New Tech Drives Demand for Office Space

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New Tech Drives Demand for Office Space Countrywide
Commercial real estate is experiencing a sea change in the market for office space. And it boils down to a classic “out with the old, in with the new” scenario.

The old? These are the finance, legal, and publishing sectors that have dominated office leasing in the past.

And the new? “New Tech” – the technology companies and e-commerce sales/marketing firms that have been growing in leaps and bounds over the past few years.

As the traditional fields have stabilized or contracted, the New Tech firms have expanded at impressive rates. The result: New Tech is dominating in the absorption of new office space in many of the leading office space markets across the country.

A recent report from Colliers International indicates that many of the newbie tech companies, which had been leasing at the 5,000-sq.-ft. level, have become market-shakers with space needs in excess of 100,000 sq. ft. Also, many have become multimarket tenants (think TripAdvisor and the job-search company Indeed). In fact, as the Colliers report suggests, New Tech is rapidly becoming the leader for leasing deals of 50,000 or more sq. ft.

What does this mean for the future of commercial real estate? Investment opportunities, for sure. But potential investors must carefully watch key market factors: be mindful of where millennials begin to settle – demand for office space may follow – and keep an eye on where New Tech firms are locating their back offices. But most important, track successes and failures to determine how many of these companies will survive long term.

Sadder but Wiser. You Can Move Past a Setback

A setback may result from something you did or failed to do. It may be due to something beyond your control. Or it may just come out of nowhere. Regardless of the cause, the first response to any sort of setback runs the gamut from denial, blame, shame, or guilt to finger-pointing.

Not only are these responses mentally, emotionally, and physically exhausting, they’re not productive. Here are some healthy coping mechanisms to help you recover from a setback:

  • Acknowledge the setback and the pain and frustration that goes along with it. Recognition and acceptance are key steps to finding a way forward.
  • End the pity party. It doesn’t do you any good, and the victim role can really turn off people.
  • Don’t blame others or dodge your own responsibility for what occurred.
  • Talk about the setback with a person you trust. Share your feelings with someone who will keep you honest and give you unbiased feedback.
  • Give yourself time. With the passage of time, you’ll gain fresh perspective, digest any lessons learned, and become more open to new approaches and opportunities. Defer critical decisions and refrain from doing anything impulsive.
  • Reflect and readjust. Think about what you might have done differently, or may do differently in the future, to avoid a recurrence of the setback or at least secure a better outcome.
  • Develop a concrete plan. This should list steps to take you to a single goal or a series of interim goals. Include a “Do by” date.

Above all, know that everyone experiences setbacks; they’re part of everyone’s life experience. And the good news: a setback can almost certainly make you wiser and more prepared to weather future storms.

How to Stay Relevant in This Era of Disruption and Change

Sometimes it feels like technology is advancing so quickly it’s impossible to keep up. Unfortunately, anyone who doesn’t may risk becoming irrelevant.

According to the Miami Herald’s Cindy Krischer Goodman, a lot of people are intimidated by technology. Singer Cher was one of them. But in a determined effort to stay relevant, she mastered Twitter and now has 3.5 million followers.

Writes Goodman, “In an era of disruption, technological advances, new workplace trends, and constantly emerging communication styles, everyone needs to follow Cher’s example: embrace change to stay relevant and effective.”

Jobs have grown more technical in the past few years, and holding onto one requires staying on top of things.

If you want to protect (and advance) your career, you need to do more than simply maintain the status quo; you need to be relevant.

Relevance is about constantly adapting to changing conditions. It means being open to new ideas so you can relate to everyone, from your peers to your customers.

In a recent article titled “How to Stay Relevant in a Constantly Changing Marketplace,” author Michael Hyatt offers a list of essentials, including staying curious. He says, “To save yourself from obsolescence, keep asking questions and poking around the next corner.”

Other essentials on Hyatt’s list: read new books, meet new people, listen to podcasts, attend webinars and conferences, take courses, hire a coach …

In effect, stay relevant by continuously learning, embracing change, and constantly exposing yourself to new ideas. It’s an approach everyone can, and should, master. No one wants to be irrelevant.

