Archives for 2014

Thanks to all of the brokers, sponsors and guests who attended the November 2014 CCIM Deal Making Session. Over 13 million dollars of commercial real estate properties available for sale were presented from all over New Mexico. Click here to view the powerpoint presentation from the CCIM NM Deal Making Session.

1.	Keith Meyer, CCIM, SIOR & Jim Wible, CCIM	Northern & Loma Colorado	Multiple Prices
2.	Brandon Saylor, Nicosha Schedlbauer & Ben Perich	6621 4th Street	$750,000
3.	Michael Reneau & Matt Reeves	Enchanted Hills Plaza	$6,195,000
4.	Keith Meyer, CCIM, SIOR & Jim Wible, CCIM	Hwy 14 & Frost	$997,672
5.	Gannon Coffman & Clayton King	2810-2820 Sudderth Dr	$1,965,000
6.	Richard Vigliano	8010 Mountain	$450,000
7.	Keith Meyer, CCIM, SIOR & Jim Wible, CCIM	NWC Unser & Anderson	Multiple Prices
8.	Brandon Saylor	2614 Pennsylvania	$325,000
9.	Gannon Coffing & Clayton King	2825 Sudderth Dr	$1,700,000
10.	Anne Apicella	5819 – 5827 4th Street	$473,330
11.	Anne Apicella	6666 4th Street	$749,900
12.	Anne Apicella	10590 2nd Street	$284,000

 

While commercial real estate has occasionally lagged behind other business sectors in use of emerging technologies such as three-dimensional virtual reality environments and real-time data mining, panelists at the ULI Fall Meeting said such advances promise to reshape how developers and property managers function.
“Developers haven’t traditionally allocated budget for software,” said panel moderator Jared Kushner, founder and chief executive officer of New York development firm Kushner Companies. “But now it’s exploding.” Kushner said he recently donned a helmet made by Oculus VR, a cutting-edge virtual reality gear maker acquired by Facebook, to take a virtual-reality tour of Related Companies’ Hudson Yards development. “It made me dizzy,” Kushner noted, “but it was cool.”
To executives accustomed to thinking of their business as bricks and mortar rather than data, such technology might seem like just a novelty. But Dave Eisenberg, founder and chief executive officer of 3-D modeling firm Floored, who convinced Kushner to put on the helmet, has closed 80 engagements this year with developers who see the value of being able to visualize and even explore projects before they are built. Eisenberg said his company’s software, which converts 2-D plans into a 3-D environment, allows viewers to look at everything from window views to how different sorts of flooring and ceilings would look. He said the software can even allow developers to see which trees could be put in landscaping.
Eisenberg said that while such emerging technologies “can go down a rabbit hole of being cool for cool’s sake,” a strong case can be made that 3-D visualization will make for better projects and control costs because design flaws can be spotted and fixed in advance. But it also promises to boost leasing velocity because it enables tenants to see how they would fit into a space and to adapt it to suit their requirements. “Shouldn’t every leasing presentation in the future be customized to the tenant you’re talking to?” Eisenberg asked. “These are things you can do with virtualization.”
Riggs F. Kubiak, founder and chief executive officer of Honest Buildings, touted his company’s web-based marketplace for various construction specialties, ranging from electrical contractors to structural engineers, which has been called a cross between Linkedin and Yelp for building professionals.
Kubiak said the site, which allows developers to find contractors who worked on various buildings and evaluate their backgrounds for relevance to a new project, has the potential to dramatically reduce costs as well.
“If I’m looking for an architect with experience in ground-up lobby work and renovation in Brooklyn, I can find him,” Kubiak explained. “I can make a decision based upon the relevant experience of that team.”
Honest Buildings’ database, which lists 10,000 contractors in the New York area, uses publicly available data from permits and other sources to build out the profiles. “We can see a very rich project history,” Kubiak said. “You also get price intelligence and efficiency. . . . We’ve really rethought the way decisions are being done.”
The site is valuable to contractors as well because it enables them to gain the attention of developers with whom they have no previous history. “Vendors have one thing in common,” Kubiak said, “they want to do interesting projects. But it’s challenging to get in front of those decision makers at a time when the decisions are being made. The vendor community spends time trying to access relevant deals. . . . But now they also can pick the owners they want to work with.”
Another company with game-changing potential is Hightower, which provides a platform allowing property managers to track marketing and leasing efforts in real time across their entire portfolios. Founder and chief executive Brandon Weber said the real estate industry was ripe for disruption because many firms still struggled to manage such data with simple tools like Excel spreadsheets. As a result, relevant data became trapped in the computers of local managers, and top executives were unable to see across the enterprise to analyze trends and look for problems or potential advantages.
But with Hightower’s product, executives can spot relevant data easily. “Why is this building getting 30 tours a month while this one is only getting 15?” Weber said. “You’ll be able to see that.”
Hightower tracks everything from proposal terms to demand and inventory. “We think of real estate as a data-driven industry that doesn’t know it yet,” he said.
In addition to software, hardware also can confer a crucial advantage, said Arie Barendrecht, founder and chief executive officer of WiredScore, which evaluates buildings for the quality of their internet connectivity and confers ratings that prospective tenants can use as a guide. Barendrecht noted that many property owners knew surprisingly little about their fiber-optic infrastructure and its possible weaknesses. “They don’t know the carriers, they don’t know the location of the fiber,” he said. “One landlord thought he had fiber in his building, but it turned out that it was out in the street.”
Barendrecht said property owners could turn strong connectivity scores into a marketing inducement because tenants know it makes a critical difference in workplace productivity. WiredScore also has migrated into the consulting business. Owners “are realizing, ‘Our connectivity sucks. What can we do?’ So we’ve created an advisory function.”
By: Patrick J. Kiger (UrbanLand)
Click here to view source article.

