Real Estate Management News - 07/20/2016

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July 20, 2016
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IREM® HEADLINES
Pokemon Go: Boon or Headache for Property Managers?
President Receives “Housing Opportunity Through Modernization Act”
Grow Your Business – Classroom Premiere in Chicago. Space Running Out!

INDUSTRY HEADLINES
Prime Retail Spaces Just What the Doctor Ordered
Security Robot Suspended After Colliding With a Toddler
This Is the Future: Workplaces that Make You Healthier
Catering to the Renters of Tomorrow
'Net Zero' Green Building Certification Coming Soon
WeWork’s Biggest Competitor: Anyone and Everyone
Dorm Overflow at Ohio State to Put Scores of Students in Upscale Apartments
Land(fill) of Opportunity: Why Builders Are Turning Dumps into New Developments
Get 'Smart' in Your Apartment Home Technology
Demand for Apartments Bounces Back in Second Quarter
The Next Frontier for Green Building Is Manufacturing
How Technology Is Disrupting the Construction Industry


 
 

IREM Headlines


Pokemon Go: Boon or Headache for Property Managers?

Excerpt from the July 14, 2016 IREM Blog posting by Karen Kazmierczak

By now you’ve likely seen, heard about, or started playing the latest mobile gaming craze, Pokémon Go. Based on the Pokémon cartoon and video game franchise, the latest version of this game is played on smartphones. The game is completely GPS and map-based. Players must physically be present in certain real-world locations to capture Pokémon, get items needed to play the game from “Pokéstops”, and battle other players for control of “Gyms” on behalf of their chosen team.

Areas with large numbers of Pokémon, Pokéstops, and Gyms are seeing significant increases in foot traffic from people playing the game. The location-based nature of the game is a potential boon to retailers and other small businesses. It also can cause real headaches for property and facility managers.

There are general safety issues managers should always be aware of, but location-based games of this sort can highlight issues that may have previously been neglected.
  1. Players may wander into surprising areas in search of Pokémon, which are not necessarily found along sidewalks or paths. If you have unsecured or broken fences or other barriers intended to keep the public out of private or unsafe areas, consider securing them.
  2. Despite in-game warnings about paying attention to your surroundings, players may have their heads down looking at their devices while walking. In public areas, look for trip/fall hazards (even off paths or sidewalks) and fix or clearly mark them.
  3. If your property or facility is the location of a Pokéstop or Gym, there may be unusual numbers of people coming at all hours of the day or night. Communicate with your security staff and tenants/residents, if necessary, who may not be aware of the reason behind the increased traffic.
  4. If your property or facility is an unsafe or inappropriate location to play the game, you may need to create signage asking players to go elsewhere.
Chances are, location-based games like Pokémon Go are here to stay. Property managers should make sure they are prepared to take advantages of opportunities and mitigate potential risks as the virtual world interacts with real estate and real life.

Read the full IREM Blog posting for additional information.
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President Receives “Housing Opportunity Through Modernization Act”

On July 14, in a quiet and quick move, the “Housing Opportunity Through Modernization Act” (H.R.3700) passed out of the U.S. Senate by Unanimous Consent. The legislation now heads to the President’s desk for his signature.

The legislation will streamline and improve many administrative provisions in the Housing Act, and will reduce program costs by roughly $311 over a five year period. Among many improvements, the legislation allows local housing agencies to use more project-based vouchers in areas of low poverty and low crime. Streamlined inspection rules for properties that have tenant-based vouchers will allow families to move in more quickly. The changes will help current property managers rent their vacant units and encourage new properties to participate. Expanding the supply of federally assisted housing is crucial due to a significantly higher demand than can be met with the current housing pool. The bill also requires the Department of Housing and Urban Development to simplify and expedite the condominium Federal Housing Administration recertification process.

IREM was actively involved in advocating for this legislation. In April more than 230 IREM Members traveled to Washington, D.C. and asked their Senators to support this legislation, which had passed the U.S. House unanimously on a 427-0 vote.

