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Posts tagged "Omni Realty"

Home» Posts tagged "Omni Realty"

The Pandemic’s Uneven Effect on Consumer Spending

Posted on December 30, 2020 by Mike Kushner in Blog, Retail No Comments

When COVID-19 hit and the U.S. went into full lockdown, consumer spending took a sharp turn. Heading out to restaurants, bars, concerts, or the movies was no longer an option. Even now, nine months later, we are far from returning to how things were. The general public is wary or deterred by new policies like limited capacity, wearing face masks, and social distancing. This has all had a profound impact on how we’re spending our money, particularly on services or experiences. Instead, we’ve shifted our spending to physical goods to find other means of entertainment and enjoyment, and to make our homes more comfortable, because we’re spending considerably more time at home.

Considering all of this, plus the fact that 10+ million Americans are still jobless, the sluggish recovery of consumer spending on services is cause for concern. At the same time, retailers selling goods, especially online and through contact-free delivery, are in a position to grow their market share. Keep reading to learn how COVID-19 has had an uneven impact on spending, and what this might mean for our economy and commercial real estate long-term.

Spending Shifts from Services to Goods

Based on data from U.S. Bureau of Economic Analysis, spending on goods quickly recovered from the initial shock of the pandemic, returning to growth as early as June. But consumer spending on services is still more than 6 percent off pre-pandemic levels.

The reasoning behind these numbers is straightforward. As the pandemic severely limited people’s option to spend money on services such as dining out, traveling, and other leisurely activities, their spending shifted to physical goods because this was both more accessible and deemed the safer option for enjoyment and entertainment. People weren’t visiting public pools or taking vacations, so spending on items like swimming pools, bicycles, kayaks, etc. skyrocketed. For many retailers, these items were out of stock nearly all summer.

Furthermore, people began reallocating discretionary income formerly used for travel and entertainment to home improvements and renovations. We saw things like new appliances, cabinetry, and mattresses run out of stock while hotels, restaurants, casinos, and event venues sit vacant.

A Double-Edged Sword for Economic Recovery

While it’s certainly positive to see overall spending levels recover relatively quickly, the slow recovery of consumer spending on services is concerning for several reasons. First, the United States is a service economy, as the U.S. GDP reveals. In 2019, personal consumption expenditure on services accounted for 47 percent of the gross domestic product, making it by far the biggest contributor to the country’s economic output.

As the following chart shows, clothing and accessories stores experienced a 30 percent decline in sales compared to the same period of 2019. Similarly, food services and drinking places were hit with a 20 percent spending decline compared to last year’s total. Department stores and electronics experienced a 15 percent decline through three quarters of 2020.

At the other end of the spectrum, non-store retailers, building material and garden dealers, as well as grocery stores, have seen double-digit growth rates in the first nine months of 2020, as consumers shifted much of their spending online and outdoor activities boomed in face of the COVID-19 threat.

What This Means for Retail Locations

Some industries have found ways to safely reopen with limited capacity and new policies in place such as social distancing and mandating facemasks be worn. But even nine months after the start of the pandemic, things are far from “normal” and this includes bottom-line sales. Restaurants, bars, and hotels can only operate at 50% capacity or less which is a huge blow to the amount of business they can do in any given week or month. And shopping at retail locations is quickly being replaced by online shopping.

While some retailers have been able to accommodate customers online, many others, particularly small businesses and boutiques, were not equipped to make this shift. For businesses already on the brink of making ends meet, the pandemic was the straw, rather the wrecking ball, that broke the camel’s back. We see shopping centers with major vacancies and entire chains of corporate stores and restaurants bow out of business.

For commercial real estate, especially shopping centers and malls, the future is bleak. In contrast industrial real estate is rising in demand because of big online retailers needing to increase their storage and rapid distribution. People want their essentials (and even non-essentials) delivered quickly to their door-step. With businesses like Amazon offering free 2-day delivery for most items, ample and accessible storage facilities have never been more important.

And for consumers, the biggest takeaway from this major shift in spending is to be mindful and intentional about how and where you invest your resources. How we spend impacts the economy. Though you may hear phrases like “shop local” and think your individual spending is just a drop in the bucket, when all those drops are put together, it has a large impact. For those that don’t feel comfortable dining out, you can still support your local restaurants through takeout or delivery. And if you don’t desire shopping in-store, consider supporting small businesses through curbside pick-up or having items shipped to your home. Our collective spending habits today, even amidst a pandemic, are painting the picture of our economy well into the future.

Even after the impact of COVID-19 on the economy begins to correct itself, what do you think the impact on consumer spending will be long-term? Comments are welcome below!

