CRE News Hour 7/19/2019
From the business desk at st broadcast news this is the c. arena news hour. I'm steve lubeck. It's friday july nineteenth twenty nineteen on this edition of the sierra news hour. We'll look at atlantic attic station. A live work play development in metro atlanta. We speak with the new jersey economic development authority about best practices for opportunities zone fund governance. We'll get some comparison of office costs in major metro areas from commercial cafe dot com and we'll have a chat with tom. Laundries chief executive officer of metro commercial about the hot retail trend online companies crossing over into bricks and mortar with micro branding those features and in the weeks sierra news right after these messages <music> turn earn your podcasting passion into profits the book the business of podcasting describes the business side of podcasting including how to become a professional national podcast. You'll learn about position your clients expertise who podcasting to plus the best business models how to find clients and much more visit the the business of podcasting dot com today. You can't wait for the media to cover your company buzney. You have to be the media. Take advantage of the power of audio and video. It's the best way to showcase your expertise to prospective customers. Let the lupatkin you bet can media companies handled the technical side. We're award winning audio and video producers. We can help you produce podcasts and video programs remotely or in our fully fully equipped studio in cherry hill visit being the media dot com for more information. Let's start off with some news and headlines from around the c._r._a. World m._s._c._i. Issued its annual real estate market size report and and the top level finding show the size of the global professionally managed real estate market rose from eight point five trillion twenty seventeen to eight point nine trillion for twenty eighteen the u._s. real estate market showed the most significant absolute change with a market size increase of honored and seventy two billion dollars dollars in the middle of downtown newark's vibrant business and development renaissance's third space a new family owned co working space. That's officially opened for for business. It's located on the ground floor of the renovated. Textile lofts building a short walk from newark penn station city hall and newark central business district third space has three conference rooms and event space <hes> state of the art podcast room. We liked that idea and twenty offices of one hundred twenty square feet each with the key 'less security entry and each office comes with a dedicated parking space and the co working space hopes to attract users by offering some unique programming jennifer. Danilo is the president of third space. We have had few events already. One that stands out was put on by makers hood and they ah <hes> presented a workshop on how to find funding for your business. We also have a few others lined up. We have a digital marketing and social media workshop coming coming up as well as a <hes> speaker alfred edmund junior nationally renowned business strategist and we really are hoping our programming will be a resource to small businesses and new and aspiring entrepreneurs furthermore will eventually be offering wellness programming like chair massage meditation tation and yoga and let's not forget about the importance of good local coffee. We have a good <hes> third wave coffee. <music> roaster who's right up the block coming in named great notch and we're really happy to be <hes> another way to be partnering with a local business. Third space is one of only a few family owned co working spaces in the country. The danilo family chose new york because of what it said was it's energy. It's diverse community and the opportunity entity to serve a community of businesses and organizations working to revitalize what is affectionately known as brick city. You can find out more by visiting third space co work. That's with a three r. D third space co work dot com c._p._r. Is out with its mid year review of manhattan office space leasing leasing activity during the first half of the year was robust at almost fifteen million square feet average asking rents jumped to over eighty dollars per square foot for the first time in history while the overall availability rate at the close of the first half of the year was eleven percent down eighty basis points from the same time last year availabilities remained below twelve percent for roughly two years cushman and wakefield advised on a sixty million dollar construction loan for phase one of a thirteen acre multifamily development in bogota new jersey p._c. Development and sabre real estate advisors are building four hundred twenty one units. It's a luxury rental property with retail on the riverfront site at two thirty eight west fort lee road jail closed a thirty million dollar sale of boulevard boulevard mall and nine hundred sixty two thousand square foot super regional mall inside a qualified opportunity zone in the buffalo area community of amherst new york. An adjacent wegmans grocery store was included in the transaction for another six million dollars. Jail l. marketed the property in conjunction with ten x on behalf of the seller douglas development development company was the purchaser endurance real estate group sold to properties in moorestown burlington county new jersey five fifty glen avenue and six hundred glenn court court there to building one hundred eight thousand square foot industrial portfolio property went for thirteen and a half million dollars and one of the trans popping up in retail is the pop up store micro branding is very hot right now it involves loves native online companies starting to break into the traditional brick and mortar round dipping their toes in the water of selling to consumers and a traditional store store environment with to talk about micro branding is tom laundries chief executive officer of metro commercial metro provides regional national national and international tenant representation to one hundred and forty individual and expanding retailers from offices in the philadelphia south jersey and florida regions regions. Tom laundries represented some of the world's largest retailers throughout the u._s. Canada and puerto rico and he's worked strategically with some of the nation's