Home» Posts tagged "carlisle"

Power Landlords Part II: Who Owns the Most Industrial Space in Central PA?

Posted on July 8, 2019 by Mike Kushner in Blog, Industrial, Local Market No Comments

You might think that Central Pennsylvania is defined by its natural resources or agriculture, or maybe you don’t think we’re known for much of anything. The truth is that there is a lot this region brings to the economy with our industrial market being one of the country’s top core industrial markets.

If this surprises you, consider the following. This particular region is well positioned along the nationally-recognized I-81 transportation corridor with immediate connections to I-78, I-76, I-83 and I-80, as well as immediate access to major deep-water ports at New York/New Jersey, Philadelphia and Baltimore. With our ability to provide manufacturers and distributors access to nearly 70% of the total consumer markets in North America within one day’s drive, the region has benefitted from significant demand, especially most recently with the emergence of the e-commerce which promises customers even faster ship times.

Additionally, nearly 8 million square feet of new Class A regional and super regional distribution facilities are under construction. Even with this much new space entering the market, vacancy rates remain right around 5% which is well below the historical market standard of 7%. Combine all of this with a backlog of millions of square feet of new tenant requirements in the market, and you can see why Central PA’s industrial real estate market is ripe for opportunity among investors and landlords.

So, who owns the most industrial space in the market? The combined square footage of the top 5 landlords in Central PA is 32,820,237 square-feet of space. Moreover, the combined vacant square-footage for all of this space is just 2,448,898 square-feet or 7%. So, who are these power landlords and what buildings account for most of this space? Let’s take a deeper dive.

Prologis Inc.

It should come at no surprise that Prologis Inc. tops this list with its portfolio of 22 industrial buildings. Combined, this accounts for 11,242,938 square-feet of real estate. The largest building, which is Key Logistics Park located at 950 Centerville Road in Newville, is home to 1,170,000 square-feet of industrial space.

Global Logistics Properties, Ltd. (GIC Real Estate)

Next on the list is Global Logistics Properties, Ltd. with 19 buildings and 7,075,922 square-feet of real estate. The largest of these buildings is Lemoyne Industrial Park located at 221. S. 10^th Street in Lemoyne which is 885,802 square-feet of industrial space.

Clarion Partners

With 10 buildings totaling 5,676,191 square-feet, Clarion Partners ranks number three on our list of “Power Landlords” in Central PA. Their largest building, located at 1 True Temper Drive in Carlisle, is 1,226,525 square-feet in size.

First Industrial Realty Trust, Inc.

At number four we have First Industrial Realty Trust, Inc. Their portfolio of 15 buildings accounts for 4,804,210 square-feet of industrial real estate. The largest building, 1,100,000 square-feet in size, is located at 5197 Commerce Drive in York.

Liberty Property Trust

Coming in at number five on the list is Liberty Property Trust with 7 buildings totaling 4,020,976 square-feet of industrial space in the Central PA region. Their largest building, which is the Carlisle Distribution Center located at 40 Logistics Drive in Carlisle, is 972,000 square-feet.

It can be hard to wrap your head around these numbers and the amount of industrial space that is located right here in Central PA. Often, these are huge buildings we drive by daily but fail to notice unless we pay attention. The products that are made in and shipped from these facilities impact the global economy and provide us with every item imaginable, from basic essentials to toys and tools to match a wide variety of hobbies. So the next time you drive by the Key Logistics Park in Newville or the Carlisle Distribution Center, you now have a little more intel into who the power landlords are behind these massive facilities.

[Online Resources] Real Estate, camp hill, carlisle, central pa, clarion partners, Commercial Real Estate, commercial real estate broker, commercial real estate investor, CRE, development, distribution, Economy, facility, first industrial realty trust, global logistics properties, growth, harrisburg, industrial, industrial space, lancaster, landlord, lemoyne, liberty property, mechanicsburg, omni realty groups, pennsylvania, prologis, tenant representative, warehouse, york

Legal Pitfalls That Could Impact Your Commercial Real Estate Deal

Posted on July 1, 2019 by Mike Kushner in Blog, Commercial Real Estate No Comments

Legal matters can arise just about anywhere and in any industry. Commercial real estate is no exception. In fact, commercial real estate transactions can be filled with legal pitfalls if you don’t take proper precautions or seek professional advice.

What legal challenges are common to commercial real estate? For the answers, we looked to an experienced real estate attorney who has helped many clients navigate through such challenges.

Hannah Dowd McPhelin is a partner with Pepper Hamilton LLP, resident in the Harrisburg and Philadelphia offices and vice chair of the firm’s Real Estate Practice Group. Attorney McPhelin concentrates her practice in real estate matters and other business transactions, including the acquisition, sale and financing of commercial real estate properties and leasing of office, retail, warehouse and industrial space, representing both landlords and tenants. She is an Accredited Professional and was named a member of The Counselors of Real Estate in 2017.

Omni Realty Group had the pleasure of interviewing Attorney McPhelin to further examine the legal pitfalls that could impact commercial real estate deals. Here’s what we learned.

Omni: Describe some of the most common legal challenges you’ve seen arise when working through a commercial real estate deal.

Hannah Dowd McPhelin: I’ve worked through a lot of different challenges on a variety of deals, but an enduring theme is that some level of trust between the parties is necessary to get a deal done efficiently. If there is no trust or trust erodes, it is extremely difficult to work through challenges and get to closing, and it makes the deal much more expensive for all parties.

Omni: What conflicts can arise between the LOI and the lease? How can this be avoided?

HDM: The issue I see most often is that, because LOIs are typically not binding, a party may not raise concerns at that stage and will believe those terms can be “re-negotiated” in the lease — this leads to mistrust and deal delays. It is better to raise material issues at the LOI stage so both parties do not waste time and resources when there is not a meeting of the minds. I also recommend that the LOI be a short and concise document containing only the most important terms. A long LOI slows down deals and makes it more likely that you will do a second round of negotiations on particular issues when you negotiate the lease.

Omni: How can an attorney help parties avoid legal pitfalls in commercial real estate transactions?

HDM: A good deal attorney should be creative and look to solve problems as they come up. Every deal has certain issues, but an attorney who only spots issues without offering useful and practical solutions to them is not helpful to the process and reduces the chance that the deal will get done. Frank and open discussions among the parties and their attorneys are the most useful tool in avoiding pitfalls and making sure that the deal is documented in such a way that each party understands its obligations and risks.

Omni: What are the benefits of using a commercial real estate broker?

HDM: Similar to a good attorney, a good broker can be very useful in moving a deal forward, particularly over any rough patches. A broker’s knowledge of the market and other options in the market is essential to understanding a party’s leverage, and a good broker has strong relationships in the relevant market that benefit his or her client.

