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Micro-Units Are A Big Deal:

Micro-Units Are A Big Deal on morrissegroup.com

And they’re coming to your city

In 1963, Walt Disney approached two of his staff songwriters, the Sherman Brothers, to come up with a catchy tune for the UNICEF exhibition in the upcoming New York World’s Fair. The result was “It’s A Small World (After All).” Little did Mr. Disney know that his song could easily be the soundtrack for today’s boom in tiny living.

Americans these days are obsessed with simplifying their lives. Television channels, like HGTV and DYI, are filled with shows celebrating tiny homes. In addition, YouTube has channels dedicated to tiny food and tilt shift photography, an effect that makes the big, wide world look like a child’s model train set. Even IKEA celebrates tiny living with displays of efficient living space in just a few hundred square feet.

Small neighborhoods, big prices

In recent years, there has been great interest – especially among aging Baby Boomers – to leave suburbia and return to city life. Developers responded by developing residential spaces above retail and commercial spaces, creating easily walk-able neighborhoods where people could live, work, and play.

Rents, though, outpaced salaries, and a younger workforce soon found themselves priced out of the urban opportunity. In cities like Miami, for example, living in an exciting urban neighborhood often requires multiple roommates and/or doubling up in bedrooms.

A big solution in a small package

It was only a matter of time before the tiny revolution made its way to the big city. Tiny homes, usually placed in rural or some suburban settings, could be adapted to urban life if they could be stacked on top of one another – in other words, the birth of the micro-unit building.

Cities across the country are in various stages of developing towers of micro-unit apartments. While some may see it as an attempt to jump on the tiny fad, for many urban neighborhoods, the micro-movement is seen as a chance to breathe new life into downtown centers. The size of the apartments forces residents to not collect stuff, but to experience city life.

  • New York City’s first micro-unit building is Carmel Place on the East Side. Studio apartments average between 260 to 360 square feet.
  • Seattle is said to have more micro-units than any other city in the country.
  • Miami’s entry into the micro-unit world is Moishe Mana Tower, a planned 49-story tower with 328 units planned for 200 N. Miami Avenue. Construction is slated to begin in 2018. Apartments are so small there’s no room for ovens, but there are plenty of built-ins and fold-aways to maximize space.

Are you a candidate for micro home management?

Living in a micro-unit is not for everyone. Most micro-dwellers are Millennials and younger, who are living alone and who have consciously chosen to trade space for affordable living in densely populated neighborhoods. Often, the micro-apartment is viewed as a stepping-stone for a specific life chapter, with residents staying for one to two years.

While many of the buildings feature amenities, such as communal full kitchens, gyms, and pools, they do not always have parking. The micro-unit towers are often located near public transportation so residents can easily commute or walk to their destination. Moishe Mana Tower, for example, will be close to public parking garages, but will also provide onsite bicycle parking.

At Morris Southeast Group, no real estate wish is too big or too small. Our team of professionals can help you find the right investment fit for your needs. For a free consultation, call us at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

How E-Commerce is Impacting CRE

How E-Commerce is Impacting CRE on morrissegroup.com

Retailers are spinning a logistics web around the country

A lot has changed since 2011. That’s when a blog post on this site stated: “Many consumers still want to see or touch goods before they purchase, so they still go into a physical store to get this experience.”

That statement still holds somewhat true, but e-commerce has continued to grow by leaps and bounds in the past six years – and fewer consumers have to go into a physical store to touch the goods before they purchase them. Instead, many more people are shopping while sitting with their laptops in coffee houses and microbreweries, at home on the couch, or via their phones while waiting at the bank.

Big numbers for e-commerce

When it comes to e-commerce, the numbers are tremendous. In 2016, global e-commerce reached $1.9 trillion. In the United States, the National Retail Federation predicts online retail will grow 8% – 12%. In dollars and sense, this means e-commerce sales are expected to be between $427 billion and $443 billion.

As a result of these numbers, retailers are renting industrial space at breakneck speed in order to fulfill online orders. According to a report in Business Insider, the second quarter of 2016 saw the most square feet – nearly 70 million – of industrial space leased in the past 30 years. At the same time, warehouse availability has decreased.

