What Role Will Big Data Play for CRE in 2018? Part III for CREs

Posted on: Tuesday, March 6th, 2018, under Data, Open Data, Real Estate Investing, Research, Technology, Thought Leadership.

Commercial Real Estate Skyline

Having more accurate market big data has always been a distinct competitive advantage in Commercial Real Estate: it gives us the ability for better informed site selection, improved floorplan design, and the ability to provide more value to our clients than anyone else can.

Because of this, it’s understandable that CREs are wary of making any technological change. They’ve been building their data-gathering system since they entered the industry and it’s one of their most valuable assets. This is a large part of the reason why big data, which has revolutionized countless other industries, has been slowly adopted in Commercial Real Estate.

The thing is, technological change happens regardless of whether the industry, as a whole, wants it. And as tech makes it easier to gather and analyze market data, what was once a competitive advantage quickly becomes a liability. As real-time market data becomes the norm in Commercial Real Estate, early adopters will be able to seize market share with better information gathered more cheaply.

We have high expectations for the role of big data for CREs in 2018. New, easy-to-use software is giving us new ways to receive and interpret actionable data – in real time. We can now see how a given market is performing right now so you can spend less time gathering and analyzing market data and more time building relationships with your clients.

Here’s our prediction for big data’s role for CRE in 2018:

Assessing Opportunities

CRE companies will invest heavily in data and analytics platforms, which means data-centricity is quickly becoming the strategic choice among CRE executives. We’re beginning to use CRE data to shape our opinions and to come up with actionable strategies to use. Big data allow us to monitor trends in our industry as they develop, so we can stay one step ahead of the newest topics giving us the advantage to spot opportunities in leasing trends.

Improving Site Selection

With software to analyze big data, you can map out locations for your clients based on minimizing their employees’ average commute. Then, with real-time market information, you can look for properties that are available within that area and give them the most up-to-date pricing information: we can use real-time data to strategically pair the right space with the right tenant.

Being Able to Give Your Clients More Actionable Data 

Being able to see your market in real time means you can see if one building in a particular area is leasing at below-market rates before their Owner Rep realizes it and increases their price per square foot. You can also see if the market is about to start a downturn and make sure they don’t sign a long-term lease and wait for better options down the road.

Building a Competitive Advantage

Today, utilizing big data and the newest tech available will give you an advantage over your competition. Today’s market intelligence platforms allow us to make informed insights on current value, risks, and opportunity costs. But, as more and more CREs adapt their intelligence-gathering to focus on real-time data, the value will shift from grabbing market share to just keeping up.

What Role Will Big Data Play for Commercial Real Estate in 2018: Part 1

What Role Will Big Data Play for Commercial Real Estate in 2018: Part 2

6 Reasons Startups Should Purchase Commercial Property: Buying property comes with many advantages

Posted on: Tuesday, October 10th, 2017, under Commercial Real Estate, Real Estate Investing.

Bob Samii

If you’re a startup founder, raising capital and getting your business off the ground the first major hurdle. There are countless decisions that need to be made daily in order to bring your product or service to market. One decision that is often overlooked, at least until they are later stage startups, is whether to rent or buy your office space.

Most startups don’t think twice and jump immediately into the rental market. But there are some distinct benefits that buying commercial real estate offers and renters miss out on. The best way to make the decision is to decide what you can handle both short term and long term. Consider your individual real estate market and the stage of your business.

Here are six reasons that as a startup, you should opt to purchase your office space rather than rent it:


  1. You Get to Be the Landlord. Being your own landlord has its advantages. You don’t have to worry about your rent going up or lease agreements changing. Plus, you set all the rules. You can change the property however you see fit without having to ask for anyone’s permission. You can renovate the space or rent part of it out for additional cash flow. You can shape your space to fit your brand, your ideas, and your team.


  1. It Costs More to Rent. In some markets, the cost of rent exceeds the cost of purchasing property. You may be able to actually lengthen your runway by investing in your office space. That’s why we recommend that you carefully examine your individual market and weigh the pros and cons of buying versus renting. Look at the numbers from both a short-term as well as a long-term perspective. Buying property is almost always a better long-term investment and it may be better for your company in the short term as well. (ahem, you could save on moving costs down the road, too).


  1. You Can Focus on the Long-Term. There are two main reasons most startups go straight to renting: they don’t want to be distracted from their main mission and their investors didn’t fund them to get into real estate. So if you’re trying to grow users to get to your next funding round, it probably isn’t a good idea add any commercial real estate to your balance sheet. But, if you have the time and energy to take it on and are able to look 5+ years into the future, it starts to look like a good idea.  


  1. Cash Flow Isn’t a Problem. When you’re cash flow positive (or are growing quickly and can easily attract investors), there are distinct advantages to owning rather than renting. Buying property is a long-term investment that allows you to build equity, which you can use as collateral for future growth. Commercial real estate appreciates in value, so if you choose to sell in the future, you could potentially make a solid return on the property. And, if you invest in a larger property and can attract tenants, their monthly rental payments will be a nice, steady source of income.


