Real Estate Management News - 12/07/2016

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December 7, 2016
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LEADERSHIP SPOTLIGHT
4 Key Challenges In Commercial Real Estate For 2017

IREM® HEADLINES
IREM participates in the China Property Association Conference and Tradeshow
Make 2017 a Smarter Year

INDUSTRY HEADLINES
Honeywell Study: Owners Overestimate How Smart Their Buildings Are
Digital Transit Display Could Become a Top Amenity for Urban Properties
Mall of America Welcomes First-Ever Black Santa, a Retired U.S. Army Veteran
New York City Cracks Down On Steam Heating
Amazon Working on Several Grocery-Store Formats, Could Open More Than 2,000 Locations
No Train No Gain: Why Your Staff Needs Training
Mayfair Mall Unveils App Directly Holiday Customers to Open Parking Spaces
How Technology Is Turning Buildings Into Butlers
Millennials Value Flexibility of Renting and Lifestyle Benefits
Trump's Overseas Properties Spark Security Fears
Green Apartment Construction Blossoming, Yet Renter Survey Shows $560 Rent Premium Is 5 Times Higher Than Most Would Pay
State Officials Urge Apartment Residents to Buy Renters Insurance


 

Leadership Spotlight


4 Key Challenges In Commercial Real Estate For 2017

In a recent Bisnow article, IREM president, Michael T. Lanning, CPM, SVP and market leader at Cushman & Wakefield in Kansas City, MO, identified four key challenges in commercial real estate for 2017.

Talent Growth: To keep up the momentum, management teams must focus on hiring and securing new young talent to the field—particularly with those seeking to establish their careers in the real estate industry over the long term.

Sustainability: As we slowly begin preparing for the challenges and rewards of 2017, more scrutiny is being placed on the reporting and results stemming from each real estate project. Helping project owners and developers outline and reach their sustainability goals may play an important role for a multitude of real estate firms, but should begin to take precedence.

Keeping Up With Tech Advancements: Most people rely on some form of smart tool as their primary form of communication, whether that’s a smartphone, tablet or laptop. Email, instant messaging, video conferencing and social media are now the primary avenues of immediate contact, and real estate firms need to recognize that—and readily adapt to it.

Economic Uncertainty: Although real estate is cyclical, every player in the industry from the small-town broker to the CEO of Cushman & Wakefield must be prepared to weather every storm. While it is impossible to predict and micromanage every aspect of the market and its effect on one’s business, it is essential to develop evolving tactics and strategies to protect it. This necessitates a wide range of skills, particularly in effectively managing. The only thing real estate brokers and managers can be inflexible on is flexibility, and they should expect to adjust their management focus on a yearly, monthly and even daily basis to satisfy clients, developers and owners.

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IREM Headlines


IREM participates in the China Property Association Conference and Tradeshow

Last week, IREM was invited to attend and present at the first ever China Property Management Industry Expo. With approximately 180 companies and 15,000 participants, it’s one of the largest events of its kind to be organized in China.

IREM representative, 2016 President, Chris Mellen, CPM, ARM, presented to an audience of over 1000 on current property management trends and future predictions. He also participated in a special session hosted by Guoqiang Pan, CPM, and the Shanghai Property Management Association, where he spoke on the U.S. residential market. Three CPM Members from IREM China Shanghai Chapter No. 118—Qi Liu, Xin Xu, and Hao Sun also spoke at the session and joined a panel discussion led by Chapter President Shu Zhou, CPM.

Elizabeth Dieng, IREM staff, Catherine Li, CPM, Jinbo He, CPM, and several other CPM Members and staff associates from the chapter attended the conference and volunteered their time at the IREM exhibition booth.

Zhou said, “Worldwide, the line between asset management and property management is beginning to blur. As asset managers, we are promoting this idea to the wider market. In China, the property management industry is mature but the asset management industry is not. There is room for growth.”

The conference took place in Guangzhou, China’s third largest city, situated on the Pearl River, just northwest of Hong Kong.

Check out IREM’s international programs.
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Make 2017 a Smarter Year

IREM has unveiled its professional development course schedule for 2017, featuring hundreds of classroom courses around the country, and, as always, online courses available 24/7 for those who prefer to work at their own pace.

Why Register for an IREM Course?
  • Get real-world skills and case studies from a trusted source
  • Amplify your knowledge on the key topics in real estate management
  • Get better at your job immediately
  • Build your resume, work towards a promotion, or earn new business with new smarts
  • Start or continue a journey toward an IREM credential, the definitive proof of your commitment to your career
  • There’s something for everyone: every property type, every experience level
Where to Start?

