As we dove into 2015’s waters, investment capital stats were already at in influx. The US has traditionally been a favorite depository for said capital. With US Treasury Rates on a decline due to demand and the US Stock Exchange experiencing new elevations, commercial real estate is an attractive invitation for both foreign and domestic investors. The evidence of this is the growth of overall commercial property transactions in the US by foreign investors has now arrived at a level that we haven’t seen since 2006/2007. Firms aim a close eye at interest rates and market stability as they compare these current statistics with historical data. The timing for interest increases is concerning for most, and whether long term and short term rates will increase in a united or disjointed manner. A majority of soothsayers, (correction: forecasters), hold the belief that the Federal Reserve will raise rates Summer of 2015. Out of the estimated $5 trillion plus capital invested in the United States, over $3 trillion is debt-driven. Commercial real estate loans are steadily gaining as per the Feds, with private equities and REIT’s in the lead. There is speculation that we will see a “re-do” of 2006 where large sums will be reinvested into #cre in 2015 if all goes according to pattern. Is your brokerage positioned for these potential opportunities? Are you as an investor positioned to take advantage of this stimulative climate and seize the day?
African American Museum of Philadelphia – Dr. Martin Luther King Jr. Sharing the Heritage Celebration and Date of Service – 11 AM – 5 PM at 7th and Arch
MLK Social Action Day Concert – The Chester Children’s Chorus – 1 PM – Congregation Ohev Shalom, 2 Chester Rd, Wallingford, PA
Macy’s Family Days at the National Constitution Center – Celebrates Martin Luther King, Jr. Day from 9:30 AM – 5 PM only $5 admission fee today
Health and Wellness Fair at Girard College 8 AM – 2101 S. College Avenue, Philadelphia, PA
Jobs and Opportunity Fair – 9 AM till 1 PM inside Hum Bldg at Girard College
MLK Tribute Concert in the Girard College Chapel – 1:30 PM – Free admission but tickets are required (215) 893-1999
US Forest Service recreation sites are waiving their fees today in honor of Martin Luther King Jr. Day
Do you see what I see?
There is a gargantuan player in this game of whom some of us may be unaware. Recall the “Defined Contribution Real Estate Council”? It was originally created to assist sponsors/participants get better results via institutional quality properties. According to the Urban Land Institute, 2014 was monumental for US retirement assets achieving the 23 trillion mark. A good portion of those funds were in defined contribution or IRA funds.
As of first quarter 2014, it was reported that there were $6.6 trillion dollars in IRA funds and 6 trillion in defined contribution 401k’s. Our industry is being propositioned to produce improved selections for real estate investing. Institutional allocations can potentially mean billions of investment capital. Because liquidity is imperative to retirees, REIT’s may outshine direct investing options.
Urban Land Institute & PWC, “Emerging Trends in Real Estate – US and Canada 2015″
Well it is that time again when the economists, financiers, commercial real estate execs and genies make their predictions for the New Year. As predicted by the Delloitte Center for Financial Services, rents and vacancies showed improvement, development pressed pause, REIT’s and foreign investment led the charge in activity, the standards for CRE lending were allayed and leasing was partially determined by tenant’s use of technology. The majority of sources remain positive regarding 2015’s outcome.
We have good news on the unemployment sector. The majority of the US saw a downturn in unemployment. That evidence includes those that vacated the workforce. For 2014, here are the stats:
States where unemployment experienced an annual increase:
- North Dakota
- W Virginia
States that experienced no change:
While Puerto Rico’s unemployment decreased, they still hold the highest unemployment rate at 14 percent. The average in the nation in December was 5.69 according to NCSL data.
- Enduring returns of REIT’s
- Expanded funding sources on a global scale
- GDP growth trend
- Investment transactions rise
- Construction Industry gradual recovery
- Technology advances
- Industrial property development growth
- Suburban markets making a comeback
The potential perils and pitfalls foreseen in wonderland, pardon me, CRE-land include currently delayed, yet inevitable Treasury rate escalations, federal regulatory ambivalence, the predicted plunge in US labor force growth two years from now, aging infrastructure and vacillating energy prices.
In Through the Looking Glass (Part 2) we will further explore the nuts and bolts of the industry findings…stay tuned.
Deloitte Center for Financial Services, Deloitte Development LLC, 2014 “2015 Commercial Real Estate Outlook”
Urban Land Institute & PWC, “Emerging Trends in Real Estate – US and Canada 2015”
National Conference of State Legislatures, http://www.ncsl.org/research/labor-and-employment/2014-state-unemployment-rates.aspx, December 19, 2014
Conferences can be brutal. Walking almost 4 acres of continuous “real estate related” booths of wonder could be intoxicating or grueling depending on who you are. For those of us who consider it to be a tad redundant or boring, NJMLS is kicking things up a notch and adding fun and games to their booth for this year’s Triple Play Conference and Trade Expo at the Atlantic City Convention Center. Today is the last day to get your game on and grab some CE credits while you’re at it. Continuing the 1932 Skee-Ball tournament tradition (that was the original in Atlantic City), they treat real estate professionals from Pennsylvania, New Jersey and New York to try their skill at Skee-Ball customized with the NJMLS logo. They are one of the over 300 exhibitors that will be trying to grab our attention and draw us in with fun and fare.
