Real Estate Management News - 07/19/2017

IREM Real Estate Management News
Facebook Twitter LinkedIn Banner
July 19, 2017
Send to a Colleague

Find a Job
Assistant Commercial Property Manager
Gain Property Management – Clearwater, FL

Maintenance Director
Hunt Military Communities – Oak Harbor, WA

Commercial Property Manager
Cushman & Wakefield – Virginia Beach, VA

Resident Manager
LBAE & Affiliated Entities – Bronx, NY

Regional Manager
Related Management – New York, NY

All Job Listings

Industry Partners

Attracting Young Professionals

Charter ENERGY STAR® Tenant Space Recognition
The Real Estate Asset Manager's Role in Acquisitions and Dispositions

Investing in Malls, Despite Store Closings
Apartment Vacancy Rates Remain in Low Single Digits in Gateway Markets
Deadly Hawaii Fire Raises Concerns About Lack of Sprinklers in Older High-Rises Across the U.S.
Atlanta’s Apartment Boom Isn’t Cooling, as 12,000 New Units Expected This Year
Six Ways Shopping Centers Are Getting Creative With Their Space Is Installing Latch Access Systems in 1,000 NYC Apartment Buildings for Easier Deliveries
Optimize Your Watering Practices by Addressing These Areas
Healthy and Secure
Renters See Big Benefits in Renewing Leases Instead of Moving as Rents Continue to Skyrocket
Arconic Faces Investor Lawsuit Over Deadly Grenfell Tower Fire
More Citified 'Main Streets' Coming to a Suburb Near You
Gymboree Closing 350 Stores After Filing for Bankruptcy


Leadership Spotlight

Attracting Young Professionals

“Let’s face it,” writes IREM president Michael Lanning in a sobering column for National Real Estate Investor. “This industry is aging. By comparison, while the average age of an American worker today, in any industry, is 43 years old, the average age of a property manager is 50.1 and the average CPM today is 52.3 years old.”

Lanning sees two major issues coming from these statistics. First is “that we as an industry might increasingly be servicing a clientele that is younger than we are. The second is that, to respond to this ever-younger clientele and self-sustain the industry, the management profession needs a strong source of young professionals to continually add to our population.”

Lanning continues. “We need to actively place property management in the forefront of rewarding career options and dispel the preconceived notion that it is somehow a less-than-sexy arm of the real estate industry. We need to compete against the allure of brokerage, for instance, which comes with images of headline-commanding deals with giant paydays.”

IREM has done its part to “spread the gospel of property management to both the population of people beginning to blaze their career paths and those just getting active in the profession.” This includes distributing property management course materials to colleges and universities, and visiting those institutions during career fairs.

“But this effort should not take place only at the association level. Individual members too have a stake in this issue, for, after all, they are the ones on the front line of hiring. They too have to network more than they ever have with colleges and universities and other associations and even other industries.

“We can all contribute to solving the puzzle of an aging industry,” the IREM president concludes.

Read about some up and coming leaders under the age of 30 in the July/August edition of JPM.
Share Facebook  LinkedIn  Twitter  | Full Article

IREM Headlines

Charter ENERGY STAR® Tenant Space Recognition

Do you have incoming tenants with corporate commitments to sustainability and energy efficiency? You can help them achieve their goals by guiding them through the new ENERGY STAR® Tenant Space recognition program for tenants that meet certain design criteria set by EPA.

EPA is looking for “Charter Tenants” to help shape the recognition program. Charter Tenants are organizations that lease office space in multi-tenant buildings and agree to work closely with EPA to provide input and feedback on the criteria and process for earning the recognition. They will be the first eligible to earn the new ENERGY STAR Tenant Space recognition.

Charter Tenant Benefits: EPA will recognize all Charter Tenants for their important role in testing and refining the new recognition. Those that go on to earn the ENERGY STAR Tenant Space designation will also receive a decal for the entrance, a digital logo to use in marketing materials, a certificate, and a listing on EPA’s ENERGY STAR website.

Application & Timeline: To express interest in becoming a Charter Tenant, tenant companies must complete the simple application available at by August 15, 2017. You can demonstrate your value to your tenants by directing them to this program and helping them through the application process.

By early September, EPA will contact all Charter Tenant applicants to confirm their participation. During the fall, Charter Tenants will participate in webinars and discussions with EPA, and will be asked to complete a more extensive application as they explore the five criteria for ENERGY STAR Tenant Space recognition: 1. Estimate energy use; 2. Meter energy use; 3. Light efficiently; 4. Purchase efficient equipment; 5. Share data. Those with eligible spaces who can demonstrate that they have achieved the five criteria will have a professional engineer or registered architect verify the information (including that efficient lighting and meters are in place), and submit a completed application to EPA.

