Real Estate Management News - 08/07/2019

IREM Real Estate Management News
Facebook Twitter LinkedIn www.irem.org Banner
August 7, 2019
subscribe
Send to a Colleague
Join IREM


Find a Job
Property Manager
Confidential Employer – Arlington, VA

Property Supervisor (South Bay Portfolio)
EAH Housing – San Rafael, CA

Tenant Services Coordinator
Shorenstein Realty Services, L.P. – Tigard, OR

Commercial Real Estate Leasing
Pennmark Management Company, Inc. – Plymouth Meeting, PA

Asset Manager
Alexandria Real Estate Equities, Inc. – Gaithersburg, MD

All Job Listings


Industry Partners
 
 
 
RentManager
 
 
 

IREM® HEADLINES
Protecting Your Building from Waterborne Pathogens
For Good Measure: IREM’s 2019 Income/Expense Analysis Reports

INDUSTRY HEADLINES
Fitness is Reshaping the Shopping Center Experience
What Tenants Really Want From Tenant Engagement Apps and Why it Matters to Real Estate Owners
Bed Bath and Beyond Is Trying to Save Itself From Extinction
Office Space Amenity Wars Catching Fire in St. Louis
Houston Apartments See Strongest Demand in Three Years
Can the Internet Save the Department Store?
Rooftop Management: Eliminate Injury Risk
New Cool Roof Technologies Adapt to the Weather
Managing Up: Skyscraper Owners Spend Big to Attract Creative Companies
The Biggest Mall Owner in the US Could Be the One to Save Retailers on the Cusp of Going Out of Business
Supply Meets Demand: Converting Office Space to Multifamily
The Second Lives of America's Iconic Shopping Malls


 
 

IREM Headlines


Protecting Your Building from Waterborne Pathogens

Legionella is a waterborne pathogen found not only in freshwater, such as rivers and lakes, but also in commercial and residential buildings. It can live in building water systems—from sink faucets to cooling towers or large plumbing systems—that are not properly maintained.

When breathing in these pathogens, tenants, residents, and visitors can be exposed to a severe form of pneumonia known as Legionnaires’ disease or an acute respiratory disease called Pontiac fever. There are currently no vaccines to avoid these diseases; they must be prevented by the owners and managers who maintain building water systems.

As a property manager, you can mitigate the risk of exposure to these pathogens by implementing programs to minimize potential outbreaks. Determining the best plan for your building starts with assessing your risk factors based on building type and building systems.

Looking for more information? Join us on August 13th for a one-hour webinar presented by the experts from Forensic Analytical Consulting Services (FACS). This in-depth discussion about this dangerous, but preventable, pathogen and resulting illnesses will have you walking away with the skills necessary to assess risks and create a plan that works for your properties.
Share Facebook  LinkedIn  Twitter  | Return to Headlines
For Good Measure: IREM’s 2019 Income/Expense Analysis Reports

IREM’s Income/Expense Analysis Reports have been the standard of real estate management data for more than 60 years. The success of these reports is based on the strong volume of objective data collected from 11,000 properties nationally. Data collected includes total collections, total expenses, operating ratios, vacancy rates and rent loss year over year. And, the reports are audited to ensure the information received is relevant to normal operating experience.

The 2019 Income/Expense Analysis Reports contain operating data for the year 2018:
  • 4,224 conventional apartment buildings containing 894,868 units
  • 769 federally assigned buildings comprising 62,143 units
  • 2,516 condominium and cooperative projects and planned unit developments, or PUDS, representing 328,941 residential units
  • 308 shopping centers 1,309 downtown and suburban office developments representing 1,442 buildings
These reports allow owners and real estate managers to access data that can serve as a benchmark to compare their own operating experience with similar buildings in similar geographies. With that knowledge, informed decisions can be made to increase the efficiency and profitability of the properties they manage.

