CRE News Hour 9/13/2019
From the business desk at St Broadcast News this is the C. Arena news hour. I'm Steve Lubeck. It's Friday September Thirteenth Twenty nineteen in this week's edition of the Sierra News Hour will learn about neuro diversity and how that's affecting the way office space is being designed with K. Sergeant of design firm H Okay we'll take an exclusive look at the building products industry with Mark Mayfield the recently appointed. CEO of Building Products Company Sango Ben and will explore section one seventy tax advantages just for nonprofits and charities that WANNA buy commercial real estate properties with giral baths and Robert Blakely of Tampa based real estate advisory firm wealth. We'll be back with the top news stories right after these messages 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. Thanks for joining us on the C. R. E. News Hour. We just like to make note of a new option on the show page for this episode. You can click on the purple. Take the survey button right below the podcast player and share some information that will help us get to know our audience better. We'd also appreciate your considering financial support for the Sierra News Hour by visiting our our patron link and becoming a show supporter you can also leave a tip in the tip jar by clicking the blue quid button right in the middle of the podcast episode page and if you're interested in becoming a sponsor of the Sierra News our right to me at Steve at St Broadcast News Dot Com and we'll send you the rate card for advertising and commercials visuals now. Let's take a look at some of the stories that are moving Sierra markets across the country Morais asset global investments is announced. It's entered into a definitive agreement to acquire a portfolio of fifteen the US luxury hotels from unbanning insurance group the deal would be the biggest cross-border real estate investment by a South Korean company and Solidify Murray's presence in the US best real estate market the portfolio includes about seven hundred twenty thousand square feet of meeting space and almost seven thousand rooms on bang invested almost four hundred million billion dollars in improvements since two thousand sixteen the fifteen property luxury hotel portfolio includes the J W Marriott Essex House in New York Ritz Carlton Half Moon Bay and Western Saint Francis in San Francisco Montage Laguna Beach in southern California Four Seasons Silicon Valley fairmont Scottsdale Princess and foresees in Scottsdale Arizona Four Seasons Jackson Hole in Wyoming and intercontinental hotels in Chicago and Miami Gabriel Hammer. Moore associates is brokered a three hundred million dollar plus sale of a multi property portfolio with more than eighteen hundred units spanning the high barrier to entry sub-markets of Northeast Essex and Bergen counties in northern New Jersey. The one point one two million square foot hundred and thirty four building portfolio is mainly comprised comprised of distinct in spacious one and two bedroom layouts some of which include duplex style options at select communities the garden style complexes also feature beautifully landscaped landscaped park like grounds and they're all close to schools shopping dining transit and adjacent parks municipal leaders state agencies and representatives of renewable energy energy companies will gather in Albany next week to explore ways to make New York's clean energy law work with passage of the climate leadership and Community Protection Enact New York made a commitment to achieve seventy percent renewable electricity by twenty thirty Alliance for Clean Energy Executive Director Ann Reynolds says is the fact that New York has passed that laws really exciting but now the real work begins. We have to get into the details about what it's going to take to implement at start talking about it soon and we're hoping that this conference is the premier forum in which those discussions take place the two day conference happens. Thursday and Friday September nineteenth and twentieth at the Albany Capital Center the conference will feature discussions on the challenges and opportunities for building wind farms solar arrays and offshore wind but Reynolds says reaching Louis clean energy goals will take more than building out infrastructure. We have a panel on electrification and efficiency because to meet the goals in the law. We're going to have to electrify. I five a lot of transportation very rapidly and home heating. She notes that achieving efficiency goals would sharply reduced demand while electrifying transportation and home heating heating will significantly increase the need for electric power. Reynolds adds that the Climate Leadership Act has an environmental justice component as well. We're also talks talks about making sure that disadvantaged communities get reinvestment. Do we have a panel on including all New Yorkers and the clean energy transition to full conference schedule is on the a New York website at ace E. E. N. Y. Dot. Org and we'll put the link to that website into show notes for this podcast. The BASCOM group successfully completed a two hundred thirty five million dollar refinance of an eleven property multifamily portfolio spanning five states. All of the properties are part of Baskin's third fully discretionary fund baskin value added apartment investors three most of the new loans are interest only with spreads over Libor ranging from one hundred and eighty basis points to two two hundred basis points and interest only periods of twenty four to thirty six months the refinance properties include the square apartments in Downey California Camden village apartments in Fremont him on California del Flora apartments in Redlands California courtyard on sixty eighth apartments in San Diego juniper terrace apartments in Escondido California south town at main apartments in Santa Ana California fifty second marketplace in Arvada Colorado Prescott Lakes senior apartments in Prescott Arizona mckinney ORCA departments wants in mckinney Texas fifty one and lyric apartments both in Las Vegas Nevada prolonged economic expansion a near fifty year low unemployment rate and a forty percent increase in non residential construction spending over the last several years has led to an increase in compensation for architects the twenty nineteen. Aa Compensation Survey says pay for architectural staff positions has risen by more than six percent per year since early twenty seventeen the survey says over the past two years compensation for architectural positions increase at two point five times the pace of growth for all professional and related staff in the economy cbre are- arranged the sale of a two hundred eighty four thousand square foot industrial facility in Philadelphia Pennsylvania the thirteen and a half Acre property at twenty four hundred Wacko Avenue was was acquired by Wharton Industrial Partners and Walton Street capital. The price wasn't disclosed. The seller is a zurich-based individual investor who