Real Estate Management News - 05/17/2017

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May 17, 2017
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IREM® HEADLINES
Asset Management in Affordable Housing Is Theme of CHAM Conference
CRE Market Insights – Compass Report Redesign
Last Call to Register for Today’s Asset Manager Webinar
Invest in Success Conference/IREM West Regional Meeting

INDUSTRY HEADLINES
Landlords Enter the Flexible Office Marketplace
Inside Kushner Cos.' Monmouth Mall Makeover
Kilroy Realty and Nautilus Solar Energy Announce a 5MW Commercial Solar Portfolio Development in California
Fed’s Rosengren Warns That Fannie, Freddie Reform Could Roil Commercial Real-Estate Market
Apple's New Headquarters Is a Sign of Tech's Boom, Bravado
Amazon Is Putting a Homeless Shelter Inside Its New Seattle Office Building
Why Affordable Apartments Are Hard for Low-Income Renters to Find
Facility Security Starts at Your Perimeter
Walk This Way: Values of Most 'Walkable' US Apartment Properties Expected to Weather Supply Wave Better Than Others
Neighbors Anonymous: Engaging Residents in Multifamily Communities
Shopping Malls in Colombia Now Have Breastfeeding Mannequins
Infographic: 15 Modern Office Layout Trends for 2017
Cottonwood Residential Debuts New Brand as Part of Larger Effort to Expand into Prominent Markets
When the Worst Happens: Responding to Violence at Work


 
 

IREM Headlines


Asset Management in Affordable Housing Is Theme of CHAM Conference

Thought leaders from across the affordable housing industry will gather in Denver June 25-27 for the annual CHAM Conference to explore and discuss emerging topics and trends within the asset management discipline.

The theme of this year’s conference is “Weathering the Storm: Asset Management Takes the Helm.” With its strong focus on improving project and portfolio-wide performance by promoting effective asset management techniques, the conference will bring together industry leaders and other key stakeholders to discuss a wide range of issues affecting the industry. Among the speakers will be Michael Simmons, CPM, past IREM national president, who will be on the opening plenary session panel, and Dustin Read, PhD, who will share results of IREM’s research on asset management.

CHAM - the Consortium for Housing and Asset Management - is a collaboration of leaders in the fields of nonprofit affordable housing production and community development: Enterprise Community Partners, the Local Initiatives Support Corporation (LISC), and NeighborWorks America. CHAM's mission is to better enable community-based organizations and others in the nonprofit housing industry to responsibly own and professionally manage affordable rental housing.

IREM is a sponsor of the 2017 CHAM Conference. To learn more about the program and register to attend, go to: https://www.cham.us/2017-conference-info
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CRE Market Insights – Compass Report Redesign

For two decades, Cushman & Wakefield NorthMarq’s bi-annual Compass Report has not only provided CRE market insights to the greater business community and media publications, but has also guided commercial real estate developers, owners/investors and occupiers in their decision-making processes as they investigate the Minneapolis-St. Paul market.

However in 2015 Cushman & Wakefield NorthMarq realized there needed to be a change. And the signature report’s redesign project is what won a 2016 IREM REME Award for Corporate Innovation. While Compass had enjoyed consistently strong readership metrics for decades, the dense, text-heavy research report format had not changed since inception. A plan was created to focus on stronger visual communication, more succinct content and graphical organization of trends with supporting infographics. In turn, this content would lend itself to stronger impact on social media, email campaigns and blog posts.

A crisp new design for Compass was launched in the January 2016 issue. The new-look report has been adapted for use by top management and is continuously hailed as one of the company’s most successful marketing exercises to date. Building data is exhaustively compiled for the multi-tenant office, industrial, retail, medical office and other markets for each subscriber’s perusal. The typical subscriber has access to such information as individual building vacancy and net rates, but also more broad information such as historical vacancy by product type and/or submarket.

“Looking to the future, we realized that to keep our market-leading position on providing Twin Cities CRE market intelligence for our clients, we needed to redesign the report to resonate with today’s readers by using more visual storytelling, reduced text and easier-to-read narratives. We believe this project will continue to make an impact on the overall Twin Cities business community since its breaks down complex commercial real estate market intelligence and helps our clients create value, solve problems and seize market opportunities,” states Lisa Dongoske, EVP of Asset and Occupier Services, Cushman & Wakefield NorthMarq, AMO.

