Can Big Data Help Your Brokerage Make More Money?

Big data analysis and applied data science techniques being applied to databases (both public and private) is certainly nothing new, but its applied use in the commercial real estate space is. Commercial real estate is a huge industry – $12 trillion, to be exact – so the ability to make a better decision through data can save both time and money for everyone involved.

If you think about it, nearly every type of commercial real estate professional has been affected and impacted by innovations in data technology, at least to some degree. And commercial real estate investors and brokers are no exception to this rule, as demonstrated by the number of startups backed by venture capital, based on building advanced and sophisticated new tools to better serve the commercial real estate investment community.

“CRE professionals can use big data to help them make sound strategic decisions. And even the way these technology platforms present the data is improving, making interpretation and application of the information much easier. In short, ‘big data’, in the hands of experienced CRE professionals, has taken the concept of ‘art and science’ to another level!” says David Hunter, Director of the East Coast of Florida Coldwell Banker Commercial NRT.

Big data can be used to easily and accurately answer questions such as:

• Are we utilizing our space efficiently?
• Does one part of the building consume more energy than another?
• How much foot traffic does each area of our space get?

Asking these types of questions is nothing new since the answers are crucial for maximizing returns and profits – but getting the answers hasn’t always been fast, or easy. The latest innovations in technology and data are shaking up the CRE industry, making it more efficient and precise in several ways:

1. Transparency

Around 10 years ago, CRE information, along with other real estate data, began migrating to the cloud. Suddenly, home sale prices, evaluation reports, demographic data and more were online, more centralized, and more easily accessible. Agents didn’t have to make a special trip to a local planning office to find the information they needed; instead, they could gather the information themselves, on their own time, and make sense of it on their own. As a result, information was more transparent and appraisals were no longer a mix of intuition and guessing.

2. Better decision making

While it’s easy to see that transparency itself is a huge benefit of big data, what is just as important is what transparency means, which is better decision making. When combined, big data and technology do most of the legwork of number crunching, churning out analogies, conclusions, and insights CRE professionals can use to help them make strategic decisions. Not only does this speed up the decision-making process, but it also reduces the risk of paying an overly inflated price or investing in a deal that won’t pan out.

3. Efficiency

It’s no secret that the real estate process, whether residential or commercial, can be slow. Large sums of money are involved and bottlenecks occur throughout the sales process, slowing down everything in its way. One of the parts of the transaction that can take the longest is the financial appraisal – whether or not a potential buyer should be given a loan to the property. This is no easy decision, and a lot of factors and considerations go into the process, but big data can help automate much of the process, making it faster and more efficient.

These 4 Restaurant Space Trends are Keeping CRE on Their Toes

According to industry insider Tasting Tables, the industrial fad is fading. Instead of steel beams and concrete slabs, a big restaurant trend taking over the market is the move to more cozy interior designs. That’s just one trend that is reversing or changing.

Additionally, European-style elbow-to-elbow café seating designs have lost their luster. Instead of diners having to squeeze into uncomfortable spaces to maximize profits, restaurateurs are coming up with more creative and flexible ways of maximizing seating space.

4 Big Restaurant Space Trends

Instead of pushing the crowded aesthetic, restaurants are looking for spaces that provide more privacy with soundproof walls and spacing designs that separate tables. That begins with the building layout. Tenants and buyers want a space that can handle all different patrons; a bar area, a private dining area, and a busy café-style area.

#1: More Unique Food Halls

A restaurant trend that began over a decade ago in Italy is finally making its way to the U.S. Food halls are all the rage in the restaurant business. Food halls are typically large structures of about 20K to 50K feet filled with several high end restaurants. This gives restaurateurs and chefs a chance to show off their culinary specialties while providing a steady flow of revenue to the building owner.

The key to a successful food hall is making sure that the restaurants filling the space are great. In Austin, there is a giant food hall slated to open later this year that includes a variety of restaurants that embody the tastes and spirit of the city.

In Denver, Zeppelin Station will launch its first 20K square foot food hall near the train station. This food hall will contain restaurants, office space, and retail. The Beverly Center in LA plans to open its first high end food hall highlighting the cuisines inspired by Michael Mina; a famous San Francisco chef, while in New York a 35K square foot food hall debuting this year will feature all Spanish restaurants.

#2: More Greenery and Green Concepts

Office spaces are adding more greenery to increase worker productivity. In the restaurant space, those same studies that reveal the positive effects of plants on humans is also influencing restaurant design trends in 2018. Restaurants are adding more plants and more windows to their building designs while also incorporating green concepts like using farm-to-table vegetables or local organics in their menus.

#3: More Less is More Interiors

Walls covered in pictures and tables smattered with statues and surrounded by large potted plants are out this year. Instead, the trend is toward more minimalist designs in restaurants. There is a drive toward less is more décor. While the industrial look is fading, those buildings are already well-suited for the minimalist look.

#4: More Like Home

Finally, diners don’t like the sterile feel of a warehouse anymore when they go out to a restaurant. Restaurants are trending toward more cozy designs with warmer wood infused walls instead of concrete and exposed brick.

Types of Spaces Restaurant Owners Need

What tenants and buyers are looking for are restaurant spaces that are close enough to public transit so that it is easy to get to for non-car owning millennials while also being near residential areas. The most successful restaurants with a steady flow of diners live near a community made up of at least 1,600 residents. Of course, the type of community matters and the overall food preferences should factor into any plans, especially for food hall style restaurants.

Why does the other guy’s investment in commercial real estate always pay off?

Kimberly McClay Aselton, Coldwell Banker Commercial Benchmark

Do you ever feel unlucky? Like your timing is always off? Have you ever found yourself saying “If I only had his luck?”