Data revealed in these reports is usually applied to:
  • Create realistic operating budgets
  • Identify opportunities to address inefficiencies and find ways to minimize operating expenses
  • Uncover real estate market trends in building operations
  • Communicate results and make sound recommendations for operational improvements, based on fact, to real estate owners and clients
  • Gain an understanding of new markets you and your company are entering
Visit the Income/Expense Analysis Reports page for more information and to place your 2019 order.
Share Facebook  LinkedIn  Twitter  | Return to Headlines
 

Industry Headlines


Fitness is Reshaping the Shopping Center Experience
Baton Rouge Business Report (07/31/19) Burkes, Caitie

Shopping centers in Baton Rouge, La., and elsewhere have been rejuvenated by the addition of boutique fitness studios. These studios -- including Orangetheory, Barre3, and Pilates Plus, among others -- have brought in not only new customers but also new businesses. Whenever a boutique fitness studio opens in a shopping center, smoothie bars, spas, and other health-related brands tend to follow not long after. This trend is happening as online shopping has spurred malls to provide more of an experience for consumers than traditional shopping centers. The addition of new fitness studios provides just such an appeal. Potential customers can fit in shopping around a scheduled fitness class or just a morning or evening workout.

Furthermore, the niche fitness studios often take up far less space than their generic gym counterparts. Carmin Austin of Saurage Rotenburg Commercial Real Estate has replaced at least five struggling apparel stores with fitness concepts in the past two months. She observes that mall landlords are starting to cluster related businesses around the boutique fitness centers to increase foot traffic. She remarks, "They're cognizant of that synergy. It’s a natural transition from traditional retail." The International Health, Racquet & Sportsclub Association estimates that about 20 percent of American adults belong to at least one fitness club. Much of the growth in that market has come from boutique fitness clubs, which grew 70 percent between 2012 and 2015.
Share Facebook  LinkedIn  Twitter  | Full Article - May Require Paid Subscription | Return to Headlines

What Tenants Really Want From Tenant Engagement Apps and Why it Matters to Real Estate Owners
Propmodo (07/30/19) Shivakumar, Thru

Building owners should devote the most amount of time to what their tenants really need instead of buying into every possible channel for tenant engagement. For example, hosting socials in the lobby of an office building might be nice. But it really won't alleviate any stress occupants feel about consistently broken appliances or other problems. When landlords make tenants' lives easier and save them time, they tend to have the most success. Indeed, a recent study of 350 U.S. office workers across 11 industries found that tenants are in favor of productivity solutions. Respondents placed especially high value on smart technologies, such as being able to use a smartphone to approve a visitor's entry to the building, submit a maintenance request, and/or order food. The survey indicated that office workers would like to see one single app providing all these services.

Shiny new amenities like in-building gyms and restaurants hit No. 1 in respondents' rankings of their preferred building improvements. But productivity fixes through self-service technology came in at No. 2, outranking aesthetic improvements and concierge services. While many office properties already have gyms, cafes, and convenience stores, their owners consistently prioritize aesthetic renovations to the lobby and other places over improving these more frequented areas. The survey suggests tenants care more about gyms and food options than the appearance of the building and certainly the lobby.
Share Facebook  LinkedIn  Twitter  | Full Article | Return to Headlines

Bed Bath and Beyond Is Trying to Save Itself From Extinction
CNBC (08/02/19) Ferris, Robert

Bed Bath and Beyond's difficulties over the last few years have left investors wondering whether it has a future and what that future will look like. Investor group Legion Partners, Macellum Capital Management, and Ancora Advisors recently pushed the company to overhaul its board of directors. The retailer did so and is now taking steps to stabilize sales, cut costs, review its store portfolio, and trim its labor force. The investor group is further urging the retail chain to adopt the best practices already seen at more successful retailers. Suggested changes include reducing the clutter in stores, which customers currently find messy and difficult to navigate. It also involves purchasing merchandise directly from overseas manufacturers instead of the U.S.-based middlemen the company sources most of its items from.
Share Facebook  LinkedIn  Twitter  | Full Article | Return to Headlines

Office Space Amenity Wars Catching Fire in St. Louis
St. Louis Business Journal (08/01/19)

