Real Estate Management News - 12/05/2018

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December 5, 2018
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IREM® HEADLINES
The Future of Work Is Changing – Are You Ready?
Fighting the Pull of Attention Deficit
NFIP Granted Seven-Day Extension

INDUSTRY HEADLINES
10 Amenities to Improve Well-Being at Your Property
Simon Installs 'Launchpad' to Showcase New Products in Malls
Renters Are Paying More for Less Space, Study Says
Top-Tier Mall REITs Post Solid Performance in the Third Quarter
How to Recruit and Retain Top Maintenance Staff
Starbucks Says It Will Start Blocking Pornography on Its Stores' Wi-Fi in 2019
Resident Communications: It’s Personal
Columbus Plans to Transform Nearly Vacant Fair Oaks Mall
Survey Finds Continuing Investment in Energy Efficiency
Robots Predicted to Step Up Invasion of Warehouses, Retail
Stronger Buildings Could Delay but Not Stop, Wildfire Destruction Alone
PCI Solar Completes Final Solar Installation of Dallas-Area Apartment Complex


 
 

IREM Headlines


The Future of Work Is Changing – Are You Ready?

The new world of work was the focus of an engaging panel discussion at PM Expo last week in Toronto, with conversations touching on artificial intelligence, robots and opportunities that can be seized to build more competitive, prosperous and inclusive organizations. Appropriately titled “The Evolution of Real Estate: Developing People and Transforming Organizations for the Future of Work,” the session was moderated by Micheline Bentley of Matrix360 and included industry and tech experts, among them Brad Keast, Dream Unlimited; Cheryl Gray, CPM, QuadReal Property Group; Monika Jaroszonek, Ratio City; and Peter Altobelli, Yardi Canada.

Four key themes emerged: first, the importance of selecting partners carefully; then, being aware of the convergence between Information Technology (IT) and Operational Technology (OT); next, focusing on the need to reduce silos and increase collaboration among organizational areas; and finally, engaging the tenant experience into IT.

Gray, IREM’s 2019 president-elect, highlighted that there is virtually an “awakening of the industry” and emphasized the importance of needing to “keep going back to the problem we are trying to solve” and focusing on execution. All panelists agreed that organizations need to create a culture that embraces sharing knowledge, provides opportunities to connect, asks staff what they need to be successful and offers training opportunities to enhance skill sets.

One thing is for certain: The future of work requires new attitudes and behaviors founded on flexibility, collaboration, innovation and creativity. Above all, the ability to adapt to an environment of continuous change will be central to the success of the real estate industry and its professionals.

PM Expo, a property management conference, is part of The Buildings Show, which attracted more than 30,500 industry professionals and was billed as North America’s largest annual exposition, networking and educational event for design, architecture, construction and real estate.
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Fighting the Pull of Attention Deficit

In a new blog, IREM CEO and Executive Vice President Denise Froemming states, “Distraction is everywhere. Alarmingly, distraction has not just crept into the workplace, it is now the status quo.” She cites a survey conducted by Udemy that concluded “nearly three out of four workers (70 percent) admit they feel distracted when they're on the job, with 16 percent asserting that they're almost always distracted.” This imposition is glaringly evident in the lives of property managers, who have to field demands from tenants, clients, owners and vendors, via multiple routes of communication. And, as Froemming recognizes, it’s “both invasive and pervasive.”

While at the American Society of Association Executives Five-Star Weekend, Froemming attended a leadership session that attacks this challenge head-on. Author and speaker Curt Steinhorst “discussed the competition for our attention generated from the convergence of information, content and connectivity. His presentation highlighted how to cut through the noise and get our attention focused. He has spent years helping Fortune 500 companies overcome distraction and achieve focus, and he reminded us that technology creates endless opportunities to ‘improve productivity.’ Conversely, he also cautioned us about the trap—individuals spend so much time responding to interruptions that they lose the ability to concentrate and do their jobs.”