[Online Resources] Real Estate, business, buyers agent, christmas shopping, Commercial Real Estate, COVID, COVID-19, CRE, Economy, harrisburg, holiday shopping, Mike Kushner, money, Omni Realty, online shopping, pandemic, pennsylvania, retail, retail shopping, spending, tenant representative

Why Retailers Must Create a Compelling “Experience” for Customers

Posted on July 29, 2019 by Mike Kushner in Blog, Local Market, Retail, Trends No Comments

We’re living in the age of the internet. With online retailers, like Amazon, who are able to offer the convenience and efficiency of products delivered right to your door with the click of a few buttons, it’s becoming more and more challenging for brick and mortar businesses to stay afloat. But there’s still one very effective way retailers can compete against online, and that’s through events and experiences that can’t be replicated in the same way by businesses who are exclusively online retailers.

For a dynamic example of how this might look for a brick and mortar business to create “experiences” for their customers, we need look no further than this region’s own SpringGate Vineyard.

SpringGate is a Farm Vineyard and Brewery located in Central Pennsylvania. This family owned business sits on 60 acres of farmland between the rolling hills of Lancaster County and Blue Mountain, near Harrisburg. SpringGate started growing wine grapes in 2010 following the successful establishment of their sister vineyard in Northern Virginia in 2003, North Gate Vineyard. With its tagline of “An experience, day and date – all year long” this is one local business who understands the need to create a unique and memorable experience for its customers in order to compete against online retailers.

Martin Schoffstall, owner of SpringGate Vineyard joins us for a Q&A of how they are constantly working to create a compelling experience for their customers, and how other retailers may benefit from doing the same.

Omni: How are online retailers a competition to your business? Or if not, what is your biggest competition?

There are online wine retailers who sell national products and ship nationally. While they provide some competition for us, there is still one piece that’s unique about visiting a winery that they can’t replicate – at least not well. And that’s the experience of seeing where the wine is made, how it’s made and trying and sampling the product. Fundamentally you buy what you taste. Convenience is certainly a critical aspect of buying as well, and online does provide convenience, but there are other ways to buy wine conveniently including grocery stores and classic convenience stores like Sheetz and Turkey Hill. Our biggest competitors are other retailers (online or otherwise) who can get the right “blend” of experience, convenience, and tasting together. So this is why we focus on providing these same aspects to our customers: experience, convenience, and tasting.

Omni: Describe some of the ways in which you are creating an “experience” for your guests that attract them to your location?

Experience first starts with tasting. So our tastings that we have throughout the state of Pennsylvania in grocery stores, and at wine and beer festivals are a huge help. For the estate (and soon other retail locations) a commitment to local food, music and such is the next layer. Then having themed events around fruit festivals (such as Peach) where the food and drink are coordinated go a long way. Essentially, we want our brand to be tied to an experience, something that makes a lasting memory and leaves a position impression.

SpringGate’s events can draw a crowd of hundreds of people at a time.

Omni: What are some of the biggest challenges you, as a brick-and-mortar location face that online retailers do not?

Manufacturing. Scale. Tasting. Wineries and breweries are nearly unique in that the retailer also manufacturers. While this has capital investment issues, it provides operational and margin opportunities. An online retailer can be a college kid in a dorm room that is not true of a brick and mortar location. At the moment, consumers who choose to purchase their wine online either don’t want the experience of tasting the wine first, or they aren’t allowing it to be the reason they refuse to buy online. So for online wine retailers, the cost of manufacturing and providing tastings is a big expense that goes away for them. However, I ultimately think that is not sustainable. Either enough consumers will desire this experience and choose to go to wineries and breweries to buy, or online will need to figure out how to replicate that piece.

Omni: Conversely, as a brick-and-mortar location, what unique opportunities do you have to market your business that online retailers lack?

Fundamentally, we have the unique ability to be multi-channel. We can do online sales, we can do grocery and convenience store sales, we can sell from our estate – we can do it all. Additionally we can do tastings and events and we can imbed good experiences with the sale of our products. Certainly you have to keep a focus on what’s going to yield the best results for your business, but having many options available is immensely helpful.

Omni: What has been one of your best/most interesting marketing tools that you’ve been using lately?

Interesting is different than effective. So to share the marketing tool that has been most effective for us should be obvious. It’s social media. We have built a strong and loyal following of people who are engaged with our products and respond to opportunities to come out to the estate for events and entertainment. Additionally, we can cast a wide net with our social media marketing and reach are target demographic fairly easily and inexpensively. For retailers with brick and mortar locations, this gives you such rich content to share on social media. You can grab people’s attention with the types of experiences and images you are sharing, which provides one more way to stay top of mind.

