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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

Pros and Cons of Crowdfunding and Commercial Real Estate

Posted on November 28, 2018 by Mike Kushner in Blog, Commercial Real Estate, CPBJ Articles, Trends No Comments

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

By now you’ve likely heard of the concept of crowdfunding. Maybe you’ve even ran a campaign for yourself or used a crowdfunding platform to give money to a cause. When most people think of crowdfunding, they think of using it to raise money for charity, like Go Fund Me, or to help grow a business, like Kickstarter. But one sector of crowdfunding that is steadily growing is crowdfunding for commercial real estate investments. It’s exactly what it sounds like. A group (or “crowd”) of fellow CRE investors purchase shares of a property or properties. Their combined resources allow them to jointly own CRE properties that none could afford to invest in individually.

On paper – or should we say on the internet – it’s a seemingly simple concept with obvious benefits. But it’s not without drawbacks too. Next we’re going to take a closer look at the pros and cons of crowdfunding for commercial real estate, and how this investment option may or may not be a good fit for you.

The Pros –

Affordable Price of Entry

Most people don’t have millions of dollars, even a hundred thousand dollars to put into a commercial real estate investment. This obstacle no longer has to stop interested investors from getting in on a great CRE deal. Through crowdfunding, pooling together funds is simple and fast. Commonly the price of entry is anywhere from $1,000 to $5,000. Compare this to outright owning your own investment property and you’ll see that this price of entry makes crowdfunding a really affordable opportunity.

Control of Your Cash

Compared to putting your money in a real estate investment trust (REIT), CRE crowdfunding gives you a lot more control and oversight. You get to choose exactly the type of property you want to invest in; you’re not relying on a trust manager to do this for you. For some investors, they love the thrill of the hunt of doing their own research and finding just the right property to invest in. If this is you, then you’ll enjoy that crowdfunding gives you control over when and how you invest your cash.

Diversity

Having a diverse investment portfolio is important. You want to be sure you’re not betting on just one horse. Through crowdfunding, you can invest in many different CRE properties within different sectors and classes. Even if you only have a moderate amount of money to invest, because the entry price for crowdfunding is so reasonable, this gives you the opportunity to diversify where your money is going.

Stability

No investment is completely stable, but when compared to traditional stocks and bonds, a CRE crowdfunded investment offers more stability because it’s not at the mercy of the stock market. Yes, other factors within the economy will certainly impact the value of the property, among other things; however, this is rarely an overnight change and can usually be predicted well in advance.

The Cons –

Longer-Term Commitment

When using crowdfunding to invest in commercial real estate, you’ll need to abide by your operating agreement. Usually when you invest, you have to lock this in for a set period of time. Sometimes this is several months, other times it’s several years. No matter how you look at it, crowdfunding investments are not easy to liquidate. They take time – and time isn’t always something people have, especially when it locks away cash that could be needed elsewhere.

Little to No Say in the Property

In the pros section we mentioned how CRE Crowdfunding gives you more control; however it’s important to note that really only pertains to your money. When it comes to the actual investment property, you have little to no say in the project. As a smart investor, you should do your homework to be sure you agree with the plans for the property and how it will be managed. Because after you invest, your opinion will most likely not be solicited.

The Unknowns

CRE crowdfunding most certainly has its risks. If you can tolerate these risks, then there is the potential for a high reward. A lot of the risks revolve around the unknown. Will the project stay on budget? Will it be completed on time? Will the property be managed as intended? Will the predictions and assumptions for the investment hold true? If you don’t like the risk and worry of the unknowns, CRE crowdfunding could really weigh you down.

Fees, Fees and More Fees

One final con is that there are a lot of hidden fees that could catch you off guard. The crowdfunding platform itself will apply fees to your investment. This varies from platform to platform, so be sure to read the fine print. Additionally, the investment property may also slap on additional costs for things like a construction fee, management fee, etc. Again, be sure to closely and carefully read every piece of your operating agreement because this is where you should uncover these fees before you sign on the dotted line.

The real takeaway here is that, like anything, crowdfunding for commercial real estate has its ups and downs. A smart investor will closely consider each side and weigh the risk versus the reward. Even with its cons, crowdfunding is a valuable investment opportunity that cannot be ignored, especially if you’re looking for ways to diversify your investment portfolio.

How do you feel about crowdfunding for commercial real estate? Is there something we missed on our list? Share your thoughts by leaving a comment below!

[Online Resources] Real Estate, benefit, Commercial Real Estate, cons, CRE, crowdfunding, digital, drawback, financial, industrial, investing, investment, Mike Kushner, money, office, Omni Realty Group, portfolio, property, pros, retail, technology

Central PA Office Submarkets End Quarter with Very Different Outcomes

Posted on November 8, 2018 by Mike Kushner in Blog, Local Market, Trends No Comments

Lancaster closes Q3 with the strongest market while Harrisburg West shows signs of distress.

The submarkets that make up Central Pennsylvania’s office real estate market each have unique advantages and disadvantages that really show through when you examine each individually. With the close of the third-quarter, we took a closer look at how the four main submarkets performed individually and comparatively.

The outcomes should surprise you! You may think you know which of the four submarkets outperformed the others, which one is most likely in distress and the others that are sitting pretty stagnant right now. But you’ll likely be shocked by the large variances in numbers, especially when compared to the historical averages and forecasted averages of what is yet to come.