purchased the property in twentieth six. Wharton Morton Industrial and Walton Street plan to invest upwards of ten million dollars to completely transform the site. They'll rebranded as Sophie Logistics Center improvements will include include installing a new roof leveling the interior floors adding new lights expanding and upgrading loading docks repaving the entire site painting the interior and exterior of the building adding new modern tailgate doors and fresh landscaping and other upgrades. The facility is expected to deliver early in twenty twenty some building owners in New York City now have an an edited incentive to create greenspace on their roof. A Green Roof Tax abatement has been available in the city for several years but few owners of taken advantage each of it in an effort to change that a new state law triples the tax break from five dollars to fifteen dollars per square foot in community district where sewers overflowed. Oh during rainstorms and that let green spaces it also extends the Existing Tax Abatement through July twenty fourth says Emily Nobel Maxwell with the Nature Conservancy the green roof tax abatement offers an opportunity for landowners to install green roofs which will in turn help make our city more or flood resistant more heat resistant and more bio-diverse. She says putting a green roof on a building can be expensive but the tax abatement can help defray the cost of installation and maintenance mental notes that green roofs not only absorb storm water they also have insulating properties that increase buildings energy efficiency and cut down on heating and cooling costs green roofs do show a return on investment over time so if that investment is made there are certainly benefits to you that property owner she adds the increased energy efficiency also helps reduce carbon emissions. There are other environmentally beneficial roof treatments like solar panel installations or reflective reflective coatings and maximum points out that having a green roof doesn't rule out other options. If you combine a green roof with solar you can get the benefits of a green roof and the solar panels will run more efficiently because of the coin benefits of the green roof. She says the next step will be for the city to determine which neighborhoods will be eligible for the new hire green roof tax abatements Admiral Capital Group announced its core plus investment platform has acquired fourteen five fifty five two hundred fifty two thousand square foot Class A office building in the lower tollway sub market of Dallas Texas fourteen five fifty five was developed by Cawley partners in two thousand eighteen. It's located on the Dallas North Tollway. Just north of I six thirty five property consists of a six story office building a three story amenity building which features a full service restaurant fitness center with locker rooms and an open air covered terrace with lounge seating fourteen five fifty five ninety five percent leased to a diverse mix of credit where the tenants Society Hill at Galloway to a popular residential community in Galloway Township New Jersey recently introduced a state of the art solar power system to benefit benefit the approximately thousand residents at the South Jersey town home and Condominium Community Society Hill at Galloway located approximately fifteen miles outside of Atlantic city consists of four hundred ninety units spread out over twenty eight well-maintained acres of Lush Green Property Key Bank Real Estate Capital secured twenty eight million dollars of financing financing and Federal Housing Authority loans for persimmon ventures. LLC based out of Baltimore the refinancing three healthcare properties in Pennsylvania sixteen million dollars went for oak-leaf manner north inland is Phil eight million dollars for Oakley Manor South in Millersville and four million dollars for Serenity Gardens in Cullman. They're all senior housing properties that offer assisted living and Memory Care Marcus and Miller Chap has announced the sale of the Grand Reserve a two hundred ninety unit multifamily community in Springhill Hill part of the Nashville Metropolitan area the property sold for sixty million dollars which represents about two hundred seven thousand dollars per unit the grand reserve is two miles us from interstate sixty five about fifteen minutes from Franklin and thirty minutes from downtown Nashville. The General Motors manufacturing plant in Spring Hill is six miles from the property other nearby employers include Comprehensive Logistics Magna and writer Logistics Twelve building three story community was constructed in two thousand fifteen and two thousand sixteen on thirty thirty one acres. You're listening to the C. R. E. News hour from St Broadcast News. Dot Com Tom. About fifteen to twenty percent of people are neuro divergent urgent that means they have one of collection of conditions that may include autism spectrum disorder attention deficit hyperactivity disorder and dyslexia employers are beginning to recognize that in addition to simply being the right thing to do accommodating neuro diverse people can provide a significant competitive advantage. This is leading to a range of more inclusive policies programs and procedures though this recognition is only just beginning to affect Workplace Design H. O. K. The global global design firm has a workplace practice. They've issued a report designing a neuro diverse workplace that explores how organizations can create create physical work environments that support a full range of employees both neuro typical and neuro divergent. We'll put a link to the report in the show notes. It's for this podcast. The report includes interviews with experts as well as suggestions for design strategies operational changes and individual adjustments that can support neuro a diverse and neuro typical staff alike joining us to talk about the report is case sergeant a director of the H. O. K. Workplace practice case is based in Washington. DC and leads project teams that solve business and organizational challenges related to Real Estate Business Process Strategic Planning Workplace Strategy Asia and Change Management. She's authored numerous reports and articles on the workplace as a speaker at many industry events she also mentors women through the DC chapter under of upward which accelerates career advancement for Executive Women K. Thanks for joining us on the Sierra News Hour. Tell us a little bit about how you came to do. I create a report on designing a neuro diverse workplace and also What are some of the issues that arose that made you think this was something you had to do? We're very unfortunate that we get to work with clients all over the world to see some of the things that are starting to emerge and probably about three or four years ago we started started to notice the increase conversation around mindfulness and the reports about stress and what's that doing the what that is doing which people in the workplace and released started