Rental crisis in the United States?

Is there a rental crisis in the United States? This infographic from Affordable-Online-Colleges.Net suggests that there is.


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NSPJ Architects’ Homburg: Loving the controlled chaos of a career in architecture

Timothy Homburg

Timothy Homburg

by Dan Rafter

Timothy Homburg started his career with NSPJ Architects in Prairie Village, Kansas, immediately after graduating from Kansas State University. He is now the co-president of the firm. Homburg recently spoke to Midwest Real Estate News about succeeding in architecture, embracing the controlled chaos of the industry and building a roster of loyal clients.

A passion for drawing: In high school, I loved to draw. I wasn’t necessarily working on architectural drafting, but I was drawing. Then I was lucky enough to get a good instructor in mechanical drawing. Later in high school, I took a class in architectural drawing. I had an idea that this might be something that I would like to do. When it was time to go to college, I had to decide what I was going to study. I made the decision to go to Kansas State University. I decided on a whim, for lack of a better word, to go into architecture. I found that it was a good fit. It matched what I really thought my career path should be.

Who needs structure? I always say, there are people who enjoy structure in their careers, who enjoy knowing what to expect on a day-to-day basis. This career is far from that. You never know when the phone rings who is going to be on the other end. I love the variety of this career. Every day you are challenged with creative endeavors. I can’t believe I have a job where someone pays me to draw and be creative. That part of it is amazing. I work with owners and developers who are challenging and creative. They push us to be the best we can be at every juncture. That is the neat part of this career. No two days are the same. Every day is exciting.

Long hours, plenty of pressure: Architecture school is a great way to prepare you for this industry. In school you’ll put in long hours in high-pressure situations. That sets you up for what your career is going to be like. We have to work late in the evenings or on weekends to get the work done.

Results: We have an interesting project going on now, CityPlace in Overland Park. It’s a very large development in the heart of the suburbs of Kansas City, 90-plus acres of mixed-use development. The site had been sitting vacant for 30 years. Numerous people had tried to get the land developed. There were challenges, though: There were some significant site constraints and a powerful surrounding neighborhood that had quashed proposals before. It almost seemed like any development plans for the site were doomed. Our team came through, though. We found a design for the master plan for the property that got us through the process. We now have the plans approved, and we are starting our first phase of 344 units of high-density multifamily development on the parcel. There will also be retail and office components to the project. This is a project that without creativity and innovation would never have gotten to this point. No one gave up on this project. It’s a huge feather in our collective cap.

The power of listening: We listened to the neighbors’ concerns and did something about them. That made all the difference. So many times, developers or architects think they know what is best without seeking input from the neighbors. We engaged everybody in the process from a very early stage. We listened to their concerns, their hot-button issues. We worked to find a way to resolve them. Not everyone got 100 percent of what they wanted, but everyone got something of substance that made it OK to give up on some of the other things that weren’t necessarily as important to them.

Controlled chaos: There are some people who want to come into work and know what every day is going to be like. They like that structure. I personally would be bored to tears with that kind of structure. For me, there’s likely to be a fire that needs to be put out. I enjoy that kind of controlled chaos, the energy that brings to the entire team.

Relationships matter: This career is about relationships. We have been in business for 53 years. We don’t do a lot of heavy, active marketing. We don’t slap our name up on every billboard and try to capture the attention of everyone out there. But what we do successfully is create loyalty in our existing clientele. Every time they have a project, they come back to us. That boils down to creating excellent service and listening to the client. You want your clients to feel like they are a part of the process. And that’s not just for a big multifamily development, but for a small residential construction project, too. You want that guy who is doing a small addition to his house to feel like he has been part of the process. It’s tough to survive by working with one-shot clients. We have such a great relationship with our existing clients, they continue to market for us and come back to us for future projects.

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Same-day delivery, mobile wallets changing the way retailers reach consumers

mobile walletby Dan Rafter

Consumers not only want to shop online, they want the dress, shoes or Monopoly game that they order from their computer screens to arrive quickly — often on the same day. More of them are researching laptops, refrigerators and microwave ovens online before making purchases. And when consumers do shop in traditional brick-and-mortar stores? More of them want the option to pay from their own mobile phones instead of waiting in line at a traditional check-out counter.

Retailers are aware of these changes. It’s why they’re constantly adapting their distribution routes, store locations and sizes and checkout procedures.

Those are the key findings from a recent Coldwell Banker Commercial Affiliates survey run by Harris Polls and released in late September. The poll provides a snapshot of how consumers’ shopping habits have changed and how Millennials, Gen Xers and Baby Boomers prefer to shop online and in traditional brick-and-mortar stores.

