Friday, October 20, 2017

The Fourth Industrial Revolution and the Commercial Real Estate Industry

If you aren't aware of the concept of the 4th Industrial Revolution (4IR) or what it could mean for the future, the following article is a great starting point. As the omnipresent connections between humans and technology become stronger, these bonds will inevitably lead to significant changes to the world we live in.

The Commercial Real Estate industry itself is poised for massive changes. Rapid advances in manufacturing driven by 3D printing will bring industry to remote locations. Decentralization and real-time asset tracking will reduce requirements for warehousing and will increase the efficiency of supply chains. Office workspaces and homes will become increasingly connected by the Internet of Things (IoT). And if our thoughts are more fully connected to the digital world, one can almost guarantee that the "personalized retail shopping experience" will take on a whole new meaning.

Despite the risks, the potential is immense.

Learn more about the 4th Industrial Revolution here.
Life Storage Blog Moving & Travel 7 Reasons Why Moving to Jacksonville, FL is the Right Move for You
Molli Spear

Whether you’re seeking beautiful coastlines, top-notch restaurants or cultural communities, moving to Jacksonville, FL could be the right move for you.
Are you considering moving to Jacksonville, FL? Known as the largest city in the Sunshine State (and largest city in the continental U.S.), Jax boasts over 850 square miles of stunning beaches, thrilling attractions and natural beauty. The city’s distinct neighborhoods also provide the perfect destination for young professionals, families and retirees.
Whether you’re seeking beautiful coastlines, top-notch restaurants or unique, cultural communities, it’s time to experience all that Jax has to offer. We put together eight reasons why relocating to Jacksonville could be the right move for you.

1. Jacksonville is a world-class arts destination.

Moving to Jacksonville: Things to do

If you’re moving to Jacksonville, FL, it won’t take you long to discover that music and art are everywhere. It’s the birthplace of Southern rock and home to a strong tradition of jazz and blues.
From music festivals to classical shows, your entertainment options are endless on this side of the Sunshine State.

See why Jacksonville lives among the top 25 arts destinations in the U.S:

Jacksonville Jazz Festival

Held every Memorial Day weekend, the Jacksonville Jazz Festival is one of the largest festivals in the country. Spanning 15 blocks downtown, the festival features live jazz, local food and a vibrant street atmosphere. The best part? It’s free!

Museum of Science and History (MOSH)

Jacksonville’s MOSH features Northeast Florida’s cultural history, interactive exhibits and the Bryan-Gooding Planetarium–the largest single-lens planetarium in the world. Visitors can attend a cosmic concert, a guided tour along the St. Johns River or host their own parties.

Art Walk

If you’re big on shopping local, you don’t want to miss Jacksonville’s Art Walk. Here you’ll find a free tour through downtown Jacksonville, featuring pop-up galleries, marketplaces, food trucks and music. Art Walk takes place on the first Wednesday of every month from 5-9 p.m.
“Attending Art Walk is a great way to be part of the arts scene here in Jacksonville,” notes event manager Alexandra Abreu-Figueroa. “Each month we see more than 60 venues, 250 artists and 800 attendees. We encourage residents to come meet people, buy some artwork and be a part of the experience, and we look forward to seeing those numbers grow!”

Alhambra Theatre & Dining

With a thriving live performance scene, you can’t miss Jacksonville’s theatre entertainment. Alhambra Theatre & Dining is the nation’s oldest operating professional dinner theatre–not to mention the only professional theatre between Atlanta and Miami. Enjoy themed, delicious dinners with each entertaining show.

Riverside Arts Market

Enjoy Jacksonville’s arts, food and music scenes as they merge every Saturday from March through November. Browse artist’s handmade creations and local food vendors as you enjoy loads of live music. There’s even a weekly kids’ activity for the little ones!

2. It’s always beach season in Jacksonville.

Moving to Jacksonville: Things to do on the beach

Jacksonville, FL operates the largest urban park system in the entire country—with 337 locations on more than 80,000 acres. In addition to municipal parks, you’ll find national facilities, ten state parks and several gardens and arboretums in the area.
Between its abundant waterways, stunning beaches and access to hundreds of piers, Jacksonville, FL is a water lover’s dream. Whether you prefer romantic sunset cruises or adventurous surfing and diving trips, it won’t take long to fall in love with Jacksonville’s sun and sand.

