Wednesday, June 6, 2018

ADA Education and Reform Act of 2017


Many people have heard of drive by lawsuits but don't know much about the term other than the words "extortion" or "blackmail." People hear the stories through friends or on the news, shake their heads and walk away. I will admit, I was one of those people until a transaction I was a part of got caught up in one. Now I am an advocate for reform.

The definition of drive by lawsuit as described by Forbes Magazine in December of 2017 is this: "drive-by lawsuits involve allegedly injured plaintiffs who never actually attempt to patronize a business, but simply drive business to business collecting addresses and notating minor and technical violations of the law. With these pieces of data in hand, they then file hundreds of lawsuits utilizing the same or similar language, and in most cases, merely change the name and address on a boilerplate complaint. Business owners, in most cases small, family-owned enterprises, must choose between paying a shakedown settlement or spending several times that amount to fight it in court."

The American with Disabilities Act (ADA) was passed by Congress in 1990 and was later amended in 2009. It was the nation's first comprehensive civil rights law focused on addressing the needs of disabled Americans. There are several different parts to the ADA, but the part that gets the most attention from dive by lawsuits is Title III.

Title III deals with public accommodations, i.e., making facilities and websites accessible to those with disabilities. Title III has provided significant benefits to individual with disabilities, and the law is obviously well-intended. However, it has been taken advantage of by many people looking to profit off of hard working business owners. Luckily, a bipartisan solution was passed in February 2018 to help business owners with this problem: the ADA Education and Reform Act of 2017.

This bill requires the Disability Rights Section of the Department of Justice to develop a program to educate state and local governments and property owners on strategies for promoting access to public accommodations for persons with disabilities. The program may include training for professionals to provide guidance of remediation for potential violations of the ADA of 1990.

The bill prohibits civil actions based on the failure to remove an architectural barrier to access into an existing public accommodation unless: (1) the aggrieved person has provided to the owners or operators a written notice specific enough to identify the barrier, and (2) the owners or operators fail to provide the person with a written description outlining improvements that will be made to improve the barrier, or they fail to remove the barrier or to make substantial progress after providing such a description. The aggrieved person's notice must specify the circumstances under which public accommodation access was denied.

The Judicial Conference of the United States must develop a model program to promote alternative dispute resolution mechanisms to resolve such claims. The model program should include an expedited method for determining relevant facts related to such barriers, as well as steps to resolve accessibility issues before litigation.

HR 620 provides a time period to fix the alleged violation or make substantial progress to resolve it. If the property owner fails, the plaintiff has the right to pursue action that the ADA provides. This legislation addresses an unintended consequence of the ADA that has been allowed to flourish over time, tarnishing an otherwise landmark, life-changing law.

The ADA is one of the most important civil rights laws of our time and I believe HR 620 will have positive changes made to assist the disabled community and benefit society as a whole.

Matt Eaton, CCIM
RE/MAX Commercial Brokers, Inc.
meaton@nolacommercial.com
(504) 838-0001
nolacommercial.com

Tuesday, April 10, 2018

New Orleans Celebrates Its Tricentennial and Relationship with China



To celebrate the New Orleans tricentennial anniversary and the Chinese New Year, we were honored to have the Hubei Peking Opera perform here in New Orleans at Harrah's Theatre last month. Sponsored by the Houston Chinese Consulate and the New Orleans Tricentennial Committee (and co-sponsored by the Asian Chamber of Louisiana, Harrah's Casino and Hotel and event chair Lucy Chun), it was a very successful event. The event was for the cultural exchange between China and the city of New Orleans, as well as to promote tourism and friendship between the two locales.

Over the years, the city started the Pilot Immigration Investigator Program and today we have the EBS Investment Program for investors with the goal of obtaining green cards; 85% of these investors are from China.

The most recent Chinese investment in our great state is Yuhuang Chemical, which is building a $1.8 billion chemical plant in St. James Parish (you can read more about this in our last blog post) - this has resulted in the creation of many direct and indirect jobs. Wanhua Chemical is also looking for a site to build a $1.12 billion chemical plant.

These are just a few examples of Chinese investments in Louisiana to help further create commerce and economic development. Over the next 50 years, I predict more and more Chinese investors coming to New Orleans to settle down with their families. I love the city of New Orleans and cannot wait to see what the rest of its tricentennial year brings us.

Lucy Chun specializes in shopping centers, restaurants, multi family, land, hotels and motels. She has been very successful in different sectors of real estate. She is an expert in public relations and client representation.

Lucy can be reached at lucychun88@gmail.com or at (504) 606-7788.

