Real Estate Management News - 04/25/2018

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April 25, 2018
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IREM® FAIR HOUSING MONTH SPOTLIGHT
Your Four-Legged Friends and The Fair Housing Act

IREM® HEADLINES
A Clear Vision for the ‘Swamp’
Grow Your Business at this Rare Executive-Level Workshop

INDUSTRY HEADLINES
Marketing to Multiple Generations
Retail Investors: Now Is the Time to Buy Shopping Centers
Toys ‘R’ Us Rejects Rescue Offer From Little Tikes' Larian
How to Protect the Buildings of the Future
4 Hot Learning Trends for Property Management Companies
Walmart Commits to Zero Food Waste in Canada by 2025
Investors See Returns in Healthy Buildings
AMLI Commits to 100 Percent Renewable Energy at Texas Properties
Madison Malls Change With the Times
Maximize Office Workspace by Making It Multifunctional and Flexible
Walmart Signals Continued Interest in Health Care Space Through Remodel of Pharmacies
Most South Florida Renters Take On More Than They Can Afford


 
 

IREM ® Fair Housing Month Spotlight


Your Four-Legged Friends and The Fair Housing Act

The Fair Housing Act (FHA) prohibits landlords from discriminating based on disability, race, color, national origin, religion, sex and familial status. The Americans with Disabilities Act (ADA) prohibits discrimination against people with disabilities in employment, transportation, public accommodations, communications and state and local government activities.

Both laws contain provisions which address the use of service or companion animals by people with disabilities. While the FHA covers nearly all types of housing, some types of housing, such as public housing, are covered by both laws. Landlords and property managers are required to make a “reasonable accommodation” for both service and emotional support animals.

What is the difference between a service animal and a companion animal? A service animal is a dog that is highly trained to do a specific task or service for the disabled person. The service can be anything from helping the person navigate through public places to alerting him to an oncoming seizure. A companion animal does not need any specialized training and is there to purely give comfort. Companion animals can be dogs, cats, birds, rabbits, lizards, etc. People may use all sorts of animals to give them the emotional support they need to live a fulfilling life.

If a person needs an emotional support animal to help alleviate the symptoms of a disability, he or she must first make the request to his or her landlord. Most accounts indicate that a request should be in writing and explain how the reasonable accommodation helps or mitigates symptoms of the disability. While the tenant does not need to disclose the disability, a landlord may ask the tenant for documentation.

According to the U.S. Department of Housing and Urban Development’s (HUD) Fair Housing and Equal Opportunity (FHEO) Notice , a landlord "may ask individuals who have disabilities that are not readily apparent or known to the provider to submit reliable documentation of a disability and their disability-related need for an assistance animal."

IREM’s position on companion animals states: “IREM supports and invites guidance from the government on the issue of companion animals, sometimes referred to as emotional support animals, with respect to the American with Disabilities Act (ADA) and the Fair Housing Act (FHA). Companion animals are not service animals. Service animals require special training. Companion animals receive no specialized training and are typically for individuals with mental disabilities or those in need of emotional support.”
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IREM Headlines


A Clear Vision for the ‘Swamp’

The dysfunction that has taken over the nation’s capital hasn’t captured the private sector, according to IREM President Donald B. Wilkerson, CPM, in his April column for National Real Estate Investor. As proof, he points to IREM’s public policy agenda and the grassroots campaign embraced by members “to keep what matters most to this industry front and center before our elected but too-often distracted officials.” This was accomplished through meetings with nearly 50 Congressmen by IREM members in cities throughout the country, as part of an in-district Congressional visit initiative.

One of the key issues on IREM’s government affairs agenda that’s been discussed at these meetings is ADA lawsuit reform. “IREM supports legislation to create a ‘notice and cure’ provision within Title III of the American with Disabilities Act (ADA),” says Wilkerson in his article. “Interestingly, this has been the source of much confusion on the part of the general public and some legislators, who misconstrue this remedy as a disavowing of ADA,” he notes, but goes on to point out that “Nothing could be farther from the truth. IREM believes that notice and cure will protect building owners from these drive-bys, while still holding them accountable for ensuring accessibility to all Americans.”

