Monday, August 13, 2018

Self-Storage Developers Cut Rents to Compete

Self-Storage
Developers are opening new self-storage properties in markets across the country, offering low rates to attract customers and pushing down average rents.
“Heavy new supply deliveries and slowing economic fundamentals are adding headwinds to street rates,” according to the “National Self Storage Report” for July 2018 from Yardi Matrix.
The number of new properties opening is expected to peak later this year. However, in the meantime, average occupancy rates for self-storage properties remain high. Even in metro areas that are overbuilt overall, individual submarkets are often very healthy and almost unaffected by competition from properties more than a few miles away. In most cases, if owners of new properties are willing to offer discounted rents, they have been able to complete lease-ups within the usual timeframe.
“Where new developments are having challenges, it’s not the lease-up. The challenge is to achieve pro-forma rents,” says Ryan Clark, director of investment sales for SkyView Advisors, an advisory firm. “Most properties are leasing up at the anticipated physical occupancy trend.”
Reaching a peak
Self-storage properties under construction or in the planning stages totaled 9 percent of the existing inventory in July, according to data from Yardi. That’s the same level as the month before. Yardi expects the completions of new properties to peak and begin to fall back during 2018.
“New supply deliveries are cresting on the heels of reduced construction lending and slower starts in late 2017,” according to the firm’s researchers. Average rents at self-storage facilities dropped by 3 percent year-over-year in June 2018 for 10x10 units after registering year-over-year decreases of 1 percent to 2 percent in April and May, Yardi report
“Oversupply is something that you have to take seriously, but there is still a relatively healthy market dynamic,” says Brandon Karr, first vice president of investments and director of the national self-storage group with brokerage firm Marcus & Millichap.
Overall, demand for self-storage units is still strong enough to fill most properties, according to recent quarterly reports from self-storage REITs. However, the market for self-storage properties is very localized. That’s because the people who use self-storage nearly always live within a few miles of the property.
That means self-storage operators generally don’t have to worry about competition from properties located more than five or six miles away from their customers. It also makes competition from a nearby property more damaging.
“People will drive 30, 60 minutes to get to an office park. They won’t do that for storage,” says SkyView’s Clark.
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Friday, August 10, 2018

Development and Investing in Student Housing


For more information on Student Housing, contact the Student Housing Specialist, Chip Sistare at Coldwell Banker Commercial Benchmark at 904-421-8546 or csistare@cbcbenchmark.com.

Wednesday, August 8, 2018

4 Reasons Senior Housing is Interesting to Investors

While senior housing has always been a profitable industry, it has really been able to stand on its own two feet recently as a viable and significant class of real estate – with more and more outside investors jumping on board and adding senior housing to their portfolios. In a recent survey conducted by the National Investment Center for Seniors Housing and Care (NIC) and National Real Estate Investor (NREI), senior housing was once again the most attractive real estate asset class when compared to a host of other commercial real estate classes, including industrial, hotels, multifamily housing, office and retail, and more.
Senior housing is currently such an attractive real estate investment prospect thanks to a sort of perfect storm of increasing demand and an inadequate supply. In other words, demographic trends in the United States and an aging population are driving the demand, and the senior housing sector is racing to keep up.
Here are 4 reasons senior housing is interesting to investors, and why it’s the hottest property type around right now.

1. The Industry Has Seen Tremendous Growth

Recently, the senior housing industry was reported as having a market value of nearly $375 billion (including skilled nursing values), and experts predict the sector will continue to experience significant growth into the future. With its value, many healthcare real estate investment trusts (REITs) have found their way into the space in the past several years, helping the sector grow as capital providers. And, in turn, healthcare real estate investment trusts have become one of the highest performing REIT sectors.

 

2. Promising Demographic Trends

It’s almost impossible to miss the many stories about the incoming way of seniors in the United States, which has even been named the “silver tsunami.” The “typical” resident of senior housing begins to need care in his or her early 80s – and the largest demographic group of Americans, the Baby Boomers, are knocking at that door. As the years continue, more and more Baby Boomers will be in need of care and housing, continuing to drive industry demand even more.

 

3. A Strong Return on Investment

Compared to other sectors and property types, senior housing investments have consistently delivered strong returns for its investors. And this trend was especially apparent during the recession. But why? The answer is simple: need. Due to the need based aspect of care, senior housing can be safely considered more resilient than other sectors – making it especially attractive to savvy investors.
“We’re seeing, when compared to other property types, senior housing investments have consistently offered impressive returns for our investor clients,” said John Sherman of Coldwell Banker Commercial NRT in Mission Viejo, CA. “With generational trends and the increased need for quality, affordable senior care, senior living continues to be an avenue our investor clients are interested in.”

