CARNM

Commercial Association of REALTORS® - CARNM New Mexico

Archives for May 2019

RPR Expands Commercial Focus in 2019

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Since 2012, RPR has offered REALTORS® an exclusive resource to support clients and customers in the commercial marketplace. In an industry of rapidly evolving technology and strong competition, RPR has consistently worked to improve its commercial resources, including the RPR Commercial Mobile app.
In 2019, RPR is further expanding its commercial programs and features through:

Expanded data licensing increases RPR active commercial listing counts in 2019

RPR has more than 665 thousand active commercial listings and 43 million off-market properties to-date, including a direct partnership with Catylist, licensing over 100,000 listings representing more than 45 Associations across the country. Additionally, RPR is pleased to announce the execution of an agreement with Brevitas, which will add 40 thousand commercial listings nationwide.
“An integration between Brevitas.com and RPR’s comprehensive database gives REALTORS® an instant competitive advantage. Real time insights into commercial property are critical to making informed decisions. The connection to the data provided by RPR will be invaluable to the REALTORS® listing and searching on Brevitas.com. We’re extremely excited about our partnership.”

Ardian Zagari, Co-Founder & CEO San Francisco, CA – Brevitas

RPR is working with two additional national commercial listing platforms with each currently reviewing data licensing terms. These partnerships, along with the new collaboration with Brevitas, gives RPR the potential of adding almost 200,000 commercial listings in the first half of 2019. This would bring the total number of active listings on the RPR Commercial platform to more than 850,000 properties, all exclusively for REALTORS® as a benefit of membership.

RPR also continues to support NAR’s Commercial Leadership on the Commercial Listing Platform initiative. With balanced results from members on the value of multiple systems, RPR is collaborating with each of the selected companies allowing members to choose the public listing platform they prefer. Each platform will provide a data feed to RPR, which will allow members to access properties and network with REALTORS® nationwide.

The value of Commercial integrations – Valuate® case study
RPR is investing resources to create integrations with products that create easy, streamlined business solutions for members. It’s not just about what each product can do, but how the products interact together producing the most straightforward experience for agents and brokers.
For example, Valuate® is an analysis program that allows REALTORS® to present and market investment properties from both the RPR website and Mobile app. Since its integration with RPR in 2016, Valuate® has evolved as the REALTOR’S®’s go-to tool for projecting investment returns, comparing multiple properties and scenarios, and assessing risks resulting in the best investment opportunity for the client.
With the RPR and Valuate® teams working in tandem on studying member usage and applying member feedback to continuously improve the experience, more than 125 thousand REALTORS® across the country have adopted this offering and produced more than 270 thousand analyses for clients on properties valuing at more than $261 billion dollars.

“Valuate® is an easy to use analysis tool within RPR that makes evaluating an investment property common sense. Most programs take hours to learn and still are too difficult or not practical to use. This is why most REALTORS® give up using investment software. Thank you RPR for bringing this member value to us!”
Mike Vachani, MBA, CIPS, President and Managing Broker Provenio Realty & Investment, Los Angeles, CA

Commercial Brokerage Outreach in 2019

In 2011, RPR released its Broker Tool Set (BTS), a suite of products and features for brokerage firms and franchises, including:
  • Company Branding
  • Affiliated Services Support Modules
  • Market Data Tool
  • Broker Automated Valuation Model (AVM)
  • Brokerages ability to Insert Custom PDF pages into all RPR reports

Today, BTS participation includes over 8,000 companies representing over 520,000 REALTORS® including 186 of the top 250 brokers in the U.S. As a measure of success, RPR usage in companies utilizing Company Branding is 45% higher than those that are not branded. This serves to increase RPR’s overall value through increased adoption, and also supports the tremendous investment companies make into their brand by extending it to the RPR web and Mobile platforms. As well as all the reports agents create for consumer use in buying, selling and leasing properties across the U.S.
In 2019, RPR is extending that success to identify, research and engage key franchisors, brokerages and offices in a new Commercial 100 program (C100). This will focus on offering top commercial firms and divisions with high value programs and support, such as customized monthly webinars, commercial branding on the RPR site, reports, the Mobile app and best practice articles to help each respective company share the value across their markets.
A couple of the most engaged C-100 companies include SVN and First Weber Commercial. At the start of 2019, RPR was invited to join SVN’s preferred vendor program which was created to support more than one thousand commercial professionals. This program identifies key commercial products and services that benefit SVN and their franchisees across the country.
With career development a top priority, First Weber Commercial has collaborated with the RPR team to customize trainings, so their agents can maximize the RPR resources. Many commercial practitioners at First Weber have integrated RPR for their business as a result of learning the depths of information they can make available for their clients.
“I made six figures on a deal thanks to resources I have as a REALTOR® and national retailers have referred me to other businesses based on the depths of data, analysis capabilities and informational reports they receive as a result of choosing me. It was a no-brainer for me to share the importance of this resource with the SVN Corporate Team so my colleagues across the country take advantage of RPR.”

