Governor Patrick and Mayor Menino announced the creation of One Fund Boston, which was established to provide assistance to those who were directly impacted by the tragedy. The local business community, including several NAIOP members, immediately stepped up to support the fund. We encourage the commercial real estate industry to show its support. To learn more, or to make a contribution, visit http://onefundboston.org.

In addition, we’ve learned that Roseann Sdoia of National Development, a NAIOP Gavel Firm, was severely injured in the explosions. Her friend set up Roseann’s Recovery Fund, where you can donate towards her treatment and recovery expenses. Our thoughts are with Roseann and the many other victims hurt by this tragedy.

Remember the “telephone game” when you were a kid?

You’d whisper, “I had ham and eggs for breakfast this morning,” to the person to the right and by the time it made its way around the circle the last person would say, “Santa has ham for legs and just installed new flooring.”

Well the same thing happens when real estate comps are traded.

In commercial real estate brokerage the lease comparable or “comp” is a summary snapshot of a transaction that includes all the relevant deal points such as the rental rate, square footage, length of term and concessions. Simply put, it is one of the most accurate real-time indicators of what tenants are willing to pay to lease space in a market at a specific point in time.

Comps are traded predominantly amongst brokers, landlords, lenders and appraisers, however there is no central repository for this information.  Each party or their respective company or firm maintains their own proprietary database where this comparable information is kept; and this comes with its own challenges.

With such a fragmented method of assembling, compiling and maintaining this data it’s impossible to warrant its accuracy.  For example, I’ve received comps for the same transaction but from different brokerages, and they have all had conflicting information – inconsistencies in the lease expiration date, tenant improvement package, rental schedule,etc.

Also, there are severe limitations to only being able to search your own firm’s database.  What if the data you need existed somewhere out there but your firm didn’t have it?  Well then you’d just have to hunt around until you found it, which can be very time consuming.

CompStak is a new, crowd-sourced model that allows CRE professionals to contribute lease comps and then earn points for what they’ve submitted.  They can then trade the points that they’ve earned for details on other comps that are more relevant and important to them.

This is huge for a few reasons.  First, having a centralized database that everyone contributes to encourages data integrity and market transparency.  Simply put, verified, accurate data benefits everyone involved.  Second, being able to magnify the scope of a search by accessing a much larger, more robust database makes me a better-informed broker and ultimately, allows me to provide better service to my clients.

CompStak is currently available in San Francisco and Manhattan, with plans to eventually go national.  Personally, the service has already proven its worth in at least two recent transactions and I look forward to their continued success.

Hopefully now when I  say, “three months free with $25 per square foot in TI’s,” it doesn’t get translated into, “tree trunks free with $25 in bacon flavored toothpaste”.

Related news: Commercial Real Estate Tech Company CompStak Makes Bay Area Inroads

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Historically throughout the US, landlords have given tenants a starting point by way of their asking rates. It’s a sticker price to some extent. But whether it’s a NNN asking rent or FS, whether it’s quoted yearly or monthly, and no matter the city or state, it is a customary starting point. And frankly it benefits everyone. As it’s good to know if you are looking to spend $30/rsf/yr. FS, that you aren’t touring and considering $50/rsf/yr. FS space. That saves everyone time.

The real estate industry would have survived without asking rates. But asking rates have been the custom. Typically over the years in our experience about 90%+ of spaces maybe even 95%+ do have asking rates. In a normal transaction, a tenant considers spaces in a rough and affordable range. They tour and then ask for proposals (by submitting an RFP). Landlords’ consider the credit of the tenant and consider costs like tenant improvements. Then they put together a sheet of terms and conditions that includes a quoted or deal rental rate. From there tenants, landlords and their advisors go back and forth through their advisors to get to a complete set of agreements.

If you asked a landlord’s broker why they don’t have asking rates, most will tell you that they don’t because they don’t know how much the TI’s will cost for any one tenant. Not a very honest response, because no one knows that on any space. Yet 90-some-percent quote asking rates.