Omni: For tenants/buyers, how will using an exclusive tenant representative help avoid conflict of interest in a CRE deal?

HDM: Exclusive tenant representatives are particularly helpful to companies that are not in the real estate industry but have real estate needs. The representative’s knowledge of the market, the tenant’s options, and the deal process helps set the tenant’s expectations and assists the tenant in making efficient decisions.

Omni: When entering a commercial real estate transaction, what is the best time in the process to engage outside professionals like attorneys and/or commercial real estate brokers?

HDM: As early as possible. A broker should be engaged when a tenant first considers a move in order to best understand the options in the market and to help the tenant make a considered decision. Ideally, an attorney is engaged in the LOI stage. As an attorney, I find it helpful if I can do a quick review of the LOI before it is signed, as I may see issues that will eventually become big problems in the lease if not addressed at the LOI stage. Often, what I am doing is asking a few follow-up questions to make sure the parties have considered how certain terms will play out in the lease.

Navigating commercial real estate transactions can come with many challenges. What’s most important to remember is that any successful deal must be built upon a foundation of trust. Additionally, seeking the input of an experienced commercial real estate broker, particularly one that is an exclusive tenant representative, will ensure your interests are represented. Finally, having the counsel of a real estate attorney on your side to review any documents and spot issues that could grow into bigger problems down the road can be invaluable to the success of your transaction.

To learn more about Attorney Hannah Dowd McPhelin or Pepper Hamilton LLP, please visit: www.pepperlaw.com.

attorney, broker, business, buyers agent, camp hill, carlisle, central pa, central pennsylvania, Commercial Real Estate, deals, Hannah Dowd McPhelin, harrisburg, hershey, industrial, investment, lancaster, leases, lemoyne, mechanicsburg, mike kusher, new cumberland, office, Omni Realty Group, pennsylvania, pepper hamilton LLP, real estate attorney, real estate broker, real estate lawyer, retail, space, tenant representative, transactions, york

Census Data: National and Local Trends You Need to Watch

Posted on June 3, 2019 by Mike Kushner in Blog, Commercial Real Estate, CPBJ Articles, Local Market, Trends No Comments

Note: This article was published by the Central Penn Business Journal. Click here to read the original version.

Census data provides a fascinating look into population growth trends that stand to have a profound impact on our economy, both locally and nationally. More than just being “interesting” data to study, population growth and decline points us to important trends that will reshape supply and demand in various industries, one of the most prominent being real estate.

Just last month, the US Census Bureau released new population estimates. These estimates account for and compare the resident population for counties between the dates of April 1, 2010 to July 1, 2018. The outcome? There are shifts in population taking place across the nation that may differ from what you might assume. Let’s take a look at some of the highlights from this data from a national and local level.

At a National Level

South and West Lead Population Growth

The census data confirmed that counties with the largest numeric growth are located in the south and the west regions. In fact, Texas claimed four out of the top 10 spots. Looking at population growth by metropolitan area, Dallas-Fort Worth-Arlington, Texas, had the largest numeric growth with a gain of 131,767 people, or 1.8 percent taking place in 2018. Second was Phoenix-Mesa-Scottsdale, Arizona which had an increase of 96,268 people, or 2.0 percent. The cause of growth in these areas is the result of migration, both domestic and international, as well as natural increase. In Dallas, it was natural increase which served as the largest source of population growth, whereas in Phoenix I was migration.

Fastest Growth Occurred Outside of Metropolitan Areas

Surprisingly, no new metro areas moved into the top 10 largest areas. Of the 390 metro areas within the US (including the District of Columbia and Puerto Rico), 102 of these areas, or 26.2 percent experienced population decline in 2018. The five fastest-decreasing metro areas (excluding PR) were Charleston, West Virginia (-1.6 percent); Pine Bluff, Arkansas. (-1.5 percent); Farmington, New Mexico (-1.5 percent); Danville, Illinois (-1.2 percent); and Watertown-Fort Drum, New York (-1.2 percent). The population decreases were primarily due to negative net domestic migration.

North Dakota Claims Fastest Growing County

Among counties with a population of 20,000 or more, Williams County, North Dakota claimed the top spot as the fastest-growing county by percentage. This county increased by 5.9 percent between 2017 and 2018 (from 33,395 to 35,350 people). The rapid growth Williams County experienced was due mainly to net domestic migration, 1,471 people, in 2018. The county also experienced growth between 2017 and 2018 by both natural increase of 427 people, and international migration of 52 people.

More Growth than Decline

Out of 3,142 counties, 1,739 (or 55.3 percent) gained population between 2017 and 2018. Twelve counties (0.4 percent) experienced no change in population, and the remaining 1,391 (or 44.3 percent) lost population. Between 2010 and 2018, a total of 1,481 (or 47.1 percent) counties gained population and 1,661 (or 52.9 percent) lost population. Though there has been more growth than decline overall, the numbers indicate that this can easily shift year over year.

At a Local Level

Dauphin County

Lancaster County

York County

Cumberland County

Cumberland, Dauphin, Lancaster and York Experience Consistent Growth

The most notable trend to take place between 2010 and 2018 in Central PA is that these counties all experienced consistent growth year-over-year. Moreover the growth occurred fairly evenly over the last 8 years. This provides consistency and enables the economy to respond to the growth over a reasonable amount of time.

Counties Also Maintain Same Order of Ranking in Population

Another trend worth noting is that the counties have maintained the same order of ranking based upon population for 8+ years. For example, in 2010 these counties in order of smallest population to largest population was Cumberland, Dauphin, York, Lancaster. This is the same ranking we see in 2018, and every year in between. No county surpassed another at any point.

Lancaster Remains Largest and Fastest Growing County

Lancaster County has a major lead in population over the others. At 984 square miles, it is also the largest of the 4 counties. Between 2010 and 2018 it also experienced the largest numeric growth at 24,112 people. Number two in numeric growth was actually the smallest of the four counties, Cumberland County, which grew by 16,017 people. York County grew by 13,301 people and Dauphin County grew by 8,997 people.

Overall, the latest US Census offers valuable and insightful information related to population growth between 2010 and 2018. Understanding the cause of either growth or decline provides framework for how these shifts may continue on their course, or change in the future.

A deeper dive into the census data reveals several demographic changes impacting commercial real estate development: household formations, aging baby boomers, growing millennials, women in the workforce, and migration toward the South.

Today’s demographic changes present challenges for commercial real estate developers, but they also offer lucrative opportunities to firms creatively adapting to new demands.

