March 24, 2018

Feed aggregator

Robots are Starting to Do Showings

Speaking of Real Estate - Fri, 01/26/2018 - 16:55

A company called Zenplace in San Francisco is using robots to help its agents conduct showings. When people arrive at the unit, they’re greeted by what amounts to an iPad on a mobile stand that leads them around, but it’s personalized; it’s the agent’s image and voice that people see and hear. Other companies are coming out with their own versions of this.

It’s a good question whether this type of automation will take off. As people get used to buying goods at automated stores in which everything is done with your phone or credit card and no employees are around, it’s feasible mobile iPads will do the trick at showings.

Screen grab from Zenplace video

Whether you like the idea or not, it’s a trend that’s poised to hit your industry. There are other tech trends you’ll be faced with whether you like them or not. One is a kind of virtual tour that’s more immersive than what you get by just wearing goggles. You get an additional tactile component, because you’re wearing gloves with sensors. Now you feel the door handle when you open the refrigerator as well as see it in multiple dimensions.

Will this be the norm six years from now? Who knows, but now that the genie’s out of the bottle, it’s not likely to get put back in.

REALTOR® Magazine spent a few days at CES in Las Vegas two weeks ago and brought back coverage of all types of tech innovations coming to real estate. CES stands for Consumer Electronics Show and it’s the big showcase each year at which companies try to wow people with what the’re cooking up for us.

You can learn more about CES and also about real estate robots in the latest Voice for Real Estate video. The video also looks at something the U.S. Department of Labor did a few weeks ago that could eventually be important to you because it promises to get the real estate industry one step closer to setting up association health plans (AHPs) for independent contractors.

The agency proposed adding “working owner” to the definition of employer for purposes of setting up AHPs, which would enable sole proprietors and small business owners to ban together for insurance under the large group market, which could make coverage available more cheaply than under the small group market. There remain a lot of hurdles, but this was a crucial step in the right direction.

The video also looks at the three-day federal government shutdown and what could happen to your pipeline of homes sales if there’s another one in a few weeks, which could happen since the short-term budget law expires in early February. If your buyers are applying for FHA-backed financing, they would probably be okay, although processing might take a bit longer. But if they[re buying a new house in a flood area, they might not be able to get flood insurance, and that would mean a delay in  closing.

Watch the video now.

Comment on 3 Myths About Home Staging by Candace

Styled, Staged & Sold - Fri, 01/26/2018 - 14:52

Myth: depersonalize the space. People take this to mean, Remove every trace that humans live in the space. But good depersonalizing removes only excessive or controversial personal items. Think of pictures frames–they’re always sold with a stock photo–the buyer gets to imagine that if they buy that frame, they will become the person in the photo. Displaying a happy family photo helps people imagine they will be a happy in this home. Setting the table for a dinner party lets them imagine they will have wonderful gatherings in this home (even if they aren’t a cook and don’t have a big friend group, they wish that was the case). Putting a book and a throw in the living room lets them imagine they’ll sit by the fire and read (even if they aren’t a reader). A completely depersonalized house lacks warmth.

Comment on White Kitchen Fatigue? by W Properties OK

Styled, Staged & Sold - Fri, 01/26/2018 - 11:22

Totally agree here. Going all white is just too bland and safe now. Two tone cabinets or different colored islands really add some life into an otherwise all white hospital-like look.

Comment on Hot Home Trend: Black Is Back by W Properties OK

Styled, Staged & Sold - Fri, 01/26/2018 - 11:21

Yes! Something to break up the 100% white finishes or grey that is still going strong.

Tackling Big Issues in the New Year

YPN Lounge - Thu, 01/25/2018 - 17:59

Matt Clements

By Matt Clements

I love January. It’s the time when everything seems possible and the new year opens up new opportunity.

I’m especially excited because my baby boy turned 1-year-old this week! He’s the light of anyone’s day, and the poop diapers mean nothing when I see that wonderful smile. Truly, I “replaced myself.”

You’ll often hear me say, “Replace yo’ self,” because that’s the goal of YPN—to bring on new leaders and for each of us to continue growing. We recently witnessed our first YPN member become president of the National Association of REALTORS®, Elizabeth Mendenhall, and that’s a perfect example of growth through YPN.

When it comes to California YPN, I’m an “OG,” but I’m a new YPN advisory board member for NAR. One of the major outreach efforts we have recently started is the leadership travel fund. This is allowing us to send advisory board members across the country to speak about YPN and share ways to boost local networks. Any YPN can request that an advisory board member visit their group for a one-day event funded by NAR (capped at $1,000 per event). It’s a super exciting opportunity, so let me know if you’d like to arrange for a national YPN advisory board member to visit your local network.

@geralt, 2017.

This past week, the California Association of REALTORS® Board of Directors met in Monterey, Calif., to discuss and vote on historically important real estate topics—and our YPN was in full-force. We have a measure going on the 2018 ballot to extend Proposition 90, which would allow any homeowner age 55 and over to transfer the tax value of their current property to a new property. This would eliminate the financial burden of increased property taxes for potential sellers on fixed incomes. It’s a $30 million to $50 million effort led by C.A.R. and its members.