  1. Tax Benefits Exist. Tax benefits are available to businesses that invest in commercial real estate. As a property owner, you can receive tax deductions for property taxes, mortgage interest, and other costs associated with purchasing and managing the property. And if your business grows too fast and you outgrow your space, you can use a 1031 exchange to upgrade your space without paying taxes on increased value.


As a startup, the decision to buy or rent office space is tougher than many think. We get it. But it’s important to know your options. You may just be surprised at how purchasing your office space could be more cost-effective and while contributing to your ongoing success.

4 Key Reasons to Buy Commercial Real Estate for Rental Purposes

Posted on: Monday, September 25th, 2017, under Commercial Real Estate, Real Estate Investing.

Bob Samii

Investing in commercial real estate has a plethora of attractive qualities. And, purchasing multi-unit properties that allow you to recruit tenants offer some of the best returns on investment around.

Of course, attracting the right tenant and negotiating leases can be challenging, but once that’s in the books, the doors are open to enjoying all the perks of your investment. The good news is most commercial tenants enter into long-term leases because they are looking for a reliable space in which to operate their business. This low tenant turnover rate, along with the steady stream of rental income, makes commercial properties a lucrative investment that you wouldn’t want to miss out on.

So, here are four reasons you should seriously consider buying commercial real estate for rental purposes:

Leases Are Long Term

We can’t stress this enough. Unlike residential leases, commercial contracts tend to be long term. Typically, businesses can enter into five year terms (some even double that).  Having a steady, long-term location is good for their business as well as yours. You have guaranteed rental income and time to build a trusting relationship with your tenant. Not to mention, banks look favorably on long-term leases if you ever plan to refinance or sell your property.

You Set the Standards

As an owner, you are able to negotiate any types of rent, deposits, or other collateral that you want with your tenants. Some leases may require a couple of months’ rent as a security deposit. You can also ask tenants to personally guarantee the space, which means that they will be held personally liable for any damage or unpaid rent caused by the business. Leases can also include what happens if the tenant terminates the agreement. So, you can be sure to protect yourself and get set-up a little bit better on the on-set of a new tenant.

Rent Provides Consistent Income

Having consistent tenants will ensure that you’ll receive a certain amount of income each month. This can help you achieve a significant return on the investment for the property. During lease negotiations, you can work out many different rental agreements with tenants.

Unlike residential properties, there are rarely any rental control regulations on commercial properties. However, landlords sometimes give new business a reduced rate in the beginning so that they can establish their business and get things ready to grow on their end. There is always an expectation is that the rent will increase over time. More established businesses are likely to pay more rent to ensure that they maintain their space – especially if they’ve created a brand awareness in the space you’ve provided. Added bonus? Tenants also often pay a portion of utilities and some maintenance costs.

Exclusivity Offers

As a landlord, you can offer exclusivity to your tenants. While this limits who you can rent to—for example, your exclusivity agreement may limit your building to one accounting firm—it also limits where the tenant can move to if they vacate your building. Essentially, it limits a tenant’s competition, which makes it an attractive feature for recruiting tenants. You want your tenants to have successful businesses, so it benefits everyone.

If you’re ready to take the plunge into commercial real estate – it’s definitely worth your while to dig in and consider purchasing a tenant-driven property. The benefits are endless, and it is a great opportunity to really get a high ROI.

Technology is Making Investing in Commercial Real Estate Easier

Posted on: Monday, September 11th, 2017, under Commercial Real Estate, Real Estate Investing, Technology.

Bob Samii

Commercial real estate investment has always been built on relationships. Traditionally, those relationships were built upon face-to-face interactions and lots of paperwork. Technology is changing that, making investing in commercial real estate all that much easier.

Technology increases organization, boosts efficiency, and helps people connect. Because technology is making investing more streamlined, new investors are empowered to enter the market. They can search for properties online, use online tools to research investment strategies, and even complete transactions online.

Investors can easily form relationships online, and the information that previously took weeks to collect and consider can now be created and examined within a few hours. These trends are helping to attract new commercial real estate investors:

More Data Is Available

The vast amount of data available can save time for commercial real estate brokers and allow them to provide property and market data to potential investors much more quickly. In the past, this data had only been available to professionals and insiders.

In addition, tech-driven investment platforms can help investors more easily find investments because data, insights, and trends are easily accessible and located in one spot. Investors can learn about properties and the market, and make smart decisions.

Details Are Easy to Access

Owners can create detailed online listings that provide potential investors with everything they need to know about properties, including history, location, tenants, and the local market. Technology better enables owners to tell their property’s story and discuss investment opportunities and philosophies.

Technology allows for a clear expression of value propositions and other essential details so that no surprises come up. Technology also enables investors to access information about their properties in real time and on demand.

