Showing posts with label commercial real estate. Show all posts
Showing posts with label commercial real estate. Show all posts

Tuesday, August 7, 2018

Commercial Real Estate - Evolving Office Spaces Part 2

RECBL - Cash Buyer's Lists
Commercial Real Estate - Evolving Office Spaces Part 2
It’s Monday morning, and you have two choices before you: drive into the office and get your lead generation knocked out in a traditional work space, or work from home or a nearby coffee shop using the virtual tools provided by your brokerage.

Which format makes agents more productive, and clients more inclined to purchase or sell a home?

It’s not a clear-cut answer, as it largely depends on personality type, work ethic and the tools a brokerage provides.

This is something that Lynsey Engels, president of Mel Foster Co., a member of Leading Real Estate Companies of the Word®, stands behind, especially when it comes to concrete office spaces.

“While being a real estate agent offers a tremendous amount of autonomy and the flexibility to set your own schedule, not every personality type thrives in an environment lacking frequent personal interaction,” says Engels. “A dedicated office space for agents provides the support and structure many agents need to truly reach their full potential.”

“A physical location bolsters teamwork and allows for ongoing learning and sharing of best practices,” Engels says. “Agents have collaboration spaces that promote networking with their peers, and these flexible spaces can also be used to meet with clients.”

In terms of virtual interactions, Engels uses private Facebook groups as a chat room resource for agents, while still putting more emphasis on in-person interactions. Is Facebook enough of a cyber communication tool for today’s real estate agent?

Josh Harley, founder of Fathom Realty in the Dallas-Fort Worth, Texas, market, believes that Facebook should be used by agents to “freely exchange ideas, share successes and issues, and encourage each other,” but in combination with other tools.

“While I do believe brokerage office spaces are going the way of Blockbuster, it will take more than just a virtual community to replace them,” says Harley. “It will require a multi-pronged approach to ensure agents have what they need to be successful and feel connected.”

With more involved virtual communities—as with eXp’s cloud campus, eXp World—agents can find cyber office spaces that are more complex and interactive, and that take on more of the features expected in a traditional office setting, such as assistance provided by support staff and even team-building activities.

“Most agents are used to paying a desk fee for an office they rarely visit,” says Mitch Robinson, senior vice president of Marketing and Communications at eXp Realty. “Plus, for those who go into the office, they often aren’t able to get the real-time support they need. We have multiple people with the same function who can help agents across North America. We also don’t have desk or franchise fees, so agents save money.

“Even in a virtual office, it is important to embrace our core value of fun,” Robinson says. “Not only do agents do important work with each other and staff; they can drive a speedboat, watch fireworks for the Fourth of July and Canada Day, or join a daily, virtual workout with others across the country.”

Are these virtual perks enough? More and more brokerages are amping up their tech offerings in order to transform their office environment, and, yet, the real estate industry is still a human-centric business in which face-to-face meetings are key to building strong relationships. That’s why Wendy Forsythe, chief operating officer at HomeSmart International, has zoned in on technological innovation that blends well with both concrete office space and the cyber world.

“HomeSmart has built its technology on a proprietary platform called RealSmart Agent,” says Forsythe. “This software is the combination of all the tools and support an agent needs to run his or her business. Agents can build a brand through websites and social tools, market listings, manage their database, have complete transaction management and get paid when the transaction closes. From an agent’s first login, he or she has access to a powerful platform to market, learn and transact with.”

How does the industry feel about a completely virtual office setting with customizable avatars, such as those within eXp’s cyber community? Personalization can help to differentiate users and build a sense of identity; however, while younger, more tech-savvy clients may appreciate the imaginative interactions that come with the modern spin on tradition, the format is still new, leaving questions unanswered. Will it take away from the seriousness of tough transaction conversations typically needed to get to the closing table? Will home showings be replaced with virtual tours? And will the agent-client relationship suffer from a lack of in-person interactions?

“My thoughts on this are twofold: Technology is giving us a beautiful way to extend our personal relationships, which is a wonderful thing, but there is still something magical that happens when humans share energy in the same space together,” says Keith Robinson, chief strategic officer at NextHome, Inc. “There is a reason live events and concerts still draw massive crowds. Sure, it would be fun to listen to a new album on Spotify in your car, but nothing compares to the experience of hearing it live, together with your friends in a shared space. The companies that win in the future will use technology for more reach, but understand the importance of an in-person, communal experience.”

