By Michael Merino, CCIM, SIOR Fledgling entrepreneurs, owners of accounting firms, machine shops, print shops, distribution companies, dry cleaning establishments or any other small businesses face the question of whether to lease or own the property housing their business. Unfortunately, for those seeking a quick fix, there is no “right” or “wrong” answer. A variety of factors pertinent to the individual business and the owner’s objectives, as well as local market factors, must be taken into account before an informed decision can be made. The company’s growth potential and future sustainability are two of the principal factors influencing the lease versus own decision. If the business is expected to grow dramatically over the next three to five years, owning is probably not a good option. By leasing, the entrepreneur avoids the prospect of purchasing a building that is too large and finding itself stuck with (costly) empty space. Alternately, the business may stumble by purchasing a building that only accommodates current space needs, which will be too small in a few years. Availability of flexible lease terms is key to an optimal leasing situation. Landlords in many markets offer a long-term lease of 5 to 10 years with a clause …
By Chris Meske and Jeff Muhlbach Landscape architects, architects, planners and developers nationwide are being challenged to change the way they design and build projects. Mixed-use and higher density developments have become more prevalent in the urban landscape as city cores and inner ring suburbs seek to stay vital by promoting infill and redevelopment opportunities. Communities are revising and rewriting zoning ordinances and design standards to allow for the development of more vertical and mixed-use projects. Strategies such as shallower building setbacks, fewer restrictions on building height and creative formulas for shared parking shed the statutes of traditional layer-cake zoning that have brought about the sprawling, uninspired suburb. This revolution in the way developers, designers and municipalities alike look at their projects comes at a time when the building industry is rethinking their approach to design in order to incorporate more environmentally sensitive and energy efficient systems. Together these objectives form a philosophy that is being adopted in all reaches of real estate development. For professionals in the allied industries, the guidelines set forth by the LEED (Leadership in Energy and Environmental Design) rating system serve as a valuable resource, even when full certification might be out of reach. Local …
By Dan Marcec It’s one of the most recognizable brands in the United States, and possibly the most well-known of its kind in the world. You’ve seen it on television, in the workplace, on t-shirts everywhere and in the hearts and minds of millions. Coca-Cola? McDonald’s? These brands are popular — even ubiquitous — but they don’t hold the sentimental value represented by the Blue Star of America’s Team: the Dallas Cowboys. As the National Football League (NFL) retains a stronghold on America’s professional athletics market, the Cowboys are possibly the most recognizable sports organization in the U.S. Thus, when the decision came along to build the new Dallas Cowboys Stadium just outside of Dallas in Arlington, Texas, the Cowboys’ organization — led by owner Jerry Jones and his family — and its real estate team were compelled to undertake a careful balancing act in order to develop the largest and most technologically advanced stadium in the NFL while retaining the lasting image of their former home, Texas Stadium, and the rich tradition that the team has enjoyed over its storied history. In With The New, But Not Out With The Old A change of pace is always welcome in …
By Kristina Paider Investors continue to have a more favorable outlook for West Coast properties versus the national average. This is due primarily to the high barriers to entry on the West Coast, where coastal property is at a premium — Hawaii at the extreme with very restricted development. The West Coast is poised with strong economies such as Portland, Seattle, Los Angeles, San Diego and all Hawaiian cities, each generating strong demand for leisure and business travelers, including group demand. Western U.S. Hotel Sales Volume On Par with U.S. Trend The United States’ year-end hotel transaction volume in 2007 reached $45 billion, the fourth consecutive year of record hotel sales. This marks a 38 percent increase over the 2006 total. Portfolio deals dominated the investment landscape in 2007, accounting for 71 percent of the volume, with hotel mega-deals — deals valued at $600 million or more — as the main driver. Often private company buyouts, these mega-deals alone contributed to $23 billion in transaction volume. In addition, Hilton Hotels Corporation was taken private by The Blackstone Group, representing a $26 billion global deal. Single-asset sales topped $12.8 billion, $3.9 billion of which were hotel sales in the western U.S. …
By Jamie Lackey The multifamily market has been through its share of ups and downs over the past several years and even more so in the last year. Always a strong market, the Northeast region multifamily market continues to attract attention from developers and investors worldwide. In many markets, multifamily rental development has taken center stage now that the condominium craze has slowed down, but in many urban markets, residents are still eager to buy their own piece of real estate to call home. In this month’s issue of Northeast Real Estate Business, we take a closer look at four multifamily developments within the Northeast marketplace. Gull’s Cove, Jersey City Metro Homes LLC is developing Gull’s Cove, a 432-unit condominium project that will also contain 30,000 square feet of street-level retail, at 201 Luis Munoz Marin Boulevard in Jersey City, New Jersey. The project is about half a mile west of the Hudson River and it is part of an 80-acre master redevelopment plan that will transform the waterfront in Jersey City. The plan includes 6,500 units of market-rate housing, 1 million square feet of hotel space, 750,000 square feet of retail space, 4.5 million square feet of office space …
