In this short video, the host of America’s Commercial Real Estate Show, Michael Bull CCIM, discusses whether and when it makes sense to not have positive leverage. The answer is simple. If leverage is not positive, then returns better be coming from sources other than net operating income. Examples of this abound, however, as commercial property investors benefit from not only current income, but also growth in income, and benefits available from redevelopment or even solid management. For example, if you buy a property at a 3% cap rate in the belief that the land value will be 50% more than the purchase price in a couple of years, any leverage would be negative, but if the valuation comes to pass you’ll be sitting pretty.
Video: CFMA CEO Stuart Binstock on Impact or 2017 Hurricanes on the Construction Industry
Stuart Binstock, President and CEO of Construction Financial Management Association (CFMA) appears on America’s Commercial Real Estate Show with host Michael Bull to discuss how hurricanes like Harvey and Irma have affected construction, costs, real estate development, and employment in the commercial real estate industry.
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Video: SiteREADY SVP Dylan McCrory on Improving Office Productivity Using Technology
Dylan McCrory, SVP of Solutions at SiteREADY, appears on The Commercial Real Estate Show to talk about how to use technology to make offices increasingly efficient, how to improve employee productivity, and what technology options for your space may assist with these objectives.
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Video: Would a Seller Want or Not Want Off-Market Bidders?
The host of The Commercial Real Estate Show, Michael Bull, answers the question of whether a seller of a commercial property would or would not want multiple bidders when selling a property. The answer seems obvious, and in fact is. More bidders means more demand which means a better price. What Michael is really doing here is discussing the wisdom, or more aptly the lack of wisdom, of selling a property off-market.
I would diverge from this opinion, however. Owners have good reasons to sell off-market. Sometimes they don’t want to spook tenants or – where owner occupied – employees and customers. These are difficult reasons to debate, although the potential negatives are likely less than believed, particularly if one manages the message. There are other reasons as well, a desire for privacy and lack of belief that the selling process benefits them.
This last belief, that the public selling process doesn’t benefit a seller, is simply wrong, which is what I think Michael is getting at. I am contacted all the time by buyers looking for off-market properties. I’ve yet to have one ask me if I know of off-market properties for which they can pay above market price. In fact, I’d submit they are almost always – OK always – looking for below market pricing.
Allow me to provide a painful example. I came across a property not too far from my office that an owner was willing to sell for just over $2 million. This was exciting to me, as his expectation was seemingly lower than the market could bear. We were going to meet, then he cancelled. In subsequent calls, he increasingly blew me off, each time with an increasingly dismissive know-better-than-you attitude. Eventually, he told me that the property was under contract for just over $2 million in an off-market transaction involving a competing broker. Less than a year later that property was for offered for sale by the new owner for nearly double the price. Personally, I thought the property could sell for more than $3 million, and would guess that is what the new owner will garner for it.
It was never clear to me why this owner wanted to be so private with his sale. I sensed that he was confident he knew what he was doing when in fact he didn’t. He’s no dummy, in fact quite the opposite, but intelligence breeds confidence which breeds complacency.
Real estate seems so sensible, “one can touch it for God’s sake.” In truth, real estate, particularly commercial real estate, is akin to a bond with an associated derivatives package causing changes in interest rate expectations, economic expectations, commerce trends, etc. to affect the underlying fixed income instrument. I see it all the time.
All this being said, the ultimate decision is the owner’s, thus that is all that matters. If an owner demands an off-market sale, I’ll not argue it for long, as I’ll argue myself out of the deal, “all hat no cattle” style (pardon the flashing of my Midwestern upbringing credentials). That would be like a politician campaigning on principles, which results in lots of principal, no office.
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Video: Green Street’s Phil Owens on Change and Opportunity in Retail Real Estate
In this short clip, Phil Owens of Green Street’s Advisory Group, discusses the opportunity for an information advantage in retail properties. Investors are assessing their mall exposure to retailers, looking at ratios of occupancy cost, and using a set of information sources to identify risk as well as opportunity.