Deena Zimmerman, Vice President SVN Chicago Commercial Chicago, IL

“First Weber Commercial Division couldn’t be more pleased with the ever improving and evolving RPR product for commercial/investment real estate. RPR’s database of properties is robust and superior in most rural areas. The support staff have been very proactive in delivering training in a wide variety of methods and the cost cannot be beaten as it is included in REALTOR® dues.”

Dan Lee, Vice President First Weber Commercial Madison, Wisconsin

RPR is looking at 2019 as a pivotal year to expand the value of both REALTOR® membership and RPR’s array of commercial resources to agents and brokers nationwide. If you would like to learn more about RPR Commercial products, programs from brokerages and franchises, or about its preferred partner program for commercial firms, please connect with us.

By: RPR
Click here to view source article.

Coworking Concerns: The Office ‘In-Crowd’ In Doubt?

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The coworking sector has put up big numbers, both good and bad, in this economic cycle.

There is no question that the coworking industry has both impressed on the street and transformed the office sector. However, doubts on the balance sheet have many experts questioning what this will look like in the future. GlobeSt.com spoke to Scott Unger, office specialist and SVP in the Pasadena/Tri-Cities office of Kidder Mathews, the largest independent commercial real estate firm on the West Coast, to get his views on coworking ups and downs, how investors are reacting, and what landlords should be focused on.
“Time will tell if the coworking industry can become profitable and remain profitable, but for now, office owners should be mindful of the reports of major losses as they consider leasing space to coworking tenants,” said Unger. “We will see how investor sentiment shifts during and after the next economic downturn as the market observes how the coworking industry performs.”
A recent American Realty Advisors report on office investor sentiment revealed the appetite for assets containing coworking tenants. If an asset has a coworking tenant that occupies 20 percent or less of the building, investors perceive on average an increase in the value of the building. When a coworking tenant occupies 20 to 40 percent of a building, investor sentiment is more varied. And the perceived building value is reduced when a coworking tenant occupies 40 percent or more of the property.
Coworking is not a new concept, but the growth in this cycle is unprecedented. The sector offers tenants the advantages of shorter-term leases, less upfront real estate capital requirements (e.g., tenant improvements, data/phone networking, etc.), and increased spatial flexibility with the ability to scale up and down as business may dictate. Meanwhile, the coworking operator enjoys the benefits of varied business types and sizes, as well as higher per-square-foot rental rates.
Also, FASB’s new corporate accounting rules, which require companies to report office space obligations, equipment and other items on balance sheets, could be a boon to coworking operators by making shorter-term leases more favorable.
“A strength of the coworking industry and benefit to the ownership of the office asset is the potential for increased demand in the building as a coworking occupant requires additional space for its operations,” said Unger. “The weaknesses and risks posed to the ownership of the office asset include a potential lack of lease securitization, short-term commitments from coworking occupants and the potential for less occupancy within the coworking space during an economic downturn, which would put pressure on the coworking operator’s payment of rent.”
Like most investments, balance is key. Coworking companies are catering to industries beyond just the tech and startup sectors in an effort to diversify tenant rosters and mitigate risk, according to Unger. Landlord due diligence must assess the coworking operator’s experience and ability to weather an economic downturn, how the lease is securitized, and whether or not the operator has “skin in the game” or is seeking a partnership with the landlord.
All CRE players can stand to benefit from a tightening of the proverbial ship late in an economic cycle. Whether it’s a reaction to current concerns or preparation for tomorrow’s storms, an ounce of prevention today can be worth a great deal more down the real estate road for the coworking industry.
By: Brian Lee (GlobeSt)
Click here to view source article.

