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New Children’s Hospitals In Texas Signal Pickup In U.S. Medical Building Demand

Author: Admin
Categories: Commercial News,Development,Healthcare,Trends

Several new hospitals are in the works for Austin, Texas, as national healthcare construction is expected to reach its highest growth of the past five years, a positive sign for the U.S. economy and real estate industry in the pandemic.

Texas Children’s Hospital is building a $450 million hospital in North Austin in what is planned be its first hospital outside of its hometown of Houston, while Dell Children’s Medical Center of Central Texas has about 34 acres teed up for a $200 million hospital and medical office building in the same area. Both hospitals are planned for Williamson County, where iPhone maker Apple broke ground on a $1 billion campus in November 2019 that has the capacity to house up to 15,000 workers.

The new hospital and expansion projects represent hundreds of millions of dollars in real estate and construction costs and point to expectations that further population gains in the Texas capital and other cities could buoy economic activity during the downturn.

The healthcare industry is in a financial crunch because eliminating elective procedures in most cities and states to help slow the spread of the coronavirus during the height of the pandemic dealt a financial blow to many hospitals, prompting layoffs and furloughs among healthcare workers. However, construction industry analysts said the pandemic could spur a burst in demand for healthcare systems to expand their surge capacities using funds from the federal government’s coronavirus relief package.

After two years of negative or flat growth, Dodge Data & Analytics, a construction data company, is projecting healthcare building starts will rise 6% across the country this year, hitting $29.7 billion in new projects nationwide. Building starts are expected to rise 13% between 2020 and 2021 for a total of $33.6 billion of new projects, the highest growth for new healthcare building starts since 2016.

“Over the short term, there will certainly be financial issues due to the cancellation of elective procedures, particularly in place where COVID hit particularly hard, but at least we did see in terms of the fiscal stimulus $175 billion set aside to shore up finances of hospitals,” said Richard Branch, chief economist at Dodge Data & Analytics, in a May 21 webinar. “We do think that, as the cycle starts to progress this year and beyond, there will be significant investment starting to flow into that surge capacity, particularly on the in-patient side as opposed to the clinic side.”

Much of those investments could come in expanding cities such as Austin, where the metropolitan area was the third-fastest growing in the nation for population in the past decade. Its population grew about 30% from 1.7 million residents in 2010 to 2.3 million residents in 2019, according to Census Bureau data.

Planned Construction

Texas Children’s, based in Houston at 6621 Fannin St,, listed total assets of about $5.4 billion at the end of 2017, including $1.3 billion in buildings and $131 million in land, according to its most recent federal form 990 filed for tax-exempt purposes. The nonprofit health system closed two land deals in December for its first hospitals in Central Texas.

Texas Children’s plans to build a $450 million freestanding children and women’s hospital at the intersection of North Lake Creek Parkway and Texas Tollway 45, east of Lakeline Mall in northeast Austin in Williamson County. The 360,000-square-foot hospital is expected to create 400 jobs.

The 48-bed hospital, which does not yet have a name, is expected to be complete by the fourth quarter of 2023 with 1,200 parking spaces. Texas Children’s bought 24.5 acres for the hospital for an undisclosed price from seller Austin 129 LLC in December, according to Williamson County deed records. There isn’t an official address yet for the hospital, but Williamson County records list the land at 10520 Lakeline Mall Drive with an assessed value of $8 million.

Dell Children’s, which is owned by Ascension and affiliated with the Dell Medical School at the University of Texas at Austin, opened its first and only hospital in 2007 at its Mueller campus in Central Austin. Now it is planning to build its second hospital in North Austin as part of a $192 million project on 34 acres. Plans call for building a 135,000-square-foot children’s hospital at Avery Ranch Boulevard in Williamson County. Construction on the 36-bed hospital is expected to start in February 2021 and be complete by November 2022. Plans also call for a 60,000-square-foot medical office building and parking garage, which could cost at least an estimated $47 million, according to state filings.

The hospitals are near where Apple is transforming former ranch land into a sprawling 133-acre campus that’s expected to be built in four phases, according to permit filings with the city of Austin. The 3 million-square-foot campus at 6900 W. Parmer Land is about 14 miles north of downtown Austin.