We, in California, are also looking at major holes in real estate sales, and we’ve identified three:

1. The disclosure process – messy, unorganized, and rarely completed on time. The business technology forum at C.A.R. is tackling this aggressively.

2. No accountability or tracking system for submitting offers – The first step in many steps to solving this issue is to implement a professional standards policy, which was completed this past week. Agents who submit offers and do not receive a reply (written) by the listing agent may now require that the agent supply written verification that the offer was presented. This request can be made by either the agent or seller.

3. HOAs – There’s no control over excessive and disorganized HOA documents, and no central database for managing contact information, correct phone numbers, reserve amounts, pending litigation, and of course, certifications and documents. We’re seeking to change that and improve the ability for our members to conduct business.

Meanwhile, if I’m not working on these issues, you’ll find me surfing before sunset at Salt Creek to remind me of “why” I work.

By the way, my recommended reading in January is “Think & Grow Rich” by Napoleon Hill.

Matt Clements, CEO of the Clements Group at Harcorts Prime Properties in Monarch Beach, Calif., is the author of the YPN Playbook and was chair of the California Association of REALTORS® in 2016 when the group won the YPN State Network of the Year. Matt is on the board of director for C.A.R. and NAR, and sits on NAR’s YPN advisory board. He is also the 2018 president-elect for the Orange County Association of REALTORS®. Connect with Matt at


Uncovering the Government’s Role in the History of U.S. Segregation

Weekly Book Scan - Wed, 01/24/2018 - 11:45

I live in Chicago, a city that consistently ranks among the most segregated in the nation. This fact is starkly evident to anyone who makes their lives here – a city where black and white citizens live separately, learn separately, and move through the city separately. It is conceivable to spend the majority of one’s life almost exclusively among others of the same race, or to travel miles within the region before encountering a neighborhood where one’s race is in the minority.

One hundred and fifty-two years after the Civil Rights Act of 1866, which abolished slavery and prohibited discrimination based on race, how are we here? Chicago may be one of the most egregious examples, but it is far from unusual. This fact is clearly demonstrated in The Color of Law: A Forgotten History of How Our Government Segregated America, where author Richard Rothstein details how the U.S. government introduced and reinforced the patterns of racial segregation we see across the United States today.

While the abolition of slavery may seem like a sign of brighter times to come, the United States actually became increasingly less integrated than it had been previously from the late 19th through the mid-20th century, largely due to the actions of our own government. Rothstein’s book is full of stories of African Americans who wanted to live closer to work, apply for a mortgage, move to the suburbs, or simply achieve their dreams of homeownership, but could not due to government policies. Zoning ordinances decreed where African Americans were allowed to live, and permitted industrial and commercial development in black neighborhoods while protecting the residential-only character of white ones. Previously integrated communities were divided by segregated housing projects that were part of President Franklin Roosevelt’s New Deal initiatives. Strategic school redistricting and the construction of the federal interstate highway system exacerbated the problem. Meanwhile, those who tried to create new, integrated developments were unable to secure funding, faced sudden zoning reclassifications, and had proposals rejected outright by local communities and government entities alike.

While the Fair Housing Act—signed into law 50 years ago this April—prohibited racially-based housing discrimination, the patterns of segregation were already deeply entrenched by the time it was passed. We are still seeing these effects today. Rothstein concludes that segregation is the primary factor in the massive disparities in wealth, education, crime rates, health, and upward mobility between black and white citizens. By the same token, greater integration would provide enumerable benefits; a recent report on the cost of segregation in my city determined that an increase in integration would mean a 30 percent drop in the homicide rate, an $8 billion increase in the region’s gross domestic product, and $6 billion increase in residential property values in Chicago.

In order to remedy our high levels of segregation in the United States, Rothstein argues that it’s critical to understand the government’s large role in creating it. Attributing segregation to the actions of certain individuals absolves everyone else from taking responsibility. Instead, acknowledging our own government’s role makes the issue one of collective responsibility for all U.S. citizens.

There are no easy solutions for dismantling systems that have built up for more than 100 years. Rothstein proposes some remedies in the final chapters of his book, but acknowledges that it will take the actions of many to make a real difference. Those in the real estate industry are in a position to have a big impact as we work toward a more integrated society. Rothstein’s book is an excellent starting point for those who want to learn more about how we got here in the first place.

The 50th Anniversary of the Fair Housing Act

This review is part of Books in Brief: Lighting the Path to Housing Equality, the Weekly Book Scan’s series commemorating the 50th anniversary of the Fair Housing Act. Learn more about how fair housing makes us stronger at

Will CodeNEXT Spur Redevelopment in Austin?

Commercial Source Blog Feed - Tue, 12/12/2017 - 16:04

Today’s blog post is Will CodeNext Spur Redevelopment in Austin guest post is by Leigh Budlong, founder of Zonability. You can connect with her on LinkedIn or email her at

Austin continues to be one of the leading US real estate markets, as evidenced by its Top 5 ranking in the PWC Emerging Trends in Real Estate 2018 report.  New mid-rise buildings are popping up where there was just a small building, roads are under construction throughout the city and the downtown skyline is on the rise.