St. Louis office developers are increasingly providing top-notch amenities at their buildings in an attempt to attract more tenants and increase existing tenants' happiness with their space. These amenities range from on-site restaurants and fitness clubs to collaborative meeting spaces and more. One St. Louis-area building boasts an extensive food hall featuring several different kinds of cuisine. That same building plans to open a large lounge devoted to amenities on the top floor, including game tables, a bar, and sweeping views of the Gateway Arch. Another building, 4220 Duncan, has a popular collaborative space as well as a fitness facility that offers personal training, massage therapy, and virtual classes. Next to Busch Stadium, the Ballpark Village property has a three-story fitness center and an adjacent apartment tower. While most amenities are fairly practical, the City Foundry, set to open next year, plans to open a movie theater.

Such amenities have already been established in markets like Chicago, New York City, and San Francisco, but were slower to reach cities like St. Louis. When incorporated well, they lead to positive results all around. Workers are able to enjoy these spaces and the easy access they have to services they previously had to find off-site. Meanwhile, tenants find it easier to attract new employees, and building owners are able to charge more in rent. Thus far in St. Louis, buildings with these top amenities have seen an average of 86 percent of their available space pre-leased. Blaise Tomazic, a JLL vice president, characterized the surge as an "amenity war." He added, "If you can have modern space in a building that offers a lot of amenities, then that can help tip the scales in your favor over competitors."
Share Facebook  LinkedIn  Twitter  | Full Article | Return to Headlines

Houston Apartments See Strongest Demand in Three Years
Houston Chronicle (07/29/19) Schuetz, R.A.

CBRE research shows that vacancy rates in Houston apartment buildings have dropped below 10 percent for the first time in three years. According to the commercial property firm's report, Houston residents are renting apartments faster than units are being constructed, leading to the decrease in vacancy rates and an increase in monthly rents. Per the report, the number of units rented in the first six months of 2019 was higher than the number of units rented in all of 2018. But recently released U.S. Census Bureau data suggests that this narrative is complicated. The Census data appears to show that the rental vacancy rate in Houston has actually increased from 8.2 percent to 11 percent over the past three years. Even with the contradictory data, real estate experts agree that apartments are in high demand in Houston.
Share Facebook  LinkedIn  Twitter  | Full Article - May Require Paid Subscription | Return to Headlines

Can the Internet Save the Department Store?
Wall Street Journal (07/27/19) Mims, Christopher

Many retail property professionals warn that the Internet is destroying the department store. However, there are some new initiatives being reported that complicate that narrative. Tech investors have backed retailers like Neighborhood Goods in Plano, Texas, which uses Internet services to redefine the retail experience. At Neighborhood Goods, visitors can browse and shop by wandering around the store or even by sitting in the cafe. All they need is the store's mobile app. When they find a product they would like to purchase, all they need to do is scan the barcode into the app. And if they decide to shop from the comfort of the cafe, a salesperson uses a GPS app to walk the product straight to them. This "marketplace" retail system is a modern take on the "store within a store" atmosphere once made popular by department stores.

While the marketplace-based retail system embraced by Neighborhood Goods and other stores has fared well thus far, some say it might not be sustainable -- or even widely applicable. So far, the marketplace system has succeeded in major metro areas with large numbers of high-earning young consumers. Neighborhood Goods are set to expand from to New York City later this fall, with plans to open an additional six locations in 2020. Neighborhood Goods CEO Matt Alexander said that the company's success is partly due to its understanding that content must be mixed in with the commerce. The Plano store, for instance, hosts exercise classes and watercolor workshops, promoting the idea that shopping is an experience rather than an errand.
Share Facebook  LinkedIn  Twitter  | Full Article - May Require Paid Subscription | Return to Headlines

Rooftop Management: Eliminate Injury Risk
Buildings (07/24/19) Hannan, Dan; Hilmerson, Debra L.

