Real Estate Management News - 12/23/2014

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December 23, 2014
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LEADERSHIP SPOTLIGHT
Managing Conflict with Your Boss

IREM® HEADLINES
Business Strategies for Real Estate Management Companies
Growing Market Demand for Transparency in Sustainability
Visit the IREM Team Store for IREM and Custom Merchandise

INDUSTRY HEADLINES
Empire State Building's Managers Face New Investor Suit
N.J. Legislators Want to Expand Law Requiring Carbon Monoxide Detectors
Seven Helpful Tips to Prevent Fires from Alternative Heating Sources
Brick-and-Mortar Still Rules Holiday Shopping, Study Finds
Inventor Offers New Fire Safety Option
Portland May Require Commercial Building Owners to Report Energy Usage
Energy-Efficient Lights, Fixtures Approved for NC Apartment Complexes
Demand for Office Space Heats Up as FIRE Sectors Recover
Luxury Living on the Mall Parking Lot
Getting to Zero Buildings Database Launches
Creating Balance in the Open Office
Blackstone to Sell U.S. Shopping Centers for $512 Million


 

Leadership Spotlight


Managing Conflict with Your Boss

Successful managers seek out, build, and maintain effective relationships with others. Managers who derail or are otherwise sidelined during their careers often mishandle interpersonal relationships. One common problem related to relationships is unresolved conflict with a boss or showing unprofessional behavior related to a disagreement with upper management. Effectively managing conflict with your boss can energize you, helping you increase your effort, air your feelings, and stimulate critical thinking, creativity, and innovations. It leads to better decision making and exposes key issues that need to be addressed, helping you avoid future conflict. On the other hand, mishandling a conflict leads to negative consequences, such as decreased productivity, communication, and cooperation; increased negative feelings and stress; and a poisoned work environment.

When conflict arises between people at different levels in the organization, the path toward resolution can be hard to see. Before you can manage a conflict with your boss, it’s important for you to examine your own definition of conflict, your beliefs about conflict, and your behavior during a conflict situation. It also requires you to assess your boss’s perception and expectation of your performance.

Your boss may also have expectations related to your style of creating and maintaining effective working relationships. Many bosses have a high regard for loyalty, openness, tolerance, and focus. If you fail to meet those expectations, conflict can result. Likewise, you should be aware of your own expectations regarding what you need from your boss in terms of performance, support, and feedback. When you understand the expectations on both sides you will have a broader understanding of the landscape on which the conflict rests and be better able to work toward a resolution.

Under its partnership with the Center for Creative Leadership (CCL®), IREM now offers a self-paced, online course that will walk you through a seven-step conflict management plan that you can use to help you with Managing Conflict with Your Boss.

The Center for Creative Leadership (CCL®) is ranked among the world's Top 5 providers of executive education by Financial Times and in the Top 10 by Bloomberg BusinessWeek.
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IREM Headlines


Business Strategies for Real Estate Management Companies

Whether you’re starting your own firm or want to grow an established business, the just-released third edition of the IREM publication “Business Strategies for Real Estate Management Companies,” will show you how to attract and retain clients, market your business more aggressively, expand the services you offer, and boost your company’s profits in today’s changing climate. This new edition also features six case studies of real estate management companies in their infancy, providing an inside look into the trials and tribulations likely to be encountered by a fledgling enterprise, along with tips and lessons learned.

Among the specific topics the publication explores in depth, with seasoned insights and “how to” guidance:
  • Hiring and retaining talent
  • Understanding the dynamics of the manager and client relationship
  • Creating a winning management proposal
  • Taking over a management account
  • Handling legal issues and ethical practices
  • Managing and mitigating risks.
Now available in either a Hardcopy or Electronic version.
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Growing Market Demand for Transparency in Sustainability

Excerpt from the IREM Blog posting on December 16, by Todd Feist.

Sustainability can no longer be seen as something you tack on to your existing operations in order to save on operating expenses and do the right thing. More often, it is a risk management issue and wise business practice, in large part because clients, tenants, investors, and other stakeholders are demanding more transparency in sustainability and corporate social responsibility (CSR) data. They also want to know how deeply these values are integrated into organizational culture and mainstream business practices.

Investor Demand: More real estate investors recognize that sustainability leads to asset value enhancement. They are attracted to the ability of the property to keep up with regulatory requirements for energy transparency and to guard against obsolescence. They recognize the tenant demand benefits, as companies with sustainability and CSR initiatives seek green space. This increased awareness among investors has led to price premiums of 2 to 30% for green buildings, according to several studies.