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Town Center One Office Condo Buyer’s Broker Expertise
With recent efforts to secure property within Town Center One for a customer, we came to understand this building from a buyer’s and tenant’s perspective. We contacted every unit in the building directly or indirectly, in the process identifying every unit that is listed or otherwise available, i.e. publicly or privately offered, for sale or lease. If you are interested in buying or leasing a unit in this building, we can be of significant assistance. We’ve developed an advanced feel for pricing, where deals can be had, and who is selling. As this post is being published, we are aware of numbers of units available for sale and numbers available for lease, some off-market and other listed with five different brokers. Working with you as your buyer’s broker, I’m working with you, beside you, on your team, not to push a particular listing. I’ll help you get the best deal, the right deal, right now.
This is not a listing. This is instead a suggestion to work with us as your (buyer’s) broker to help you search for office condominiums in Town Center One in the Downtown Dadeland area of Kendall/Miami. Working with a buyer’s broker is a common practice. In this case, working with us brings not only benefits typically afforded by working with a buyer’s broker, but it also offers the benefit of working with someone that has negotiated both to purchase and lease multiple properties within the building.
Contact us now:
James Hawkins
786-581-7990
james@hawkinscre.com
The existing units in this building according to Miami-Dade records retrieved in 2017 are: 8950 SW 74 Court Unit 1701; 8950 SW 74 Court Unit 101; 8950 SW 74 Court Unit 102; 8950 SW 74 Court Unit 103; 8950 SW 74 Court Unit 1201; 8950 SW 74 Court Unit 1202; 8950 SW 74 Court Unit 1203; 8950 SW 74 Court Unit 1204; 8950 SW 74 Court Unit 1205; 8950 SW 74 Court Unit 1206; 8950 SW 74 Court Unit 1207; 8950 SW 74 Court Unit 1208; 8950 SW 74 Court Unit 1209; 8950 SW 74 Court Unit 1210; 8950 SW 74 Court Unit 1211; 8950 SW 74 Court Unit 1212; 8950 SW 74 Court Unit 1213; 8950 SW 74 Court Unit 1214; 8950 SW 74 Court Unit 1401; 8950 SW 74 Court Unit 1402; 8950 SW 74 Court Unit 1403; 8950 SW 74 Court Unit 1404; 8950 SW 74 Court Unit 1405; 8950 SW 74 Court Unit 1406; 8950 SW 74 Court Unit 1407; 8950 SW 74 Court Unit 1408; 8950 SW 74 Court Unit 1409; 8950 SW 74 Court Unit 1410; 8950 SW 74 Court Unit 1411; 8950 SW 74 Court Unit 1412; 8950 SW 74 Court Unit 1413; 8950 SW 74 Court Unit 1414; 8950 SW 74 Court Unit 1501; 8950 SW 74 Court Unit 1502; 8950 SW 74 Court Unit 1503; 8950 SW 74 Court Unit 1504; 8950 SW 74 Court Unit 1505; 8950 SW 74 Court Unit 1506; 8950 SW 74 Court Unit 1507; 8950 SW 74 Court Unit 1508; 8950 SW 74 Court Unit 1509; 8950 SW 74 Court Unit 1510; 8950 SW 74 Court Unit 1511; 8950 SW 74 Court Unit 1512; 8950 SW 74 Court Unit 1513; 8950 SW 74 Court Unit 1514; 8950 SW 74 Court Unit 1601; 8950 SW 74 Court Unit 1602; 8950 SW 74 Court Unit 1603; 8950 SW 