Whether you own, lease, or are going to build a new warehouse, these 10 Tips will help boost your efficiencies in your loading dock operations.
1 - IMPROVE EMPLOYEE COMFORT
Install a dock door with ventilation screen panels, which let in light and fresh air. Also seal the dock to keep employees warm and dry during cold, wet weather.
2 - CREATE BIGGER DOCK OPENINGS
Make sure your dock door openings are tall and wide enough to service today's larger and wider trailers. Dock door openings should be 10' tall and 10' wide.
3 - LIGHTEN THINGS UP
Lighting the inside of the trailer will improve dock productivity. Try LED dock lights which save energy and provide better light quality than traditional incandescent bulbs.
4 - THINK PUSH-BUTTON LEVELERS
Mechanical levelers, which require manual operation should be replaced by hydraulic or air-powered levelers that operate at the push of a button speed efficiencies and reduce maintenance needs.
5 - SEPARATE PEDESTRIAN AND LIFT TRUCK TRAFFIC
Install industrial safety barriers to protect people from multiple safety risks, including forklift impacts. They also keep employees and visitors from entering the dock, where they can distract forklift operations and cause accidents.
6 - GET THE RIGHT SEQUENCE
Improper sequencing of controls can lead to equipment damage and inefficiencies. Dock workers should lock the trailer with the restraint first, then open the overhead door, and finally, lower the leveler into the open trailer for servicing.
7 - GUIDE THE TRUCK
Use trailer wheel guides to help drivers back up to the docks. Steel wheel guides anchored into the drive approach help drivers properly align trailers with the dock opening, and reflective guides on the wall below the dock bumpers indicate where to position the trailer. Less time spent aligning the trailer to the dock translates into more time spent loading/unloading the trailer.
8 - USE ADVANCED LIGHT COMMUNICATIONS SYSTEMS
Lights installed on the top corners of the dock doors tell the dock manager whether a trailer is being serviced by a lift truck or sitting idle. These indicators help the manager keep dock traffic flowing.
9 - INSTALL VERTICAL-STORING LEVELERS
Eliminate the need for truck drivers to get out of the cab, open the trailer doors, then fully back up the trailer to the dock doors. With vertical-storing levelers, the driver can simply back the trailer up to the door and let the dock attendant do the rest.
10 - MOVE BEYOND WHEEL CHOCKS
Wheel chocks prevent trailers from moving, but vehicle restraints are more effective. Wheel chocks take time to position and can create safety issues. Electro-mechanical vehicle restraints secure the trailer at the push of a button and hold it safely.
(Source: IL April 2010)
Wednesday, May 5, 2010
Sunday, November 15, 2009
Tenant Protection - Non-disturbance clause
One concept that has often gone unnoticed in leases is a non-disturbance clause or agreement. It benefits the tenant in case of a lender foreclosure on the property or premises they occupy. The agreement is between a tenant, a landlord, and a landlord's lender.
-The tenant agrees: His/her interests in the premises are subordinate to the lender's interests.
-The lender promises: If there is a default by the landlord on the mortgage, the lender will honor the terms of the lease and not disturb the tenant, so long as the tenant is not in default.
Should a lender foreclosure take place without this clause in place, the tenant would be at the mercy of the lender. The lender could demand new terms (i.e. higher lease rate, increased lease escalations, removing or altering lease extensions, etc).
Given our current environment, this clause is becoming an increasingly important protection for the tenant and one to ensure is in your current lease and future lease agreements.
-The tenant agrees: His/her interests in the premises are subordinate to the lender's interests.
-The lender promises: If there is a default by the landlord on the mortgage, the lender will honor the terms of the lease and not disturb the tenant, so long as the tenant is not in default.
Should a lender foreclosure take place without this clause in place, the tenant would be at the mercy of the lender. The lender could demand new terms (i.e. higher lease rate, increased lease escalations, removing or altering lease extensions, etc).
Given our current environment, this clause is becoming an increasingly important protection for the tenant and one to ensure is in your current lease and future lease agreements.