Tenant Demand: Companies have real estate policies with minimum sustainability performance requirements. They will enter a lease transaction demanding to see specific data on the property’s resource consumption, material use, recycling programs, and similar metrics. This data then rolls up into their sustainability and CSR reporting for their stakeholders, enhancing the value of the company. Real estate managers can add value to their services and attract tenants by becoming sensitive to and knowledgeable of these needs.

Employee Demand: Employees—yours, your tenants’, and your clients’—want to work in healthy, environmentally friendly, and comfortable workplaces. They want to feel that their employer cares about them, and they want to work for a company that cares about the world. A recent survey showed that over 50% of employees would like to see a change in their company’s employee sustainability efforts, and 65% want to learn more about what their co-workers are doing related to conservation.

Shareholder Demand: Public companies see an increasing demand from shareholders for sustainability and CSR data in formal reports. Standards are emerging for how this data is reported to shareholders and other interested parties.

Are you seeing this demand for more transparency in your market and business? It will vary by market and the clients and tenants with which you work—but demand will continue to grow.

You can find more information about sustainability at the IREM Sustainability website: www.iremsustainability.com.

Continue checking the IREM Blog for other useful information.
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Custom Merchandise: You can also custom order merchandise with your company logo! Contact the Team Store for more details.
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Industry Headlines


Empire State Building's Managers Face New Investor Suit
Bloomberg (12/19/14) Hurtado, Patricia

In New York City, the Empire State Building's managers last week were accused in a new lawsuit of defrauding investors when the landmark skyscraper was taken public. Similar suits in state court were dismissed this past summer after a judge said the investors had agreed not to sue the managers, Peter and Anthony Malkin, after settling with them in a related case. Investors in those cases said the father-and-son team wrongfully turned down higher offers for the iconic building by itself to drive up the value of 17 other Malkin-owned properties by making the Empire State Building the centerpiece of a REIT. According to the latest lawsuit filed in Manhattan federal court, investors allege that the Malkins schemed to "usurp power, revenue, and ultimately the building itself" from its owners by issuing false and misleading statements to gain investors' consent to the consolidation of the various buildings.

Investors charge that due to the actions of the Malkins, the proceeds of the public offering were reduced by approximately $234 million. "These claims are wholly without merit and we will respond to them in court," said Nathaniel Garnick, a spokesman for the law firm representing Empire State Realty Trust. Some of the plaintiffs were part of a group which opposed the inclusion of the Empire State Building in the REIT. They contend that the Malkins spearheaded a sophisticated publicity campaign to secure the necessary unit-holders' votes, depriving them of the value of the Empire State Building to which they were entitled.
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N.J. Legislators Want to Expand Law Requiring Carbon Monoxide Detectors
NorthJersey.com (12/17/14) Cowen, Richard

In reaction to the deaths of two people in a Passaic, N.J. rehearsal studio earlier this month, Democratic lawmakers in the Garden State have proposed sweeping legislation that would require carbon monoxide (CO) detectors in nearly every commercial building and school throughout the state. Sponsored by Assemblyman Gary S. Schaer and Sen. Paul Sarlo, the bill would require the owners of buildings with a potential for a carbon monoxide hazard to install CO alarms or pay a fine. But some business leaders are skeptical of what they fear is government overreach in the wake of a tragedy. While acknowledging the danger of CO, some business leaders are concerned that such a regulation if approved may not be enforceable. Schaer counters that carbon monoxide detectors are inexpensive and can safeguard against a deadly, odorless, and colorless gas. Under current state law, such detectors are required only in hotels, rooming and boarding houses, apartments, and single- and two-family houses upon initial occupancy or a change in occupancy.
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Seven Helpful Tips to Prevent Fires from Alternative Heating Sources
Property Management Insider (12/09/14) Blackwell, Tim

Apartment owners and operators take note. The National Fire Protection Association (NFPA) and other fire prevention advocates warn that heating a living space can be dangerous when using alternative means if precautions are not taken. In 2011, heating equipment was involved in nearly 54,000 reported U.S. home structure fires, causing $893 million in direct property damage and taking 400 lives while injuring 1,520 others. The risk of fire or carbon monoxide poisoning from using kitchen devices should be taken into account when alternate heating sources are used for home heating. Ed Wolff, President of LeasingDesk Insurance, says apartment managers should educate residents about how to use alternate heating devices safely.

