Monthly Archives: September 2015
Well-established formats for lifestyle centers and malls are falling by the wayside as commercial real estate developers seek to infuse U.S. retail space with office space and residential living space to attract tech-savvy millennials, as well as affluent baby boomers, according to a report from the CoStar Group.
Developers of malls and lifestyle centers in several states are just as interested in leasing space to anchor tenants such as multi-screen or IMAX cinemaplexes and Apple Stores as they are in adding a blend of creative office space and apartments to their multi-million-dollar projects.
The demographically driven changes are aimed at attracting the millennial generation’s 80 million consumers, who are the largest and fastest-growing retail consumer segment in the U.S. Although baby boomers continue to exert the greatest buying power in the retail industry, millennials’ influence on the industry is massive.
Developers of U.S. retail space are eager to cater to millennials, who are categorized as social beings who prefer a walkable mixed-use environment where they can exercise, eat, shop, visit with friends, see a movie and more. Adding office and apartment components to lifestyle centers and malls is one avenue developers are exploring to create new income streams that will replace dollars lost to online shopping.
Projects in the works now are described as mixed-use, open-air malls that eventually will have office space and residential units added to the mix. In some cases, hotels may be components of projects, which include both new construction and exiting centers.
The best of these new U.S. retail space projects are both the commercial and the social and civic centers of the community, with the design for outdoor space following traditional urban planning principles, according to one developer.
But while mixed use might be ideal for one community, more traditional lifestyle centers may make more sense in another, experts warn. The key to making the determination lies in understanding the community’s demographic and economic base and knowing what customers want.
Although millennials are often viewed as hip urban dwellers, the Urban Land Institute says only 13 percent of Gen Yers live in or near downtowns. The majority live in city neighborhoods or the suburbs.
The most influential millennials are the oldest ones, now in their mid- to late-thirties and entering the phase of life where they are having children and creating households. About 35 percent of millennials currently own a home, the report said.
The changing demographics also may have an influence on suburban office parks, where some landlords are looking to add residential and retail space in response to tenant demand for ways to attract potential employees in their 20s and 30s in the face of an increasingly competitive job market.
For more information about Philly retail space, Philly office space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (firstname.lastname@example.org) or Leor Hemo (email@example.com) at Wolf Commercial Real Estate, a premier Philadelphia commercial real estate brokerage firm that specializes in Philly retail space and Philly office space.
Wolf Commercial Real Estate is a Philadelphia commercial real estate broker that offers a full range of Philadelphia commercial real estate listings and services, marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.
Wolf Commercial Real Estate, a Philadelphia commercial real estate broker that specializes in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking Philly office space or Philly retail space with the Philadelphia commercial properties that best meet their needs. As experts in Philadelphia commercial real estate listings and services, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals. If you are looking for Philly retail space or Philly office space for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.
Please visit our websites for a full listing of South Jersey and Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.
By Brian Blaston, Hardenbergh Insurance Group – September 25, 2015
So, you’ve decided to go green by buying or renting a LEED-certified building for your business. In addition to a reputational boost for taking strides to help the environment, you will likely also be saving on heating and electricity costs. The next step is to look at your insurance policies and make sure your investment is protected, and that you are covered for the perils associated with green properties and buildings.
Because going green is a still a relatively new phenomenon, your commercial general liability (CGL) policy probably does not specifically address these risks or indicate whether or not they are covered. It is always best to take a close look at your policy to determine if your plans to go green cause any changes. Learn about additional coverage options for green buyers or renters here.
Maybe you want to go green but are not ready or able to fully convert yet. One option that is becoming more common is green upgrade property coverages. These policy additions would allow you to upgrade to a green-certified level in the event of a physical property loss. Update-to-green coverage benefits you because your building has the potential to be even more efficient after a loss, and it puts you at a lower risk of filing construction defect claims in the future because of the rigorous and careful LEED certification process.
BREACH OF WARRANTEE/BREACH OF CONTRACT
Though a typical CGL policy will cover you for bodily injury, property damage liability and personal injury, breach of warranty and breach of contract are generally excluded. However, when you are a tenant in or an owner of a green- certified building, these are two or the most important kinds of coverages to have.
One of the most common claims against property owners or managers is that after construction or years down the road, the green building is not living up to promised standards. The building may not qualify for the LEED certification level promised, or savings on energy may not be as high as marketing and advertising materials guaranteed. You will need additional coverage beyond your CGL policy to protect yourself in this case.
Similarly, problems with tax credits and incentives will require breach of warrantee or breach of contract coverage. If a developer or owner tells you, the prospective buyer or tenant, that they will be able to get a certain number of carbon credits and later cannot deliver, you will need proper coverage to retain the promised return on investment. The amount of necessary coverage will depend on how energy efficient the building is or strives to be.
