Category: Real Estate

Bisnow NYC Office & Workplace of the Future
Real Estate

Bisnow: NYC Office & Workplace of the Future

Snehann

Happy #WellTailoredWednesday! I recently went to an event in Brooklyn about the future of the workplace, sponsored by Bisnow. Since I work in commercial real estate tech, I try to attend one of these events at least once a quarter. This one was at 175 Pearl Street in Brooklyn. Overall, I would give the event a rating of 2/5. I had some takeaways for each panel and here are my thoughts:

Garment District Alliance Fireside Chat

Eric Gural – Co-CEO and Principal – GFP Real Estate

Barbara Blair – President – Garment District Alliance

  • The Garment District has a colorful history and used to be called the “Devils Arcade”
  • The average starting rents in the District ($155/SqFt) are incredibly low. Rents around Penn Station are $357/SqFt and in Times Square around $387/SqFt
  • Millennials are expanding into the area as the number of food and rooftop bar options are increasing. Eric Gural commented, “The good thing about restaurants and bars in an area is that if you have a good day, you want to drink…and if you have a bad day, you want to drink.”

Design, Construction & Workplace Strategy

Design, Construction & Workplace Strategy

Ryan Simonetti – Co-Founder and Chief Executive Officer – Convene

Rachel Casanova – Senior Managing Director, Workplace Innovation – Cushman & Wakefield

David Weinberg – Principal – ZGF Architects

Joe Rigazio – CEO – Talisen Construction Corporation

John Dulin – VP, Market Development & Real Estate – Corning Optical Communications

MODERATOR Dodie Williams – Director of Project Management – Macro Consultants

  • The real knowledge of a workplace comes after the workplace is built. Currently, there’s no feedback loop from the tenants back to the architects, but there needs to be
  • We cannot think of “design” as just a product anymore. Instead, we need to think about it as a service and we need to incorporate it in our world of architectural design as a whole
  • Despite all the generational differences in the workplace, we need to think back to how we are more alike than we are different. We all want the same thing: human to human experience, choice, and a sense of belonging and community

All About the Tenants: Talent, Trends, Amenities & More

Workplace - All About Tenants

Susana Balbes Pazos – Head of Real Estate for Americas – L’Oréal

Paul Teti – Partner – Normandy Real Estate Partners

Eugene Lee – Chief Investment Officer – Knotel

Rachel Walters – Sr. Market Development Manager – Join

Bryan Murphy – CEO – Breather

MODERATOR Marc Schwartzberg – CEO/Owner – Office Furniture Heaven

  • In general, the market is very tenant friendly and landlords need to take notice
  • This panel disappointed me. All the panelists’ answers sounded more like a pitch for each company (“Knotel is great because we do ____” or “Join helps tenants because ____”, etc.)
  • There was so much redundancy on why flexibility is important and how workplace as a flexible service is starting to take over the world. Yes, at this point of the panel we get it.
  • There were multiple opinions on what would happen to co-working and flexible office space during an economic downturn. Most people said that companies are going more to want to be more flexibility, but there were also some contrasting opinions
    • Marc Schwartzberg: Tenants will want to hunker down to a more permanent space and not pay the rent premiums that flexible spaces/coworking firms command.
    • Paul Teti: To accommodate for the needs of large and small tenants, landlords will need to be flexible in the way they offer space.
    • Susana Balbes Pazos: Tenants will demand flexibility and will need landlords to compromise.

All About the Landlords: Investment, Development, & Leasing

Workplace - All About Landlords

Jonathan Lee Cohen – Head of Acquisitions – RFR Holding

Chris Shehadeh – Senior Managing Director, Regional Director New York – Tishman Speyer

Gerard Norcia – Executive Director – JP Morgan Asset Management

Paul Gillen – Managing Director / Regional COO – Hodges Ward Elliott

Kevin Chin – VP, Securities & Head of Corporate Development – The Guarantors

MODERATOR Ryan Blair – Managing Director – Stanwich Energy Advisors

  • Tenants are now increasingly focused on amenities, employee happiness, and having a cafeteria. They’re also willing to outsource, focused on wellness, and are more communal
  • Investor underwriting has evolved to be more conservative, allowing for a diverse tenant base, and the increasing trend of landlords providing amenities
  • Investors need to be careful not be careless because there’s a lot of debt and equity capital willing to be deployed
  • Paul Gillen: The intersection of office, retail, and residential classes will be an opportunity for older buildings looking to get with the times
  • This was easily the worst panel of the event. The moderator just asked some very basic questions such as “How do new projects impact a market?” and “How can landlords capitalize on the changes to the market?”
  • I asked a question on the future technologies they are most excited for and the answers were quite underwhelming:
    • Autonomous vehicles
    • New Jersey becoming more appealing with new legislation
    • Isolated investments on the life sciences side
  • Tenants want better interspace modular design and responsiveness to tenant needs

Thanks for reading and please let me know what you think in the Comments’ section below!