IREM applauds the Senate’s quick action on this legislation. It is common sense, bipartisan policy that will save the government money, and help give people access to quality housing.

Check out additional information on the legislation and IREM’s advocacy efforts.
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Grow Your Business – Classroom Premiere in Chicago. Space Running Out!

Building for Tomorrow: Leading a Successful Property Management Company

Classroom Premiere July 27-29 in downtown Chicago. Hurry -- space is limited!


Register for the live classroom premier in downtown Chicago, right on the Magnificent Mile, of Building for Tomorrow: Leading a Successful Property Management Company.

Joe Greenblatt, CPM, President and CEO of Sunrise Management, a San Diego based AMO firm will lead you to discover the latest strategies and best practices for building and leading a sustainable, customer-centric real estate management company. Designed for management company owners, executives, and department heads charged with driving business results, this interactive course gives you a template to create a forward-thinking organizational environment to grow your business. And, completion of this course earns your firm credit towards IREM's prestigious AMO accreditation.

Topic covered include:
• The making of a best practice real estate management company
• Talent strategies
• Creating a leader development program
• Forward-thinking strategies for business growth
• Defining an ethical, client-centered organization

Course fact sheet with location, lodging, and travel information.

Can’t make the classroom premiere? Building for Tomorrow is also available in a convenient online format.
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Industry Headlines


Prime Retail Spaces Just What the Doctor Ordered
NorthJersey.com (07/17/16) Verdon, Joan

Prime retail locations on North Jersey highways that used to be stores that sold eveything from clothing to sports equipment to music CDs are now being filled by health-care entities. Walk-in clinics and such other medical providers as Doctors Express and PM Pediatrics started moving into fringe retail locations on secondary roads starting in 2008 when the recession began taking hold and creating vacancies. More recently, they have been occupying some of the premium spaces national retail chains used to vie for. Urgent care and walk-in clinics are looking for the same features that brought retailers to those spaces -- good visibility from the roadway, lots of passing vehicles that see their signage. and a parking lot with quick and easy access to the buildings. Retail property experts expect to see more medicine mixed with retail in the months and years to come.

According to the latest American Academy of Urgent Care Medicine estimates, there are more than 9,300 walk-in, urgent-care centers staffed by physicians nationwide and the country adds 50 to 100 clinics a year. The growth of urgent care has been driven by the public's desire for quick access to health care and the need for medical attention in the evenings and weekends when traditional doctors' offices are typically closed. The new reality of retail leasing is that retail building owners, previously hesitant to rent to medical tenants, are now welcoming them. "Years ago, landlords didn't want doctors," recalls Chuck Lanyard, president of The Goldstein Group retail brokerage firm. "To them, medical was an office use. It didn't bring in a tremendous amount of traffic." During the recession, however, landlords found that medical tenants were steady, dependable occupants that actually created attractive storefronts that added to their properties.
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Security Robot Suspended After Colliding With a Toddler
Wall Street Journal (07/14/16) Wells, Georgia

The Stanford Shopping Center in California has suspended its security robots after a collision involving one of them resulted in a toddler getting a bruised leg. Knightscope Inc. designed the machine to protect against malicious humans. Children usually present the greatest risk to the robots' ability to do their jobs properly, as they usually harass the machines albeit in a mostly playful manner. Knightscope has called this recent incident a "freakish accident" and issued a formal apology to the family. “Our primary mission is to serve the public's overall safety, and we take any circumstance that would compromise that mission very seriously,” said CEO William Santana Li. The mall, which is looking into the incident, has halted the robot program until the investigation is complete.
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This Is the Future: Workplaces that Make You Healthier
Fortune (07/13/16) Lorenzetti, Laura

Companies and developers have responded to the growing demand for environmentally friendly buildings, but a new initiative aims to create working spaces that are healthy for employees. The WELL Building Standard is administered by the International WELL Building Institute. The goal of the standard is to create spaces that improve the health and quality of life for workers. The standard was developed after seven years of work by scientific, medical, and other experts. It takes into account air, water, nutritional, light, fitness, comfort, and mental factors when developing working space. All of those factors are optimized based on 100 WELL requirements.