Browse our extensive list courses available in 2017, and start planning your path to success today.

Choose from courses like:
  • Budgeting, Cash Flow, and Reporting for Investment Real Estate
  • Leading a Winning Property Management Team
  • Managing Maintenance Operations and Property Risk
  • Marketing and Leasing Strategies for Retail, Multifamily, or Office
  • Managing Residential Properties
  • Enhancing Property Value with Deep Retrofits
  • Understanding Loss to Lease
…and dozens more.
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Industry Headlines


Honeywell Study: Owners Overestimate How Smart Their Buildings Are
Construction Dive (11/30/16) Wood, Chris

A recent Honeywell survey of 487 properties in seven U.S. cities found that most building managers often give their facilities a higher smart score assessment than the assets deserve. The research shows that managers of airports and schools tend to have a more advanced perception of the smart qualities of their facilities, while retail and small office building managers tend to be more pessimistic. The study's results were based on the Honeywell Smart Building Score, which is a benchmarking index on sustainability, technology, safety and productivity. A white paper detailing the study's results reveals the Honeywell Smart Building Score is presently being used in the United States and India.

Through the survey, Honeywell has determined that smart buildings must excel in a trio of areas: green (sustainability and energy performance), productivity (including advanced systems and technology), and safety and security. Among the three, Honeywell researchers forecast that the productivity sector will witness the fastest innovation growth. Meanwhile, smart building technology continues to gain momentum in the commercial and residential building sectors as more and more owners look to improve the efficiency of their properties. The latest MarketsandMarkets report projected that the value of the global smart building market will rise to $24.73 billion by 2021 from $5.73 billion this year.
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Digital Transit Display Could Become a Top Amenity for Urban Properties
Multifamily Executive (12/01/16) Devon, Kayla

A software service that helps apartment residents plan their public transportation and ride-sharing commutes can be a simple, but useful amenity property management can provide that can add value to a multifamily housing community. TransitScreen, a software-as-a-service company, taps into local transportation data, such as transit times for bus stops and subways and the availability of nearby Ubers, Zipcars and shared bikes. For a monthly fee, the live data feed is displayed on a television monitor in an apartment building's lobby. Property managers also are able to upload relevant travel advisories and community messages for display on the screens. According to co-founder Ryan Croft, TransitScreen addresses two rapidly converging trends: urbanization and the urban mobility revolution. Millennials, in particular, are expressing a preference for living in walkable cities with easy access to mass transit, ride-share, and bike-share services.
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Mall of America Welcomes First-Ever Black Santa, a Retired U.S. Army Veteran
RollingOut.com (12/04/16) Hawkins, Ruu

For the first time in Mall of America’s 24-year history, a black Santa Claus is welcoming children and their families and posing for annual Christmas photos. "This is a long time coming," Landon Luther, co-owner of the Santa Experience, which has run the photo studio at the landmark mall for a decade. "We want Santa to be for everyone, period." The largest mall in the country is offering a free, wait-in-line-by-the-masses Santa, as well as appointment opportunities which require buying a photo package. Luther launched a nationwide search for the perfect Kris Kringle last spring that a broader array of kids could relate to, the local paper reports.

The "Santa for everyone" initiative found their winner, retired U.S. Army veteran Larry Jefferson, at a "Kringle family reunion" in July, where almost 1,000 impersonators convened. Jefferson was the only Black Claus to attend. "What [children] see most of the time is this red suit and candy," said Jefferson, a graduate from a premiere Santa school. "I'm just a messenger to bring hope, love and peace to girls and boys." In 2015, the Texas native was dubbed the first and only African-American member of the Lone Star Santas, a nonprofit complete with 350 Santa Clauses, Mrs. Clauses, and elves who donate toys to kids in disaster-stricken areas.
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New York City Cracks Down On Steam Heating
CityLab (12/02/16) Bliss, Laura

Most of the greenhouse gas emissions -- nearly 75 percent -- generated by such cities as Boston, Chicago, and New York come from heating, cooling, and lighting buildings. However, it can be difficult to get building managers to do a whole lot about it. To be sure, at least 15 cities nationwide now have "energy benchmarking" laws, requiring building operators to report annual water, heat, and cooling use, plus a clutch of rebates for stuff like solar panels to help them improve their stats. Even so, the incentives to act are not always great, especially for those in charge of large buildings. Property owners are the ones fronting the costs of installing new, more energy-efficient technology. Still, they are not necessarily the ones covering the costs of the utility bills.

