It seems fitting for Shakespeare to be the inspiration for this headline. In many ways, the Bard faced this same dilemma as a playwright, actor, and businessman. In his time, traveling troupes of actors would perform in rented locations or even out in the open, often passing around a hat for payment. As London’s population grew, building owners would lease out performance space and keep a portion of the profit.
When the owner wanted to do something different with the building, the actors found themselves back on the street and performing for a pittance. Shakespeare, already an established playwright and founding member of a joint-stock theater company, and his fellow shareholders were tired of remaining dependent on landlords and decided it was far better to own a theater: The Globe.
While times have changed, Shakespeare’s work has remained timeless – and so too has the “to buy or to lease” question. In fact, it’s often the top question among my commercial clients, regardless if they’re interested in an office, retail, or industrial space.
In order to come up with the best answer, there are a few questions and metrics that need to be examined:
All businesses are not created equal, and as a result, there are specific variables that will often drive the answer to the own/lease question. For example, a manufacturing business will most likely need to own a space so it can have a facility specifically designed for its needs – which can include smelting equipment, laser-cutting technology, or something else that’s very expensive to relocate each time a new location is leased.
On the other hand, a more standard company – office, some industrial, or even retail – may have a more difficult time coming to an own/lease conclusion. Factors that drive that decision to own include a business model that is unlikely to change, quick expansion being unlikely and plans to be in business for a long time.
Determining this requires the entrepreneur to look at an amount of money and to decide where that money is best used. For some, the answer will be to invest in a property as an owner, anticipating back-end gains as it appreciates in value. For others, a wiser choice would be to put that money back into their business, the bond market, pork belly futures, or whatever else they choose.
As with any business-related decision, it’s critical to look at the bottom line – and this question gets to the heart of the own/lease dilemma. Owning and operating have their own costs, as does leasing. When looking at these numbers, it’s important for the costs of either option to be at or near each other, plus or minus 10%.
If either number is significantly higher or lower, then the next step is to closely examine what’s driving that discrepancy. With more questions come more answers, and this results in greater clarity on whether to buy or to lease.
When we think of Shakespeare, we often consider him as a solitary worker, a genius locked behind closed doors with his quill and paper. Scholars, though, believe otherwise. Shakespeare was part of a talented team that worked closely together, excelling in boldness, flexibility, and foresight.
That’s pretty much how I would describe the team at Morris Southeast Group, especially as we assist clients in making smart decisions for their businesses and their investments.
For a free consultation or to learn more about our property investment opportunities and/or other services in South Florida, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at firstname.lastname@example.org.
While the Amazons of the world grab headlines for site selection and financial incentive packages to lure them to community ‘X’ and ‘Y,’ it’s worth remembering when seeking an industrial site or back-office location that tertiary markets in many U.S. markets are working just as aggressively to attract businesses with programs and incentives that appeal to manufacturers, distribution companies, and office occupiers.
Of course, the main elements of a site search – location, facilities, access to a qualified and perhaps abundant employment pool, and connectivity to major transportation services such as freeways, rail, cargo-friendly airports, and ports, remain the most important aspects of in a site search, yet securing incentives for your clients will add real operating income to their bottom lines.
Our firm was recently involved in the $4.5 million acquisition of a 280,000-square-foot manufacturing and distribution facility on 19 acres on behalf of The Legacy Companies, a leading food service and consumer appliance organization with multiple household name brands based in Fort Lauderdale, Florida.
After evaluating at least a dozen sites in six southern states, including Tennessee, Arkansas, Mississippi, and Alabama, the client selected a Paris, Kentucky property because it checked all the boxes and the Commonwealth of Kentucky offered a flexible incentives package. The Kentucky Business Investment (KBI) program allows companies to decide what percentage of their annual incentive allotment they’d like to take in payroll tax and/or corporate income tax. For example, they can do 0% in payroll and 100% on income one year, then change it up and request 36.3% in payroll and 63.7% the following year, or whatever split they choose.
This creates maximum flexibility for recipient companies. A company with few employees and high-profit margins may want to take more on corporate income. Those with many employees and lower income may want more back in payroll. It allows individual companies to decide on the best fit for them.