thinking about what's the new generation that's coming into the workplace and and how do we accommodate them and multiple. The factors really started to point to this notion that there's a rise in neuro diversity and that we really aren't aren't addressing that in the workplace. If you think about all the things that we do to accommodate kids in school who are neuro diverse verse you know they don't outgrow it and so once they come into the office there's a stigmatism associated with that and most people don't want to admit that they are diverse and so they don't and that sets them up. I think in a lot of cases for failure in the workplace because we haven't really accommodated accommodated the space to be designed for them so we started putting all these dots together and started to do some more research around that and in Europe the stigmatism associated with this is really started to come off both of the princes of come out and said that they've had issues with periods of depression and or stress several people in the corporate world of come out and said that they've had nervous breakdowns downs or that their diversity is is impacting them and you've got some amazing people Richard Branson etc that call their neuro diversity there superpower because they really got to look at it like the neuro typical tend to think think in a band they tend to think you know kind of in a given parameter where people who are neuro diverse amazingly brilliant certain areas but also so have some real challenges so they can be really creative or you know really hyper focused but then there are other things that really bothered that there's they have some sensitivities we're living in this world where we have more and more people that are striving for creativity being able to tap into the people that at that comes naturally to or can deal with stress naturally just seems like it's a really important thing for us to do right now so when you talk about if someone being neuro diverse or a stepping neuro diverse and people individuals being neuro divergent. What are we talking about? What some of the typical kinds of neuro divergence agents and how do you factor that into what you do in terms of designing office space nerd diversity can cover a a lot of different aspects but it's it's in the sense you know people that are on the autism autism spectrum disorder so they're are on the scale for autism it can be it can be eight the HD it can be dyslexia and one of the things that isn't really studied that much as also and how it's impacting us in the workplace is Parkinson's because a lot of the research around neuro diversity is geared towards people in learning our Educational Environment Parkinson's Parkinson's doesn't typically affect people into they're in their fifties or sixties and so you're far out of school by that time and quite frankly a lot of you know it used to be you'd be out the workforce by that time but as we're living and working longer and longer we're going to have to deal with more people that are getting early early onset of Parkinson's in the workplace so neuro divergence are people that are basically wired differently and they have incredible oh strengths but they also have some challenges. So what are the things that you do to make the workplace comfortable or welcoming for people like doc so we have a whole plethora of things that we really talk about right so you know color can be a very important clarity. AM space making sure that we're giving people clear lives of navigation. We're not making spaces that are overly confusing making areas for people where they can control control the amount of distractions indoor engagement that they have because sometimes it's very difficult for nor divergence city like cut off the noise and and a and a lot of people stabbing areas where they can go and get out that excess energy indoor you know they can move. They can physically engage. They need some form of stimulation. Stimulation is a big issue whether it's whether it's acoustic whether interest visual or whatever it's physical stimulation and so giving people options and choices because just like that you might have with a physical the disability rights somebody who's blind needs something different than somebody who's in a wheelchair and so just you know the same thing. I think applies to no divergence. There's a variety of different things and it impacts different people in different ways so at the end of the day what we're really seeing is we need to create environments that have an ecosystem of options and choices so that people are virgin urgent can decide. What's the right setting them at any given time. How do you go about coming up with those kinds kinds of choices in design and physical features Did you work with specialists in these areas of neuro divergence do you have people on staff who have these kinds of conditions so so yes to all of those so first of all one eight people as Neuro divergent and if you think about the creative the creative industry we probably have more of our fair share than most industries too. I think so yes we absolutely absolutely do and nowhere that we have gone and talked about this. Do we not have an incident where multiple people in the audience will self identify themselves sells or a close family member as be nerd divergent and really struggling with that and it's it's just because we're not treating environments that are friendlier conducive or inclusive for the we did talk to a tremendous amount of experts about what are they seeing and however they going about this and what are some of the rules and the guidelines and the other thing. I think is that you know we tapped into our core. As designers we absolutely understand the art of space that's right and the art of design but there is an absolute science behind what we do and I don't think most people give that much credit right. I think every the decision that we make as a design firm. There's a reason and a purpose behind it. Nothing is random. People will say you know Oh. I like this color. It's like okay well. That's that's nice. That's why you have a house. Do whatever you want at your house but you're hiring us to do what works for you and what's the most conducive so if I put somebody in a uh-huh an environment that's red ultra patterned and loud excetera. I mean you can you can just physically and understand what's going to happened to somebody. In those types of environments there uber stimulating and people tend to short circuit but the color Palettes that choosing the textures the introduction of natural natural elements woods the lighting levels all of those things can really set either a very calm reassuring grounding safe-space or it can create incredible chaos in an environment and so we can control and manipulate the environment and people who are in just by the way that we're designing them and that's a very powerful tool so we challenged our designers to to really think about how do we create this ecosystem that is well balanced and