What’s happening in … Panama City?

Nestled on Panama’s Pacific coast, Panama City is a bustling commercial hub that houses the regional headquarters of multinational giants like Caterpillar, Dell, BMW, and Philips. The city combines an eclectic mix of towering high rises, commerce districts and old, colonial areas like the charming Casco Viejo. 

An international trade hub

Progressive tax laws and the ease of setting up a business in the country have contributed to robust growth. The country is a top economic performer in Latin America and holds a unique position of global trade importance due to the presence of the recently-expanded Panama Canal and the world’s second-largest free trade zone. 

Panama has therefore established itself as a trade and logistics hub, with a lot of the resultant economic activity concentrated in, or near, Panama City. Thanks to this focus on a services-based economy, Panama also attracts large amounts of foreign direct investment (FDI), leading the Central American region in 2019 with $4.835 billion claimed.

The flip-side of having an economy rooted in world trade and foreign investment is that the pandemic hit Panama particularly hard. The country recorded a 17.9% GDP contraction in 2020.

CRE crunch through the pandemic

Due to the hard lockdown measures implemented from March 2020, real estate sales in Panama City came to a halt. As in many other cities, industries like tourism also took a hefty hit, and the retail sector faced challenges as the hard lockdown extended into June.

For Panama City’s office market, the pandemic came at a particularly inopportune moment, hot on the heels of an oversupply phase in 2019. The boom in office construction was the result of a period of sustained growth during 2013-2015, which saw a large amount of development undertaken in subsequent years. 

At the end of 2020, the office property sector recorded a vacancy rate of 24.2%, with increasing competition between rentals. This includes Class A and A+ offices, which showed a 25.7% to 26.5% increase in vacancies quarter-on-quarter by Q4 2020.

Similarly, in the first quarter of 2021, general property prices in the city have dropped, following a 10-15% drop-off in rents in 2020.

A strong recovery expected

Despite the hard impact of the pandemic, the overall investment sentiment in 2021 is positive. Early in the year, Panama gained a vote of confidence with the extension of a $2.7 billion precautionary credit line by the International Monetary Fund (IMF). 

The city has also resumed key development projects, like a twin cruise ship pier that will open up new tourism opportunities to bolster the local economy. And as far back as May 2020, Forbes listed Panama City as a strong contender for an investment with a short-term horizon, even in the midst of the pandemic downturn.

Charting a course

This strength is reflected in the extensive measures being taken by the Panamian government to encourage investment and build confidence.

According to President Laurentino Cortizo: “We have an economic recovery plan that has five pillars. We cannot talk about economic recovery if we do not have a good vaccination strategy […] that’s the base of that. We do have programs for small, medium-sized enterprises. We have infrastructure projects that generate quite a lot of employment. We have also […] some resources for our financial sector, and the bigger economic activities, for example construction. And the last one […] is related to the attraction of foreign direct investment.”

The reopening of international travel in October 2020 also saw an influx of FDI, as buyers jumped at the lower prices on offer in the Panama marketplace. Property tax exemptions and the opportunity to obtain resident status through real estate investment are additional contributing factors to the country, and Panama City’s, appeal.

Click here for the details of NAI Global’s regional partner in Panama.

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Emerging tech and CRE: IoT in CRE

IoT in CRE: The smart development, and smarter CRE professional

It is a well-established fact that digital transformation and the integration of technology have impacted almost every aspect of human life including our workplaces – and commercial real estate (CRE) is no exception.

With this in mind, we’re taking a look at the emerging technologies that are changing property in a new series of blog posts. This is the first, and in it we will look at the current and future possibilities of internet of things (IoT) technology in CRE.

Smart things 101

First off, let’s start with a basic definition of IoT. IoT makes “dumb” things “smart”, or disconnected things into connected ones. It includes a range of sensors and communication modules so that physical things – doors, parking booms, lighting arrays, heating, ventilation, and air conditioning (HVAC) systems, boilers, etc. – can be monitored and controlled remotely.  

IoT also supports further digital transformation, such as machine learning in which data can be used to teach a system to the point of a high degree of autonomy.

Green ambitions and controls

IoT has a large number of applications in our CRE developments already, but one of the most common (and commonly understood) is how they can aid in managing energy and systems like lighting and HVAC – from the simplest option of running on a thoughtful schedule to dynamic adjustment in response to factors like the weather and footfall.