As well, KBI has three target requirements, which companies must meet annually to be eligible for their incentives:
The Legacy Cos. opted for the payroll incentive package worth up to $600,000 if the firm hits its targeted numbers annually for employment, average hourly wage and investment over a 10-year period. The performance-based incentives are available at the company’s discretion on corporate income and/or payroll tax deductions. On payroll tax, the incentive contribution breakdown would be one-half percent from the City of Paris, one-half percent from Bourbon County and 3 percent from Kentucky.
We worked closely with the Gordon Wilson, the Executive Director of the Paris Bourbon County Economic Development Authority and Taylor Sears, a Project Manager with the Kentucky Cabinet for Economic Development, an executive branch of government that reports to the state governor, to negotiate the incentive package.
Here is why the deal worked for The Legacy Cos. Paris is 18 miles from Lexington, KY, the horse country capital of North America with an MSA population of approximately 400,000. The region has a deep pool of potential assembly and distribution workers, but also mid-level and even senior management personnel, if Legacy decides they want to continue expanding in Paris. The current plan is to employ 60 full-time people at its new facility.
Lexington also has culture, The Lexington Opera, the University of Kentucky Center for the Arts, University of Kentucky sports, Churchill Downs Racetrack in nearby Lousiville (home to the Kentucky Derby) and NASCAR racing. Interstate 75 is about 15 minutes from Paris. Paris landed CMWA, or Central Motor Wheel of America, which supplies aluminum and steel wheels to major car makers such as Toyota, which built a plant in nearby Georgetown, KY in the 1980s and has been a draw for automotive components makers ever since.
As logistics go, trucks can depart from Paris and reach two-thirds of the U.S. population with a one-day drive. The Cincinnati/Northern Kentucky International Airport (CVG) is currently ranked #2 in the U.S. for air cargo and with a new, $1.5 billion Amazon facility there, the airport expects to move into the #1 spot soon. DHL has one of its three worldwide air cargo hubs at CVG. As well, Louisville International Airport (SDF) also has two major UPS operations; Worldport air hub and Centennial ground hub.
Kentucky Governor Matt Bevin is an American businessman and has helped set the tone for Kentucky’s economic growth. In January of 2017 Kentucky became a right to work state. Kentucky smashed records for investment growth when it attracted $9.2 billion in 2017 compared with its previous best year, 2015, which drew $5.1 billion of investment capital to the state — only including manufacturing, distribution and technology business – not retail or restaurants, according to a spokesman for the Kentucky Cabinet for Economic Development.
Similarly, a SIOR colleague of mine, Tim Echemann, SIOR, CCIM with Industrial Property Brokers in Piqua, Ohio, recently leased half of a new 100,000-square-foot factory building in Defiance, OH to DECKED, the truck bed storage and cargo van storage systems manufacturer. He said the city payroll tax rebate would likely save DECKED $50,000 a year in city income taxes, or enough to pay for one full-time employee with benefits for a year, and that was a significant reason for the auto parts company to select that property.
Echemann is also listing an industrial building in Tiffin, OH that is within a property tax abatement zone in which the owner/occupier can save about $30,000 in property taxes a year during a 15-year period, based on the assumption that the new building would be valued at $2 million.
“The cities in the tertiary markets of Western Ohio and Eastern Indiana that offer incentive packages can really make a difference to a smaller company’s profit and loss statement. There is no question that incentives play a role in site selection, even in small-town America,” Echemann said.
This article was originally published at GlobeSt.com.
Ken Morris is principal of Morris Southeast Group. To reach Morris Southeast Group, call 954.474.1776. You can also reach Ken directly at 954.240.4400 or via email at email@example.com
These days, zombies are big business. From television shows to movies, books to bumper stickers, zombies are everywhere. Not only have Abraham Lincoln and Jane Austen jumped into the flesh-eater-fighting fray, but the Internet is full of expert advice on how to survive a zombie attack. There’s so much zombie stuff out there, it’s as if the apocalypse has already begun.