***

If you live in Central Pennsylvania, or have plans to visit the region, be sure to add SpringGate to your bucket list. To learn more about their products, upcoming events, and more, visit: www.springgatevineyard.com.

[Online Resources] Real Estate, brewery, Commercial Real Estate, commercial real estate agent, competition, CRE, customer, experience, harrisburg, hershey, lancaster, local retailer, Martin Schoffstall, Mike Kushner, Omni Realty, online business, online wine retailer, real estate broker, retail, retail business, retailer, retailers, spring gate vineyard, springgate vineyard, success, tenant representative, wine, winery, york

Tips for Promoting Your Commercial Real Estate Business on Social Media

Posted on July 22, 2019 by Mike Kushner in Blog, Commercial Real Estate No Comments

Businesses in every industry have turned to social media as a marketing tool to share information, grow their band and cultivate an audience. While in many cases, this has proven successful, there are plenty of businesses who miss the mark, and wind up disappointed when their social media strategy fails to deliver its intended results.

For commercial real estate professionals, social media can be a highly valuable tool, but only when used correctly – and consistently. Take a look as we discuss five important points for using social media to promote your commercial real estate business – or any business.

Brand yourself as a thought leader.

We all have to start somewhere. The same is true for building your online brand. Who are you going to be? Your content, and how you share it, will have a profound impact on the answer to this question. In business, I would think most of us want to be branded as a thought leader in our industry. In commercial real estate, you can achieve this by sharing expertise on technical topics, offer an analysis of data and trends, and partake in thought-provoking discussion. One of the most powerful platforms for this is Linkedin. Here, you can use your profile to reinforce your personal brand, you can share content through regular posting, and you can spark discussion in groups.

Make your content unique.

A staggering amount of content hits the internet each and every second. What’s going to make people stop and read yours? If you’re asking for someone to take time out of their day to read your words, it’s important to make them at least one, if not all four of these things: timely, importantly, relevant and interesting. For some added input, we asked John Webster, Owner of The John Webster Company and digital marketing expert.

“There is a lot of ‘noise’ on social media so your content needs to stand out,” explains John. “When sharing information about available properties do not simply inform about the property (everyone does that) take an additional minute to describe something special about the property, who would be a good fit for the property and why this specific property caught your eye.”

Be responsive and engaging.

If you want to create a true “audience” for your business’s content on social media, you need to remain present. This means you need to check in regularly on your posts to monitor comments, and respond. People appreciate and remember a personal response. This also increase the reach of your content. Sure, it make take 15 minutes out of your day to diligently login to your various social media accounts to monitor content, and engage with other people’s content, but make it a point to do this habitually, and it will pay off greatly as you cultivate an active audience.

Share the spotlight.

Once you build a valuable platform for sharing content, whether this is on your website, blog, Linkedin, Twitter, etc., you should consider sharing the spotlight every so often with other professionals who have an interesting perspective to share. Omni Realty often features guest Q&A blogs that expand our area of expertise while growing relationships with other respected professionals. When sharing the spotlight, this also opens up the door for others to do the same. My blogs are often published by TheBrokerList, and shared on their social media, which greatly amplifies their reach.

Build relationships with media.

Most people view the media as a tool, or approach outlets in a very self-serving manner. While, yes, at the end of the day promotion is an objective, you must also work to forge trust, respect, and even friendship with reporters and editors. Omni Realty has received a lot of earned media by approaching local media outlets in this manner. Through relationships with reporters, I’ve had 25+ articles featured in the Central Penn Business Journal, and none of it was paid placement.

Whether it’s a commercial real estate business, or any business that you’re trying to promote on social media, the most important thing to keep in mind is that your content creates your brand. What you share, how often, and how you engage with your audience, will leave a lasting impact and frame how people view both you and your business.

How have you found success when promoting your business on social media? Share a tip or personal story by leaving a comment below.

[Online Resources] Real Estate, agent, blog, blogging, branding, broker, buyers agent, carlisle, central pa, Commercial Real Estate, commercial real estate broker, communications, digital marketing, Facebook, harrisburg, hershey, investor, lancaster, lemoyne, LinkedIn, marketing, mechanicsburg, Mike Kushner, Omni Realty, Omni Realty Group, pennsylvania, real estate broker, Social Media, strategic communications, tenant representative, twitter, york

A Decline in International Students Will Hurt a Lot More than Colleges and Universities

Posted on March 22, 2019 by Mike Kushner in Blog, Community, Trends No Comments

According to a report by MarketWatch, the number of overseas students coming to the U.S. for grad school declined for the second year in a row. There is much speculation as to what could be causing this trend; however, one reappearing theme ties back to the current political climate here in the United States.