largest private in public owners of shopping centers. Tom you and your metro commercial brokers are out trying to drum up business from these micro brand stores from. I'm online retailers. Tell us what's going on with that. We are we are <hes>. We've done a couple of representing landlords off pitching business weekly trying to get this business. <hes> there's very few that have scaled the brick and mortar world and their genesis was was online. We're just at the threshold of that happening. It's uber for years ago. Did you use it over four years ago now. Do you use it use lift. Okay so you use the concept right four years ago to lift it was red hot for years ago but it but it wasn't epidemic proportions meaning. It wasn't my dad uses uber. He's in his eighties four years years ago. He didn't know what uber was now. Uses it all the time. I used uber four years ago so when i say all birger i see indochino or i say <hes> canot boasts you might know these names <hes> there the more prominent ones but when i say state liberty <hes> when i say mod clawsf off <hes> because they only have one store and they're testing it right so <hes> soho is like an incubator for these micro bands they we all get together and people travel there a lot of tourism lotte population. They try it on <hes>. You know it's so no i. I don't think so so no says the speaker put in your house. You thought it was almost completely sure hundred percent online well. They have one store. They wants to right so you know we're in pitching the business. 'cause it's red hot genre within our larger industry. It's just not scaled yet. It's a very different environment. It's not like online where you're just like like it changes but you can change with it because there's no physical boundaries i bought my first were parker glasses ten years ago i bought it online and i was one of the disciples and then they started opening up stores and their sales went through the roof because now they got all these different windows and i love the stores because it's really hard to get your your your glass adjusted online. It's really easy if you walk into a store so this whole thing of micro brands is no different than target improving their online presence as a reaction to get balancing their platform and bonobos in war parker getting their bricks and mortar so we're the fide to balance their platform. I i think most people would say oh that makes sense to me. That's why i don't see <hes> all these micro brands popping up in every grocery sh <hes> senate anchored center in the country because they don't. They're figuring it out like they're. They're trying to see what the market is for bricks. In line outlet for their goods is the traditional national approach was you started with bricks and mortar store and then you created a website. These people started online and they don't have the depth of experience perhaps in the bricks and mortar world yeah. There's actually a project. I think outside of l._a. The name escapes me that the guy the developer are built of bricks and mortar shopping center to house a hundred percent of micronutrients. He basically said to these migrants. I'm building your retail tale environment for you to come and explore this world. How about that and it's a it's a big project and it's a very successful project. I'm actually going to go out to l._a. In august and look at it but you know he's saying to all these need <hes> micro brands come and test and you know you're gonna pay your fair share and it's going to be a nice environment arment but let's huddle together and figure zamal or is it a power center or a strip shopping center. What's what's the layout. I think it's more or like a lifestyle center that that term is not if it's familiar to you. You'll know what i'm talking about. The term is not industry anymore <hes> that it's been replaced replaced by specialty center but yeah it's a it's a nicer. <hes> you know outdoor garden type park type in feel deal. It's not a big parking lot and it's not about power centers. Not local grocery store got it so <hes> so maybe a little bit of perspective on mixed excuse in the cities and what's driving the millennials and baby boomers. What's going. I mean we we keep hearing about it. They're all going into the city and in the urban environments but what else yeah so the energy behind it the wind behind that sale is live work play platform that model that attraction <hes>. You know we're done right now. <hes> the baby boomers don't which <hes> throw birthday parties and have kicked ball games for their kids in the backyard's anymore and nobody shows up and swims backyard pools anymore <hes> so they're kinda done with that. They're done with the suburban house. They raise their kids. The millennials are pushing that whole thing off <hes>. They're pushing the whole relationship off. They're pushing a lot. The things off <hes> i think it will trend back but right now what they're exchanging what the baby boomers did early on get a job commit to the job. <hes> put some money in the bank. Live the american dream move to the suburbs. Get your own house razor two point three kids. That's kinda done and these baby boomers are now saying. I don't want mom's house. I don't want moms taxes and i don't have any use for the backyard 'cause they don't have kids so i wanna live move and i wanna work and i wanna play in a very convenient tight knit geography the first <hes> areas that are already built for that or urban areas in live there you can work there and and you can play there the infrastructure there <hes>. There's already existing residential. There's entertainment and there's existing jobs what you're seeing in some suburbs. Now is a micro development that has those aspects. They're taking b. and c. Malls they're taking big tracks ground located off of really convenient highways and they're building these what they call mixed use developments. It's the urban environment is already a planned mixed use environment in a large geography if you can look at it that way right so if it's lacking one they'll just add one what they're doing in the suburbs is taking all free and building new oh and then each market each break <hes> larger metropolitan markets in the country. You'll see different examples of this. I think of atlanta one of the most successful successful one is called the avalon. It's purely one hundred percent suburban almost