So, what does the real estate office space of the future look like? It depends on who you ask; however, the industry will most likely retain its varied offerings in order to maintain healthy brokerage competition and appease the various personality types of real estate clients.



Jason Grace is AZ Social Realty's content editor. Email him your real estate news ideas at jason@cashbuyerslists.com.​




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Commercial Real Estate - Evolving Office Spaces Part 1

RECBL - Cash Buyer's Lists
Commercial Real Estate - Evolving Office Spaces Part 1

You’re walking along the downtown strip and come across a quaint storefront with large glass windows looking into an agent-occupied office space. From the outside, you can peruse the various listings marketed by the brokerage, and once you enter, you’ll engage with one of the many agents waiting to help you buy or sell your home.

If you think back to more recent memories, however, you’ll realize that this model is swiftly becoming a part of the past. Today, traditional real estate offices are being replaced with variations that embrace technology, as buyers are largely beginning their search online before engaging an agent.

HomeSmart International, for example, has structured the brokerage so agents can choose the more traditional route or a virtual space in which all of its technological systems are still easily accessible.

“A business model that combines the best of the online world with the physical world means the agents get a true win-win,” says Wendy Forsythe, chief operating officer at HomeSmart International. “They don’t have to choose an office location or virtual; they can have both, and this gives them ultimate flexibility in their business.”

The NextHome franchise also embraces a hybrid model to introduce more elasticity in an industry in which not all agents have the same needs.

“I see more and more of our NextHome franchise owners and brokers working in a hybrid-type office,” says Imran Poladi, vice president of Business Development at NextHome. “Gone are the days of having a monster-sized building to accommodate a huge agent count. Today’s REALTOR® wants a professional place for meeting clients but doesn’t necessarily have the need to come into the office every day. With technology being so advanced, it makes sense to have a great work environment for collaboration with colleagues, but the flexibility to work from anywhere.”

Meanwhile, at Mel Foster Co., a member of Leading Real Estate Companies of the World®, physical locations are embraced; however, technology remains at the forefront of the office environment.

“We have multiple traditional brick-and-mortar offices and two boutique-style offices—smaller, more collaborative spaces that support agents’ desire to work in a more mobile environment,” says Lynsey Engels, president of Mel Foster Co. “These meet client needs more quickly with the technology that makes buying and selling more convenient for those clients.”

Other brokerages lean heavily toward a tech-centered office space. eXp Realty, for example, does not have brick-and-mortar locations, and instead provides an immersive virtual experience through its cloud campus, eXp World.

“eXp Realty’s cloud campus environment allows agents to meet and learn together, no matter where they might be located,” says Mitch Robinson, senior vice president of Marketing and Communications at eXp Realty. “They can jump in a meeting or learn on-the-go with eXp Realty agents located everywhere. They also gain instant, live support from eXp Realty’s agent services, technology and accounting teams.

“eXp Realty cuts overhead brick-and-mortar costs by offering agents a cloud campus environment,” Robinson says. “This means we can invest in agent support and technology instead of expensive leases.”

Josh Harley, who founded Fathom Realty in the Dallas-Fort Worth, Texas, market in 2010, has committed to a cloud-based model since day one in order to lower overhead costs, reflecting the savings through an attractive commissions structure that doesn’t sacrifice technology, training or support. While some physical locations are necessary in order to meet certain state restrictions, cutting back on concrete spaces has proved fruitful, according to Harley.

“Unfortunately, not every state allows a brokerage to completely forego brick-and-mortar offices, but that doesn’t mean those spaces have to be large enough to house all of your agents,” Harley says. “Having brick-and-mortar locations is costly and eats up a huge percentage of a brokerage’s revenue and profitability. By eliminating this unnecessary cost, where possible, we are able to keep our expenses low and pass those savings onto our agents in the form of low or no fees and awesome commission splits.”

How do these varying office strategies impact the industry’s agents, and the buyers and sellers they serve? Since each company adopts a unique model, the agent and consumer experience can be vastly different between brokerages.




​​​Jason Grace is AZ Social Realty's content editor. Email him your real estate news ideas at jason@cashbuyerslists.com.







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Sunday, November 12, 2017

Commercial Real Estate Outlook Remains Strong, Prices at a Standstill

RECBL - Cash Buyers Lists
Commercial Real Estate Outlook Remains Strong, Prices at a Standstill

RECBL - Real Estate News

Commercial prices will plateau and may fall in large markets, but secondary markets will experience sustained demand and stable real estate prices, according to Lawrence Yun, National Association of REALTORS(R) (NAR) chief economist.

