Surviving Dual Agency                       (Next week. One-time only. Don't miss it!)

Wednesday, January 11 -- 8:30 - 10:00 a.m.

Speaker: Bill Hunter

Cost: $10 for SAR Members and REALTORS®/$15 All others

When a real estate broker represents more than one party in a transaction, the odds are good that the situation is one of dual agency.  What does the law require? How can one identify a situation of dual agency?

Additionally, real estate brokers are expected to be facilitators.  They find owners who want to sell or lease their properties, take listings and negotiate sales and leases. But they are also "fiduciaries" in that they are expected to serve as trusted advisors and advocates for their clients, even when the clients have conflicting interests.  How can a broker do that without incurring liability? What must the broker do to protect itself and its clients? How can a broker and its agents survive dual agency? Additional Information and Registration Form 

REGIONAL EVENTS

A Look Ahead at the Commercial Industry in 2012 -- Podcast

NAR Treasurer Bill Armstrong takes a look at the top three issues that are at stake for the industry in 2012 and highlights the latest commercial forecast for 2012. He also provides details on a commercial refinancing program that has recently been expanded. Duration: 5:53  Listen to Podcast
 

by Mark Anderson

California does have the right to dissolve its redevelopment agencies, the California Supreme Court ruled last week in San Francisco. The lawsuit brought by California's redevelopment agencies challenged the constitutionality of the state's plan to eliminate redevelopment agencies.

The court also ruled against a law that would have allowed redevelopment to continue if the agencies handed the state $1.7 million this fiscal year and $400 million in each of subsequent years.

The battle for redevelopment money has gone on for several years as California has been struggling to close wide budget gaps. The court said that the state had the authority to create redevelopment agencies, and it therefore had the right to dissolve them. Gov. Jerry Brown said in a statement that the ruling "validates a key component of the state budget and guarantees more than a billion dollars of ongoing funding for schools and public safety." (Sacramento Business Journal) CA Can Cut Redevelopment

by George Ratiu

The economy -- not to mention the commercial real estate sector -- is looking for some sparkle. While the third quarter brought some positive news to commercial real estate, economic concerns continue to hold back a robust commercial real estate recovery. Still, while commercial real estate markets have been relatively flat this year, improving fundamentals mean a more positive trend is expected in 2012.

Based on the Bureau of Economic Analysis's second estimate, gross domestic product (GDP) rose 2.0 percent in the third quarter. Mirroring the second quarter's patterns, all major components advanced, except government spending. The major driver of economic growth - consumer spending - remained steady growing 2.3 percent during the third quarter. Business investments provided a double-digit boost behind the economic advance. Business spending rose 14.8 percent during the quarter. Businesses have accelerated spending with each successive quarter during 2011.

Businesses upped their spending on equipment- transportation was up 31.7 percent while spending on industrial equipment rose 31.6 percent. Notably, spending on commercial real estate gained for the second consecutive quarter, advancing 12.6 percent.

International trade, which has proven resilient this year, continued to expand during the third quarter. With exports rising by 4.3 percent and imports growing by 0.5 percent, the balance of trade was positive. However, along with growth in trade, prices of exchanged goods also increased. Import prices, in particular, have been growing at double-digit rates for the better part of 2011, with September's prices 13.4 percent higher year-over-year. Export prices rose at a much slower pace, with September 2011 figures up 9.5 percent from the prior year.

On the employment front, there's still a lot of room for improvement. The number of payroll jobs rose by 368,000 during the quarter. Businesses cite general uncertainty, lack of demand and regulatory concerns as the main reason for modest hiring. Still, manufacturing, construction and mining maintained a steady pace of growth. Another positive sign: professional and business services posted a net 100,000 new jobs during the quarter. The other contributors to employment growth were the education and health sectors. (NAR)  Commercial Outlook

When Patricia Lynne, CCIM addressed a commercial audience at NAR's annual conference in 2011, she talked of a radically shifting office space marketplace. She saw the common cubicle-farm concept of office space rapidly falling out of favor with the youngest office workers. The millennial generation is used to high mobility, high connectivity and knowledge work, and the cube farms across the country just weren't set up with these things in mind.

