Author Archives: Klein James

How To Make Deals For Big Industrial

IndustryLand

Whether you make one deal in a lifetime or several a year, Occupiers look at the Space Markets one dimensionally, fixed-in time, because they need to have doors open ASAP. Only available space will do. Most times, Occupiers do not have the luxury to leverage their space commitment on the investment side. A select few, mostly those who own their own business, use space commitments as an opportunity to increase personal net worth by turning rent expense into profit.

In the one-dimensional world, the entire market is represented by listings. And if you need to open immediately, that’s the only market that counts. Conversely, for the dealmakers, taking new space is an opportunity to earn income. You join the developer, land owner, and capital in a profit-making, multi-dimensional enterprise as we describe in our pictorial. Generally, you work off-market to leverage your Occupancy into profits.

warehouse-pics-850w

Many companies who warehouse and distribute are moving to the Inland Empire. You get 50% more space for the same money and the extra ceiling height is free. There will be a new wave of construction of all sizes. The best deals are presales in the early development phase. Remember to leverage your occupancy.The Move to Inland Empire

sole_occupant-850w

Warehouse and building sharing can reduce costs and maintain flexibility. Sharing has gained popularity in the tech/startup world and is now entering the mainstream. One impetus to sharing is to capture scale advantage because big buildings are much cheaper to build than smaller ones. Production industries will also share resources as a way to reduce capital investment. What Exactly is Space Sharing?

key-development-sites-850w-south-dallas

Data creates better deals. While a lot of our business is good relationships and experience, databases are essential to know the entire scope of business. We collect parcel and occupier data nationally so we can make better deals. One thing to look for is our MAPP Applicationwhere we merge the virtual and non-virtual into a deal making platform for Big Industrial. We’ll send you our log-in information by year end. Data Analytics and Industrial Real Estate

Thanks for subscribing.

Regards,

Jim Klein, SIOR
310-493-0053
jimklein@kleincom.com

(If you want to be removed from this list, please respond accordingly and we will remove you from the database)

PS: Don’t forget Gardena, California. Best place to invest in the entire U.S. for industrial infill. Ideal for ecommerce and close-in production. Sweet spot is $500,000 to $5,000,000.

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Avalon Distribution Center – 6360 Square Feet – Best ecommerce Space in Los Angeles

14438-68 S. Avalon Boulevard Gardena, CA 90248 Unincorporated L.A.County

  • 14438 S. Avalon – Total Available Space is 6360 Square Feet; 
  • Asking $1.10 Per Square Gross + $.08 CAM Fee, Monthly
  • Best ecommerce space in Los Angeles

BUILDING FEATURES: 

  • 2 Dock-Hi Positions Per Unit
  • 2 Oversized Ground Level Doors – This Unit Only.
  • 24′ Minimum Clear Height; Clear Span
  • New Construction – Completed in 2009
  • Designed For Freight and Distribution Companies
  • Concrete Yard Area – 115′ Truck Court
  • 750 SF Offices: 1 Private, 1 Large General
  • 3 Bathroom; Shop Sink; 480 V Power
  • Clear Span
  • $1.10 Gross + $.08 CAM Fee Monthly.

 

LOCATION FEATURES:

  • Adjacent to Harbor (110) and Century (105) Freeways
  • Equidistant between the Harbor, LAX and Downtown L.A.
  • Rosecrans and Avalon
  • Suitable for Air and Ocean Freight

avalon-site-plan-12-27-12-01-copy

LINK TO SITE PLAN

Site Plan in JPG

 

Contact: James Klein, SIOR; 310-451-8181 jimklein@kleincom.com

What’s New For Gardena Industrial – Fall 2016

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The Space Market is on a different trajectory than the general economy. Industrial building prices have doubled since the Great Recession and are up over 20% from previous peaks. Rents are keeping pace and $1.00 per foot Gross for industrial in Gardena and greater South Bay is becoming the norm in many segments especially for smaller units and new, Class A Buildings. All other buildings, while renting for less, are still at all-time highs. Space shortages persist across the board. A disconnect exists between a real estate pricing surge and muddling economic conditions.

There are several explanations for the dichotomy between the property and general economy, but at the heart is monetary policy and central banking. Low (and negative) interest rates allow purchase prices to be high and still provide fair relative returns. Spreads also remain generous on a leveraged basis. Lack of new development, entitlement hurdles and financing constraints contribute to the space shortage. But is this a real estate bubble? 4%-5% cap rates are better returns than you can find in other comparative investments, so rationally, property pricing has a lot of Buyer support. This is not to say prices can’t come down but when Investors need yield to pay off obligations as in the case of pension plans or insurance claims, industrial property provides dependable cash flows in an era that is starved for yield.

