Real Estate Management News - 09/11/2019

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September 11, 2019
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IREM® HEADLINES
Closing the Gap by Empowering Women in Real Estate
Property Managers Offer Insight on Hurricane Disaster Plans
Harassment and the Act
2019 REME Award Finalists Announced

INDUSTRY HEADLINES
Hotel Design Tactics Continue to Pop Up in Corporate Settings
In Efforts to Revive Struggling Malls, Developers Eye Apartments, Microbreweries
Walgreens, CVS Ask Customers to Stop Carrying Guns
Town Requires Apartments to Have Cameras After Man Was Killed in Broad Daylight
One-Third of Convenience Stores Want to Upgrade Customer Loyalty Tech
The Future of AI in Facility Management
Atlanta’s Soaring Office Space Rents, Like Housing Costs, Are Reaching All-Time Highs
Sustainable: Mass Timber Construction’s Appeal Spreads
Jewelry Retailers Bring Back Shine, but Hurdles Remain
Why Landlords and Property Managers Should Require Renters Insurance
Off-Site Modular Construction: Building for the Future
Janesville Mall Testing New Ways to Lure Youths, Families


 
 

IREM Headlines


Closing the Gap by Empowering Women in Real Estate

The number of women building careers in the commercial real estate business has surged over the past 20 years. While they still lag behind men in pay and leadership roles, the gains are impressive. Women are launching real estate development firms, closing deals and leading property management companies. The more empowered they become, the more these women empower others.

Cheryl Ann Gray, CPM, 2020 IREM president, and head of special projects at QuadReal Property Group, is among those leading the way, and recently she shared her insights on gender equality with GlobeSt.com. “There are a lot of things we can do more of in the North American market specifically,” notes Gray, “but I will say there are many institutions supporting and promoting women. We have to continue to advocate up to the most senior levels of every organization.”

It’s not only women advocating for women. Gray recently attended a presentation in New York by the Property Council of Australia, led by the Male Champions of Change, who promote the advancement of women in the industry with a focus on talent and equal pay. Their mission is particularly important, as the real estate industry in Australia represents 13 percent of the country’s GDP, and employs 1.4 million Australians.

IREM is among those organizations actively supporting female empowerment with the Diversity and Inclusion Initiative, along with BOMA, the CREW Network, and Real Estate Forum’s Women of Influence program. Learn more about gender equality and Cheryl Gray’s insights on women in real estate by visiting the IREM Blog.
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Property Managers Offer Insight on Hurricane Disaster Plans

Two weeks before Hurricane Dorian hit the Bahamas and the Southeast, Bisnow interviewed several commercial property managers on how they prepare and recover from hurricanes.
The resulting article notes that, although the commercial real estate industry is more conscious of the effects of major storms, improvements implemented by managers might not be enough to counteract the effects of ongoing climate and demographic changes.

Hurricanes aren’t necessarily expected to increase in frequency, but there is the chance the most severe ones will increase in intensity due to climate change. Industry veteran George Caruso, CPM, principal of The Cooper Cos., states, “This has become, particularly in the Southeast, much more front of mind, because of the flooding we’ve had and the hurricanes we’ve had… most of the flooding we’ve had [in the region] has been a byproduct of hurricanes, even without it being a severe hurricane.”

Caruso and other CRE professionals Bisnow spoke to also identify insurance as another challenge facing the commercial industry. Property owners that have assets in an established flood risk rely on the National Flood Insurance Program (NFIP), but conflicts in Congress over the program have left it to be reauthorized in four-month increments. As it stands now, the NFIP will either have to be reauthorized or lapse in September. Most commercial property owners supplement NFIP insurance with private coverage, but since insurance companies adjust premiums based on their own payouts and perceived risks, the cost can spike quickly.

Click here to read the complete Bisnow article.
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Harassment and the Act

The Fair Housing Act long ago established that harassment of those classes defined as protected under the Act is prohibited. But how exactly is harassment defined under the Act, and how can property managers and owners protect themselves from accusations and charges of harassment?

Next week’s Live Accelerator on September 18—which is free to IREM members—will set out to answer these questions for attendees. In Fair Housing & Harassment - Best Practices, William Cannon, chair of Offit Kurman’s Landlord Representation Practice Group, draws from his experience in Fair Housing Act compliance to help participants identify types of harassment, including sexual harassment; become familiar with the types of penalties that can be imposed for infractions of the Act; and address other fair housing concerns, all to aid property managers and owners in steering clear of situations where harassment allegations could be made against them.

