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In the latest CIRE (Commercial Investment Real Estate) magazine, coach and trainer Rod Santomassimo, CCIM offers commercial brokers a valuable resource: a plan to take charge of their careers. On pages 36-38, Rod offers insights to CMS and business management systems, marketing strategies and targeting prospects, investing in human capital (in a efficient, effective way) and leveraging your company's debt and equity. A point Rod took from my experiences and beliefs was: "A sales plan will consist of a targeted list, an approach to reach that list, and follow-up steps. Do you know who your ideal clients are and how you can secure a list of these ideal clients? Once you have your list, how are you going to contact them? Are you going to launch a mail/phone campaign, a phone/email campaign, or use a more personal approach? Ask Jim Tucker, CCIM, of NetWorksCRE in Richmond, Va., and he will tell you commercial real estate is a "belly-to-belly" business. He is correct. Jim has a specific sales plan for reaching his targeted audience. Jim is not an average broker. He is the CEO of NetWorksCRE." Rod Santomassimo, CCIM is president and founder of The Massimo Group, a professional coaching firm focused on commercial real estate, whom I have hired in the past to help me in my own professional goals. Rod can be reached at [email protected] or through www.massimo-group.com. CIRE is the magazine of the CCIM Institute, published every other month.
Citation preview
Investors emerge from their corners in search of single-tenant opportunities.
Retail
Invveesstttors emmeerggeeRematch
www.ciremagazine.com
COMMERCIALIN V ES T MEN T
The Magazine of the
Institute
Who’s the Boss? You Are!
Foreign Investors Eye U.S. Bargains
Healthcare Reform for Properties
May | June | 2010
In this economic environment, nothing is as important to your immediate and long-term success in the commercial
real estate industry as your ability to negotiate favorable deals and make impactful presentations.
The new Preparing To Negotiate online, self-directed, interactive course shows you how to incorporate CCIM’s
renowned three-step, interest-based Negotiations Model into your business — without taking valuable time away
from it. Developed by commercial real estate professionals for commercial real estate professionals, this course will
teach you the tools and strategies these successful practitioners are already using to effectively close their deals.
After completing Preparing To Negotiate, you will be able to:
u Apply the CCIM interest-based Negotiations Model to your preparation for negotiations.
u Interpret CCIM interest analysis chart elements, and consider creative solutions for identified interests and issues.
u Assess risks and action plans for potential conflicts.
Don’t compromise on tomorrow: get the skills you need now to negotiate your way through the coming year!
Get complete details and register now at CCIM.com/preparing-negotiate
Introducing The New CCIM
P R E P A R I N G T O N E G O T I AT E
uOnline uSelf-Directed u Interactive Course
CCIM Institute
Equipping the world’s best minds
in commercial real estate
1May | June | 2010
¬
COMMERCIALIN V ES T MEN T
DEPARTMENTS
4 In This Issue
6 Market Trends
42 Regional Outlook
44 International Beat
45 Buyers Guide
46 Deal Makers
48 CCIM Connections
COLUMNS
2 President’s Desk
12 CCIM Q&A
14 Financing Focus
16 Investment Analysis
18 Legal Briefs
20 Technology Solutions
FEATURES
22 Property PrescriptionsA little preventative medicine
may protect asset health.
by Rich Rosfelder
32 International Infl uxLow prices attract foreign
real estate investors.
by Philip G. Skinner and
Abe J. Schear
36 Step It Up! Take your career in a new
direction.
by Rod N. Santomassimo, CCIM
39 The Case for ConversionOffi ce makeovers add value.
by Reed Miller and Ken Boyle
COVER STORY26
In the Retail Ring
Investors move off the ropes to fi ght for quality deals.
by Beth Mattson-Teig
May.June.2010 Vol. XXIX No. 3
Cove
r: B
rand X
Pic
ture
s/P
hoto
libra
ry; A
bove
: I
Love
Im
ages/
Corb
is
COLUMNS
2 President’s Desk
6Lenders say they will open their wallets this year.
May | June | 2010 Commercial Investment Real Estate
www.ciremagazine.com
PRESIDENT’SDESK
@Only@
What’s online with Commercial Investment Real Estate
magazine?
• Cap Rate Crazy — Is direct capitalization pushing values even lower? Appraiser Brian D. Frank, CCIM, GAA, discusses the underlying weakness of using cap rates to determine property value.
• Drop the Puck! — Native Minnesotan and CEO of Chief Real Estate Co. Michael Houge, CCIM, SIOR, compares the commercial real estate market to a hockey game. Buyers and sellers want to get back on the ice but lenders are frozen in fear.
• Retail Overstock — What do other CCIMs around the country say about their local retail markets? Read the comments that didn’t make it into the cover story.
• CCIM Connections Continued — Find out how CCIMs leverage STDBonline and other member benefi ts for profi table deal-making.
Online. All the Time.
Only @ ciremagazine.com.
m
Change the Way You WorkCCIM MEMBERS:Mailed along with this magazine is the instruction book for the next gen-
eration of CCIM member benefi ts: the CCIMREDEX User Guide. Learn-
ing to use this commercial property data exchange is the best investment
you can make in your future. It will change the way you work.
“T e real value of CCIMREDEX is the third-party applications,” says
CCIMREDEX Director Todd A. Kuhlmann, CCIM. “You enter your
property data once, and you can promote it, publish it, and analyze it in
many diff erent programs.” Data entered into CCIMREDEX is pushed
out to national commercial property listing services such as Catylist,
CommercialSource.com, CoStar, Property Line, RealUp,
TotalCommercial.com, and Proxio, an international real
estate platform where it is translated into 12 languages.
CCIMREDEX also gives CCIM members access to
several marketing and analysis programs. Turn to page
20 to learn more about these services. And to understand
the thought process behind CCIMREDEX, read Kuhl-
mann’s interview on page 12.
CCIMREDEX was developed for CCIM members by CCIM mem-
bers. It is a service of the institute’s wholly-owned subsidiary, CCIM
TECH, which also operates STDBonline, CCIM’s most popular member
benefi t. Nearly 11 years ago, the institute committed time and resources
to developing STDB, one of the premier online real estate resources
with more than 25 databases, including demographics, aerials, business
information, and mapping tools. T e institute is following the same
path with CCIMREDEX, which is integrated with STDB, providing
CCIM members with the industry’s most complete technology resource
— at no additional cost.
You owe it to your business to take advantage of this tremendous
CCIM member benefi t.
Richard E. Juge, CCIM
President, CCIM Institute
Go to www.ccimredex.com to view Todd Kuhlmann’s video on
the benefi ts of CCIMREDEX and to sign up for a CCIMREDEX
Webinar.
Only@
Investors emerge from their corners in search of single-tenant opportunities.
RetailRematch
www.ciremagazine.com
COMMERCIALIN V ES T M EN T
�The Magazine of the�
�Institute�
Who’s the Boss? You Are!
Foreign Investors Eye U.S. Bargains
Healthcare Reform for Properties
May | June | 2010
For the first time ever, CCIM
Institute and CCIM TECH will
share a large booth in the
Leasing Mall with plenty of
comfortable and functional
space just for CCIM members.
As a CCIM member, you can:
u Reserve tables for meetings and
doing deals
u Attend demonstrations showcasing
powerful technology tools (including the
new CCIMREDEX)
u Run STDBonline reports for ICSC
RECon
u Participate in a deal-making session
u Attend a cocktail reception
So come by Booth # C201 H ST (H Street right by 19th
Avenue and the Food Court) and see how CCIM and CCIM
TECH have created an environment at ICSC RECon for you
to make connections with the industry’s finest and access
all the resources you need to close a deal that day!
CCIM members are
invited to:
u Reserve a Table
u Register for a
Demonstration
u Participate in a Live
Deal-Making Session
Mark your calendar to
also attend these CCIM
learning opportunities:
Retail Decisions: Location, Timing and
Demographics Sunday, May 23, 9:45-10:45 am
Market and Financial Feasibility – Finding More
Tenants & Attaining CCIM Designation
(co-hosted by CCIM and ICSC)
Sunday, May 23, 1:30pm to 4:30pm
Visit: web.CCIM.com/icsc to learn more.
Be sure to stop by the CCIM TECH
Booth # S3813 in the Trade Expo
CCIM Institute
Equipping the world’s best minds
in commercial real estate
May | June | 2010 Commercial Investment Real Estate
COMMERCIALIN V ES T MEN T
Commercial Investment Real Estate, the member
publication of the CCIM Institute, reports on market trends and analysis, current
developments in the fi eld, and successful business strategies.
CIRE Staff
Interim Executive Vice President
Susan J. Groeneveld, CCIM
Senior Director of Communications
Jennifer [email protected]
Executive Editor
Sara [email protected]
Associate Editor
Rich [email protected]
Contributing Editors
Linda Bryson, LEED-APSara Harris
Dennis LaMantiaJonathan LittrellShawn Mayberry
Jennifer TulliusJohn W. Waldeck Jr.
Design Consultant
Commercial Investment Real Estate
(ISSN 1524-3249) is published
bimonthly by the CCIM Institute of
the National Association of Realtors,
430 N. Michigan Avenue,
Chicago, IL 60611-4092.
Periodicals postage paid at Chicago,
Ill., and additional mailing offi ces.
Ride-along mail enclosed.
Postmaster: Send address changes
to Commercial Investment Real
Estate, 430 N. Michigan Avenue,
Chicago, IL 60611-4092.
Subscriptions:
$45 for nonmembers in U.S.;
$55 for nonmembers in Canada and
Mexico. Call (800) 532-8633. For
reprints, call (312) 321-4460.
The opinions expressed in signed
articles and materials appearing in
Commercial Investment Real Estate,
including specifi c references to
products and services, are those of the
authors and not necessarily those of
Commercial Investment Real Estate,
the CCIM Institute, or the National
Association of Realtors.
© 2010 by the CCIM Institute.
All rights reserved.
Editorial address: 430 N. Michigan
Avenue, Chicago, IL 60611-4092;
(312) 321-4460; magazine@ccim.
com; www.ciremagazine.com.
The CCIM Institute, an
affi liate of the National
Association of Realtors, confers
the Certifi ed Commercial
Investment Member
designation to commercial real
estate professionals who have
extensive training and industry
experience and complete a
rigorous study program.
Executive Offi cers
President
Richard E. Juge, CCIM Metairie, Louisiana
President-Elect
Frank N. Simpson, CCIM Gainesville, Georgia
First Vice President
Leil Koch, CCIMLahaina, Hawaii
Treasurer
Craig Blorstad, CCIM Bloomington, Indiana
Editorial Review Board
Adrian A. Arriaga, CCIMDonald G. Arsenault, CCIMRoger B. Broderick, CCIMDavid B. Eaton, CCIM Jeff Engelstad, CCIM Paul G.W. Fetscher, CCIMTony M. Guglielmo, CCIMThomas E. Hankins, CCIMJames L. Helsel, CCIMJ. Howard King, CCIMRobert Knight, CCIMGeorge C. Larsen, CCIMKevin G. Lenze, CCIMMark L. Levine, CCIMCharles A. Mack, CCIMLen Magnani, CCIMMichael T. McLean, CCIMJames J. Piro, CCIMDavid L. Schank, CCIMCarol Rockhold Shoemaker,
CCIMRobert M. Stone, CCIM
Reader Services: All dues-paying
members of the CCIM Institute receive
Commercial Investment Real Estate
magazine six times a year as a mem-
ber benefi t. Subscribe, purchase back
issues, or order customized article
reprints: www.ciremagazine.com or
(800) 532-8633 x4507. Make address
changes: [email protected] or
(800) 532-8633 x4507. Request
reprint permissions: rrosfelder@ccim.
com. Submit articles and editorial
ideas: [email protected].
Reporter Beth Mattson-Teig found
strong demand for single-tenant net-lease retail properties as she
spoke to CCIMs for this issue’s cover story. Turn to p.26 to read why
investors are getting back into
the game. How can you pro-
tect your asset’s health from
an epidemic of declining fun-
damentals? Associate Editor
Rich Rosfelder searches for
the cure on p.22.
FEATURED WRITERS Co-authors of “International Infl ux” on p.32,
Philip G. Skinner and Abe J. Schear are part-
ners in the law fi rm Arnall Golden Gregory in
Atlanta with extensive commercial real estate
experience, including work-
ing with foreign investors
with U.S. holdings. T ey co-
chair AGG’s cross-border practice group.
If you’re
ready to
jump-start
your brokerage career, read
CCIM Rod Santomassimo’s
no-nonsense advice on p.36
for elevating your brand and
your business. Rod heads up the Massimo Group, a professional
coaching firm exclusively focused on commercial real estate
brokerage.
Reed Miller and Ken Boyle are managing part-
ners of Hanover Real Estate Partners, which repo-
sitions undervalued institutional-grade assets. On
p.39, they explore remaking single-tenant offi ce
properties for multitenant use.
“Retail is down, but
by no means
out.” p.26
¬
“The wave of foreign
investment should
benefi t depressed U.S.
real estate markets” p.32
¬
For advertising information, contact:
Kathleen Thomas at (202) 721-1497 or [email protected].
Only @ http://podcast.ccim.comMarcus & Millichap’s retail specialist Bernard Haddigan updates this issue’s
look at the retail investment market.
podcast
IN THIS
ISSUE
Skinner
Schear
Santomassimo
Commercial
Real Estate
They’re the three most important wordsin commercial real estate right now.
Because in a challenging market, having a powerful and recognized name
can open a lot of doors. See why, now more than ever, your most valuable
asset is a name people trust.
Visit prudentialrealestate.com/commercial or call 866-224-8895 to find
out how to become part of the Prudential Commercial Real Estate network.
© 2010 Prudential Financial, Inc. and its related entities. An independently owned and operated broker member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company.Prudential, the Prudential logo and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide. Used under license.
Acquisition & Disposition | Relocation | Lease Administration | Capital Services | Property Development
Market Research | Energy & Sustainability | Location & Site Selection
Prudential Commercial Real Estate
May | June | 2010
lTRENDS
MARKET
Is Lending Back?Lenders are ready to loosen the purse strings, according to Jones Lang LaSalle’s 1Q10 survey of
60 of the industry’s top loan originators. In a survey of life companies, CMBS originators, pri-
vate equity, commercial banks, and government agencies, 43 percent responded that their loan
production would range from $1 billion to $3 billion this year. T e number of lenders expecting
to lend more than $4 billion jumped from 9.3 percent in 2009 to 15.2 percent in 2010. Expected
loan-to-value ratios averaged between 50 percent and 70 percent and estimated debt coverage
ratios ranged from a high of 2.25 on hotels from life companies to 1.15 on multifamily from
private equity.
T eir preferred asset? Twenty-seven percent voted for multifamily, followed by 22 percent
for retail, 21 percent offi ce, 15 percent industrial, 11 percent hotels, and 4 percent other.
Worth Quoting “In 2010, the United States should see sig-nifi cant foreign capital coming from Asia (especially China and Korea), German investment funds, and the Middle East. … Industry organizations have been work-ing to assure that U.S. tax policy does not discourage foreign investment.”
— Deloitte 2010 Real Estate Outlook— D Deleloioittttee 20201010 Real Estate Outloo
Briefl y NotedHospitality — The number of major hotel sales fell 83
percent in 2009 from the market’s peak in 2007, the
largest decline in 20 years, according to an HVS survey.
The majority of 2009 assets sold between $10 million and
$50 million.
Industrial — Texas, Ohio, Illinois, California, and Penn-
sylvania top the list of U.S. states that saw the most new
logistics and warehouse distribution facilities built in the
past two years, says Site Selection Online.
Multifamily — Local buyers will drive sales activity
among smaller private investment deals because lend-
ers continue to favor investors with experience manag-
ing apartments in their home markets, says Marcus &
Millichap.