Elsewhere in the Austin area, Texas Children’s purchased about 23 acres in South Austin, about 13 miles south of downtown and 3 miles north of Buda off Interstate 35 and Puryear Road near Old San Antonio Road, according to a statement. The hospital system bought the land at the site called the Estencia property for an undisclosed price from SLF II Onion Creek LP in December, according to Travis County records.

Dell Children’s second hospital is expected to open in north Austin in 2022. (Dell Children’s)

The Houston-based healthcare system has urgent-care and specialty-care clinics in Austin, but not any hospitals.

“Our promise to Austin remains strong — to deliver specialized care closer to you through our multiple locations across the city,” said Michelle Riley-Brown, executive vice president at Texas Children’s, in a statement.

Meanwhile, Dell Children’s plans to continue expanding its footprint in Central Texas over the next five years, the healthcare system said. It is expanding its Mueller campus and hospital with a 4-story tower with 72 beds. Three parking garages with 2,600 parking spaces also are planned for the campus. And the healthcare system broke ground in March on a 161,000-square-foot pediatric outpatient facility adjacent to the hospital. Called Children Specialty Pavilion, the outpatient facility is expected to be complete next spring.

“The ongoing challenges related to the COVID-19 pandemic have made it even more evident that we must continue to focus on expanding access to pediatric care so that families in Central Texas never have to leave home to receive exceptional care, especially for the most complex cases,” said Christopher M. Born, president of Dell Children’s Medical Center, in a statement.

For the Record

Texas Children’s hospital in Williamson County does not have a construction start date, but McCarthy Building Cos. is the general contractor and Page is the architect, a hospital spokeswoman said in an email. Public renderings of the hospital are not available.

 

Source: CoStar

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Florida CRE Markets Poised for Rebound as Tenants, Landlords Navigate Lease Negotiations

Author: Admin
Categories: Commercial News,Leasing

Despite uncertainty brought on by the COVID-19 pandemic, Florida’s real estate industry may be primed to recover with a sharp rebound.

According to a JLL report, prior epidemics that affected Florida’s real estate market recovered quickly, with the market spiking about 30% in the year following the 2002 SARS pandemic, which caused 286 global deaths. A less sharp recovery followed the 1918 Spanish flu, which caused 675,000 deaths in the US, with the industry rebounding about 10% the following year. The pandemics triggered a “V-shaped recovery” in Florida’s real estate market.

In the last two decades, Florida’s downturns in the rental market have seen 7% average rent declines. The Florida market took almost 6 years to return to pre-recession levels. Hardest hit by the financial crisis were Orlando and South Florida, with Orlando a 13.4% decline, and South Florida with a 14.9% decline.

The state’s ability to bounce back from economic impact due to the COVID-19 epidemic may hinge on that 25% of Florida office leases were in industries less affected by co-working spaces. Co-working space companies have seen their stocks plummet—IWG stock dropped 66% and WeWork’s 7Y unsecured notes were trading at 63 cents on the dollar. The JLL report points out that the Florida economy was in a strong position before stay-at-home orders began, with unemployment at 2.8%.

However, individual landlords and tenants are navigating lease renegotiations under financial strain put forth by mandated closures. Tenants, particularly small business owners, face financial pressures of keeping businesses afloat while negotiating rent relief from landlords. Tenants have put leases on hold, often seeking legal advice on their obligation to pay contractual rents, or seeking rent relief from landlords.

Landlords have largely kept buildings open, which provides leverage when tenants seek rent relief. Generally, a landlord may ask a tenant to exhaust all federal aid options, such as the CARES Act, before resorting to rent relief. In cases where landlords agree to rent relief, the terms tend to be 30- to 120-day forbearances, with rent money amortized over the remainder of the lease once payments resume.

 

Source:  Globest.

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Four Stores Closed Permanently At Brickell City Centre. Here’s Why

Author: Admin
Categories: Commercial News,Leasing,Retail

Four stores at Brickell City Centre — Adolfo Domínguez, Emporio Armani, Musart and Stuart Weitzman — have closed permanently, a Swire spokesperson confirmed. BCC attributed some of the closures to the coronavirus pandemic.

“We have been prepared that some retailers may close or accelerate their closures as a result of COVID-19. It is an unfortunate result of this unprecedented pandemic,” said a Swire spokesperson by email.

But one tenant said problems emerged prior to the pandemic. The tenant, who asked to remain anonymous for fear of reprisal, blamed rising rents and lower-than-expected foot traffic.

