Chat with us, powered by LiveChat

Tag Archives: Wolf Commercial Real Estate


Open Office Etiquette

Open Office PoliciesThe open office presents some etiquette concerns. Let’s examine Policies, Protocol and Politeness as it relates to the open office environment. Cost considerations and space utilization can direct an organization’s decision to move from private to mostly open space. However, achieving strategic goals and supporting a firm’s mission, brand message and culture often play a more significant role. By improving collaboration and communication, flattening hierarchies and eliminating siloes, open environments can catalyze the innovation businesses seek.

Removing barriers and creating a more efficient footprint brings additional benefits. Open office environments can enhance workplace flexibility and provide the agility to meet evolving business needs. Infusing a workplace with natural daylight helps achieve sustainability and wellness initiatives.

Download Printable Article (PDF) >>>

Transforming a workplace to a more open setting creates an opportunity to drive other organizational changes.
A successful approach to the shift is pragmatic, holistic and begins well in advance of occupancy. It continues through the actual transition and includes regular updates and checkins. Developing and introducing appropriate guidelines, expectations and etiquette to the workforce will help streamline your firm’s adjustment to its new environment, minimizing downtime and lowering stress levels. This paper provides advice on the process for developing workplace protocols and presents an example of guidelines for a hypothetical company that addresses some typical hot button issues.

SIMPLE PROCESS FOR DEVELOPING WORKPLACE PROTOCOLS

Before the move

Gain leadership support and sponsorship. An effective shift begins at the top. Active and visible leaders play a critical role in times of change. It is important to involve them early in the process as they provide the authority and influence necessary for a successful workplace change. An employee’s direct manager also plays a significant role in providing specific information and reinforcing change principles.

Introduce the open office concept. Using multiple forms of media and approaches, educate employees on the changes taking place and the business reasons for the change. Maintain a positive, informative tone while highlighting ways it will benefit them as well as the organization.

Initiate a transition from the old environment to the new. Provide the support and tools necessary to assist employees in the change. For example, shredding and scanning materials ease the move to digital records. Consider offering incentives or sponsoring a company-wide contest for purging physical files.

Involve employees in creating guidelines. Including employees in the process will further engage them, solidify “buy-in” and sidestep a perception that change is “being done to them.” An appropriate level of engagement can give employees a voice, without setting unrealistic expectations of influence.

Assemble a small group of employees who represent different areas of the business that will be moving to the
new space.

Using the sample guidelines we have provided, brainstorm a list of no more than 5 to 8 issues relative to adopting an open workplace that the group feels should be addressed. Within that list, include these three areas of concern: audible distractions, privacy and uninvited interruptions.

Employee representatives can then solicit input from co-workers on the specific issues, such as common sources of noise in the office, and the collective team can create a short “rule” or guideline that addresses each issue. Some issues may require more than one guideline.

• Consult with Human Resources to assure compliance. Your Human Resources representative should be
involved to ensure that any guidelines you create align with existing policies. • Confirm that the appropriate infrastructure is in place. Security and shared spaces reservation systems should be functional; individual and team workspaces should be fully equipped and accessible. Storage and supplies should be available. All elements of technology, including hardware, power and connectivity, must be available, serviceable and reliable. Be sure to provide proper training to employees and managers on how to use new spaces and technologies.

DURING THE MOVE

• Deliver guidelines. Use the release of guidelines as an opportunity to reiterate your message and celebrate the mission. Depending on the number of employees involved in the change, you can incorporate the guidelines with other training meetings related to the move. If that is not practical, the guidelines can be posted on the corporate intranet and/or presented via “lunch & learn,” webinar, town hall or other method appropriate to your organization’s size and culture. Guidelines should also be a component of onboarding materials for new hires.

• Make the change a positive experience. Celebrating the move process with events and consistent visuals and messaging acts to reinforce a positive experience. Consider providing a welcome letter from leadership and a small office-related gift to each employee on move day.

• Distribute all essential materials and guides. In addition to the sample guidelines presented, develop a printed series of handouts such as office plans, technology instructions and codes, and any other needed guides that employees can refer to.

• On move day, have staff on-hand to resolve problems and answer questions.

• Lead by example. Managing a successful change starts in the C-suite. Encourage all levels of the organization to follow the suggested guidelines on a daily basis. Users will be more inclined to accept their new workstyle upon seeing senior leaders adopting the new workplace norms.

AFTER THE MOVE

• Monitor and adjust. Assess the successes and shortcomings of the change process. There is no substitute for regular face-to face conversations and walking around to see if policies are working and being adhered to.
Build in means for users to submit feedback on how they feel the guidelines are working after about 90 days. Based on insights learned, policies can be tweaked as needed.

A well-executed plan will aid in acceptance of a new environment. Moreover, knowing their input was considered and future feedback welcomed will engage and encourage employees to embrace their new space.

