Category Archives: Trends

Climb Higher

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6 steps to your highly successful 2013:

  1. Take a longer view and know the world is not ending anytime soon.
  2. Embrace worker mobility and BYOD (bring your own device). It will filter out employees that shouldn’t be there and inspire loyalty from the ones that should.
  3. Leverage technology to save and make money. Digital information is growing exponentially and the market for data management services are too. Co-locating data is one way a company can save money. Data mining is one way to uncover metrics that make money.
  4. Look to repurpose underutilized assets. An old manufacturing plant might be turned into a great technology campus. A retiring workforce can be slowly transitioned and mentor a newer generation.
  5. Utilize experience and leadership of Colliers International. Our adaptive reuse marketing and technology practice group services can help realize the value of your assets and best place them within the current market.
  6. Focus and engage others to focus on your behalf. Energy flows where attention goes.

To support your success, my service expertise at Colliers is focused on:

> Data Center Owners and Occupants

> Adaptive Reuse Property Marketing

> Creative Tenant Workplace Strategies

If you have needs in any of these areas, please contact me and I will be happy to meet with you for a free consultation.

Happy New Year and Continued Success!

flickr photo: Kathryn McCallum

Technology Solution for Commercial Real Estate

the key to the officeFor many of our clients; data growth, cloud computing and worker mobility are forcing them to consider outsourced IT solutions to stay competitive.  The decision involves internal IT and real estate teams but also requires the support of leadership and finance. At Colliers, we provide an integrated service to help bridge the gap for all departments with an analysis of what exists today and what needs to as part of a go-forward strategy. The innovation necessary to deliver any strategy is the interface. In our case the interface is the technology AND the physical space.

We are not alone. Interface design is at the center of most recent innovation in the Product to Systems delivery continuum. On the digital side, it can explain the crazy growth of  user interest in products such as Pinterest, Twitter, Instagram, etc. Interface design is the self selecting genius in presenting information in an easy to use from and in language that connects with people the best. The evidence of success is the exponential networked adoption.

The integration of IT and Real Estate is interface design as well. Users (companies) are redefining how they access and maintain critical business information and control and utilize facilities. The product (data and space) is accessible in virtual systems and decentralized touch points. Collaboration will still use both physical and digital interfaces but not always in the same environment or at the same time. Physical space and digital policies are what define the rules but the tools have evolved by networked models, thereby changing the rules and polices. For example, more people are tweeting, facebooking to talk cube to cube,  using cloud services to share data and third places to meet face-to-face. All leaves the owned physical space often left underutilized. The result is more reliance in interfaces making collaboration on demand. More and more interfaces are being developed in the digital world to collect interest. It is a strong bet that the physical world will continue to do the same. To read more about workplace trends fro Colliers International, click here.

Predictions for commercial real estate in 2012

 

 

 

 

I started my version of the ‘commercial real estate trends for 2012′ post but found others out there with whom I agreed with (almost) completely. So I figured why not give these folks more props and I’ll save tips and taps for another post.

One is Coy Davidson, a colleague at Colliers International. Coy posts regularly on many CRE related topics and his 2012 list for corporate real estate exhibits both the influence of technology and new realities of the economy. Workplace solutions are showing further evidence the freelance nation has something to teach the corporate culture. As well as mobile devices and technology developments now putting teeth to the telecommute directives inspired to in Web 1.0.

The other is ULI’s Urbanland. In this case, they have a good post from Deloitte’s report on the macro trends affecting investment real estate. Foreign investment, patient development centered on the fundamentals and good ole’ cash will rule the day…again. Hope is that we keep this in mind before we get all bubbly over data center REITS or apartment projects. Although I think its too late for the latter.

Where do I think progressive CRE companies are going to address the workplace, economy and global markets of the future? They are going to the places these trends germinate, learn what makes them tick, make a select offering of strategies and services to address them and then wait for the masses to catch-up.

Me, I’m looking at these and the smart folks inside the organization for clues and resources for doing it all better, faster, more mobile and more conscientious for 2012. Let’s make it a great year where the trends are what we make them.

Flicker photo cred: Alex E. Proimos

Like those guys in Road Warrior

Remember this guy? As a kid growing up playing hockey in Minnesota, when I saw this movie I can remember thinking,’is that what  happens to hockey equipment in the future? Is there no hockey?’

Maybe sports equipment is destined to be combat garb in the future but until we get there, we’ll still need to do something with all our buildings. You can’t drive them to the fortress protected gas pump in the desert and they cost too much money and CO2 to tear down.

But lots of the built environment has adapted to the times in order to survive.  Some special purpose buildings have found new life by finding a new audience to adapt the space with a similar use. The Fort Snelling Boy Scout Base Camp for example. Some old industrial buildings have been adapted to house new uses like data centers.  And in the retail world, tenants come and go as do the trends but as online retailing matures and mass-consumerism takes its necessary lumps, new tricks for old malls are showing to be gun ranges and go-carts.

