More sophisticated management services are being requested by tenants; more tech, more advisory, even fundamentals are being pushed to a higher level. Management services must become more sophisticated as tenants’ businesses become more specialized. Management employees are changing as Gen X and Millennials replace retiring Boomers; Boomers have been harder-working, while young employees are interested in more work-life balance; younger workers are more comfortable with tech; 60% of boomer managers are nearing retirement. If tenants and landlords request more robust and varied services, how are management companies to price that? Sometimes it pays off to give more without increasing the fees to retain loyalty to your property management group, but customers are usually willing to pay more if they see they are getting more. Property management services are in danger of becoming a ‘commodity’, so how to differentiate your company from the competition? Should fees be lowered or quality and quantity of services be increased? Don’t just get cheap on your fee-quality delivery of service matters the most. Click to read more at www.rednews.com.
The Howard Hughes Corp. has announced that Western Midstream Partners has signed a 133,948-square-foot lease in a Class A+ office high rise at The Woodlands Towers at The Waterway in Houston. The company will occupy five floors in the 31-story skyscraper. Cushman & Wakefield assisted the tenant, while Colliers International represented the owner. This commitment brings the 595,000-square-foot building to an occupancy rate of 35 percent. The tenant is expected to move into the tower in November, with the owner providing temporary space as early as April. Later this year, Howard Hughes will also relocate from its Dallas headquarters to The Woodlands. Located at 9950 Woodloch Forest Drive, the LEED Silver-certified building was completed in 2014. Amenities include a lobby cafe, two-level fitness facility with a basketball and volleyball court, conference rooms and a 33,000-square-foot rooftop terrace. Situated close to Interstate 45, the high-rise is 20 miles from George Bush Intercontinental Airport. Click to read more at www.cpexecutive.com.
Which commercial real estate sector will escape the COVID-19 pandemic with the least amount of damage? According to a new report from commercial real estate researcher Yardi Matrix, multifamily is best poised to weather the pandemic. This isn’t to say, though, that even this sector won’t suffer. Plenty of tenants will struggle to pay their rent. Law enforcement throughout the country has vowed to put a hold on evictions. And many tenants won’t be able to absorb rent increases. These factors will all hit the bottom lines of apartment owners and operators, according to Yardi Matrix’s Economic and Coronavirus Update National Multifamily Report. According to the report, the multifamily sector remains well-capitalized and strong enough to weather a modest slowdown. The report, though, also says that owners and operators might face short-term rent-collection issues if the economy slumps too badly. And value-add projects will likely slow. Yardi Matrix predicts that the impact of the COVID-19 pandemic will last three to six months before a steady recovery boosts the economy once again. Click to read more at www.rejournals.com.
Leaders of the real estate industry are asking the federal government to help them weather the market slowdown caused by the novel coronavirus pandemic. On March 18, Compass founder and CEO Robert Reffkin sent a letter to Congressional leadership asking for specific consideration for real estate agents and other independent contractors in any coronavirus relief package. Reffkin, head of the Softbank-backed real estate firm, wrote that the roughly 2 million real estate agents in the United States, according to National Association of Realtors figures, make a gross median income of approximately $41,800 a year before taxes, and have seen business severely contract amid shelter-in-place policies and social distancing. “When they can’t show a property, they can’t earn a living,” he says. The letter claims that this industry is uniquely damaged by the economic fallout from this pandemic, and highlights how both the pandemic itself and a general slowdown in activity will likely impact homesellers and homebuyers for the foreseeable future. The industry is older, with 63 percent of agents over 50 years of age. The incentive structure of real estate sales also presents a challenge; agents will only earn commission after a sale. That means that even after the economy begins to resume normal operations once social distancing measures are deemed no longer necessary, agents will have to wait to make a sale before earning anything, extending their period of operating without an income. Click to read more at www.curbed.com.
Before WeWork’s failed IPO, much of the criticism of the coworking and flexible office business model focused on the challenges that coworking operators would likely face in a recession when clients could easily end short-term memberships to conserve cash. By contrast, since WeWork and other coworking firms were often on the cutting edge of open-office design and were emulated by tenants in traditional leases, their dense office layouts were more likely to be identified as an asset than a liability. The COVID-19 crisis is now testing each of these assumptions, as coworking operators make difficult decisions to keep their members and employees safe while also keeping their businesses running.
he open office design of many coworking and flexible office spaces can allow viruses to spread more easily than traditional office layouts, as Konrad Putzier noted in the Wall Street Journal. Without walls or a cubicle divider, droplets from a sneeze or cough can spread farther. Offices that use unassigned desks – a common practice in coworking – can also make it easier for a virus to spread as new desk occupants come into contact with infected surfaces. Putzier observed that some companies have opted for office layouts that encourage close contact between occupants to facilitate interaction. For example, WeWork has intentionally narrowed office corridors so that workers are more likely to physically run into each other. Click to read more at www.blog.naiop.org.
CORPUS CHRISTI, Texas, March 19, 2020 /PRNewswire/ — Capital Square 1031, a leading sponsor of Delaware statutory trust (DST) offerings, announced today the launch of CS1031 MOB TX VI, DST, a Regulation D private placement for investors seeking tax deferral under Section 1031 of the Internal Revenue Code and cash investors seeking cash flow and appreciation potential. The offering is comprised of two medical office buildings located in Corpus Christi, Texas. The buildings are leased to Covenant Physician Partners for a base term of 15 years on a triple net basis. “Medical real estate has historically demonstrated to be a recession-resistant investment,” said Louis Rogers founder and chief executive officer. “This is Capital Square’s sixth medical DST investment in Texas for Section 1031 exchange and other investors. Texas is a preferred location for investment due to the high level of growth driving demand for additional medical services and the absence of a state income tax, creating a friendly environment for out-of-state investors.” The portfolio includes: 5721 Esplanade Drive, a 9,228-square-foot, Class A multi-specialty ambulatory surgery center built in 2015 and situated on 1.08 acres of land, and 6002 S. Staples Street, a 24,264-square-foot Class A ophthalmic clinic built in 2018 and situated on 1.501 acres of land. Click to read more at www.finance.yahoo.com.