that will give people the retreat and and the types of spaces that they need to be successful one of the things when you're trying to persuade companies that are designing office space that this is something valuable to do in your report you talk about some of the success stories that companies have had with being cognizant of the need for spaces that accommodate neuro diverse employees. Can you describe some of those cases and the successes that companies had yeah sure so you know I mean there's there's a lot of companies. They if people want to be super focused K. if you put them at the wrong type of environment they're going to be so distracted that they're not going to be able to focus so whether it's the combination of the Color Palette whether its duration of how long they're sitting the type of settings that they're in how they're facing access to natural daylight all of those things start to come into play so if I'm designing space for someone who really needs to focus and concentrate think about like somebody who's writing code or processing numbers or doing research you you don't want to put that person on a busy intersection on accord or whether they're physically watching. All these people walk by their hearing all of these things you know there's just there's there's just kind of chaos in their field of vision and acoustically there's chaos you wanna put those people in places where they can have some kind of retreat and they can and have some solace and they can they can really kind of get to some deep meaningful thought but if you're in those spaces all the time you tend to get very stimulated so having. I mean areas where we go to like cafes that have food and water refreshment because it's all it's not just about the mind is about the body the soul all of that spaces where they can go and they can connect with other people where they can get access to natural daylight. They can have some bright pops of color that just kind of rejuvenate them. That's really important or designing spaces. I think that you don't have to be assigned one seat and sit there all day. A lot of people have a lot of excess energy and they need to get that out of their system and if they don't they can't really function or do anything anything else so giving people opportunities for whether it's walking meetings or curve bridging people to move through the space or pick different prince settings all of those things. I think have helped us design spaces really around. What is the company trying to achieve and if you think about it you know some companies are all about innovation creativity and others are about deep meaningful thought and other ones are about you know meetings and engaging with each other those all have different parameters and different settings that way nature design for when you're talking with companies about designing? Xining the space to meet these needs and they give you pushback. What are some of the things you say to them to persuade them that. This is really something important important for them to focus on or most companies understand that today well. I you know I I would say this. I think in general most people think that design nine arbitrary that it's just you know we're just trying to do something that looks good we approach all of our projects really from understanding who our clients are and defining them but I would say that every company kind of has their own unique organizational. DNA and if you understand what that organizational DNA is then the solution start mark to become self evident and so that the elements of that DNA really are involved What industry are you with. What what region are you at. You know what demographic are are your employees. What are the work styles What is your culture. What is your organizational structure. Can we start pulling all of those things in and we really understand the science behind this the decisions really start to become very clear and direct about what we want to do and so when we can explain the principles and the elements of design and what we're trying to achieve. Steve I think most of our clients don't really understand how much thought has gone into this and they appreciate that science behind. It and often are like okay this that this is exactly why we hired you because you are the expert and you understand what you're doing so. I think that's a big. Aha Moment for a lot of our fights aw what comes after neuro diversity in terms of issues that you're thinking about when you're thinking about modern office designers there's something is there a a a what's next that you can point. Oh sure there's there's cuts right you know so so we always look about you know what he's year right now now but then also what's on the horizon like I I think we're living in a world where the world is not getting any calmer. It's actually getting a little bit more chaotic and so the next piece that we're about to put out is about the trends that we see coming and how they're going to impact this and we think that the the issue of diversity is going to become more more important important and you know the interesting thing is when our team was doing all of this we kind of looked at this and said every single person. I know would benefit from being one of these environments. It's not just people people that are neuro divergent. We as humans are getting overwhelmed and there's all kinds of challenges ahead of us. You know there's there's a need innovate faster and quicker so divergent creativity and Co creation and breaking down the silos is the big thing that we're talking to our clients about right now. you know how do we go beyond just being sustainable to really addressing issues a much more holistic realistic way and not just add plans to a space introduced by affiliate but how do we mimic nature and introduced by mimicry more in circularity where things have a complete life cycle and repurposing and reuse seen things rather than just disposing of the robotics and technology and how artificial intelligence so the Internet of things how all of that is evolving those the things we talked to our clients about a tremendous amount of research about and you can either get really excited about the path that's ahead or really really overwhelmed with it but we kind of feel like understanding it and embracing it. Is You know kind of helping to see what's coming. It really helps us to be able to handle it and address that much more proactive way and that's what we really advocate for today. We appreciate you taking the time to talk about it. Maybe we'll oh have you redesigned our studio to be more newer diverse. We would love to tale bet you K- sergeant thanks very much for being with us. Advocate Advocate K sergeant is the director of the workplace practice at the global design firm. H Okay she's based in Washington. DC AW you're listening to the C. R. E. News Hour. I'm Steve Leveque. Mark Mayfield was just named chief executive officer of Sango Ban in North America. One of the world's largest