Learn more about this IREM Accelerator and register here.
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2019 REME Award Finalists Announced

Real estate managers improve the quality of our lives by ensuring the places we live, work and visit operate efficiently and safely. They apply new technologies to improve the resident and tenant experience, they establish adequate building staffing, and they can identify and resolve issues before they evolve into major problems. All this is just scratching the surface of the role of a real estate manager.

IREM honors the exceptional contributions these professionals make with the Real Estate Management Excellence (REME) Awards. “Our industry is full of talent, and we’re so excited to have the opportunity to celebrate the spectacular work that is being done every day,” said Jae Roe, CPM, REME Awards Advisory Board chair, with the RMR Group, AMO, in Norfolk, Va. “Thanks to all who took the time to submit nominations, and congratulations to this year’s finalists.”

2019 Finalists have been selected in the following six corporate and individual categories:

Corporate Innovation
  • DLP Real Estate Capital, Bethlehem, Pa.
  • Shenzhen Unova Commerce Management, Shenzhen, China
Corporate and Social Responsibility
  • CAHEC, Raleigh, N.C.
  • MPS Shanghai Co., Ltd., Shanghai
  • Schochet Companies, AMO, Braintree, Mass.
  • Southwest Clinical Center, Brasilia, Brazil
  • Woodmont Real Estate Services, AMO, Belmont, Calif.
Employee and Leadership Development
  • CBRE, Pasadena, Calif.
  • JLL, Washingto, D.C.
  • The RMR Group, Denver
  • United Realty Management Corporation, AMO, Troy, N.Y.
AMO of the Year (Accredited Management Organization)
  • Physicians Realty Trust, AMO, Milwaukee
  • Roscoe Properties, AMO, Austin
  • United Realty Management Corporation, AMO, Troy, N.Y.
CPM (Certified Property Manager) of the Year
  • Shannon Longino, CPM, SunTrust Community Capital, Atlanta
  • Patricia McLean, CPM, Hillwood Properties, Fort Worth, Texas
  • Tracy Mitchell, CPM, Sampson Morris Group, Monroeville, Pa.
  • Angelina Scarcelli, CPM, Colliers International, AMO, Las Vegas
ARM (Accredited Residential Manager) of the Year
  • Kristen Alessi, ARM, Draper & Kramer, AMO, Chicago
  • Jesse Miller, ARM, AcoM, Greystar Real Estate Partners, AMO, Portland
  • Brody Sheets, ARM, Pedcor Management Corporation, Carmel, Ind.
  • Kimberly Sisco, ARM, Klingbeil Capital Management, Montgomery Village, Md.
Winners will be announced at the 2019 IREM Global Summit held Sept. 23-26 in San Francisco. Visit the IREM website to learn more about this year’s REME Award finalists.
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Industry Headlines


Hotel Design Tactics Continue to Pop Up in Corporate Settings
Buildings (09/03/19) Kaufman, Cindy

At hotels, guests and employees alike have come to expect transparency, instant online gratification, and hyper-personalized experiences. And as the younger generation feels increasingly empowered to provide feedback and criticism, a power shift has taken place within the corporate world. Whereas executives once held all the power, industries are now shifting to allow power to individuals, even if they are not particularly high-ranking. This shift is evident even in the physical layout of corporate offices. Companies are finding innovative ways to appeal to young workers, who are starting their careers as the country boasts a low unemployment rate of 3.7 percent. Millennial workers, in particular, are statistically inclined to want to feel a strong connection to the morals and values of their workplaces. They typically prioritize social equality, so companies are increasingly designing their offices with sustainability and diversity in mind. In some cases, designing around elements of nature -- like green walls, trees, plants, carpet patterns, and natural furniture finish materials -- has been linked to positive employee experience. And amenities prioritizing health and wellness are also proving popular with workers.

