Real Estate Management News - 06/22/2016

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June 22, 2016
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LEADERSHIP SPOTLIGHT
SFinvest®, AMO, and the Sheridans recognized as “Champions of Diversity”

IREM® HEADLINES
Join Thought Leader Joe Greenblatt, CPM, as he facilitates IREM’s new course!
Want to Save $200? Register for the IREM Fall Conference by 6/30
Did You Submit for a REME Award?

INDUSTRY HEADLINES
America's Dying Shopping Malls Have Billions in Debt Coming Due
Keeping Cool: A Look Into Apartment HVAC Systems
New York Puts Up $36 Million for Energy-Efficient Buildings
Experts Question Investor Appetite for Secondary Office Markets
For Active Workplace, Avoid These Common Pitfalls
Influx of Younger, Wealthier Residents Transforms U.S. Cities
Solar-Powered Air-Con Uses Heat to Cool Shopping Center
How Multifamily is Blending Retail With Residential
4 Surprising Ways Energy-Efficient Buildings Benefit Cities
Nobody Knows Whether Your Landlord Can Stop You From Smoking Pot
2-Block Texas Complex to Be Connected by Sky Bridge
New Green Building Report Shows Industrial Sector Prioritizes Sustainability in Design and Operations


 

Leadership Spotlight


SFinvest®, AMO, and the Sheridans recognized as “Champions of Diversity”

William “Bill” and Geralyn Sheridan, of the Chico, CA, property management firm SFinvest®, have been recognized by California State University (CSU), Chico, as “Champions of Diversity”. Bill Sheridan was a founding member of the American Civil Liberties Union of the Northern California Chico Chapter, and has been involved in actively promoting diversity and inclusion in his professional and public life ever since. Geralyn and Bill have always embraced diversity and inclusion, and formalized that commitment in deed, and by including it in their company’s mission, goals, and values. In addition, the Sheridans provide an annual scholarship to an outstanding CSU, Chico student who is a minority or member of the LGBT community.

“Embracing diversity and inclusion in our business has been beneficial to our company in all respects,” Mr. Sheridan noted. “It is the morally and ethically “right thing” to do. It is, from a business perspective, the “best management practice”, and the benefits fall right to the bottom line. Our cosmopolitan demographic resident population is steeped in cultural and societal diversity making our communities interesting and fun to work and live in.”

SFinvest® is an investment management firm specializing in multifamily real estate. As an Accredited Management Organization (AMO), SFinvest® is one of only 550 firms worldwide to earn this accreditation from IREM. Formally adopting the “AMO Code of Professional Ethics” as part of their organization’s operating procedures, SFinvest® embraces diversity and is committed to cultivating a culturally inclusive environment where diversity of thought and expression are valued, respected, appreciated and celebrated.
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IREM Headlines


Join Thought Leader Joe Greenblatt, CPM, as he facilitates IREM’s new course!

Building for Tomorrow: Leading a Successful Property Management Company

Classroom Premiere July 27-29 in downtown Chicago. Hurry -- space is limited!


Register today for the live classroom premier in downtown Chicago, right on the Magnificent Mile, of Building for Tomorrow: Leading a Successful Property Management Company.

Joe Greenblatt, CPM and IREM Past President is President and CEO of Sunrise Management, a San Diego based AMO firm where he manages a multifamily portfolio of over 13,000 units in California, Nevada and Arizona. He has owned a commercial management company and has served as a court appointed receiver for both residential and commercial properties. In addition to serving as IREM’s International President, he currently serves on IREM’s Executive Committee and on the Executive Committee of the National Association of Realtors.

Joe will lead you to discover the latest strategies and best practices for building and leading a sustainable, customer-centric real estate management company. Designed for management company owners, executives, and department heads charged with driving business results, this interactive course gives you a template to create a forward-thinking organizational environment to grow your business. And, completion of this course earns your firm credit towards IREM's prestigious AMO accreditation.

Topic covered include:
• The making of a best practice real estate management company
• Talent strategies
• Creating a leader development program
• Forward-thinking strategies for business growth
• Defining an ethical, client-centered organization

Course fact sheet with location, lodging, and travel information.

