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Real Estate

EXPECTATIONS WHEN HIRING A REAL ESTATE BROKER

Expectations When Hiring A Real Estate Broker Photo

EXPECTATIONS YOU SHOULD HAVE WHEN
HIRING A REAL ESTATE BROKER
When a firm engages the services of a licensed real estate broker, what should be the expectation in terms of service and performance? There are many areas to note, but I will mention three that I believe are most important.

Experience.
Enthusiasm and hard work can make up for many deficiencies. There is no question that those two qualities are critical to any successful real estate assignment. However, people just beginning their careers in the brokerage business don’t start by tackling the most difficult deals. Standard practice in the industry is for a young person to be partnered with, and mentored by, a more seasoned veteran. There is much at stake in any real estate deal. Understanding how to structure the proper deal, familiarity with existing market conditions, editing lease language, and negotiating with area landlords generally is earned by riding the coat tails of a more experienced broker and on-the-job experience. Most of what I have learned over the years has come through time spent with experienced and competent landlords, attorneys and contractors . . . and making plenty of mistakes!!!

Honesty.
Absolutely essential! When any firm, large or small, places its trust in an individual broker, particularly with what’s at stake in a real estate deal, the broker must present an “open book” of himself and the deals he presents to the client. If a landlord is offering a special broker trip or bonus for concluding a deal, the client needs to know. If the broker represents a building they are recommending to the client, the client needs to know. A perceived conflict is sometimes worse than an actual conflict. In every instance, without exception, the broker must do what is best for the client.  There should be total transparency from start to finish.

Value.
The broker must provide value in every step of the process. If there is no value, what benefit is there to the client? Value comes in many forms and weighted differently by various firms. However, successful firms are focused firms, and taking the time required to complete a real estate deal can easily eat up lots of time . . . and money!!! Expecting a full-time employee with no experience or knowledge to represent the firm’s best interests in the marketplace is foolish. Landlords know their business, and you know yours; and someone needs to be an advocate for the client.

Looking For A Great Real Estate Broker? Look No Further!!!
Industrial Brokers:
Fred Hedberg, CCIM, SIOR, Principal
Phil Simonet, Principal
John Young, CCIM, Vice President
Joseph Schultz, Associate
Jack Buttenhoff, Associate

Office Brokers:
Nancy Powell, Vice President
 
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THE ECONOMIC OUTLOOK FOR CRE INVESTMENTS

THE ECONOMIC OUTLOOK FOR CRE INVESTMENTS WITH DR. MARK DOTZOUR

DESCRIPTION:
We are proud to present this special TCN Worldwide webinar featuring Dr. Mark Dotzour.  He is a frequent participant at TCN conferences and one of the truly ‘entertaining economists’ to provide an economic outlook and forecast for TCN members as well as their clients, prospects, friends, and family.
Join TCN Worldwide and Dr. Mark Dotzour as he discusses:

The outlook for job growth in the US.
Will the recovery be quick or prolonged?
What is the outlook for inflation in 2021 and beyond?
The outlook for borrowing rates
What is the outlook for cap rates?
What is the outlook for investor demand for US commercial real estate?

SPECIAL GUEST SPEAKER:

Dr. Mark G. Dotzour (CRE Economist)
Former Chief Economist and Director of Research at Texas A & M University
Dr. Mark G. Dotzour is a real estate economist who served for 18 years as Chief Economist of the Real Estate Center at Texas A&M University in College Station.  He has given more than 1,450 presentations to more than 250,000 people.  He has written over 90 articles for magazines and journals.
Dr. Dotzour makes complex economic issues easily understandable.  Above all, Mark’s goal is to provide his audience with a “tool kit” of useful information that will help them make good business decisions.  Ultimately, helping their families, their clients, and their company.
His research findings have appeared in the Wall Street Journal, USA Today, Money Magazine and Business Week.  Similarly, his clients include banks, private equity firms, real estate investment trusts, construction firms, engineering companies, wealth managers, private foundations, and commercial and residential brokerage firms.  In addition, he has made presentations to local and national trade associations all over America.
Special thanks to TCN Worldwide for hosting this webinar.
Questions? Call Paramount Real Estate Corporation.