In the CRE world, though, zombies are a whole new breed of monster. What may work for the undead doesn’t work on a property, leaving many tenants to wonder if it’s financially wise for them to lease what’s called a “zombie” space.
In markets around the country, including South Florida, there are many Class B and C and older tiered properties suffering from neglect. In a perfect world, many of these properties can be repurposed and fixed up into something new and exciting, but the owners of these properties lack the capital to provide even adequate maintenance.
In time, the fixer-upper looks more and more like a zombie, a battered, dusty shell of its former self: parking areas full of weeds, dead landscaping, water-stained ceilings, AC and plumbing issues, falling rents, and mostly-vacant spaces.
There’s a sadness when it comes to zombie properties. Neglect of any kind is never easy to witness, and for tenants, that unease often translates into walking by some really good deals. In other words, some zombie properties shouldn’t be ignored, but should be considered with even greater caution than usual.
To help navigate that path, it’s important to develop a relationship with the landlord and or the management company and to get a firm understanding of their current financial state and financial wherewithal.
When a potential tenant is interested in leasing a space, the owner can request to see the financials of that tenant to determine if it’s a financially secure deal. The tenant, though, often doesn’t have that same ability when it comes to getting a better sense of the landlord’s financial status.
While paper proof isn’t an option, there is a way of establishing a comfort level through a few key questions. For example, if you’re going to lease a facility that requires some additional work after you take occupancy or you’re aware of some issues, such as HVAC units that are older than five years or a roof that will need replacing during the time of your lease, tenants can ask the landlord/management team:
Many states, including Florida, have detailed laws that explain a commercial landlord’s building management responsibilities. As a result, many commercial leases have a maintenance clause that stipulates that responsibility, and the consequences if the landlord fails to address those issues.
That’s why it’s always a good idea to work with knowledgeable professionals in the commercial property – zombie and otherwise – leasing business; professionals like the team at Morris Southeast Group.
For a free consultation or to learn more about our CRE investment opportunities and/or other services, including finding a great lease or property management, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at firstname.lastname@example.org.
These days, any discussion of South Florida’s changing coastline inevitably resorts to a debate on climate change and rising sea level, pumping stations, and adding ground height to new construction.
In Ft. Lauderdale, that conversation must also include the amount of new construction that will forever alter the city’s beachside appearance. While downtown is already in the midst of a makeover and luxury hotels are now a staple along the north end of Ft. Lauderdale Beach, these new projects – already approved by the city – provide a re-do of where Las Olas Boulevard meets the sea.
Perhaps the most controversial project is the current site of the Bahia Mar, a 38.6-acre peninsula-shaped property that sits on the Intracoastal. Because the city owns the land, there has been a years-long tug-of-war between investors, developers, residents, special interest groups, and commissioners.
City approval was finally given in December 2017 and has a 2028 completion date. The new Bahia Mar will include:
To help make the beach a more exciting place for tourists and investors seeking the beach life, Las Ola’s luxury is moving closer to the shore. At the intersection of Las Olas Boulevard and A1A, six projects are already underway:
Earlier this year, an additional 4.46 acres with 500’ of beachfront just north of the Elbo Room also came on the market – and developers have already started talking about luxury residential space and high-end commercial possibilities.
The professionals at Morris Southeast Group are excited to witness Ft. Lauderdale’s renaissance. Investors and developers are at last seeing this jewel as we’ve always seen it – a city that’s more than mobs of spring breakers. Ft. Lauderdale is simply stunning.
For a free consultation or to learn more about our property investment opportunities and/or other services, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at email@example.com.
Anyone involved in real estate investment, from the entrepreneurial veteran to the newbie looking to get into the game, has a common question at the start of the process: What will be the return on my investment? That is, after all, the reason people get involved with investment properties in the first place.
To reach the bottom line answer to the bottom line question, there are two rate-of-return calculations worth exploring. While one is simple and the other complex, they both provide the guideline to help investors determine their next move.
For most entrepreneurial investors, the cash-on-cash calculation is the way to go. It’s simple and provides an easy-to-understand cash flow outcome. In basic terms, cash-on-cash means subtracting expenses and debt services from gross income. The answer is the annual return.