Companies have also turned to the hospitality industry for ideas on how to make their offices more welcoming. The Boston Consulting Group specifically designed a non-corporate look and feel at its New York office, hoping that the unique space would encourage "creative collisions" among its workers. Other spaces, like Ponce City Market in Atlanta, have attempted to fuse together elements of live, work, and play to make offices more appealing for workers young and older. Some office spaces are being designed or retrofitted to look like living rooms with the intention of making young employees feel more comfortable. In these offices, the exact space where a person works is flexible. At Interface's global headquarters in Atlanta, for instance, workers are given the choice of having a traditional workstation, a semi-private cubby, a standing table, or communal seating. Studies suggest that when workers feel comfortable in specifically-designed office space, they have reduced stress, enhanced creativity, and improved well-being.
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In Efforts to Revive Struggling Malls, Developers Eye Apartments, Microbreweries
Philadelphia Inquirer (09/02/19) Park, Katie

In the Philadelphia metro area and elsewhere, developers are turning to innovative new ideas to fill vacant space at struggling malls and breathe new life into the brick-and-mortar retail institutions. Online shopping has dealt a blow to retailers' bottom lines, and in the most drastic cases some companies have been forced to declare bankruptcy and close thousands of locations nationwide. Shopping malls are not immune to the problems plaguing retail today. According to Coresight Research, more than 7,500 major retailers' stores have closed so far in 2019, with another 4,500 potential closures predicted by the end of the year. Some malls have been forced to close altogether, while others are struggling to stay afloat. Those centers are turning to unconventional solutions to fill their vacant spaces.

The Oxford Valley Mall complex in Pennsylvania has lost two of its four anchor stores and multiple smaller stores over the past few years. But developer Cornerstone Tracy and Simon Property Group have collaborated on a design that would add hundreds of luxury apartments to the mall. They are betting that families will flock to the residential space, thereby giving the mall a built-in customer base. For the potential apartment residents, the retail options at Oxford Valley would be close and convenient. Given enough success, the apartments could attract new retailers and restaurants, reversing the recent trend of closures. In New Jersey, meanwhile, a developer is drafting plans to turn a shuttered Macy's department store at Voorhees Town Center into an indoor sports center. Voorhees Township is also considering converting the mall's food court into a modern space complete with microbreweries and flat-screen TVs.
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Walgreens, CVS Ask Customers to Stop Carrying Guns
Wall Street Journal (09/06/19) Nassauer, Sarah

CVS Health and Walgreens Boots Alliance this past week asked customers to stop openly carrying firearms in stores. "We join a growing chorus of businesses in requesting that our customers, other than authorized law-enforcement personnel, do not bring firearms into our stores," a CVS statement read. The request came two days after Walmart asked shoppers to stop carrying guns openly in its stores and said the company will cease sales of ammunition that can be used in semiautomatic rifles and handguns. Last month, 22 people died in a mass shooting in an El Paso, Texas, Walmart, prompting company executives to rethink their policies around gun violence in the United States. Thirty-one states allow the open carrying of a handgun without a license or permit, although in some cases the gun must be unloaded. Over the past decade, gun-control advocates including Moms Demand Action have asked various retailers to stop allowing customers to openly carry guns in stores.
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Town Requires Apartments to Have Cameras After Man Was Killed in Broad Daylight
NJ.com (09/04/19) Franklin, Chris

Penns Grove, N.J., has unanimously passed a law requiring that apartment complexes in the town install and maintain security cameras covering every part of the property. The law is designed to make apartment communities safer by providing footage of all of the complex, including playgrounds, trash collection areas, and parking lots. It also mandates that there be adequate lighting across the entire property. The law further requires that apartment operators save the footage recorded on the cameras for 180 days. The law was inspired by the death of 26-year old Tayshon Hayward, who was shot and killed at a Penns Grove apartment complex in May. Hayward intervened in an argument between his cousin and another man at the complex.

Hayward's mother, Nokomis Waters, said the law will help keep her son's memory alive. Penns Grove officials hope that the presence of the security cameras will deter would-be criminals from engaging in violent or unlawful behavior at apartment buildings in the borough. If a crime does occur, the video footage can help investigators and law enforcement officials determine exactly what happened and identify suspects. As of now, one Penns Grove apartment complex has already installed security cameras. Three more are working on securing funding to follow suit.
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One-Third of Convenience Stores Want to Upgrade Customer Loyalty Tech
Retail Dive (09/05/19) Walk-Morris, Tatiana

