Archives for March 2019

Heads Up, Real Estate World, Driverless Cars Are Coming

March 8, 2019 by CARNM

This disruptor should not catch the real estate industry by surprise says the CEO of the transportation information company TransitScreen in a GlobeSt.com interview.

With BMW and the maker of the Mercedes-Benz joining forces to work on technology for driverless cars, everyday use of this technology is around the corner. Matt Caywood, CEO of TransitScreen, says this will affect commercial real estate. His company works closely with the real estate industry. It provides real-time, live information about public and private transportation and shared mobility that serves specific buildings.
Caywood divides driverless vehicles into two categories:
(1) Low-speed autonomous shuttles run on a single route. They are often corporate shuttles carrying people back and forth from offices to public transit nodes. May Mobility and Local Motors are companies rolling out these driverless options.
He sees advancements with the low-speed driverless vehicles for places where people want to go which might not all be adjacent to transit. Caywood cites places in Manhattan such as the Far West Side, Brooklyn Navy Yard, Roosevelt Island and Long Island City. “It doesn’t have to be a super expensive Second Avenue subway or Penn Station,” he says. “As long as it’s providing people with enough options to get from that site, for example Brooklyn Navy Yard with an autonomous shuttle, and with e-bike shares, you can zip over to Brooklyn Heights or Atlantic Avenue in 10 minutes.”
Caywood states corporate shuttles can be expensive when adding up labor costs. “Autonomous shuttles can run cheaply and all year round,” he states. “I think we’re going to start seeing these first mile/last mile shuttles going autonomous pretty quickly in and around the tri-state area.”
He comments this could unlock more real estate values throughout the rest of the region. Plus, it doesn’t require the costs with digging up ground, laying tracks or building infrastructure. He describes the technology as “a smart car with cameras and sensors that might cost what an ordinary bus would, maybe $50,000 to $100,000.”
(2) High-speed autonomous vehicles are the individual passenger cars similar to what most people drive today. They now resemble cruise control, considered luxury features. For example, consumers can purchase the Mercedes-Benz E-Class or BMW 5 series with driver assistance packages. Technology can provide certain automated features, such as parallel parking and auto-pilot steering and speed control.
Caywood notes to get these vehicles fully driverless will take longer to develop than the low-speed autonomous shuttles. These cars would be an advantage for suburban areas, helping to increase real estate values further away from urban centers with faster travel time and more options.
However, the transportation information entrepreneur warns planning ahead for this technology is critical. Within dense urban areas, it could increase traffic, congestion and parking problems. This would require appropriate charges for driving and parking within the city.
“Very strong leadership would need to be ahead of this,” warns Caywood. “People don’t worry about things until it becomes a problem. At that point it becomes a really big problem.”
“The BMW and Mercedes projects should be a wake-up call to leaders to start anticipating this now,” he adds.
By: Betsy Kim (Globe St)
Click here to view source article.

Realtors® Applaud Six-Year Reauthorization of Federal Terrorism Risk Insurance Program

March 7, 2019 by jakobsmith

WASHINGTON (January 8, 2015) – The following is a statement by National Association of Realtors^® President Chris Polychron:

“Realtors^® applaud the U.S. House of Representatives and U.S. Senate for prioritizing the reauthorization of the federal terrorism risk insurance program and quickly passing the Terrorism Risk Insurance Act, which authorizes the program for six years. When TRIA lapsed at the end of 2014, Realtors^® urged swift congressional action to renew the program and return certainty to the commercial real estate market.

“TRIA provides a crucial framework for economic recovery in the wake of a catastrophic terrorist attack and allows the U.S. to maintain a stable terrorism insurance market so employers can invest in properties, create jobs and insure against losses due to a terrorist attack. Without TRIA, many property owners with existing commercial mortgage balances that require terrorism insurance would be in technical default of their mortgage terms.

“The bill sent to President Barack Obama’s desk today provides commercial property owners with sustained and affordable access to terrorism insurance, which is required by commercial mortgage-backed securities. NAR urges Obama to sign the TRIA reauthorization without delay.”

The National Association of Realtors^®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

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When Your Smart Tech Needs a Boost

March 7, 2019 by CARNM

Sales technology is only as good as the data is has, but smart sales technology can make or break a deal.