Fred Schmidt, president and chief operating officer of Coldwell Banker Commercial Affiliates, told Midwest Real Estate News that retailers today need to take an omni-channel approach to reaching the minds — and wallets — of shoppers.

Retailers who go the omni-channel route offer consumers a host of shopping options: They provide shopping apps that consumers can log onto from their mobile phones, e-commerce Web sites from which consumers can order products, traditional brick-and-mortar stores, mobile pop-up stores that might disappear after two months and even old-fashioned telemarketing.

“If my daughter wants to buy a pair of pants at a women’s apparel store, if they don’t have them in supply they will find that product and deliver it to her within 24 hours,” Schmidt said. “That changes the whole merchandising mix.”

The key for success today? Retailers need to be able to sell their products in a variety of ways to meet the shopping preferences of consumers of all ages. And then they need to be able to deliver those products to shoppers as quickly as possible.

That’s why some retailers are choosing to increase the number of locations they operate. They want to be closer to their consumers. But these same retailers are opening smaller versions of their traditional stores. Walmart has adopted this approach in many markets.

Changing shopping habits are also forcing retailers to update the locations of their warehouses. Again, speed is the key here. Retailers need enough warehouses located close to their consumers so that they can offer 24-hour or same-day delivery.

Same-day delivery has become especially important. According to the Coldwell Banker survey, 50 percent of U.S. adults are more likely to make a purchase online if the Web site offers a same-day delivery option. The survey found that 40 percent of adults now expect this option.

The numbers are even stronger for Millennials. According to Coldwell Banker’s survey, 64 percent of Millennials are more likely to make a purchase online if there is a same-day delivery option. For Gen Xers, this number falls to 56 percent. For Baby Boomers, it drops to 40 percent.

The survey found, too, that 63 percent of parents are more likely to make a purchase when same-day delivery is offered. Only 46 percent of non-parents are more likely to make purchases when given the option.

This doesn’t mean that traditional shopping is dead. The survey found that 69 percent of U.S. adults still prefer to make their purchases in a store. But if consumers don’t find what they’re looking for in these stores? They’re more likely to order their products for delivery. And when they do, they are looking for quick delivery.

It’s why traditional brick-and-mortar retailers are increasingly offering same-day delivery options, opening warehouse space immediately outside large urban areas.

While the mobile wallet still remains largely a novelty, the Coldwell Banker survey shows that a growing number of consumers like the idea of checking out with their phones or mobile devices instead of at traditional check-out counters.

According to the survey, 33 percent of Millennials said that making purchases with technology such as Apple Pay, Google Wallet or Visa PayWave is important to them. Just 21 percent of the total survey population said this same thing. The survey found that 33 percent of parents compared to just 17 percent of non-parents said that the ability to make purchases with a mobile wallet program is important.

This might lead retailers to cut down on the number of or even eliminate their cash registers as consumers make their purchases immediately through mobile wallet apps.

“We don’t know yet how mobile wallets will change the way stores look,” Schmidt said. “But we do know that the trends are shifting, that this technology will only become more important. Will we get to the point where more retailers don’t have the check-out counter that you traditionally see at store? Consumers are growing more accepting of that. What does that mean in terms of configuring stores? What does it mean in terms of security? We don’t know that yet.”

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Very superstitious? Construction companies keep the tradition of the topping-out ceremony alive

hilton topping outby Dan Rafter

Are construction companies superstitious? Maybe just a bit.

Consider the tradition of topping out.

Topping-out is a construction tradition dating back more than 1,000 years, and it’s all based in an old superstition. Back in the old days, people believed that they needed to appease the gods and ancestral spirits who made their homes in the trees that people cut and used to erect new buildings.

Construction companies today often honor this old tradition. When they wrap construction of the top story of a new building — especially on high-profile projectes — construction workers will hold their own topping-out ceremonies.

Just look to downtown Cleveland. Turner Construction Company is in the middle of building the $272 million Hilton Cleveland Downtown, scheduled to open in June of 2016. The 600-room convention center and hotel will be a key addition to the city’s center, located adjacent to FirstEnergy Stadium and connected to the new Cleveland Convention Center and Global Center for Health Innovation.

The hotel celebrated a milestone yesterday when officials from Turner Construction Company, Hilton Worldwide, the city and Cuyahoga County gathered to mark the building’s official topping-out ceremony.

For this particular version of the topping-out ceremony, attendees signed a signle symbolic construction beam. In a nod to tradition, ceremony organizers had mounted a small tree on top of it. The beam also came with its own American flag, in recognition that the 2016 National Republic Convention will be held in downtown Cleveland.