Using a potato chip analogy, if I throw a bowl of potato chips into an investment, I need to know how many potato chips will be thrown off in a year for a rate of return for that investment.
In dollars and cents terms, the annual amount earned from an investment ($6,000) is divided by the amount of the initial investment ($100,000). The answer is then multiplied by 100 to get the cash-on-cash rate of return (6%).
The internal rate of return formula adds a complex spin to the calculations. In essence, the formula looks at the net present value of either the negative or positive cash flow that comes out of a specific property. If the internal rate of return is higher than your floor number, then it’s a good investment. If it’s below, then that is not an investment you should be making.
While that certainly seems logical, the formula grows in complexity because it uses an assortment of variables, such as depreciation and appreciation. Because some of these variables change with time and other outside forces, they cannot be firmly defined with a consistent number value. As a result, the internal rate of return cannot be calculated analytically and is instead achieved through trial and error or computer software.
This doesn’t go to say, however, that the internal rate of return doesn’t have a place in real estate investment. Using this formula is especially valuable when determining if a property should begin a new operation or whether it should expand/upgrade an existing one.
To help navigate the ups and downs of real estate investment, it’s always a good idea to work with a team skilled in both rates of return calculations, available properties, and client needs. Morris Southeast Group is able to provide the professional guidance you need before, during, and after you make your investment.
For a free consultation or to learn more about our property management, investment opportunities, and/or other services, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at firstname.lastname@example.org.
In 2016, Florida voters passed a measure to legalize medical marijuana. Ever since that same measure has been locked in a sort of legal limbo at both the state and local levels. Back-and-forth lawsuits in Tallahassee have resulted in delays, go-ahead, and more delays, while some local communities have passed moratoriums and bans on the location of growing facilities and dispensaries.
Despite these growing pains, one thing is certain: medical marijuana is profitable. In 2016, legal cannabis sales reached $6.7 billion. This number is expected to jump to $20 billion by 2021. For commercial real estate, particularly in South Florida, those numbers are just too big to ignore.
At the moment, legally-grown cannabis cannot be transported across state lines. As a result, states with approved medical marijuana initiatives must grow their cannabis locally – and the real estate that is most suitable for doing so are warehouses zoned for light industrial.
Generally speaking, these spaces are large enough to be converted to meet various growing needs (growing and processing plants, producing edibles, and distilling oils), ventilation, moisture controls, and lighting.
While conversions can run in the millions of dollars, the result will be profitable. One only has to look at Denver and other areas where the medical marijuana industry is fully operational. There, lease prices for vacant warehouses that couldn’t be given away pre-pot have jumped more than 50% in just a few years.
Investors looking to get into the medical marijuana business are just one part of the CRE equation. The other participants are the grower entrepreneurs looking to own their spaces. In Denver, for example, many growers soon learned that skyrocketing rents could quickly put them out of business. In fact, many growers seem to have taken a page from lessons learned from Wynwood artists and gallery operators who quickly learned that owning their own space put them in charge of their profits.
At the same time, legal cannabis markets have seen a sort of offshoot to the CRE boom: investors who also get a grower’s license. Once the warehouse conversion is complete and the business is up and growing, the investors then sell the entire operation.
In addition to an inability to transport crops and products across state lines due to Federal regulations, there are other issues that are especially unique to the growing business.
At the moment, it’s impossible for those in the legal cannabis trade to receive bank loans. The result is that financial transactions – from rents to purchases – are cash only.
Similarly, cash earned through medical marijuana requires banks to do more compliance work, which means higher account fees. Investors and entrepreneurs, then, tend to look for other venues in which to invest their money – and the short answer is often more industrial, commercial, and residential real estate. In other regions of the country, for example, residential neighborhoods have seen home values skyrocket because of medical marijuana.
Two years after Florida voters approved the medical marijuana measure, the state and various municipalities are still in a range of stages. Miami, for example, opened its first dispensary in April 2017, while it took until January 2018 for Broward County to approve dispensaries, which can only be located in unincorporated regions of the county. (Critics believe this relegates dispensaries to low-income, high-crime, predominantly black neighborhoods, while advocates maintain this measure will breathe new life into these communities.)