Offi ce — In 16 of 18 offi ce markets surveyed, all
participants said they offered a free rent concession,
according to the 1Q10 Korpacz Real Estate Investor
Survey. Average amount of free rent topped out at
7.8 months in Atlanta and Manhattan and 7.6 in
Chicago. The lowest amount was 3.7 months in
Los Angeles.
Retail — Retail development will reach just
70 million sf this year, the lowest amount on
record, according to Marcus & Millichap. On top
of 2009’s 107 million sf of completions, the
restricted supply may help fundamentals to start
recovering in 2011.
William
Whit
ehurs
t/P
hoto
libra
ry
H.
Arm
stro
ng R
obert
s/G
ett
y Im
ages
CCIM’s high-powered designation curriculum now has evolved to a whole new
location: online, anywhere you choose.
Online CI 101, 102, 103 and 104 are now open for registration. And with sessions
scheduled twice a week for five consecutive weeks, you’ll have plenty of time to
reflect on the instruction and to ask questions.
You’ll also interact, build relationships and network with classmates and expert
instructors who are successful practitioners within the commercial real estate
industry.
Save the time and expense of travel and register for an online course today. Go
to CCIM.com/content/online-courses now.
u Upcoming Online Course Schedule
CI 101 Session A: June 9 - July 14 Wed + Mon 12-2 pm CST exam open July 14 - 21
Session B: July 29 - Aug 30 Thurs + Mon 4-6 pm CST exam open Aug 30 - Sept 7
Session C: Aug 18 - Sept 22 Wed + Mon 12-2 pm CST exam open Sept 22 - 29
Session D: Oct 21 - Nov 23 Thur + Tue 4-6 pm CST exam open Nov 23 - Dec 1
Session E: Nov 16- Dec 21 Tue + Thur at 6-8 pm CST exam open Dec 21 - 29
CI 102 Session A: Aug 4 - Sept 8 Wed + Mon 4-6 pm CST exam open Sept 8 - 15
CI 103 Session A: July 8 - Aug 10 Thur + Tue 4-6 pm CST exam open Aug 10 - 17
Session B: Aug 4 - Sept 8 Wed + Mon 2-4 pm CST exam open Sept 8 - 15
CI 104 Session A: June 23 - July 28 Wed + Mon 4-6 pm CST exam open July 28 - Aug 4
Session B: Aug 5 - Sept 7 Thurs + Tue 4-6 pm CST exam open Sept 7 - 14
u The Most Respected Curriculum
u The Best Instructors
u The Most Convenient Online
Classroom
u All For An Affordable Cost
CCIM Institute
Equipping the world’s best minds
in commercial real estate
Commercial Investment Real Estate
TRENDSMARKET
PROPERTY TYPE 1Q10 AVERAGE CAP RATE (%) CHANGE FROM 4Q09 (BP)
Apartment 7.85 –18
CBD offi ce 8.35 +11
Strip center 8.49 –4
Warehouse 8.73 –7
Medical offi ce 8.78 –13
Net lease 8.86 –8
Aggregate 8.42 –7
Source: Colliers International
Los Angeles/Long Beach, Calif.
New York/New Jersey
Seattle/Tacoma, Wash.
Savannah, Ga.
Charleston, S.C.
Houston
0 10 20 30 40 50 60 70 80
% Imports % Exports
70.1
29.9
64.3
35.7
59.3
40.7
51.6
48.4
52.1
47.9
42.1
57.9
Port
Export AdvantageT e decline in global trade hit the nation’s industrial markets hard, but
not equally hard, according to a Colliers International report. Dur-
ing the global slowdown of the past two years, vacancy rates in port
city industrial markets climbed faster than in the overall industrial
market. T is points up the clear correlation between trade and indus-
trial demand. For every 1 percent change in port TEUs, the standard
measure of shipping trade, industrial demand changes 0.33 percent. So
the recent 15 percent decrease in TEUs resulted in a 5 percent decline
in port city industrial occupancy. But not all port cities experienced
the decline equally. In fact, those focusing on exports fared better
than those concentrating on imports, as exports to foreign countries
remained fairly stable throughout the recession.
Import-Export PercentagesSince 2008
Smart ReadsNegotiauctions pretty much describes the commercial real estate
deal-making process — continually rearranging the deal until it
works for all parties. It’s the deal-making mechanism for the future,
says author and Harvard professor Guhan Subramanian, who adds:
“Sophisticated deal makers … engage in a carefully thought-
through sequencing strategy: Get all the pieces lined up to the
point where, when you go in the room, it’s basically a done deal.”
ÃFunds Target Hotel BuysFrom Magna
Hospitality’s $75
million to Blackstone
Equity’s $10.9 billion,
some 38 equity groups
are devoting dollars to
picking up hotel assets
this year. To access
the complete list of
fund names and target
property types go to
www.hotelnewsnow.
com.
Cap Rates StabilizeGeographically, 16 markets reported a decline in capitalization rates, while 12 reported
increases, according to the 1Q10 Korpacz Real Estate Investor Survey. Going forward, inves-
tors in 19 markets expect cap rates to hold steady for the next six months, up from two
markets in 4Q09.
Andre
w U
nangst
/Gett
y Im
ages
Hospitality s $75
million to Blackstone
Equity’s $10.9 billion,
some 38 equity groups
are devoting dollars to
picking up hotel assets
this year. To access
the complete list of
fund names and target
property types go to
www.hotelnewsnow.
com.
Andre
w U
na
CI 101
Birmingham AL May 17-21
Orlando FL Jun 14-18
Baltimore MD Jun 21-25
Chicago IL Jul 12-16
Addison TX Jul 19-23
Las Vegas NV Jul 26-30
CI 102
Austin TX May 17-21
Minneapolis MN Jun 7, 8, 10-12
Santa Ana CA Jun 7-11
Boston MA Jun 7-11
Denver CO Jun 10, 11, 14-16
Charleston SC Jun 14-18
Atlanta GA Jun 21-25
Nashville TN Jun 21-25
Tampa FL Jul 19-23
San Francisco CA Jul 26-30
CI 103
Houston TX Jun 7-11
Pleasanton CA Jun 14-18
Albany NY Jun 21, 22, 24-26
Glendale CA Jun 25, 26, 28-30
Austin TX Jul 19-23
CI 104
Chicago IL May 17-21
Scottsdale AZ Jun 7-11
Stamford CT Jun 10, 11, 14-16
Addison TX Jun 14-18
Louisville KY Jun 14, 15, 17-19
Madison WI Jun 14, 15, 17-19
Washington DC Jun 14-18
Atlanta GA Jul 19-23
San Antonio TX Jul 21-25
CI Intro
Pittsburgh PA May 17-18
San Diego CA May 17-18
Lansing MI May 19-20
Mississauga ON May 19-20
Washington DC May 25-26
Las Vegas NV May 27-28
Fishkill NY Jun 3-4
Indianapolis IN Jun 7-8
Mission Viejo CA Jun 9-10
Addison TX Jun 17-18
Gulfport MS Jun 24-25
Pembroke Pines FL Jun 24-25
Los Angeles CA Jul 8-9
San Francisco CA Jul 14-15
Memphis TN Jul 22-23
Port St. Lucie FL Jul 29-30
Let others react to market conditions with a bunker mentality. Right now
is your perfect opportunity to become stronger, faster and more effective with the new,
evolved CCIM curriculum. The advanced learning methods and applications will put you light
years ahead with knowledge that can be put to work the day you finish the course. Register now
by visiting CCIM.com/CourseSchedule or calling our Solution Center at (800) 621.7027, ext. 3100.
To learn more about all
the career launching
benefits that come from
being plugged into the
world’s most powerful
network, go to CCIM.com
Schedule subject to change without
notice. For the most up-to-date schedule,
visit CCIM.com/CourseSchedule.
CCIM Institute
Equipping the world’s
best minds in
commercial real estate
May | June | 2010 Commercial Investment Real Estate
TRENDSMARKET
Top General Services Administration leasing markets outside
of Washington, D.C., Maryland, and Virginia
State 2009 leased offi ce sf Change from 2008 (sf)
California 10,266,025 146,887
Texas 9,351,863 650,863
Florida 6,542,955 566,499
New York 6,405,228 204,598
Georgia 5,843,917 52,236
Source: Jones Lang LaSalle
Dallas-Fort Worth is poised
to become a world capital
in the well-populated
future due to available
land for development and
pro-business attitudes,
says Joel Kotkin, author of
The Next Hundred Million:
America in 2050. The
growing U.S. population
— estimated to reach 400
million by 2050 — may be
just the engine that keeps
the U.S. economy chugging
along. Kotkin sees the
demographic diversity of
New York and other major
gateway cities spreading
throughout the country.
Vacancy Forecast (%)Property 2009 2010 2011
Offi ce 15.7 17.3 17.4
Industrial 13.2 14.6 14.5
Retail 12.0 12.7 12.7
Multifamily 7.4 7.0 6.1
Source: National Association of Realtors/CBRE Econometric Advisors
Beyond the Beltway: Where the Government Works
1Q07
Weighted average price per unit
1Q081Q09
1Q10
$116,4
20
$101,6
61
$73,2
33
$88,8
59
Trending
UpwardApartment transactions
greater than $500,000
Ã
Source: PPR, A CoStar company
Mauri
cio
Sim
onett
i/G
ett
y Im
ages
■ Manage your cash flow: lock in your class with an initial deposit of just $100 then waitto pay the balance until you actually take the class
■ Plan ahead without paying ahead: add your next class without worrying about paying forthe entire cost now
■ Be flexible: if your plans change you have the option of applying your deposit to any upcoming class or to next year’s dues
Don’t miss this chance to interact and build relationships with classmates and expert
instructors who are successful practitioners within the commercial real estate industry.
Sign up for your next class and Save Your Seat today with a simple
deposit of only $100.
To find out more, go to web.CCIM.com/SaveaSeat or call toll-free
now: (800) 621-7027, ext. 3100.
THE NEW CCIM ‘SAVE YOUR SEAT’ PLANIS THE PERFECT WAY TO:
CCIM InstituteEquipping the world’s best minds in commercial real estate
May | June | 2010 Commercial Investment Real Estate
Q&ACCIM
oby Jennifer Norbut
REDEX Rolls OutOn March 31, CCIM TECH launched CCIMREDEX, an online prop-
erty listing and marketing database that is poised to revolutionize
the way CCIM designees and candidates do business. Commercial
Investment Real Estate asked Todd Kuhlmann, CCIM, vice presi-
dent of Dallas-based CCIM TECH and director of CCIMREDEX, to
share his insights on this new member benefi t and the opportuni-
ties it provides exclusively for CCIM members.
creating their own personal property data-
base, and select individual CCIMREDEX
users to collaborate on a property.
CIRE: How does CCIM’s other top
technology tool, STDBonline.com,
integrate with CCIMREDEX?
Kuhlmann: STDB provides CCIMs with
tools to analyze markets, determine the
demand for real estate and products in those
markets, and track their growth and trends.
CCIMREDEX users can maintain specifi c
property information, perform detailed anal-
ysis and marketing for a property, and dis-
tribute the property information to multiple
listing services. In other words, STDB helps
our members identify demand for the market
and CCIMREDEX complements this with
the supply that is available in the market.
CIRE: Tell us more about
CCIMREDEX’s property marketing
features.
Kuhlmann: The marketing tools allow
users to create brochures, fl iers, and Flash
Todd Kuhlmann, CCIM
REDEX RESOURCESCCIMREDEX LEARNING CENTER
(www.ccimredexlearningcenter.com) provides:
• Online Flash tutorials
• Training videos
• On-demand instructional Webinars
• Online Quick-Start Information Guide
• Schedule for on-site classroom training in
select cities
CIRE: What will CCIM members gain
by using CCIMREDEX?
Kuhlmann: The top three benefits of
CCIM REDEX will be diff erent for each user,
depending on whether they are owners, buy-
ers, or listing brokers. CCIMREDEX is ideal
for owners and managers who want to track
their properties and buyers who are com-
paring multiple properties for acquisition.
Listing brokers greatly increase exposure
for their listings when they submit them to
CCIMREDEX because they are pushed out
to numerous listing services, commercial
information exchanges, and syndication
sites.
CIRE: What advantages does
CCIMREDEX offer over other local,
regional, and national commercial
information exchanges?
Kuhlmann: Most CIEs allow brokers, and
in some cases, the general public, to search
for commercial properties within a spe-
cifi c area. However, CCIMREDEX was not
designed to replace or compete with CIEs.
It was designed to be a members-only data
exchange for CCIM designees and candi-
dates that integrates with third-party appli-
cations such as CIEs and marketing and
analysis tools.
Most importantly, CCIMREDEX com-
pletely streamlines and maximizes the
listing process for CCIM members. For
example, many brokers spend a great deal
of time entering property information into
numerous listing services and CIE systems
to increase their exposure opportunities.
But with CCIMREDEX, CCIM members
enter their property listings one time and
the listings are automatically pushed to an
array of integrated listing services and CIEs
nationwide. Our users also can choose not to
publish their records and listings, eff ectively
May | June | 2010ciremagazine.com
Web presentations for their listings and
allow users to distribute property informa-
tion using postal and e-mail services. T e
analysis tools also allow users to complete a
fi nancial or lease analysis of a property and
obtain an environmental summary report.
(Read Technology Solutions on page 20 for
more details on CCIMREDEX tools.)
CIRE: What’s the best way for
CCIM members to learn how to use
CCIMREDEX?
Kuhlmann: The more members know
about how to use this exciting product, the
more they will see the tremendous value it
provides in their business. To assist CCIMs,
we have established the CCIMREDEX
Learning Center (www.ccimredexlearn-
ingcenter.com), which includes detailed
tutorials for each CCIMREDEX function.
(See sidebar.) A series of instructional on-
demand Webinars and Flash video tutorials
also are available for members in the online
Learning Center. CCIM Technologies also
has a full-time support staff available by
phone — (469) 232-2615 — and e-mail
([email protected]) to assist mem-
bers who have questions.
CIRE: You’ve said that CCIMREDEX
technology is evolving all the time.
What types of features might CCIMs
expect to see in the future?
Kuhlmann: CCIMREDEX was designed to
integrate and evolve. A good analogy is to
think of CCIMREDEX like the iPhone — it
was built to integrate property information
“CCIMREDEX is like the iPhone—it
integrates property information with
third-party applications.”
INTEGRATED CIES AND LISTING SERVICESProperty listings entered into CCIM-
REDEX can be distributed to Catylist,
CommercialSource.com, CoStar,
Proxio, TotalCommercial.com,
PropertyLine, and RealUp.
with multiple third-party applications. As
we receive feedback from our members on
how they use CCIMREDEX, more third-
party application tools will be integrated.
T ese may include more e-mail marketing
tools such as CCIM’s MailBridge tech-
nology and listing services such as local
CIEs.
Jennifer Norbut is senior director of com-
munications for CCIM Institute. If you have a
story worth sharing in CCIM Q&A, send it to
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May | June | 2010 Commercial Investment Real Estate
FINANCINGFOCUS
Equity Injection Tax credit programs boost funding for qualifi ed properties.
by John W. Waldeck Jr.
Ste
ve A
llen/G
etty
Images
tThe dominos continue to fall in
the commercial real estate mar-
ket, leaving lenders exceptionally
conservative in making loans
for new projects. Loan-to-value
ratios in the 50 percent range
are not uncommon. In fact,
some would say that outright
rejections are the norm.
But not all news is bad. Opportunities exist
in segments that can take advantage of exist-
ing and evolving federal and state tax credit
programs, such as historic tax credits and new
markets tax credits. Qualifying projects have
the advantage of signifi cant equity creation,
which bridges the diffi cult loan-to-equity gap
in today’s market.
