Games

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Board GameDaniel Hertz, a senior fellow at City Observatory, wrote an article for The Atlantic describing what he learned about urban planning by playing computer games. He cites two specific games about building: SimCity and Cities:Skyline. Zoning, traffic, parking, public transportation, and growth are all challenges to be had in the games. Seemingly, left out are the human aspects: politics, diversity, income driven neighborhoods. These factors contribute to the richness of urban dwelling that the games don’t appear to incorporate.

If you don’t want to plan a city, you may want to try being President. Gene Billingsley, founder of GMT Games, has a board game in development called Mr. President, which will hopefully be available by late fall 2016. “Mr. President is a solitaire game that puts you in the shoes of the President of the United States, attempting to govern, with limited resources, in a complex and ever-changing world.”, according to Billingsley.

Farmland Investments

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Farm LandAs demand for food increases farmland has become increasingly attractive to both US and overseas investors. While new buildings can built, land cannot be created and is proving to be a stable long-term investment.

USDA reported farm real estate value (land and structures) was $2.38 trillion in 2014.  Farm land is often rented to local farmers. Owning a number of farms in various locations can increase the variety of crops grown, insuring against one crop experiencing a lower yield.

Investor farms typically grow corn, soybeans, wheat and cotton. Specialty crops are becoming attractive as an investment and specifically blueberry farms are being acquired in Michigan.

According to USDA Land Values Summary (August 2015), farm real estate value (land and buildings) in Michigan has increased 4.3%.

Source: DesMoines Register

Source: USDA

Source: Economic Research Service USDA

Source: CNBC

 

Detroit – Matching Vacant Space and a Business

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Detroit view from Belle IsleIn 2015, Motor City Match provided $500,000 in matching grants; connecting business owners with property owners. Property owners with vacant space looking for tenants and entrepreneurs looking for space in Detroit may look to find help through this potentially viable option.

Grant Applications for Business Owners and Building Owners in Round 3 is currently open and will close January 1st.

In the previous round, 10 businesses received a share of the $500,000 Grant to start or expand a business plus 87 businesses received assistance in planning or guidance to get their businesses started.

For more information and to submit an application go to www.motorcitymatch.com.

The Detroit Economic Growth Corporation, a private, non-profit organization, one of the partners in Motor City Match, has a lot of resources to help companies and businesses arrive and thrive in Detroit.

 

Downtown Condos in Demand Across the Country

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Condo BuildingDowntown Ann Arbor condo developments are booming. Urban living is more desirable than ever all across the country. A recent NPR broadcast reports larger cities, that were once ghost towns on the weekends, are emerging as the new places that Millennials want to live and developers are altering their mindset from office developments to walkable residential community.

Some cities are turning vacant floors in office buildings or total office buildings into higher-end residential condos or apartments. Detroit, Michigan, Wilke-Barre, Pennsylvania, Cleveland, Ohio, and Milwaukee, Wisconsin have all had residential conversions and are experiencing an upturn in downtown living.

Detroit has numerous companies that have moved from the suburbs to downtown.

Office markets are improving, due in part to conversions pulling office space out of the market.

The largest age group living in cities is 25-34 followed by Baby Boomers who are finding it increasingly more attractive to live “downtown”.

Source: Crain’s Detroit

Source: Urban Milwaukee

Source: Cleveland.com

Source: Citizens Voice

 

We’re Still Talking about Millennials…

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millennial at workAnd we will be for the foreseeable future. In order to market commercial real estate to Millennials, the 20-34 year age group, you have to understand them.

A good place to start is the government report, 15 Economic Facts about Millennials by The Council of Economic Advisers, issued late last year. Some facts stated are:

  • 15% of that age group were born in a foreign country
  • They are technologically connected
  • A study found half of those surveyed expressed interest in starting a business
  • They are a third of the labor force
  • They stay at early-career jobs longer
  • Women have more labor market equality
  • Millennials get married later
  • They are less likely to be homeowners
  • They are more likely to live in urban areas

Millennial Nicole Weinburger gives her perspective in a National Real Estate Investor article. Some of her key points are:  You have to keep up with technology to close sales; millennials will demand more information; video tours of commercial real estate listings will become more prominent; online leads will outpace referrals. Ms. Weinburger writes: “Millennials that have started to build up some equity and need to know with whom to invest their new, hard-earned money……Millennials who are first generation investors that don’t know who to trust will immediately turn to the internet as their first source.”