“The topping out is a significant accomplishment, and we are on track to complete the work in the spring as planned,” said Marty Burgwinkle, project executive with Turner Construction Company’s Cleveland office. “We think the community will be proud of this hotel.”

The new hotel is just the latest evidence that downtown Cleveland is on the rise. The 32-floor Hilton Cleveland Downtown will add more than 46,000 square feet of function space to the city’s downtown, including a 20,778-square-foot grand ballroom and 15,729-square-foot junior ballroom.

The hotel will also include nine meeting rooms and a subterranean passage that will connect hotel visitors to the Cleveland Convention Center.

The hotel project is a collaboration between the Cuyahoga County Council, Cleveland Building and Construction Trades Council and the City of Cleveland. The hotel is expected to open in June of 2016.

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Bringing new life to a former Macy’s — complete with rooftop hockey rink

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by Dan Rafter

The former Macy’s building in downtown Saint Paul, Minnesota, has been one of the more conspicuous empty spaces in the booming Twin Cities market. Those days, though, are coming to an end.

The former department store will soon become a key mixed-use development for downtown Saint Paul. And Excelsior, Minnesota-based Oppidan Investment Company will play a key role in making this happen as the project’s developer.

Oppidan is teaming with the Saint Paul Port Authority to take on the $60 million 515,000-square-foot building project. Construction on the new mixed-use project — which will be located in a block bounded by Wabasha, Cedar, Sixth and Seventh streets — is expected to begin in the spring of 2016.

Oppidan will own 90 percent of the redeveloped building. Construction crews will not demolish the former department store, but will instead “re-skin” it, transforming it into a building with a modern look.

“This is such a unique project,” said Paul Tucci, vice president of development with Oppidan. “We have been asked what qualifies us over others to do this deal. My honest answer? I don’t know that any of the groups that the Port Authority was talking to has done anything like this, either. It is so unique. The building, the location and the size of it all combine to make this a project like no other in the Twin Cities.”

The groundwork for the mixed-use project took place in January of 2014. That’s when Macy’s Retail Holdings sold the former department store and its adjacent parking lot to the Port Authority for $3 million.

The Port quickly began marketing the property. The site has attracted the interest of the NHL’s Minnesota Wild, which plans to build a training facility in the building. This will include an enclosed ice rink on the top level of the building, something that would set the site apart from other downtown Saint Paul buildings.

Tucci said that having the Wild involved will help attract other tenants. It’s not yet been officially announced, but it’s widely assumed that a Walgreens store will occupy about 25,000 square feet in the new development.

The Port Authority is now negotiating with other potential tenants, and the list is a diverse one. Possible tenants here include a craft brew pub, restaurants, healthcare organizations, software companies and financial services firms.

Louie Jambois, president of the Port Authority, said that the authority has one goal for the project: to make the new building a destination point in Saint Paul.

“It will leverage the city of Saint Paul’s investment in the Palace Theater, the Amsterdam and other downtown redevelopment projects, increase the city’s tax base in the long term and be an attractive and vibrant addition to downtown Saint Paul,” Jambois said in a statement.

Tucci said that it should take anywhere from nine to 12 months to complete the construction work on the project. He said that the mixed-use development – if all goes well – could be open by early 2017.

Tucci predicted that the site will attract plenty of attention – and tenants – once the new development starts taking shape.

“Having the hockey rink and the Minnesota Wild interested makes this the right deal and the right partner to attract a lot of interest and energy from other tenants,” Tucci said. “The biggest factor that makes this such a top project is the location. We have light rail on one side and foot traffic all the way around. There are a lot of positives for this site.”

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Industrial market strong in Twin Cities: Minneapolis/St. Paul sees record amount of new construction

Univ  III temp  picby Dan Rafter

Developers in the Twin Cities are building new industrial facilities – many of them speculative – at a record-setting pace.

Just ask John Ryden, a senior vice president and industrial specialist with the Minneapolis office of CBRE. He’ll tell you that the Minneapolis/St. Paul industrial market is busier than it’s ever been.

The Twin Cities industrial market is on track to see 5.1 million square feet of new construction this year, Ryden said. About half of this is spec construction, he said.

“We have very strong activity in this market today,” Ryden said. “In terms of net absorption and new construction, we are seeing record-setting activity. It’s nice to see, and it’s nice to be a part of it.”

Ryden said that the Twin Cities market had a net absorption of 2.3 million square feet of industrial space in the first half of the year. In 2013 and 2014, the same market saw a net absorption of 2.6 million industrial square feet for the entire year.

“So it looks like we are on our way to a record year for net absorption in the industrial market,” Ryden said.