[Online Resources] Real Estate, 2018, america, analysis, blog, blogger, camp hill, carlisle, census, census bureau, central pa, central penn business journal, change, Commercial Real Estate, cumberland, data, dauphin, decline, facts, growth, harrisburg, hershey, homes, hummelstown, increase, information, lancaster, lemoyne, local, local market, migration, Mike Kushner, nation, national, pennsylvania, population, real estate agent, real estate broker, residential, statistics, trends, united states, york

Power Landlords: Who Owns the Most Office Space in Central PA?

Posted on May 30, 2019 by Mike Kushner in Blog, Commercial Real Estate, Local Market No Comments

These are buildings that you have likely passed countless times. Whether you live in Central Pennsylvania, or any other part of the world, real estate is all around us. Have you ever stopped to wonder who owns a particular piece of real estate? Maybe it’s the not the first question you’re asking on your morning commute, or when out running an errand, but the answer to this question may fascinate you.

Particularly the commercial real estate industry holds a lot of potential to impact economic development in a region. For entities who have made it a business to accrue large amounts of commercial real estate, they provide us with valuable insight into to the state of the economy, based upon their decision to buy or sell/lease space and at what price point. Knowing who the big players are can help keep us apprised of changes in the market that will ultimately trickle down to impact businesses far and wide.

So who are these businesses and how much property do they own? Among private, for-profit entities located in Central Pennsylvania, these are the top five “power landlords” who own the most office space in the region.

Linlo Properties

According to a CoStar Group analysis on April 5, Linlo Properties owns 745,349 square feet of space in Central Pennsylvania. Linlo’s assets include the AT&T Building, an 87,718 square-foot building at 2550 Interstate Drive; 4250 Crums Mill Road, a 75,000 square-foot building; Vista Plaza, a 71,800 square-foot building at 1215 Manor Drive; and Hillside Corporate Center, a 68,525 square-foot building located at 5001 Louise Drive.

Healthcare Trust, Inc.

Healthcare Trust, Inc., a non-traded traded real estate investment trust that focuses primarily on healthcare related assets, comes in second, per CoStar data, with all its 638,516 square feet purchased from UPMC Pinnacle (formerly Pinnacle Health) in 2014. The Landis Building, located at 2501 North Third Street (formerly part of Polyclinic Hospital) is its largest holding at 314,790 square feet.

High Associates

High Associates is the third-biggest property owner in the region with 561,276 square feet of commercial real estate. All their properties are in Lancaster County except 5000 Ritter Road, Mechanicsburg. 1853 William Penn Way, their largest holding, which is 82,331 square feet of space, is occupied by the High Companies.

Select Capital Commercial Properties

Fourth is Select Capital Commercial Properties with 544,599 square feet of commercial real estate. Select Capital’s holdings include 225 Grandview Avenue (the former HP/EDS building) with 214,150 square feet; 300 North Second Street (Commerce Towers) with 72,000 square feet; and 425 N. 21st Street (Plaza 21) with 62,304 square feet.

Hoffer Properties

Hoffer Properties ranks fifth with 531,741 square feet of space. Hoffer’s assets include 100 Sterling Parkway (the former PHICO building), a 220,000 square-foot building and 300 Sterling Parkway, the 129,000 square foot building built in 2016 for Deloitte.

These power landlords of Central PA hold a significant amount of commercial real estate assets. How they choose to use and further develop this space has the potential to shape the economy, locally and beyond, by attracting new businesses which brings new jobs. With the backing of these large entities who are continually investing in and improving commercial real estate, every business in the region benefits from the ripple of this economic impact.

It’s important to note that this list is limited to private, for-profit entities located in Central PA. Hbg. Realty Inc. (Harristown Development Corp.), PA Economic Development Agency, The Commonwealth of Pennsylvania, and Highmark, Inc. all rank higher than the top five on this list.

[Online Resources] Real Estate, camp hill, carlisle, central pa, central pennsylvania, Commercial Real Estate, costar, harrisburg, healthcare trust, high associates, hoffer properties, lancaster, landlord, Leasing, linlo properties, local, mechanicsburg, Mike Kushner, office, office real estate, Office Space, Omni Realty Group, pennsylvania, real estate agent, real estate broker, select capital commercial properties, selling, tenant representative, trends, york

Commercial Real Estate Appraisals in Central PA: Q&A with JSR Appraisal Group, Inc.

Posted on May 6, 2019 by Mike Kushner in Blog, Commercial Real Estate, Local Market No Comments

Appraising commercial real estate is a particularly unique process, and one that if not done carefully and correctly can have a profound impact on the value of a commercial property for many years to come. To dive deeper into the topic of commercial appraising, including the industry trends and challenges, Omni Realty Group enlisted the expertise of Judy Striewig and M. Shane Rorke, Certified General Appraisers and Co-Founders of JSR Appraisal Group, Inc.

JSR Appraisal Group, Inc. is a commercial appraisal firm located in Camp Hill, Pennsylvania, which serves the South Central Pennsylvania market. Together, Judy and Shane opened the firm on January 1, 2015. With 25 years of appraisal experience, Shane has appraised most all types of commercial real estate. In recent years he has focused on land subdivision appraisal work and has tracked many Central Pennsylvania markets for in-depth absorption analysis. Judy’s 15 years of appraisal experience began in 2004 when she entered the industry as an apprentice in the residential appraisal arena. In 2008 she made the move to appraise commercial real estate.

With Judy and Shane’s wealth of knowledge, Omni asked them to weigh in on the most essential questions surrounding the commercial appraisal industry. Here are their answers.

Omni: What do you view as the strengths of your commercial appraisal firm?

JSR: We track most all commercial sales in several markets in South Central Pennsylvania. This data is entered and tracked in our commercial sale database that provides both a detailed and summary picture of sale transactions. This enables us to analyze market transactions and keep an eye on what is happening in the market.

Second, while we are not a large firm, we have four staff members that work together sharing data and ideas on property types, trends, and other real estate issues. We regularly talk to brokers, developers and business owners to gain a pulse on market nuances and business trends.

Omni: How will automated valuation models impact the commercial appraisal process?

JSR: The commercial appraisal process has not been as impacted by automated valuation models as the residential appraisal process for several reasons. First, the quantity of data is much smaller than residential sales. Second, commercial properties are often bought based on the income they produce. This information is typically not available through public sources and is often confidential. And third, a valuation model may be appropriate for certain types of commercial properties like office buildings or warehouse facilities, assuming rental rates are ‘at market’. However the commercial real estate market has such a varied type of product with many specialized buildings, there may not be sufficient amount of data for a valuation model to be effective.