Charter Tenants should be ready to commit approximately 10 hours to this initiative, including discussions with EPA and participation in webinars, as well as completion of the ENERGY STAR Tenant Space application (available later this summer). Questions? Send an email to

Outreach to tenants on sustainability and resource efficiency and use of ENERGY STAR tools and resources are key components of the IREM Certified Sustainable Property certification. Learn more at
Share Facebook  LinkedIn  Twitter  | Return to Headlines
The Real Estate Asset Manager's Role in Acquisitions and Dispositions

WEBINAR: Thursday, August 17, 2017 – 3:00pm ET; 2:00pm CT; 1:00pm MT; 12:00pm PT

Asset management is often described as the process of managing the financial performance of income-producing properties over the entire life-cycle of an investment from acquisitions to dispositions. While generally accurate, this definition does not take into account the fact that many asset managers begin their work long before properties are purchased and remain involved until after they are sold. This webinar sheds light on the various roles asset managers play in acquisitions and dispositions, as well as the ways in which they interact with property managers, to complete the following tasks on behalf of real estate investment management firms:

• Evaluate market conditions
• Vet underwriting assumptions
• Source investment opportunities
• Make disposition recommendations
• Prepare offering memorandums
• Position properties for sale

Dustin C. Read, PhD/JD, serves as an Assistant Professor of Property Management and Real Estate within the College of Liberal Arts and Human Sciences at Virginia Tech. His teaching responsibilities include courses in asset management, commercial leasing and real estate development. Dr. Read's research interests include land use policy, property management and urban growth.

This webinar is part of IREM’s Real Estate Asset Management Initiative, which explores the points of connectivity between the property management and the asset management professions, as well as ways to help individuals working in both fields collaborate more effectively. This exploration draws upon ongoing contributions from practitioners representing real estate investment and service firms in the United States.

Register Now!
Share Facebook  LinkedIn  Twitter  | Return to Headlines

Industry Headlines

Investing in Malls, Despite Store Closings
New York Times (07/15/17) Alster, Norm

Real estate funds have faltered, dragged down by the closing of big stores at shopping malls nationwide. Now, the big question is whether investors in malls can successfully adjust to a threatening environment. Real estate mutual funds and exchange-traded funds hold REITs that must deliver at least 90 percent of after-tax earnings to investors. REITs own all sorts of income-generating properties: apartment communities, warehouses, and medical office buildings, and so forth. Coveted for their yield -- 2.18 percent over the past year -- in a low-rate environment, REIT-owning mutual funds have returned 8.5 percent annually over the last five yeas. But in the year ending June 30, they produced a negative return of 0.61 percent thanks to a 17 percent average negative return among retail REITs, reports Morningstar. While some real estate sectors continue to thrive, mall REITs like Simon Property Group and CBL & Associates have been hit hard by numerous retail outlets folding. Simon, for instance, closed last month just under $162 a share. One year earlier, its shares fetched nearly $217.

Fears of wider surrender to such competitors as Amazon are weighing heavily on retail REITs. This is coinciding with many malls and shopping centers scrambling to find replacements to recently close shops and department-store anchors. There are some signs of success. The Natick Mall near Boston, for instance, lost one of its big tenants in J. C. Penney. However, it has found a replacement for most of that space in the form of Wegmans, an upscale supermarket that could eventually produce 10 times the revenue of the departed department store, estimates Russ Devlin, a research director with AEW Capital Management. Industry optimists say other malls can similarly adjust. New targets range from restaurants to entertainment venues with novel themes. Malls are looking for new ways to amuse. Table tennis is the lure at SPiN, a new chain co-founded by actress Susan Sarandon that will soon open its seventh location. SPiN could appeal to malls "chasing entertainment concepts." Rent pressures, though, will remain strongest in the country's lower-tier malls.
Share Facebook  LinkedIn  Twitter  | Full Article - May Require Paid Subscription | Return to Headlines

Apartment Vacancy Rates Remain in Low Single Digits in Gateway Markets
National Real Estate Investor (07/11/17) Anderson, Bendix

Despite an influx of new development, vacancy rates for rental apartments remain low in the top six U.S. markets. The strongest four markets in the nation -- New York City, San Francisco, Los Angeles, and Boston -- appear nearly impervious to shifts in new supply. Vacancy rates are still very low overall, although it can be argued that certain neighborhoods have too many new super-luxury apartments leasing at the same time. Seattle and the District of Columbia also have strong demand for apartments that has kept up with a flood of new rental units so far. In fact, new construction can make these core markets seem even more attractive. John Affleck, a research strategist with the CoStar Group, states, "More residents in urban areas [do] create a virtuous cycle: amenities improve to serve the affluent newcomers, which in turn attracts more affluent newcomers."