Proposed “CodeNEXT” changes, the name the city has given its re-writing of the zoning for the City, are in a hot debate with the second draft currently in review. Given Austin’s popularity with new companies, residents, and real estate development, is CodeNEXT going to be the catalyst for even more change? This piece strives to put the proposed CodeNEXT in context by analyzing an area I dubbed “The Triangle” (for its shape).

Real estate investment and development basics pertaining to this analysis:

  • Real estate and real property reflect the existing structures, land, and contracts associated with the parcel. While real estate is “immovable” is it “re-doable.”
  • A parcel is an identifiable piece of land – with or without improvements – that can be bought and sold with title assurances. The assurance part of the equation is essential to understand when thinking about investing and developing.
  • Restrictions can be public or private and are “invisible” except on paper. Private restrictions include deed restrictions. A prime example of a public restriction is city zoning.
  • Zoning is an ordinance set by a specific city. The general intention behind zoning is to create rules that enhance public safety, quality of life, and property values.
  • A district is an area defined by either a government agency or quasi-government agency that grants them authority. The reason this is key for real estate investment and development is a property can be subject to multiple districts.
  • A zoning district can be expressed as having “base” or “primary” controls and also be subject to “overlay” or “secondary” zoning controls. In Austin, the average parcel has 3.5 layers of zoning districts. CodeNEXT is attempting to reduce the number but there will still be some overlay zoning.
  • Property rights are given to the parcel – the dirt – through zoning whether that is public, private or both. There are instances where an existing structure is less valuable than the dirt; this is an economic concept about what contributes to value.
The Triangle: A Use Case

This interesting shaped block has frontage on Burnet Road, an area with plenty of marketed “redevelopment opportunities.” The question is will CodeNEXT make it a truly “hot” area to focus on for development like when the City of Austin rezoned Rainey Street from residential to central business district (CBD) zoning?







Here are some images, courtesy of Google Street.

I also added notes on a zonability map which uses “blue” to show commercial zoning.

The Triangle and CodeNEXT

Under the proposed September draft (of CodeNEXT), all of the parcels in the Triangle would have a single district called Main Street 3A, or MS3A for short. Zoning is known for its vibrant use of letter/numbers! The glaring differences between current and proposed zoning:

More height allowed under the new plan – 3 stories now vs. 5 stories
Larger buildings allowed under the new plan – greater land coverage ratios

By my rough estimate, the current structures are less than 20% of the size compared to what could be there under CodeNEXT.

So will the boost in potential be the catalyst to spur redevelopment? While “up zoning” may create the economies of scale needed for a mid-rise to pencil out, there are still other considerations in the game of real estate. This is a short list (certainly not exhaustive) of such aspects to consider:

  • For starters, how do the existing rents compare to rents for new construction?
  • Is it better to “add-on” or “tear down?”
  • What are current and projected construction costs?
  • How great is demand for new construction in the immediate area?
  • What is the supply of new construction coming on line in the immediate area?
  • Would there be a premium to buy out any existing leases?

The Triangle location is a mix of Community and Neighborhood Centers given the high volume of traffic on Burnett Road relative to Hancock Drive.

Austin, TX 2017 Retail Annual Report

Element Community Retail Neighborhood Retail Rents $24.80 $21.00 Vacancy 5% 6% Expenses Triple Net Triple Net Going in Cap Rate 6.5% 6.5% Direction – Year Over Year Asking rent Up Up Going in Cap Rates Down Down

“Despite a relatively tight market, developers are being very selective about new and speculative construction, and we expect this market to remain strong.”

– Integra Realty Resources – Austin

In Summary, the Triangle Analysis Reflects
  • CodeNEXT may create new opportunities for real estate development but whether or not it is a catalyst to spurn redevelopment is only one piece of the puzzle.
  • Individual considerations will impact the timing for when owners decide to sell or transform their properties.
  • Even if a property doesn’t get redeveloped, owners seeing redevelopment and thinking about their property’s position may spring for upgrades to their buildings out of concern of “not keeping up” or just to make their properties look better.

The upward direction of commercial rents and downward vacancy rates combined with Austin’s low unemployment and increased population have spurred new construction – without CodeNEXT. Once this major subject is finally settled, I suspect the decision to develop or not will be influenced by the real estate and business cycle. We may have to wait to see just how influential CodeNEXT is – or isn’t – on what gets built and where.


The post Will CodeNEXT Spur Redevelopment in Austin? appeared first on CRE Blog | CommercialSearch.