By Margie Holly In commercial real estate, the importance of curb appeal cannot be underestimated, particularly in today’s market. . In order to keep vacancies low and property values high, it is essential for buildings to look their best year round. To keep commercial properties in tip-top condition, a well-maintained landscape is a must. Unfortunately, in Southeastern states like Georgia and the Carolinas, frequent droughts and stringent water restrictions have turned landscaping into a real challenge in recent years. However, with a little forethought and careful planning, there are ways to keep a commercial landscape green during even the driest of months. Consider the following information as while working with a landscape contractor to develop a drought-tolerant landscape plan. Careful plant selection is vital to the success of landscapes in areas that are subject to severe or frequent droughts. For that very reason, native landscaping, also called natural landscaping, is gaining popularity wherever there are limited water supplies. Because indigenous plants are adapted to the soil, climate and hydrology of their local area, they are able to flourish with minimal care and assistance. Plants native to the Southeast are better suited than other plants for the high temperatures and sporadic …
By Margie Holly, Brickman In commercial real estate, the importance of curb appeal cannot be underestimated, particularly in today’s market. In order to keep vacancies low and property values high, it is essential for buildings to look their best year round. To keep commercial properties in tip-top condition, a well-maintained landscape is a must. Unfortunately, in Southeastern states like Georgia and the Carolinas, frequent droughts and stringent water restrictions have turned landscaping into a real challenge in recent years. However, with a little forethought and careful planning, there are ways to keep a commercial landscape green during even the driest of months. Consider the following information as while working with a landscape contractor to develop a drought-tolerant landscape plan. Careful plant selection is vital to the success of landscapes in areas that are subject to severe or frequent droughts. For that very reason, native landscaping, also called natural landscaping, is gaining popularity wherever there are limited water supplies. Because indigenous plants are adapted to the soil, climate and hydrology of their local area, they are able to flourish with minimal care and assistance. Plants native to the Southeast are better suited than other plants for the high temperatures and sporadic …
By Bob Spratt, president, Hill Partners To lifestyle centers, in particular, the overall brand and image of the center is paramount. From the merchandising, to the architecture and the aesthetics, to the marketing, everything works in unison to create one larger than life reputation — the brand image. A proper image can effectively set the tone for the property, especially with new developments that continually arise, and with the changing moods, wants and desires of shoppers. At the end of the day, it’s the image of the property that will prevail, setting the tone for quality from day one. But how can lifestyle centers predict whether their branding efforts overall are effective, and whether the brand is being built or eroded? Telltale signs exist every step along the way, but the acid test is whether shoppers buy, and continue to return to buy, at the prices these premium lifestyle retailers command. Poor shopper support, retailer support, and in general, community support are all signs of a brand that has been eroded over time. Best Foot Forward Perhaps the first and most noticeable brand to the community is the name of the property. Many real estate firms have been successful in …
By Nick Stomski, Industrial Broker with NAI Avant Columbia is located within a 1,000-mile radius of three quarters of the U.S. population and 100 miles from the Port of Charleston. It is located at the intersection of Interstates 20, 77, and 26 giving it exceptional access to the eastern part of the country. The metropolitan area is home to 715,000 persons making it the 69th largest MSA in the United States. At yearend, the market had a total of 34.2 million square feet of industrial space. Approximately 97.6 percent of this space was occupied at the end of 2007 following a year in which 775,000 square feet was absorbed. The Columbia market is influenced by a number of positive factors unique to this area. In addition to proximity to the Port of Charleston, the quality of the Columbia workforce has been a plus. The region has one of the highest rates of adults with a college degree or greater, and adults with a high school diploma or greater — a trait not shared by many of the surrounding rural areas. Third, the exchange rate of the dollar has improved the export oriented manufacturing market, in which South Carolina is a …
By John Burpee, president, NAI Tampa Bay Unless you have been living on a mountaintop in Tibet with no cable TV for the last 6 months you already know that the credit markets are on a rollercoaster ride and the Fed is desperately trying to bring order back to the schoolyard. So what does the Fed and Wall Street have to do with the value of apartment properties across the country? Everything. First, every buyer in the market today and every lender behind them is only concerned with actual income not projected rents or future ancillary income from sub-metering or cable contracts. Lenders will only use the current rent rolls for underwriting purposes and place no value on future rent growth projections. Many markets are predicting rent decreases for the next 18 to 24 months so pro-forma growth forecasts carry no weight in the underwriting procedures for today’s loans. Most lenders have started using internal expense models to validate operating costs relevant to certain markets. A lesson learned from the amount of condo foreclosures, they are now forced to return to rental markets that make no financial sense. An example would be that in coastal states whose insurance rates will …