CLICK HERE TO SEE THE SAMPLE GUIDELINES FOR OPEN OFFICE POLICIES, PROTOCOL AND POLITENESS INCLUDED WITH THIS ARTICLE

For More Information, Contact

Share

Mall Outlook Darkens as Online Sales Surge

A couple of the more than 2,200 numbers buried deep in this month’s Census Bureau report on retail sales in the national and Philadelphia commercial real estate markets may add to mounting concerns for U.S. shopping mall investors about the growing threat from e-commerce.

The report shows that for the first time, non-store retail sales (including e-commerce sales) in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – totaled more than those for the department stores that anchor most traditional Class B and Class C malls.

This Co-Star report involving U.S. and Philadelphia commercial properties is being made through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.

Non-store retail sales in February, the most recent month reported, totaled $59.77 billion involving U.S. and Philadelphia commercial real estate listings. E-commerce sales account for about 88 percent of that volume.

The total for general merchandise national and Philadelphia commercial real estate properties housing retailers, the category that includes department stores, totaled $59.74 billion. Ten years ago, general merchandise store sales outpaced non-store sales by 47 percent.

The figures contribute more gust to the intensifying headwinds for shopping mall investors in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – whether they are property owners, lenders or real estate investment trust and commercial mortgage investors.

“Class B and C malls in particular are driving weaker loan performance as they generally have less favorable locations, weaker anchor profiles and are particularly vulnerable to competition, both from other malls and internet sales,” Fitch analysts said in a recent report. “Losses of foot traffic and sales have led to additional store closures with increasing mall vacancies affecting property-level cash flow, thus putting pressure on loan performance.”

Overall, there have been more than 5,800 store closings reported this year among national and Philadelphia commercial real estate listings. That elevated level of closings could lead to a widening gap in performance between property owners with more Class A malls than those with more Class B and Class C malls, Morgan Stanley & Co. analysts reported this week in their outlook for upcoming REIT first quarter earnings results.

For more information about Philly office space, Philly retail space, and Philly industrial space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading Philadelphia commercial real estate broker that specializes in Philly office space, Philly retail space and Philly industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, property management services, and 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 with expertise in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philly office space, Philly retail space or Philly industrial 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, Philly retail space or Philly industrial 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.

Share

Protecting Vacant Real Estate

Protecting Vacant Real Estate

In a time when layoffs and foreclosures are widespread, your firm may be forced to manage vacant real estate. The insurance risks and liabilities associated with owning vacant property can be extensive, and to ensure you are adequately protected, it is important to know these risks. In addition to purchasing comprehensive insurance coverage, there are numerous preventive strategies for maintaining vacant properties to reduce risk and liability.

Download Printable Article (PDF) >>>

Potential Risks of Vacant Real Estate

There are a host of risks and concerns associated with owning vacant real estate. Vacant buildings are an obvious target for theft, trespassing and vandalism. For example, the rising cost of copper has given rise to an increase in the theft of copper pipes from vacant properties. In addition to any loss or property damage that may occur, keep in mind that the owner of a property can be held liable for criminal activities or accidents that take place on the premises.

In addition, vacant properties are susceptible to undetected damages, such as fire, water damage, electrical explosions, wind or hail damage, and mold. A study by the U.S. Fire Administration shows that approximately 30,000 fires occur every year in vacant buildings, costing $900 million annually in direct property damage. Many of these incidents occur in vacant buildings due to small, undetected maintenance issues; someone in an occupied building would have recognized and handled the problem before it caused a larger loss.

In certain facilities, there may also be environmental hazards that the owner needs to consider. Facilities that are used to store chemicals or other pollutants should ensure that such materials are removed or securely stored— the owner may be held liable for any hazardous materials that contaminate groundwater or other nearby natural resources. Also, underground fuel tanks present serious challenges and thus should be frequently and carefully inspected by professionals.

Other Ways to Mitigate Risk with Vacant Real Estate

In addition to extending coverage, there are some simple steps that owners of vacant property can take to limit their risk and liability.

Prevent vandalism: Notify local authorities of vacated properties so they can watch for criminal behavior.

Maintain an “occupied” appearance: mow the lawn, have mail forwarded or picked up regularly and install light timers and/or a security system.

Limit liability: Make sure the property is free from significant hazards (e.g., broken railings or steps, broken windows) that could cause injuries to anyone on the property—this could include police officers, maintenance workers, firefighters or even trespassers.

Avoid damage: Performing regular maintenance on the property can decrease the odds of sustaining damage. Make sure the heating system and chimney are cleaned and inspected regularly. Have the plumbing system winterized to prevent frozen pipes. Periodically inspect roof, insulation, attic, basement, gutters and other areas of the property for any necessary repairs, mold, damage or other problems. Consider installing smoke detectors that are tied to a centrally monitored fire alarm system so the fire department will be notified in the case of an alarm. Remove all access material and combustibles from in and around the building.