Can’t make the classroom premiere? Building for Tomorrow is also available in a convenient online format.
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Want to Save $200? Register for the IREM Fall Conference by 6/30

You’re invited! Pack your sunglasses and head to San Diego for the IREM Fall Conference, October 18-21. Want to save big bucks? Then make your plans now. Just register by June 30, and we’ll knock $200 off the registration fee!

This year’s IREM Fall Conference will be one to remember. Inspiring speakers, fun networking events and motivating education sessions are guaranteed to keep you on your toes.

You can look forward to conference sessions like:
• 10 Trends in Multifamily Property Management
• Corporate Cyber Security: Every Company is Susceptible
• Mixing it Up: The Power of Well-Managed Mixed-Use Properties
• Evaluation of Staff and Structure for Optimal Results
• Transforming Leadership in the New Age of Real Estate

Just interested in education? Take advantage of the professional education day pass, giving you access to all the education sessions on Friday, October 21st – including the keynote session featuring Mike Walsh and Industry Leader lunch featuring Marla Maloney, CPM and Tony Long. Register by June 30, and this pass is just $299.

What are you waiting for? Register for the IREM Fall Conference today.
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Did You Submit for a REME Award?

Congratulations to those of you want to celebrate Real Estate Management Excellence by submitting for a 2016 REME Award! Once again this year, we have submissions from companies of all shapes and sizes, and individuals from around the globe, demonstrating innovation and advancement of the real estate management industry. We look forward to an exciting competition, and announcing the finalists in early August and sharing their stories. The finalists will be recognized and the winners announced at the Inaugural Gala and REME Awards during the IREM Fall Conference in San Diego on October 21, 2016.

If you submitted for a 2016 REME Award but did not receive a confirmation e-mail from IREM, please contact us immediately – Jenner Gohr or 312-329-6067.

Stayed tuned for more coming soon as we build toward the most prestigious night of the year!
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Industry Headlines


America's Dying Shopping Malls Have Billions in Debt Coming Due
Bloomberg (06/16/16) Mulholland, Sarah; Evans, Rachel

Hundreds of U.S. retail centers are being buffeted by the rise of e-commerce, a harbinger of trouble nationwide as a wave of debt from the past decade's borrowing binge comes due for many of these properties. According to data from Bank of America Merrill Lynch, around $47.5 billion of loans backed by retail properties are set to mature over the next year and a half. That is coinciding with a tighter market for commercial-mortgage backed securities, where many such properties are financed. For some shopping mall owners and operators, negotiating loan extensions or refinancing may be tricky. As unease surrounding the future of shopping centers grows, lenders are tightening their purse strings. Bleak earnings forecasts from such department-store chains as Macy's and Nordstrom coupled with and bankruptcy filings by Aeropostale Inc., Sports Authority Inc., and others haven't helped.

Analysts say older malls in small towns and cities are being hit the hardest, squeezed by competition from both the Web and newer, glitzier malls that draw wealthy shoppers. Tad Philipp of Moody's Investors Service observes, "The advent of online shopping is kind of accelerating the separation of winners and losers." Retail landlords that are unable to refinance debt may either walk away from the troubled asset or negotiate for an extension of the due date. Meanwhile, it's getting harder to find takers for lower-tier malls, states Green Street Advisors LLC. The pool of buyers is shallow and funding is elusive. "The criteria to get financing is getting a little bit more stringent and cutting off the lifelines for some of these malls," concluded DJ Busch, a senior analyst at Green Street.
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Keeping Cool: A Look Into Apartment HVAC Systems
Property Management Insider (06/14/16) Blackwell, Tim

Investing thousands in new air-conditioning units or making a jump to the next wave of refrigerant to keep residents cool is something apartment owners and operators need to think about with the summer now here. Taking into account changing EPA regulations concerning "the juice" that cools air conditioners, a more conservative approach may be the best strategy. The challenge is not just the ongoing phase out of R-22 -- the refrigerant of choice for the past 20 or so years -- but what's going to happen to its successor, R-410A. Today, all newly manufactured air conditioners and refrigeration systems in the United States are charged with R-410A, but that refrigerant is now under scrutiny because it's considered a greenhouse gas that contributes to global warming. While the EPA has yet to order an R-410A phase out, many believe it's only a matter of time. For certain, R-22 will not be produced after 2019. What happens then could be anybody's guess, says David Jolley, National Director of Maintenance/Purchasing for Pinnacle. "We're kind of lost out in space as to where we're going," he stated.

