Time to Fly

You’re capable, competent and want more compensation. You know how to fly but want to build a nest with your feathers. You want partners for flocking and latitude to navigate opportunities. We are here. We are looking for the next Sr. Associate to join our team and partner in building a growing business.

Ideal candidates will:

Have CRE industry experience.

Possess strong communication skills.

Have a desire to grow a business.

Get satisfaction from getting results.

Be curious enough to be creative.

Have a network to access.

Be hungry but not starving.

Be accountable and can manage their time efficiently.

Be comfortable using technology and the Internet.

Be focused.

The best candidates will have more than a few years in the business under their belt; have competence in their own performance and a strong desire to chart a new course. We offer extremely fair splits and exceptional support. All conversations will respect complete confidentiality.

We are boutique brokerage/advisory located in Minneapolis, MN representing tenants, buyers and owners. We build relationships to convert vision into value by finding and creating unique spaces and investments for our clients.

Follow your gut. Email contact info to info@adamcommercial.com

Flickr photo cred: Yan Bleney

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

TERMS of the DEAL: Greyfield

Greyfield(as defined by aboutremediation)

The term “greyfield” is a term coined by some analysts to describe the emergence of under-performing and/or declining shopping centre proprieties or strip malls. Most greyfields are a problem for urban development and economic growth but are not necessarily “brownfields”

A number of indicators can be used to identify greyfield locations. Typical signs of declining health include high vacancies, increases in tenant turnovers, the lost of anchor tenants and national chains; and, the decline and/or lack or reinvestment in the physical structure of the mall.

It should be noted that the redevelopment of key brownfield properties adjacent to greyfield properties has led to the revitalization of these sites and the surrounding community.

Theoretically, the redevelopment of greyfield mall sites can benefit non-greyfield malls through redevelopment and construction of mixed-use commercial and residential
projects on greyfield mall sites. Redevelopment of greyfield mall sites replaces obsolete properties with urban synergies and increases households in trade areas.

flickr phot cred:  fPat

New opportunities in Old Nordeast Minneapolis

Adam Commercial is fortunate to have been given the assignment of representing the landlord of 1300 Second Street NE. For those who do not know, 13th Ave and 2nd St is home to a four-corner commercial district in the midst of the Northeast Art District of Minneapolis. This area has been gaining national attention for its hip factor in restaurants, music and retail… not to mention the namesake, ARTS. Hear of a thing called Art-a-whirl?

We Minneapolitans know all about this but what you might not know is the Northeast Bank Building has a couple options for budding businesses to set up shop with a new lease. If your taste is slightly different and ownership is more your meal, we have a property for sale next door. Check out the NE goodies at Northeast Bank Building or just give us a call or email. We’d be happy to help get you acquainted, or reacquainted with this new opportunity in old nordeast.

William H. Fruen and the “Liquid Drawing Device”

Thanks to a heads-up from one of the Adam-ites, we were reminded that on this day in 1884 a patent was issued and thus causes us to do a little reflection on the old owner of the Fruen Mill.

Here for your information and historical perspective is a Sketch of William H. Fruen.

A true Minneapolis entrepreneur.

William H. Fruen carried an influence in business and political circles
in Minneapolis. He was born in Fisherton Anger Parish, Salisbury,
Wiltshire, England, July 15, 1845, and served an apprenticeship as a
machinist at Newcastle-on-the-Tyne. Coming to the United States in June,
1865, he found employment with the Boston Screw Company, and there
learned all the detail of the manufacture of screws and of making the
screw machinery. He made patterns for several new machines and installed
them, also becoming a stockholder in the company. In those years the
American Screw Company was buying up the smaller shops and forming a
monopoly, the Boston Screw Company being thus absorbed.

In 1870 Mr. Fruen visited St. Paul–had then never heard of
Minneapolis–but soon secured a repair and machine shop in the milling
district of Minneapolis. The new process of flour manufacture was being
introduced; and his skill was sought to make patterns and build new
machinery. With the idea of screw manufacture in mind he built
twenty-five machines; and in 1874, he built a dam on Basset’s Creek near
where Glenwood Avenue crosses it and erected a plant where he made 8,000
gross of screws, most of which were sold to T.B. Janney and Company.
R.P. Russell and M.J. Mendenhall were original partners, but both were
so crippled by financial depression that the burden fell wholly on Mr.
Fruen, who found it difficult to enlist capital, so that it took some
years to get well established.