For aging heating systems, there are smaller, more affordable tweaks that can be made. New York City is wagering that an active approach to educating decision-makers about those upgrades can significantly shrink its carbon footprint. The city's Retrofit Accelerator program is reaching out to landlords and decision-makers to help them seize on the single largest opportunities to reduce NYC's building emissions overall: steam heat. The NYC Mayor's Office of Sustainability estimates that if every large, steam-heated building in the Big Apple performed relatively simple upgrades, New York's building-based greenhouse gas emissions could be slashed by nearly 5 percent. That would be like taking 360,000 cars off the roads. But tackling steam all by itself could bite off a chunk of New York City's broader climate goal of reducing its greenhouse gases by 80 percent by the year 2050. Beginning in December, NYC property managers will be able to go to the Retrofit Accelerator for "direct one-to-one assistance" on upgrading aging steam systems.
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Amazon Working on Several Grocery-Store Formats, Could Open More Than 2,000 Locations
Wall Street Journal (12/06/16) Stevens, Laura; Safdar, Khadeeja

Amazon.com Inc. this week took the wraps off its first small-format grocery store, dubbed Amazon Go. This is one of at least three brick-and-mortar formats the online retail giant is exploring as it makes a bid for an area of retail that remains stubbornly in-store. According to Wall Street Journal sources, at least a couple of the other store formats Amazon is considering are bigger than the convenience-style Go store. Last month, Amazon's technology team green-lit a proposal to open large, multi-function stores with curbside pickup capability. Two drive-through prototype locations, which do not offer an in-store shopping option, are also set to open within the next few weeks in Seattle.

Depending on the success of the new test locations, the Journal sources say, Amazon aims to eventually open more than 2,000 brick-and-mortar grocery stores under its name. By comparison, Kroger Co. operates nearly 2,800 locations in 35 states. Adding grocery pickups will be "part of their secret sauce in terms of all of the different ways in which they can engage the customer in bringing the product to them," remarks Bill Bishop, chief architect at grocery and retail consultancy Brick Meets Click. "Everyone is looking at grocery because of frequency. Frequency guarantees that you have density."
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No Train No Gain: Why Your Staff Needs Training
Property Management Insider (12/01/16) Blackwell, Tim

About 54 percent of adults in the labor force say that it will be essential for them to get training and develop new skills in order to keep up with changes in the workforce, including the multifamily housing industry. According to a Pew Research Center survey, about 83 million people work in jobs that require an average or above average level of training, up 68 percent since 1980. Rapidly changing technology has altered the multifamily housing workplace, with many tasks once done manually now conducted on computers. Establishing apartment rent rates based on competition has become more complex, and maintenance technicians now carry tablets and other mobile devices.

Many onsite positions do not require a college degree, but these employees still need the skills necessary to keep up with quickly evolving technology. As technology enables more employees to work remotely, additional training will be essential to ensure people are able to do their jobs no matter their location. Training can be costly for apartment owners and operators, but they and other employers must ensure their workforce is well-prepared, according to Doug Bibby, president of the National Multifamily Housing Council. "During the recession and coming out of the recession training was not emphasized," he says. "I think there is a lot of catch-up work to be done right now."
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Mayfair Mall Unveils App Directly Holiday Customers to Open Parking Spaces
CBS News (11/30/16) Kittilstad, Jacob

A shopping mall in Wauwatosa, Wis., has released a new mobile application to help shoppers find parking spaces during the busy holiday shopping season. The app, dubbed GGP Malls, uses a color-coded system to show how busy individual lots are. Parking lots in green are not busy, while lots shaded in red are nearing capacity. The app then directs customers to the least busy parking lot section nearest the store to which they are headed. "To figure out how busy it is, we use heat maps. But it's something that throughout the day we're constantly evaluating, the lot levels,” says Chris Jaeger, senior general manager at Mayfair Mall. “So it's something that we do in person, as well."
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How Technology Is Turning Buildings Into Butlers
JLL Real Views (11/24/2016)

Smart buildings and facility management technologies are evolving rapidly, catering to individual workers' needs and becoming more affordable and mainstream. Technologies such as those in use at The Edge in Amsterdam, which houses Deloitte, act as personal assistants or butlers for their tenants, adjusting the lighting and temperature, playing music, and even tracking coffee preferences. By offering personal workstation temperature controls and other customizable features, a company gives their employees greater control over their environment, contributing to direct productivity gains. Some facilities offer mobile applications for tasks such as scheduling conference rooms, adjusting a room's temperature or remotely ordering a drink from a building's coffee shop. Larger campuses provide applications for navigating buildings or finding a particular space.