Features that can be created as a result of the standards include purified air, water filling stations, access to natural light, and usage of natural elements like wood. In particular, the results of WELL Building Standards in McKesson's headquarters in Virginia have been well received. Employees at the building have responded positively in surveys about the layout and features of the office space.
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Catering to the Renters of Tomorrow
Multifamily Executive (07/14/16) Mosher, Diana

The next generation of apartments will see a furthering of resort-style amenities that encourage a sense of community. Analysts and apartment insiders expect tomorrow's standard amenity package will be aimed at fostering interaction, featuring everything from sports lounges and music jam rooms to experimental kitchens and swim-up bars. Scott Ziegler, principal in charge of Living Place Studio at Ziegler Cooper Architects in Houston, states, "Millennials will pay more in rent to have the amenity package or will downsize their unit size [to studio or micro] to be able to afford the amenities.: He adds that this trend demands more common-area square footage. For example, as online shopping continues to increase, more square footage will be needed for package rooms. "Of course, we must also continue to engage the dog and bike revolution, which is really driving a lot of design decisions," Ziegler adds. "Cities are giving credits to developers who reduce parking spaces by providing bike racks."

To Mark Humphreys, CEO of Dallas-based Humphreys & Partners Architects, the inflow of renters today isn't just about Millennials. He and his colleagues are also factoring in Baby Boomers and Generation Z. "This is the first time in U.S. history that the two largest generations are going after the same market," he notes. "Right now, this is our biggest challenge and greatest opportunity." Whether newly single or married, Boomers are demanding the same high-end amenities and appliances they've become accustomed to as homeowners, along with large closets, big master bathrooms, and balconies large enough for outdoor dining. The growing number of young families who want to stay in the city is another emerging market.
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'Net Zero' Green Building Certification Coming Soon
Environmental Leader (07/12/16) Hardcastle, Jessica Lyons

The World Green Building Council (WorldGBC), in an attempt to reduce emissions from the building sector, is launching net zero building certification and training. The project, which has set a goal of having 100 percent of buildings be net zero by 2050, will initially involve green building councils (GBCs) in Australia, Brazil, Canada, Germany, India, Netherlands, South Africa, and Sweden. In addition, Architecture 2030, a nonprofit that works to reduce emissions from buildings, is partnering on the initiative. "The success of our ambitions to keep global warming to within 1.5 to 2 degrees will depend on our ability to advance net zero buildings," says WorldGBC CEO Terri Wills.

Participating GBCs will develop action plans, with an aim to launch a national net zero certification as soon as possible. Each participating council also will create specific net zero training for green building professionals, and support the development of net zero demonstration projects within their own countries. Other long-term goals include having 75,000 professionals trained on net zero building by 2030 and 300,000 by 2050, and making sure all GBCs that operate certification programs have a net zero tool in place by 2030. Although the project will initially focus on certification and training, WorldGBC hopes it also will encourage businesses and governments to adopt ambitious targets on net zero buildings.
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WeWork’s Biggest Competitor: Anyone and Everyone
Wall Street Journal (07/17/16) Brown, Eliot

When WeWork Cos. opened its first location in Manhattan six years ago, the shared-office-space firm had the market mostly to itself. Today, the co-working business is mushrooming. New locations are popping up on a seemingly weekly basis in old warehouses and new skyscrapers alike, as more and more small and medium-size businesses eschew small offices and coffee shops for the incubator-like workspaces where members share common spaces. In New York City, there are approximately 180 co-working locations -- an increase from about 25 in 2009, reports Newmark Grubb Knight Frank. WeWork controls roughly 50 percent of the market. Nationwide, the number of co-working spaces increased to almost 3,000 in 2015 from around 250 in 2010, adds Steve King, a researcher who studies co-working at Emergent Research.