As you likely remember, President Donald Trump initiated a ban on people entering the U.S. from multiple Muslim-majority countries, all of which have a track record of sending students to America for higher education. It’s not difficult to see a near-immediate impact. For example, U.S. graduate school applications from Iran, one of the countries targeted by the travel ban, fell 27% between fall 2017 and fall 2018. The travel ban isn’t the only blamed culprit. President Trump has floated changes to student visas that would reduce the amount of time international students can stay in the U.S.

Naturally, colleges and universities in the U.S. who rely on international students to make up a significant portion of their admissions are concerned. If the U.S. continues to present hurdles that make it unappealing, if not impossible for certain international students to study in the U.S., our colleges and universities are not the only pillars of our community who should be concerned. A decline in international students will have a ripple effect on our economy which will flow into many different industries, including real estate.

How significant is this impact and what industries should be most concerned? Let’s take a closer look at the economic impact of fewer international students coming to the U.S.

International Students Drive Economic Growth

Simply put, international students are pivotal to our economy. First, they often pay the highest tuition rates which is why colleges and universities carefully account for enrolling so many international students to keep their budgets in line. Next, while international students are studying in the U.S., they are spending money on food, clothing, living essentials, as well as renting space to live. Many smaller colleges have built on-campus apartments primarily for the use of their international students. Compared to students that reside with their parents and commute to school, international students have a markedly different economic impact on the school and the surrounding community.

To put a value on this point, the Institute of International Education, an organization that promotes research and international study, estimates that international students contributed $39 billion to the U.S. economy in 2017. In fact, some colleges and universities rely so heavily upon their international students that they have gone as far as taking out an insurance policy to protect themselves against the drop in international enrollment!

A Local Look

The facts and stats reporting the decline in international students coming to the U.S. takes a national look, but what about locally here in Central Pennsylvania? Are we seeing the same trends? One of the area’s leading universities for international enrollment is Penn State Harrisburg. College Factual ranks Penn State Harrisburg as 114th out of a total 1,300 colleges and universities for popularity with international students. And the pool of international students is diverse. At least 50 countries are represented on the Penn State Harrisburg campus with the most being from China, India, and, South Korea.

Interestingly from 2011 to 2016, enrollment of international students has been steadily increasing with 716 international students being enrolled at Penn State Harrisburg in 2016. What this doesn’t account for is the most recent travel ban and change to student visas implemented in 2017-2018 that would not be reflected in this data; however, it is likely to be released soon. With international students making up about 14.2% of the student body at Penn State Harrisburg, should the University also experience the decrease in international enrollment that has been sweeping the nation, it will join the ranks of so many other educational institutions hurting due to this downward trend.

As It Relates to Real Estate

It’s clear how international students impact the colleges and universities in which they are enrolled, but what impact do they really have on real estate and is this decline enough to cause any significant changes to our residential and commercial real estate markets?

International students arriving in the U.S. to study are in immediate need of semi long-term housing, typically at least two years and up to 6+ years depending upon the type of degree they are pursuing. International students can technically choose to purchase real estate on their student visa, but mortgages and lending have a whole host of challenges, making cash to most desirable and feasible option for purchasing home a home. Most commonly, international students decide to rent real estate either from the college or university that they are attending or from a landlord in the community.

Depending upon the demand for off-campus student housing, some real estate investors have created a significant business around owning and renting out real estate to students, including international students. Should there be a severe enough decline in international students, this could cause a decrease in demand for real estate. Property owners will need to make a strategic decision to either ride this wave, with a decreased income for an unknown period of time, or sell off some of their properties if they feel this trend could last a while.

Additionally, should a decline in international students persist, colleges and universities whose campus housing is mostly occupied by international students are not likely to invest in renovating or adding to this real estate until the decline stabilizes and/or reverses.

Key Things to Keep in Mind

All-in-all, this trend in decreasing enrollment from international students is one we must keep an eye on for a variety of reasons. When our colleges and universities are economically impacted, it is highly likely that other businesses and the community as a whole will also feel an impact. Should this provide to be a short-lived trend that passes as the political climate changes, there is the probable outcome that things will return to normal and possibly better than before.

However, we would be shortsighted to not think beyond forces within the U.S. To compound the issue, other counties are also competing for international students and are surely making every effort to market themselves as the most attractive option. It will be a constant battle for the U.S. to retain and grow its international students. Given our country’s reputation for high-quality education, this is not an impossible feat, but we must remain strategic to stay ahead of the curve!

What do you feel are the most critical areas to be impacted by a decline in international students? Beyond colleges and universities what other industries will be most significantly impacted?

Share your ideas by leaving a comment below!