“I got evicted as I couldn’t pay rent in full. Nobody can,” the tenant said. “COVID just accelerated the process. It was the icing on the cake.”

The tenant said he put down $75,000 in deposits and spent another $250,000 to build out his space. He saw increasing revenues: $328,000 in 2017, $452,000 in 2018 and $484,000 in 2019. But the number of transactions fluctuated, growing from 3,344 in 2017 to 3,886 in 2018, then dropping to 3,355 in 2019. Meanwhile, rent rose from $50,000 in 2017 to $60,000 in 2018. In 2019, rent was $110,000 plus 16% of sales in 2019, or $7,500, he said.

“I had a tremendous increase in rent while the traffic has gone down,” the tenant said.

The mall declined to comment on rents but said it had seen double-digit growth in foot traffic between its 2016 opening and the end of the year in 2019, with a 17% year-over-year increase from 2018 to 2019. Brickell City Centre uses wireless beacon technology to measure the shopping center’s foot traffic, said David Martin, vice president of Swire Properties.

Store closures are normal at a new mall, Martin said in a December interview. “Any mall as it evolves will have openings and closings.”

A mall spokesperson said via email that a roster of new retailers will be announced soon.

“Each of these new retailers remained steadfast on their opening timelines despite the delays from COVID-19, a promising sign of the resurgence and resilience of retail in mixed-use open-air shopping centres such as BCC.”

BCC reopened some stores last week with limited hours and COVID-19 protocols similar to those at other Miami malls. Its restaurants will open for dine-in service Wednesday. First weekend foot traffic met expectations, a spokesperson said.

“Several retailers reported strong foot traffic and sales, with some exceeding their sales goals. We expect traffic will ramp up further as our restaurants open for dine-in service.”

The store closures are a precursor of the challenging local retail landscape that will likely struggle for the next 12 to 18 months, said Beth Azor, founder and head of the Weston-based Azor Advisory Services.

“These luxury stores don’t see the foreign travelers coming in and buying these high-ticket items. And their customers are going to be significantly decreasing in those numbers.”

Luxury malls and shopping areas — such as Aventura Mall, Bal Harbour Shops and the Design District — will have to compete for the luxury consumer market in South Florida, she said.

“The luxury consumer is there, but I don’t know if the South Florida consumer is enough.”

Retailers elsewhere in Miami are struggling to keep their doors open, including small business owners, said Michael Comras in early May. Comras, one of South Florida’s largest commercial landlords, said he’s seeing some retailers and restaurants close their doors permanently.

“This has propelled the demise of some of our great brick-and-mortar retailers,” he said.

But some brands and retailers are seeing a rise in activity, Azor said. Pizza vendors, Target, Walmart and home supply stores such as Home Depot are performing well because they “cater to lower-priced items and are offering curbside pickup.”

 

Source:  Miami Herald

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Survey: Healthcare Designers Look To Future Of Medical Facilities In Light Of COVID-19 Pandemic

Author: Admin
Categories: Commercial News,Development,Healthcare,Trends

The American College of Healthcare Architects (ACHA) has released the key findings of a survey of its members revealing their insights on the future of healthcare architecture and the role of design in the context of the COVID-19 healthcare crisis.

“The extensive experience of ACHA’s healthcare architects gives us unique insights into how this pandemic will shape the future of healthcare,” said Vince Avallone, AIA, ACHA, CASp, LEED AP, the ACHA‘s President. “These findings will influence the design of hospitals and healthcare environments for years to come.”

ACHA Coronavirus Survey Reveals Healthcare Designers’ Role In Addressing The Pandemic

The ACHA survey revealed:

  • Over 63% of respondents helped clients evaluate alternative care sites.
  • Over 60% of ACHA experts were called on to help healthcare systems increase capacity – 28% created over 100 beds.
  • Over 70% of respondents believe design for mass casualty patient surges will be an important element for hospitals in the future.
  • Over 80% of respondents thought the telehealth boom would have major impact on facility design.

ACHA surveyed 129 certified professional healthcare designers to reveal lessons learned from COVID-19 and the role of architects in addressing the crisis. Participants represent areas across North America, including many severely affected states such as New York, New Jersey, Illinois, Massachusetts, California, and Pennsylvania.

What Will Happen With Healthcare Facilities After The COVID-19 Pandemic?