Finding and Funding Great Deals by Anson Young

Finding and Funding Great Deals by Anson Young

Happy #WellTailoredWednesday! As some avid readers of this blog may recall, one of my 2019 resolutions is to invest more in real estate. Since the start of the year I've invested in an online REIT and another online real estate crowdfunding company. I've also been reading a lot about real estate...and one of the books that I just completed was Finding and Funding Great Deals by Anson Young. Anson is a successful investor from BiggerPockets and he's been a 3-peater on their famous podcast in these episodes:

Before I begin my review, I want to caveat that this is the first book that I did not read page by page and cover to cover. I skimmed many parts and reread others. The book is very comprehensive. Whether you're a beginner looking to get your feet wet or if you're an experienced landlord who's looking for tips on streamlining your process for finding deals, there's great content in the book for everyone.

Putting the Fun in Fundamentals

Showing how to narrow down the property type on ListSource. (Chapter 2)

For example, in his chapter on Market Analysis (Chapter 2), he talks about how investors can find data on leasing platforms such as Zillow, ListSource, Redfin, and the MLS. Additionally, he even adds screenshots of the filters and fields the investor should input to find what he or she is looking for. In Chapter 6 where he talks about Evaluating Deals, he goes into great detail on what to look for when analyzing comparables. From here he defines some key formulas such as the 70 percent rule, the Fixed-Cost Method, the meaning of Cap Rates, and how to use these formulas during the underwriting process. For budding investors, these fundamentals are the key to success.

Another great aspect of this book is that it's just so easy to read. Throughout the book, Anson does a great job translating both high-level and granular real estate concepts into digestible bits. He also makes the content seem more conversational by adding his wit and a ton of jokes throughout the book: "a basement in Phoenix is about as common as a day you needed a coat." (Chapter 6) or providing quotes from Groundhog Day (Chapter 1)!

Putting the Fun in Funding

In the latter part of the book, Anson focuses on how to finance deals. From the get-go, he highlights the massive tradeoff that investors face when they seek funding:

The easier-to-find options are harder to get; you could walk into any bank to get a loan, but you need to have the credit, job history, and down payment to get that loan—not to mention the appraisal, loan conditions, and thirty-day close! The harder-to-find options offer better rates and looser standards; you could find a handful of rich guys who want to earn 10 percent, could fund in two days, and never want to see your credit report or ask for a down payment. Chapter 7

This is something that I'm struggling with at the moment--getting bank financing and raising private capital from investors. I've thought about some of the ways of securing financing that Anson talks about, which include:

  • Cash
  • Self-Directed IRAs (SDIRAs)
  • Bank Financing
  • Loans--Conventional, Construction, FHA, VA, Portfolio
  • Hard & Private Money
  • Seller Financing
  • Subject To
  • Lease Options
  • Transactional Funding
  • Partnerships
  • Crowdfunding

Clearly there a lot of ways to finance a deal that I need to consider! After highlighting the pros and cons of each method, Anson then dedicates a lot of time to Negotiation.

Initiating Negotiating

One of the goals for my day job is to work on my negotiating skills, so I made sure to read up on this section intently. A key nugget of advice Anson provides is for investors to get comfortable with hearing "no". In other words, the sooner they can overcome the fear of hearing "no", the better equipped they will be in handling those objections.

Go out in the world and get to ten nos as fast as possible. Chapter 8

In addition, Anson talks about how negotiation doesn't always have to be financially-driven for a discount off the sales price. This is usually the main reason sellers say "no" in the first place. Sometimes the investor simply needs to solve the seller's problem. Some of these creative concessions include closing quickly, providing moving assistance to the seller, allowing the seller to carry-back the note, and more, all of which I found to be incredibly helpful. In the future I plan to read one of the best-known negotiating books: Never Split the Difference by Chris Voss as well as the [in]famous The Art of the Deal by Donald Trump, so stay tuned to those reviews!

How to scale your business by optimizing your marketing budget (Chapter 11)

Anson also does a great job on spending time on the logistical procedures of closing the deal. This is by far one of the most dense stages of the acquisition process. From describing the different contracts that could be used (Chapter 9) to finding an investor-friendly Title company or attorney, Anson walks the reader through several nuances he or she should watch out for.

To close out the book, Anson zooms out and talks about the big picture. Chapter 11 provides tangible tips on how investors can successfully scale their business by building processes. Consequently, the investor will find better deals at a great price and will be able to secure funding. As a budding investor, I appreciated him providing this advice because it gives me a clearer path ahead in my investing career.