In other words, retailers are leasing warehouses faster than new ones can be built.

What’s the driving the e-commerce force?

In its infancy, e-commerce retailers were interested in specialized buildings. The emphasis is now on logistics and proximity to consumers. Although Amazon, Walmart, and Apple are the big three e-commerce retailers, more and more retail corporations are jumping into the e-marketplace.

To remain competitive, those in the game – including the big three – have had to up the ante with free shipping and rapid delivery. While some of the e-retailers envision drones crisscrossing the sky, at the moment, most consumers will receive their packages via traditional UPS, Fed Ex, or USPS delivery.

The solution to remaining relevant in this competitive e-world is leasing or building distribution centers near major population hubs. Because it’s a growing industry, there are specific demands that e-retailers require in their warehouse space:

  • Higher ceilings to accommodate shelving and top stock;
  • More dock doors for the loading and unloading of goods; and
  • Enough space to accommodate distribution, fulfillment, returns, and liquidations.

The changing tale of retail

Once upon a time, mail order catalog shopping was considered revolutionary. It’s how some retailers, like Sears, made their name. The e-commerce retail wave is the latest in the ever-changing, always-competitive marketplace.

As a result, the in-person retail experience is morphing into something else. Many stores have streamlined their stock, choosing to offer much more online. The physical world is becoming an extension of the online world, rather than the other way around.

Sadly, it also means that some retailers – many of them anchor stores in shopping malls – have had to close locations or shut down completely. Towns and cities across the country now have ghost malls and vacant parking garages – but these too can be repurposed into e-commerce facilities. They already fulfill what logistics managers require: large spaces, high ceilings, and close proximity to population areas.

The vision for South Florida

South Florida is in a unique position in terms of e-commerce distribution. Sitting at the tip of the Florida peninsula, the area is a perfect location for delivering goods purchased online to local communities and international ones. Smart investors are capitalizing on this reality, and we can help them do it.

Since 1976, Morris Southeast Group has seen CRE’s peaks and valleys. We are especially excited about the opportunities e-commerce can bring to the local commercial market. Our team of South Florida professionals can help you find the right building for the right job, in the right location.

For a free consultation, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

Artists Creating – And Owning – Their Own Spaces in Miami

Artists Creating – And Owning – Their Own Spaces in Miami on morrissegroup.com

How creativity is changing commercial real estate

Art does a lot for people. It appeals to our creative nature; it’s personal; its expression touches something in all of us. In the words of Pablo Picasso, “The purpose of art is washing the dust of daily life off our souls.”

The same sentiment can be said about art in communities. By embracing creativity, neighborhoods are learning that art can wash off their dust. We’ve seen that with Miami’s Wynwood district and Fort Lauderdale’s FAT Village, and now with Little Haiti. This time, though, things are a little different.

An artist’s life in Miami

Miami is a city born and bred on art. From its Art Deco architecture and the mix of cultures to the draw of creative souls from around the world and the abundance of light and color, the city is a palette of creative juices. The fact that it had an abundance of available, cheap, and often large empty spaces also didn’t hurt.

There is a caveat, though – and that’s the word “had.” When a neighborhood such as Wynwood thrived as a result of art, rents increased and developers and owners turned their properties into more lucrative projects.

Artists and gallery owners were forced to downsize and/or face rent increases. While some found a haven in donated or discounted spaces, these deals were often short-term. As a result, many artists and gallerists, no longer satisfied with art-powered gentrification, had to get creative with real estate.

Art’s new wave

For artists known for being free-spirited, it all came down to control. If they wanted to maintain an artistic foothold and have a say in how a neighborhood was developed, and to not be priced out, they would have to become developers in their own right.

In addition to needing their own studio space, many artists also needed space to display their work, as well as the work of other local artists and pop-up installations. In some cases, artists needed a place to live.

There were also the matters of accessibility and affordability – and one neighborhood quickly rose to the top of the list: Little Haiti.

If you build it …

Nestled between Wynwood and the Design District, Little Haiti is now a center for cultural tourism – thanks in large part to the indie arts movement. The main thoroughfare, NE 2nd Avenue, is lined with galleries and commercial art storefronts.

