ccim commercial mag
Post on 22-Mar-2016
231 Views
Preview:
DESCRIPTION
TRANSCRIPT
CommerCialin v es t men t
ShelterFrom the Storm
January | February | 2012
Find New Clients
Through Social Media
Where the Real Estate
Jobs Are in 2012
Commercial real estate offers investors refuge amid economic uncertainty.
The Magazine of the
Institute www.ccim.com
CAPITOL HILLCCIM’s Annual
VISIT
DAT
ES TUESDAY, APRIL 17 - Orientation
WEDNESDAY, APRIL 18 - Hill Visits
On April 18, CCIM Institute members will join with IREM to bring issues that affect commercial real estate to Capitol Hill.
An orientation will be held at the J.W. Marriott in Washington, D.C., in the afternoon on Tuesday, April 17.
Capitol Hill Visit Day provides a unique opportunity for CCIM members to build relationships with their U.S.
representatives and senators. Members will be prepared to discuss CCIM’s positions with their elected officials. It is
vitally important for CCIM members to attend and participate in the Capitol Hill visits.
The CCIM and IREM Capitol Hill visits have a proven track record of bringing change to the commercial real estate
industry. Here are just a few of the results of CCIM and IREM’s lobbying efforts over the past few years:
2010: Defeated proposed legislation that would have increased tax rates
2011: Built support for CCIM’s position on energy conservation
2010 - 2011: Consistently voiced the need for mortgage liquidity to increase health of overall U.S. economy
for financing and refinancing commercial property
LOC
ATIO
N
WASHINGTON, D.C.
CCIM Legislative Liaison Adriann Gerardi at
(312) 329-6033 or agerardi@ccim.comCO
NTA
CT
1January | February | 2012
¬
COMMERCIALIN V ES T MEN T
DEPARTMENTS
4 In This Issue
6 Market Trends
42 Regional Outlook
44 International Beat
45 Buyers Guide
46 Deal Makers
48 CCIM Connections
COLUMNS
2 President’s Desk
12 CCIM Q&A
14 Financing Focus
16 Investment Analysis
18 Legal Briefs
20 Technology Solutions
FEATURES
22 Land of OpportunityForeign investors wash up on
U.S. shores, cash in hand.
by Dave Liniger
31 Build Your Business
Through Social MediaGet over it — the future of
marketing is online.
by Dennis LaMantia
34 Resizing or
Right-Sizing?There are big surprises in
store for the offi ce market.
by Rich Rosfelder
26
January.February 2012 Vol. XXXI No.1
Cove
r: S
treet,
Matt
hia
s K
ulk
a/C
orb
is;
Rain
dro
ps,
Ocean/C
orb
is
39 Employment
EvolutionWhere will you fi nd
your next job?
by Scott J. Kolb
6
Medical offi ce tops this year’s niche prospects.
COVER STORY
Shelter From the Storm
Commercial real estate offers investors refuge amid eco nomic
uncertainty.by Kenneth P. Riggs Jr.,
CCIM, CRE, MAI
January | February | 2012 Commercial Investment Real Estate
www.ciremagazine.com
PRESIDENT’SDESK
w @What’s online with Commercial Investment Real Estate
magazine?
• 2012 Expectations and Realities — Find out what’s on the horizon for the economy and commercial real estate from CCIM’s chief economist Ken Riggs, CCIM, CRE, MAI.
• Contemporary Zoning Confl icts — Today’s evolving landscape presents new challenges for urban planners, developers, and other commercial real estate professionals.
• 2012 Utility Budgeting — Howard Berends, a certifi ed property manager at American Utility Management, tells owners and facility managers how to keep expenses under control in the coming months.
• The New Bottom Lines — What factors should corporations consider when planning for tomorrow’s offi ce?
Online. All the Time.
Only at www.ccim.com/cire
Gearing UpWhat do you have to look forward to in 2012? More opportunities in
smaller markets if current forecasts are any indication.
CCIM members possess the network, skills, and tools to emerge as
sought-af er industry leaders. With the strong foundation you’ve built
as a CCIM member, it’s critical to renew your membership for 2012 and
continue to benefi t from:
• A network of CCIMs worldwide who are ready to make deals;
• Webinars, educational workshops, and other resources that provide
insight on today’s critical industry issues; and
• Technology that allows you to provide exceptional client service.
In 2012, CCIM will add even more value to your membership with
these initiatives:
Education, Marketing, and Technology. Plan to attend
an exclusive event at the Silverado Resort in Napa, Calif.,
Feb. 6–7. T is “super session” will incorporate highlights
of our updated core curriculum, a property marketing
deal-making session, and a technology education event.
National Property Marketing Webinars. A series of
national Webinars will provide an opportunity for members to show-
case their listings.
Strategic Plans for Global Growth. As the Institute continues to
expand internationally, CCIM’s education and networking will foster
more global opportunities for members.
CCIMs Pause for a Cause. T is summer the Institute will ask all
members to designate one day to give back to their local communities.
With the support of my strong executive leadership team that
includes Nick Miner, CCIM, Lou Nimkoff , CCIM, Carmela Ma, CCIM,
and Don Sebastian, CCIM, I look forward to a prosperous 2012 and
encourage you to renew your CCIM membership and position yourself
to succeed as the market recovers.
Leil Koch, CCIM
President, CCIM Institute
leilkoch@ccim.net
CCIM President Leil Koch talks more about his
2012 initiatives and how you will benefi t in a video
at http://j.mp/ccim2012.
Only@
Only@
Save the Date:APRIL 17–18, 2012
Join your fellow CCIMs in Washington, D.C., April 17–18,
to make your voice heard at CCIM’s annual Capitol Hill
Visit. Go to www.ccim.com/newscenter/public_policy
for more details or contact CCIM’s legislative liaison,
Adriann Gerardi, at agerardi@ccim.com.
COMMERCIALIN V ES T M EN T
ShelterFrom the Storm
January | February | 2012
Find New Clients
Through Social Media
Where the Real Estate
Jobs Are in 2012
Commercial real estate offers investors refuge amid economic uncertainty.
The Magazine of the
Institute www.ccim.com
I AM THE INDUSTRY OF ONE
BACKED BY A HISTORY OF$150 BILLION IN FINANCING.
Because I’m a part of Berkadia, I’m a part of the leading commercial mortgage lender
in the United States—the only lender to combine access to large amounts of capital
with unparalleled fl exibility. That’s the Industry of One. So when you’re backed by me,
you have access to everything you need for the lifecycle of your property.
IRIS ANDRAKE VP TREASURY
GET THE INDUSTRY BEHIND YOU.
BERKADIA.COM
January | February | 2012 Commercial Investment Real Estate
COMMERCIALIN V ES T MEN T
Commercial Investment
Real Estate, the member
publication of the CCIM
Institute, reports on market
trends and analysis, current
developments in the fi eld, and
successful business strategies.
CIRE Staff
Executive Vice President/CEO
Henry F. White Jr.
Executive Editor
Sara Drummondsdrummond@ccim.com
Senior Editor
Jennifer Norbutjnorbut@ccim.com
Associate Editor
Rich Rosfelderrrosfelder@ccim.com
Contributing Editors
David Alvarado, Bernard D. Bollinger, Dennis LaMantia, Jay R. Lucas, CCIM, Delmar Nehrenberg, Lily Oberman,
Daniel Rowe, CPA
Design Consultant
Commercial Investment Real Estate
(ISSN 1524-3249) is published
bimonthly by the CCIM Institute of
the National Association of Realtors,
430 N. Michigan Avenue,
Chicago, IL 60611-4092.
Periodicals postage paid at Chicago,
Ill., and additional mailing offi ces.
Postmaster: Send address changes
to Commercial Investment Real
Estate, 430 N. Michigan Avenue,
Chicago, IL 60611-4092.
Subscriptions:
$45 for nonmembers in U.S.;
$55 for nonmembers in Canada and
Mexico. Call (800) 532-8633. For
reprints, call (312) 321-4460.
The opinions expressed in signed
articles and materials appearing in
Commercial Investment Real Estate,
including specifi c references to
products and services, are those of the
authors and not necessarily those of
Commercial Investment Real Estate,
the CCIM Institute, or the National
Association of Realtors.
© 2012 by the CCIM Institute.
All rights reserved.
Editorial address: 430 N. Michigan
Avenue, Chicago, IL 60611-4092;
(312) 321-4460; magazine@ccim.
com; www.ccim.com/cire.
The CCIM Institute, an
affi liate of the National
Association of Realtors, confers
the Certifi ed Commercial
Investment Member
designation to commercial real
estate professionals who have
extensive training and industry
experience and complete a
rigorous study program.
Executive Offi cers
President
Leil Koch, CCIM
Lahaina, Hawaii
President-Elect
Wayne D’Amico, CCIM
Essex, Connecticut
First Vice President
Karl Landreneau, CCIM
Baton Rouge, Louisiana
Treasurer
Craig Blorstad, CCIMBloomington, Indiana
Editorial Review Board
Adrian A. Arriaga, CCIM
Roger B. Broderick, CCIM
Todd D. Clarke, CCIM
David B. Eaton, CCIM
Jeff Engelstad, CCIM
Eric B. Garfi eld, CCIM
Tony M. Guglielmo, CCIM
Thomas E. Hankins, CCIM
James L. Helsel, CCIM
Soozi Jones-Walker, CCIM
J. Howard King, CCIM
Robert Knight, CCIM
George C. Larsen, CCIM
Kevin G. Lenze, CCIM
Mark L. Levine, CCIM
Charlie Mack, CCIM
Michael T. McLean, CCIM
James J. Piro, CCIM
David L. Schank, CCIM
Robert M. Stone, CCIM
Reader Services: All dues-paying
members of the CCIM Institute receive
Commercial Investment Real Estate
magazine six times a year as a mem-
ber benefi t. Subscribe, purchase back
issues, or order customized article
reprints: www.ccim.com/cire or (800)
532-8633 x4507. Make address
changes: magazine@ccim.com or
(800) 532-8633 x4507. Request
reprint permissions: rrosfelder@ccim.
com. Submit articles and editorial
ideas: sdrummond@ccim.com.
For advertising information, contact:
Rich Rosfelder at (312) 321-4507 or rrosfelder@ccim.com
Only @ www.ccim.com/podcastsMarty Barkan, CCIM, CRE, senior vice president with First Property
Realty Corp., in Beverly Hills, Calif., explains how he’s building his
business through social media.
podcast
In the new post-recession market,
social media is going to be a huge
factor in attracting new clients, as many CCIMs are already
fi nding out. Check out what they told CCIM’s interactive mar-
keting manager Dennis LaMantia about
developing new business through social
media on p.31. Another big change is
how space will be used by corporations
in the coming years. On p.34, Associ-
ate Editor Rich Rosfelder examines the
trends that will determine how much
offi ce space companies will need.
FEATURED WRITERS T e roiling U.S. economy, buff eted by the euro
crisis and other world events, seems to have put
the recovery on hold. But that’s to be expected,
according to CCIM Chief Economist Ken Riggs,
CCIM, CRE, MAI, who, in this
issue’s cover story, explains that
2012 is the year these things get
sorted out in preparation for a strong comeback
in 2013. But through it all, commercial real estate
looks pretty solid in comparison to other invest-
ment options. Find out which sectors hold the
most promise on p.26. Dave Liniger, co-founder
and chairman of Re/Max, looks at foreign inves-
tor activity in U.S. markets, one of the most posi-
tive industry trends of the past six months, on
p.22. And Scott Kolb, a principal in the Chicago
office of Christenson Advisors, an executive
recruitment fi rm, discusses where the commer-
cial real estate jobs will be this year on p.39.
“The year 2012
will serve as the
foundation for
new business
growth.” p.26
¬
IN THIS
ISSUE
Riggs
Liniger
Kolb
$22,200,000
Buffalo Grove, IL
Multifamily
236 Units
Acquisition
Agency
$5,200,000
Charlotte, NC
Office
64,637 Sq.Ft.
Acquisition
Insurance Company
$16,400,000
Galveston, TX
Hospitality
168 Rooms
Construction
Insurance Company
$12,740,000
Streetsboro, OH
Industrial
368,060 Sq. Ft.
Acquisition
Insurance Company
$144,432,200
TX, CO, AZ
MHC Credit Facility
11 Communities
Acquisition
Agency and CMBS
$27,000,000
Baton Rouge, LA
Multifamily
286 Units
Refinance
Agency
$20,370,000
Ft. Walton Beach, FL
Retail
722,284 Sq. Ft.
Refinance
Proprietary Bridge
O P P O R T U N I T I E S R E A L I Z E D .
Atlanta | Birmingham | Charleston | Charlotte | Columbus | Dallas | Ft. Lauderdale | Greenville | Houston | Indianapolis
Jacksonville | Kansas City | Louisville | Madison | Milwaukee/Chicago | Minneapolis | Mobile | Naples | Norfolk
Pittsburgh | Raleigh | Tampa | Washington, D.C.
gbrecap.com/connect Loans are subject to credit approval.
Grandbridge Real Estate Capital provides the vital link
between complex market conditions and capital solutions.
As a national full-service leader in commercial and
multifamily finance, we combine our wide range of
capital sources with a knowledgeable and experienced
team to deliver results, deal after deal.
Our scope of services includes:
- Freddie Mac Program Plus® Seniors Housing and Targeted Affordable Housing
- Fannie Mae DUS® - FHA-insured Loans | MAP and LEAN - Nearly 50 Insurance Companies- CMBS | Institutional Investors | Pension Funds- Proprietary Lending Platform | Structured Finance- $25 Billion+ Loan Servicing Portfolio
To find the lending professionals in your area, visit
gbrecap.com/connect.
Connecting
ideas,
capital and
clients.
January | February | 2012 Commercial Investment Real Estate
TRENDSMARKET
Chri
stopher
Nuzz
aco/V
eer
Briefl y NotedHospitality — Up to a 100-day wait for visas
is keeping foreign tourists, especially those from
China, Brazil, and India, the fastest-growing and
highest-spending segment of overseas travelers,
from visiting the U.S., according to HotelNews
Now.com. Based on the U.S. Travel Association
statistics, from 2000 to 2010, the U.S. share of
global travelers fell almost 5 percent.
Industrial — Weary of fi ghting for offi ce tro-
phies, institutional investors are looking more
closely at plain-Jane warehouses, according to
CoStar, which has tracked an uptick of 3Q11
big-box warehouse sales in major distribution
hubs. Six quarters of positive absorption and a
70-basis-point drop in vacancy since 2009 may
signal rent growth ahead.
Multifamily — Buy multifamily “any way you
like it,” is the advice from Emerging Trends in
Real Estate 2012. Every market and class was
suggested by commercial real estate profession-
als interviewed, except one: Avoid markets with
an oversupply of single-family homes to rent.
Offi ce — While demand for medical offi ce
will certainly continue for the next decade, per-
formance varies considerably by market, says
Marcus & Millichap. Well-performing markets are
found in Texas, the Midwest, and the Northeast.
However the Southeast, the West, and Mountain
states suffer from an oversupply of spec devel-
opment built during the housing boom.
Retail — Tablets and smartphones will com-
pletely revolutionize the shopping experience
at apparel and department stores in the next
three years, according to Chainstoreage.com.
Cash registers and checkout counters will dis-
appear as sales associates armed with mobile
devices will make sales wherever the customer
happens to be. By 2015 more than 2.7 million
tablets a year will be shipped for use in retail
and hospitality locations.
Niche Investment Prospects1. Medical offi ce2. Urban mixed-use3. Data centers4. Self-storage5. Mixed–use town centersSource: Emerging Trends in Real Estate 2012 survey
2012
Register NOW by visiting CCIM.com/CourseSchedule or calling our Solution Center at (800) 621-7027, ext. 3100
*For specific dates and times of Online, Instructor-Led courses, please refer to the course schedule or contact the CCIM Solution Center for more information.
+Denotes Non-United States/Canada courses Schedule subject to change without notice. For the most up-to-date schedule, visit CCIM.com/CourseSchedule.