74 Court Unit 1604; 8950 SW 74 Court Unit 1605; 8950 SW 74 Court Unit 1606; 8950 SW 74 Court Unit 1607; 8950 SW 74 Court Unit 1608; 8950 SW 74 Court Unit 1609; 8950 SW 74 Court Unit 1610; 8950 SW 74 Court Unit 1611; 8950 SW 74 Court Unit 1612; 8950 SW 74 Court Unit 1613; 8950 SW 74 Court Unit 1614; 8950 SW 74 Court Unit 1702; 8950 SW 74 Court Unit 1703; 8950 SW 74 Court Unit 1704; 8950 SW 74 Court Unit 1705; 8950 SW 74 Court Unit 1706; 8950 SW 74 Court Unit 1707; 8950 SW 74 Court Unit 1708; 8950 SW 74 Court Unit 1709; 8950 SW 74 Court Unit 1710; 8950 SW 74 Court Unit 1711; 8950 SW 74 Court Unit 1712; 8950 SW 74 Court Unit 1713; 8950 SW 74 Court Unit 1714; 8950 SW 74 Court Unit 1801; 8950 SW 74 Court Unit 1802; 8950 SW 74 Court Unit 1803; 8950 SW 74 Court Unit 1804; 8950 SW 74 Court Unit 1805; 8950 SW 74 Court Unit 1806; 8950 SW 74 Court Unit 1807; 8950 SW 74 Court Unit 1808; 8950 SW 74 Court Unit 1809; 8950 SW 74 Court Unit 1810; 8950 SW 74 Court Unit 1811; 8950 SW 74 Court Unit 1812; 8950 SW 74 Court Unit 1813; 8950 SW 74 Court Unit 1814; 8950 SW 74 Court Unit 1901; 8950 SW 74 Court Unit 1902; 8950 SW 74 Court Unit 1903; 8950 SW 74 Court Unit 1904; 8950 SW 74 Court Unit 1905; 8950 SW 74 Court Unit 1906; 8950 SW 74 Court Unit 1907; 8950 SW 74 Court Unit 1908; 8950 SW 74 Court Unit 1909; 8950 SW 74 Court Unit 1910; 8950 SW 74 Court Unit 1911; 8950 SW 74 Court Unit 1912; 8950 SW 74 Court Unit 1913; 8950 SW 74 Court Unit 1914; 8950 SW 74 Court Unit 2001; 8950 SW 74 Court Unit 2002; 8950 SW 74 Court Unit 2003; 8950 SW 74 Court Unit 2004; 8950 SW 74 Court Unit 2005; 8950 SW 74 Court Unit 2006; 8950 SW 74 Court Unit 2007; 8950 SW 74 Court Unit 2008; 8950 SW 74 Court Unit 2009; 8950 SW 74 Court Unit 2010; 8950 SW 74 Court Unit 2011; 8950 SW 74 Court Unit 2012; 8950 SW 74 Court Unit 2013; 8950 SW 74 Court Unit 2014; 8950 SW 74 Court Unit 2101; 8950 SW 74 Court Unit 2102; 8950 SW 74 Court Unit 2103; 8950 SW 74 Court Unit 2104; 8950 SW 74 Court Unit 2105; 8950 SW 74 Court Unit 2106; 8950 SW 74 Court Unit 2107; 8950 SW 74 Court Unit 2108; 8950 SW 74 Court Unit 2109; 8950 SW 74 Court Unit 2110; 8950 SW 74 Court Unit 2111; 8950 SW 74 Court Unit 2112; 8950 SW 74 Court Unit 2113; 8950 SW 74 Court Unit 2114; 8950 SW 74 Court Unit 2201; 8950 SW 74 Court Unit 2202; 8950 SW 74 Court Unit 2203; 8950 SW 74 Court Unit 2204; 8950 SW 74 Court Unit 2205; 8950 SW 74 Court Unit 2206; 8950 SW 74 Court Unit 2207; 8950 SW 74 Court Unit 2208; 8950 SW 74 Court Unit 2209; 8950 SW 74 Court Unit 2210; 8950 SW 74 Court Unit 2211; 8950 SW 74 Court Unit 2212; 8950 SW 74 Court Unit 2213; 8950 SW 74 Court Unit 2214; 8950 SW 74 Court Unit 2301; 8950 SW 74 Court Unit 2302; 8950 SW 74 Court Unit 2303; 8950 SW 74 Court Unit 2304; 8950 SW 74 Court Unit 2305; 8950 SW 74 Court Unit 2306; 8950 SW 74 Court Unit 2307; 8950 SW 74 Court Unit 2308; 8950 SW 74 Court Unit 2309; 8950 SW 74 Court Unit 2310; 8950 SW 74 Court Unit 2311; 8950 SW 74 Court Unit 2312; 8950 SW 74 Court Unit 2313; 8950 SW 74 Court Unit 2314; 8950 SW 74 Court Unit 2401; 8950 SW 74 