Click here to read the complete blog and find out more about Steinhorst and his strategies for concentrating amidst the chaos.

Denise Froemming, CAE, MBA, CPA, is CEO and Executive Vice President of IREM.
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NFIP Granted Seven-Day Extension

The National Flood Insurance Program (NFIP) remains in place as a result of the House and Senate passing a seven-day extension last week, averting the November 30 deadline. In addition, the Senate passed a six-month extension, sending it to the House. It is unclear at this point if the House will take up the Senate bill or if both houses will agree to a longer-term extension as part of the Omnibus government funding bill due December 7.

The NFIP and flood insurance reform has been one of IREM’s top public policy priorities throughout 2018. IREM supports long-term reauthorization of NFIP as well as broader reform that would increase affordability of flood insurance and increase access to private market insurance.

The program is a partnership between federal, state and local governments helping to mitigate flood risk by providing affordable flood insurance to 5.6 million families and businesses. It provides 90 percent of all flood insurance nationwide and close to 100 percent for individually owned residential and small- to mid-sized commercial properties.
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Industry Headlines


10 Amenities to Improve Well-Being at Your Property
Buildings (11/28/18) Cohn, Jon

According to the Global Wellness Economy Monitor 2018 report, the average annual grow rate of wellness real estate was 6.4 percent from 2015 to 2017. Wellness real estate incorporates wellness elements into design, materials, and building amenities. The environment building owners and operators design should support work-life balance and improve well-being. The article's author details 10 wellness amenities that should be considered in commercial buildings, starting with living walls. Also known as vertical gardens, they've proven to be beneficial for employee health. Two, an on-site cafeteria with breakfast, lunch, and dinner options means employees will spend less time leaving the property. Three, common spaces that create a sense of community with picnic tables, fountains, and so forth are in demand. So, too, are rooftops that have been turned into a basketball or tennis court; a lounge with deck chairs, tables, and a bar; or even a swimming pool. Five, more tenants are looking to offer "rooms for mindfulness" -- i.e., nap pods, technology-free reflection spaces, etc.

Six, offer resources for parents like private lactation rooms and an on-site childcare facility. Seven, floor to ceiling windows are in high demand, as are full-service gyms and spas. Full service typically means everything from traditional weights and exercise equipment to saunas, hot tubs, and lap pools. Nine, consider hiring a transportation concierge. To this end, a virtual transportation kiosk that features train and bus times and shows a map highlighting nearby rideshares is a way to stand out from other buildings. Finally, some buildings looking to increase wellness among occupants offer personal valet service that can be called on for everything from grocery shopping to dry cleaning.
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Simon Installs 'Launchpad' to Showcase New Products in Malls
Retail Dive (11/28/18) O'Shea, Dan

Simon Property recently took the wraps off Launchpad by Simon, a retail platform for showcasing new products and trends. The mall operator unveiled Launchpad by Simon at a half-dozen of its shopping centers nationwide on Black Friday. Sourcing merchandise for the platform was a worldwide effort, as Simon drew products and innovation inspiration from wholesalers while attending such events as the CES Show, Canton Fair, and the Hong Kong Gift and Toy Show. The Launchpad by Simon locations will each feature two technology installations. The first is the 720 Degree Experience, a virtual reality experience "with a 720 camera creating HD images and video to post on social media or view via VR goggles. The second is Youth Tech, featuring a smartphone-enabled gaming console, a robotic dog able to respond to verbal commands, and other trendy technology.