Soak in the sun and sand.

Minutes from downtown Jax, you’ll find 22 miles of uncrowded, white sandy beaches. Jacksonville offers three different beach areas: Neptune Beach, Atlantic Beach and Jacksonville Beach. Soak in the sun, catch some waves or check out the happening Jacksonville nightlife. Nearby, you’ll also find the historic village of Mayport. Explore casino boats, freshly caught seafood and Kathryn Abbey Park—offering Jacksonville’s best camping, hiking and biking spots around. For just $1 fare, locals can also hop a ride on the Beaches Trolley to explore the nearby neighborhoods and attractions.

Drop a line.

In every lake, river, pond and creek, you’ll find top-notch fishing spots that few other regions get to experience. Fishing enthusiasts can enjoy Jacksonville’s convenient water access (including deep fishing waters just 30 minutes from downtown), wide variety of fresh and saltwater species, and world-class angling. Drop a line on Jacksonville’s shorelines, head to the pier or charter a boat for some deep sea fishing. If you’re into serious fishing, consider entering the Jacksonville Kingfish Tournament in July.

Put your boat in.

With more shoreline than any other city in Florida, Jacksonville has plenty of opportunities to explore the waterways. Spend time on the St. Johns River, cruise through the Intracoastal waterway or hang out offshore in coastal waters. Locals will tell you that the best view of Jacksonville is from the water, so bring your own boat to the marina or check out the canoe and kayak launches.

Explore under the sea.

For those on the more adventurous side, we have some good news for you: Jacksonville’s extensive reef system offers one of the best diving spots on Florida’s east coast. You’ll find over 30 offshore and two inshore reefs attracting a wide variety of colorful marine life. Plan a diving expedition or a scuba session to explore the corals, sponges and pristine reefs.

3. Jacksonville offers tons of family fun.

Moving to Jacksonville: the Zoo and parks

If your family enjoys sightseeing and entertainment, you’re moving to the right place. Families love the “River City by the Sea” because of its relaxed, fun and affordable atmosphere. You’ll find fun things to do in Jacksonville for kids of all ages.

What to do in Jacksonville, FL:

The Jacksonville Landing

Nestled along the St. Johns River in downtown Jacksonville, the Jacksonville Landing is a waterfront complex full of shopping and entertainment. Burrito Gallery, Chamblin’s Uptown Cafe and American Grill all offer extensive kid’s menus and you’ll even find magicians and balloon artists wandering through the restaurants!

St. Johns River Taxi

Looking to explore Jacksonville with the kids? Hop on a water taxi! You can ride across the St. Johns River to the Northbank for only $5 (and $4 for kids). Hop off at the Jacksonville Landing to explore downtown or ride it for the entire loop to enjoy breathtaking sunsets and live music.

Adventure Landing

If you need to let the kids run wild, take them to Adventure Landing! Play in the arcade, race go-karts around the track or hit up a round of mini golf. Adventure Landing is also home to Shipwreck Island Waterpark, featuring four major water slides, rides and endless fun for kids who want to test their adventurous side.

Kingsley Plantation

Tucked away in the Timucuan Ecological & Historic Preserve is Kingsley Plantation—Florida’s oldest plantation house. Take a step back in time to learn the story of freedom and enslavement, tour the plantation house and sign up for a ranger-led tour around the grounds. Kingsley plantation is open seven days a week and admission is free.

Jacksonville Zoo and Gardens

This is one of the top things to do in Jacksonville, FL. Sitting at the mouth of Trout River, The Jacksonville Zoo and Gardens consistently ranks as a top animal attraction. The zoo occupies over 100 acres with over 2,000 animals and 1,000 plants in its collection. Ride the train, feed the giraffes or get up close and personal with tigers in the zoo’s wide open spaces!

Jax Sports

With great year-round weather and tons of teams to root for, sports will be a way of life if you’re moving to Jacksonville, FL. The area is home to eight pro sports teams, four college teams and tons of year-round events. Cheer on the Jacksonville Jaguars, take a swing on one of the 70 golf courses around or test your luck at any of Jacksonville’s water sports.

4. There are great places to live in Jacksonville.

jacksonville neighborhoods

Living in Jacksonville, FL comes with endless perks. From miles of natural beauty and authentic dining options to thrilling attractions, Jax offers an array of different neighborhoods for young professionals, couples and families. Not to mention, the median age in Jacksonville is 35—younger than any other city in Florida.