Photo:  Death to the Stock Photo

Work-Life Integration

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Work-life balance is now about work-life integration.Work Space

Startups are currently looking for spaces and  buildings where their workers can live and work.  Co-living, or group living, with a small personal space and large communal spaces for living and working.

It’s not a 9 to 5 workday, it’s 24 hour accessibility for hours that work best for work, rest or play.

Both shared and independent office space are in high demand. Freelance workers, independent contractors, and the self-employed are estimated to be 33% of the work force and may grow to 50% by the end of this decade, certainly an opportunity for landlords to be creative.

Source: Buzzfeed

Source: Bizshift-Trends

Photo: Death to the Stock Photo

Two Small Free-Standing Buildings for Sale

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Bela Sipos of Reinhart Commercial has two smaller free-standing buildings listed for sale. One is good for an owner/user, the other as an investment property. Located in Manchester and Canton, Michigan.

327 W Main St

1450 SF Building on Main St in quaint Manchester, Michigan. Good for a number of uses. Currently used by a catering business. View details.

5773 Canton Center

Brick, 3570 SF Office Building on Canton Center Rd, just North of Ford Rd, Canton, Michigan. 100% occupied with 5 long-term tenants. View details.

 

 

Commercial High-Rent Blight

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Recently an article in The New Yorker explained high-rent blight in the West Village area. Rising properties values allow landlords to justify raising rents on commercial properties often pricing long-term tenants out of the market. This has resulted tenants being forced to close their business or having to move. Many storefronts have been closed for a long time, as landlords wait for higher paying tenants, often whom are national chains.

New York City is not the only place that high commercial rents start to undermine the unique character that makes areas of a city appealing to shop and visit. When too many national chains move in, it reduces an area’s special attributes and hurts the small businesses that have created the charm and character in the first place.

Ann Arbor’s State Street retail district, adjacent to the University of Michigan’s central campus, recently saw two restaurants closing with claims of “high rent” as a factor in their decisions.

One city is finding a way to deal with empty storefronts. In 2011 a group of people in Minneapolis came together to develop a community real estate cooperative. Northeast Investment Cooperative buys and develops real estate. They have bought, sold, and renovated buildings in an area that was once empty storefronts. The area is now thriving with several businesses enhancing the neighborhood.

To reduce blight in Detroit a task force was created in 2013 called Detroit Blight Removal Task Force. They have been targeting residential neighborhoods first; starting with those that are most populated and have the fewest abandoned homes. The city’s goal is to tear down 200 houses a week.  Commercial blight will be more challenging as there are more than 5,400 commercial, civic and church properties on the removal list.file4841291052003

Source: MLive.com

Source: MLive.com

Source: Crosscut.com

Source: Detroit Free Press

Source: MLive.com

Commercial Real Estate Outlook and Portfolio Asset

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Chicago SkylineAccording to the NAR’s Commercial Connection, Research Report, the Commercial Real Estate market is looking positive for the rest of the year. Net absorption is expected to increase for all property types with the exception of apartment markets where there is an increased supply. New commercial construction will also grow albeit at a slower rate.

Institutional investment companies once considered Commercial Real Estate an alternative investment, not anymore. It is now the fourth institutional asset along with the traditional three asset classes of stocks, bonds and cash.

Development Magazine of the NAIOP explores this in their Spring 2015 issue. They state that Commercial Real Estate represents nearly 10 percent of a portfolio for institutional investors.

Real Estate provides portfolio diversification and can be an inflation hedge and offer competitive returns.

Income Property

There can be many benefits to buying income property. Investopedia states that some income properties can be included as part of a retirement plan.

Forbes states that parents purchasing a home in a college town for children to live in while attending college may be a good investment verses paying for their rent. It can remain an income property after they graduate or serve as a home the parents will eventually move into. Claiming a depreciation deduction on federal income tax is a great benefit when owning rental property.

Nolo gives the Top Ten Deductions for Landlords and an article on how to Calculate Income and Cap Rate.

Rental Housing was researched and a report published on America’s Rental Housing: Evolving Markets and Needs by the Joint Center for Housing Studies of Harvard University.

An Ann Arbor Income Property currently listed by Reinhart Commercial’s Bela Sipos is at 1700 Packard. This great 2-story brick building is located in the Lower Burns Park neighborhood. It has two (2) bedroom units on the 2nd floor. The main floor was an office and the best use would be to convert it back to residential.  Includes an ample black-topped parking lot at rear of building. Newer roof, windows, furnace, and doors.

1700 PackardView Property Info