Insuring Vacant Residential Properties

Most insurance companies include a clause that the homeowner’s insurance will expire if a home is left vacant for more than 30 or 60 days. This leaves the property owner financially vulnerable for all previously noted risk. However, many insurance companies do offer vacant property insurance, also known as vacant building insurance or vacant dwelling insurance.

Insuring Vacant Commercial Buildings

Vacant commercial buildings are more difficult to insure because they present greater risks, including increased chance of theft, malicious damage and burst pipes. It is important to disclose all relevant facts when seeking insurance, including the reason for the property’s vacancy and a schedule of any work to be done on the property. Because of the increased risks and liability associated with a vacant property, these types of insurance tend to be costly—ranging from one and a half to five times the cost of a property insurance policy. It is important to look beyond the price and consider the suitability and comprehensiveness of the coverage being purchased.

For more information about vacant property insurance and other strategies to help protect your assets and mitigate loss from vacant real estate, contact us today at (856) 489-9100.

vacant-real-estateBrian Blaston
Commercial Lines – Manager
Hardenbergh Insurance Group
phone: 856.489.9100 x 139
fax: 856.673.5955
www.hig.net

Share

Preventing the Most Common Cause of Property Loss

the Most Common Cause of Property LossWhether you count your career in months, years or decades…it doesn’t take much time to see this pattern: the overwhelming majority of the property losses you face are liquid based events. Your “Location, Location, Location” will be interrupted by “Water, Water, Water” because it is the most common cause of property loss. The risk is present year round, whether it’s a flood that’s weather driven, or it rains inside your space due to a plumbing break or roof leak. Due to its threat level to life safety, fire receives our attention to protocols by way of building design, code compliance, annual inspections, drills, materials selection and more. However, the rate of incidence of fire is extremely low compared with the frequency, and high cost of property damage and business interruption caused by water. With this in mind, it’s a great return on your investment of time, to initiate or review your team’s plan for response.

Download Printable Article (Preventing the Most Common Cause of Property Loss) >>>

Preventing the Most Common Cause of Property Loss

HOW READY IS YOUR STAFF TO CONTAIN A WATER LOSS? (the most common cause of property loss)

6 Quick Questions before the next emergency

• Is my staff aware of the Safety hazards of a water event, and how to safely navigate them?
• Is a diverse cross-section of my staff knowledgeable and trained in how to shut off the water?
• Are key 24/7 contacts for subs such as plumbers, electricians, alarm and remediation contractors at your fingertips and in hard copy? Is the information published and posted in a logical, accessible manner?
• Do I have an app with a closed group, or group text pre-loaded for my crisis team and I to communicate during an emergency?
• Is my staff trained in how to divert water in a multi-floor water release, and how to conduct an assessment of the extent of damages?
• Do we have basic tools on hand such as shop vacs for extraction, plastic sheeting to cover and protect contents, and clear bags to remove (but not dispose of) water impacted items?

SAFETY FIRST

• Make certain the area is safe for entry, free of electrical hazards. A licensed electrician is required to manage the following:
• Water impacted basements housing electrical and HVAC
• Equipment and appliances not rated for submersion
• Any wiring, outlets, and panels that have come in contact with water
• Coordinate with a licensed mechanical contractor to inspect and verify HVAC equipment if affected by water damage.
• Contact Alarm & Elevator contractors as needed.
• Determine Category of Water Source (Clean or Contaminated).
• If Flood or Sewage water, PPE and environmental testing are recommended.

ADDRESS THE SOURCE

Address the source and stop water from flowing into the building. Multiple people in various departments should be trained in how to shut off the water. Photomapping and signage to demonstrate the location and instructions for shut off valves is key.

INSPECTION & INITIAL CLEANUP

• A Thorough Assessment is the Foundation of a Successful Recovery. Missed areas and issues create costly secondary damage down the road.
• Direct and/or capture water in a manner that is efficient and prevents further infiltration and damage. For example, when water pouring from floor to floor, direct water into one stream through one deliberate opening in the ceiling tiles, instead of many points.
• Walk the building to determine extent of damage. Use the “360 degrees” approach. Work from the source room/area, up & down, side-to-side, follow gravity as water seeks its lowest point.
• Inspection Tools Include: High powered flashlight, Hygrometer (Temp & Humidity Monitor), Moisture Meter, Thermal Imaging camera, painter’s tape for waterlines & mark out and floor plans.
• Document via photos & video.
• Move sensitive equipment, cover & protect contents.
• Extract standing water, set drying equipment.
• Manipulate contents in a manner to promote proper drying. For example, move lateral cabinets away from walls, roll back carpet and carpet pad.
• Remove saturated contents, do NOT dispose, document, allow insurance adjuster to determine if salvageable. Save potential faulty parts and subcontractor logs in the event subrogration (legal means of seeking other another party’s resources for financial recovery) measures apply.

