Credit Crunch and Surplus is Affecting Ag Industry

iStock_000017068698Large.jpgIt seems that a crop surplus has led to a 14-year low in agricultural industry profits according to Bloomberg. The amount of debt that farms have taken on is said to be the highest in the last 30 years.

The banks don’t want to give out anymore loans unless they are secured by land. This has caused an influx of interest in the USDA program which was originally designed to be a last ditch effort, not a standard. Enter in the statistically consistent problem with any government programs. You said it. Yes. This one is almost broke as well. 

The lessors of land will find it to be a difficult year most likely. Will lease rates fall? Still remains to be seen. According to the USDA, the forecasts do not look good in the profit column for 2016. The National Farmers Union is petitioning Congress for a credit solution asap so that they can continue production.

Recently there has been a surprising increase in prices and it is the agricultural industries hope that the rally continues. 

(Data courtesy of Bloomberg, National Real Estate Investor 2016)

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The Beiler-Campbell Business Center Welcomes New Tenant: Cyron & Company

Cyron-0798-1For over twenty years, Cyron & Company has offered a comprehensive suite of customizable accounting, payroll and tax services for small to mid-sized businesses and individuals. Our unique approach of delivering custom-tailored solutions truly sets us apart. We help you achieve balance by aligning your business and personal goals. We pay close attention to your goals, ideas, plans, and concerns—and design a services package that meets these specific needs and objectives.

Our distinct philosophy has not only earned us the loyalty of our clients, but has allowed us to grow through a steady stream of referrals. We’re known for our clear focus on helping clients reach their full financial potential and are proud to develop partnerships that support business growth and ongoing financial strength.

Cyron & Company is moving into the newly constructed 400 Building within the Beiler-Campbell Business Center.

Add their new contact information into your CRM/Address Book:

Cyron & Company Certified Public Accountant

The Beiler-Campbell Business Center, 400 Old Forge Ln, Suite #405, Kennett Square, PA 19348

Find out more about Cyron & Company by visiting their website HERE

Atlantic City Hopes to Draw Real Estate Agents With Fun & Games

AC Convention Center

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. Skee_Ball_Ice_Ball

No Lead Left Behind

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.

Google Glass for #CRE

With the emerging tech eye candy that is finally making its way into the Commercial Real Estate Industry, there is a unusually balanced amount of excitement versus concern. Sites such as View the Space give you the try before you buy realistic experience before you even bother to make the appointment with the listing agent.  With all the available data flooding the consumer base, most of which we as Commercial Brokerages are willingly supplying to the CRE data storehouses such as CoStar and LoopNet, you have to wonder if you really need to show up in person ever again, right? Boy, that’s really going to cut down on that tax break for the dry cleaning, huh?

Enter, stage right….Google Glass, Google Tango. If you didn’t have to actually wear it or carry it you would be having eery flashbacks to the Matrix wondering if reality is overrated. From all of the reviews we’ve watched, comments included “efficient”, “time-saver”, “get more deals done quicker”, etc. Google Glass allows you to video tour the property for your client who may just happen to be on the other side of the hemisphere, virtually interacting while providing a more “personalized” experience.

But wait, behind door number three…Google Tango materializes, furnishing mobile devices a “human-scale understanding of space and motion”{1} .  The possible applications are endless in regards to Google Tango, because a user can be impaired and be empowered to navigate in a way they never thought possible. The application for the retail environment could be epic. Instead of the individual store apps, Google Glass could direct you to that much desired item through a captivating virtual and realistic experience combined without proprietorially taking up more memory on your tablet or your mobile.

For the Commercial Real Estate Industry, virtual tours are not the only tool in its belt folks. Google Glass can create 3D advertising images such as “For Sale” and “Office Space Available for Lease”. Google Glass Real Estate Layer App Tenant improvements could be visualized in that same 3D format, bringing vision to reality in a potentially shorter time frame. For Property Manager, this technology could prove helpful in maintenance, security and construction on-site.