FOCUS ON WHAT’S IMPORTANT

Focus on what's important post photo

FOCUS ON WHAT’S IMPORTANT
Companies searching for new office or industrial space in today’s soft office market, or conversely today’s healthy industrial market and listing brokers and landlords are guilty of this as well… They often tend to focus almost exclusively on rental rate.  In other words, the lowest price should be enough to positively influence a tenant’s decision to lease space in a building.  The result? We’re “commoditizing” commercial space alternatives while losing the focus on what is right and best for the tenant.
SPACE ISSUES BEYOND PRICE
Let me be the first to say that economics are always important and competing buildings must be reasonably similar.  However, economics are not the most important element when it comes to making a real estate decision.  I have often told clients, “What difference does it make if the landlord provides the space at no cost, if the space is not functional and does not effectively work for you?”  Retail clients generally seem to have a better handle on weighing the intangibles when they make space decisions.  They understand that there are issues far more important than price.  Issues such as exposure, vehicle traffic counts, ease of access, parking and neighboring tenants.  Issues that will impact their long‐term success more than a marginal reduction in their base rental rate.
TOTAL COST SOLUTION
So many components go into a good real estate decision, and price is only one of those components.  Tenants need to look at a “total cost solution” rather than just a “rental rate” solution.  The latter is the proverbial tail wagging the dog kind of decision, and decisions like that never work well over the long term.  That’s why establishing a preliminary budget is critical to the process.  So that companies don’t waste time looking at what they can’t afford.  Companies often do themselves a disservice by discounting the importance that a well thought out facilities plan plays in their long‐term success.  Space, like any other component of a firm’s business plan, should function strategically.  Ultimately, ensuring long‐term success for the firm.  The list of items that ensure long‐term success generally relegates price to the lower tier of importance.
RANKING CRITICAL ISSUES
Companies must address, evaluate and rank the importance of critical issues.  These may include parking availability, access, visibility, building efficiency, flexibility to expand and contract, on‐site or close‐by amenities, public transportation availability, security, sustainability issues, building management, landlord financial viability ‐‐‐ and, obviously, the financial structure.  Whether internally generated or broker generated, tenants must understand the total cost of the deal.  One deal may provide more dollars for tenant improvements; another deal may offer less tenant improvement dollars but more free rent.  Yet another may offer to graduate or step the rent and pay moving costs.  And in the end, a simple consideration like ease of client access or proximity to public transportation may trump the lower base rent deal.
Guard against making an impulsive, “head in the sand” facility evaluation.  Select a member of your team and a competent real estate broker who will ensure that your firm makes a well thought out space decision, not a decision based on a single issue like rental rate.  Make sure you have completed the proper due diligence before signing on the bottom line!
NEED HELP FINDING THE RIGHT SPACE?
Reach out to one of our
TRUSTED. DEDICATED. EXPERIENCED.
brokers at Paramount Real Estate Corporation: 
Industrial: Fred Hedberg, CCIM, SIOR, Principal
Phil Simonet, Principal
John Young, CCIM, Vice President
Joseph Schultz, Associate
Jack Buttenhoff, Associate
Office: Nancy Powell, Vice President

TWIN CITIES MARKET SNAPSHOT

TWIN CITIES MARKET SNAPSHOT
The Minneapolis-St. Paul Real Commercial Estate Market continues to perform admirably with office and industrial sectors demonstrating excellent performance throughout 2019.  The Markets characteristics remain upbeat and include positive net absorption of vacant space, moderate to low vacancy rates and measured new speculative development.  Economic conditions remain favorable however, recent statics raise concern for the continued overall economic growth in Minnesota and the USA.  While inflation continues to remain low at about 2% (annualized), unemployment has increased from 2.5% to 2.9%.  Median income for Minnesota households as stagnated year over year at $70,300.  Both still much better numbers than the national averages of 3.4% unemployment and median household income of $63,179 respectively.  The 15 month trade war with China combined with all of the uncertainty in Washington DC (impeachment and gridlock) and slowing business investment-down 1% on an annualized rate last quarter create potential headwinds to sustained future economic growth.

Industrial Market



 
Industrial has been the best performing asset class of real estate since the Great Recession in 2009.  Vacancy rates are at an all-time low (4.9%) in a Twin City universe of 248 million square feet and have decreases by 1% since the beginning of 2019.