It’s interesting to see the cities where you most see this no asking rate structure. San Francisco and New York are two cities where the brokers hide these rates. In San Francisco it’s been a trick for a long time, but with many more brokerages and landlords these days than in the past. It’s ironic that we also see a lot of young tech companies absolutely getting slaughtered by over-market rents in San Francisco. Newer companies without lots of real estate experience tend to be the biggest victims here. Withheld rents are a good way for the brokerages and the landlords to pump up the rates they get. As a market like San Francisco’s gets tighter, shrewd landlords and their brokers can test out over market rents during a tour.

So we warn TMC tenants about this process. We also work around it. If we are looking at 2 or 3 buildings in a specific price range, we might add a no-asking rate building or two to the RFP process. The RFP process causes those buildings to compete for the deal. We also find in this process that most no-asking rate buildings will come in with higher rent proposals than equal and comparable buildings. If you find a landlord looking to gouge you on rent before a lease is negotiated, consider yourself lucky. Then say bye-bye.

Group: Young Gifted
Title: Friday
Artist : L.O.V.E.
Produced by: Total Kaos
Representing: New Brunswick, New Jersey, Exit 9
Young Gifted Entertainment
http://www.youtube.com/watch?v=ocGRtI7h8Qg

Tenant Representation Project Gantt Chart

Many users of space are under the belief that the only value added by a commercial real estate broker is providing the knowledge and information of spaces which could work for them.

If you are a fellow broker, you understand that sharing our knowledge of viable options is merely one part of a comprehensive process.

However, no one is to blame for the mis-communication of our spectrum of services to tenants but ourselves as brokers — it is our responsibility to educate them on our true value.

As a Tenant Representation broker, I have a project schedule acts as a basic road map for each client.  The project schedule has 4 major processes (Preparation and Planning; Site Selection; Negotiation & Analysis; Construction & Move in) and 46 sub-processes — the comprehensive market survey and review of those options account for only two of the 46 sub-processes.

Not that you can realistically weigh each part equally, but two out of 46 steps comes out to only 4.35% of the project!

On a renewal deal (where many tenants don’t understand our benefit entirely) if you subtract the Construction & Move-In sub-categories which wouldn’t apply, the market survey portion of the project is still only 5.88%!  

But it’s not about what percentage of the work we do is broken into a certain category or process - its all about the value added by the synergy of the whole process:

In short, good tenant representation brokerage provides not just access to a list of available spaces, but a full-service, start-to-finish, time, energy and money saving solution.

-Colt Power

In those cases, unless it is a very large space, we recommend that the tenant use the building’s architect and contractor to do the tenant improvements. When you go this route you’ll want a trusted and very experienced real estate advisor working on your behalf to make sure you are getting what you want in the plan and therefore in the space. It requires lots of their attention and time. You should make sure they will give you that and at no cost.

It’s also wise for a tenant that takes this route to stay away from the Tenant Improvement (TI’s) Allowance. As then you don’t control the architect, contractor and the cost. That’s a problem about to happen. We recommend for our clients to instead seek a turnkey arrangement for TI’s at the Landlord’s cost. What does that jargon mean?

That’s a fairly protective way for a tenant to make sure they get the quality of work they need, and the specific improvements done, and at the landlord’s cost. Here’s how to accomplish it. At the time of submitting a request for proposal, we tell the landlord that before they reply to the proposal they should complete a preliminary and ultimately a comprehensive plan of our client’s needs. The plan should be fully detailed with notes on the side. When the landlord makes their proposal they should guarantee that they will build that plan at their cost. There are other protections and language to add to this. But that is the basic concept.

So now you sit down with the landlord’s architect. First, by trade they should be cooperative and insure that you get what you need, but probably not more. They won’t bring up floor to ceiling glass for all the private offices as an example. But generally they should professionally be open to you designing a space that works for your business and employees and fits with the typical build out in the property.