The survey also identified the healthcare designers’ concerns about the future:

  • How can hospitals be designed so normal operations (such as elective procedures) can continue through a pandemic so as not to disrupt regular patient treatment and create financial shortfalls for providing institutions?
  • With the likely implementation of restrictions on patient/visitor traffic flow to control cross-contamination, how will this transform facility intake and entry design?
  • How will increased restrictions placed on patient/visitor traffic flow to control cross-contamination transform facility intake and entry design?
  • How can architects emphasize building flexible, adaptable facilities that can be easily modified to allow a quick response to changing medical priorities?
  • How can healthcare and non-healthcare facilities be designed to handle patient overflow in a more expedient fashion?

ACHA Member Represent The The Top U.S. Healthcare Design Firms

“ACHA certificate holders represent a majority of the nation’s top healthcare design firms,” said Avallone, a Vice President/Senior Medical Planner at SmithGroup. “These results show our continuing commitment to help develop solutions for future healthcare design challenges. ”

For the full results of the survey, click here.

 

Source: Building Design+Construction

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From Bankruptcies To Rent Relief, Here’s How Retail Landlords Can Prep For The Coming Fallout From Covid-19

Author: Admin
Categories: Commercial News,Leasing,Retail,Trends

For the last 18 months, Noah Shaffer has been counseling retail landlords who lease space to Pier 1 Imports to be ready for the company to declare bankruptcy.

Pier 1, known for its eclectic mix of home goods and furniture, filed for Chapter 11 bankruptcy protection in March. This week, the Fort Worth, Texas-based retailer said that it was unable to find a buyer for its business and that it will close all stores nationwide. Shaffer’s clients, however, were ready and already in talks with new tenants to take the space.

Navigating tenant bankruptcies will be far more challenging in the era of Covid-19. The novel coronavirus pandemic has forever changed the restaurant and retail business, beginning with stay-at-home orders across the U.S. in March and April to a severe drop-off in consumer spending. A wave of bankruptcies is expected in both the retail and restaurant industries in the coming months, affecting everyone from national chains to mom-and-pop shops.

 

Source:  SFBJ

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Construction Of Mixed-Use Development In Miami’s Wynwood District Tops Out

Author: Admin
Categories: Commercial News,Development,Multifamily,Offices,Retail,Wynwood

CIM Group announced that it has topped out construction of the two eight-story towers set above the ground floor retail and three levels of office space which comprise CIM’s significant mixed-use development at 2201 N Miami Avenue in the Wynwood Arts District of Miami.

The development, which is a major contributor to the evolving Wynwood district, includes approximately 60,000 square feet of office space, 27,000 square feet of street-level retail and studio space, 257 apartments and approximately 480 parking stalls. The 1.78-acre site spans a full city block bounded by NE 22nd and NE 23rd Streets, with approximately 250 linear feet of frontage on N. Miami Avenue to the west and fronts the Brightline Rail to the east.

Three office floors are located above the street-level retail and studio space and extend across the full block creating expansive office space that allows for flexible configurations and the ability to divide the approximately 20,000-square-foot floor plates into office suites. The newly-constructed raw space provides the user the ability to design interiors to meet individual needs as well as a fresh approach to delineated employee spaces and distancing that reflect the demands of our new environment. Abundant floor-to-ceiling windows infuse the space with natural light, while 12-foot high ceilings add to the spaciousness.

Set above the retail and office base are two eight-story towers, at the northern and the southern ends of the block, providing contemporary apartments in a variety of sizes and floor plans, from studios to three-bedroom units.

The development has a central position in Wynwood, a distinctive area in the urban core of Miami, nationally recognized as a center for arts, innovation and culture, as well as one of the major settings for Art Basel, and one of the world’s largest street art installations. The ground floor retail space will accommodate a variety of shops, cafes and restaurants, galleries or other businesses that desire a prominent location in Wynwood.

The Wynwood Arts District has been transitioning from an industrial zone to a flourishing center for art, fashion and creative enterprises, with rehabilitated factories and warehouses repurposed for galleries, studios, bars, workshops, and offices — an evolving neighborhood, which includes more residential offerings.

The project is anticipated to be complete in mid-2021. CIM acquired the fully-entitled site in October 2018.

 

Source:  BusinessWire

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The COVID-19 Shutdown Tests Medical Office Buildings As An Investment

Author: Admin
Categories: Commercial News,Development,Healthcare,Offices

As U.S. health-care systems limit medical services to emergency and urgent care situations in the face of COVID-19, medical office buildings are standing empty, and the threat of tenants missing lease payments mounts.