Consequently, repairing existing units may be the best solution for now. Jolley notes that his firm is riding out the refrigerant debate until the EPA has the final say. Investing in dozens of new R-410A-charged units would be a definite gamble if the refrigerant is phased out. "Our goal is to fix what we have," he remarked. Pinnacle is one of several apartment managers investing in maintenance training so that HVAC issues can be diagnosed correctly and the right repairs made. It's a step that Jolley says is necessary in an industry that has not traditionally "gotten its wrench" fully around teaching maintenance technicians proper air-conditioning service.
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New York Puts Up $36 Million for Energy-Efficient Buildings
Glen Falls Post-Star (NY) (06/17/16)

New York will spend $36 million to increase the energy efficiency of commercial buildings across the state. The grant money will support the use of advanced technologies to help office towers, retail stores, hospitals, and other buildings fine-tune their energy systems and identify capital projects to reduce energy costs. The money will fund new building efficiency programs. The two programs could reduce the energy bills of participating buildings by more than $200 million over eight years, according to the state's Energy Research and Development Authority. They are expected to save enough energy to power and heat 64,000 homes, and reduce greenhouse gas emissions by the equivalent of taking approximately 51,000 cars off the road. The initiatives are funded through New York's Clean Energy Fund, a 10-year, $5.3 billion program to support clean energy development.
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Experts Question Investor Appetite for Secondary Office Markets
National Real Estate Investor (06/20/16) Carr, Robert

Office investors have finally started to exhibit caution following a string of strong quarters characterized by high demand and outstanding property fundamentals. Analysts, though, disagree about whether this will put the focus in 2016 on assets in primary or secondary markets. So far, there has been no blip in demand. Instead, it is getting more difficult to secure great deals in top markets. Investment in office buildings in primary markets took a dip in the first three months of this year, as investors got unnerved by witnessing yields shrink in high demand areas. According to a recent office outlook report from JLL, large portfolio sales in secondary markets coupled with a lack of development pushed transaction volumes to 37 percent of the total market in the first quarter.

Investors moved into secondary U.S. office markets because of such factors as rising political and global tension and prices getting out-of-reach in the top central business districts (CBDs), observes Steve Collins, head of JLL's capital advisors group. "They are realizing it's better to spread it around," he adds. "The same credit that they put into New York might see a 300-point basis point difference in yield in a market such as Charlotte or Atlanta." Other property professionals concur. The breadth of the U.S. office market is one of its greatest strengths, as having such options as so-called "pocket markets" and mixed-use developments provides value, states Aegon Asset Management's first-quarter overview report. “Secondary office markets are experiencing higher levels of investment for just this reason, somewhat greater volatility priced by higher yields, and the ability to accommodate fast-growing companies with a volume of new construction, at costs much lower than that available in the primary downtowns," the research concluded.
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For Active Workplace, Avoid These Common Pitfalls
Facility Executive (06/17/16)

The latest trends in active design can help keep more office workers healthy and energized. But that's only if employers avoid some common pitfalls, cautions integrated design firm JZA+D of Princeton, NJ. One of the biggest traps? Thinking that active design is a product choice. "For too many facilities, standing desks are offered as the solution," states JZA+D founding partner Joshua Zinder, AIA. "But making employees stand for eight straight hours is no better than having them sit." His firm has incorporated standing desks into its workplace designs, but as part of a holistic approach that encourages movement and activity throughout the business day. A second pitfall is indeed adopting a workplace design that does not encourage movement. "Standing is only one part of a healthy lifestyle, explains Zinder. "More important is variety: people need to be moving and doing things, so we work with clients to create buildings and interiors that promote activity during the working day."