Top 12 Landlord Major Missteps that Can Slow or Derail Your Leasing Efforts

Commercial Source Blog Feed - Tue, 12/05/2017 - 16:32

Today, David Morris, CCIM runs down the Top 12 Landlord Major Missteps that Can Slow or Derail Your Leasing Efforts. David is a Sales Executive with Xceligent and former president of St. Louis CCIM, SIOR, Missouri Commercial Realtors, and St. Louis Commercial Realtors chapters. Connect with David on LinkedIn: DavidMorrisCCIM



  1. Signing leases without a strategic plan. A whole-building approach to leasing is critical to achieving the best rates and best tenants.
  2. Leasing the best space first. This can devalue the rest of the building’s available space, such as leasing half of a floor with a better view, or leaving small spaces vacant.
  3. Failing to ensure each tenant’s lease terms support the long-term investment objectives for repositioning or disposition.
  4. Faulty termination clauses that allow tenants easy “outs” can leave you, the landlord, with unamortized costs from tenant improvements (TIs), incentives, and fees.
  5. Hiring a broker without the right specialization – experience working with properties of a similar type and location.
  6. Failing to investigate the tenant’s finances, business plan, and revenue stream, and failing to require a substantial security deposit.
  7. Allocating capital incorrectly; spending money on things that won’t help lease the building, e.g. replacing sconces on the exterior of a building. A better use of funds might be replacing dated light lenses in a vacant space to refresh it. Ask, “Does my improvement help lease the building more quickly or at a higher rate?” before spending.
  8. Choosing incompatible tenants. Placing a staid law firm next to a bustling sales organization or a come-as-you-are creative firm is bound to create friction.
  9. Pricing the building incorrectly. Holding out for an extra nickel or dime in pricing may keep the building stuck in vacancy limbo.
  10. Failing to evaluate the competition. Ruthlessly compare your building’s pros and cons against competitors – aided by your broker – to determine your unique selling points and high-impact improvements.
  11. Forgetting the small stuff. Prospective tenants can be turned-off by the little things, so keep empty spaces free of debris, lights working, and blinds open. Common areas should be clean, parking lots and signs in good condition, and consider investing in seasonal plants at the entrance points.
  12. The biggest mistake? Lacking a story. Your building should have a compelling message that differentiates it from the competition.The building’s story should be tailored to a key tenant driver, such as visibility, tech infrastructure, or accessibility. Some landlords develop a theme or foster tenant clustering.  The “story” is a creative element of a leasing business plan that many brokers fail to develop. Your broker should collaborate with you to identify and enhance your property’s unique story, then use that story’s powerful potential to drive tours and contracts.

The post Top 12 Landlord Major Missteps that Can Slow or Derail Your Leasing Efforts appeared first on CRE Blog | CommercialSearch.

Save the Eulogy! Retail is Not Dead!

Commercial Source Blog Feed - Mon, 11/27/2017 - 10:11

Today’s post warns you to Save the Eulogy! Retail is Not Dead! The author, Misty Belsha, is a Director of Analytics for Xceligent’s Kansas City market. Connect with Misty on LinkedIn: Misty Belsha





We’ve all read reports indicating the sky is falling for shopping centers and malls. Then, a contradictory report is released the following day stating the retail market is just fine and we need to adjust the way we’re looking at it. Well, which is it?

To simplify, retail is the optical illusion of commercial real estate. From one perspective, media reports paint the picture of a lifeless and stale retail industry. However, when you look from another angle, statistics and factual reporting from credible sources throughout the country cite new restaurants, specialty stores, and non-traditional retail tenants are driving growth in the retail sector.

According to the August 2017 U.S. Census Bureau report, estimated retail sales totaled more than $1.2 billion dollars in 2Q17 with online sales accounting for only 8.9% of that total. However, year-over-year sales volume in the eCommerce division increased by 16.2 %.

You’re probably wondering what’s fueling this rise in eCommerce sales. My guess is no one wants to put “real” pants on and walk into a store. Or, maybe that’s just me…. Joking aside, convenience is a major factor. The modern American lifestyle is so busy we’re always seeking to find balance and enjoy a little downtime. After a typical work day (or week), taking children to activities, finding time to prepare meals, etc., the thought of even walking into a store is enough to bring on stress hives. For many, standing in checkout lines, fighting crowds, and digging through unorganized racks isn’t the way they want to spend what little free time they can scrounge up. Instead, after finishing what feels like a 29.3-hour day, changing into their most comfortable sweats, plopping onto the couch, and ordering nearly anything a heart desires from their snazzy smartphone is much more appealing. Heck, even groceries are available online now! Beyond the convenience it offers, additional advantages to online shopping include price comparisons, increased variety, no crowds, and less impulse shopping. Did I mention you also don’t have to wear “real” pants?

Though online shopping has become increasingly popular, you can save your eulogy. The need for brick and mortar stores isn’t dead, but traditional retailers are having to step it up to stay in the game. You’ve heard the saying “go big or go home”? That’s exactly what stores are going to have to do to survive in the evolving world of retail. But, adapting requires some creativity. Landlords have kept vacancy rates low by backfilling large big-box type spaces with non-traditional uses such as gyms, postal services, churches, and daycares. Specialty stores such as Spirit Halloween are also backfilling large spaces, often previously vacated by national tenants like Gordman’s. Others have even converted the space to mini storage. The rules of retail have changed.

What could traditional retail stores offer that would outweigh the benefits of online shopping? Plenty, actually – if they’re willing to make changes that will appeal to the modern shopper. If consumers are going to give up their precious free time to visit a store, they expect the trip to be worth their while. Maybe they just ran in for yoga pants, but that’s not what will keep them coming back. People want the experience, social interaction, and atmosphere that you can’t get from shopping online. This includes upbeat music, entertainment, and energetic, attentive staff that will provide personal service. In-store shopping is often used as a social gathering where friends and family meet to catch-up and browse, grab a bite to eat at nearby restaurants, and/or just enjoy a fun day.