almost verging being the rural area and and it has a complex <hes> that includes hotel's residential of all different levels single-family the high end single family mid level apartments condos rentals <hes> has entertainment it has venues for speeches his concerts <hes> <hes> markets <hes> large events shows <hes> then it has venues for or movie theaters and live theaters than it has <hes> retail of all scale convenience pharmaceutical so large shopping discount shopping high end shopping all integrated into the one avalon project. That's one of the shinier leading more popular ones in the country now but there's many in this greater philadelphia market that are either completed on a smaller scale or under construction an equal scale and new york has them boston has them chicago has the texas has them florida has them and they're really the goal of a missed two from a developer point of view to spread the risk. I don't want to put all my eggs in one basket. I don't want to just build an office complex. I don't want to just build a residential complex. I don't wanna bill just a retail complex and we integrate small parts of all of them into one that would be suburban and urban environments. They're gonna play off of what's already there and give if those markets one or two of the aspects that they don't have already. I think of lincoln square philadelphia it has to who with a component to tip broad in washington has has a residential component with the retail down below they target their petsmart sprouts then they have about four hundred higher end well appointed apartments above and then the entertainment is right at their back door because because it's located on broad street the avenue of the arts spreading the risk it is a way of spreading the risk and it's away in the urban environments to complement implement. What's already there. You're seeing cities like minneapolis. That have a good entertainment base. Their professional sports orch teams play right downtown in the center city district. An older employers are in the center city district target. Being probably one of the biggest supporters are headquarters headquarters right at nicolette mall right downtown and now what's happening in that city is people are deciding to live there. There's not a lot of residential so the residential component of the live work play is on fire. There philadelphia had all three so depending on where you're talking about their adding these components around what's already there make sense to add more residential and more retail on the avenue of the arts because the entertainments there so when you come out to the suburbs <hes> there's projects like the one we're involved in an upper dublin alan opening fall two thousand twenty. It's anchored by sprouts which is a high end specialty grocery store. It's going going to have four hundred high end apartments. It's going to have <hes> higher end. Retail mid retail a lot of restaurants outdoor seating being for restaurants. It's going to have a three acre park. <hes> for it's going to have a running track. A walking track <hes> it's going to include <hes> <hes> <hes> some luxury <hes> residential as well as mid-level residential all packed into one area of a welsh address road road upper dublin high end area but purely suburban and now they're going to squeeze everything into one one project and not just i exploited one of those three <hes> on new in that new development which traditionally they would do the traditional developer they had had say twenty seven acres or eighty nine acres and it was at a key intersection they would say what does this work for and they would choose between the disciplines residential industrial office retail <hes> now what they're thinking is why not do all of <hes> and get the best of the best so why not have the good retail and scale it for that area and mr delegation and not overbuilt why not assess what the residential needs are in the area and built for that. Let's assess what what's not there. You're in the office market and build for that and quite frankly it's. It's smart. Development really smart. Development probably should've happened a long time ago but because of this trend this wind behind this new sale right the baby boomers are moving from their tool to suburban home of the backyard backyard pool. They don't want that anymore and the millennials are yet ready to accept that as their next step and these mixed use use live work play is a is attractive to both sectors which are the two biggest sectors of the demographics slice in this country right now the millennials and the baby boomers those are the two biggest buckets and they're all looking for the live work play in various the transformations in iterations yes so <hes> i'm a baby boomer. I'm fifty four. I was born in nineteen sixty four warm. I think i'm in the last last year the baby boomer maybe the first year the next one but <hes> yeah i don't want a tiny limited appointed apartment <hes> with a beer garden and <hes> a gym. I want other amenities so there are the projects that are built more for me but they're still mixed use projects. I'm still working. <hes> i still work in an office. I don't work in a shared cooperative cooperative space. <hes> i have my own office and i want my parking spot for my <hes> large suburban type car <hes>. I don't want to rent a car and i want to work out with a personal trainer in a gym. I don't want to do classes and i don't mind spending money on a white tablecloth with restaurant. I want someone to receive my packages and help me plan my trip so i wanna concierge in the building where the complex and i want higher higher end more luxury type amenities so i will look for that found millennial. I may wanna share an apartment with somebody. I may want ah flexible apartment. I may want apartment. That's furnished but maybe a studio i wanna. I want rental cars. I don't own a car as a part of this this complex part of my building <hes> i wanna i wanna loaner bike. I don't oh my bike <hes> and <hes>. I want a limited they just sort of <hes> low price grocer <hes> i don't cook at home so i don't really need a lot of a lot of prepare <hes> <hes> perishables or refrigeration and that type of thing i eat out a lot and nice surely do want a beer garden. I wanna hang out for a long time with with my friends and experienced something really neat when i am ready to spend money. I'm not