Now that the galleries are open and tourists are arriving, so too are the other businesses. Wynwood coffeehouses and bars are now opening locations in Miami’s newest arts district. The difference is that in Little Haiti, the artists are calling the shots.

Morris Southeast Group is thrilled to be a part of the diversity that is South Florida, from its people to its neighborhoods. In the decades that our doors have been opened, we’ve seen communities thrive, stumble, and then be reborn into something new and exciting.

Our team of professionals is able to connect investors and developers to the right property for today and tomorrow. For a free consultation, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

 

CRE In Miami is Getting Greener

CRE In Miami is Getting Greener on morrissegroup.com

South Florida cities are fighting climate change

When it comes to climate change, perhaps no other region in the nation has as much to lose as South Florida – Miami and Miami Beach in particular. With each year, King Tide flooding becomes increasingly extreme and creeps into more and more neighborhoods, and herculean efforts are underway to adapt city design and pump water back into the ocean.

It should come as little surprise that cities are also fighting back with initiatives that promote green building – and the investment is yielding results. A recent CBRE study, in conjunction with Maastricht University, has Miami in the top 20 for green commercial real estate.

What does it take to be a green city?

Despite an abundance of sunshine and palm trees, Miami wasn’t so quick to embrace green building standards. Cities like New York and San Francisco were among the first. But today, more and more cities, including those in South Florida, are offering green initiatives.

Miami is now ranked at 15. A combination of smart public policy and support from investors and owners helped jumpstart the city’s green efforts – and the work is paying off. Looking at LEED-certified and Energy Star-certified buildings, researchers report:

  • 12.29% of Miami’s commercial real estate is certified as green. (The current leader, Chicago, has 18.06%.)
  • That translates into 33.91% of total square footage in green buildings.

Going green is constant work

Climate change is a hot topic. There remain doubters out there, so it takes a particular amount of dedication on the part of public officials to continue moving forward with an eye on the future. That future, according to some predictions, may not be so bright – everything from devastating superstorms to submersion, with 2.5 million Miamians becoming refugees.

It is, so to speak, an uphill battle for city leaders – but they have taken proactive steps through the Office of Miami Sustainable Initiatives:

  • LEED Silver certification is required for new construction over 50,000 square feet, with density bonuses for projects exceeding green building certification levels;
  • There is expedited permitting for green building projects;
  • Some existing properties may qualify for financing for improvements to energy efficiency, renewable energy installations, and hurricane hardening; and
  • Other incentives and rebates are available through local and state initiatives, as well as through Florida Power and Light.

The bottom line is also the bottom line

When real estate goes green, the environment is not the only thing saved. There are financial savings, as well. Through the use of environmentally superior building materials and the installation of energy-efficient and water-conserving systems, businesses have seen savings in a variety of areas, according to Miami-Dade Green:

  • 15% – 30% savings on cleaning costs;
  • 35% on energy; and
  • 20% – 60% on water.

Additionally, Miami-Dade County, Miami, and Miami Beach have joined forces with The Rockefeller Foundation’s 100 Resilient Cities. As a member of this network, the area is eligible for funding and support, as well as sharing in the knowledge base of member cities from around the world.

Connecting you to green properties

Morris Southeast Group loves South Florida. It’s why we live, work, and play here – and why we’d like to see it around for many, many years to come. Our team of professionals can help you find the property of your dreams and connect you with green initiatives that will help you, the community, and our future.

For a free consultation, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

When Old Buildings Are Reborn

When Old Buildings Are Reborn on morrissegroup.com

CRE discovers its repurpose

Repurposing objects and residential properties has been big business for several years. HGTV has a long list of shows that have made repurposing their core theme – taking former banks and converting them into homes, teams of crafty folk raiding flea markets to re-do found objects, and remodels using reclaimed wood for floors and walls.

In real estate, repurposing has been a means of revitalizing neighborhoods and maintaining historical exteriors. The fervor seems to be picking up in the commercial arena, where there are many opportunities just waiting to be rediscovered and put to new use.

Why is repurposing happening now?

The ebb and flow of the human tide is an interesting phenomenon. With the Industrial Revolution, people left rural communities for factory jobs in cities. Economics, wars, and a growing middle class once saw cities diminish as suburbs sprawled.