2012 COURSE SCHEDULE
CI INTRO ClassroomCary NC Jan 19 - 20
Washington DC Feb 9 - 10
Mandeville LA Feb 9 - 10
El Paso TX Feb 9 - 10
Birmingham AL Mar 1 - 2
Albany NY Mar 15 - 16
San Francisco CA Mar 21 - 22
Kirkland WA Mar 29 - 30
Orlando FL Apr 5 - 6
Houston TX Apr 12 - 13
Addison TX Apr 19 - 20
Columbus OH Apr 19 - 20
New York NY Apr 21 - 22
Oak Forest IL May 10 - 11
Radnor PA May 10 - 11
Minneapolis MN May 14 - 15
Austin TX May 14 - 15
Denver CO May 15 - 16
New York NY May 26 - 27
Santa Ana CA Jun 21 - 22
Honolulu HI Jun 25 - 26
St. Augustine FL Jul 19 - 20
Alexandria LA Jul 26 - 27
Sacramento CA Sep 12 - 13
Kirkland WA Sep 27 - 28
Baton Rouge LA Sep 27 - 28
El Paso TX Oct 1 - 2
Cromwell CT Oct 3 - 4
Oak Brook IL Oct 4 - 5
Richmond VA Oct 8 - 9
Las Vegas NV Nov 1 - 2
CI 101Classroom
Addison TX Feb 6 - 9
St. Louis MO Feb 13 - 16
Scottsdale AZ Feb 13 - 16
Calgary + AB Feb 27 - Mar 1
Atlanta GA Feb 27 - Mar 1
Coralville IA Feb 27 - Mar 1
Moscow + RU Feb 28 - Mar 4
Stamford CT Apr 16 - 19
Kent WA Apr 30 - May 3
Indianapolis IN Apr 30 - May 3
Warsaw + PL May 14 - 19
CI 101 CONTINUED
San Francisco CA May 14 - 17
St. Petersburg + RU May 19 - 24
Singapore + SG Jun 4 - 9
Leawood KS Jun 4 - 7
Nashville TN Jun 4 - 7
New York NY Jun 9, 10, 16, 17
Austin TX Jun 11 - 14
Charlotte NC Jul 9 - 12
Denver CO Jul 10 - 13
Tampa FL Sep 10 - 13
Moscow + RU Sep 11 - 16
Honolulu HI Sep 17 - 20
Birmingham AL Sep 18 - 21
Warsaw + PL Sep 28 - Oct 3
Houston TX Oct 22 - 25
Santa Ana CA Oct 23 - 26
Washington DC Oct 24 - 27
Calgary + AB Nov 5 - 8
New Orleans LA Nov 5 - 8
Portland OR Nov 12 - 15
Online Jan 24 - Feb 23
Online Mar 6 - Apr 5
Online May 8 - Jun 7
Online Jul 16 - Aug 15
Online Aug 21 - Sep 20
Online Sep 11 - Oct 18
Online Oct 22 - Nov 26
Online Nov 5 - Dec 10
Online, Instructor-Led*
CI 102Classroom
Warsaw + PL Jan 9 - 14
Santa Ana CA Mar 12 - 15
Radnor PA Mar 19 - 22
Chicago IL Apr 16 - 19
Addison TX Apr 16 - 19
Calgary + AB Apr 30 - May 3
Atlanta GA May 21 - 24
San Francisco CA Jul 23 - 26
Columbus OH Sep 10 - 13
Kent WA Oct 1 - 4
St. Louis MO Oct 2 - 5
Scottsdale AZ Oct 8 - 11
Moscow + RU Oct 9 - 14
Stamford CT Oct 22 - 25
Orlando FL Nov 5 - 8
Warsaw + PL Nov 12 - 17
Online Feb 13 - Mar 19
Online Mar 12 - Apr 11
Online May 1 - 31
Online Jul 10 - Aug 9
Online Aug 14 - Sep 13
Online, Instructor-Led*
CI 102 CONTINUED
Online Oct 29 - Nov 28
CI 103Classroom
San Francisco CA Feb 13 - 16
Warsaw + PL Feb 20 - 25
Miami FL Feb 20 - 23
Moscow + RU Mar 27 - Apr 1
Denver CO Apr 10 - 13
Addison TX Jun 4 - 7
Calgary + AB Jun 18 - 21
Washington DC Aug 8 - 11
Las Vegas NV Aug 27 - 30
Atlanta GA Oct 1 - 4
New York NY Oct 13, 14, 20, 21
Chicago IL Nov 5 - 8
Santa Ana CA Nov 5 - 8
Moscow + RU Nov 13 - 18
Online Feb 6 - Mar 12
Online Mar 12 - Apr 11
Online May 1 - 31
Online Jul 24 - Aug 23
Online Sep 11 - Oct 18
Online, Instructor-Led*
CI 104 In ClassTokyo + JP Feb 1 - 5
Austin TX Feb 13 - 16
Leawood KS Feb 20 - 23
Las Vegas NV Feb 27 - Mar 1
Kent WA Feb 27 - Mar 1
Warsaw + PL Mar 26 - 31
Orlando FL Apr 30 - May 3
Charlotte NC Apr 30 - May 3
Radnor PA Jun 4 - 7
Santa Ana CA Jun 5 - 8
Addison TX Jul 16 - 19
Calgary + AB Sep 24 - 27
Chicago IL Oct 1 - 4
Atlanta GA Nov 5 - 8
Online, Instructor-Led*Online Jan 31 - Mar 1
Online Mar 13 - Apr 12
Online Apr 30 - May 31
Online Jul 30 - Aug 29
Online Sep 11 - Oct 18
January | February | 2012
Svl
um
a/V
eer
TRENDSMARKET
Commercial Investment Real Estate
Top U.S. Cities for Investment Increase in property investment
4Q10–3Q11, excluding development
Source: Real Capital Analytics/Cushman & Wakefi eld
29.7New York metro
Investment volume4Q10-3Q11
(in $ billions)
8.7Chicago
2.6Philadelphia metro
3.2Denver
6.1 Boston
0 50 100 150 200
165.5%
160.6%
157.7%
148.9%
141.3%
“Commercial real
estate has already
demonstrated for a solid
18 months that it can
perform reasonably
well in the throes of a
deleveraging recovery.”—Kevin J. T orpe, chief economist,
Cassidy Turley
2012 U.S. OutlookSECTOR NET ABSORPTION (MSF)
2012 (2011)VACANCY
(%)PSF RENTS
($)
Offi ce 56.5 (51.7) 15.6 (16.3) 21.53 (21.37)
Industrial 69.6 (89.8) 8.8 (9.3) 5.20 (5.10)
Retail 8.2 (-0.2) 10.9 (11.0) 18.99 (18.97)
Multifamily (in thousands)120.0 (167.5)
4.9 (5.8) (per month) 1,110 (1,056)
Source: Cassidy Turley
Bank Failures ContinueAs of November, 90 banks had failed in 2011, according
to Trepp, which predicts bank closures to continue
into 2012 and beyond. Of the 11 banks that failed in
October and fi ve in November, commercial real
estate loans comprised 80.8 percent of the banks’
nonperforming loans.
0 10 20 30 40 50
Tennessee 11
North Carolina 13
Minnesota 14
Illinois 26
Florida 37
44Georgia
2012’s High-Risk Banks Location Number of banks at risk
Source: Trepp
JOIN US IN BEAUTIFUL NAPA, CA,
FEBRUARY 6 - 7, FOR
CCIM EMTEducation, Marketing,
and Technology is a new event, designed so you can reconvene with colleagues between national business
meetings.
PROGRAM HIGHLIGHTS: Financial Analysis Update - learn to use the latest CCIM analysis tools to streamline your workflowMarket Analysis Update - discover how to bridge the gap between market and financial analysis Personal Networking - get up close and personal in this speed networking sessionUser Decisions Analysis Update - examine occupancy alternatives to help your clients make better decisions Investment Analysis Update - examine hold vs. dispose investment decisions through quantitative analysis High-Tech Marketing - use technology to market commercial real estate and position yourself as an industry expertProperty Marketing - learn best practices and test your property “elevator pitch”
Registration fee is only $149 for CCIM Institute members, $349 for non-members. Don't miss out – register now for this exciting new event at the Napa Silverado Resort. Book your room early to receive CCIM's special rate.
SEE YOU
IN NAPA.
CHEERS!
Visit our Conferences & Meetings page for full program details: http://www.ccim.com/networking/conferences-meetings
January | February | 2012 Commercial Investment Real Estate
TRENDSMARKET
TRENDSMARKET
Operatingexpenses53.6%
Compensation11.9%
Maintenance& repairs
5.2%
Insurance 1.9%
Marketing 3.1%
Turnover 2.4%
Taxes9.0%
Utilities11.0%
Late fees1.0%
StudentHousing Expenses Average expenses as a percent of rental income
Source: Off-Campus Student Housing: 2011 Income and
Expense Benchmarking Survey, National Multi-Housing Council
2012’s Top 3 CRE Issues On a scale of 1 (no importance) to 5 (very important)
Source: Emerging Trends in Real Estate 2012 survey
Vacancy rates
4.10
Interest rates
4.12
Job growth
4.82
0
1
2
3
4
5
West
Rock/G
ett
y Im
ages
ICSC’s Largest Annual Educational EventNew colleges of study for 2012:
t College of Finance for Non-Financial Professionals
t College of Law for Non-Lawyers
Also featuring:
t CCIM Institute’s College of Financial Analysis
t College of Debt Workout, Transactions and Repositioning of Distressed Assets
t Real-world examples and practical solutions
t Distinguished faculty of industry leaders and experienced practitioners
For more information please visit www.icsc.org/2012UV
MARCH 5 — 7, 2012
Now is the time to boost your retail industry
knowledge and be ready to conduct business
when the sector rebounds.
January | February | 2012 Commercial Investment Real Estate
Q&ACCIM
iby Jennifer Norbut
Tuned Into the Market
In a world where business professionals have instant access to information, some
might think radio communication is a thing of the past. Not true, say listeners who
tune into the “Commercial Real Estate Show,” a weekly online and on-air talk radio
broadcast. Hosted by Michael Bull, CCIM, CRB, founder of Bull Realty in Atlanta,
the show brings together a new panel of experts each week to share their insights.
Commercial Investment Real Estate asked Bull for a behind-the-airwaves look at what
goes into producing his show.
media. On average, it requires 60 to 70 hours
per week for a one-hour show and that does
not include the guests’ prep time.
As for the return, the show certainly helps
us build relationships, stay on top of the mar-
ket, and establish credibility. It has increased
our number of Twitter followers as well as
driven traffi c to our blogs, YouTube chan-
nel, and BullRealty.com. T e show is part of
a large marketing funnel to attract clients,
customers, brokers, and referrals. Bull Realty
has done very well in a tough cycle, so the
show is helping — or the combination of
what we are doing is working.
CIRE: How has your CCIM designation
helped you achieve success with the
show and in the industry?
Bull: Part of the benefi t of the CCIM train-
ing is the confi dence. You’re confi dent dis-
cussing business with the chief fi nancial
officer of a major firm, the underwriter
for a big fund, or just the guy next door.
CIRE: What prompted you to start
your own radio show?
Bull: I’ve been in the industry for 30 years
and several clients and colleagues along
the way have said that my sense of humor
combined with my commercial real estate
expertise would make for interesting talk
radio. So I decided to produce a show with
meaningful content for listeners, regardless
of where they live or work. T e show is fast-
paced and covers a tremendous amount of
industry information each week.
CIRE: How do you determine the
topics and select your guests?
Bull: Topics are chosen based on cur-
rent issues in commercial real estate. For
example, we have quarterly updates on the
various property sectors as well as shows
that address buying and selling distressed
assets, the health of the banking industry,
auctions, and commercial loan workouts,
among other topics. We’ve also covered
commercial real estate training, the return
on sustainability, tenanting strategies, and
social media marketing.
We invite guests who are well-known
for their experience related to each topic
and we’ve established relationships with
top analysts at Reis, Real Capital Analytics,
and many other industry-leading fi rms as
well as with top developers and real estate
investment trusts. Guests also include
leaders from the top commercial real estate
associations, such as CCIM’s 2011 Presi-
dent Frank Simpson, CCIM.
CIRE: How much time does the show
take to produce? Is it worth it?
Bull: T e show has a full staff and is much
more time-consuming and involved than
initially anticipated. Staff members are
devoted to planning the shows, writing
the content, selecting and coordinating
the guests, producing the show, marketing,
updating the website, and handling social
January | February | 2012www.ccim.com
My CCIM experience gives me more con-
fi dence when talking to powerful industry
leaders on the show.
We have a large concentration of CCIMs at
Bull Realty and recommend CCIM training,
resources, and networking to everyone. T e
fi rst place we turn to partner with expertise
around the country is the CCIM network.
CIRE: With access to so many experts
in the industry, you must glean a lot
of insights on the market. What does
2012 hold for commercial real estate?
Bull: T e already-strong sectors, such as
multifamily, single-tenant net lease, and
medical offi ce, will continue to strengthen
in 2012. T e sales volume of these assets
will increase and capitalization rates will
remain stable or compress even further
on properties with longer leases. Cap rates
for stable assets in secondary markets will
improve for sellers as investor demand
spreads to these markets.
Industrial, offi ce, and retail sector perfor-
mance will continue to improve very slowly
and in that order. T e growth will be slower
for class B properties and even slower for C
properties, especially in suburban locations
not tied to an employment or education cen-
ter. Improving performance will be partially
due to lack of new construction.
Jennifer Norbut is senior editor of Commer-
cial Investment Real Estate. If you have a
story worth sharing in CCIM Q&A, send it to
jnorbut@ccim.com.
Michael Bull, CCIM, CRB
Listen to the “Commercial Real Estate
Show” online anytime at
www.CommercialRealEstateShow.com.
MAKE PLACES, not projects.
Curriculum focuses on sustainable and responsible real estate development practices.
Executive Master of Real Estate Development Program
For more information visit: mred.auburn.edu
a joint degree offered by the College of Architecture, Design and Construction and the College of Business
Auburn University is an equal opportunity educational institution/employer.
Starting May 2011 with rolling admissions
January | February | 2012 Commercial Investment Real Estate
FOCUSFINANCING
Self-Rental Rule Don’t get caught in a trap of unintended consequences.
by Daniel Rowe, CPA
tbecause under the passive activity loss rules, a
passive loss usually can only be used to off set
passive income. Generally, any passive loss
that exceeds passive income is suspended and
carried forward to be deducted in a future
year. However, there is an exception of up to
$25,000 for taxpayers who actively participate
in a rental real estate activity. Nonpassive loss,
on the other hand, can off set both passive and
nonpassive income.
Self-Rental NuancesTaxpayers can generally offset rental
income from one property by rental loss
from another property, as passive loss is
The only thing worse than incurring a loss on investment property
is incurring a loss that cannot be deducted for tax purposes. Self-
rental property may cause this tax result for some property owners
if rental arrangements are not strategically prepared. The following
overview of the self-rental rule, including an explanation of passive
activities in the context of rental real estate, may shed light for prop-
erty owners who want to avoid such tax consequences.
Passive Activities ConceptThe Internal Revenue Service considers
most business activities to be nonpassive
if a taxpayer materially participates in the
business. One exception to this rule is rental
real estate.
Partly because of their past use in tax shel-
ters, rental real estate activities are generally
considered passive regardless of participation
level. (T ere are exceptions that go beyond the
scope of this article.) T e distinction between
passive and nonpassive activities is important West
end6
1/G
low
Im
ages
January | February | 2012www.ccim.com
deductible to the extent of passive income.
However, an exception to this simple rule
occurs when property is rented to one’s self
or a business in which one materially par-
ticipates. In such a case, the rental real estate
activity’s treatment as passive or nonpassive
varies depending on whether it produces
income or loss.
For example, assume Juan has three activi-
ties for tax purposes: He is the sole owner
of a bookstore, in which he materially par-
ticipates, and he owns two rental properties
—a warehouse and an apartment building
—that are passive by nature. T e activities
generate $150,000 income and $100,000 loss,
with a net gain of $50,000. (See Example 1.)