Falls from significant rooftop heights have long plagued workplaces, resulting in serious injury or even death for workers. The Occupational Safety and Health Administration (OSHA) mandates that employers identify and protect workers from falls of at least six feet during construction work and four feet during routine maintenance work. Employers must then be wary of ladders, roofs, skylights, loading dock platforms, and more places where workers commonly fall. And facility owners who contract crews to work on rooftops are also obligated to follow the OSHA regulations. Employers and building owners should first and foremost take any and all preventative steps to protect workers who may find themselves working up high.

The cost of a serious injury or fatality far outweighs the short-term cost of committing more money to safety budgets. Preventative steps may include securing unprotected roof edges, hatchways, fixed ladders, and skylights. But they could also include fall protection systems and clearly defined written protocols. A simple way to secure the edge of a rooftop is to erect a temporary or permanent steel guardrail. In addition to taking steps like these, writing a protocol for rooftop work and use will establish clear expectations for conduct. The protocol should spell out how people will access the roof, what sort of work should be done on the roof, what fall protection systems will be used, and what should be done in case of emergency.
Share Facebook  LinkedIn  Twitter  | Full Article | Return to Headlines

New Cool Roof Technologies Adapt to the Weather
Construction Dive (07/31/19) Goodman, Jenn

The increased frequency of heat waves has begun to encourage architects, builders, and developers to explore cool-roof technologies. Essentially, these roofs reflect more sunlight and absorb less heat than traditional roofs. However, in the winter time these roofs also result in cooler building interiors and higher heating bills. New advancements in technology have addressed this problem. Builders can use materials that are capable of changing their reflectance and thermal emittance properties based on the season. These products use technologies like phase change material and smart coatings to keep buildings cool in summer and warm in winter. Most buildings can be outfitted with a cool roof, but the climate and other factors must be considered before installing one. According to the U.S. Department of Energy, a standard roof can reach temperatures of 150 degrees in the summer. By comparison, a cool roof could stay more than 50 degrees cooler.
Share Facebook  LinkedIn  Twitter  | Full Article | Return to Headlines

Managing Up: Skyscraper Owners Spend Big to Attract Creative Companies
Los Angeles Business Journal (07/26/19) Madans, Hannah

Skyscrapers in downtown Los Angeles are undergoing expensive renovation projects in an attempt to lure in creative companies that typically flock to low-rise campuses in the Westside. Since 2013, the skyscrapers' owners -- ranging from Coretrust Capital Partners to KBS to and Brookfield Office Properties Inc. -- have spent about $6.5 billion on renovations for downtown L.A.'s high-rise office buildings that include high-end designs and amenities. The downtown skyscrapers, originally constructed from the 1970s through the '90s, have earned a reputation for being outdated and belonging to yesteryear. But since 2013, a majority of the major skyscrapers have come under new ownership, infusing a breath of fresh life into the high-rise market.

While financial companies and law firms have traditionally been mainstays of the downtown office market, "now the growth is in . . . media, arts, tech, design. and fashion -- more creative industries," observed Nick Griffin of the business improvement district. As more skyscrapers embrace renovations, the others will have no choice but to follow suit if they want to continue attracting new tenants. "Landlords used to just be able to hand someone a floor," concludes Rising Realty CEO Chris Rising. "Now tenants are saying our employees want more out of the space, or we are going to move somewhere new, and that is scaring a lot of landlords."
Share Facebook  LinkedIn  Twitter  | Full Article - May Require Paid Subscription | Return to Headlines

The Biggest Mall Owner in the US Could Be the One to Save Retailers on the Cusp of Going Out of Business
CNBC (07/31/19) Thomas, Lauren

Simon Property Group has said that it will consider more opportunities to invest in retailers to prevent them from going out of business. The nation's biggest shopping mall owner has previously swooped in to rescue struggling retailers. Three years ago, for instance, Simon was part of a team that bought teen apparel brand Aeropostale out of bankruptcy, salvaging over 150 Aeropostale locations in Simon's property portfolio. Simon is also a partner with Authentic Brands Group, where Juicy Couture and Nautica reside, and a shareholder in Allied Esports, a gaming venue company that is seeking to expand its footprint at malls.