Let’s take a closer look at some of the most interesting trends and numbers reported from CoStar’s Q3 2018 office report for Harrisburg East, Harrisburg West, Lancaster and York.

Harrisburg East

Vacancy – The vacancy rate for Q3 2018 in the Harrisburg East submarket is 6.4%. This is notably lower than the historical average of 7.8% and the forecast average shows this dipping lower to 5.7%. For comparison, the peak in vacancy rate occurred in Q4 2012 when it reached 10.8% and the trough was in Q4 1997 when it plummeted to 3.1%.

12 Month Net Absorption in SF – The twelve-month net absorption is 106,000 square-feet. While this is still lower than the historical average of 187,046 square-feet, the forecast average predicts the current net absorption will fall significantly to 61,648 square-feet. Though not by much, net absorption will at least remain in the black for now.

Rent Growth – The current 12 month rent growth is 2.0%. This is higher than the historical average of 1.4%, though the forecast average predicts that this will fall to 0.7%. For comparison, the peak in Harrisburg East’s rent growth occurred in Q1 2001 when it reached 8.3% and the trough was in Q4 2009 when it plummeted to -2.4%.

12 month deliveries in SF – Harrisburg East has a twelve-month delivery of 30,000 square-feet. This takes into account all of the deliveries that occurred over the last year; however no new buildings were delivered specifically in Q3 2018. Additionally, 20,000 square-feet of 4 and 5 star office space is under construction, which will be delivered in coming quarters.

Harrisburg West

Vacancy – The vacancy rate for Q3 2018 in the Harrisburg West submarket is 7.3%. This is slightly higher than the historical average of 7.0%; however, CoStar’s forecast average predicts this to dip to 5.6%. For comparison, the peak in vacancy rate occurred in Q2 2002 when it reached 9.8% and the trough was in Q4 1997 when it plummeted to 2.5%.

12 Month Net Absorption in SF – The twelve-month net absorption is negative 258,000 square-feet. The historical average is 95,454 square-feet and the forecast average predicts the market will again return to positive numbers with 25,193 square-feet. Q3 net absorption is not far from where it was in Q4 2014 when it was negative w 292,042 square-feet. Since then, it peaked in Q3 2016 at 611,057 square-feet before falling substantially to its current negative state.

Rent Growth – The current 12 month rent growth is 1.9%. This is higher than the historical average of 1.4%, though the forecast average predicts that this will fall to 0.6%. For comparison, the peak in Harrisburg West’s rent growth occurred in Q3 2000 when it reached 7.1% and the trough was in Q4 2009 when it plummeted to -2.8%.

12 month deliveries in SF – Harrisburg West has a twelve-month delivery of 40,000 square-feet, compared to the historical average of 127,660 square-feet. This takes into account all of the deliveries that occurred over the last year; however no new buildings were delivered specifically in Q3 2018. Additionally, 26,400 square-feet of 3 star office space is under construction, which will be delivered in coming quarters.

Lancaster

Vacancy – The vacancy rate for Q3 2018 in the Lancaster submarket is 3.6%. This is notably lower than the historical average of 6.8%; the forecast average predicts this remain fairly stable at 3.7%. For comparison, the peak in vacancy rate occurred in Q4 2004 when it reached 9.7%. The lowest the vacancy rate has ever been in Lancaster County is actually right now, in Q3 2018.

12 Month Net Absorption in SF – The twelve-month net absorption is 324,000 square-feet. The historical average is substantially lower than what it is currently and that is 109,103 square-feet. The forecast average predicts net absorption will decrease to 89,086 square-feet.

Rent Growth – The current 12 month rent growth is 4.9%. This is significantly higher than the historical average of 1.3%, though the forecast average predicts that this will fall to 1.6%. For comparison, the peak in Lancaster’s rent growth occurred in Q3 2000 when it reached 6.9% and the trough was in Q4 2009 when it plummeted to -5.0%.

12 month deliveries in SF – Lancaster has a twelve-month delivery of 12,000 square-feet, compared to the historical average of 114,237 square-feet. This takes into account all of the deliveries that occurred over the last year; however no new buildings were delivered specifically in Q3 2018. Additionally, 81,840 square-feet of 4 and 5 star office space is under construction, which will be delivered in coming quarters.

York

Vacancy – The vacancy rate for Q3 2018 in the York submarket is 5.3%. This is lower than the historical average of 6.9%; the forecast average predicts this remain fairly stable at 5.4%. For comparison, the peak in vacancy rate occurred in Q1 2008 when it reached 10.5%. The lowest the vacancy rate has ever been was 2.2% in Q4 1998.

12 Month Net Absorption in SF – The twelve-month net absorption is 29,500 square-feet. The historical average is 72,892 square-feet. The forecast average predicts net absorption will decrease to 8,847 square-feet.

Rent Growth – The current 12 month rent growth is 1.6%. This is fairly close in line with the historical average of 1.1%, though the forecast average predicts that this will fall to 0.6%. For comparison, the peak in York’s rent growth occurred in Q3 2000 when it reached 6.8% and the trough was in Q3 2009 when it plummeted to -4.3%.

12 month deliveries in SF – York has a twelve-month delivery of 0 square-feet, compared to the historical average of 80,056 square-feet. The forecast average predicts that this rise to 13,093 square-feet. Additionally, 22,000 square-feet of office space is under construction, 17,000 square-feet of 4 and 5 star space and 5,000 square-feet of 3 star space, which will be delivered in coming quarters.