T e rental loss can off set rental income, with
the excess loss then suspended. T e result
for Juan is $100,000 of taxable income and
$50,000 of suspended loss.
But suppose Juan rents the warehouse to
his bookstore instead of an unrelated third
party. T is is when the self-rental rules come
into play to recharacterize the rental activity.
In the case of a self-rental, income is
treated as nonpassive and loss is treated as
passive. T us, the warehouse income is non-
passive and the apartment loss cannot be
deducted against it. Because of the self-rental
trap, Juan’s tax result is $150,000 of income
and $100,000 of suspended loss, as shown in
Example 2.
Because he is renting to himself, Juan
controls the rent that the bookstore pays. By
adjusting this amount he can theoretically
create a loss for the bookstore. If he increases
the bookstore’s rent for the warehouse by
$125,000, he will get the results in Example
3, which is $150,000 in taxable income and
$100,000 in suspended losses. Again, because
it is a self-rental, the warehouse income is
treated as nonpassive.
T e result would be the same even if Juan’s
spouse was running the bookstore business.
In determining material participation, par-
ticipation by Juan’s spouse is considered
participation by him as well. T e self-rental
rule’s primary purpose is to prevent taxpay-
ers from manipulating rent for companies
they (or their spouses) own and operate to
create passive income to use against other
passive losses.
Avoiding the TrapTaxpayers can avoid or reduce the detri-
mental tax eff ect of the self-rental rule. One
way is to reduce their participation level in
the operating activity so it fails the material
participation tests. T en both the operat-
ing activity and the rental activity will be
considered passive and the self-rental rule
will not apply. However, it is usually not
feasible for owners to reduce their partici-
pation, especially when the operating activ-
ity is their primary business. T e interplay
of the operating activity and its income or
loss with any other activities of the taxpayer
should be analyzed in aggregate prior to
considering a reduction in participation.
A more reasonable method of combating
the self-rental rule is to minimize net income
for the rental activity. A net loss will still be
Potential tax consequences of a self-rental arrangement can make a bad situation even worse.
Effects on Taxable Income EXAMPLE 1 EXAMPLE 2 EXAMPLE 3
Nonpassive Bookstore
$100,000 income
Bookstore
$100,000 income
Warehouse
$50,000 income
Bookstore
($25,000) loss
Warehouse
$175,000 income
Passive Warehouse
$50,000 income
Apartment
($100,000) loss
Apartment
($100,000) loss
Apartment
($100,000) loss
Net ($50,000) $150,000 income $150,000 income
Taxable income $100,000 $150,000 $150,000
subject to the normal PAL rules, so minimiz-
ing loss may be important as well. However,
fair-market rent must be charged, as an arti-
fi cially high or low rent used to manipulate
income will not withstand IRS scrutiny.
Another option is to rent from a third
party. To avoid the poor tax results in
Example 2, Juan’s bookstore could rent a
warehouse from an unrelated party and he
could rent his warehouse to another unre-
lated company for an off setting amount. T is
method relies heavily on market conditions
that allow Juan to fi nd both a tenant for his
property and his own lease space.
It’s not always easy or practical to avoid
the reclassifi cation of income under the self-
rental rule. Property owners or investors who
rent to themselves or their entities should be
aware of the potential tax consequences that
can make a bad situation even worse.
Daniel Rowe, CPA, is a tax manager at the
accounting fi rm Deemer Dana & Froehle LLP
in Savannah, Ga. Contact him at drowe@
ddfcpas.com.
January | February | 2012
tThe recent bankruptcy fi ling by retailer Syms signals that the dis-
tressed asset fallout is far from over in the commercial real estate
market. In addition, roiling credit markets and the reduction in both
commercial and residential real estate values have resulted in a
new interest in the impact of bankruptcy fi lings upon real estate
investments. As banks succumb to the pressure to move bad
loans off their books, more distressed properties will come
onto the market this year. Here’s a look at what this
can mean for investors and landlords.
Could an increase in bankruptcy sales change the game?
by Bernard D. Bollinger
Distressed Opportunities
INVESTMENTANALYSIS
Commercial Investment Real Estate
Are asset sales in bankruptcy cases an opportunity to buy real estate on the cheap?Although it might seem counterintuitive,
the distressed nature of bankruptcy sales
doesn’t always lead to depressed sales prices.
While I have recently seen more real estate
sales in bankruptcy cases than at any other
time in my nearly 25 years as an insolvency
attorney, whether those sales resulted in
good investment opportunities still depends
upon the investor’s knowledge of both the
asset being sold and the particular market
niche involved.
However, knowledge of the bankruptcy
sales process helps to increase the chance
of getting a good buy. All bankruptcy sales
are subject to overbid, but the process for
obtaining the highest bid is
somewhat malleable. Most
sales occur only af er a sepa-
rate notice and a hearing estab-
lish sales procedures. T ese of en
include provisions such as breakup
fees, bid deposits, and bid qualifi ca-
tion deadlines that ostensibly stream-
line the process but can also operate to
restrict the number of bidders.
Inherent in the process of restrict-
ing bidders is the potential that a
debtor’s management could
be attempting to steer a
bankruptcy sale toward
a desired bidder. Thus,
the most successful
investors in this arena are
those who realize how the
sales process works — that it is based upon
the inherent contradiction between the
creditors’ interest in obtaining the highest
sales price and the desire of a debtor’s insid-
ers to maintain control of an asset or steer
the sale toward a preferred purchaser. To
be successful, investors must understand
the target asset, the details of the sales pro-
cess, and how to combat any attempts at
manipulation of that process. T ese goals
are more likely to be achieved if the investor
is involved in the early stages of a debtor’s
bankruptcy case and is nimble in its due
diligence capabilities.
Has the proliferation of single-asset real estate cases increased the likelihood that the bankruptcy sales process will result in a good investment opportunity?T e bankruptcy code was revised in 1994 to
apply special rules limiting the automatic
stay in single-asset real estate cases and
those rules were expanded as part of the
bankruptcy code revisions of 2005. Limiting
the automatic stay was intended to expedite
Alm
agam
i/Veer
January | February | 2012www.ccim.com
SARE cases involving “real property con-
stituting a single [nonresidential] property
or project … with fewer than four units …
on which no substantial business is being
conducted by the debtor other than the
business of operating the real property” [11
U.S.C. §363(d)(3)]. But it hasn’t quite played
out that way.
Instead, many courts have loosely applied
the SARE standards. For example, one court
held that the “historic synergy” between
multiple single-asset properties in a case pre-
vented the single-asset standard from being
applied to any of those properties, while
another court held that a hotel was not a
single-asset property because room cleaning,
Internet service, and food service constituted
enough business beyond the mere operation
of the real property.
These types of exceptions to the rule
appear to be indicative of a larger trend that
has resulted in many potential investment
properties remaining in bankruptcy longer,
thereby regulating the fl ow of assets to mar-
ket and reducing the likelihood that bank-
ruptcy sales will result in an extraordinary
investment opportunity.
How might existing real estate investments be impacted by the infl ux of commercial tenant bankruptcies?While a tenant’s bankruptcy of en portends
a reduced income stream from a commercial
property, the bankruptcy code does contain
a number of provisions that are calculated to
protect a landlord’s interests. T ose provi-
sions include administrative claim priority
and expedited payment requirements for
post-petition occupation of leased prem-
ises; restrictions on assumption and assign-
ment (although the bankruptcy code does
permit assignment even if the underlying
lease prohibits it); and an expedited process
for requiring a debtor tenant to determine
whether it will assume or reject a pending
lease [11 U.S.C. §365].
T ese provisions are very complicated and
can be tricky in their application, but with
the help of experienced bankruptcy coun-
sel, the owner of commercial real estate can
eff ectively limit the losses typically incurred
when a commercial tenant fi les a bankruptcy
petition.
Bankruptcies and distressed assets will
continue to aff ect the commercial real estate
market throughout this year and probably
beyond. While such investments can off er
value-add opportunities that may pay off
handsomely when the market recovers,
investors must have an in-depth understand-
ing of the asset and its market before moving
forward.
Bernard D. “Bo” Bollinger is chair of the insol-
vency and fi nancial solutions practice group
at law fi rm Buchalter Nemer in Los Angeles.
Contact him at bbollinger@buchalter.com.
SAV
E TH
E D
ATE APRIL 22 - 26, 2012
MIDYEAR BUSINESS MEETINGS
CCIM INSTITUTE
Kansas City, MOKansas City Marriott Downtown
Commercial Investment Real Estate
Commercial Calculations Measurement methods can make a big difference in lease negotiations.
rRent, operating expenses, tax obligations, and several other economic matters are tied to the square
footage of leased premises. Generally speaking, a higher square footage yields higher rent and other
payments for the leased premises. Therefore, landlords and tenants often disagree on the appropriate
square footage to be used in lease negotiations.
by Delmar Nehrenberg and David Alvarado
BRIEFSLEGAL
Confl icting Measurements In California’s largest offi ce lease transac-
tion in recent years, digital television ser-
vices provider DirecTV signed a 15-year,
approximately 630,000 rentable square-
foot lease valued at more than $400 million
for the company’s corporate headquarters
in El Segundo, Calif. T e lease included
another approximately 89,000 rentable
square feet of must-take space to be
delivered by the landlord and leased
by DirecTV upon the expiration
of the existing third-party
leases. Eventually DirecTV
would exclusively lease the
entire three-building Kil-
roy Airport Center.
How to CalculateMany methods are used to calculate square
footage in commercial leases. Usable square
footage refers to the actual occupied area
leased. Rentable square footage is the sum
of the usable square footage and a portion
of common areas and other non-leasable
building areas allocated to the area leased
(of en determined by applying a percentage
load factor to the usable square footage). T e
portion of such other areas to be added to
the space’s leased usable area is negotiable.
T e most widely used U.S. standard for
measuring offi ce buildings is published by
the Building Owners and Managers Associa-
tion International. T e BOMA standard was
fi rst published in 1915 and has been revised
various times to refl ect industry changes.
T ough widely used, the BOMA standard
is voluntary. Landlords may choose not to
use it at all or may elect from a variety of ver-
sions of the standard to apply. T e selection
of the appropriate BOMA standard version
to be used isn’t always straightforward. And
more importantly, when landlords and ten-
ants disagree on which standard to use, the
diff erence in rent over the lease term can be
substantial. For example, in the following
case, the diff erence in the applied standards
amounted to $10 million in lease payments.
One major point of contention was how
to measure the premises. Prior to beginning
lease negotiations, both parties agreed that
the 1996 version of the BOMA standard
would be applied. However, a disagreement
ensued regarding the application of that
standard during lease negotiations.
It was the landlord’s position that any full
buildings leased by DirecTV should be mea-
sured as “gross building area,” as defi ned in
the 1996 BOMA standard yielding a higher
January | February | 2012
Am
bie
nt
Ideas/
Veer
January | February | 2012www.ccim.com
square footage than other methods. T e GBA
measurement includes the total constructed
area of a building and is computed by measur-
ing to the outside fi nished surface of perma-
nent outer building walls without deductions.
DirecTV argued that, whether or not it
leased a building in its entirety, GBA was not
the appropriate standard. Rather, DirecTV
proposed that the 1996 BOMA standard
used for multitenant offi ce buildings be used
for all portions of their premises. T e mul-
titenant application begins with the occupi-
able area of the premises and adds a portion
of the common areas but excludes from the
rentable square footage the major vertical
penetrations (stairs, elevator shaf s, fl ues,
pipe shaf s, vertical ducts, and the like), and
other non-usable areas.
T e 1996 BOMA standard provides mul-
tiple variations as to how to measure the
premises when a building is leased by a single
tenant. T e landlord argued that the 1996
BOMA standard would not have provided
for a GBA if BOMA did not intend for it to be
used; GBA applied specifi cally to and was the
most appropriate method for single-occu-
pant buildings. In addition, the landlord
argued that, where a tenant occupies all of
the rentable area of a building, it is appropri-
ate to charge a single occupant based upon
the entire gross area as the entire building is
dedicated to its use.
DirecTV argued that the application of
GBA was not consistent with market stan-
dards and that it should not have to pay for
vertical penetrations or non-usable areas
simply because it was the single occupant
(particularly given that the landlord did not
have other single-tenant off ers and would
likely have to lease on a multitenant basis
in DirecTV’s absence).
T e economic diff erence resulting from
application of the two proposed mea-
surement methods was approximately
$10 million. Given the magnitude of the
economic impact at stake, the measure-
ment dispute led to a short stalemate in
the negotiations. T e parties were even-
tually able to consider the desirability of
completing the lease and agreed to a com-
promise as to the stated square footage of
the premises. T e compromise equated
economically to more than the multiten-
ant measurement but less than the gross
building area.
Delmar Nehrenberg is a partner and David
Alvarado is an associate in the Century City,
Calif., offi ce of the law fi rm of Allen Matkins
Leck Gamble Mallory & Natsis LLP. Contact
them at dnehrenberg@allenmatkins.com. and
dalvarado@allenmatkins.com The authors of
this article represented the landlord in the dis-
cussed transaction.
One major point of
contention was how to
measure the premises.
Ward Center Online Education
Session 1: Feb 7 - 23
Session 2: Jul 17 - 31
Session 3: Oct 30 - Nov 8
REAL ESTATE
FINANCIAL ANALYSIS
USING EXCELMastering Microsoft Excel’s financial analysis capabilities can make proforma
models more accurate and bring enhanced meaning to sensitivity analyses. In this
class, students learn step-by-step instructions for creating an accurate proforma
for analyzing the financial performance of commercial and investment real estate.
Students are expected to have a basic knowledge of Excel and a firm grasp of basic
real estate finance concepts such as time value of money, IRR, and NPV.
Live virtual session dates and times vary. Visit http://www.ccim.com/
education/ward-center or call (800) 621-7027 for more information.
TECHNOLOGYSOLUTIONS
tThis year, the commercial real estate industry will continue to face
challenges. CCIM members are looking for information that will help
them save time, cut costs, and enhance their productivity. In the
current economic climate, for example, retail leasing specialists and
shopping center owners might benefi t from knowing which tenants
are most likely to succeed in their location. And with access to free
tech support, small fi rms and solo practitioners could focus on clos-
ing deals instead of fi xing their computers. Likewise, a neighbor-
hood’s “walkability” rating might help attract commercial tenants,
particularly in active urban markets.
by Jay R. Lucas, CCIM
Commercial Investment Real Estate
Work Smarter
Svanhorn
/Veer
Last year, CCIM Tech introduced services
that meet these needs. CCIM members can
start the New Year by capitalizing on these
new member benefi ts to overcome the chal-
lenges that lie ahead.
Rating RetailBrandScore is the most recent addition
to STDB, in cooperation with T eRetail
Planet.com. BrandScore measures the
degree to which a specifi c brand is likely to
succeed in a given retail location based on
four components: neighborhood, retailer
synergy, competitive environment, and
commercial activity. T e higher the Brand-
Score, the more likely a retailer will be to
succeed.
Let’s say a broker would like to recruit a
new tenant for a retail property in Denver.
She can enter the property address into
STDB, and using the BrandScore wid-
get, she can immediately see the top fi ve
retail tenants for that location based on
To learn more about
these services and other
valuable technologies
available for CCIM
members, visit the
CCIM Tech Learning
Center at www.
ccimtechlearningcenter.com.
January | February | 2012www.ccim.com
TheRetailPlanet.com’s proprietary retail
property scoring algorithms. She can then
focus her recruiting eff orts on those retail-
ers. T ere is also a link to T eRetailPlanet.
com, where users can get more-valuable in-
depth data with a subscription.
To access the top BrandScore retailers
for a specifi c location, log in to STDB’s Site
Analysis. Click on the RetailPlanet icon on
the right-hand side of the map below the
measurement tools. T en click on the prop-
erty location to see a list of retailers with the
highest BrandScores. Users can also modify
the square-footage range to get a new list.