In 1878 the American Screw Company sought to buy the Fruen plant, and
make screw machinery.

After the historic explosion of the Washburn “A” mill, his services were
sought to provide means to prevent a recurrence, one invention being an
alarm bell to indicate shortage of flow of grain between the mill stones
and stop the machinery before the surfaces would be injured. speed of
machinery also needed regulation and in 1878 he secured patents on a
Water Wheel Governor; which, within a year, had replaced all other such
devices in Minneapolis; although, to get his first governor into use he
had to give it to one of the mills. His old screw factory was now
converted into a manufactory of these governors. These machines which
automatically regulated the speed of water wheels, regardless of the head
of water, were shipped into many foreign countries including England,
Japan, and Argentina. This industry demanded his attention largely until
1890, and proved a financial success, making him an important factor in
business circles.

Mr. Fruen was doubtless best known in connection with the supply of
spring water to Minneapolis. Fine springs of purest water near his
factory began to be utilized for this purpose about 1882. It was during
this time of the development of the spring water business that he
invented a coin machine for the dispensing of a glass of water by the
deposit of one cent through a slot. This is listed in the official
Gazette of the United States Patent Office as “Liquid Drawing Device”,
Patent no. 309219 issued on December 16, 1884 to William H. Fruen.

The general appearance of the equipment was a replica of a four-sided
office building with cast iron fronts. Depressions formed the windows
and a larger and deeper depression formed the building entrance. In the
latter was placed the water tap and drinking glass, and also the slot
through which the coin was dropped. The weight of the coin actuated the
mechanism which measured and delivered the water to the glass. One of
these was placed in operation in the lobby of the West Hotel, the
principal Hostelry of Minneapolis at that time. Here it was the subject
of considerable comment.

A franchise was also asked for to lay mains to bring the water to the
heart of the city and to supply users on the route, John T. West and
Thomas Lowry being associates. Only one dissenting vote opposed, but
Mayor Pillsbury vetoed it, the rates asked not being satisfactory. In a
second effort Phillip Winston was a partner; and still later a third
attempt was made, Mr. Winston then being mayor; but then not interested,
he vetoed it

In 1885 they began to deliver water in jugs. An ice plant was added and
ever since then the business has grown until it has now assumed large
proportions. In 1896 Mr. Fruen retired, his son William F. Fruen
becoming the head of the business, now known as the Glenwood-Inglewood
Company.

The Fruen Milling Company is another project which was started by William
H. Fruen. About 1890 he experimented with steam rolling wheat from which
only the exterior bran had been removed, and which was then packaged and
sold through grocers as a breakfast cereal.

The company was incorporated in 1894 as the Fruen Cereal Company. Later
as the business broadened, the name was changed to the Fruen Milling
Company.

The old machine shop, in which were first manufactured screws, then water
wheel governors and the coin operated dispensing machines, had been
converted to a mill in the early part of the twentieth century when it
was still using the water power with the assistance of a steam engine.
In 1909 this cereal mill was turned over to the management of another
son, Arthur B. Fruen, who is still active in the company; now holding the
position of Chairman of the Board.

Mr. Fruen’s house stood on an elevation on the bank of Bassett’s Creek,
and here he was occupied with history, politics, philosophy sociology and
religion. His experiences a manufacturer made him and ardent free
trader, his views appearing in pamphlets which he wrote. He was a member
of the First Baptist Church of Minneapolis. He died in October, 1917.

(Written by Arthur B. Fruen in 1960. The above sketch came about as as
result of a request from Frederick Fried of New York who was researching
and writing a book about the development of coin dispensing machines It
owes much to The History and Biography of Minneapolis and Hennepin
County, Minnesota, By Holcombe.)

Glenwood Inglewood

Pure, refreshing and great-tasting spring water is the hallmark of the
Glenwood-Inglewood company. Our story starts in 1884 when William Fruen,
a machinist, built his factory on Bassett’s Creek at the edge of
Minneapolis. In his leisure time, William was an avid fisherman so he
decided to construct a pond to keep his catches alive until he was ready
to eat them.