The bottom line is we can get pretty creative when we want to survive. But I wonder what Max’s dog would think about dog daycares?

 

Collaboration Nation

The theme prevalent in today’s world is collaboration. Social media, work trends and new realities on economics and energy have produced new and exciting opportunities for all of us to help each other help ourselves.

Cloud computing, outsourced IT infrastructure, 3rd party data management, etc. would make it seem IT is headed toward earning the title of the “fourth utility” for everyone to use.  Co-working, telecommuting, contract vs. career engagement, 3rd party logistics and a reversing trend toward more local manufacturing are making commercial real estate or  the business base of operations more fluid.

We are using more partners for mission critical than ever before. IT and CRE are at a crossroads where the space inside the organization does not need to be more scarce but more sacred. Power consumption for data and collaborative floor plan for employees are two drivers in this road to where we are lowering the sqft per employee and rising the $ per KW count. I soon see the co-location applying more to corporate office strategies than data centers and office suite applying more to the place you house your data than your people.

Its an exciting time to be in the business of helping organizations collaborate between IT and Commercial Real Estate. Want to collaborate? Reach out to me.

 

flickr photo cred: bionicteaching

Technology of Real Estate and the Real Estate of Technology

Much has been written and reported on developments in Intelligent Buildings. The modern age of commercial real estate design, construction, function and management has evolved to include technology as the main utility that serves all other utilities. CRE in Minneapolis, MN and elsewhere is attempting to develop, compete and retrofit itself into a new era where efficiency and experience meet environmentalism and economic merit. Tolerance for cost and adoption is guided by the value of the real estate or driven by the demand of the market. It would appear it will be a situation where the integration of technology of real estate has a sound methodology for its self correcting progression.

The real estate of technology, on the other hand, would appear more susceptible, or at least less synergistic between the two parts. Yes, data center design, latency issues, disaster recovery management and virtualization are constantly progressing but it feels more like catch-up. Energy efficiency, geography, power sources are all real estate related issues that when you actually look at where a lot of the Internet traffic is routed, it looks more like cart paths than grids. Yes, the power grid, power centers of commerce and information need drive the development but with data centers now going near the Arctic Circle, its apparent data needs, and can, be anywhere.

Its almost scary to think of the all the information going through a place like 60 Hudson Street. The linked video is great little overview that got me thinking about all this and saying, DATA WILL BE THE NEXT DRIVER OF COMMERCIAL REAL ESTATE ABSORPTION/DEVELOPMENT if it is not already. What do you think?

60 Hudson Street and the Hidden Internet

flikr photo credit: UggBoy♥UggGirl [ PHOTO // WORLD // TRAVEL ]

What do you get when…

You combine Canadian $ interest in Minnesota commercial real estate with clean economy R & D projects sponsored by the University of Minnesota with a and a regional partnership looking for attract economic development and create jobs?  Triple bottom line potential. All we need is to put them in the same room and say,  ’hey Region: want jobs? Get the 19 Fortune 500 local companies behind the ramp-up of clean economy concept to turn this into a clean economy hub.’ Then say ‘hey U of M: give attractive $ deals to corporations to take R & D to market and scholarships to the brain trust that brings more IP to U of MN. Then say, ‘hey Canada, what value add real estate deals in a state you already believe in? Yeah, they are more risk but with lease guaranties, or similar credit enhancements from State and private entities, the shared risk puts collective skin in the game and the result will accelerate the success for all of us. To simple? Missing some big pieces? Maybe. But it starts with collaboration. No one segment can get it done alone.

flikr photo cred: ifmuth

Does the recent stock market activity and Fed action help commercial real estate?

It depends who you ask. Certainly the idea of investing in income producing hard assets sounds like a good hedge regardless if the Fed is trying to hold off inflation. To me the idea that the value in dirt, the commodities it produces and rental income are timeless and ever increasing. If anything, the recent uncertainty so prevalent has made me more certain about commercial real estate.

From the National Real Estate Investor:

The Fed’s message that interest rates will remain stable for some time bodes well for property investors, contends Hughes. Economic realities of job creation, manufacturing output and consumer confidence will drive real estate fundamentals, he acknowledges, but other forces may drive capital to the sector.

“The recent volatility in the stock market will ultimately drive dollars into more secure investments, such as commercial real estate,” he says. “With property fundamentals improving and stability assured, we are going to see more investors putting their money into the commercial real estate arena, which will further solidify values.”

flickr photo cred: stoneford

A sunny drive down France Ave.

Ahh, sunny spring in Minnesota. Time to take the long way. As I did from my weekly pilgrimage from the bluffs of the Minnesota River northward, I took notice of the continued progression (and in some cases regression?) of the development landscape.

France Avenue offers a sampling of it all.