Tech RescueDo you ever have problems with your com-
puter hardware, sof ware, network, or digi-
tal devices? Are these problems so frustrat-
ing that you can’t focus on the transaction
you’d rather be working on?
CCIM members now have free access to
the full-time Tech Helpline, which can assist
in fi xing any tech-related problem. Helpline
experts efficiently troubleshoot and offer
solutions, of en by remotely connecting to
members’ computers. T is allows members
to spend that time focusing on the assign-
ments that pay the bills. Tech Helpline users
have successfully removed computer viruses,
resolved sof ware confl icts, connected to new
routers, and fi xed problems with antivirus
programs. T e Tech Helpline can be reached
at (888) 509-9541 or by clicking on the “Free
IT Support” link on www.stdb.com.
What’s the Score?CCIM members also now have access to
Walk Score and Transit Score through
STDB. T ese tools display location ratings
based on services within walking distance
and access to public transit. Given the fl uctu-
ating cost of gasoline and increased interest
in urban real estate, a good score could help
convince a buyer or tenant to close the deal.
Access Walk Score through the STDB
services menu af er logging in to www.stdb.
com. Enter a property address and click
“Get Walk Score.” A tremendous amount
of information appears, including a Walk
Score and Transit Score on a scale of 1 to
100. High scores indicate that a property is
in a walkable area with easy access to public
transit. Also provided are a map and list of
nearby businesses such as restaurants, hotels,
banks, child care, gyms, and other highly
valued services. Walk Score includes direc-
tions and additional details for each business
listed, and Transit Score provides a list of all
public transit services around the property
including bus numbers and stops.
Walk Score has also been added to STDB’s
Site Analysis as a heat map, with green por-
traying more walkable areas and red denoting
less walkable locations. Walk Score heat maps
can be found under STDB’s Map Layers tab.
Jay R. Lucas, CCIM, is president of CCIM
Technologies, a wholly owned subsidiary
of the CCIM Institute. Contact him at jayr@
stdbonline.com.
Coldwell Banker Commercial® has the most
CCIM designees and candidates of any
commercial real estate company!
Emil Akopian, CCIMColdwell Banker Commercial
North County
Glendale, CA 91203
(818) 334-1889
eakopian@cbcworldwide.com
Don G. Chapman Jr., CCIMColdwell Banker Commercial
Las Colinas
Albuquerque, NM 87109
(505) 897-7227
dchapman@cbcworldwide.com
Jeffrey Cusson, CCIMColdwell Banker Commercial
Saunders Real Estate
Lakeland, FL 33801
(772) 332-9070
jcusson@cbcworldwide.com
Alanna M. Hogan, CCIMColdwell Banker Commercial
NRT - FL
Maitland, FL 32751
(407) 222-7205
alanna.hogan@cbcworldwide.com
Scott Hurst, CCIMColdwell Banker Commercial
Advantage
Raleigh, NC 27612
(919) 830-7184
shurst@cbcworldwide.com
David R. Issaians, CCIMColdwell Banker Commercial
North County
Glendale, CA 91203
(818) 334-1916
dissaians@cbcworldwide.com
Justin Kite, CCIMColdwell Banker Commercial
First Equity, Realtors
Amarillo, TX 79106
(806) 468-4897
jkite@cbcworldwide.com
Stephen C. Lyon, CCIMColdwell Banker Commercial
Las Colinas
Albuquerque, NM 87109
(505) 897-7227
slyon@cbcworldwide.com
Karl D. Maret, Jr., CCIMColdwell Banker Commercial
NRT - FL
Tampa, FL 33609
813-286-2964 x205
dmaret@cbcworldwide.com
Leslie Mary Anna Phelps, CCIMColdwell Banker Commercial
United, Realtors
Houston, TX 77049
(281) 935-0755
lphelps@cbcworldwide.com
David P. Schooff, CCIMColdwell Banker Commercial
Fisher Group
Mankato, MN 56001
(507) 625-4715
dschooff@cbcworldwide.com
Beau Tucker, CCIMColdwell Banker Commercial
Rick Canup, Realtors
Lubbock, TX 79414
(806) 793-0888
btucker@cbcworldwide.com
Congratulations to the Newest Designees
cbcworldwide.com�������&ROGZHOO�%DQNHU�&RPPHUFLDO�$IÀOLDWHV��$�5HDORJ\�&RPSDQ\��$OO�5LJKWV�5HVHUYHG��(DFK�2IÀFH�LV�,QGHSHQGHQWO\�2ZQHG�DQG�2SHUDWHG���
Land of
by Dave Liniger
Foreign investors rejuvenate the U.S.
commercial real estate market.attteeeeeee
It’s no secret that commercial real estate in the U.S. has had its fair
share of struggles as the economy gets back on track. But when
compared to other parts of the world such as Europe, which is expe-
riencing sovereign debt crises and economic angst, the U.S. is still
one of the most attractive options for foreign investors with capital
to spend.
Just as we’ve seen in the housing market, challenging times cre-
ate great opportunities in the commercial sector. Foreign investors
recognize this, and they see the value in investing in U.S. commer-
cial properties. Savvy, professional commercial brokers can expand
their businesses to include this growing client base and be a part of
something big.
January | February | 2012 Commercial Investment Real Estate
ing to the U.S. in droves. In 3Q11, Canadian
capital represented one-third of all foreign
commercial acquisitions, followed closely
by Latin American and Asian investors,
according to Real Capital Analytics.
Investors based in Hong Kong and China
have also ramped up activity, with acquisi-
tions surging to nearly $1.5 billion in the past
year — a major increase considering these
investors acquired practically nothing 18
months ago. South Koreans are right on their
heels, totaling well over $1.1 billion worth of
commercial investments over the past year.
T e surge in Canadian acquisitions is a
relatively new phenomenon, driven mostly
by strong economic conditions and a stable
Canadian dollar, says Jim Fetgatter, chief
executive of the Association of Foreign
Investors in Real Estate, a trade organization
that represents foreign investors interested in
U.S. real estate.
“Canada’s economy never went through
the fi nancial crisis we did during this reces-
sion, so the U.S. is an ideal choice, plus there
are limited investment opportunities in Can-
ada due to the smaller size of its commercial
market,” Fetgatter says.
It might be surprising to some that despite
the infl ux of cross-border acquisitions, pur-
chasing U.S. real estate is actually a diffi cult
endeavor for foreign investors, due in large
T e numbers tell the story: For the fi rst
time since 2007, cross-border acquisitions
topped $7.8 billion in third quarter 2011.
What’s more, these buyers accounted for
more than 10 percent of all sales volume —
another recent high, according to Real
Capital Analytics.
Underpinning global investment activity
is a mix of buyers who are looking for quality
assets, investment safety, and high returns.
U.S. commercial markets possess these
strengths, says George Ratiu, manager of
quantitative and commercial research with
the National Association of Realtors.
“T e U.S. is attractive to global investors
because it has a mature and stable economic
environment, which provides investors with
quality assets and capital safety,” Ratiu says.
“Another factor is the rising availability of
investment capital in China. While Chinese
real estate continues to be a powerful magnet
for international investors, Chinese inves-
tors are looking to diversify their holdings,
and the U.S. is an ideal choice. Also, the sof
dollar is making dollar-denominated assets
a relative good buy.”
Canadians Lead the Way
Looking at the overall picture, our neigh-
bors from up north are the largest group of
international investors, and they’re fl ock-
BROKERS:
BE ON THE
FOREFRONT Real estate is based on relation-
ships, and this includes both
investors and other brokers who
could serve as a gateway to
potential buyers for your commer-
cial listings. It always helps if you
have a direct tie in common and
a way to meet them in person.
For example, vital contacts are
made at the annual Re/Max Com-
mercial World Symposium and
the R4 convention, where com-
mercial professionals from doz-
ens of countries come together
for a special commercial track to
network. If you don’t have this
sort of global network available to
you, look for other ways to meet
and interact with international
contacts, such as attending
foreign investment association
meetings and conferences.
Aside from being knowledge-
able about your market and other
global commercial hotspots, be
hands-on in your service. You
ultimately control how much — or
how little — you are involved with
foreign investors.
One thing I’ve always noticed
in my travels, which include visits
to some of the 80-plus countries
in the Re/Max network, is how
entrepreneurs from other coun-
tries are so savvy about what’s
happening in the U.S. They read
up on international news. They
know business trends. They take
the time to cultivate contacts
abroad.
We should be just as diligent
in knowing what’s happening
around the world.
January | February | 2012www.ccim.com
Spectr
al-
Desi
gn/V
eer;
C.J
. B
urt
on/C
orb
is
January | February | 2012 Commercial Investment Real Estate
part to Foreign Investment in Real Property
Tax Act legislation. FIRPTA mandates that
foreign investors be taxed on dispositions of
U.S. real property interests. It makes transac-
tions more costly and time-consuming for
inbound investors.
“No other type of foreign investor is taxed
on capital gains in the U.S. except for real
estate investors,” Fetgatter says. “T e manner
in which foreign investors tailor their acqui-
sitions for tax purposes depends on whether
the U.S. has a double taxation treaty with that
country and what kind of investor they are.
For example, high-net worth individuals are
taxed diff erently than foreign pension funds
in relation to how they’re able to structure
their investments.”
Secondary Markets Gain Steam
Traditional commercial gateway markets
such as Manhattan, which accounted for 40
percent of foreign purchases through 3Q11,
are still the hot destinations for global inves-
tors. But cities like Miami, Houston, Seattle,
Dallas, and San Diego are making gains in
commercial investment activity.
In Miami, for example, foreign investors
purchased more than $650 million worth of
commercial properties as of mid-October.
Asian investors led the way, accounting for
about 63 percent of all foreign capital in the
city, according to RCA data.
JM Padron, CCIM, broker/owner of Re/
Max Commercial Associates in Fort Lauder-
dale, Fla., is seeing this fi rsthand. Large multi-
national companies, such as Genting Malaysia
Berhad and Hong Kong’s Swire Group, have
recently announced major multimillion-dol-
lar investment projects in downtown Miami.
And that’s just the beginning.
“Asian investors are defi nitely prominent
in South Florida investments, but we’re also
seeing major players come in from Brazil and
other Latin American countries; Brazilians
account for 35 percent of commercial buys in
downtown Miami,” Padron says. “Israel also
is an important investor in South Florida; the
Dizengoff Group has invested $85 million,
mostly in anchored retail centers and bulk
condo deals.”
Nationally for foreign investment, offi ce
sales have recovered quite nicely, account-
ing for over half of cross-border acquisitions
as of June 2011 — a 65 percent year-over-
year increase over 2Q10, according to RCA.
T e retail and apartment sectors, however,
recorded the largest gains, signaling an
emerging preference for those property
types.
If 2011 numbers are any indication, more
foreign investors will be looking to diversify
their holdings — and they’ll be investing
their capital in the U.S.
Dave Liniger is co-founder and chairman of
Re/Max, one of the leading real estate fran-
chise companies with a global reach of more
than 80 countries. Contact him at dave@
remax.com.
Foreign Investment in Secondary Markets U.S. market Investor country
2011 total investment
($)# of properties
Dallas Canada 180,165,000 6
Israel 96,900,000 7
Germany 6,040,274 1
Australia 49,750,000 2
Hong Kong 182,602,304 3
Total 515,457,577 19
Houston Canada 167,756,400 5
Europe 3,809,001 1
Israel 175,999,944 3
Japan 7,000,000 1
Total 354,565,345 10
Miami Asia 412,249,896 4
United Kingdom 61,000,000 1
Americas 67,350,000 5
Germany 99,927,500 2
Hong Kong 13,100,000 1
Total 653,627,396 13
San Diego Europe 4,674,750 1
Asia 9,200,000 1
Total 13,874,750 2
Seattle Canada 78,100,000 1
Switzerland 51,915,250 1
United Kingdom 55,325,250 3
Japan 18,400,029 2
Hong Kong 3,400,000 1
Total 207,140,529 8
Source: Real Capital Analytics
Contact
Kenneth P. Riggs, Jr.,
CFA, CRE, FRICS, MAI, CCIM
312.587.1900
One of the first,and now, more than 80 years later,we are still at the heart of the industry.Real Estate Research Corporation (RERC) continues to be one of the most committed
commercial real estate research, valuation and consulting/advisory firms in the
nation. Our real estate research, publications, market studies, property valuations,
and investment and trends analysis have proven visionary for more than 80 years.
As an SEC-registered investment advisor, we use our knowledge and expertise in the real estate
field to act as an independent fiduciary on behalf of our clients, including:
� Independent fiduciary services for a major financial services fund valued in excess of
$12 billion.
� Fairness opinions on dozens of major acquisitions.
� Expert witness testimony regarding the valuation of billions of dollars of real estate.
� Valuation management and consulting for one of the nation’s largest pension funds, with
oversight responsibilities on a real estate portfolio containing approximately $20 billion in
gross asset value.
For additional information, including a complete list of services provided by RERC,
visit www.rerc.com.
Fiduciary & Advisory Services
Research & Publications
Valuation Management & Oversight
Management Information Systems
Addressing the industry’s real estate investment needs since 1931.
ShelterFrom the Storm
January | February | 2012
Now that we are several years past the credit
crisis of 2008, the world is still in turmoil.
T e European debt crisis and unrest in the
Middle East — these global circumstances
set the tenor for U.S. economic concerns.
Gross domestic product grew 2.0 percent in
3Q11, but the federal debt grew to $15 tril-
lion in 4Q11. Unemployment remains at 9.0
percent, home prices are still declining, and
although the nation has dealt with many of
its fi nancial issues, the political climate is
the worst we have seen in recent history as
attested by Standard & Poor’s downgrading
of U.S. credit to AA+.
Not surprisingly, businesses and con-
sumers lack confi dence, market volatility
has increased, and investors are tentative. It
seems the only certainty is that uncertainty
will prevail throughout 2012, at least until
the fall elections. T e year 2012 will serve as
a foundation for new business growth, more
deals, and getting our ducks in a row for what
is to come. T en we can fi nally turn the page
to 2013, when it’s time for commercial real
estate to come clean.
Ballast in the Storm
Although the uncertainty is dragging on,
investors can take heart in the fact that com-
mercial real estate has been able to more
than hold its own in this environment.
Commercial real estate has held vary-
ing degrees of value throughout history,
but compared to the banking industry and
other investment alternatives, it has always
been tangible, mostly transparent, and has
served as a secure investment to which
we have retreated when times were tough.
Given the uncertainty we are experiencing,
this security is a very appealing place to be —
an investment foundation that is relatively
stable fi ts our needs quite well and, from an
investment perspective, will continue to for
the next decade. Commercial real estate is
able to deliver what cannot be delivered by
the alternatives.
As shown in Table 1, the returns for com-
mercial real estate for private institutional
equity investors are up strongly and exceed
all other investments on a year-to-date basis
through 3Q11, according to the National
Council for Real Estate Investment Fiducia-
ries Index. Public equity investors are down
on a YTD basis following a strong bull run
in the prior two years, according to the
National Association of Real Estate Invest-
ment Trusts Index. In addition, much of the
loss we are seeing in the NAREIT Index is
due to the inherent volatility in the stock
market. In fact, as of 3Q11, institutional real
estate investors are still seeing a YTD annual
rate of return of 10.97 percent according to
the NCREIF Index, despite the increasing
risk. Most investors consider these returns
quite good on a relative or risk-adjusted basis.
Investors are fed up with the volatile stock
market, which can fl uctuate 3.0 percent or
more a day based on news from overseas.
Further, according to some estimates, 80
percent of daily trading volume comes from
high-frequency traders that are careless about
the fundamental value of the companies they
are trading. Much of 2012 will be spent clean-
ing up the volatility created by traders versus
investors. T e bond market is a risky bet too,
with interest rates at historical lows. As rates
rise — and they will one day — values will
go down accordingly. T e year 2012 will be
a pivotal time for the fi nancial markets, as
investors separate the wheat from the chaff .