T ere is a catch, however: Not all projects
will qualify. For federal and state historic tax
credits, as the name implies, an existing, qual-
ifying property’s restoration must conform to
standards issued by the U.S. Department of
the Interior. For new markets tax credits, proj-
ects must be located in a low-income census
tract (many urban centers qualify). Renewable
and green energy credit programs also may
generate credits at the state and federal level.
Historic Tax CreditsDevelopers may use federal historic tax
credits to raise equity equal to either 10 per-
cent or 20 percent of the project’s rehabilita-
May | June | 2010ciremagazine.com
tion expenditures. Land and purchase costs
do not count, and rehab expenditures must
exceed the developer’s basis in the project.
T e majority of projects use the 20 percent
credit, which is available for certifi ed historic
structures or qualifying structures that are
in certifi ed historic districts. Additionally,
such funding requests require a three-part
application, which is approved by the state
historic preservation offi ce and the National
Park Service. T e federal credit is automatic.
If developers follow the proper guidelines
and application, the 20 percent credit may
be taken in the year in which the project is
placed in service. State programs may be
automatic or based on competition.
HTC equity comes into the project in the
form of a capital contribution made by an
investor in the project, usually C corpora-
tions with taxable income — many still are
very active in the market. T ese investors
contribute at the rate of 75 cents to 95 cents
for each dollar of credit passed through to the
investor. T e investor remains in the project
for the fi ve-year tax-credit-recapture period,
during which time there can be no sale or
disposition of the property.
Numerous HTC projects would never
have been completed, let alone
realized, without this program.
For example, in Cleveland much
of the nationally publicized East
Fourth Street District (which
includes the House of Blues in a
former Woolworth building and
Iron Chef Michael Symon’s Lola
Restaurant) was restored and
converted to an urban mixed-
use retail and residential devel-
opment, employing a combina-
tion of federal and state HTC.
New Markets Tax CreditsWhile new markets tax credits
also may fi ll equity gaps, they
diff er from historic tax credits
in a number of respects. As contrasted with
HTC, NMTC are available to the taxpayer
over a seven-year period in an amount equal
to 39 percent of the qualifi ed investment (5
percent per year for three years; 6 percent per
year for the next four years).
Also, NMTC are allocated annually on a
competitive basis, requiring the developer
to approach a successful allocatee with the
project request.
T ese allocatees may
include banks, com-
munity develop-
ment corporations,
port and develop-
ment authorities,
and the National
Trust for Historic
Preservation.
Investment may be direct or through a lev-
eraged structure. Due to the structure’s com-
plexity, fees and expenses can be signifi cant;
the project’s size needs to be large enough to
justify the costs incurred.
The beauty of NMTC in a real estate
project is that these credits can be com-
bined with HTC in an appropriate project
(residential components are signifi cantly
limited) to further boost the
equity component to the point
that the equity gap is nearly
filled. A developer’s typical
equity contribution would not
be suffi cient. But with the push
given by the tax credit equity
pieces, the project will green-
light, notwithstanding a con-
servative loan-to-value ratio.
A recent example is a Cleve-
land hotel fi nancing that closed
in early fall 2009. T e project,
the conversion of the 1930s-era
Tudor Arms into a Doubletree
Hotel, featured HTC, NMTC, a
conventional construction loan
at approximately a 50 percent
loan-to-value ratio, and some
The number of renewable energy and green tax
credits continues to grow.
¶additional layers of fi nancing from commu-
nity development sources. Getting a hotel
deal done in the current environment is vir-
tually impossible, yet with the twin engines
of HTC/NMTC bolstering the fi nancing it
became a reality.
Other Credit-Based FinancingThe number of renewable energy and
green tax credits continues to grow.
Developers on the cutting edge of aff ord-
able housing tax credits have successfully
used solar panel technology to qualify for
tax credits or outright grants to reduce
energy costs to tenants and pay for other-
wise cost-prohibitive installations, giving
hope that commercial real estate projects
could also be suitable candidates for such
installations.
For commercial and industrial projects
that generate jobs, the more-traditional
enterprise zone tax abatements and jobs
creation tax credits of en are available at the
state or local levels. T e tax-burden reduc-
tion changes the pro formas of such projects
for the better, increasing appraisal numbers
in a time when every dollar is critical.
Prospects are dim for near- or even
mid-term restoration of more customary
loan-to-value ratios. T is means only those
projects with signifi cant equity to plug the
gap will be built. Because such development
doldrums often translate into developer
demise, it’s time to take a look at tax credit
programs and qualifying development to
generate some lifeblood in the commercial
marketplace.
John W. Waldeck Jr. is a partner and prac-
tice head of the real estate section at Walter
& Haverfi eld LLP in Cleveland. Contact him at
Where to Go Next• www.nps.gov/history/hps/tps/tax/index.htm
• www.cdfi fund.gov
• www.dsireusa.org
$3.3 millionin federal HTC
$4.4 millionin state HTC
$4 millionNMTC
$8.9 millionmortgage
Tudor Arms
Financing¶
Source: Cleveland.com
May | June | 2010 Commercial Investment Real Estate
INVESTMENTANALYSIS
c approach, equity investors should elect
to enhance the percentage of repre-
sentative observations conducted
by the field observers, since,
in ASTM’s standard, the field
observer does not survey 100
percent of a given repetitive sys-
tem or component. ASTM’s
minimum threshold is
10 percent of repeti-
tive systems such as
apartment units,
common areas, or
retail spaces. Such
observations should
be carried out to the
extent that the fi eld
observer can offer
a confident opin-
ion as to the general
condition of recur-
ring components. For
an equity deal, this might
involve observing perhaps
25 percent or more of spe-
cifi c areas.
Record ResearchOff -site research is another
area not required by the
ASTM standard, but it is of en
just as important as the walk-through
survey. Interviews with building ser-
vice firms about various systems,
including conveying, roofi ng, heating,
ventilation, and air conditioning,
fi re suppression/sprinkler, build-
ing security, building automation,
Equity investors need a
tougher due diligence workout.by Linda Bryson, LEED-AP
Physical Fitness
SA
KIs
tyle
/Getty
Images
Commercial real estate investors conduct many types of due
diligence, such as fi nancial, legal, and physical. Regarding
the latter, many investors assume that if they follow the
current physical due diligence standard, ASTM guideline
E2018-08, Standard Guide for Property Condition
Assessments: Baseline Property Condition Assessment
Process, they will be adequately protected. What
you and your clients should understand is that
this standard represents the lowest common
denominator of physical due diligence and is
only appropriate for investors with a high risk
tolerance. Investors whose risk tolerance is lower
than, for example, that of a commercial mortgage-
backed securities issuer, will want to ratchet the
investigation up several notches.
Inadequate Observation At least 90 percent of all CMBS and balance-
sheet lenders’ due diligence complies with
E2018-08, but because the standard was
designed as a baseline it is rarely adequate
for those taking an equity position. The
standard describes a “walk-through” sur-
vey of a building’s readily observable and
easily accessible components and systems. It
was never intended to be suffi cient for par-
ties with a lower risk tolerance for incur-
ring costs to remedy undisclosed physical
defi ciencies. ASTM’s standard specifi cally
acknowledges these limitations.
An ASTM baseline survey typically is con-
ducted by a fi eld observer, who is described
as a “generalist” having knowledge about
various building systems. However, due
diligence conducted on behalf of equity
investors — those in a fi rst-loss position —
of en takes a team
approach, much
in the same way
buildings are designed.
At a minimum, the
team should include
an architectural engi-
neer, a mechanical
engineer, an elevator
consultant/technician if
applicable, and a roof-
ing technician or consultant.
Depending on such factors
as the asset’s age, design,
materials, and scope, the
team also may include a
curtain wall consultant,
a fire/life-safety code consultant,
and other technical specialists.
In addition to insisting on a team
May | June | 2010ciremagazine.com
cooling towers, water treatment, plumbing,
and electrical, provide signifi cant informa-
tion that would not be discovered during a
walk-through. T ese fi rms also have access
to service records indicating the frequency
of certain repairs and costs, chronic call-
back problems, pending repairs or replace-
ments, proposals submitted to ownership
but never executed, equipment obsolescence
(both functional and economic), upgrades
necessary to comply with local codes or
revised applicable standards, and more.
Researchers also should conduct interviews
with local building and fi re code enforce-
ment offi cers and look into building depart-
ment fi les for open building code violations
or mandated improvements to comply with
recent or pending code upgrades.
While generalists may be knowledgeable
about certain systems due to their educa-
tional background or work experience, they
may have minimal, if any, knowledge about
other building systems or components. Some
investors say they will only bring in specialty
consultants if the generalist spots something
signifi cant or questionable. However, it is
very probable that a generalist may not be
able to recognize the existence of a signifi -
cant physical defi ciency in certain building
systems because many are simply too com-
plex. No architect or engineer is knowledge-
able about all building codes or systems.
What’s Suffi cient? A paradox among balance sheet lenders
today is the more conservative the under-
writing and the higher the appraised value
of the collateral, the less physical due dili-
gence exercised regardless of the asset’s
physical size. As an example, a lender who
recently took a fi rst mortgage position on a
250,000-square-foot Midtown Manhattan
offi ce building was emphatic that the physi-
cal due diligence budget not exceed $3,000,
even though the asset had an appraised
value of about $100 million. Absent inter-
nal guidelines, it is common for lenders
to require the same level — and spend the
same amount — for physical due diligence
on assets as varied as a 30,000-sf strip center
and a 20-story hotel.
Not only are lenders conducting minimal
due diligence, but so are many opportunistic
buyers in this down market. Most bargain
hunters correctly recognize that they are
purchasing properties below replacement cost
and as is under adverse time constraints. T eir
emphasis, many times, is simply to secure the
asset under contract. Due to the competitive-
ness of the market in identifying such prop-
erties, the Property Condition Report — the
product of a Property Condition Assessment
— cannot be used to renegotiate the purchase
price as a result of discovering physical defi -
ciencies. T erefore, the discovery of physical
defi ciencies of en is moot unless they will
materially impact tenancy.
Property Condition Reports prepared on
behalf of sellers, also referred to as disclosure
reports, have become quite common over the
past fi ve years. Sellers use them to present
an asset to potential buyers with physical
defi ciencies disclosed along with the ask-
ing price, which takes the defi ciencies into
consideration. T is technique of en is used
to prevent a potential buyer from using a
defi ciency discovered during the course of
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his own due diligence to renegotiate the pur-
chase price.
However, depending on the exit strategy and
length of the intended hold, most sellers will
expend minimal monies for conducting their
own due diligence, if they conduct any at all.
Almost always, the scope of disclosure reports
is reduced. For example, it usually is conducted
by a single fi eld observer, and it is not unusual
for sellers or their agents to forego interviewing
on-site building maintenance personnel and
off -site building service fi rms or to keep quiet
about known physical defi ciencies.
T e scope and intensity of due diligence
varies with the objectives of the entity retain-
ing the due diligence services. It’s a business
decision. Due diligence exercised for one
party might not be suffi cient for another.
Make sure your clients know the diff erence.
Linda Bryson, LEED-AP, is a principal for IVI
International and manager of its due diligence
group. Contact her at linda.bryson@ivi-intl.
com.
May | June | 2010
LEGALBRIEFS
wby Jennifer Tullius and Jonathan Littrell
Receiver’s Role
Image S
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hoto
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Landing the PartIn most states, a real estate receiver is a
court-appointed individual who is given
custodial responsibility over real prop-
T at amount is then added to the borrower’s
principal loan balance.
Learning the LinesA receiver’s primary duty is to secure the
property, prevent waste, and collect rents.
In general, the receiver is required to follow
the court’s order, which may include specifi c
authority to manage the property, collect
rents, and provide monthly accountings.
In some instances, the court may grant the
receiver authority to enter into leases and
position the property for sale.
Once appointed, the receiver must take
custody of the property, which may include
changing locks, securing operating accounts,
and retrieving property-related documents
from the borrower. Depending on the situa-
tion, obtaining control can be rather simple
or very diffi cult. T e key for the receiver is to
act quickly so that the borrower cannot cause
harm to the property.
Af er securing the property, the receiver
should promptly inspect it and prepare a
report summarizing the property’s general
condition and itemizing personal property of
the borrower. T e receiver also should send
a letter to the tenants notifying them of the
change in control, providing a new point
of contact, and, ideally, arranging a time to
meet with them individually to establish a
relationship and discuss areas of concern.
Other items that generally require the
receiver’s immediate attention include the
transfer of utility bills, placement of prop-
erty insurance, hiring of a third-party man-
agement company, maintaining or entering
Who plays this part in the
distressed property drama?
Within the chaos of foreclosures and deeds in lieu, lenders are
utilizing receivers to minimize losses, maximize property values,
and reduce potential liability on properties in default. It is no great
surprise that an ever-growing number of commercial real estate
professionals are expanding their résumés to include receivership to
capitalize on this trend. What is surprising, however, is the apparent
lack of understanding of the actual role, benefi ts, and drawbacks of
appointing a receiver over real property.
erty that serves as collateral for a loan in
default. Once appointed by the court, the
receiver completely displaces the borrower
and becomes responsible for the tangible
and intangible assets
related to the property.
Owing a fi duciary duty
to the court and parties
involved in the litiga-
tion, the receiver makes
all decisions regarding
management and opera-
tions, including leasing,
improvements, and in
some cases, positioning
the property for sale.
Receivers’ fees and
fees for third-party pro-
fessionals hired by the
receiver typically are paid
out of available cash-fl ow
from the property’s oper-
ations. If the property is
cash negative, the lender
of en will advance funds
to pay the receiver’s fees.
Commercial Investment Real Estate
May | June | 2010ciremagazine.com
into new service contracts with vendors, and
other issues concerning the property’s over-
all operation and security.
Upon termination of the receivership
(generally as a result of a foreclosure, cure of
the underlying default, or borrower’s bank-
ruptcy fi ling), the receiver will be required to
fi le a fi nal accounting and motion for order
discharging the receiver.
Good Career Move?Both the borrower and the lender typically
benefi t from the appointment of a receiver.
More specifi cally, the borrower’s liability
will be reduced or in some cases elimi-
nated, if the receiver is able to fully reha-
bilitate the property. T e lender will benefi t
from the protection of the asset and possi-
bly an increase in the asset’s value that will
decrease defi ciencies.
Although the benefits of appointing a
receiver generally outweigh the drawbacks,
receivership can be a costly endeavor. In
addition to the receiver’s fees, there may be
other professionals’ fees such as the receiver’s
legal counsel and third-party management
costs. However, because a receiver is typically
a professional asset manager with strategic
partnerships with third-party vendors, the
property is more likely to become cash posi-
tive upon the appointment of the receiver,
which in turn may reduce the amount of the
lender’s out-of-pocket expenses.
Another potential drawback is lack of con-
trol. Because receivers are agents of the court,
their interests may not always align with the
interests of the other parties. For example, if
the receiver determines that it is in the best
interest of all parties to sell the asset and the
court agrees, the receiver may be granted
authority to do so even over the borrower
or lender’s objection. However, maintaining
open communication is a good way to ensure
a lender’s goals remain aligned with, or at the
very least considered by, the receiver.
Jennifer Tullius and Jonathan Littrell are attor-
neys with Raines Law Group in Beverly Hills,
Calif. Contact them at jtullius@raineslawgroup.
com and [email protected].
A receiver’s primary duty is to secure the property, prevent waste, and collect rents.
Coming Next IssueMidyear Market Update — Where do we go from here?
Finding Financing — How to connect with today’s cash
Industrial Outlook — Will this sector recover fi rst?