Further, a wave of venture capital is crossing the country, funding startups in technology and related fields, trying to springboard the next Groupon or Amazon. The shared office model being second nature to the generation of workers that will power these startups means that the office real estate practitioner who ignores this new pattern of economic development is likely missing out on a big chunk of the future.

While the predictions suggest a growth in alternative office occupancy models, a look around the web confirms it. Indeed, shared office space, incubator-style arrangements idealized for startups and membership-based rental models are on the rise in primary and secondary markets. Traditional office building listings websites and services are generally a poor fit for this market, so let's take a look at some of its key sites that define the online marketplace in shared office space.

Craig's List - Due to its information simplicity, CL remains hospitable to the shared office listing alongside the listings for more traditional listings for buildings, floors, blocks and the like. Due to Craigslist's history and cultural positioning with the technology industry, it will probably always be a stop for the prospective technology startup on the hunt for affordable, flexible and appropriate digs.

SuiteMatch - Powered in part by Zillow listings, this site provides listings in over twenty major cities. Searches for spaces in Chicago came up with bupkus, so I got an impression of thin offerings, although listings did show up in markets highly identified with tech startups such as San Francisco. Just not as many as I expected. 

Regus - Using Google AdSense aggressively and an effective landing page strategy to market shared spaces and suites, Regus is a player in this market that displays full understanding of search marketing.

SharedBusinessSpace.com - This "national office sharing directory that solely focuses on unused space for rent that is available within an established business location" boasts"hundreds" of listings and focuses on 10 major markets. Kudos for being upfront about the amount of listings, but I wished I could find more.

ShareYourOffice.com - Neat design, map support and information-rich listings make this worth a look when considering a marketing plan for shared office space.

The top commercial real estate transactions in Sacramento of 2011

Includes both market-rate and distressed transactions by large investors. The buyers picked up top-of-the-line assets across all property types. View here

The biggest bankruptcies of 2011
2011 list of the top 10 bankruptcies for the federal eastern district of California, which includes Sacramento and much of northern California. View here

 

by Randyl Drummer

In a trend that may bode well for a broadening recovery in CRE markets, small business owners are feeling more optimistic -- or at least less pessimistic -- about sales, hiring and expansion prospects over the next three to six months, according to the latest national index from the National Federation of Independent Business (NFIB).

The NFIB Optimism Index rose 1.8% in November, with small business owners anticipating improved sales, hiring and capital spending amid a 'less negative' outlook for business conditions over the next three to six months.

Eight of the 10 index components improved or remained unchanged in this month's report, based on the responses of 781 randomly sampled small businesses in NFIB's membership surveyed throughout November.

While encouraged by the results, the advocacy group was careful not to portray the report as unrealistically sunny during a time of continued difficulty for many small businesses struggling in the tepid recovery.

"The numbers have been depressing for so long, any little progress looks good," said NFIB Chief Economist William Dunkelberg, who co-authored the monthly Small Business Economic Trends report with policy analyst Holly Wade. Dunkelberg noted that the November reading is still "eight huge points" below its pre-2008 average and 14 points below the comparable recovery period in 2001. (CoStar) Small Business Optimism

by Bob Shallit

Some community bankers are gearing up for increased activity on the commercial real estate (CRE) front in 2012. A recent Federal Reserve Board survey of senior loan officers found that more than 13 percent of respondents noticed stronger CRE demand in the fourth quarter, up from 1.8 percent a year earlier.

"Barring Europe imploding, we do generally expect the economy to continue to improve and the real estate market to continue to improve," says Ryan Severino, Senior Economist at Reis Inc., a commercial real estate research firm in New York. "If someone is thinking about ramping up their [CRE] lending process, now would not be a bad time to do it."

Umpqua Holdings recently reported that it is enhancing its CRE divisions in certain cities. Many of those cities have lost many local competitors when the real estate market collapsed, and survivors want to take advantage on a recovery.