Keep your camera button on your smartphone on the ready for now. With a limited quantity of glass users and Project Tango still in the incubation stages, you, our Commercial Realtor friend, and your camera app are still needed. Uneasiness lies in the guts of more than one industry, let alone governmental authorities regarding safety, security and privacy concerns.  How many times do pass people on the highway who are texting away while holding 70+.  The Department of Transport in the UK has deemed using Google Glass while driving as careless driving and is a penalty offense. West Virginia’s Gary Howell proposed an amendment to their state’s law including bans against any wearable computer  out of concern for safety. Video capture is not welcome everywhere, people. I know the minute you finally got your turn when the I-Phone came out you felt an empowerment to share EVERYTHING. However, companies hold proprietary information, private records, personal data, codes, strategies…the list goes on.  The cyber-crime units see the vast buffet of new ways to commit felony “virtually”. And lest we forget, Big Brother Google is able to track your every movement while utilizing Glass or Tango. This gives new meaning to “personalized ads”, doesn’t it?

References: {1} Project Tango https://www.google.com/atap/projecttango/

Airbnb: Innovative or Illegal?

GavelThe jury is still out on this one…literally. Airbnb is facing off against New York City’s attorney general, Eric T. Schniederman for the right to exist. Strong opinions are doing the dance, as property owners and managers claim that this is a major security, safety and management issue. The legitimate tenants’ safety and security are considered as compromised by Airbnb “vagrants” taking up residence in their buildings for an unknown period of time with no signed rules of engagement.

The property owners are screaming because they aren’t even made aware these strangers are in their buildings.  Suburban Airbnb’ers have HOA’s and neighbors up in arms alike. Mr. Schniederman seems to be “loaded for bear”, as he has subpoenaed Airbnb users detailed contact information and usage details. Well, Airbnb has apparently wiped out quite a few of the NYC online innkeepers in a perceived act of compliance and showmanship. A good move, since it is alleged that 2/3rd of the listings in New York City were in violation of the law. Another crucial item of dispute is the loss of tax revenue. Oh yes, the tax man has his hand out and Airbnb users are not paying up. That’s an issue that the government is not taking lightly. But NYC officials aren’t the only ones that are outraged at this newcomer. NYCThe hospitality industry sees Airbnb as a viable threat to the industry. Hotel chains have struggled with maintaining costs, the evidence thereof in the rise in rates around 20% within the last few years. In their opinion, it is a hit to the tourism industry as a whole. Oh, lest we forget the Airbnb “victims” that assume “reasonable risk” of which Airbnb assumes no responsibility should your arranged sub-let go awry . Neglected users are coming out of the woodwork, becoming quite a PR risk. As of late, Airbnb is said to have tried to make amends by a request to become a sanctioned hotel entity and pay their share of those taxes and change the way NYC officials, property owners and neighborhoods view their service.  They are swinging an approximate $21 million in front of lawmakers as a pendulum symbolizing prosperous success for everyone involved. NYC..ball’s in your court…courtroom that is. Some say that money can fix anything.  Good luck Airbnb…we think you might need it.

NYC2

Has Technology Made Us Lazy?

EMarketeerMy opinion? Absolutely 110% yes!

We are bombarded with marketing for the latest and the greatest every single day of our lives, from the coffee we gulp to the cars we drive to tools we use to run our business.

As technology propels forward, new CRE tools pop up more often than Nicki Minaj gets her Botox fix. I get new offers in my email, through social media and believe it or not snail mail…(yes, it still exists).
There is also a copious menagerie of CRE websites to add your listings to for “THE BEST EXPOSURE”…this is not Britney on TMZ folks. This is commercial real estate. So first tell me who my listings are getting to and why you are the “best”. What difference does it make if my listing is on 16 different CRE listing sites and they are: 1) serving market areas OUTSIDE of my market area, or 2) unknown to most of the population.

I find that some are trying to impress their clientele with the laundry list of marketing avenues that their listing will receive exposure on. I’m all for the marketing proposal and putting a nice package together, but let’s get serious here for a minute. What is the ONE THING that will impress your client more than anything?? RESULTS. PERIOD…that is all.

So, I digress from my rant, “Duke Long Style” and I move on to say this. If you have swallowed the hype like mother’s milk and are counting on the internet to do all of the work for you, you should stop reading this post right now.

(Insert Cheesy Game Show Music)….You’re still here? Great! Commercial Real Estate is moving with the technology (gradually) but do not rely on the geeks behind the curtain to do all the work. You still have to connect, network, face-to-face meet, hit the pavement with those loafers or stilettos and for the love of all that is good and right – FOLLOW UP.

I am a Social Media hound at times. I admit it and my #CRE buds will testify. They will also testify that I take breaks from the #SMM to work on LOI revisions, lease transactions, renewals, target marketing and prospecting. It’s a balancing act to which I thoroughly enjoy playing my part.

