According to The Washington Post – drawing from the studies presented at the world’s largest climate science conference in December 2021 – extreme weather events as a result of climate change are here to stay, and will get worse. The word from researchers is brace yourselves for a “new era of climate disasters”.
Extreme weather has already had huge ramifications for residential property – planning, building, and critically insuring – and the global commercial property sector must grapple with the same set of issues.
Residential and commercial
In the US, a new report from nonprofit, First Street Foundation and engineering firm, Arup suggests that an estimated “730 000 retail, office and multi-unit residential properties face an annualized risk of flood damage”. The risk assessment they used did incorporate fundamentals like sea-level rise, but – the researchers told CNBC – “focused more on flash floods, also known as pluvial flooding”.
First Street Foundation previously worked with Realtor.com to enable flood scoring for all US-based residential properties, and tools like this and other research models are increasingly going to be a part of the real estate developer’s toolbox.
Harvard finance lecturer John Macomber – writing in the Harvard Business Review – says that “climate risk has become financial risk”, and he argues that owners and developers have five options open to them for risk mitigation or “in investing in resilience” as he calls it. These are “reinforce, rebuild, rebound, restrict, and retreat”.
The challenge, he concludes, is “to look ahead, not behind, and to make these choices with intent”.
So far in this blog series, we’ve looked at some of the most cutting-edge emerging technologies: The Internet of Things (IoT), robotics, and virtual reality. We’ve discussed the potential these developments have to revolutionize the way we do business and work in the real estate space.
While each of those has its applications, none hold quite the same promise for changing the fundamental aspects of how we make, and document, commercial real estate (CRE) deals as blockchain. In this fourth entry in the emerging tech series, we have a look at the implications of this pivotal technology.
Nowadays, blockchain is a term everyone’s hearing with increasing regularity. To start, it’s worth having a brief recap of exactly what the tech is. At its simplest, a blockchain is a ledger – a record of information. Not all that different from the databases you’re already using to record details of properties, clients, or transactions.
The feature that makes blockchain unique is the way that information is recorded. Each “block” can hold a certain amount of data. Once a block is full, a new block is started and the previous block forms part of an immutable chain – essentially a timeline extending outwards from the first block to the current one.
Information on the blockchain is public and distributed across a network of computer systems – meaning that it’s very, very difficult for one person to hack or alter the information stored in the chain.
The opportunity blockchain presents for the CRE space, is the ability to streamline a lot of time-consuming tasks. Imagine having all of the paperwork for a given property digitized, accessible to everyone involved in the deal, and confirmed as accurate by multiple parties.
“There are two areas where I think the blockchain is. There’s going to be the intersection with legal tech, so that’s land registry and recording and ownership, and all of that paperwork that exists in the system… the other is the intersection with fintech.”
Of course, an issue that comes up here is how this system can be used with potentially sensitive information – client details that shouldn’t be a matter of public record. For business networks, private blockchains can be set up to only allow access to specified parties. In this case, the identity of participants is verified in the network as well, unlike public blockchain where users can remain anonymous. Private blockchains function more like a traditional database in this sense, trading off some of the immutability of their data for privileged access.
Sealing the smart deal
Maybe the most promising application of blockchain for CRE deals is being able to deploy “Smart Contracts” for things like tenancy agreements. Smart contracts hard code the details of an agreement on the blockchain, and are uniquely suited to real estate deals, because they can handle conditional clauses.
As an example, startups like UK-based Midasium are already providing a prototype platform that replaces traditional landlord-tenant agreements. Using smart tenancy contracts, clauses of the agreement are automatically enforced when certain conditions are met. This can include paying rent, returning a security deposit, and directly deducting maintenance costs from the rental amount paid across to the landlord.
It’s a system designed for transparency and rapid settlement, and the concept is gaining traction in other parts of the world. An added bonus of using smart contracts for tenancy is the possibility of building up a database of real-time data for rental prices and trends in the rental market.
A growing sector
Overall, enterprise reliance on blockchain is set for rapid acceleration. Forbes, quoting an International Data Corporation (IDC) report notes that:
“Investment in blockchain technology by businesses is forecast to reach almost $16 billion by 2023. By comparison, spending was said to be around $2.7 billion in 2019, and we will see this acceleration ramping up over the coming year.”
Blockchain adoption in CRE, however, is still in the early stages. The tech still needs to overcome a few growing pains – in terms of privacy concerns, operational complexity, and a lack of standardized processes – before we’ll necessarily see it forming the backbone of CRE transactions.
That said, it’s a space well worth keeping an eye on. There’s been growing interest, for example, in CRE tokenization – splitting the value of a given asset into separately buyable blockchain-based tokens. What this means in practice is that instead of looking for one buyer for an expensive asset the value gets subdivided and opened to a much broader market. Which in turn may actually boost the value of the underlying asset.
There’s a lot of potential and little doubt that blockchain will make its way into CRE one way or another. But, like many things in the cryptocurrency and blockchain space, the real challenge will be separating the wheat from the chaff, the fact from the hype, and identifying functional applications of the tech rather than purely fanciful ones.