As for commercial real estate returns, we
are already seeing moves toward stabilization
among the core property types, according to
Real Estate Research Corp.’s institutional
investment survey respondents. As shown in
Table 2, RERC’s required pre-tax yield rates
and required going-in and terminal capi-
talization rates increased or decreased only
nnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnCommercial real
estate offers investors refuge amid economic
uncertainty.
by Kenneth P. Riggs, CCIM, CRE, MAI
January | February | 2012 Commercial Investment Real Estate
slightly, if at all, for the offi ce, industrial, retail,
and apartment sectors. In contrast, required
returns for the hotel sector decreased some-
what signifi cantly from the previous quarter.
It does not take much brain power to con-
nect the dots when commercial real estate is
providing extremely attractive risk-adjusted
returns versus Treasuries (Table 3). Analy-
ses of RERC’s required pre-tax yield rate
(discount rate) and cap rates demonstrate
returns with spreads of 600 basis points
and 450 basis points respectively, which
are above the long-term averages. Although
Treasuries are at all-time lows, these low
rates are anticipated to continue for the next
several years.
U.S. commercial real estate continues
to provide the ballast needed in this global
fi nancial storm that remains fraught with
moral hazard, lacks honesty and transpar-
ency, and has turned the world on its head.
It will take several years to deal with many of
these systemic issues in a world that operates
between greed and fear, but if commercial
real estate does not come clean by 2013, it will
be a lost relic of the Great Recession.
Fundamentals Hold Their Own
Commercial real estate’s saving grace is that
it was not signifi cantly overbuilt nor did it
have a huge construction pipeline when
the recession began. As a result, property
fundamentals continue to improve, despite
sluggish and downright dismal employment
growth. T e interaction between demand
and supply for commercial properties has
translated into stabilizing fundamentals
relative to the dislocation felt throughout
most industries. Commercial space absorp-
tion is now positive, and new construction
remained at record lows in 2011. As a result,
vacancy rates and rents posted slow but
steady improvements. T is is what needs to
continue for property prices to inch up.
Offi ce vacancy declined to 17.4 percent
in 3Q11, while asking and eff ective rents
increased 0.4 percent and 0.6 percent respec-
tively, according to Reis. RERC’s transac-
tion analysis indicated that total volume
increased 20.0 percent, as the size-weighted
average price per square foot increased
approximately 5.0 percent.
T e availability rate for industrial proper-
ties declined to 13.0 percent in 3Q11, accord-
ing to Grubb & Ellis, as new supply and rents
increased slightly. Industrial property volume
increased about 10.0 percent on a 12-month
trailing basis, but the overall size-weighted
average price per square foot declined slightly,
according to RERC’s analysis.
Despite a weak economy and slow con-
sumer spending, the retail sector vacancy
rate remained at 11.0 percent during 3Q11,
according to Reis. However, net absorption
remained negative, and rents remained fl at.
Transaction volume increased nearly 10.0
percent on a 12-month trailing basis, and
the size-weighted average price psf of retail
property space increased slightly, according
to RERC’s analysis.
With a vacancy rate of only 5.6 percent
during 3Q11, according to Reis, increas-
ing rents, and positive net absorption, it is
easy to see that the multifamily sector poses
minimal risk nationally, regionally, and in
most metro areas. Apartment sector volume
increased 15.0 percent on a 12-month trail-
ing basis, although the size-weighted average
price per unit declined slightly, according to
RERC.
Hotel occupancy rose to 62.8 percent in
3Q11, according to Smith Travel Research.
T e average daily rate and revenue per avail-
able room also increased. RERC’s transac-
tion analysis showed that total volume for
the hotel sector rose 10.0 percent, but the
overall size-weighted average price per unit
decreased about 5.0 percent.
All in all, we should be thankful for the
fundamentals we see today on the heels of
Table 1:
Financial Markets vs. Commercial Real Estate PerformanceCOMPOUNDED ANNUAL RATES OF RETURN AS OF 9/30/2011
Market Indices YTD4 1-Year 3-Year 5-Year 10-Year 15-Year
Consumer Price Index1 3.05% 3.93% 1.23% 2.27% 2.45% 2.46%
10-Year Treasury Bond2 3.02% 2.98% 3.14% 3.62% 4.01% 4.59%
Dow Jones Industrial Avg. -3.90% 9.21% 3.15% 1.37% 4.67% 6.52%
NASDAQ Composite3 -8.95% 1.97% 4.91% 1.35% 4.89% 4.62%
NYSE Composite3 -14.72% -6.72% -3.39% -4.32% 1.68% 3.80%
S&P 500 -8.67% 1.14% 1.22% -1.18% 2.81% 5.23%
NCREIF Index 10.97% 16.10% -1.45% 3.40% 7.82% 9.39%
NAREIT Index (Equity REITs) -6.05% 0.93% -1.99% -2.43% 9.18% 9.14%
1 Based on the published data from the Bureau of Labor Statistics (seasonally adjusted)2 Based on Average End of Day T-Bond Rates3 Based on Price Index, and does not include the dividend yield4 Year-to-date (YTD) averages are not compounded annually
Source: BLS, Federal Reserve Board, S&P, Dow Jones, NCREIF, compiled by RERC
January | February | 2012www.ccim.com
Table 2: RERC Required Return Expectations1 by Property TypeCOMPOUNDED ANNUAL RATES OF RETURN AS OF 9/30/2011
Offi ce Industrial RetailApartment Hotel
AverageAll Types
RERC Portfolio
IndexCBD Suburban Warehouse R&D Flex Regional Mall Power Center Neigh/Comm
Pre-tax Yield (IRR) (%)
Range 7.0-10.0 7.5-11.0 7.0-11.0 8.0-11.5 8.0-12.0 6.5-11.5 6.0-11.0 7.0-12.0 6.0-11.0 8.0-15.0 6.0-15.0 6.0-15.0
Average2 8.1 9.1 8.6 9.1 9.5 8.1 8.7 8.67.9 10.4 8.8 8.5
Weighted Average3 8.7 8.7 8.4
BPS Change4 20 0 10 0 10 10 -10 -3010 -30 0 10
10 0 0
Going-in Cap Rate (%)
Range 5.0-8.5 6.3-9.5 6.0-8.0 7.0-9.0 7.0-9.0 5.0-8.0 6.5-8.0 6.0-9.0 5.0-8.0 6.0-10.0 5.0-10.0 5.0-10.0
Average2 6.4 7.4 7.1 7.7 7.9 6.4 7.4 7.15.9 8.3 7.2 6.7
Weighted Average3 6.9 7.2 6.8
BPS Change4 0 -10 10 0 10 -20 -10 0-10 -50 0 -10
-10 10 -10
Terminal Cap Rate (%)
Range 6.0-8.5 6.8-9.5 6.5-8.5 7.5-9.0 7.0-10.0 6.0-8.5 7.0-9.8 6.3-10.5 5.5-8.5 8.0-11.0 5.5-11.0 5.5-11.0
Average2 7 8 7.6 8.2 8.4 7 7.8 7.86.5 8.9 7.7 7.3
Weighted Average3 7.5 7.7 7.4
BPS Change4 0 -10 0 0 0 0 -30 0-10 -40 -10 -10
-20 0 -10
1 This survey was conducted in July, August, and September 2011 and refl ects expected returns for third quarter 2011 investments.2 Ranges and other data refl ect the central tendencies of respondents: Unusually high and low responses have been eliminated.3 Weighting is based upon 3Q11 NCREIF Portfolio market values.4 Change (+/-) in basis points (BPS) are from quarter immediately preceding current rate.
Source: RERC Investment Survey
the Great Recession. As 2012 unfolds and
we see increased fi nancial stability, the need
for companies to hire and the confi dence of
businesses to spend the $2 trillion in cash
hoarded over the past several years should
increase. T at said, commercial real estate
market fundamentals are poised to see
strong rent increases.
Class B and C Improve
Class B and C markets generally are not
seeing the kind of returns realized in the
institutional market or with class A proper-
ties in top markets, but investors have been
expanding their search into tertiary mar-
kets and smaller cities looking for higher
returns and lower-priced assets. T ere is
plenty of capital in search of the right deal
at the right price, as the issue is not liquidity,
but pricing.
Class B and C properties are starting to
show improving fundamentals, with class A
properties tending to see peak pricing and
Table 3: RERC Rates vs. 10-Year Treasuries
Recession
Historical Avg.: Going-in vs. 10-Yr Treasury
Spread: Going-in vs. 10-Yr Treasury
Historical Avg.: IRR vs. 10-Yr Treasury
Spread: IRR vs. 10-Yr Treasury
1Q '1
1
1Q '1
0
1Q '0
9
1Q '0
8
1Q '0
7
1Q '0
6
1Q '0
5
1Q '0
4
1Q '0
3
1Q '0
2
1Q '0
1
1Q '0
0100
200
300
400
500
600
700
800
Source: RERC, Federal Reserve, and NBER 3Q11 data
January | February | 2012 Commercial Investment Real Estate
rents, according to Reis. For example, B and C
offi ce properties experienced rental growth
and positive absorption in 2011, although
vacancy rates have yet to decline. Tertiary
markets are also beginning to show growth,
given that volume doubled in the fi rst half of
2011 as compared to a year earlier. In addi-
tion, offi ce, apartment, and retail property
transactions of less than $5 million showed
larger increases in volume than transactions
greater than $5 million during 3Q11 on a
12-month trailing basis, according to RERC.
CCIM members are seeing this trend and
believe that commercial real estate’s overall
value is holding its own as well, giving the
asset a value versus price rating of 5.4 on a
scale of 1 to 10, with 10 being high, during
3Q11. As for the individual property types,
CCIM members rated the value of each sec-
tor equal to or higher than the property
price. As shown in Table 4, the apartment
and industrial property sectors have the
highest value versus price ratings.
Despite the relative stability of commercial
real estate, there is risk with any investment,
particularly in periods of great uncertainty.
As a result, we are seeing investors turn to
cash as the stock market turns stomachs
and bonds are priced for perfection. In fact,
according to RERC’s 3Q11 Investment Trends
Quarterly survey of CCIM members, cash
is the only investment type where the rat-
ings have consistently increased during the
past year. As we saw with the NCREIF and
NAREIT Index readings in Table 1, com-
mercial real estate is not immune from eco-
nomic risk — particularly when the rest of
the market is going haywire. It is diffi cult to
quantify the amount of risk associated with
commercial real estate, but according to
CCIM members, the return for commercial
real estate continued to outweigh its invest-
ment risk in 2011, even though the amount
of risk associated with commercial real estate
continued to increase throughout the year.
By 3Q11, the return versus risk rating for this
asset type overall was 5.1 on a scale of 1 to 10,
with 10 being high, indicating that the return
for commercial real estate was only slightly
more than the risk.
Further, the apartment sector was the only
property type where the return versus risk
rating increased in 2011, while investment
risk increased and outweighed the return for
the offi ce, retail, and hotel sectors, as detailed
in Table 4. T e industrial sector had a return
versus risk rating of 5.1 in 3Q11, indicating
a slightly higher return than risk, but this
return rating was down from 5.5 earlier in
the year. With a healthy score of 6.8, the
apartment sector’s investment return easily
outweighed the risk.
The Outlook for Values
RERC forecasts aggregate private commer-
cial real estate values to continue to increase
over the next few years. RERC’s expectation
is bracketed by upside and downside sce-
narios that refl ect a projected value change
between -1.0 percent and 6.0 percent in
2012, with the current investment climate
suggesting a higher probability to achiev-
ing the upside scenario versus the downside
scenario. Adding an income return of 6.0
percent, total returns in 2012 are expected to
range from 5.0 percent to 12.0 percent, with
the base-case scenario near 9.0 percent on
an unleveraged basis. It is important to note
that RERC’s estimates are unleveraged, and
the use of debt has a compounding impact
on value increases going forward. T us, if
positive leverage is added to these estimates,
one can see that commercial real estate
off ers very attractive risk-adjusted returns
for a core strategy.
Commercial real estate entered this reces-
sion in better shape than in past recessions
and did not need to come clean on as many
facets as other investments. In light of the
turmoil we see in the stock and bond mar-
kets, this forecast refl ects the fact that com-
mercial real estate is delivering what inves-
tors thought they would get from the asset
class some 40 years ago — a hard asset that
holds up in chaotic times, an income stream
that is relatively predictable when you truly
analyze leases that are in place, diversifi ca-
tion when times are bad in the other invest-
ment arenas, and some equity kicker with
values increasing, especially when you add
some debt into the equation.
Kenneth P. Riggs, CCIM, CRE, MAI, is chief
real estate economist for CCIM Institute
and chairman and president of Real Estate
Research Corp. in Chicago. Contact him at
riggs@rerc.com.
Table 4: Historical Value vs. Price and Return vs. Risk RatingsHistorical Return/Risk and Value/Price Ratings
3Q 2011 2Q 2011 1Q 2011 4Q 2010 3Q 2010
Return vs. Risk
Overall 5.1 5.3 5.6 5.4 4.9
Offi ce 4.4 4.4 4.5 4.5 4.1
Industrial 5.1 5.1 5.5 5.2 4.8
Retail 4.4 4.7 4.8 4.9 4.2
Apartment 6.8 6.7 6.7 6.7 6.2
Hotel 4.7 4.8 4.8 4.7 4.1
Value vs. Price
Overall 5.4 5.4 5.5 5.5 5.1
Offi ce 5.1 5.0 5.1 4.8 4.7
Industrial 5.5 5.4 5.7 5.2 5.1
Retail 5.0 5.0 5.3 4.9 4.8
Apartment 5.5 5.2 5.4 5.3 5.4
Hotel 5.1 4.9 5.3 4.7 4.5
Ratings are based on a scale of 1 to 10, where 1 is poor and 10 is excellent.Source: RERC/CCIM Investment Trends Quarterly Survey, 3Q 2011
BUILD YOUR
BUSINESS
THROUGHSOCIAL MEDIALOOKING FOR NEW CLIENTS? YOU’LL FIND THEM ONLINE.
so
cia
l ne
two
rkin
g
Commercial real estate is all about relation-
ships. So the industry’s interest in social
media — a venue where relationship build-
ing is turbocharged — should be expected.
“We have gained several clients because
of the exposure we received through Face-
book,” says N. Justin Cazana, CCIM, princi-
pal at Cornerstone/Cushman & Wakefi eld in
Knoxville, Tenn. Cazana is one among many
CCIMs who have used the social networking
site as an eff ective business development tool.
As social media becomes a more integral
part of business development, commercial
real estate professionals are getting results by
incorporating Facebook, Twitter, and other
platforms into their marketing strategies. A
social media presence can increase the likeli-
hood of being found by new clients, establish
professional credibility, and streamline com-
munication. Although social media is free, it
does require time to learn and maintain. So
what’s the return?
Quantifying the Value
“Learning about social media and setting
up my profi les took a lot of time,” says Chad
Gleason, CCIM, of Real Estate Investment
Services in Kent, Wash. Although it can be
an effi cient tool, there is an opportunity cost
for overcoming the initial learning curve,
refi ning messaging, learning new programs,
and staying current on existing ones. And
high-profi le gaff es by celebrities and politi-
cians remind users of the potential risks of
participating in social media.
Given this risk and opportunity cost, com-
mercial real estate professionals — people who
rely on models and analysis for decision mak-
ing — are naturally interested in measuring
social media’s return on investment. “It’s hard
to determine,” says Greg J. Vollman, CCIM, of
Apartment Investment Realty in Cincinnati,
voicing a common sentiment among CCIMs.
Even Fortune 500 companies are still
fi nding their footing in social media analyt-
ics. Ford Motor Co. recently launched a $95
million marketing campaign that included
a Facebook page, but the company still had
by D
ennis L
aM
antia
www.ccim.com January | February | 2012
January | February | 2012 Commercial Investment Real Estate
Integrating social media into a marketing
strategy doesn’t have to become a part-time
job. Palmeri limits his social media use to an
average of 30 minutes a day. Other interview-
ees worked eff ectively with even stricter time
limits. T ird-party sites like Seismic, Tweet-
Deck, and HootSuite improve efficiency
by allowing users to update multiple social
media profi les from one site. Using these
time-saving tools, “I am able to update my
Facebook and Twitter profi les with material
from my blog with one click of the mouse,”
Barkan says.