Still, experts say, investors have every reason to keep MOBs high on their list of sector favorites. In addition to pent-up demand, strong sector fundamentals—aging Baby Boomers, expanded medical insurance coverage, new treatment options and shifts in service delivery—are expected to aid the MOB sector’s rebound and its love affair with investors.

“Medical office buildings and other outpatient care settings have been hot commodities in commercial real estate investment for the past several years,” according to Cushman & Wakefield’s 2020 Health Care Investor Outlook released at the end of last year. “Legacy investors are doubling down on the sector, while new investors are competing for the limited product supply.”

In the meantime, medical office building owners will have to wait for tenants and their patients to return.

“Most owners are trying to not make an impulsive decision, to wait and see how this situation plays out,” said Allen Bolden, a partner with HB Medical Real Estate.

But despite the MOB market’s underlying strength, too much time may prove to be an enemy.

“The fact that we don’t know if this will last another week or several months is why we can’t give solid answers to the future,” Bolden added. “The only thing we do know is the longer the economy is shut down, the more this will test the strength of MOBs as an investment.”

 

Source: CPE

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Why Multifamily Rents are Holding Up Better than Expected

Author: Admin
Categories: Commercial News,Multifamily,Trends

Despite mass unemployment and underemployment, multifamily rental payments have held up far better than many industry experts expected amid the economic wreckage caused by the spread of the novel coronavirus.

More than 36 million people have filed for unemployment in recent weeks and millions of others working fewer hours and taking reduced pay. That’s amid new estimates that real GDP growth for the second quarter will come in at -42.8 percent. Toss in a backdrop in which, as of December, 69 percent of Americans had less than $1,000 in savings accounts, and it would seem to paint a bleak picture on the ability of renters to meet their obligations.

Yet 87.7 percent of apartment households made a full or partial rent payment by May 13, according to a survey of 11.4 million professionally-managed apartments across the U.S. by the National Multifamily Housing Council (NMHC). That’s up from the 85.0 percent who had paid by April 13, 2020, during the first full month of the crisis caused by the spread of the coronavirus. That’s also down from the 89.8 percent of renter households who made rental payments the year before, when the U.S. economy was still strong and long before the coronavirus began to spread.

“Once again, despite the economic and health challenges facing so many, we have found that apartment residents who live in professionally-managed properties are meeting their obligations,” said Doug Bibby, NMHC President.

So what gives?

There are a few things at work. For one, NMHC’s dataset is weighted towards renters more likely to be able to continue working their jobs remotely and those with some savings as a backstop.

NMHC gathered its data from five leading property management software systems: Entrata, MRI Software, RealPage, ResMan and Yardi. It does not represent all apartments in the U.S. For example, the data does not include many government subsidized affordable housing properties.

“These excluded properties are the ones more likely to house residents experiencing financial stress,” says NMHC’s Bibby.

The data also does not include smaller apartment properties that typically don’t use those software system.

“There are thousands and thousands of buildings with 10 units, 20 units, 40 units,” says John Sebree is the senior vice president and national director of Marcus & Millichap’s Multi Housing Division. “They generally don’t have property management software…. However, they generally have personal relationships with their clientele. [So,] their collections are a little better.”

In all, the percentage of renters who made full or partial payments at less-expensive, class-C apartment properties continues to be lower—by about five percentage points—than the percentage of renters at class-A or mid-tier class-B properties who made payments.

“There’s a little more financial distress among residents of lower-priced Class C properties,” says Greg Willett, chief economist for RealPage, Inc. “Many of those who held jobs in hard-hit industries like hospitality and retail stores live in the nation’s class-C apartment stock.” These families often earn lower incomes and have little or no emergency cash reserves to deal with income interruptions, says Willett.

Still, even in class-C stock, the percent paying rent remains high.

A big reason: The expanded federal $600-a-week unemployment benefits put in place as part of the CARES Act on top of whatever each state normally pays out has left many workers making more money now than when they were in their jobs, enabling them to keep up with rental payments.

As an analysis from Fivethirtyeight.com explained, Congress arrived at the $600 a week figure by looking at the national average unemployment payout of $370 per week and the national average salary for unemployment recipients of $970 per week. So the goal of the $600 was to make up the difference.