WeWork jumped ahead of the market early by expanding aggressively and generally managing to fill its new spaces within months of opening. "The market's rapid growth underscores a big challenge for WeWork: low barriers to entry," the article's author writes. Indeed, competition can come from anyone who has an office lease and the money to set up work spaces. That could pose a problem for WeWork investors, which include everyone from Fidelity Investments to T. Rowe Price Group. Despite controlling only a fraction of their square footage, the company's lofty valuation of $16 billion is greater than all but two publicly traded office landlords. Some WeWork investors have compared WeWork with overnight home-rental provider Airbnb Inc. and taxi-service provider Uber Technologies Inc., saying WeWork will upend and transform the office-space market. But Airbnb and Uber enjoy high barriers to competition. The more drivers and hosts in their networks, the harder it is for an upstart to take them on directly. By contrast, WeWork leases all of its office space itself and then rents it out, making it more like a big hotel operator than a network that connects buyers and sellers -- and potentially more susceptible to competition.
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Dorm Overflow at Ohio State to Put Scores of Students in Upscale Apartments
Columbus Dispatch (07/18/16) Edwards, Mary Mogan

Ohio State University’s North Campus building boom added approximately 3,200 residence-hall beds over the last couple of years. But in this first year that sophomores are required to live on campus, the university still fell short of accommodating every student who applied to live in a dorm this fall. Of the nearly 14,500 who requested dorm rooms and paid a deposit this past spring, about 130 of them recently received letters offering them a place in a nearby apartment instead. They aren't required to accept the apartment placements, but the university is spending around $1.2 million to lease units in three new or nearly new apartment buildings: The Doric on Lane on 150 W. Lane Ave.; Norwich Flats, 250 W. Norwich Ave.; and Fisher Commons at 900 Nettle Drive. The price includes not only the lease, but also the utilities, maintenance, housekeeping, and furnishings.

The university will employ resident advisers and other staff members for the apartment locations. The offer was made only to upperclassmen. "We thought it was important that first- and second-year students have the opportunity to be in residence halls," university spokesman Dave Isaacs reasoned. The three properties lease bedrooms individually even if they are in two-, three- or four-bedroom units. Monthly rents range from around $900 to as much as $1,300. The fewer the bedrooms in each unit, the more each bedroom costs. A furnished room in a four-bedroom unit comes with a private bathroom and paid Internet and cable service. The occupants share a kitchen, study area, and terrace. The apartments advertise full-size beds, granite countertops, and stainless-steel appliances, plus full-size washers and dryers. Finally, each of the three buildings has 24-hour computer-printing areas and parking under the buildings.
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Land(fill) of Opportunity: Why Builders Are Turning Dumps into New Developments
Construction Dive (07/15/16) Slowey, Kim

Some developers are transforming landfills into new communities and in-demand spaces. Two of the major issues when prepping a landfill site for building are dealing with gases that emanate from the site and subsidence, or sinking and settling of the land as waste decomposes. As the waste sinks and settles over time, not only do depressions develop on the surface of the site, but leachate, or liquid, passes through the waste carrying contaminants as it goes, possibly spoiling ground water and the surrounding soil. In addition, gas or vapors from the decomposing material works its way into surrounding soil and then up and out of the ground. If there are no structures on top of the site, the gas releases into the air. If it's trapped by a building's foundation, the result can be a dangerous accumulation of gas.

