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Commercial Real Estate: The Time to Act May Be Now

Posted on December 7, 2011 by mike.kushner in Commercial Real Estate No Comments

This year hasn’t been the best for the commercial real estate industry. According to a report released by the National Association of REALTORS® (NAR) on Nov. 28, NAR Chief Economist Lawrence Yun points out that “vacancy rates are flat” and “leasing is soft.” These factors, along with the struggling economy, have created an ideal market for winning concessions from landlords and owners.

But if you’re in the market to lease or buy commercial real estate, and you haven’t taken advantage of these conditions, the time to strike may be now. In the NAR report, Yun goes on to say “with modest economic growth and job creation, the fundamentals for commercial real estate should gradually improve in the coming year.”

He predicts vacancy rates to trend lower. When comparing the fourth quarter of this year to the fourth quarter of 2012, NAR forecasts that vacancy rates will drop across the board for the four commercial real estate sectors – by 0.6 percent in the office sector, 0.4 percent in industrial real estate, 0.8 percent in the retail sector and 0.7 percent in the multifamily rental market. Fewer vacancies would mean less supply and more favorable conditions for landlords and sellers.

In terms of rental rates, NAR is forecasting modest increases for next year. This trend could be more dramatic in the multi-family market, which already has the tightest vacancy rates of any commercial sector. Apartment rents are expected to rise at faster rates throughout most of the country, and if new multi-family construction doesn’t ramp up, “rent growth could potentially approach 7 percent over the next two years,” Yun says.

When you combine this report with the fact that unemployment is at its lowest level in 2-1/2 years, there are strong indications that real estate leverage may soon begin shifting back to the sellers’ side on a broad scale.

Many of the same trends mentioned in the NAR report are playing out in our local market of central Pennsylvania. Of course, no one truly knows where the local, national and global economy will end up next year, but the present time may very well be a better time to invest or lease commercial real estate than 12 months from now.

Want to know more about what 2012 has in store for the commercial real estate industry? Would you like information about local vacancy or unemployment rates? Contact Michael Kushner at Omni Realty Group and learn more today!

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Retail Market Shifts to Meet Demands of Modern Consumers

Posted on November 30, 2011 by mike.kushner in Trends No Comments

In today’s economy, it is imperative that a business stay nimble and grounded. The most successful business will display the ability to plan for the future while not losing sight of lessons from the past. As the online store front becomes a staple for many businesses, the role of traditional brick and mortar stores are undergoing a significant change.

Here are a few ways the retail space is changing and a few advantages and disadvantages of each.

1) The Showroom – This is no longer just for furniture and cars. If your business sells things, people want to see them, touch them and typically try them out. Think Apple Stores and anywhere that offers samples.

Advantages of the showroom: People can touch and use the items prior to purchase. This also allows you to be more hands-on with a customer and create a personal bond with them. Business to person is taking place of business to consumer.

Disadvantages of a showroom: If you are not the only retailer of the product they may test it at your store and then buy it from somewhere else. This can be avoided by price matching and other incentives for in-store purchase.

2) Sub-leasing space – This is when you can take part of your space and add a business within your business. Think franchised coffee shop inside a grocery store.

Advantages of sub-leasing space: Income that doesn’t depend on customer purchases. The sub-tenant will be responsible for paying their rent no matter if they get one or 100 customers per day.

Disadvantages of sub-leasing space: The space is lost for the term of the lease. If your inventory expands you cannot recapture that space that is being rented.

3) Break out into smaller pieces – Set up small, nimble stores and hubs that will allow you to move a large amount of inventory in a very specific part of your business. Think Toys R’ US breakout stores in years’ past.

Advantages of break out stores: Allows you to promote small, highly profitable sectors of your business at convenient locations for specified times.

Disadvantages of break out stores: Pulls people away from your main location where impulse buys may add to total bill with full inventory available.

4) Make your inventory unique and allow for online shopping at your retail location – Companies that have a unique item assortment can leverage an online presence within their brick and mortar stores. (Think Best Buy.)

Advantages of unique inventory: In the store the customer can see and try out the product while having additional options via the online store. For example, a customer can enter an electronics store and test a new camera and then decide if they want to purchase the store inventory (typically a best-selling color of the product) or if they would like to order from the online inventory (sometimes the manufacturer will allow certain businesses to offer a customized color or package only available via the online store).

Disadvantages of unique inventory: Fairly minimal although you can run into many of the same issues as the showroom store with testing at your store and then purchasing from a different retailer if the items are not truly unique. If there are other comparable items in the market the customer may test at your store and decide on a different non-store specific model.

Once again, these are just a few newer and developing changes in the retail market and some general advantages and disadvantages of each.

Remember to contact a tenant rep who is knowledgeable of current market conditions and offer expertise suited to your leasing and buying needs. Contact Mike Kushner at Omni Realty Group today!