Some of the other issues on the docket are federally assisted housing, rent control, flood insurance, and online sales tax.

The complete article can be found here on the NREI website.
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Grow Your Business at this Rare Executive-Level Workshop

Asset and property managers spend so much time solving problems for clients’ businesses. How often do you have the chance to devote time to your own businesses?
Only scheduled twice for this year, Leading a Successful Property Management Company - BDM603 will emanate from Falls Church, Va., May 2-4; and Chicago, June 27-29. This highly interactive, 2.5-day, hands-on session offers the opportunity for top-tier executives to collaborate with peers, and to learn and trade ideas on how to implement strategies for building and leading a sustainable, customer-centric real estate management company.
Joe Greenblatt, CPM, president and CEO of San Diego-based Sunrise Management Company, AMO, and an IREM Past President, will facilitate an analysis of participants’ companies and help you discover how to optimize opportunities, plus answer key questions, like:
• How can you set your business up to grow, develop and earn new business?
• How are leaders molded, and what does a brilliant succession plan look like? Do you need an exit strategy?
• How can you develop realistic, achievable personal goals and action plans for improvement?
• How is an ideal company organized to support a talent strategy that achieves your vision?

To learn more or to register, visit www.irem.org/BDM603.
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Industry Headlines


Marketing to Multiple Generations
Multi-Housing News (04/16/18) Clark, Eric

Today's pool of apartment renters is made up of a wide range of ages that can pose challenges to developers, owners, and managers. While the focus on Millennials in multifamily is certainly understandable, it would be a mistake to believe that the renting population consists entirely of this generation. As Baby Boomers age, more and more are selling their homes and opting for the ease and convenience of apartment living. Meanwhile, Generation Z is coming of age and emerging as a sizable segment of the renting population. Eric Clark of Bainbridge Cos. shares four tips on how apartment communities can appeal to anyone. First, offer flexible common spaces. Boomers, Generation X, Millennials, and Generation Z all enjoy such areas at apartment properties. They just want them for different purposes. Baby Boomers love onsite group activities that allow for ample socializing, while Gen Z'ers often want to be in their own nook while on their mobile devices. As a result, owners and operators have to strike that balance of offering common areas that can easily accommodate group activities, but still allow individuals to use them and have their own space when a group activity isn't taking place.

Tip two, understand the differing technology needs. All generations use technology, so apartment properties must offer fast Internet speeds in both common areas and rental units. In addition, residents must have the option of filling out things like maintenance requests online and then be able to communicate with the service team exclusively via text afterwards. The third tip is choose the right location. Development sites that are located about 10 minutes away from a central business district can offer real advantages, including increased walkability. These less expensive and bigger sites can allow developers to build apartments at a size and with a finish level that attract residents in their mid-30s and older, while still allowing younger renters to be within an easy and inexpensive Uber or Lyft ride to downtown. Finally, be sure to market strategically. Clark writes: "Don't underestimate the power of marketing methods that some in the industry might be quick to dismiss as 'old school.' You might be surprised at how younger Millennials and Gen Z'ers respond to guerrilla marketing."
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Retail Investors: Now Is the Time to Buy Shopping Centers
GlobeSt.com (04/17/18) Borland, Kelsi Maree

Strong fundamentals and low interest rates make this an ideal time to scoop up shopping center opportunities. John Read, first vice president with CBRE's National Retail Partners, West team, was recently interviewed by GlobeSt.com for his thoughts on the matter. He marveled at the efficiency of the current market. He explained, "Sellers are looking to sell shopping center assets they have likely owned longer term, maximizing value and equity throughout their ownership, and buyers are looking to buy given continuing property level fundamentals improvements with the benefit of locking in low-interest rate financing long-term if they choose to finance the property." Retail has gotten a bad reputation in the past several years due to the explosion of e-commerce. Often, the biggest concern investors voice about investing is how this ever-changing world of retail will impact the brick-and-mortar shopping centers they are pursuing.