An Allentown company, CrossAmerica Partners LP and its partner CST Brands Inc have conjoined in an agreement for the purchase of Erickson Oil Products Inc. and specific related assets. CrossAmerica is a leader in wholesale distribution of motor fuels. This $85M deal will allow CrossAmerica to initially operate all of the Freedom Valu convenience stores, but is expected to transfer the operations over a period of time. Gary Vander Vorst, President of Erickson Oil feels that this acquisitions will promote Erickson’s growth and cause it to be more competitive. This opportunity has also opened new doors to new markets for CST and CrossAmerica. The transaction is scheduled to close in the first quarter of 2015.
Still think that social media is a waste of time for your CRE business? Newsflash – Social selling is a great way to build rapport, engaging with potential clientele or resources to get you to those people, developing clout and credibility by sharing your market expertise and is a great platform to showcase opportunities within your market area.
When you can catch them during the “still conceptualizing my vision” phase, but they’ve already at least developed their business plan, you are golden. You the commercial real estate professional can guide them through the process now that they have a definitive plan on paper.
Another advantage of social media is that it is non-evasive. By now the one billion Facebook users and 645,750,000 Twitter users are accustomed to minor blurbs of communication injected into their workday. It is S.O.P. (standard operating procedure) at this point. Your interjections, if executed well, are seen as both a pleasant diversion and a necessary function to keep one’s awareness of local markets and business current. You have become a local resource and knowledge-base. It’s not “in-your-face” as some marketing that you’ve experienced that makes you want to hang up, block or take your name off the list, but it does truly have “in-your-face” visibility and notability. If you are congenially interacting and not always “on the sell”, you will build community and hold followers better.
These days everyone with a wi-fi connection seems to prefer “kicking the tires” online and doing as much research on the interweb before making purchases, making decisions, even the ones you are required to make in person.
Pulse your posts – timeliness is crucial. Be relevant and current and professional with a touch of humanness. You are a person, right? You have a life beyond commercial real estate….at least I hope you do. Be personable without getting personal. Develop your own Social Community and allow it to work for you as you do your part. Track your results and you may find the ROI is surprising.
They always say you have to go where the opportunities are…it’s that right place, right time concept.
Hey CRE professional. I hear ya loud and clear. “I am so stupid busy trying to make my current stuff happen. I feel like the wheels are spinning off the bus!” If some CRE mogul tells me I have to do one more thing to make money in this business I’m gonna hang it up, don some beach attire and head for paradise found.
Hold on now…although I’m with you on the paradise idea. I’m not saying you have to do “another thing”. I guess what I’m trying to get at is this: If you are not constantly going after new business, rest assured, someone else is going to. You hear buzz phrases all of the time like sustainable and renewable as it pertains to energy, resources, etc. What about your commercial real estate business? Is it sustainable and renewable? Think about it as a living, growing identity. If it is not continuously full of life, growing and rejuvenating what is it? Dead or on its way out in this day and age and in this marketplace.
So I can hear those of you that come from the small brokerages saying, “We don’t have access to all of the tools the national and international brokerage houses do”. That may be the case, however, you might have essential tools that will help you get the job done. Yes, it might take a little more elbow grease, but the effort is worthwhile in the end. We have an online system available in our area that provides us not only the extensive public record information, but allows us to query based on multiple factors, such as tenant occupied vs. owner occupied, type of commercial use or latest sale price to all units on certain blocks with your specified criteria.
I know some prefer to purchase mailing lists or emailing lists. I understand the fishnet method. I also know that approximately 18% to 30% on average return to sender or bounce. But if you are trying to target a specific user type or a specific type of property, why would you pay for or waste time on all that file 13 or spam potential?
If you’ve done your homework, you know your target. You know the zoning officer your potential client will have to work with. You know what the locale is expecting to do based on your local economic council’s reports. You can give the property a price range off the top of your head because you have the averages based on the data you collect for yourself on a consistent basis. You already have a potential buyer or tenant in mind because you are keeping in touch through social media, email, phone calls or an occasional golf game or coffee meetup.
So, you see, you’ve already done the prep work. Kudos! Now make it all work together to a successful end by connecting your efforts with targeted movement for a great ROI for all that hard work. What are the tools that you find most useful in prospecting for your CRE business?