Wednesday, June 10, 2009
Common Acronyms/Terms for the Warehousing/Distributing Professionals
If you are dealing with Professionals engaged in the Warehousing/Distribution line of work, you may want to familiarize yourself with these common terms and acronyms. One of the basic rules of selling is being fluent in the languages that your clients speak, so I hope you will be able to add a few of these words to your vocabulary.
ABM - ACTIVITY BASED MANAGEMENT is the management of an enterprise based on the activities and processes in the organization and key performance measures of time, quality and cost for each activity and process.
ABC - ACTIVITY BASED COSTING is a technique to determine the resources required to produce a particular product or serve a particular set of customers. This should serve to determine which products or customers are profitable and also to improve a process.
AEI - AUTOMATIC EQUIPMENT IDENTIFICATION is the use of machine readable tags on transportation equipment such as railcars, containers and trucks in order to track location and usage.
AG/VS - AUTOMATED GUIDED VEHICLE SYSTEM is a system to control vehicles that transport loads directed along a wireless, logical guidepath, an embedded guidewire, or other tracking mechanism.
AI - ARTIFICIAL INTELLIGENCE is the concept that computers can be programmed to assume capabilities such as learning, reasoning, adaptation and self-correction.
ASN - ADVANCE SHIPMENT NOTICE consists of detailed information of the contents of a shipment which is transmitted and made available before the arrival of the merchandise.
AS/RS - AUTOMATED STORAGE/ RETRIEVAL SYSTEM is a combination of equipment and controls to handle, store, and retrieve materials with a high degree of automation.
BENCHMARKING - the use of specific measurements to compare your performance against industry’s best practices in order to establish operating targets and productivity programs which lead to superior performance.
BAR CODING is a system in which a label is “read” electronically and information is recorded or transmitted.
CAD - COMPUTER AIDED DESIGN is a type of software that is used for drafting and design.
CD - CROSS DOCKING is a technique in which incoming merchandise is broken down or moved “as is” to the shipping dock. This eliminates the need for storage.
CFM - CONTINUOUS FLOW MANUFACTURING is a strategy for eliminating wasted movement, unnecessary processes and extraneous data from manufacturing.
CFP - CUSTOMER FOCUSED PLANNING is the integration of information and utilization of assets with emphasis on meeting the needs of the customer.
CIP - CONTINUOUS IMPROVEMENT PROGRAM is a method of measuring quality, service levels, productivity and other criteria; improving products and services while maintaining or reducing costs; and demonstrating year-over-year plans for improvement and cost reduction of the services provided.
CIT - CONTINUOUS IMPROVEMENT TEAM is a cross-functional team established to ensure transfer of information to all areas, to review manufacturing cost-effectiveness, sourcing options, technical data flow and determine how to best satisfy customers.
CRP - CONTINUOUS REPLENISHMENT PLANNING involves transferring responsibility for retail warehouse replenishment from the retailer to management or suppliers.
CRT - CATHODE RAY TUBE is the visual output device used to display computer output. Preferred usage is monitor.
CTR - COMPUTERIZED TRUCK ROUTING is a method of using computers to generate truck routes based on stop locations, delivery appointments and backhauls to improve utilization.
CYCLE COUNTING A method of taking physical inventory in which only a few items are counted at a time but eventually all inventory is counted.
DOE - DESIGN OF EXPERIMENTS is a sophisticated quality improvement tool that measures the relative impact of several factors in a given process area. The impact of all factors in question is measured simultaneously, eliminating the need to conduct independent and extensive testing on each variable. DOE is generally used to isolate opportunities to refine a process or for process redesign once a set of problems within the process has been stabilized.
DSD - DIRECT TO STORE DELIVERY is a distribution methodology based upon having a supplier deliver to the retail outlet, without going through the retailer’s distribution center
ECR - EFFICIENT CONSUMER RESPONSE is the grocery industry’s acronym for QR (Quick Response) which promotes the development of a demand-driven grocery supply system in which partners work together to streamline business processes and provide maximum consumer value at minimum cost.
EDI - ELECTRONIC DATA INTERCHANGE is computerized paperless communication between two or more distinct entities.
ESFR - EARLY SUPPRESSION FAST RESPONSE is a sprinkler system that eliminates the need for in-rack sprinklers.
ESP - ENTERPRISE SYSTEMS PLAN is a blueprint for proactive long range planning, decision making, and orderly change.