Overall Thoughts

In summary, I enjoyed reading this book, although I don't think investors need to read every page cover to cover. I give it a full 5/5.

Read if you:

  • Are having trouble sourcing deals or finding financing.
  • Are looking for a manual on real estate investing. Anson does a great job of highlighting the step-by steps needed to become successful in the business.
  • Are looking to scale your business by building systems and negotiating to find better deals.

Don't Read if You:

  • Focus on multifamily or commercial real estate. While there are nuggets of information on best practices for real estate investing, I would say 80% of this book is catered to those investors who focus on Single Family or Fix & Flip.
  • Are skeptical on real estate investing in the first place. If you still need convincing, you may want to consider reading Rich Dad, Poor Dad by Robert Kiyosaki first.
  • Already have a full-fledged real estate business. I highly doubt Grant Cardone will find anything new from this book. If you're like him, you may want to read about optimizing your business or about some of the more advanced real estate investing strategies.

If you're interested in buying Finding and Funding Great Deals, you can purchase it on BiggerPockets here. Thanks for reading and please feel free to leave your thoughts in the Comments' section below!

Commercial Real Estate Investing for Dummies by Peter Conti & Peter Harris

Happy #WellTailoredWednesday! As 2018 winds down, I've been thinking about my goals for next year. One of them is to get involved with commercial real estate investing (CREI) in some capacity. Maybe it's actually owning a building outright. Or simply investing in a REIT. Whatever the case is, I just want to jump into this asset class. I've been reading a few books and listening to a TON of podcasts on real estate investing (more on those in another post!) and one of those books is this one---Commercial Real Estate Investing For Dummies by Peter Conti and Peter Harris. Let's dive in!

An Overview of Commercial Real Estate Investing

Like many of the other "For Dummies" books, this one is designed as sort of like a manual of commercial real estate investing. There are chapters that talk about the benefits of CREI and how to get started finding and making deals. The book also highlights the nitty gritty details of financing and owning and operating the investments. Lastly, there is emphasis on how investors can scale their business to be sustainable for the long-term.

Commercial real estate investing can be very lucrative and CRE tycoons often make the news: many of us have heard of some of the more [in?]famous real estate investors such as Robert Kiyosaki, author of the best-selling "Rich Dad, Poor Dad", Larry Silverstein, owner of the World Trade Center, and of course, Donald Trump, developer and current U.S. president. There's a reason why the rich love real estate: it can offer a diversified stream of income outside of the stock market, it can be a tax shelter, and it can be bought using leverage. These same reasons also make commercial real estate investing alluring to the average Joe Snehann!

Useful Advice and Tangible Tips

What I really enjoyed about this book was that the authors support their advice with reason, statistics, and real-world examples. For example, there are some great tips on building and maintaining a rolodex of potential investors, including a word-for-word script readers can use to build their own network (Pg. 78). It all sounds so easy...but the authors make it clear to readers that building that rolodex comes from a lot of hard work spent on networking and maintaining relationships.

There are even moments throughout the book where the authors talk about mistakes they made and how they lost a lot of money because they failed to educate themselves properly. And it's not just the authors. The book features short parables of other investors who lost money and recovered by following the straightforward advice provided.

Education is key. And one of the real-world tips the authors talk about is around the 1031 exchange (Pg. 303), which can be very useful to commercial real estate investors, but only if they're very meticulous about its strict requirements. Such advice is refreshing from that of the other real estate "gurus", who promise prospective investors a life of sipping margaritas on a beach...just as long as those investors pay $50,000 to sign up for their course! It's reassuring to know that even though the authors are both successful investors, they went through their series of mistakes.

https://www.youtube.com/watch?v=tPl9K2dbS90
Peter Harris, co-author of Commercial Real Estate Investing for Dummies, gives an overview of the book.

Overall Thoughts

Overall, I really enjoyed reading this book. While I found some sections to be a bit dry, most of the book was very informative and digestible. For these reasons, I would give it a rating of 4.5/5.

Read If You:

  • Would like a 101 of the different opportunities in commercial real estate investing
  • Currently invest in single family housing and would like to expand into commercial investing
  • Read one of Peter Conti's or Peter Harris's other books (review coming shortly!)

Don’t Read If You:

  • Are an intermediate or experienced commercial real estate investor looking for more advanced strategies
  • Like the "traditional" vehicles of investing, such as stocks and bonds, or the speculative vehicles, such as crypto or private companies and are unwilling to change your opinion on why CREI is "too risky"
  • Are not willing to put in the time and hard work into learning the ins-and-outs of commercial real estate investing. If you think CREI will immediately lead you to sipping margaritas on a beach, stay far away from this book!

Thanks for reading and please feel free to leave your thoughts in the Comments' section below!