Featured Articles

SWFL Commercial Real Estate Suite Life Magazine By Gary Tasman (Jan. 3, 2017) — SWFL commercial real estate and residential real estate markets saw considerable growth in 2016, as every sector continued to rebound. The ongoing expansion of the housing sector, in rental community development and new single-family sales, was especially notable and should remain robust this year. As a result, I expect strong demand for commercial real estate in 2017. In addition to housing, factors driving this positive trend include: Population growth Job growth Low-cost financing Rising rents Post-election political resolution Cushman & Wakefield’s data supports an increase in new commercial development this year, along with an uptick in renovation and reconstruction projects throughout SWFL commercial real estate. More specifically, here are the commercial property trends we’re predicting for this year. Office For the past three years we’ve seen positive absorption rates, although there have yet to be meaningful price and rent increases. That will begin to change this year. Medical office will remain particularly active. In response to declining vacancy rates, speculative construction will make a comeback for the first time in a decade. Two new spec office buildings are slated for delivery this year — one each in Naples and Fort Myers. Retail The regional retail market continues to evolve and strengthen as our area grows. Expect continued deliveries of small, non-anchored, convenience based multi-tenant and freestanding single tenant spaces. Big-box “category killer” retailers will continue to suffer, resulting in higher vacancies, redevelopments and repurposing of big-box space. Industrial High demand and low vacancy rates have made industrial space a hot commodity. This year we see rents stabilizing and new spec space entering the market, along with the delivery of several big box industrial projects. We will also see the construction of some small flex space. Any new vacancies entering the market will be absorbed quickly. Investment Market We expect the investment market to remain very active and desirable. Properties with a stable and predictable cash flow are selling at record prices to cash buyers seeking better returns. The sales velocity of investment-grade shopping centers, apartment communities and industrial complexes will continue improving, just as it has in recent years. However, the most attractive aspect of our investment market is the very limited amount of developable land compared to the area’s rapid growth. This supply/demand imbalance in itself increases the intrinsic value of the area for investment purposes. Summary In general, after almost eight years, we are back to pre-correction price and value levels in most categories and we expect the trend to continue in 2017. While the market is active and robust, it’s not euphoric and that’s a good thing. We still see discipline with a good dose of measured risk-taking and we don’t see bubbles or irrational exuberance. Accordingly, we expect the SWFL commercial real estate market to continue growing and expanding. Furthermore, we see good value and opportunity for users and investors who are prudent and focused. (Gary Tasman is CEO and principal broker of Cushman & Wakefield Commercial Property Southwest Florida LLC. With more than 30 years in the real estate industry, Tasman’s expertise includes all aspects of commercial brokerage, development and financial feasibility analysis. For more information, please contact him at (239) 489-3600 or gtasman@ cpswfl.com or visit www.cpswfl.com.) SuiteLife Regional Commercial Real Estate Market Year-End Review and 2017 Projections

Why Cyber Monday is taking over Black Friday. The eCommerce Impact on Supply Chain and Brick-and-Mortar Retail— Predictions and Insights from our Industry Experts. To view an online presentation of Cushman & Wakefield’s Special Research Report Bricks vs Click Click on the picture below

How will the new president affect the economy and commercial real estate? How might policy change? To Download a PDF of Cushman & Wakefield’s Special Research Report Trump: Impact on the U.S. Economy & the Property Markets Click on the picture below