HAZMAT - HAZARDOUS MATERIALS are raw materials and products that have been classified by regulatory agencies as dangerous, i.e. flammable, toxic, caustic, etc.
ILM - INTEGRATED LOGISTICS MANAGEMENT involves the coordinated management of logistics functions and collaboration of supply chain participants to reduce total system costs.
IS - INFORMATION SYSTEMS (same as MIS or MANAGEMENT INFORMATION SYSTEMS) is the data processing support used to provide information to business operations.
IT - INFORMATION TECHNOLOGY consists of data collection/storage, communications, and processing technologies.
JIT - JUST IN TIME is the technique of replenishing an operation (manufacturing, store, etc.) just before it is needed.
LAN - LOCAL AREA NETWORKS are a software and wiring system used to connect computers and peripheral devices in order to share information and resources.
LIS - LOGISTICS INFORMATION SYSTEMS provide information about the distribution and transportation activities in a company.
MIS - MANAGEMENT INFORMATION SERVICES (See IS).
MRP II - MANUFACTURING RESOURCES PLANNING is the computer based method for planning the use of a company’s resources, including raw materials, vendors, production equipment, and processes.
OUTSOURCING is the practice of using a third party provider to perform functions formerly done in-house.
PARADIGM A model, example or pattern.
PARTNERING is a type of strategic alliance which is formed to serve a specific need.
PDT - PORTABLE DATA TERMINALS are devices used to gather operating information. They communicate with the host computer by RF signals or by batch downloads at a central site.
POS - POINT OF SALE captures information as the sale is made and the data is distributed to sales, inventory, and financial management systems.
PI - PROCESS INNOVATION (OR REENGINEERING OR REDESIGN) (See REENGINEERING)
QR - QUICK RESPONSE is the concept of replenishing goods quickly.
RF - RADIO FREQUENCY is used to link computer peripherals without using wires, thereby permitting mobility.
RFT - RADIO FREQUENCY TERMINAL A terminal which communicates with a host computer by radio instead of by wire.
REENGINEERING is the process of making revolutionary changes in performance. It might be on the order of 50% to 100% improvement rather than objectives of 5% to 10% in incremental process improvement. (Also called PI - PROCESS INNOVATION).
RFDC - RADIO FREQUENCY DATA COMMUNICATION is the same as RF COMMUNICATIONS.
SCM - SUPPLY CHAIN MANAGEMENT is an integrating process to optimize product and information flow from the purchase of raw materials to the delivery of finished product.
SIX SIGMA is a statistical term defining standards with only 3.4 errors or defects per million measurable units of product or service.
SQC - STATISTICAL QUALITY CONTROL is a tool that sheds light on process variation by predicting trends.
TCA - TOTAL COST ANALYSIS is a measure of logistics performance to achieve customer service objectives.
TCO - TOTAL COST OWNERSHIP is a technique to develop the true cost of doing business with a particular supplier for a particular good or service.
THIRD PARTY also known as outsourcing, is the use of non-employee resources for specific activities or services.
THIRD PARTY CONTRACTORS provide services for customers which may include warehousing, transportation, customer service, manipulation of merchandise and any other requirements that a customer wants.
TQM - TOTAL QUALITY MANAGEMENT is the concept of continuous process improvement to develop processes that are controlled and result in predictable quality products.
UPC - UNIVERSAL PRODUCT CODE is a standard bar code symbology used in retail businesses, particularly in the grocery industry.
UCC 128 is a standard bar code symbology.
VE - VALUE ENGINEERING is a total approach to design that achieves improved performance and quality by stressing simplicity and integration of design and manufacturing techniques.
VR - VIRTUAL REALITY is the use of computers to generate interactive simulations.
VR - VOICE RECOGNITION is a system whereby speech is decoded, captured and interacts with a computer.
WCS - WAREHOUSE CONTROL SYSTEMS are programs designed to control warehouse operations, labor, inventory and equipment.
ABM - ACTIVITY BASED MANAGEMENT is the management of an enterprise based on the activities and processes in the organization and key performance measures of time, quality and cost for each activity and process.
