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LinkedIn- THE place for commercial real estate conversation?

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LinkedIn.  I think we all know it has always been considered to be in the “big three” online platforms along with Facebook and Twitter.   At first it was seen as a resume type/put your business stats and info on kind of a platform.  

It looked like it was going to be a HR persons dream set up.  I think that has changed, for the better of all.

Commercial real estate digs in.

Let’s start with over 1500 commercial real estate groups.  The types of groups run the gambit of commercial real estate: corporate, distressed, investment multi-family, brokerage, and so on. Memberships of the groups start with just a few members and other groups with memberships from 1000,3000,10,000 and yes up to 50,000 people.  A quick scan of the groups will net you some quality slideshare presentations, great updates on individuals and quick connects to those same people.

Commercial real estate takes control.

If you have been on LinkedIn for any period of time you may have noticed a change. The groups have become much more self-policing.  This is a very good thing.  It’s all about business.  No Facebook friendliness or cutesy Twitter quips.  If you spend any time at all on any site it is obvious you want quality.  This plays right to the hardcore, no nonsense commercial real estate business.

What I see that is good.

Regional networking at its finest.

Chicago and Florida groups are diverse and at the same time specialized. They are using it to….wait for it…Network to get referral business.

Groups from individual companies have taken over their own groups.

Colliers is a great example.  They have basically said (in a nice way)”Hey quit putting random stuff on here.” “We want to use this for Colliers related peer to peer interaction and conversations.”  They want education, conversation and help from and for each other.  I say great. It’s your group and you can make whatever rules you want.

Joining different and non commercial real estate related groups.

Think facilities management, economic development.  I personally follow a facilities management group. The conversations are educational, interactive, and hey, they know the owners of the buildings.

We are all getting better at this online thing.

This is where I truly get my hardcore commercial real estate content.  This is where I find people to follow on twitter. This is where I find people who blog and people who are actually doing deals. Conversation, debate, peer to peer, education, real people with real credibility. They are staring you in the face.

My super special secret.

LinkedIn is a place where I post my Agent Genius posts in discussions and get a high level of comments and response. People are comfortable commenting in the LinkedIn environment.

I see LinkedIn gaining more and more online traction and credibility within the commercial real estate community.  Is there another online platform that has even a vague chance of competing?  What are your little secrets?  Are we just starting to dip our toes in or are we starting to see this LinkedIn online thing as THE place to do business?

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Broker/Owner in Lafayette, IN, whose passion is Commercial Real Estate with focus on Technology, Social Media, and Networking.

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26 Comments

26 Comments

  1. Coy Davidson

    July 5, 2010 at 11:25 pm

    Duke, nice post….I don’t think there is any doubt Linkedin is the social networking platform that CRE professionals are most comfortable with and most the target rich platform for relevant social networking connections.

    The spamming of groups is certainly a problem and annoying, but the group administrators seem to be sending the message it won’t be tolerated. I think also Linkedin continues to make positive changes to increase the level of engagement within the platform.

    You will see the big brokerage firms with hundreds or thousands of professionals make the move to internal private networks for networking and collaboration internally..hint, hint, but Linkedin will remain a valuable tool for accessing not only other CRE professionals but the business community at large.

    Twitter and Facebook have their merits but for the CRE professional…I agree Linkedin is probably the most valuable tool. The traffic I am getting to my blog from Linkedin continues to grow at a rapid pace.

  2. Benn Rosales

    July 6, 2010 at 11:09 am

    Are they really expanding a network by hiding in linkedin? I don’t think so anymore than I believe it’s healthy for residential pros to hide on ActiveRain or Facebook, or only tweet.

    Agents have a really bad habit of being shortsighted as there are a million other agents out there that want to connect who flat out ignore linkedin. It’s a failure to take advantage of opportunities by only doing just enough to say you tried.

  3. Nadina Cole-Potter

    July 6, 2010 at 11:54 am

    If the bigger corporate CRE houses take their lists in-house, they are just reducing their networks and their resources. The great thing about serious LinkedIn CRE participants is that they bring a lot of business diversity to the table. And in this day of no “plain vanilla” deals, that is a good thing. Through researching one very good poster’s company web site, I found a fantastic resource to use for lead generation of a specific type of distressed property in this market.

