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The 2009 Chicago Roundtable was printed in edited form in the October issues of Shopping Center Business and Heartland Real Estate Business. The following is Part One of the complete transcript. Shopping Center Business recently held a Chicago Retail Roundtable hosted by the law firm Levenfeld Pearlstein. Despite a lackluster year for retail, turnout at the roundtable was robust and the discussion was again lively, offering a snapshot of activity within the market and a view of general industry trends. In attendance this year were: Adam Secher, Baum Realty Group; Peter Eisenberg, Clark Street Development; Peter Caruso, Intercontinental Real Estate & Development; Lew Kornberg, Jones Lang LaSalle; Marlon Stone, Katz & Associates; Richard Kahan, KB Real Estate; Marc Joseph, Brian Kozminski and Keith Ross, Levenfeld Pearlstein; Terry McCollom, McCollom Realty, Ltd.; Ben Wineman, Mid-America Asset Management; Jim Schutter, Newmark Knight Frank; Robert Rowe, Sierra Realty Advisors; Marc Siegel, SJS Realty Services; Ryan Murphy; SRS Real Estate Partners; Tim Thanasouras, Thanasouras Commercial Properties; Aaron Gadiel and Jonathan Payne, The Jaffe Companies; James Turner, The PrivateBank; Sy Taxman, The Taxman Corporation; Richard Dube, Tri-Land Properties; Glen Todd, U.S. Cellular; and Camille Julmy, U.S. Equities. SCB: How are retailers viewing the Chicago market …

Michael Mele Everyone is interested in self storage these days. At a time when most product types in commercial real estate are facing hard times, many are taking a look at this so-called “recession proof” investment. But like all product types, the self storage industry is feeling the pain of this economy as well. Self storage — or mini warehousing, as it was first called — was created in the late 1960s by land speculators who wanted to find a use for the parcels they bought that were not quite ready for development. As a way to help pay taxes and make the land self sufficient until development caught up to the area, they erected cheap steel industrial buildings mainly geared toward small businesses. The idea caught on, and the industry grew steadily through the 1970s. By 1979, there were 3,500 mini warehouses nationwide. The high flying 80s led to tremendous expansion in the industry. The buildings were becoming better, the facilities were getting larger and the properties were no longer relegated the edges of town or in industrial areas. Self storage facilities were now being built in major commercial and retail areas. Although most operators seemed profitable, the jury …

J. Scott Rae Buono According to the Work Design Collaborative, 40 percent of the American workforce will work outside the traditional office environment by 2012. Small business owners aren’t the only parties benefiting from this shift. As the American workforce becomes more and more dispersed, commercial real estate developers are starting to look toward serviced office center concepts, coming aboard as investors and adding a lucrative opportunity to their portfolios. The key to success for a serviced office center is to understand and keep pace with work style trends. Increasingly, companies are freeing employees to work when, where and how they want. This means rather than bringing all the workers to a central location, businesses are distributing work to their employees, but they need to provide a location where that work can be done. When a company finds someone with a required skill set who is hundreds or even thousands of miles away, relocating that person is no longer essential. And if that individual leaves and his replacement is in another city or state, no problem; work is no longer a place to go, it’s a thing to do, and it can be done from almost anywhere. The growth of …

Timothy Van Valen With vast amounts of land, financial and technical resources and access to trade corridors, New Mexico is a state of expansive opportunity for real estate developers. It’s also a state with some of the most aggressive incentive packages in the country. While the New Mexico Constitution generally bars the state and local governments from providing direct cash grants to private businesses or project-specific tax abatements, both of which are common in other states, New Mexico offers a plethora of incentives that can help facilitate real estate development. These incentives include industrial revenue bonds; Tax Increment Development Districts; infrastructure funds provided under the Local Economic Development Act; and the Investment Tax Credit. As with most states, New Mexico also offers numerous gross receipts and income tax incentives, particularly for the film, renewable energy and aircraft industries. It also provides a generous job-training program for qualifying businesses. Industrial Revenue Bonds For substantial commercial projects, one of the most commonly used economic development incentives in New Mexico is an industrial revenue bond issued by a county, municipality or the New Mexico Finance Authority. While obtaining an IRB requires a developer to navigate the political process, it has been used for …

The 2009 Southeast Retail Roundtable was printed in edited form in the October issues of Shopping Center Business and Southeast Real Estate Business. The following is Part Two of the full transcript of the event. SREB: Hazel [Dennis], are you seeing activity in Macon among tenants? Are they looking for better spaces in centers? Hazel Dennis: Tenants were looking 2 to 3 years back for something but couldn’t get from the market they’re currently in to the market they wanted to be in at the price they wanted. A number of these were self-funded, but the ones that were dealing with the banks, one of the things that was helping us with our deal time and shortening it a little bit is that the bank is guaranteeing an interest rate for a shorter period of time; it’s put a little bit of pressure on the tenants to make up their minds. Before, they knew that they could get a good interest rate forever. It’s helping a little bit from an unexpected side of banks. We’re seeing tenants like Dollar General very active in the market. SREB: As a tertiary market, does Macon have a lot of vacant space in and …