Key Takeaways

Overall, York County and Harrisburg East have been very stable. Not much is moving the needle. There is not a lot of absorption nor much new construction that could spur activity.

The real positive news from Q3 2018 is Lancaster County. This submarket rose above the rest for several reasons. First is its 324,000 square-feet in net absorption and 4.9% rent growth (highest since Q3 2003). Additionally the vacancy rate decreased 2.3%. Currently there are 81,840 square-feet under construction and 89,166 square-feet of new construction proposed.

In contrast, the Harrisburg West submarket is showing signs of distress. Its negative 282,000 square-feet of net absorption combined with a modest vacancy rate increase of 1.6% does not offer much hope for a major turnaround anytime soon. Additionally, the submarket has 86,400 square-feet of new office space under construction and 225,596 square-feet of proposed new space that the market will struggle to absorb, further driving down the net absorption.

Based on the activity taking place in Central Pennsylvania’s office real estate submarkets, how do you think this will impact business growth and development throughout these counties? How will this have a ripple effect into other areas of our economy?

Share your ideas by leaving a comment below!

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How the Medical Office Market Can Benefit from Using Flexible Office Space

Posted on September 21, 2018 by Mike Kushner in Blog, Office Leasing, Trends No Comments

Co-working and shared office space is not a new model. Businesses, like Regus, have been providing flexible, monthly memberships for access to shared office space for years now. This rose out of a growing need for businesses to have short-term, extremely flexible work locations so that they can scale up or down rapidly. Particularly, early stage startups couldn’t afford to lock into even year-long contracts for office space, because from week-to-week their needs for workspace were constantly changing.

What shared co-working space provides is an extremely flexible option for businesses and their employees to have a professional workspace with the ability to increase or decrease their space quickly and frequently. Now other industries have taken note of the unique benefits of co-working spaces and have started to develop their own model. The healthcare industry has jumped on this bandwagon and we’re now beginning to see the idea of medical co-working spaces spread across the nation, starting in cities such as Scottsdale, Arizona.

It may be hard to envision how doctors and other medical professionals can use shared workspaces to see patients, especially given the privacy and health considerations that come with the nature of the business. However, when you dig a little deeper, you’ll see that it’s a well thought out model that stands to disrupt traditional medical offices that tend to carry a large overhead and are unable to easily adapt.

Benefits of Using a Medical Co-Working Space

Co-working spaces are usually newly remodeled and fully built-out to fit the exact needs of the industry they serve. For medical co-working spaces, these rooms will feature a clean and organized space with new furniture and all the necessary resources to see and treat patients. Medical professionals can reserve the space for only the days that it’s needed. For some, this might be just 2-3 days per week. In a traditional medical office setting, when not in use, the space must still be paid for even if it’s sitting vacant.

Additionally, the concept of medical co-working spaces allows medical professionals to “test out” a new area where they may consider opening an office in the future. By offering services in a co-working space in the new area, they can see if patients prefer to see them at this location, and about how often they can fill their schedule here.

Space That Can Change with Demand

Additionally, co-working spaces are extremely flexible. Most businesses offering this amenity require only a 12 week commitment, then charge month-to-month. This is a big difference from a traditional office lease which is at least one year, usually multiple years.

In the medical industry, providers typically experience one of two problems as it pertains to medical office space. Either their practice is growing, and they don’t have enough rooms to accommodate their patients, thus delays in appointments or appointments that must be made weeks in advance. Or, the practice is shrinking and they’re losing even more money paying for space that is not being used. In both scenarios, medical professionals could benefit from the flexibility of office space that can change with demand.

With flexible office space, like co-working spaces, the need for space can change week-to-week and month-to-month. This affords medical professionals extreme flexibility. The end result is more convenient options for patients and less overhead for doctors.

Privacy and Health Considerations

It’s important to take into consideration that the highest standard of privacy and cleanliness is always expected by patients. If medical professionals should choose to see patients in a co-working setting, they should be prepared to reinforce to patients that though this is a “shared” space, the room is completely private and always properly cleaned.

As with any new trend, there may be some initial hesitations to overcome from both the providers and the patients. It’s a new model and something that will take some getting used to. However, because there are so many pros to outweigh the cons, as more and more people experience medical care from a co-working space, soon it will feel as comfortable as a traditional office environment – if not more so!

A Trend on the Rise

The reality is the co-working model is exploding, taking real estate empires, like New York City by storm. The 1.7 million square feet that co-working providers, like WeWork, leased in the first half of 2018 accounts for 10 percent of all new leasing activity in New York City this year. In fact, WeWork is about one lease away from becoming the biggest private office tenant in Manhattan – beating out JP Morgan Chase! How this relates back to the medical office market is that a trend that so quickly proved its value and dominance in a place like New York City in just eight years, will next begin to expand into smaller markets and new industries. This is not some overnight trend that will be a flash in the pan. Rather, it’s the future of office real estate that traditional real estate owners and investors need to embrace if they want to keep and attract new tenants.

The Bottom Line

Major healthcare trends are sweeping the nation and they stand to greatly change the way healthcare-related businesses view and use commercial real estate. The concept of co-working spaces that doctors and medical professionals can use to see patients is just one of these trends, and potentially a very disruptive one.

The benefits are clear. Being able to add or lose space on short notice and without penalty will allow medical professionals to save a ton of cost on overhead while having access to adequate space, if their practice grows. The most critical piece that will make this trend a success is that patients “buy into” the idea that they will be receiving care in a space that could be shared by other medical professionals on different days. So long as privacy and sanitary conditions are maintained, this trend has a lot of potential to benefit all parties.