Meanwhile, some are questioning whether the financing opportunities are there for shopping centers. Read is undaunted. He stated, "The combination of these strong retail market fundamentals with a robust financing market where interest rates remain near historical lows, lender spreads have compressed to offset some increasing index rate movements, and a variety of debt capital is available through a wide array of lenders, makes for an optimal time to acquire shopping centers." He added that as evidence that brick-and-mortar retail is here to stay, look no further than Amazon's recent acquisition of grocer Whole Foods.
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Toys ‘R’ Us Rejects Rescue Offer From Little Tikes' Larian
Bloomberg (04/17/18) Church, Steven; Townsend, Matthew

Toys "R" Us Inc. this past week rejected an offer from MGA Entertainment Inc. founder Isaac Larian to keep some of its North American stores in business. Larian's bid did not qualify under auction rules approved by a judge overseeing the bankruptcy, a Bloomberg source said. "Two other bids for Toys 'R' Us's Canadian operations, from unspecified parties, also didn't qualify," the source added. The company is hoping to get at least one offer nailed down so it can set a floor for a coming auction of its Canadian business. Larian had offered to pay $675 million for the U.S. stores and $215 million for retail locations in Canada. MGA sells such popular toys as Bratz and Little Tikes.
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How to Protect the Buildings of the Future
Security InfoWatch (04/18/18) Turney, Steven

A growing number of industries are adopting Internet of Things (IoT) solutions for increased efficiency and reduced costs. At the same time, the buildings industry is looking to do the same by incorporating IoT and mobile functionality into a range of facilities. As part of this trend, many businesses are opting to use cloud and IoT-based technologies within their buildings, including building management systems that integrate data on HVAC, physical security, and other systems into one display, and smart devices such as digital power meters and smart circuit breakers. Navigant Research has predicted that the total number of smart devices in buildings will reach as many as 10 billion by 2020. To ensure that this rapid growth is sustainable, businesses must address growing concerns around IoT security and develop effective strategies to protect all building data from outside threats.

The International Facility Management Association estimates that with active controls and IoT-enabled technology, facilities can reasonably expect a 50 percent increase in cost efficiency, including energy and other recurring costs. Providing facilities with IoT capabilities enables building management to implement predictive maintenance and analytics technology, enabling facilities to save as much as 20 percent annually on energy and maintenance costs. To secure their buildings after implementing IoT-based systems, IT teams must implement IoT-based cybersecurity solutions, such as the use of authentication and encryption to protect communications between mobile devices, controllers, and workstations. As IoT-connected building management systems become increasingly popular, new standards and protocols are being implemented to ensure cybersecurity is managed across each system connected to mobile applications.
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4 Hot Learning Trends for Property Management Companies
Property Management Insider (04/18) Lyman, Guy

Too many property management firms still consider staff as a static asset. In reality, these companies can be constantly increasing their value through an organized and consistent learning program. The article's author details four of the hottest trends in learning today. The first is gamification. This one is becoming less a "trend" and more of a "must-have." People love to compete. They love to be rewarded for their achievements. They also love to watch themselves climb ladders of accomplishment, with milestones along the way. The second trend is personal, customized learning. "One size does not fit all," the author reasons. "Trending now is the intelligent customization of learning to the individual learner." Best of all, this does not have to involve labor-intensive personalization and restructuring of content. It can be enabled and automated via assessments and carefully crafted learning paths.

A third trend is micro-learning. Increasingly, training is being served up in bite-sized pieces that are accommodated into today's busy schedules. At its best, micro-learning incorporates highly targeted nuggets of learning specifically related to tasks at hand and can be in the form of short videos, quizzes, factoids, and infographics. A fourth and final trend in learning is integration with online social activity. This way, staffers can easily keep up with how they're doing compared to others, comment about the various courses, congratulate one another, and more. The author concludes that "popular contemporary social platforms such as Facebook and Twitter are not good tools for this sort of corporate learning. It requires that a specialized social component be integrated into the learning platform itself."
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Walmart Commits to Zero Food Waste in Canada by 2025
Globe and Mail (04/20/18) Hui, Anna