While my thoughts on using a packaged valuation model for commercial (and even residential) real estate are leery, I do believe analysis of large data sets would be helpful to the profession. The use of regression testing to provide rules of thumb to assist in making adjustments and decisions on comparing properties would be helpful. For example, we often consider making an adjustment for properties of different sizes (based on the economies of scale principle). I see a true benefit in models that use regression analysis to provide guidelines for different pricing based on size of a property and other similar property characteristics.

Omni: What are some of the recent regulatory changes on valuation rules and do you foresee this impacting your profession?

JSR: There have been two recent regulatory changes on valuation rules, but we don’t see either of these as having a significant impact. In June of 2018, Pennsylvania passed into legislation a law that allows State Real Estate Brokers, Associate Brokers and salespeople to provide Broker Price Opinions (BPO). Brokers are limited to performing BPO’s for financial institutions in conjunction with properties owned by the institutions that meet certain criteria. They remain prohibited from providing valuation services for mortgage financing, eminent domain, tax appeals and valuation scenarios. Additionally, the FDIC is contemplating raising the appraisal threshold from $250,000 to $500,000 for commercial real estate transactions, and $250,000 to $400,000 for residential real estate transactions.

Omni: What are some of the biggest challenges you face as a commercial appraiser?

JSR: Appraisals are often viewed as a necessary step or hurdle to obtain financing. (Yes, we know this.) And because of this the borrower often picks the ‘cheapest’ bid provided. The borrower has no idea how much experience the appraiser has with the specific property type or what due diligence will be performed in developing an opinion of value.

A second challenge is that the only part of the appraisal report that gets any attention from the borrower is typically the final value. The support and analysis that went into developing the value opinion are often not considered or read by the borrower. And, if a buyer really takes the time to review the report, there is a lot of pertinent information about the property within the report, other than the value opinion. In today’s busy times, I am not sure this will change anytime soon. However I would like to see the borrower use the document as a source of information about the property as well as an objective viewpoint in value.

Omni: What most often causes a disconnect between an appraiser’s and an owner’s opinion of value?

JSR: Often, a buyer’s business is interwoven with a commercial building. Take a well performing restaurant with good management and a well-known reputation. Most commonly when we appraise the property we are appraising the real estate only and not the business value. Our value opinion must isolate the real estate, and exclude any value attributed to the business which includes the reputation and operation. This sometimes results in a real estate value opinion lower than the opinion of the owner of the thriving business. We must look at a property as if that management and reputation were taken away, what would the real estate sell for on the open market.

There have been times when we are asked why we need leases or historical income and expenses to appraise a building. “Isn’t the value, the value?” we are asked. As mentioned earlier, commercial real estate is often valued by the income it produces and long-term leases have significant impact on value. Would you pay the same price for a building that produces leased income of $100,000 annually for the next 20 years or an identical building that produces leased income of $50,000 annually for the next 20 years?. While this may sound obvious, it often is not taken into consideration when a value differs from what an owner has in mind.

Omni: Is there anything else you wish to add that could offer insight into Central PA’s commercial real estate market right now?

JSR: While we do not have any earth shattering observations, we can share some of the trends we see, of which some are obvious.

Retail that can be purchased on-line is struggling, while retail that requires ‘hands on’ shopping is prospering.
The retail restaurant business has grown at a rapid pace in the last few years. Younger generations eat out much more frequently than previous generations, and this sector of retail is strong.
Because of our central location and access to highway systems, the South Central Pennsylvania Industrial Market is our strongest real estate market.
The apartment market in the City of Harrisburg continues to grow with new apartments being quickly absorbed as they come on-line. Rental rates for nicely renovated apartments are $700 to $800 for studios, $800 to $1,000 for 1-bedroom units and $950 to $1,250 for 2-bedroom units. Based on the rental rates and occupancy rates, these properties are yielding high values. However there has been no recent sales of these newly renovated apartments to truly gauge how investors look at renovated apartments in the City as pure investments.
There has been significant price appreciation in the professional office market for good quality, stabilized assets. Cap rates are below 8.00% with some recent transactions in the low 7.00% range that have long-term, credit rated tenants in place. Cap rates for single-tenant medical office buildings are sub 7.00%.

When working with a commercial real estate appraiser, there are several important things to keep in mind. Look for one who is experienced and reputable in your local market and who can demonstrate on-going, extensive research of market sales and lease activity. You also want to work with someone who encourages open dialogue and discussion to ensure the scope of work and appraisal assignment meets your expectations and needs. Omni Realty Group thanks Judy and Shane of JSR Appraisal Group, Inc. for sharing their insight and expertise in this blog. You can learn more about JSR Appraisal Group, Inc. at www.jsrappraisal.com.

Judy Striewig

M. Shane Rorke

[Online Resources] Real Estate, appraisal, appraisal firm, appraiser, appraising, camp hill, carlisle, central pa, Commercial Real Estate, cumberland, dauphin, harrisburg, hershey, hummelstown, jsr appraisal group, judy striewig, lancaster, lemoyne, local market, m. shane rorke, mechanicsburg, Mike Kushner, Omni Realty Group, pennsylvania, professional, trends, york

What’s the difference between a listing agent and tenant rep agent?

Posted on April 8, 2019 by Mike Kushner in Blog, Tenant Representative/Buyer Agent No Comments

The use of the term real estate agent casts a broad umbrella under which people tend to lump all real estate professionals into the same category. The truth is that there is a big difference between the role of a listing agent and a tenant/buyer agent. While both might be referred to as simply a “real estate agent,” it’s important to understand when and how you would use each when it comes to buying or selling real estate.

Listing Agent – A listing agent might also be referred to as a seller’s agent. This is the person who represents the seller or landlord in a deal. His or her job is to list and market the property to attract potential buyers, then negotiate an acceptable deal on behalf of the seller.

Tenant/Buyer Agent – On the other side of the deal you have the tenant/buyer agent. This is the person who represents the tenant or buyer looking to lease or purchase property. His or her job is to find and bring a tenant/buyer to properties which meet their criteria, then represent them in a deal to ensure terms and pricing is fair to the buyer.

How is a listing agent compensated?

Most commonly, a listing agent signs an exclusive right-to-sell/lease listing with the seller/landlord, meaning only the listing agent’s brokerage is entitled to an agreed upon commission upon the sale or lease of the property. The brokerage then typically shares the commission with the agent. Exclusive listings are bilateral agreements between a broker and a seller/landlord. It’s important to know that a listing actually belong to the broker or brokerage, not the listing agent unless he is also owner of the brokerage. However, it is important to make the distinction between a tenant/buyer agent and a subagent of the seller/landlord. If the tenant/buyer does not have a formal written agreement with the tenant/buyer agent then the agent who is showing the property and providing information to the tenant/buyer is considered a subagent of the listing agent and is not representing the interests of the tenant/buyer.