What are some other benefits or drawbacks you see as the result of using medical co-working space? Share your thoughts and ideas by leaving a comment below!

[Online Resources] Real Estate, co-working, Commercial Real Estate, coworking, doctor's office, flexible office space, healthcare, hospital, industry, lease, medical office, Mike Kushner, office, Office Space, Omni Realty Group, patient, trends

How to Prepare For a Commercial Business Relocation

Posted on June 25, 2018 by Mike Kushner in Blog, Commercial Real Estate No Comments

For any business who has navigated the challenges of moving into new office, retail or industrial space, you likely learned some valuable lessons along the way of things you would choose to do differently if you had to do it again. A commercial business relocation has a major impact on company culture, customer service and your bottom line. For this reason, it’s critical to be strategic about how you approach your move to set yourself up for a smooth and seamless transition.

To provide valuable insight on the topic of commercial business relocation, Omni Realty interviewed Dick Michaelian. Dick is a principal of Relocation Consulting & Management, Inc (RC&M) located in Mechanicsburg, Pennsylvania. Having been in the moving and storage business for over 36 years, with 26 of those with RC&M, Dick has helped local, state and federal governments, schools, colleges, healthcare, courthouses, museums and corporate businesses successful relocate to new facilities.

We asked Dick to answer five important questions regarding commercial business relocation covering everything from the biggest challenges to planning for a successful move. Take a look at Dick’s insight and advice that can be applied to any business or organization considering a relocation.

Omni: What are the biggest factors that cause businesses to relocate?

Dick Michaelian: The number one factor is change. While that sounds quite simple, it can be very difficult for an organization to change. Growing, shrinking, change of ownership or leadership are all examples of change. Other factors include the expiration of a lease or sale of a building as well as a desire to change a location because of customers or taxing entities.

Omni: For businesses considering a relocation, what are the most important details they should think through?

Dick Michaelian: A business should begin with the end in mind. How do you want everything to look and operate when the move is completed? From there, you should work back to where you are now and then determine how much time, money and effort will be required to get to where you want to be. Businesses often under estimate the amount of resources required for a good, effective relocation.

Another consideration is how to maintain your level of productivity during the transition. The last thing that should ever happen during a move is for a customer to be told “we can’t be of service to you because of our move.” The entire relocation should be virtually invisible to customers!

Finally, a business should strongly consider what and how it wants to change as a result of the relocation. Change will happen whether it is desired and planned or spontaneous and intrusive.

Omni: How early should businesses begin to plan for their relocation?

Dick Michaelian: The planning should begin as soon as the decision is made that the business is going to move. I’m working with a client now whose move is planned for late 2020 and they want to get a clear picture of what is required for their budget. Planning can never begin too early. The actual implementation of the plan usually begins about four to six months prior to the relocation.

Omni: Describe your recommended planning process for corporate relocation.

Dick Michaelian: The planning process begins with leadership setting the path and goal. From there, it’s getting everyone to work together using the same data. Effective communication is critical. A ‘team’ approach works best, utilizing resources from different facets that will be playing a part in the move – large or small: IT, procurement, facilities, operations, administration and leadership. It’s essential to have a “big picture” perspective of the project while assigning expectations and due-dates to the players.

Once the plan is agreed upon and set, any changes should be well considered. You never want to change a plan in the middle of the move. That rarely proves successful in the end, as often the goal changes as well.

Omni: In your experience, what factors most commonly impact the success of a business’s relocation?

Dick Michaelian: The single most important factor are people moving. The reliability of the planning team members and their dedication to the success of the project is critical. No one person can be responsible for a fantastic move – it’s a team effort. However, one person can really make it hard for everybody else if they don’t want to move or change. Management has to set the tone. Getting the different elements to buy into the change that needs to occur is difficult; but, with the right vision and passion, good leaders will help their organizations through the necessary transition. I always enjoy observing this process with successful businesses.

Moving can be very difficult. Good leaders who recognize that they are in the “people business” have the most impact on the success of a relocation.

Another factor is timing. You never want to move until the new space is ready. And yet, most relocations occur without a new, completed space. Construction delays, last minute changes and contractors not performing are the major causes of this situation.

You can create a great new working environment for your business; but, if the move goes poorly, that’s what everyone will remember. Don’t underestimate the vital importance of a well-planned, smoothly executed relocation from beginning to end!

Is your business considering a relocation to new retail, office or industrial space? What piece of advice did you find most helpful? Join in the conversation, or ask a question by leaving a comment below!

[Online Resources] Real Estate, advice, business, central pennsylvania, commercial, Commercial Real Estate, company, industrial, Mike Kushner, move, moving, office, Office Space, Omni Realty Group, organization, relocate, relocation, retail, tips

How to Identify the Best Commercial Tenant Agent (Guest Post by William Gary)

Posted on June 18, 2018 by Mike Kushner in Blog, Commercial Real Estate, Guest Blogger, Tenant Representative/Buyer Agent No Comments

Note: This article was originally published by William Gary, MBA, MIM on MacLaurin Williams, LLC. Permission to republish has been granted. Click here to read the original version.

How to Identify the Best Commercial Tenant Agent

Commercial Tenants and Buyers often complain that “their” supposed Real Estate Broker seems more interested in depositing a commission check than in helping them to find the right workspace at the best price. Sadly, they are quite correct. Far worse, do Occupiers understand what’s wrong when Brokers try to “double-end” their deals and pocket commission checks on both sides of the table? In commercial real estate parlance, this is aptly known as “double-dipping” and it’s not good for Tenants and Owner-Occupants.