High Pricing, Few Available Assets Deter Industrial Investment Sales

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In spite of strong demand from tenants, industrial investment sales have slowed down recently.
Industrial vacancy ticked up in the first quarter of 2019 for the first time in nine years, to 5.0 percent, mostly due to new deliveries, which totaled 54 million sq. ft., according to a JLL report. Another 405 million sq. ft. of industrial space is under construction, with more than 1 million sq. ft. underway in 75 percent of markets tracked, noted a national first quarter 2019 report from real estate services firm Transwestern.
Leasing remained strong in the first quarter, with 40 million sq. ft. absorbed, representing more than half of new deliveries. Asking rents increased to an average of $6.28 per sq. ft. nationally, reported Transwestern. Of the 47 markets tracked, 41 experienced year-over-year rent growth, due in part to high demand, but also because new construction commands higher rates.

Industrial and multifamily are currently the most popular commercial property types among investors, notes Mark Glagola, senior managing director of Transwestern’s Mid-Atlantic capital markets group. “There’s lots of money looking for a home, and all types of investors are allocating more to industrial real estate than ever before,” he says.
E-commerce growth will continue to keep individual industrial sales strong, says David Bitner, head of Americas capital markets research with real estate services firm Cushman & Wakefield.  “We have record low vacancy in coastal markets, and places like Cincinnati are having a ‘place in the sun’ too, because e-commerce continues to expand.”
The health of the industrial sector is born out in statistics presented in the JLL report, which notes that 3 billion sq. ft. of industrial space has been leased since 2010, offsetting the 1.9 billion sq. ft. of new product delivered during the same period.
However, industrial sale transactions have fallen off from a year ago due to the thin for-sale pipeline, according to Glagola—“everyone wants to buy, but nobody wants to sell,”—and investors’ concern about the market turning this late in the cycle. On top of that, investors are “pickier” than ever, they want new product or assets that are in perfect condition. “It can’t have any hair, any problems they will have to fix or something that needs [to be] replaced,” he says.
As a result, on the one hand, there is a lot of capital seeking opportunities, but all of the above issues, combined with record high pricing, are deterring sales.
Pricing on properties in urban areas is aggressive, agrees Bitner, but he notes that cap rates have remained relatively stable year-over-year, increasing by maybe 10 basis points in some markets. “Few people want to sell, so most transactions are big plays,” Bitner says.
As a result, he predicts, “Investors will continue to make platform plays, and we may see incremental increases in cap rate compression in secondary markets.”
Both domestic and foreign capital is seeking opportunities in U.S. industrial markets, he notes. The latest survey by the Association of Foreign Investors in Real Estate, found that 71 percent of foreign investors are looking for opportunities in U.S. industrial markets.
Meanwhile, e-commence is expected to keep the industrial market strong for the foreseeable future, Glagola says, noting that Amazon and Wal-Mart are beginning to offer same-day delivery, which will require them to increase the amount of stock kept on hand at locations in close proximity to consumers. This will create greater demand for  “last mile” distribution space and infill sites zoned for industrial use, running up pricing in already aggressively priced urban locations.
In fact, Glagola says that the current market may represent a new paradigm for industrial real estate cycles, as it is unlike cycle in the past. With e-commerce continuing to drive expansion, there appears to be no end in sight for expansion in the foreseeable future. “We’re still in e-commerce 1.0, so there’s still significant running room.”
Bitner contends that with so much expansion in the domestic e-commerce market, especially with food delivery ramping up, Trump’s current tariff war with China will have little impact on demand for industrial space. “Currently, business uncertainty is more problematic than tariffs,” he says.

By: Patricia Kirk (NREI)
Click here to view source article.

10 Must Reads for the CRE Industry Today (May 28, 2019)

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Mortgage REITs increased their mortgage bond portfolios by almost 28 percent over the past year, according to the Wall Street Journal. Amazon is looking at office space on Manhattan’s West Side, reports the New York Post. These are among today’s must reads from around the commercial real estate industry.