Launchpad by Simon is similar to what b8ta has been doing with some retailers and the store-within-a-store concepts that have been leveraged by such chains as Best Buy to build experiences into the traditional store environment. Retail professionals say providing fun tech experiences, and showing off new concepts that may not be in most stores, could help Simon generate excitement around its malls and give the general public something they have not seen before. Joseph Gerardi, vice president of specialty leasing for Simon, issued a statement that read: "Items that sell extremely well will quickly migrate to another location outside of Launchpad. If the product does not sell to a satisfactory level during the trial period, we will immediately return it and test the next product on our list."
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Renters Are Paying More for Less Space, Study Says
SILive.com (NY) (11/29/18) Porpora, Tracey

A growing number of renters across New York's Staten Island are paying more for less space, according to property professionals. This is most evident in new apartment communities like Urby in Stapleton, where the monthly starting rent for a 538-square-foot studio apartment is $1,775. Paying more money for less space is in line with what's happening nationwide, according to a new study by Rentcafe.com. Its research shows that the average U.S. apartment has shrunk by 52 square feet in the past decade, clocking in at 941 square feet this year. The study further revealed that rents in newly-built apartments have increased by 28 percent nationwide, but their size has gotten 5 percent smaller compared to 10 years earlier.

"Without question, we have seen a shift in the way people live here on Staten Island," observes James Prendamano, vice president and CEO of Casandra Properties. Nevertheless, Staten Islanders are smart consumers who, as a group, will only pay more for smaller apartments when such high-end amenities as closet organizers and granite finishes are included. Prendamano concludes, "When you offer amenities above and beyond your everyday fitness room and meeting space and start to deliver resident farms, yoga spaces, outdoor pools, communal cafes, you are able to drive a higher rate."
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Top-Tier Mall REITs Post Solid Performance in the Third Quarter
National Real Estate Investor (11/29/18) Wolf, Liz

While the retail sector continues to face its share of challenges, REITs that own top-tier shopping malls are registering healthy performance numbers and solid earnings. Regional mall REITs can be an especially stable investment, with returns of 2.14 percent this past year versus 0.53 percent for the S&P 500, according to Barron's. Despite record numbers of retail bankruptcies and store closures over the past several years, such major mall REITs as Macerich and Taubman Centers posted increased store sales and occupancies in the third quarter. In fact, REIT-owned regional malls are outperforming malls held by other owners, with same-store net operating income (NOI) climbing 2.1 percent on average in the July-through-September period -- the sector's strongest quarter in 18 months, NAREIT reports. In general, REITs own malls in areas that are wealthier and have high population density.

Calvin Schnure, NAREIT's senior vice president of research and economic analysis, states that population density is 20 percent higher around REIT-owned malls and average incomes are 9 percent higher. The average household income within five miles of a REIT-owned mall is $66,148 versus $60,877 for other shopping centers. "This is really important when you're dealing with the disruptions from e-commerce and bankruptcies and store closures, because the REITs have an easier time refilling the space," Schnure comments. That's also a net positive for the REITs moving forward, because many of the new tenants inking lease agreements for spaces vacated by retailers like Sears are paying more. "They're paying higher rates because these are fresh stores coming in with a new product," he concludes.
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How to Recruit and Retain Top Maintenance Staff
Multifamily Executive (11/29/18) Hogrebe, Tony

The number of qualified, high-performing maintenance technicians trails the amount needed in today's apartment sector. That makes finding and retaining such staffers more important than ever in the current multifamily housing landscape. Amid a thriving economy, these professionals have a definite advantage given the multitude of opportunities available to them. Meanwhile, with the industry tasked with developing a projected 4.6 million new rental apartments by 2030, according to the National Multifamily Housing Council, apartment operators will have to exhibit increased focus, develop an innovative culture, and get creative in an effort to attract and retain such top talent. To identify the best talent, keep up with the typical marketing channels, advertising sources, and recruiting groups. Also keep in mind that referrals often generate the most-qualified workers, especially for maintenance positions that demand a specific skill set. Start the retention process early, too. Workers should feel like they are engaged with the company's mission, are well informed, and are being given all the tools necessary to perform their jobs at a high level to make their residents happy.