Like an optical illusion, when you look closer or approach it from a different perspective, we see that brick and mortar is not dead. While true that stores that aren’t evolving their business model to meet modern expectations will lose relevance and be left behind, those who adapt will continue to thrive.

The post Save the Eulogy! Retail is Not Dead! appeared first on CRE Blog | CommercialSearch.

Repurposing Commercial Real Estate

Commercial Source Blog Feed - Wed, 11/15/2017 - 14:56

An empty office building doesn’t have to remain an office building — and an old supermarket doesn’t have to continue to house groceries. As the needs of communities evolve, the way people use older buildings can also evolve. Repurposing commercial real estate gives you the opportunity to revitalize an older building and breathe new life into a neighborhood or town.

Revitalizing commercial real estate can have many benefits for the area around it. Although the definition of abandoned property varies from state to state, it has a similar effect across the U.S. For example, buildings within a certain distance of abandoned property are likely to see a decrease in value. In some cases, buildings within 250 to 1,500 feet of an abandoned property can have their values negatively affected by the presence of the vacant real estate.

Abandoned and unused buildings also have an adverse effect on quality of life for people in the area. In Pittsburg, for example, crime tends to be 15 percent higher within 250 feet of a vacant property. Empty and unused buildings also cost cities money that could be better spent on other things. Philadelphia spends more than $20 million each year maintaining vacant buildings, for example.

One solution to the abandoned building problem is to transform former office buildings, warehouses and stores into in-demand properties. Repurposing commercial real estate is a good idea for cities that have plenty of empty buildings and a high demand for housing. It can also be a cost-effective move for developers and others in the commercial real estate sector. It often costs less to repurpose an existing structure than to build a new one.


Finding Property to Repurpose for Your Needs

Whether you’re transforming an unused warehouse or a vacant office building into a residential property or mixed-use building, there are a few things to keep in mind. You may need to get the support of area community members and residents before you purchase the property and make any changes.

Depending on the age of the building and its zoning, you might need to spend some time and money to change the zoning or making sure your project meets historical code requirements.  Pre-Due Diligence can help you quickly understand the amount of time and effort that may be required to make your project a reality.


Zoning and Ordinance Considerations

Zoning determines what can be developed and dictates the acceptable uses for a property. A city or municipality usually creates a zoning plan to direct what how development will occur. For example, buildings zoned for industrial purposes are often located in the same general area, while residential buildings are usually situated near each other.

Although specific zoning categories might vary by municipality, there are several broad categories:

  • Commercial. Within the commercial zoning category, there are many subcategories determined by the use of the property and the businesses located in it. Office buildings, hotels, nightclubs, restaurants, shopping malls and some apartment buildings are usually zoned as commercial.
  • Industrial. Industrial zoning is similar to commercial zoning in that it has several distinct subcategories. Considerations that inform zoning include noise, pollution and how close the building can be to other properties. Industrial zones usually also have higher setback requirements, meaning the buildings need to be a certain distance away from the road or property line.
  • Residential. Buildings zoned for residential use include any type of property where people live, including single-family residences, duplexes, co-ops, condos, apartments and trailer parks. Zoning determines how many separate buildings are allowed and whether a manufactured home can be located on the property. Residential zoning laws have a say over which animals can live on the property. For example, it’s usually against the law to keep cows or chickens on a residential property, but cats or dogs are okay.
  • Agricultural. You won’t likely find many properties zoned for agricultural use in a developed city. Agricultural zoning is usually used to limit the number of non-farm properties in a primarily agricultural area.
  • Combination. Combination zoning is any type of zoning that combines two categories into one. You might find buildings that are zoned for both commercial purposes and residential, for example.
  • Historic. In some cases, older buildings might have a historic zoning or be on the National Register of Historic Places, which affects what you can do to the property. Historical buildings often come with a tax credit or incentive to encourage owners to rehabilitate them.

If you intend to renovate or repurpose an existing property for a use that’s not consistent with its current zoning, you’ll most likely need to apply for a change of zoning or zoning approval. You might also be able to request a zoning variance, which would let you use the property in a way not currently specified by the zoning, without changing the zoning itself.

The process for changing zoning is likely to vary slightly from area to area. You will usually need to complete an application and pay a fee. A hearing is typically part of the process. During the hearing, residents and business owners can express their opinions and argue for or against changing the zoning.


Historical Code Considerations

Buildings of a certain age — usually at least 50 years old — might end up on the National Register of Historic Places. The register seeks to protect and preserve historic and archeological resources in the U.S.

If your building is on the National Register or is otherwise considered a historic property, you are limited in some ways when it comes to renovating it. But working with a historical property can open the door to some opportunities for you.

For example, properties on the National Register often qualify for federal tax credits and grants for their rehabilitation and preservation. State tax incentives and grants might also be available.