    I am grateful to the LinkedIn participants who write an inviting caption to their articles, then link to their blogs or a serious article by someone else, or write the entire article in a “respond” posting. Even though I receive my posts from each group in weekly e-mail digests, I hate, hate, hate those posters whose entire articles (advertisements) appear in the digest. And feel sorry for those who receive their group posts as a daily digest or even as separate posts.

    I have been known to respond privately to posters whose content is irrelevant to the group and to tell them so. I also responded privately to a local poster whose link led to the entire MLS listings for single family homes! Are people really that clueless? Do they imagine that hogged and inappropriate bandwidth leads anyone to want to do business with them?

    • Duke Long

      July 6, 2010 at 12:03 pm

      Nadia, Way to tell it like it is…and should be! Thanks for your comments and opinions.

  4. Dave Lewand

    July 6, 2010 at 12:47 pm

    Personal experience within my LinkedIn network (mostly #CRE professionals) offers me an opportunity to make this educated guess – a high percentage of your readers will submit that LinkedIn is the most powerful tool within their social media arsenal. I would be interested to see the results of a more comprehensive poll that goes beyond an educated guess.

    Many of your readers will certainly favor Twitter, Facebook, Ning-based verticals CREOpoint (.creopoint.com), Reverb (chicagoreconnect.ning.com) and countless others (any BuddyPress networks out there?). I’m not certain if they favor a tool (join a network) because of preferred user interface or number of current connections in that environment – or another reason.

    In my opinion, the leader is the one that works best for YOU. Making that determination requires a lot of trial and error. And of course, the concept that one tool is enough is negligent. These tools communicate with each other.

    I was recently able to determine what percentage of my LinkedIn network (mostly #CRE professionals) had a Twitter account. The answer was approx 10%. I would guess that only 5% were actively tweeting. Is that good or bad?

    I think this is a great subject and I hope that the commentary can keep flowing!

  5. Miami Condo Shop

    July 6, 2010 at 12:58 pm

    LinkedIn started a few years ago with about 30,000 users and now has more than 9 million, and perhaps that number represents unique business users. One of the best things about this online platform is it’s search engine. You can effectively search profiles from different angles which make it enticing to business users. While it may not be as intuitive as Facebook or Twitter, the contacts are not the type of people you’d tell about your drunken nights out. It has a more focused approach and certainly The place for real estate conversation. Twitter and Facebook have their merits too, so better join all three and optimize each to suit your specific needs.

  6. Dave Lewand

    July 6, 2010 at 1:16 pm

    Personal experience within my LinkedIn network (mostly #CRE professionals) offers me an opportunity to make this educated guess – a high percentage of your readers will submit that LinkedIn is the most powerful tool within their social media arsenal. I would be interested to see the results of a more comprehensive poll that goes beyond an educated guess.

    Many of your readers will certainly favor Twitter, Facebook, Ning-based verticals CREOpoint (creopoint.com), Reverb (chicagoreconnect.ning.com) and countless others (any BuddyPress networks out there?). I’m not certain if they favor a tool (join a network) because of preferred user interface or number of current connections in that environment – or another reason.

    In my opinion, the leader is the one that works best for YOU. Making that determination requires a lot of trial and error. And of course, the concept that one tool is enough is negligent. These tools communicate with each other.

    I was recently able to determine what percentage of my LinkedIn network (mostly #CRE professionals) had a Twitter account. The answer was approx 10%. I would guess that only 5% were actively tweeting. Is that good or bad?

    I think this is a great subject and I hope that the commentary can keep flowing!

  7. Joe Loomer

    July 6, 2010 at 2:08 pm

    LinkedIn certainly is a great place not only for CRE agents, but residential and property management specialists, too. I’ve watched the KW Referral Network grow consistently, and have even been fortunate to be on the receiving end of business directly from that group.

    Good post Duke, and somewhat overdue (in the sense that LinkedIn is just out there waiting to be tapped).

    Navy Chief, Navy Pride

  8. Coy Davidson

    July 7, 2010 at 1:07 am

    Having an in-house network won’t prevent CRE brokers from being active on Linkedin….just an internal communication and collaboration tool that is more robust than e-mail without the noise and spam. Linkedin is a rich resource for industry collaboration, thought leadership and yes networking and business developement. A CRE broker will be missing out if he ignores Linkedin

  9. Joe

    July 7, 2010 at 10:04 am

    Does not surprise me. LinkedIn is largely a network of one professional to another, so commercial real estate is a great topic for the platform.

