Commercial real estate is a dynamic industry. Keep up with Spaces’ monthly recaps of the most valuable industry articles we’ve recently come across, focused on news in Ohio, Michigan and Pennsylvania.
The U.S. Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) announced proposed alterations to current lease accounting standards and disclosure requirements on May 16. The business of real estate leasing will be dramatically different – affecting businesses around the globe.
Newly released JLL research outlines the most prominent impacts on business, including (but not limited to):
- Decision-makers will have to compile new criteria when determining whether to buy or lease.
- Asset evaluations will be dependent on newly formed factors, like duration, borrowing rates and more.
- The management time needed for leasing will increase. Administrative roles will increase in regards to recording and reporting.
- Data collection will see exponential growth in the real estate industry.
- The CRE team will serve as the go-to source to oversee completion of new standards by company executives and treasury professionals.
But, the changes are not yet official.
The deadline to demonstrate opposition or show support for the updated exposure draft is Sept. 13, according to a recent article in CFO.
Satisfying all the players in the lease-accounting game is a tall order. Investors have clamored for years for more transparency in how corporations account for lease transactions, prodding companies to estimate the impact of leases on their financials. – Standard-Setters Near Leasing Finish Line, CFO
So how can your business prepare for these changes?
In order to help you prepare for the upcoming change, JLL compiled an insightful Preparedness Checklist, which outlines critical activities like team training and design processes. It is key to give the changes ongoing due diligence, delegate planning and preparation, activate implementation and rethink your current leasing strategies.
Download the full checklist.
Savvy Technologies Improve Real Estate Services
New technologies have (and still are) changing the way real estate brokers do business.
A recent article from National Real Estate Investor emphasized the importance of “sifting through the deluge of new tools” to find the ones that truly make an impact on client services. NREI pointed to virtual tours and 3D models as two effective uses of technology. Prospective tenants can view spaces from the comfort of their homes, speeding up the process while better serving customers.
As mentioned in the JLL Spaces April News Brief, real estate professionals are also growing a community on social channels, including Twitter, LinkedIn and Facebook. The commercial real estate industry is ever-evolving, and now it is adapting to the fast-paced, digital world.
Online Shopping Shakes Retail Sector Leasing Strategies
It’s no secret; shoppers are often abandoning the traditional in-store experience and frequenting their favorite brands online.
“Retail development is at historic lows,” according to a recent article from CCIM Institute. A big impact, noted by CCIM, is the new mix of tenants now seen in your average shopping center. A trending staple is restaurants (CCIM reported “42 percent of new retail units in 2013”).
But, brick and mortar are yet to be a thing of the past. In a recent National Real Estate Investor article, author Steve Jones, Managing Director of JLL’s PDS team, points out critical in-store advantages that cannot be experienced online. These include in-person interactions, new technologies, visual benefits and tactile benefits, as well as store design.
The good news is that not all consumers shop on price alone. According to a Deloitte survey, nearly a third of consumers want to see the actual product before purchasing it, which validates the role of the brick-and-mortar store. – Retailers Must Deliver on Customer Service and Experience to Compete with Online Merchants, National Real Estate Investor
News Wrap Up In Our Region
- Congratulations to JLL’s Joshua Gerth who was recognized by the Business Courier as a 40 Under 40 2012 Winner!
- SPA Inc. secured a 10-year lease in Milford at 401 Milford Parkway. The new facility (200,000 square feet) will expand current operations by 50,000 square feet.
- The second phase of the Flats East Bank development officially began in May. Cuyahoga County offered a $1.5 million dollar loan to support the $133 million dollar development.
- The maker of pepper spray, Mace Security International Inc., has secured a 10 year lease in Cleveland. The new office is located in Midtown.
- Isaac Brant Ledman & Teetor LLP and Wiles Boyle Burkholder & Bringardner Co.—both law firms—have formally merged and moved into their new office at Two Miranova Place.
- Honda of American Manufacturing Inc. announced that it will open a new assembly plant in Marysville. The chosen location is the neighboring building to another existing Honda plant.
- Time Equities Inc., a New York real estate firm, purchased Travelers Towers I and II. The Towers are located in Southfield at 26555 and 26533 Evergreen Road.
- Ralco Industries Inc. proposed construction of a $13.5 million dollar headquarters located in Auburn Hills. The new facility would span 125,000 square feet.
- The Penn Center West office complex acquired a new tenant, Swift Worldwide Resources. The new tenant will be located in Building 4.
- The Koppers Building, standing 34 stories tall, is now on the market. The 356,439 square foot building was built in 1929.
Newspaper image via NS Newsflash