How is a tenant/buyer agent compensated?

Generally, the listing agent cooperates with the tenant/buyer agent and shares a portion of the earned commission in exchange for bringing a tenant/buyer to the table, if that tenant/buyer then submits an offer that the seller accepts. This is referred to as a “co-op” commission. It’s important to note that a tenant/buyer agent is at no cost to the tenant/buyer.

Do I really need to work with an agent?

Legally, no. You are not required to work with an agent and can opt to list your property as a For Sale By Owner (FSBO). But there are benefits to working with a listing agent. Foremost, it becomes their responsibility to market and sell your property in a timely fashion and for an agreeable price. They will schedule showings and handle all of this for you. Many sellers benefit from working with a listing agent because their property may sell faster and at a higher price point than if they decided to go it alone. Also, many people value having a professional to take these time-consuming tasks off their hands.

If you are on the other side of the deal as a tenant/buyer, again you do not legally need to work with a tenant/buyer agent in order to buy or lease a property. However, similarly to the points regarding working with a listing agent, a buyer may also experience benefits when working with a tenant/buyer agent. Foremost, you will have their knowledge and expertise to guide you through the buying/leasing process, and someone who will represent your best interests. A tenant/buyer agent can also make your property search less time consuming by showing you only properties that they know fit your criteria. Think of them as your tenant/buyer “concierge.”

Can the listing agent also be the selling agent?

Simply stated, no. A listing agent should not be the selling agent within the same deal. Why? Because there is a major conflict of interest in doing so. Think of it like having the same lawyer represent both the defense and the prosecution in a case. Neither side will receive fully unbiased, honest representation, and the counsel walks away with twice the compensation. In fact, states such as California have gone as far as making such “dual agency” practices illegal.

Too often, a tenant/buyer begins looking at property without hiring a selling agent (aka tenant/buyer agent) to exclusively represent them. Usually they do not realize that a selling agent is not at the cost of the tenant/buyer, since the tenant/buyer agent will normally co-broke a commission with the listing agent. A tenant/buyer agent is compensated by splitting the commission with the listing agent. So, the client gets representation at no cost. The commission arrangement between the owner and listing agent will be paid whether or not the tenant/buyer has representation.

Without representation, tenants or buyers often find themselves needing the expertise, advocacy and unbiased advice of a listing agent. This can result in a number of troubling issues and frustrations for the tenant/buyer. These include losing the upper hand in negotiations, being subject to unfair pricing and unsatisfactory terms and too late realizing that things could have gone far better if they had a professional dedicated solely to representing their best interests.

When it comes to understanding the differences between a listing agent and a selling agent (aka tenant/buyer agent), the most important take away is that whatever side of the deal you’re on, you want to be sure you have your own representation to advocate for your best interests and negotiate a favorable deal.

[Online Resources] Real Estate, agent, broker, buyers agent, camp hll, carlisle, central pennsylvania, Commercial Real Estate, harrisburg, hershey, hummelstown, industrial, lancaster, lemoyne, mechanicsburg, Mike Kushner, office, Omni Realty Group, pennsylvania, property, retail, tenant representative, york

Central PA’s Largest Commercial Real Estate Sales of 2018

Posted on February 25, 2019 by Mike Kushner in Blog, Commercial Real Estate, Industrial, Local Market, Office Leasing, Trends No Comments

Central PA’s Largest Commercial Real Estate Sales of 2018

There is much we can learn by analyzing a market’s largest commercial real estate sales in a given year. Looking at each the industrial, retail and office sectors, it’s interesting to see the varying demand for size, price and class from sector-to-sector. This tells us a lot of about the direction of economic growth for a region; and for a real estate investor, it also showcases where the best investment opportunities for the future may lie.

Here is a look at the largest commercial real estate sales that took place in Central Pennsylvania in 2018, grouped by sector and sorted by highest sell price.

INDUSTRIAL

1. 2 Ames Drive – Amazon (Carlisle)

This 700,000 SF, Class A industrial distribution building sold on December 20, 2018 to MetLife Real Estate Investments for $74,600,000. Built in 2012, this building was sold by American Realty Advisors for $106.57 per square foot. The price represents a 4.89% cap rate. American Realty Advisors had acquired the property in 2015 for $62.475 million.

2. 3700-3900 Industrial Rd – Supervalu (Harrisburg)

This 750,000 SF, Class B industrial building sold on May 1, 2018 to Fortress Investment Group LLC for $38,373,479. Built in 1985 and renovated in 1999, this building was sold by Supervalu Inc. for $51.16 per square foot. The lease agreements between Supervalu and the new landlord had an initial term for 20 years, with five five-year renewal options on a triple-net lease.

3. 6345 Brackbill Blvd – Exel Logistics (Mechanicsburg)

This 507,634 SF, Class B industrial warehouse sold on April 5, 2018 to Penwood Real Estate Investment Management, LLC for $33,100,000. Built in 1985, this building was sold by the Abu Dhabi Investment Authority for $66.20 per square foot. The price represents about a 6.15% cap rate on in-place income.

4. 102 Roadway Drive – Saia, Inc. (Carlisle)

This 61,658 SF, Class C, truck terminal along with 40 acres was sold in October 2018 to Saia for $32,000,000. The additional acreage pushed the sales price to over $518 per square foot. YRC, the seller, still owns and occupies the larger industrial building next to this property.

5. 571 Independence Ave – Upper Allen Business Park (Mechanicsburg)

This 378,000 SF, Class B industrial warehouse sold on August 22, 2018 to Prologis, Inc. for $24,971,824. Built in 1999, this building was part of a portfolio sold by DCT Industrial Trust for $66.06 per square foot. Prologis, Inc., a global leader in logistics real estate, acquired DCT in an all-stock acquisition of for $8.5 billion, including the assumption of debt.

RETAIL

1. 6416 Carlisle Pike – Silver Spring Square (Mechanicsburg)

This 342,603 SF power center anchored by Wegmans was sold on April 17, 2018 to The Wilder Companies for $88,810,000. Built in 2007, this building was sold by Silver Spring Square, LLC for $235.87 per square foot. The price represents an in-place cap rate of 7%.

2. 830-870 N. US Route 15 – The Dillsburg Shopping Center (Dillsburg)

This 162,783 SF neighborhood center was sold on September 24, 2018 to Vastgood Properties, LLC for $24,400,000. Built in 1994 and renovated in 2002, this property was sold by Brixmoor Property Group for $149.89 per square foot. The property traded at a 6.333% cap rate.

3. 5301 Simpson Ferry Rd – Giant (Mechanicsburg)

This 51,394 SF retail property sold on August 17, 2018 to Patriot Equity Partners, LLC for $17,540,000. Built in 2004, this property was sold by Exchange Right Real Estate, LLC for $341.28 per square foot.