You can do what you want to the historic property so long as you aren’t taking any money from the federal government and as long as your state doesn’t have specific rules or regulations concerning the preservation of the building. It’s a good idea to review the laws in your state before you start any projects. You may need to preserve the exterior of the building and limit your changes to the interior.


Location and Size

The property’s size and location will both factor into the success of your repurposing project. In real estate, few things matter more than location. You might be able to get a good deal on a property in an out-of-the-way neighborhood or an underused section of a city. But that might not be the best option for you.

For example, if you transform a warehouse in an industrial part of a town into apartments, but there are few amenities in that area, you might struggle to find tenants. On the other hand, if you transform a warehouse in a worn-out and neglected area into a mixed-use property complete with restaurants, cafes, a supermarket and housing, you’re much more likely to attract people.

Size also matters. Some industrial properties are huge, which might make them prohibitively expensive for the average developer or small business to manage. The larger the property is, the more it will cost to purchase, renovate and maintain.


Tips for Revitalizing Commercial Real Estate

Once you’ve found a commercial property you think is ideal for renovating, how do you decide what to use it for and how to do you prepare it for that use? There are some things to consider when repurposing commercial real estate — including playing to the strength of the building and its amenities and dealing with the inevitable setbacks and delays.



One way to determine how you’ll repurpose a building is to examine the surrounding area carefully. If you intend to renovate a shuttered school in a residential area, one option might be to transform at least part of the school into condos or apartments. You might also include retail shops and restaurants in the building to make it more appealing to potential tenants.

Paying attention to the structure of the building and its needs will help plan a renovation project:

  • Play to the Building’s Strengths. Older buildings have lots of architectural details and features you just won’t find in newer construction. Those details are usually the things tenants desire. For example, if your building has lots of old wood and exposed beams in the ceilings, keeping those intact will be a selling point with tenants. The same goes for high ceilings, large windows and pressed-in ceilings and molding.
  • Natural Light Considerations. Most people enjoy working and living in environments that provide abundant natural light. The great thing about older warehouses is that they often have large windows that let in plenty of sunlight. Some buildings, such as older office buildings and schools, might not have enough natural light or might have interior areas with no windows at all. If that’s the case, you might need to rethink how you’ll upcycle the building. It might be better suited for a different purpose or you might want to pass on it entirely.
  • HVAC, Plumbing, Electrical and Tech Updates. Although repurposing an older building is often less expensive than building a new one from scratch, there are cases when the required updates add to the cost significantly. If a building lacks adequate plumbing, cable, internet connections or electricity, it might cost you a pretty penny to update it. Along with a plan for installing any necessary electrical, HVAC, plumbing or other tech connections, you need to have a plan to keep them up-to-date and functional.


Finances and Loans

Another thing to consider when planning a makeover for an existing property is how you’ll finance the renovation. Although you might be able to cover the cost of renovating the property out of pocket, taking out a loan for renovations or updates might help you manage your cash flow better.

Commercial real estate loans are available in a variety of configurations. If you already own the property, you might decide to apply for a construction or renovation loan to cover the cost of the project.

If you don’t yet own the property, a commercial mortgage — with additional funds to cover the cost of the renovation — might be the way to go. Whether a mortgage is the right option will depend on how much you have to put down and your credit history or financials. Depending on the size of your down payment or your credit history, you might not qualify for a loan big enough to cover the acquisition cost and the renovation cost.

Another loan option that might be right for you is a commercial bridge loan. Usually, commercial bridge loans are reserved for borrowers who have completed similar real estate projects and who have some experience under their belts.  The loan is designed to give certain borrowers a leg up in the negotiation and purchasing process. If the seller of the property prefers all-cash buyers, applying for and obtaining a bridge loan can give you the assets you need to compete even if you don’t personally have the cash on hand.

Once you purchase the property, you should be able to refinance the bridge loan into a conventional commercial mortgage. Compared to your typical mortgage, the terms for bridge loans are very short — often less than one year. The interest rates offered on these loans also tend to be considerably higher.


Dealing With Setbacks

When you’re renovating an office or warehouse, something is bound to come up. If there’s one thing you can count on in commercial real estate, it’s that there will be a setback or two. Although you won’t be able to plan for specific delays, having some room in your timeline and budget for unexpected issues lets you roll with the punches.

For example, it’s a good idea to plan on an additional 10 or 20 percent to the expected cost of the project. That way, you won’t be scrambling to make up the difference if there are unexpected costs or delays.

It’s also a good idea to add some time to the timeline. Leave space between your anticipated completion date and the target completion date. If your project ends up taking longer than expected, you won’t need to reschedule grand openings or other events.