For those of you who need closure, the bottom line is:
1. Do not rely on Social Media for marketing of properties – that’s not what it is for
2. Do not rely on CRE listing websites to sell your properties for you – that is why they call you a “REALTOR” – You do the selling, remember?
3. Your clients deserve better – It’s not enough to blast their property all over the stratosphere and never give them an update, make cold calls, etc.
4. Impress Me…how? Give me RESULTS.PERIOD.THAT IS ALL.

Chester County US1 – The Next Frontier

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According to the CCEDC (Chester County Economic Development Council) a new CCEDC-led taskforce has been created to facilitate new business along the US1 corridor from Kennett Square and traveling Southbound to the Maryland line. This is our backyard folks. We are excited and anticipating the opportunities this poses for the Southern Chester County business community, not to mention the Commercial Real Estate biz in our local region.

Representatives from a dozen municipalities have come together to brainstorm and create a “draw” to this specific area of the Greater Delaware Valley. Within the next ten years, they estimate 3 million sf of commercial real estate to be in the project development stages.

The foremost hurdle they must bound is targeting the issues that hinder new growth and interest. Pinpointing those ball-and-chains is paramount before moving forward with new marketing and splash about Chester County. Key infrastructure challenges include public transportation, sewer and water utilities, affordable housing, land planning and the overall approval process. Without a coordinated effort by all key parties, we lose countless opportunities to other states. Jobs and revenue cast away for naught. Agencies working together, efficiencies in executing new utility extensions honed and innovative implementations by the local leadership would all be integral portions of this new “plan” as I see it.

We do have positive attributes going for us. Large thriving companies have made their home here. They include:

  • Herrs Corporation
  • Dansko Corporation
  • Everfast
  • Dole Mushroom
  • Flowers Foods/Tasty Baking Oxford
  • Genesis Health Care
  • W.L. Gore & Associates, Inc.
  • Neuchatel Chocolates dba Confiseurs, Inc.
  • Leading Edge Composites, Inc.
  • Pollert Plastic Systems
  • Endo Pharmaceuticals

We look forward to new possibilities, challenges and successes for the Southern Chester County corridor and are very proud to be a part of the transformation of a new portal of flourishing business and industry.

Care to Dance?

When analyzing the current economy and market conditions, often times Commercial Real Estate and Residential Real Estate are assimilated in the reports. Although similar, they are often found dancing to different “tunes” on the same dance floor. What I mean by this is that although they are operating simultaneously in a wavering economy, they are distinct, which has allowed for the Commercial Real Estate industry to “creatively” overcome and seek sustenance in other ways that the housing market does not provide. Some examples of those new dance steps are:
REIT Running Man:
REIT’s are pushing for rent increases on multi-units, due to apartment and housing turnover trends at record lows due to inability to acquire mortgages. Public REIT’s are said to be paying yields in the 3.5% range. If you shift to the private sector, you can expect somewhere in the 8’s. Commercial Real Estate can also be considered an inflation hedge.

Buy or Build Butterfly:
Large Developers are focusing on new construction retail projects while some remain conservative favoring property acquisitions. When considering an acquisition, take a careful look beyond the cash flow. What will the rent income be when the current leases terminate? Novice investors miss this all of the time. Commercial Real Estate as a whole is driven by jobs, particularly the office and industrial sector. Consumer spending drives retail. Although the multi-unit industry has made remarkable improvement, we see a need to shrink the chasm between new construction costs and trending rental rates.

Land Limbo:
Buying land in the current market can be sketchy at best. Land with approvals, availability of utilities and located within the “right market”…it’s like trying to find a customized car with all of your wish list features off the lot of the used car dealer. Before jumping in with both feet, most investors are considering several items of interest when performing their due diligence:
Demand – What is the demand for the project?
Dinero – What will my ROI be and how far out can I expect my rate of return?
Domination – What bureaucratic hullabaloo will I have to endure to gain the “blessing” to execute this project and how long will it take to come to fruition? Also, will you be able to sell the property when you are ready to? What will it take?

The Lean,..oh I mean GREEN wit it, Rock wit it:
As an owner/investor, green solutions can potentially provide tenant attraction and maximize your property value. Applying Green initiatives to your current property can influence negotiations, improve operations and sustainability, boost tenancy and rent rates, improve the property to optimize sales price and attract “green” buyers.