Upselling customers remains a high priority for convenience store retailers. According to a new survey by Zynstra, more than one-third (39 percent) said that upgrading customer loyalty programs was a key IT priority. Some 44 percent of convenience store shoppers said they would be interested in technologies that let them pay instantly and bypass checkout lines. As Amazon Go, Zippin, Grabango, and others enter the marketplace, it's clear established chains must invest more in technology. Convenience store retailers identified scan-and-go technology and mobile app payments (43 percent) and "buy online, pick up in store" capabilities (42 percent) as the technologies they most want to introduce. An overwhelming majority of convenience store IT managers (96 percent) said that they would implement new applications and services more often if it were easier to do so. Convenience chain 7-Eleven is leading the way. The chain has introduced Apple Pay and Google pay to its U.S. stores and rolled out mobile checkout at its New York City locations in August.
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The Future of AI in Facility Management
Microgrid Knowledge (09/03/2019)

Commercial buildings will incorporate more and more artificial intelligence into property management and operations over the next few years. New generations of technology will allow managers to complete routine tasks in a cost-effective, efficient manner, saving money and time for everyone involved. Building management teams in office buildings will likely start to add smart and app-connected products and appliances to individual workplaces. These products and appliances have been successful in multifamily housing settings, and it is likely that residents will come to expect the same convenience at their offices, too.

The Internet of Things (IoT) technology will be especially helpful for facility managers. For instance, a maintenance technician working on repairs could use an Alexa-esque service to order more parts without taking a break from the task at hand. Furthermore, IoT algorithms could be used to predict when maintenance will be required on building equipment, allowing managers to keep the building running smoothly with preemptive repairs. If more building managers begin to embrace IoT solutions, they will also need increased cybersecurity, thereby requiring more training and education for them and their support staff.
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Atlanta’s Soaring Office Space Rents, Like Housing Costs, Are Reaching All-Time Highs
Curbed Atlanta (08/23/19) Keenan, Sean

Office space is becoming more expensive seemingly by the day in Atlanta, mirroring a larger trend in affordability as residential living spaces become pricier, too. A new report from Bisnow Atlanta uses Transwestern research data to conclude that office rents in metropolitan Atlanta are at an all-time high. Likewise, the amount of money investors are willing to pay for Class A space is reaching record highs. Last year, metro Atlanta office buildings traded for about $229 per square foot. That number jumped to an average of $244.30 earlier this month. And several recent transactions saw office space trade for more than $400 per square foot. The price jump may be due to the fact that it is more tempting to buy existing space than construct new offices. Landlords are now able to charge at least $50 per square foot in office rent as job growth and population simultaneously grow. As Atlanta grows more crowded and more expensive, some developers have abandoned downtown and set their sights on the suburbs where land and labor is cheaper.
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Sustainable: Mass Timber Construction’s Appeal Spreads
Finance & Commerce (09/02/19) Jossi, Frank

When T3 opened a few years ago in Minneapolis, it was the largest mass timber office building in the country, standing seven stories tall and having a total of 222,000 square feet of office space. The building quickly filled with technology companies such as Amazon and Industrious, a co-working space. Now mass timber buildings are being built across the country due to their sustainable building material that could help mitigate carbon emissions, reinvigorate the timber industry, and create jobs in logging.

Buildings represent about 40 percent of all carbon emissions, according to federal and international studies. Wood has 65 percent less weight than steel or concrete, meaning buildings' foundations do not require as much concrete as heavier building materials do. Construction time can also be reduced by at least 25 percent. Most of the mass timber buildings in the United States are being constructed on the coasts, though they are expanding into the Midwest. The U.S. has 545 mass timber projects either built, under construction, or in a design phase, states structural engineer Lauren Piepho.
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Jewelry Retailers Bring Back Shine, but Hurdles Remain
Wall Street Journal (09/05/19) Menton, Jessica

As shopping malls experience ever-decreasing foot traffic and slower sales, the jewelry retailers who rely on brick-and-mortar locations there have struggled, too. These problems have been compounded as millennials increasingly seek out inexpensive or alternative options to traditional engagement rings. But there are signs of hope. Last Thursday, shares of Signet Jewelers increased 27 percent after the retailer outperformed Wall Street estimates for profit and revenue. Signet is the world's largest retailer of diamond jewelry, and owns Kay Jewelers, Zales, and Jared the Galleria of Jewelry. The 27 percent surge is the largest single-day increase for Signet since 1996.