Over the past four to five years, RealPage reports that developers have opened about twice as many new apartments as usual in the top six coastal markets. In San Francisco and Seattle, multifamily housing developers have opened a little more than twice the historical average number of apartments. In Boston and D.C., meanwhile, they have opened close to the historical average. And in Los Angeles and New York, they have opened slightly less than the historical average. The percentage of vacant apartments remains stubbornly low despite this. In five of the six markets, the apartment vacancy rate ranges from 2 percent to 3 percent. The lone exception is Washington, D.C., where the vacancy rate has climbed to 4 percent, states RealPage. "It's probably impossible to overbuild New York or San Francisco at large, Affleck concludes. "But it is quite possible to overbuild the high-end of the market, and weak rents and rising concessions suggest that developers may have succeeded."
Share Facebook  LinkedIn  Twitter  | Full Article | Return to Headlines

Deadly Hawaii Fire Raises Concerns About Lack of Sprinklers in Older High-Rises Across the U.S.
Los Angeles Times (07/15/17) Chang, Heidi; Jarvie, Jennifer

At least three people died Friday after a fire swept across the upper floors of the Marco Polo condominium building in Hawaii, causing hundreds of residents to evacuate. Unfortunately, the 36-story tower was not equipped with sprinklers. Residents and officials in Honolulu, like many other cities nationwide, have for years debated the costs and benefits of installing fire sprinkler systems throughout aging residential buildings. Persuading owners to retrofit such buildings can be a challenge. In the case of The Marco Polo, it was built four years before Honolulu required fire sprinkler systems in new residential high-rises.

Twelve years ago, the Honolulu City Council assembled a task force to estimate the cost of retrofitting and installing fire sprinkler systems in about 300 residential condominium buildings. A report estimated that retrofitting the Marco Polo would cost $4,305.55 for each unit. Owners, who were represented by the Hawai'i Council of Assns. of Apartment Owners, lobbied strongly against any retrofitting, recalls Samuel Dannaway, chief fire protection engineer for Coffman Engineers and author of the 2005 report. "Cost was the reason, he lamented. "This was inevitable. We already knew on this one -- you need to install sprinklers in a high-rise building for the safety of the occupants and the safety of the firefighters."
Share Facebook  LinkedIn  Twitter  | Full Article | Return to Headlines

Atlanta’s Apartment Boom Isn’t Cooling, as 12,000 New Units Expected This Year
Curbed Atlanta (07/14/17) Green, Josh

Atlanta is in the midst of an apartment boom. About 40 such projects are now in various stages of planning, development, or have recently opened in Midtown alone. Large apartment communities, in particular, show few signs of "easing off the gas pedal." Roughly 11,800 new apartments are expected to be added the Atlanta metro area this year -- a 40 percent increase over last year. Another important and relevant stat is that metro Atlanta's employment growth of 3.1 percent makes it one of the hottest job markets in the country. "With more units on the table, renters may be able to get some discounts and concessions on new leases," concluded Yardi Matrix senior analyst Doug Ressler, "including one month of free rent, waived move-in fees, and free gym memberships."
Share Facebook  LinkedIn  Twitter  | Full Article | Return to Headlines

Six Ways Shopping Centers Are Getting Creative With Their Space
JLL Real Views (07/14/2017) Polk, William

Mall owners and operators say there are still some things about visiting a physical retail space that cannot be replicated online. As the retail industry continues to evolve, shopping centers nationwide are seizing new opportunities to move beyond housing bricks-and-mortar stores to transform themselves into activity hubs. The article's author details a half-dozen ways shopping centers are maximizing space in today's intensely competitive environment. Number is one is offering seasonal activities such as pumpkin patches, boat shows, car shows, Christmas tree lots, and summer carnivals. Number two is "creating experiences." Events are springing up at malls across the U.S. as consumers spend more of their disposable income on experiences over goods and clothes. Shopping centers are hosting special 5k runs, for instance, where runners race around during the night. Other events can include cupcake decorating for kids and meet and greets with pop stars. Three, malls can also maximize vacant space by "adding destinations" like exercise classes or healthcare facilities.