4. 130 Kline Village – Kline Plaza (Harrisburg)

This 214,628 SF community center was sold to Nassimi Realty Corp. on December 12, 2018 for $8,700,000. Built in 1952, this property was sold by Brixmoor Property Group for $40.54 per square foot. The price represents a 10% in-place cap rate.

5. 1313 Kenneth Road – Dick’s Sporting Goods (York)

This 55,200 SF retail property was sold to the Stewart Companies on December 27, 2018 for $6,250,000. Built in 1988, this property was sold by First Capital Realty Inc. for $113.22 per square foot.

OFFICE

1. 1920 Technology Pky – Pennsylvania Department of Corrections (Mechanicsburg)

This 100,000 SF Class B Office Building sold on December 3, 2018 to Boyd Watterson Asset Management for $26,950,000. Built in 2010, this building was sold by Hudson Companies for $269.50 per square foot at a 7.5% cap rate. The building is fully leased to the PA Dept of Corrections.

2. 1250 Camp Hill Bypass (Camp Hill)

This 84,000 SF Class B Office Building sold on November 27, 2018 to Waterday Properties for $19,750,000. Built in 2015, this building was sold by Hoffer Properties for $235.12 per square foot. The building is leased to Hewlett Packard and Medical Mutual.

3. 1 Trinity Dr E – UPMC Pinnacle FamilyCare (Dillsburg)

This 43,212 SF Class B Medical Building sold on August 9, 2018 to Hammes Partners for $19,000,000. Built in 2008, this building was sold by Anchor Commercial Realty for $439.69 per square foot. The MOB is occupied by UPMC Pinnacle and Presbyterian Senior Living.

4. 909 Elmerton Ave – Pennsylvania DEP South Central Regional HQ (Harrisburg)

This 73,101 SF Class B Office Building sold on August 2, 2018 to Boyd Watterson Asset Management for $14,500,000. Built in 1998, this building was sold by Elmerton 909, LP for $198.36 per square foot. The building is fully occupied by the PA Dept of Environmental Protection.

5. 3801 Paxton Street (Harrisburg)

This 61,198 SF Class A Office Building sold on January 31, 2018 to Arthur L. Walters Co. for $8,425,000. Built in 2006 and updated in 2017, this building was sold by Thomas A. Salvaggio for $137.67 per square foot. The property traded at a 6.86% cap rate.

Closing Thoughts

In Central Pennsylvania and across the nation, it’s fair to say that the commercial real estate market delivered its fair share of ups and downs. Now that we’ve taken a closer look at the largest industrial, retail and office real estate sales of 2018, there are a few interesting points worth noting in each sector.

Industrial – Industrial real estate continues to lead all other real estate sectors with $529 million in sales volume in 2018. The average price was $60 per square-foot, with the average property selling for $4.2 million with a 6.3% cap rate.

Retail – A total of $346 million was invested in Central PA’s retail real estate market in 2018, an increase over 2016 and 2017. The average sale price was $107per square-foot with a 7.5% cap rate.

Office – Annual volume levels for Central PA’s office real estate market were trending down for 3 years running, but 2018 rebounded with $266 million in total sales. The average office property sold for $1.4 million with 8.2% cap rate. Two of the top five largest office sales to take place in 2018 were buildings leased to the Commonwealth of Pennsylvania.

Given the largest and most notable commercial real estate sales that took place in Central PA in 2018, do you notice any other trends this might indicate? Share your insights below by leaving a comment.

[Online Resources] Real Estate, biggest, buyer agency, buyer agent, camp hill, carlisle, commercial, Construction, deals, harrisburg, hershey, hummelstown, industrial, largest, mechanicsburg, Mike Kushner, negotiation, office, Omni Realty Group, real estate broker, retail, sale, sell, space, tenant representative

Growing Demand for “Live-Work-Play” Communities in Central PA

Posted on December 4, 2018 by Mike Kushner in Blog, Commercial Real Estate, Community, Guest Blogger, Local Market, Trends No Comments

Photo: Walden in Mechanicsburg, PA

If you’ve been a resident of Central Pennsylvania for more than a few years, you’ve likely seen various live-work-play (LWP) communities – maybe you even live in one. What we’re talking about it mixed-use commercial and residential real estate where people have the opportunity to live, work and play (shop, dine, etc.) all in a relatively close distance to one another. A great example is the Walden community in Mechanicsburg, but there are many others that we will examine in this article.

To help us explore this growing trend, we turned to Chris LeBarton who is a Senior Market Analyst with CoStar Group. Chris covers commercial real estate data in Western Maryland, including the Baltimore metro area, up through Central Pennsylvania for CoStar’s Market Analytics platform.

Chris joins Mike Kushner of Omni Realty Group for a Q&A series where we specifically look at the growing demand for LWP communities in Central PA – and what this means for CRE professionals. Here is how Chris answers our most pressing questions.

Omni: When did the LWP trend begin and how has it grown?

Chris LeBarton: The earliest usage of LWP spaces I can find was in 2005. The trend really started to grow in popularity leading up to the market crash, but there’s no correlation between the two that I can see. The term “live-work-play” was very likely used prior to that, but I’m guessing the branding of mixed-use development really took off as concepts of ‘walkable urbanism’ and ‘Transit Oriented Development’ (TOD) exploded across the country.

According to the Urban Land Institute’s Mixed-Use Development Handbook, which was published in 2003, mixed-use development: provides three or more significant revenue-producing uses (such as retail/entertainment, office, residential, hotel, and/or civic/cultural/recreation); fosters integration, density, and compatibility of land uses, and; creates a walkable community with uninterrupted pedestrian connections.

Omni: Describe a LWP community in Central PA.

Chris LeBarton: First, let’s clarify what a LWP community really is, and what it is not. Some economic development entities and marketing types play pretty fast and loose with the term. An area can be a really nice place to live, work and play in, but if there’s over a mile or so between one element of the triad and the other two legs of the stool aren’t in the same building/development, it’s not really a LWP dynamic. Of course, the likelihood that most people who live in one of these communities also works in the same office/industrial park nearby is fairly low. But being able to do all three and be largely reliant on public transportation or your own two feet is really the spirit of the LWP concept.