While excavating for the pond, he hit a flow of spring water. The high
quality of the crystal clear water prompted William to abandon his pond
project and deliver his find to Minneapolis homes. Because the spring was
in a glen surrounded by woods, William called it Glenwood Spring. The
company operated under this name until Inglewood Spring was acquired and
the name changed to the Glenwood-Inglewood Company.

Today, homes and offices throughout the Upper Mid-West enjoy the delivery
of delicious drinking waters. The company also delivers the highest
quality distilled water to homes, druggists and industrial customers.

From water.com downloaded January 2001

Senior Housing Land is valuable in today’s market

While it can be said that most of a parcel of land’s value is its location, the intended purpose for which that and will be used is the driver of realizing any income. For a commercial parcel zoned at Elderly Housing and residing across the street from a hospital, it would seem to be logical that the 3 acre parcel in Spring Lake Park is an attractive offering in today’s market. This site has been estimated to handle up to 88 units of Sr. Housing. A good project at the right time for the right group. As many seem to agree.

CCIM Q3 Transaction Report – Midwest data

Midwest Transaction Breakdown 12-Month Trailing Averages (10/01/09 – 09/30/10)
  Office  Industrial          Retail  Apartment Hotel
< $2 Million Volume (Mil) $198 $376 $391 $121 $16
           
Size Weighted Avg. ($ per sf/unit)    $59 $26 $62 $29,902 $17,802
           
Price Weighted Avg. ($ per sf/unit)  $81 $41 $102 $41,646 $22,419
           
Median ($ per sf/unit) $63 $34 $63 $31,905 $18,081
           
$2 – $5 Million Volume (Mil)  $143 $350 $297 $193 $45
           
Size Weighted Avg. ($ per sf/unit)    $64 $31 $97 $28,107 $28,027
           
Price Weighted Avg. ($ per sf/unit)  $121 $49 $195 $43,845 $36,407
           
Median ($ per sf/unit)               $85 $41 $136 $36,002 $35,000
           
> $5 Million Volume (Mil)        $3,312 $1,311 $2,350 $1,452 $774
           
Size Weighted Avg. ($ per sf/unit)    $146 $40 $169 $90,758 $121,548
           
Price Weighted Avg. ($ per sf/unit) $291 $84 $270 $173,755 $148,861
           
Median ($ per sf/unit)               $119 $44 $158 $63,393 $111,512
           
All Transactions Volume (Mil)             $3,652 $2,037 $3,038 $1,766 $835
           
Size Weighted Avg. ($ per sf/unit)    $129 $35 $130 $65,600 $94,214
           
Price Weighted Avg. ($ per sf/unit)  $273 $70 $241 $150,478 $140,411
           
Median ($ per sf/unit) $71 $36 $80 $36,085 $52,134
           
Capitalization Rates          
Range (%)                                 6.2 – 9.7 6.8 – 11.0 6.7 – 10.00 5.0 – 10.1 -
           
Weighted Avg. (%)                   6.9 8.8 8 6.4 -
           
Median (%)                               8.5 9 7.9 8  
           
Source: RERC.          

ULI Emerging Trends 2011 best CRE bets

ULI(Urban Land Institute) issues an annual trends and forecast publication called Emerging Trends in Real Estate. The report is a highly regarded forecast on real estate investment and development trends, real estate finance and capital markets, property sectors, metropolitan areas and other real estate issues in North America. The report surveys 800+ professionals of the related industries.  Here are some of their main insights and suggestions for 2011 along our interpretation of them.