Court Unit 2402; 8950 SW 74 Court Unit 2403; 8950 SW 74 Court Unit 2404; 8950 SW 74 Court Unit 2405; 8950 SW 74 Court Unit 2406; 8950 SW 74 Court Unit 2407; 8950 SW 74 Court Unit 2408; 8950 SW 74 Court Unit 2409; 8950 SW 74 Court Unit 2410; 8950 SW 74 Court Unit 2411; 8950 SW 74 Court Unit 2412; 8950 SW 74 Court Unit 2413; 8950 SW 74 Court Unit 2414. These units appear to be or have been owned by a number of individuals and entities including Angelo Petrillo, Lucia Maria Di Clemente, Auld Realty Corp, C/O Steven R Frankel et al, Ferr Real Estate Corp, C/O Arazoza & Fernandez, Dadeland Parcel C LLC, Pristina LLC, Malini Corp, Tropical JN Holdings LLC, Hamsa Investment LLC, Dadeland Parcel C 2 LLC, Mailcom Corp, Rabel Real Estate Inc, C/O Arazoza & Fenendez Fraga PA, Bridges Real Estate, Investments L L C, Tropical JN Holdings Ii LLC, Towncenter US Investment LLC, Elevate Investment Group LLC, Ferr Real Estate Corporation, C/O Arazoza & Fernandez Fraga P A, Ct Intl Holdings LLC, SBI Realty LLC, TCO 1407 LLC, 8950 SW 74Ct 1709 LLC, Grg Family Investments LLC, Roccos Holdings I LLC, Sina Negahbani, Soraya Negahbani, Williamson TC1 1810 LLC, C/O Ed Williamson, Marini & Associates P A, 123 Property LLC, Dadeland Parcel C 3 LLC, Ferr Real Estate Corporation, Best Meridian Insurance Company, Rabel Real Estate Inc, Best Meridian Insurance Co, and Villaverde Parking LLC.
This is not a listing. This is instead a suggestion to work with us as your (buyer’s) broker to help you search for office condominimums in Town Center One in the Downtown Dadeland area of Kendall within the greater Miami metro area of Miami-Dade County in Florida.
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Video: Reis Economist Barbara Denham Reviews Office Property Performance
Barbara Denham, Economist at Reis, appears on The Commercial Real Estate Show to review office market performance and variables that may be affecting it, including differences in suburban versus urban office space performance. Highlights include:
- Vacancy rate was flat at 16.1% for Q3, also unchanged for year
- Rent grow 0.3% in Q3, 1.4% year over year
- flat vac rate and rent growth
- odd given how deep we are in this cycle
- Similar vacancy trends in class A and B office space
- In height of 2003 to 2007 expansion vacancy rates dropped to 12.3% as opposed to stalling today at 16% or so
- Vacancy rate unchanged for 7 quarters in a row
- Seeing big gap between good and bad markets
- Gap in performance anticipated to widen
- Expect rent growth of 2 to 2.5% in next year
- Suburban markets have rebounded, now doing about as well as central business district markets
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Video: Jim Costello of Real Capital Analytics on Business Cycle, Interest Rates Impact on Retail Real Estate
Jim Costello, Senior Vice President at Real Capital Analytics, joins The Commercial Real Estate Show to discuss where we are in the cycle of retail real estate, tax reform impacts on retail properties, rising interest rates and cap rates.