 

[Online Resources] Real Estate, aborad, admissions, businesses, central pa, colleges, community, economic impact, Economy, enrollment, harrisburg, international students, landlord, Mike Kushner, money, Omni Realty, overseas, penn state, pennsylvania, property, real estate investor, renting, students, study, trends, universities

6 Things in 2018 that Should Have Commercial Real Estate Agents Feeling Grateful

Posted on November 13, 2018 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.


It’s about that time when people start to reflect upon the last year, making note of progress that has been made, and milestones that have been achieved. In light of the Thanksgiving holiday, there are certain things that should have commercial real estate agents, in particular, feeling grateful for what 2018 has brought with it.

Here’s a look at six things that should have CRE professionals giving extra thanks this year – and looking to 2019 with high expectations.

  1. Interest rates are still historically low.

Yes, interest rates are indeed rising and people are panicking over them reaching 6%, but keep in mind that we are still way below the average rate of the last 47 years at 8.35%. Furthermore, recent gauges of U.S. inflation signify little need for the Fed to change its slow-but-steady stance on interest rate hikes at this juncture, so we don’t expect this to jump up several points overnight. Plus, there are a lot of other factors working in the economy’s favor like…

  1. Unemployment hit a 49-year low.

It’s the headline you’re seeing smattered across every major news publication – the U.S. unemployment rate reached 3.7 percent in September — the lowest it has been since December 1969. What’s more, the job market is so tight that the amount of available jobs far exceeds the number of people seeking employment! Employers reported more than 7 million unfilled jobs in August, the highest level since record-keeping began in 2000.

  1. Demand for industrial space remains strong.

In Central PA, 2018 brought with it an increasing demand for industrial real estate. The third-quarter saw rent grow hit 6.9%. When compared to the historical average of just 1.9%, it’s easy to see how this boom in demand for industrial space is an exciting new trend for our local economy, particularly because we are poised to welcome more and more warehousing and distribution companies to the area.

  1. Sales of multifamily real estate hits record high.

In the third-quarter, multifamily real estate sales set a new record with the all-time high of $160.6 million. This same sector set another record this year in the second-quarter with an all-time low vacancy rate of 4.3%. With just two numbers, 2018 paints the picture of Central PA’s thriving commercial real estate market, particularly in the multifamily sector.

  1. The Fed raised short-term interest rates for a third time this year.

At its September policy-setting meeting, the Federal Reserve raised short-term interest rates for a third time this year. While to some a rate increase may not be something that has you feeling grateful, this is yet one more indication of a healthy, growing economy that can sustain such an increase. Furthermore, forecasters contend that unless inflation picks up or the economy starts slowing, the federal funds rate, which is currently between 2 percent and 2.25 percent, should continue to head higher.

  1. New industries are expanding their commercial real estate.

The sixth and final thing that should have commercial real estate agents feeling grateful this year is healthcare mergers. Why? Because this is shaking up the way healthcare systems are approaching real estate. Across the region, the Commonwealth and nationwide we are seeing mergers taking place between healthcare systems small and large. All of this “teaming up” is causing a change in the way these organizations are using commercial real estate. In some instances, such mergers call for consolidating medical office space to reduce redundancy. In other instances, more space is needed to break into new markets or regions. This burst of acquisitions and activity spurs growth and fuels CRE sales.

Gratitude…and Caution

It’s important to note, this is the highlight reel from 2018. The CRE market has certainly experienced both its ups and downs in the various sectors of retail, office and industrial real estate. What’s most important is to take all good news, and bad news, with a grain of salt and know that what goes up, will eventually come down – whether that’s next quarter, next year or next decade.

For now, we can slide into the holiday season feeling grateful for these “gifts” the market has given us this year and enter 2019 cautiously optimistic.

[Online Resources] Real Estate, agent, article, blog, broker, camp hill, central, central pa, central pennsylvania, commercial, Commercial Real Estate, CRE, east, gettysburg, harrisburg, hershey, investor, lancaster, market report, Mike Kushner, Omni Realty, Omni Realty Group, pennsylvania, tenant representative, trends, west, writing, york

Jobs – Not Economy – Drive Commercial Real Estate Activity

Posted on August 22, 2018 by Mike Kushner in Blog, CPBJ Articles, Trends No Comments

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


Earlier this month, it was reported that the number of Americans filing for unemployment benefits rose less than expected. To put this into perspective, claims dropped to 208,000 during the week of July 14, which was the lowest it has been since December 1969! After peaking at nearly 300,000 claims in October of 2017, we have seen a mostly steady (with some variation) decline in unemployment claims moving forward.

Dropping unemployment numbers indicate a strong labor market. The United States has an estimated 149 million jobs – 19 million more than it did just nine years ago. When you think about that type of job growth, it’s easy to see how it will have an impact on commercial real estate. To accommodate 19 million more workers, businesses have had to add space. Even for jobs that are run outside of traditional office space, there are still many more that do utilize office, retail or industrial real estate to some capacity.