building materials companies and manufacturer of innovative materials solutions a San go ban is one one of the oldest companies in the world was originally started more than three hundred and fifty years ago in France where it created the mirrors that line the famous hall of Mirrors Mirrors at Versailles Palace Senga Ben North America has more than fifteen thousand employees across approximately one hundred sixty locations throughout the United States and in Canada it reported sales of about six point one billion dollars in twenty seventeen in addition to his role as head of Sango Ban North America America mark also serves as CEO of certain teed Sango bands manufacturer of building materials for commercial and residential construction certain teed it has more than sixty nine hundred employees at sixty manufacturing locations throughout the US and Canada it reported sales of about three point nine eight billion dollars in two thousand eighteen greyfield began his career with Sango ban in nineteen ninety nine in sales he spent the next two decades working in various roles including sitting vice president of Sango Bans Abrasives North America division president of certain teams citing and CEO of Sangha Band Building Distribution United Kingdom England Ireland most recently he was named CEO of certain teed in two thousand seventeen. We sat down for our conversation at Sangha Bands sustainable headquarters building in malvern Pennsylvania about thirty miles west of Philadelphia Mark. Thanks for joining us today happier thanks for having me or you just became the the CEO of Sangha Ban in North America. Tell us a little bit about what you see as challenges. You're facing in terms of communicating with your people and also the challenges facing your registry well. Yes very fortunate to get this job. In January. I think the challenges facing the industry are as you. Well know a pretty broad you know there's a combination the nation of labor issues and getting people to join into the workforce so finding people who will generating a narrative that gets is this next generation of kids and young adults to come into construction today. I think one of the biggest challenge is getting enough people to build the buildings we need to build whether it be a commercial residential so training that next Workforce Building Tomorrow's workforce today's what we like to say he's one of the big challenges sustainability I think in building is another huge huge one that we face finding building practices and products that provide the kind of aesthetics people want plus sustainability that we need for the future so those are the two of the big ones that I think we'll see. There's so much pressure on young people to go onto university educations and yet. There's a shortage of people going into construction into manufacturing. How do you attract people. How do you persuade them to think about those. Kinds of job opportunities a great question. I think we have to get to him earlier. I I think we have to provide the proper training through vocational schools. I think if people take a look the career careers that are available and construction fantastic. You know not only are you able to work with your hands work outside create great things in that process but you can fill the amazing career the the level of small medium house builders and commercial contractors that that make great livings. It's fantastic so I think we just have to get visibility too because I think construction as well as manufacturing are fantastic careers for this next generation coming up and I think we shouldn't we have to find a way to communicate that you talked about sustainability as a challenge for the industry you've been doing a lot in terms of building ending sustainable products into your product mix. What are some of the things that you look for in the next couple of years while I think from more perspective we have to keep going and trying to find systems and ways to put our products together to give the most sustainable house or building. I think going forward. It gets back to what we said. With the a youth going forward is educating educating the contractors and the and the homeowners and the banks frankly of the value of sustainable home of a home that uses less energy when you're dealing with someone on a commercial basis wouldn't that owns the building they can look at that they can look at the payback sustainable building. They can understand if they put in electronic medical broke glass the proper installation the lower operating costs. We need to residential. It's harder to make that link to the homeowner. If you build the building in a highly sustainable manner her resale value would be better. Your operating costs me better so I think it goes back to a degree of educating both the contractors and homeowners orange what are some of the things that you're seeing as trends in commercial real estate development in particular so trends and commercial real estate development. I think that affect your problems product a wide range again I think going back a number of years you saw a lot of open space activities so you see this office building here and when I think of open space too big drivers and open space huge warehouse construction which ends up with very large building but not a lot of products inside side of them and then from an office perspective a lot of open office open plan building just to the open office open plan change the way you design. Zayn your products to serve that industry. Does I mean I don't know if you had the chance to tour this building but I have we actually did a story building very well and the reality of his being an open office open plan. You know how you put the building together from a sounded cousteau perspective so you can have people working close to each other without having to hear each other going forward. Lord how you put the proper space around so folks you know private meeting space as well as collaboration space how you manage light with glass coming in so they have daylight the over ninety percent of the building but you don't get a glare computers. All this is highly technical emits a big difference on the productivity of the people in the building and it's easy to do an open space office on if you will cost basis I put no walls up for a bunch of cubicles in it's very inexpensive but if you don't put the right materials in Acoustically mystically and from a life perspective then you end up with a situation where you're GonNa get the proactive unique. saint-gobain is literally one of the oldest companies. He's still in operations over three hundred fifty years. How do you keep things fresh say soccer. Bond has a very long history and in one essence it tends to reinvent itself to some degree every twenty five years or so not per se but insensitive changing structures in the portfolio or how they go to business and we're in the middle of something called transformed grow right now which is this twenty five year transformation and it's basically