COMMUNICATION

• Review your Organizations Chain of Command & Procedures for Internal Reporting.
• Make sure your “phone/text tree” and alert systems are ready to activate your response, and to provide notifications to management, staff and occupants.
Tip: A few basic notification templates developed in advance will go a long way towards saving time and stress during a crisis.

For more information about the most common cause of property loss, Contact:

Christine Messina

 

Christine Messina, Vice President
AllRisk Property Damage Experts
TeamAllRisk.com
877.247.5252 24 Hrs
609.634.9960 cell
christine@allriskinc.com
Connect with us!
https://www.linkedin.com/in/christine-messina-b836073

Share

Baby Boomers, Retailers Could Change Commercial Lending

Some of the industry’s top commercial real estate mortgage bankers expect business to stay just as strong in the national and Philadelphia commercial real estate markets in 2019 as it was in the past two years even as the economy shows signs of slowing.

The Mortgage Bankers Association predicts loan origination in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – will only reach $530 billion in 2019, essentially on par with 2017 and 2018.

This report involving U.S. and Philadelphia commercial properties is being made through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.

The amount of financing in the fourth quarter of 2018 beat the year-earlier period by 14 percent, the group said. It suggests that commercial and apartment lenders apparently have not been scared off by government shutdowns, stock market volatility, looming global trade wars and other headline events. And this follows almost a decade of recovery involving U.S. and Philadelphia commercial real estate listings tipped from one of the nation’s worst real estate collapses, as analysts and economists wonder how long this recuperation can last.

Indications for the immediate future of both national and Philadelphia commercial real estate properties are for steady lending activity, bankers agree.

For 2018, “the market as a whole ended the year roughly flat compared to 2017, continuing a plateau we’ve seen in mortgage borrowing and lending since 2015,” said Jamie Woodwell, vice president of commercial research for the mortgage bankers’ group.

These were among the key points from the Washington, D.C.-based trade group, which represents lenders, investors, developers, and others involved in commercial real estate financing.

Financiers avoid retail: Blame the rise of ecommerce and retail chain store closings, but MBA figures show loans in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – posting relatively anemic growth in the past year. They were up 1 percent in the fourth quarter from a year earlier in 2017, compared with 32 percent growth for apartment loans and 28 percent growth for industrial loans.

Aging boomers haven’t yet spurred a healthcare lending boom: US. growth for healthcare and senior-housing-related lending was up 61 percent year-over-year for the fourth quarter, but analysts said aging baby boomers still comprise only a fraction of development and lending activity.

As banks get queasy, others stand by: Even if banks dealing with national and Philadelphia commercial real estate listings are getting skittish about how long the good times can last, a multitude of other financiers stand ready to step in, and the fastest growing contingent includes debt funds. Numerous prominent firms in financial management and private equity have established funds geared primarily to lending to third-party commercial investors and developers, and they are finding rewards even in a tight interest rate environment.

For more information about Philly office space, Philly retail space, and Philly industrial space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading Philadelphia commercial real estate broker that specializes in Philly office space, Philly retail space and Philly industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, property management services, and 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 with expertise in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philly office space, Philly retail space or Philly industrial 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, Philly retail space or Philly industrial 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.

Share

Office Space Decommissioning – The Overlooked Embedded Cost of Moving

Office Space DecommissioningThis article talks about how important Office Space Decommissioning is when moving to a new space.

Here’s a secret that no one ever tells you about moving – the bulk of your relocation costs are NOT transitioning your belongings to the new space. The fact is, office space decommissioning is a significant factor in your budget, sometimes adding up to 3-5 times that of the actual relocation itself.

Office Space Decommissioning Is More Than Just Moving Out

All too often, clients miss the not so obvious “other move” when it comes to their office relocation. Clients split their time and attention operating their core business while also focusing on the “new” space and the endless questions, details, and decisions that are required to get that space ready to unveil. The “old” space, as well as the furniture in it, is often overlooked. If you think you can just leave the furniture and the cleaning for the landlord, you are mistaken!

The problem is that neglecting to properly decommission the old office space leaves you exposed to a wealth of unnecessary costs.
The majority of commercial leases contain very specific requirements as to how the old space needs to be turned back over to the landlord. If not, it’s your deposit that hangs in the balance, just waiting to satisfy those obligations you signed off on in your original lease long ago. The removal of unwanted furniture and equipment can be an expensive undertaking, especially if not handled properly, and your landlord is well within his rights to apply your deposit to those costs.

Most commercial leases require that the occupied space be left “broom swept.” This means that all contents, freestanding furniture, workstations, office/IT equipment, shelving, racking, etc., must be completely removed, and all floors left cleared of debris and vacuumed. That also means following through on tiny details like removing any data/IT cabling that you’ve added while in residence. Overall, you need to return the space back to its original condition prior to your occupancy. Your lease should spell out the specific requirements and standards you will be held to.