  10. Coy Davidson

    July 8, 2010 at 1:17 am

    Dave, I could probably ramble on about this forever. but a quick overview.

    Linkedin-has been great for me to access CRE professsionals within my organization (Colliers) in other offices outside of Houston, where I am located. I think mostly because a high percentage of our professionals are on Linkedin. It hasn’t been a great source of new connections outside of Colliers, but I have probably given it the least attention of the big 3. Engagement has been challenging on Linkedin. The advantage too Linkedin is that it is all business professionals, so there is a much higher percentage of people I might actually do businesswith someday. Blog traffic from Linkedin is growing rapidly. I get lots of Linkedin requests from CRE brokers in my market which I don’t accept. I see no reason why competitive CRE brokers need access to my list of connections and clients. I could go private with my connections but that defeats the purpose. I really look to engage people outside of CRE on Linkedin, business people who have the potential to be clients, but I have found it challenging. I think there are a lot of business people with Linkedin profiles but not necessarily active on the network.

    Facebook: has generated a couple of new business relationships and was the slowest to develop…but is gaining steam. I refuse to ignore facebook because I still think long-term it has the potential to be the most effective. It is not at the moment, but I won’t discount its potential. Since integrating the like button on my blog posts. traffic has skyrocketed to my blog from facebook. I have not tried any ads on facebook yet.

    Twitter: by the far has been the most effective for me in several areas 1) blog traffic 2) new connections that have turned into face to face meetings, advocates, friends and even clients 3. exposure for my personal brand. Levels of engagement are much higher on Twitter than facebook or Linkedin. Twitter is also very time intensive. If I had not spent a lot of time on Twitter, posting links, engaging people, I don’t think I would have gotten so much out of it….That being said Twitter has been rewarding. In fact I am sure we crossed paths on twitter. I have met ton of people on twitter both from with CRE and outside of CRE

  11. Stephen Alter

    October 29, 2010 at 11:58 pm

    For the CRE brokers that exclusively list the larger office, retail, industrial, multifamily, hotels, self-storage, parking lots, and mobile home parks and want to present themselves and their listing in the most professional way possible (which help to source your next ten exclusives), and you first need to cast a very wide exposure and yet super targeted to hit “qualified buyers only” (at least for the first couple of weeks), please have a look at RCM1. The exclusive listing broker can run an ultra confidential process to begin and have each of the serious buyers submitting their offers online just as if they were paying their bills. You can even run your own online auction for your seller where you can pre-set the reserve, minimum bid, bidding increments, offer due date, bidding rules are up to the broker with the exclusive right to sell. RCM1 serves the most successful CRE brokers across the nation and I also think that LinkedIn is terrific.

    • Nadina Cole-Potter

      October 30, 2010 at 7:50 pm

      Thank you, Stephen. I did sign up. The listings that are posted are a bit thin in the Phoenix multifamily market. I’ll see what transpires with the email notifications. Got a lot of hungry and cash-flush buyers out there!

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Commercial Real Estate

Pace of commercial real estate improvement is slowing

(Commercial Real Estate) The commercial real estate sector has improved substantially since the economy crashed, but is now showing signs of slowing, but data does not indicate lost ground.

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commercial real estate

commercial real estate

Commercial real estate outlook is positive

According to the National Association of Realtors’ (NAR) quarterly forecast, commercial real estate is continuing to improve, but the pace is slowing.

Dr. Lawrence Yun, NAR chief economist, said that fundamentals are still on an uptrend. “Growth in commercial real estate sectors continues at a moderate pace from a very slow pace of absorption, despite job additions to the economy. Companies appear hesitant to add new space,” he said.

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“Office demand is expected to see only slow and gradual improvement,” Dr. Yun added. “Demand for retail space is benefiting from improved household wealth, while industrial real estate is stable with increasing international trade, which requires warehouse space. Of course, the apartment market fundamentals are the strongest, as nearly all of the new household formation in the past 10 years has come from renters, and not homeowners.”

Forecasting the future

Overall, national vacancy rates in the coming year are forecast to drop 0.2 percentage point in the office sector (the sector with the worst vacancy rates) to 15.6 percent in the first quarter of 2015.

Vacancy rates are projected to fall 0.1 point in industrial to 8.9 percent, and 0.3 point for retail real estate to 9.9 percent.