building more agile organization so focusing workstation that that drives more empowerment down into the businesses into the regions into the folks that are closest to the customer taking the customer intimacy in the feedback we get from our customers and aligning lining are strong. Technical background are indeed with what the customer says in a streamlined organization to grow the business so it's a big change for company. Coban which has been war war. If you will matrix hierarchical in the past you were also doing a lot in the Greater Philadelphia Community engaging in sustainability sustainability initiatives around town and so forth the love Love Park restaurant now situation what what does that bring to the company. What's the value that we're we are big here in Philadelphia and this important part to us a little more we can we can connect to our local communities by helping them with sustainable able building whether it's renovating row houses whether it's working in Love Park. We are Nice project with one of the boat houses. The last one is you go up to Schuylkill on the right where where we can really connect and nunnelee showoff products but help the community in general. It means a lot to us a business. It means a lot to our people and we need to take you talked about earlier. How we bring the youth into this into this marketplace and focus on places like Philadelphia and Boston upstate New York in the Midwest. Will we have big presences and we can get involved with our senior executives in our products and really show them tangibly. He'll come to this building. Let us show you what a construction can mean. We can start waking end up. Let's take you into Worcester and share with a career manufacturing can mean we can start we can set great. Chris Stories there and if we ain't engage our senior leaders the local communities with the up and coming next generation workforce. We've gotTa Win when you look at the overall economy which is so often often driver of how your business goes. How do you see things going over the next twelve to eighteen months. You know that's I wish. I wish I always had the answer. I think right now we see a good economy and I think you know when it's always talks about when the next slowdown will be how big it will be and what have you. I think two thousand nine hundred looks good we see good good activity both commercial and residential a lot of remodeling activity this uncertainty and as uncertainty comes you know every everyone keeps on trying to pick the date when things might slow down. I don't think we'll see a huge slowdown in anytime in the near future. Maybe a flat. Are there any particular things you look for measures that you will. WanNa see going certain way. I'd like to see everything going. Of course you know so I mean I think like yourself. You get all the housing reports. What's the mortgage reports everything else in and you can read into a lot. I try to listen to what distributors are contractors. Say What I hear from contractors is a very busy they have a large order orderbook and I go back to our developing the workforce concept most of them have a very large orderbook and they're not gonna they don't have the staff to do it quicker so so just tends to push the orderbook further out so the reality is. I think the what we see is a pipeline looks very strong think the biggest risk to the industry is we don't have the people to build commercial and residential buildings. We need over the next decade. He talked about the challenges of attracting people to work in the industry. There are some other challenges like getting getting rid of waste and making the industry more efficient. What are some of the things that you're looking at to help make your company officiant and also encourage others to be more efficient questioned Russian to me. I think probably the leading thing we're doing that is a partnership we have with ud homes up and and New Hampshire partnership with the part of Benson would homes which which is kind of an innovative innovator in the prefab manufacturing site for residential homes and working with them really to learn about the proper systems to put together and Prefab managing waste along with sustainability and there's been a great partnership as far as learning again where that I think that prefab and production style manufacturing of homes can can teach us in construction will do you see an opportunity for increasing collaboration with other building products companies or is it too heavily competitive to Oh to really get any traction. They're no I think you can. I think you know really we're working on Kevin. Open platform there that will bring in lots of different billing company so we can't we loved you can't make everything that makes the house or or commercial building so we have to work with other partners in that process so the overall processes how to make more efficient building processes how to minimize waste waste because there's a big part of the of the downstream of building that we have to take a look at and do so in a in a wildly sustainable way where we build the best ideally carbon-neutral the home. You have a customer experience center here to try to help you learn how to get closer to the customer. Tell us a little bit about how that works. We do very excited about it so building. You see back over your corner there. It's a bar and that would be rebuilding. It's a really bringing something I learned my period and building distribution where we have a very robust customer experience center where we would talk to customers who purchased from us and you learn really what was driving the person decisions and what they wanted in the future and the takeaway from that was if you ask your customers. What's what's important to them. They'll tell you if you build your strategy around what they tell you. You'll have a strategy that invest the money in the right places puts the resources right places and delivers livers the products and the services of the customer want so we're building with that same team. I brought over one of the colleagues who ran that business that same experience here. We'll have the largest ears. North America America will end up talking to more contractors customers distributors than anybody else and understand what's important to them and let that drive our strategy more. Greyfield is the CEO Joe of Sango Band Building Products Company headquartered in Malvern Pennsylvania. Uh and 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 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 in Eiji. The secrets of meaning podcast gassed airs every Friday morning at eight. AM AT JEWISH SACRED AGING DOT COM when 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 to showcase your expertise spur ts to prospective 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 broadcasts and video programs remotely or in our fully equipped studio in Cherry Hill visit being the media dot Com for more information. Most commercial real estate market