But given the income inequality in the U.S., far more workers’ wages are below that average figure than above. The net result has been that for millions of workers, being unemployed has led to a rise in their weekly pay. The multifamily sector has been a backdoor beneficiary of that federal largesse, since it has translated into more people being able to pay rent than one would expect with an official unemployment rate approaching 15 percent.

“The enhanced unemployment benefits provided by the CARES Act are helping the financial burdens of those who have lost their jobs,” says Willett. “These households appear to placing rent payments as a top priority.”

The issue going forward, however, is that the expanded benefits are scheduled to expire at the end of July. So the concern multifamily property owners were feeling before the CARES Act was enacted could rise anew later in the summer if the economy has not sufficiently recovered.

“As current federal support programs begin to reach their limit, it will be even more critical for Congress to enact a meaningful renter assistance program,” says Bibby. “It’s the only way to avoid adding a housing crisis to our health and economic crisis.”

Regional differences

Rental payment rates are also varying by region.

“Rent payments tend to be best in the places where the local economies are heavy on the tech sector or government defense tend to have the high shares,” says Willett. May’s best collections through about the middle of May 2020 are in Sacramento, Calif.; Virginia Beach, Va.; Riverside-San Bernardino, Calif.; Portland, Me.; Portland, Ore.; Denver, Colo.; and San Jose, Calif. “Some 93 percent to 94 percent of households in these places have paid their rent.”

Trouble spots include New York City; New Orleans and Las Vegas. These are locations where the spread of COVID-19 has been especially challenging or where tourism is particularly important to the local economy. The payment figures also are well under normal in Los Angeles, says Willett. Higher-cost markets like New York and Los Angeles are also cities where the expanded federal unemployment payouts are less likely to result in unemployed workers making more than they did while they had jobs.

 

Source:  NREI

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How Will Food Halls Fare Post COVID-19?

Author: Admin
Categories: Commercial News,Retail

Food halls will struggle as states reopen businesses and some may close permanently, say industry sources. Over the long term, however, they should return to their pre-COVID-19 success.

Before the virus hit, there were approximately 226 food halls operating in the U.S., according to Phil Colicchio, executive managing director of Colicchio Consulting, the specialty food and beverage, hospitality and entertainment group at Cushman & Wakefield

“Prior to the current health crisis, food halls were a growing trend that catered to a macro trend among consumers looking for more authentic and varied dining options, as well as more experiential and community elements,” says Scott Holmes, senior vice president and national director of the retail division with brokerage firm Marcus & Millichap. “While there will be time needed, and perhaps some operating changes that will need to be implemented, we expect that macro trend to continue, making these retail centers attractive to consumers and investors alike.”

But initially, food halls will struggle as they reopen due to several factors and considerations for the operator, says Anjee Solanki, national director of retail services with real estate services firm Colliers International. Those considerations include the need for reduced customer entry, strategic seating arrangements and safety measures such as contactless ordering, kiosk ordering and rotating staff. There will also have to be a significant increase in cleaning, according to Adam Williamowsky, director of restaurants at Streetsense, a design and strategy firm specializing in retail and restaurants. This will in turn create higher labor and materials costs to keep food hall spaces safe and prolong the amount of time it will take for food halls to rebound.

“I wouldn’t say [food halls] are dead, they’re just put on the shelf,” says Solanki. “Of course, food halls are going to take a little longer to open compared to drive-throughs or restaurants that have the ability to quickly flip and provide curbside delivery.”

Some brokers in secondary markets are saying restauranteurs and quick-service restaurants are struggling to get their employees back to work because their unemployment benefits are higher than their original wages, says Solanki. Furthermore, the cost of operating will continue to go up in the entire supply chain for the food and beverage industry.

“The current sentiment is generally negative related to these categories, since many have been forced to shut down, through no fault of their own,” says Holmes. “Once the shutdowns are lifted, and consumers begin to feel more at ease, we would expect all of these categories to come back strongly, but it will take time for that to happen.”

In order to proceed with reopening, food hall owners will need to rethink the operations of their establishments, so they comply with social distancing and other state- and city-mandated health and safety guidelines. For national companies with multiple locations this is an added challenge as reopening plans will need to be customized locally, says Solanki. Williamowsky notes that some food halls will be forced to close permanently.

However, food halls will also have some advantages over traditional restaurant venues in regaining their footing once the lockdowns end.