 

4. The Current Inventory Is Aging

It may seem like the industry is already saturated, but consider this: nearly 60 percent of current senior housing is more than 17 years old, and more than 30 percent is more than 25 years old. As these properties continue to age, they will become more and more obsolete, thanks to advancements in care and regulations, as well as personal tastes and trends. These older properties provide a great opportunities for real estate investors, as they are primed for an opportunity to be refurbished or even replaced.
As more is understood about the psychological and emotional benefits of community living for seniors, there is no doubt that this growth trend isn’t going away anytime soon – and smart real estate investors are getting on board now. 
  
For more information on Independent Living or Senior Housing, contact the Senior Housing Specialist, Chip Sistare at Coldwell Banker Commercial Benchmark at 904-421-8546 or csistare@cbcbenchmark.com.


Friday, August 3, 2018

Don't be scammed!! JEA scam

Scammers are targeting utility customers across the country, including JEA residential and business customers. Recently customers have contacted us to report a higher number of scam phone calls from people claiming to be JEA employees.
They’ll ask you to go to a store, buy a prepaid card and call them back with the card information and PIN number. The call may even appear to be coming from JEA.
Please know that no JEA employee will ever call you and ask for a payment over the phone.
Don’t do it! When in doubt, call JEA’s Business Support Center at (904) 665-6250. If the scam caller provided you a number to call back with payment information, please write it down and provide it to our Customer Care staff. This can help us locate and shut down the number.

Jacksonville No. 5 fastest growing City.. Forbes

Inspiring Dreamers and Doers
Why Jacksonville? Florida has always inspired dreamers and doers. Back in the day when this region was essentially a wasteland, Spanish adventurers saw its potency and developed the first permanent European settlement here. Hundreds of years later, scientists would also see Florida’s potential by putting men on the moon from its shoreline. Not surprisingly, that same notion of possibility drives every city of Florida, particularly Jacksonville!
The metropolis experienced massive growth during the latter decades of the previous century and into the twenty-first. The city where Florida’s largest river St. John’s meets the Atlantic Ocean offers a diverse economic base, young, urban population and fantastic quality of life. CNN termed the city hot for startups and its reputation is thriving as an urban area where dreams of visionaries can become a reality. Not to mention the fact that businesses that choose to relocate or expand in the southeasternmost U.S. state see limitless possibilities here.
Jacksonville, Florida Massive Growth
As of June 2017, the unemployment rates for the Jacksonville area is 4.2%, which is 7% better than the national average. The city witnessed massive job growth (2.11% compared to the U.S. average of 1.59%) in the previous 12 months, bringing the rate down from 5%. Specifically, from June 2016 to June 2017, well over 100,000 jobs were created in the city’s professional and business services sector. This also indicates a thriving ambiance for businesses in Florida’s largest city. Also, the future job growth is predicted to be 39.21% compared to the national estimate of 37.98%.
Forbes has listed Jacksonville at No.5 fastest-growing U.S. cities for business and careers. For the records, Dallas and Sacramento are ranked #25 and #26, respectively. Statistically, about 1/4th of Jacksonville professionals are engaged in the business, management and finance sector compared to the country’s average of 14.54%. All types of businesses can flourish in Florida’s largest city as capital, land, and labor are more affordable in Florida than in New York or California. Therefore, the possibilities of success pull new corporations to Florida while the sweet reality of profitable bottom-line keeps existing entrepreneurs at home.
However, the sectors of advanced manufacturing, finance and insurance, aviation and aerospace, life sciences information technologies, and logistics and distribution are given special focus by the Office of Economic Development. The reason being that there is an existing active cluster of organizations and these industries’ growth potential is high, and Jacksonville offers advantages that are attractive to these sectors. For example, companies looking for workforce training, specific locations or road infrastructure may also be eligible for specific incentive programs.
A significant reason for the economic vibrancy of the city is due to State’s pro-business tax advantages and exemptions as well as no state personal income tax. Jacksonville’s sales tax rate is 7.00% and income tax is 0.00%. Moreover, Jacksonville World Trade Center Association assists Florida companies to enter or expand into overseas markets. Therefore, Businesses thrive in this low-tax environment and employees enjoy the benefit of no personal income tax.

