Archives for February 2020

James Scott, lead researcher at MIT’s Real Estate Innovation Lab and IREM’s innovator-in-residence, explains that this information is exploding still more as our building systems, from lighting and HVAC to door access, get fitted out with Internet of Things (IoT) sensors, rendering each formerly analog device “a vehicle that can transmit information to the outside world.”
Clearly, big data delivered to our devices provides a powerful tool of tenant engagement. But, according to Scott, “Property managers need to understand the security features of each component. You need to perform due diligence on each device, and understand how each one stores the information it gathers.”
Indeed. At risk here are issues far more critical than an occupant’s lighting preferences, with data such as names, addresses, social security numbers, bank-account and routing information, and credit-card access all there for the taking.

Scott provides a sobering statistic on this need from the commercial side of the equation: “When it comes to cyber security, many offices believe they are too small to be considered a target, but in reality, over 70 percent of cyberattacks take place in offices of less than 100 employees.”
As Forrester Consulting stated in a recent report, “Highly publicized breaches dominate headlines, and cybercriminals’ sophistication continues to grow. Forging a clear way forward is challenging.”
The good news here is that there is progress being made on the legislative front in terms of data privacy. It‘s about time, given the traditional dearth of U.S. regulations overseeing data use. In fact, as Scott explains, the U.S. lags behind such initiatives as Europe’s General Data Protection Regulations (GDPR), implemented in 2018. He is confident, however, about the ability of the U.S., in both the private and public sectors, to catch up.
The implementation of the California Consumer Privacy Act (also enacted in 2018) set the tone, says Scott, and since April of last year, no fewer than 17 states have enacted some form of legislation focused on privacy. What’s more, at the national level, Senator Kirsten Gillibrand (D-NY) earlier this month floated a bill that would create a national Data Protection Agency.
Whatever Congress ultimately does, says Scott, “One way or the other, legislators need to focus on people’s rights, the risks of doing harm, and on accountability.”
But it takes more than legislation, and responsibility starts in the private sector, with due diligence. In turn, part of due diligence is transparency. An article in TechRepublic notes that “When it comes to privacy, big data analysts have a responsibility to users to be transparent about data collection and usage.”
The article goes on to say that, “A prominent aspect of your responsibility is to be honest with your subjects [your building occupants]. At a minimum, it’s your responsibility to let people know what you know about them, and what you’re capable of doing with your analytics. For instance, if location analytics allow you to know where they are and where they’re likely to go next, then let users know you have this technology.” And, in partnership with your vendors, certainly let them know what safeguards are in place to prevent hacking.
But whatever regulations come about from legislators or providers, IREM’s focus will not waiver, and we will continue to view privacy in the age of big data as an extension of our overall commitment to the highest standards of professional, ethical performance.
“Property managers are at the forefront of this initiative,” says Scott. “We need to remember that we are the caretakers of people’s data.”
I couldn’t agree more.
By: Cheryl Ann Gray (NREI)
Click here to view source article

Investors are increasingly targeting parking lots for potential multifamily redevelopment, especially in urban areas, according to industry sources.
“Given the multifamily market has been so strong for the past decade, we’re at a point that really justifies development,” says Rob Goldstein, assistant portfolio manager at CenterSquare Investment Management, a global investment manager focused on actively managed real estate and infrastructure strategies. “We’ve seen debt costs decrease and demand and rental revenue increase. So, those two factors both contribute to the appeal of parking lot conversions to residential.”

Parking lots have been selling quickly recently, especially in cities where they occupy valuable pieces of land. Over the past seven years, the average number of urban parking lot transactions nearly doubled from the average number during the 2006 to 2012 period, according to data from real estate research firm the CoStar Group. Since 2013, the average annual volume of urban parking lot sales totaled $130 million—up from annual volume of under $100 million from 2009 to 2012.
“The trend of surface parking lots changing into multifamily housing has been increasing in KTGY’s work over the past decade across the country,” says Ben Kasdan, associate principal at KTGY, an international architecture firm. KTGY is currently working on about a dozen projects on former parking lot cites, including projects in Fairfax, Va., Pasadena, Cal. and Los Angeles.

Along with multifamily properties, vacant parking lots can also be repurposed into office buildings or hotels.
“Any asset that can provide high density, so, offices or hotels would make sense,” says Goldstein. “It wouldn’t make sense to build a two-story building on a parking lot because land values have increased so much that you would really need to build up to justify the land costs. That’s why you’re seeing high density properties being constructed.”
While this redevelopment trend has been partially driven by the expectations that there will be less need for parking spaces in the future, not all industry sources see parking lots going away. Portland-based MMDC Commercial Real Estate purchased a nine-story stand-alone parking garage in downtown Denver this February for $10.65 million, according to public records. The brokers in the deal said the “overwhelming interest from buyers for this property clearly demonstrates that many investors don’t see that risk [of parking lots going way].” Still, developers can often save millions of dollars if they build fewer parking spaces.
“It’s not that cars are no longer needed entirely, but the way in which cities utilize private vehicles has already changed and is continuing to change still,” says Kasdan. “With fewer drivers, fewer parking spaces are needed. Zoning ordinances need to catch up with this trend, as the cost of constructing code-required parking contributes significantly to the challenge of providing new attainable housing.”
By: Sebastian Obando (NREI)
Click here to view source article