Examples of Repurposed Commercial Real Estate

Repurposing commercial real estate isn’t a new concept. In fact, there are great examples all across the country of old buildings given a new lease on life:

  • Bok School in South Philadelphia. Bok is a former technical high school located in South Philadelphia. The school closed for good after the 2012-2013 school year and the building sat empty while the school district looked for a buyer. In 2015, a development company purchased the school with the goal of making it into a “creative hub.” One of the first projects to come to Bok was the opening of rooftop bar called Le Bok Fin (after Le Bec Fin, a renowned restaurant in the city). Slowly but surely, new tenants began to fill in the empty classrooms at the school, including a wedding planning company, hair salon and a furniture design company.
  • The Pearl in San Antonio, Texas. The Pearl was once one of the largest breweries in Texas. Today, it’s a massive mixed-use community with 13 retailers, residences, a hotel and a farmers’ market. You can still find Pearl beer at the complex, but today it’s brewed in Fort Worth.
  • The Cotton Gin Factory in Atlanta. Located in the Atlanta Metro area, the Cotton Gin Factory was built in the 19th century. It’s made up of 12 buildings and sits on 12 acres. Two developers bought the property in 2010 for $8 million and transformed it into an arts hub with performance space and artists’ studios.
  • Alehouse Inn in Portsmouth, New Hampshire. The Alehouse is another former brewery that’s been transformed for the 21st century. The hotel is located in the old warehouse for the brewery, which closed in 1917 thanks to Prohibition.
  • The Century Building in Pittsburgh. The Century Building is a 12-story, 80,000-square-foot former office space in the Cultural District of Pittsburgh. In 2012, the building was transformed into an apartment complex with 60 units. Twenty-eight of the units were designated as “workforce” units and are now rented by people who earn between 60 and 120 percent of the median income in the city.Developers completed the renovation using a mix of grant money from private organizations like the Richard King Mellon Foundation plus funding from Pittsburgh Cultural Trust and federal low-income tax credits. It received the Jack Kemp Workforce Housing Models of Excellence Award in 2012 for providing housing options that meet the needs of the modern workforce.
  • The Arcade in Providence, Rhode Island. The Arcade is one of the country’s oldest indoor shopping malls. Its redevelopment project kept the first floor as a shopping center but transformed the second and third floors in micro-lofts, which are small and energy-efficient living spaces. The first tenants moved into the 48 micro-lofts in 2013 and demand has been high ever since, despite the fact that the lofts don’t include stoves or many of the other amenities people typically look for in a residence.


Search for Your Property on CommercialSearch

How do you plan on repurposing a commercial property? Whether you hope to turn an office space into apartments or a warehouse into artists’ studios, browse the listings at CommercialSearch and find your next real estate project today.

The post Repurposing Commercial Real Estate appeared first on CRE Blog | CommercialSearch.

Innovation in Retail

Commercial Source Blog Feed - Tue, 11/07/2017 - 10:19

Neil Golub is Sales Executive with Xceligent in the New York Tri-State area. Connect with Neil on LinkedIn: NeilGolub.

Our New York Next Generation ICSC Committee assembled a diverse group of companies to discuss “The Emergence and Impact of Disruptive Retail Concepts”. As retail faces headwinds with economic challenges and changes in consumer behavior, it was insightful to hear from these companies who have sprouted over the past few years by listening and adapting to the market.

Represented were real estate directors from Peloton, Bonobos, Honeygrow, Kidzania and Appear Here, a platform focused on short-term space. The common theme among these groups was catering to a younger demographic and being able to serve their needs. Today’s consumer is now accustomed to shopping online. The storefront needs to catch up and match the internet by adopting technology. The shopper doesn’t have time for someone to go in the back and see if a product is in stock. Andrew Neelon from Bonobos described their shopping environment as an e-commerce transaction that takes place within 4 walls of their brick n mortar, all ordering taking place on an iPad. Honeygrow is also incorporating tech by having customers place orders via touch-screen.

Outside of technology, there was a lot of discussion around pop-ups and brands going direct-to-consumer. Ryan Engel talked about how Peloton began “popping up” back in 2013, doing 1-2 year lease deals so they could begin educating the market. Appear Here has built a platform catering to the pop-up market by allowing retail brands to go direct to consumer. There are too many financial and operational challenges in finding the right location, which also requires a long-term commitment. Popping up allows for the brand to test the market. In addition, landlords need to innovate and think differently. Elizabeth Layne, Appear Here’s CMO, gave a great analogy stating “the best landlords think like Editors. Owners need to keep the content fresh and up to date and wanting the consumer to come back for more”. Simon has been a leader in this space. Cynthia Kernan of Westfield moderated the panel and mentioned they’re working on a DTC area in Century City, allowing for online brands to reach consumers which will consistently rotate.

The discussion also covered changes in lease terms, desired co-tenancy and creating quality experiences for their customers. My main takeaway.. if you’re a retailer – think about how you’re speaking the language and catering to the next generation. What worked yesterday may not work tomorrow. How are you utilizing your space and technology to build your brand and customer loyalty? Perhaps if you’re still handing out paper rewards cards, you may want to explore another way to have them return.

The post Innovation in Retail appeared first on CRE Blog | CommercialSearch.

Tips for Conducting a Successful Property Tour

Commercial Source Blog Feed - Thu, 10/19/2017 - 14:48


Today’s guest post is by Dave Morris, CCIM, Sales Executive with Xceligent and former president of St. Louis CCIM, SIOR, Missouri Commercial Realtors, and St. Louis Commercial Realtors chapters. Connect with David on LinkedIn: DavidMorrisCCIM



As a listing broker, you spend a significant amount of your time prospecting for new tenants for your listings.  Once you’ve identified a prospect, you want to be sure to present your listing in the best possible way.  The initial property tour is the best time to highlight the properties’ benefits and address any concerns they may raise.  Do not miss this opportunity by allowing cooperating brokers and/or prospects to tour a space without you.  Here are some tips for conducting a successful property tour.