Here are some of the best places to live in Jacksonville:

San Marco

San Marco was built in the 1920s to resemble the Piazza San Marco in Italy. Here you’ll find an eclectic arts and shopping district with trendy bistros, distinctive boutiques and diverse people.
Location: south of downtown and north of Mandarin.
The neighbors: single professionals, creatives and artists.


Once a heavy industrial area, the Northside has turned into a residential area with several acre lots and new home developments. It’s also close to the airport, shopping and several state parks and nature preserves. While downtown Jax is only minutes away, the Northside remains somewhat rural and peaceful.
The location: 20 minutes northeast of the city.
The neighbors: families, retirees and first-time homebuyers.

The Beaches

Did somebody say Salt Life? The Atlantic, Neptune and Jacksonville Beach areas host some of the priciest and desirable neighborhoods in Jacksonville. The median home price in the area is around $300,000, which comes with close access to the water and outdoor life.
Location: east of Jacksonville along the coast.
The neighbors: families and retirees.


Southside and Mandarin are loaded with history and boast some of the most stunning river views in all of Jacksonville. The residential area has a low crime rate, great schools and an extensive network of parks and recreation development. It was even described as a “tropical paradise” by author Harriet Beecher Stowe!
Location: south of San Marco along the St. Johns River.
The neighbors: families with young children and young couples buying their first home.


If you love the water and prefer living in a rural setting, the Westside and Orange Park are for you. The Westside area features full-service marinas, boating facilities and the Naval Air Station Jacksonville. This neighborhood offers reasonable house prices, several-acre lots and a relaxing break from the hustle and bustle downtown.
Location: Just south of Jacksonville and west of the St. Johns River.
The neighbors: Navy families, horse lovers and people who desire land.

5. Jacksonville is for food lovers.

Moving to Jacksonville: The food

If you’re relocating to Jacksonville, you’re in for some full-fledged flavor of the coast. No other Florida city offers Jacksonville’s unique flavors, thriving culinary scene and internationally renowned chefs. The area even made it to Forbes list of five surprising foodie cities to visit—for good reason!
From kid-friendly restaurants and sandwich shops to locally sourced seafood and upscale bistros, you’ll find it all. Here are some Jacksonville food joints you won’t be able to pass up.

American Eats

For those with a hankering for sandwiches and burgers, the options are endless. French Pantry has the freshest bread and longest line, for good reason. At Maple Street Biscuit Company you can satisfy your brunch cravings with a delicious chicken biscuit. Don’t forget to check out Kickbacks and Goozlepipe & Guttyworks, the best Gastro-pub Jax has to offer!

Food Trucks

Jacksonville boasts almost 100 different food trucks. Whether you’re on-the-go, hungry during your shopping outing or just in the mood to try something new, Jax food trucks offer creative options for every craving. Be sure to get a taste of some of the top favorites: Salty Dog, The Butt Hutt Smokehouse, Funkadelic Food Truck and Mother Truckin’ Pizza. Check out the full list of vendors here.

Farm to Table

For those with an appreciation for eating local, Jax has over 20 locally owned, farm-to-table restaurants. You’ll also find over 30 restaurants with vegan menus and gluten-free options. Orsay, 904, and Black Sheep Restaurant all offer elegant, locally sourced cuisine. Kitchen on San Marco also consistently ranks as the top farm-to-table restaurant in Jacksonville.

Ethnic Cuisine

When you feel like mixing up the menu, there are plenty of ethnic options in Jacksonville. Green Erth Bistro offers Middle Eastern cuisine and vegan fare. Nile Ethiopian Restaurant has fresh Ethiopian cuisine and great customer service. For a taste of Lebanese food, visit Mandaloun Mediterranean Cuisine located near Deerwood Village.

Seafood Galore

Seafood is a must in Jacksonville. Visit Clark’s Fish Camp in Mandarin or Whitey’s Fish Camp in Orange Park for the down-home fish camp experience. If you’re looking for local seafood but want to head somewhere classy, check out North Beach Fish Camp or Bistro AIX raw bar. Wherever you go, don’t forget to request the culinary staple, the Mayport Shrimp!