In the meantime, properties are readily available for investment, purchase, and conversion, and the entire CRE industry is waiting for a firmer understanding of local zoning restrictions and statewide regulations. The team at Morris Southeast Group is ready now to help connect clients with the facilities necessary for the coming boom.
For a free consultation or to learn more about our property investment opportunities and/or other services, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at email@example.com.
It’s easy to understand why some investors and tenants get discouraged about CRE space in South Florida. Gentrification projects are well underway, empty lots are fenced and prepped for new construction, and the tremendous amount of traffic creates a sense that prices are in the stratosphere because all of the good space is gone.
Nothing could be farther from the truth. Depending on the type of real estate owners, tenants, and investors are considering, there are millions of CRE square feet of 2nd- and 3rd-generation space available in South Florida. Finding the intersection of the right real estate at the right price in the right place can certainly still be done – though it’s not always easy.
No matter the market – Los Angeles, New York, Atlanta, or Miami – there are essential considerations when matching the unique needs of clients with the proper space.
A key to making this link is flexibility. In South Florida, for example, there is an abundance of warehouse space that has the potential to be repurposed into something else. The low ceilings of many 2nd- and 3rd-generation warehouses are no longer suitable for today’s industrial/distribution center needs. They are, however, perfect for converting into office space or other uses.
Before embarking on such a project, it’s essential to understand the cost of the conversion. Parking, air conditioning, and roofing may need to be updated, and these costs could be very high.
While conversion costs can certainly hamper development plans, another issue can be as much of a hindrance: zoning regulations. The last place any buyer, renter, or seller wants to be is at the table while the deal falls apart because no one thought to investigate zoning regulations and restrictions.
To prevent surprises, it’s essential to understand the zoning rules that are specific to the municipality where the property is located. What’s allowed in location A may not be permitted in location B, and that can make all the difference.
The zoning departments in all municipalities tend to not like surprises. Sooner or later, they will discover the work being done on a property and issue fines and/or work stoppage orders. To prevent these costly consequences, take the time to visit the zoning department in which the property is located. Ask questions and help to bring the municipality on board with the property’s new concept.
Marijuana provides a great example of how a potential business trend can interface with flexible CRE space. In 2016, Florida voters overwhelmingly approved medical marijuana. Ever since, the proposal has been in a sort of limbo – tied up in hearings and court cases.
Soon after voters approved the measure, the Florida legislature passed a law preventing patients from using smokable marijuana. This then resulted in a circuit court judge ruling that patients have the right to use medical marijuana in any form – and this led to an appeal from the Florida Department of Health, which means an automatic stay so the judge’s ruling cannot go into effect.
This back-and-forth means many obsolete warehouses – many of which can be quickly converted into indoor grow spaces for medical marijuana – remain empty. Florida CRE investors are waiting – and looking at the example of Denver, CO, where marijuana has been legalized and it’s now nearly impossible to find available warehouse space.
When investigating CRE possibilities, it’s important to work with an agency that knows the rules of the market and looming trends. Morris Southeast Group has a 40-plus year history, which translates into a team of professionals who are not only aware of opportunities but also know the ins and outs and changes in zoning regulations in the municipalities which we serve.
For a free consultation or to learn more about our property investment opportunities and other services, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at firstname.lastname@example.org.
In a market like South Florida, where cranes are a part of the skyline and neighborhoods are routinely undergoing transformations, it seems as if there’s an investment opportunity on and around every corner. Before signing on the dotted line, though, there’s a lot to think about – because not all investments are created equal.
When considering a commercial real estate investment or a multi-unit residential investment opportunity, it’s important to consider that each transaction has its own unique complexities, as well as some similarities.
Taking a page from Real Estate Investment 101, the purpose of investing in any sort of property is to generate profit or income. It’s the income stream that’s essentially being purchased in a commercial real estate investment. The bricks and mortar of the property just happen to come along with it.