going to buy a lot of things things but i am going to buy experience and so my complex may have rock climbing walls outdoor parks <hes> you know lounging areas beer gardens outdoor eating that type of thing hopefully that some of that makes sense <hes> but <hes> they're all still geared towards a certain demographic. You know what's not happening is the flight to urban or the flight to mixed-use live work replay environments. They're not they're not going together. This is a this is not a reckoning of the millennial to the baby boomer. They're they're. You're doing it for similar reasons. They want different <hes> they want different offering living necessarily in the same exact development yeah. That's a good question <hes> a lot of developers in the early age in the early stages of this where one or the other and now they're trying to integrate 'cause they wanna scale this and they wanna make it the bigger they wanna make one-size-fits-all and their difficulties in that they're real difficulty said that <hes> because you know quite frankly. That's not how the suburbs the suburbs worked out. What do they <hes> you know. There's <hes> there's certain subdivisions that are built for a certain type of housing stock and income <hes> and expectation levels and there's certain ones that are built differently and so there there is that separation so when you start to blend <hes> those needs from a millennial to a baby boomer millennial may want a small intimate <hes> <hes> rock concert late at night on the rooftop deck and i will tell you almost with a lot of confidence that the baby bloomberg would not want that <hes> so there's a difficult magic trick to pull off when you bring them all together in one project there are projects that have done that but they're they're larger scale and so they have that segregation if you will but done in a very smart development way so it looks like one project but that's a tougher one but that's that's kind of what's evolving so tom laundry chief executive officer of metro commercial. He joined just from his office in mount laurel new jersey. Tom thanks for being on the sierra. News hour was very nice talking to you. Thank you for your time. You're listening to the cr news hour. I'm steve labatt and at a recent meeting of the national governor's association the governance project and new jersey's economic development authority authority discussed some national best practices for leveraging opportunities zones. The goal of the opportunities owns tax incentive program is to attract transformative community investment and cultivates sustainable economic growth. The governance project released its new governors toolkit for opportunities owns owns at the event it outlines step-by-step strategies and provides states with best practices like the value that anchor institutions like universities and hospitals skin play as key mediators for community focused opportunity zones. We asked thai cooper the managing director of policy and advocacy at nj edna to explain the importance of the toolkit tie. Thanks for joining us on this theory news hour. Thank you so much for having me so the governor's toolkit for opportunity zones <hes> the nj e._d._a. Had some input into developing this. Tell us a little bit about why someone needs a tool oh kit and what it will do for them if they're thinking about developing in an opportunity zone governance has been a fantastic partner with new jersey economic development authority really with the entire opportunities process itself when restarting breaking fan. It was through initial conversations discussing. What is this program actually going to be like. How is it going to work and they were really good in guiding states and municipalities forward. I think for them with him recognized early on as states that this is an incredibly new project. Nothing like opportunity zones is come before and we don't ignore him will come like afterwards and so as we're starting this process we have to be very intentional and so the governor's has project for us was incredibly resourceful in how we were streamlining are processed opportunity zones but also giving best practices on how to do outreach with municipalities how prepared here. They had to be on every single level. One of the things that we're finding even now is that these are still learning about what opportunities zones are. Why is this important. Morton came out of the job cuts and tax act between seven team <hes> that was sponsored by senator booker and senator tim scott opportunities on origin but it was kind of hidden in the legislation and so now a year out people are starting to find more out about it and so now is a really intense time when the state in organizations specifically the governance diligence doing their outreach touching cities wants to be out of time and and really guiding them through this process so what what are some of the things that you advocate in your toolkit for people to do as best practices i mean is it. It's been one of those just things that as a state agency because we do have an inter agency task force we've been pushing for a lot of work with our agencies to help these municipalities build without will be calling investment perspectives and so that for them is really building up all the assets that they have with immigrants of how targeting them strategically going in with a set set of principles that they wanted us from this process with our communities is you're going to focus on affordable housing target those areas immediately in your municipality look at what what areas are immunity development gonna focus on apprenticeships or building out job growth and employment opportunities nothing hyperfocused. I think the best part the toolkit is that a target their efforts into one area very streamlined systematic what they're doing and so for for us again. It's it's having municipalities being noble resources exist with enron and also no resources exist with the state <hes> kind of as a complimentary thanks react onto this toolkit over jerseys create a one stop shop inner one-stop shopping all the resources that you'll need as immune palladini as a business as a community resident or as a real estate villa developer charity walk your entire process that was in conjunction with the government's giving us some best practices and they've seen around the nation so for us. It's always a pleasure to have some good