Technology Solutions — Mobile apps for commercial real estate
Read these articles and much
more in the July/August 2010
issue of Commercial Investment
Real Estate, The Magazine of
the CCIM Institute.
Not a member of CCIM Institute?
Then subscribe now at www.
ciremagazine.com.
RECEIVERS
BEWAR E The receiver’s primary duty is to safeguard the property’s assets, but he must
not act beyond his authority or neglect his duties. For example, if the receiver
has the power to sell the property, he or she should obtain court approval of the
broker, the terms of the sale, and the buyer. Likewise, property improvements,
especially those requiring large capital expenditures, require court approval. If
a receiver intends to bring a lawsuit to protect, recover, or obtain possession
of assets belonging to the receivership that are in the hands of another party,
again he or she needs court approval. Failure to do so may result in the other
party bringing a lawsuit against the receiver.
Receivers also can be held liable if they fail to comply with the orders of the
receivership court. Liability may not be limited to a civil lawsuit; it could also result
in criminal action if the receiver’s conduct is found to be illegal by the court.
Other potential concerns include failing to obtain adequate insurance to
protect the receivership assets, taking possession of assets that are not the
property of the receivership estate, or transferring receivership property to a
party not entitled to receive the property or where the receivership court has
not approved such transfer.
When in doubt of what action should be taken, the receiver should always
apply for instructions from the receivership court.
—by Sara Harris, an attorney at Rutter Hobbs & Davidoff. Contact her at
May | June | 2010
TECHNOLOGYSOLUTIONS
rREDEX ExtrasRoll out the red carpet: CCIMREDEX, CCIM Institute’s real estate
data exchange platform, has arrived. In addition to a host of listing
services, this newest member benefi t also integrates several mar-
keting and analysis programs that offer discounted (and sometimes
free) services to designees and candidates. We’re shining the spot-
light on the special features that make CCIMREDEX an even more
effi cient and valuable business-building tool.
May | June | 2010
Photo
dis
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hoto
libra
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Af er gathering pertinent property infor-
mation, users also can create PDF brochure
covers with photos and company logos. In
addition, CCIM designees will have full
access to REI Wise’s other MarketEdge
investment and lease analysis tools. For more
information, visit www.reiwise.com.
Environmental Record SearchWhen CCIM members visit sites they’re plan-
ning to list, they may notice that something is
a little off . Perhaps there’s an unpleasant odor
or a radioactive glow. Whatever the case, they
can research these natural and unnatural
mysteries through CCIMREDEX. “Anyone
who posts a listing can order a free environ-
mental risk summary of the area,” says Eric
Kieselbach of ERS. T is report color codes
potential areas of environmental contami-
nation on a quarter-mile radius street map.
Red symbols denote locations that currently
are contaminated; yellow symbols indicate
locations that have been listed by an agency
but may not be contaminated; and green
symbols tag locations that have active envi-
ronmental permits or have been contami-
nated in the past. “If you run the report and
see only green symbols, it’s all clear and you
can proceed,” Kieselbach explains. “If you see
red and yellow symbols, you can purchase
an Environmental Lender-Check report,”
which is delivered via e-mail and includes
a risk analysis. For more information, visit
www.reccheck.com.
MindMatrixWith its own brand of special eff ects, Mind-
Matrix provides marketing automation
sof ware for commercial real estate listings.
CCIMREDEX users have free access to the
program’s Web-to-print and Flash Web site
components. Based on listing information,
the former allows users to create high- and
low-resolution PDFs of f liers, postcards,
newsletters, and off ering documents
that can be professionally printed or
converted to an e-book. T e latter
lets users turn the aforementioned
marketing materials into a dynamic
Flash Web site.
by Rich Rosfelder
REI Wise“Over the last several years we have been
striving to make our online platform a
seamless solution for the fi nancial analy-
sis and marketing of investment and lease
opportunities,” says John D. Freyder, chief
executive offi cer of REI Wise. CCIMREDEX
users have seamless — and free — access to
REI Wise’s Flash Web site template, invest-
ment analysis tool, and customizable bro-
chure covers. T e Web site template uses
the information entered in CCIMRE-
DEX to create a custom Web presenta-
tion that includes pages for a property
summary, investment information,
photos, and contact information.
The Analyze Now! widget uses
purchase price, annual income/
expenses, down payment, inter-
est rate, and other information
from CCIMREDEX listings
to calculate key financials
and chart annual cash
fl ow, cumulative wealth,
and equity vs. debt.
Commercial Investment Real Estate
May | June | 2010ciremagazine.com
MindMatrix also off ers e-mail campaign
management services starting at $15 per
month. Af er creating html brochures or
newsletters, “you can see which properties a
person clicks on, allowing you to tailor your
follow-up pitch based on their level of inter-
est,” says Harbinder Khera CEO of Mind-
Matrix. For more information, visit www.
mindmatrix.net.
ClientLook“T e real appeal of our service is that it’s
super simple,” says Michael Griffi n, presi-
dent and CEO of ClientLook, an online
project collaboration and documentation
system geared toward commercial real
estate pros. With the push of a button,
CCIMREDEX listings are sent to the Cli-
entLook portal, where all project updates,
correspondence, and documents can be
tracked and shared with colleagues and
clients. “It provides the opportunity for
real-time collaboration,” Griffi n adds. Cli-
entLook also off ers desktop assistant and
e-mail reader applications. For more infor-
mation, visit www.clientlook.com.
ExpressCopy.comCCIMREDEX users who want to promote
their listings via direct mail also have
access to ExpressCopy.com, which off ers a
20 percent discount on the fi rst order and
a 48-hour turnaround. “T ey can order
any of our products in just minutes, and
we will take care of all the printing and
mailing for them,” says Joshua Carlsen of
ExpressCopy.com. “It’s truly a hands-free
marketing solution.” In addition to post-
card design and mailing, the company
offers f liers, brochures, and campaign
mailing services. For more information,
visit www.expresscopy.com.
Rich Rosfelder is associate editor of Commer-
cial Investment Real Estate. Send your tech
ideas to [email protected].
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May | June | 2010 Commercial Investment Real Estate
Prescriptionsby Rich Rosfelder
Property
Follow these doctors’ orders to improve asset health.
Today, CCIM asset managers are no longer just asset managers; they’re asset-value
physicians. For some, this means providing emergency, life-saving care: “As a court-
appointed receiver, my role is of en like a battlefi eld surgeon’s,” says Aaron Weiner,
CCIM, CPM, LEED-AP, senior vice president of Weiner Property & Management Co. in
Irvine, Calif. “T e fi rst order of business is to staunch the bleeding and address the infec-
tion.” Luckily, Weiner always wears a dark suit.
Outside of the distressed-assets war zone, however, property owners and managers play the
role of general practitioner. T ey check a property’s vital signs, recommend preventative mea-
sures, and call in a specialist when necessary. If an asset looks weathered and needs a boost,
they might even recommend cosmetic surgery. In all cases, whether the property is stable, on
life support, or somewhere in between, the goal is to avert emergencies and increase immunity
May | June | 2010ciremagazine.com
against plummeting values.
“All savings translate into added
value,” Weiner says, but in this epi-
demic of declining fundamentals,
reduced expenses may not be enough
to ward off value-eating aff lictions
such as unexpected vacancies, deferred
maintenance, and unrealistic pro for-
mas. Owners and managers must monitor
even the healthiest properties. But like every
patient, every property requires a slightly diff er-
ent approach. CCIMs were asked to share procedures
they’ve successfully used to preserve asset value. T e follow-
ing strategies constitute a checklist for all property doctors faced
with lagging fundamentals, looming loans, and an asset with the
will to live.
1. Examine the Financials If the foundation of any property preservation plan is to reduce
expenses without compromising value, a forensic analysis of an
asset’s fi nancials may be the best place to start. “T e income ledger
reveals if the property is being marketed at a competitive level, if
leases are being properly administered with respect to operating
expense billings, and whether delinquencies have been addressed,”
Weiner says. “T e expense side of the ledger will reveal whether
the appropriate services are being rendered at the property at the
appropriate level.”
Roy Hanlin, CCIM, CPM, of Coldwell Banker McLain Real Estate
in Huntsville, Ala., always looks for a lag between operating costs
and actual expenses when he reviews fi nancials. “T e budget versus
actual operating expenses should be reviewed at least quarterly,” he
says. Typically tenant charges for operating expenses are set at the
beginning of the year, based on budget projections. “If the actual costs
are exceeding the budgeted projections, you can notify the tenant to
increase the monthly payments,” Hanlin adds.
An asset may be sound in the short term but headed for trouble
in the future. Avoid potential pitfalls by reviewing the assumptions
built into the fi nancials, which are of en unrealistic, says Mark Lee
Levine, CCIM, director of the Burns School at the University of Den-
ver. “T ere are of en positive assumptions in internal rate of return
or net present value projections that income will increase at a given
rate and expenses will not rise as fast as reality might prognosti-
cate,” he explains. “T us, the interest rates are too optimistic, and
the appreciation projection is unreasonable.” Once adjusted, these
projections can reveal a more realistic picture of a property’s value
and its cash-fl ow potential.
2. Prescribe the Best Use“It is crucial that the asset always undergo what our fi rm calls the
functionality stress test,” says J.R. Chantengco, CCIM, president and
managing director of T e Triwest Group in San Diego. “T is unique
process, which can be applied during any stage of the real estate life
cycle, validates whether an asset’s current use is actually the most
relevant in today’s marketplace.” When a property fails this test, it
may be time to reposition.
For example, when Hanlin took over the 40,000-sf Madison Med-
plex building in Madison, Ala., it was 90 percent occupied by medi-
cal tenants. But within two years, four tenants lef to buy their own
properties. Hanlin and his team tried to entice other medical users,
but the economy and the property’s distance from a hospital kept
them at bay.
It was time to reposition. “We knew the property’s medical offi ce
features such as ample parking and canopies were attractive to non-
medical tenants,” Hanlin says. T ey capitalized on these features by
renaming the property Madison Professional Center and targeting
a variety of offi ce tenants. Within six months, a government con-
tractor leased 3,000 sf, and other non-medical users have expressed
interest.
3. Target the Right Tenants For years, Rob Kost, CCIM, vice president of Sherman Associates
in Minneapolis, struggled to fi ll the retail space in his company’s
Midwest mixed-use properties. “These locations are certainly
not cookie-cutter arrangements for national fi rms,” he explains.
Mom-and-pop retailers, on the other hand, of en thrived in these
spaces, bolstering the properties’ occupancy and rents. Gradually, Dig
ital Vis
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May | June | 2010 Commercial Investment Real Estate
Kost began to focus almost exclusively
on local tenants. “We are bending our
credit underwriting to get these folks in
the door,” he says. “Our ownership has
made a conscious decision to take some
risks with these ventures.” Kost currently
is working with a coff ee shop, bakery,
primary-care clinic, barber shop, and
restaurant — “all home-grown start-up
companies.”
Depending on the property, however,
targeting local tenants may be too risky.
When Skip Duemeland, CCIM, chief
executive offi cer of Duemelands Com-
mercial in Bismarck, N.D., creates an
asset-value business plan, the fi rst things
he asks are, “Can tenants pay the bills consistently, with a corpo-
rate guarantee, and can they maintain a 20-year lease?” Mom-and-
pop operations of en can’t guarantee anything — especially in this
economy.
T e lack of fi nancing in the current market creates an opportu-
nity to target potential owner-occupiers in need of funding. Vance
C. Southard, CCIM, of T e Moser Group in Indian Trail, N.C., and
his team utilize an “economic stimulus package,” off ering up to 90
percent fi nancing for qualifi ed buyers. “We serve as the bank to create
a stream of interest and take away a major roadblock,” he says. “T is,
in turn, has propped up the value of our properties, opened up many
high-level discussions, and resulted in transactions.”
4. Nip and TuckIt’s not always what’s on the inside that counts. Lee Y. Wheeler III,
CCIM, president of NAI Fidelis in Beaumont, Texas, focuses on
cosmetic changes and parking lot upgrades, which usually trans-
late into higher rents and longer lease terms. “Stucco or an exterior
insulation and fi nishing system … can turn a metal warehouse into
a nice retail shopping center,” he explains. “And tenants love to see
owners investing in their success.”
Making the property beautiful, however, doesn’t necessarily come
at a high price. “Of en overlooked is the most basic and cheapest
upgrade of all: exterior painting,” Weiner explains. “A contemporary
color scheme can change a building’s image more than any other
improvement.”
Adding increased functionality can set a property apart from the
pack. Duemeland built his area’s largest loading dock on a distribu-
tion warehouse. “We have extensively upgraded the project and now
have a more desirable tenant that may pay more,” he says.
New doors also can be a gateway to increased value. Weiner
recently oversaw the makeover of a med-
ical offi ce building in Anaheim, Calif.,
that had suff ered from lax enforcement
of signage guidelines and low tenant stan-
dards. “Af er getting rid of the marginal
practices and massage parlors, we retro-
fi tted the entry doors … with windows
and fi berglass pediments and pilasters,”
he says. “T is simple change signifi cantly
improved the building’s professional
image.” Marketed as offi ce condomini-
ums, the property is now occupied by a
variety of reputable medical and dental
practices.
5. DetoxSustainable upgrades are hot right now — and for good reason.
T ey can help owners and tenants save money on utilities, they’re
often eligible for tax credits, and they make properties more
marketable.
T e key concern when considering expensive modifi cations like
solar installations, highly effi cient heating, ventilation, and air-
conditioning systems, and xeriscaping is the return on investment,
which can be unclear. “One can quantify items like the savings on
utilities,” Levine says. “Other items, such as better air quality leading
to less time off for employees, are more diffi cult to quantify.”
Vicki Beal McDonald, CCIM, asset manager with Foundation
Communities in Austin, Texas, recognizes the limitations of these
ROI analyses — especially for multifamily properties, where tenants
of en foot utility bills — but contends that sustainable upgrades can
pay off . McDonald manages a 16-building portfolio that includes
2,163 multifamily units and 20,000 sf of offi ce space. During the last
fi ve years, seven solar photovoltaic installations were added to prop-
erties in the portfolio, off setting the cumulative utility expenses by
more than $27,000. Also, rainwater harvesting and xeriscaping at one
of the multifamily properties have kept the utility cost for irrigation
at a very low $48 per month. “Since we have an older portfolio, these
and other utility cost savings can be another way to attract residents,”
McDonald says.
6. Boost Tax Immunity When it comes to taxes, asset managers can use a variety of tools to
increase their savings.
Weiner points out that with the help of an experienced fi rm, compo-
nent valuation can be a very eff ective means of preserving asset value.
“Assumptions built into projections are often unrealistic.” — Mark Lee Levine, CCIM, director of the Burns School at the University of Denver
May | June | 2010ciremagazine.com
“It’s low hanging fruit that every property
owner should avail themselves of,” he says.
Wheeler recommends an extensive
review of the appraisal district fi les. “Many
mistakes can be found and corrected in
favor of the property,” he says. For exam-
ple, square footage numbers can be over-
estimated, which aff ects the property value
and taxation level.
Cost segregation is another readily avail-
able tax tool. Hanlin commissioned a study
when he consulted on the purchase of a single-
use restaurant property. It cost $15,000 but
saved the owners $45,000 — not a bad ROI.
But Hanlin is quick to note that “if you’re not
planning to hold the building for a while, this
strategy might not make sense” because in some circumstances the
property taxes can be recaptured.