Walmart recently announced C$19 million in funding through the Walmart Foundation for charities and research institutions to address systemic issues contributing to food waste in its 411 stores across Canada. The Arkansas-based retail giant is on track to become the largest Canadian grocer to reach "zero food waste." However, its commitment to reach the target by 2025 puts it behind the Metro chain, which aims to do so by 2020. In recent years, a manual has been circulating among Walmart store workers in Canada, helping them decide whether fruits and vegetables are still good for sale and when they should be "culled." The aim is to reduce the amount of perfectly good produce being thrown out. This and other changes have helped the retailer realize a 23 percent reduction in waste since 2015.
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Investors See Returns in Healthy Buildings
The Investor (04/23/18) Clifford, Matthew

Evidence is mounting to show that healthy buildings are good business. Although it remains somewhat hard for investors to see the benefits of a healthy building in their bottom line, there are more tools than ever before that allow occupants to quantify the benefits of wellness for staff productivity. In time, this should translate into higher rents and capital values. John Mooz, Senior Managing Director for Hines in Houston, calculates that buildings with healthy features could attract a rental premium of as much as 20 percent. Building wellness measures might range from better access to daylight to increased ventilation to help employees feel more comfortable year-round. In addition, a building might offer healthy eating options or be designed to encourage walking. Finally, healthy offices could feature such "biophilic design" elements as indoor gardens, which are intended to bring nature indoors.

Where healthy buildings are today is similar to where green buildings were a decade or so ago, reports Matthew Clifford, Head of Energy and Sustainability Services, Asia Pacific – JLL. He notes, "Landlords are experimenting with promising technologies and techniques, in order to work towards a clear understanding of exactly how to maximize the value and output. Leading firms understand they are in the 'early adopter' phase, but see enough value and benefits, especially in terms of communicating wellness plans to staff and occupiers, that they continue to push ahead." His firm is one of the sponsors of a series of studies on the "Cognitive Effects of Green Buildings," which have shown that working in high-performing green certified office buildings generated 26.4 percent higher cognitive test scores and 30 percent fewer symptoms of "sick building" problems like headaches and dry throats.
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AMLI Commits to 100 Percent Renewable Energy at Texas Properties
Multifamily Executive (04/20/18) Shanesy, Lauren

AMLI Residential recently announced plans to install 330 kilowatts of solar panels across four of its apartment communities in the Dallas area. Also, through a partnership with Green Mountain Energy Co., it will purchase 100 percent renewable energy for all of the common areas at its apartment communities in Dallas and Houston. "We worked with Green Mountain to identify four properties that were great candidates for solar panels, based on utility pricing, state legislation, and energy regulations in the market," reports Erin Hatcher, vice president of sustainability at AMLI. "Our Dallas communities were a great fit because we had mid-sized buildings with a lot of available roof space, so we were able to take the idea from a want to a real possibility." Two of the communities, AMLI Campion Trail and AMLI West Plano, already have solar panels installed. Another solar array is now underway at AMLI Frisco Crossing. The fourth will be completed at AMLI at the Ballpark this fall.

Upon completion, the four projects combined will generate 20 percent of common-area electric use at each community, which AMLI officials say will offset approximately 750,000 pounds of carbon dioxide a year. AMLI also will start to power the common areas at more than 20 apartment communities in the Lone Star State with renewable energy sources, which the company says will offset over 20 million pounds of carbon dioxide annually. Clean energy is a top priority in housing for many AMLI residents. "Last year, we surveyed 3,000 of our residents to get an idea of what their wants and needs are around sustainability, and 85 percent of them said that living in a sustainable community is important to them," comments Hatcher. "Plus, one of the most requested features by residents was to live in a community that had solar."
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Madison Malls Change With the Times
Channel3000.com (Madison, WI) (04/16/18) Franke, Eric

As shopping habits change, shopping malls in and around Madison, Wis., are trying to change with them. Some are doing so successfully. The first to make an about-face from its traditional origins was Hilldale Shopping Center on Madison's near west side. After financial hardships, including a 2011 foreclosure, the mall found new ownership in the form of WS Development. The company successfully transformed the mall into an outdoor, street-style shopping experience complete with pedestrian walkways, restaurants, and attractive landscaping. It still has a traditional anchor tenant, but now 40 percent of its stores are locally owned, thus delivering a mix of tenants that appeal to local shoppers.