SpaceIQ is a company that offers a suite of software solutions for companies that want to improve workplace productivity. They talk about the efficiency these types of systems provide, explaining: “sensors that integrate with your lighting system can track room occupancy and activity. Based on the occupancy data, the sensors can automatically turn lights on and off. Having lights automatically turn on only when rooms or spaces are in use can translate to significant energy savings”.

These types of sensors can be used to adjust cooling and heating too, based on the real-time occupancy of a building. This is not just efficient energy use but can boost the experience of a space, for workers in an office and for shoppers in a retail center.

Digital twins

This is why IoT in facilities management is becoming an exciting area, as well as a means to maximize profit and curtail costs. With well implemented data collection, we are now able to produce “digital twins” to our buildings, or a virtual representation of a building that can show in real time the state of that building and its systems.

Forbes has a recent article on this, quoting John D’Angelo, US real estate leader from Deloitte Consulting. D’Angelo explains that insights gleaned from using IoT data can be used to track “how the building operates to make [..] operations more efficient, improve occupant (shopper, resident and patient) experiences and identify issues or potential issues”.

Wide use potential

Yahoo Finance – quoting from a new market study published by Global Industry Analysts Inc., (GIA) – says that the “IoT Analytics Market” is expected to be worth some $40.6 Billion by 2024. The breakdown of the in-demand IoT functions to watch over the next two years as “demand response, distributed energy generation and storage, smart meters, and fleet management” predicting these “will emerge as largest IoT spending categories”.

“Applications with medium-term potential include automated inventory management, and predictive equipment maintenance,” they add.

Security first

Although the potential for these systems is almost limitless, we must caution that connecting a boiler – for example – to the internet for remote monitoring and maintenance, also means opening that boiler and system up to the possibility of bad actors or “hackers”.

One needn’t look beyond the headlines for multiple examples of how important this factor is – as the recent Colonial Pipeline attack so clearly illustrated.

Any connected system will require security too, ideally from an expert in IoT systems – as the connection protocols for physical objects (whether retrofitted with comms tech or designed to be smart) can be vastly different from those of our phones and computers.

Top Tech: VTS

Recently, we at NAI Pleasant Valley have been sharing some of our top commercial real estate (CRE)-related technology tools in a series of blogs – the kinds of tools that help us perform at the top of our game. This series is about sharing best practices and fit-for-purpose tools, but, please note, this is NOT a paid or sponsored blog. We are motivated only by sharing information with our network.

This is our fourth blog in the series, and here we will be looking at VTS – a platform built specifically for commercial real estate (CRE) leasing and asset management. Read below to see why we love them, and you can explore them directly at www.vts.com/.

What is VTS?

VTS was founded by real estate professionals for real estate professionals because – they say on the website – “they have experienced the challenges facing today’s landlords and brokers first-hand” and want to “empower commercial real estate professionals to work smarter not harder”. Sounds good to us! And to loads of others, apparently, as VTS platform is used to manage some 12 billion square feet.

Data dealer

Additionally, with so many users and properties on the platform, this cloud-based provider is also a data and insights producer, releasing a monthly Office Demand Index. CEO of VTS Nick Romito recently spoke to BisNow’s Make Yourself at Home podcast about his optimism for a return to the office.

According to Romito, based on conversations with some 25 CEOs: “… 95% of folks are going to say, ‘It is mandatory you’re in the office in September.’ Is it three full days or four? No one’s doing less than three that I can see.”

Power platform

Of course, our main concern is the platform itself which is really a multi-tasker with three main components: lease, data, and market. The former (VTS lease) is the workhorse including online deal execution and tenant management, and the latter (VTS market) is all about marketing CRE in a digital-first world. VTS data is probably self-explanatory, offering real-time market data, and fascinating forward-looking data.

Their target market is, thus, just about the whole CRE value chain: tenant reps, brokers, and landlords.

Communication

Although it isn’t their core offering, we also like the active blog that VTS runs which includes company news and their thought leadership-style content. Recent posts that we found interesting include a look at medical offices, retail’s recovery, and market predictions.

What is your top commercial real estate tech? What do you use to track deals and stay on top of leasing? Share your tips with us here.  

Eye of the beholder: Tapping into the art of CRE photography

Commercial real estate (CRE) comes alive with compelling photography, and this has never been truer than in this age where most prospective tenants and clients begin and end their search for property online.

Of course, there are some things a great photo can’t do: it can’t negotiate rates, or check leases, and it certainly doesn’t have the connections that a broker has. Thankfully, they are not competing. In CRE, a great photograph (several actually) and a great broker are a killer combo.