Today, we are witnessing another tidal change.

  • More and more people – especially millennials and new retirees – are choosing to live in urban areas. There, they can enjoy cultural offerings by foot, by bike, or by Uber – and thanks to advances in mobile technology, they can work from home or anywhere.
  • Technology has also changed the way people shop. E-commerce has led to the wane of large box store giants and malls, while creating a need for regional distribution centers. As a result, there is a host of empty spaces begging to be repurposed.
  • Economic cycles: Businesses have come and gone, and while similar businesses have tried to fill the void in those same spaces, they too have gone under. The economy is now booming, but perhaps the time has come for a bakery to not always be a bakery.
  • Finally, there are the start-ups – new ideas in need of an affordable home base. As they start out, they may not be able to afford leasing space in a high-end location, but could easily adapt to a repurposed space in a more affordable neighborhood.

Why repurposing is important

Sometimes businesses close, the building is bulldozed, and new construction begins – or, the empty property simply sits vacant for years, slowly deteriorating. This is bad for communities, property values, and anyone interested in leasing or purchasing the space.

Around the country, repurposing and its benefits are on display:

  • A box store in Missouri is now an artist colony
  • A Maryland office building is now a green-building showcase
  • An auto dealership in Michigan became a grocery store.

Before beginning a repurposing project

While repurposing a building can be expensive – say, upgrading and modernizing the guts to meet new standards – many municipalities offer tax incentives to offset those costs. It’s also a good idea to partner with architects and developers who have repurposed before, as well as, in some cases, to work with local historical and preservation societies.

To help make the repurposing project smoother, it’s important to generate a Due Diligence Report (DDR). Broader than a Property Condition Assessment (PCA), the DDR is especially important when examining a property that was constructed before modern technologies. New tech, such as infrared photography, ground radar, and spectrographic analytics, can help “see” various issues, such as moisture and cracks.

South Florida’s repurposing project

Repurposing projects don’t always have to be about the building. It could also be about land, as it was for the FBI building in Miramar.

A developer destroyed the native wetlands on the edge of the Everglades by dumping the area with gravel fill – but a vision to restore the land and to then use the swampy landscape as a natural security barrier interested the federal government. A repurposing project was born.

Morris Southeast Group has a decades-long history in the South Florida CRE market. We know the hidden gems and believe strong real estate initiatives and imagination make stronger communities.

For a free consultation, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

Florida in The Top 5 For Commercial Development

Florida in The Top 5 For Commercial Development on morrissegroup.com

For investors and developers, the sky’s the limit

When the NAIOP, the commercial real estate development association, conducted its analysis to determine the top states for commercial development, it looked at GDP, salaries, wages, and the amount of jobs created and supported from the development and operation of commercial real estate.

People in South Florida, though, merely had to look at the number of cranes and construction projects filling the skyline to realize that Florida is in the top 5.

A closer look at Florida’s numbers

The compiled data indicates that Florida’s future is very bright, indeed. The Sunshine State ranked:

  • 5th in commercial real estate development;
  • 3rd in retail development;
  • 3rd in warehouse development; and
  • 7th in office space development.

Additionally, $7.59 billion was spent on commercial real estate in 2016, which resulted in more than 134,000 jobs, contributed nearly $16 billion to the state’s economy, and earned workers more than $5 billion. The end result is new job creation, infrastructure improvements, and opportunities to develop new spaces in which to work, shop, and play.

Why Florida matters to developers

For decades, Florida’s climate had always played a major role in attracting developers to the state. While weather is still an influence, it’s difficult to ignore a dynamic economy, a low tax burden, and a growing population that is culturally diverse and globally connected.

According to a report from the CBRE Group, foreign investors are attracted to the state’s strong cultural and economic connection to Latin America and the Caribbean. It also helps that many of the state’s cities, like Miami and Orlando, are strong global brands that are familiar to investors and developers from around the world.

Florida is the new frontier to meet new trends

Florida is in a great position to meet the needs of a changing labor market and a new work model. Technology has created a workforce that is able to work remotely, while at the same time shrinking the average square footage needs of employees when they’re in the office.