Even Landlords and Sellers may feel pressured by their Listing Brokers, Landlords’ Agents or Sellers’ Agents to make price reductions or to accept offers that are less than what they wanted. On the other side of the table, Tenants and Buyers can feel their arms painfully twisted by “their” Brokers to pay more than they had budgeted to lease space or purchase a building.

So whose Broker is whose and what’s really going on? And why does it matter so much?

DIRTY SECRET NO ONE WANTS TO TALK ABOUT

Shockingly, in many transactions in the US, Commercial Real Estate Brokers have no (zero) legal obligation to look out for the best interests of the Tenants or Buyers they work with. However, many Tenants and Buyers are woefully unaware of this troubling fact.

Laws in at least 25 US states now allow a Commercial Broker to work with a Tenant or Buyer as a Transaction Broker, Facilitator, Intermediary, Dual Agent or Subagent. All but the last of these are pure middlemen. None of them have any legal fiduciary duties of loyalty or obedience to the Tenant or Buyer they work with.

In some states, Texas as one example, the “Client” legally is not even a Client of an Intermediary, Transaction Broker or Facilitator; he or she is merely a “Customer.”

Such Brokers might work “with” you as their Customer, but certainly not “for” you as your advocate. That’s a critical distinction. They’re definitely not your Tenant Representative, 100% Tenant Rep, Tenant’s Agent or Buyer’s Agent.

All fifty (50) states provide avenues for Commercial Brokers to double-end deals, i.e. work with both the Landlord and Tenant or both the Buyer and Seller in the very same transaction and, thereby, avoid any obligation to split or share commissions with an outside “Cooperating Broker“. A Broker (or his or her Brokerage House/Company) is legally allowed to keep the commissions on both sides of a transaction; hence the term “double-dipping“.

In such instances, detractors, including Consumer Advocates, maintain that neither a Tenant nor an Owner-Occupant is actually represented. That’s accurate because neither has an advocate nor champion truly sitting on his or her side of the table.

A Consumer, in this case a Tenant or Owner-Occupant, should not assume that his or her Broker is obligated to represent his or her best interests, and his or her best interests alone, until one has first seen a formal, written disclosure describing the agency relationship under which real estate services are being provided. Tenants and Owner-Occupants should see this disclosure upfront, too, not at the closing table as some Tenants report Big Brokerage Houses are doing. By then, it’s usually way too late to hire a 100% Tenant Rep as an advocate and start over.

Even Landlords and Sellers looking to negotiate the best commission rates, to obtain the highest levels of service and to protect their legal rights in the event of a dispute, should start the process by making certain that they fully understand the form of representation that a Broker is offering to provide them.

Is it a “Single Agency” relationship, which is the optimum and best relationship for the Consumer? That is The Gold Standard of Representation, especially for Tenants and Owner-Occupants.

Or is it a legal relationship that leaves the door open for a Broker or his or her company to double-end the deal and double-dip on commissions?

TYPES OF AGENCY RELATIONSHIPS

Agency relationships are created when one person or party agrees to act on another’s behalf, or to represent them in dealings with a third party.

Once an agency relationship is established, Brokers (as Agents) owe their Clients “fiduciary duties of loyalty and obedience.” In a Single Agency relationship, Agents are typically required to place their Clients’ interests above and ahead of their own. They do so by providing advocacy services with honesty and good faith, while carefully avoiding conflicts of interest or “self-dealing.”

There is confusion, though, because rules governing agency relationships between Consumers and Real Estate Brokers vary from state to state, and all have been rewritten in the last 25 years. Depending on the laws of the state in which they are licensed, Brokers provide services through one of six (6) relationships:

#1) Single Agency: A Broker represents only the interests of the Landlord or the Tenant (or the Seller or Buyer) in a transaction, either as the “Listing Agent” for the property or as a “Tenant’s Agent” or a “Buyer’s Agent” for the Occupier. Consumer Advocates maintain that Single Agency is the optimum form of representation. This is The Gold Standard of Representation, especially for Tenants and Owner-Occupants.

#2) Designated Agency: This occurs when a conflict of interest arises within a Brokerage Company and one Broker is in a position to represent both parties on opposite sides of a transaction; for example, the Landlord and the Tenant on lease. To seemingly remove the conflict of interest, the Employing, Sponsoring or Managing Broker of the Brokerage Company separately designates two (2) of his In-house Brokers, one to represent the Landlord and the other to represent the Tenant.

When states require that Employing, Sponsoring or Managing Brokers implement safeguards to protect a Client’s confidential information, academics and Consumer Advocates say that Designated Agency is the next best alternative to Single Agency. But we maintain that there’s a giant drop off between #1 Single Agency Representation versus #2 Designated Agency. That is particularly true for the Tenant, which only needs one lease at a time as compared to a Landlord that requires assistance from its Listing Broker or Landlord’s Agent with multiple leases in a single building or maybe even in multiple buildings in a portfolio.

Colorado offers Designated Agency. In reality, it was creative wiggling by the Big Brokerage Houses and traditional Commercial Brokers to get the Colorado Legislature to exempt them with a pen from having hundreds of troubling, very inconvenient conflicts of interest. You see, when the Big Brokerage Houses and traditional Brokers were previously seeking to represent Tenants, every single one of their property listings was an actual or potential conflict of interest. So the Colorado Legislature gave them just the legal loophole they wanted. In my opinion, you can expect to see this occur in many other states, too.’