Hilldale is an example of how, with the right amount of investment and creativity, an old mall can be re-invented. West Towne Mall, located less than four miles away, is also undergoing a major transformation. As part of this makeover, mall owner CBL Properties added a Dave & Buster's and a Total Wine Store. Dave & Buster's General Manager Jim Schiavo says the whole idea is to offer a more "experienced-based" venue for the public. "We require a big footprint," he stated. This is over 31,000 square feet, a lot of parking, and it's just a natural, great fit with West Towne Mall."
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Maximize Office Workspace by Making It Multifunctional and Flexible
Buildings (04/20/18) Craven, Valerie Dennis

More and more building owners, operators, and occupants are maximizing their office space by making it more flexible and multi-functional. For instance, luxury textile company Matouk undertook a renovation of its corporate headquarters in Massachusetts. Collaborative spaces were a key to the redesign. A wide array of meeting areas of varying sizes, privacy levels, degrees of flexibility and formal/informal characters were added. They range from big, glass-wrapped conference rooms to quirky, individualized booths to informal meeting zones interspersed within the main open office area. Similarly, for the Boston headquarters of True Fit, the redesign team sought to reuse as much of the existing office space and materials as possible to create a stylish and creative work environment. "We adapted existing private office spaces and repurposed them as huddle rooms, reinforcing True Fit's culture of teamwork and connection," remarks Deniz Ferendeci, Director of Asset Design + Support at architectural firm Dyer Brown.

Meanwhile, at eBay's Silicon Valley corporate campus, the company strived to create a media-rich hub where employees are tuned into the large company's everyday business. To accomplish this, eBay has relied heavily on interactive digital installations throughout that can display the company's day-to-day progress at the touch of a screen. For Fresenius Medical Corporation's Boston-area workplaces, the main objective was to open up offices. Departments used to be segregated and siloed, with there were no central hubs for workers to interact. “The new workplace concept for Fresenius encourages collaboration and interaction by reorganizing workspaces into 'neighborhoods' with one of three types of conveniently located collaboration spaces serving as a hub for each," states Sara Ross, Director of Corporate Services at Dyer Brown. Other organizations are adding personal touches that reflect their direction and mission. For example, the boardroom at AAA's Northern California headquarters echoes the organization's roadside assistance mission with a textured ceiling that resembles tire tracks and a table showcasing vintage hubcaps.
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Walmart Signals Continued Interest in Health Care Space Through Remodel of Pharmacies
Healthcare Finance News (04/13/18) Sanborn, Beth Jones

Walmart has announced that it will remodel 500 stores across two dozen states, primarily in Texas and Florida. The changes, which will be funded through its $11 billion capital expenditure plan, will include updated pharmacy areas equipped with private consultation rooms. Walmart already operates walk-in care clinics in Georgia, South Carolina, and Texas, according to the company's website. The clinics are staffed by certified nurse practitioners and offer primary acute care services, wellness and preventative care, labs services, and chronic illness treatment and management. Walmart is also said to be in talks for a merger with Humana, which would allow the retail giant to benefit from Humana's specialization in Medicare Advantage plans.
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Most South Florida Renters Take On More Than They Can Afford
Fort Lauderdale Sun-Sentinel (04/17/18) Barszewski, Larry

South Florida has the country's highest percentage of renters who are severely burdened by the rent they pay, according to a Harvard University study. In the area from Miami to West Palm Beach, 36 percent of residents spend more than half of their income on their homes, while 62 percent spend more than 30 percent of their income on the same expense. Broward County is examining several solutions to increase the stock of affordable apartments and homes. First, it is considering creating an affordable housing trust fund to support projects that offer affordable rents or mortgages. In addition, it is also debating allowing bigger apartment complexes along major roads if developers agree to charge lower rents.

Another solution is purchasing available land that could be offered to developers who agree to build affordable housing, and a fourth option is encouraging defunct golf courses and retail properties heavy on big-box space to be transformed into projects that merge commercial space, offices, and mixed-income residential units. However, these efforts may be insufficient if area wages do not rise. Broward's current average rent is $1,858 a month, which would be considered a burden for a household earning less than $74,320 a year. The high costs are not only pricing out low-skilled and minimum-wage workers, but also seniors and professionals ranging from teachers to nurses.
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