Tuesday, March 6, 2018

Big News for the Big Easy


I recently attended a presentation by Dr. Loren C. Scott to the GNO, Inc. Investor Group on the proposed industrial expansion of oil prices impacting the New Orleans region.

An amazing industrial boom is coming our way - and one that's highly concentrated geographically. From Baton Rouge to New Orleans alone, $53.2 billion is expected to come in - that's 50x better than in other southeastern states!

Of the $170.4 billion of state of Louisiana projects predicted by the GRIMA survey, the New Orleans MSA expects to see $37.3 billion, with $11 billion already underway and $26.3 billion at the FEED stage. Yuhuang Chemical leads the pack with $1.85 billion worth of industrial construction either completed or underway. Other big spenders include Monsanto ($975 mm), Entergy ($869 mm), Dyno Noble ($850 mm) and more. There's a lot of potential industrial construction on the line as well - Formosa Plastics ($9.4 billion), Venture Global LNG ($8.5 billion), IGP Methanol ($3.6 billion), etc.

In 2020, IGP Methanol will open a $3.6 billion 4-plant methanol facility at Myrtle Grove in Plaquemines Parish, which will bring over 300 jobs to the area. Venture Global LNG's project at the Port of Plaquemines will bring in 220+ jobs with an average wage of $80,000; the Port of New Orleans is hoping for a similar project in St. Bernard as well.

In New Orleans, DXC Technology's new digital transformation center plans to hire 300 IT & business enterprise professionals in 2018, ramping up to 2,000 over the next five years. Chevron is also expanding operations in Covington, and will employ about 550 by the end of 2018, a figure higher than ever before.

I am excited to see all of this development as more industry equals more jobs, and more jobs equals a stronger economy. Bring on 2018!

Richard Juge, CCIM, SIOR
Owner | Broker
RE/MAX Commercial Brokers, Inc.

rjuge@nolacommercial.com
(504) 838-0001
nolacommercial.com

Friday, February 2, 2018

Starting Your Own Business: How to Get Ahead of the Game


You’ve been putting in the hours developing a business plan for your fledgling business, and now you’re ready to make your next move - to find a location to sell your product. Making this step out into the business market can be flooded with obstacles, and you want to get ahead of the game. What are the things you need to know before leasing a building and making sure your new business will be a success?

Location is everything! Finding the right location is the key to making your business thrive - there are plenty of properties on the market but not everything is right for you. Make sure you know your demographics for your business. This will help you narrow down which part of town you want to be in. A commercial agent has access to multiple platforms to help you with this process.

Zoning - will this site work? So you found a location that you think may work but the previous tenants business differed vastly from your concept. What does this mean? You’re going to want to get ahead of zoning before entering a lease. Take a trip to your local zoning board. You may find that there can be some major hurdles here that could end up being a burden on your pocketbook. The zoning department should be able to give you more guidance should a change of use be necessary.

Who’s going to pay for that? In commercial real estate, most buildings that have had previous tenants will have a little more wear and tear on them than brand new construction. Problems arise - the HVAC system is out of date, the electrical in the building needs work, the interior layout of the building needs to be demolished. Who is responsible for that? Before entering a lease, negotiate these terms with the landlord. There can be a lot of hidden costs in leasing a space and you don’t want to be the one holding the bill at the end. Bringing in outside help of a contractor can help you grasp what kind of costs you will be looking at; this will help as a negotiating tool when working with the landlord.  

Insurance? Permits? Depending on the business, use of the building, or landlord requirements, there can be a lot of work to do regarding obtaining the proper insurance and permits. Make sure you shop around! Your business will be responsible for liability insurance and possibly more. Do your due diligence on researching insurance policies and make sure you find the right one. Building permits may be required depending on what kind of work needs to be done. Know that this takes time and may push back an anticipated opening date.

All this being said, the most important thing you can do is work with a commercial realtor. They will give you guidance and will work with you to get you the best deal on your new location. Locate an agent who has a niche for your business model and let them do the heavy lifting for you regarding your new lease.

With this valuable information you'll have a head start on getting your new business off the ground. Know that there will always be unseen obstacles to overcome and keep pushing forward. The world looks forward to seeing you succeed in 2018!


Cameron Lombardo is a commercial realtor at RE/MAX Commercial Brokers, Inc. in Metairie, LA. He has an expertise in retail and office leasing and sales. Contact him today about any real estate needs you may have!