ARK Spine Care & Pain Management offers the most comprehensive non-operative pain management care available. Dr. Jha is a triple board certified (Pain management, Neurology, Psychiatry) physician who is dedicated to upholding the highest professional standards and providing the highest quality of healthcare while striving to deliver pain relief for her patients.
Chronic pain is a complex condition with multiple layers of challenges, many which unfortunately are invisible to others except for the person suffering. It often has multiple facets to its presentation ranging from physical and emotional to social factors. Unfortunately, very commonly, chronic pain goes untreated or under-treated in our society.
Given the complexity, the essence of comprehensive pain management at ARK Spine Care & Pain Management includes a multimodal approach, which includes different modalities spanning from physical therapy, medications, psychological treatments if indicated, and injections. Reliance on only one modality may result in minimal or partial improvements. Our ultimate goal is to improve our patient’s level of functioning and pain scores in the most compassionate and safe way.
Providing the most advanced medical approaches and highest quality of pain management, Dr. Jha strives to work with patients to develop a plan of care that best meets the needs of each individual. She evaluates patients with a variety of pain problems and devises a carefully thought out treatment plan according to each unique pain problem. Implementing interventional and non-interventional therapies of pain management to deliver effective comprehensive care, ARK Spine Care & Pain Management provides the highest quality of non-operative pain management available.
As many of you know, working in a commercial real estate office can be a hectic environment at times. The tedious research, the list of phone calls handwritten on this morning’s Starbucks napkin, the ever-changing deadlines for the contingencies and due diligence items for that deal you’re working on…it never ends. You can be a great commercial realtor and one fatal flaw will potentially break you…the followup.
I know how it goes. You are involved in 6 transactions right now. Two are large sales which entail a lot of detail, multiple corporate entities, not to mention the fun spin of the 1031 exchange thrown into the mix and potential bo-ku bucks in your bank account. The third transaction is a 10-year lease in your own business center, but there are a lot of fit-out negotiations to work-out at the table. The remaining three are small, local retail leases. If only the dollar amounts on the commission were equivalent to the hours you spend trying to get these little deals done, right?
In the meantime, you have received 3 phone calls with wants and wishes that you will need to vett further, 2 email inquiries regarding your own property listings, and you’ve been asked to take on a new retail development project which is a couple years out, but you need to start marketing it to be sure to land that ideal anchor tenant.
Science has proven that no human being, super-human or otherwise, can truly do two things at once. Your brain works in sequence, not in a simultaneous state.
Before you guzzle down more of that warm delicious drug and pop another Excedrin, think about this for a moment. What if I developed a “protocol” for how I handle all this communication as it comes in from various sources? What if I established a game plan so that no leads get left behind?
If you have a mack-daddy CRM solution such as GoldMine or SalesForce, you already have these things in place and you may think there is no need to have this conversation. They trigger you automatically to do what you need to do, like a mom only a “CRE Mom”. However, every agent needs a system in place to control and prioritize communications. Most of the time it is a behavioral protocol you develop for yourself to prohibit what I like to call “CRE ADD”. Also, if you are a smaller brokerage without such a resources will need to invent the wheel that will drive them on their current path until they graduate to a faster track.
It can begin with taking simple steps like creating rules for certain types of messages. Yes, as commercial agents we are inundated with junk mail, but some items that aren’t junk mail aren’t good for your prioritizing efforts. To quote the apostle Paul, “all things are lawful but not all things are expedient”. Take all those RSS feeds, REIT and Investment news and have them automatically hit a CRE news and blog folder that you can peruse when your schedule permits. Next, take all of those opportunities coming in from your fellow CRE brokerages and assign a rule that directs them to a specific folder as well. Email alone can bog you down and make you unproductive which equals unprofitable for most. Your social media is another time hustler if you’re not careful. It’s like candy for a sweet-tooth. It draws you in and if you’re not cautious, consumes every bit of focus you might have thought you had.
So is there hope in this instant messaging, instant notification, instant gratification world of commercial real estate? I believe there is. Setting aside certain time slots during the day to perform certain tasks creates a pleasing and freeing sense of order in that chaotic office of yours.
Take charge of your time and guard it as the precious possession it is. At the end of the day, what creates revenue has to be top priority in business. Consider your schedule and priorities just like a company CEO would do. If it makes money, it has a higher value. If it doesn’t, it is overhead and you have to control it. Schedule your social media throughout the day via HootSuite or TweetDeck or the like. Check in periodically to respond to interaction, but don’t get lost in it. If you aren’t using a CRM solution, take the time to create a pipeline tracker in Excel and sort it by priority. Give the leads categories and I’m not just talking property types, wants or haves. My suggestion would be to include columns such as lead source, time frame, value, percentage of probability and final weighted forecast amount. There is an empowerment that takes place inside when you are the “master of your universe”, at least your own CRE niche of it.