#3) Disclosed Dual Agency: This is when a single Broker or two (2) Brokers working for the same Company provide services simultaneously to both the Landlord and Tenant (or the Seller and Buyer) in a limited, reduced agency relationship, which they must disclose to the to Principal Parties to the transaction. However, part of the disclosure is that neither Broker is legally allowed or obligated to represent the best interests of either the Landlord or the Tenant (or the Seller or Buyer).

In states with no provisions for Designated Agency, the single broker or two (2) Brokers affiliated with the same Company may be considered Dual Agent(s). It’s rather like “double agents” in the world of espionage and it’s not a good situation for Landlords and Tenants or Sellers and Buyers because Dual Agents are required to be impartial and cannot act as an advocate for either side of the transaction.

Although controversial even among Real Estate Brokers and Agents, Disclosed Dual Agency does present an opportunity for experienced Landlords and Sellers to negotiate discounted or “variable rate” commissions in advance, primarily because the Landlord or Seller would have to settle for a lesser standard of representation than in a Single Agency relationship.

But for Tenants and Buyers in the US, who don’t pay the commission to their Brokers or Agents, since it’s paid by Landlords or Sellers, what Tenants and Buyers unfortunately receive in Dual Agency situations are lower standards of representation, including zero advocacy.

#4) Transaction Brokers, Facilitators & Intermediaries: Transaction Brokerage occurs when one (1) Broker or two (2) Brokers at the same Brokerage House/Company work with a Landlord or Tenant or a Seller or Buyer in a non-agency, non-advocacy relationship. It may or may not be declared in writing but a Transaction Broker owes no fiduciary duties of loyalty and obedience to a Landlord, Tenant, Seller or Buyer.

A Broker that performs Transaction Brokerage is called, as one might expect, a “Transaction Broker” in some states but a “Facilitator” or “Intermediary” in other states. In Colorado, it’s called a Transaction Broker and in Texas it’s called an Intermediary.

Transaction Brokers, Facilitators and Intermediaries share the same disadvantages as Dual Agents because neither the Landlord nor Tenant (nor the Seller or Buyer) can expect a Broker to represent its best interests during any negotiations. As a result, a Tenant or Buyer working with a Transaction Broker, Facilitator or Intermediary has little latitude to file a claim for professional negligence or ommission by any such Broker.

Another little dirty secret is that some Brokers intentionally dodge having the higher standards and duties owed to a Tenant or Owner-Occupant under a Single Agency relationship and prefer to work as Transaction Brokers, Facilitators or Intermediaries. Why? Because it affords them much more “wiggle room” and greater margin for error, plus it leaves the door wide open for a potential double-dipping down the road.

#5) Providing Ministerial Services to Unrepresented “Customers”: In real estate law, the unrepresented Tenant or Buyer is often called a “Customer.” A Listing Broker for a property may avoid splitting a commission with an outside Cooperating Broker by providing limited administrative services to an unrepresented Tenant or Buyer, i.e. to a Customer. Why? Again, it’s so the Broker can bank a commission on both sides of a transaction.

#6) Subagency: It’s pretty clear that the Listing Broker for a property represents the Landlord or Seller in a declared, usually written agency relationship, called a Listing Agreement.

But in some states, like Texas, without a written or declared agreement, all Brokers and Salespeople who work with Tenants or Buyers are actually legally “Subagents” of the Landlord or Seller’s Listing Broker/Agent for the property.

That’s right.

It means that all of the Brokers involved in a Subagency state like Texas legally owe 100% of their allegiance, loyalty and expertise to the Landlord or Seller. The Tenant or Buyer has no legal representation whatsoever.

In effect, in a Subagency state all of the Brokers can legally gang up against a Tenant or Buyer, if the Tenant or Buyer does not elect to sign up a Tenant or Buyer’s Agent to act as its advocate and to protect and advance its best interests.

Although Subagency was previously a national real estate industry practice in the US until the 1990s, this form of representation has largely fallen out of favor due to lack of protection for The Public/Consumers and the legal liability risks for Brokers, Landlords and Sellers. Nevertheless, Subagency remains the default or beginning legal relationship in a few states where nothing is in writing between a Tenant or Buyer and a Commercial Broker.

Colorado does not allow Subagency but in Texas it’s the default relationship. Unfortunately, Subagency can turn into a bad dream for unrepresented Tenants, Buyers and Owner-Occupants. To be frank, I can’t even believe that Texas and a few other states still allow Subagents.

CONCLUSIONS

Every state in the US provides avenues for Commercial Brokers to double-end deals and double-dip on fees, which is usually the worst-case scenario for Tenants, Buyers and Owner-Occupants.

Of the eight (8) states that ban Dual Agency altogether, four (4) states still allow Designated Agency (Alaska, Colorado, Maryland and Texas); five (5) states allow Transaction Brokerage, Facilitators or Intermediaries (Florida, Colorado, Texas, Kansas and Oklahoma); and three (3) states allow both Transaction Brokerage and Designated Agency (Alaska, Colorado and Texas).

Designated Agents, Subagents, Transaction Brokers, Facilitators and Intermediaries, effectively, are all just Dual Agents and double-dipping under different legal names. Certain states’ outlawing of Dual Agency is pretty much an illusion and window dressing to assuage the legitimate concerns of Consumers/The Public.