On the surface deflation sounds wonderful. Rather than rising prices, deflation results in declining prices. In this way, purchasing power rises, effectively giving everyone a pay raise. Better yet, deflation is accompanied by near zero interest rates making borrowing cheap. What on Earth could be better! It turns out, almost anything.
When people expect falling prices, they wait as long as possible before making large purchases, such as a car or a house because the longer you wait the cheaper the item becomes.   Similarly, deflation breeds a strong desire on the part of households and firms to hold cash as it continually appreciates. By contrast, inflation creates an incentive to spend since cash falls in value over time.
Deflation is not simply falling prices, which can be good, but is also characterized by falling wages, not so good. In a deflationary environment, due to a lack of demand for goods and services, firms fight for market share by slashing prices. By doing that, total revenue falls, forcing firms to pay workers less. However, since reducing wages of existing employees is hard, companies first hire fewer workers, then lay workers off, which leads to stagnant wages and eventually rising unemployment, which forces workers to accept lower wages.
Deflation also creates a reluctance to borrow, since loans have to be repaid in future dollars that are worth more than those borrowed. Think about it – if you have a mortgage payment that is $750/month and inflation is 4%/year and your income keeps up with inflation, your mortgage payment becomes a smaller and smaller percentage of your monthly income. But if deflation is 4%/year and your income falls by that amount each year, that $750 mortgage payment can quickly loom large and dramatically crimp spending.
As a result, borrowers find that the real amount of their debts rise over time. In response they save more to compensate and in the process spend less. Of course, lenders are better off, but they do not increase their spending by as much as debtors decrease theirs. As a result, overall spending levels decline more.
Exacerbating this problem, in a deflationary economy banks have little incentive to lend, as the only way to entice borrowers is to offer negative interest rates. But in this case, the more banks lend, the more they lose. As a result, banks do little lending, firms struggle to grow and many of both fail, causing wages to fall. In the end, consumers buy little more than essentials and everyone holds on to as much cash as possible. Not a pretty picture.
Lastly, deflation makes it essentially impossible for central banks to set interest rates low enough to stimulate demand. While central banks can set rates at 0%, it’s hard to get below zero. With inflation of 3%, a zero interest rate is a -3% real interest rate. But with -1% deflation, a central bank would have to offer an interest rate of -2% to achieve the same -3% real interest rate. While theoretically possible it’s impossible in practice.
Because of chronic falling wages, reduced spending and limited lending, deflation is something to be avoided. Once it takes hold, it’s inordinately difficult to get rid of. Japan has been struggling with deflation for decades and is now employing desperate measures to eliminate it, with limited success and high costs. We don’t want to wind up like Japan.
Have a wonderful holiday season and see you in January! (Remember, I will not be writing an article in December).
Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at Elliot@graphsandlaughs.net. His daily 70 word economics and policy blog can be seen at www.econ70.com.
By: Elliot Eisenberg, Ph.D. (GraphsandLaughs)
Click here to view source website.
 

These growing hubs of economic activity aren’t just for tourists and transit anymore.

Once viewed primarily as gateways to cities, airports have emerged as economic engines in their own right—and are fueling rapid commercial and residential development in many parts of the world.
That assertion comes from Prof. John D. Kasarda of the University of North Carolina, who during a Nov. 9 session at the REALTORS® Conference & Expo in New Orleans pointed to a host of data about the impact airports are having on global commerce as evidence that “location, location, location” has given way to a new axiom: “accessibility, accessibility, accessibility.”
“If you think of an airport as transportation infrastructure, you’re so twentieth century,” Kasarda said. “The three As have replaced the three Ls in real estate.”
As Amazon.com and other companies increasingly rely on “just-in-time” models to move high-value goods and time-pressed executives place a high level of importance on the ability to efficiently travel between business centers, airports are serving as the cores of fast-developing commercial and residential zones that are giving traditional metropolitan centers a run for their money, said Kasarda, director of the Center for Air Commerce at UNC’s Kenan-Flagler Business School in Chapel Hill, N.C.
Airports are attracting companies that want quick access to air transportation, which in turn is pushing up demand for office space in those areas, Kasarda said. Demand for residential areas located near big airports, such as Dallas-Fort Worth and Washington Dulles international airports, is also strong, spurred by employees of companies with nearby operations who want to live close to work.
Kasarda uses the term “aerotropolis” to explain the phenomenon of population and business centers anchored by airports. “New urban forms are evolving as a result of these airports being business magnets and, in some cases, economic catalysts,” he said.
Kasarda also noted that the sheer number of people who use airports has transformed them from transit places to vibrant retail and entertainment centers. Hartsfield-Jackson Atlanta International Airport, for example, serves more people in a typical year than Disney World, Graceland, and the Grand Canyon combined, he said.
This means airport shops often generate more sales per square foot than comparable establishments located elsewhere. Some airports record more revenue from retail activity than from aviation-related operations, according to Kasarda. “They’re becoming urban realms in their own right,” he said. “The city airport is becoming an airport city.”
By: Sam Silverstein (REALTORMag)
Click here to view source article.