Check out the full story in the May/June edition of JPM. You can also learn more about Compass at northmarqcompass.com.
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Last Call to Register for Today’s Asset Manager Webinar

Register for today’s webinar, You Might Be an Asset Manager and Don’t Even Know It: Defining Asset Management in Property Management, scheduled for 2:00 PM - 3:00 PM, Central Time. This live webinar covers the results from IREM’s seminal research report Real Estate Asset Management: A Process and A Profession, which explores the roles, responsibilities, and requirements placed on individuals working as asset managers.

Dr. Dustin Read of Virginia Tech will outline the key asset management functions and tasks, as well as the skills required to complete them in practice. He will also share insights gained from interviewing 90 real estate practitioners familiar with asset management as both a process and as a profession on how sophisticated ownership groups and real estate service firms are sourcing talent to fill asset management positions within their organizations.

Register Now!
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Invest in Success Conference/IREM West Regional Meeting

The over 500 asset and property managers who attended the 27th annual IREM Invest in Success Real Estate Conference in Costa Mesa, CA last week were treated to variety of educational and networking opportunities.

As 2017 IREM President, Mike Lanning, CPM, Cushman & Wakefield, AMO, noted in his opening remarks, “Those of you in attendance today are surrounded by intelligent, like-minded practitioners, who are immersed in the real estate management profession, just like you. This is a wonderful opportunity for you to share opinions, ideas, best practices – and to learn – because you are with people who get it.”

Keynote speaker Doug Lipp, former head of the Training Team at Disney University, discussed the behaviors, tools, and attitudes that drive cultural excellence at Disney and other top organizations – and gave those in attendance ideas on how to build a better business and brand.

Educational session topics ranged from economic forecasts to working through change, from the dark side of social media to impacts of recent legislation, which means attendees had a plethora of opportunities to learn something new to put into practice at their own organizations.

IREM Chapter Leaders from across the west region also gathered at an IREM Regional Meeting held in conjunction with the conference to discuss how important a strong, contemporary chapter network is to achieving IREM’s strategic goals and industry relevance.
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Industry Headlines


Landlords Enter the Flexible Office Marketplace
National Real Estate Investor (05/12/17) Kirk, Patricia

A growing number of office building owners are offering flexible options to tenants who want temporary space or a lease commitment of less than three years. A new LiquidSpace study found that more than 30 percent of public listings on LiquidSpace come from businesses sharing excess space,. However, building owners and managers have jumped into the mix and now account for 7 percent of listings. That's twice the amount a year ago. Mark Gilbreath, founder/CEO of LiquidSpace, states, "The opportunity to provide flexible space has gotten large enough [that] it's now on landlords' radar screen." Gilbreath adds that companies using LiquidSpace include large, creditworthy tenants seeking flexible, creative space for teams of 15 to more than 100 members who are working on special projects or entering new markets and are unsure of future space needs.

WeWork, Regus, and other coworking companies are capturing demand from this market. Office landlords naturally want in on this business. Shorter business cycles coupled with an increase in contract assignments and temporary staffing and workforces distributed through multiple geographic locations have been the underlying drivers of demand for flexible office space. According to the LiquidSpace study, technology companies lead the categories of tenants currently seeking flexible space at 41 percent, followed by consulting firms (24 percent); financial services (10 percent); and media (7 percent). Researchers note that the ubiquity of cutting-edge technology -- everything from high-speed WiFi and mobile devices to cloud computing and collaborative software -- has provided employees the freedom to work from various locations and reduced the number of people working at the same time in the same office.
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Inside Kushner Cos.' Monmouth Mall Makeover
Wall Street Journal (05/13/17) Morris, Keiko

Kushner Cos. is converting a giant New Jersey shopping mall into a retail village with entertainment space and apartments, "transforming it for the next generation." The New York-based developer has joined forces with Rouse Properties, owned by affiliates of Brookfield Asset Management Inc., to revamp the Monmouth Mall in Eatontown, N.J., into an open-air shopping village. Renamed the Heights at Monmouth, the nearly $500 million project will feature a walkable streetscape, more dining and entertainment venues, and multifamily housing. Kushner President Laurent Morali states, "This is where malls are heading, and we need to transform it for the next generation." The venture aims to get ahead of the changes buffeting the retail sector, which include consumers increasingly opting for Web-bsaed shopping and reducing the time they spend in shopping malls.