Even with this increase, Signet has had a tough year and reportedly plans to close 200 locations inside shopping malls. At the same time, though, it is looking to open some new stores away from malls to push back against low sales at existing locations. Experts said that Signet's focus on e-commerce has helped the jeweler navigate through a tough patch and regain some ground. Meanwhile, luxury jeweler Tiffany & Co. has seen lower results as fewer foreign tourists visit locations while on vacation in the United States.
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Why Landlords and Property Managers Should Require Renters Insurance
Multifamily Executive (08/29/19) Jankelow, Laurence

Apartment owners and operators eager to protect their investment should consider requiring residents to have renters insurance. A building's insurance generally does not cover renters' individual possessions, such as furniture and clothing. If renters insurance is required, both tenants and managers can rest assured that damages to those items will be covered in case of necessity. Moreover, renters insurance provides protection to third parties. If a guest visits an apartment complex and his or her belongings are damaged, he or she may choose to sue the property owner if there is no renters insurance to cover the damages to those belongings. Similarly, renters insurance can provide coverage for things like ambulance rides or medical bills if a third-party visitor is injured at an apartment building.

Renters insurance can also cover a deductible if an apartment resident's negligent action results in widespread damage to the building. And if invasive repairs are needed on the building, renters insurance can cover residents' hotel costs and remove the burden from apartment owner and their management staff. Still, it is important to keep in mind that such policies do not cover everything. Renters insurance cannot help when buildings are damaged by such natural causes as earthquakes or floods. Moreover, renters insurance does not help when a building is negatively impacted by a sinkhole. And if the policyholder is judged to have engaged in illegal activity, renters insurance will not help cover the damages incurred. Finally, while it covers personal belongings, there are usually fairly low limits for valuables like jewelry.
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Off-Site Modular Construction: Building for the Future
Contractor (09/03/19)

The market for modular off-site construction is estimated to have expanded 26 percent from 2014 to 2017 and is expected to grow another 4 percent per year from 2018 to 2020. Developers, architects, and builders are becoming more aware of the benefits of the modular approach for such structures as office buildings and hotels. The off-site construction model produces components of a more consistent quality as a result of standardized processes and training. Components undergo multiple checks, including when they leave the factory and again on the construction site. Using off site assembled modules means they are ready-equipped with the latest electrical and plumbing systems along with high-end finishes.

Building components are produced in a controlled environment, where delays due to inclement weather, theft of materials, or sub-contractor absence are virtually eliminated. Furthermore, new technologies for taking accurate measurements helps curb the margin for error significantly. Modular building can also more easily fulfill green building certification requirements such as the Building Research Establishment Environmental Assessment Method (BREEAM). Finally, off-site methods reduce material waste in the factory and on site.
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Janesville Mall Testing New Ways to Lure Youths, Families
Journal Times (Wis.) (08/31/19) Johnson, Neil

Wisconsin's Janesville Mall is experimenting with a number of new stores in an attempt to entice families and young shoppers back to the mall. For the past few years, Janesville Mall has seen several retail spaces sit vacant, but mall manager Julie Cubbage is putting her faith in alternative uses for that vacant space. Matthew and Tesha Clark, who are movie set, makeup, and special effects designers and filmmakers by trade, are two entrepreneurs reimagining what can go in traditional retail space to appeal to young people. The Clarks are taking over a space once containing a jewelry store and opening a vintage video game arcade. Their Drop Zone Arcade is set to open in early September and will feature a mix of vintage games from the 1980s and '90s with games popular today set in a space with PacMan and Super Mario Brothers murals on the wall. The Clarks are trying to recapture the spirit of 1980s mall culture and make Janesville Mall a popular destination for people of all ages. The Clarks have also brought two other businesses to Janesville Mall—Extreme Graphics, which provides airbrushed items like shirts and jackets, and Spotlight Photography.

The Clarks are not the only entrepreneurs interested in Janesville Mall. According to Cubbage, there are multiple other businesses looking to take over traditional retail space and provide a new service to mall-goers. A children's museum is looking to open in a space where a clothing store once stood. The local public library is opening an express branch and hoping to appeal to young parents who can easily grab their children some library books while shopping for other things. And Cubbage said another entrepreneur is exploring bringing an escape room to the mall, which would provide people of all ages with a unique, family-friendly experience they cannot find online. Cubbage also said that Janesville Mall is in the running to house the area's planned ice arena and sports complex.
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