For many absentee property owners, the benefit of retaining professional Property Management is abundantly clear, yet many local property owners fail to realize the real cost savings of professional management. Many believe Property Management is a vehicle to reduce operational costs and assist in timely rent collection, but this barely scratches the surface of the benefit of a competent Property Management team. In fact, the whole dynamic of Property Management has changed drastically over the years as property owners struggled to weather economic losses, retain their asset’s occupancies and enhance overall value. The best Property Management teams today have restructured to reflect this changing standard—superseding outdated models and becoming fully-aligned partners who think and act like owners. Utilizing collaborative brokerage relationships, Property Management teams remain completely in tune with ownership’s goals, risk-tolerance level, investment timeline, exit strategy, and specific performance margins. Our firm believes in this new philosophy so much that we successfully completed an acquisition of one of the area’s most prominent established Property Management operations in May of this year—resulting in a fully-integrated commercial real estate platform armed with significant enhanced capabilities. Quarterback Approach: By utilizing Property Management as a strategic differentiator through collaboration amongst owners, managers, leasing agents, tenants, and third-party vendors, the result is an innovative operational approach which delivers a more stable rent roll and profitable operating statement. The right tenants are key to this approach and add significant value through long-term lease structures, high-credit regional / national brand backing, and their ability to act as a traffic generators. Skilled Property Management teams employ aggressive campaigns to fill vacancies before expiration to reduce turnover, tactical methods for lease renewals, and in-depth screening and vetting for top quality tenants—ensuring tenant mixes remain accretive to the overall goal of enhancing investment value. Repairs and Improvements: When tenants do relocate, the majority of newly-vacated spaces require some degree of tenant improvement. The ability to minimize down time between tenants is vital to ownership’s occupancy goals. Through commercial relationships, expertise in managing contracted improvements, and volume discounts from contractors, professional Property Management teams put the best team on the field to prevent owners from costly delays. Moreover, leading-edge preventative maintenance approaches keep major repairs in check and implement plans for value-added capital improvements including energy efficiency and “green” solutions. Execution at precisely the right time operationally, ensures investment properties remain highly competitive in the market. Expertise: While most owner-operators are adept at dealing with most day to day landlord-tenant issues, there is far-reaching benefit to an intermediary or liaison to provide a degree of separation between landlord and tenant. Property Management teams are this liaison. At its very basic level, this intermediary saves ownership valuable time, yet, the potential cost savings is significant. Knowing and ensuring compliance with current landlord/tenant legislation from evictions, to tenant privacy laws, and expertise in legal proceedings is an invaluable asset to any investment portfolio. Owners who believe property management is a commodity service which “anyone” can do are likely unnecessarily saddled with underperforming assets. In this competitive environment, maintaining tactical excellence is the only path to superior operational performance. Property Management must be recognized and utilized as a strategic differentiator for ownership to realize growing profitability and consistently improving operational statements.

The property manager is concerned on a daily basis with a multitude of management details such as rental rates, merchandising space, negotiating leases, adequate insurance coverage and competition from similar buildings. However, ultimately he or she must be concerned with the understanding they have with their property owners. The management agreement is a written understanding between the property owner and the property management company (referred to as the agent). The agreement details the duties, responsibilities, rights and obligations of each party throughout the existence of the agency relationship. Managers’ and owners’ obligations are often complex. The written contract spelling out the understanding of the parties avoids any misunderstandings as to rights, obligations and duties. The management agreement or contract is only put into written form after the property manager and the client have met and reviewed in detail their requirements. If the property is operated by a department of the ownership a formal contract, in the agency sense, may not be necessary. However, there must be the same sort of recitation of rights, duties, obligations and responsibilities as between the management entity and ownership entity. Terms of the Property Management Contract. The term of the agreement between the property manager and property owner will vary depending upon many factors. Some of them are: 1) The size of the project and the scope of the property management work; 2) The extent of problems. The property manager must have an agreement with the owner that allows sufficient time to solve the existing problems and be adequately compensated for his services; 3) The owner’s objectives. In many cases there will be considerable work to be done in order to transfer ownership at a fair price to the owner. If one of the owner’s objectives is to sell the property, then the property manager must insure that the management agreement allows sufficient time to accomplish this goal. Under these circumstances the contract would probably have a cancellation agreement in the event the property is sold. A primary consideration in determining the term length of the agreement should be the amount of time needed by the property manager to accomplish any agreed-upon goals. The property management company should be provided a fair profit for services rendered during the term of the contract. Bearing this in mind, management contracts are written for varying terms, depending upon specific situations. An initial term normally might be one or two years, with possible negotiated cancellation conditions. Any extensions should probably be on an automatic annual renewal basis unless one of the parties desires to make a change in the terms and conditions. Contracts which are not backed up by the good faith and cooperation of both parties are often difficult to live with. For this reason there often is a base period established in which to accomplish certain goals (as outlined above) and then a reversion to a month-to-month agreement. In some cases, the property manager may prefer to be released from the contract if he or she has difficulty working with the owner. In the final analysis, the intent of both parties is the most important factor in any contract. The parties to the agreement. The owner should be named in the agreement and the agreement should be signed by the owner or his/her authorized agent. It’s a good policy to determine how legal title to the property is held and thus be sure that the contracting parties have the right to contract. The contract: • Must be dated and include a commencement date as well as a specific termination date or provision for termination. • Should provide a description of the property. • Should provide a clause pertaining to the execution of leases and other documents by the property manager. If the property manager is to execute leases on behalf of the owner, the maximum length of term of those leases, as well as other terms if appropriate, must be stated. • Must address repairs. The agreement should specify the amount the property manager may spend for any repair without the consent of the owner. • Should state who will pay for advertising and/or promotional efforts. • Should state the responsibility for procuring and payment of proper insurance to cover the property. If this becomes the owner’s responsibility, it should be clearly stated in the management agreement. • Should have a bank account clause. There should be no commingling of funds between the property manager’s business and that of the owner. • Should be a cancellation or Termination Clause. This is a clause which clearly states under what conditions cancellation of the management agreement can be made. The last clause of the contract is a clause which states employees on the property are employees of the owner and not of the property manager. While the employees are normally under the direct control and supervision of the property manager, they are paid out of the owner’s funds by the manager. Worker’s compensation, insurance, social security, etc. are payable whether the employees are those of the property owner or the management firm. A Supreme Court decision stated that only from the standpoint of the Wages & Hour Laws are employees under certain conditions to be considered as those of the manager; regardless of contractual provisions, they are the employees of the property owner. In some cases on-site employees may be employees of the manager. If so, the agreement should so state and should include any pertinent recitations relative to compensation.