Thursday, August 2, 2018

3 Ways Blockchain Is Impacting CRE

1. Smarter and more transparent transactions

One of the biggest impacts that blockchain could have on the commercial real estate sector would be expedited deals, thanks to a faster and smarter process of contract management. Like the name implies, smart contracts are when every portion of a lease or sales agreement is automated and when payments are received in real time, even beyond normal business hours. These smart contracts offer numerous benefits, providing additional peace of mind with built-in transaction instructions and increased transparency to all parties. Further, blockchain helps to reduce the risk of payment disputes  and speeds up pre-leasing due diligence and the background check process.
Blockchain would make it possible to essentially cut out the intervention from a middle man, allowing users to create and edit contracts immediately and in real time, all around the world.

2. Liquidity

For those investors who are trying to cultivate a diversified portfolio, it can be difficult to liquidize assets. Blockchain technology has the ability to make this process easier and more seamless; if all investments are properly registered in the ledger, exchanging shares among investors instantly becomes more simplified.
Blockchain enabled trading platforms for illiquid real estate holdings have the potential to breathe new life and viability into previously restricted aftermarkets, by increasing liquidity and ease of access for investors. This can possibly reshape the face of a traditionally dislocated network of real estate brokers, investors and sponsors as we know it, transforming it into a more dynamic and fluid marketplace.

3. Land titles

Another way that blockchain technology is impacting CRE is its innovative use in recording land titles. With most of this information kept offline, this area has always been notoriously challenging to access. But blockchain stands to change this drastically, cutting the historically lengthy process of recording and/or transferring titles – with the additional benefit of increased transparency.
It would be an understatement to say that we have just begun to scratch the surface of blockchain technology and all that is has to offer commercial real estate, among other industries. When expanded to other applications and uses, the sky’s the limit for what blockchain can do. Of course, as with any emerging technology, blockchain has its critics, with questions and concerns being raised over the technology’s reliability and security. However, with continued and more widespread use, these issues are expected to resolve, and the technology will help lead the way in streamlining the traditionally cumbersome commercial real estate industry.

Tuesday, July 31, 2018

Expanding Bulter/95

Property Theater LLC President Justin Clark expanding Butler95 to meet flex space demand.
by: Karen Brune Mathis Editor

E-commerce is changing how businesses sell and consumers buy.
It also is influencing how developers develop.
Property Theater LLC President Justin Clark credits the movement for his decision to expand the Butler95 Business Center.
It sits along Philips Highway south of the reconstructed Interstate 95 and Butler Boulevard interchange.
Property Theater LLC President Justin Clark
Clark is developing Butler95, an office-warehouse condominium development comprising units, starting at $216,000, from 2,400 to 14,400 square feet in size.
 “Commercial real estate is going through a unique transition. The emergence of e-commerce as a preferred channel for consumers seems to be the strong driving force behind the appeal of flexible workspace,” Clark said.
“It used to be that people would go to the office for business, the warehouse for light manufacturing distribution and a retail center for the consumer connection,” he explained.
Those distinct purposes had distinct physical locations.
“They are increasingly merging into one because of the ‘Amazon effect,’” Clark said.
The lines blurred between the digital and the physical, he said.
“In this new click-and-mortar environment, flex warehouse space offers an all-in-one opportunity,” he said.
The first phase of Butler95 is almost sold out. Property Theater, a real estate brokerage and development firm, developed the 5.3-acre first phase at 8200 Cypress Plaza Drive, south of Butler Boulevard along Philips Highway, in the Cypress Plaza business park.
C.&R. General Contractors Inc. built it. Clark is developing it with investment partners Charlie Skinner and Mike Barker.
Butler95’s first phase comprises 69,600 square feet among four buildings that total 29 office-warehouse units. 
Of those, 22 have been sold to buyers, many of whom bought multiple units.
First-phase uses include a yoga studio, fitness center, corporate offices, distribution, warehousing and light manufacturing.
Property Theater seeks regulatory approvals to develop the second phase on 6.75 acres. 
It is designed for 67,200 square feet of office-warehouse space among five buildings with units for sale starting at 2,400 square feet and up to 28,000 square feet of contiguous space for tenants that need more room.
This phase also will offer 30,000 square feet of retail and restaurant space for lease fronting Philips Highway.
“We have had interest from traditional retailers, such as fast food, fitness and other commercial services that want drive-by traffic,” Clark said.
The retail space could comprise traditional strip-center space but also could become a storefront for a warehouse showroom.
Clark said the location offers “huge traffic counts” and a central location to most of the area.
“You’re 20 minutes to everything,” he said.
He said the property is under contract from Cypress Plaza Properties Inc. and he estimates a $6.5 million cost for land and development. The first phase was a $5 million project.
He said he and Barker are developing the second phase.
The landowner applied for changes to the area’s Development of Regional Impact to convert some of the space for commercial use.