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:
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!
Everyone loves their pets – especially your tenants. Today’s multifamily residents want to live in a building that rolls out the red carpet for fido. These demands are increasing, prompting the multifamily sector to reanalyze how they’ve been defining “pet friendly.”
Is your multifamily community showing its furry friends enough love? Beyond just allowing pets to live on the property, it’s important to start considering ways that you can make your multifamily building extra pet friendly.
If you’re thinking this isn’t such a big deal, it’s time to think again.
Data reveals that the number of U.S. apartments with pets is more than double the amount of households with children. In 2019, there was a recorded 84.6 billion households with pets throughout the country. That’s a massive portion of the multifamily tenant pool – and appealing to that market can be a major strategy to fill vacancies and attract residents.
Having a pet-perfect apartment community can give your listings some extra brownie points, helping to upend the competition. Here are 6 ways you can create a truly pet-friendly multifamily community:
Dog Washing Stations
Nothing is better than a community filled with clean and happy pets. Adding a dog washing station as an amenity to your multifamily property will surely wow pet-loving prospects. Even a small dog washing area can relieve some of the bath day stressors, making it a great pet-friendly consideration.
Offer Waste Pick-Up Bags
Keeping clean can be as easy as providing free waste pick-up bags. Encouraging residents to pick up after their pets not only helps to keep your community clean, but it also is a kind way to show that you care.
Designing relief areas around your multifamily complex is a great way to keep things clean and help out your tenants in one smart move. If you’re tight on space, don’t worry. These areas don’t need to be huge. Even small patches of grass can serve as a useful pet relief area in your community.
Not all pet-friendly projects need to involve your complex’s physical space. Multifamily operators can create a pet-loving community culture. Planning pet gatherings and activity days are savvy ways to get residents to come together for wholesome fun. Consider a weekly pet meetup or themed holiday events.
Discounts with Local Providers
Teaming up with the local community is another way to promote a pet-friendly multifamily culture. Dog walkers, pet sitters, or pet stores are all promising candidates to collaborate with. Setting up discount programs can be a powerful incentive for prospective residents.
Coupon Codes for Pet-Centric e-Retail
E-commerce hasn’t forgotten about pets, so neither should your multifamily property. Setting up a discount program for your residents with mail services like BarkBox or Chewy.com can add that extra touch of pet-loving power.
These six ideas will turn your multifamily property into an oasis for pets – and their owners will love them, too. Don’t forget to highlight your pet-friendly amenities and programs on your building’s website and listing pages. It may seem simple, but being pet-friendly packs a powerful punch.
As we’re approaching the industry’s slow seasons, we all can benefit from adopting some tenant-attracting strategies.
Compared to winter and autumn, the spring and summer months can bring about a slow down for the CRE biz. Property owners who still have vacancies on their hands should step up the game to get tenants – especially when it comes to multifamily properties.
Here are 4 winning ways to lease rental properties within multifamily buildings.
Everybody Loves Incentives
If you’re looking to attract tenants to your multifamily property, you’ve got to sweeten the deal.
Incentives can work wonders in catching the eyes of today’s buyers and renters. Consider offering special offers on the internet, cable, or TV packages. Properties that are located nearby commercial assets such as gyms, vets, or cafes can even partner up with these businesses to provide discounts to renters as a ‘welcome to the neighborhood’ package.
When it comes to incentives, get creative. Zero-in on the tenant experience to get an idea of what renters in your area are looking for.
Consider Lowering the Asking Price
Dropping the price point of your vacant units can be a powerful way to spike the market interest of your property’s listings.
The good news is this actually won’t be hurting your profit margins. Reducing the asking price by a couple of hundred dollars on a unit that’s been unoccupied for a great length of time can save money in the long run.
Having vacant units sitting in your complex is probably costing you more money than you think. Empty apartments are still consuming utilities but not producing positive income – resulting in a negative asset. Long-standing vacancies take a huge hit to annual ROI.
Multifamily property owners should lower the asking rent for properties that have been sitting on the market as we’re entering into the spring and summer.
Don’t Ignore the Power of Curb Appeal
Appearance plays a pivotal role in attracting tenants to your multifamily property. Remember, it’s about more than just choosing a unit in a commercial real estate property. It’s about finding the perfect home, which innately means delivering one’s lifestyle goals.
And, this isn’t only achievable via ultra-luxe amenities. Aesthetics play a powerful role in giving the market what it wants. Today’s buyers and renters are looking for a multifamily property that lives up to their design goals.
Consider sprucing up the exterior of the building with some new landscaping and plant additions. Lobbies are a big point of influence – so don’t forget to focus your efforts there, too.
Work With a Tech-Savvy Team of CRE Pros
As with any commercial real estate endeavor, working with an outstanding team of professionals is the best way to enhance any deal.
Make sure that your choice is actively using technologies to get your listings out to a broader audience and catching the eyes of prospective leads. Including HD video content such as VR touring technologies and overhead neighborhood tours with drones can also enhance your property’s web presence.
Spring and summer are approaching quickly, so use these 4 insider’s tips to fill up your vacant multifamily units.