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The Latest CRE Gadgets & Gizmos In One Word: PropTech

The Latest CRE Gadgets & Gizmos In One Word: PropTech on morrissegroup.com

Now more than ever, your investment is in your hands

In the world of CRE, 2019 may be remembered as the year PropTech became a key buzzword in the industry’s vernacular. Short for property technology—or using information technology to research, purchase, sell, or manage the property—the concept has moved out of the residential market and into the commercial one.

For anyone watching from the sidelines, it can be an overwhelming (or daunting) scenario. There are many products currently available, and with investor interest, more are on the way.

Data is the bottom line

At the core of PropTech is data: collecting it, analyzing it, and utilizing it. But the term generally applies to several elements:

  • Software, like property portals and platforms, is used to improve property research and management, as well as to streamline communication between all parties involved with a specific property or project.
  • Hardware includes the tools that gather the data, such as sensors and drones. According to one estimate, over a trillion sensors will be connected to the Internet by 2022, and this Internet of Things (IoT) network will be collecting all kinds of data from building systems and energy efficiency stats to foot traffic to weather patterns. One company has even developed sensors to be placed on cranes at building sites to better understand and prevent expensive delays and extended deadlines.
  • Materials, such as bricks to act as batteries for solar panels and climate change-mitigation products, and manufacturing, such as 3D printing, are also key elements.

The new kids on the PropTech block

The latest additions to the PropTech industry are start-ups. At the moment, there are countless start-ups around the country competing for billions of dollars in investment capital. At the same time, big names like Amazon and Google are jumping into the CRE PropTech arena.

While smart technology is pretty much a staple when it comes to new construction or repurposing older buildings, the increased amount of data and financial interest in PropTech are pushing next-generation development to the fringes of the CRE imagination in several key areas:

  • Expect greater use of drones, not only for capturing footage of properties from the air but also for data collection. More and more drones are being used to capture real-time progress on construction projects, as well as to map them.
  • With all of this data, someone—or, rather, something—has to sort through all of it to develop predictive analytics. Enter Artificial Intelligence (AI). While already responsible for virtual reality tours and filtered property searches, future AI will only be enhanced by areas such as biometrics, bots (for 24-hour customer support), geolocation tech (to better predict trends for specific properties in specific locales), and to oversee IoT technology that manages building systems’ usage and maintenance.
  • While today’s AI devices are designed to act intelligently, Machine Learning (ML) devices are a form of AI that is intelligent. By feeding data to ML devices, they will be able to learn for themselves.
  • In general terms, a platform is a means to digitally facilitate communication between individuals or groups of people. Think of it as a public ledger of data without the middleman. Blockchain, a platform that was instrumental in the cryptocurrency craze, is beginning to gain a foothold in the real estate industry, especially as it pertains to lease transactions, property acquisitions, maintenance records, and due-diligence processes for both full and fractional property sales.

Working together to make PropTech work

While there is no predictor of which technologies will have staying power and what their exact influence will be, one thing is certain: technologies, as exciting as they are, must be able to work together. For example, IoT sensors will gather data for AI to analyze and apply. Without one, the other can’t reach its full potential.

The same could be said about people. Without good relationships, successful CRE investment is a lot harder, if not impossible.

To learn more about what Morris Southeast Group can do for you, call us at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

Alternative Property Investment Opportunities: What are Some Options?

Sometimes it pays to think different—or more specific—in real estate

If the 21st century has taught us anything, so far, it’s that the rules have changed. What was once considered inconceivable at the dawn of the millennium is now a reality. Livable, walkable downtown development is surging, shared workspaces and telecommuting are givens, and ridesharing, scooters, and on-demand food delivery are a smartphone swipe away.

It makes sense, then, that the traditional boundaries of commercial real estate are also expanding in new and alternative directions—or breaking down into smaller segments. Individual investors and REITs are no longer confined by the large multifamily, retail, office, or industrial boxes.

1. Niche housing

Investing in housing has long been a tried-and-true way to enter the real estate marketplace. In recent years, though, things have gotten a lot more personal, with owners and landlords eager to market properties to very specific tenants. There’s something for everyone.