With rising apartment construction, the average multifamily vacancy rate will edge up 0.1 percent to 4.1 percent, but this sector continues to experience the tightest availability and strongest rent growth of all the commercial sectors.

Rental rates for various sectors

Office rents are projected to increase 2.3 percent in 2014 and 3.2 percent next year. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is likely to total 44.6 million square feet this year and 50.0 million in 2015.

Annual industrial rents should rise 2.4 percent this year and 2.6 percent in 2015. Net absorption of industrial space nationally is seen at 106.1 million square feet in 2014 and 110.6 million next year.

Average retail rents are forecast to rise 2.0 percent in 2014 and 2.3 percent next year. Net absorption of retail space is likely to total 14.6 million square feet this year and 20.9 million in 2015.

Average apartment rents are projected to rise 4.3 percent this year and 3.5 percent in 2015. Multifamily net absorption is expected to total 204,900 units in 2014 and 112,500 next year.

Regional performance varies

The markets with the lowest office vacancy rates in the first quarter are New York City, with a vacancy rate of 9.5 percent; Washington, D.C., at 10.2 percent; Little Rock, Ark., 11.6 percent; Birmingham, Ala., 12.7 percent; and San Francisco and Nashville, Tenn., at 12.8 percent each.

The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 3.7 percent; Los Angeles, 3.8 percent; Miami, 5.8 percent; Seattle at 5.9 percent; and San Riverside/Bernardino, Calif., at 6.1 percent.

Markets with the lowest retail vacancy rates include San Francisco, at 3.1 percent; Fairfield County, Conn., 3.8 percent; Long Island, N.Y., 4.8 percent; San Jose, Calif., 5.2 percent; and Northern New Jersey and Orange County, Calif., at 5.3 percent each.

Areas with the lowest multifamily vacancy rates currently are New Haven, Conn., at 2.1 percent; Minneapolis and New York City, 2.3 percent; and Oakland-East Bay, Calif., and San Diego, at 2.5 percent each.

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Commercial Real Estate

Should you buy or lease office space? 5 questions to consider

When considering whether you should lease your office space or buy, an industry expert outlines the questions you should ask yourself.

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office leadership

Should you buy or lease an office space?

Many people set up shop and lease office space, assuming this is their best, and often only option, but there are some instances where buying office space is a better option. Many blindly make this decision based on a gut feeling, and we’re not saying that is a bad thing, we’re saying that in addition to that instinct, these five questions should be asked when considering whether you should lease or buy an office space.

Stan Snipes, senior advisor, Sperry Van Ness Investec Realty of Nashville notes that the two options depend on several variables, as he outlines below:

1. Is your business well-established?

If your business is still in the startup phase, I rarely recommend buying. During the next 5 to 10 years you’ll experience employee count fluctuations, client and customer oscillations and even business direction and strategy adjustments. That is, you’ll need to be flexible, not tied to a certain space. Additionally, any leftover capital should most likely be recycled back into your budding startup. You don’t want to stretch yourself too thin.

The only exception that applies some of the time — not every time — is if your startup is in the technology space. Oftentimes tech employees can work remotely, or the technology is automated and won’t require more employees in the future. Additionally, clients of many tech startups can successfully access the company’s offering without visiting a physical office space.

2. Will you endanger your business with a property purchase?

Yes, buying can be a great investment and add a source of revenue, but even well-established business owners need to think about the stress that buying a property can put on their bottom line. Oftentimes your time and money is best spent on what you do best, running your enterprise. If buying means you won’t be able to focus essential resources to your first priority, your business, then you might want to hold off on buying.

Further, because commercial real estate can be a great investment, business owners are sometimes so eager to get in the game that they sell off portions of their business to finance the purchase. This is a bad idea. You should not let real estate decisions determine how you run your business. You’ve worked long and hard to build a successful company — don’t give it away. Another deal with always come along.

3. Do you have heavy, difficult-to-move equipment?

If you have machinery or specialized equipment that make it difficult for you to move, buying may be a great option for you. Two primary reasons: 1.) Lugging dense equipment from leased space to leased space is annoying, cumbersome and costly.

Plus, you increase the chances of damaging it every time you move. 2.) When a landlord knows it’s difficult for you to relocate, he or she is holding the cards when it’s time to renew your lease. If your lease doesn’t have a stipulation to remediate this, leasing office space will cost you more money than it should. More often than not, buying a custom space for your specialized equipment is the way to go.

