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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.
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.
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.
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.
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.
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.
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:
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.
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.
“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.
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:
With time on your side, you can now begin the task of looking into the following cost-saving tips.
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:
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.
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.
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.
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.
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:
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.
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.
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.
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.
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.
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.
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
The world of work – or at least the world of the workspace – is undergoing a major evolution as a result of a changing workforce, technology, and the twists and turns of the modern economy. As a result, the commercial real estate market is also seeing a shift in demand due to how that space is utilized.
Advances in technology have allowed workers, particularly those in Generation Y and Z (who are most comfortable with tech), to be exponentially more mobile and more connected. This freedom and adaptability means an increasing number employees are able to work from home, the car, a hotel, or the neighborhood coffeehouse.
Similarly, economic changes have forced workers to meet financial challenges by adapting their approach to work. In the absence of full-time employment, they have embraced temporary or contractual work to help make ends meet. One leading analyst has referred to this as the “Gig Economy.”
In the course of the CRE revolution, cubicles have been torn down and corner offices dismantled. Instead, floor plans embrace open and collaborative spaces, with areas dedicated to small groups and focused work away from the maddening office crowd.
The end result of this design shift is a smaller footprint for many businesses. Mobile workers, it seems, don’t necessarily need their own in-house office. They merely need a place to log on while in the office.
A recent study found that workers in non-traditional employer/employee relationships grew from 10% in 2005 to 16% in 2015. To put these numbers in another perspective, between 2003 and 2008, 118 square feet was dedicated for each new office worker. By 2012, that number had dropped to 60 square feet.
The new workspace model, according to the World Economic Forum, means streamlining and cost savings for businesses, from small to large, start-up to established. For example, Aetna –which has long embraced telecommuting as a means of retaining employees – has reduced its office space by 2 million square feet, generating a savings of $78 million. In addition, its 1.3 million square-foot “office park of the future” was shut down and demolished.
Other companies, however, have brought back employees from the field. Yahoo, for one, believes that many great ideas are born in hallways and cafeterias – a nod to the strength of collaboration, or at least collaborative spaces in overall office design.
In a world in which concepts like Airbnb and Uber have become commonplace, it’s very likely that similar innovations will impact the CRE market.
Mature markets, it’s believed, may have seen a peak in rents. As commercial demands have changed, landlords have begun to lower rents or to consider possibilities that would have seemed taboo ten years ago.
One such idea is co-location or shared work environments, a concept that’s ideal for smaller companies, those that lack capital, or those that seek to avoid non-negotiable items, such as furniture. Rather than leasing their own spaces, these companies may be interested in sharing the same location, or at least the collaborative meeting areas within that space.
Two companies spearheading the co-location phenomena are Büro, based in South Florida, and WeWork, with shared locations around the world. By providing fast Internet services, stylish furnishings, conference rooms, monthly events, and a host of other office amenities, both companies are able to bring small businesses, entrepreneurs, and freelancers together to create a work community that’s inspiring and collaborative. Currently, Büro has more than 300 companies sharing workspaces across the Miami area.
Similarly, as companies crisscross the country for deals that best meet their new needs, there will inevitably be a void in the locations that were vacated. To help fill these voids, it will be necessary to do what tech companies have done all along: to think outside of the box.
South Florida continues to provide opportunity for CRE. The combination of weather, innovation, a vibrant multicultural workforce, low taxes, and new and improving properties are tremendous commercial benefits.
For a free consultation about CRE and shared work environment opportunities in the area, contact the Morris Southeast Group today at 954.474.1776 or reach out to Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.
Once upon a time, anyone with a commercial real estate (CRE) investment opportunity could only offer it, courtesy of a 1933 law, to a select group of people – only those with whom they had a substantial business relationship. That usually meant friends, family, and business associates.
All that changed in 2012, when President Obama signed the Jumpstart Our Business Startups (JOBS) Act. One of the key components of the law was opening up that 1933 investment restriction. With the new law, individuals earning more than $200,000 per year, couples earning over $300,000 per year, or anyone having a net worth of $1 million, excluding their primary residence, could invest.
Crowdfunding was – and is – a game-changer in the CRE investment market.
Although the country is now five years into the legislation, it took until 2015, when Titles III and IV of the law were enacted, for real estate crowdfunding to explode. For starters, these new components eliminated the $1 million net worth requirement, thereby opening up investment opportunities to an even broader range of people.
To date, statistics are overwhelmingly positive:
Now that investors no longer need to know a sponsor, there is a growing investor interest in crowdfunding platforms.
In addition:
Benefits are equally apparent for the sponsors and developers of real estate projects. As interest rates gradually inch upward, developers need to look outside of the traditional fundraising box in order to raise capital for their projects.
With the JOBS Act, they have been able to take advantage of new technology via the Internet to reach a broader pool of investors. With more and more individuals participating, there is a greater opportunity to do more projects.