COVERAGE FOR NON-PERFORMANCE INVESTIGATIONS
If a problem ever arises with your green building, you will need to find out who is at fault—the design professional, developer, owner or contractor. Doing so will require extensive testing of the building and its systems to figure out why it is performing under the promised standard. As CGL policies are crafted now, the cost of this investigation may not be covered. CGL policies usually require an occurrence or event—a specific incident where damages happened—to respond. In most green building cases, there is no damage to the structure, it just does not perform as efficiently or effectively as the contract specifies. Therefore, you should consider adding extra protection to your policy that would pay for the cost of finding the at-fault party, which can get extremely expensive if it requires looking into design and construction elements.
NEW COVERAGES EMERGING
Green building is still making its way into the insurance world. There are still grey areas, and insurers are debating whether green buildings add extra perils or reduce risks overall. Some carriers are even beginning to offer discounts for those businesses who decide to become more environmentally responsible. When in doubt about what aspects of your green building investment are covered, turn to Hardenbergh Insurance Group for guidance. Call (856) 489-9100 today to make us part of your initiative to go green.
For more information, contact
Commercial Lines – Manager
Hardenbergh Insurance Group
phone: 856.489.9100 x 139
U.S. banks are continuing to meet the rising demand for commercial real estate lending in key markets, according to a new report from the CoStar Group. Total commercial real estate loans issued by all FDIC-insured commercial banks and savings institutions reached $1.75 trillion in June 2015, a 7.1% increase from a year ago. In comparison, commercial real estate lending stood at $1.63 million in June 2007 at the peak of the commercial real estate markets.
The biggest hike came in construction and development loans which soared to $256 billion, up $33 billion or 15% form a year ago. Multifamily loan balances rose 11.8% over the past 12 months, reaching $315 billion by the end of second quarter 2015, according to the FDIC. The biggest segment of commercial real estate loans came in other non-farm non-residential property loans, which totaled $688 billion end the end of the second quarter, up 6% year over year.
One area that did not follow the trend was in the segment for loans totaling $1 million or less for small businesses backed by nonfarm, nonresidential properties. Small business lending in this area was down 1.6% in the past year, or 30,284 fewer loans.
While banks continued to back more commercial real estate loans, the asset quality of the commercial real estate loans continued to improve. Net commercial real estate loan losses dropped over the past year for the 20th consecutive quarter. In the first half of the year, banks charged off only $1.2 billion in commercial real estate loans, a decline of 31% year over year.
Delinquent commercial real estate loan balances at U.S. banks declined for the 21st consecutive quarter at the end of the second quarter, reaching $22.35 billion, a drop of 30% in the past 12 months. Banks held $10.4 billion in foreclosed commercial real estate properties at the end of June, a decline of 26% year over year. Half of that total dollar volume consisted of foreclosed construction and development properties.
Bank profits also continued to climb in the second quarter, with a reported aggregate net income of $43 billion, an increase of $2.9 billion or 7.3% from the second quarter 2014, the FDIC noted. It was the highest quarterly income ever recorded.
Overall, bankers reported higher profits, improved asset quality and increased lending in the second quarter, the FDIC reported. Nearly 60% said quarterly net income grew, while less than 6% saw a net loss. The number of banks categorized as problem banks fell in the second quarter 2015 from 253 to 228, the lowest number in seven year and a stark drop from the high of 888 in first quarter 2011. Only one bank failed in the quarter.
Despite this improved environment, the FDIC noted that low interest rates remain a challenge to the banking industry.
For more information about Philly office space, Philly retail space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (firstname.lastname@example.org), Leor Hemo (email@example.com) or Lee Fein (215-799-6900-office; 215-206-5580-cell; firstname.lastname@example.org) at Wolf Commercial Real Estate, a premier Philadelphia commercial real estate broker with expertise in Philly office space.
Wolf Commercial Real Estate is a Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.
Wolf Commercial Real Estate, a Philadelphia commercial real estate broker that specializes in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philly office space or new Philly retail space with the Philadelphia commercial properties that best meets their needs. As experts in Philadelphia commercial real estate listings and services, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals. If you are looking for Philly office space or Philly retail space for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.
Please visit our websites for a full listing of South Jersey and Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.
By: Moshe Hildeshaim, Director of Operations, Madison SPECS September 11, 2015
The IRS recently confirmed the newest regulations which govern the treatment of expenses incurred in improving tangible property. The regulations determine how to break down the costs related to repairs or capital improvements. These rules will affect taxpayers who acquire or improve tangible property.
According to the new regulations, structural assets may be broken down in greater detail for future writeoff benefits. When the taxpayer is determining if improvements were made, the building structure and each building system can be considered separately.
The building is evaluated and broken out into units of property (UOP) according to nine Enumerated Building Systems.
• HVAC systems, including motors, compressors, boilers, furnace, chillers, pipes, ducts and radiators.
• Plumbing systems, including pipes, drains, valves, sinks, bathtubs, toilets, water and sanitary sewer collection equipment and site utility equipment.
• Electrical Systems, including wiring, outlets, junction boxes, lighting fixtures and associated connectors.