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Superior Infill Location

Besides financial conditions, throughout the Los Angeles area, rents are also influenced by traditional location patterns. As companies grow, they seek more space and lower rental rates. For instance, Gardena has always been attractive to Westside and Downtown Los Angeles (DTLA) companies looking to grow. Unlike distribution and warehouse companies who move to the Inland Empire for cheaper cube space, the creative and production companies have different needs. Proximity to employees, markets, and their industry ecosystem is more important than high ceilings and an abundance of docks. Older buildings, like those found in Gardena, can be attractively refurbished with natural light, green space and attention to details.

In the area of ecommerce, a growing Occupier niche, Gardena is perhaps the best location to serve all of Los Angeles. Not only is Gardena 15 minutes from both the Harbor and LAX, but upscale demographics of West L.A., Beach Cities, and DTLA are within 20 miles or less, considerably under the 60-minute benchmark that is used to judge delivery effectiveness. While docks are important for last mile delivery, large parking lots, van loading, and especially location, are even more so. Flat roofs for drone takeoffs will soon be an additional criterion because of the area’s outstanding location.

A final factor for investors in the Gardena area is the building composition. Average building sizes are smaller than many other markets. While there are still many institutional-sized buildings, 80,000 square feet is considered big and 10,000 to 20,000 square feet is more the norm. For this reason, Gardena has always been a great area for owner users, who if this were a normal economy, would always pay the highest prices. But now with a sluggish economy and a risk adverse mindset, this has opened the door to more investors to compete. Low interest rates and rent surges have given investors the impetus to creatively reposition buildings for companies heading to Gardena.

warehouse-pics-850w

Many companies who warehouse and distribute are moving to the Inland Empire. You get 50% more space for the same money and the extra ceiling height is free. There will be a new wave of construction of all sizes. The best deals are presales in the early development phase. Remember to leverage your occupancy.The Move to Inland Empire

sole_occupant-850w

Warehouse and building sharing can reduce costs and maintain flexibility. Sharing has gained popularity in the tech/startup world and is now entering the mainstream. One impetus to sharing is to capture scale advantage because big buildings are much cheaper to build than smaller ones. Production industries will also share resources as a way to reduce capital investment. What Exactly is Space Sharing?

key-development-sites-850w-south-dallas

Data creates better deals. While a lot of our Gardena business is simply good relationships and experience, databases are essential to know the entire scope of business. We collect parcel and occupier data so we can analyze it and make better deals. Look for a public release of MAPP, our application to visualize spatial relationships and real estate. Data Analytics and Industrial Real Estate

Thanks for subscribing.

Regards,

Jim Klein, SIOR
310-493-0053
jimklein@kleincom.com
klein-indus-lands-logo

(If you want to be removed from this list, please respond accordingly)

Data Analytics and Industrial Real Estate

dallas-sites

Analytic tools are essential ways to address space shortages for Occupiers or Investors. The reasons are complicated but the traditional market no longer supplies enough quality space. Online listing services do not yield satisfying choices. More aggressive tools, that emulates your precise business strategy or market expertise are needed to find deals in the era of Space Scarcity. The surest way to make deals is to create them and data is an integral part. Understanding the market comes first before developing the tools to exploit it. For instance, this is the case that better data will help you purchase Big Industrial deals…

The development side of Big Industrial is generally made up of two groups. One is the Big Entities which as a combined group owns roughly 50% of the better industrial space in major markets. They have their own capital, a stable of Occupiers, and control land and buildings. They are generally public companies and receive institutional finance who need internal returns to pay to shareholders or claimants. Performance is benchmarked to market indices. At the Big Entities, real estate is normally held to generate income for stable returns and property is only for on limited occasions. Yield is the end game.

The second group are the entrepreneurial developers who can come from different backgrounds. They include Big Entity veterans, land owners themselves, and opportunists with a taste for risk. They each have an expertise in market specialization, build-to-suit, capital relationships, or a low land basis. Because of the diverse backgrounds, there are different profit motives. The entrepreneurs hold or sell depending on their best choice at the moment. By skewing Big Industrial data, we can focus on merchant builders who are seeking profit.