Here’s how to get the best visuals of your listings:

  1. Work with the professionals: If you are selling your own home, you might – we repeat, MIGHT – just get away with taking your own pictures. For a serious CRE listing, however, you need seriously great photographs that can capture a sense of place and project the potential of a site.
  • Collaborate with creative: A CRE broker may want to identify a small pool of tried-and-trusted photographers and freelancers who they can turn to as listings come up. Then they know the quality they can expect, and the photographers know the kind of photos a broker is after. Look for photographers specializing in real estate and architectural photography specifically; they come with a wealth of insight and tricks up their sleeves.

Also on this point, one must give clear briefs to the photographer, especially if there is a particular market or prospective client they want the photos to appeal to – such as startups or ‘blue chips’, niche or volume audiences, and so on.

  • Look local (and timing is critical): Knowing the area – its rhythms and moods – can mitigate some of the challenges an outsider might be faced with when capturing an office space or retail park. A local photographer can advise on what time is best for the lighting you need and want, which is one of the most critical decisions that you will make before a shoot.

A golden reflection, deep color saturation, or the sparkling backdrop of a city at night can all make the difference between a photo that shouts out to a viewer and a site that looks lifeless and cold.

  • Landscape, landscape, landscape… except when not: Almost exclusively, the landscape orientation lends itself best to CRE photography, and it is the most versatile for listings online and the types of standard content management systems many listing sites use.

There are, however, a handful of excellent reasons to break from this, such as drawing attention to an architectural feature or making a splash with printed peripherals. This “standard” operating procedure is shifting, especially as more listings are being viewed on mobile sites and apps (more directly below) in square and portrait form.

  • Tech-led: Fancy a 3D rendering or a sweeping drone shot? These kinds of photography are becoming cheaper and more accessible every day, and a professional CRE photographer will likely offer these extras or be able to recommend another service provider. Not every listing needs this, so be discerning.

Got a photography tip to share with your colleagues or an example of great real estate photography, from your listings or archives? Share this article, with your photography tip, and be sure to tag us on social media!

These Perks are Getting Employees Back into the Office

Over the past few months, office owners and team leaders have been doing everything they can to make their workspaces safe and healthy. Office buildings have undergone massive alterations to prepare for the full-scale return to the workspace… but when will that happen?

Changes to the Office Space

Today’s offices are contactless, tech-powered, and socially distant. Commercial property owners and residing tenants have teamed up to build an office space that does not put occupants at risk.

This required immense investment on the part of CRE and individual companies, but the result is an office that can accommodate workers safely. In these times, health and wellness are priceless.

Even though COVID-combatting protocols are being adopted across the sector, most workers are still yet to return to work. WFH remains as the primary professional landscape since COVID-combatting efforts did not convince workers to come back to the office.

If All Else Fails, Incentivize It

There’s something about amenities that wins people over.

Office tenants have taken this route to convince their teams to return to their workspaces. This new incentive-driven company culture trend is giving workers a reason to come back. But, beyond the attraction, office perks are also solving some of the key issues that today’s workforce has been dealing with since the pandemic.

For example, offices and schools closed at the same time earlier this year. Even though offices are slowly reopening, not all schools have welcomed students back again. As a result, workers with children cannot return to the office without paying for babysitters – which isn’t always feasible in these challenging financial times. Allowing team members to bring their children to the office with them is enough to solve one barrier keeping people away from the commercial workplace.

This is one example of how offices are adding perks to draw people back to work – but there’s more. Let’s look at 3 other benefits that are gaining momentum within the office scene as companies try to win back their teams:

Free Lunch

Free, pre-packed lunches are also becoming a norm for in-office employees. Companies are providing free meals for their workers who have come back to the office. Not only does this financially benefit team members, but it also mitigates the risks of having to enter and exit the office building to get lunch from external restaurants.

Learning Pods for Children

With workers bringing their children to the office, many companies are creating positive educational environments for the little ones. Companies are setting up learning pods for children – and they’re even hiring professional tutors to teach them.

Discounts on Parking

Parking at home is free, so offices needed to compete if they wanted to win workers back. Free or discounted parking is becoming another industry standard within the office sector as companies want to make the transition back to the office as smooth as possible.

Companies are heavily investing in their commercial operations to get their workers to return. Will these efforts introduce new amenities that expand the current workspace model?