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Video: Jim Costello of Real Capital Analytics on Medical Office Property Cap Rate Trends
Navigating the Trends in Healthcare Real Estate: Insights from Jim Costello
In the dynamic landscape of commercial real estate, certain sectors often emerge as hotbeds for investment, driven by demographic shifts, economic factors, and evolving consumer needs. One such sector that has garnered significant attention in recent years is healthcare real estate, particularly medical office buildings (MOBs). In a recent segment on America’s Commercial Real Estate Show, the host delved into the nuances of this market with Jim Costello, Senior VP at Real Capital Analytics, providing valuable insights into the trends, challenges, and future outlook for MOBs nationally. Note that while discussing medical office property dynamics across the country, it’s crucial to understand that market performance, including in Miami, can deviate from national trends.
Rising Interest in Healthcare Real Estate
The conversation kicked off with an exploration of the current state of MOB investments. Costello highlighted a notable trend: the narrowing gap between cap rates for medical office properties and traditional office buildings. Traditionally considered an alternative asset class, MOBs have witnessed a surge in investor interest, driving cap rates down. This trend is particularly intriguing given the complexity often associated with medical properties. Costello attributed this convergence to the growing recognition of the demographic imperative posed by the aging baby boomer population, which is expected to drive increased demand for healthcare services.
Implications of Market Dynamics
As the host and Costello delved deeper into the discussion, they examined the factors shaping the MOB landscape. Despite rising interest rates and construction costs, MOBs continue to attract investors drawn to their stable income potential and long-term viability. Costello emphasized the role of real estate investment trusts (REITs) in driving acquisitions within the MOB sector, highlighting their ability to navigate market uncertainties effectively.
Challenges and Opportunities Ahead for MOBs
Looking ahead, Costello identified several key considerations for investors in the MOB market. While acknowledging the ongoing compression of cap rates, he emphasized the importance of understanding local market dynamics and tenant profiles. He cautioned against overlooking the competitive landscape, particularly with major players like Healthcare Trust of America (HTA) REITs and Physicians Realty Trust dominating acquisitions.
Strategies for Success
Costello concluded the discussion by offering valuable tips for investors venturing into the MOB space. He underscored the significance of local market knowledge and strategic partnerships, urging investors to align themselves with reputable healthcare providers and prime locations. By staying attuned to emerging trends and leveraging insights from industry experts, investors can navigate the complexities of the MOB market and capitalize on its growth potential.
Closing Thoughts
As the conversation drew to a close, the host teased the upcoming discussion on the synergy between investors, developers, and brokers in the MOB arena, highlighting the collaborative nature of commercial real estate transactions. The dialogue between the host and Costello provided a comprehensive overview of the evolving dynamics within the healthcare real estate sector, offering valuable insights for investors and stakeholders alike.
In a market shaped by demographic shifts and economic forces, MOBs stand out as a resilient investment option, poised to capitalize on the growing demand for healthcare services. By staying informed, adaptive, and strategic, investors can position themselves for success in this dynamic and rewarding segment of the commercial real estate landscape.
This article encapsulates the key points and insights from the provided transcript, focusing on the trends, challenges, and strategies discussed in the conversation between the host and Jim Costello regarding healthcare real estate investments nationally.
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Video: Jim Costello of Real Capital Analytics on Retail Property Cap Rates, Opportunities
Jim Costello, Senior Vice President at Real Capital Analytics, joins appears on The Commercial Real Estate Show to discuss various opportunities in retail commercial real estate properties, retail property cap rate trends, and retail real estate lender sentiment.
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Video: Brian Bailey Shares Federal Reserve’s View on Impact of Changing 1031 and Banking Regulations
Brian Bailey, Subject Matter Expert with the Federal Reserve Bank of Atlanta, appears on The Commercial Real Estate Show to discuss the Federal Reserve’s view on potential 1031 tax reform and banking regulations.
Video: Plum Lending CEO Bill Fisher on Technology and Big Data Benefiting CRE Financing
Bill Fisher, Founder and CEO at PLUM Lending, appears on The Commercial Real Estate Show to talk about the utilization of technology and data to power one’s business and make better financing decisions. Also discussed are the rapid changes in technology in the commercial real estate industry.
