Tuesday, December 4, 2018

The Importance and How to of Marketing


In any business, marketing can be the most powerful tool one can utilize to create a booming,
successful business. Marketing is as old as time and has been utilized since the days of Ancient
Rome when gladiators would promote items in the arena for local businesses. Like time, however,
it is constantly changing and in order to stay successful, one must adapt to newer trends while still
maintaining the core elements that helped brand the business.


In real estate, putting up a sign with your name on it is not going to cut it. You need to be putting
yourself out there - making a name for yourself! There are many different ways you can market your
brand.


Real Estate Listing Websites
This is the easy one. Any market area has national and local databases on which you can list your
properties. These are not only available to the public, but are heavily utilized by other agents to
convey information about which properties are available for sale/lease. These sites typically charge
a usage fee for publishing content but can certainly generate leads for you.


Blog/Social Media
With the internet at society’s fingertips, the utilization of internet platforms is an inexpensive marketing
route that everyone should take advantage of. Sites like LinkedIn and Facebook are great tools to put
out your personal brand to generate leads and reach other professionals in your market. There are
also blog hosting websites where you can produce a blog (like this one) to further expand your reach.
Nothing makes you more credible than being knowledgeable on a topic and sharing it with the public.


Mail Campaigns
Another set of very successful yet pricey marketing tools are email, snail mail, and postcard
campaigns. National sites like WWW.EXPRESSCOPY.COM and WWW.POSTCARDMANIA.COM
work with business professionals and have access to mailing lists that you can purchase to target a
certain demographic. These hosting sites work with companies to prepare their logo, a distinct
message, and a targeted audience to get your business name out there.


Cold Calling
At times, one of the most important marketing tools that you can utilize is cold calling. Nothing beats
picking up the phone, going down a prepared list, and making a phone call to a lead prospect or a
long time client. Sometimes all people need is a simple conversation to drum up more business. The
success rate of cold calling puts any other marketing tool to shame.


Get Involved
The final marketing point would be keep yourself involved in your community and profession. Attend
as many networking events as you can - this will always lead to new information in the market and will
help identify the major players in your business. It is also a good idea to get involved in your local
community. Join a neighborhood association and attend a meeting or volunteer to help, as this gives
you a public image as a driving force behind positive change.

Your image is not going to create itself: you need to be constantly active and creating new contacts on
a daily basis. Turn yourself into a brand that people can trust and believe in!

Charlie Mullin
RE/MAX Commercial Brokers, Inc.
cmullin@nolacommercial.com
(504) 838-0001  |  (504) 400-3254

Wednesday, November 7, 2018

The Ins and Outs of a Commercial Lease


You're looking for a new commercial space for your business and have located a property that you believe is the best fit for you. Before you sign that lease, there are a few things that you need to consider:

  • Rent. Let’s start with the basics! When leasing a space, rent is the equivalent of price per square foot. Nobody wants to pay for space they don't need or pay above market price. Make sure you're able to utilize the entire space and make the most out of your square footage. Also, familiarize yourself with market expectations for lease rates.
  • Lease Term. A majority of landlords are looking for a tenant who can commit to an initial term of 2-5 years with the ability to renew the lease. Make yourself aware of when your lease contract begins and ends, as well as when you're responsible for any renewals. You don't want to be blindsided down the road because you didn't have a firm grasp on your lease timeline.
  • Net Charges, Unexpected Costs and CAM. If you find yourself in a net lease or triple net lease, you'll find that there are other expenses to consider besides just your base rent. These leases sometimes include taxes and insurance, as well as common area maintenance charges (CAM). Landlords may also make the tenant responsible for major repairs (roof repairs, HVAC repairs and servicing, plate glass window repairs, etc.).
  • Rent Escalation. It's common in commercial leases to see an escalation in rent over time. The average increase is between 3-5% annually, or anywhere from 12-15% over a five year period.
  • Deposits. Most landlords require a deposit when leasing a space. This could be equal to first months rent. Many times, landlords will also require a tenant to pay the first and last month's rent, especially to a new business whose future may be murkier than that of a longstanding national tenant.
  • Buildout. Each commercial property is different - some come delivered as a ready to go space for the tenant, while others will require a lot of modifications in order to make the space work. Negotiate with the landlord and see if he is willing to do any improvements himself (this is called a Tenant Improvement Allowance). Other landlords may do the buildout for you and amortize the cost of the buildout over the term of the lease. Some may not commit anything to a buildout and grant the tenant a rent abatement to offset some of the costs of building the space out. Always explore your options because each landlord is different!