The Occupier market is similarly constructed. The majority of occupiers want leased space and have no interest in ownership equity. They are not rewarded for owning property and in many cases punished by stockholders even if the numbers make sense. At the same time, there is a much smaller sub-group of Occupiers who use real estate to increase net worth. These are mostly tightly held companies or family run businesses who leverage their occupancy into favorable real estate returns. Data analytics can optimize the relationships between merchant builders and occupiers who can anchor the deal. To improve overall performance, additional analytics can be run on the entire team involved in the real estate deal. Often this will include the land seller, developer, broker, investor(s). lender, occupier(s) and buyer.

This amount of data, especially on a national basis, can only be done by coding. Investors are A, Occupiers are B, Developers are C. Sellers are D. Brokers are E. There are also codes for geography, size, industry and preference. More data generally will deliver better results but only to a certain performance hurdle. It’s really no different than what a smart dealmaker does in his head but data science is able to increase the scale without diminishing the contribution of relationships, experience and street smarts.

By the end of the year, we will be making our MAPP program public. It’s a program we developed that combines data and spatial information. It was designed in particular as an acquisition tool to help buy property. I use MAPP for infill land sites, Gardena, and Big Industrial Nationwide. I can see all US ownership, who leases, and how much space they occupy. By running relationship queries MAPP can make predictive analysis about who would be right for a given site. There will be some interesting platform economics to get buy-in from participants but I’ll explain how I hope that will work on another day. For now, if you are looking for industrial real estate deals, I have the data.

16428 S. Normandie Avenue, Gardena, CA 90247 – For Sale

16428-s-normandie-cropped
16428 S. Normandie Avenue, Gardena, CA 90247

3,000 Square Foot Office Building For Sale; 2-Story

6,270 Square Foot Concrete Paved and Fenced Lot.

Located at Signalized Intersection – Normandie Ave and Gardena Blvd.

Excellent Freeway Access – 91, 405, 110

$725,000 – All Cash

Please Contact Jim Klein, SIOR – 310-493-0053; jimkleinkleincom.com

PLANS – First Floor (1394 SF), Second Floor (1650 SF) and Site Plan

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second-floor-plan

 

normandie-site-plan

 

 

gardena-site-map

The Move To Inland Empire

move to IE

For Los Angeles area companies, Inland Empire (IE) is a serious contender for relocation if you do not move out of state all together. Western IE, now considered infill Los Angeles, is 45 miles from Downtown. The space ratio is generally 50% more space for the same rent and the additional cube height comes free. While new buildings are being absorbed as quickly as they are being built, there are currently several million square feet of space going through the planning process. If you are taking a big chunk of space, the time to get the best deals are just after entitlement and before construction begins. This is when developers are looking for financial partners and will consider pre-sales.

Industrial park developments are coming with great ferocity. There are about seven developments planned in the area with many common features. Small to mid-sized buildings, most no greater than the 300,000 Square Feet. Most projects are in the 1MM square foot range composed of several free-standers. The mix of building sizes will give Users a broad selection. However, if you want a larger building to gain scale advantage, you will need to look elsewhere. Most cities are using outdated standards to mitigate trucking traffic from nearby residents and are creating more expensive buildings as an unintended consequence. While the concern for residents is understandable, by placing size restrictions on the buildings it will result in more jobs, but at lower wages. Instead of needing only one or two tenants to fill a building, some developers will need twenty or thirty occupants creating a much riskier development. While smaller buildings increase the opportunities to smaller Occupiers, it also raises operation costs and not surprisingly, local property taxes.

warehouse pics

For larger distribution buildings pricing is generally based on what an institution will pay for a property under a new, 10-year lease. If you use $.45NN rents and a 5 cap rate, purchase prices are $108 per foot. Many insurance companies and pension fund advisors will partner at the land purchase stage to obtain a profit. In the case of strategic distribution facilities, being in on the original design can be essential. Most Occupiers can’t start that soon because they are often hedging business needs to the last moment. Public companies in particular are apt to pay market at the time the building is ready to lease counting on their financial muscle to get a negotiating advantage.