Why are companies building their industrial facilities in the Twin Cities? Why are others finding unoccupied industrial space here and gobbling it up?

Ryden said that the Minneapolis/St. Paul market offers plenty of benefits for industrial users. The area’s workforce is a well-educated one, and the population here continues to grow. At the same time, the Twin Cities area enjoys a deserved reputation as being friendly to businesses, Ryden said. That plays a significant role in attracting new industrial users.

Even with the rising amount of spec construction in the Twin Cities, the Minneapolis/St. Paul industrial market has not seen a significant rise in vacancy levels, Ryden said. That’s a good sign that the demand for modern industrial space is still higher than the supply.

“To this point, the spec projects have filled up,” Ryden said.

Ryden expressed concern about just one submarket, the northwest bulk market. This market does have several large industrial vacancies. It also has several new projects coming online.

“That submarket is likely to get competitive,” Ryden said. “But otherwise, the new industrial projects have been filling pretty consistently.”

This industrial activity is happening even though many don’t view the Twin Cities market as being a major distribution hub. That’s because historically the Minneapolis/St. Paul market has distributed its products mostly to the five-state area of North Dakota, South Dakota, Minnesota, Iowa and the western half of Wisconsin.

That is steadily changing, though. More industrial users are opening distribution centers in the Minneapolis/St. Paul market, centers that Ryden would traditionally have been located in the Chicago area.

As in many thriving industrial markets, e-commerce is playing a significant role in the Twin Cities industrial sector. Amazon is a good example. The e-commerce giant has plans to open an 820,000-square-foot distribution center in Shakopee, Minnesota, and plans to hire more than 1,000 workers here. Amazon has also taken about 200,000 square feet of existing industrial space throughout the Twin Cities market, Ryden said.

“Right now, Amazon is the most noteworthy example of how important e-commerce is becoming to our market,” Ryden said. “But Amazon is not the only e-commerce company playing a big role here. We are seeing a significant rise in e-commerce companies targeting our area.”

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From the top down: As work spaces shrink, CEOs lead by example

Michael Kruklinski

Michael Kruklinski

Guest post by Michael Kruklinski
Head of Siemens Real Estate for the Americas

The trend of the shrinking work space is well established. The average amount of space for every office worker in North America dropped from 225 square feet in 2010 to 176 in 2012, according to CoreNet Global. When a company institutes a reduction in individual work spaces, more often than not the CEO is the exception. This doesn’t exactly help foster a sense of shared commitment to this new way of working.

Michael Bloomberg famously subscribed to an open office “bullpen” configuration both in his business and during his tenure as mayor of New York City. Encouragingly, more CEOs are starting to lead by example. Here at Siemens Real Estate, we are seeing a number of C-suite executives throughout Siemens shrink their own work spaces as we roll out our New Way of Working (NewWow) office configuration, which emphasizes open office environments and shared work spaces.

Some of these executives have even decided to go a step further and forgo assigned offices, a decision that often makes a great deal of financial sense. This is especially true for executives who travel frequently. In a traditional office environment, their spaces would go unused when they are out of the office. Instead, these executives maximize real estate efficiency and help set the tone for the rest of the company.

Executives who give up the big corner office demonstrate that it is not just OK, but advantageous to do so. The elimination of the designated office opens up the space, both literally and figuratively, making it more inviting for employees at all levels to get together when necessary to collaborate on tasks or easier to find a private place to complete a project solo.

For example, Siemens Foundation CEO David Etzwiler successfully manages his Foundation team remotely with personnel in Washington DC, New York City, Atlanta and New Jersey. In his case, a dedicated office is unnecessary given his and the team’s extensive travel commitments. The team takes full advantage of current technology for “virtual check-ins,” individual one-to-one meetings and daily interactions to stay in touch and ensure a close and coordinated working environment.

At Siemens Canada, all of the divisional CEOs and CFOs have relinquished their assigned offices. When the sectors changed to divisions within Siemens, the executive team decided to follow a progressive path and change all sector offices to “think tank” conference rooms that anyone can use.

In my own case, I have a non-dedicated office at our Orlando headquarters. The style is that of a conference room and is open to others. So when I am not present, it is available for use by other employees. I’ve also committed to being paper-free so I can seamlessly work from anywhere in the world. Since I am not in Orlando every day of the month, this is clearly the appropriate choice.

By 2017, more than 150,000 Siemens employees around the world will work in an open office environment. CEOs that lead by example and participate in shared work-space environments help set the tone for successful roll-outs of open office configurations and ensure buy-in by employees across the company. Time will tell if this becomes a widespread practice. I, for one, hope others will follow their lead.

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