“The trend that I think is most important is the trend of the economic structure that most food halls are built on,” says Cushman & Wakefield’s Colicchio. “The cost of opening up in a food hall for a vendor is staggeringly low when you compare it to either a food truck or a stand-alone restaurant. And that is going to also be a very important component of the bounce back that we all hope to see.”

In addition to many independent restaurants being severely undercapitalized pre-COVID-19, a big issue for the traditional restaurant model was high fixed rent, says Trip Schneck, executive director at Cushman & Wakefield. But in the food hall model, under a percentage rent deal structure, the landlord and the tenants share the risks and rewards of the enterprise.

 

Source:  NREI

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Multifamily Owners Go Virtual to Get Leases Signed Amid COVID-19

Author: Admin
Categories: Commercial News,Leasing,Multifamily,Trends

Virtual and augmented reality have been available for some time and had seen sporadic use, but the mass COVID-19 precipitated shutdowns nationwide have led to rapid adoption of the technologies by multifamily owners in order to get leases signed during the pandemic.

“Owners of apartment buildings across the U.S. are looking for new ways to have contactless touring… anything to decrease one-on-one touring,” says Georgianna Oliver, founder of Tour24, a technology company based in Medfield, Mass.

New technologies let apartments shoppers to check out potential homes without ever being in the presence of a leasing agent. That includes virtual tours, video chats and even “self-guided tours” that let potential renters make an appointment to see a real, physical apartment without a real, physical leasing agent being present.

These technologies are likely to be helpful, even in places where the rules of social distancing, meant to slow the spread of the virus, have begun to relax. “It’s here to stay for some time,” says Dan Russotto, vice president of product for Apartments.com, based in Atlanta. “Even as things re-open, there are going to be people who want to practice social distancing.”

Apartments.com creates virtual tours in which potential renters can move through a three-dimensional computer rendering of a model apartment.

Potential tenants can turn around to get a panoramic view, back into and out of rooms, and even look out of windows. They can take these virtual tours from the comfort of their own homes. The effects are similar to those in computer games in which players move through three-dimensional spaces. Apartments.com uses its “Matterport” technology to wrap a three-dimensional computer rendering of a model apartment with photographs of that model apartment.

These virtual tours are becoming easier to create. Apartments.com used to have to send photographers to create the specialized images needed to create a virtual tour. The company is now creating technology that allows property managers to take their own pictures.

In May 2020, Apartments.com also plans to introduce an online leasing office. Visitors to its website will be able to press a button on the webpage to start a video chat with a leasing professional.

Other property owners and property managers are using video chats and online tours to attract potential renters.

“We have always used these tools in our lease-up efforts… We are ramping it up,” says Jordan Brill, partner at Magnum Real Estate, based in New York City, the center of the coronavirus outbreak in the U.S.

The firm is using virtual tours to lease-to-own condominiums at it new-constructed properties at 196 Orchard in the Lower East Side neighborhood and 100 Barclay in the Tribeca neighborhood.

Potential residents can also now let themselves into an apartment and receive information about the unit and the community without needing the presence of a human leasing agent.

“In the last couple of months the interest in the product has grown tremendously,” Tour24’s Oliver says. The firm launched its technology less than two years ago. Today it provides self-guided tours at over 100 apartment communities, averaging 250 units each.

Apartment shoppers sign up to tour an apartment online and chose an option to take a self-guided tour. These potential renters download Tour24’s app onto their smartphones. They submit an image of a picture ID and a credit card number, which is verified by Tour24’s system.

At the time appointed for the tour, electronic locks let them into the apartment. The geo-location function on their phones track their location as they move through the apartment and the tour the amenities in the community, while listening to recorded information through the Tour24 app.

“You can have a message for the kitchen and another for bedroom,” says Oliver. “We provide a curated experience similar to a museum tour.”

So far, existing residents have not been too worried about having potential residents visiting their community unattended.

“It hasn’t been an issue,” says Oliver. “With all of the short-term rental activity and deliveries, there is already a lot of traffic in and out.”

 

Source:  NREI

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Discover prime performance for your asset or portfolio with FIP’s Repositioning professionals. We offer experienced asset management professionals and techniques to help you scale the positioning of your property and the growth of returns. Our Valuation professionals will assist you with everything from financial analysis to personalized investment strategies to meet your needs.

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2136 NW 1st Ave Miami, Florida 33127 (305) 438.7740 web@fiprealty.com
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