Another key element to understand is that LWP is not at all relegated to a city environment. In fact, part of these projects’ collective appeal is that they can recreate a city environment without being in the hustle and bustle of a CBD. Specifically in Central Pennsylvania, there are a number of LWP developments. Here are just a few:

Lime Spring Square (Lancaster/Hempfield Township): A multi-phase, mixed-use campus being developed by Oaktree Development Group, the end result will include over 100,000 SF of retail, several hundred high-end apartments, and components of office, medical and industrial space. Penn State Health has a 76,000 SF medical office building there, while PDQ Industries is expanding operations into an 80,000 SF building.
North Cornwall Commons (Lebanon/North Cornwall Township): Another phased project that has been delayed off and on since being proposed in 2004, North Cornwall Commons is finally seeing movement at what would be the largest mixed-use development in Lebanon County history. A retail strip center with at least one confirmed tenant (a local coffee business) is underway at 148-acre site that includes plans for roughly 165 townhomes, office space and a hotel.
The 1500 Condominium (Harrisburg): An example of how you don’t have to have everything in one place, 1500 has 43 units (mostly rentals) that sit over top of two restaurants and is within walking distance to the Broad Street Market and several small-to-medium sized employers.
Wyomissing Square (Reading/Wyomissing Borough): A quintessential brownfield redevelopment, Wyomissing Square now consists of 250 4 Star apartments, a Courtyard by Marriott, small-scale retail, restaurants, and a 60,000 SF medical office building.

Omni: Who is the target demographic for this type of community?

Chris LeBarton: As with anything that deals with where people live, shop/eat or work, I think the answer is “All of the Above.” We hear all too often about Millennials, or Boomers, or Downsizers, or Divorcees. Honestly, the more conversations I have with leasing agents and brokers the more I’m convinced the rule is diversity and the exception is homogeneity. Granted, most of these LWP sites cater to the more upscale or educated among society, but that doesn’t mean there can’t be families with two working blue collar parents who make a decent living and who want to save money on a car/parking and live close to work.

Omni: What advice could help commercial real estate professionals capitalize on the LWP trend?

Chris LeBarton: I don’t give investment advice, but here are a couple thoughts. First, find a way to make it authentic. Be it the retail mix, or a unique concept to the green space, or simply having the “town center” not look boiler plate, be conscientious of that buzz word “place making.” If you’re going to basically spend the majority of your waking life in a small area, it can’t be boring or cookie cutter.

Next, think ahead. What will you need to provide 3-5 years from now? Who would have thought that cities would be crawling with scooters?! Or even just electric vehicles. People looking to walk or be publicly transported or drive as little/cheaply as possible will likely demand options and flexibility. Things to consider are multiple charging stations, bike share platforms, car-share parking lots, etc.

Finally, identify fairly gentrified but not-yet-there locations that are retail/grocery deserts. LWP in the middle of a depressed community won’t work in many places (there are exceptions, of course). But cool/changing areas that are the next ‘it place’ often still need the food and fun to complete the shift.

Omni: Looking to the future, how do you predict LWP communities to evolve in Central PA?

Chris LeBarton: I think you can expect to see more of these types of projects turn up around dying malls or outlet centers that have to repurpose big blocks of space. Another interesting new trend that I could see taking off is the rise of co-living and co-working spaces in the same building.

The LWP trend stands to have a significant impact on Central PA’s commercial real estate market. Because LWP communities rejuvenate the local community, drive business and create employment opportunities, Central PA should be encouraged that so many of these communities are popping up across the region. Additionally this type of real estate appeals to a wide variety of demographics, making it a valuable investment opportunity for commercial real estate professionals. Looking to the future, LWP communities could be among the most powerful tools to breathe new life into struggling areas, and spur a burst of new economic activity that is greatly needed.

What are your thoughts on the growing demand for live-work-place communities in Central Pennsylvania? Is this type of community attractive to you? Why or why not?

[Online Resources] Real Estate, analyst, buyers agent, camp hill, carlisle, central pennsylvania, chris lebarton, Commercial Real Estate, costar, CRE, harrisburg, hershey, lancaster, live work play, local, LWP, mechanicsburg, Mike Kushner, mixed use, office, Omni Realty Group, pennsylvania, real estate agent, real estate broker, real estate investor, residential, retail, tenant representative, trends, york

How Omni Realty Uses Research, Skill and Experience to Benefit Our Commercial Real Estate Clients

Posted on June 4, 2018 by Mike Kushner in About Us, Blog, CCIM No Comments

When in search of a service or product, you’re likely to start with a Google search. These results will lead you to visiting some potential businesses’ websites and possibly their social media pages. You may feel like you’ve gathered enough information based on the quality of their online presence, reviews and word of mouth recommendations to choose the right business to fit your needs.

But how often do you consider a business’s mission statement in this decision making process? If you don’t, you should!

A business’s mission statement (or lack thereof) will tell you a lot about their focus, approach and how they treat their customers. A nice website, active social media and high ranking reviews only paint part of the picture of the quality of the company – and what they stand for.

For the benefit of our clients, whether they be past, present or future, we hope to give you deeper insight into our own mission so you can understand what we value and our commitment to serving you!

At Omni Realty, our mission is to secure the most effective space at the most favorable terms for our clients. We use research, skill and experience to offer unmatched, highly personalized service while carefully determining our clients’ needs and analyzing all possible solutions.

But our mission statement is more than just words on paper. The values it represents are closely woven into our daily client interactions as well as our long-term visioning. Here is how Omni Realty strives to live out our mission with everything we do.

Current and Consistent Research

We are strategic about maintaining access to the industry’s most comprehensive database of commercial real estate through our partnership with CoStar. Even though we specifically serve the Central Pennsylvania market, we have access to a combination of reliable tools, resources, and expert analysis on over 5 million commercial real estate properties in today’s market. This allows us to pull and compare market reports, keep a pulse on emerging trends and give our clients valuable advice even if it’s outside of our market.

Additionally, we have access to the most technologically advanced industry tools including:

Esri ArcGIS and Business Analyst – demographics and mapping
DataVu – business list data
Riskmeter Flood Maps – assess flood hazards and generate reports
RealNex MarketEdge – financial analysis

High-Level Skill

Mike Kushner is a graduate of University of Pennsylvania (Penn) with his degree in economics. This education is combined with Mike’s CCIM Designation, making him a uniquely qualified commercial real estate broker, developer and investor. CCIM stands for Certified Commercial Investment Member and requires advanced coursework in financial and market analysis. The CCIM designation demonstrates extensive experience in the commercial real estate industry. Furthermore, CCIM designees are recognized as leading experts in commercial investment real estate.

As part of Omni Realty’s mission, developing this high-level of skill is essential to offering our clients unmatched expertise backed by confidence. Just a few of our uncommon, but highly valuable skill areas include:

Property Management
Raw Land Development
Historic Rehab Property Development
Chairman of Local Zoning Hearing Board
Expert Witness Testimony

Diverse Experience

Skill can only be grown when it is applied. Over the last 25 years of being a licensed real estate broker, Omni Realty has grown a diverse portfolio of experience. We have served over 500 clients, brokered 1,250 commercial real estate deals and have helped businesses of all sizes and industries find the most effective space at the most favorable terms. Our diverse experience also includes extensive property management, both residential and commercial.