There are many owner users out there who have experience in big industrial. If they own their own business and want to build up personal net worth, they too can be forward thinking and tie up at an early stage. Otherwise, the other gambit is to wait for overbuilding and pick from the remains. But this will give a limited choice in functionality. Better to get in on the development stage for the best deal and product design. When conditions are tight, most merchant developers prefer spec buildings so they can obtain the highest market rent before selling to an investor. Build-to-Suits have a much lower profit margin so is only preferred in soft markets. The overall opportunity to purchase is limited because many developers build directly for long term holders who are comfortable with development risk. When buildings are available for purchase, there is a “User Price” that includes risk, carry, and profit

In the end, for bulk space users, IE is the place to be for any local or national distribution company because of the inexpensive volume cost of space and relative location. However, a lot of new, large bulk space does not come on the market because of either early commitments or the deliberate intention to mitigate political pressures. Smaller buildings will be attractive if the majority of employees and the executives live nearby. If you are already located in Los Angeles and need more space, simple calculations based on transport, availability, real estate costs, and individual business factors will be a guide.

big_bldgs

What Exactly Is Space Sharing?

Another trend, popular in West L.A. and DTLA, as well as other creative centers across the country is Space Sharing. Networks, mobile computing and particularly start-up finance, has made sharing office and desk ubiquitous. Many innovative industries share common production resources like equipment, processes, and costly tenant improvements in Maker Spaces. (see New Industries post). While normally more expensive on a square foot basis, the total cost of rent, on a demand and hedged basis, is much less. Compatibility, or in the Space Sharing vernacular, curation, is an essential factor easily overlooked. Having a common bond or a similar industry cluster increases the likelihood of success. The drawing below is of the LaKretz Innovation Campus in Downtown Los Angeles, a 65,000 square foot space that can be easily adapted for the changing needs of multiple occupants.

lakretz

Warehouse Sharing is quickly evolving into a new product type managed and financed much differently than other industrial. The most common way to share, and always a very viable development model, is cutting up a large building into several parallel units with either demising walls or fencing. Different today is the advent of very high ceilings (32’ to 40’) that makes cube height a significant source of profits. Often the top 10’ is difficult and expensive to access and goes to waste. However, many businesses have a very profitable model of renting from developers by the square foot and charging their customers on the cube. The best examples are 3PLs that charge by the pallet and storage companies that charge by the storage crate. No one takes advantage of atomizing the warehouse like Amazon. Using a web server model, Amazon sells bits of storage to their fulfillment customers at multiples of 10 to 20 times market rents depending on the season. New technologies particularly robotics and space sensors will allow for different variants of warehouse sharing. These applications will increase building returns by allowing warehouses to operate on a “demand” model offering Occupiers complete flexibility at lower overall costs.

spot_space

Why share a building when you can occupy your own? Because space costs can be cut in half by buying into a bigger building. Industrial building economies are greatly influenced by scale. Bigger buildings cost 50% less to build than smaller buildings. In addition, taller ceilings and more loading doors per square foot provides the more utility and lower cost per square (or cube) foot. It allows for hedging space needs to expand and contract at will. Other tenants can be brought in to make empty space profitable.

How will the financing work? One way is to pool four or five Occupiers together. They put 30% down and get an insurance company loan at the lowest interest rate possible. The building is run and syndicated like a partnership. There is an internal mechanism set up to allow for space sharing or to take in outside tenants. If at any time one of the partners cannot maintain their obligation, their equity position can be sold under certain conditions. Otherwise it is forfeited.

Similar arrangements can be made with one purchasing entity who brings in other Occupiers to pay the rent. Large Developer/Investors will get in the act because of potential profits. At first the majority of the space will be occupied in a traditional manner – one tenant per section. But as the overhead is covered, more portions of the space can be atomized to increase return multiples. No matter how the financing works, robust pre-leasing, marketing and data science will be needed to make sure there are plenty of paying tenants. Large Occupiers for big chunks of space. Smaller internet resellers for racked space.

But the most logical way to finance a sharing deal is to accept higher rent for shorter and more flexible space terms. This entices more investors to come in for higher returns. In return, the risk is reduced because you have a pool of different credits and space terms which reduces risk because of a diversified tenant base. In essence, the owners are collecting more rent for less risk operating a sharing building. Debt would be covered by fixed, minimum lease terms. Profits come in the form of the so-called value-add part that sharing contributes.

sole_occupant

The technology at hand, including robots, automation, sensors, clear heights, autonomous vehicles, and drones are revolutionizing industrial real estate. In the “on demand” world, paying for use is a better model than owning. At the same time new investment entities are forming to finance and develop Warehouse Sharing Buildings. In this world bigger is better and investments of $50MM to $100MM will be typical for large distribution buildings. Smaller investors will do the same in infill markets capturing the last mile and creative production uses. The key to both is increasing building net income by offering a mix of long-term and “on demand” occupancy.

