One of my favorite real restate authors is my friend and fellow SIOR, Bill Gladstone, who dominates the Harrisburg Commercial real estate market. In his Second Quarter 2015 Real Estate Review in an article focused on downtown revivals that have been mushrooming across the country. “Charles Lesser & Co., a real estate consulting firm, recently surveyed the preferences of young adults ages 20 to 34 and found that:
- 31 percent prefer to live in a center city.
- Two-thirds seek walkable places or town centers. One-third are willing to pay a premium to be within walking distance to shops, restaurants, bars and other amenities.
- Half are willing to give up living space in order to live in a walkable neighborhood.”
In a July 15, 2015 report by Morgan Stanley, AlphaWise Survey: Broker Optimism Nearly Maxed Out, “Almost 300 brokers nationwide participated in our July real estate survey. Industrial optimism reached new heights but concern over new supply ticked up. Office sentiment polarized and large financial tenants remain weak.” Reviewing their various charts, half the cities are Landlord markets (San Francisco, Atlanta, New York City, and Boston) and half are Tenants markets (Washington, D.C., Philadelphia, and Los Angeles).
Site Selection July, 2015 cited a report by Smart Growth America – “Core Values: Why American Companies are Moving Downtown”… Our younger employees don’t want to go to a suburban office park. It’s boring as all get-out out there. Here they walk outside and see cool stuff and it’s fun … More people are now living downtown, there are more restaurants, more cultural opportunities, more fun by an order of magnitude”.
WeWork Companies, Inc., the cool, hip operator of co-worker spaces which can be rented by the hour, day or month, has 3.6 million feet under lease and is valued at ten billion dollars. Wow! … headphoned employees sit across from one another on long picnic tables and stare at their computer screens. Amenities include couches, beanbag chairs for dogs, fresh fruit, free coffee, ping pong and pool tables, and free beer at happy hour.” (The Registry, July 14, 2015)
Talk to your tenants…Monanetworks.com has a tool for property managers and building owners to easily communicate with their tenants, as well as a space for everyone in the building to share information. I can just see the flurry of comments between tenants if the owner jacks up the operating expenses and zaps everyone with their new bill (Don’t laugh, right now I am dealing with a landlord who spiked the pass-throughs 40% in one year!) But overall, probably, it is a great management tool… (The Registry, June 23, 2015)