We love sharing our experience and applying it toward delivering favorable outcomes for our clients. Experience gives us negotiation power on behalf of our clients, a leg-up on emerging market trends and a vast network of contacts that we call upon to help our clients overcome any number of challenges, both inside and outside the scope of commercial real estate.

Unique Value Proposition

We understand that other businesses may tout that they are “different” and it can be confusing to cut through the clutter and determine which commercial real estate business truly offers a unique model. First, when we say we work with businesses of all sizes, we truly mean it. From a one-person startup looking for co-working space, to a Fortune 1,000 organization looking to develop a growing campus, we are excited to work at both ends of the spectrum because we are excited to see our locally-based businesses thrive.

Second, our skill and expertise comes at no cost to our clients. As an exclusive tenant representative/buyers agent, Omni Realty is compensated by the landlord or seller, not by our client. This also means we come to the table to represent only you and your interests. There is no conflict of interest like there might be if a single agent represented both the tenant and landlord in a commercial real estate transaction. Finally, our service is highly personalized and highly hands-on. You work with only the principals in our firm; and we are responsive and proactive in our communications.

With a better understanding of our mission, and the various pieces involved in bringing our mission to life, we hope you can see why Omni Realty is in a unique position to serve our commercial real estate tenants and buyers. And remember, a business’s mission should not be taken lightly. When looking to work with a commercial real estate broker in Central Pennsylvania, be sure to assess their mission and compare it to your own. The most successful partnerships come from businesses and clients who work together over a shared mission!

Have a comment or question? Join in the conversation by leaving a comment below.

[Online Resources] Real Estate, best, buyers agent, camp hill, carlisle, CCIM, central pennsylvania, Commercial Real Estate, exclusive, experience, gettysburg, harrisburg, hershey, industrial, lancaster, lebanon, lemoyne, mechanicsburg, Mike Kushner, office, Omni Realty, Omni Realty Group, pennsylvania, qualified, quality, research, respected, retail, skill, space, tenant representative, trusted, york

How Commercial Real Estate Owners and Investors Can Capitalize on the Co-Working Movement

Posted on May 9, 2018 by Mike Kushner in Blog, Local Market, Office Leasing, Trends No Comments

To younger generations who are making up more and more of our work force every day, work is no longer a physical space, but rather an activity that, for better or worse, can be taken nearly everywhere we go. For this reason, the movement toward co-working spaces has emerged in virtually every city that has a business industry. Co-working is present here in Central Pennsylvania with spaces like the Park and St@rtUp in Harrisburg, the Candy Factory in Lancaster and the Techcelerator in Carlisle, to name just a few.

Even though co-working spaces are present in Central Pennsylvania, the majority of our workplaces are still modeled after the “old” economy assembly line, where workflow was linear and corporate structures were hierarchical. For commercial real estate owners and investors who want to capitalize on the growing demand for co-working spaces, here’s what you need to know.

Understand how the modern day “office” has changed

Foremost, we must take a step back to understand how the modern day “office” has vastly changed from what was desired decades ago. Simply put, stop thinking like a baby boomer! Nearly 10,000 baby boomers retire every year. It’s estimated that millennials will comprise the largest segment of our work force (75 percent to be precise) within the next decade.

If you’re a commercial real estate landlord or investor, you know the importance of understanding your clients’ wants and needs. So let’s examine what millennials want out of an office. First, the word “office” isn’t really appropriate anymore. What’s desired is a workspace that in one instance can provide quiet and solitude for “head-down” work, and the very next moment, provide an energizing and collaborative group work environment. Should it come as a surprise that millennials want it all without having to commit to one style of space? This brings us to the next important point, which is design.

Design spaces that quickly adapt to changing needs

Co-working spaces are high on function and that means being able to quickly adapt to a variety of work situations. In a single day, a business and its employees may need quiet, private work stations where people can work independently; open, collaborative space where people can work in groups; and traditional meeting space where people can meet with clients. Over time, growing businesses also desire the ability to easily accommodate more employees without having to uproot and find a bigger office every few months.

With traditional office space, businesses usually have to settle for dysfunctional work spaces that don’t quite fit the number of employees or their work styles. As a result, employees are less efficient, communication is disjointed and company culture suffers. For those who own or invest in commercial real estate, the focus needs to be on redesigning traditional office space to function more like a co-working space. This means large, open work areas where employees can interact and collaborate. Also, look for furniture that can be easily reconfigured as often as needed to provide more work spaces and private offices for independent work and meetings. These features will be huge selling points for businesses who want an office that will meet their immediate needs as well as grow with them.

Offer shared amenities to attract and retain tenants

The good news about co-working spaces is that people get used to sharing amenities. Multiple businesses working in the same building could all benefit from a shared conference room, snack bar, lounge or gym. While this would be far too much for any one of these businesses to individually afford in their own office, a building that provides all tenants with access to such amenities has quite a leg up over the competition.

Look at how Google and Apple have designed “campuses” for their employees. You can create the same effect out of your office building. Give businesses a place to interact with other businesses. Now you not only offer work space, you offer networking and business development opportunities for all!

Deliver a seamless experience – even if it comes at a premium

By adding luxury amenities to your office building, like mentioned above, you give businesses a seamless experience. Their employees will have incentive to do more at the office, even if that is relaxing, eating or exercising. Best of all, this higher level of employee engagement comes at a premium. Businesses will pay more for office spaces that keep employees happy, healthy and invested in their jobs. When you invest in adding luxury amenities to you work spaces, you will stand out among the competition and be able to charge more for your space.

Focus on building your own brand!

If you want to engage the growing millennial workforce, you need to pay attention to your brand. This demographic is used to polished and prominent branding. If you want to attract them to your office space, you need to present them with a brand worth buying into. Many co-working spaces brand themselves with a trendy name and logo. They have professional websites and a strong social media presence. How does your “brand” compare? Any effort put into properly branding your properties will bring exponential benefits as time goes on.

Which of these tips do you believe is most valuable to commercial real estate owners and investors capitalizing on the growing trend of co-working spaces?

Join in the conversation by leaving a comment below!

[Online Resources] Real Estate, blog, camp hill, carlisle, central pa, co-working, Commercial Real Estate, company culture, coworking, CRE, harrisburg, hershey, lancaster, mechanicsburg, Mike Kushner, office, Office Space, Omni Realty, pennsylvania, real estate investor, real estate owner, shared work space, virtual office, work environment, work space, workspace, york