Reports emerged last month that prominent apparel retailer Forever 21 asked some of its landlords, including Simon, to take a stake in the company as Forever 21 restructures itself. There are 99 Forever 21 locations across Simon's properties, and the retailer is Simon's No. 7 tenant in rent money. While Simon has refused to comment specifically on the Forever 21 reports, it did acknowledge that "becoming an investor in a distressed situation" for its tenants was not out of the question. Another bonus for Simon would be greater insight into a company's financial situation, which could inform the REIT how much rent to charge. Simon reportedly has significant resources to fund more agreements like the Aeropostale deal.
Share Facebook  LinkedIn  Twitter  | Full Article | Return to Headlines

Supply Meets Demand: Converting Office Space to Multifamily
GlobeSt.com (07/30/19) Smith, Steve

As employers flock to new office buildings with impressive amenities that will impress prospective employees and clients, older buildings in prime locations are falling by the wayside. Building managers looking for a way to revitalize these properties would do well to consider converting the office space to apartments. This move would not only bring older buildings back into the spotlight, but also create more urban housing in cities that often face shortages. Adapting a building from office to residential use is both environmentally friendly and financially appealing to many building owners and managers. Office buildings typically have higher ceilings than are the norm in today's average apartment buildings. Moreover, building managers can give staggered leases as the transition is completed floor by floor.

Still, building managers should consider the inner core of the building before deciding whether it is a sensible move to transition from office to residential space. Apartments that are placed along perimeter windows and stretched to central hallways would be awkwardly laid out and bereft of natural light toward the inner rooms, but inserting new hallways to reshape the apartments would create seemingly useless space at the center of the building. A Cooper Carry design team working on an office building's transition to residential space recently solved this dilemma by inserting amenities into the supposedly useless central space. In that building, the central rooms host storage space, a gym, a movie-screening theater, an arcade with video-game consoles, and more. They also made some of the amenities, like the gym, span multiple floors, maximizing the number of rental units in close proximity to the eye-catching services. The design team also converted several office floors above the lobby into a parking garage.
Share Facebook  LinkedIn  Twitter  | Full Article - May Require Free Registration | Return to Headlines

The Second Lives of America's Iconic Shopping Malls
Commercial Observer (07/24/19) Gourarie, Chava

The outlook continues to be uncertain for retail and shopping malls. In the first six months of 2019, there were 7,000 planned store closures -- a mark higher than the total for all of 2018. Even so, some malls have evolved from their original purpose and remain standing, but with different services offered inside. Across the country, mall buildings have been converted into medical centers, casinos, gyms, train stations, and even college campuses and sets for television and movies. For example, Gwinnett Place Mall in Atlanta has been described online as a "ghost town," but it recently was featured as Starcourt Mall in the third season of Netflix's popular show, "Stranger Things." Elsewhere in Georgia, the North DeKalb Mall was saved from demolition by featuring in movies and TV shows like the upcoming "Zombieland 2" and "MacGyver."

Meanwhile, malls in Florida, Illinois, and North Carolina have become partially or fully taken over by mega-church facilities. And other malls across the country have been converted into housing, whether in gated communities or for colleges and universities. Surprisingly, the harbingers of malls' downfall -- Internet giants Amazon and Google -- have also jumped on mall properties. The former turned one vacant mall in Ohio into a fulfillment center last year and has plans to do the same elsewhere. The latter, meanwhile, has acquired several old mall properties in California and converted them into corporate offices. In Mountain View, Calif., Google has an innovation lab on the site of the old Mayfield Mall.
Share Facebook  LinkedIn  Twitter  | Full Article | Return to Headlines



News summaries © copyright 2019 SmithBucklin



©Institute of Real Estate Management. All rights reserved. IREM®, Certified Property Manager®, CPM®, ACCREDITED RESIDENTIAL MANAGER®, ARM®, ACCREDITED MANAGEMENT ORGANIZATION®, AMO®, Income/Expense Analysis®, Expense Analysis®, MPSA®, and JPM® are registered marks of the Institute of Real Estate Management.

Our site uses cookies to improve your visiting experience. Please view our Cookie and Privacy Policy
Got it