As a result, it’s important to underwrite the integrity of the current income stream or the potential income stream that could come from that investment. This in and of itself contributes to the complexity of a CRE investment. Two examples better illustrate this idea:
You’re interested in purchasing a triple-net investment; a free-standing building that’s currently home to a CVS Pharmacy. With the reputation of its brand, you generally have a sense that CVS is a very strong, credit-worthy company and the risk associated with the tenant is not that high. In other words, you’re likely to get your full income stream remaining on that lease.
Now, let’s up the complexity factor – and risk – with the purchase of an office building that has 27 tenants. As an investor, you have a responsibility to read and investigate every lease, as well as know the length of each of those leases, the average lease term on the rent roll, and see how creditworthy each of those 27 tenants are. The findings of this sort of research will help you establish the risk related to that investment. This same due diligence is required for retail and industrial investments, as well.
This doesn’t mean that residential investment opportunities are not concerned with risks or income streams, or that they are “easier” than a commercial investment. In fact, they are uniquely complex because of the nature of the residential tenant.
First and foremost, residential tenants move frequently. It’s generally safe to assume that one-third to one-half of your tenants will move out of your investment property. In a building with 30 rental units, that number translates into 10 – 15 vacant units at any time. As a result, you will have to figure out what your capital expenditure will be to replace those tenants, as well as how to maintain a profit while those units are vacant.
As different as residential and CRE investments may be, they also have several items in common — which can add more complexities to the mix:
At the end of the day, it may be beneficial to consult with or hire a qualified professional who is adept at navigating investment waters. The professional team at Morris Southeast Group is skilled at property management services and investment due diligence. Our comprehensive services include owner and tenant representation, marketing, lease administration, collections, and financial reporting.
For a free consultation or to learn more about our property management services, current investment opportunities, and/or other services, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at email@example.com.
It’s been said that a CRE investment partnership requires two types of people: someone with capital and someone with the knowledge to put that capital to work. It’s also been said that these investment partnerships can be more difficult to nurture and maintain than a marriage.
Forbes columnist Amanda Neville notes that all businesses partnerships have an 80 percent failure rate, a full 30 percent more than marriage. Another estimate reveals that roughly “70 percent of real estate partnerships fail because two equal partners cannot agree on anything.”
Nevertheless, a successful CRE investment partnership isn’t impossible. In fact, there are many successful examples. When comparing those that work and those that fail, a framework appears – one that will guide your next move.
CRE means big money, which can mean bigger risks, which in turn can mean greater excitement when an opportunity presents itself. While it’s perfectly okay to enjoy the adrenaline rush, don’t be overtaken by it. It’s important to stay grounded and firmly entrenched in reality to be able to make well-thought-out decisions – specifically as they pertain to the items outlined below:
When people enter a partnership, it’s because it makes sense for two or more parties to pool resources for the mutual benefit of all involved. In CRE, though, risks and rewards are higher – each decision is not only important, it can potentially be contentious. In 50-50 partnerships, disagreements can lead to no decisions at all and, as a result, place the venture in jeopardy before it even had a chance.
An option for a 50-50 relationship is a real estate limited partnership (LP), as opposed to a general partnership. One individual is the general partner who is responsible for the day-to-day decisions, whereas the limited partner is a passive investor.
Limited liability companies (LLCs) are also an option. To avoid gridlock or conflict, individuals who comprise an LLC can be designated as “managers” or “members.”
Before meeting with potential partners, understand your own objectives for wanting to invest in a commercial venture. What is your ideal rate of return and how much margin of error has been built into the investment from a break-even perspective? Is it a long-term investment that is intended to generate income for decades? Or is it a mid-term project that ends in a lucrative sale? Essentially, what is the exit strategy?
With your own answers to these questions, you can better assess potential partners and join with those who share your strategy.
This is perhaps one of the most important things to consider, and the most difficult. It’s also one of the main reasons to remain grounded and not get carried away with the excitement of the partnership.
Simply stated, markets change and life happens – so it’s critical to have an exit strategy for yourself and/or your partner. Whatever is decided should be in writing so all parties are protected.