The 2009 Southeast Retail Roundtable was printed in edited form in the October issues of Shopping Center Business and Southeast Real Estate Business. The following is Part One of the full transcript. Recently Southeast Real Estate Business hosted its annual Southeast Retail Roundtable at the offices of Arnall Golden Gregory at Atlantic Station in Midtown Atlanta. The attendees at the 2009 Southeast Retail Roundtable were Christopher Decoufle, CB Richard Ellis; Hazel Dennis, Fickling & Co.; Steve Gunning, SRS Real Estate Partners; Alan McKeon, Alexander Babbage; Robert Mimms and Brad Shoemaker, Mimms Enterprises; Bill Read, Developers Diversified Realty Corp.; Abe Schear, AGG; Reece Stead, Stead Retail Group; and Marc Weinberg, Shopping Center Group. SREB: Chris [Decoufle], give us an update on the investment market here. Christopher Decoufle: There are certainly trades out there. We’ve traded a couple deals this year. We’re working on about $400 million in deals which we think have an opportunity to trade, but in the current climate, even if you have a willing buyer and seller, it can be challenging. The activity is driven by pricing that investors can start to sink their teeth into. If you look at the seller pools, it’s not developers. That group …

Wally Harding Depending on who you talk with, the troubled commercial real estate situation is continuing its downward spiral, approaching the bottom or has bottomed out and will begin recovery late this year. A look at today’s market paints a picture of either a sunny ray of hope or continued grey clouds of financial woe and despair. The problem is not money. There are more than ample funds sitting on the investment sideline. This money has been there for months, and new investment funds are being created by numerous groups that hope to take advantage of someone else’s problem assets. Loan money is also piled high in the vaults of life insurance companies, banks, credit unions and investment banking groups. By virtue of the amount of money waiting to be utilized and the number of new funds being organized, it’s safe to say the bottom may be near. Should it be invested now? In 6 months? In late 2010? The problem lies with lending collateral (product), conservative underwriting, lack of sales (comparable data for appraisers and valuations), falling rental rates, lack of borrower liquidity and over-leveraged existing loans with near-term note repayment dates. Adding capital ratios to the picture, you …

Tim Ehrhart Business owners in the southeastern United States are all too aware of the looming threat posed by hurricanes. While the 2009 season has been comparatively mild so far, the economic downturn has thrown new exposures into the mix that business owners may not have considered as elements of hurricane preparedness. As is the case throughout the country, the economic downturn has dealt a substantial blow to the commercial real estate market in hurricane-prone states. With numerous commercial properties standing vacant, this year’s hurricane season presents a new level of risk not only to the owners of these vacant properties, but to the businesses operating nearby. Understanding the exposures vacant properties create for surrounding businesses during hurricane season is crucial for business owners looking to protect their assets. Taking precautions before a hurricane hits will position local businesses to survive both natural and economic disaster. In the event of a severe storm, debris is one of the biggest hazards a vacant property poses to surrounding buildings. Structures with large windows, like car dealership showrooms or contemporary office buildings with extensive glass paneling, are both the most vulnerable and the most hazardous to surrounding properties. The contents of abandoned buildings …

Joe Lewis The reasons that people choose to occupy one piece of real estate over another are legion. The usual suspects are location, amenities, economics and improvements — quantifiable attributes that can be explained in a memo to the board or to the boss. Most buildings on a prospective tenant’s short list will be fairly equal in these left-brain reasons for occupancy, but there are simply not many unique reasons to choose one building over the other. There is one unusual and indefinable attribute that prompts prospective occupants to choose one place over another. People speak of it in unquantifiable terms that are often expressions of feelings — “I love the feel of this place; I feel at home here” — rather than analytics. Although these are not the typical comments one could write in the memo to the board, the real reasons for selecting one building over another are emotional. Basically, marketing is a connection with the buyer. In a market where occupancy is 95 percent, this is really not an economic issue. As long as the building operator matches the competition, occupancy will in his property will remain at an acceptable level. However, in a market where occupancy …

Jonathan Christianson Ownership of real property consists of a bundle of rights and a bundle of obligations. Anyone who owns a residence knows the basic truth of this statement when, from the comfort of their living room, they sign the property tax or casualty insurance check. In this increasingly complicated world, most individual investors continue to hold title to investment property in their individual names. Apart from paying for the property, the owner’s obligations include maintaining the property and ensuring the property is not a nuisance, paying property taxes and assessments, regulating access to the property, preparing and executing leases, collecting rents, managing tenant deposits, paying for tenant improvements, ensuring that tenants maintain adequate liability and casualty insurance, servicing mortgage debt, participating in the activities of local government and sometimes prosecuting or defending legal actions arising out of the sale, transfer use or occupancy of the property. Of course, few property owners handle all of these tasks personally. An owner will usually employ a variety of professionals to manage the day-to-day operations. Even though many tasks may be delegated, a significant failure on the part of the owner to continue to meet these obligations or to adequately respond to potential …