What’s New For Gardena Industrial

gradena map

The Space Market is on a different trajectory than the general economy. Industrial building prices have doubled since the Great Recession and are up over 20% from previous peaks. Rents are keeping pace and $1.00 per foot Gross for industrial in Gardena and greater South Bay is becoming the norm in many segments especially for smaller units and new, Class A Buildings. All other buildings, while renting for less, are still at all-time highs. Space shortages persist across the board. A disconnect exists between a real estate pricing surge and muddling economic conditions.

There are several explanations for the dichotomy between the property and general economy, but at the heart is monetary policy and central banking. Low (and negative) interest rates allow purchase prices to be high still provide fair relative returns. Spreads also remain generous on a leveraged basis. Lack of new development, entitlement hurdles and financing constraints contribute to the space shortage. But is this a real estate bubble? 4%-5% cap rates are better returns than you can find in other comparative investments, so rationally, property pricing has a lot of Buyer support. This is not to say prices can’t come down but when Investors need yield to pay off obligations as in the case of pension plans or insurance claims, industrial property provides dependable cash flows in an era that is starved for yield.

gardena reg

Superior Infill Location

Besides financial conditions, throughout the Los Angeles area, rents are also influenced by traditional location patterns. As companies grow, they seek more space and lower rental rates. For instance, Gardena has always been attractive to Westside and Downtown Los Angeles (DTLA) looking to grow. Unlike distribution and warehouse companies who move to the Inland Empire for cheaper cube space, the creative and production companies have different needs. Proximity to employees, markets, and their industry ecosystem is more important than high ceilings and an abundance of docks. Older buildings, like those found in Gardena, can be attractively refurbished with natural light, green space and attention to details.

In the area of ecommerce, a growing Occupier niche, Gardena is the perhaps the best location to serve all of Los Angeles. Not only is Gardena 15 minutes from both the Harbor and LAX, but upscale demographics of West L.A., Beach Cities, and DTLA are within 20 miles or less, considerably under the 60-minute benchmark that is used to judge delivery effectiveness. While docks are important for last mile delivery, large parking lots, van loading, and especially location, are even more so. Flat roofs for drone takeoffs will soon be an additional criterion because of the area’s outstanding location.

A final factor for investors in the Gardena area is the building composition. Average building sizes are smaller than many other markets. While there are still many institutional-sized buildings, 80,000 square feet is considered big and 10,000 to 20,000 square feet is more the norm. For this reason, Gardena has always been a great area for owner users, who if this was a normal economy, would always pay the highest prices. But now with a sluggish economy and a risk adverse mindset, this has opened the door to more investors to compete. Low interest rates and rent surges have given investors the impetus to creatively reposition buildings for companies heading to Gardena.

Inland Empire Development Deal – 180,000 SF Total

typ site plan IE

More and more, typical industrial development in the Inland Empire will look like this. Instead of one large warehouse with lots of truck doors, cities will require smaller buildings so not to conflict with nearby residential communities. This planning protocol significantly increases the costs for the developer but it creates opportunities for Occupiers who wouldn’t ordinarily find a building in smaller sizes to purchase.

Because of space shortages in Los Angeles, a location like this, on the extreme western side of the Inland Empire – 40 miles from downtown Los Angeles and 60 miles from the Los Angeles Ports – has become an infill location. In addition, unlike many other developments on the drawing board, this project has all the infrastructure in place and can be occupied in 14 months or less.

Sizes are deceptive. These buildings will be 80,000 SF, 75,000 SF and 22,000 SF. For many Occupiers in older buildings, moving to a new building with 32’ to 36’ ceilings will increase your warehouse by 25% to 50% for a very marginal additional cost. In other words, the same footprint will likely handle your need for more space.

Development costs for a building like this will run $100 per square foot. Current lease rates yield about a 5% return on project costs. Occupiers who get in at an early stage of development will buy closest to cost. By the time the property goes through development and holding periods, the developer will seek a higher price for taking added speculative risk. In contrast, if you can find a building like this in Los Angeles it will cost $150 to $170 per foot and ceiling heights will not typically be as high.

Not enough buildings are being built for Occupiers to purchase. Everything is being snapped up by institutional investors for long term investment. While space is scarce, it’s made even more so because of intense competition from the capital markets. Getting in at the “ground floor” is where the deals are.

moving to IE

SIOR 2016 International European Conference

londonsior

SIOR had their first European Conference in London at the end of June. Coincidentally, it was at the same time as the Brexit Referendum. The day before, gleeful developers, confident at being the center of the developed world were completely dazed by the results the next morning, with news of their world being threatened. However, it did not take long to speculate about the opportunities, not only in London but under a new financial order.