ABC - ACTIVITY BASED COSTING is a technique to determine the resources required to produce a particular product or serve a particular set of customers. This should serve to determine which products or customers are profitable and also to improve a process.
AEI - AUTOMATIC EQUIPMENT IDENTIFICATION is the use of machine readable tags on transportation equipment such as railcars, containers and trucks in order to track location and usage.
AG/VS - AUTOMATED GUIDED VEHICLE SYSTEM is a system to control vehicles that transport loads directed along a wireless, logical guidepath, an embedded guidewire, or other tracking mechanism.
AI - ARTIFICIAL INTELLIGENCE is the concept that computers can be programmed to assume capabilities such as learning, reasoning, adaptation and self-correction.
ASN - ADVANCE SHIPMENT NOTICE consists of detailed information of the contents of a shipment which is transmitted and made available before the arrival of the merchandise.
AS/RS - AUTOMATED STORAGE/ RETRIEVAL SYSTEM is a combination of equipment and controls to handle, store, and retrieve materials with a high degree of automation.
BENCHMARKING - the use of specific measurements to compare your performance against industry’s best practices in order to establish operating targets and productivity programs which lead to superior performance.
BAR CODING is a system in which a label is “read” electronically and information is recorded or transmitted.
CAD - COMPUTER AIDED DESIGN is a type of software that is used for drafting and design.
CD - CROSS DOCKING is a technique in which incoming merchandise is broken down or moved “as is” to the shipping dock. This eliminates the need for storage.
CFM - CONTINUOUS FLOW MANUFACTURING is a strategy for eliminating wasted movement, unnecessary processes and extraneous data from manufacturing.
CFP - CUSTOMER FOCUSED PLANNING is the integration of information and utilization of assets with emphasis on meeting the needs of the customer.
CIP - CONTINUOUS IMPROVEMENT PROGRAM is a method of measuring quality, service levels, productivity and other criteria; improving products and services while maintaining or reducing costs; and demonstrating year-over-year plans for improvement and cost reduction of the services provided.
CIT - CONTINUOUS IMPROVEMENT TEAM is a cross-functional team established to ensure transfer of information to all areas, to review manufacturing cost-effectiveness, sourcing options, technical data flow and determine how to best satisfy customers.
CRP - CONTINUOUS REPLENISHMENT PLANNING involves transferring responsibility for retail warehouse replenishment from the retailer to management or suppliers.
CRT - CATHODE RAY TUBE is the visual output device used to display computer output. Preferred usage is monitor.
CTR - COMPUTERIZED TRUCK ROUTING is a method of using computers to generate truck routes based on stop locations, delivery appointments and backhauls to improve utilization.
CYCLE COUNTING A method of taking physical inventory in which only a few items are counted at a time but eventually all inventory is counted.
DOE - DESIGN OF EXPERIMENTS is a sophisticated quality improvement tool that measures the relative impact of several factors in a given process area. The impact of all factors in question is measured simultaneously, eliminating the need to conduct independent and extensive testing on each variable. DOE is generally used to isolate opportunities to refine a process or for process redesign once a set of problems within the process has been stabilized.
DSD - DIRECT TO STORE DELIVERY is a distribution methodology based upon having a supplier deliver to the retail outlet, without going through the retailer’s distribution center
ECR - EFFICIENT CONSUMER RESPONSE is the grocery industry’s acronym for QR (Quick Response) which promotes the development of a demand-driven grocery supply system in which partners work together to streamline business processes and provide maximum consumer value at minimum cost.
EDI - ELECTRONIC DATA INTERCHANGE is computerized paperless communication between two or more distinct entities.
ESFR - EARLY SUPPRESSION FAST RESPONSE is a sprinkler system that eliminates the need for in-rack sprinklers.
ESP - ENTERPRISE SYSTEMS PLAN is a blueprint for proactive long range planning, decision making, and orderly change.
HAZMAT - HAZARDOUS MATERIALS are raw materials and products that have been classified by regulatory agencies as dangerous, i.e. flammable, toxic, caustic, etc.
ILM - INTEGRATED LOGISTICS MANAGEMENT involves the coordinated management of logistics functions and collaboration of supply chain participants to reduce total system costs.