Sales technology is becoming integral to the closing a deal. It can answer a range of questions about the neighborhood, demographics, pricing patterns and investment activity. Sales technologies include communication tools, AI technology and machine learning. Some companies have been slow to adopt these smart technologies, but Roy Dekel, CEO of SetSchedule, an Orange County-based real estate technology firm, says that companies without technology will face growth challenges.
“Any real estate company not utilizing technology in their marketing is missing a great opportunity to field clients and build their pipeline,” Dekel tells GlobeSt.com. “Even the old fashioned way of holding open houses, to find customers in the market to buy, are at a disadvantage without tech. Technology enhances the tools already at a real estate agents disposal.”
Real estate is the perfect industry for technology disruption. Data is an integral part of the deal process. “Data is ingrained in every aspect of the sales cycle—from finding a customer and nurturing the relationship to closing a deal,” says Dekel. “When looking to price or make an offer on a home, you will need to run an analysis on active and sold properties in the neighborhood. You may want to see what the original loan was the homeowner took out or the history of the home and neighborhood.”
In the end, the technology is only as good as the data that it has. Some companies are using “dumb” sales technology, and as a result, they are missing opportunities. To ensure that a company is using smart sales technology, it must update it frequently and work closely with a data company. “If the company has developed their own software, they should work to update this constantly,” tells GlobeSt.com. “If the company has partnered with other data enrichment companies, they should see updates several times a year. The fastest and easiest way for real estate companies to smarten up sales data is to partner with a data company that provides the tools they need.”
SetSchedule develops technology solutions for real estate companies, and these tools can help to guide prospective buyers through digital tools, offer transparent information and help to track prospects. “CRMs allow you to keep on top of the sales process, so opportunities never fall through the cracks,” adds Dekel. “Lastly, lead generation through technology is a cost-effective way to get in front of your potential and relevant customers. This could be websites, pay per click advertising, lead purchases, or bulk data purchases. If you are not utilizing these tools now, I have to say, you missing an opportunity to work smarter.”
By: Kelsi Maree Brown (Globe St)
Click here to view source article.

The 2019 Capital Issue

March 7, 2019 by CARNM

What a year 2018 was. And all signs point to another year of bounty for commercial real estate.

What a year 2018 was. We experienced stomach-churning market volatility, tariff wars, several terrifying natural disasters and, at the end of the year, the beginning of a government shutdown. Unfortunately for us, all of these factors are still in place, poised to mark 2019 in the same way
The commercial real estate industry was not immune to these forces last year. Commercial property was lost or damaged in the hurricanes, floods and wildfires. The market volatility began to spook some investors about assets of any type and the tariffs played a role in rising construction costs as well, adding expenses for retailers. The government shutdown—the longest in history at 35 days—has ended as of this writing, but President Trump indicated he could shut down the government again if an agreement is not reached about border security.
And yet, even as the industry felt the effects of these events, it still managed to make remarkable gains. Last year some $733 billion in investment sales worldwide closed, up 4% from 2017 and the best annual performance in a decade, according to JLL. In the US, commercial property sales volumes were 11% higher during the first three quarters of 2018 than during the same period in 2017, according to the Mortgage Bankers Association. And as the stock market was on its roller coaster ride, REITs were making up lost ground—by year-end they were slightly outpacing returns for the S&P 500 and were significantly higher than the Russell 2000. Incidentally, REITs are expected to deliver a similar performance this year with NAREIT estimates calling for 14% in total returns, outperforming the stock market by 5.8%.
Indeed, REITs’ trajectory last year and its expected performance this year are the perfect illustrations for CRE in general. Like last year, the industry was able to face down several headwinds and expectations for 2019 call for another round of healthy deals and originations. Our annual feature on CRE Rainmakers shows that—even though rising interest rates hampered the CMBS and bank lending markets last year, the producers that made this year’s list originated thousands of transactions, accounting for some $40 billion in debt and equity financing volume.
Likewise for multifamily finance—even though the robust supply chain has been worrying some investors, all of these projects “will keep the capital markets moving,” Kim Betancourt, head of multifamily research at Fannie Mae, predicts.
The institutional investors who participated in our 14th annual Capital Markets Symposium echoed that sentiment as well. Though prime deals are admittedly hard to find, opportunities do exist to put capital to play—and the capital these players bring to the table is bound to have an impact.
In short, all signs point to another year of bounty for commercial real estate.
This is a theme that carries through our entire January-February issue. Read about it all in the features below, and let us know if you agree.
By: Sule Aygoren (Globe St)
Click here to view source article.