And fi nally, don’t overlook anything, in particular, the potential for
tax credits and other government programs. “In researching a recent
project, my team discovered that the subject
property falls within the city’s redevelopment
district and would qualify for tax-increment
bond financing and affordable housing
funds,” says Chantengco. T e property also
is in the state’s enterprise zone, making it
eligible for net income deduction for any
loan made on the asset, including bridge or
mezzanine fi nancing and up to $10,000 per
employee in tax credits. Along with state and
municipal programs, owners and developers
should investigate U.S. Department of Hous-
ing and Urban Development fi nancing, Sec-
tion 42 tax credits, Section 8 rental housing
vouchers, Small Business Administration
loans, and historic preservation and new
markets tax credits as potential funding sources.
Rich Rosfelder is associate editor of Commercial Investment Real
Estate.
“All savings translate into added value.” — Aaron Weiner, CCIM, CPM, LEED-AP, of Weiner Property & Management Co. in Irvine, Calif.
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May | June | 2010 Commercial Investment Real EstateCommercial Investment Real Estate| 2010 Maay | June
Investors emerge from their corners in search of single-tenant opportunities.
theIn
Retail
Ringby Beth Mattson-Teig
May | June | 2010ciremagazine.comciremagazine.com
T e retail property investment mar-
ket looks a little like a battered prize
fi ghter these days. It’s down, but by
no means out.
Given the one-two punch of the
credit crisis and the tepid economic
recovery, retail investment sales are
well off the 2007 peak of $78 billion.
Transaction volume tumbled to $32
billion in 2008 and fell almost by half again in 2009 to around $17
billion, according to Marcus & Millichap.
But slowly investors are moving off the ropes, drawn partly by
opportunities in the single-tenant niche. Buyers are fi ghting for well-
located properties in major markets and strong in-fi ll locations that
are leased to national credit tenants such as CVS, Walgreens, Burger
King, and McDonald’s. “When you look at properties priced below
$5 million or even $3 million, there is still a lot of money on the
acquisitions side,” says Bernard Haddigan, a Marcus & Millichap
managing director in Atlanta.
In fact, retail properties priced between $1 million and $10 mil-
lion represented the lion’s share of 2009’s retail property sales — 94.5
percent of the 4,554 individual transactions in total retail sales. In
comparison, properties priced between $10 million and $20 million
accounted for 3.5 percent of transactions, and those properties priced
above $20 million represented just 2 percent, according to Marcus
& Millichap.
One key factor propping up the single-tenant sector is that many
of those buyers are not looking for leverage. “T ey are looking for
stability and cash fl ow, so they don’t mind putting more equity into
the deal to get their monthly cash fl ow checks,” Haddigan says.
Returning to the RingOverall retail investment activity increased during the early part
of 2010 with a rise in both the supply of properties on the market
and more interest from buyers. “What is surprising me is that I
have been busier in the last 45 days than I was during the last six
months of last year,” says Cynthia Shelton, CCIM, CRE, director of
investment sales at Colliers International in Orlando, Fla. “If that
continues we could have, perhaps not a great year, but a good year
— certainly better than 2009.”
T e majority of action is on two fronts. One segment of the market is
small investors looking for safety: single-tenant properties structured
with triple-net leases. T e other group is comprised of opportunistic
buyers shopping for value-add deals among distressed assets.
One reason for increased activity among net-lease properties is that
1031 buyers have started to return. Over the past two years, it didn’t
make sense for owners to sell property such as apartments and land,
which is what drives the majority of 1031 deals. “Today, those owners
are starting to sell again for one reason or another — not a tremen-
dous amount, but enough to keep cap rates stable,” says Deborah K.
Vannelli, CCIM, director of net-lease sales at Minneapolis-based
Upland Real Estate Group.
Single-Tenant Players
RETAILER 2010 NEW U.S.
STORE ROLLOUTAVERAGE CAP RATE
FOR RETAIL CATEGORY
Walgreens 250 7.5%
Dollar General 600 8.5 – 8.9%
7-Eleven 250 7.0 – 7.5%
McDonald’s 150 7.5 – 8.0%
Source: Marcus & Millichap, CNNMoney.com
May | June | 2010 Commercial Investment Real Estate
3,330
4,435
3,284
5,880
7,559
8,919
10,00810,531
7,355
4,554
0
2,000
4,000
6,000
8,000
10,000
12,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
U.S. Retail Transactions by Price Category
Sources: Marcus & Millichap, CoStar Group, Real Capital Analytics
Tota
l Tr
ansa
ctions
$1–$9.9 million $10–$19.9 million $20 million+
Another explanation for the bump in activity is that people sim-
ply are tired of sitting on the sidelines. “A lot of people mentally
buried 2009, and now they are more optimistic,” says Jerry A. Wil-
liams Jr., CCIM, a vice president at Grubb & Ellis in San Antonio.
Part of the buyer interest has resulted from the narrowing bid/ask
gap in pricing, Williams believes, as well as the fact that some lenders
are returning. “In 2009, almost no one was lending, but now we’re
starting to see regional banks and credit unions opening up lending
for the right asset,” he says.
Last year was a learning curve for lenders and the commercial
real estate industry as a whole, notes Mike Milano, CCIM, MAI,
managing director of retail investment sales at Colliers Interna-
tional in Clearwater, Fla. “As the mountain of distressed proper-
ties started to build, lenders were not sure what to do with them,”
Milano says. “Now lenders are going to start moving properties out,
and I expect distressed sales to start picking up around the second
and third quarters.”
Prizefi ghter StrategiesSingle-tenant properties structured with triple-net leases are actively
trading, and there has been a defi nite fl ight to quality as buyers
gravitate toward solid credit tenants and top locations in a still-
shaky economy. “Most buyers are acquiring investment-grade-rated
tenants only,” Vannelli says. T at appetite has helped keep pricing
strong for top tenants in good locations.
For example, McDonald’s ground leases are being snapped up
quickly even though capitalization rates have remained near historic
lows around 5.5 percent to 5.7 percent. T e problem is that those pre-
mium properties remain in short supply. “We recently sold a McDon-
ald’s ground lease in Florida at full price with seven more full-price,
all-cash off ers waiting in case the initial transaction fell through,”
Vannelli says.
McDonald’s is one of the few exceptions that are still commanding
cap rates below 6.0 percent. T e bulk of the net-lease investment mar-
ket has seen cap rates increase 150 to 200 basis points amid tougher
underwriting standards and economic uncertainty. T ree years
ago, Walgreens stores were trading at cap rates between 5.7 percent
and 6.3 percent. Today, Walgreens are up about 200 basis points to
between 7.7 percent and 8.4 percent. “T at would be considered the
baseline of the easiest to sell and even on those deals the prices have
gone down and cap rates have gone up,” Haddigan says.
Investors are being very cautious in underwriting both the credit
and the location. Most buyers today only are looking at solid urban
locations or in-fi ll locations in fi rst- or second-ring suburbs with good
demographics. T ey are attracted to core markets such as Washing-
ton, D.C., New York, Houston, San Francisco, and Chicago. At the
same time, most remain wary of investing in secondary and tertiary
markets: Even double-digit cap rates are not enticing them. “Almost
every investor I’ve closed a deal with over the past 12 months either
used to live where the property is located, currently lives there, has
family nearby, or vacations there,” Vannelli says. “T is gives
them additional comfort that even if the tenant fails they know
the market will survive.”
T e return to conservative underwriting is having a big
impact on pricing. Colliers International currently is market-
ing a single-tenant property occupied by a national book and
game retailer in Orlando. T e store is likely to sell for a 14 per-
cent cap rate because the operator only has six years lef on the
lease. “With everyone skeptical of the retail market, buyers are
wondering if the tenant will make it through for the six years,
and if they do, will they renew?” Shelton says.
The Battered and BruisedT e volume of distressed properties continues to pile up on
lender balance sheets. Banks alone reported $41.7 billion in
commercial mortgages that were in default at the end of 4Q09,
according to Real Capital Analytics. T at default rate repre-
sents 3.8 percent of all outstanding loan balances on commer-
cial properties, which is a 16-year high for the nation’s bank
lenders. However, banks have been slow to write down those
troubled assets and push them out into the sale market.
As a result, the distressed deals have yet to materialize as
U.S. Retail SnapshotCOMPLETIONS (SF) VACANCY RATE
2006 215,845,210 6.9%
2007 189,974,323 7.1%
2008 207,553,748 8.3%
2009 97,483,903 9.9%
2010* 70,000,000 10.4%
* ForecastSources: Marcus & Millichap, CoStar Group
Corb
is/P
hoto
libra
ry
many bargain hunters had hoped. “T ere is
a lot of paralysis on the bank side, because
they can’t aff ord to take the losses,” Had-
digan says. T e banks don’t want to take
the write down, because they don’t have
the reserves to make sure they have their
depositors’ balances covered. “As distress
continues to accumulate, it will force some
people to act,” Haddigan says. “So I think
the second half of 2010 is going to be a more
active acquisition market.”
Florida is a big retail market hit hard
by the recession. Many in the commercial
real estate industry are watching to see how
that market deals with its heavy load of dis-
tressed properties. “Banks and owners are
just starting to realize that they will have to
take a hit in order to dispose of assets that are
now worth less than the debt in most cases,”
Shelton says. “T e income-producing assets
are starting to have off ers generated, but at
values that shock many.”
Is Retail Leasing Down for the Count?Shaky consumer confi dence and a national unemployment rate hovering around 10 percent continue to pummel the retail
industry. Yet the rate of decline appears to be slowing as the economy gains steam.
“Leasing activity had begun to pick up at the end of third quarter 2009 but trailed off signifi cantly in the fourth quarter,”
says Jerry A. Williams Jr., CCIM, a vice president at Grubb & Ellis Co. in San Antonio. “The new year has brought a new
infl ux of activity, and we hope the trend follows through the summer months in order to sustain the momentum.”
The retail vacancy rate reached 9.9 percent at the end of 2009, the highest level in more than a decade, and vacancies
may inch higher to 10.6 percent by year-end, according to Marcus & Millichap. The vacancies along with rising concessions
have caused effective rents to drop 7 percent in 2009 with effective rents projected to fall another 4.2 percent this year.
Even though national statistics paint a struggling retail market, local and regional retailers as well as quick-service
restaurants are fueling leasing activity in many parts of the country. “We are seeing very little new deal activity from
national retailers,” says Jordan M. Spiegel, CCIM, president of Sunburst Advisors in New York. “A good portion of the
national tenants that are already saturated in the New York marketplace have allowed their leases on older, unprofi table
stores to expire.” Major retailers such as Starbucks, Ann Taylor, The Gap, and Foot Locker are among those that have
vacated locations throughout New York in recent months. In comparison, regional and local retailers such as Crumbs
Bake Shop, Planet Fitness, and BonChon Chicken have remained fairly active, leasing new stores throughout Manhattan
and the outer boroughs, Spiegel adds.
The retail industry is still struggling under the weight of 6,600 retail store closings in 2008 and another 6,200 closings
in 2009, according to data from Marcus & Millichap and the International Council of Shopping Centers. Although the tide
of store closings has likely peaked, the volume of vacant big-box space continues to be an issue for landlords because there
are not enough large-format retailers to absorb the big blocks of empty space. “Unless that space is fi lled with creative
re-uses, such as medical use, churches, and skating rinks, a lot of that space needs to be knocked down,” says Bernard
Haddigan, a managing director at Marcus & Millichap in Atlanta.
$1–$9.9 million $10–$19.9 million $20 million+
0
10
20
30
40
50
60
70
$80
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
U.S. Retail Dollar Volume by Price Category
Sources: Marcus & Millichap, CoStar Group, Real Capital Analytics
Tota
l D
olla
r Volu
me (
bill
ion
s)
24.8
15.1
27.3
46.4
58.1
63.965.7
77.7
32.0
17.1
May | June | 2010 Commercial Investment Real Estate
As of Feb. 1, 2010 Total troubled retail assets:
$43 billion
Amount resolved:$1.1 billion
Source: Real Capital Analytics
Where is retail investment headed in the next six
months? Marcus & Millichap’s Bernard Haddigan tells us
in a follow-up podcast at www.ciremagazine.com.
Only@
For example, Colliers Interna-
tional is listing a 45,000-sf non-
grocery-anchored neighborhood
center in Fort Myers, Fla., being
sold at the request of the lender
through a court-appointed
receiver. T e property sold for
$3.8 million in 2003, $8.8 million
in 2006, and now will likely fetch
a price of around $3 million.
“We anticipate seeing a lot more product coming to the market,”
Milano says. “Lenders now are more attuned to the fact that the best
way to get out of their problem is to take the write-down and sell it.”
Knock-Out OpportunitiesPersistence is paying off for investors who have access to capital.
Commercial Alliance traditionally works as a developer of single-
tenant properties for restaurants and drugstore tenants. T e fi rm
currently is pursuing prime corner locations with the potential to
redevelop or reposition real estate.
“We’re seeing a lot of opportunities to buy good sites that we
wouldn’t even have been able to bid on before,” says Kristian Cotta,
CCIM, director of acquisitions at Commercial Alliance in Scottsdale,
Ariz. Two to three years ago, the overheated investment market had
produced bidding wars for well-located corner sites. Today, Com-
mercial Alliance is fi nding itself in more situations where it is the
sole bidder. “Now small to midsize companies can compete on a level
playing fi eld,” he adds.
For example, Commercial Alliance was poised to purchase a
vacant grocery store in Corpus Christi, Texas, at the onset of the
credit crisis in November 2008. T e lender backed out two weeks
prior to closing. Commercial
Alliance was able to fi nd equity
from a small group of investors
that enabled it to purchase the
property all cash. T e fi rm has
since leased the vacant grocer to
a charter school and re-platted
the 9-acre site to include four
pad sites. The developer has
sold one pad site to Jack-in-the-
Box, has another site under contract to a national quick-service
restaurant chain, and is working on additional deals. In the end,
Commercial Alliance expects to deliver about a 30 percent return
to investors. “T at is an example of how you have to be creative to
make deals in this market,” Cotta says.
Ultimately, 2010 likely will be a year of transition as the retail
industry as a whole stems the tide of deteriorating occupancies and
rents and searches for solid footing before it can start to recover. “I
see the retail market trending sideways for the next 12 months, not
getting much better but not worse either,” Cotta says. “Once those
fi rst deals start going through and we can gauge the success of those
transactions,” he adds, “then the activity will pick up as everyone else
will want to take advantage of the opportunities that are hiding.”
Beth Mattson-Teig is a freelance writer in Minneapolis, Minn.
0
50
100
150
200
$250
U.S. Retail Price and Cap Rate Trends
SINGLE-TENANT TRENDS
Note: Includes sales $1 million and aboveSources: Marcus & Millichap, CoStar Group
Ave
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rice p
er
square
foot
Ave
rage c
ap ra
te
2000 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’090
50
100
150
200
MULTITENANT TRENDS
Note: Includes sales $1 million and aboveSources: Marcus & Millichap, CoStar Group
Ave
rage p
rice p
er
square
foot
Ave
rage c
ap ra
te
2000 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’096
7
8
9
10%
6
7
8
9
10%Average price Cap rate Average price Cap rate
The land on which the iconic Chrysler Building sits is owned by The Cooper Union. The building last sold in 2008 to the Abu Dhabi Investment Council as part of a $800 million deal.n
Commercial Investment Real Estate
by Philip G. Skinner and Abe J. Schear
Infl uxInternational
May | June | 2010ciremagazine.com
The role of foreign investors in the U.S. real estate market
ebbs and fl ows with a host of factors. T ough not quite
as predictable as the tide, its movement of en is in tan-
dem with the market’s fundamental drivers. Currently
two factors — the decline in commercial real estate prices and the
constraints on available capital to fi nance or refi nance — align to
make this a very favorable time for foreign investors with sources
of equity or debt to acquire U.S. real property.
When these aspects of the U.S. market are coupled with global fac-
tors such as favorable currency exchange rates, instability of various
kinds in other countries, and the desire to achieve both product and
geographic diversifi cation on a worldwide scale, the time appears to
be ripe for foreign investment capital to come to the U.S.