participants are familiar with section ten thirty one of the federal tax code involving property exchange transactions and and of course the hot topic. Today is the relatively short opportunities own program that has a limited shelf life one area of the irs code that doesn't get much attention is section one seventy seven-day. That's the century-old provisions of the tax code offering tax deductions for charitable contributions raw blakely is the national acquisitions director for our wealth aunt a Tampa based commercial and Residential Real Estate Company that specializes in providing real estate investors in the nonprofit sector with a wide range of services says including Brokerage Representation Advisory Marketing underwriting due diligence financial services asset management and dispositions. He's joined today by Durrell. Bass a senior acquisitions manager at wealth on Bass and Blakely helped nonprofit clients meet their Real Estate Needs Jaryl and rob thanks for joining us on this theory news our most people in the Commercial Real Estate World Know About irs section ten thirty one but I'm not sure that many they are as familiar with the irs section one seventy that you focus on in some of the transactions you're doing talk a little bit about the importance of this section and how it factors actors into the work. You're doing with clients this drill. Everyone like you said it has heard of ten thirty one and very few people. Have anybody probably nine out of ten people that we deal with have I've not heard of the section one seventy but the section one seventy actually pre dates the ten thirty one exchange it was created in nineteen seventeen by Congressman Senate and then it was signed into law by Woodrow Wilson said it makes it a hundred two years old and an actually predates the ten thirty one and how we use it it allows charities to purchase anything of value but we focus on the real estate section of it so we help charities purchase real estate with excuse me cash plus charitable tax deductions and we structure that amount to maximize the net cash for the seller and then since we're able to lower the actual purchase price due to the reduced cash and the increase in charitable tax deductions were able to sell the property to the buyer on the back again and they get a good value on their purchase so the seller maximize their net cash. The buyer gets a good purchase charities which is the main thing the charity raises as you know thousands and thousands for their cause and then we as brokers for the listing brought grand for our selves get paid on the Commission's. Is there an advantage to the charity garrity in terms of not having put out as much money in a transaction. This is rob. Absolutely I mean any time that a charity can save money as more money going to their mission so we we also do that as well one of the other tools that we use for us at as well thought we are just little detail about wells fargo wealth lawns is a commercial brokerage and we represent nonprofits only that's all we do so we don't do list things we don't do things like that and then and then back to the benefit to the charity what we're launching now is an MD user of program so say Ymca comes to us like hey. We want this building. It's ten million dollars. We can't afford ten million but would you guys be willing to try to help us in utilize one seventy and so we'll go to that seller. We'll try to pick it up for seven million cash and then we'll turn around in hell debt charity of wire it for that seven million cash and then that way they're saving money so that's one way that benefits charities take the other side is to a lot charities they tried to do fundraising work and when they do those funds fundraisers and things like that they spend a lot of money one of our charities as they bid like a fishing tournament with celebrities local in Tampa Bay and they spent sixty thousand dollars to do that event and then what happened. Is that the only race forty thousand dollars so this is a way that a small to medium charity can raise significant capital to fund their missions and not have to do with they can just call wealth pretty powerful so I'm still having a little hard time picturing how this actually works in practice. Can you walk me through a hypothetical transaction and talk about some of the numbers and you will give you a specific example of the last transaction that we help someone with it was on a property up in North Dakota. It was listed for five point six million we helped our charity acquirer that for three million and in three point six million in charitable tax selections to the seller and then we helped the charity find the back in buyer at three point seven five million dollars so after taking out commission and fees thousands and thousands were raised for the charity the in out start from the beginning a little bit with the seller. Why would a seller sell the property for three million when you're on a five point six list so that seller was in a high tax bracket in his State had high income state income tax as as well so when he got three million in cash and then the three point six million dollars in charitable tax deductions that to him was the equivalent blackhawks four point eight million dollar offer on his property or purchase on his property which is where he wanted to be and since he had owned the property and his end depreciated such a long time he'd owned it for over twenty years and his basis was low and he appreciated the downs he was going to get really really hit with capital gains and recapture so when you factor in the whole picture of all right here's the purchase price on the surface then what still has a deal with on the back end on a traditional sale with recapturing capital gains in their state income tax our federal income tax when you compare that to the bargain sale. Which is a section one seventy? That's just kind of the street term for most people notice a section when seventy they know it at all with the cash being at three it was was pretty close to his adjusted basis little bit more so he did end up paying a little bit attacks on it but far less than if you didn't five point six so his net was actually about us just roughly about six hundred thousand dollars more on that transaction than if he had gotten five million dollar offer so it sounds like from what you're saying this works works best and maximizes the value for both sides in high tax states and jurisdictions absolutely your places like California where you have state income taxed the highest level of thirteen point three other states that are pretty close to ten it works best in those scenarios goes you get immediate ten percent bop in the transaction but also works well in places like where we live in. Florida where there is no state income tax if they're in the thirty seven percent tax bracket and they've owned the property for over ten years straight line depreciation costs segregated depreciation or accelerated that situation where they're gonNA get