So how do you protect your deposit? You need a detailed plan and a schedule! The easiest way to satisfy your lease obligations and get your deposit back is to consult a professional who is well-versed in handling the office decommissioning process. When you partner with the right commercial removal company or transition management company, they can help you properly navigate and negotiate your exit. Most standard moving companies aren’t experienced enough to guide you through this process, and handling it yourself elevates your “soft cost exposure.” Most people over value what they have, don’t fully understand what they’re required to do, and then end up running out of time. The reality is that there is a very tight timeline when you move and the space needs to be vacated. Why wait on a potential buyer to purchase unwanted assets, when it elevates your risk of exceeding that timeline and paying a costly penalty to your former landlord? You need to understand the cost of the distraction to your core business while focusing on something that is only likely to yield a marginal return.

When you value the assets you will not be moving to your new space, factor in the time it takes to liquidate them. It’s often best to hire an expert to advocate for your bottom line, and help you sort it all out in an efficient and expeditious manner. There are three outcomes in an office decommissioning: net positive, net zero, and net negative. To achieve “net positive,” the liquidation of furniture and/or equipment yields a positive cash return and is clearly the optimal outcome to strive for. To attain “net zero,” you can choose to donate contents to a local charity for re-purpose, or have a third-party company remove them at no cost. While you don’t make any money on the transaction, you save the potential cost of having to remove the contents yourself. For those items that simply don’t have much or any value, and need to either be recycled or disposed, you’ll find yourself in a “net negative”
position. Although there’s a nominal return for recycled items, the cost for disposing valueless items leaves you with a fee that an office decommissioning expert can help minimize. You don’t want to incur unnecessary storage costs for assets that won’t garner you a net positive return on that investment.

Quite frankly, there is an enormous difference between a transition management expert and a standard moving company. Before you sign with a relocation company, discuss with them the decommissioning services that they provide. Pin down the price for the services that you need, and compare that cost with hiring various removal providers. Most commercial movers overlook office space decommissioning, and this portion of the job can cost many times your relocation fee depending on how much of your existing furniture you will be taking to your new space. Once you have the transition team in place, establish a facility decommissioning plan and lock in hard dates and deadlines.

Make sure that the company is reliable, and that the personnel have the necessary skills to execute the plan. Often times, it is not worth the risk of going with the vendor with the lowest bid, as the cost for additional “buy back days” at your old space can quickly eclipse those cheap vendor savings.

So what is the takeaway from all of this? Simply that companies that focus all their time and effort on “hard costs” of relocation will be blindsided by the much more important “soft costs” of the move. A transition management expert minimizes your company’s exposure to lost revenue by reducing the distraction to your core business and curtailing downtime. Consult with an expert, and the savings on office space decommissioning will more than likely pay for the actual relocation.

About Argosy Management Group, LLC
Argosy Management Group (AMG) is a leader in office relocation and logistics project/move management. AMG services companies throughout the U.S. and worldwide. AMG delivers a wide range of comprehensive services: move management and transition planning, space planning and furniture needs, office and industrial relocation and liquidation, storage solutions and asset management, furniture disassembly and installation, and I.T./data center relocation.

AMG

For more information contact:
Shawn O’Neil, Partner
609-744-4112

Paul Sipera
609-760-8312

Argosy Management Group, LLC
7905 Browning Rd., Suite 112
Pennsauken, NJ 08109
www.argosymg.com

 

Share

Commercial Building Life Expectancy Isn’t What It Once Was

Commercial Building Life ExpectancyBuilding life expectancy isn’t what it used to be. What to do with obsolete commercial buildings and how to prevent your portfolio from falling into the trap. Buyers, owners, investors and developers of real estate are facing questions regarding how properties are valued in the current market, especially where there are problems appraising a property’s highest and best use. More specifically, this question focuses on reversion value.

Download Printable Article (PDF) >>>

Commercial Building Life Expectancy – Multiple Cases

Recent Class B or lower valuation projects (as well as some lower level Class A properties) have presented serious, widespread questions from a valuation standpoint. The main question is simple: What should be done with “obsolete” buildings?

Historically, such a question became pertinent only after 50-100 years. Buildings were “built to last,” and most were designed to be updated over time. Part of the reason for that long horizon was that ample land was available for expansion. Another was that zoning was very prescriptive and clearly defined in many ways. Lastly, fixed real estate was a capital-intensive asset class.

In the past five years alone, that question, however, is now being asked about buildings that are only 20 to 30 years old. Many buildings that have been constructed in the last 30 years or so, like suburban office buildings and parks, retail centers and malls, some well located industrial parks and even sports stadiums, now face the wrecking ball because they are, effectively, obsolete. Some investors report that many U.S. submarkets, for a variety of uses, are “under-demolished.”

What is driving Decreased Commercial Building Life Expectancy?

The short answer is technology. The longer answer is human interaction with technology.