During a commercial real estate forecast session at the 2017 REALTORS(R) Conference & Expo, Yun and JLL Chief Economist Ryan Severino both expressed confidence that the commercial sector should remain on an upward trajectory, but buyers and sellers could be at odds over price. "The commercial market should expect a standoff between buyers and sellers over price in the next year, which could lead to fewer transactions.

Buyers cannot offer low cap rates because of rising interest rates, and sellers cite the strong economic climate as a reason for high prices. Furthermore, vacancy is falling, yet construction has been lagging because of worker shortages," Yun said.

Yun went on to say that overall, the market is healthy; commercial property prices rose 90 percent in the last seven years, but recent headwinds are developing some ambiguity.

"The economy is quite impressive and gross domestic product [GDP] has grown 3 percent in the last quarter, despite hurricanes and other economic factors," Yun said. "The consumer confidence index is also growing, and the nations net worth and consumer spending are at historic levels."

Yun expects GDP to come in around 2.2 percent for the year and to expand to 2.8 percent overall in 2018, as long as job growth remains solid and construction picks up in both residential and commercial sectors. National office vacancy rates are forecast to remain fixed over the coming year, with rent rising at 2.5 percent per year. The vacancy rate for industrial and retail space are expected to also remain stable, with rent rising slowly at 4 percent and 2 percent, respectively.

Even as new apartment completions bring more supply to markets, the multifamily sector will likely see a vacancy rate remain steady, with rent rising slowly at 3 percent per year. Supported by the ongoing stretch of outstanding job creation since 2010, commercial real estate and vacancy rates, in particular, are expected to be stable across the country. Warehouse vacancy will continue to decrease because of a strong appetite for industrial space, specifically ecommerce and trade.

Yun went on to say that high-tech company expansions, such as Amazon, will have a large effect on regions across the country.

"Depending on where these secondary headquarters land, nearby property owners will experience robust growth and property prices, but renters will indirectly feel a pinch of much higher rent payments," Yun said. Severino joined Yun onstage and delved into the global economy and the performance of major property types.

"Global economic growth is accelerating, and 2018 sees the world’s economic trains running strongly together. Interest rates are also going up but remain low by historic standards," Severino said. Severino anticipates a strong performance from all sectors of commercial real estate, with supply starting to catch up with demand.

"It is important to note that commercial practitioners may be getting too comfortable with the large demand for construction and the great performance of the industrial sector. Furthermore, the suburban market is seeing more activity compared to downtown," Severino said.

Yun also highlighted the current tax reform plan in front of Congress and the impact it may have on the commercial market.

"The industry holds the 1031 like-kind exchange sacred and, currently, it is included in the tax code plan for commercial real estate. This is great news for commercial practitioners and for the industry at large," Yun said.

For more information, please visit www.nar.realtor/commercial.



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Wednesday, October 18, 2017

Commercial Real Estate to Grow 'Moderately' Through 2019


RECBL - Cash Buyers Lists
Commercial Real Estate to Grow 'Moderately' Through 2019

RECBL - Real Estate News

A recent forecast out of the Urban Land Institutes (ULI) Center for Capital Markets and Real Estate predicts moderate growth for the commercial real estate industry through 2019.

The ULI Real Estate Economic Forecast, a semi-annual projection based on survey responses, anticipates commercial real estate will see $450 billion in transaction volume in 2017 and $427 billion in volume in 2018 and 2019.

All are declines from the previous year. On the broader economy, the forecast expects GDP to grow 2.2 percent in 2017 and 2.4 percent in 2018.

"Respondents to the October 2017 ULI Real Estate Economic Forecast downplayed the possibility of a spike in economic growth through 2019," said William Maher, director of North American Strategy and Research at LaSalle Investment Management, leader at ULI and a survey respondent. "At the same time, they confirmed that the current expansion could become the longest one since records were kept starting in the 19th century.

While real estate will benefit from continued growth, U.S. property markets are close to equilibrium, which should result in inflationary rent growth and returns in the single digits for core real estate and equity real estate investment trusts (REITs)."

The forecast expects 960,000 single-family housing starts in 2019, and home prices to appreciate an average 4.8 percent through 2019.

Source: Urban Land Institute (ULI)



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