At the same time, smaller businesses and start-ups are sharing workspaces. As a result, traditional office spaces are being repurposed or new spaces need to be built from the ground up. New opportunities will be available in all areas of the region, from multi-building complexes in suburban areas to mixed-use facilities in downtowns.

In terms of industrial space, a growing e-commerce economy means there is a greater need for warehouse space to promote faster delivery of goods. It also means that some large box stores are closing down, and these spaces will have to be torn down to become something else, or converted into something smaller. In other words, it’s a chance for developers to think outside the box store.

Bringing Florida into the future

Morris Southeast Group is excited by the possibilities of Florida’s excellent development ranking. Our team of professionals is able to connect investors and developers to the right property so that the economy can continue to thrive.

For a free consultation, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

6 Ways to Save On a CRE Lease

6 Ways to Save On a CRE Lease on morrissegroup.com

Because everyone loves a good bargain – if the space is right

“Man is an animal that makes bargains; no other animal does this – no dog exchanges bones with another.”

Economist Adam Smith wrote these words in 1776 in his seminal Wealth of Nations, and this macroeconomic maxim is just as appropriate for today’s CRE market. Everyone loves a good bargain, from BOGOs at their local grocery store to businesses looking to lease office space.

Bargain hunting, however, is easier said than done. While not impossible, it takes due diligence and negotiation before signing on the dotted line, as well as an honest evaluation of whether a bargain is truly a bargain, long-term.

1. Make sure that Time is on your side

Saving money on an office lease requires a degree of homework. Rather than waiting to do it just before your current lease is set to expire, take advantage of the stretch of time that’s given to you before renewal. The size and complexity of your business will dictate the approximate length of time necessary to evaluate the current lease and to consider options and alternatives to better meet your needs:

  • Smaller businesses should set aside 6 months for this process.
  • Medium businesses usually require 12 – 18 months.
  • Large, complex businesses can take 2 – 3 years.

With time on your side, you can now begin the task of looking into the following cost-saving tips.

2. Know your market

Landlords know that most tenants will take the path of least resistance and renew a lease. This equation changes, though, if that landlord believes you can and will relocate. To that end, it’s important that you know what else is available so you:

  • Have some leverage in the negotiation;
  • Have a Plan B in case Plan A falls apart; or
  • Have viable options when there is a true desire to relocate.

While evaluating available properties, keep an eye open for unique opportunities. If a company is shutting its office with years left on its lease, a landlord may be willing to offer the space for a reduced price. In addition, many municipalities offer tax incentives and low interest loans to attract businesses to redevelopment zones.

3. Be realistic

It’s one thing to want all the bells and whistles; it’s quite another to be able to afford them. Keep your overhead in check by not going overboard.

It’s also a good idea to be aware of cost-saving real estate trends. For example, thanks to more efficient furnishings and technologies, the required square footage for each employee is  shrinking – from an average of 225 square feet in 2010 to 176 square feet in 2012 to just 151 square feet in 2017. This trend is likely to continue with the adoption of automation technology in the office and industrial workspace.

4. Share and share alike

When considering real estate trends, take a look at one of the hottest ones: collaborative workspaces. This idea means at least two companies can work independently while sharing common spaces, such as the reception area and break room. Frugal companies that are willing and able to share without compromising privacy or brand image can reap significant discounts.

5. Go green and save green

Some commercial spaces have received a Leadership in Energy and Environmental Design (LEED) certification. Through the use of smart design and green technology, landlords and tenants alike can realize significant utility savings, not to mention the appeal and positive branding associated with working in an energy-efficient space.

6. Hire a tenant representative

Another way to save money and a tremendous amount of time – and to avoid doing a lot of the homework listed above – is to hire a professional tenant representative. Quality reps are intimately aware of local and national CRE opportunities, availabilities, and trends, and they will negotiate with landlords on your behalf. A quality tenant rep also thoroughly gets to know your company and its needs, applying to them to find the right space.

In addition, these professionals can spot when a bargain isn’t really a bargain. For examples, a low price per square foot will actually wind up costing money in the long run if:

  • The location will drive down foot traffic for a retail store
  • The image of the building will turn off a company’s customers and employees
  • An industrial space lacks the necessary infrastructure and will wind up needing expensive modifications or other work-arounds
  • The area is poised for economic growth – or a significant slowdown. The former may be good for the local economy and your specific business, but it could also presage an increase in rent once a shorter-term lease is up. In contrast, a slowdown within a specific location may cripple a business, regardless of the savings on a lease or the physical suitability of the space.

