Less is More

Subleases from a Sub-Tenant's Perspective

Walt Batansky — Wed, 25 Jun 2008 01:40:54 +0000

As you might guess, recently we've been much more active on both sides of subleasing transactions. Almost every market search includes a sublease option or two, perhaps more. If you are looking for space, should you bite? They may not be worth the trouble. Read on.

What's Good About a Bad Economy?

Walt Batansky — Wed, 07 May 2008 01:20:40 +0000

Recession, recession, recession! There, I said it. We're in one. Don't let the government or the landlord reps mislead you.

It doesn't effect all business directly, and is certainly selective in its targeting of particular industries. Anyone with interests related to residential real estate is getting hammered, and the trickle-down effect is reaching out to financial markets, retailers, and distributors. The government is trying to bolster home prices and lessen the effects of oil inflation, and the jury is still out on the long term forecast.

Here's what I like about it:

Creative Destruction

Walt Batansky — Sun, 30 Dec 2007 20:16:40 +0000

In his recent book,The Age of Turbulence, Alan Greenspan compares capitalism to collectivism by remembering a drive that he had in the Moscow countryside in 1989, just before the fall of the Berlin Wall. There he saw a 1920's steam tractor, which might have been in a museum in the U.S., clanking and belching through a field under a local farmer. "Why do you suppose they still use that?, Greenspan asked his security man. "Because it still works?", the man replied.

It is easy to fall into a "real estate rut" just like that farmer. Are you using your facility the same way a businessperson might have used a similar property in the 1920's? Perhaps it is time to scrap your steam-engine equivalent and gain some efficiency.

You're Not in Kansas Anymore - International RE

Walt Batansky — Wed, 03 Oct 2007 00:07:27 +0000

The world is experiencing rapid globalization and merging of economies and cultures. In his book, The World is Flat, Thomas Friedman discusses how the internet, modern travel, and communications are commoditizing just about everything. Where globalization is not happening quite so quickly is in real estate which is still, very much, a local business. As citizens of the United States, we take property rights for granted. Ownership is black and white - you either own something or you don't, right? Well, not necessarily once you leave our borders.

The Death of the Operating Lease

Walt Batansky — Mon, 20 Aug 2007 23:58:15 +0000

For 31 years, public companies have used a rule known as FAS 13 to classify most real estate lease transactions (virtually all leases 15 years or less) as Operating Leases. Unlike a Capital Lease, the Operating Lease does not appear on the company's balance sheet.

The governing Federal Accounting Standards Board, affectionately known as FASB (pronounced Faz-bee), is currently in the process of scuttling this provision in favor of a new Sarbox-friendly full disclosure plan that will eliminate or greatly reduce the qualifications for Operating Lease classification.

I can see many of the non-accountants out there falling asleep. So what, right? WAKE UP! This is a big deal.

Service Providers - Is Bigger Really Better?

Walt Batansky — Wed, 08 Aug 2007 01:30:33 +0000

Whenever I have speaking engagements, I always end with a Q&A session and inevitably someone will ask, "How will the merger between CBRE and Trammell Crow impact the industry?" My response is usually, "Which part of the industry?" I'd like to address it here in the hopes that the next person who might ask will read it and save me the time of repeating myself.

The impact to real estate development and investment segments will be significant in that CBRE now has the development resources to support the supply of investment capital that it has raised, and they've moved into position as one of the top ten owners (not just third-party landlords - actual owners) of office properties.

A Lot of Hot Air

Walt Batansky — Fri, 22 Jun 2007 01:42:31 +0000

An article in the April 2007 issue of CFO Magazine titled "Cleaning up Carbon" addresses the pressure that most corporate users will soon have to face regarding CO₂ emissions. Peter Breitstone, the CEO of insurance giant AON's Environmental Services Group, says "Each company is going to have to deal with some sort of [CO₂] regulation. We know that it is coming." The Investor Network, a coalition of enviro-friendly investors with more than $200 billion in assets recently published a list of 10 major offenders. The list includes the usual energy company suspects, plus a few you might not expect such as Wells Fargo (the group says that unlike JP Morgan and Bank of America, WF hasn't come up with a plan to reduce carbon emissions from their everyday business practices), and Bed, Bath, and Beyond (Investor Network says the retailer hasn't disclosed its strategies on how to improve energy efficiency). So has YOUR firm disclosed your strategies on how to improve energy efficiency? No? Read on.

Virtual Lifesaver

Walt Batansky — Tue, 15 May 2007 01:48:28 +0000

Not too long ago, almost all of my high tech clients would build a server room with raised flooring, Liebert (another client) 24 hour air conditioning, and UPS systems the size of a Hummer. More often that not, those build outs now look as dated as a wood-paneled earth-toned space with 8' ceilings. Computing is getting faster, cooler, and frequently, remote. And the absolute best remote data storage service that I've seen is a simple service called...Mozy.

How to Fit 10 Lbs. in a 5 Lb. Sack

Walt Batansky — Fri, 13 Apr 2007 01:31:39 +0000

Spalding Sports is the largest producer of basketballs in the world. A few years ago, they asked us to help them expand their west coast distribution center. At the time, Spalding had 180,000 SQFT of space and estimated that they needed about 40K more for a total of 220K SQFT. We asked a question: Why?

Between Here and Hell

Walt Batansky — Thu, 29 Mar 2007 02:03:51 +0000

What is as large as four shopping malls, has 17 miles of paved roadway, and is 75' below the ground? The Underground Business Center in Louisville, KY is a warehouse and storage facility with almost four million square feet housed in a former limestone mine.