T e answers to certain key questions about the prospects for for-
eign investment in U.S. real estate in the next year or two will help
stateside commercial real estate professionals understand the current
trend and perhaps profi t from it.
Is the current market climate likely to attract more
attention from foreign investors?
Foreign investors looking to the U.S. now likely are experienced
investors who have invested in a number of countries around the
world. T ese savvy investors believe that they can take advantage of
the problems that the U.S. commercial real estate industry currently
is facing. T ey believe that the U.S. off ers the best global opportu-
nity for capital appreciation at this time, while also being the safest
A rising tide of foreign real estate investment may help to lift all U.S. markets.
FOREIGN
INVESTMENT
PREFERENCESTop U.S. Cities
Washington, D.C.
New York
San Francisco
Boston
Los Angeles
Top Property Types
Multifamily
Offi ce
Industrial
Retail
Hotel
Association of Foreign Investors in Real Estate, January 2010
survey
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country in which to invest. T ey can be aggressive and eff ective
negotiators and can wield their foreignness as both a sword and a
shield in negotiations. T ey know how to make a deal but also are
willing to walk away if the deal doesn’t suit them.
U.S. market dynamics clearly give any investor who has capital
or access to ready capital the opportunity to make investments in
good properties at a greatly reduced cost basis, and of en well below
replacement cost. We should expect that many foreign investors will
take advantage of this opportunity in the next two to three years. T is
wave of investment will have the benefi cial eff ect of helping depressed
U.S. real estate markets fi nd and defi ne the bottom of the current
cycle and help lead to an eventual recovery.
What types of properties interest foreign investors?
Discussions with Israeli and European investors over the course of the
last year indicate a wide variety of U.S. real estate investment inter-
est. Core central business district offi ce properties in major markets,
multifamily/residential in locations with projected long-term positive
demographics, and retail, including both grocery-anchored neighbor-
hood retail as well as major mall properties, came up most frequently.
Industrial, hospitality, and mixed-use proj-
ects came up far less frequently.
Regardless of property type, foreign
investors uniformly are interested in taking
advantage of depressed U.S. prices, as well as
a scarcity of fi nancing, to drive good deals
in the next year or two. T ey believe that in
many cases property valuations are the low-
est they have been in 15 or even 20 years, not-
withstanding the fact that many properties
have ongoing solid cash fl ow and stable rental
income in place.
Foreign investors also prefer off -market
opportunities or properties that are being
quietly marketed, rather than those where
they have to bid competitively in the open
market. Foreign investors are not afraid to
use discounted debt acquisitions as an indi-
rect vehicle that ultimately will lead either to
acquisition of the underlying assets or favor-
able loan repayment terms.
What deal structures work best?
Many of the larger foreign investors with suf-
fi cient capital are interested in direct invest-
ments or co-investments with U.S. strategic
partners. Regardless of the type of joint ven-
ture vehicle used, the foreign investor typi-
cally wants to be the majority partner with
control over major decisions, allowing its U.S.
A DONE DEALIn 2009, Profi mex, an Israeli private equity fi rm that has co-invested in an
estimated $26 billion worth of properties worldwide, raised half of the $6 million
purchase price for Northwoods Business Center in Atlanta. With an additional
$700,000 of equity from U.S. investors, the newly formed partnership’s 60
percent equity secured a commercial loan on acceptable terms for the remaining
40 percent of the purchase price. Because of the low leverage, existing rents,
net operating income, and positive cash fl ow from the property, the investors
are realizing an annualized 8 percent return. The property and transaction
characteristics made the deal attractive to the foreign investors: The investment
could immediately yield a solid return, while it had upside potential because the
property was not 100 percent leased.
Like any investor, Profi mex had to approve the deal from several different
perspectives: The purchase price, operating budget, lease risk, internal rate of
return, and exit assumptions all had to be acceptable. The property type and
location had to fi t the investors’ appetite, as did the existing leases, current
vacancies, and lease-up assumptions. The investors had to have full confi dence
in the proposed joint venture structure and the U.S. strategic partner, who would
run and manage the property on a day-to-day basis.
Both U.S. principals made multiple trips to Israel to meet with Profi mex
to establish mutual trust and confi dence. Building such strategic alliances to
develop a commonality of interest and mutual goals helps ensure trust and
confi dence. Foreign investors in particular rely on their U.S. attorneys, brokers,
property managers, and other experts and consultants to be their eyes, ears,
and active representatives. Those that do a good job are awarded with repeat
business, which is the best recommendation that can be given to a service
provider.
May | June | 2010ciremagazine.com
Some of these investors held off investing in the U.S. from 2004
to 2007, as commercial real estate here became more overheated.
During this time some foreign investors felt that other areas of the
world off ered greater upside potential and less downside risk than
the U.S., including areas that were considered to be emerging mar-
kets in Eastern Europe, India, China, and Brazil. Now the tide has
turned: Many emerging-market economies have been shaken by the
worldwide fi nancial crisis, and U.S. prices have come down to what
some investors view as historic levels, creating capital appreciation
opportunities that only come around once in a generation.
What skills are needed to succeed with
foreign investment deals?
T e skills are the same as those used when dealing with U.S. inves-
tors. But such skills have to be packaged in a manner that is at the
same time clear, convincing, informative, articulate, direct, helpful,
patient, and deal-oriented. Also, one must be aware of the diff erences
in the level of involvement of various professionals. For example, in
a number of other countries lawyers play a greater or lesser role than
they typically play in U.S. transactions. Civil law systems of en use
civil law notaries, who play a much greater transaction role than U.S.
notaries. Title insurance, which is universally desired or required here
in the U.S., may be an unfamiliar deal requirement and an unantici-
pated deal cost for some foreign investors. Good communication and
sensitivity to cultural diff erences can help to minimize or avoid mis-
understandings and manage expectations of the foreign investor.
What kinds of connections facilitate
foreign investment deals?
Developing a plan that will introduce you to foreign investors and
their brokers, attorneys, or other professionals locally or overseas
is the best way to create a favorable environment for working with
foreign investors. Trade associations, foreign chambers of com-
merce, consulate offi ces, and other groups exist in which these kinds
of interaction can occur over time. T e time to work on these rela-
tionships is now, before a deal is at hand. By doing so, you and your
foreign investor partner or client can be poised to strike when the
time is right, rather than having to complete negotiations with each
other fi rst.
Philip G. Skinner and Abe J. Schear are partners and members of the
commercial real estate practice team and co-chairs of the cross-border
practice team in the law fi rm Arnall Golden Gregory in Atlanta. Contact
them at [email protected] and [email protected].
strategic partner to have day-to-day
operational control and responsibil-
ity, including the right to earn arm’s-
length fees for necessary services
including property management and
leasing services. For cash-strapped
U.S. property owners that may be
faced with looming debt maturities,
cutting a 90/10 or a similar deal with
a foreign investor that will allow the U.S. partner to retain some
ownership, earn leasing and management fees, and also have a profi t
participation based upon a typical waterfall distribution can liter-
ally save the day. Of course, many foreign investors might look to
negotiate with lenders on such deals to acquire the debt, based on a
loan-to-own strategy.
What are the biggest challenges in putting together a
foreign investment deal?
Challenges of en relate to the learning curve: helping foreign inves-
tors understand the market, submarket, and property conditions that
characterize a particular investment and dictate the time to make the
deal; familiarizing them with the relevant U.S. deal process, includ-
ing the use of non-binding letters of intent followed by full contract
negotiations, a due diligence period, and a closing period; helping
them select, engage, and work with brokers, surveyors, environmental
consultants, and title insurance agents and companies, among oth-
ers, all of whom may play diff erent roles than in the investors’ home
countries and may cost more than they anticipate; and structuring
the joint venture relationship between a foreign investor and its pro-
posed U.S. strategic partner. All take time, patience, and expertise to
help coordinate the foreign investor’s path through what may be an
unfamiliar and uncomfortable landscape.
What geographic markets interest foreign investors?
Generally foreign investors who don’t have strong strategic alliances
with U.S.-based partners are interested in major U.S. markets and
core CBD areas that they already are familiar with, such as New
York City, Boston, Washington, D.C., San Francisco, and Los Ange-
les. T ese are areas they believe will rebound well in the next fi ve to
seven years, if not sooner.
A strong alliance with a U.S. partner can widen the focus to include
a variety of products in a greater array of market areas, with the
foreign investor relying upon its U.S. partner to identify appropriate
markets and properties.
What foreign investors are looking at U.S. properties?
Traditionally, investors from around the world have looked to the
U.S. as a safe haven for commercial real estate investment. Investors
from Germany, Holland, Israel and other Middle Eastern countries,
Canada, Japan, and China have been historically active. Currently
investors from many of these locales who are in strong fi nancial
shape are looking at the U.S. based on the belief that the timing is
again right for them to invest.
Largest Global Real Estate Markets
COUNTRYGLOBAL INVESTMENT VOLUME
(IN $ MILLIONS)ANNUAL
CHANGE (%)
2008 2009
China 64,392 156,195 142.6
United Kingdom 41,380 38,802 -6.2
United States 106,028 38,354 -63.8
Source: Cushman & Wakefi eld
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by Rod N. Santomassimo, CCIM
Follow this plan to take charge of your career.
Step It Up!
May | June | 2010ciremagazine.com
Know Your NumbersT e operational plan is the framework upon which you should con-
duct your personal brokerage business. As CEO, you must work on
your business (strategy) and in your business (transactions). To do
this as eff ectively as possible, an infrastructure must be put into
place, utilized, and refi ned. For commercial real estate pros, the
operational plan can be supported by a sound customer relationship
management database.
Today there are a variety of off -the-shelf products that can essen-
tially run an individual’s brokerage business. And no, Microsof
Outlook is not one of them. A database, if used correctly, is actually
less about the data and more about consistent utilization. As CEO of
the Massimo Group, each morning I turn on my monitors and am
greeted by an up-to-date dashboard of information that displays the
vital levers in my business. In this dashboard are charts, graphs, and
lists that include:
• daily prioritized to-dos;
• my current sales and net income to date as measured against tar-
geted goals;
• my pipeline with weighted averages for closing; and
• my opportunities with key prospects highlighted.
As a colleague once told me, your database should
not simply track data, it should generate commissions.
T e simple fact is top performers do not “wing it.”
You can’t wing it to win it. Consistent access to the
information noted above provides me with a con-
sistent measurement of my progress against targets.
If we are falling behind, I can quickly recognize it and
adjust. If we are ahead of plan, I can easily identify our
top-producing sectors and reallocate my No. 1 resource — time.
Access to this information, if reviewed and implemented consistently,
can expedite eff orts, which in turn expedite closings.
Promote YourselfCommercial brokerage success is dependent on four factors: your
role, your area, your monetary infrastructure, and your presence.
In today’s ever-changing marketplace, presence is becoming the
foremost factor in winning business.
Since your personal or team presence is so essential, you need
a comprehensive marketing program. Yes, the program should be
consistent with your commercial broker’s policies and branding
guidelines, but it should focus on you.
A regular contributor to this magazine on personal marketing is
Alex Ruggieri, CCIM, of Sperry Van Ness in Champaign, Ill. Ask
Alex for his business plan and he is sure to give you his marketing
plan fi rst. Alex knows where, when, how, how of en, and how much
he will be promoting his business throughout the year. Alex is not
an average broker. He is CEO of the Ruggieri Team.
Stay on Target When I travel across the country, I always hear brokers
and agents say they need to “prospect more.” It sounds
good, but it means nothing. What is more? And is
more really the answer? Usually it’s not a matter
of prospecting more. It’s a matter of prospecting
better. You can make 100 calls a day and still not
become a top performer. Sure, you may fi nd a deal, but
even a blind squirrel fi nds a nut every now and then.
How’s business? Pretty simple question isn’t it? Every day someone asks this or a similar
question that seems innocent enough. And, like the vast majority of commercial real estate practitioners, you probably
respond with a simple answer: “Business is slow” or “Hanging in there” or hopefully “Never better.” Ideally though, you
should consider this simple question — How’s business? — as one of the most important questions to ask yourself.
Most commercial real estate brokers and agents are legally independent contractors and, as such, are self-employed. It
doesn’t matter if you are a seasoned veteran or the newest agent in the offi ce: You are the chief executive offi cer of Me, Inc.
Congratulations!
What does this mean exactly? T ink of any CEO that you personally know or have read about. What are their responsibili-
ties? Certainly they have to craf a company vision. T ey also must enact a sound operational plan to sustain current revenues
and support growth. In addition, the CEO oversees the company’s marketing, sales, human capital, and fi nancial plans.
No one said being a CEO was easy.
But is this too much to expect from the average commercial real estate professional, who doesn’t have the infrastructure
to account for all of the elements noted above? Perhaps it is. But then again, that is why that broker or agent is average. Aver-
age performers chase deals. Average performers work transaction to transaction and wouldn’t dare consider investing in
their business unless they receive a commission. Average performers treat their craf as a hobby, not as a business. Average
performers view themselves as employees looking for their broker or company to generate business for them.
Who wants to be average? Not you: You’re the CEO of Me, Inc.
So what can you do to build an infrastructure to support Me, Inc.? Let’s start with the operational plan.
The simple
fact is top performers do
not “wing it.”
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A sales plan will consist of a target list, an approach to reach that
list, and follow-up steps. Do you know who your ideal clients are and
how you can secure a list of these ideal clients? Once you have your
list, how are you going to contact them? Are you going to launch
a mail/phone campaign, a phone/e-mail campaign, or use a more
personal approach?
Ask Jim Tucker, CCIM, of NetworksCRE in Richmond, Va., and he
will tell you commercial real estate is a “belly-to-belly” business. He is
correct. Jim has a specifi c sales plan for reaching his target audience.
Jim is not an average broker. He is the CEO of NetworksCRE.
Team UpWhen I ask prospects and clients what their human capital plan
is, they of en say: “A human capital plan? Are you kidding me? I
am just a sole agent with only 18 months in the business.” Average
brokers do not invest in themselves or hire outside assistance, and
as a result they continue to be, well, average.
If you are reading this article, you are probably a CCIM designee
or candidate. Congratulations: You have invested in yourself! But was
this part of your plan, or simply something you wanted to do? Don’t
get me wrong. Attaining the CCIM designation was one of the most
rewarding events in my long career in commercial real estate. But it
wasn’t just a personal goal — it was part of my plan. T e return on
this investment has been signifi cant.
T ere are many options for investing in a human capital plan. As
noted above, a CEO must look at the company goals and set up the
infrastructure to support the attainment of these goals. As CEO of
Me, Inc., you cannot do it all. You need to outsource
wherever and whenever possible. T is is a small
investment, and there are many tools available
today to leverage your time to focus on more
productive tasks that drive revenue.
For example, I recently needed a veri-
fi ed list of 2,500 contacts. All I had were
the contacts’ name and company. To prop-
erly market to this list, I needed addresses,
phone numbers, Web sites, and e-mail
addresses. Does this sound familiar? Doing this
myself was not an option. My time, like yours, is
too valuable. I contacted Elance (www.elance.com) to secure propos-
als from virtual assistants around the world. I contracted a service
provider and received my list three days later. It cost $200 — total! I
have since provided this VA with a series of tasks and all have been
completed in a professional and timely manner. More importantly,
they have all been completed within budget.
I have a human capital plan with a budget for both personal invest-
ments and outsourcing of services. I have a team behind me, but 90
percent of them are virtual assistants or independent contractors. My
marketing department is located in Virginia; my Web design team is
in North Carolina; my data research department is in India; my cold
caller was in Hawaii and now is in Michigan. I’m a sole practitioner
in one way, but I’m also the CEO of the Massimo Group.