A fourth option is to offer office space, which is becoming increasingly prevalent as an option for empty shopping center space. From insurance offices to call centers to coworking spaces, new office space is popping up in many shapes and sizes at the nation's retail centers. A fifth idea is to work with cell phone companies, with rooftop antennas being placed on more and more shopping centers throughout the U.S. After all, a two-story mall in a suburban market might be the highest point in that area. Finally, unused mall space can be transformed to house packages from online purchases. Storing those goods in vacant shopping center space would accelerate logistics and slash costs for the last mile of delivery.
Share Facebook  LinkedIn  Twitter  | Full Article | Return to Headlines Is Installing Latch Access Systems in 1,000 NYC Apartment Buildings for Easier Deliveries
TechCrunch (07/13/17) Tepper, Fitz

Jet, the online retailer acquired bought by Wal-Mart Stores in 2016, has struck a deal with smart access provider Latch to make deliveries easier for its customers in urban areas. More than 100,000 residents living in 1,000 New York City apartment buildings will get free and full access to Latch's residential "R" system for the exterior door of their building, with the installation paid for by a "joint investment" from Jet and Latch. This means residents can use their cell phone as a key; grant access to guests without walking downstairs; and, of course, get packages delivered safely without being home. In addition, building managers can use Latch's system to grant access to trusted delivery providers like USPS at their discretion.

It should be noted that this is a marketing partnership and not an operational one. There will not be any significant integrations with Jet's backend, besides the start-up knowing if you live in a Latch building and prompting you to take advantage of this by ordering things that typically require a doorman or smart access system -- fresh groceries, for example. The partnership is also further proof that Jet is taking its focus on urban and metro areas seriously.
Share Facebook  LinkedIn  Twitter  | Full Article | Return to Headlines

Optimize Your Watering Practices by Addressing These Areas
Buildings (06/28/17) Feit, Justin

Facility managers can make sure a property's irrigation is running efficiently with these four considerations. Number one is "proper maintenance and oversight." Quite possibly the most important mistake property managers are making with their irrigation systems is overlooking maintenance duties. Such systems require careful oversight in order to ensure proper operation. If that is neglected, it can lead to a massive waste of water. Periodic checks by management staffers are strongly recommended. Number two is "overhead versus drip." The type of system an income-generating property incorporates is important to the specific area that you hope to water. Drip systems provide a steadier flow of water that goes directly into the soil. , while overhead systems are the more traditional sprinklers that spray water above the targeted plants. The latter systems require less maintenance.

The third consideration is irrigation control and scheduling. The schedule your irrigation is set at is indeed vital to controlling water usage. Conseqequently, specifying your system's operation over time will have a big impact on conservation efforts. On a more micro level, the article's author writes, "it is common for irrigation systems to run on a set timer." Smart controllers have increased in popularity, they do come with their own drawbacks. Most notably, they require personnel to be on board with their operation. The fourth and final consideration for reducing irrigation water costs is focused on the spaces you are watering. Using the right plants and landscaping strategies can significantly slash costs.
Share Facebook  LinkedIn  Twitter  | Full Article | Return to Headlines

Healthy and Secure
Security Management (07/17) Gilbert Stowell, Holly

Drugstore chain Walgreens has more than 8,000 locations across the United States and approximately 247,000 employees. The company's security team strives to respond to any incident that requires attention in a timely manner, whether it be a robbery or a door alarm. Through its access control platform, the company can set an expiration date for temporary badges for vendors, consultants, and contractors who need access for only a certain amount of time. Walgreens has a handful of high-security locations, such as data centers, which require two-factor authentication. The employees with access to these areas must present their card to the reader, and place their fingerprint on a biometric scanner.

The company has also deployed anti-passback measures, which means the worker must badge in and badge out of the high-security location to prevent the badge from being shared. "If you leave without badging out, it will prevent you from badging back in, because the system thinks you're still in there," said Hal Friend, director of physical security and fire prevention for Walgreens. "It helps enforce compliance in high-value areas, so that we have exact record keeping on who was where, when." When a burglar alarm goes off at any of the store locations, security specialists use high definition video to go back and view the video associated with the alarm. If they can confirm that an intruder set off the alert, they call the police.
Share Facebook  LinkedIn  Twitter  | Full Article | Return to Headlines

Renters See Big Benefits in Renewing Leases Instead of Moving as Rents Continue to Skyrocket (07/11/2017)

Renewing a lease rather than moving to a new apartment can mean major savings for renters. According to a new Zillow analysis of rent data from the U.S. Census American Community Survey, those who moved paid an average of $3,946 more in 2015 on rent than renters who stayed in the same unit for the previous five or more years. While rents increased nationwide, market-rate rents – those that are advertised for new residents -- rose more than rents did for those who renewed their leases. The United States faces a rental affordability crisis, as rents have soared in recent years while incomes have remained mostly stagnant. Zillow's research shows that when rents are rising rapidly, renters can save a good chunk of money by staying put and renewing their lease. Renters can use these savings for an eventual down payment on a home, which most say is the greatest barrier to ownership.

