Archives for June 2020

Warehouse Sales a Bright Spot for Commercial Real Estate

June 22, 2020 by CARNM

Investors are increasingly turning to warehouses as investments during the pandemic, The Wall Street Journal reports. The growth of e-commerce—which has only widened since the start of the COVID-19 crisis—has sparked the need for greater storage space for businesses. Warehouses have reportedly fared better than other property types during the pandemic.
Investors are making headlines for their large scale purchases: This month, real estate investment company BentallGreenOak paid $164 million for a warehouse in Franklin Township, N.J., one of the largest single-asset industrial property sales of the year. Warehouses had been growing in popularity even prior to the pandemic due to an upswing in online sales. For example, Blackstone Group Inc. last year paid $18.7 billion to buy industrial real estate space from GLP. That raised the firm’s total to 850 million square feet of warehouse space it now owns.
The COVID-19 pandemic led to a jump in online orders as people stayed at home this spring. Online retailers struggled to keep up with demand. Companies were in need of greater warehouses to store and process goods. “Without e-commerce, [the industrial sector] would be crushed,” Eric Frankel, a senior analyst at Green Street, told the Journal. Frankel does expect demand for warehouses to slow, but he expects prices to stand firm.

Source: “Warehouses Serve as Pandemic Haven for Property Investors”

New Buildings Don’t Always Perform as Designed

June 19, 2020 by CARNM

Even in buildings that have been at similar times with the same systems, usage isn’t always consistent.

Matthew Ganser, EVP Engineering and Technology, Carbon Lighthouse, says there is a misconception about new buildings.
“Just because you have modern building materials and maybe a more modern building management system or control system, it doesn’t necessarily mean you have a more efficiently run asset,” Ganser says. “There are a lot of reasons for that.
One of the primary reasons is that buildings don’t always perform as designed. “The way they’re commissioned is a little bit different than the way they’re actually run as a building with the actual loads the building experiences and when the building experiences those loads,” Ganser says.
Even if two buildings have similar control systems, performance can be dramatically different.
“Often, to make a building really hum and be a lot more efficient, you have to finetune and adapt the controls of that specific building,” Ganser says. “It’s not just a copy and paste from the previous building.”
Even with matching systems operated in similar ways, every building is different. “We haven’t come across the same building twice,” Ganser says. “Even when it comes to new buildings, what worked in the past isn’t perfectly how a new building should be operating now.”
In this random world, similar buildings produce far different energy usage outcomes. “It’s a very discombobulated random world to work in,” Ganser says. “Technology allows us to do a lot of things that are difficult much more quickly in an automated fashion.”
Ganser says technology can identify inaccurate readings in the building management systems. It can also identify problems or savings opportunities in the building, regardless of the structure’s age. “We’ve worked in a lot of old buildings that have had plenty of major opportunities for improvement,” Ganser says. “We also have that same situation with brand new buildings as well.”
If technology can produce accurate energy usage information, Ganser thinks it can do much more than improve the performance of individual assets. It has the potential to push the industry beyond accusations of greenwashing.
“If we can move the conversation past greenwashing and move it towards the common currency [expense savings] that all businesses run off of, that’s where you can have a conversation that anyone would be excited to be part of,” Ganser says.
COVID-19 also plays a role in these discussions.
“With energy efficiency and COVID-19, there is a lot of overlap with what’s being discussed about how buildings might change,” Ganser sa.ys
Energy could provide a way forward as budget crunches get worse. Reducing energy spending can be useful for the bottom line. “They are two sides of the same coin,” Ganser says.
Source: “New Buildings Don’t Always Perform as Designed”

June 2020 LIN Properties

June 17, 2020 by CARNM

At the June 2020 Virtual LIN Meeting held on June 17, 2020, 6 excellent properties were presented.
Thank you for presenting properties and attending the meeting!
View the June 2020 LIN properties here.
View the June 2020 LIN Thank Yous here.

SBA Rolls Out Major Updates to PPP

June 17, 2020 by CARNM

The Small Business Administration and U.S. Treasury Department on Wednesday rolled out major updates to the Paycheck Protection Program, offering automatic forgiveness for certain independent contractors and creating a broader application form for forgiveness.
Specifically, the updated forms clarify that the “owner compensation” amount automatically forgiven for borrowers who use a 24-week covered period, as opposed to the original eight-week period, is equal to 2.5 times their average monthly net income. This means independent contractors with a 24-week loan can have the full amount automatically forgiven under the new guidelines. The amount of forgiveness for borrowers who choose an eight-week period remains unchanged.
Borrowers who received their PPP loans before June 5 can opt for either an eight- or 24-week period in which to use their loan; borrowers who received their loans after that date must use a 24-week period. The new forgiveness forms reflect a 60% requirement for payroll expenses, down from the original 75%.
Additionally, the agencies created a streamlined “EZ Forgiveness Application” for borrowers who:

Are self-employed and have no employees; or
Did not reduce the salaries or wages of their employees by more than 25% and did not reduce the number or hours of their employees; or
Experienced reductions in business activity as a result of health directives related to COVID-19 and did not reduce the salaries or wages of their employees by more than 25%.

“NAR has been working closely with congressional leaders to loosen forgiveness requirements,” says Shannon McGahn, senior vice president of government affairs for the National Association of REALTORS®. “Small-business owners don’t have the resources to hire lawyers and accountants like large companies, and they shouldn’t be burdened with paperwork and red tape at a time when they’re trying to stay afloat. These new guidelines should go a long way to help.”
The deadline to apply for a PPP loan is June 30. The program still has funding available and will close at the end of the month unless Congress acts to extend it.
More information:

Source: “SBA Rolls Out Major Updates to PPP“