The immediate challenge on the “day after” was to decide on the “Brexit” termination clause that many contracts had. All with a narrow time to exercise. Longer term, there is a 2-year period to exit the European Union and until that time, anything can happen, making investment decisions uncertain. It’s compounded by a robust development scene with supply on the way. On one day touring the Docklands and the former Olympic Center, Stratford International, we counted over 100 cranes building more homes and offices for the European financial industry. New high-rise communities are also in abundance to house a growing population, just surpassing its previous peak of 8.6 Million people in 1939. The morning after Brexit we saw Pubs across London with crowds spilling spill out onto the street. If the pub numbers around the financial districts are an indication to the vacancies being left behind, Brexit will create a substantial hole at Canary Wharf and the neighboring Docklands.

docklands

Not swayed at all by the Brexit, opportunistic investors are looking ahead to bargains. One theme on the industrial side, is buying real estate from companies who may lose access to the Common Market. Just as in most cities, closer in holdings are overtaken sooner on the path of development, but the excellent light rail, makes more distant areas attractive because of the larger sites to build communities. However, with the amount of current construction activity coupled with the Brexit news, holding periods likely increased substantially. We saw many examples of well located industrial property as we traveled on the A13. We were on our way to see the DP World London Gateway, a large port development half way to building six Super Panamax sized berths with a large industrial park.

DLR

Capital flow was widely debated, not only where, but in what form. Germany and the United States were predicted to be the recipient of massive waves of capital. Transparency and scale are the most important reasons and no other countries compare. Limited Partnerships are the investment vehicles of choice particularly for large Asian investors. They prefer discrete investments in Limited Partnerships to maintain a low profile and avoid scrutiny. A favored investment are large distribution buildings in major gateway markets. Capital preservation is the goal for many. The focus is on current returns not IRR. A moderately leveraged return of 6% for a long term lease with indexation and no intent to ever sell. No secondary cities. At least up until Brexit it was London, not England. Paris, not France. Gateway cities in the U.S. Logistics is a favored investment. International investors resemble sovereign capital but on a more flexible and fungible basis. Undoubtedly they will give institutional investors strong competition for long term, moderate return investments.

The keynote session by Martin Wolf, chief economics commentator at the Financial Times, on the day of the Brexit vote is paraphrased because of his shrewd comments about macroeconomics and central banking. He also mentioned political risks in an era of rising Populism. The current economic landscape shows low interest rates, slow growth, and low productivity with no end in sight. Demography is the largest factor because of an aging population. He praised Robert Gordon, in his masterwork of this year, The Rise and Fall of American Growth, which demonstrates a future of low growth compared to the past 100 years, mostly due to one-time technological achievements that will not be repeated. In addition, neither corporations or governments are investing, unsure of a payback, and hamstrung by austerity. He closed by saying Brexit is the worst political blunder of a lifetime.

use decel

To a question about high asset values and bubbles, his answer was high values are a rational response to low interest rates causing investors to seek out yield wherever possible. This does not mean that high prices may be reversed at some time, but 4% Cap Rates in comparison to zero rates at the banks has a clear investment rationale. He elaborated we are in a long term, 20-year trend of declining interest rates.

The final speaker of note was Sir Stuart Lipton, a prominent London developer of large scale high rises and communities. He came to make a point. We are not building for the current society and developers are leaving a lot of needs unmet. We are still building the way we did hundreds of years ago, not for today. The goal is communities where people can be happy and successful. Elements include sharing, social, mobile, global, tech, and working together. The clearest example we have are WeWork and Airbnb. These businesses represent principles for every building. Building is a servant and service is primitive. Culture is changing, but not the real estate. On a larger scale, the same principles lead to questions of Smart Cities, Civic Cities and what makes for Great Cities. Hallmarks are University Towns and Village Greens. Urban areas, that contain clusters and a variety of activities all creating an infrastructure of success. Or as Stuart said, a great civic space requires the 2P’s, and one of them is a Park. There are new, big projects popping up in major cities that combine spaces with creativity, productivity, social, and almost always, food.

Limehouse

The SIOR European Chapter hosted a wonderful conference. Total attendees exceeded 200 and for the first time, Americans were clearly in the minority. I learned a lot about Europe and because of the intimate setting, I could meet everyone. Besides the superior education, there was time for social activities and exploration of London. There will be opportunities for years to come.