Features

Tax Attorney Daniel Smith: When Law Firms Collaborate, Property Owners Reap the Benefits on Their Bottom Line

by Katie Sloan July 19, 2016

Traditionally, a commercial real estate owner would retain several law firms, each with its own area of expertise. One firm might handle development, construction, acquisition and leasing issues, while another firm would oversee contract disputes and litigation. Although it may have become conventional, this service model is losing its appeal. Law firms with mutual clients often fail to communicate with each other, sending mixed signals to the client and leading to inconsistent advice. As owners become more astute and the market for legal services grows increasingly competitive, owners can now demand that law firms seeking their business distinguish themselves from the competition. One-stop shop One of those distinguishing attributes is the ability of the firm or its real estate practice group to address an owner’s overall real estate needs, not just a specific function. This approach better enables the law firm or practice group to demonstrate their understanding of the owner’s business and commitment to achieving the owner’s goals. Some service-oriented law firms recognize this and have learned to provide value in practice areas beyond those for which they were hired. They are now looking to bring in additional professionals to ensure that their client-service teams have the expertise to …

July 19, 2016

San Francisco Remains Top Tech Market, But Cost of Living Boosts Other Metros, Says CBRE

by John Nelson July 14, 2016

LOS ANGELES — The San Francisco Bay Area remains the nation’s leading tech market, but the competition for talent is getting tougher as more highly skilled tech workers — especially Millennials — are flocking to cities where the cost of living is lower and tech jobs are plentiful, according to CBRE Group Inc.’s (NYSE: CBG) research report, “Scoring Tech Talent.” The annual report ranks 50 U.S. and Canadian markets according to their ability to attract and grow tech talent. To appeal to skilled talent at a lower cost of doing business, both new and expanding companies are establishing footprints in more affordable markets — including Nashville, Charlotte, Tampa, Seattle and Phoenix — leading to a rise in demand for office space and a decrease in office vacancy. “Tech talent markets share several distinct characteristics, including high concentrations of college-educated workers, major universities producing tech graduates and large Millennial populations,” said Colin Yasukochi, who authored the report on behalf of CBRE Research. “The robust entrance of Millennials into the labor pool contributed greatly to the growth in tech talent across all 50 downtown markets in our ranking this year.” Tech Talent Scorecard Established tech markets, namely the San Francisco Bay Area, …

July 14, 2016

Features Industrial Top Stories

Record Absorption Leads to Lowest U.S. Industrial Vacancy Rate of Past 30 Years, Says Cushman & Wakefield

by John Nelson July 12, 2016

NEW YORK — The U.S. industrial market has absorbed a record-setting 70.1 million square feet of space in the second quarter, up 6 percent from the same period a year ago, according to Cushman & Wakefield. Year-to-date, the industrial sector has absorbed 132.2 million square feet. The second-quarter figure marks 25 consecutive quarters of net occupancy gains for the industrial sector, with the current quarter’s absorption reaching a new cyclical high. Nationally, the industrial vacancy rate is currently tracking at 5.8 percent, the lowest level of the past 30 years and 270 basis points below the 10-year historical average. Additionally, 38 U.S. markets reported more than 1 million square feet of absorption during the second quarter, with 11 markets recording more than 2 million square feet of absorption. Kevin Thorpe, Cushman & Wakefield’s chief economist, says that despite a series of shocks to the U.S. economy this year and heightened uncertainty emanating from Europe, economic fundamentals remain mostly solid, which ultimately benefits the U.S. industrial sector. “We expect to see some headwinds form in manufacturing and exporting created by the stronger U.S. dollar, but other important industrial-related indicators, such as containerized traffic flows, transportation indices, and business inventories, demonstrate that …