The 1.5 million square-foot Monmouth Mall hasn't been hit with large vacancies like other shopping centers throughout the country. However, retail and property analysts and brokers say even owners of top-performing malls in strong locations are aggressively redeveloping their assets. "The trophy landlords . . . are moving today because they already have market share and dominance, and they aren't going to give it up," states Garrick Brown, national retail-research director for Cushman & Wakefield. Mall owners have gravitated toward the open-air format with fine dining and such entertainment options as laser tag and multi-screen cinemas. The rationale: more time spent at these centers translates into more dollars spent, concludes Adelaide Polsinelli, a principal at real estate services firm Eastern Consolidated.
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Kilroy Realty and Nautilus Solar Energy Announce a 5MW Commercial Solar Portfolio Development in California
PRNewswire (05/14/17)

Kilroy Realty Corp. (KRC) and Nautilus Solar Energy LLC last week announced the ground breaking for a portfolio of commercial solar developments spread across nine of the former's Class A office properties across Southern and Northern California. The decision to develop solar projects for each property not only leverages the respective strengths of each party, it also extends their common vision towards building a more sustainable future. "We chose to work with Nautilus Solar because of their exceptional track record of successfully developing and financing complex commercial solar developments in the U.S.," remarks Sara Neff, KRC's senior vice president of sustainability. "This solar portfolio will complement our longstanding commitment to reducing energy consumption throughout our buildings."

The commercial solar developments will be comprised of solar carport and rooftop applications located at Kilroy's office properties in San Diego, San Francisco, Menlo Park, and Long Beach. These sites will begin construction by the end of next month, with most reaching final completion by the end of the year. Jeffrey Cheng, COO of Nautilus, comments, "We're very pleased to provide a solution for KRC that allows them to achieve their sustainability goals in an economic manner and look forward to expanding our relationship."
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Fed’s Rosengren Warns That Fannie, Freddie Reform Could Roil Commercial Real-Estate Market
MarketWatch (05/09/17) Robb, Greg

Boston Federal Reserve President Eric Rosengren last week stated that efforts to overhaul Fannie Mae and Freddie Mac could lead to "a potential and significant shock" to the nation's commercial real-estate sector. The two government-sponsored enterprises have historically boasted outsize influence on the single-family mortgage market. Rosengren, though, expressed concern that the duo's growing clout in the multifamily housing sector may pose risks as the federal government considers new structures for each. In a speech delivered at New York University's Stern School of Business, Rosengren said Fannie and Freddie's "large and growing footprint" in apartments and condominiums is noteworthy. Rosengren has been expressing concerns about so-called "reach for yield" in the commercial real-estate market since 2015's fourth quarter.
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Apple's New Headquarters Is a Sign of Tech's Boom, Bravado
Fox Business (05/14/17) Mickle, Tripp; Brown, Eliot

In April, Apple Inc. employees started testing the company's latest innovation: Apple Park, one of the most expensive corporate campuses ever. The first of 12,000 Apple headquarters employees moved from several rather drab buildings in Cupertino, Calif., across town to space in the 2.8-million-square-foot circular building that is meant to resemble a spaceship. It boasts a seamless, curved-glass exterior and a theater architects said was designed to look like a MacBook Air. The estimated $5 billion project is the most lavish in a spate of glitzy new architectural projects by technology companies at a time when their operations are booming and market valuations are skyrocketing to new heights. Facebook Inc. and Alphabet Inc., for instance, have tapped architects Frank Gehry and Bjarke Ingels for their expansions, while Amazon is building giant glass globes containing an indoor forest in Seattle. Not to be outdone, business-software company Salesforce.com Inc. paid to put its name on a new, 61-story tower that will be the tallest building in San Francisco.

Louise Mozingo, an urban-design professor at the University of California, Berkeley, observes, "This is what rich, wealthy and powerful individuals have done since the Pharaohs built the pyramids -- you build a building that projects power to the world," said who wrote a book on corporate campuses." To be sure, the trend marks a departure for the tech industry, which long eschewed the corporate palaces of financial and oil giants in favor of largely bland and "low-slung" office buildings. These new buildings are designed to project their companies' identities. For instance, Amazon -- named after the rainforest -- earlier this month began planting trees in the glass spheres of its new Seattle headquarters.
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Amazon Is Putting a Homeless Shelter Inside Its New Seattle Office Building
Business Insider (05/10/17) Garfield, Leanna

Last year, Amazon purchased an old motel in downtown Seattle and turned it into a temporary shelter for the homeless. The lease only extends through this October when the building will be demolished to make way for a couple of new Amazon office towers. Now, the Internet retail giant will give the shelter a permanent home. On May 10, Amazon announced it will devote half of one of the six-story office buildings to the shelter, known as Mary's Place. Construction on the two towers is on track to start this fall, with a 2020 grand opening targeted.

