Category: Management

The White House Rental Plan: What Does It Mean For CRE?

February 1, 2023

On January 25, the Biden-Harris administration released a statement outlining their new plan to promote a more “renter-friendly” multifamily environment. Echoing notions from the “Blueprint for a Renters Bill of Rights,” this statement outlines different action strategies that combat recent “egregious rent increases” which they say have been more common within the industry. The pandemic has left its impact on many industries, and the rental sphere is no different. With new federal influence entering into the multifamily real estate industry, some investors may worry that this interference could destabilize a normally steady sector of CRE. To begin demystifying the results of these recent initiatives, let’s discuss the details of the White House’s new plan. The New Federal Oversight The primary and immediate result of this announcement is the new tasks assigned to the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB). Both agencies will begin to collect information, tracking things like methods used for tenant background checks, influence of a tenant’s source of income, and results of algorithmic tenant screenings. These efforts are intended, in part, to cut down on unfair and unequal treatment, viewed to have grown in recent years. Many are criticizing these moves as

Save On Taxes With Cost Segregation

January 11, 2023

In the world of commercial real estate, any opportunity to save money can be retooled back into properties to improve amenities, elevate tenant experience, or even invest in new ventures. Cost segregation is a tax-saving method that is not taken advantage of as often as it should. In partnership with Scarpello Consulting, National Property Inspections is now offering cost segregation services to preferred commercial property clients. Cost segregation can seem like a complex topic to those unfamiliar with the concept, but it is more straightforward than the name might suggest. To discover whether you may qualify for cost segregation, let’s take the time to discuss what it is and how it works. What Is Cost Segregation? Cost segregation is a tax savings tool used to reduce the income tax liabilities of property owners by accelerating depreciation deductions. A cost segregation study is conducted to evaluate a qualifying property and track its components on a shortened scale, usually after 5, 7, or 15 years rather than the traditional 27.5 or 39 year period. This allows owners to write-off components much earlier than usual, saving considerably on property taxes. While there is an initial cost with a cost segregation study, the tax

Underestimated Investments in Commercial Real Estate

January 4, 2023

Anyone who has spent some time in the commercial real estate sphere will know that the key to sustained longevity comes from one simple word: diversification. While specializing in a niche can help investors and property owners develop unique knowledge, an unfriendly season in their selected industry can prove disastrous. In turbulent economic times, the importance of diversification becomes all the more important. However, overly risky investments and haphazard experimentation might not sound the most enticing at the moment. For some comparatively lower risk investments, consider these underestimated investments to increase your ROI. Use The Space You Already Have If you haven’t invested in ATMs or vending machines already, now might be a good time to look into it. With such a small space demand and the convenience potential for your tenants, these amenities sound like a positive addition to properties before even considering the modest monetary returns. With leasing or purchasing options available, property owners can take the most advantage out of these investments in areas with considerable foot traffic. For vending machines, while cash-only receivers are cheaper, models with card readers are much more accessible today. Again, while the returns are minimal, these additions have the opportunity to

Short-Term Leasing Opportunities With Airbnb

December 28, 2022

For property owners of multi-family real estate, a new option to drive down vacancy might have been introduced by short-term subletting service Airbnb. Referring to the new service as “Airbnb-friendly apartments,” Airbnb is advertising the service as a potential perk for tenants looking to make extra money while anticipating a tough economic season. This service is only offered at properties partnered with Airbnb, likely with liability and legal hurdles in mind. Still, depending on the negotiated rates, property owners have the potential to receive up to a 20% portion of booking revenue from any tenant activity on Airbnb. For investors and property owners interested in the potential behind this service, here is a brief overview of the publicly released details. Why Become A Partner Property? From a property owner’s perspective, there seem to be a few potential benefits in partnering with Airbnb. According to their advertising, a partnership with Airbnb is the best way to maximize value for each unit, believing that the opportunity should be a draw for potential tenants. Additionally, the association with a brand like Airbnb may provide an extra level of recognition and credibility for the property as a whole. With increased resident satisfaction and the

What Do Office Spaces Look Like In 2023?

December 21, 2022

Over the past few years, commercial real estate has been through the ringer. Relying on data-driven, easily predictable trends has been much more difficult for investors and property owners. Although plenty of uncertainty remains as a hindering force for office spaces, workers are making their voices heard. In the future, property owners will need to adjust their strategies in order to capitalize on the best tenants. While many investors are opting to diversify their holdings through multifamily conversions, the key to succeeding with office spaces in 2023 could be more about specialization and adaptation. Identify The Purpose Of The Office SpaceAfter work-from-home mandates transformed the way employers and workers viewed the workplace, the standing of office properties within the market has been less stable. While the realities surrounding office spaces vary depending on location, the truth is that most property owners still see their tenants using their offices in the traditional manner. For the most part, the old-school 9-to-5, 5-day workweek is still the standard. However, as reported by JLL Technologies (a leading voice in PropTech), 84 percent of property management teams see a portion of their tenants using a hybrid work model. Class-B and C office properties are projected