Capitalize to Thrive A fi nancial plan is not a commission goal. My chief fi nancial offi cer
always reminds me that “we don’t pay bills with revenue.” Average
brokers look at their year in terms of commissions. A CEO looks at
their business in terms of profi t margins. T ey budget for invest-
ments (cash outlays) over the year. T ey understand that invest-
ments drive revenues.
Commissions obviously can be created by spending little or no
capital. If you have a solid relationship that leads to a transaction —
perhaps a tenant representation assignment — your personal cash
outlay can be minimal. However, to sustain a business you must
invest in the business. And there are only two ways to capitalize a
business: equity and debt. Top performers understand that leveraging
debt can greatly enhance their opportunities for success.
For commercial real estate pros, debt can come in several forms.
You can take a line of credit, either from a bank or, less formally, a
family member. Other forms of debt may include your savings, a
second mortgage on your house, or a loan on your life insurance
policy. Don’t get me wrong: I am certainly not endorsing fi nancial
risk. However, CEOs take calculated risks. T ey understand that, in
a down market, investing in a more aggressive marketing campaign
will separate them from their competition. T ey also understand that
fi nancing their business strictly on revenue, especially in a cyclical
sector such as brokerage, is unrealistic.
In addition, CEOs understand their personal fi nancial projections.
T ey look at metrics such as net new under contract and average days
on market. As CEO of Me, Inc., you must understand these metrics as
well. At any given time you should know what your personal checking
account will look like 30, 60, 90, and even 180 days forward. You must
understand your pipeline and the probabilities and timing of each deal
closing. You must have contingency plans if transactions are delayed or
dismissed. T e average broker waits to see how a transaction evolves
and then reacts. T e CEO proactively plans for success and evaluates
alternative paths based on forecasted performance.
Certainly there are many other facets to being the CEO of Me, Inc.
T e fi ve elements noted above, however, are the most essential. Each
component of your personal business is supported by and/or drives the
other. I would suggest starting with your fi nancial plan. From there you
can craf an operational plan, and the other plans will follow.
Understand that you are responsible for the livelihood of all your
employees, even if you are the only one. As CEO you have to craf the
brand and reputation of Me, Inc. You have to provide the infrastruc-
ture for your company’s success and a foundation for its growth.
So the next time someone asks you “How’s business?” you have two
choices. Either you can give them a standard reply, such as “not bad,” or
you can ask them which division of your corporation they would like to
know about. Either way, as CEO of Me, Inc., you are in control.
Rod N. Santomassimo, CCIM, is founder and president of The Massimo
Group, a professional coaching fi rm focused on commercial real estate.
Contact him at [email protected]. For more information, visit
www.massimo-group.com.
Top performers understand
that leveraging debt can
enhance their success.
In today’s economy, owning or leasing your own building is a luxury that few companies can aff ord. Most
corporate real estate budgets have been slashed and companies are cautious with the dollars they spend
and the real estate they choose to occupy.
To reduce costs, companies that formerly occupied their own buildings exclusively are now open to shar-
ing space in multitenanted assets. Some single-tenant occupants are considering ways to downsize by either
subletting or restructuring their existing leases to give back space. Companies with new space requirements
that previously would have developed build-to-suit properties now are looking at available space in multi-
tenant properties.
As a result, property owners have an opportunity to turn single-tenant buildings into multitenant assets
The Case for Conversion
Owners add value by repositioning single-tenant offi ce assets as multitenant properties.
by Reed Miller and Ken Boyle
May | June | 2010
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that better fi t the needs of today’s offi ce space users. In our experience,
such conversions are tremendous value-add propositions: T ey lessen
the risk of being dependent on one tenant, and they off er a chance to
reconfi gure space for today’s market as well as for less-typical ten-
ants. In addition, owners can replace mechanicals, add sustainable
features, reconfi gure common areas, and upgrade fi nishes to make a
property more competitive in the leasing market. For former single-
tenant corporate owners or users, this arrangement allows companies
to focus on their core business operations, eliminate their real estate
responsibilities, and reduce occupancy expenses.
For real estate owners with long-term hold strategies, this is a great
way to recession-proof offi ce properties against today’s uncertain
economic outlook. We look at three properties we have converted
from single-tenant to multitenant use to meet the growing demand
for downsized, shared offi ce space arrangements.
Getting In-ShapePreviously net-leased to Wells Fargo, a seven-story, 87,000-square-
foot offi ce building in Stockton, Calif., was repositioned as a mul-
titenant offi ce tower. We negotiated new direct leases with several
of the subtenants and a major long-term lease with regional fi tness
company In-Shape to occupy almost 34,000 sf, including a ground-
level state-of-the-art fi tness center and two fl oors for its corporate
headquarters.
We completely demolished and rebuilt several fl oors in a staged
process and then relocated the tenants as the new space was com-
pleted. While this complicated sequencing proved challenging, all
of the tenants are now occupying fi rst-generation space.
We also renovated the lobbies and bathrooms to make them more
suitable for shared tenant use. T e fi nal touches, including a new
main lobby entrance and elevator upgrades, are expected to be under-
taken in the near future.
In-Shape Fitness opened its facility in January. Other tenants
include law fi rms and county government offi ces, drawn by the
property’s location near the courthouse. T e building has been
credited with breathing new life into downtown Stockton, and the
tenants are pleased to have an updated facility with a health club in
the building.
What’s Cooking?In San Antonio, Texas, we acquired two 60,000-sf offi ce buildings
last year that were net-leased to a large regional bank. Both build-
ings contained bank branches and the older of the two would have
been diffi cult to re-lease as bank space. It did attract a culinary
school however; af er the school signed a 10-year lease, the bank was
converted into kitchen and restaurant space and the upper fl oors
were converted into classroom space. In addition, both buildings’
common areas and building systems were upgraded to meet mul-
titenant needs, and more than half the leasable
area has been rented.
Marathon ProjectOne of our more notable transitions was the
Marathon Oil Tower in Houston, Texas, which
we successfully converted several years ago from
a single-tenant net-leased 1.1 million-sf, 41-story
offi ce building to a multitenant facility. Over the
years, the needs of Marathon Oil changed and as
they required less and less space, they sought to
sublease to other companies to off set expenses.
T is was not a situation they wanted to continue.
We negotiated a mutually favorable transac-
tion: Marathon signed a new long-term lease for
approximately two-thirds of the building, and
we assumed the management and leasing, which
aligned with our ownership position. Following
this restructuring, we evaluated and renegotiated
lease agreements with several of the subtenants
and entered into several new leases with highly
respected companies. We invested millions of
dollars into upgrading the property and making
it more appropriate for shared use. We also took
the opportunity to identify and implement cost-
eff ective energy conservation measures, which
included upgrading the lighting and mechanical
systems. Robert
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Analyzing the Asset For owners considering transitioning properties to multitenant sta-
tus, in-depth property evaluation is essential, as not all properties
are candidates for conversion. Unusual mechanical or physical char-
acteristics might make them a poor fi t at best. In addition, a prop-
erty must be well positioned in its market so that a variety of tenants
will be attracted to its location. Shallow or thin markets, or those
dominated by a single industry, need to be carefully assessed.
T e property’s mechanical and structural systems require special
attention to determine, in a cost-eff ective manner, whether they can
meet the needs of the redevelopment. Poorly designed or improperly
maintained systems will result in uncomfortable and angry tenants,
causing damage to a building’s reputation that shiny new lobbies
can’t off set.
During the actual transition, focus on the common areas, such
as lobbies, elevators, and restrooms, to ensure that the space fl ows
together and provides a comfortable atmosphere for the various ten-
ants. Also establish a new set of building standards and fi nishes that
are in keeping with the character of the building and market. T is
allows tenants to customize offi ces to fi t their needs.
Assemble and rely on a qualifi ed, experienced team of local profes-
sionals, such as brokers, architects, engineers, and project managers,
to discuss repositioning options. T eir input will be of great value
when brainstorming and implementing the repositioning strategy.
T is initial design and idea-gathering phase consumes the most time.
All ideas are discussed and vetted and evolve slowly. When you have
identifi ed an anchor or large tenant, ideas start to take shape more
quickly to accommodate them. Accordingly, a conversion can take
anywhere from a few months to well over a year.
Executing the PlanAs a value-add commercial real estate company, Hanover Real
Estate Partners funds its own acquisitions and renovations. As
part of our strategy, we also negotiate long-term leases and create
a marketing plan for every property, working with local brokers to
ensure they are familiar with our plans for the updated property
and the various ways it could be used. We host broker lunches at
the property so that they can get a feel for the space and review
architectural renderings or models that illustrate how the space
can be transformed to accommodate a particular tenant’s needs. As
owners who are active in the management, operations, and leasing
of our properties, we take pride in attending and participating in
various local activities.
It’s also important to be responsive when introducing a property
to the market. Local tenants and their representatives need to know
that although we may not be located in their market, we respond
promptly to requests or problems.
While a single-tenant building is far less complicated to own
and manage, in today’s market it is much easier to re-tenant a
building with multiple tenants than it is to fi nd another single
large user. By focusing on converting single-tenant net-leased
buildings into multitenant buildings, we are able to lower the risk
associated with single-tenant properties and provide diversity
and stability.
Reed Miller and Ken Boyle are managing partners of Hanover
Real Estate Partners, a privately owned real estate investment
company headquartered in Greenwich, Conn. Contact them at
www.hanover-partners.com.
The working patterns of American corporations have changed dramatically over the past few years.
Many companies have downsized, reducing the amount of required square footage. The evolution of
mobile technology also has allowed a growing number of employees to work from home or remote
offi ces. Reports predict that in 2010, the number of workers telecommuting at least one day a week
will rise above 100 million, compared with just 4.4 million in 2003, according to the American Inter-
active Research Group.
Fewer workers in the offi ce creates different space requirements. Some companies have opted to
increase the amount of commuter space they offer, so telecommuters lose their full-time space and
use common space when in the offi ce. This means less offi ce space is required and more cubicles
or open, shared desk space is needed. In addition, some companies now require space for telecon-
ferencing, social gatherings, even child care, in some instances.
In the current economic environment, companies are now more open than ever to sharing their
offi ce space, offering underutilized or shadow space for sublease. Since most companies lack
expertise in marketing this space, there is an opportunity for real estate operators and owners to
help manage the process. Restructuring net-leased properties provides these companies with an
exit strategy that enables them to signifi cantly reduce their leasing costs. These companies can refo-
cus their efforts on their core business operations while we focus on our core business, commercial
real estate.
CHANGING CORPORATE NEEDS
May | June | 2010 Commercial Investment Real Estate
Austin, Texas, received the top score in Portfolio.com/bizjournals’s “small-business vitality” ranking of the top 100 U.S. metros. Austin has added more small businesses than any other metro in the country and expanded its job base by 15.6 percent between 2004 and 2009. The Texas capital saw a 19.5 percent gain in population between 2003 and 2008, nearly four times the national population increase average.
REGIONALOUTLOOK
WEST
Property Market Rate (%) National average (%)
Offi ce New York 8.4 16.9
Industrial Los Angeles 8.6 14.3
Retail San Francisco 6.6 12.6
Multifamily Pittsburgh 4.6 7.3
Source: National Association of Realtors/CBRE
Lowest Vacancy Rates, 1Q10
N A T I O N A L
�
S O U T H
South Florida Multifamily Update• 45 South Florida multifamily assets traded
last year, a 48 percent increase over 2008.
• 60 percent were traditional class B assets
bought by private equity groups as long-
term holds seeking cap rates of 7.25 per-
cent to 8 percent with leveraged returns
in the mid-teens.
• 40 percent were fractured condominium
assets bought by foreign equity with a
three- to � ve-year hold period targeting a
20 percent to 25 percent all-cash IRR.
Source: CBRE
Á
ciremagazine.com May | June | 2010
E A S T
Metro DC GSA Lease Analysis
REGION GSA % OF MARKET
% INCREASE 2008–09
2009 MARKET RENT ($PSF)
2009 GSA RENT ($PSF)
Washington, D.C. 19.8 0.3 46.92 39.15
Suburban Maryland 10.3 5.2 27.01 27.73
Northern Virginia 13.3 1.6 28.99 30.74
Total metro area 14.7 1.6 33.41 33.92
Source: Jones Lang LaSalle
M I D W E S T
Chicago Suburban Offi ce BlockedPlummeting office-using employment
has pushed suburban Chicago’s large
blocks of available offi ce space to its high-
est level in 10 years, according to Studley.
As of 4Q09, 91 blocks of 50,000 sf or more
were available, a total of more than 10.7
million sf. And tenants are ready to move:
Class A leasing jumped 41.8 percent over
the previous quarter, fi lling 429,601 sf.
Ã
E A S T
N.J. Industrial Construction216,000 sf Under construction
126,000 sf Preleased
41.7% New-construction vacancy
Source: Cushman & Wakefi eld
Á
S O U T H
A foreign investor paid $26 million for a 93
percent stake in Atlanta’s famed Greenbriar
Mall, saving it from foreclosure. One of the city’s
fi rst enclosed malls, Greenbriar also was the fi rst
mall to feature a Chick-fi l-A restaurant, an early
proponent of the food court concept.
Á
E A S T
Feds Drive D.C. MarketsT rough the General Services Administration, the federal government is one of the biggest
offi ce space users in the metropolitan D.C. area. Financial regulation, healthcare reform,
energy policy, and defense spending are the crucial areas that will drive increased GSA
space use throughout the region and the U.S.
Á
W E S T
Distressed Retail AssetsLas Vegas $2.16 billionHawaii $1.9 billionLos Angeles $1.2 billionSan Francisco/Bay Area $870 millionSource: CBRE
Â
“10% to 15% of the
[Chicago] suburban
offi ce market today
can be classifi ed as
“zombie buildings”
— meaning the
owners don’t have
money to fund tenant
build-outs or leasing
commissions.”
—ChicagoRealEstateDaily.com
Commercial Investment Real Estate May | June | 2010
INTERNATIONALBEAT
Markets to Watch
¬ Brazil— T is South American powerhouse with an estimated 5 percent annual growth rate is attracting both
foreign and domestic investors to its top cities of Rio de Janeiro and Sao Paulo, says Jones Lang LaSalle. Rio was one
of the few major global markets to show double-digit class A offi ce rent growth in 2009.
¬ London — T e economy of Europe’s top fi nancial center should start to grow this year, with new fi nancial-sector jobs sustaining
its improving offi ce space demand, according to CB Richard Ellis. CBD vacancy rates have fallen from 15.6 percent to 13.5 percent. However,
new users soon may be squeezed out of the market with only 2.3 million sf of new space coming on line this year and 1 million sf in 2011 —
the lowest increase in 25 years. T is limited supply should set the stage for rising rents in 2011 and 2012.
BRIC-A-BRAC FACTS4Q09
Top marketsOffi ce
yields (%)Offi ce
vacancy (%)
Beijing 9.0 28.1
Shanghai 6.1 11.5
Bangalore 9.9 11.4
Mumbai 10.2 13.9
Rio de Janeiro 11.0 4.8
Moscow 12.0 18.9
Source: Jones Lang LaSalle
U.S. developer
Tishman Speyer
already has leased
half of the fi rst-
phase offi ce space
in the Castelo
Branco Offi ce
Park, a six-tower,
27-acre develop-
ment in suburban
Sao Paulo.
Reading Is FundamentalT e new library in Denmark’s main port city of Aarhus is a good example of
how today’s civic facilities can be destination draws for revamping downtowns.
This “urban mediaspace” will
anchor an industrial waterfront
redevelopment that will include
retail and restaurants. To find
more about mixed-use libraries,
read “New Libraries Revitalize
Cities” at www.miller-mccune.
com.