Home Sweet Rental: The New American Dream?
For past generations, homeownership was as American as baseball and apple pie. It was an integral part of the dream. Today, we are witnessing change. The dreams of millennials are not those of baby boomers. We’re seeing shifts in lifestyle choices and a consequent shift in the economy.

The shifts mean new opportunities for the rental market. For investors, these factors are working together to make becoming a landlord increasingly lucrative. Consider the following:

Retiring generation

As baby boomers downsize, many are moving away from high-cost, high-maintenance homes and scoping out rentals. But they come with an agenda: These renters are seeking the latest technologies, amenities, and leisure pursuits. They want convenience and an environment that will attract their children and grandchildren. And higher-end rental units in urban areas offer them a great option.

Affordability crisis

Middle-class and lower-income renters looking to buy are finding few affordable options in many areas of the country. At the same time, increases in income are failing to keep up with rising rental rates. From 2001 to 2014, inflation-adjusted rents rose by 7%, while renter-household incomes dropped by 9%. Reasonably priced rental properties are now, and will continue to be, very much in demand.

Millennial lifestyle

The average age for a first marriage is now 30, and as a result, millennials are delaying starting families and are renting longer. In an article in IPE Real Estate magazine, Tim Wang, director and head of investment research at Clarion Partners, notes that this generation is the “largest rental-age cohort in history,” and as a result the demand for rentals will not slow down in the near future.

Millennial careers

Unlike their predecessors, millennials tend to move where they want to live, rather than where the jobs are. As a result, jobs are moving to them. Companies, particularly the growing New Tech firms, are searching for locations with the biggest pools of good workers and establishing a presence there. Investors can provide the housing required by this generation to reside where they want to live and play, as well as work.

Landlord advantages

In the IPE article, Rob Vahradian, senior managing director and head of U.S. investments at GTIS Partners, says, “(F)ew real estate managers are investing in single-family rental homes, and the strategy currently offers a yield premium-unleveraged single-family rental property yields are approximately 150-200 bps (basis points) higher than multifamily assets in similar markets.” Additionally, rented single-family homes have a high retention rate compared to multifamily; Vahradian reports that the average tenancy is 36 months-twice the average of apartment dwellers.

Effectively, the American dream has come full circle. A significant number of potential buyers have shifted their dream home to a rental that satisfies their needs and the economic realities.

The conclusion for investors: Follow the demand. And choose housing for modest earners at the start of their careers, affordable housing for those in lower income brackets, and high-end rentals that boomer retirees demand.

SA Realty Watch Group
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Worth Reading
Why We Need to Plan for a Future without Jobs
By Sean Illing
Vox Topics

In an interview with Vox’s Sean Illing, former union leader Andy Stern makes the case for universal basic income (UBI), a form of social security in which the government pays a regular stipend to all working-age citizens. Technology has rendered the future of work in America extremely uncertain, Stern suggests; he believes UBI is the best way to deal with the potential social and economic disruption that he sees on the horizon.

How to Invest in Yourself
By Jon Westenberg


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Not every billion-dollar business starts with a billion-dollar idea. In fact, many of the world’s biggest, most successful companies began with very modest ambitions. Start small, let your aspirations evolve, and, who knows, you may change the world.

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To some, entrepreneurship sounds exciting. To others, it’s terrifying. So much is involved. Do you have what it takes? Is now a good time to start? Get help here:

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A poor launch can spell disaster for a start-up. Here are a few tips to help you “just start”:
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At the same time, it can be difficult to know whether you’re ready. Are you? Watch for these signs:
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This newsletter and any information contained herein are intended for general informational purposes only and should not be construed as legal, financial or medical advice. The publisher takes great efforts to ensure the accuracy of information contained in this newsletter. However, we will not be responsible at any time for any errors or omissions or any damages, howsoever caused, that result from its use. Seek competent professional advice and/or legal counsel with respect to any matter discussed or published in this newsletter.
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