In an effort to help prevent unit fires from alternate heating sources, the American Red Cross offers the following tips: one, keep all potential sources of fuel at least three feet away from space heaters, stoves, or fireplaces; two, do not leave portable heaters unattended; three, place space heaters on a hard, level, and nonflammable surface; four, look for space heaters that shut off automatically; five, screen off fireplace; and, finally, have stoves, fireplaces, and chimneys professionally inspected and cleaned once a year. Apartment managers should also instruct residents to never use a cooking range or oven to heat their units. Regular inspections and testings of all smoke alarms is also highly recommended.
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Brick-and-Mortar Still Rules Holiday Shopping, Study Finds
Bloomberg (12/18/14) Rupp, Lindsey

According to Manhattan Associates, shopping malls may live in fear of Amazon and the plethora of other online retailers, but the majority of U.S. consumers are still buying most of their holiday gifts at brick-and-mortar stores. The Atlanta-based firm, which worked with IDG Research Services on its latest survey of the retail sector, found that while 93 percent of consumers plan to do some online shopping this holiday season, 54 percent will primarily purchase gifts from stores. According to Retail Metrics, same-store sales topped estimates in November helped by lower gasoline prices and an improved employment market. Additionally, many shoppers are ordering goods online and picking them up in the stores, melding the worlds of online and offline commerce. Manhattan Associates found that 77 percent of Internet consumers will choose to pick up their online orders in the store, while 78 percent prefer to return items in person to local stores.
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Inventor Offers New Fire Safety Option
Victoria Advocate (Texas) (12/17/14) Garcia, Laura

Texas resident Tony McGarrah invented something he believes could help prevent the loss of lives during a building fire. People trapped in structures during a blaze could exit through his emergency access corridor using a kick-and-push method, which can be retrofitted into walls of existing high-rise office buildings, hotels, commercial businesses, and even schools. Fire experts agree that, in the worst cases, occupants may have as little as two minutes to escape a burning building before it is too late to get out.

McGarrah said his invention could be effective in a wide array of emergencies from a fire or building collapse to a hostage situation or a school shooting. While the panels look like any other wall, the interior drywall has been perforated so any individual can kick a pathway through the other side in an emergency situation. Additionally, the walls have a wireless remote that automatically notifies emergency responders. McGarrah said that if the system is used in a hotel, for instance, the installation could be done in a way that the front desk could monitor which walls had been broken and quickly identify the location of a fire. Victoria (Tex.) Fire Marshal Tom Leglar said he has seen instructional videos of the panels and thinks they are a great concept.
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Portland May Require Commercial Building Owners to Report Energy Usage
Oregonian (OR) (12/18/14) Njus, Elliot

In an effort to curb carbon emissions, Portland may soon begin gathering and publicizing energy use data from nearly 1,000 of its biggest commercial buildings. The new policy, which still requires approval from the Portland City Council, would compel owners of commercial buildings 20,000 square feet or larger to track figures from monthly utility bills and report year-end results. The landlords would report their building's energy use per square foot and total annual carbon emissions to the city on an annual basis. City officials would ultimately release these figures online, which could then be used by potential tenants or potential buyers to convince owners to make investments in energy efficiency. To date, a total of 10 other major U.S. cities have implemented similar programs. Seattle, for instance, has required buildings of a similar size to report energy usage since 2010. However, it does not post the findings publicly. For its part, San Francisco requires reporting for buildings as small as 10,000 square feet, and it does post the figures on a website.
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Energy-Efficient Lights, Fixtures Approved for NC Apartment Complexes
Raleigh News & Observer (NC) (12/18/14) Murawski, John

Late last week, North Carolina regulators approved an energy efficiency program that will supply free materials to apartment owners and operators in the Duke Energy Progress service area. Approved by the state's Utilities Commission, the program will distribute energy-efficient light bulbs, faucet aerators and low-flow shower heads to apartment communities with the ultimate intent of getting residents to cut their energy usage. It is expected to become available in 2015. Currently, around one-fifth of Duke Energy's nearly 2.7 million residential customers live in multifamily housing. Duke plans to recoup the cost of free materials and lost power sales through utility bills. In approving the program, the N.C. Utilities Commission reasoned that it is in the best interests of the public.
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Demand for Office Space Heats Up as FIRE Sectors Recover
National Real Estate Investor (12/17/14) Carr, Robert

Professional services that have traditionally led demand for office space, including finance, insurance, and real estate, have finally made a comeback after a slump following the recession. Office market experts hope that those sectors, collectively referred to as FIRE, will join with the technology and energy industries to heat up office demand in primary U.S. cities during the new year. Pete Culliney, director of research at Colliers International, said office markets that cater to the FIRE sectors hit nearly seven million square feet of absorption in this year's third quarter, almost matching the eight million square feet of absorption in markets that primarily service the intellectual capital, energy, and education sectors. The demand has drawn tremendous attention to the top markets in the United States, by both domestic and foreign investors, according to the latest Colliers report. "These investors are not expecting a high yield. They just believe, especially the foreign investors, that the U.S. office market is very stable," said Avi Benamu, managing director of New York City-based Winchester Equities. "For the most part, they're happy to make single-digit yield because they believe in the long-term appreciation here."