Source: Bureau of Labor Statistics

Many people may assume that it’s the economy that drives commercial real estate activity, but really it’s jobs. The two are closely correlated, but for several compelling reasons jobs have the greater impact and drive businesses to either expand or contract their commercial space.

It all comes down to people and space.

Economic growth is measured by GDP and can be fueled by any number of factors, most of which won’t have a direct impact on commercial real estate. Businesses can earn more money without necessarily needing to hire more people or move into a different commercial location. Though it’s common that when the economy is growing, the commercial real estate industry becomes more active, the true driving force is jobs.

When businesses need more people, they also need more space to accommodate these people. A business using traditional office space is not likely able to hire more than three or so people before working quarters begin to feel a bit crammed. As a result, they move. It is increasing jobs, not just economy, that spurs new commercial real estate activity.

Change doesn’t happen overnight.

There is somewhat of a long tail on job growth driving commercial real estate activity. It takes time to catch up! When businesses are adding employees, they will usually make their current space “work” for as long as possible and then strategically move into a bigger space when they absolutely must. Conversely, when businesses are forced to lay off employees, they often stay in their current space, even if it means some space goes unused. The reason is it’s easier (and less expensive) to lay off employees as the first means of cutting costs than it is to downsize commercial space.

So, the job growth that we’ve seen over the course of many years is now driving the commercial real estate activity we are seeing today.

Slowing, but not stopping.

Job growth peaked in early 2015, then fell steadily through the end of 2017. Since then we have seen a modest, yet mostly steady increase in recent months. The reality is job growth, at any rate, cannot go on forever. The reason is, at some point, the United States will reach its “full employment” where everyone who wants a job, has a job. The unemployment rate, now at 4%, is about as low as it has been since the late 1960s, almost 50 years ago.

For commercial real estate, the link between job growth and space demand is clear and direct, though there may be lags. There will always be businesses who are looking to change their commercial space. Some will want more space, some will want less. Others will want to move to a newer space or will desire a different location. Businesses will close while others open. And so the cycle continues.

Short-Term Impact

Even with economic growth heating up, commercial real estate investors and property owners should not set their expectations for greater space absorption too high, at least in the short-term. Yes, there will be some pick-up in leasing associated with the spike in GDP growth. However, CRE professionals would be wise to focus more on job growth as the gauge for leasing prospects – and this outlook looks much more moderate because the ranks of unemployed workers available is largely exhausted. Looking at the short-term, we should not anticipate significant growth in property leasing this year. The surging industrial sector is the exception, which is the result of the shift from in-store to online shopping, not jobs.

Do you agree that it’s jobs, not the economy, that has the greater impact on commercial real estate activity? Why or why not? Join in the conversation by leaving a comment below.

[Online Resources] Real Estate, advice, blog, central penn business journal, Commercial Real Estate, cpbj, decline, Economy, effect, employment, expert, growth, impact, jason scott, job, jobs, labor, long-term, Mike Kushner, Omni Realty, opinion, rate, short-term, statistics, trends, unemployment

Central PA Retailer Shares Challenges and Strategies for Competing with Online Retailers

Posted on July 27, 2018 by Mike Kushner in Blog, Local Market No Comments

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


In June, the Supreme Court ruled that states can begin to collect sales tax on web purchases. Previously, online sellers who did not have a physical presence (or “nexus”) in a given state had a perceived advantage over sellers that did. This is because these online retailers did not have to collect and remit sales tax back to the state in which the buyer lived. Rather, it was the buyer who was supposed to, at the end of the year, take all the purchases he or she made online that were not collected, calculate the sales tax, tally up the total and remit it to the state at tax time.

If we’re all being honest with ourselves, we know that it’s no stretch to say that this method for collecting sales tax for online purchases was costing states up to $33.9 billion annually in payments that were simply never made. Now that states have been given control to collect sales tax on web purchases, how will this impact our retailers? Moreover, how will this impact the use of and need for commercial retail space?

For insights we went straight to the source. Omni Realty Group interviewed Central PA retailer and owner of World Cup Ski & Cycle in Camp Hill, Pennsylvania, Lee Gonder. Lee is a wealth of knowledge when it comes to running a successful a local retail store and competing against online retailers. Through the questions and answers below, you will gain a better understanding of challenges brick-and-mortar retailers are up against and how the smart ones are developing strategies to provide unique benefits to customers that online retailers simply cannot replicate.

Omni Realty: As a local, brick-and-mortar retailer, how have you been impacted by online retailers?