Designated Agency, in particular, is artful window dressing that quite pleases Big Brokerage Houses and traditional Commercial Brokers, all of which seek to obfuscate and camouflage their numerous Conflicts of Interest. It still allows them to legally double-end deals as an excuse to double-dip on commissions. Dual Agents, Subagents, Designated Agents, Transaction Brokers, Facilitators and Intermediaries do little good for Tenants, Buyers and Owner-Occupants, since none of them are true advocates.

To argue otherwise is disingenuous but traditional, regular Commercial Brokers go out there and do it every day.

This troubling issue for Tenants and Owner-Occupants is critical enough for the Office of General Counsel in the New York Department of State to post a notice to The Public. The warning is titled “Be Wary of Dual Agency” and you can read it for yourself at this link.

Honestly, the more I think about it, it’s obvious that Big Brokerage Houses and traditional Commercial Real Estate Brokers believe that Tenants and Owner-Occupants are naive. And that Occupiers still won’t recognize Conflicts of Interest or do anything about them. At best, the whole thing is confusing, even to licensed Brokers.

Some traditional Brokers still argue adamantly, as long as they disclose double-ending and double-dipping to the Landlord and Tenant or to the Seller and Buyer, then it’s perfectly OK based on the “Everyone Knows About It Theory.”

Here’s a link to a stunning article titled Major US Tenant Files Suit Alleging Multi-state Real Estate Fraud & Bribery Scheme. It’s about what goes wrong when a major Tenant doesn’t take Conflicts of Interest seriously enough and engages a Big Brokerage House accustomed to serving two masters in the same transaction. Letting the fox count the chickens doesn’t usually end well and this story doesn’t.

For Tenants, Buyers and Owner-Occupants, what is the point of working with a Broker, even a friend or acquaintance, if they are not a true advocate sitting on your side of the table? It costs more or less the same to have your own advocate as it does to have a Broker whose loyalty is either totally to the other side or whose hands are severely limited and tied halfway behind his or her back.

This is why true Tenant/Buyer Representatives (“Tenant Reps”), Tenant Brokers, Tenant Rep Brokers, Tenant’s Agents and Buyer’s Agents, like MacLaurin Williams and our colleagues at MacLaurin Williams Worldwide, practice only Single Agency Representation. That is The Gold Standard of Representation. We never consider representing two (2) masters in the same transaction. Just because the law allows (less principled) Commercial Brokers to double-end deals and double-dip on commissions, we strongly believe that it’s highly unethical and we won’t do it.

But, for most Commercial Brokers in the US, double-ending and double-dipping are business as usual.

Author of this article, William Gary, MBA, MIM works at MacLaurin Williams Worldwide and can be reached by +1 303-901-1108 or at wgary@MacLW.com.

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Does Your Commercial Real Estate Property Qualify for Section 110 Construction Allowances?

Posted on June 11, 2018 by Mike Kushner in Blog, Commercial Real Estate No Comments

Section 110 of the current Internal Revenue Code (IRC) provides an interesting opportunity for commercial tenants and landlords alike. Essentially Section 110, in certain instances, allows commercial tenants to make improvements to their leased workspace with the benefit of not having to recognize income for any cash payments or rent reductions that are expressly identified in the lease as qualified Section 110 allowances. Additionally, under a qualified Section 110 provision, the landlord will be treated as the owner of the constructed improvements and entitled to depreciation deductions as nonresidential real estate.

The purpose of this tax provision is to provide a set of rules for certain construction allowances, in which the tax reporting and treatment will be consistent between the lessor and lessee. It’s important to understand the nuances of Section 110 that determine whether such improvements qualify. Qualified property is nonresidential real estate which is part of, or present at, “retail space,” which property reverts to the lessor at the termination of the lease. The term of the lease must be 15 years or less, applying certain rules.

For most commercial landlords and their tenants, it can be overwhelming to understand how and when it’s appropriate to take advantage of Section 110. If you find that you’re uncertain as to whether your situation qualifies, don’t let this be the reason you forfeit this potential tax break altogether. When used properly, Section 110 can offer a huge benefit to both parties, allowing tenants to enjoy an upgraded, functional workspace, and allowing landlords the ability to improve their commercial property.

Take a moment to answer these questions to determine if your property might qualify under Section 110. To help us answer, we’ve enlisted the expertise of Jim Holland, Certified Public Accountant (CPA) to offer insight into qualifying for this tax deduction. *It’s important to keep in mind that these are simplified questions and answers. More details may be necessary to fully assess your situation.

Is my space considered “retail?”

If you leased, occupied or use space in your trade of selling tangible personal property (i.e. products or goods) or services to the general public, this is considered retail space. You qualify!

Am I in a short-term lease?

If your lease, with extensions, is not greater than 15 years in length this is considered a short-term lease. You qualify!

Am I constructing qualified long-term real property for use in my trade or business?

If you construct nonresidential improvements (sec 1250 property vs. sec 1245 property) which revert to the lessor (i.e. landlord or person leasing you the space) at termination of the lease, the answer to this question is yes. You qualify! A note of caution: if the lessor chooses to use a cost-segregation study to reallocate the costs, a different language must be used in the lease agreement.

Who will ultimately own the improvements to the property?

To adhere to the requirements under Section 110, your lease must specifically indicate that the lessor retains ownership of all improvements to the property. In this case…you qualify!