Every lease is different, and they can be complex and intimidating. Remember to always utilize a commercial realtor and a lawyer before signing a lease. Never blindly commit without understanding the fine print!

Cameron Lombardo
RE/MAX Commercial Brokers, Inc.
clombardo@nolacommercial.com
(504) 838-0001  |  (504) 444-7897


Wednesday, October 3, 2018

Blogging: What Is It Good For? Absolutely Everything

In a world where everyone has a smartphone and access to expressing their opinions, blogging has become the cornerstone of professionals getting their advice out to the public. Blogs can be a great marketing strategy for very minimal cost (if any!) to boost your business, while also educating the reader at the same time.

The important factors in writing a successful commercial real estate blog boil down to five key concepts:

  1. Write on topics that are popular and relevant to the current market. Commercial real estate, like any other business, has trends - make sure to keep up with the current market and educate yourself and your audience on what’s up and coming.   
  2. Include key words or jargon that will show up in a search engine. Make use of the #hashtag - this allows your content to appear in similar searches, thus boosting your audience.
  3. Focus on one key topic to drive home your message. To keep an audience focused, it is always good practice to focus on one topic. Readers can get lost in a sea of information if you are jumping from one thing to the next. 
  4. Keep the topic general and do not focus on yourself. Readers are looking for answers specific to themselves. Simplifying your blog so that it's easy to comprehend is also important. Relating to the reader is a must if you want to keep their attention.
  5. A good blog answers your readers questions. Make a habit of writing down questions you think your readers are asking. Incorporate these questions into your blog.

Why blog? The answer is simple - it generates more leads to your business while also establishing you as an expert on the topic at hand. People tend to find bloggers more credible on a subject if they are willing to go out there and express their opinion on a matter. It is important to be consistent with how often you blog and allow a comments section for readers to give their feedback. This will establish your blog as brand and generate more leads to successfully increase your business.

Starting a blog doesn't have to be difficult. There are multiple outlets online for creating your own blog. Spend a couple hours each week writing down your thoughts and before you know it, you too will be a #blogmaster.

Peter Lombardo
(504) 838-0001
plombardo@nolacommercial.com



Wednesday, September 12, 2018

Opportunity Zones

There was a provision in the Tax Cut and Jobs Act of 2017 (Tax Reform) that flew under a lot of radars,
including those of many in who make their livelihood in commercial real estate-related fields. The
provision – 26 U.S.C. § 1400Z-1&2 – created Opportunity Zones (OZ), which I liken to a combination
between a 1031 exchange and New Markets Tax Credits (NMTC). The program is similar to the 1031
exchange in that it can defer capital gains that would ordinarily be owed following the sale of property
by an investor, and similar to NMTC in that it is intended to incentivize investments in economically
distressed communities.    


What do OZs do? Briefly, they can defer capital gains for five years for investments made in qualified
OZs. After the fifth year, taxes may be cancelled on ten percent of the original capital gains investment
and deferred for the remainder. After the seventh year, taxes may be cancelled on fifteen percent of
the original capital gains investment, and the remainder may be deferred through 2026. And for
investments lasting ten-plus years, investors are exempt from capital gains taxes on the OZ investment
itself, in addition to the other benefits for capital gains carried into the investment.  


It’s a lot to wrap your head around, but once you do, you’ll concur that this is an incredible program.
Other commentators have realized that as well, penning articles titled An Unlikely Group of Billionaires
and Politicians has Created the Most Unbelievable Tax Break Ever and Opportunity Zones: Building the
Plane While Flying It.  


Two logical questions about OZs are 1) where are they, and 2) where can I get more information on
them?  