These are just a few of the factors that a tenant representative will take into account when finding a bargain for your business – determining if any deal is simply too good to be true.

For more than 40 years, Morris Southeast Group has negotiated office leases throughout South Florida and the entire United States. We’ve seen the CRE market in the best of times and the worst of times; we’ve seen trends come and go. Through it all, we have successfully met the needs of countless tenants, landlords, and owners.

If you’re looking for a tenant representative who can help you negotiate your next office lease, call Morris Southeast Group at 954.474.1776 for a free consultation. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

The Traits of a Good Tenant Representative

The Traits of a Good Tenant Representative on morrissegroup.com

Quality tenant representation goes far beyond listings and price per square foot

It is difficult to overstate the importance of quality tenant representation in commercial real estate. Through the peaks and troughs of the market, a good tenant rep must be able to assess economic trends, broker deals, thoroughly evaluate a client’s needs, and make sure those needs are always their priority. The best reps will possess a rare combination of market awareness and vision. They’ll not only work for you but with you to understand that the deal is more than just finding a rental space – it’s a decision with specific financial implications that directly impact the success of your business.

If you’re thinking of braving the property market alone, take a moment to review the hallmarks of an experienced tenant rep – and how having one on your side can make a world of difference.

Excellent tenant reps appraise the full potential of properties

A successful real estate deal must be viewed within a strategic framework. A great tenant rep will size up a potential property holistically, evaluating exactly how it will meet the client’s needs while contributing to the business’s bottom line. They’ll do a thorough check on the property and basic financials of course, but beyond that there are a variety of factors that may or may not suit the property’s intended use.

In order to find the right facility, professional tenant reps become lay experts about their client’s profession. A physician looking to open a new office will have vastly different needs from a manufacturer aiming to move to a new facility, including factors like location, access to parking, visibility, and the physical infrastructure of the space.

Developing this client-specific expertise comes from both experience with a range of clients and asking the right questions. A real estate professional will coax necessary information out of clients who may know they want a space, but may not be aware of the specific elements that will maximize its value. Some examples include:

  • Financial aspects: Does the price per square foot fit within the client’s budget? And does paying a little more or a little less make more sense when other factors will contribute or detract from the value of the space? Long-term, what is the projected growth of the property’s corresponding value and its potential for rate increases?
  • Spatial and structural needs: Is a potential office space for 40 employees going to have the square footage and layout for the open, closed, or hybrid office design envisioned by the client? If a property is intended as a warehouse, are the ceilings high enough and does it have a loading dock? Does a retail establishment have enough storage for inventory?
  • Geography: Is the location desirable for the principal stakeholders? For a retail business, this might be as simple as obtaining a space in an area with high visibility and foot traffic, as well as nearby anchor stores and little direct competition. A shipping company may be looking for quick access to transportation hubs and a wide enough perimeter for its security strategy.
  • Image: Does the location befit the business’s brand? This is a key consideration in office and retail locations which must make the right impression with clients, potential employees, or customers.

These are just a few considerations in addition to the essentials that every client needs to know, such as the cost per square foot and zoning regulations. For example, a business services company looking to find a new office space needs to consider if the property’s image is the right one, whether it’s centrally located for employees or clients, and if the building is flexible enough for anticipated growth or reduction of the organization. Tenant representatives assess these needs by spending the time to learn as much as possible about a client’s business.

A great tenant rep is always transparent

You hire a rep to help you navigate unfamiliar territory – but you don’t want to be a mystified onlooker while they hammer out a deal on your behalf. You may have a lot of questions, and a good rep will answer all of them while keeping you proactively and fully informed at every stage.

Commercial real estate shoppers should look for a rep who uses an open book process to analyze the entire market. Essentially, this means that you will see everything within the parameters that have been established, giving you greater flexibility and fewer surprises or regrets. With an open book process, there is simply no downside to using a tenant rep – once the list of properties is generated within the specified parameters, you have your pick of the entire market. When it comes to dealing with potential landlords however, that becomes a closed book as the professional tenant rep does their best to leverage the market in their client’s favor. The open book transparency is solely between the tenant rep and their client.