6. It’s close to other major cities.

jacksonville to orlando

One of the best parts of moving to Jacksonville, FL is its convenient proximity to other major cities. Located in northeastern Florida where the St. Johns River meets the Atlantic, Jax isn’t far from Georgia, Alabama or other major cities in Florida. Whether you’re moving to the Sunshine State for the first time or just relocating a short drive away, you’re going to love Jacksonville’s convenient location to the following cities:
Atlanta. If you’re looking to get a taste of Atlanta’s heritage and Southern hospitality, you’re in luck. The drive from Atlanta to Jacksonville is around 4 hours and 50 minutes without stops.
Miami. When it comes to cities in Florida, Miami is the life of the party. Each year, the city expects 14 million visitors. If you plan to check out its beaches and exciting nightlife, the drive from Miami to Jacksonville should take around 5 hours and 25 minutes by car.
Naples. Known for its high-end shopping, sophisticated dining and world-class golf courses, Naples, FL is an affordable family destination for beach enthusiasts. You can travel from Jacksonville to Naples in about 5 hours and 30 minutes by car.
Orlando. So, how far is Jacksonville from Orlando? Get this: the Jacksonville to Orlando drive time is only a little over two hours. You can pack up the car, head to the most-visited destination in the U.S. and get there in no time.

7. There are plenty of jobs in Jacksonville, FL.

The cost of living in Jacksonville remains lower than the national average. Although the average home price is low, you’ll find Jacksonville to be deemed a seller’s market due to the low inventory and high demand for residential property.
The good news: the unemployment rate in Jacksonville is around 4%, which is 0.3% lower than the national average. Jacksonville is also second in job growth in the state of Florida, right behind the Orlando metro area.
Jax is home to four Fortune 1,000 companies and three Fortune 500 company headquarters, more than any other city in Florida. The area presents attractive markets in finance, logistics and hospitality due to its growing epicenter for restaurants, retail and commercial housing.
If you’re moving to Jacksonville, FL and currently job searching, you won’t find a shortage of job opportunities. Here are some of the top companies in Jacksonville:
  • Fidelity National Financial
  • Fidelity National Information Services Inc.
  • Landstar System
  • Winn-Dixie
  • Hyatt Regency
With NAS Jacksonville nearby, Jax also has the third largest military presence in the country. The city was originally named after General Andrew Jackson, the first military governor of Florida. Today, the military employs over 30,000 active-duty personnel and nearly 20,000 civilians in the Jacksonville area.

Moving to Jacksonville, FL?

If you and your family have an appreciation for an exciting nightlife, world-class attractions and life on the water, it’s time to experience a new side of the Sunshine State. Moving to Jacksonville, FL might just be your best move yet.
Whether you’re relocating across the state or hauling your things across the country, don’t forget that Life Storage can help store your belongings. Find self storage in Jacksonville to make your move as stress-free as possible.
Do you have any questions or advice for those moving to Jacksonville? We’d love to hear from you. Leave us a comment below!

Thursday, October 19, 2017


Workers Prefer Dynamic and Efficient Office Space with Comfortable, Convenient and Communal Amenities


 Survey of 2,000+ U.S. adults finds 63 percent of employed adults feel their office could better configure its physical space

 As employers seek to define the workplace perks most likely to attract and retain employees, a recent Coldwell Banker Commercial Affiliates survey found that the physical office itself could keep staff happier.

According to the survey results, nearly two-thirds (63 percent) of employed U.S. adults believe that their office could better utilize its physical space, and one-third (34 percent) say improvements can be as simple as a better floorplan.

“Over the years there have been many transformations that have shaken up the traditional office configuration,” says Fred Schmidt, president and chief operating officer of Coldwell Banker Commercial Affiliates. “These go beyond the headline-grabbing news of foosball tables and napping pods. Workers, and notably the newest members of the workforce, are demanding smart uses of office square footage, and commercial real estate professionals are taking note.”

The survey, which was conducted by Harris Poll on behalf of Coldwell Banker Real Estate, dba Coldwell Banker Commercial Affiliates, surveyed over 2,000 adults, including Younger Millennials (18-29), Older Millennials (30-34), Gen Xers (ages 35-49) and Baby Boomers (50-69), to identify worker attitudes toward their current physical workplace and better understand how office space can be optimized to meet worker needs and comfort.