Each state’s governor proposed OZs, which were subsequently approved by the Department of
Treasury. In Louisiana, many proposed OZs were generated via suggestion by economic development
agencies. Louisiana Economic Development, the largest such agency, has put together a neat GIS tool
showing OZs across the state. Here’s a capture of their location within the city of New Orleans
(highlighted in blue):




And here’s a zoomed in image of their location within New Orleans’ historic core:




Per the text of the Tax Reform bill, the aim of the OZ program was to identify “lower-income census
tracts”, including those with poverty rates of at least twenty percent, or those with median family
incomes of no more than eighty percent of statewide or metro area family income. I would argue that
some of the identified census tracts, while perhaps meeting the letter of this portion of the law, likely
don’t meet it in spirit. But nevertheless, it’s likely that decision makers also took into account areas
which were likely to support the additional new investment that OZs are anticipated to encourage.
And with the already existing momentum in many of the OZs, such support shouldn’t be a problem.  


Getting back to the location of the OZs, you’ll see that large swaths of core neighborhoods – from the
Warehouse District, Central Business District, Central City, Treme and Mid-City – are included. That
means – you guessed it – opportunities await investors who can secure investments in these areas.  


The concept of OZs can be difficult to wrap one’s head around. Luckily, plenty has been written about
the nascent program since it came into existence less than one year ago. You can go direct to the
source with IRS’ FAQs, or Treasury’s Opportunity Zones Resources. Or you can seek out guidance from
the private sector, like Novogradac & Co.’s Opportunity Zones Resource Center. For those readers in
New Orleans (or for those looking for an excuse to travel to New Orleans), Novogradac & Co. is also
putting on a first-of-its-kind Opportunity Zone Conference here in October.  

I can’t tell you how much tax savings you stand to benefit from by investing in an OZ. And I can’t
advise you on the partnership structure of your OZ investment. But I, and the other agents in our
office, can certainly help you locate investment opportunities within the boundaries of qualified OZs.
Please reach out to let us know how we can help!  

Jonathan Shaver, CCIM
jshaver@nolacommercial.com
(504) 838-0001
(504) 579-4082

Wednesday, August 8, 2018

Staying Ahead of Information in the World of Commercial Real Estate


There has never been a better time for access to information about the commercial real estate industry. Whether you are a seasoned investor, a first-timer getting started on your first property, or just curious about the industry, with a few clicks of the mouse there is a wealth of knowledge at your fingertips.

Here are three things I do every day to stay on top of things in the world of commercial real estate:

1) Listen to a podcast.

Podcasts are terrific and portable sources of information. They are better than talk radio, and there is almost no level of detail to which you can't drill down to find the exact info you seek. Although there are numerous podcasts specific to commercial real estate, I tend to favor shows that are more investment-based in their approach, but still deal with CRE. Three shows I tend to favor are:
  • Bigger Pockets. This show is more or less the gold standard of real estate investment podcasting. Their most recent episode (as of the writing of this blog) is #290 “7 Paths to Financial Independence” and it is an exceptionally good listen.
  • Real Wealth Show. Always real estate focused, lots of multi-family information, useful information, always.
  • Invest Like the Best. This show is more traditional capital market focused, but still has good discussion about investment principles.

2) Read a blog post.

A quick Google search can bury you in CRE blogs but I tend to gravitate towards the ones that speak to brokers and broker development. By preparing yourself as a broker, anyone can get an insight into the investment side of the industry. Again, this list probably changes weekly, but lately some of the ones I seem to keep going back to are:

3) Read a Book

Who has time to read books? Simply put, if you’re not reading, you’re not learning. A few of the books I find myself picking up more often than not for either reference or perspective include:
  • What Every Real Estate Investor Needs to Know About Cash Flow by Frank Gallinelli. There is a lot of Real Estate Investment 101 in here, but that’s okay. When I started in the industry, I don’t think there was a book I referenced more frequently than this one.
  • Investing In Real Estate by Gary W. Eldred. If I didn’t know any better, I’d say that Mr. Eldred took a few of the CCIM course manuals and used them for a framework to write a book, but that’s perfectly fine because this book, though slight in size, leaves no method or metric of real estate investment uncovered.
  • The Millionaire Real Estate Agent by Gary Keller. Written by the founder of Keller-Williams, this book is written for residential realtors, but there are mounds of good information that can be gained by just about anyone in the real estate industry.
  • Right now I’m reading Never Split the Difference: Negotiating As If Your Life Depended On It by former FBI hostage negotiator Chris Voss. Simply put, it's an essential read for anyone who negotiates anything (which is pretty much all of us).