Lee Gonder: It’s difficult to quantify the impact of online retailers in dollars, but it’s easy to see their effects in day to day business. With online retailing, the consumer no longer has to compromise on their purchase; they will go find exactly what they want. As a small, local retailer it’s impossible to stock, service or even know about every conceivable product within your industry.

In the past, you could explain the choices you made in your inventory and why they were best suited for the local consumer. Most of those educational opportunities are gone with the internet. All research is done online and the retailer is no longer the expert. With the availability of virtually any product online, not only can the consumer research their purchase, but more than likely have a direct link to be able to make the purchase. We’ve been affected on both big ticket items like bikes and skis, but we also take an incremental hit on everything from ski wax to bike chains and other accessories.

Omni: If you had to pick one thing, what would you say is your biggest competition right now?

Lee: Online retailing would have to be our biggest competition right now. In the ski industry, there are a number of domestic companies that do a good job of providing consumers with numerous options for purchase. The ski industry does a reasonable job of requiring its dealers to maintain minimum advertised pricing (MAP). With the current MAP policies it allows my business to compete on price, just bringing inventory choice in as the major obstacle to making a sale.

However, in the bike industry it is quite different. There are numerous international companies that really make competing for the consumer very difficult. The international companies are not governed by the MAP policies that we U.S. retailers are asked to abide by. Therefore, not only can we not compete in the inventory game, but quite often they have pricing that is equal to or sometimes less than my wholesale. Add in two-day free shipping, and there go a lot of my incremental parts and accessory sales.

Omni: Given the recent supreme court ruling to allow states to tax online purchases, do you think this will drive more business back to local brick-and-mortar retailers?

Lee: Simply put, no. Many of the larger online retail services, like Amazon, already have nexus in the state of PA. They already had to collect and remit sales tax. It may help curb the purchasing of some bigger ticket items, but I think the effect will be minimal.

Speaking as a retailer, it will make me rethink how I handle my webpage, which is ecommerce enabled. Now I will have to collect and remit tax to other states if I sell something on my site to an out-of-state consumer. That becomes another hurdle for a small business, to track and remit sales tax to out of state government agencies. I think for a small, local business it may indeed just make things a bit more difficult. The larger companies that have the infrastructure to handle these changes will be able to continue with their online retailing with a few internal adjustments.

Omni: How have you had to adjust your business strategy to compete with online shopping?

Lee: Our focus over the past several years has been to invest in technology or services that can’t be bought on the internet. Precision ski tuning equipment, bike fitting equipment and ski boot fitting equipment and knowledge. Some services can’t be easily addressed online, so we’ve made investments in those areas. We’ve trained the staff to sell that service, use the equipment and that is what sets us apart from the online retailer.

Conclusion

Competing against online retailers is no easy task for our local, brick-and-mortar stores. Though the Supreme Court ruling to allow states to collect sales tax on web purchases was intended to level the playing field for retailers, it’s not exactly an immediate windfall for local retailers.

However, commercial real estate professionals could see a boost in demand for commercial retail space as both conventional and online retailers may put more stock in brick-and-mortar locations since there is no longer an advantage to not having a physical location in each state. In fact, being closer and more accessible to customers will become an even greater advantage for retailers.

For this reason, commercial real estate remains a critical aspect of any retailer’s business strategy. Location, visibility and flow of space has a profound impact on how customers find you and their customer service experience. Retailers who wish to remain competitive against online retailers, or even other brick-and-mortar retailers, should closely consider whether their commercial space is meeting the needs of the business and their customer base.

Through the insights shared in this article, it’s obvious that local retail businesses will continue to face some unique challenges, even after the Supreme Court ruling on online sales tax. Being strategic with the location and type of commercial retail space a business invests in can help deliver exceptional customer service, and in turn earn more business!

Do you agree or disagree that something more should be done to level the playing field between online retailers and local retailers? Share your ideas or ask a question by leaving a comment below!

behavior, brick and mortar, central pa, consumer, customer service, lee gonder, local, Mike Kushner, Omni Realty, online, online sales tax, pennsylvania, retail, retailer, sales tax, shopping, store, supreme court, tax, trends, world cup ski and cycle

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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Major Trends Impacting Central PA’s Retail Real Estate Market in 2018

Posted on May 24, 2018 by Mike Kushner in Blog, Local Market, Trends No Comments

For Central Pennsylvania’s retail real estate market, things are off to a, well, interesting start. The market has seen its fair share of ups and downs in recent quarters, and 2018 is no exception. On one hand, major retailers continue to shutter brick and mortar locations across the Susquehanna Valley. At the same time, other retailers are making the move into new locations. It can be hard to grasp what’s really going on in the market. Does the good outweigh the bad? What will the next quarter bring? The next year? For the answers, we turn to an expert.