ideas. Come from department there and also i think the best thing press in creating <hes> also coming out with a one stop shop so for his new jersey are are but site is in jail for trinity's zones nj dot gov and again. That's the resource for you can find every resource that you possibly need for zones including. I think this is one of our star features as state is our asset map. This is about that has about sixty seven different layers on identifying a restate resource that exist this within the state of new jersey layers all on how each other but also breaks things down within that sense translates fences track block lots art details. One of the things is highlighted in the <hes> materials about this tool. Kit is the the value of anchor institutions like universities and hospitals in opportunity zones. How does that work and why are they so important gangrene <unk> thanks for helping to move this process forward <hes> from our hospitals to our centers of higher education drivers in the economy already they've been angered and within those communities already so let's partnerships have been established already so it's a way for them to activate these spaces as it exists and so for us again again if you go onto our asset map for each one of the opportunities that we have in the state within these census tracts on our map. It'll identify what anchor institutions are established within a specific uncover -tunities zone port. There is a hospital whether it's an of higher learning but they're all located within these spaces they can really do it. I think has been phenomenal at this is activate all the spaces all the anchorman institutions in the city of pushing towards his process so ensuring that they have an integrated degraded system with their hospitals with their with their job providers so they're all working in line to get the best type of investment. They need for their cities. This is something that is going to be truly beneficial and again for us. Municipalities are the driver of what happens in our state and i think the governor's project understands that they understood from the very beginning of why it's important for us to have their finances together wides important to get your investments together why it's important to really strategic and targeted and i think with a toolkit hit did which was so helpless it outlines very simply it puts it in very simple language and strategic tips on how cities can move even having a single point of accountability those small things make such a huge difference and you have to realize that over this nation in any seven hundred <unk> that have been designated so the competition is not just within your own state. It really is regional. It's really national and i think governors project has done a good job by identifying what the strategic advantages are helping cities identify what their should you could damages are in really being able to promote them so even past the ten year period for opportunity zones municipalities are on their way they have a more streamlined system when it comes to zoning zoning and permitting and really having a single point of accountability for development so i think that's a really critical piece. It's not just as play opportunity zones but also the long term success sustainability. We appreciate your taking the time to explain it all to us. Ty cooper's the managing director of policy and advocacy the at the new jersey economic development authority. She joined us from her office in trenton commercial cafe. Dot com has put together a new study looking at the fifteen most popular central business district district in the country. They've created to calculators. You can use to compare the prices of similar sized assets across these fifteen c._b._d.'s you you can find out which c._b._d.'s the right choice for you based on the amount you want to invest so for example in philadelphia seventeen point three million dollar investment can get that you one hundred thousand square feet of class a office space in comparison the same amount of space would cost seventy nine million dollars in midtown manhattan sixty sixty point six million in washington d._c. Twenty four point four million in charlotte north carolina and fourteen point seven million in atlanta. We'll put a link linked to the study and the calculators in the show notes for this podcast at st broadcast news dot com but we wanted to get some perspective on the results from patrick mcgregor egger who prepared the analysis of the c._b._d.'s four commercial cafe dot com patrick. You have done some research into the price per square foot for office assets in the various central business district around the country. What are some of the findings of the survey and if you could take us back to so what made you decide to take a look at this comparison between all these cities and the different classes of buildings yes absolutely <hes> so i'll start with breath why we decided to do this study so a lot of the comparisons you see especially within real estate are on more general residential offers received comparison between own self prices in various regions also see rents and those are the biggest what we don't really see a lot of our the prices of large assets. <hes> office assets for instance is widely chosen this one <hes> one of the things we ran into was was identifying a region the look at where you know that every m._s._a. would have so you also you always have a primary urban area suburban areas of joseph c._b._s. News which are more easily <hes> have bonkers that are easy to find which is why would show c._b._s. C._b._s. <hes> as well hop your assets that many people would identify from a skyline photo <hes> so that's where the idea came from one of the areas that we had an issue with was making sure we had a large data set. That's a work with which is why we did nine nine quarters of beta and some of the interesting things that we identified were <hes> the distribution of <hes> the the space between the differences between as and bs and for instance in seattle and you had a assets to see being going four two hundred five dollars for more than these <hes> part of that was due to asset size but the distribution when they happen to really make a difference in that particular market whereas in <hes> san francisco for instance where the price of business as you had b.'s transferred being transferred at a later date so