Workers Want Convenience – and a Social Scene – At The Office
The survey also uncovered which popular office amenities resonated with respondents to see how office spaces could further improve the functionality of their square footage. Overall, the survey found that ample parking, food courts and outdoor lounging space were the most coveted office amenities, signaling a desire for convenience and a sense of community.

  • Ample parking is the most popular amenity: Sixty-four (64) percent of U.S. adults surveyed report that having enough parking would be helpful to have within the workplace
  • More lunchtime options at the workplace: Sixty (60) percent of respondents surveyed would want to have a food court, cafeteria or restaurant onsite
  • Rooftops, outdoor patios and gardens are in vogue: Forty-one (41) percent of U.S. adults surveyed would like to have outdoor lounging space available
“Younger Millennials appear to be the tastemakers when it comes to office trends. As this group continues to enter the workforce, there will be a greater demand for convenience and community within the workplace,” noted Schmidt. “Workers are demonstrating that they want to eat lunch with their colleagues rather than eat alone, and they want to spend time in outdoor office lounges rather than at their desks. Offices are becoming a center for social activity, and it is important for office commercial real estate to accommodate this.”

U.S. Workers Demand Private Workspace Within the Open Office
Aside from identifying the added amenities that can enhance an office, the survey sought to uncover ways to improve existing open office layouts. Open floorplans might still be the dominant choice in U.S. offices, but workers are increasingly seeking private space to temporarily withdraw from their shared workspaces, take a personal call or focus on important assignments.

  • Nearly 8 in 10 U.S. adults (79 percent) report they would feel comfortable with an open floorplan if private spaces were available.
  • This is especially popular among the newest generation of workers. Nearly 9 in 10 Younger Millennials (89 percent) would be comfortable working in an open floorplan if private spaces were available.
“Open floorplans can facilitate collaboration and creativity within the office, but it is also important to carve out private spaces in order to provide a break from the buzz around the office. We’ve noticed an increased demand for private space within the open office after years of conducting this survey.

It is imperative that office developers and commercial real estate professionals alike counsel clients on the wants and expectations of today’s workforce,” added Schmidt.

For more information on Dynamic and Efficient Office Space, contact the Office Specialist, Chip Sistare at Coldwell Banker Commercial Benchmark at 904-421-8546 or 
Methodology This survey was conducted online within the United States by Harris Poll on behalf of Coldwell Banker Commercial Affiliates from August 15-17, 2017 among 2,001 adults ages 18 and older, including 194 Younger Millennials (18-29), 160 Older Millennials (30-34), 479 Gen Xers (35-49), and 884 Baby Boomers (50-69). This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated.

About Coldwell Banker Commercial Affiliates
Coldwell Banker Real Estate LLC, dba Coldwell Banker Commercial Affiliates is a division of Coldwell Banker Real Estate LLC. The Coldwell Banker Commercial brand has been a premier provider of franchised commercial real estate brokerage offices, recognized globally as a company that puts the client first while delivering individual, distinctly different service. Coldwell Banker Commercial affiliates cover territory throughout North America, South America, Europe, Africa, Asia and Australia. Coldwell Banker Commercial is an industry leader in providing commercial real estate solutions that serve the needs of tenants, landlords, sellers and buyers in the leasing, acquisition, disposition and management of all property types. Each office is independently owned and operated. Coldwell Banker Commercial® is a registered trademark owned by Coldwell Banker Real Estate LLC. For more information, visit:

Saturday, October 14, 2017

Why Use a Commercial Real Estate Broker?

A commercial real estate broker may very well be the most valuable tool available to you in managing your real estate portfolio. Whether you are looking to lease or buy space, brokers help you with every stage of the process. Furthermore, in most cases, their services won't cost you anything.

Friday, October 13, 2017

Commercial RE Ever Changing Market

Amazon continues the assault on the Retail Community.   Offering new jobs in the development of cutting edge techno; logy, where will this continue to expand and how will it influence the Commercial RE.  This recent article from Costar details the new platform.

Lost in the coverage of Amazon's very public search for a second, multi-billion dollar national headquarters, was the barely-noticed lease the company signed in New York City last month. Yet that lease could signal billions of dollars in losses coming for retail commercial real estate across the country.

Amazon signed a 15-year office lease for 360,000 square feet at Brookfield Properties' recently-renovated 5 Manhattan West building. Amazon will take the entire sixth and seventh floors of the 2.15 million-square-foot tower as well as part of the eighth and 10th floors in a move that is expected to bring 2,000 jobs to the Penn Plaza / Garment District submarket of Manhattan.