IS - INFORMATION SYSTEMS (same as MIS or MANAGEMENT INFORMATION SYSTEMS) is the data processing support used to provide information to business operations.
IT - INFORMATION TECHNOLOGY consists of data collection/storage, communications, and processing technologies.
JIT - JUST IN TIME is the technique of replenishing an operation (manufacturing, store, etc.) just before it is needed.
LAN - LOCAL AREA NETWORKS are a software and wiring system used to connect computers and peripheral devices in order to share information and resources.
LIS - LOGISTICS INFORMATION SYSTEMS provide information about the distribution and transportation activities in a company.
MIS - MANAGEMENT INFORMATION SERVICES (See IS).
MRP II - MANUFACTURING RESOURCES PLANNING is the computer based method for planning the use of a company’s resources, including raw materials, vendors, production equipment, and processes.
OUTSOURCING is the practice of using a third party provider to perform functions formerly done in-house.
PARADIGM A model, example or pattern.
PARTNERING is a type of strategic alliance which is formed to serve a specific need.
PDT - PORTABLE DATA TERMINALS are devices used to gather operating information. They communicate with the host computer by RF signals or by batch downloads at a central site.
POS - POINT OF SALE captures information as the sale is made and the data is distributed to sales, inventory, and financial management systems.
PI - PROCESS INNOVATION (OR REENGINEERING OR REDESIGN) (See REENGINEERING)
QR - QUICK RESPONSE is the concept of replenishing goods quickly.
RF - RADIO FREQUENCY is used to link computer peripherals without using wires, thereby permitting mobility.
RFT - RADIO FREQUENCY TERMINAL A terminal which communicates with a host computer by radio instead of by wire.
REENGINEERING is the process of making revolutionary changes in performance. It might be on the order of 50% to 100% improvement rather than objectives of 5% to 10% in incremental process improvement. (Also called PI - PROCESS INNOVATION).
RFDC - RADIO FREQUENCY DATA COMMUNICATION is the same as RF COMMUNICATIONS.
SCM - SUPPLY CHAIN MANAGEMENT is an integrating process to optimize product and information flow from the purchase of raw materials to the delivery of finished product.
SIX SIGMA is a statistical term defining standards with only 3.4 errors or defects per million measurable units of product or service.
SQC - STATISTICAL QUALITY CONTROL is a tool that sheds light on process variation by predicting trends.
TCA - TOTAL COST ANALYSIS is a measure of logistics performance to achieve customer service objectives.
TCO - TOTAL COST OWNERSHIP is a technique to develop the true cost of doing business with a particular supplier for a particular good or service.
THIRD PARTY also known as outsourcing, is the use of non-employee resources for specific activities or services.
THIRD PARTY CONTRACTORS provide services for customers which may include warehousing, transportation, customer service, manipulation of merchandise and any other requirements that a customer wants.
TQM - TOTAL QUALITY MANAGEMENT is the concept of continuous process improvement to develop processes that are controlled and result in predictable quality products.
UPC - UNIVERSAL PRODUCT CODE is a standard bar code symbology used in retail businesses, particularly in the grocery industry.
UCC 128 is a standard bar code symbology.
VE - VALUE ENGINEERING is a total approach to design that achieves improved performance and quality by stressing simplicity and integration of design and manufacturing techniques.
VR - VIRTUAL REALITY is the use of computers to generate interactive simulations.
VR - VOICE RECOGNITION is a system whereby speech is decoded, captured and interacts with a computer.
WCS - WAREHOUSE CONTROL SYSTEMS are programs designed to control warehouse operations, labor, inventory and equipment.
Friday, June 5, 2009
Updated Rental Survey - Industrial Lease Rates for Salt Lake County
I have completed my latest rental survey for Industrial Lease Rates in Salt Lake County. 
I have broken it up by region and am showing how many availables are on the market in each of the six quadrants, at what rate, and in what size range. This will give the prospective tenant or landlord a quick view at what to expect as far as what lease rates are doing out there right now. For example, say I am a tenant in the SouthWest quadrant and I would like to relocate my business up to the NorthWest quadrant. I will need 15,000 SF when I move up there, so looking at the rental survey page here, I know that the average lease rate in that area at that size is $0.54 NNN. (All lease rates on the chart have been modified to reflect NNN lease rates).
