Even despite a dearth of financing for new construction, some developers remain optimistic.
Letb s not underestimate the lack of financing. As Anthony Westreich, chief executive of landlord Monday Properties, told The Wall Street Journal,
“It’s a bit of a cart-and-horse situation. You have tenants saying, ‘I don’t want to commit to a lease in your building until I know the financing is there,’ and lenders saying, ‘I don’t want to commit to financing your building until I know the tenants are there.’ “
Nevertheless, the halting of new construction could mean demand for newer buildings may be greater than the supply in the next few years. In addition, a few construction projects are moving forward, just not nearly as many as during the boom, as developers seek financing beyond the banks. Extell Development Co., for example, still hasnb t gotten a bank construction loan, but is moving forward on a building in Manhattan with a little help from partners in the Middle East.
Photo credit: Monday Properties via The Wall Street Journal
Seeking out the business world as its main market, The BlackBerry PlayBook will have a 7-inch screen and weigh 0.9 pounds, making it smaller and lighter than the iPad—thus fitting better in a briefcase, according to an analyst at Avian Securities LLC. Itb ll use Wi-Fi to connect to the Internet wherever available.
RIM acquired QNX Software Systems in April, and is making the PlayBook based on software from QNX. QNX software can be found in nuclear power plant control systems as well, making it seemingly more reliable than its competition.
The PlayBook will be available in U.S. stores early next year. Click here to learn more. What do you think about this new option in technology from RIM? Will you be using it at work? Leave a comment to let us know.
Image credit: rim.com
A number of American companies have begun using software and other means to find innovative ideas and solutions to problems in customer service from straight out of their own ranks: workers at the company.
Pitney Bowes Inc., for example, has implemented around 700 if its employeeb s ideas. Rather than an old-school suggestion box, the company uses U.K.-based Imaginatik Plcb s program Idea Central. The company found a way to help its callers without transferring them between numerous agents that nearly immediately increased customer satisfaction.
AT&T uses similar software from Spigit Inc., dubbing its new internal network The Innovation Pipeline. To encourage employee participation, the telephone company offers employees financial incentives.
The networking at Pitney Bowles also led to another unintended positive outcome: contracts worth almost $384,000.
For more information about employee innovation, check out Bussinessweekb s article, b Workers of the World, Innovate.b What do you think of companies using software to draw and implement ideas from their employees? Leave a comment to share your thoughts.
Image credit: strategicmarketsegmentation.com
National commercial real estate prices fell in July following a previous decline in June, according to Moodyb s and Real Estate Analyticsb Monday report.
From January through July 2010, commercial real estate prices have dropped 4 percent altogether, even despite gains in April and May. Contributing factors beginning early this year include the potential for a double-dip recession in the U.S. as well as the European debt crisis.
According to GlobeSt.com, managing director Nick Levidy at Moodyb s said this in a statement:
b The recent performance, while perhaps somewhat discouraging, should not come as a complete surprise. We have noted for several months that markets are likely to remain choppy for some time as property values slowly form a bottom in conjunction with a gradual recovery of the broader economy.b
Other indices reveal property prices in the East increased in the office, retail and apartment categories while dropping in the industrial properties category. Click here to learn more.
You can connect with Morris Southeast Group online through more than just our blog—web re also on Facebook and Twitter. Following us on these social networking sites is a great way to keep up with our latest updates and interact with others also interested in the commercial real estate industry and the changing workplace.
To find us on Facebook, simply click Liking and following us on Facebook and Twitter will help keep you in the know on important commercial real estate issues, from declining real estate values to occupancy and marketplace trends.
An interesting trend has surfaced in corporate America: young, single women have higher earning power than their male counterparts. Females are more likely to go to college than men, and higher education ups earning potential.
The Wall Street Journal reports,
b In 2008, single, childless women between ages 22 and 30 were earning more than their male counterparts in most U.S. cities, with incomes that were 8% greater on average, according to an analysis of Census Bureau data released [recently] by Reach Advisors, a consumer-research firm in Slingerlands, N.Y.b
Nevertheless, when compared to male peers of equal status, women still make less than men at every education level. Their incomes also plateau, or even decrease, after having children.
Click here for more information. What do you think about this trend? Share your thoughts!