Amazon Fashion has also previously invested $9 million in a 40,000-square-foot fashion photo studio in Brooklyn (pictured).

"We're excited to expand our presence in New York - we have always found great talent here," said Paul Kotas, Amazon's senior vice president of worldwide advertising.

Those jobs will be coming primarily in the Amazon Fashion and advertising divisions, and that signals the online retail behemoth is getting more serious about advancing its fashion and apparel sales. In the past year alone, it has introduced seven private apparel brands to its Prime members, including Goodthreads, Amazon Essentials, Paris Sunday, Mae, Ella Moon, Buttoned Down and Lark & Ro.

A hypothetical rapid rise in Amazon's U.S. apparel market share could have significant credit implications for existing retailers, REITs and CMBS transactions, according to Fitch Ratings in a 'shock scenario report' published last month.

Worst-Case Scenario

Sharp declines in retailer revenue and margins, along with accelerated store closings, would likely drive significant cash flow erosion and weaken credit profiles for apparel-focused retailers, mall REITs and retail-heavy CMBS deals in such a scenario.

This shock would likely fan out broadly across much of the retail real estate sector, with large credit profile effects on mall REITs and retail-heavy CMBS transactions. Large-scale store closures, going well beyond previously announced cuts, would likely follow, Fitch projected.

"REITs owning regional malls with high exposure to troubled anchor stores and a less diverse tenant base would face heavy cash flow pressure," Fitch analysts said. "We estimate that as many as 400 of approximately 1,200 U.S. malls could close or be repurposed as a result of retailer liquidations and square footage reductions."

The Fitch shock scenario assumes an accelerated three-year apparel market share shift to as a price-competitive and convenient alternative to traditional in-store purchases. The hypothetical rapid growth in Amazon's apparel market share to 25% by 2020 could cut apparel retailer margins by around 300 basis points, pushing several retailers toward financial distress.

In addition to weaker cash flow, many mall owners would face reduced access to capital due to negative lender and investor sentiment. Attempts to re-tenant or repurpose underperforming malls with high vacancy rates would likely take considerable time and capital. Efforts by REITs to reposition mall properties in this scenario would be difficult given constraints on capital spending and liquidity in a tight financing environment.

"Widespread defaults on loans backed by malls would have a significant impact on credit quality for Fitch-rated CMBS transactions," the rating agency said. "Given the accelerated timeframe of this retail shock scenario, special servicers would be forced to sell lower tier malls at significantly distressed values rather than undertaking normal stabilizing efforts."

Assuming Amazon's share gains are concentrated in lower price points, low- to mid-tier apparel retailers, including JC Penney, Kohl's and Dillard's, would face intense competitive pressure in such a scenario, Fitch said.

Amazon's Road into Fashion Isn't Assured

The Fitch stress test does not explicitly factor in retailers' responses to a more challenging operating and financing environment. Many of these responses, including cost reduction initiatives, asset sales and secured debt issuance, could mitigate the impact of such a severe competitive shock, particularly for companies that have ample liquidity to respond to accelerated competitive threats.

And let's face it, fashion and apparel margins and sales are thin and thinning out, and could present a tough market for Amazon to break into. Competitive pressures on in-line apparel retailers have been building for at least a decade. Younger apparel consumers have demonstrated less interest in traditional department store fashion offerings, and shifted more toward 'fast fashion' and off-price retailers.

Retail real estate brokers operate in dual worlds when it comes to shopping. They are both consumers of merchandise online and brick and mortar sales people. As such, their take on Amazon is interesting.

Going into fashion is nothing new to Amazon, said Soozan Baxter, principal of Soozan Baxter Consulting, a New York-based, landlord-focused retail advisory firm. "They own Shopbop and Zappos. Shopbop is a phenomenal collection of contemporary brands with a loyal customer, while Zappos is a favorite for anyone who likes to buy shoes online."

However, shopping on Amazon is like being in an online market place without a point of view, she said. The chaotic experience doesn't resonate.

"If they can execute a bricks-and-mortar experience that is more like Shopbop and perhaps even use that name, they will be very successful," Baxter said. "If they execute more retail stores under the name Amazon, do customers get confused: is it the bookstore? Is it a Macy's? Is it an Intermix? Is it a car showroom? Is it a grocery store? The point of view gets confusing."