4. Does your location affect employees or clients?

If attracting and maintaining top-notch employees means securing office space in your city’s prime business district, finding the perfect space to buy may be difficult. Why? Prime business districts usually have lower vacancy rates, which typically means higher prices plus fewer properties to choose from. Anytime you’re limited to a narrow location, you risk not landing the best deal. This doesn’t mean don’t buy, just understand what you’re up against from the onset.

The other issue you may face in buying location-specific space is when your customers or clients depend on your position for convenience. This is a challenge when and if your city’s submarkets are in transition. The trendy spot of the last five years, may not be in vogue five years from now. A lease allows flexibility to move where your customer and clients need you to be.

5. Are you prepared to be a landlord?

There’s a lot of maintenance that goes along with owning a building. Will you have the ability to hire a maintenance crew or will you tend the bathrooms, burnt out light bulbs and overflowing trash bins yourself?

Furthermore, many landlords have easy access to financing that could benefit you in the form of a tenant improvement package. Even though you may have capital to buy your building, can you afford to build it out the way you want to? The cost of ownership is sometimes underestimated. Make sure you’ve considered all of the possible expenses that go along with buying your office space.

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Commercial Real Estate

Commercial real estate improving modestly, little change to come

As commercial real estate improves across all sectors, the gains have been modest and NAR predicts they will continue to inch forward.

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Commercial real estate sector is improving

According to the National Association of Realtors’ (NAR) quarterly commercial real estate forecast, commercial real estate is improving modestly, with little change seen for the near future. Dr. Lawrence Yun, NAR’s Chief Economist said in a statement, “Jobs are the key driver for commercial real estate, and the accumulation of 7 million net new jobs from the low point a few years ago is steadily showing up as demand for leasing and purchases of properties,” he said. “But the difficulty of accessing loans remains a hindrance to a faster recovery.”

NAR reports that leasing activity rose 2.0 percent in the third quarter compared to the second, and sales levels are higher than a year ago.

Yun said there have been some shifts in commercial purchases. “Investors have been looking for better yields, and have found good potential in smaller commercial properties, notably in secondary and tertiary markets. Sales of commercial properties costing less than $2.5 million in the third quarter were 11 percent above a year ago, while prices for smaller properties were 4 percent above the third quarter of 2012.”

Commercial investment in properties costing more than $2.5 million rose 26 percent from a year ago, while prices for large properties were 9 percent above the third quarter of 2012.

National vacancy rates over the coming year are forecast to decline 0.2 percentage point in the office market, 0.6 point in industrial, and 0.5 point for retail real estate. The average multifamily vacancy rate will edge up 0.1 percent, but that sector continues to see the tightest availability and biggest rent increases.

Retail vacancy rates should be going down

Retail vacancy rates are forecast to decline from 10.4 percent in the fourth quarter of this year to 9.9 percent in the fourth quarter of 2014. Average retail rents should increase 1.4 percent in 2013 and 2.2 percent next year. Net absorption of retail space is projected at 11.0 million square feet in 2013 and 18.1 million next year.

Multifamily construction will meet demand

Multifamily Markets
The apartment rental market – multifamily housing – is likely to see vacancy rates edge up 0.1 percentage point from 3.9 percent in the fourth quarter to 4.0 percent in the fourth quarter of 2014, with new construction helping to meet higher demand. Average apartment rents are forecast to rise 4.0 percent this year and 4.3 percent in 2014. Multifamily net absorption is projected to total 239,400 units in 2013 and 211,300 next year.

Office rents should be going up

Vacancy rates in the office sector are expected to decline from a projected 15.6 percent in the fourth quarter to 15.4 percent in the fourth quarter of 2014. Office rents should increase 2.4 percent this year and 2.5 percent in 2014. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is seen at 32.2 million square feet this year and 46.1 million in 2014.

Industrial vacancies on the decline

Industrial vacancy rates are likely to fall from 9.2 percent in the fourth quarter of this year to 8.6 percent in the fourth quarter of 2014. Annual industrial rents are expected to rise 2.3 percent this year and 2.5 percent in 2014. Net absorption of industrial space nationally is anticipated at 97.0 million square feet in 2013 and 104.9 million next year.

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