hit with a lot of capital gains and recapture capture in the narrow already in a high tax income for the better level. That's when we can structure it to maximize their net cash in that scenario does it work well in states like New York and New Jersey which are also high tax states have. Have you done any transactions on the east coast. This is rob. Absolutely I mean one of the great things that we see now is that over the past ten years that we've had such great appreciation in assets and folks have been depreciating at the same time so the perfect storm for those areas especially with the rank controlled districts now in New York that they're tapping out those rents and things like that so if I'm a seller and I'm sitting on that property. What do I do with it. How can I get that five capture that six cap because there's no more value add. There's no more rent increases for buyers so what we can do. We can go to that seller and say. Have you ever considered this for your philanthropic intending sending your generosity by taking this count on this property the irs say hey they'll give you deductions in return most likely of an individual or group that had owned those type of properties will have multiple properties so it's a perfect target for them and then since they're in rent controlled area. New York what we can do is we can come in say one hundred million dollar property we can come in with eighty five million cash potentially and then we could do the rest and deductions that way we can sell it to another buyer of value add guy or a guy. That's interested at a different cap rate. Maybe seven or eight cap rate and then we can turn around and sell it to them and raise significant funds for the charity we help the seller now move from property that he couldn't move out of and didn't have a solution for and then we get a buyer and asset that he's happy with and it's in the best MC criteria his feet so it's pretty powerful those markets right now especially with jobs leaving corporation tax rates different type of things people are looking for creative solutions and this is one of them so in the context of one of the hottest topics in a commercial real estate right. Now is the opportunity zone tax incentives. Is there any way that this section. One seventy strategy can be applied within an opportunities for maybe an extra bite at the tax apple the funny you say that we're actually have a meeting tomorrow with a group about some opportunity zones are charities have acquired opportunities zones without even knowing knowing it prior to this opportunity zone movement and so we actually had our charities ahead inventory of a ton of opportunities which are gone now the great thing about that that is a lot of opportunities now. It's not all of them are in areas that need development so the greatest thing that we know about the irs one seventy one of the greatest things dyson. There's so many is that the irs created a section called publication five sixty one those are guidelines for Ma appraisers to follow how to appraise as a property and the cool part is diarrhea says there's no compulsion for the cellar cell or the buyer to buy so when you go into an opportunity zone area that's great because you may have a power plant that just needs to be cleaned up and isn't an opportunity so buyer sees opportunity there right so we can do is we can go in. We we've just acquired a power plant in North Carolina Rivera successful in selling it as well and so we could go in and actually acquire that power plant we can give that seller per our charities parodies of deductions in return for that for that power plant which is an opportunity zone and most of the time the sellers will take low cash if not zero grow cash and then we turn around and we sell it to an end user that understands the process of how to clean it up and reposition that asset so it's perfect for opportunities zones owns because they have that that ten year window there to to get that property improve but it also gives them the ability to buy extraordinary low basis and it also gives the seller maximize net cash because he's GonNa get a significant amount of deductions because of the highest and best of that property the publication five sixty one states per one seventy code section. One seventy is a permanent section of the tax code. It doesn't have a sunset date. I gather since it's over one hundred years old already is do with charities and their ability to issue charitable tax deductions is the same thing when someone goes by goodwill or salvation armie donates whatever merchandise they have and then they get the ticket it kinda under that same premise because then the charity takes it if is over a certain amount goodwill or salvation army we will issue the charitable donor at eighty two eighty three form defile with their taxes is the same process that we process that we do with real estate real estate such a larger transaction than something that's on someone would take good-will or salvation army is is there widespread use of this or you guys kind of innovating in this area. We're innovative in the fact that we help small to mid sized charities with it so that's our specialty chilly and where we've innovated but there's about twenty thousand of these transactions done yearly and your major players with our Harvard Cornell Stanford the Red Cross. They have departments to set up for the section. One seventy said they use it every year and then we've taken it to help small to mid. It's nice charities that don't have that ability to navigate real estate and so so it's opening up to small and mid sized charities like examples. Give me some examples. I one of my favorites. We have twenty five different charities. We've worked with so we vetted them. We make sure they'd been established. Stable ninety percent of what they raise goes goes towards their 'cause. That's our main criteria in working with the small to mid sized charities. We weren't with one voice which is a children's Prince cancer here. Locally we work with product transition which helps a military transitioning out of the military to civilian life. We have the other Jerry's that cover things from missions to homeless pretty much every journey you can think of we try to cover the made the main when someone someone they were talking with as a seller. I Hey this is important to me. We can link them up with the charity that we represent and find a cause dear their heart art what sounds like an interesting aspect of commercial real estate finance and we thank you guys for being with us on the podcast today absolutely. Steve Thank you thank you. Steve we really appreciate it. Robert Blakely as the national acquisitions director and giral BA's senior acquisitions manager for well font a commercial real estate brokerage company in Tampa Florida up and that'll do it for this week's edition of the Sierra News Hour. Don't forget to check out our audience survey by clicking on the purple. 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