Follow him on Facebook @CameronLombardoRealtor

Thursday, January 11, 2018

Longevity in Commercial Real Estate: the Plan



Real estate is always changing. I am often posed the question, “How many years have you been in business?” My usual reply: “Over 40 years, but longevity is not what makes me a successful businessman.” Years of experience is not what makes the agent – hard work and constantly refining your negotiation skills is what will keep you ahead of the rest of the field.

When I am trying to land a listing, the owner/landlord does not care about your “greatness,” but how you apply that greatness to benefit working with you over other agents. Years of experience mean nothing without something to back that up. I have managed to last this long because of my skill set. Anyone can sit at a desk for 40 years in real estate, but this does not measure their success.

The real estate game is often seen by the outside world as “easy money” and many try to jump into it, only to end up failing. The key to longevity in real estate is to ask yourself, “What separates me from everyone else?” The answer is simple: YOU MUST HAVE A PLAN! You cannot sit at a desk waiting for the phone to ring.

THE PLAN

  • Strong negotiating skills: You can never have enough experience in this area. Every year I make it a point to attend seminars on negotiations. This is the most valuable tool in your repertoire. Many deals end up falling through because of poor negotiation skills. Make sure each year to get a tune up in this area. 
  • Know your area: Get out of the office!!! The only way to last in this industry is to be familiar with the demographics of the area. Spend time walking the neighborhood, meeting local business owners, and chatting with the residents. It’s amazing what information you can learn from the general public. Being able to answer questions about a certain market gives you a giant edge over your competition.
  • Marketing: Marketing is always evolving. Technology has become a major factor over the past ten years. It’s not all about signs and cold calls. Make sure you are utilizing social media and internet advertising. Your competition is only getting younger and they will have a leg up on this. Make sure you stay in the technological loop.
  • Your drive: All of this comes down to your drive. You must set aside time in your day to accomplish your goals. Enter your office with at least five tasks to complete. Set individual goals and you will find yourself more motivated to achieving your goals.

The real estate market is always reinventing itself. Start 2018 right with a plan. Get out there and hustle, and do not be afraid to reinvent yourself. You too can last in this business.

Peter Lombardo, RE/MAX Commercial Brokers, Inc.
Peter Lombardo
RE/MAX Commercial Brokers, Inc.
(504) 838-0001




Tuesday, December 5, 2017

President Jonathan Shaver, CCIM Looks Back On 2017




I got involved with the Louisiana CCIM Chapter very shortly after entering the brokerage business in 2010.  I participated on the board level for several years before joining the executive committee as Secretary-Treasurer in 2015.  It’s been an extremely gratifying experience to serve as President this year, and I wanted to take a look back at the year that has been. 

We started the year with a bang at our annual Ruth’s Chris dinner in January.  I was sworn in as President, along with our other executive committee members, David Gleason, CCIM as President-Elect and Ben Walker, CCIM as Secretary-Treasurer.  This coming January, we’ll follow largely the same program, except that David will be sworn in as President, Ben as President-Elect, and Flo Meadows, CCIM as our next Secretary-Treasurer.  It should be a great event as always.  Shameless plug: please join us on January 18 at Ruth’s Chris if you can – the registration link is at our website, www.ccimlouisiana.com

We held CI 103, User Decision Analysis for Commercial Investment Real Estate, in New Orleans in March.  It was taught by Richard Juge, CCIM and Joe Larkin, CCIM and was attended by twenty-nine aspiring designees.   Also in March was a happy hour we co-hosted with the Urban Land Institute (ULI) at Urban South Brewery. 

April and May brought conference season, with our CCIM Mid-Year Meetings in Chicago, our 5th annual Energy Conference in Lake Charles held in conjunction with the Houston Gulf Coast CCIM Chapter and a Beach Meeting in Orange Beach, AL held in conjunction with the Mississippi, Alabama and Florida CCIM Chapters.   In Chicago, we pinned two new designees: Michael Cashio, CCIM and Hartley Crockett, CCIM, both with NAI Latter & Blum in Baton Rouge.  In Lake Charles, we heard from Dave Wilson, CCIM, 2018 CCIM Institute President and Barbara Crane, CCIM, 2018 CCIM Institute President-Elect and networked with more than sixty CCIMs from Louisiana and Texas.  And in Orange Beach, we enjoyed visiting with seventy CCIMs from across the Gulf Coast and heard from Robin Webb, CCIM, 2017 CCIM Institute President and others. 