Christmas Decorating Tips for Commercial Properties

November 30, 2022

With seasonal changes coming quick, it is not too late to start transforming your commercial property to reflect the festivities. Whether you have a multi-family property, an office building, or another type of commercial property, there are many benefits that come with investing in seasonal decorations. For this season, here are some quick tips on how to make your commercial properties the talk of the town! Establish a BudgetNot every holiday decor project needs to be overly elaborate, but even plans that are intended to start small can grow quicker than expected. Start by setting a reasonable boundary for your decoration budget, and consider cost-saving opportunities like partnering with companies that offer business-specific discounts. In addition, remember to consider both your indoor target spaces, as well as your outdoor and exterior spaces. When building a cohesive plan, it can be easy to plan a budget for just one of these spaces while leaving the other forgotten. To ensure that you have a reasonable budget carved out, employing a professional decorating company is, of course, the best way to reduce budget surprises. While partnering with a professional company, you can usually set a specific budget limit at the beginning of the

How to Use Public Art to Increase Your Curb Appeal

November 16, 2022

Art is subjective. Some people love country music, while others can’t stand it. Some people love abstract paintings, and others prefer realistic landscapes or portraits. Preferences and opinions on art can be incredibly diverse, but almost universally, art has a unique power to inspire people. In a national survey conducted by the Americans for the Arts council, 90% of respondents said that they believed arts institutions are important to a community’s quality of life, and 86% said that they are important to a community’s businesses and economy. Property investors know this well, but strategizing how to best incorporate art into commercial properties can be difficult. In order to increase your curb appeal, here are a few considerations when investing in public art. Community Connection Incorporating art into your commercial property can be transformative, but it is important to act strategically. Consider the local culture and character of the community selecting artists and content. Any public art associated with your property will create a touchstone for that property, and for your tenants. In competitive markets, this can be the differentiator needed to secure high quality tenants and reduce vacancies. When considering the type of art that you want to invest in,

Coworking Spaces: What They Are, and How To Manage Them

November 9, 2022

In case you were unaware, Covid changed a lot of things. It is unlikely that we will ever again experience such a sudden change to the way that we conduct business or live our lives. However, new innovations and adaptations have been forced into the forefront of commercial real estate as the result of new worker demands. Of particular note has been the growth in popularity of coworking spaces. The Rise of Coworking SpacesCoworking spaces aren’t a new phenomenon. They actually date back to the mid-2000s as technological advancements offered the potential for new lifestyles, like the digital nomad. Through the pandemic, workers around the world were forced to adapt to remote operations, and as work preferences have changed, more and more offices have closed completely. For some, this new standard is welcome, but others have missed the camaraderie and social stimulation that comes from working in an office. It has been with these conditions in place that coworking spaces have seen a renaissance. But what exactly is a coworking space? In coworking spaces, workers pay for memberships to work alongside other independent members, usually from different fields (eg. freelancers, entrepreneurs, artists, etc.). Coworking spaces are similar to offices in

How To Be Proactive With Property Maintenance

November 2, 2022

There are many things to worry about when managing a successful commercial real estate property. You have to find great tenants that will improve your property’s overall draw, while also figuring out how to retain those high-value tenants through updated amenities or through competitive rental prices. It is understandable that some things can fall to the wayside. Oftentimes, the thing that gets shorted is maintenance. Keeping your property clean and functional is, of course, vital to successful business, but too often, property managers and owners only resort to significant moves after it is too late. Something critical breaks down, or even an injury to a tenant are sometimes the only thing that prompts owners to make meaningful changes. Investing into a solid maintenance plan foregoes these disastrous scenarios, and the best type of maintenance plan, is one that is proactive. What is Proactive Maintenance?Proactive Maintenance Plans are strategies that property managers and owners employ to avert costly maintenance issues before things deteriorate beyond salvageability. The opposite of this strategy would be a Reactive Maintenance Plan, or maintenance techniques that only prompt action after a feature of a commercial property becomes unusable, requiring either major repairs or complete replacement. With proactive

4 Ways to Win the Office Leasing Game with Amenities

October 12, 2022

The world has changed quickly in a few short years, and although the newfound flexibility in work spaces has been a boon to workers, office property owners have doubtlessly noticed a difference. Now, lessors not only have to compete with other office spaces, but they also have to compete with workers’ own homes. According to a Pew research poll, 61 percent of work-from-home employees work at home by choice, rather than due to work space closure. Amenities have always been a major consideration when standing out from the crowd, and in the current CRE landscape, they are more important than ever. But what does the modern worker actually want? What really moves the needle when it comes to securing that dream tenant? Today, we cover the amenities that make a difference in filling your empty office spaces. 1. Social SpaceAn inherent advantage in office properties is that they provide direct access to fellow co-workers. In that same Pew poll, although 64 percent of teleworkers reported that they found it easier to balance work and personal life, 60 percent felt that they were less connected to co-workers. Take advantage of this discrepancy by diversifying shared spaces. Aside from conference spaces and