  1. REITs Bet Big on Mortgage Market“Real-estate investment trusts that buy residential home loans increased their mortgage-bond portfolios by almost 28% to $308 billion over the 12 months through March. It was the largest stockpile in a half-dozen years, according to an analysis of 15 REITs by industry research group Inside Mortgage Finance. Annaly Capital Management Inc. and AGNC Investment Corp., the two biggest companies in the sector, drove the majority of the growth.” (Wall Street Journal, subscription required)
  2. Amazon Is Eyeing a Return to New York City “Amazon may have bid farewell to Queens, but it still ‘hearts’ the Big Apple. After walking away from a deal to build a headquarters on the Queens waterfront in Long Island City, Amazon is back to shopping for office space on Manhattan’s West Side, sources tell The Post. The tech giant has been in talks with owners of two shiny new skyscrapers located just one block west of Penn Station — the newly built One Manhattan West and its soon-to-be sister project, Two Manhattan West, sources tell The Post.” (New York Post)
  3. Climate Change Can Pose Big Risks to Real Estate Investments “Climate change could dramatically alter the value of real estate investments. And that goes for real estate investment trusts, companies that own income-producing real estate, if they do not shift their investment strategies to address growing risks, industry experts say. A 2018 report found that 35% of REIT properties have geographic exposure to climate hazards, including inland flooding, typhoons or hurricanes, and coastal flooding and elevated sea levels. The research evaluated 73,500 properties owned by 321 REITs.” (CNBC)
  4. A Decade After the Crash, Barclays Bets Again on Bundling U.S. Home Loans “Ten years on from the global financial crisis caused by a crash in bonds tied to U.S. home loans, Britain’s Barclays is betting a return to that market can bring in bumper revenues to fortify its investment bank. After the crisis, banks initially shunned the business of selling and trading slices of loans tied to residential property, autos or commercial real estate, as such securitizations were demonized for their role in the crash. But now Barclays is preparing to make its comeback, having assembled a team of over 140 securitization bankers and traders with plans to hire more as investors clamor for the higher returns such deals offer compared with traditional stocks and bonds.” (Reuters)
  5. Rise of New Hotel Brands Irks Some Property Owners “Major hotel companies are introducing new brands at a rapid pace, a strategy that can boost revenue but one that risks confusing guests and alienating hotel owners. Five of the world’s biggest publicly traded hotel operators have launched a combined 16 new brands since 2013, including five over the past 18 months. This contrasts with past periods, when hotel companies could go years without adding a new brand. The rise of new brands reflects a push by the big lodging companies to boost their top line with new products they can market to hotel owners and collect fees from them.” (Wall Street Journal, subscription required)
  6. KBS Sells 580 KSF St. Louis Office Property “KBS has sold a 579,846-square-foot office complex in the St. Louis-area to Lingerfelt CommonWealth Partners for an undisclosed price. Pierre Laclede Center is a two-building, Class A property in Clatyon, Mo., that KBS acquired in 2010. Lingerfelt CommonWealth will own the tower through Lingerfelt CommonWealth Value Fund II, its discretionary investment vehicle.” (Commercial Property Executive)
  7. More Construction Cranes Are on the Way in Plano’s Legacy Business Park “You may have noticed that something’s missing from the skyline in Plano’s Legacy business park. That forest of construction cranes is mostly gone from the stretch of the Dallas North Tollway near Legacy Drive. Just a couple of office projects are still underway. Legacy West developer Karahan Cos. is building about 87,000 square feet of new offices in a mixed-use building on Headquarters Drive. And Heady Investments is building a 14-story office high-rise on the east side of the tollway near the Shops at Legacy.” (Dallas Morning News)
  8. Has #MeToo Changed Real Estate? “The sexual misconduct allegations against Richard Meier offer a telling case study for the #MeToo movement. In many ways, the mixed messages the case sent is indicative of how the movement has unfolded in the New York City real estate industry over the last year and a half. On the one hand, real estate firms are taking sexual harassment more seriously — not only because they’ve been forced to comply with new legislation, but also because they’re protecting themselves from financial liability.” (The Real Deal)
  9. Starwood Buys Jacksonville Office Portfolio for $231M “Starwood Real Estate Income Trust Inc. has acquired a 1.3 million-square-foot, 11-building Class A office portfolio in Jacksonville, Fla., for about $231 million through an off-market transaction, Starwood REIT announced. The Florida Office Portfolio is in the Deerwood Park submarket, which according to Starwood commands Jacksonville’s highest asking rents and has its lowest vacancies. The submarket reportedly offers convenient access to both executive and workforce housing and to North Florida’s most successful retail complex, St. Johns Town Center.” (Commercial Property Executive)
  10. How L.A.’s Parcel Tax Will Impact CRE Properties “Los Angeles is seeing yet another real estate-focused ballot measure. On June 4, residents will vote on Measure EE, a $0.16 tax per square foot on commercial properties to raise $500 billion over the next 12 years to support the Los Angeles Unified School District. The measure was drafted in response to recent teacher strikes, according to CoStar’s Randyl Drummer, and LAUSD says that it will use the funds to attract and pay qualified teachers. Measure EE proposes to include not only residential properties but also commercial properties such as multi-unit apartments, retail spaces, and offices.” (GlobeSt.com)
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