Can you imagine how much money you would accrue if you were given a dollar for every time you’ve been interrupted at work? Interruptions have become a pandemic not only in our everyday lives as we scurry from place to place trying to get it all in, but also in our lives as property managers and in the workplace. In recent research results it was noted that property managers spend up to 4.5 hours per week ‘being interrupted’. After each interruption, it takes up to 5 minutes to return to productive time, and coupled with dealing with email, tack on another 8.8 hours per week. Of course, most of these interruptions to property management are due to continually processing and receiving requests for maintenance issues from tenants; owner inquiries; information received from clients; and inquiring brokers and tenants. What’s the answer to effectively dealing with and overcoming interruptions? More property management companies are investing in high-tech computer email technologies so commercial tenants can submit everyday requests and urgent messages to their property managers as quickly as possible. It is an amenity that clients increasingly insist upon. Using technology, property management firms differentiate themselves in their markets – it requires a commitment and taking on additional risk. However, many management companies are experiencing how investing in technology is paying off. Spending less money on technology is short-sighted: owners will ultimately find that they will lose market share or worse yet, have the need to rush and catch up with the market leaders – to maintain occupancy. Ideally property management firms and building owners must talk about becoming business partners and establishing mutually beneficial, long-term relationships. However, property management companies that are separate entities and that service a variety of clients and building types must determine how much technology to invest in? They are often unaware of any tangible benefits from such an investment. Currently 60 to 70 percent of property management clients today are utilizing such technology and prefer making requests (via email) as opposed to placing a request by voice. The computer technology creates internal efficiencies in managing client’s needs and can increase billable tenant requests. It also puts the problem in written form eliminating the confusion a voice message can convey. The need for professional property managers with sophisticated management skills and extensive technical training increases more each day, especially with the growth the Lee and Collier County markets have been experiencing over the past several years. We all swear by ‘gadgets’…cell phones, emails, faxes, PDA, Blackberry’s — it seems like everyday there is some new ‘gadget’ being exposed to the marketplace. Software solutions have also entered the world of property management in an attempt to reduce time lost to interruptions. Custom solutions can be costly, and off-the-shelf document management applications can be time consuming to administer. Many of the document management solutions available today provide some helpful functionality, however, property managers who only provide access to documents fall short of providing answers. When clients don’t have the access to seek the answer and obtain specific data, they will in turn interrupt the property manager for that information. Recently, a new breed of software tool has been developed that combines the cost effective advantage of off-the-shelf document-management with much of the functionality of custom solutions. They use a ‘data dashboard’ to pinpoint the information by providing answers directly to the people who need them. These new tools reduce the number of interruptions and allow property managers to stay focused, work more productively and reclaim previously lost time. Most of the information requested for any property manager falls within one of several categories, i.e. documents, dates, dollars, space, contacts, vendors, etc. By providing clients with the means to answer their own questions, property managers will reduce the number of requests they get from clients and decrease the amount of time it takes them to respond to the requests. This type of software application brings tenant/lease abstracts, building information, tenant information, occupancy costs, vendors, all together in one easy to use platform. Ultimately, this helps property managers gain a competitive advantage to win and efficiently maintain more business while providing a higher level of customer service.