When it comes to information about commercial real estate, the internet is your friend, and indeed, the groundswell of information can seem overwhelming but if you start someplace and take the information in bite-sized chunks, you'll begin to see what works and what doesn't. The important thing if you want to get ahead in the field is simply to start somewhere.

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

(504) 838-0001  |  (504) 330-4879
jsmith@nolacommercial.com


Wednesday, July 11, 2018

The Rise of the Machines in Real Estate


We are entering an era of intimate intercourse with technology. We are cyborgs (cybernetic organisms). Each of us has a little device in our pocket or on our person with access to millions and millions of pages of information, anything from funny videos to the weather in Mozambique, the ability to record daily life or to find a mate. Even the simplest of minds has the capacity to access more knowledge than the most brilliant of minds. Technology has allowed people to market and reach an audience that would have been price prohibitive in the past and it has and will continue to cause serious disruption with the “old” way of doing things. Multiple companies and even entire industries have been decimated. We must confront the idea that we may be making ourselves obsolete through the sheer ubiquity of technology. The real estate industry is no exception; we have seen huge changes in the last decade or two with the democratization of information.

How do we balance the exponential explosion created by technology and the simple human, who has remained relatively unchanged for thousands of years? How can we assert value in a world where barriers for many industries have either collapsed or been completely rendered meaningless by technology?

Within the real estate industry, we can already see the disruption caused by technology and its double edged sword; on one side we are able to work from anywhere, send listings off around the world, use mapping technologies to better assess areas, research properties, explore zoning and expand our reach far beyond our local areas; and on the other side of the equation many of the same technologies are available to our prospective clients as well. They, too, can leverage the technology and search for properties, market and sell their property, set alerts for areas and do many of the same things that they would be contracting an agent to do. My clients send listings to me as often, if not more often than the other way around.

So, again, have we planted the seeds of our own obsolescence or how, do we as agents create a value proposal that ensures our survival and the survival of the industry at large?

What intangibles do we bring that cannot be replaced?

In my experience, there are always going to be those that just don’t get it. Why am I going to pay an agent for what I can do myself? On the other side, there are those who are more than happy to turn things over to a professional for any number of reasons. If someone does not see the value in contracting an agent, there is little chance that I am going to convince them of the benefits of hiring someone to represent him or her. I think of abstract art and those who say, well I could have painted that. I am not going to convince that person of the value I bring to the equation so it is not worth my time. On the other side I need to realize that what is going to keep a client and ensure my success is going to be earning their trust and instilling the relationship with the knowledge that I will only ever act in their best interest, that I will work tirelessly to find solutions to their problems, and that I will be there for them when they need advice or guidance and that whatever money I earn in the equation, what I return to them goes far beyond any dollar value.

I would never let a robot or my Roomba babysit my kids because I want someone there who is and will be accountable, who I can call or who will call me if the need arises. I want to know that someone I trust is looking out for and caring for them.

There is a tremendous value to human contact and accountability and that is something that cannot be easily replaced. I view and vet all properties as though I am considering them for myself and advise my clients as such. It is very true that you don’t know what you don’t know and if someone has not had that experience or has had a previously poor experience it can be very hard to work against that preconceived notion. We all have unique qualities and traits that we bring to the equation, whether it is our specific knowledge about a market area or esoteric information about tax incentives, or simply our advice and sense of humor (humor being one of the most difficult things to program in to an artificial being).

The machines are on the rise but they have yet to replace real human interactions, a smile and handshake, intuition, the nuances of negotiation and the assessment of decisions based on parameters that go far beyond ones and zeroes.

Mike Mito
RE/MAX Commercial Brokers, Inc.
3331 Severn Ave. Suite 200
Metairie, LA 70002
(504) 838-0001
mmito@nolacommercial.com


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