  • Mobile homes have long catered to those who are unable to afford a down payment for a single-family home and some “luxury” mobile home parks have started to become more common. Mobile homes are also an opportunity for someone new to CRE investing or who doesn’t have a lot of capital. While profits may be smaller than those in higher-priced CRE properties, the affordability makes it possible for someone to develop property investment and ownership skills in an area with low competition.
  • On the opposite end of the housing spectrum is corporate housing. Very often, companies having to do regular business in locations away from the home office need mid- to long-term accommodations for employees. To keep costs down, they would rather avoid pricey hotels while providing employees with a home-away-from-home experience. While leases can be either short or long term, the goal is to make an attractive property financially attractive for the tenant.
  • With college enrollment continuing to climb even during slow economic periods, students are facing a housing crisis. On-campus dorms are crowded and run-down, while off-campus housing can be expensive—and this, in turn, has given birth to a larger student housing marketplace. Investors are purchasing multi-family properties close to college campuses and offering clean and affordable accommodations with shared social spaces. Anyone investing here should be prepared to manage first-time renters who lack references; their parents; and significant wear and tear on the property.
  • While Millennials are front and center in many of today’s discussions, Baby Boomers are the gift that keeps on giving. In this case, it’s through a seniors housing trend. The scope of that population spans those approaching retirement to significantly older individuals—and this translates into everything from active adult communities to assisted-living facilities to nursing homes.

2. Medical office buildings

In addition to seniors housing, an aging population—along with an increase in outpatient treatment—is also creating a strong demand for medical office buildings. Sweetening the prospects for investors is the idea that medical office tenants tend to be stable, long-term occupants and the need for patient care remains strong no matter the economic climate.

3. Self-storage

In recent months, there’s been the talk of a looming recession. Whether or not that economic downturn gets here is anyone’s guess, but it’s always wise to look at opportunities that have historically done well in lean years. Self-storage properties are often that investment. In good times and bad, people need to store stuff—and interest appears strong across economic classes and market locations.

4. Data centers

Demand for data grows each day, and there is no indication that will ever slow down. As a result, storage—the size of the cloud and the buildings that store the physical servers that support it—has to grow. That’s why data centers are predicted to be strong performers. While they can be considered a riskier investment because of the increase in competition and capital commitment, the business model has performed well even during slow times. 

Thinking outside of the box in SoFlo

When it comes to thinking outside of the CRE box, the professionals at Morris Southeast Group cannot think of a place that’s more creative than South Florida. Whether it’s converting a warehouse into an artist hub or developing a vacant lot into a state-of-the-art housing rental property, everything seems to be achievable here.

To learn more about what Morris Southeast Group can do for you, call us at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

CRE Insurance For Owners And Tenants in South Florida

Who needs what and why

When it comes to commercial real estate, owners and tenants have at least one thing in common: both want to protect their investment. To that end, insurance is a necessity—but all too often, it becomes the elephant in the room. Everyone knows it’s there, but few ever want to talk about it because it’s overwhelming, confusing, and somewhat negative at a time when everyone is energized about positive possibilities.

Ignoring the insurance issue, though, can mean very expensive and legally complicated consequences for both parties. On the other hand, understanding what’s required can prevent lots of last-minute scrambling and help develop a smarter business plan. Here, then, is a rundown of who needs what and why.

Insurance needs for the CRE owner

The trick with insurance is creating a balanced plan that is fiscally sound and provides appropriate coverage. To that end, it’s imperative for the investor to consider what sort of coverage works best for each specific property. Property along the coast, for example, has different risk factors than one located further inland or in another part of the country.

First and foremost at the top of any insurance list are fire insurance and liability insurance. From there, depending on the needs of the owner and/or the property, other insurance plans can be added:

  • Flood insurance, especially if the property is located in a designated flood zone or if flooding is an issue in the property’s location.
  • Terrorism insurance in case the property is a terrorism target risk.
  • Builder’s risk insurance if the property is vacant or mostly vacant and will be renovated.
  • General contractor insurance if the owner will act as the general contractor and pull his/her own permits for the work.
  • Workers compensation insurance if the owner plans to hire on-site employees, such as maintenance workers.

