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- Never Be Defeated
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Howard Tullman was recently interviewed by PropertyWeek.com and hits the nail on the head when he states,
“…. the space is rapidly evolving and they are now introducing more closed ‘traditional’ office spaces. We’re getting rid of the open-plan office concept – we’ve got video that indicates that when people wanted to do anything serious or were trying to concentrate they got up and moved. And when they wanted to meet as a group they moved because the other people shushed them – so they needed to have a space. So we’re going to have some open areas, but we’re going to have a lot more ‘identity areas’: closed areas, conference areas, phone rooms.”
Space must be configured to work for both heads down, focus-intensive work and open air collaboration. Firms that created entirely open spaces without huddle rooms for privacy are now having to make capital investments to reconfigure their offices to meet these needs.
In a comprehensive office space acquisition strategy including all of your employees in establishing design criteria is critical for successful office reconfiguration adoption.
In a recent article written by Eric Jaffe of The Atlantic titled: Google’s New Chicago Home Isn’t More Transit-Friendly, But It Is More Highway-Friendly Eric cites a study done by Lauren Ames Fischer, who lived in Chicago before coming to Columbia University as an urban planning doctoral student, where she disputes the notion that Google’s move was driven by the new transit hub at the Morgan Street Station.
In fact, Fischer ran a transit anlaysis and found her hunch backs up the idea that transit did not play the role everyone, including Mayor Emmanuel, has touted. Although Google’s new location at 1000 W. Fulton Street does have strong transit access its old location on Kinzie Street did too. Her study concludes the new headquarter loses on transit criteria or at best ties.
“I think there’s enough to celebrate in just saying that firms are choosing to stay in urban locations — and particularly with the West Loop, urban locations that are up-and-coming and not necessarily fully established as employment centers,” says Fischer. “We don’t have to take the next step and say that transit causes this.”
For a sneak peak at Google’s new headquarters have a look at Fulton 1K’s marketing video.
World Business Chicago does an excellent job of summarizing the key economic indicators of the Federal Reserve’s Beige Book survey.
“Chicago District Beige Book Highlights (March 2013):
- Growth in consumer spending decreased, and some contacts suggested that the end of the payroll tax holiday was having an increasingly negative effect. Lingering winter weather prevented retailers from selling spring-related merchandise, which drove up inventories. Regardless, sales during the Easter holiday mostly followed expectations.
- Business spending was up as inventories increased slightly, and spending on software, equipment, and structures increased. The labor market showed modest improvement, and contacts indicated that demand for highly skilled profession and manufacturing positions continued to outpace supply. Opportunities for recent college graduates were up, and employers saw greater competition to fill internships.
- Construction and real estate activity improved; residential construction increased as demand for multi-family housing remained strong, and single-family grew. Increases in non-residential construction remained moderate, but commercial real estate conditions improved as rents increased and vacancy rates decreased.
- Growth in manufacturing slowed, with some contacts speculating that it was hampered by uncertainty surrounding the federal budget sequestration – however, they reported little evidence of this is their shipments. Demand for steel was flat, mining activity …
Using lease comps to assist a client in understanding where their lease economics should end up at the end of a negotiation needs to be reviewed. Prospective clients are told how important it is for a brokerage firm to have these details – and lots of them – to use in helping establish their negotiation end-point.
“Hogwash!”, I say.
Leverage is what establishes the bottom of the barrel economics with landlords not lease comps.
Every deal is unique, every client is unique. Reliance on lease comps is a poor substitute for applying a process that drives the outcome. Even if you could standardize the transaction details, all a comp represents is a unique set of conditions in a single moment of time that cannot easily be generalized to any other deal. You get all you need to know about where prices are going by looking at asking lease rate trends, applying a process to create leverage and letting the process drive the outcome.
Rental rates across the country continue at historic lows and landlords continue to offer attractive concessions packages to attract or retain an office user’s tenancy. Will these advantages for tenants continue to prevail in 2013? Across the country, the office sector has shown signs of improvement in 2012. Our expectation is this will continue incrementally and unevenly throughout 2013. In other words, the recovery is expected to move at a snail’s pace and may even deteriorate in 2013. The impending Fiscal Cliff and tax climate continue to present headwinds. Deloitte echoes this sentiment in their recent Commercial Real Estate Outlook report saying,
“the impact of European uncertainty on U.S. capital markets may act as a damper. While average rents are likely to grow, a more robust recovery is not expected to begin until 2015.”
What does that mean for occupiers of office space? Landlords are still hungry for your business. The ball is in your court.Read more...
“Cityscape Chicago is a personal timelapse piece consisting of over 30,000 still photographs shot on the Canon 5D Mark III incrementally between July and October 2012 around downtown Chicago, Illinois.
The inspiration of this piece was my fascination with the city of Chicago, particularly at night. For me, there has always been a mysterious sort of feeling to Chicago at night, so I decided to explore and capture it.”
Bella Terra Partners’ leadership team approved a five year envisioned future for the organization, as well as a strategy map for the next two years at its recent Annual Meeting. The future plans build a culture and DNA for Bella Terra Partners that leads to perpetual innovation and improved client experience.
We have to be an indispensible resource to our client. We must advance and support the practice of Tenant Representation locally and globally and align our service offering with our client’s corporate needs, establish market driven development and delivery models and identify the core competencies and skills sets that contribute to excellence in the client experience and outcome.
For Bella Terra Partners a five year forecast can be tricky but we believe it is an essential exercise for us to map organization strategy, where we want to be tomorrow and where we want to be in 2017. We’ve set a clear and attainable path ahead and look forward to growing and connecting with our clients, vendor partners and employees!Read more...