I have also included a chart from excel that illustrates the current average lease rates in the county based on size range. So if you need 45,000 SF, you can look at this graph and see that you will find, on average, the lowest lease rates in the Central East quadrant.
Please email me at jhagblom@naiutah.com for a clean .pdf version of the report.
Sunday, May 31, 2009
New Land Listing
On Friday, May 29th, I picked up a new land listing for my team. I had been asked to contact a land owner by my partner Patrick a few weeks ago. The land listing had been on the market for sale and lease for about 9 months with one of our competing brokerages. The listing had expired and I contacted the land owner and got to talking about how my team had closed several land deals in the area and had a buyer currently looking for about 4-5 acres for a build to suit project. The land owner has 4.15 acres and my team thought it would be a great play for our client. Sure enough, there was interest there and within three days we were able to get in an offer to the land owner. On Friday I sat down with the land owner and got the listing agreement signed as well as the counter offer. Thanks to being part of a great team, we were able to pull this all together. Our new land listing is shown below. We are taking it to market at $4.50 psf for 4.15 acres and still looking for offers! Contact me at jhagblom@naiutah.com
Friday, February 13, 2009
Useful Discovery - Free Public Records Directory
I stumbled upon this useful website today while working with NAI's Corporate Services on a project for Flying J. The website is Public Records Free Directory and was extremely useful. My project involved gathering data on 50-odd Flying J properties. I needed to know total acreage, parcel numbers, and true-market value. By going to the Public Records Free Directory site and selecting the State and then the County, I was able to find a phone number to the Assessor's Office in each county. Once I had the number I gave them a call and asked for the information I needed on each Flying J property. All the Assessor's Office needed from me was a simple address and they were able to give me all the information I needed!
Also, almost every Assessor's Office had their own website (linked through the Public Records Free Directory website) where I was able to pull up some kind of map/parcel viewer and get some great aerial views of the properties.
If you are doing any kind of work for a national company, this is a great resource.
Also, almost every Assessor's Office had their own website (linked through the Public Records Free Directory website) where I was able to pull up some kind of map/parcel viewer and get some great aerial views of the properties.
If you are doing any kind of work for a national company, this is a great resource.
Tuesday, January 20, 2009
Available Commercial Real Estate - January 2009
The Data Department at NAI Utah has the best commercial real estate data in the state. On a daily basis a team of people are tracking the latest comps and availables to hit the market. From a variety of sources they pull the data and make it available to the NAI agents. Here is a spreadsheet I have put together that summarizes the availability currently on the market.
I am very impressed by these numbers. This means, that as an agent, I have at my fingertips over 2,700 available properties to show clients. Since I specialize in Industrial Real Estate, there are over 650 available properties I have detailed information on! It is no surprise that utilizing my services as a broker an be very beneficial for tenants, owner/users, and investors alike. Knowledge is definately power and being part of NAI Utah is what makes me such a powerful broker. If you are in the market for space, please don't hesitate to give me a call at 801-578-5555.
Wednesday, December 3, 2008
Tough Times for Brokers
Here is the latest news:
1. The stock market had the 3rd worst one day drop in the history of the market- proceeded by 911 and an early day this October
2. IHC (intermountain health care) announced they are suspending any 401 k match for all employees
3. CB Richard Ellis is letting go over 1000 employees and that their stock is down from over $40 per share to under $6.00. Additionally, they have eliminated the service credit of $40,000 that they had previously made available to producers of $400k per year.
4. Jones Lange Lassalle stock is similar to CB and same with the cuts.
5. Coldwell Banker Parent company Realogy, lost over $20 million in the 3rd quarter – almost $200 million for the year – with debt climbing to $3.2 billion from $3.1 billion. Additionally, they increased their splits by 3% across the board last January.
6. Cushman Commerce CRG has cut all extra company events including their top producer trip.
7. Many top producers had deals-big deals they were counting on- go sideways that were not recoverable – they were dead.
The top four commercial brokerages are all making drastic changes. Their basic theme in the past was to grow, build, and expand. At the beginning of this year, that slowly changed to a theme of embracing change. Today, the basic theme has become "Survive". We all need to go back to the fundamentals and make changes in our personal lives now in order to weather out the storm.