Do I have an official agreement between the tenant and landlord?

If you have obtained a signed agreement, before payment or before the reduction in rent begins, from the lessor to lessee…you qualify!

Will the allowance be expended in the tax year it is received?

If the full amount of your construction allowance is expended within 8 and 1/2 months after the close of the tax year…you qualify!

Will both the landlord and the tenant disclose this information with their tax returns?

In order to fulfill this requirement, you must disclose both the landlord and tenants names, addresses, employer IDs, location, and amount reported on both lessee and lessor tax returns. In doing so…you qualify!

Does the Safe-Harbor Exclusion apply?

If you have met all of the above requirements, the safe-harbor exclusion applies to your situation. You qualify!

As you can see, Section 110 provides a valuable opportunity for commercial tenants and landlords to improve their spaces while each receiving a benefit for doing so. If you meet the requirements, and it makes sense for your situation, taking advantage of the Section 110 tax breaks could open up new possibilities to create the commercial space you’ve dream about having! The most important thing to keep in mind is that you must be aware of the requirements to qualify under Section 110 in order to receive the maximum benefit. Speak to a professional advisor before entering any contract or commitment.

*General Disclaimer: These are simplified answers and your situation may be more complicated. This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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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.

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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!

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Search Available Commercial Real Estate in Central Pennsylvania

Posted on April 5, 2018 by Mike Kushner in Blog, Commercial Real Estate No Comments

The American culture is heavily reliant upon the internet to provide us with information. If we have a question, we are quick to turn to our cell phones or computers to deliver the answer.

The search for real estate is no exception. According to a report by the National Association of Realtors, as many as 51% of buyers found the home they ultimately purchased through an internet search. This statistic demonstrates the power of having an online presence when marketing your real estate properties.

Looking specifically at commercial real estate, tenants or buyers wanting to rent or buy retail, office or industrial space often take to the internet to begin their search. And why not? You can do this from the comfort of your home or office and view details of hundreds, if not thousands of different properties with the click of a button.

We recognized this very real need for people to quickly and easily search Central Pennsylvania for commercial real estate. As a result, we are excited to announce the launch of Omni Realty Group’s property search feature. While there are many available websites and platforms that allow for commercial property search, we’d like to explain a little more about what makes ours unique and advantageous to you, the tenant or buyer.

How Do I Search for Commercial Real Estate in Central Pennsylvania?

This is a question we hear often. “How do I search for commercial real estate in Central Pennsylvania?” Many businesses looking for commercial office, retail or industrial space will begin with a Google search. While this will yield many results, it can be difficult to sort the results by your property “wish list.” The top search results have the strongest SEO, but may not have the features you desire.

When using the Omni Realty Group commercial property search to look for commercial real estate, you are able to use a variety of filters to fully customize your search results to yield properties that most closely match what you’re looking for. Filters such as: Lease or Purchase; Use (e.g. Retail, Office, Industrial) and Size (SF) will help you save time scrolling through results that aren’t relevant to what you need. In addition, the “draw” feature allows you to create geographical boundaries so that search results are located only within the areas you wish to consider.

Most importantly, the Omni Search feature allows you to view all the properties that are available in the market not just those your agent wants you to see. Omni is committed to securing the most effective space at the most favorable terms for our clients.

Benefits of Omni Realty Group’s Commercial Property Search

Benefit of Saving Time: You can save an immense amount of time by not actually visiting the place and instead going online. You clearly deduct the time of travelling and you don’t need to deal with the traffic and weather problems. You can do it anytime you want to regardless of other factors.

Benefit of Comparison: When you check online you can compare prices of different landlords or sellers for the same area. All these gives you clear idea of pricing and gives you the power of bargain as an online platform is more competitive as well as transparent. In addition, you can get multiple properties at different locations in the same screen. You can see the actual difference between two sites and have data which is better and why.

Benefit of Convenience: There are many mediums when it comes to the actual ground visit of a property. When you search online you are master of your own will. You can do the initial research at your convenience. You can use your leisure time while commuting or even late night.

Benefit of Representation: Once you find properties you wish to tour, you have the dedicated and exclusive representation of Omni Realty Group to guide and advise you through every step of the process. Literally any property you find on our search, we can show you and represent you as your tenant representative or buyer’s agent. It’s easy to fall victim to a dual agency saying only they can show you a property, but that’s simply not true. When you begin your search with Omni Realty Group, you eliminate the chance that you will be without proper representation to negotiate favorable terms and pricing in your lease agreement.

How a Tenant Rep/Buyer Agent Adds Value

As an exclusive tenant representative and buyer agent, Omni Realty Group adds value and peace of mind to your commercial real estate property search. First, this means you receive exclusive representation without conflict of interest between the two parties. Second, you have an experienced commercial real estate professional on your side to advise you of current market pricing and negotiate on your behalf for fair and reasonable terms.

What most people don’t know about working with a tenant rep or buyer’s agent is that it almost never comes as a direct cost to you. Our fee is commonly paid for by the landlord or seller. At Omni Realty Group, we pride ourselves on building strong working relationships with other real estate businesses in the area. The result is a mutual respect that allows us to work effectively on behalf of our clients to expedite the leasing process and get them into their new space on the best possible terms!

Now that you have a better understanding of how the Omni Realty Group commercial property search feature works, you have all the tools you need to find your new office, retail or industrial space to take your business to the next level. Check it out now to see how fast and easy it is to find the best available commercial properties in Central Pennsylvania!

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