• Fire Protections Systems, including sensing devices, computer controls, sprinkler heads, sprinkler mains, associated piping or plumbing, pumps, visual and audible alarms, alarm control panels, heat and smoke detection devices, fire escapes, fire doors, emergency exit lighting and signage, and firefighting equipment.
• Security systems, window and door locks, security cameras, recorders, monitors, motion detectors, security lighting, alarm systems, and entry and access systems.
• Gas distribution systems
The new regulations expand the definition of disposition of structural property. The amount paid can be considered an improvement if it is made to either the building structure or one of the building systems. It is considered an improvement to a unit of property when a property owner spends money on the property that results in the betterment of the property, restoration of the property, or adaption of the property to a new or different use.
The retirement of an individual structural component in the building is eligible for a write-off of the net tax value of the asset. This framework for capitalization requires a detailed analysis of a taxpayer’s facts and circumstances. A thorough cost segregation study can determine those building systems which may be eligible. Property owners can also take advantage of total or partial structural dispositions. After conducting an initial cost segregation study with UOP break downs, property owners can avail themselves of total or partial structural disposition of any impaired asset by filing a Form 3115. The Form 3115 is an application for change in accounting method which can be filed as a stand alone disposition, or in conjunction with a look-back study. A proper application of the new regulations can help property owners to minimize their income taxes and increase cash flow.
About the Author
Moshe S. Hildeshaim is Director of Operations for Madison SPECS, LLC., a division of Madison Commercial Real Estate Services. In that capacity, Mr. Hildeshaim assigns, oversees and reviews all cost segregation studies for Madison SPECS, deals with client needs and provides direction on all sales and marketing efforts for the division. Prior to joining Madison SPECS, Mr. Hildeshaim was with BCRS Associates, a boutique tax practice located in New York City where he serviced high-net-worth individuals with their specific tax needs. Mr. Hildeshaim graduated from Fairleigh Dickinson University with a Master’s degree in accounting.
For more information, contact:
Carlos Alvarez, Regional Business Director
Madison Commercial Real Estate Services
By: David Leff & Whit McGinley of Corporate Interiors September 4, 2015
What do hypertension, sleep disorders, cardiovascular disease, impaired cognition and being annoyed have in common? All are possible outcomes of too much noise around us. Many people complain about noise, but fewer realize how harmful it can be.
Defined by scientists as “unwanted sound” – noise puts a burden on our hearts and brains, as well as our ears, according to research in the field of environmental noise.
In offices, irritating noise can come from many different sources: air conditioning, obnoxious ringtones, construction, and unsophisticated sound-masking systems and-especially-other people’s voices. Noisy environments tend to get worse over time and are a source of disruption in the workplace, affecting worker happiness and productivity.
Studies have shown that annoyance is the most common response to noise. We are easily set off by noise because we have been programmed to be aware of sounds as possible dangers. We are constantly alert to our environment, and noise easily makes us uneasy. Lab studies on humans as well as animals have shown that exposure to noise arouses the nervous system, causing rising blood pressure and the release of stress hormones. Over time, these instinctive responses can stress the cardiovascular system and give rise to negative outcomes such as anger and exhaustion.
As if those effects aren’t bad enough, cognitive impairment is another non-auditory result of noise that researchers have been studying. More than 20 studies in multiple countries have shown that environmental noise negatively affects school children’s learning.
Without effective acoustical solutions, experts say, the negative impacts of day-to-day noise in office environments can be significant.
Cognitively, there is plenty of research that shows that the most destructive sound of all is other people’s conversations. The level of noise for the type of work that is supposed to happen in the workplace is an issue. In some open-plan offices the level of noise can make cognitively demanding work difficult.
The recommended noise level for intellectual work pertains to participating in discussions and meetings as well as working solo.
In other words, in noisy environments with poor acoustics, workers can just as easily get stressed by trying to hear others as by trying not to hear others-a lose/lose proposition.
The solution is a variety of workplace environments, each designed with consciousness of sound for the task and the people using the spaces. Good acoustics can reduce stress in the workplace and make environments more productive.
Sound masking is designed to cover:
• Human voice in corporate, healthcare and similar worksettings
• Light office sounds such as keyboard typing and papers shuffling
• Some echoes in reverberant spaces
• Light traffic noise
There are many different options for sound masking that can be tailored to your specific needs. Some available key features of sound masking are:
• Direct field speaker technology which provides a more uniform sound masking level.
• Paging and music capability integrated to the system.
• Simply layout and installation.
• Flexibility for installation in unique spaces such as open plenum or drywall ceilings.
• Emitters are plug and play and do not require tuning.
• Control modules allow up to five different zones with coverage up to 180.000 ft2.
Corporate Interiors is an industry leading provider of sound masking and acoustics. Our Architectural Solutions Engineers are experts in integrating technology and furniture with an innovative construction process to create a more effective and productive workplace.
David Leff – Workplace Consultant
Whit McGinley – Achitectural Products Specialist