Our early summer was relatively quiet, but then came our Foundations Course in Alexandria in July, our Election Luncheon in Lafayette in August and our Past President’s Luncheon in New Orleans in September.  The Foundations course was taught by Karl Lanreneau, CCIM and Richard Juge, CCIM, and was attended by twenty-one.  It included a lively post-class happy hour at the Mirror Room Lounge and dinner at the Diamond Grill on Thursday night.  The speaker for the Election Luncheon was Mark Zappi, Director of University of Louisiana Lafayette’s Energy Institute, who gave us an update on the oil and gas industry in light of diminished oil prices.  Finally, our Past President’s Luncheon was attended by thirteen CCIM past presidents and was filled with valuable insight from our past chapter leadership. 

In September, we also co-hosted the second of two happy hours with the New Orleans Metropolitan Association of Realtors’ (NOMAR) Commercial Investment Division (CID), the Women’s Council of Realtors and ULI at Oak and Ale on Oak Street.  Special thanks to Matt Eaton, CCIM, Liz Tardo and Kendra Home for helping organize a great couple of social events. 

Our Chapter sponsored, and many chapter members attended, the 7th annual NOMAR/CID Economic & Real Estate forecast in October.  Speakers included Dr. Lawrence Yun with the National Association of Realtors, Rick Haase with Latter & Blum, Chris Bonura with the Port of New Orleans and Guy Williams with Gulf Coast Bank & Trust. 

October also brought our CCIM Mid-Year Meetings & Conference in Toronto.  It was a great trip and we pinned three new designees from across our state – Joel Davidson, CCIM with NAI Latter & Blum in Lake Charles, John Monteleone, CCIM with Dwight Andrus Real Estate in Lafayette and Jon Smith from our RE/MAX Commercial office in New Orleans.  The conference included a fascinating conversation with Steve Forbes, as well as plenty of other insightful speakers. 

The month of November was also a busy one – it included CI 101, Financial Analysis for Commercial Investment Real Estate and our annual Golf Tournament.  CI 101 was taught by Karl Landreneau, CCIM and Alec Pacella, CCIM and attended by nineteen candidates and others from Louisiana, Alabama, Mississippi and Oklahoma.  Our Golf Tournament, held at University Club in Baton Rouge and attended by approximately 50 friends of the Chapter, was not won by the RE/MAX Commercial team. 

Whew!  It’s amazing to me A) how much we accomplished this year and B) how quickly it flew by.  I want to thank all our 2017 Chapter leadership for their service.  So David Gleason, CCIM, Ben Walker, CCIM, Flo Meadows, CCIM, Will Adams, CCIM, Richard Juge, CCIM, Scott Graf, CCIM, Andrew Vanchiere, CCIM, Gregg Thompson, CCIM, Jim Purgerson, CCIM, Matt Ritchie, CCIM, Jack Hodges, CCIM, Justin Gallionardo, CCIM and Steve Legendre, CCIM, thank you!  There’s no way our Chapter would operate without you.  And of course thank you to the Nicole Davis and all the folks at Strategic Management Services, LLC.  Their work behind the scenes helped us all look good (or as good as it’s possible for us to look anyway). 

I quoted from President Kennedy in my inauguration address.  He did not have any opportunity to give a farewell address, so I thought I would reiterate the quote from his inauguration here: “ask not what your country can do for you, but what you can do for your country.”  Our Chapter is in great hands.  But we are always looking to widen our tent and cultivate new leadership.  If you are a Chapter member (or not) and have ideas about how to grow and improve our chapter, please join us and get involved.  My involvement has been incredibly rewarding over the years, and I know it will continue to be for many years to come. 

For more information on the CCIM designation or the Louisiana CCIM Chapter, please contact Jonathan D. Shaver, CCIM at (504) 838-0001 jshaver@nolacommercial.com.


Monday, November 13, 2017

A LEASE: WHAT'S IN THE NAME?



Jon Smith, CCIM, Sales Associate
RE/MAX Commercial Brokers, Inc.

William Shakespeare may have written "A rose by any other name would smell as sweet, " but he was indeed talking about flowers and not commercial real estate. One of the most important, yet confounding, aspects of the acquisition of commercial property is the commercial lease form, and unfortunately, often many of them smell nothing like a rose.

A commercial lease is a legally binding contract between a building owner and the user of the property, and even though the asset classes in commercial real estate are common from one market to the next, there is no such thing as a standard, universal, or uniform commercial lease. Compounding the confusion contained in a commercial lease is that there is no typical structure or length. All too often a building owner will try to save money on legal fees by recycling a contract form picked up from a broker or one from another property. It is not uncommon for a tenant to see a lease that is cobbled together from several different contracts written specifically for several different uses.

Following the medical warning “don’t take prescription medication not prescribed to you,” the end-user and the building owner alike would be well served to ensure that the lease they are entering into was written specifically for that property and looks at all of the conditions that need to addressing in each particular situation. 