Net Absorption of available space stands at 2.73 million square feet through the third quarter of this year.  With bulk (high-bay) warehouse experiencing 1.74 million square feet of net absorption.  Driving the net absorption has been e-commerce related companies localizing the distribution of almost everything now available on the internet.
To date there are 27 industrial projects under construction totaling 3.6 million square feet.  1.9 million square feet has already been delivered to the market.

Collectively, what all this most likely indicates is a continuation, at least through 2020, of relatively good conditions and performance for the industrial market.  The two current deterring factors, other than an economic slowdown, are the cost of tenant improvements and finding and hiring employees.

Office Market

The office market continues its long standing recovery albeit some sub markets are stronger than others.  The overall office vacancy rate for all Twin Cities office properties is 11.8%, which is down .8% from January 2019, however within multi-tenant properties the vacancy rate is 15.4%.  The northeast office market has the lowest vacancy rate at 8.6% and St. Paul CBD has the highest vacancy rate approaching 20%.  Class A multi-tenant office space has the lowest vacancy rate at 12.5%. Class B Office space is at 17.7% and Class C is 13.8%.
Net absorption Year to Date is 363,871 square feet.  Actual absorption Year to Date is 504,247 square feet, however sublease space create 128,052 square feet of negative absorption.

The office market performance has instilled enough confidence in a local developer to spec a 361,104 square foot office building in the West End mixed use development named 10 West End.  Net rental rates are projected to start at $25.50/sf.

One new office market characteristic that has been gaining momentum is the demand for building amenities.  Many office buildings have completed or are planning to complete updates to building common areas, add amenities such as work out areas, coffee bars, common area meeting spaces, food service, and concierge services among other things.  Many of today’s sophisticated tenants want space that is fun and functional.  They want space that will retain and attract top talent in the current tight labor market.

LEED CERTIFICATION

LEED Certification

REAL ESTATE TIP OF THE WEEK: LEED CERTIFICATION
In order for a building to earn LEED Certification, it must meet certain criteria and goals within the following categories:

Location and Transportation: How close is the project to mass transit?
Materials and Resources: Will the project use locally sourced, sustainable products?
Water Efficiency: To what extent will the project reduce potable water usage?
Energy and Atmosphere: How will the project improve energy performance and indoor air quality?
Sustainable Site: To what extent will the project utilize nearby natural resources and ecosystems that can naturally take part of the design, minimizing environmental pollution?
Regional Priority Credits: This addresses particular concerns based on project location
Innovation: Any idea that is not covered under the main LEED areas

Each of these respective categories contains a series of opportunities to earn credits.  The project earns points when it uses and integrates these opportunities.  The more points the project earns, the more sustainable is the building.  Depending on the number of points gained, the project can then earn certification as a certified building or as a silver, gold or platinum building.
Benefits of a LEED Certified building are many:

Reduced use of energy and water
Reduced operation and maintenance costs
Increased indoor air quality
Reduced construction waste during the construction process
Usage of recycled materials
Increased employee performance, satisfaction and retention

Need advice on LEED.  Call Paramount.
TRUSTED.  DEDICATED.  EXPERIENCED.
(952) 854-8290

TCN Worldwide Top Industrial Deals! (2018-Q2)

TCN Worldwide Top Industrial Deals! (2018-Q2)

John Young, CCIM’s transaction with Warner’s Stellian made TCN Worldwide’s Top Industrial Deals (Q2-2018)
Read more: 2018 Qtr2 Commercial Focus
Warner’s Stellian purchased an 80,000 SF industrial building located at 2601 Broadway Street NE, Minneapolis.
TCN Worldwide, a consortium of independent commercial real estate firms, provides complete integrated real estate solutions locally and internationally.  With approximately $58.6 billion in annual transactions, TCN Worldwide ranks as one of the largest service providers in the industry.  An extensive range of real estate services coupled with a personal commitment to exceed client expectations.  This allows TCN Worldwide to be a leader within the commercial real estate industry.  Made up of over 5,000 commercial real estate professionals allows them to serve more than 200 primary and secondary markets worldwide.