[Online Resources] Real Estate, buy online, Central PA Real Estate, commercial lease, Commercial Real Estate, Finding a Commercial Realtor, Harrisburg office space, Mike Kushner, office lease, Office Leasing Market, Office Space, Office Space in Camp Hill, Omni Realty Group, online shopping, retain market, sublease, workplace trends

Telecommuting: Is It for Your Employees?

Posted on November 23, 2011 by mike.kushner in Trends No Comments

Last week, we discussed the advantages and disadvantages of telecommuting from the perspective of the telecommuter. This week, we’ll review telecommuting from the perspective of the employer.

Telecommuting is now easier than ever with increased use of mobile technologies such as smartphones, tablets, and mobile internet/email. Telecommuting is a great way for a business to lower costs, but it’s essential that management and staff understand how to create a solid telework concept. Here are a few things to consider before implementing a telecommute program.

1. Costs

Telecommuting can save thousands of dollars in real estate costs for many businesses. Even without telecommuting, many employees spend more than half their time away from their office/desk. As the use of telecommuting increases, the resulting empty office space can easily be re-rationalized by desk- share, “hoteling” or other office-space strategies. With a bit of strategic planning, companies can save about one office for every three telecommuting employees.

However, having a brick and mortar office is not a thing of the past. Many clients and business partners still prefer face-to-face meetings in a traditional office setting. Whether it is a consumer who doesn’t understand or enjoy today’s technology or simply wants to get a better feel for who you are as a company in person, nothing is going to replace the office in the near future.

2. Employee Interaction and Productivity

They are many advantages for companies who allow employees to telecommute including: saving money, improved performance, reducing staff redundancy, and increased productivity. However, telecommuting is not for everyone and it can lead to problems such as lack of social interaction, insufficient IT support, and an ‘out-of-sight, out-of-mind’ mentality.

Some managers feel that distance inhibits collaboration. At the same time, managers may not be prepared to handle the unique challenges posed by employees who telecommute and employees may not have the discipline to use their time wisely. Other times, the nature of a business may make telecommuting less beneficial.

If you’re considering allowing employees to telework, we suggest having a written telework policy and have all management and staff complete telework training.

To learn more about traditional and non-traditional work space options, we recommend that you consult with a tenant representative.

[Online Resources] Real Estate, alternative workspace, Central PA Real Estate, commercial lease, Commercial Real Estate, Finding a Commercial Realtor, Harrisburg office space, Mike Kushner, office lease, Office Leasing Market, Office Space, Office Space in Camp Hill, Omni Realty Group, telecommuting, work from home, workplace trends

Considering Working from Home? The Pros and Cons of Telecommuting

Posted on November 16, 2011 by mike.kushner in Trends No Comments

Technology has allowed many professionals to telecommute, which allows workers to use mobile technology to work from home, from coffee shops or other locations.

There are obvious advantages of telecommuting, such as flexibility and lower costs for things like fuel, meals, and even your wardrobe.

We asked for feedback about the advantages of working from home. Here are some of the responses:

Mark B: It’s peaceful. I don’t have to be at the computer all the time and I can work in comfortable clothing.
Sarah S: I love working from home! I get so much more accomplished than being in the office and I cut down on drive time.
Ryan C: I like that I can cook on the stove, wear whatever I want, hang with friends on occasion, and work from wherever there’s internet.
Kathy S: I can be working on the computer, have the latest business news or a shopping channel on in the background, run a load of laundry, and make soup at the same time.

One respondent said that because of a disability, he often has trouble working with other people. He said telecommuting is a great fit to accommodate his limitations.

There are a few disadvantages, as well. Some aren’t disciplined enough to stay on task while others find it difficult to create a work/life balance. Here are some responses about the cons of working from home:

Matt H: Lack of personal contact.
Joe S: The biggest problem is being productive when kids are around.
Jennifer G: Often I have no one to brainstorm or discuss ideas with. I miss talking about last night’s TV shows or what everyone did on the weekend around the water cooler.
Sarah S: I don’t feel like I can ever “escape work.” I feel like I’m always making myself available because I know my stuff is sitting on my desk in the other room and it’s just too easy to walk over there! My fiancé would 100% agree!

Whatever your preference, be sure to examine all options before making a big leap.

You’ll want to consider where you will hold business meetings or how to handle childcare if you need to leave home for a few hours. If you want to learn more about office leasing options or to scout out co-working space, be sure to consult with a tenant representative. A tenant rep has your best interest in mind and can often negotiate the best deal on your behalf.

[Online Resources] Real Estate, alternative workspace, Central PA Real Estate, commercial lease, Commercial Real Estate, community, Finding a Commercial Realtor, Harrisburg office space, Mike Kushner, office lease, Office Leasing Market, Office Space, Omni Realty Group, telecommuting, work from home, workplace trends