"The bottom line is that the margins in retail are challenging. As they want to delve further into bricks and mortar, can they create a different experience? Furthermore, Amazon has been richly rewarded by Wall Street without making a 'real profit.' As Amazon morphs into more of an omni-channel player, how will Wall Street respond to them?" Baxter asks.

Jason Polley, managing leasing director of StoneCrest Investments in Germantown, TN, says Amazon clearly has retailers scrambling to evolve and better integrate their brick and mortar stores with their online presence.

"Apparel has always seemed to be an area of retail that requires a brick and mortar presence for the customer to see, touch and try on merchandise before a purchase, as on-line purchases of apparel have a much higher return rate compared to other products sold online," Polley said.

But the problem is not all Amazon.

"Despite Amazon's clear impact, I do believe some apparel retailers have lost touch with their customer base and their core mission to deliver what their customer wants to buy," he added.

Paul Schloss, an associate broker at NAI Horizon in Tucson, also says the onus is on traditional retailers.

"Conventional apparel retailer's inventory models demand velocity of inventory turn-over to generate absolute gross margin/profit to recover fixed occupancy costs," Schloss said. "As traffic migrates to the internet, and those logistical efficiencies drive down competitive prices and margins, we are witnessing the implosion of mall retailing: reduced consumer traffic and turns, obsolete structural inventory models. How these retailers re-construct, narrow and innovate their inventory profiles, merchandise offerings, and tactical offerings will define site base retailer's demise or survival."

Eddie Segars, VP
Land & Investment Specialist
Coldwell Banker Commercial Benchmark
Florida Broker Lic# BK3205623

Wednesday, October 11, 2017

The Retail Team at Coldwell Banker Commercial Benchmark sold the commercial property and gas station located at 2035 & 2061 S. Reynolds Toledo, OH for a combined sales price of $955,000.00. The property is being redeveloped for the use of a blood plasma collection center.

Tuesday, October 10, 2017

Jacksonville Mentioned as Hot Multifamily Market

Investors Pour into Small Markets, Drive Price Momentum

Robust Demand in Markets Like Jacksonville, Denver, Nashville Suggest Continued Investment Upside for Smaller Markets

Commercial real estate investors priced out of major U.S. markets have expanded their scope to secondary and tertiary markets to find properties yielding more generous returns, a trend typical of late-inning property cycles.

But the robust demand for real estate and the current cycle's longevity set this growth period apart from past ones and suggest that smaller markets will continue to reap investment for some time.

According to the CoStar Commercial Repeat Sales Indices (CCRSI) in September, property price momentum in smaller markets increased an average of 16.5% over the 12 months ended Aug. 31 of this year, far outpacing the average growth of 3.5% in major cities. Additionally, a 19.8% average increase in the pricing of smaller, lower-priced assets over the same period further indicate that more investors are targeting a wider range of properties across more markets, according to CoStar.

"The dynamics associated with the pursuit of assets in secondary and tertiary markets have to do with the fact that a tremendous amount of equity and debt is looking for yield," said David Blatt, CEO of CapStack Partners, a New York-based investment bank and advisor focused on real estate and other asset classes. "While price in primary markets is a factor in terms of getting value for your dollars, yield is a stronger driver for many of these buyers."

Blatt and other observers suggest that investors are avoiding more speculative cities that tend to suffer most at the onset of a downturn. Instead, they favor markets enjoying increasing population and jobs and that have the diversified economies, infrastructure and other underpinnings that support more growth.

"As the economy has been gaining momentum, we've seen a lot of smaller metros really gaining momentum, too," said John Chang, first vice president of research services for Calabasas,CA-based Marcus & Millichap. "Weve seen the performance of metrics for apartments, office and retail centers all improving, which has created a compelling case for investment. Setting aside a 'black swan' event, it appears that this growth cycle still has momentum."

Metros on the radar span the nations regions and include Denver, Nashville, Portland, Dallas and Pittsburgh, observers say. Buyers are interested in all property types, from industrial properties in the Midwest to facilitate ecommerce distribution, to creative office and mixed-use redevelopment opportunities in old industrial areas experiencing gentrification, they explain.

What's more, many investors remain enamored with multifamily properties, particularly Class B and C assets that are rehab candidates or that have been recently renovated.