RELOCATING A COMPANY

Relocating a Company

RELOCATING A COMPANY
Qualifying your real estate needs, researching, locating and negotiating a new lease or purchase of a property is by no means the end of the relocation process for most companies. 
One of the most important and costly items within relocating a business operation is the actual move itself.  This activity requires:

diligent planning
multiple bids for competitive pricing
knowledge related to construction
furniture systems
Tel-com and IT
relocation/moving service providers

Many other move related items are required as well, which is where a project manager can add tremendous value.  A seasoned project manager can save time and money, keeping everything on schedule and handling any problems as they arise when relocating a company.  Why risk exposure to additional costs, disruptions or unforeseen delays and headaches, not to mention the stress the inside person who was tossed the project manager hat will experience.  Interview and select a Project Manager as part of the initial space planning process and the move experience (and costs), will be well worth the cost of a Project Manager.
Call Paramount.
TRUSTED.  DEDICATED.  EXPERIENCED.
(952) 854-8290

SALE LEASE-BACKS

Calculator - Sale Lease-Backs

SALE LEASE-BACKS
Sale lease-backs can be a great option for your business. While many business owners feel that building ownership is right for them, a sale lease-back can provide financially-strapped companies with the capital injection they need. The transaction is simple: an owner/user sells the building to a third party investor, then leases the building back, often long-term. Equity in a building will generally see an appreciation equal to that of inflation (1-2%/year). A sale lease-back allows for a much higher return on equity by reinvesting the cash from the building sale back into the business itself; where owners can see a return much higher than 2%.
Want more information?
Call Paramount.
(952) 854-8290
www.paramountre.com

Top Brokers for 2017

Top Brokers for 2017
TCN Worldwide (TCN), has been named one of the 2017 Top Brokers by National Real Estate Investor®.   The top commercial real estate brokers are based on total global leasing and investment sales transaction volume in 2016.  TCN came in #9 on the list with $58,603,344,000.  This is the second consecutive year TCN has been on the Top Broker List.  They were ranked 8th (by Deal Volume at $58.6 Billion) in 2016.
According to David Bodamer the author of 2017 Top Brokers, “For 2017, slower growth was a theme among many firms this year. Many saw slower paces of growth than they did a year ago. Some firms even experienced year-over-year decreases in deal volume.
Overall, six firms cracked $100 billion in deals, 13 were exceeded $20 billion in volume and 18 were over $10 billion.
This version of the ranking features additional data, including breakdowns of volume by leasing and investment sales globally and in the U.S in 2016.  It also includes the number of transactions closed, the number of brokers employed and revenue figures for some firms.”
TCN Worldwide is a consortium of independent commercial real estate firms, provides complete integrated real estate solutions locally and internationally.  An extensive range of real estate services coupled with a personal commitment to exceed expectations is what allows TCN Worldwide to be a leader in this competitive industry.  Comprised of leading independent brokerage firms, serving 20 countries, more than 200 markets globally, TCN Worldwide combines an entrepreneurial approach with years of local experience.  Around the globe, across all property types and service groups, TCN Worldwide’s more than 5,000 brokers and salespeople have a well-earned reputation for providing straightforward expert advice.  Paramount Real Estate Corporation has been a member of TCN Worldwide since 2008.
For a list of the top brokers for 2017 click Here.
 
 

FOR LEASE – LONE OAK BUSINESS CENTER II


FOR LEASE
LONE OAK BUSINESS CENTER II
1060 Lone Oak Road | Eagan, MN

Property Highlights:

Two (2) office/ warehouse spaces located in Eagan are available For Lease immediately

Option #1: 3,410 SF office + 9,133 SF warehouse = 12,543 SF total
Option #2: 7,605 SF office + 10,256 SF warehouse = 17,861 SF total

Located just off Lone Oak Road and Neil Armstrong Road, with easy access to I-35E, I-494 and Hwy 55
Close proximity to downtown Saint Paul and MSP International Airport
Docks & drive-in doors available

Option #1: four (4) docks; one (1) drive-in door
Option #2: two (2) docks; one (1) drive-in door

16’ clear height

CONTACT:

Phil Simonet | (952) 854-8381 | psimonet@paramountre.com
John Young, CCIM | (952) 854-5067 | jyoung@paramountre.com