An initial decision also needs to be made
about how “social” social media should
be. Users like Palmeri don’t mind mixing
business and personal information. “You
need to express a little bit of your personal-
ity, which gives insight into who you are,”
Palmeri says.
Gant B. Hill, CCIM, president and princi-
pal broker of Venterra Realty in Louisville,
Ky., also chooses to share personal infor-
mation alongside business information.
“I don’t mind mixing the two,” Hill says.
“It creates character and makes you more
approachable, but never take either to the
extreme.”
Facebook and Google+, Google’s social
network, allow users to have it both ways.
Facebook users can create a group of business
friends and share only certain updates with
that group. Google+ off ers similar function-
ality with its Circles feature.
diffi culty determining the value of the inter-
est it generated. “T ey can give you Likes,”
Scott Kelly, Ford’s head of digital marketing,
told T e Wall Street Journal, referring to the
Facebook feature that allows users to provide
quick, positive feedback. “But the question is,
What is the value of those Likes?”
“It’s too early to establish an ROI on the
time I invest in social media,” says Shawn E.
Massey, CCIM, partner at T e Shopping Cen-
ter Group in Memphis, Tenn. “My goal was
to increase exposure and keep my name in
the retail community during this slow period.
Based on that, it has worked very well.”
However, one concrete form of measure-
ment is new business. Cazana — whose com-
pany has four Facebook sites, three Twitter
feeds, and two blogs — has gained several
new clients as a result of social media. Dan-
iel Palmeri, a senior associate at Colliers
International in Las Vegas, uses LinkedIn
to locate potential clients and connections
to them. “T is has resulted in a far greater
success rate than a cold-call,” he says. He
attributes three closed deals to social media.
Gleason says that 40 percent of his deals can
be linked to social media connections, which
gives him a larger presence in the market and
a larger pool of lease tenants.
“When I get a call from someone I con-
nected with through social media, I know
my social media campaign is eff ective,” says
Martin Barkan, CCIM, CRE, senior vice
president of First Property Realty Corp. in
Beverly Hills, Calif. Barkan is working on
several transactions that originated from
connections on Facebook, LinkedIn, and his
blog. “T ese transactions with new clients
took six to 12 months to develop af er the
initial contact, but I believe the return on the
investment will be exponential over the next
two to three years. I’m certain this will be
the single biggest market visibility and client
growth platform in my business.”
Being Found
Candice A. Donofrio, owner of Next Wave
Real Estate Investments in Laughlin, Nev.,
gained referral business using social media.
Af er reading a commercial real estate blog
post, she found the author’s Facebook page
through a Web search. Af er commenting
on the author’s Facebook wall, she received a
phone call from him about a business oppor-
tunity, which she referred to a colleague in
Las Vegas.
Donofrio’s story is an example of how
social media can help with inbound mar-
keting. Prospective clients are searching the
Web for information about potential business
partners, and LinkedIn, Twitter, and Face-
book profi les and updates are of en top results
when an individual’s name is searched.
“When someone searches for me, my
LinkedIn page, Facebook business page, and
Twitter profi le are at the top of the results,”
Barkan says. Social media sites give users
privacy settings to control what parts of
their profi les appear in search engines. But
it pays to have some information available to
the public, especially if it’s business-related.
A recent Pew Research report found that 92
percent of adults use search engines to fi nd
information, making it the most common
online activity, along with e-mail. Creating
a social media profi le can help commercial
real estate professionals be found online, and
it gives their peers a convenient way to com-
municate with them.
I’m There. Now What?
The initial aversions to social media are
being replaced by questions about how to
best calibrate and integrate social media into
a broader marketing strategy.
0%
20%
40%
60%
80%
100%
Facebook Twitter YouTube
94%
77%
42%
Priority Social Media Platforms(% of respondents listing this platform among their top 3)
Source: Booz & Co.
Future Investments in Social Media
Source: Booz & Co.
Somewhat More Resources
56%
Substantially More
Resources39%
Will Remain
Unchanged 5%
January | February | 2012www.ccim.com
Part of the appeal of Facebook and other
social media sites is their reach. Social media
provides an opportunity for businesses to
reach outside their customer contact lists to
a much bigger audience. “T e more I grow my
social media presence the more my inbound
marketing increases, which has been essential
to growing my business,” says Barkan, who
like other CCIMs, is fi nding that making
sense of social media makes business sense.
Dennis LaMantia is interactive marketing man-
ager at the CCIM Institute.
For those looking for more separation
between their business and personal lives,
the solution is to create diff erent profi les for
each. “People who want to communicate
their professional information to their per-
sonal network can simply post the relevant
information in both places,” says Jeff rey B.
Pollock, CCIM, principal at Pollock Com-
mercial in Atlanta.
What to Share
Sharing information about recent transac-
tions, insights into local market observations,
or trends in certain property types can help
establish credibility among peers and poten-
tial clients. “People are looking to us for infor-
mation, and we use social media to provide
news about properties and tenants that have
come to the market,” says Cazana.
LinkedIn is a particularly good platform
for such information. For example, Bob Rein,
CCIM, associate vice president of NAI REOC
Austin in Austin, Texas, posted a series of
LinkedIn updates to attract investment from
his home state of Arizona. What started as
a single post about Austin market trends
turned into series of 10 posts. A prospective
client saw the posts and contacted Rein, sug-
gesting they work together when an invest-
ment opportunity arises.
Finding business-related information to
share can sometimes be as easy as repurpos-
ing existing content. Barkan takes advantage
of the low incremental resource cost of social
media by repurposing blog and newsletter
content on Facebook and Twitter. Businesses
and individuals without blogs can still cre-
ate a social media presence by fi nding qual-
ity industry information and sharing it with
their followers. CCIMs can share insights by
applying CCIM education concepts to cur-
rent commercial real estate news.
Other sources of business-related infor-
mation include quotes from industry events,
reactions to other users’ posts, product
reviews, and more. A little bragging doesn’t
hurt either. “I used LinkedIn to announce
earning my CCIM designation, and my pro-
fi le views went up signifi cantly as a result,”
Rein says. His connections congratulated
him on the accomplishment and asked for
information about the designation.
Social media is about building relation-
ships, and in the U.S., that relationship build-
ing is mostly occurring on Facebook. T e site
dominates among social media platforms.
U.S. Internet users spend 16 percent of their
online time on Facebook, according to Citi
Investment Research and Analysis, a fi gure
that has steadily increased over the past few
years. Businesses are recognizing the impor-
tance of going where their customers are.
Booz & Co. recently reported that 94 percent
of the businesses surveyed view Facebook as
one of their top three social media priorities,
followed by Twitter with 77 percent and You-
Tube with 42 percent. T e same report found
that 96 percent of companies plan to either
allocate substantially or somewhat more
resources to social media.
0% 10% 20% 30%
23%
28%
40%
50%
40% 50% 60%
2008
2009
2010
2011
Companies Using Social Netwoking Tools
Source: McKinsey & Co.
Commercial Investment Real Estate
ResizingRight-Sizing?
or
Prepare for the smaller
(and smarter) corporate
offi ce.
by Rich Rosfelder
January | February | 2012www.ccim.com
Corporations around the globe have been
holding on to offi ce space in anticipation
of a market rebound, but that’s about to
change. “A growing number of corporate
property owners say they have up to 50 per-
cent excess leased offi ce space,” according
to Jim Young, CEO of RealComm, a com-
mercial real estate and technology advisory
fi rm. “T eir goal over the next fi ve to seven
years is to eliminate that excess space.”
T at “50 percent” fi gure might be shock-
ing, until you refl ect on recent changes aff ect-
ing corporate offi ce space usage. In the fi rst
10 months of 2011, employers announced
more than 520,000 planned job cuts, accord-
ing to outplacement company Challenger,
Gray & Christmas. While well below reces-
sion levels, this fi gure marks an increase of 16
percent over the same period in 2010.
At the same time, technology continues to
reshape corporate offi ce culture. T ose who
keep their jobs are now more likely to work
outside the offi ce, at home, or at client sites.
According to Teknion’s recent Workplace of
the Future study, 46 percent of companies
surveyed currently employ cloud comput-
ing — which allows employees to access
company data from any computer — and 90
percent plan to increase their investment in
productivity-enhancing technology by 2015.
Thus, when it comes to corporate office
space usage, bigger is no longer better. At
November 2011’s CoreNet Global Summit in
Atlanta, Peter Miscovich, managing director
of corporate solutions for Jones Lang LaSalle,
predicted that by 2015, the average square foot-
age allocated per employee will shrink by up to
75 percent, depending on the industry sector.
The new paradigm is “smaller and
smarter,” Young says. But less space means
smaller and possibly fewer leases. If portfolio
managers and brokers hope to compete in
the changing corporate real estate landscape,
they need to understand how companies are
preparing for tomorrow’s offi ce.
Sharing Space
What does tomorrow’s office look like?
According to Johnson Controls’ recent
study Collaboration 2020, during the next
decade employees expect to spend less time
at their desks and more time working in
dedicated collaboration rooms and com-
municating via video conferencing.
Many companies have already begun to
implement what is perhaps the most striking
innovation: shared seating. Some prefer a res-
ervation-less hot-desking arrangement, while
others use hoteling, which requires employ-
ees to reserve unassigned seats. Either way,
“the idea of an offi ce where you can hang pic-
tures of your family and display your sports
trophies is a thing of the past,” Young says.
T is change seems to be a natural out-
growth of the increased popularity of mobile
technology. According to an international
workplace study by Cisco, three out of fi ve
workers say they don’t need to be in the offi ce
to be productive anymore. With a laptop,
tablet, smartphone, or some combination
of those devices, many offi ce employees can
work anywhere they can get online.
cCorporations aroundC
holding on to offi ce h
of a market reboundo
change. “A growing c
property owners say tprop say t
cent excess leased offi cent e eased o
to Jim Young, CEO oo Jim Young, C
Wilfr
ied K
recic
hw
ost
/Gett
y Im
ages
January | February | 2012 Commercial Investment Real Estate
T is also means that time spent in the
office is often dedicated to meetings and
other face-to-face activities rather than sit-
ting at a desk. According to the Workplace of
the Future survey, 77 percent of corporations
are already utilizing more open, collabora-
tive workspaces and fewer individual offi ces.
Ryan M. Lorey, CCIM, director of
global real estate at Booz Allen Hamilton
in McLean, Va., recently coordinated his
company’s move from two buildings total-
ing approximately 750,000 square feet of
old, ineffi cient offi ce space in Tysons Cor-
ner, Va., to newly designed buildings with
shared seating. “Our 15-year lease terms
were coming up, and the buildings’ heat-
ing, ventilation, and air conditioning and
other infrastructure were reaching the end
of their functional economic life,” Lorey says.
“All of the new buildings were designed for
maximum effi ciency, with more collabora-
tion space and a hoteling environment, so
eligible employees can work where they need
to, when they need to.”
Technology is also helping corporations
redefi ne their offi ce space utilization. “We
are implementing alternative work environ-
ments in every new project,” says Dennis
Virzi, CCIM, a senior portfolio manager with
AT&T in Dallas. “By deploying high-speed
Wi-Fi and Follow Me telephone services, we
can off er a functional workplace at approxi-
mately half the footprint of a traditional cube
layout.” Virzi’s company is currently in the
process of eliminating an expensive lease.
Using only technology enhancements, they
plan to accommodate 150 employees at a new
location that has only 85 workstations.
Other corporations are fi nding shared-
seating opportunities and collaboration
space in their current portfolios. Liam Mur-
phy, CCIM, of Hayes Commercial Group in
Santa Barbara, Calif., recently worked with
a client who began using offi ces previously
reserved for traveling executives to accom-
modate hot-desking. “Now they are able to fi t
more of their regular staff into the corporate
offi ce without taking on more square foot-
age,” Murphy explains. When the economy
bounces back, corporations that recognize
these opportunities will be able to expand
without leasing additional space.
At What Cost?
But as full economic recovery continues to
recede into the distance, most corporations
are still focused on cutting costs rather than
expanding payrolls. T e key to reducing
costs associated with a leased offi ce portfolio
is also one of the keys to creating a smaller
and smarter offi ce: Study occupancy needs.
A careful analysis is almost certain to reveal
excess space that can be shed or used more
effi ciently.
“Gone are the days when brokers and real
estate directors can use generic formulas to
calculate occupancy needs,” says Andrew
Job Cuts: Top 5 Industries
Industry 2011 (thru Oct.) 2010
Government 162,373 128,218
Financial 54,510 20,886
Retail 46,053 33,169
Aerospace/defense 33,256 16,186
Healthcare/products 22,584 25,411
Source: Challenger, Gray & Christmas
The key to reducing costs associated with a leased offi ce portfolio is also one of the keys to creating a smaller and smarter offi ce: Study occupancy needs.
Harnish, CCIM, director of enterprise devel-
opment for Johnson Controls in Seattle. “In
today’s global, virtual, and dynamic work-
place, we need to analyze how people work
together, where they work together, when
they work, and the frequency of their desk
and conference room usage.” T is process
might involve interviews, direct observation,
or the installation of temporary motion sen-
sors that track space usage. “T ough this
seems like an expensive study, the cost is
very little compared with the inefficient
space being paid for over the life of a lease,”
Harnish adds.
A shared-seating setup can also give
companies more information about their
workforce and how they utilize offi ce space.
At Booz Allen Hamilton, employees must
reserve a space, with a fi ve-day max per res-
ervation. To get metrics, Lorey collects data
from the online reservation system. T ough
the results are still preliminary, he expects
the company will reach 80 percent utiliza-
tion af er all of the renovations are complete.
January | February | 2012www.ccim.com
Johnson Controls recently worked with
a global company that transitioned to a
shared-seating arrangement for several rea-
sons, including cost. T e company reduced
its carbon footprint by nearly 20 percent,
resulting in an annual savings of more than
$3 million. Another client that made this
transition was able to reduce infrastructure
needs by 15 percent, Harnish says.
“It is always more effi cient to consolidate,”
says Stuart L. Rosenberg, CCIM, SIOR,
president of ICI Commercial in Arlington
Heights, Ill. “Typically, utility costs can be
cut just by reducing the amount of exterior
wall space exposed to the elements.”
Corporations that aren’t ready to consoli-
date should consider taking advantage of
today’s rent rates to prepare for tomorrow’s
offi ce. “Open a dialog with the landlord for
a blend and extend,” Virzi says. “Market rent
rates are down and most owners are eager to
extend lease terms. B&Es are also a good way
to obtain fresh tenant improvement funds,
which takes the pressure off corporations’
operating budgets for things like new carpet-
ing, paint, and landscaping.”
Murphy suggests incorporating early ter-
mination or “buyout” language into every
new lease, as it saved one of his clients hun-
dreds of thousands of dollars. For example,
a seven-year lease might have a termination
option af er the third year. “T e end result is
that corporate users do not have to absorb
the risk of subleasing if their demand for
space changes suddenly,” he explains. “Most
of our buyout clauses end up being a penalty
of 10 percent of the remaining lease liability,
which ensures that the landlord is compen-
sated for unamortized TIs and brokerage
commissions.” Tenants have the option to
terminate, and landlords get an extra check.
Other consolidation and expense-reduc-
ing opportunities are out there, but small
companies may not have the resources to dis-
cover them. In that case, Murphy says, “Copy
the big guys.” Most Fortune 1,000 compa-
nies hire consultants or create full-time
positions to identify and implement these
ONLY@CCIM.COMAre corporations missing opportunities
by focusing only on cost-reduction?
Read “The New Bottom Lines,” a
CIRE Web Exclusive supplement at
www.ccim.com/cire.
Changing the Corporate CultureProposed FASB rules could have unintended consequences.
T e single most important change of the proposed Financial Accounting Standards Board lease accounting standards would be
eliminating the distinction between capital and operating leases. Under the proposed guidelines, companies would be required to
recognize every leasehold obligation (in excess of one year) on its balance sheet.