The project is one of Amazon's biggest philanthropic ventures to date. The current shelter features 60 rooms and can house up to 200 people. The new, 47,000-square-foot space will be larger, with about 220 people able to live there in its 65 rooms. Seattle is weathering a homelessness crisis, which led the city's mayor to declare a state of emergency two years ago. Moving Mary's Place into its new office building could help Amazon's reputation, especially in Seattle. In recent years, anti-gentrification activists have blasted the company for driving up commercial real estate costs and making downtown less diverse. When Amazon's 10 million-square-foot corporate campus opens by the end of the decade, it will take up 15 percent of the city's inventory.
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Why Affordable Apartments Are Hard for Low-Income Renters to Find
Multi-Housing News (04/28/17) Betancourt, Kim

Kim Betancourt, who oversees economics and market research for Fannie Mae's multifamily housing platform, details her team's latest findings on barriers to apartment affordability. In its Multifamily Market Commentary for March, the team stated that it anticipates almost 404,000 apartment to come online this year -- up from around 343,000 deliveries in 2016. However, only a small number of metropolitan markets account for a disproportionate share of the U.S. total. Last year, five major gateway markets -- Boston, Los Angeles, New York City, San Francisco. and the nation's capital -- combined to account for approximately 79,000 of the total apartment deliveries. This year, those five metros will have nearly 81,000 deliveries.

These cities tend to have substantially more expensive housing than other parts of the country. So, it's no surprise that much of the construction occurring in them is of the high-rent, Class A variety. Meanwhile, the cost of construction for all types of multifamily housing has risen every year for the last four years, with 2017 not expected to be any different. RSMeans researchers estimate that the cost of constructing a building with eight to 24 stories will average $34 million this year, a 20 percent increase in just a few years. Among the leading major metros, only the District of Columbia, at $31.2 million, fell under the national average. Such factors as increased net migration, job growth, and a rising renter population have helped boost activity there.
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Facility Security Starts at Your Perimeter
Inside Indiana Business (05/04/17) McCarty, Mike

The recent shooting at a San Bernardino, Calif., school illustrates that security for every business and workplace begins at your perimeter. The best way to deal with a potential shooter or anyone else who intends to cause harm to a building's occupants is to keep them from getting into your facility in the first place. Security begins with your perimeter, with knowing who is in your facility and why. A visitor management system is therefore a vital part of creating that perimeter. Such a system gives you a way of controlling access to the building's interior and is one of the most effective ways to help minimize potential threats.
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Walk This Way: Values of Most 'Walkable' US Apartment Properties Expected to Weather Supply Wave Better Than Others
CoStar Group (05/10/17) Drummer, Randyl

CoStar's State of the U.S. Multifamily Market First-Quarter 2017 Review and Outlook shows that one segment of the high-end urban apartment market continues to be a stand-out performer: those apartment properties in the most walkable locations, based on a CoStar analysis of sales ranked by price per unit. Apartment buildings with Walk Scores more than 90 -- denoting a "walker's paradise" based on an algorithm awarding points for proximity to employers, public parks, entertainment, and schools -- registered a 16 percent increase in price paid per apartment year-over-year in the first quarter of 2017. Since 2010, CoStar researchers found per-unit pricing has increased a whopping 167 percent for the most walkable apartment properties. The scores are generated by Seattle-based Walk Score, which assigns a numerical walkability score to any address in the United States, Canada, and Australia.
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Neighbors Anonymous: Engaging Residents in Multifamily Communities
Property Management Insider (05/09/17) Blackwell, Tim

More apartment owners and operators are looking to increase renewals through engaging residents with their neighbors. Today's apartment residents are more social butterflies than they have been in years, expecting a greater sense of community in the place they call home. To this end, property management has a new social responsibility to cultivate a tighter-knit culture. The latest research by Witten Advisors, an apartment market strategy consultant, showed that 53 percent of residents don't have a friend in the community where they live. Furthermore, only 3 percent had seven or more friends. But the takeaway is that 47 percent of that group with seven or more friends was more likely to renew. A resident who is comfortable with his or her neighbors is more likely to re-up his or her lease for another year or more.