Senior Market Analyst with CoStar Group, Chris LeBarton covers commercial real estate data in markets stretching from Western Maryland, including the Baltimore metro area, up through Central Pennsylvania for CoStar’s Market Analytics platform. His insight and expertise are helpful for understanding not only where the market currently stands, but how it’s likely to move in the future.

Chris joins Mike Kushner of Omni Realty Group for a Q&A series where we specifically look at the current state of Central Pennsylvania’s retail real estate market – as well as trends and challenges that stand to reshape things in 2018 and beyond. Here’s how Chris answers our most pressing questions.

Omni: With a net absorption of almost 95,000 SF, the Harrisburg East Retail submarket had a great bounce back quarter in Q1 2018 after four consecutive featuring net move outs. Can you elaborate on the various factors contributing to this?

Chris LeBarton: Retail leasing on the east side of Harrisburg has been fairly whippy this cycle, and certainly since 2015. So, putting too much stock into it is unwise. Minus Hobby Lobby’s move into almost 70,000 SF at Colonial Commons, this looks like less of a win. With that said, there are some strong pockets of buying power (median household income x households) in this submarket, including parts surrounding Colonial Park. In fact, Dauphin County has been one of the faster-growing counties in Pennsylvania since 2010.

Omni: What were the largest lease deals that took place in Central PA’s (Harrisburg East and Harrisburg West) retail real estate market in Q1 2018?

Chris LeBarton: Hobby Lobby’s move-in was the standout for sure, but there were a couple other sizable deals in the region. There was 15,000 SF leased in Carlisle on Newville Road and Ideal Auto Body absorbed 11,000 SF in Hanover. Also, Generations of Furniture signed a three-year deal on roughly 8,100 SF in Lancaster.

Omni: Amidst recent, massive retail closings, how would you say Central PA has responded/rebounded? What factors contribute to your assessment?

Chris LeBarton: Few areas are immune to the wave of big-box retail closings; stores like Kmart, Sears, Boscov’s, Macy’s and Toys R Us were once ubiquitous across the country. But a review of the biggest names shows fairly limited exposure in Central PA. Simply based on population density, natural tourism corridors, and buying power, this region isn’t swimming in malls and power centers. A review of a dozen or so metro areas inside Central Pennsylvania shows that, overall, vacancies are largely where they were coming out of the crash and in some cases improved.

In addition, several retailers that did not have a presence in Central Pennsylvania have absorbed space vacated by some of the big box closings. Stein Mart, Home Goods, and Hobby Lobby moved into the former Kmart on the Carlisle Pike. In Lower Paxton Township, Hobby Lobby opened in the former Giant Foods location and Giant moved across the road to the space vacated by Gander Mountain. At the Capital City Mall, Field and Stream moved into the former Toys R Us location. Overall, Central PA should feel encouraged that the region was no by means hit the hardest, compared to others. In fact, some significant regrowth has occurred as a result of many of these retail closings.

Omni: In your opinion, what are some of the future trends you expect to see in the Central PA retail real estate market?

Chris LeBarton: Mixed-use projects offering at least live-play (work there, or nearby, is an added bonus) with smart ground floor retail are all the rage. If areas outside of the major urban centers want to grow their population, they need to think about approving these types of projects. Naturally occurring affordable housing is becoming a big draw for those who want a nice place to live, but don’t want the high price tag. Developers who are trying to overcome the challenges of rising land and labor costs are looking more and more at secondary and tertiary markets, and there’s no reason Harrisburg can’t accommodate small-to-midsized projects with local/authentic retailers.

Another trend on the rise is related to the last piece of the “last mile” industrial craze and e-commerce. Central Pennsylvania is booming with warehouse and distribution construction; as a result, the biggest population centers in the region may see retailers testing new concepts here. Amazon Key, a home delivery service, opened in close to 40 cities last fall, and Walmart is doing all it can to keep up with the biggest player in the space. It would be reasonable to think that such trends could make their way to the Central PA retail real estate market as well.

While technology and the shift in the way consumers prefer to shop and purchase goods has had a significant impact retail real estate, we can expect the market to react and adapt – just like any industry must to stay afloat. The key to survival is for retailers to stay in front of emerging trends, keep an eye on competitors, and be willing to evolve.

How do you feel Central PA is responding to the changes and challenges taking place in the local retail real estate market? Are you more hopeful or more concerned? Share your thoughts by leaving a comment below!

[Online Resources] Real Estate, 2018, central pa, central pennsylvania, challenges, changes, chris lebarton, Commercial Real Estate, costar, east, gettysburg, harrisburg, lancaster, market report, Mike Kushner, Omni Realty, pennsylvania, retail, retailers, trends, west, 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
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