Historically, most companies had fairly simple operations and spatial needs, so real estate decisions were driven by location and/or resources, with physical building changes limited by cost and location. The current digital revolution, however, is changing that—literally at the speed of light. Locations are not as “fixed” as they were previously, and businesses’ physical space needs tend to change quickly due to technological shifts. Flexibility will be the key to long-term survival in all industries, including real estate.

Traditionally, real estate has been a fixed asset acquired at high prices compared to most assets. Such requirements mandated long lead times, high fixed costs, significant capital resources, segregation of uses, long-term contracts (i.e., leases and mortgages) and zoning. The industry faces the challenge of adapting fixed physical space needs, and all that goes along with it, to meet the new reality of demand for change at the snap of a finger, and how to underwrite office or other spaces that will likely shift to “creative space” when re-financed (at lower rents, not higher).

Possible Solutions to Decreased Commercial Building Life Expectancy

From a valuation standpoint, there are two traditional factors: zoning/legal issues and physical utility. To maintain real estate flexibility, underwriters, analysts, municipalities and all industries will have to consider:

1. Revised zoning codes that stress density/form over use. The economic lives of buildings are getting shorter and it may be necessary to re-configure space more quickly. This change, however, often runs afoul of local zoning ordinances, minimally, as it relates to uses. If structures in the future are more generic in form, site-specific codes may have to be revised to reflect multiple future uses. By “pre-coding” such code requirements, one of the major impediments to re-development (generically, all permitting costs) can be streamlined for material cost savings and faster re-use. Urban areas already have an advantage in this regard due to greater densities and uses. Suburban areas will need to adapt this concept, or face an even stronger “back to the city” trend than currently in the market. Otherwise, suburban office parks and similar “obsolete concepts” could risk vacancy. All jurisdictions, in order to retain and attract industry—their tax base—will have to re-write zoning laws to allow rapid flexibility.

2. In terms of physical utility, architects and engineers will have to design buildings that can be quickly adapted to alternate uses at a reasonable cost. Aesthetics will still be important. Those who are able to successfully design and build the most flexible buildings first will fare the best. Prime locations will also continue to have great importance. These locations, however, will not be limited strictly to traditional site selection parameters. The key will be how flexible the site and/or building improvements are perceived to be for needed changes due to technological shifts that dramatically alter market demand for that space.

The combination of these elements will require a shorter-term view, and investors and municipalities should incorporate some level of alternate use analysis, even from the original construction date. Underwriters would then have the benefit of downside underwriting (to consider future conversion costs)—on a current basis.

For many years, zoning and functional utility have simply been boxes to check during the valuation process. Moving forward, and given the rapid clip of technological change, it is now time to remove it from a box and think about a real exit strategy beyond the end of a lease or mortgage term.

peter-cordua

Share

Analysts See Strong Warehouse Demand Despite Varied Concerns

Leasing and sales of distribution centers and other industrial properties reached records across the country last year, signaling strengthening demand in the national and Philadelphia commercial real estate markets as shoppers accelerate their shift to buying online.

Industrial activity was robust for a ninth-straight year in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – as overall economic growth and goods consumption drove unprecedented warehouse sales and leasing across the United States in 2018. The data, however, shows some signs pointing to slower growth this year.

This Co-Star report involving U.S. and Philadelphia commercial properties is being made through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.

Investors, meanwhile, continue to pile into industrial space given its strong and consistent occupancy, rent growth, and return on investment. Total sales volume involving U.S. and Philadelphia commercial real estate listings tipped the $100 billion mark in 2018, the highest on record, and industrial sale prices rose about 10 percent over the prior year, an impressive feat this late in the economic cycle and easily the largest increase of all the major property types.

CoStar’s forecast expects new logistics buildings will be completed at a record pace this year as developers try to capture the demand. The research firm is tracking about 275 million square feet of industrial space under construction, equal to about 1.7 percent of the nation’s total supply. That amount of development among national and Philadelphia commercial real estate properties translates into what’s likely to be a high-water mark for new warehouse and distribution building this year to support the delivery of goods to households shopping online.

That’s a change from last year when the amount of new industrial space in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – dipped 11 percent in 2018 from the prior year. Construction finished the year on the upswing, but even that still may be insufficient to meet demand as more retailers move onto online platforms that require more warehouse space.

White demand remains robust, CoStar predicts the vacancy rate among national and Philadelphia commercial real estate listings will gradually rise and rent growth will slow as developers finish new buildings, more space hits the market, and the beneficial effects of tax cuts and fiscal stimulus begin to diminish and cool the economy.

For more information about Philly office space, Philly retail space and Philly industrial space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading Philadelphia commercial real estate broker that specializes in Philly office space, Philly retail space and Philly industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, property management services, and 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 with expertise in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philly office space, Philly retail space or Philly industrial 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, Philly retail space or Philly industrial 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.