That theory especially resonates with Millennials. "There's been some very specific connections between the number of relationships a person has in an apartment community and their likelihood to renew," says ManagInc COO Jen Piccotti, former SatisFacts senior vice president of education and marketing. "There is a lot of research that backs up that the more friends you have in your community, the more likely you are to stay and feel plugged in." The trend has given rise to operations like Apartment Life, a faith-based, non-profit organization that, via its CARES program, focuses on increasing resident retention and improving resident satisfaction. CARES Teams live onsite and welcome new neighbors by offering insight to the community. According to Apartment Life's website, 83 percent of apartment residents and 92 percent of staff said the "sense of community" was stronger at a CARES community.
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Shopping Malls in Colombia Now Have Breastfeeding Mannequins
Metro.co.uk (05/11/17) Scott, Ellen

Despite being one of the most natural things in the world, many people are still uncomfortable with the sight of a woman breastfeeding in public. One shopping mall in Bogota, Colombia, has introduced a new way to normalize the practice. Centro Mayor mall has placed breastfeeding mannequins in a number of its stores. The female mannequins are depicted with their shirts unbuttoned, holding a baby mannequin up to their nipple. The idea for the initiative comes from Amigos de la Lactancia (Friends of Breastfeeding), a group that's fighting back against breastfeeding shame and looking to change attitudes. Each shop that has agreed to display the mannequins has declared itself a breastfeeding-friendly zone.
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Infographic: 15 Modern Office Layout Trends for 2017
Commercial Property Executive (03/20/17)

The article details more than a dozen modern office layout trends that have been taking hold this year. First and foremost, private offices are out, and large open floor plans are now very much in demand. As part of this drive for more "open" offices, glass-enclosed conference rooms are going a long way to maintaining such a vibe. So, too, are open kitchens and lounge areas in today's modern offices. Collaboration workstations, with seating for four or more employees, are proving to be increasingly popular. Standing desks, meanwhile, are being utilized in those offices aiming to be seen as healthy work environments. To this end, office buildings with on-site fitness facilities have fast become a top draw for building tenants with younger, active staffs.

With more companies and corporate departments transferring files to the cloud, there is less of a need for storage rooms within offices. Separately, commercial property professionals are seeing a growing number of offices that are organized by colors. Adding pops of color in unexpected ways can brighten employee moods and result in more interesting furniture choices. Office managers, meanwhile, are stressing the need for less desk clutter and wires, in general. Under-the-desk organizers are a great accessory for office workers looking to de-clutter. Finally, an increasing number of offices are looking to bring the outdoors inside with the addition of plants and natural light.
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Cottonwood Residential Debuts New Brand as Part of Larger Effort to Expand into Prominent Markets
Multifamily Executive (05/10/17)

Cottonwood Residential recently unveiled its new brand at two recently acquired apartment communities. The first is Modera Prime 235, a luxury community in St. Petersburg, Fla., which has been rebranded Cottonwood Bayview. The second is Elan Westside, an upscale community in Atlanta's West Midtown neighborhood, which has been rebranded Cottonwood Westside. "The brand represents the next phase for Cottonwood Residential, in which we are redefining our portfolio to provide the best apartment living experience available in incredible locations where today’s renters want to live," comments Cottonwood Residential President Chad Christensen.

Looking to transform its portfolio, the firm is reinvesting in well-appointed communities in strategic Class A locations while also rehabbing existing Class B apartment properties. The company's plans also include implementing an upgraded all-in-one property management system, which aims to simplify the resident user experience and streamline operations. Cottonwood Residential has focused solely on the multifamily housing sector since its 2004 inception. The firm currently owns and/or manages more than 18,000 rental units in 15 states.
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When the Worst Happens: Responding to Violence at Work
Business Insurance (04/25/17) Esola, Louise

Employers in every industry need to better prepare for what to do before, during, and after an event of workplace violence, according to experts at the recent Risk & Insurance Management Society Inc. conference in Philadelphia. Only two out of 50 risk managers raised their hands when a panelist asked who of them knew exactly what to do in the event of an emergency in the workplace. According to Dr. Teresa Bartlett, senior vice president of medical quality for Sedgwick Claims Management Services Inc., the best thing a risk manager can do to get the workplace back to normal after a tragedy is to make it a normal practice to prepare for the worst. Some key components in preparing for tragedy include assigning a crisis management person for each area or floor of the building, ensuring a company has proper equipment to assist individuals with disabilities, designing and designating escape routes, and installing bulletproof glass in some areas.
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