There are currently 43 million renter households nationwide, about 4 million more than there were just five years ago. Analysts note that the majority of recent household formation happened on the renter side versus the homeowner side, partly because of Millennials reaching the age to move out but not having sufficent savings to buy. Young adults are also renting longer than in previous years before buying. Zillow chief economist Dr. Svenja Gudell concludes, "With the country in the middle of an affordability crisis, it's important for renters to understand how much they can save if they renew their lease instead of finding a new rental. Nationally, rental rates have slowed and the savings from renewing are not as significant for renters today. However, in some of the hottest rental markets, where rents are still rising aggressively, continually renewing a lease can mean saving thousands of dollars."
Share Facebook  LinkedIn  Twitter  | Full Article | Return to Headlines

Arconic Faces Investor Lawsuit Over Deadly Grenfell Tower Fire
CNNMoney (07/14/17) Petroff, Alanna

Shareholder Michael Brave filed suit against Arconic this past Thursday, accusing the company of defrauding investors. The proposed class action alleges that the American manufacturer of cladding panels installed at the Grenfell Tower in London failed to properly disclose the sale of "highly flammable" building materials used to refurbish the building, which burned back in June killing at least 80 people. Arconic made false and misleading statements about its "business, operational, and compliance policies," according to the lawsuit, which seeks to recover "significant losses and damages" suffered by shareholders. Arconic stopped selling the cladding for use in high-rise buildings less than two weeks after the fire, which the company said was "the right decision because of the inconsistency of building codes across the world and issues that have arisen in the wake of the Grenfell Tower tragedy regarding code compliance of cladding systems in the context of buildings' overall designs."
Share Facebook  LinkedIn  Twitter  | Full Article | Return to Headlines

More Citified 'Main Streets' Coming to a Suburb Near You
Philadelphia Inquirer (07/14/17) Bond, Michaelle

Nationwide, mixed-use developments are taking the place of shopping malls in many areas. Such projects generally yield higher returns on investment than traditional shopping centers. Residents get walkable amenities, while and towns and counties are able to pull in additional tax revenue. Pedestrians are the focus of mixed-use developments. As a result, hiding parking behind buildings, constructing "Main Streets" lined with storefronts and parallel parking spots, and including office space and residences as close as possible to shops are common. Also important is the addition of public gathering places and bits of green space -- even if the grass is artificial. "They're trying to replicate the role historic town centers have had," observes Andrew Svekla, associate manager of Smart Growth at the Delaware Valley Regional Planning Commission. "I see these new ones as hybrids: the traditional downtown and the evolution of shopping centers."

However, such projects are more likely drawing high-end chains that can afford the rent than the likes of family pharmacies and Mom-and-Pop hardware stores. Some municipalities are embracing the mixed-use trend and shaping how these developments should look before developers come in with their own ideas. For instance, Susquehanna Township in Dauphin County, Pa., passed an ordinance earlier this year to create a Traditional Neighborhood Development district. Acceptable designs in this district would be "compact, mixed-use, walkable, and interconnected," with pedestrian gathering places and green spaces of a certain size.
Share Facebook  LinkedIn  Twitter  | Full Article | Return to Headlines

Gymboree Closing 350 Stores After Filing for Bankruptcy
U.S. News and World Report (07/11/17)

Gymboree Corp. announced this past week that it is closing 350 stores as its works to restructure in bankruptcy. The San Francisco-based children's clothing seller is mostly closing Gymboree and Crazy 8 locations. Its portfolio also includes Janie and Jack stores. The company will still have more than 900 locations, many of which are mall-based, after the targeted stores are permanently shuttered. Gymboree filed for Chapter 11 back in June.
Share Facebook  LinkedIn  Twitter  | Full Article | Return to Headlines

Abstract News © Copyright 2017 INFORMATION, INC.
Powered by Information, Inc.

Institute of Real Estate Management. All rights reserved. IREM® logo, IREM®, Certified Property Manager®, CPM®, the CPM key logo, Accredited Residential Manager®, ARM®, the ARM torch logo, Accredited Management Organization®, AMO®, the AMO circle logo, Income/Expense Analysis® , Expense Analysis® and JPM® are registered marks of the Institute of Real Estate Management.