Among other markets, that strategy is accounting for about 70% of apartment transactions in Jacksonville, FL, where sales volume is expected to exceed $1 billion this year, said Brian Moulder, a managing director with Walker & Dunlop Investment Sales. 

Moulder was part of a Walker & Dunlop team that represented Atlanta-based Cortland Partners in its $74.5 million sale of the 616-unit Aqua Deerwood complex to Investcorp International in July. The sale price represented a capitalization rate of 5.25%. Cortland Partners acquired the 31-year-old property about six years ago and overhauled it, he said.

"The asset is in a great location and submarket, and it will probably be a long-term hold," added Moulder, who is in Walker & Dunlops Orlando office. "Weve really seen institutions that have not come to Jacksonville in the past entering the market, and they are getting better returns than they would in bigger Southeast markets like Miami or Atlanta."

In another recent Jacksonville deal, Fairfield Residential sold the Harbortown Apartments (pictured above) at 14030 Atlantic Blvd, to Praedium Group for $57.3 million in July.

Similarly, in Charlotte, NC earlier this year, New York-based developer Gamma Real Estate paid $43.2 million for Stone Ridge apartments, a 314-unit complex built in 2000. The acquisition exemplifies a strategy that many investors are pursuing in the market: targeting properties with nine-foot ceilings and up-to-date floor plans for extensive renovations, said Jordan McCarley, executive managing director with Cushman & Wakefield's multifamily advisory group in Charlotte. He along with Marc Robinson, vice chair in the brokerages office, represented the local seller in the deal.

"Over the last 12 to 18 months, we've seen a changing landscape in terms of a new buyer pool that really wasnt here previously," McCarley said. "It's not all institutional, but they are bringing a lot of investment demand and interest to the market."

CapStack Partners, through its recently created investment advisory platform, also has entered the Southeast with a mandate to partner with local operators and acquire value-add and opportunistic apartment assets. The firm is targeting Nashville and Atlanta, Blatt said, and expects to close its first couple of acquisitions by the end of the year. We certainly like the drivers in the region and the fact that were seeing growth on a macro level, he explained.

Indeed, employment in metro Nashville grew at annual rate of 4.2% last year and 3.4% in 2015, for example, well above the national average of 1.7% and 2.1% for the years, respectively, according to the Bureau of Labor Statistics. Moulder and McCarley also credit job growth for increased investment activity in their markets: In 2016, employment grew 2.7% in Jacksonville and 4.2% in Charlotte, according to the BLS.

Although job creation is tapering in Denver, it is still outperforming the nation, and along with population growth, continues to attract new investors. Employment grew 2.6% last year, a dip from each of the previous two years by about 130 basis points, according to the BLS. To capitalize on the healthy investment interest, Chicago-based JLL recently launched a new office sales initiative covering the Denver and Texas regions.

Among other efforts, the brokerage is quietly marketing a $200 million suburban office portfolio in Denver that features several major credit tenants, and many well-known institutional investors are showing interest, says Michael Zietsman, an international director with JLL who is leading the new endeavor. The assets should sell at a capitalization rate of around 6.75%, some 100 basis points higher than a similar property in a major market, he said.

"Were definitely seeing big institutional funds and offshore tenants looking at what we consider to be non-gateway markets," Zietsman added. "Not only are buyers finding better yields, but the growth dynamics in these markets are pretty strong."

For lenders like Los Angeles-based Thorofare Capital, funding deals in Denver has become a primary strategy, said Felix Gutnikov, a principal with the firm. In September, Thorofare provided $30.3 million in short-term bridge financing to Mass Equities to acquire industrial buildings on 7.8 acres in Denvers booming River North Art District (RiNo) neighborhood near downtown.

Based in Santa Monica, CA, Mass Equities is planning a $200 million mixed-use redevelopment on the site, and Thorofares loan replaced a financing commitment that fell apart last year.

The RiNo loan followed Thorofare's first investment in the market last fall, a roughly $20 million senior loan to fund the purchase of an office building, Gutnikov said. The company also is bullish on Portland and is funding senior housing, self-storage and student housing deals in other small markets, he said.

"We're not averse to going into secondary and even tertiary markets, but it depends on the buildings location - we get much more granular in smaller markets," he said. "We want to know what street the property is on, what the visibility is, and whether it's on the right side of the street."

 Joe Gose is a freelance business writer and editor based in Kansas.