Experts agree that crowdfunding is able to benefit larger metropolitan areas and smaller cities. In a place like South Florida, that’s especially important. Our largest cities are surrounded by satellite smaller cities.
Assisting South Florida in the crowdfunding frenzy is its population. In addition to American citizens, many of the residents from Latin America, the Caribbean, and Europe are cash-rich but comparatively contact-poor. With the JOBS Act, they can more easily participate in real estate development both at home and abroad.
Morris Southeast Group is among the top commercial real estate brokers in South Florida. To learn more about commercial real estate investment opportunities in the area, contact our team today at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com for a free consultation.
In a recent blog post, we showcased five smartphone and tablet apps that have drastically changed the commercial real estate industry. But those are by no means all of the technological innovations geared toward CRE; here are 5 additional apps that are also making an impact:
1. CoStarGo – This tool is a free iPad and iPhone app, but requires a CoStar subscription. Users are able to easily search nearby listings and have results shown on a dynamically updated Google map. CoStarGo also includes handy features such as local market data and even a financial calculator to help investors and agents understand the true cost of a certain property.
2. RCA Commercial Property Search – Real Capital Analytics is a global provider of commercial real estate data. This iPhone and iPad app offers subscribers of RCAnalytics.com data access to commercial property transactions from around the world. Easily analyze comparables across the following property types: Office, Industrial, Retail, Multifamily, Hotels, Senior Living Properties, and sites that are under development.
3. Catylist – With Catylist, commercial agents gain access to a large database of sale/lease listings as well as interactive tools for listing syndication, email communication, reporting, and much more. Catylist PropFeed allows agents to create a private database for listings and completed transactions which can all be easily accessed from a mobile device.
4. 10bii Financial Calculator – In today’s fast-paced industry, the last thing that commercial agents want to tote around is a dedicated calculator. Most agents already have their smartphone, possibly a tablet and a slew of other tools to make their clients’ job easier. The 10bii Financial Calculator, which is available for both Android and iOS devices, allows agents to use an app that has a close resemblance to the HP 10BII, which is used in most CCIM courses. This includes all of the familiar calculations that are necessary to run a successful commercial real estate business.
5. TAS Mobile – If you’re in the retail space, TAS Mobile should likely be high on your list of apps to download. Currently available for iOS devices, it allows agents to quickly access retail data to assess the viability of certain locations based on the competitive landscape of the area. This tool offers a free version that offers access to some local data, but the premium version is much more robust and requires a subscription.
There’s little doubt that mobile apps have allowed commercial real estate agents to be much more efficient and accurate when providing information to their clients. What once took hours to compile can now all be done out in the field, in a matter of minutes. At Morris Southeast Group, we’re constantly looking at the latest commercial real estate innovations to ensure we’re providing optimum service for our clients.
If you’re looking for your next commercial real estate investment or hunting for the perfect office space in South Florida, reach out to our team today. We’d be happy to sit down with you to assess your needs, plus show you how mobile tools can cut a lot of the guess work out of choosing your next space.
To set up an appointment for a free consultation, reach out to our team at 954-474-1776 or email Ken Morris at kenmorris@morrissegroup.com.
There’s a revolution on the road ahead and it’s picking up speed. Just a few years ago, order-by-phone car services like Uber and Lyft were a novelty. Today, they’re more like a necessity – so much so, that along with technological advances, the idea of driverless cars is no longer the stuff of science fiction. In fact, they’re coming.
With changes in the road ahead, it’s only natural for them to have an impact on nearly every industry, including the commercial real estate market.
First and foremost, with an increase of car services – either with a driver or without one – there will be less of a need for building tenants to lease parking spaces in garages, no matter if that garage is beneath an office building or in a nearby location.
As a result, revenue garnered from parking spaces will decrease for the landlord. Rather than paying a monthly fee for a space, commuters and tenants will likely direct their money toward affordable transportation plans.
In addition, developers will have a chance to redirect their commercial investment funds. Instead of budgeting for garage space, dollars could be spent in other areas of the building, such as an enhanced lobby, security systems, or expanded office space.
When more commuters arrive to work via Uber, Lyft, or a driverless car, the question for developers is what to do with the front of the building. Fewer tenants will enter the building from the garage. Instead, the front of the building will become even more of a hotspot.
Landlords and developers will have to address morning traffic flow so there isn’t a jam at the start of the workday.
Similarly, at the end of the workday, building lobbies will become a hive of activity as tenants and commuters congregate to catch their waiting car. The front area of buildings may have to feature a holding pen for arriving vehicles, while the lobby may have to look more like an airport terminal with shops, cafes, lounges, bars, and charging stations to keep commuters occupied and entertained until their ride home pulls up. In addition, these areas could generate additional revenue.