I can’t tell you the number of times I’ve been in court – on both sides of the table – because of inadequate, vague, and ambiguous language in a boilerplate lease misapplied to a tenant, who themselves didn’t take the time to read the contract.

Certainly, it is simple enough to determine if a lease is legally valid and binding. A quick check of the following can determine that:
  • Names of all parties
  • Description and ADDRESS of the property (and, yes, I’ve seen leases that omitted this) 
  • Consideration, or right to occupy premises in exchange for payment of a sum.
  • Legality of Objective (can’t break any laws with the lease)
  • Offer and acceptance
  • Written form (there are some instances where verbal commercial leases are valid and binding; however if you get into a verbal commercial lease it will be as the old saying goes “a fool and his money are soon to part”)
The above are all conditions that must be met to make the lease valid and binding, however, within that lease lives a host of things that can trip up landlord and tenant alike if they are not carefully and specifically addressed in the lease. 
  
Namely, these include:

Lease Term with specific commencement date and termination date. I’ve seen leases without a commencement date, or a blank commencement date. Always have a hard number in your lease for this. I try to avoid leases that read “Lease commences on the date of occupation by Tenant and expires 60 full months thereafter.” Instead, I like “Lease begins on July 15, 2017, and expires on August 31, 2022.”\

Rent. Believe it or not, there are vagaries here too. Be sure that your rent section has when, where, and how to pay rent and a recourse if that method becomes delayed.

Occupancy and Use. For landlords especially, this is an important clause to add to a lease to ensure that the pleasant dress shop doesn’t become a coffee shop, motorcycle repair garage, or death-metal rehearsal studio. 

Utilities and Services. Use this section in a lease to spell out who pays for what, and who holds what deposits, if any. This is especially important in Gross and Net leases where the tenant pays some, but not all of the utilities. 

Parking. If parking is a factor, it is critical to spell out all details of parking in the lease. Parking is as contractually essential to the operation of a commercial entity as anything. If parking is not available, then have the lease define this. Parking squabbles are one of those items of minutiae that can cause significant headaches down the road. 

Signage. Another landlord clause, the Landlord should always retain the right to control any and all signage, including temporary window signage. Once that lease begins, this right is waived unless previously negotiated. 

Tenant Improvement. Almost always, space will need physical repair. Use the lease to determine who is paying for what portion of the repairs, how long that process will take, and how that repayment will occur. Will the Tenant pay and have rent abated? Will the Landlord pay and bill back the tenant over time? This is another major area of the lease that is usually fumbled during execution and causes significant headaches in the future.

Alterations and Improvements. A third major landlord protection, if the tenant wants to make physical modifications after the lease commences, the Landlord should always retain the right to approve those alterations. You’d be surprised how many leases do not hold this clause. 

Casualty and Condemnation. Who is responsible for what in the case of fire or other damage, and how can the lease be negated as such. I have seen leases without a casualty section, where the property was partially damaged by fire and the tenant had to sue to be let out of the Lease.

Right to Relocate. This states what rights (if any) a landlord would have to relocate a tenant within the leased premises. In smaller properties, this can be seen as a non-factor, but for smaller businesses within larger centers, having this protection can be critical. 

Options to Renew. A good commercial lease has a section to renew, it states when the period to notify the landlord is and it indicates the terms under which the lease can be renewed. I was once in the middle of a landlord and tenant who spent over $100,000 in legal fees suing each other over a very poorly worded renewal clause. It is important to have this in writing and to make sure it is clear and unambiguous. 

Sure, there are many other sections in a well written commercial lease. Sections such as right to assign, expansion options, holdover clause, estoppel certificates, and many other terms are ones you’ll see in a lease as you pass it on to your attorney.  However, some of the ones I’ve highlighted above are ones that either get left out of a lease for whatever reason, or are so poorly written that they WILL cause a legal battle in the future. 

Remember, one size does not fit all on a commercial real estate lease, and more draft contract forms are floating around that you can imagine. Always read your lease since you’re the one signing it, but always have a legal professional review it for you.

Landlords who go the cheap route by using boiler-plate or retread leases or tenants who try to save money by leaving legal counsel out of it usually wind up paying for it in one way or the other in the end. 

Note: This post discusses contracts and leases in general, broad terms and is not intended to be legal advice. You should always seek the opinion of a lawyer when dealing with leases, contracts, and other written instruments of business.

Jon Smith, CCIM
RE/MAX Commercial Brokers, Inc.
504-838-0001