July 12, 2016

Features Multifamily Seniors Housing Top Stories

NIC: Seniors Housing Occupancy, New Construction Sag Slightly in Second Quarter

by Jeff Shaw July 7, 2016

ANNAPOLIS, Md. — The average occupancy rate for independent living and assisted living properties in the second quarter of 2016 dropped to 89.7 percent, as new inventory outpaced absorption of units, according to a quarterly report from the National Investment Center for Seniors Housing & Care (NIC). The occupancy rate represents a decrease of 30 basis points from the prior quarter, and brings average occupancy back down to where it was a year ago. During the past three years, occupancy has averaged 89.8 percent. As of the second quarter of 2016, occupancy was 2.8 percentage points above its cyclical low of 86.9 percent during the first quarter of 2010. The skilled nursing sector saw the same drop of 30 basis points to 87.1 percent. Despite the lower occupancy rate the second quarter, annual asking rents for independent living and assisted living continued to grow, increasing 3.2 percent. This is an increase of 10 basis points over the first-quarter growth rate and 80 basis points over the previous year. It’s the highest rate since the second quarter of 2008, NIC reports. In skilled nursing, the asking rent growth stayed flat at 2.8 percent. Annual absorption for independent living and assisted living …

July 7, 2016

Features Multifamily Top Stories

Wanted: Tech-Savvy Apartment Managers to Boost Revenue

by Jeff Shaw July 5, 2016

Today’s apartment property managers wear a lot of hats. In addition to being responsible for leasing up residential buildings or knowing how to calculate a property’s return on investment, they must also maintain healthy relationships with their workers, owners and residents. Figuring out how to leverage technology is key to achieving this delicate balancing act. According to a 2015 survey by the National Multifamily Housing Council (NMHC), 37 percent of households within the United States rent versus own. That’s up from 32 percent in 2010. Approximately 26 percent of those who rent are under the age of 30. This shift from owning to renting by younger residents has changed the way the industry reacts to them. “It’s one of the interesting dynamics of the 21st century and has changed the way we and other management firms do business,” says Mark Zettl, chief operating officer of Chicago-based Waterton, an owner and operator of multifamily and hospitality assets across the United States. “While customer service and satisfaction have always been priorities, today’s managers are constantly being held to a higher standard — one that measures response times in minutes and hours rather than days,” says Zettl. “We’ve embraced the change because the …

July 5, 2016

Conference Coverage Features Top Stories

Seniors Housing Operators Share Their Secrets to Smart Growth at InterFace Conference in Chicago

by Katie Sloan June 30, 2016

CHICAGO — The U.S. economy may be stuck in low gear, but tactical and targeted growth strategies can produce outsized returns in the seniors housing space, according to a panel of property owners and operators who spoke during France Media’s InterFace Seniors Housing Midwest conference. The event, which took place June 21 at The Westin Chicago River North hotel, attracted 265 attendees from the seniors housing industry. Close attention to rental rates and occupancies boosts top-line revenue growth, said panelist Joe Solari, vice president of corporate development at Capital Senior Living. The Dallas-based company owns and operates 126 independent and assisted living properties. “We focus on buildings that are less than 90 percent occupied,” said Solari. Other successful growth strategies at Capital Senior Living include converting independent living units to those designed for a higher level of care, and the acquisition of stabilized communities in locales where the company already operates. “We can absorb these properties without almost any increase in corporate overhead,” said Solari. Moderated by Adam Heavenrich, managing director of Chicago-based Heavenrich & Co., the panel shared other effective corporate growth strategies. Participants included Bob Karn, executive vice president and CFO, Allegro Senior Living; Isaac Scott, principal, Anthem …

June 30, 2016

Features Top Stories

Food Halls Make Their Way onto the California Foodie Scene

by Katie Sloan June 28, 2016

There were food courts, then there were food trucks. Now, the latest trend to fill the needs of today’s fast-paced culinary crowd is the food hall. Though the Todd English Food Hall at The Plaza hotel in Manhattan is generally credited with starting this latest development trend, the idea of creating a large space with multiple vendors offering fresh, locally sourced fare, is nothing new to California. Pair that with a little natural sunlight and communal seating, and you have the recipe for success in the sun-worshiping state. “California has long suffered a dearth of quality fast-casual dining,” says Anthony Deen, creative director of branded environments for CBX, a New York-based creative marketing service that specializes in food halls, among other things. “Pretty much every neighborhood in California has one great cheap place to eat, but to get variety, customers have to follow food trucks around. Food halls will solve these problems.” Though the food hall scene has not yet penetrated every region of California, its presence is definitely felt up and down the coast. It started with classics like the Ferry Building Marketplace in San Francisco, Grand Central Market in Downtown Los Angeles and the Original Farmer’s Market, which …