Below is a partial list of some of the items to think about if you are the tenant and want to make sure you get a complete plan detailed and then priced, and therefore built out at the landlord’s cost:

• Offices
• Conference rooms
• Kitchen/Break Areas
• Carpet type, details and color
• Paint Color and Accents
• Server closet or room
• Baseboard
• All electrical outlets
• Open cubicles
• Duplexes or quads
• Collaborative space
• Storage rooms
• Dedicated circuits
• Glass offices or relites
• Coat Closet
• Door types
• Data out let locations
• Reception area and furniture
• Lighting and special lighting
• Special wall insulation
• Cabinets in any room
• Hardware
• Glazing
• Sink, dishwasher, refrigerator

The LaSalle Wacker Building, located at 221 N. LaSalle, has received the North Central Region TOBY Award for Historical Building category in Chicago. The property which is managed and leased by MB Real Estate will now advance to the BOMA International TOBY Awards where the results will be announced at the BOMA International Conference in San Diego this June.

Our EVP & Chief Operating Officer, Kevin Purcell, said, “We are very proud of our team, tenants and the ownership at 221 N. LaSalle. BOMA awards are known for recognizing the best of the best in commercial buildings, and it is an honor to be a part of this esteemed circle.”

MB Real Estate has managed and leased the LaSalle Wacker Building since 2010. The property was designed by the prominent Chicago architectural firm of Holabird and Roche in partnership with Andrew N. Rebori, and Wentworth, Dewey and McCormick and constructed in 1930. The 413,000 square foot building has 41 stories, a penthouse, and three lower levels. It is the third largest courtyard office building in Chicago after the Board of Trade and the Civic Opera House.

TOBY awards are presented through the Building Owners & Managers Association (BOMA). Regional winners of the TOBY will compete in 14 categories to win the highest honor as an International TOBY Award Recipient.

Best of luck to all those that advanced!

The office vacancy rate fell slightly across the board, with Broward County ending the quarter with the lowest level in the region at 16.1%. The industrial sector also performed well, with vacancy inching downward in both Broward County and Palm Beach. Miami recorded quite a bit of activity; however, vacancy remained relatively flat due to the delivery of the 335,000-square-foot Miami International Distribution Center.

“Across South Florida, over 1.1 million square feet of office leasing activity was tracked in the first quarter,” said Jon Bourbeau , vice chairman in NGKF’s Miami office. “The majority of deals came from tenants already in the market in the form of expansions, renewals, relocations and, in some cases, contractions, but the pendulum appears to have swung with demand outpacing supply.”

As a result of this market improvement, and the fact that new development across South Florida has been kept in check, asking rents for both office and industrial product are expected to increase moderately over the next several quarters, and landlords will feel less compelled to offer leasing concessions as the year progresses. Still, stronger signals of widespread economic recovery are needed before robust growth takes hold.

Mr. Bach explained that improving market fundamentals, especially job growth, retail sales and the housing market, bode well for commercial real estate on a national basis, and said that South Florida in particular is benefiting from a rebound in the residential sector.

“The spike in demand for residential real estate is a harbinger of stronger growth on the commercial side,” Mr. Bach said. “This is especially true for retail, as homeowners look to remodel existing properties or homebuilders deliver new projects.”

Activity in South Florida’s investment sales market has been fueled by competitive, long-term low interest rate financing and a continued demand for yield by investors. This is true across a variety of product types, such as multifamily, retail and office.

“The pending purchase of 1111 Brickell Avenue by Principal Global Investors underscores the fact that South Florida is attracting global private and institutional capital,” said Michael Lapointe , executive managing director, NGKF Capital Group.

The region’s hospitality sector remains one of the strongest in the country. Over a 10-year period, the compounded annual growth rate in RevPAR is one of the highest in any major domestic city as Miami continues to move toward becoming a true 12-month market. Improving fundamentals coupled with longer-than-average hold periods are producing high per-key valuations.

Another property type that will continue to attract investors both locally and nationally is healthcare real estate. Todd Perman , executive managing director, Global Healthcare Services, explained how the Obama administration’s Affordable Care Act is having an impact on this sector and the effect it is likely to have on South Florida.

“Healthcare currently makes up 18 percent of the gross domestic product, and due to a growing and aging population, this figure is expected to increase to 22 percent, with 30 million new patients entering the market over the next several years,” Mr. Perman said. “This trend will fuel demand for healthcare properties, and prompt healthcare organizations to aggressively explore cost reduction strategies and efficiencies.”