  • Buy well-leased core assets and look for 6 to 7% cash flows – because that is a good return on a sound investment…once again…. cash flow rules.
  • Lock-in leverage – Mortgage rates can’t get much lower and cyclical bottom is the optimum time to leverage properties in order to magnify future value gains as property fundamentals ameliorate. In other words, with low interest loans, inflation charged valuations and even smaller returns are a larger victory.
  • Provide debt and recap equity – Players who fill the gap on assets with lowered cost bases can obtain excellent risk-adjusted returns up and down the capital stack, including mezzanine debt and preferred equity, if not loan to own opportunities. In other words, its a good time to get back in if you are a player.
  • Focus on global gateways, 24-hour markets – Everybody wants to be in the primary coastal cities with international airport hubs. If your market is not one of the logical candidates for this, its time to recommit yourselves on figuring out how your market will compete in a global market and attract international desires.
  • Favor infill over fringe – The ‘move back in’ trend gains force as twenty-something Echo Boomers want to experience more vibrant urban areas and aging Baby Boomer parents look for greater convenience in downscaled lifestyles. Cities with more multi-modal living options are a better investment than hoping for the suburbs and the larger square footage users to come back after the cycle. Adaptive reuse and smaller footprints are here to stay.
  • Patience is a virtue – Transaction activity will increase and more value add and distressed deals will appear. Don’t chase deals, that’s how bad ones are made.
  • Buy or hold REIT – Survey respondents expect solid cash flowing returns.They have cash to capitalize first on the market as it is today and the are an efficient hedge.
  • Buy land – It won’t get any cheaper than now, but prepare to wait for the right development opportunity.Dirt cheap is when nobody wants it, so that’s when you buy it.
  • Exercise caution on distressed loan pools – They could be a recipe for disaster if you don’t underwrite the assets properly. See chasing deals comment above and know we have short memories about collections of risky assets.

The reminder from the report is that this may be the beginning of the Era of Less but its more than likely that we had too much in the Era of Excess. We are now working our way through the Period to Deal with the Mess. Our reminder is there is commercial real estate opportunity in every era.

Social Media and Commercial Real Estate

Note: I wrote this article back in 2006. I made a few tweaks to relate more specifics to social media but the message still holds true.

“This instrument can teach, it can illuminate; yes, and it can even inspire. But it can do so only to the extent that humans are determined to use it to those ends. Otherwise it is merely wires and lights in a box. There is a great and perhaps decisive battle to be fought against ignorance, intolerance and indifference. This weapon of television could be useful.”

Edward R. Murrow said that in 1958. Today it could be said about Web 2.0 and social media….with a caveat. The individual now has enormous reach and resource (and audience) where there once was only access to very few. But now all the data, technology and packaging can loose the focus unless someones images and words help guide us toward an understanding or help coach an inspiration.

Like everything else, digital tools exist for commercial real estate to make cool packages and present a dynamic platform for our ideas and assets to be attractive to others. But without our ability to dialogue on the meaning of such shapes and visions is there always the conversion to understanding? Or in other words, are we getting to the sale?

It may be actually harder now to be understood (which might be the very case with this blog entry!). There are so many voices and self-directed channels, your message can be lost further in the noise. What you need to get the message across and the sale done is an experienced storyteller that advocates and navigates through the myriad of channels.

Adam Commercial is working to evolve its packaging, analysis, and web platform as important components for your assets to be best positioned. But great consideration for all of us is understand the importance the storyteller has in this mix. They can help educate in times where the digital medium will leave us just slightly entertained and peripherally informed. At the very least, with the journalistic adherence to who, what , where, why and how can this new weapon be a more useful tool.

With the advent and adoption of social media tools such as Facebook, Twitter and Linked-In, Foursquare, Posterous, etc., etc., the time for people to more easily connect and dialogue on like minded subjects is now. However, the sophistication of filtering may be enhanced but the conversion still is reliant on clear messaging and calls to action.

The questions for those that care to comment, as this site evolves and the tools are developed, what aspects of commercial real estate would you like to know more about? Are there areas of commercial real estate you find more interesting than others? Is there real meaning and information you need on timely basis that our tools can help deliver? We’d like to hear from you.

Good night and good luck.

Flicker Photo credit:  webtreats

Reasons to Hire a Commercial Real Estate Broker

A Commercial Real Estate Broker…

  1. Has knowledge of the process and product.
  2. Has a high degree of professionalism offering the ability to cut down the number of complications during the transaction process.
  3. Will have a vast amount of knowledge, providing the client with a greater advantage when negotiating with landlords.
  4. With a well established track record is beneficial, in that, the client may be assured that the broker has dealt with circumstances similar to their own.
  5. Is primarily focused on the current objective, leaving out distractions that may conflict with a successful transaction.

Information courtesy of Strategies in Tenant Representation provided by the Society of Industrial and Office REALTORS®