Inevitably, there will still be diehard drivers who will need a place to park – but what about all of the additional square feet now available for something else? According to Commercial Tenant Resource, today’s ratio of 3-4 spaces per 1,000 square feet of office space could potentially drop to 0.01 spaces per thousand. This is where creativity and ingenuity will have to take the wheel.
For starters, on-premises garages could be designated as holding pens for car service vehicles, or something more. Retail space? Gyms? And let’s not forget about parking garages, very often located in prime locations. They – or the property on which they stand – can be repurposed, perhaps as a combination of commercial and residential real estate.
Morris Southeast Group is excited about the road ahead and the changes and challenges it will bring to the commercial real estate marketplace. For a free consultation on how you and your current or future properties can keep up with the changing times, you can reach our team at 954.474.1776, or call Ken Morris directly at 954.240.4400 or via his email, kenmorris@morrissegroup.com.
While it has largely flown under the radar, the industrial real estate sector is growing at a steady clip. The financial and professional services firm JLL recently issued a wide array of data that paints a positive story for the industrial sector, including:
These statistics seem like great news for the industrial real estate market. And there are additional trends that point to continued growth:
If you think back to the last few items you purchased, how many were purchased via the Internet? If you’re like most Americans, you’re buying more and more products online, which is great news for the industrial real estate market.
Large online retailers like Amazon, Wal-Mart, and others are continuing to see major growth. This growth requires larger warehouses, strategically placed around the country, to ensure customer orders are handled and shipped quickly and efficiently. In the second quarter of 2016, online sales accounted for just 8.1 percent of total retail sales, showing the massive opportunity that online companies have to capture even more sales over the coming years.
After the global recession of 2007, it has taken quite a few years for real estate and other sectors to rebound to pre-recession levels. Commercial and residential real estate are growing in most major markets across the country, which is good news for investors looking to grow their portfolios.
Another benefit for property investors who own existing industrial real estate is the fact that construction costs continue to climb. With the rising costs, companies are more apt to lease industrial space as opposed to build, which helps investors fill unoccupied space and generate more income.
As mentioned above, the low vacancy rates in industrial real estate mean that now is a good time to be an investor in industrial real estate. With current demand, investors would be hard-pressed to find a better option in the real estate sector.
If you’re a seasoned industrial real estate investor, or someone who is just starting out, the team at Morris Southeast Group can be your advocate. With decades of experience in the South Florida real estate market, we can help you find opportunities in the area’s industrial space. For more information, feel free to reach out to our team today at 954.474.1776, reach Ken Morris on his cell at 954.240.4400, or email kenmorris@morrissegroup.com.
For business owners, the real estate landscape can offer a number of opportunities for brick-and-mortar businesses. When rent is low, inventory is inexpensive, and people are willing to spend money, it’s a great recipe for success.
But if you’re looking to start a new retail establishment, don’t simply be lured by low prices or rent to tempt you into signing a long-term deal. Choosing the wrong location can kill your business before you even get it off the ground.
On the flip side, don’t let a high payment scare you away from a great opportunity. If a location offers high-end foot-traffic, easy access for your existing customers, and a constant stream of walk-ins, it could be well worth the investment. In this sense, you can think of your lease or purchase as simply a part of your overall marketing strategy to get people into the doors of your establishment.
Rather than focusing only on price, here are three factors to consider when choosing a retail location:
It’s important to become intimately knowledgeable about any zoning ordinances, local laws, or potential construction that could affect your business. You also want to know any rules related to signage, as well as your ability to host special events during certain hours.
The best way to get answers to these questions is to work with an experienced commercial real estate broker who is familiar with local laws as well as the area where you’re looking to locate your business. Never be afraid to ask your broker lots of questions related to the location to be certain it is right for you.
Do you have any idea of your target buyer? What do they do for a living? Where do they work, live, and play? You need to find a retail space that’s easy to see and access, especially if you’re catering to either an especially older or younger clientele. For example, young parents may like a location with ample parking close to your store so that they’re not forced to walk long distances.
One of the best reasons to open a retail space in a great location is for the exposure. Advertising is likely one of the most expensive aspects of any businesses marketing budget and if you can get loads of free exposure from your business location, you’ll be ahead of the game. Each person who enters your store as a walk or drive-by can turn into a long-term customer that you never required any advertising dollars to acquire.
Conversely, if you can’t afford a prime location, you’ll likely need to dedicate more resources to advertising to help educate your target audience about where you are located.
Finding the perfect retail location in South Florida can be difficult without someone who is well-versed in the area. At Morris Southeast Group, we’ve been helping business owners secure high-profile retail locations for years. To learn more about our experience and get recommendations for your business, feel free to reach out to our team today by phone at 954-474-1776, reach Ken Morris on his cell at 954.240.4400, or email kenmorris@morrissegroup.com.
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