Starting with Normandale Community College in Bloomington, the old “high school with ashtrays” has really grown in curriculum and square footage along with the interest for more higher learning. There is no doubt education was/is good commercial development business.

Crossing 494, I come upon the wrecking ball at Centennial Lakes Plaza tearing down a structure built as recently as 1989 to make way for the new Whole Foods. I mean, come-on, could we not use our heads a bit more to come up with an adaptive reuse strategy before we scraped the site? There are buildings three times as old and as ugly across the street. For the time being, the development party has mostly turned its back on the that side of the street. I guess to me this seemed short sighted and I expected more from Whole Foods and Edina. For what its worth, if they had considered all the adaptive strategies and they were deemed not feasible,  my apologies. It will be a sad day when they tear down the Macy’s (Dayton’s) Home Store down the street  for a short term endeavor or whatever development wave is breaking on the beach.

All is well and good with Leisure Lane, Tavern on France, Galleria and all the other main drag sites that have found development or redevelopment love. Or is it? Looking closer at the Container Store development, the strip center looks a little forced. The future may prove it to be smart infill but maybe there is a reason there wasn’t retail beyond an uncompetitive movie theater there before. The development track of bringing the residents closer to the shops like the Galleria condos, Westin and apartments on York seems to make more sense. Whatever phase of development thinking, this part of France is definitely the main thoroughfare of the new retail /mixed development that has grown around and now beyond the old lady with too many face lifts, Southdale.

Point of France corner marks what I call France’s symbolic version of Edina’s demographic turn. POF was the first big condo tower and now is showing its age. So are the residents of Edina. Fittingly, the Southdale medical area around Crosstown has developed to suit the surroundings. Like all medical facilities, Fairview has no shortage of customers and funds. Somehow the density of buildings fit in an area not easily ready to accommodate. Both old and new structures jam into a spot like a swollen foot in an orthopedic shoe yet function with design efficiency and functional ingress/egress with each addition.

Crossing Crosstown, I enter into the lot and block version of Edina. Guided by grids and Minneapolis echoes, France is tamed into being more sensible, at least until 50th. However, as you approach the holy grail of urban shopping you are confronted with modified residential living now more adapted toward affluent clustering. Density is less but the Edina side of France wins out over Minneapolis for the new developments. Hitting the commercial district of 50th, new mixed-use developments once the fears of some are now firmly supplanted. The residual is greater mixed-use density and more economic action. Restaurants such as Barrio, Salut and Mozza Mia and new additions for the hip looking to grow up and the grown up to try to stay hip. Fare thee well Pearsons.

Jumping down to 44th, a sense of more grounding comes over me as I see the Linden-Hills Co-Op where the neighborhood successfully avoided the CVS wave and the Sunnyside Gardens have endured long enough for a new generation to discover gardening. Buildings last over here. Maybe because its less prized than their 50th & France big sister or its Southdale area uncle.  Local success stories, old classics and independent operators survive with minimal pretense. Whatever the case, the development gods have not penciled out too much in the way of tear-down/build-up for this end of France, and that is a good thing.

So is rolling down the windows and taking the long way in Minnesota spring.

Fickr photo creds:  Marcus MetropolisJohn McNab

The REAL investments.

So much craziness. Violence, scarcity, disaster, turmoil, uncertainty. Time once again to do a gut check and know thy self and thy assets intimately. Focus on what is real. Invest in what is real.

What is real? Real estate of course.

What is real is land. As you’ve heard, they are not making any more of it and we seem to be running to the cities instead of running to the hills.

What is real are resources such as lumber, minerals and agriculture. Last I checked, we still have to make stuff like paper, batteries and food. Everyone is pretty clear on that and with more people in places like China, allocating resources is getting more competitive.

What is real is cash flow. So much for projected growth and appreciation. What an asset produces is the evidence of value. Replacement material costs are too high, lending confusion and market uncertainty has removed the importance of these other metrics.

What is real is businesses that make & sell things that feed, clothe and house people. Manufacturing is not dead.

What is real is businesses that sell things locally. Logistics and transportation costs are taking care of this more than trends are.

What is real is businesses that bring things here from other places. Will still are global and will continue to be. We are all still in this together. Products, parts and markets need to go round and round…no mater how much we squabble.

What is real is that commercial real estate investment involve and support all of these. The framework of commerce NEEDS real estate in some form at some point of the process. Grow, Manufacture, Transport,  Sell, Consume, Dispose, Repeat.

Additionally, what is real is that people are valuing these REAL assets more in light of the previous preoccupation with paper assets(housing bubble) or blue sky assets(dot.com bubble). If you own a REIT or SILVER, you know what I mean.

Real investments are not speculative margin accounts or credit lines. They are  to be held and valued as a platform of sustainable production. Brick and timber is back. By the way, it never left. The classics endure.

flickr photo cred: Joost J. Bakker IJmuiden