From there, a tenant rep will help you evaluate the candidates based on everything from image and cost to infrastructure access, zoning, future growth, and even macroeconomic or industry-specific factors. Complete information means complete freedom to choose.

Quality tenant reps consider all options

Some companies know that they aren’t happy with their current space, but moving may not be the best decision. The rep will assess what works in the current space and what doesn’t, followed by always providing options that are in the best interests of the client. For example, if the current space is too hierarchical for a collaborative work environment and can’t be modified, then a move may indeed be necessary. But if the real issue is that the cost per employee or square foot is too high, or a business needs to expand and there is the potential to lease adjoining space, it may be smarter to simply renegotiate the current lease. If so, the tenant rep will step in to negotiate with a landlord who is looking to maximize his or her revenue stream and doesn’t have the tenant’s best financial interests as a top priority given that the profit motive is understood and appropriate for each party to work hard to negotiate for the best terms possible. The professional tenant rep will take into account the various landlord’s metrics and advise their clients of what is and isn’t a sustainable transaction

A good tenant representative will impartially provide this advice, regardless of the personal financial benefit from one option or the other. Doing this isn’t simply ethical, it’s practical. Success in real estate is as much about long-term relationships as it is about immediate ROI, and one feeds the other.

You can take advantage of our free market report if you’re thinking of a property move. And if you’re convinced of the benefits of top-flight tenant representation, then look no further.

At Morris Southeast Group, we’re proud to be among South Florida’s leading real estate brokers. Since 1976, we’ve been devoted to meeting the diverse property needs of our clients. For comprehensive tenant representation, you can reach us at (954) 474-1776 (ext. 303). To speak directly to our president, call (954) 240-4400 or email him at kenmorris@morrisgroup.com.

Could Big Data Help CRE Investors and Developers?

Could Big Data Help CRE Investors and Developers? on morrissegroup.com

Smarter decisions are a click away

For better or for worse, we live in a data-driven world. Everything we do, eat, wear, or Google leaves a digital footprint to be placed in an algorithm for further crunching, analysis, interpretation, and distribution.

The easiest example is to do an Internet search for anything – a new mattress or a future vacation destination – and see how quickly related information and ads appear in your Facebook newsfeed. From Netflix preferences to complex medical diagnostics, big data is transforming the way many industries conduct business.

CRE is jumping into big data

For years, big data has transformed industries around the globe, and the growth of the Internet of Things has accelerated this trend. Banking and insurance are two such industries that have turned data analysis into an art. Thanks to modeling massive amounts of information, they are better able to see trends, steer marketing initiatives, and determine risk factors.

While the real estate industry has used data to a point – to get a better view of property values and taxes in a particular neighborhood, for example – 2017 is predicted to be the year that big data will have a much greater influence. The key phrase here is predictive analytics.

Predictive analytics opens a whole new world

Simply stated, predictive analytics is the gathering and analyzing of data through a variety of means, including statistics, mining, and artificial intelligence, to make predictions about the future. For the commercial real estate industry, the availability of this information and the indication of trends can bring the client-broker relationship to a whole new level. Thanks to good data, the broker may be able to spot a client’s need before the client is even aware of the need.

Let’s say there is a client interested in making a real estate investment, perhaps to own a building and then to lease out space. If the local market doesn’t meet the client’s criteria, a smaller market might.

Armed with data, the broker can fine-tune and automatically obtain a location – perhaps a secondary market the client never considered, where prices are lower but future potential is high – and that future potential might be mapped with numerous points of data, from trends within a certain industry to overall economic factors and interest rates.

Start-ups are starting up each day

The key to strong predictive analytics is rich data gathering. To meet that need, companies and apps are popping up to compile data and overlay it so that the combination provides meaningful answers.

Among the data that can be used for a successful transaction:

  • Levels of property/space availability in a specific market;
  • New construction trends in a specific location;
  • Employment trends, education level, tax information, and insurance requirements for a specific location;Traffic information and all that that entails, such as pedestrian numbers and behaviors, parking availability, and public transportation; and
  • Traffic information and all that that entails, such as pedestrian numbers and behaviors, parking availability, and public transportation; and
  • Property history, including physical soundness and renovation history.