Photo by Daniel Borman via Flickr
Letb s face it—more and more companies are leaning toward the concept of a virtual office, due in part to the current state of our economy. The idea of working from home is very appealing to employees since they can choose the setting in which they work and wear whatever they want. Employers might like the idea that business expenses can be drastically cut. As with any major business decision, there are some serious issues to consider.
As reported on E-Commerce Times, managers are still clinging to the philosophy that working from home results in lower productivity from employees, as well as wasted resources. An additional concern for managers is that when employees work from home they cannot be managed as effectively as they would if everyone were in the same physical location. A shocking discovery from a study commissioned by Citrix Online revealed that one-fifth of U.S. respondents would willingly give up 5 percent of their salary in order to work away from the office one or two times per week.
The biggest challenge for employers is effective management when it comes to the virtual office. Virtual workplace environments should have set standards and be managed like any other business plan. Another big challenge for managers is virtual security. In general, employee-owned devices cause a great deal of concern since they are not controlled by IT organizations and can be improperly figured. Unauthorized or insecure access to the company Intranet raises a great deal of concern over data leakage from notebooks when firewalls have been opened in order to support teleworkers.
Obviously, there are many things to think about before setting up a virtual office. We want to know if it would be worth the hassle. Leave us a comment and tell us what you think.
Photo credit: Commuteconnection.com.
In the business world, a smartphone is a necessity. Microsoft has yet to make a huge impact in the smartphone marketplace when you compare its Windows Mobile 6.5 to the tough competition from Apple and Google on the consumer side and Blackberry on the business side. However, that may be about to change.
Microsoft is releasing the Windows Phone 7 in September. Due to the tight control Microsoft is maintaining over the operating system of this phone, early reviews have revealed mixed opinions for the Phone 7 handset, according to All Business. Phone 7 features a lot of Microsoftb s b usual suspects,b music and videos from Zune, Bing-based maps and searching, and a mobile version of Xbox Live for gaming. The biggest strength of this phone is the intelligently integrated Office Suite, with which users can access Word documents and Excel spreadsheets, view PowerPoint presentations and collaborate with SharePoint, making Phone 7 an option for business people who are on the go.
But there are a few flaws to consider with this early version of Phone 7. This smartphone is currently unable to copy and paste, a feature found within the competition. Phone 7 also lacks Flash, but Adobe has said it should be available in the months following the launch. Multi-tasking on this phone is available only on first-party apps. For example, you can play your Zune songs while checking text messages, but you canb t do that from the Pandora app.
Click here for more information. And donb t forget to let us know what you think about this new option from Microsoft. Will you consider this phone for your business needs? Leave a comment to let us know.
Image from gizbuy.com
Doing business in the United States is about to get a whole lot more complicated and expensive.B Recent proposed rule changes by the FASB (Financial Accounting Standards Board), if set in place, will have a dramatic and severe impact on the way that US companies treat their leased real estate.B If the proposed FASB change takes effect all lease expense based accounting will be eliminated and all leases will be treated as a debt obligation to be reported on the balance sheet.B The proposed standard replaces FAS 13 in the United States andB will affectB companies that lease real estateB in the following manner:
The proposed changes currently scheduled to take effect in 2013 couldB notB come atB a worse time for the US economy struggling to recoverB in the worst economic environment since the Great Depression, andB presently could be headed into a “double dip” recession.B The commercial real estate and banking sectors of the economy already weakened by the steep correction over the previous two years could be hammered to its knees by the proposed rule changes.B Very few sectors of the economy are as interwoven as commercial real estate and banking into the overall equation.
The net effect of the proposed change will be profoundly negative – B far reaching in scope and time.B Companies will soonB be required to report aB significantly higher amount of debt on their balance sheet, which could affect the overall valuation of the entity and perhaps trigger defaults with their lenders on preexisting debt covenants.B The dynamic between commercial landlord and tenant will change as the ruleB creates an incentive forB the lessee to sign shorter term leasesB in an effort toB lower the negative impact on the balance sheet – lease options to renew will soon be a thing of the past.B Consequently, B landlords will charge a higher rent and shift more of the burden of renovation costs to the tenant as the ability to amortize those costs diminishes for those shorter term leases.B Landlords will suffer because they will no longer be able to secure long term financing asB lenders will not provide a ten year loan for a property that could only have three year leases on average – constantly having to chase after financing every 3-5 years will be expensive and time consuming.B Buildings with short term leases are considered less stable, hence worth less, and so its likely that property values will decline further which will also result in more volatility in the property and capital markets.B US companies could be valued dramatically lower due to the effect of placing all operating leases on the balance sheet which could have a profoundly negative affect on the equities markets for some time to come.