Brazil’sBig Deal
“58% of U.S. investors are domestically focused,with 16% preferring Asia and 12% targeting Europe.” — Raymond Torto,
global chief economist
for CB Richard Ellis
BRICs Lead the WayT e BRICs — the combined economies of Brazil, Russia, India, and China — are leading
the global real estate recovery, according to Jones Lang LaSalle’s Global Market Perspective.
T ose economies are expected to grow by an average of 8 percent this year. Goldman Sachs
predicts that nearly two billion BRIC residents will join the middle class by 2030, spurring
demand for residential, retail, and warehouse properties. Foreign investors are already
returning to these countries’ top cities.
ciremagazine.com May | June | 2010
LoopNet on Your iPhoneAccessing LoopNet’s 745,000 listings, the
company’s iPhone application gives users
location-sensitive, on-the-spot commer-
cial property information.
When the iPhone’s built-in
GPS is activated, the app
displays nearby for-sale
and for-lease properties.
A custom search function
also allows users to retrieve
information about proper-
ties in other locations and
filter by property type,
price, or size. Af er select-
ing a property, users can
view images, listing infor-
mation, and directions. Currently only
available for iPhones, the app is free.Contact LoopNet at (888) 567-7442 or
www.loopnet.com.
Milking the Cash Cow“Check’s in the mail.” T at’s what Brian Patton, CCIM, wants you
to hear af er reading his book, Mailbox Moo-La: How Real Estate
Cash Cows Put Money in Your Mailbox. T rough personal anec-
dotes, Patton explains how you can recognize commercial real estate
opportunities and successfully manage them af er purchase. Com-
mercial real estate isn’t just a matter of understanding net present
value and cap rates, according to Patton. It also requires a fi rmness
in dealing with tenants, described in Chapter 6, and other people
skills. T e second half of Mailbox Moo-La contains practice problems
to test readers’ understanding of the strategies outlined in Part 1.
An easy-to-read resource for fi rst-time property investors, the book
costs $14.99. Contact the author at www.mailboxmoo-la.com.
Only slightly longer than an AA battery, the
Novero Lexington Bluetooth headset has brushed-
steel and piano-black accents and ships with an Italian leather case. T e device’s dual
microphones reduce noise, making for more pleasant conversations. With a fully charged
battery, the Lexington allows 20 hours of talk time. Included are car and wall chargers, car
mount, USB cable, and eight ear loops. Contact Novero for cost information.Contact Novero at www.novero.com or (678) 338-4423.
Slick Headset
Cash-FlowCompassProjection is a commercial real estate sof -
ware program that provides cash-fl ow fore-
casting, transaction analysis, and property
valuation features. T e program organizes
rent rolls, stores qualitative information
related to asset valuation, and compares up
to four years of historical data. Using various
assumptions, a present-value discounting
matrix runs sensitivity testing calculations
to determine the value of money throughout
the analysis. Projection’s reporting interface
allows users to drag and drop individual
windows to customize the program’s look.
Af er a 15-day free trial, the program’s price
ranges from $1,295 for one license to $3,995
for a server version, which includes three
fl oating licenses. Contact Infl ux Sof ware at (830) 446-3589 or
www.infl uxsof ware.com.
BUYERSGUIDE
Portable PrintingMeasuring 1 inch by 2 inches by 11 inches and weighing
less than two pounds, Planon’s PrintStik PS950ME portable
black-and-white printer fi ts neatly into glove boxes and laptop
bags. T e printer uses direct thermal printing, eliminating the
need for bulky toner cartridges. Fully charged, the printer can
print about 30 pages at three pages per minute, so it isn’t intended
for multipage STDB reports, for example. It’s also compatible with USB and Bluetooth
devices, including Blackberries. PrintStik’s price ranges from $199.99 for a basic unit
to $349.99 for a model that includes a 12-volt car charger. Contact Planon at www.planon.com or (888) 507-3926
May | June | 2010 Commercial Investment Real Estate
DEALMAKERS
Offi ceBIG Deal´ Trisha A.
Talbot, CCIM,
of GPE Commer-
cial Advisors in
Scottsdale, Ariz., represented
Western America Commercial
LLC in the 10-year, more than
$4.6 million lease of a 18,367-
sf offi ce space in Mesa, Ariz.,
to Country Club Medical Group.
³ David
Ballard, CCIM,
of Reata Real
Estate Services
in San Antonio
represented First Park Ten
LLC in the 5-year, more than
$4.2 million lease of 65,000 sf
of offi ce space in San Antonio
to Transcom North America.
¶ Matthew B. Fenster,
CCIM, of Paragon Corporate
Realty Services in Troy, Mich.,
represented Dayco Products
LLC in the 11-year, $2.4 mil-
lion lease of 25,124 sf of offi ce
space in Troy to Troy Indus-
trial LLC.
´ Andrew
D. Martin,
CCIM, of
Cassidy
Turley in
Indianapo-
lis and a
partner represented Backhaul
Direct LLC in the more than
$2.2 million lease of 16,213 sf
of offi ce space in Indianapolis
from Jeff erson Plaza LLC.
µ Timothy M. Brown,
CCIM, and John G.
Hoagland, CCIM, of
Hoagland Commercial Real-
tors in Louisville, Ky., repre-
sented Neuroscience Institute
Real Estate LLC in the more
than $2.2 million purchase
of a 33,000-sf offi ce property
in Louisville from AAA East
Central.
Joseph Muratore, CCIM,
of Benchmark Commer-
cial Real Estate Services in
Modesto, Calif., represented
an undisclosed seller in the
more than $1.7 million sale
of 16,000 sf of offi ce space in
Tracy, Calif., to Orthopedic
Properties Two LLC.
Retail Partners Cool Springs
LLC. Nachman also repre-
sented Philip M. Nachman
LLC in the more than $1.5
million purchase of 7,000 sf of
retail property in Pasadena,
Texas, from Lost Boulder
Partners LLC.
Lyle D. Chamberlain,
CCIM, of Sperry Van Ness
in Reno, Nev., represented an
undisclosed buyer in the $1.7
million purchase of a 2,800-sf
retail property in Susanville,
Calif., from Jack in the Box.
³ Soozi
Jones-Walker,
CCIM, and
¶ Bobbi
Miracle, CCIM,
of Commercial
Executives in
Las Vegas repre-
sented Charles-
ton Marketplace Malcai LLC
in the more than 15-year,
more than $1.5 million lease
of 10,395 sf of retail space in
Las Vegas to La Espiga de Oro.
J. Tyson Glasser, CCIM,
of RealtyLink in Greenville,
S.C., represented Hardee’s
in the more than $1.1 mil-
lion sale of a 2,854-sf retail
property in Greenville, S.C., to
a private investor group.
IndustrialBIG Deal´ Whitney E.
Kerr Jr., CCIM,
of Colliers Turley
Martin Tucker
in Kansas City,
Mo., represented Glazers
Wholesale Distributors in the
10-year, $7.2 million lease
of 210,000 sf of warehouse
space in Kansas City, Mo.,
from an undisclosed lessor.
Kerr also represented Payless
³ Jeremy G. Woods, CCIM, of Summit Realty Group in Indianapolis and two partners represented Belkin International in the 10-year, more than $25 million lease of a 798,096-sf distribution facility in Plainfi eld, Ind., from ProLogis.
The Biggest Deal
RetailBIG DealR.J. Neary, CCIM, and Ryan
M. Zabrowski, CCIM, of
Investors Realty in Omaha,
Neb., represented Goodwill
Industries in the $6 million
purchase of a 69,808-sf retail
property in Omaha from Seldin
Investments LLC.
Andy R. Fishler, CCIM, of
T e Boerke Co. in Milwaukee
represented two undisclosed
sellers in the more than $5.6
million sale of a 94,500-sf
retail property in Menomonee
Falls, Wis., to Continental
Fund 202 LLC.
Thomas F. Campenni,
CCIM, of T omas F. Cam-
penni Co. in Stuart, Fla.,
represented the lessee, CGP
Enterprises, and an undis-
closed lessor in the 10-year,
more than $3.5 million lease
of a 1,750-sf retail property in
New York.
³ Arthur
Stuart Nach-
man, CCIM, of
Long and Foster
Commercial
in Vienna, Va., represented
Pauline Nachman LP in the
10-year, more than $3 mil-
lion lease of 4,750 sf of retail
space in Franklin, Tenn., from
May | June | 2010ciremagazine.com
Advertisers’ Index
1-800-The-Sign.com .................19
Building Owners and Managers Institute International .............25
CCIM Course Schedule ...............9
CCIM Education ........................11
CCIM ICSC RECon Booth ............3
CCIM Online Curriculum ..............7
CCIM Preparing to Negotiate Course............ cover 2
CIRE Subscriptions ....................19
Education Foundation of the CCIM Institute ..................31
Grandbridge Real Estate Capital 13
Merlin Information Services .......21
Prudential Commercial Real Estate ...............................5
Re/Max International ......... cover 4
STDBonline ....................... cover 3
Walmart Realty ..........................17
www.ciremagazine.com ..............2
Looking for more information on a product or service? Visit our advertiser Web links on CIRE magazine’s Web site at www.ciremagazine.com/advertisers.htm.
For advertising information contact Kathleen Thomas at (202) 721-1497 or [email protected].
Submit transactions to Deal Makers, CIRE, 430 N. Michigan Ave., Chicago, IL 60611; e-mail to [email protected]; or fax to (312) 373-8219. Include a high-res digital color property photo or head shot if available.
ShoeSource in the $4.5 million
sale of 812,000 sf warehouse
property in Kansas City, Mo.,
to PTMW.
µ Terrance W. Bixler,
CCIM, of T e T omas A.
Duke Co. in Farmington
Hills, Mich., represented Paul
Opfermann PEO Holdings
LLC in the $5.4 million sale
of a 124,000-sf warehouse
in Canton, Mich., to Charles
Hawes Properties LLC.
James P. Center, CCIM,
of Grubb & Ellis Co. in City of
Industry, Calif., represented
the lessee, United Stationers
Supply Co., and the lessor,
Grand Avenue Venture LLC,
in the more than 4-year, $4.6
million lease of a 214,177-sf
warehouse property in Indus-
try, Calif.
µ R.J. Neary, CCIM, and
Ryan M. Zabrowski, CCIM,
of Investors Realty in Omaha,
Neb., represented Goodwill
Industries in the 11-year,
more than $4 million lease
of a 91,939-sf fl ex property
in Omaha from South 72nd
Street Associates LLC, repre-
sented by David H. Maenner,
CCIM, of CB Richard Ellis/
MEGA in Omaha. Neary and
Zabrowski also represented
Goodwill Industries in the
$2.5 million sale of a 60,064-
sf warehouse in Omaha to
Douglas County, Neb.
´ Jack A.
Haley, CCIM,
of Lee & Associ-
ates in Orange,
Calif., and a
partner represented D5W in
the more than $3.4 million
purchase of a 33,415-sf indus-
trial building in Santa Ana,
Calif., from an undisclosed
seller.
µ Wesley Cox, CCIM, and
Henry H. Hanna III, CCIM,
of Sperry Van Ness–Miller
Commercial Real Estate in
Salisbury, Md., represented
the seller, Regina USA, and
the buyer, GKD-USA, in the
more than $1.7 million sale of
a 65,705-sf industrial facility
in Cambridge, Md.
Alex Nottmeier, CCIM, of
Neal Turner Realty in Bowling
Green, Ky., represented Desa
Manufacturing in the $1.6
million sale of a 212,000-sf
manufacturing facility in
Bowling Green to an undis-
closed buyer.
Susan Singer, CCIM, of
Bradford Commercial Real
Estate Services in Dallas rep-
resented Acquiport DFWIP
in the more than 5-year,
more than $1.1 million lease
of 48,838 sf of warehouse
space in Richardson, Texas, to
Optex Systems.
MultifamilyBIG Deal³ John W. Preiss,
CCIM, of The Preiss
Co. in Raleigh, N.C.,
represented Preiss-Wal PAT III
in the $6.3 million purchase
of a 164-unit student-housing
property in Statesboro, Ga.,
from Midland Bank.
³ “STDBonline is an inte-gral part of my day-to-day business,” says Kenneth M. Kujawa, CCIM, of Century 21 Signature Realty in Saginaw, Mich. “I
use the Pictometry imagery, satellite maps, and reports to assemble brochures for every property I work on.” Kujawa recently lev-eraged this member benefi t to market a 24,000-sf industrial property in Zilwaukee, Mich., which sold for more than $1 million to an undisclosed buyer.
µ T. Patrick Murray, CCIM,
of Real Estate Investment Team
in Fayetteville, N.C., repre-
sented Ted and Sony McWil-
liams in the more than $1.1
million sale of a 32-unit apart-
ment building in Fayetteville to
Angel’s Court Apartments LLC.
FinancingPaul B. Natalizio, CCIM, of
Cornerstone Realty Con-
sultants in Malden, Mass.,
arranged the more than $1.5
million fi nancing of a 28-unit
apartment building in Malden
for an undisclosed buyer.
CCIM ROI
May | June | 2010 Commercial Investment Real Estate
Whether they call it STDBonline, STDB,
or Site to Do Business, CCIMs use this powerful site
analysis and demographic data tool on a daily basis.
It’s one of the many member benefi ts that boost
CCIMs ahead of the competition.
A New Angle
Using the STDB Pictometry
oblique tool, I was able to pro-
duce a customized aerial dis-
play of a former corporate HQ building with
a unique large acreage campus — even as
a rank amateur on a PC. Zoom-out shots
highlight key location advantages, the
neighbors, and the nearby interstate exit.
— Sydney Machat, CCIM
CCIMCONNECTIONS
Getting the Business
In today’s down market, owners want to know exactly how you are going to solve their
vacancy issue. I’ve used STDB to do just that — walk the prospective listing client through
my process to show them exactly who I will target and even provide them with a sample list
of who those targets are. Owners love this sort of thing and it can really set you apart.
— Jeremy Woods, CCIM
Fast Data
In the time it took to discuss a client’s new-
location concerns on the phone, we put
together a full STDB package including
demographics, aerial map showing compe-
tition and services in the area, and traffi c
counts. It was e-mailed to him and received
before the call was completed. He could not
believe the data we sent over so quickly! He
was sold on the location and we are fi nal-
izing the lease now.
— Soozi Jones-Walker, CCIM
Lender Info
We utilized STDB to produce
a lender report to show a site’s
potential as a restaurant. T is
deal ultimately won the Beaumont Board
of Realtors’ 2009 Commercial Transaction
of the Year.
— Lee Y. Wheeler III, CCIM
Deal Closer
I recently closed a $5.6 million retail transac-
tion where I was able to successfully utilize
STDB’s mapping system to help my client
obtain the absolute highest value for their
property, which will accommodate a 103,000-
square-foot build-to-suit grocery store.
— Andy Fishler, CCIM
New Tools
T e new map annotation and aerial photos
are great. I also use the business list quite a
bit to prospect and do mailings.
— Craig Johnson, CCIM, RECS
Money-saving Research
STDB has saved us millions of dollars over the years with its research poten-
tial. When presented with a buy opportunity, STDB is the fi rst place we go to
learn the market. By looking at maps, demographic reports, and businesses in
the area, we are able to quickly eliminate properties without having to waste
thousands of dollars through travel.
— Beau Beery, CCIM, MSRE
STDBonline Webinars keep my knowledge base up-to-the-minute with the latest advances from this invaluable platform.
— Garry Cuff, CCIM
NextIssue
Ã
How do you use your local CCIM chapter resources?
Send your responses to [email protected]. To read what other
CCIMs say about STDBonline and other member benefi ts, go to
“CCIM Connections Continued” at www.ciremagazine.com.
STDBonline’s Pictometry imagery
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