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What Is Lean Construction and Why You Should Care
Lean construction is a concept of fairly recent origin. The concept of lean construction originated during the latter part of the 20th century. In fact, the term “lean construction” itself was coined in 1993 by the International Group for Lean Construction during its first meeting.
Before diving into a more complete discussion of what is lean construction, and why it matters, the concept is ubiquitous in its application to the construction industry. Lean construction impacts all elements and segments of a construction project. Consequently, lean construction involves end users, owners, architects, designers, engineering, constructors, and suppliers, like Federal Steel Supply.
Essential Definition of Lean Construction
The most commonly accepted, and utilized, definition of lean construction was formulated in “Design and Construction: Building in Value.” This settled definition was promulgated about 10 years after the term “lean construction” itself initially was coined. Specifically, lean construction is defined as a “way to design production systems to minimize waste of materials, time, and effort in order to generate the maximum possible amount of value.”
The construction system requires the involvement of all stakeholders, who previously were enumerated in this article. These stakeholders must not just play their appointed roles in the construction scheme. Rather, they most jointly collaborate on designing what is called a production system for the construction project from start to completion.
Substantive Research Into Lean Construction Principles and Practices
Since the advent of lean construction as a cohesive concept in the latter part of the 20th century and beginning of the 21st century, a growing amount of academic research has been undertaken in regard to the principles and practices associated with this system. Research has been undertaken, or currently is underway, at an array of respected academic institutions that include:
• University of California, Berkeley
• Israel Institute of Technology
• Michigan State University
• Centro de Investigación en Ingeniería y Gerencia de la Construcción
• Nottingham Trent University
• Texas A & M
• University of Colorado
• Arizona State University
• University of Edinburgh
• Indian Institute of Technology Madras
• Universidad Politecnica de Valencia
In addition to research being conducted at institutions of higher education, a steadily increasing number of colleges and universities have commenced teaching lean construction concepts in the classroom. This is also happening at colleges and universities located in different locations around the globe, a trend that is expected to continue into the future.
Last Planner System
An outgrowth of lean construction more generally is the creation of what is known as the Last Planner System. The Last Planner System was formulated by the Lean Construction Institute.
The Last Planner System has been succinctly defined by the Lean Construction Institute as:
“The collaborative, commitment-based planning system that integrates should-can-will-did planning (pull planning, make-ready, look-ahead planning) with constraint analysis, weekly work planning based upon reliable promises, and learning based upon analysis of PPC (plan percent complete) and reasons for variance.”
With the use of the Last Planner System, all stakeholders in a construction project enjoy enhanced scheduling predictability. Using traditional construction practices, one of the greatest, most significant problems for stakeholders is scheduling-related issues. Indeed, it is scheduling missteps, perhaps more than anything else, that drive cost overruns and missed deadlines in construction projects of all types.
Why Lean Construction Matters to You
Lean constructions matters to you in a number of different ways. First, through the use of a lean construction system, the costs associated with a construction project can be better contained. Analysis of projects that have applied lean construction principles reveals that costs can be contained with this systemic approach to a project. With the ever-increasing costs of commercial and residential property across the United States, and in other nations the world over, steps to contain costs associated with new construction is vital.
Second, lean construction concepts are wide-ranging in their application. Lean construction principles can be applied to any type of construction project, industrial, commercial, and residential.
Third, analysis of lean construction also reveals that this systemic approach to a project can have a positive impact on environmental issues. Through the use of a fully collaborative approach to a construction project, two primary things can happen when it comes to environmental issues.
On the one hand, a particular construction project can be commenced and completed with less of an impact on the environment. On the other hand, the construction project itself, and the final structure, can incorporate in a comprehensive and coordinated fashion, a wider array of green technologies.
As lean construction concepts and practices become more widely utilized, the benefits enumerated here will become more broadly enjoyed. This likely reality, in and of itself, is yet another reason why lean construction should matter to you today, and will become more important in the future.
Jessica Kane is a professional blogger who writes for Federal Steel Supply, Inc., a leading steel tubing suppliers of carbon, alloy and stainless steel pipe, tubes, fittings and flanges.
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