Geographically, new demand has pushed office vacancy down to about 13.5 percent, according to the Colliers research. Vacancy is decreasing even further in already tight markets. Pittsburgh vacancy is now at 7.7 percent, for instance, while New York Midtown South is at 8.4 percent and San Francisco at 7.5 percent. Several secondary and even a few tertiary markets are also seeing improved vacancy numbers, most notably Charlotte, N.C. (8.7 percent); Portland, Ore. (9 percent); and Omaha, Neb. (6.9 percent).
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Luxury Living on the Mall Parking Lot
Wall Street Journal (12/12/14) P. M3 Davis, Lisa Selin

U.S. shopping malls increasingly are being converted into mixed-use developments, with residential space being built on what used to be mall parking lots. In Edina, Minn., a 232-unit, three-building luxury development has gone up on the southeast corner of the mall's parking lot; and it was 50 percent leased three months after opening. "There was not any new supply of luxury rental product in Edina," said Stuart Co. CEO Lisa Moe. "We were able to fill a void." Similar developments have opened at malls in Phoenix, Raleigh, and Atlanta. Meanwhile, some malls that have closed, including White Flint in Rockville, Md., and Landmark in Alexandra, Va., will be razed, with housing built in their place. These projects are making it possible for developers to meet demand for walkable neighborhoods in the suburbs, and the proximity of shopping malls to major highways and mass transit have made them prime targets for redevelopment. Patrick Peterman -- vice president at the nation's biggest mall owner, Simon Property Group -- says, "We get calls all the time from residential and hotel developers wanting to buy land in our parking lots."
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Getting to Zero Buildings Database Launches
SustainableBusiness.com (12/11/14)

The New Building Institute has launched its Getting to Zero Buildings Database, which currently includes 280 buildings in the United States and Canada in all climate zones and sizes. Most of the 280 are office buildings (134) and schools (69). In the U.S., there are buildings that made the list from 44 states, the District of Columbia, and Puerto Rico. The database can be searched by building type, size, location, efficiency level, and retrofit versus new construction. Each profile includes details on everything from energy use to design features to companies involved in the project. Another tool that is under development is the 2030 Design Data Exchange by the American Institute of Architects (AIA) and the U.S. Energy Department by which architects will be able to enter data and anonymously compare their project performance with those in the AIA 2030 Commitment portfolio. Earlier this summer, architects worldwide unanimously adopted the 2050 Imperative, which commits them to 100 percent net-zero energy design and construction by then.
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Creating Balance in the Open Office
Buildings (12/01/14) Curtland, Christopher

While many firms believe that enhancing employee engagement means cultivating collaboration through open work space, some building experts say they should focus on finding a balance between open and closed spaces, quiet and collaboration, and privacy and spontaneity. The problems with open offices are well known and include everything from sound control to inadequate meeting spaces to inflexible furniture and partitions. While research shows that lack of space is an important issue to worker satisfaction, it is possible that improving the use of the current space can address such concerns.

But when it comes to space utilization, "the problem is that one size doesn't fit all," remarks Karen Thomas, principal at architectural firm Lawrence Perry and Associates. "If the design is not appropriate for the individual company and the users, then it's not going to work." Jim Hanlin, corporate interiors design principal at Ziegler Cooper said it can be helpful to think of work modes in terms of different styles and the different generations in the workplace. To this end, each group's expectations in terms of aesthetic, acoustic, ergonomic, and amenity needs should be taken into account. "Owners assume that if one group has a certain space or amenity, then they should provide it for everybody. That comes from the erroneous one-size-fits-all mentality," Hanlin concludes. "There's a right solution for each group or team. You don't get into the trap of backlash if you understand people's work processes and support them accordingly."
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Blackstone to Sell U.S. Shopping Centers for $512 Million
Bloomberg (12/12/14) Yu, Hui-yong

Blackstone Group LP has agreed to sell a controlling interest in 39 U.S. shopping centers to joint-venture partner Kimco Realty Corp. for $512.3 million. The deal will nearly double the firm's equity investment. Kimco is set to purchase Blackstone's two-thirds interest in the properties, which total 5.6 million square feet and are spread across six states -- New York, Virginia, Texas, Florida, California, and Maryland. The deal is valued at $925 million, including debt. Blackstone is in the process of selling some investments as it markets a new global real estate fund. Kimco has previously been reducing its number of joint ventures and selling lower-quality assets to simplify its holdings. Kimco CFO Glenn Cohen states, "The transformation of our portfolio is in its final stage. We will continue to mine for acquisitions with redevelopment opportunities, but anticipate being a net seller in the fourth quarter." Blackstone bought the stake in the Kimco venture near the end of 2013's second quarter for an implied value of $733 million, including debt from the UBS Wealth Management North American Property Fund.
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