time difference which is something we tried to account for but what it was going to be different distribution so so talk a little bit about the findings of the survey <hes> wide disparities between different <hes> central business districts were was there sort of a <hes> a running theme for some of the more popular locations well. Obviously you have san francisco manhattan seattle. Those are going to have some of a higher <hes> d._c. Billy are going to have some of the higher c._d. Prices just because of their prominence of popularity the sides well well. They have some of the larger c._b. Areas was cedeno such in san. Jose isn't going to have a very large geographic speaking c._b._d. Area so those were the only real things that we could end on a high as a track right <hes> other than that. It was really based based on popularity so you have baltimore down towards the bottom of prices. If older buildings i it's just not <unk> as popular where up and coming markets like nashville and austin which aren't as large but they're still up and coming drying the the business away from silicon valley from seattle portland so that's what i found quite interesting in this study for accompany. That's thinking about <hes> looking for office space in one of these markets. What's the best approach for them to take looking at your research and factoring during it into their planning their you know mitt creating a universe places they wanna consider oil and i think that's a that's a multifaceted did point <hes> on the one hand you have is this company going to come in and are they going to be leasing space versus purchasing space now all the data set were working with was everything over five fifty thousand square feet so right there is is a parameter on which news that is going to disqualify. Some companies are going like that's a lot of space for a company to come in and purchase an asset <hes> from a leasing standpoint standpoint. I mean you're going to be looking at everything from the cost the amenities that are in the area the cost of living premium poisoning on the area <hes> utilities already and that sort of thing but from an investment standpoint or if you're going to be purchasing the building you wanna look at how is that investment going to perform just like any other investment so <hes> this study didn't go into carrots for instance so i can tell you what the cap rates in manhattan arbres austin but with some degree of of <hes> educated estimation mission if you will i would assume they're decamp rates in a city like nashville or austin are going to be slightly higher than they are going to be be really build out popular large c._b._d.'s that was studied here. Were there any surprises in your research <hes> cities that were either more expensive or less expensive than expected them to be <hes>. I actually surprised i was surprised to see charlotte. <hes> n baltimore both be the in this in this <hes> study charlotte has been up and coming as well as the whole region is <hes> kind of gaining more march action obviously with a triangle you'll still have asheville north carolina but charlotte and during the top c._d.'s was interesting as well as baltimore's mars. This data before is not a very popular. I mean you don't hear about it. A lot. <hes> implement investments them point. I mean they didn't how many transactions in the last nine quarters but it was is still an interesting <hes> entry into our into our study <hes> and then san francisco just because of the distribution on one properties were sold entered the end the list in a different way because you had the asset classes as properties selling for a higher price aid days. What trends do you expect in property values. I mean obviously the overall overall long term trend is always up but <hes> what are you seeing over the next say twelve to eighteen months in terms of <hes> the economy in in how that's going to affect the pricing that people get difficult to say to be honest with you because real estate state <unk>. I mean you have boom bust forest but it's also <unk> but it's also as volatile bruce most other assets so <hes> i would say that it it's trending towards a a slight increase over the next twelve months but i don't think you're gonna see any huge. Debts cassini huge <hes> johnson's well patrick mcgregor is the author of the office building price study in top commercial business district that appears on commercial cafe dot com. You can find the link for patrick study in the show notes at st broadcast news dot com patrick. Thank you for taking the time. We'll check back in with you. Again sounds good. Thank you very much. We'll be back in a minute sean. This is rabbi richard address join us for our podcast series from jewish sacred aging entitled seekers of meeting will explore some of the issues and events that impact ourselves our families and our jewish world at large in light of the current revolution eighty the secrets of meaning podcast airs every every friday morning at eight a._m. At jewish sacred aging dot com <music> today. You can't wait for the media to cover your company. You have to be the media. Take advantage of the power of audio and video. It's the best way showcase your expertise to perspective customers. Let the lubec in media companies handle the technical side. We're award winning audio and video producers. We can help you produce podcasts and video programs remotely or in our fully equipped studio in cherry hill visit being the media dot com for more information off the atlantic station property in atlanta is a retail office complex of about a hundred and thirty eight acres is being redeveloped by houston-based hines to better engage promote walkability and community throughout the property for shoppers residents and visitors and the leasing team is working to revitalize the retail mix at the once traditional mall space by by retaining and expanding the anchor tenants and attracting new retailers. We talked with jon hagey. The senior managing director of hines and dan hynes director of leasing nick garcia to talk about the transformation. That's taking place at atlantic station neck and john. This is a major project object. It's one hundred and thirty eight acres. It's got the retail component. It's got the office component nick. Tell us a little bit about how your transforming the retail experience experience on the property <hes>. Thank you for having us