Even unsuccessful deals can lend a helping hand. One app, for example, gets feedback from prospective tenants to analyze what about the property they didn’t like, such as the physical layout of the space, ceiling height, or windows. This information not only helps the broker to find a more suitable space for the tenant, but it also helps the broker work with the owner to consider renovations.

Moving South Florida into the future

Morris Southeast Group is excited about technology and its ability to meet the needs of tenants, developers, and investors. Not only does it keep all parties satisfied and profitable, it also helps to keep our South Florida cities growing and vibrant.

Our firm has seen a lot of changes since it opened its doors in 1976. We’re proud to have grown with the times, and we look forward to always looking forward. To discover a commercial real estate property that meets all of your needs, contact Morris Southeast Group at 954.474.1776 for a free consultation. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

Florida Is the Only State to Tax Commercial Leases

Florida Is the Only State to Tax Commercial Leases on morrissegroup.com

Politicians, business owners, realtors, and lobbyists are all baffled

While this notoriety can be blamed on ease of access to police blotters thanks to the state’s open records law, there’s another item that is uniquely Florida: We are the only state that imposes a sales tax on commercial leases.

The monetary benefit of the Business Rent Tax

Written into the state’s tax code in the late ‘60s, the Business Rent Tax (BRT) means businesses must pay a 6% state sales tax on their rent and any added costs to that lease, such as property taxes, maintenance fees, and insurance costs. On top of this, local governments can add an additional 1.5%.

In terms of the bottom line, the tax generates a lot of money for Florida. While the bulk of state revenue comes from the state sales tax, about $25 billion dollars in fiscal year 2015-2016, the BRT also contributes its share. Current estimates place the amount at $1.7 billion dollars, with a projection of $2 billion dollars by 2020.

These numbers are important to keep in mind since Florida’s constitution prohibits a personal income tax and we are state with many needs.

How the business rent tax hurts the state

Those opposed to the tax, including Governor Rick Scott, Florida TaxWatch, and the Florida Chamber of Commerce, believe the BRT puts Florida at a unique disadvantage. With the tax in place, there is little incentive for businesses to relocate to Florida.

For smaller businesses and start-ups, there is a disproportionate financial hardship. Some local retailers, for example, could pay more than $100,000 a year in taxes on their leases. Not only do these costs lead to a sluggish economy and suppressed job growth, the costs are passed down to consumers.

Florida realtors also oppose the BRT

Not surprisingly, the BRT hurts commercial real estate in Florida. Small businesses with limited capital, for example, are less likely to expand and more likely to lease spaces too small for their needs. They’re also less likely to hire employees and to provide competitive salaries for staff.

Florida Realtors has added its voice to that of the Governor and other groups to begin cutting the BRT. The organization’s findings indicate that in the first year of a complete repeal of the BRT, 185,000 jobs would be created and there would be a $20 billion economic impact.

Florida sits in the middle, and that’s unacceptable

To further illustrate the impact the BRT is having on the state, one only has to look at various rankings. Florida’s business ranking – determined by competitiveness, business costs, labor supply and other factors – placed the state in 13th place in Site Selection magazine and in 22nd place by Forbes.

In 2016, a small business friendliness survey placed Florida 15th among 35 states. That’s a B minus. Texas received an A plus, and neighboring Georgia, an A. In other words, businesses are more likely to turn to those states for opportunities, rather than the Sunshine State.

Morris Southeast Group responds to the BRT

For more than 25 years, Ken Morris has been dealing with the impact of the BRT on the commercial real estate market. It has been a headwind; stifling growth, innovation, and jobs. While the state, at the moment, may not be in a financial position to enact a complete repeal of the tax, it is in a position to begin reducing the tax so businesses and the Florida economy can grow and be competitive with other states.

It is our belief that Florida has so much to offer businesses – from our beautiful climate to cultural enrichment; from vibrant communities to a strong and eager workforce.

For a free consultation about commercial real estate opportunities in the area, contact Morris Southeast Group at 954.474.1776 or reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com

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