1. The stock market had the 3rd worst one day drop in the history of the market- proceeded by 911 and an early day this October
2. IHC (intermountain health care) announced they are suspending any 401 k match for all employees
3. CB Richard Ellis is letting go over 1000 employees and that their stock is down from over $40 per share to under $6.00. Additionally, they have eliminated the service credit of $40,000 that they had previously made available to producers of $400k per year.
4. Jones Lange Lassalle stock is similar to CB and same with the cuts.
5. Coldwell Banker Parent company Realogy, lost over $20 million in the 3rd quarter – almost $200 million for the year – with debt climbing to $3.2 billion from $3.1 billion. Additionally, they increased their splits by 3% across the board last January.
6. Cushman Commerce CRG has cut all extra company events including their top producer trip.
7. Many top producers had deals-big deals they were counting on- go sideways that were not recoverable – they were dead.
The top four commercial brokerages are all making drastic changes. Their basic theme in the past was to grow, build, and expand. At the beginning of this year, that slowly changed to a theme of embracing change. Today, the basic theme has become "Survive". We all need to go back to the fundamentals and make changes in our personal lives now in order to weather out the storm.
Saturday, November 22, 2008
Market Share
I thought it would be interesting to show the YTD state-wide market share of the top four Commercial Brokerages here in Utah.
Overall YTD $ Volume of All Transactions
Saturday, November 15, 2008
Class A, Class B, and Class C - A Guide to Classifications of Office Buildings
When considering office space, tenants will find that office buildings are generally classified as being either a Class A, Class B, or a Class C building. The difference between each of these classifications varies by market and class B and C buildings are generally classified relative to Class A buildings. Building classifications are used to differentiate buildings and help the reporting of market data in a manner that differentiates between building types. That said, there is no definitive formula for classifying a building, but in the general characteristics of each are as follows:
Class A
These buildings represent the highest quality buildings in their market. They are generally the best looking buildings with the best construction, and possess high quality building infrastructure. Class A buildings also are well-located, have good access, and are professionally managed. As a result of this, they attract the highest quality tenants and also command the highest rents.
Class B
This is the next notch down. Class B buildings are generally a little older, but still have good quality management and tenants. Often times, value-added investors target these buildings as investments since well-located Class B buildings can be returned to their Class A glory through renovation such as facade and common area improvements. Class B buildings should generally not be functionally obsolete and should be well maintained.
Class C
The lowest classification of office building and space is Class C. These are older buildings (usually more than 20), and are located in less desirable areas and are in need of extensive renovation. Architecturally, these buildings are the least desirable and building infrastructure and technology is out-dated. As a result, Class C buildings have the lowest rental rates, take the longest time to lease, and are often targeted as re-development opportunities.
The above is just a general guideline of building classifications. No formal international standard exists for classifying a building, but one of the most important things to consider about building classifications is that buildings should be viewed in context and relative to other buildings within the sub-market; a Class A building in one market may not be a Class A building in another.
There is no international standard for classifying office buildings. In fact, BOMA is generally against the publication of a classification rating for individual properties. Were there a more scientific method for classifying buildings though, some of the building characteristics which could be used to compare and rank buildings would be as follows:
-HVAC Capacity
-Elevator quantity and speed
-Backup Power
-Security and life safety infrastructure
-Ceiling heights
-Floor load capacity
-Location
-Access (freeway, public transportation)
-Parking
-Construction, Common Area Improvements
-Nearby and/or on-site amenities (dry cleaning, restaurants, ATM, etc.)
Class A
These buildings represent the highest quality buildings in their market. They are generally the best looking buildings with the best construction, and possess high quality building infrastructure. Class A buildings also are well-located, have good access, and are professionally managed. As a result of this, they attract the highest quality tenants and also command the highest rents.
Class B
This is the next notch down. Class B buildings are generally a little older, but still have good quality management and tenants. Often times, value-added investors target these buildings as investments since well-located Class B buildings can be returned to their Class A glory through renovation such as facade and common area improvements. Class B buildings should generally not be functionally obsolete and should be well maintained.