New investors and a younger generation of investors are more drawn to CRE investing as information becomes more easily accessed online. With information and investment opportunities readily available, investors can build knowledge, and the flow of information and completion of transactions is easier than ever before.

Are You Ready to Be a Landlord? The high return on investment comes with many responsibilities

Posted on: Tuesday, August 8th, 2017, under Commercial Real Estate, Real Estate Investing.

Bob Samii

Purchasing an office building or other commercial real estate property is a lucrative investment. It’s an asset that appreciates in value, and having ongoing and steady tenants means a continuous cash flow.

Investing in a building with tenants means you’ll become a landlord, which comes with a wealth of benefits and challenges. Making a commercial real estate purchase is the first big step, but before you buy, make sure you’re ready to be a landlord. Here are some signs that you are.

You have the money (or can get the financing) to invest.

Sounds obvious, but do you have the money to invest in commercial property? Paying cash may be ideal in some situations, but there are also many financing options out there. One option is the CDC/504 Loan Program through the U.S. Small Business Administration.

504 loans specifically finance major assets, such as real estate. While there are several eligibility requirements, these loans are fixed rate, come with flexible terms, and are less expensive than other types of financing. A 504 loan is a great option for first-time commercial real estate investors.

You can find solid tenants.

When you own commercial real estate, tenants are your lifeblood. Having solid, long-term tenants will keep cash flowing, helping you pay back loans and adding to your bottom line. Finding such tenants can be challenging.

Advertising the property online is one of the best ways to attract tenants. You create a profile for your space (link to: https://www.realmassive.com/signup), include lots of appealing amenities, and take enticing photos to stir interest. You can share the listing on social media to attract even more interest.

You’re not dependent on the cash from rent.

While commercial real estate brings a nice return on investment, don’t rely on the rental income as your sole source of income (or even a large part of it). Chances are there will be times that you have vacant spaces—and, no matter how successful your tenants are, they might not always pay their rent on time. Not to mention that companies can go out of business.

You understand the responsibilities.

Being a landlord comes with many responsibilities. You will be responsible for maintaining the property, making any repairs and keeping it in a state that will attract tenants. You also have to insure the building and keep all certifications, like fire safety, up to date. Landlords are also responsible for creating lease agreements and sticking to the lease’s conditions.

If you’re ready for the responsibility that comes with being a commercial landlord, these tips will help you get started.

Buying Commercial Real Estate? Here are 3 Advantages to Property Management’s Involvement in the Due Diligence Process.

Posted on: Thursday, July 20th, 2017, under Commercial Real Estate, Guest Authors, Real Estate Investing, Thought Leadership.

Bob Samiiby Liz Berthelette, Director of Research NAI Hunneman. Liz is a seasoned CRE researcher with a penchant for maps, graphs & data; providing insights on the local Boston market and beyond.
Purchasing a commercial property can be challenging; sometimes requiring a significant amount of due diligence in a short period of time. During this truncated timeframe, the new buyers need to complete a detailed investigation of the property to determine whether or not they remain satisfied with the asset and all its systems before closing the transaction.

Buyers can easily be overwhelmed and get lost in the details. NAI Hunneman’s COO & Director of Property Management, Steve Prozinski, looks at three key advantages to enlisting the assistance of a property management team during the due diligence period in order to ensure all the details are covered.

Pharma R&D

    1. Create A Property Budget: With years of operating budget experience under our belt, our Property Management team is able to provide buyers with an unbiased budget based on expected asset performance. This has proved to be an invaluable tool as the buyer can review it against the proposed budget in the Offering Memorandum (OM).


    1. Thoroughly Review Leases: Our team performs an extensive analysis of all tenant leases; looking for any terms or options that could present a problem prior to closing the sale or upon assuming new ownership. We also review all leases and amendments to confirm the accuracy of information presented in the OM — ensuring the marketing materials represent reality. Finally,
      our team examines the effects of certain decisions, such as future operating costs vs. capital costs and how these decisions could impact the on-going escalations from the tenant.


  1. Examine Physical Conditions: Conducting an extensive review of a property’s physical conditions involves reviewing specific areas or building systems (i.e., HVAC or roof conditions) with third-party consultants and experts to help identify any hot button issues. Then our Property Management team creates a capital plan for the asset, which provides the buyer with detailed information on potential repairs required on the building.

Over the years, NAI Hunneman’s Property Management team has saved new owners millions of dollars by identifying discrepancies in property OM’s, as well as discovering capital items that need to be addressed prior to the close of sale.

Our team can act fast, especially within the tight time constraints of the due diligence process, and our clients have benefitted tremendously.

Steve Prozinski is NAI Hunneman’s Chief Operating Officer & Director of the Company’s Property Management Division, which oversees a portfolio in excess of 7 million square feet. For more information on our property management services visit our website.