More often than not, the ideal staffers are already on your management team. Retaining them entails helping them achieve their ambitions centered on professional growth and development. Often, those goals align with those of the company and it becomes a win-win. But if you develop someone and that worker decides to ultimately pursue another career path, honor his/her decision to maintain your reputation as a good place to work. Of course, incentives still go a long way to keeping high performers in place. Provide a competitive pay rate and maybe even implement a service appreciation day or week for your teams.
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Starbucks Says It Will Start Blocking Pornography on Its Stores' Wi-Fi in 2019
NBC News (11/29/18) Fieldstadt, Elisha

Starbucks this past week announced it will start blocking pornography over its stores' Wi-Fi beginning in 2019. The announcement came amid renewed public pressure on the coffee giant by Internet-safety advocacy group Enough is Enough. A Starbucks spokesperson remarked, "We have identified a solution to prevent this content from being viewed within our stores, and we will begin introducing it to our U.S. locations in 2019." To push change, Enough is Enough circulated a Starbucks-specific petition that garnered more than 26,000 signatures. The nonprofit launched its porn-free campaign aimed at McDonald's and Starbucks four years ago, and it says that while McDonald's "responded rapidly and positively," Starbucks has not.
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Resident Communications: It’s Personal
Multi-Housing News (11/27/18) Bellack, Larry

Sending messages to an apartment building's residents is an important aspect of property management. However, getting them to see the messages and read them is a challenge, especially in today's high-tech world. E-mail is no longer a cutting-edge communication channel in a world of texting and apps. Some property managers have complained that only 15 percent of the e-mails they send to residents are opened. "The truth is, e-mail is a difficult medium in which to connect with residents because we are looking at it from a business lens," the article's author writes. "Personal e-mail accounts just aren't checked very often these days."

By contrast, texting (SMS and MMS) is easy, highly efficient, and has become a fundamental part of communicating in our culture. Still, those managers who have been using it to communicate with residents have run into some problems. First, texting can present significant regulatory issues. Apartment occupants have to agree to receive texts from a given business, and unsubscribes must be strictly adhered to. In addition, not all apartment residents have unlimited texting, and receiving unnecessary messages from their apartment building could cause them to pay unwanted text messaging fees. It's no wonder that so much communication now takes place via apps like Facebook Messenger and WhatsApp. The main reason is convenience as such apps help people manage their personal needs.
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Columbus Plans to Transform Nearly Vacant Fair Oaks Mall
WTHR-TV (Indianapolis) (11/27/18) Runevitch, Jennie

Officials in Columbus, Ind., have a plan to transform Fair Oaks Mall into a community recreational and sports tourism complex. The shopping center lost two of its anchor tenants last year, and most of its other retail tenants followed. Currently, Fair Oaks is only 30 percent occupied. "Our fear was that it would continue to deteriorate," remarked Tom Brosey, a consultant hired by the City of Columbus to help with purchasing and transforming the space. "We do not want flea markets, fireworks, or just general deterioration of the property." Consequently, the city has stepped in and bought the property for $5.9 million. Partnering in the project are the Heritage Fund Community Foundation of Bartholomew County and Columbus Regional Hospital.

Now, instead of a place to purchase stuff it is becoming a place to do stuff. The hope is that the recreation and sports tourism complex will draw people regionally to Columbus for tournaments and give neighbors indoor recreation options and community classes. Brosey stated, "That's one of our prime objectives is to provide the Parks and Rec Department with indoor programming space for all sorts of activities. There will be space for athletic programming, sports, but also cooking classes, arts programming, [and] wellness programs from the hospital." With parks and outdoor ballfields plentiful in and around Columbus, city leaders view the mall as a potential place to increase indoor recreation. Best of all, some existing stores may not have to leave the mall space.
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Survey Finds Continuing Investment in Energy Efficiency
EC&M (11/26/18)

A study by Johnson Controls reveals that U.S. organizations are planning to expand their investments in smart building controls and systems integration, going beyond such basic improvements as HVAC equipment and lighting upgrades. The 2018 Energy Efficiency Indicator polled nearly 2,000 facility and energy management executives from 20 countries, finding that 57 percent of U.S. organizations and 59 percent of global organizations intend to increase investment in energy efficiency in the next year. Those surveyed identify greenhouse gas footprint reduction, energy cost savings, energy security, and enhanced reputation as key drivers of investment fueling growth in green, net zero energy, and resilient buildings.