But will that change the way corporations make their real estate decisions?
As part of our graduate thesis project at the Massachusetts Institute of Technology Center for Real Estate, we interviewed representa-
tives from 29 companies to answer that question. We conducted targeted interviews with a diverse sample of companies representing
tenants, landlords, and other industry professionals, from both the public and private sectors.
We concluded that the proposed changes in lease accounting would not cause an industry-wide shif in corporate real estate strat-
egy. However, for those companies that value the accounting impact of real estate decisions to a greater degree, the proposed changes
could be a catalyst for changes in real estate behavior.
T e impact for a particular fi rm would be largely based on two main factors: the size of a company’s operating lease portfolio rela-
tive to its balance sheet and a company’s sensitivity to fi nancial statement presentation. T ese factors make a company more likely to
change its behavior to mitigate the eff ects of the proposed changes.
We also discovered through our research that the proposed accounting changes would require companies to incorporate sophis-
ticated lease tracking systems in order to comply with the new reporting requirements. For example, since a balance sheet entry for
a particular lease could change over the lease term based on the likelihood of certain events (such as the exercise of a termination or
renewal option), more analysis and more communication between internal departments would be required. For instance, corporate
real estate groups would need to discuss transactions with corporate fi nance and accounting groups. As a result, companies would
scrutinize their real estate footprint in greater detail and have a greater awareness of any ineffi ciency in the space they occupy. Com-
panies would be better equipped to make real estate decisions that would lead to increased effi ciency in the market.
Timothy Canon was a senior analyst for Boston-based real estate advisory fi rm Richards Barry Joyce & Partners, and Christina Fenbert
is a portfolio analyst for Colony Realty Partners in Boston. Companies’ responses were based on the tentatively agreed upon FASB/IASB
changes as of July 2011. Read the complete research synopsis at www.ccim.com/cire.
strategies, and small companies can borrow
and apply the strategies that work for them.
For example, as a branding tool, companies
such as Cisco and Intel release white papers
that outline their sustainability eff orts. Other
companies publish their criteria for landlord
vendors, which might include a list of spe-
cifi c tenant improvements. “Best practices
are best practices,” Murphy adds, “no matter
who discovers them.”
Rich Rosfelder is associate editor of Commer-
cial Investment Real Estate.
Commercial real estate jobs adapt to new market dynamics.
Employment Evolution
by Scott J. Kolb
As the commercial real estate market has
so adeptly illustrated during the past fi ve
years, the saying “What goes up must come
down” has a much broader application
beyond Isaac Newton’s law of gravity. T is
idiom has served as an apt metaphor for
not only the commercial real estate market,
but also for the careers of the thousands of
professionals who are employed in this $10
trillion industry.
Af er more than three years in the down
phase of the cycle, it’s starting to look as
though commercial real estate’s trajectory
may be on the rise. Approximately 87 per-
cent of commercial real estate executives
who responded to a Christenson Advisors
market outlook survey anticipate continued
commercial real estate improvement in 2012,
including improved revenues and profit-
ability. And, as the commercial real estate
market continues its ascent, the employment
outlook will continue looking up.
Shifting Market Dynamics
To fully understand where the industry is
headed, it’s helpful to retrace the commer-
cial real estate employment market’s path in
recent years. T e market’s downturn in 2008
caused the commercial real estate industry to
shif its focus from transactions and develop-
ment to portfolio and asset management. As
a result, many companies redeployed their
transaction and development professionals
into portfolio and asset management roles.
January | February | 2012www.ccim.com
Pete
r D
aze
ley/
Gett
y Im
ages
January | February | 2012 Commercial Investment Real Estate
knowing when to acquire and sell at the
opportune time,” he added. T e survey fur-
ther suggests that while not only remaining
relevant during the downturn, the portfo-
lio/asset management role has evolved.
“Historically we’ve hired generalists in
this role that do not focus on a particular
property type, whereas today we look to fi ll
these positions with property specialists,”
the survey respondent said.
Ready for Growth
With a substantial amount of capital remain-
ing on the sidelines, many investors are
eagerly waiting to dive back into the industry
Further, many commercial real estate
companies used this extended down cycle
to reassess their organization from strategic,
organizational, human capital, and fi nan-
cial perspectives. Many fi rms restructured,
resulting in layoff s and leaving highly skilled
commercial real estate executives and pro-
fessionals unemployed. Companies quickly
learned how to do more with fewer resources
and employees.
A number of executives, particularly on
the debt side of the industry, branched off to
start new fi rms and prepare for the next mar-
ket cycle. Yet throughout the downturn and
still today, the most in-demand commercial
real estate jobs are in the areas of portfolio
and asset management, capital markets, and
fi nance and accounting.
“Given the contraction of the lending
markets during the downturn, professionals
with strong fi nancing skills became highly
valuable to our organization. High-perform-
ing-portfolio/asset managers help protect
assets and increase value through expense
control during volatile times,” said the senior
vice president of human resources at a public
real estate investment trust in response to a
Christenson Advisors survey.
“These managers are experienced at
understanding the value of assets and
40% 50%
43%4
0% 10% 20% 30%
29%
24%
17%
12%
12%
12%
12%
10%
10%
5%
7%
7%
2%
2%
2%
2%
7%
Future Roles in Commercial Real EstateIn Which of the Following Functions Does Your Company Plan to Hire the
Greatest Number of Employees Over the Next Few Years?
Source: Christenson Advisors 2011 Talent Management Survey
Portfolio/asset management
Property management
Transactions
Marketing
Brokerage
Capital markets
Construction
Leasing
Corporate accounting/tax
Due diligence/underwriting
Development
Legal
Facilities mangement
Appraisal
Technology
Project management
Risk management
Other
January | February | 2012www.ccim.com
while others have already re-entered. Value-
add opportunities are a key driver and have
replaced the core deals that were active at the
beginning of the downturn.
As a result, now may be an opportune
time for young, well-educated professionals
to enter the commercial real estate industry.
Most companies have reassessed their oper-
ational strategies, right-sized their teams,
tightened up their balance sheets, and are
suffi ciently prepared for business again.
As the industry moves forward, appeal-
ing job opportunities will emerge across all
functional areas of commercial real estate,
including transactions, development, capi-
tal raising, investor relations, information
technology, and sales and marketing, among
other areas. More than 75 percent of respon-
dents to a 3Q11 Christenson Advisors talent
management survey expect their companies
to increase workforce size in 2012. T is is a
signifi cant improvement for the industry.
Since the downturn, commercial real
estate companies have increasingly searched
for younger, less-expensive hires to shore up
departments and be mentored by functional
heads with 15 or more years of experience.
“T e youth are our industry’s future and
we need to keep indentifying and attract-
ing young, talented professionals to learn
and eventually lead the business,” said a
human resources leader at one of the coun-
try’s largest real estate investment manage-
ment fi rms.
A vice president of human resources at
a public seniors housing company further
added, “My advice for the young interested
in commercial real estate is to get out there, be
proactive and aggressive, network with people
already in the industry, sell yourself, and work
hard, because the rewards are fulfi lling. Every
sector of our industry — from hotel to offi ce,
apartments to retail, industrial to self stor-
age — can provide an extremely satisfying
career/life’s work.”
Those in commercial real estate who
remained employed through the down-
turn were of en labeled as high performers
and deemed indispensible to the company,
according to Christenson Advisors research.
For many, however, this meant taking on
increased responsibilities and working lon-
ger hours than what was required during
better times. Many companies also shed
their low performers and kept their top talent
during the downturn, while other compa-
nies were apt to replace their low performers
with highly skilled, proven professionals at
reduced salaries given the level of talent read-
ily available.
As companies move forward and continue
to reassess their personnel, executives and
staff will need to make an impact and add
value to keep their positions. “We need
the doers, not the hiders, going for-
ward. Peak markets can cover up a
lot of mistakes and make mediocre
management teams look good,”
said a global head of recruiting for
a large public real estate services
fi rm. “Down markets expose weak
management teams. Our focus these
last several years has been to attract
and retain top talent across all facets of
our business, senior to junior.”
Over the next several years, as the indus-
try builds momentum, there will be a recur-
ring push for increased sophistication and
proactive behavior across all organizational
levels and functional areas. As the downturn
becomes an event of the past, executives will
once again focus their eff orts on growing
their businesses in a rising market.
Compensation Changes
Compensation in the commercial real estate
industry is highly competitive with other
industries. Since reaching a peak in 2007,
compensation has declined over the last few
years as a result of the downturn. However, it
has recently stabilized and now off ers a huge
upside given the current standing along the
bottom of the market cycle. Base salaries that
were reduced or frozen during 2008 and 2009
are once again increasing at the standard rate
of 3 percent to 5 percent on average, accord-
ing to Christenson Advisors research.
Similarly, cash bonus awards were down
considerably in 2008 and 2009. However,
bonuses paid for 2010 performance were in
line with what was targeted at the beginning
of the year and are expected to pay out at or
above target for 2011 performance on average.
Although long-term incentive awards in the
private market have been somewhat limited,
there have been consistent grants in the public
market — particularly at companies that have
raised capital and are well positioned from a
capital structure perspective. Across both the
private and public markets, long-term incen-
tive compensation is expected to increase
going forward. As a result, the compensation
opportunities for executives and staff alike are
compelling given the anticipated long-term
growth of the industry.
As the commercial real estate cycle con-
tinues to climb out of a down cycle, exciting,
rewarding career opportunities will become
available for skilled professionals in the sec-
tor. While opportunities in certain subsec-
tors, such as multifamily, healthcare, and
seniors housing, are likely to re-emerge faster
than others, the industry in general is well
positioned for another great run.
Scott J. Kolb is a principal in the Chicago offi ce
of Christenson Advisors, a full-service real estate
consultancy firm that provides customized
executive recruiting, compensation consulting,
survey services, and management consulting to
the global real estate industry.
Improved Financial Performance
How Do You Expect Your Company to Perform
Financially Compared to the Previous Year?
Source: Christenson Advisors 2011 Commercial
Real Estate Market Outlook Survey
Revenue Increase
21+%
22%
16-20%
11%
11-15%
11%6-10%
16%
1-5%
20%
No change
20%
January | February | 2012 Commercial Investment Real Estate
S O U T H
“Based on the Miami Association of Realtors, the
city of Miami will break every sales record in the
history of Dade County in 2011, including the condo
boom years of 2006 and 2007, because of the torrid
pace of international buyers now fl ooding the market
with cash purchases.” — World Property Channel
Big Deal in TexasWarren Buffett’s favorite furniture store plans to enter the Texas market in a big way: Nebraska Furniture Mart — owned by Buffett’s Berkshire Hathaway — has announced a $1.5 billion development anchored by a 546,000-sf showroom, a regional headquarters, and a 1.2 million-sf warehouse and distribution facility, according to the Omaha World-Herald. NFM would occupy about 90 acres of a 433-acre site in the Dallas suburb of Colony, Texas, leaving plenty of room for just about anything else. “Everything’s possible,” NFM executive vice president Robert Batt told the paper, adding that a theme park, other retailers, a convention center, hotels, and residential development are all under consideration. Construction begins this spring with the fi rst phase scheduled to open in May 2015.
OUTLOOKREGIONAL
SOUTH
Ä E A S T
Class A Offi ce Rents – Now and Then
Source: Studley
0 5 10 15 20 25 30 35
Atlanta$23.43
$20.47
$26.52
$27.41New Jersey
$27.35
$24.73Philadelphia
$31.45
$30.67Northern Virginia
$31.84
$29.73U.S. average
3Q2011
3Q2006
Á
W E S T
Top Development Markets in 2012Rated “generally good”San FranciscoAustin, TexasSan Jose, Calif.SeattleSource: Emerging Trends in Real Estate 2012
Ä
January | February | 2012www.ccim.com
Ã
BIG-BOX TENANT LOOKS WEST Discount retailer Forman Mills opened its fourth Chicago-area location, in a 50,000-sf former Burlington Coat Factory
in the Back of the Yards neighborhood on Chicago’s Southwest side. A privately owned company headquartered in
Philadelphia, Forman Mills is a good fi t for 50,000-sf to 80,000-sf big boxes in off-market locations. The 30-store
chain has locations in the East and Midwest and is researching expansion opportunities in the western U.S.M I D W E S T
ÁS O U T H
Offi ce Availability Rate, 3Q11
Houston 17.9%South Florida 21.6%Dallas/Fort Worth 25.4%Atlanta 26.0%U.S. average 17.9%Source: Studley
E A S T
Next Big Thing?ShopHouse Southeast Asian Kitchen debuted its fi rst restaurant in Washington, D.C., last
September, but given its pedigree as the second concept from the folks who brought you
Chipotle, this rice bowl eatery may be coming to a storefront space near you in the not-too-
distant future. Although expansion rollout plans have not been announced, the good food reviews
and the lack of a successful competing national Asian food chain bode well for this concept. In
addition, founder Steve Ells seems to know what he’s doing: Each Chipotle outlet — and there
are more than 1,000 — is worth three times the average McDonald’s, according to NYmag.com.
Ä
41%Canada
and Mexico
26%Latin Americaand Caribbean
23% WesternEurope
10%
Others
S O U T H
Florida's Foreign Buyers
W E S T
Denver Life Sciences StatsStatus: Emerging life sciences cluster
Epicenter: Northwest submarket
Business: 100 life sciences companies
Capital: $76.7 million venture capital
funding; $31.5 million state grant fund
“Denver’s life sciences industry is trending
positively. Budding start-ups have the
intellectual and innovation resources
needed to develop into successful and
solid companies, … However, it is
evident that the market requires investors
and landlords who specialize in the
development of research facilities.”
— Jones Lang LaSalle, Life Sciences
Cluster Report, 2011
Ä
N A T I O N A L
Top 5 States for Doing Business1. Texas overall cost of doing business
2. Georgia labor availability and work force
development programs
3. Alabama incentive programs, labor costs
4. South Carolina overall business environment
5. Indiana rail and highway accessibility,
leader in economic recovery
Source: Area Development Online
z
Source: World
Property Channel
Á
January | February | 2012
INTERNATIONALBEAT
In what Jones Lang LaSalle calls “the largest deal ever recorded in Hong Kong’s history,” Mapletree Investments purchased Festival Walk shopping center from Swire Pacifi c for $2.4 billion, as its fi rst Hong Kong acquisition. Analysts predict it won’t be the last, speculating that the seven-story, 800,000-sf mall could be Mapletree’s seed property for a Chinese real estate investment trust. Hong Kong retail rents jumped 46 percent in 1Q11, according to CBRE, securing its place as the world’s second most expensive retail location after New York.
“The industrial market in Mexico is highly
segmented, with robust demand levels
in some markets such as Mexico City,
Monterrey, and Bajio (central Mexico),
while others, including several border
districts, are negatively impacted by the
demand shortfall in the U.S.”
—Jones Lang LaSalle, 4Q11
Biggest Deal
Ä
Commercial Investment Real Estate
Top Cities for Foreign Direct Investment, 2006–2011
1. Singapore2. Shanghai3. Dubai4. London5. Tunis
Source: FDI Markets/Cushman & Wakefi eld
Top World Labor MarketsEmployment growth 2009–10 for these top fi ve cities
averaged between 4 percent and 7 percent.
1. Istanbul2. Santiago, Chile3. Shenzhen, China4. Lima, Peru5. Singapore
Source: Cushman & Wakefi eld
Hong Kong’s
Markets to Watch
¬ Europe is hard hit by the euro crisis, but
some markets may fare better than others, according
to DTZ Research. In a forecast scenario, non-euro-
zone countries such as Sweden, Russia, Poland, and Turkey off ered better value
to offi ce investors than traditional German and French safe havens.