Why is this happening? The FASB and it’s international partner the IASB (International Accounting Standards Board) got together to develop a unified approach to accounting in recognition of a globalized economy.B The FASB/IASB recommendations are designed to provide more transparency and comparability and to eliminate off balance sheet transactions. At present, it is estimated that the value of operating leases for publicly traded companies in the US is between 1.3 and 2 trillion dollars. The proposed rule changes stem in part from spectacular business failures in the pastB such as Enron, which was a company that borrowed more than it was worth in part by using off balance sheet transactions.
While its understandable that the FASB (which answers only to the US SEC) would strive for greater clarity in US accounting practices the far reaching and grosslyB negative affects the proposed rule changes will have, B must be studied and carefully considered by all stakeholders.B TheB way commercial real estate is leased and sold will change overnight.B Already, US companies with multiple locations areB scrambling to analyze how the rule changes will affect their balance sheets and overall real estate strategies. Many companies will soon start asking whether its better to own their real estate instead of leasing it because it will be on the balance sheet anyway. Those companies with multiple locations (like retailers and banks) could be at a competitive disadvantage to those that have a lower real estate footprint or already own their facilities.B
Members of theB accounting communityB have been quotedB B thatB the solution in many cases would be for companies to purchase their real estate now instead of leasing, and frankly, I find that to be extremely naive.B A company that leases a space or a floor within a multi-tenanted property won’t easily be able to justB convert itsB leased space toB an owned space, especially if the property is owned by a REIT or another institution that purchased that asset based on a specific set of parameters (including longer lease terms for the tenants in the property to create a minimum rate of return for that asset). Furthermore, I don’tB think B it likely that REITs, pension funds and insurance companies will be eager to start carving up their ‘tier-1’ assets into condominium vehicles for their tenants to convert to owners as a result of the new accounting rule.B One of the primary reasons that companies lease their real estate instead of purchase it is because it is hard to predict what their needs will be beyond a typical 5-10 year lease term.B B The purchase ofB real estate is not a liquid asset and cannot be disposed of easily which means making strategic changes over a shorter time period will be exceedingly difficult.
So, here we find ourselves already mired in an era of overwhelming uncertainty with the old paradigms seemingly and unnervingly being killed on a daily basis.B B Along comes the FASB, rushing like a fireman late to the fire with a can of gasoline in handB – all in the name of clarity and theB prevention of another ENRON.B The economic cost of the new FASB rule will be devastating as its likely that there will be a global devaluationB inB B the value of real estate assetsB as well asB equities already during a time of – you guessed it, devaluation.B The FASB may just have created an economic stimulus package for the accounting profession, and I am sure that the accountants hired to find every last nickel of assets and debts will do so. After the dust settles a few years from now, after the great upheaval this will cause, the accountantsB whoB did the findingB B ofB the last nickel will find that its made out of wood, and will have to be tossed in the bonfire at company headquarters to keep themselves warm…
Let me know what you think.
As more and more work piles on fewer and fewer employees, workersb stress levels are through the roof. In fact, 75 percent of Americans are on the brink of a meltdown, according to a Fairleigh Dickinson University report.
The results: more job-related errors, employees calling in sick and higher turnover rates, to name a few.
Most of the companies trying to address high stress levels are suggesting workers see mental health counselors through employee assistance programs.
But not only are employees stressed about work, they also have finances, job security and families to worry about. Stress in this economy is high in most facets of life. And the longer work-hours and endless to-do lists of high-up executives doesnb t make them the most susceptible to stress-related heart disease, for example. The workers lower on the totem pole who worry about set hours, job security and unsupportive bosses suffer more from stress, neuroscientist Robert Sapolsky explains.
Click here for more information from The Miami Herald. Have you noticed stress on the rise in your workplace? Is your company addressing this stress?
Image from ashestraining.co.uk