  • Be knowledgeable about the space and building (building specs)
  • Research the company and individuals who will be touring the space
  • Conduct research on the company’s industry to understand recent performance and long-term expectations
  • Get the space in showable condition. Try to get the landlord to demolish any functionally obsolete space and/or remove ugly carpeting or furnishings
  • Confirm how much time you have to conduct your tour and how many people will be on the tour
  • If possible, reserve a few prime parking spots near the building
  • Bring property fliers, maps, demographics (retail), and floor plans

Pre-Tour Preparation:

  • Arrive early
  • Prepare the space by turning the lights on, opening the shades and adjusting the temperature in the space
  • Bring a small cooler with bottled water and some kind of snack like granola bars
  • Dress appropriately
  • Stage your tour (have a routine) so you know where you will meet, where you will take the prospect(s), and what you will tell them each time you stop

During the Tour:

  • Share information about the landlord and tell the prospect(s) that the owner is responsive and eager to make deals!
  • Be enthusiastic!!!
  • Keep things light…smile!
  • Make eye contact
  • Take notes on their requirements, comments, and questions to follow up afterward
  • Help them to visualize the space
    • Ask them to revise the space to the way they would need it built out
    • Ask them what departments would go where
  • If possible, take the prospect through some recently renovated space(s)
  • Highlight area amenities such as food options and nearby retail
  • Highlight ingress and egress
  • Have a few open-ended questions prepared
    • “If you could change two things about your current space, what would they be?”
    • “What’s the best thing about your current space?”
    • “What changes would you foresee making to this space?”
    • “What is going to influence a relocation the most?”
  • Determine next steps.  If a prospect doesn’t have a broker, be sure to tell them what the next step is and when they need to take action.

Follow up

  • Get feedback from the tenant rep broker
  • Call your client with the feedback (be honest)
    • Describe the tour and the prospect’s interest
    • Tell the landlord what you think it will take to make the deal
  • Consider sending an unsolicited proposal
  • For a larger prospect, send a small gift card (Starbucks, Golf Discount, etc.) to the cooperating broker
  • For a larger prospect, send something small to them so they remember you and the property

The post Tips for Conducting a Successful Property Tour appeared first on CRE Blog | CommercialSearch.

Outlook Remains Bright for Commercial Real Estate Despite Price Plateau Commercial Headlines - Fri, 09/29/2017 - 03:00

WASHINGTON (September 12, 2017) — Commercial real estate price growth in large markets is expected to flatten over the next year, but strong leasing demand and investor appetite in smaller markets should keep the sector on solid ground, according to the latest National Association of Realtors® quarterly commercial real estate forecast,

Backed by the ongoing stretch of outstanding job creation in recent years, national office vacancy rates are forecast by... Read More

NAR at NAIOP Commercial Headlines - Fri, 09/29/2017 - 03:00

NAIOP extends discounted pricing for the CRE.Converge conference to REALTORS®! 

NAR members qualify for discounts on registration, education, and project tours at NAIOP’s preeminent conference in Chicago, October 10–12. 

Hear from industry experts on topics ranging from global investment to smart construction, and enjoy keynotes from thought leaders... Read More

Technology, Inventory and Competition Among Firms’ Top Challenges: Realtors® Survey Commercial Headlines - Fri, 09/29/2017 - 03:00

WASHINGTON (August 22, 2017) – Keeping up with technology, maintaining sufficient inventory, competition from nontraditional participants and profitability are among the biggest challenges for real estate firms,  according to the National Association of Realtors® 2017 Profile of Real Estate Firms.

Conversely, for a third year in a row, the survey found the vast majority of firms have an optimistic outlook for the future of the industry’s growth. Although expectations have slightly... Read More

Commercial Real Estate Alert: Visual Story Commercial Headlines - Fri, 09/29/2017 - 03:00

The data in this visual presentation comes from the 2017 Commercial Real Estate Alert report. 

More Information

Instant Reaction: July Jobs Report Commercial Headlines - Fri, 09/29/2017 - 03:00

Employment gains in restaurants, professional services, and health care translates into continued demand for commercial office space. 

2017 NAR Commercial Member Profile Commercial Headlines - Fri, 09/29/2017 - 03:00

Download (PNG 3.12MB)

This infographic highlights findings from the 2017 NAR Commercial Member Profile.... Read More

Realtors® Report Finds 11 Percent Increase in Commercial Member Income, 19 Percent Increase in Sales Transaction Volume Commercial Headlines - Fri, 09/29/2017 - 03:00

WASHINGTON (August 2, 2017) – Commercial real estate markets continue to improve, with Realtors® specializing in commercial real estate reporting both an increase in member’s gross income and sales volume, according to the National Association of Realtors® 2017 Commercial Member Profile.

The annual study's results represent Realtors®, members of NAR, who conduct all or part of their business in commercial sales, leasing, brokerage and development for land, office and... Read More