Share

A Tenant for Your Commercial Rooftops-Commercial Rooftop Solar Installations

Commercial Rooftop Solar InstallationsCan rooftop solar installations increase the profitability of your commercial buildings? Lets explore your options. Experts say the US is past the point where solar is ‘alternative energy.’ In 2018 alone, a new solar project was installed in the US every 100 seconds. Although regulations and incentives vary state-by-state, commercial real estate owners in all 50 states are taking advantage of the benefits of adding rooftop solar installations to the buildings in their portfolio.

Download Printable Article (PDF) >>>

Up to now, the owner of the real estate also owned the solar system and was responsible for all maintenance. Starting in 2019, this isn’t necessarily the case for commercial real estate owners and investors in New Jersey. Now, commercial real estate owners in NJ can take advantage of Community Solar due to the newly unveiled/ launched NJ Community Solar Pilot program. Real estate owners in other states, such as Rhode Island, New York, and Maryland, have found great success with similar programs.

About the Program:

The Community Solar Energy Pilot Program enables utility customers to participate in a solar energy project that is remotely located from their property and is currently under development. Subscribers from the community pay for subscriptions. Funds from the subscriptions go to a Community Solar Project Owner or a Subscription Organization. The solar energy from that project goes into the electricity grid. The power from the grid is then delivered to the subscribers, who receive credit on their electric bills for their involvement.

Commercial real estate owners in NJ can take advantage of this program by working with an experienced Community Solar Project Owner. The Community Solar Project Owner pays the commercial real estate owner for use of their rooftop and is responsible for all aspects of the Community Solar Energy Pilot Program. The Community Solar Project Owner applies for the program, builds and maintains the solar system, and pays the taxes. Commercial real estate owners simply collect the checks!

Top 5 Perks for Commercial Real Estate Owners:
• Portfolio’s net operating income is immediately increased
• Additional positive cash flow line item is added to the corporate balance sheet
• All costs for the solar projects’ viability and development process are paid for by the Community Solar Project Owner
Ongoing ownerships costs are absorbed by the Community Solar Project Owner
• Additional property tax on the solar equipment is paid by the Community Solar Project Owner

For more information, NJ C/I Real Estate Owners can contact:

Jacob Yaeger
Managing Principal
Green Skyline Solar
267-994-8723
JYaeger@GreenSkyline.Solar

Green Skyline Solar is a vertically integrated partner in the deal-flow process in utility scale, Community Solar, and large net-metered solar projects. Green Skyline Solar’s investor consortium has leased/ purchased and developed 75% of the first Rhode Island Community Solar program equaling $50M in investment capital and 20% of the first Maryland Community Solar program equaling $30Min investment capital. Green Skyline Solar’s team has developed over 500mW nationwide.

Share

Rising Interest Rates Change the Makeup of Securitized Loans

Headwinds from rising interest rates and investor caution as U.S. economic growth approaches a record stretch are likely to lead to less traditional lending terms for commercial real estate loan securitization in 2019 throughout the national and Philadelphia commercial real estate markets.

While the Federal Reserve’s rate increases appear to be having little meaningful economic impact on the U.S. commercial real estate market, including Philly office space, Philly retail space and Philly industrial space, they do seem to be influencing a preference for commercial mortgage-backed securities with shorter-term floating-rate debt or interest-only payments, a survey of credit rating agencies said.

This Co-Star Research report involving U.S. and Philadelphia commercial properties is being made through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.

Full or partial interest-only loans among U.S. and Philadelphia commercial real estate listings made up 87 percent of the commercial mortgage securitization market last year and, according to CoStar analysts, this trend is continuing in early 2019.

These loan dynamics have contributed to single-borrower deals and commercial real estate collateralized loan obligations among national and Philadelphia commercial real estate properties having a very good year in 2018. Those two types of securitizations accounted for $52 billion in deals in 2018, up from $42 billion in 2017, said CoStar analysts.

While the Kroll Bond Rating Agency is forecasting up to $55 billion in these types of issuances in 2019, traditional commercial mortgage-backed deals with longer-term loans in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – started out the first half of 2018 with a solid increase in activity. These deals, however, slowed noticeably in the second half as annual volume in 2018 decreased to $41 billion as compared to $44 billion in 2017.

Overall issuances of this type among national and Philadelphia commercial real estate listings could fall a bit more next year. One of the main factors that could drag down lending volume is a shrinking pipeline of loans coming due for repayment. With fewer loans maturing, there is less demand for borrowing. Loan maturity volume dropped from highs of about $83 billion in 2016 and 2017 to about $34.65 billion in combined maturities over the next two years.

For more information about Philly office space, Philly retail space and Philly industrial space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading Philadelphia commercial real estate broker that specializes in Philly office space, Philly retail space and Philly industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, property management services, and 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 with expertise in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philly office space, Philly retail space or Philly industrial 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, Philly retail space or Philly industrial 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.