I was one of those people, always wondering why other people seemed to make a profit on every investment they made. We’ve all heard the idiom, “You make your own luck,” but what does that even mean? I don’t know how to make luck.

“Knowledge is power;” now that, I understand. I have found that the most successful investors make certain they have all the knowledge and information needed to make an excellent investment. When considering investing in commercial real estate, most people call a commercial broker and ask them to find a great investment property for them. That makes sense. After all, they must understand the market. It is very simple, many will say, “the higher the cap rate, the more money you will make.” Having a broker that knows the market is critical, but they must also understand basic investment measures and what those measures mean to you, the investor.

There are four commonly known investment measures that most brokers and investors use: Cap Rate, short for capitalization rate; Cash on Cash, commonly known as ROI (Return on Investment), IRR (Internal Rate of Return); and GRM (Gross Rent Multiplier).

The most commonly used term is Cap Rate. In a nut shell, Cap Rate is a value for your money at any given point in time, or what kind of deal you are getting on the property. It is NOT a rate of return in any way. Cap Rate is determined by dividing the Net Operating Income (NOI) of a property by the current market value (price) of that property. You can look at it as like an interest rate charged. It is a determination of risk. Investors can use cap rates to compare the relative risk associated with different properties. Since Cap Rate determination does not consider how you purchase the property (cash or leveraging someone else’s money adding financing costs to you), the Cap Rate on a property will not change based on how the investor buys the property. It is specific to the property, and therefore does not change for each investor.

Cash on Cash is completely different. It is the annual cash flow divided by your investment equity. Your annual cash flow is your NOI minus any expenses incurred with borrowing any portion of your initial investment (principle or debt repayment and interest). Using this way to measure, you are taking into account what the money is costing you, where as with Cap Rate, you do not. When using this method, the ROI will vary for each investor due to differing interest rates and down payment amounts.

Internal Rate of Return (IRR) is often used by Pension Funds, Life Companies, Investors and Brokers. IRR measures the profitability and true return on an investment. Unlike the other investment measures, IRR looks at the entire life of the investment, not just a snapshot at a given point in time. This measure considers financing, tax, as well as change in cash flows from operation and appreciation through sales proceeds.

The Gross Rent Multiplier is used mainly with multifamily buildings and therefore is less commonly used. It is the Value (price) divided by the potential rental income for the property. It does not take into consideration the property expenses which can vary greatly between properties.

There are so many variables that go into determining whether a commercial property is a good investment for you, and each of the four commonly used investment measures do not take them all into account. If you are considering an investment in commercial real estate, get a broker who specializes in commercial real estate. Make sure the broker can explain how they are determining investment recommendations for you. Make sure the broker understands your individual investment goals: how long do you intend to hold the investment, monthly revenue needed, the ROI you are trying to obtain, etc. Also, most importantly, make sure your broker thoroughly understands the different investments measures and which one makes the most sense for evaluating YOUR investment opportunities. Knowledge IS power…make sure your broker has it.

HAPPY MEMORIAL DAY FROM EVERYONE AT CBC BENCHMARK!

Thank you for all  your service and sacrifice!

https://benchmark-jacksonville-fl.cbcworldwide.com/

Jacksonville earns #6 spot for local business growth!

The study looked at the rate of change of the business population in each city’s metro area. Cities where openings greatly outnumber closures are ones where business owners have spotted opportunity and found success. The top ten is as follows:

1. Austin, TX
2. Miami, FL
3. Atlanta, GA
4. Phoenix, AZ
5. Charlotte, NC
6. Jacksonville, FL
7. Albuqurque, NM
8. Tulsa, OK
9. Rochester, NY
10. New Orleans, LA

Check it out here:

https://www.bizjournals.com/jacksonville/news/2018/05/21/study-jacksonville-earns-no-6-spot-for-local.html

Now as retail looks for ways to get back into brick-and-mortar and for a reprieve from struggling malls, could U.S. airports be the next big win in retail?

Find out here:

https://www.cbcworldwide.com/blog/will-airports-be-the-next-big-retail-win

#ColdwellBankerCommercial #CBCBenchmark #CBC

New survey indicates brick and mortar retailers should adopt tech and small-store format to please shoppers...Learn more here:

https://www.cbcworldwide.com/news/nearlyhalfofusadultsprefershoppinginstoreoveronlineshopping

Experts have predicted that the office market will continue to remain generally flat throughout 2018. Yet despite those numbers, there are cities that are really thriving...



Read more: https://www.cbcworldwide.com/blog/10-cities-where-the-office-market-is-not-flat

Which investment is best for you?

If you're seeking the benefits of investment real estate but not in the market for the expense and workload of buying and managing rental properties, real estate investment trusts and real estate crowdfunding are ways to become a landlord.

"Only investors willing to take the time to review property and investment documents should invest in crowdfunding," Hogue says. "Those that want a more passive investment should elect to invest in REITs."



Read more:
https://money.usnews.com/investing/real-estate-investments/articles/2018-04-25/which-is-best-reits-or-real-estate-crowdfunding

5 Industries Most Interested in Industrial Flex Space Right Now!

There are clear advantages in owning or leasing industrial flex space in today’s environment. From the tech startups taking over cities large and small to online retailers snapping up industrial space to utilize as warehouses and distribution centers, there are plenty of opportunities in these spaces for building owners and landlords in 5 particular industries.

1.Retail/Logistics
2.Office
3.Tech
4.Real Estate
5.General Services


Check out:
https://www.cbcworldwide.com/blog/5industriesinterestedinindustrialflexspacerightnow