"We think the markets are starting to, and will continue to, come back," says John Swanson, who is leading Umpqua's new commercial real estate division. "Now is the time to bring in some experienced CRE people. With the downturn and reduction in many CRE groups over the last two-to three-plus years, I've had an impressive list of candidates to choose from. (American Banker)

by Victor Calanog

by Elaine Misonzhnik

 
After generating strong momentum in the first half of 2011, the national office sector will experience slow growth in 2012. The financial crisis in Europe, coupled with government budget-cutting in the U.S., will put a damper on demand for new office space next year, except for the select markets that serve as homes to technology firms and energy companies.

By the end of 2011, the average office vacancy rate for the U.S. as a whole will stand at 16.8 percent, according to research by Grubb & Ellis, a national real estate services firm. Over the course of 2012 it will likely budge just 110 basis points, to 15.7 percent. What's more, average rents will continue to stagnate. Asking rents on class-A properties might rise 0.7 percent next year, while rents on class-B buildings will go up 0.2 percent, according to Robert Bach, senior vice president and chief economist with Grubb & Ellis.

"In some ways, it's the best case scenario. It's hard to fathom right now how what's going on in Europe is going to affect the financial markets and exports," Bach notes. "The U.S. economic indicators seem to be picking up, but at the same time, some of the global indicators are softening. Growth in the U.S. won't be robust if the rest of the world isn't participating, and that will carry over into leasing demand for commercial real estate." (NREIOnline) Energy Hubs Outperform

by Mark Heschmeyer

My daughter, D'Ella, gave me a three-story, mixed-used building for Christmas. I wasn't expecting it -- after all, she is only 11. In addition to a casino, the building houses a barber shop, photo studio, hat shop, coffee house and 10 residents of the Plainlake Apartments. The casino is a worry to me, though, but it brings in some good coin.

And D'Ella has proved to be a good manager. We've celebrated birthdays with some of the tenants and she has added five floors to the building in the past week - in fact, it has become a 'Tiny Tower.'

In case, you haven't figured it out by now, Tiny Tower is a free iPhone game. And judging from the loyal following the game is attracting, it's more fun to be a landlord today than ever. Even though Tiny Tower doesn't appear in the top smart phone game downloads charts, Apple last month named this addictive 8-bit-style game its iPhone Game of the Year.

Tiny Tower puts you in charge of a residential or business block of towers; you can build and furnish additional floors to attract "bitizens" (residents) and then manage their daily affairs. It's that interaction with the residents and their needs that make the game so popular.

When the game was introduced last summer by NimbleBit LLC, more than 1 million people downloaded the game and started playing in the first four days. By August, it had grown to 4.5 million players.

Judging by the throng of people playing and chatting about it online, the experience of being a landlord appears to closely match the real-life experience, with all the exhilaration and exhaustion that comes with the responsibility. (CoStar) Landlord Game

by Dees Stribling

The United States remains the number-one choice for cross-border (i.e. foreign) investors in commercial real estate, but its popularity has slipped somewhat, according to the 20th annual survey of members of the Association of Foreign Investors in Real Estate (AFIRE), which was conducted by the James A. Graaskamp Center for Real Estate of the Wisconsin School of Business and released as the New Year rung in. In the opinion of AFIRE members, the U.S. still offers the most secure option for real estate investment, but they also say that "improved property fundamentals" and the "repeal of FIRPTA"-the Foreign Investment in Real Property Tax Act of 1980-would spur further investments in U.S. real estate.

A clear majority of survey respondents, 60 percent, say they plan to increase their investment in U.S. real estate in 2012, but that number is down from a stronger majority of 72 percent who said the same thing at the beginning of 2011. Although the U.S. is still regarded as providing the best opportunity for capital appreciation, only 42.2 percent of the respondents placed the U.S. first for 2012, down from 64.7 percent last year. The runner-up country in capital appreciation potential was Brazil, with 18.6 percent of the respondents picking it as the best nation for capital appreciation.

Indeed, Brazil is a hotspot these days among CRE investors, along with its largest metro area, Sao Paulo. Only last year, Brazil was fourth place in capital appreciation, but now it has pushed China into third position. On the other hand, the euro-zone crisis has investors spooked about that part of the world. According to the AFIRE survey, with all European countries except Switzerland-and even Germany-falling in the estimation of CRE investors. (Multihousing News) U.S. Number One