Share

WCRE APPOINTED EXCLUSIVE AGENT BY NFI TO MARKET 32,858 SQUARE FEET WITHIN THE VOORHEES CORPORATE CENTER

NFI Voohees NJWCRE | CORFAC International is pleased to announce that it has been appointed by NFI Industries as the exclusive leasing and sales agent to market 1005 Laurel Oak Road, Voorhees, New Jersey.

Download Printable Article (PDF) >>>

This 32,858 square foot property is part of a two-unit 78,205 SF single story building situated within The Voorhees Corporate Center.

The neighboring occupant in the other half of the building is Kellman Brown Academy, which is one of several well-known entities within the corporate center along with Jefferson Health, AAA, CHOP, Kingsway Learning Center, YALE School, UPenn and SunGard.

The office/flex space available for sale or lease and is ideal for a variety of uses including education, back-office operations center, healthcare or for general flex/office use.

The Voorhees Corporate Center is located within close proximity to I-295 and the PATCO High-Speed Line, and provides for immediate access to Eagle Plaza, Voorhees Shopping Center and is within close proximity to many other high-end retailers.

Jason Wolf, managing principal of WCRE commented: 

“We are excited about the opportunity to partner with NFI and market a first-class property on behalf of a top tier owner and operator in the region.”

WCRE’s vice president and principal Chris Henderson and Jason Wolf will be working closely together with NFI in order to facilitate the sale or leasing of this well-located property.

A marketing brochure is available upon request.

About WCRE

WCRE is a full-service commercial real estate brokerage and advisory firm specializing in office, retail, medical, industrial and investment properties in Southern New Jersey and the Philadelphia region. We provide a complete range of real estate services to commercial property owners, companies, banks, commercial loan servicers, and investors seeking the highest quality of service, proven expertise, and a total commitment to client-focused relationships. Through our intensive focus on our clients’ business goals, our commitment to the community, and our highly personal approach to client service, WCRE is creating a new culture and a higher standard. We go well beyond helping with property transactions and serve as a strategic partner invested in your long-term growth and success.

Learn more about WCRE at www.wolfcre.com, on Twitter & Instagram @WCRE1, and on Facebook at Wolf Commercial Real Estate, LLC. Visit our blog pages at www.southjerseyofficespace.com, www.southjerseyindustrialspace.com, www.southjerseymedicalspace.com, www.southjerseyretailspace.com, www.phillyofficespace.com, www.phillyindustrialspace.com, www.phillymedicalspace.com and www.phillyretailspace.com.

Share

Winter Weather and Its Impact On Your Business

Winter weather is unpredictable and can have a large impact on your business. While maintaining business operations is always at the forefront of your mind, it is important to consider employee safety as well. You should have policies and procedures in place before bad weather hits so that your company and employees are as prepared as possible.

Download Printable PDF>>>

Driving in Winter Weather on Company Time

winter weatherA major concern regarding winter weather is employees who drive a company car or vehicle as part of their workday. All vehicles should be given a safety check by a mechanic before the bad weather hits, and they should also be equipped with emergency materials such as a snow scraper, blanket, first aid kit and
flashlight.

In addition, employees should be instructed to dress properly for the weather, including a hat, scarf and gloves, or have extra clothing on hand in case of a breakdown or accident. In order to protect your company against liability, any employees who may drive in bad weather on company time should be trained in safe, cautious driving techniques and what to do in case of an accident. Also consider employees who drive as part of their commute—it may be wise to educate them in cautious winter driving techniques to ensure their safety while driving to and from work.

Employee Pay During Winter Weather

Pay issues arise when weather forces your business to close for any length of time or prevents employees from making it to work even if your business remains open. For non-exempt (typically hourly) employees, you are only required to pay them for the hours they actually work. Thus, if your business opens late, closes early or closes for an entire day, you are not required to pay them for any time missed.

If an exempt (typically salaried) employee works any part of the day, you must pay them for a full day. Similarly, if the business is closed for a day or more but less than a full week, you need to pay exempt employees their normal salary if they worked any part of that week. You do not need to pay employees if business is closed for a full week. This applies whether your company uses a five-day or seven-day workweek. You may, however, require that they use available paid time off or vacation time, if available. If your business remains open but an exempt employee cannot come in due to weather conditions, this is a personal reason, and you do not need to pay them. One option to ease the loss of a business day or any missed productivity is to ask exempt employees to work from home if you are already paying them for the day. You may also consider offering a telecommuting option during inclement weather even if your business remains open so employees can avoid the dangers of driving in the extreme cold or snow.

Be Prepared for Winter Weather

Employees should be informed of your company policies related to inclement weather—safety, attendance and pay-related. You should have an established communication method to inform your employees of a business closing or delay. When bad weather is coming, address all your policies again, remind employees of communication channels to address attendance and plan for the worst potential outcome to ensure your company is prepared for the weather.

Brian Blaston
Commercial Lines – Manager
Hardenbergh Insurance Group
phone: 856.489.9100 x 139
fax: 856.673.5955
www.hig.net

Share

Share

Share