¬ Along with other international fi nancial centers Hong Kong, New York,
and Singapore, London is seeing a decrease in offi ce leasing activity due to
fi nancial services layoff s, according to Jones Lang LaSalle. In 3Q11, London’s
offi ce leasing fell 40 percent YOY; New York’s leasing activity was down 40
percent from 2Q11.
www.ccim.com January | February | 2012
BUYERSGUIDE
Collaborate
Soonr
Project collaboration moves from
e-mail threads to the cloud with
Soonr, a cloud-based fi le storage pro-
gram. Similar to Dropbox, Soonr dif-
ferentiates itself with role-based per-
missions, 256-bit encryption, a search
function, and commenting and alerts
via text message and e-mail. The
program requires a monthly sub-
scription, which ranges from $9.95
to $29.95. For more information, visit www.soonr.
com or call (855) 377-8500.
More
Monitor AOC’s portable USB moni-
tor provides a second dis-
play screen for a laptop or
desktop computer through a
USB port. Powered only by
USB, the 16-inch device does
not require additional cords.
T e monitor also comes with
a foldable stand that can
be adjusted for vertical or
horizontal viewing. AOC’s
portable USB monitor costs
$129.99.Get more information at
us.aoc.com or call (510) 770-9988.
Investment PrimerWealth Opportunities in Commercial Real Estate: Management,
Financing and Marketing of Investment Properties, by Gary Gra-
bel, takes readers from basic commercial real estate terminol-
ogy to more-complex concepts including partnerships and deal
restructuring. Some of the material will already be familiar to
CCIMs: Discounted cash fl ow, net present value, and internal
rate of return all make an appearance. Grabel also includes seven
case studies and discusses the interdependence of property mar-
keting, leasing, and management. The book costs $32.64.
Get more information at www.wealthcreationbook.com or call
(877) 762-2974.
Fuse’s PowerSlice charger allows users to neatly charge up to four
devices on one pizza-inspired platform. T e pan-shaped base unit holds
customized charging “slices” that accommodate iPhones and iPods,
Samsung and LG phones, and any USB-powered device. T e base unit
costs $39.99, and each slice costs $9.99.For more information, visit www.fuseplusyou.com or call (877) 366-3432.
Personal
Pan Power
A Social BoostFacebook, the National Federation of Independent Business,
and the U.S. Chamber of Commerce recently unveiled the
Facebook Small Business Boost program, which provides
small-business owners with Facebook marketing training and
a $50 advertising stipend. Using Webinars and case studies,
the program shows business owners how to improve their
connection to customers via Facebook. In addition, a road-
show will bring Facebook training to state and local cham-
bers of commerce and regional NFIB offi ces. The training
resources are free, and the advertising credit is now available.Get more information at www.facebook.com/
smallbusinessboost.
January | February | 2012 Commercial Investment Real Estate
DEALMAKERS
RetailBig Deal Patrick D. Gallagher, CCIM,
of Siegel-Gallagher Oncor Inter-
national in Milwaukee, and fi ve
partners negotiated the $15.4
million sale of the 188,122-sf
Brookfi eld Towne Centre in
Brookfi eld, Wis., to an undis-
closed buyer. Gallagher and a
partner also brokered the $1.4
million sale of the 14,000-sf
Gateway Market in Watertown,
Wis., to the Doneff family.
³Kevin D. Chin,
CCIM, of Sperry Van
Ness in San Francisco,
represented SC Flag-
staff LLC in the $12.7
million purchase of a 140,000-sf
Sam’s Club in Flagstaff , Ariz.,
from an undisclosed seller.
´Jim Casale, CCIM, of Lee
& Associates in
San Diego, rep-
resented a family
trust in the $7.3
million purchase
of a 14,500-sf Walgreens in
McKinney, Texas, from an
undisclosed seller.
³Christopher
Chamberlain,
CCIM, of Coldwell
Banker Commercial
NW in Medford,
Ore., represented Lithia Real
Estate in the more than $6.9
million purchase of a 2.8-
acre car dealership from JPF
Investments LLC.
Bruce R. Schiff, CCIM, of
Cassidy Turley BRE Commer-
cial in Carlsbad, Calif., and a
partner represented Lotus Café
in the 10-year, $1.4 million lease
of 3,625 sf of retail space in San
Diego from Village Hillcrest
Partners LP. Schiff and a part-
ner also represented Mortony’s
Pasta House in the 7-year, $1.2
million lease of 6,000 sf of retail
space in Vista, Calif., from
Regency Centers.
¶Christopher Prosser,
CCIM, of Colliers International
in Cincinnati, and a partner
represented
Snider Com-
mons LLC in the
more than $1
million sale of
the 10,799-sf Snider Commons
Shopping Center in Mason,
Ohio, to an undisclosed buyer.
FinancingBig Deal Lawrence J. Harwood,
CCIM, of Q10/Lutz Financial
Services in Birmingham,
Mich., arranged the more than
$14.4 million fi nancing for a
140,000-sf medical offi ce
building in Dearborn, Mich., for
an undisclosed borrower.
Larry Emmons, CCIM, of
Grubb & Ellis Co. in South-
fi eld, Mich., represented
CSMC 2007-C1 Warehouse
on 65th LLC in the more than
$1.5 million sale of the Planta-
tion warehouse in Plantation,
Fla., to Miron One LLC.
LandBig Deal Sandy Shindleman, CCIM,
of Shindico Realty in Winni-
peg, Manitoba, represented an
undisclosed seller in the more
than $3.7 million sale of 7.41
acres of land in
Winnipeg to a
local investor.
´William A.
Eshenbaugh,
CCIM, and Ryan Sampson,
CCIM, of the Eshenbaugh
Land Co. in Tampa, Fla., repre-
sented an undisclosed seller in
the $3.7 million sale of 67 acres
of land in Lakeland, Fla., to an
undisclosed buyer.
Robert J. Dikman, CCIM,
of the Dikman Co. in Tampa,
Fla., represented FR/CAL Inter-
change LLC in the more than
$1.4 million sale of 4.45 acres of
land in Riverview, Fla., to the
T omas M. Cooley Law School.
Larry Emmons, CCIM, of
Grubb & Ellis Co. in South-
fi eld, Mich., represented David
W. Wallard in the more than
$1.3 million sale of 82 acres of
land in Erie Township, Mich.,
to Lost Peninsula Port LLC.
Offi ceBig Deal ´Joel A.
Fulmer, CCIM,
of the Boyle Investment Co.
in Memphis, Tenn., and a
partner represented the city of
³Hersh Tencer, CCIM, of the Ontario Infrastructure and Lands Corp. in Toronto represented the city of Ontario in the $76 million sale of 2.5 acres in Toronto to Menkes Developments Ltd. and the Healthcare of Ontario Pension Plan Realty Inc.
The Biggest Deal
³Shahid K.
Abdulla, CCIM,
of Broadway
National Bank
in San Anto-
nio arranged the $12 million
fi nancing of a 120-unit, 15,770-
sf mixed-use building in San
Antonio for an undisclosed
borrower.
Paul Natalizio, CCIM, of
Cornerstone Realty Consul-
tants in Stoneham, Mass.,
arranged the more than
$5.4 million fi nancing of a
64-unit apartment portfolio
in Chelsea, Mass., for Trident
Management.
´Dimitris
Vattes, CCIM,
of Mortgage
World Bank-
ers in Astoria,
N.Y., arranged the $3.4 mil-
lion refi nancing of a 55-unit
multifamily property in
New York for an undisclosed
borrower.
IndustrialBig Deal Michael R. Merino, CCIM, of
NAI Norris, Beggs & Simpson
in Portland, Ore., and a partner
represented SIC in the $1.8
million sale of a 42,000-sf
industrial property in Portland,
Ore., to a private investor.
January | February | 2012www.ccim.com
Looking for more information on a product or service? Visit our advertiser Web links on CIRE magazine’s Web site at www.ccim.com/cire.
For advertising information, contact: Rich Rosfelder at (312) 321-4507 or rrosfelder@ccim.com.
Submit transactions to Deal Makers, CIRE, 430 N. Michigan Ave., Chicago, IL 60611; e-mail to dealmakers@ccim.com; or fax to (312) 373-8219. Include a high-res digital color property photo or head shot if available.
Memphis and Shelby County in
the $35.8 million sale of the
4.2 million-sf Memphis Depot
Business Park in Memphis to
Mayfi eld Properties.
Hans Kaunath, CCIM, of
Ciminelli Real Estate Services
in Tampa, Fla., and a partner
represented CW Capital Asset
Management in the 11-year,
$13.6 million lease of 70,706 sf
of offi ce property in Clear-
water, Fla., to an undisclosed
lessee.
¶Nora Hogan, CCIM, of
Transwestern Commercial
Services in Dallas and a
partner repre-
sented Highland
Capital Man-
agement LP
in the 10-year,
more than $13 million lease of
43,515-sf of offi ce space in Dal-
las from an undisclosed lessor.
´Thomas F. Campenni,
CCIM, of T omas F.
Campenni Co.
in Stuart, Fla.,
represented
KMG Partners
in the 10-year,
more than $8.2 million lease
of a 22,000 sf of offi ce space in
New York to the Washington
Square Institute. Campenni
also represented CB Richard
Ellis in the more than $3.7
million lease of a 22,000-sf
offi ce space in New York to
Schematic.
Mark V. Phillips, CCIM, of
Sperry Van Ness in Fountain
Hills, Ariz., negotiated a $7.4
million sale of a 23,485-sf offi ce
property in Sierra Vista, Ariz.,
from the General Services
Administration to a New York-
based REIT.
Sandy G. Shindleman,
CCIM, of Shindico Realty
in Winnepeg, Manitoba,
represented an undisclosed
seller in the more than $7
million sale of a 69,096-sf
offi ce property in Winnipeg to
a private investor.
MultifamilyBig Deal Michael B. Gross, CCIM, of
LDG Development LLC/LDG
Multifamily LLC in Louisville,
Ky., negotiated the $24.5
million sale of a 192-unit
multifamily property from an
undisclosed seller to Mallard
Crossings LP.
¶Michael W. Bobick, CCIM,
of Granite City Real Estate in
St. Cloud, Minn.,
represented
Keeneland Vil-
lage LLC in the
more than $7.6
million sale of a 100-unit mul-
tifamily property in Sartell,
Minn., to a private investor
group.
¶Joe W. Edge, CCIM, of
Sherman & Hemstreet Real
Estate Co. in Augusta, Ga.,
represented an
undisclosed
seller in the $4.4
million sale of
a 285-unit mul-
tifamily portfolio in Orange-
burg, S.C., to an undisclosed
buyer.
Patrick D. Gallagher,
CCIM, of Siegel-Gallagher
Oncor International in
Milwaukee, and a partner rep-
resented an undisclosed seller
in the more than $1.1 million
sale of a 37-unit multifamily
complex in South Milwaukee
to LBAH II LLC.
HospitalityEarle B. Wason, CCIM, of
Wason Associates Hospitality
Real Estate Brokerage Group
in Portsmouth, N.H., repre-
sented B and C Management
T e General Services Administra-tion is not your average commercial tenant. Negotiating its unique terms and conditions can be diffi cult for a broker to master. So Brian E.
Fratzke, CCIM, of Fratzke Com-mercial Real Estate Advisors in
Bend, Ore., reached out to fellow CCIMs when he repre-sented Courtney Family LLC in the 20-year, more than $25 million lease of 25,000 sf of medical offi ce space to the U.S. Department of Veterans Aff airs. “T roughout the lease negotiations, I spoke with several designees in my region to understand how other lease negotiations took place with the federal government,” Fratzke says. By tapping the expertise of the CCIM network, he was able to close on a long-term lease with one of the most reliable tenants in the business.
in the $3.2 million purchase
of the 104-room Best Western
Granite Inn in Nashua, N.H.,
from Karen Enterprises.
SpecialtyPatrick D. Gallagher,
CCIM, of Siegel-Gallagher
Oncor International in
Milwaukee, and a partner
represented an undisclosed
seller in the more than $1.5
million sale of the Mequon
Country Club in Milwaukee
to a local investor.
CCIM ROI
Advertisers’ Index
Auburn University .....................13
Berkadia ......................................3
CCIM Capitol Hill Visit ........ cover 2
CCIM Course Schedule ...............7
CCIM EMT Napa .........................9
CCIM Membership ............ cover 3
CCIM Spring Business
Meetings ...................................17
CCIMREDEX ..............................38
CIRE Online .................................2
Coldwell Banker Commercial .....21
Grandbridge Real Estate Capital ..5
ICSC University of Shopping
Centers ......................................11
LoopNet ....................................10
Re/Max International ......... cover 4
Real Estate Research Corp ........25
Ward Center for Real Estate
Studies ......................................19
CCIMConneCtIons
Emmitt Smith may be best known among sports fans as a former Dallas Cowboys powerhouse, the National Football League’s all-time leading rusher, and a 2010 Pro Football Hall of Fame inductee. He may be widely recognized by reality TV watchers as the dance-floor champion of hit series “Danc-ing With the Stars.” But in commercial real estate, Smith is a star in his own right for earning the CCIM designation and proudly adding the coveted CCIM pin to his lapel last fall.
Afer his long and successful NFL career, Smith set his sights on real estate and embarked on the path to the pin. “Earn-ing the CCIM desig-nation means a great deal to me,” he said. “It shows that I went through the complete program, did the work, and showed commit-ment. It lets my peers know that I can do the work.”
Smith co-founded and currently serves as CEO and co-chairman of ESmith Legacy, a Dallas-based com-
mercial real estate development and asset management firm
with projects in New York, Baltimore, and Phoenix.
“I am willing to do whatever it takes to become the person I need to be so I can achieve the goals I have set for myself,” Smith says about his journey to success in his new book, Game On: Find Your Purpose — Pursue Your Dream.
“Today’s commercial real estate market is
a buyer’s market, particularly if you
are buying with cash. There is
great opportunity out there, but you
have to do your homework.”
— Emmitt Smith, CCIM
Winning strategy
January | February | 2012 Commercial Investment Real Estate
STDB is an integrated resource center
providing comprehensive site analysis,
mapping and demographic data, aerial
property images, flood zone determinations,
financial analysis tools, customized reports,
and a broad spectrum of other business
services. Spend less time on wasted site
visits and more time finding solutions for your
clients!
CCIM’s award-winning magazine is your
bi-monthly source for the latest articles,
analysis, and insight into all facets of
commercial investment real estate.
Your subscription keeps you up-to-date and
helps you make informed decisions about the
industry.
Through its affiliation with the National
Association of REALTORS®, the Institute is part
of a legislative advocacy team that constantly
monitors legislative and regulatory developments
in order to shape the direction of today’s policy
issues. CCIM Institute’s Public Policy staff tracks
federal, state, and local legislative activity to
ensure that the interests of the commercial real
estate industry are addressed at all levels of
government.
Interact with brokers, leasing professionals,
investment counselors, asset managers,
appraisers, corporate real estate executives,
property managers, developers, institutional
investors, commercial lenders, attorneys,
bankers, and other allied professionals. The
experts who possess the CCIM designation
are an invaluable resource for commercial real
estate owners, investors, and users.
Explore your education options with CCIM’s
new classroom delivery methods. We’re
giving you the tools you need today with
expanded classroom, online instructor-led,
and online self-paced offerings for the most
convenient and efficient delivery possible.
To learn more about the benefits of membership,
please call (800) 621-7027, e-mail membership@
ccim.com, or visit www.ccim.com/membership
CCIM MEMBERSHIP BENEFITS
TECHNOLOGY:
EDUCATION:
LEGISLATIVE ADVOCACY:
LOCAL & INTERNATIONAL
NETWORKING:
CIRE MAGAZINE:
BUILD YOUR BUSINESSNOT YOUR BROKER S The RE/MAX network closes $8.3 billion in commercial volume annually*. There’s a reason for that.
RE/MAX Commercial Practitioners are supported by the most recognized name in the industry and are part of the world’s most-productive referral network.
With an ENTREPRENEURIAL APPROACH AND FLEXIBLE COMPENSATION MODEL RE/MAX puts them in charge of their business. It can do the same for you.
Find out more at JoinREMAX.com/commercial
*Average yearly volume in commercial transactions for the RE/MAX network, from 2003-2011. ©2011 RE/MAX, LLC. All rights reserved. Each office is independently owned and operated. 111533
A BETTER WAY in
Commercial Real Estate
’
top related