Capital Tower in Singapore has a smart parking lot with real-time lot maps that help drivers find empty spaces as well as an integrated building control system that automatically manages many building functions. "In the past, companies and investors focused mainly on the energy efficiency advantages of smart buildings," says Maureen Ehrenberg, executive managing director at Jones Lang LaSalle. "Today, they're beginning to see how mobile apps, smart building technologies and a holistic approach to occupant experience can have a measurable impact on employee productivity, engagement and satisfaction."
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Millennials Value Flexibility of Renting and Lifestyle Benefits
OPP.Today (11/29/2016) Bishop, Adrian

Millennials as a group tend to gravitate toward renting instead of buying, as they often have student loan debt they want to pay off first and appreciate the flexibility to take advantage of new economic opportunities without being tethered to a mortgage. "For Millennials, life is about the experience over ownership," says Sumner Billingsley of The Brickyard in Dallas. "Thoughtfully designed apartments and rental townhomes give you the ability to enjoy creative and unique design elements that are typically reserved for single family homes, but on a budget, you can afford. This is a fun time in your life where you can try out new and different styles to see which one will become your own."
When looking for a rental apartment, members of Generation Y often prioritize proximity to work and entertainment, eco-friendly housing, public space, urban feel and design, and technology. The Brickyard, a New York-inspired property catering to young professionals, offers such amenities as a swimming pool and smart car charging ports. In addition, a few rental units are even trying out a new smart apartment system from Dwelo that allows renters to control lights, locks, and thermostats via their smart phone.
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Trump's Overseas Properties Spark Security Fears
Politico (11/30/16) Crowley, Michael

President-elect Donald Trump’s midtown Manhattan tower is currently being protected by the Secret Service. Security experts, though, warn that many of Trump’s branded properties around the world will be difficult and expensive to secure against terrorist attacks. Trump owns or leases his name to dozens of buildings in the United States and abroad, with properties prominently featuring the president-elect’s name. "I think the Trump brand itself, based on the president-elect, certainly raises the profile and certainly places those properties in a much elevated threat matrix,” says Fred Burton, chief security officer for Stratfor.

Unless the Trump administration deploys federal security services to guard his private properties, either Trump himself or his property owners will shoulder the costs of security upgrades. Overseas structures with some connection to the U.S. have long been considered targets for anti-American terrorists. Some experts believe the Secret Service and U.S. intelligence agencies may pass along potential threats to the Trump brand. However, it is unclear if the U.S. government would give threat intelligence to non-American companies bearing Trump's name on their buildings.
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Green Apartment Construction Blossoming, Yet Renter Survey Shows $560 Rent Premium Is 5 Times Higher Than Most Would Pay
Rent Cafe Blog (11/28/16) Balint, Nadia

A review of Yardi Matrix's national inventory of more than 14 million apartment units in large rental buildings of 50 units or more, in 123 U.S. cities, found 44,800 new LEED-certified green units opened in 2015 in large-scale developments. This marks a 13-fold increase over 2008 numbers. In 2016, about 30,000 were open or being built of mid-year, and approximately 59,000 green-certified apartments are expected to be completed by year's end, a four-fold gain from five years ago. According to U.S. Green Building Council records, there were 3,187 green multifamily residential projects in the U.S. as of October 2016, including buildings that are LEED-certified or in the process of being LEED-certified. The portion of sustainable large-scale mutlifamily buildings rose from 2 percent in 2008 to about 15 percent this year.

Chicago was rated with the most green apartment units, with 13,800 in 62 large residential buildings. However, Cambridge, Mass., has the best ratio of residents to green apartments, with one green rental for every 39 individuals. The Yardi Matrix rental survey also found the average rent in green-certified apartments is $560 more than in regular new apartments, while most renter respondents are only willing to pay additional $100 per month. The most popular sustainable apartment features named by respondents are "energy-saving appliances and thermostats," "water-saving plumbing,” and "eco-friendly transportation options."
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State Officials Urge Apartment Residents to Buy Renters Insurance
WTVM-9 (Georgia) (11/21/16) Zozaya, Jose

The recent fire at the Woodcliff Apartments that destroyed 18 rental units and displaced 35 people should serve as a reminder for people to protect themselves with renters insurance, urges the Georgia Office of Commissioner of Insurance (OCI). "If it's something that is in your budget and you can afford it and you want to protect your personal property, then yes, get it," says OCI Communications Director Glenn Allen. He says it covers any and all personal property, like "your furniture, your computers, your TV, in case something happens, whether a neighbor has a fire in their apartment, or you have a fire in your apartment." Allen adds that the OCI highly recommends renters insurance, even though many apartment owners and operators in the state do not require it.
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