Sixty-eight percent of U.S. respondents want to implement building controls improvements over the next 12 months. Meanwhile, building system integration saw a 23 percent increase in respondents planning to invest in 2019 compared to 2018, the largest increase of any measure in the survey. One third of U.S. and global organizations mentioned the importance of being able to maintain critical operations during severe weather events or extended power outages. Roughly half said they are "extremely" or "very likely" to have one or more facilities able to operate off the grid in the next decade -- a 10 percent increase in the United States from a year ago.
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Robots Predicted to Step Up Invasion of Warehouses, Retail
Investor's Business Daily (11/21/18) Seitz, Patrick

The use of robots in retail settings, warehouses, and factories is set to accelerate, with research firm IDC predicting that 60 percent of the world's largest companies will have deployed autonomous mobile robots in some fashion by 2021. One reason for the projected increased use of automation is because demand for labor has overtaken the number of available workers. Looking at the retail sector, 25 percent of leading retail stores will have explored or deployed in-store robots by 2023 to relieve human workers from repetitive tasks, according to the IDC forecast. These robot deployments could increase worker productivity by as much as 40 percent, the research states, as retail bots will take over mundane tasks that keep workers from helping customers.

Walmart, in particular, is now testing robots that roam store aisles to check inventory and tell workers where to find goods. Retail robots in operation today can track on-shelf inventory, with fetching items the next stage. More and more retailers are pursuing omnichannel fulfillment, which can range from e-commerce warehouse fulfillment and online ordering to in-store pickup and ship-from-store ordering. "Today ship-from-shelf is a costly and complex effort," IDC analyst John Santagate concluded. "Store associates are required to push shopping carts through the store to pick up items that are meant for an order. That means that they aren't helping to service the customers that are in the store at that moment."
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Stronger Buildings Could Delay but Not Stop, Wildfire Destruction Alone
Civil & Structural Engineer (11/28/18)

Julio Ramirez, a Professor of Civil Engineering at Purdue University, says better materials and creating defensible spaces around a building where a fire can be stopped cannot make buildings completely safe from wildfires. His remarks came after firefighters announced that the Camp Fire in California has been completely contained. Many of the buildings damaged in the wildfire were made of wood and flammable roof materials. Ramirez says to delay damage from future fires, buildings should be made of steel reinforced concrete and clay tile roofs. A defensible space surrounding a building can add another layer of protection, he conceded. Such spaces place buildings farther apart and away from wooded areas. These two strategies could give more time for people to evacuate and potentially slow the spread of a fire.
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PCI Solar Completes Final Solar Installation of Dallas-Area Apartment Complex
Solar Builder (11/27/18) Crowell, Chris

PCI Solar and Green Mountain Energy have completed construction on the fourth and final rooftop solar installation for AMLI Residential at its Dallas-area apartment complexes. The projects are part of a sustainability initiative between AMLI and Green Mountain Energy. They total 445 kilowatts (kW). In addition, AMLI has agreed to buy 100 percent renewable energy for all of the common areas at its apartment properties in Dallas and Houston from Green Mountain Energy. The Dallas-area projects are located at AMLI at the Ballpark, Campion Trail, AMLI Frisco Crossing and AMLI West Plano apartment communities.

PCI erected the four projects in a phased process, starting in November 2017. Combined, they are expected to generate 20 percent of common area electric use at each apartment community. The sustainability initiative marks a major phase in AMLI's commitment to making its multifamily housing increasingly more sustainable. By moving its more than 20 apartment properties in the Texas competitive electricity market to 100 percent renewable energy, AMLI is expected to offset over 20 million pounds of carbon dioxide annually -- the equivalent of planting 2,300 trees or taking 2,100 automobiles off the road for a year.
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News summaries © copyright 2018 SmithBucklin



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