To mitigate the risk, contractors can install a permeable layer of gravel, which provides a pathway of escape for gas, and then a membrane underneath the slab of a building. The gas can then be piped out from underneath the building, up the sides and then released at rooftop level. As far as the waste is concerned, it's common for developers to move the waste, consolidate it and then encapsulate it away from where buildings will be constructed. If there is no other option than to build directly over waste material, contractors must anchor the foundation into solid ground beneath the waste with, for example, a deep foundation with piles.
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Get 'Smart' in Your Apartment Home Technology
Property Management Insider (07/11/16) Lashley, Lea; Behr, Howard

Apartment owners and operators have an opportunity to bring innovations from the smart home prototype to its residents. In multifamily housing, having a smart apartment indicates that technology-based devices such as thermostats, locks, and lights are replacing their mechanical-operating counterparts. There are many opportunities within the community where "smart" makes a play -- in the billing and sub-metering business, for instance. Once smart devices are installed in apartment units, the responsibility for managing them can quickly land on the apartment managers' shoulders. This has the potential to become noticeable, especially at turnover time.

The question then becomes: "What is needed, and who manages this technology so property managers and owners start to see a return?" For one, a cloud-based network is a must for managers and residents to easily operate and manage smart devices. Two, an isolated, building-centric network allows operators to install smart technology separate from the resident wifi network to ensure security and reduce complexity in solving future network issues. Finally, there is dashboard management to ensure organization-wide oversight from a single source that anyone can operate based on roles and permissions. Ultimately, Embue President and CEO Robert Cooper says that leadership is required to create effective apartment policies, as well as to help select which devices become smart" and to determine implementation so that an apartment property can realize the value of investing in smart devices quickly.
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Demand for Apartments Bounces Back in Second Quarter
National Real Estate Investor (07/12/16) Anderson, Bendix

Industry experts say demand for rental apartments is on the rise again. Earlier this year, global financial issues and poor demand for multifamily rental housing had negative effects on the market at a time when a myriad of new buildings and apartment communities were set to open. However, economists expect demand for apartments should remain stronger than supply for some time. John Sebree, director of the national multi-housing group with Marcus & Millichap, says most of that demand is a result of new households needing places to live and a lack of new housing to meet the rise in demand. Despite the positive news, there is also a growing gap between luxury apartments and less-expensive developments. More expensive apartments are trying to draw renters from less pricey buildings that may have long waiting lists.
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The Next Frontier for Green Building Is Manufacturing
Crain's Chicago Business (07/12/16) Ramanujam, Mahesh

A new study from the U.S. Green Building Council lists more than 1,775 current LEED-certified industrial facilities, with projections of an increase to more than 2,710 facilities, writes the USGBC's Mahesh Ramanujam. "Manufacturing plants, industrial facilities, and product factories...have become a cornerstone for the international green building industry," he says. "The growing adoption of LEED in this sector has given corporations another tool to achieve high-performing business operations and positively affect occupant health, reduce water and energy use, and increase cost savings, all at the same time."

Ramanujam also notes the LEED program is proliferating among legacy product manufacturers, citing as an example the Fiat Chrysler Automobiles Trenton South Engine plant, which became the world's first such facility to achieve LEED Gold. "Because of its design, annual CO2 emissions were lowered by 12,000 metric tons -- equal to the energy use in nearly 1,000 homes -- and annual new energy use was reduced by 39 percent, saving $1.25 million a year," Ramanujam says. He says LEED-certified buildings reduce operating costs, support a higher return on investment, and drive up resale and rental rates. "Professionals in the industry, from architects to contractors, should see the benefits of LEED and use it in manufacturing structures," Ramanujam contends.
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How Technology Is Disrupting the Construction Industry
Forbes (07/12/16) Kavis, Mike

New technologies are allowing construction companies to build complex structures at swift speeds. One such advancement is the use of drones to inspect buildings. The drones can be equipped with advanced lenses to capture small details and do so in a short amount of time. In addition, any data collected can be sent in real time for evaluation. 3D printing is also changing how some structures are built. In some cases, automated robots are also being used to construct beams, lay bricks, and perform other labor duties. RoboticsX, based in Germany, hopes to develop automated technology that will eventually allow robots to build structures and buildings on Mars.
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