June 28, 2016

Conference Coverage Features Illinois Midwest Multifamily Seniors Housing Top Stories

Non-Core Properties Present Best Buying Opportunities in Seniors Housing Today, Say InterFace Panelists

by Christina Cannon June 23, 2016

CHICAGO — What are the best buying opportunities today for investors in the seniors housing space? The answer begins with an understanding of the deals that are among the least attractive, according to veteran broker Ryan Saul. A property that is 99 percent full that trades at a 6.5 percent cap rate could hardly be called opportunistic because there is no upside, points out Saul, managing director of Chicago-based Senior Living Investment Brokerage. Instead, buying a property that is 75 percent occupied for $100,000 a unit with a broken management team in place presents real opportunity, he believes. “You can go in, turn it around and really add value so that you can sell it stabilized for a much larger premium.” Saul’s insights came during a panel discussion on the state of the investment market at InterFace Seniors Housing Midwest, which took place Tuesday at the Westin Chicago River North Hotel. The conference attracted 265 attendees from a cross-section of the seniors housing industry. Moderated by Ben Firestone, managing director of Blueprint Healthcare Real Estate Advisors, the investment panel discussed who’s buying, who’s selling and what’s driving deal velocity. In addition to Firestone, the panelists included Talya Nevo-Hacohen, chief investment …

June 23, 2016

Features Retail Top Stories

Wave of Store Closures Presents Opportunity to Reimagine Retail Spaces

by Christina Cannon June 22, 2016

The recent move by several national retail chains to close hundreds of their stores across the country creates a tremendous opportunity for shopping center owners, developers, communities and design professionals. This is a nationwide trend that reflects a shift in how we are shopping and living today. Property owners around the country are evaluating what to do with these empty big boxes. In years past, if a large retailer couldn’t be found, the space would be divided into two or three smaller retail spaces. This remains a viable option today in some cases. Expanding retailers with a store footprint of 10,000 to 20,000 square feet are also attracted to these locations. Breaking down the large boxes to mid-size footprints creates an opportunity for expanding retailers to open a new store in an established, mature location. However, with more cities encouraging mixed-use and vertical developments, owners are studying options to break out of the confines of the enclosed mall to create a multi-use environment. Such developments might include residential, hotel, shopping, dining and office uses, much like what is found on the vibrant streets of the world’s greatest cities. This forward thinking is redefining shopping centers and big-box retail spaces across …

June 22, 2016

Features Multifamily Seniors Housing Top Stories

Greystone: 5 Ways to Get More Out of Class B Seniors Housing Properties

by Christina Cannon June 21, 2016

There are a lot of ways to increase and unlock value in lower-quality seniors housing, according to the June 2016 Seniors Housing Market Trend Report from Greystone Real Estate Advisors. According to Senior Care Investor’s annual report, Class A properties reaped $248,500 per unit for assisted living and $243,300 per unit for independent living communities in 2015. Class B properties, comparatively, earned only $138,300 per unit for assisted living and $72,900 per unit for independent living. In 2015, approximately 60 percent of assisted living properties sold were Class B, while 40 percent were Class A. In independent living, approximately one-third of the properties sold were Class A, while two-thirds were Class B. In Greystone’s report, the writers distinguish three different factors — physical location, asset quality and operational performance — that set Class A and Class B properties apart. The report outlines five ways to boost value if a property is lacking in one of those measures. 1. Add amenities — Location is extremely important when it comes to the value of an asset, the report suggests. Since this factor is out of the owner’s control when disposing of a property, owners should focus on increasing the quality of the …

June 21, 2016

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