today. Stephen really really appreciate it. <hes> the retail <hes> portion of the center is really kind of the heart and soul all of the project and the public really really knows <hes> hines involvement with the project goes back to the fall of two thousand fifteen when we first when we first acquired it but our partners at morgan stanley <hes> since then we've been in the process of really kind of <hes> scraping the old image off of the center when the project trek was first conceived <hes> back in the late nineties early two thousands <hes> <hes> kind of the consensus of how to build projects like these was to make them <hes> feel kinda like a disneyesque town square and <hes> a lot of things over the years worked with that a lot of things really didn't so we're really doing this kind of amplifying the strength at the center which are really the dining the entertainment as well as the fashion aspects of the project and then <hes> bringing in newer users kind of really really reflect today's overall conditions in the retail <hes> market <hes> <hes> couple of things that we've done. We've <hes> taken a very successful agent. I'm store <hes> which is the highest performing store they have in the southeastern united states and they've expanded twenty six thousand square feet of forty thousand square feet. We've added <hes> five new restaurants and we're in the midst of a pretty significant transformation of our central park portion which is what we've kinda referred to as the living the center and <hes> <hes> which there's going to be home to three brand new restaurants and just a great public gathering space. It's <hes> not really about cramming more and more stuff you know so to speak <hes> in the retail environment. It's about creating a place where people really want to be and hang out and spend time and having those <hes> parts of a project it really resonate with today's retailers and the <hes> the property is being transformed. I guess because you're you're building these office. Spaces the two john talk a little bit about the office space sure well you know and the the office component of the project for hines really <hes> is just a continuation of of what's already been so successful there in the project <hes> our predecessors at three major office towers to the the <hes> development in the early stages so there's about a million and a half square feet of existing <hes> class class triple a. office space. That's <hes> along along the spine of the project which seventeenth street and going back you know probably about three years now <hes> ago partners and i <hes> seeing the advantages of of <hes> office development in the the really the the strength of the market in mid town. We <hes> acquired two sites within the project. This was actually kind of interesting actually in advance of heinz involvement with the overall master plan that that <hes> nick just described to you but <hes> again getting back we we saw the value of of midtown in general we saw shortly the value of the experience development this being done there so we we took <hes> <hes> one of the newest development products that hines really has and it's <hes> in its portfolio buildings across the across the globe a project and a product that we call teeth free with stands for timber transit technology. It's very unique. <hes> very high end office product. That's made made <hes> completely of heavy timber frame. We took that that product and <hes> designed a gorgeous building that we're about to to deliver however the market here actually in about sixty days <hes> two hundred thirty thousand square feet <hes> as i say that's a very unique <hes> <hes> <hes> office product never been built certainly in the <hes> in the southeast. This'll be the first of its kind. Actually when it's delivered it will be the largest timber frame office office going in <hes> in america and <hes> and then <hes> shortly on the heels of that delivery <hes> give it call it about eighteen months <hes> in in our world eighteen months is short <hes> ah eighteen months from from september <hes> we'll be delivering a the second product that we refer to as atlantic yards and that's <hes> <hes> a much larger project is built down <hes> right across the street from the existing three three office towers that are in the project <hes> approximately five hundred twenty thousand square feet and it's <hes> it's a project very interestingly <hes> <hes> designed to <hes> pay historical respect to the the <hes> the original use of this property which was the old atlantic ninety steel mill and <hes> you know in the in the parlance of the day when when steele was was being fabricated in america in many locations locations like <hes> like the south this was largely a train yard so <hes> hence the name of the project atlantic yards and a lot of our lot of our architecture architecture and interior <hes> finish that we're putting into this building really is a tip of the hat to <hes> to that heritage and i want to get back to the t. three property for just a minute of what made you decide to build this as an as a timber project. It's very unusual and <hes> you know it certainly raises people's eyebrows when they hear that the building is constructed completely of timber in an age of glass and steel well it isn't it is unusual and <hes> and that's uh-huh frankly one of the reasons that we're doing it. I mean i think you know i can give you that simple answer. I'll give you kind of another inch an interesting inside baseball answer also but <hes> but the first answer <hes> were were saying our customers literally across the country <hes> in their <hes> in their pursuit of talent. They're looking. I'm for highly differentiated <hes> highly unique office locations that help them recruit and retain employees just that simple and <hes> you know the buildings that even hines built <hes> you know call it over the last ten to twenty years. They're they're nice buildings. Many of them are even great buildings endings but they are. They're not nearly as highly differentiated as the products that we're we're developing <hes> today <hes> and certainly t. three is is is a classic example of that and give you the inside baseball story also about how we how we came up with the teeth re concept. It goes back to a site site that our firm had <hes> up in <hes> minneapolis that <hes> that frankly was <hes> targeted as a as a <hes> <hes> large