The 42Floors Crew

In a nutshell, 42Floors is a free search engine for office listings in San Francisco and  New York, wrapped up in a gorgeous user interface.  The model itself isn’t exactly groundbreaking, except for the fact that their current focus is not on monetization, but on creating the absolute best user experience possible.

Here’s how it works.  The user searches active office space listings and when they find something they like, they submit their contact information and the handoff is made to the listing broker, who then follows up with them to schedule a tour of the space.  Nothing revolutionary there.  Where 42Floors really sets itself apart, however, is with their Concierge; a human being that uses a telephone to actually call you.  How many companies actually do that anymore, and for free?  Their only task is to make sure you’re happy, answer questions about the market and commercial real estate, and ultimately, that you’re successful in finding your new office space online through their website.

Don’t get me wrong, there are plenty of other great features that elevate the user experience, like robust filtering options, photo-intensive listings and rental estimates for properties that don’t publish their asking rents, but the Concierge addresses a gaping hole in the online listing arena: tenants not only need but deserve the advice of an expert that’s looking out for their interests.  This is something that gets lost when a tenant uses the internet to find an office space online and then cuts a direct deal with the landlord without being represented by an advisor.  With 42Floors Concierge, the tenant can receive guidance and assistance from a professional they can trust.

My big takeaway from my experience with helping 42Floors develop their concierge program, is that tenants will always need a human advocate, and 42Floors understands that.

Just like WebMD.com will never replace the role of the doctor, 42Floors.com will never replace the role of the tenant advisor – they exist to enhance and compliment the process, be it a trip to the hospital or signing a new office lease.

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For more information on 42Floors’ Concierge, reach out to their Product Guru with the Mostest, Leslie Chicoine: leslie@42floors.com

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We are bombarded with marketing for the latest and the greatest every single day of our lives, from the coffee we gulp to the cars we drive to tools we use to run our business.

As technology propels forward, new CRE tools pop up more often than Nicki Minaj gets her Botox fix. I get new offers in my email, through social media and believe it or not snail mail…(yes, it still exists).
There is also a copious menagerie of CRE websites to add your listings to for “THE BEST EXPOSURE”…this is not Britney on TMZ folks. This is commercial real estate. So first tell me who my listings are getting to and why you are the “best”. What difference does it make if my listing is on 16 different CRE listing sites and they are: 1) serving market areas OUTSIDE of my market area, or 2) unknown to most of the population.

I find that some are trying to impress their clientele with the laundry list of marketing avenues that their listing will receive exposure on. I’m all for the marketing proposal and putting a nice package together, but let’s get serious here for a minute. What is the ONE THING that will impress your client more than anything?? RESULTS. PERIOD…that is all.

So, I digress from my rant, “Duke Long Style” and I move on to say this. If you have swallowed the hype like mother’s milk and are counting on the internet to do all of the work for you, you should stop reading this post right now.

(Insert Cheesy Game Show Music)….You’re still here? Great! Commercial Real Estate is moving with the technology (gradually) but do not rely on the geeks behind the curtain to do all the work. You still have to connect, network, face-to-face meet, hit the pavement with those loafers or stilettos and for the love of all that is good and right – FOLLOW UP.

I am a Social Media hound at times. I admit it and my #CRE buds will testify. They will also testify that I take breaks from the #SMM to work on LOI revisions, lease transactions, renewals, target marketing and prospecting. It’s a balancing act to which I thoroughly enjoy playing my part.

For those of you who need closure, the bottom line is:
1. Do not rely on Social Media for marketing of properties – that’s not what it is for
2. Do not rely on CRE listing websites to sell your properties for you – that is why they call you a “REALTOR” – You do the selling, remember?
3. Your clients deserve better – It’s not enough to blast their property all over the stratosphere and never give them an update, make cold calls, etc.
4. Impress Me…how? Give me RESULTS.PERIOD.THAT IS ALL.

Coretta Scott King dies of a stroke at age 78.