metrics identified in each state to create the conclusive ranking.
Hovering over the interactive map above displays the Clean Tech Index score for every state, but here’s a cheat sheet for the top 10:
1. California: 93.7
2. Massachusetts: 79.4
3. Oregon: 67.0
4. Colorado: 66.8
5. New York: 64.8
6. New Mexico: 61.9
7. Washington: 61.6
8. Illinois: 61.5
9. Vermont: 58.6
10. Connecticut: 57.3
To determine the top cities, Clean Edge tracks 20 indicators within the categories of: Green Buildings, Advanced Transportation, Clean Electricity & Carbon Management, and Clean Tech Investment & Innovation in the 50 largest U.S. metros.
Each circle in the interactive represents the Clean Tech Index score for a city, but here’s your cheat sheet for the top metros (five of the top 10 are located in California):
1. San Francisco, California: 94.4
2. San Jose, California: 79.7
3. San Diego, California: 66.3
4. Portland, Oregon: 62.9
5. Sacramento, California: 61.0
6. Boston, Massachusetts: 56.2
7. Los Angeles, California: 56.0
8. Washington, D.C.: 53.6
9. Austin, Texas: 51.3
10. Denver, Colorado: 49.7
For in-depth analysis, and to compare data from the past three years, download the full U.S. Clean Tech Leadership Index report.
By: Charlotte O’Malley (EcoBuildingPulse)
Click here to view source article.