This is common sense, but it bears emphasis: If you are the person in charge of making decisions, you will be the one spending other people’s money. It’s imperative to be more frugal with your partner’s money than you are with your own. If you are making operational decisions or advocating a certain strategy, this strict fiduciary duty must guide everything you do.
Part of being fair is transparency. It means consulting with partners – even the silent kind – on really big decisions, as well as informing them of what’s happening with the project. Is a tenant moving out? Is there a fantastic tenant on the horizon? Is a renovation or repair work in the wings?
If there are questions from partners, respond immediately. Greater care in selecting partners with the same CRE objectives helps to minimize criticisms.
At Morris Southeast Group, we cannot stress enough the importance the getting everything in writing. This is, after all, business. While CRE certainly has its share of risks and rewards, a written, highly-detailed contract between you and your partner(s) is a necessary tool to help offset risks and disagreements while increasing rewards.
For a free consultation or to learn more about our CRE investment opportunities or other services, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at firstname.lastname@example.org.
One of the greatest thrills for South Florida city drivers these days is to find available parking, whether it’s in front of a specific destination or in a convenient garage.
That gift, though, is becoming fewer and farther between, which is why so many commercial and corporate locations provide valet services. Drivers and passengers get to walk a short distance, while valets run all over the city to park and retrieve automobiles.
A headache, yes, but it’s a way of life that many urban dwellers have come to begrudgingly accept. Parking is a pain – but parking as we’ve always known it is in the throes of an evolution that’s connected to technology.
Parking first became an issue in 1908, when Ford’s Model-T was introduced. Ten years later, the first multi-story parking garage was built at the La Salle Hotel in Chicago. Ever since American drivers in many urban areas have been driving around in circles to find an available space.
Changing attitudes toward cars, technology, start-ups, and competition are coming together to move the parking industry into the 21st century. For the first time, ideas once considered fantastical are becoming a reality.
When it comes to car ownership, Millennials and Generation Z-ers have mixed feelings. Many workers in this age bracket tend to work from locations outside of a traditional office, and fewer of them own cars.
Rather than owning, they would much rather use public transportation or walk. At the same time, driverless cars and driving services such as Lyft and Uber are cutting into garage usage.
Nevertheless, car ownership overall is on the rise– particularly in South Florida, where development is surging, walkable downtown areas are still catching up to the times, and public transportation is sparse compared to other urban areas.
It was only a matter of time before driverless car technology would lead to driverless parking opportunities. As automakers continue to move forward with automated technologies, they are already testing smart garage capabilities in markets around the country, with cars dropping passengers off and then driving and communicating with a nearby garage.
As with just about all things related to technology, the parking garage is moving toward a data-driven environment that is also sustainable:
With improved and more commonplace car and garage technologies, parking garage footprints will become smaller. Cars will be parked more efficiently. With driverless capabilities and stacking, parking spaces will be narrower.
As parking becomes more efficient, there will be less carbon emission. Through the use of embedded hardware in parking spaces, drivers will be alerted (either through apps or signage) of available spaces to curb driving in circles.
To see such a system in action, visit the parking garage at Fort Lauderdale-Hollywood International Airport. Carbon emissions are further reduced as some garages move cars via automated platforms.
Because of driverless parking capability, there is enhanced security for vehicles. There will be no way for pedestrians or thieves to get near parked cars.
No one ever said that evolution was easy. Sometimes, there are setbacks and unforeseen issues.
Such is the case with BrickellHouse in Miami, where the promise of the city’s first fully-automated garage fell victim to the human glitch. There, developers and the technology failed to realize rush hour surge in car retrieval – resulting in residents reportedly waiting up to 45 minutes for their vehicles. The end result has been litigation and years of parking headaches.
At Morris Southeast Group, we believe it’s imperative for parking garages to continually evolve to meet the challenges and changes in our rapidly changing South Florida landscape. To step away from the future would be detrimental to residents, commuters, and tourists – all of whom make our cities come to life.
For a free consultation or to learn more about our property investment opportunities and/or other commercial real estate services, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at email@example.com.