A third challenge is creating silos for architecture, furnishings, technology, and work policies -- areas that must be fully integrated in order to achieve long-term active design solutions. That's why it is important for employers to see out a workplace design firm that provides integrated consultative design and eager to collaborate from the earliest planning phases. The JZA+D design teams focus on a fourth major challenge that is commonly overlooked: That active employees with well-rested brains are more productive. Most restful breaks include activity — i.e. walking to lunch, playing a game, etc. For this reason, recent workplace design projects by JZA+D include: break areas and shared printing stations located away from offices; fitness equipment provided as an amenity; and, finally, adjustable desks for alternating between sitting and standing.
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Influx of Younger, Wealthier Residents Transforms U.S. Cities
Wall Street Journal (06/09/16) Kusisto, Laura

Young, educated, and relatively affluent workers have been flocking to many U.S. cities since last decade, and this migration accelerated during the housing implosion. The trend is revitalizing urban cores, spurring renovation of older residential and commercial buildings along with new real estate developments and upgrades to transit systems, parks, and cultural institutions. Economists say factors compelling the influx include job growth, declining crime in cities, and young professionals waiting longer to have children—or choosing not to have them at all. Young professionals also are opting to rent long-term due to tighter mortgage lending and concern about homeownership risks. City rents across the country are now about $1,730 a month on average, versus just under $1,250 for their suburban counterparts, according to CoStar Group. Zillow reports the average urban home is worth 2 percent more than the average suburban home, which was worth 4 percent more in 2010.
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Solar-Powered Air-Con Uses Heat to Cool Shopping Center
Gizmag (06/19/16) Jeffrey, Colin

Solar-concentrating thermal technology is being utilized to power the air-conditioning system of an entire shopping center in Australia solely from the rays of the sun. With nearly three-fifths of all energy used in retail centers being consumed by heating and cooling needs, the new system could pave the way to significant power and cost savings in an array of large commercial spaces. The prototype system was developed by the CSIRO and installed in the Stockland Wendouree Shopping Centre in Ballarat, Victoria. It was partly funded by the Australian Renewable Energy Agency (or ARENA) program, which aims to increase the supply and competitiveness of renewable energy in Australia. The new system is a "closed-loop" air-conditioner, meaning it heats and cools air within the building without introducing any external air into the system.

A pair of "desiccant" (drying) wheels act as dehumidifiers to remove moisture from the air and operate at separate temperatures. The high-temperature wheel uses the captured solar energy for regeneration of the low temperature wheel, which operates without any external heat. The research team believes that solar heat-driven desiccant air conditioning systems have the potential to significantly reduce the electrical power requirements and costs related to supplying humidity controlled fresh air in big commercial spaces like malls and warehouses. They plan to spend the next year monitoring and assessing the new system and gauge its capabilities in a commercial environment.
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How Multifamily is Blending Retail With Residential
Property Management Insider (06/14/16) Blackwell, Tim

Horizontal mixed-use developments are gaining in popularity, especially as multifamily housing continues to evolve into a desirable housing choice for a wider cross-section of Americans. Architects are migrating from vertical mixed-use designs, many of which have come up short in providing a favorable blend of retail, commercial, and residential. Horizontal designs feature separate commercial centers linked by residential units, creating a walkable community close to local amenities. Some developers are going one step farther and including hotel and convention spaces. The development style supports a more suburban footprint with everything so spread out. Dallas-based architecture firm Hensley Lamkin Rachel Inc. has seen a recent shift from more urban core design to horizontal developments in such Dallas suburbs as Frisco, Plano, Flower Mound, and Allen. Most recently, HLR designed properties in the walkable Uptown area of Dallas and incorporated the first-floor retail concept.

Horizontal mixed-use is another example how apartments and condominiums are adapting to a changing landscape. It's a whole new generation of multifamily housing living. To that end, consensus is building that horizontal mixed-use developments work best when multifamily is established first and retail is added later. That's partly because more and more city planners are shedding their preconceptions that apartments only look good for a few years and are then prone to dilapidation. "I think part of this walkable community is selling that story that it's not your parents' multifamily," HLR founding principal David W. Hensley summed up. "It's by choice."
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4 Surprising Ways Energy-Efficient Buildings Benefit Cities
GreenBiz.com (06/18/16) Mackres, Eric

New research from the WRI Ross Center for Sustainable Cities examines how building efficiency can influence sustainable cities of the future, and how policymakers can accelerate it in their own communities. One opportunity building efficiency supports is better social and financial dividends. Worldwide, buildings and construction account for 60 percent of electricity use, 12 percent of water use, 40 percent of waste, and 40 percent of material resource use. In cities, buildings take up at least half the land area, and although each efficiency augmentation in energy and resource use is a cost, they each eliminate a cost the city and its residents no longer have to pay.