scale residential development. We had one building on that site that had <hes> <hes> had <hes> was adaptively reused from romay <hes> <hes> from an old warehouse building. I think in many respects we consider that building might be great to convert to to residential or even demolition it and turn it it into something residential long story short we were amazed at how easily that building was leased and released and we learned a very very valuable lesson <hes> in that in that whole experience and that was that our office customers once again looking for something very highly differentiated love the soul i i love the <hes> <hes> the integrity they love the the authenticity of that kind of product and <hes> and our partner up there <hes> fellow named steve lutheran been out of the chicago office concede to the idea of building a product that we could build a scale and t- three was was <hes> oh was conceived with an architect out of <hes> <hes> canada and <hes> and and the rest of the kinda history the t the first teeth rebuilding the building was delivered in minneapolis <hes> to to incredible success atlanta will be the second and at this point we probably have as many as five five to eight sites around the country that we've identified as logical location to expand the <hes> the t. three <hes> <hes> enterprise. It is pretty unusual. We'll <hes> nick. I wanted to ask about the <hes> the shopping and the retail <hes> have you seen any significant transition away from the traditional all kinds of <hes> tenants that you would find in a in a retail mall property. Are you going for more experiential or dining or <hes>. How has that mix changing aging retail in general is going through a lot of changes right now and obviously the retail portion atlantic stations really kind of reflecting that and <hes> being such a dense and diverse. I part of atlanta. We're able to do a lot of things that a lot of you know. Other parts of the city and town are able to be done <hes> so to answer your question yes <hes> we are kind of ah shifting the mets around you know the days of building a project with seventy or eighty percent of your tenants being soft goods and apparel <hes> those days these are kind of over so <hes> <hes> that's partially due to a lot of changes in the overall demographics of our country but <hes> and we are really amplifying the different uses here to kind of get away from that model so <hes> having a great collection of restaurants schrafft's really if you have five or six good restaurants those you know collectively act as an anchor or you so <hes> we've made five new restaurant deals three of which are open <hes> up sure which render construction. We've got a couple more coming down the pike here as well too little be opening up in two thousand twenty in two thousand twenty. One <hes> we've had fitness uses is is well to then. We're really amplifying the entertainment <hes> experience here as well to <hes>. We got a very successful movie theater. <hes> <hes> regal cinema alantic station is the highest volume cinema and the state of georgia and <hes> what we're going to be adding. Here's a bolero which is a high end family bowling rolling center and gastro pub concept and the combination of a to really make for a nice nice night out of town a lot of corporate events and those dollars kind of spread throughout the rest of the shopping center is well. She'll if i could just add into something that that <hes> nick said because it really it really triggered a thought you you know the our office customers <hes> <hes> again in their in their effort to differentiate and create create environments for their employees they are <unk> highly focused on <hes> a lot of the <hes> the enterprise that you've just heard nick described certainly food and healthy options for that matter for food are terribly important to them and and <hes> so what nick has underway in the development is really just a incredibly important to us with the the new office customers that we're going to be bringing to the project. I'll also tell you that that <hes> there's a lot of new development that's happening within the in the project check in terms of the hospitality side <hes> certainly it's it's well no now on the market that are are twelve hotel product of that's been in the project since the beginning is now being converted to a marriott autograph collection a quality product and and really has helped us attract tennis as a as a consequence of that new product and then. You're just literally in the last thirty days. <hes> embassy suites hotel has just broken ground on a brand new hotel that they're bringing bringing to the market that they hope to have open <hes> at the end of end of next year so there's a lot more of this happening <hes> in the developing <hes> that's really again from my standpoint on the office side is is huge to create the right environment for all these customers that that's a great point john and john and i work and then glove here because a lot of the retailers that we're going after they don't like you know quote unquote static retail environments single use mall so to speak or just one hundred percent retail. They love seeing permits. You know more than three thousand residential units sober overall atlantic spacious <hes> they love seeing new office space they love having neely daily traffic generated <hes> by the office users and not have to rely on people just coming out for shopping so it's a very very <hes> <hes> symbiotic and beyond relationship that all the uses have with each other well. It sounds great. I appreciate you both taking the time to talk about it with us. Absolutely real nick garcia is is the director of leasing for retail at heinz and jon hagey is the senior managing director focusing on office leasing atlantic station in atlanta and that'll wrap things up for this edition of the c. r. e. news hour you can send your comments suggestions story ideas to steve at st broadcast news dot com or you can leave an audio comment for us using the voice mail icon on the homepage at st broadcast news dot com and we tape this program in studio a at st broadcast news in cherry hill new jersey join us again for the next episode of the sierra news our next friday at eight a._m. Eastern eastern time at st broadcast news dot com or wherever you get your pod guests. This is steve lubeck and we'll see you out there on the net. Take good care.