Insurance needs for the CRE tenant

As important as it is for the owner to protect the entire physical property, it’s equally essential for the tenant to provide coverage for the actually leased space. Commercial renters insurance generally covers damage or destruction to property caused by fire, vandalism, and most weather-related issues. This property can include office and manufacturing equipment, inventory, and business records.

From here, a tenant can look into additional coverage, some of which are identical to that carried by the owner, such as worker’s compensation and flood insurance policies. While not mandatory, some owners may require the following options:

  • Business liability insurance not only protects the tenant should a customer become injured on the leased property, but it also protects the owner. Because the owner does not want to be held responsible for the tenant’s mistakes, he/she may ask to see the tenant’s certificate of liability insurance at the time of the lease signing. No certificate, no lease.
  • Business interruption insurance assists the tenant in paying bills, including rent, if the business is not generating income for a variety of reasons, such as theft, vandalism, or even sewer/water line repairs by the city.

Ensuring you’re insured correctly

The last thing anyone wants is for the elephant in the room to destroy an investment or leasing opportunity. Whether you’re new to the CRE market as an investor/owner or a tenant, it’s important to work with a team of professionals who are acutely aware of commercial properties and their insurance needs for specific locations. With more than 30 years of experience in South Florida, Morris Southeast Group is that team.

To learn more about owner and tenant representation and what Morris Southeast Group can do for you, call us at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

Going Green On Top: Heat-Mitigation Design is an Emerging Climate Solution

Going Green On Top: Heat-Mitigation Design is an Emerging Climate Solution on morrissegroup.com

Commercial real estate is a cool key player in new green solutions

Most discussions about climate change and South Florida focus on sea-level rise. The topic is one of the major concerns when predicting storm surges during hurricane season, and it’s a regular headache for more and more residents during periods of King Tide.

Temperature is less frequently one of the region’s climate change talking points—even though South Florida is coming off one of the warmest summers and autumns on record. For many, the feeling is that it’s supposed to be hot here. But is it supposed to be this hot?

CRE can help cool things off

A recent study from the Urban Land Institute, Scorched: Extreme Heat and Real Estate, took an in-depth look at the causes, concerns, and cures for the Urban Heat Island Effect, a very real phenomenon in which asphalt and cement absorb heat during the course of the day and then radiate that heat throughout the evening. The result is a marked heat difference between downtown and rural areas. In turn, this can have a negative impact on the environment, the economy, and public health.

In many areas of the country, the loss of green space for the sake of development has played a huge role in raising temperatures. The good news, however, is that CRE development is playing a larger role in cooling things off. Designers and developers around the country are incorporating cutting-edge heat-mitigating technologies in their new projects.

Among these are the creation of green roofs; gardens in the sky that can reduce a building’s energy consumption and stormwater run-off while improving sound insulation and filtering out pollutants. They also help reduce urban temperatures.

Things to know before going green on top

Although it’s far easier to incorporate a rooftop garden at the start of the design process, existing buildings can also participate in this greener solution—one that is considered a high-impact temperature reduction strategy. There are, though, a few things to consider:

  • A structural engineer first needs to evaluate the load capacity of the roof, since rooftop gardens are quite heavy. A watered garden with a 6” soil depth can weigh up to 40lbs. per square foot.
  • In addition, the waterproof integrity of the roof also needs to be evaluated. The last thing any owner wants is to install a rooftop garden and then discover that there is a leak beneath the soil—or that the membrane was damaged during installation.
  • Working with a rooftop garden designer, owners and landlords can decide the type of garden, the plant selection, any safety issues should the public have access and alternatives if a full garden is not an option.

Embracing heat-resilient technologies comes with unique challenges but also significant rewards for CRE developers and investors, especially in the areas of new project development, marketing, and operations.

South Florida’s coolest solution

There is little doubt that South Florida is hot—in terms of temperature and the real estate market. And Morris Southeast Group recognizes the immense value of finding sustainable and ethical solutions that also enhance ROI. Our professionals can help you brainstorm smart, green CRE options and connect you with leaders in the field.

To learn more about what Morris Southeast Group can do for you, call us at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

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