A second urban benefit from energy-efficient buildings is the massive economic opportunities they present, especially for developing countries. Such nations could reap the economic and climate advantages of energy-efficient buildings and avoid "locking in" years of inefficiency and the need for more expensive renovations later. A third opportunity is a way to curb climate change affordably, as building efficiency yields the most value for the money in cutting greenhouse gas emissions. Such improvements typically have little or no marginal cost, or deliver a return-on-investment in the form of energy cost savings in as soon as six to 12 months. A fourth benefit is a reduction in air pollution and associated illness and death.
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Nobody Knows Whether Your Landlord Can Stop You From Smoking Pot
Bloomberg (06/20/16) Clark, Patrick

Marijuana legalization laws are creating a lot of apartment owner and manager confusion. In recent years, resident demand for smoke-free living environments has prompted some operators to extend bans on cigarette smoking to also cover marijuana. But some are concerned that prohibiting the use of medical marijuana might violate fair housing laws. This uncertainty derives from a tension between state laws legalizing marijuana and federal regulations that still outlaw the substance. A 2011 memo from the HUD instructed local housing authorities to reject medical marijuana users applying for federally subsidized housing. However, state laws intended to prevent landlords from discriminating against renters on the basis of a disability could offer apartment residents a greater measure of protection.

Last month, the California state Assembly passed a bill that gives apartment landlords explicit permission to ban marijuana smoking, even for medical use. The state Senate has yet to vote on the bill, which follows a California law passed two years ago that spelled out the right of multifamily housing owners and managers to ban tobacco smoking on their properties. More and more apartment community owners are making their complexes smoke-free in order to appeal to residents who see smoke as a health risk or a nuisance, notes Tom Bannon, chief executive of the California Apartments Association. Smoke in an apartment also increases the likelihood that the owner will have to spend money on new carpeting or fresh paint when a resident moves out.
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2-Block Texas Complex to Be Connected by Sky Bridge
Multifamily Executive (06/15/16) Goodman, Jennifer

A new apartment project under construction in Texas will straddle two separate city blocks. Oleander Apartments, a 327-unit development located in the Hospital District of Fort Worth, is indeed being erected on a couple of separate blocks and connected by a bridge. Designed by JHP Architects and developed by Dallas-based Lang Partners, the 279,114-square foot apartment complex will connect one five-story wood-frame building via a sky bridge to another five-story wood frame-building wrapped around a six-level concrete parking garage. The bridge will provide a crossover to the apartments' garage, clubhouse, pool, and other shared amenity areas. Monthly rents will range from $1,100 to $2,800 a month. It is on pace to be completed in the summer of 2017. "The construction of Lang Partners' Oleander Apartments will be transformational for the Medical District due to the impressive design and the additional option of high-quality housing for those working and serving in the neighborhood, as well as those looking to be near the Magnolia Entertainment District," comments Brian Webster, executive vice president of KWA Construction.
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New Green Building Report Shows Industrial Sector Prioritizes Sustainability in Design and Operations
For Construction Pros (06/14/16)

The U.S. Green Building Council (USGBC) has released its LEED in Motion: Industrial Facilities report, which highlights the collaborative efforts across the manufacturing sector to design and implement LEED and prioritize environmental stewardship for industrial facilities. There currently are more than 1,755 LEED-certified industrial facilities worldwide totaling more than 496 million square feet and an additional 2,710 projects registered totaling nearly 737 million square feet. The report also highlights the world's most impressive LEED-certified industrial facilities. "The world's manufacturing plants, industrial facilities, and product factories have become an important cornerstone for the global green building industry," says USGBC CEO Rick Fedrizzi. "The growing adoption of LEED in this sector gives corporations another tool to achieve high-performing business operations and positively impact worker health, reduce water and energy use, and increase cost-savings all at the same time." Separately, USGBC's recent Green Building Economic Impact Study found across all industries, green construction is poised to create more than 3.3 million U.S. jobs and $190.3 billion in labor earnings by 2018.
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