Class C
The lowest classification of office building and space is Class C. These are older buildings (usually more than 20), and are located in less desirable areas and are in need of extensive renovation. Architecturally, these buildings are the least desirable and building infrastructure and technology is out-dated. As a result, Class C buildings have the lowest rental rates, take the longest time to lease, and are often targeted as re-development opportunities.
The above is just a general guideline of building classifications. No formal international standard exists for classifying a building, but one of the most important things to consider about building classifications is that buildings should be viewed in context and relative to other buildings within the sub-market; a Class A building in one market may not be a Class A building in another.
There is no international standard for classifying office buildings. In fact, BOMA is generally against the publication of a classification rating for individual properties. Were there a more scientific method for classifying buildings though, some of the building characteristics which could be used to compare and rank buildings would be as follows:
-HVAC Capacity
-Elevator quantity and speed
-Backup Power
-Security and life safety infrastructure
-Ceiling heights
-Floor load capacity
-Location
-Access (freeway, public transportation)
-Parking
-Construction, Common Area Improvements
-Nearby and/or on-site amenities (dry cleaning, restaurants, ATM, etc.)
Friday, November 14, 2008
50 Commercial Real Estate Definitions You Should Know
1. Appraisal
A written report by a state-licensed professional that includes an unbiased analysis of the property's value and the reasoning that led to that opinion. An appraisal report is required for any property sale.
2. Assignee
Individual to whom a contract is assigned.
3. Assignor
An individual who transfers a contract to another individual.
4. Broker
An agent who brings together a buyer and a seller, or a landlord and a tenant, in a real estate transaction. All brokers must be licensed by the state in which they work. Most work on commission, and the landlord or seller usually pays the fee.
5. Build Out
The construction or improvements of the interior of a space, including flooring,walls, finished plumbing, electrical work, etc.
6. Build-to-suit
A method of leasing property in which the landlord makes improvements to a space based on the tenant's specifications. The cost of construction is generally factored into the lease terms. Most build-to-suit provisions apply to long-term (10-year) leases.
7. Cancellation Clause
A provision in a contract (e.g., lease) that confers the ability of one in the lease to terminate the party's obligations. The grounds and ability to cancel are usually specified in the lease.
8. Capital Improvement
Any major physical development or redevelopment to a property that extends the life of the property. Examples include upgrading the elevators, replacement of the roof, and renovations of the lobby.
9. Certificate of Occupancy (CO)
The government issues this official form, which states that the building is legally ready to be occupied.
10. Common Area Maintenance (CAM)
This is the amount of additional rent charged to the tenant, in addition to the base rent, to maintain the common areas of the property shared by the tenants and from which all tenants benefit. Examples include: snow removal, outdoor lighting, parking lot sweeping, insurance, property taxes, etc. Most often, this does not include any capital improvements that are made to the property.
11. Concessions
Benefits or discounts given by the seller or landlord of a property to help close a sale or lease. Common concessions include absorption of moving expenses, space remodeling, or upgrades (also called "build-outs"), and reduced rent for the initial term of the lease.
12. Contiguous
Touching at some point or along a boundary (most often seen with two or more suites).
13. Contingency
A requirement in a contract that must occur before that contract can be finalized.
14. Deed Restriction
An imposed restriction in a deed that limits the use of the property. For example, a restriction could prohibit the sale of alcoholic beverages.
15. Delivery
Transfer something from one entity to another.
16. Escalation clause
A clause in a lease that allows the landlord to increase rent in the future. Rent increases dictated under an escalation clause may be charged in various ways, including:
• A fixed increase over a definite period (usually 3% annually)
• A cost-of-living increase tied to a government index, such as the tax rate
• An increase directly related to increases in operating the property
17. Exclusive Agency
An agreement in which one broker has exclusive rights to represent the owner or tenant. If another broker is used, both the original and actual broker are entitled to leasing commissions.
18. Fiduciary
A person who represents another on financial/property matters.
19. Fixtures
Personal property so attached the land or building (e.g., improvements) it is considered part of the real property.
20. Grace Period
Additional time allowed to complete an action (e.g., make a payment) before a default or violation occurs.
21. Gross Lease
A lease of property whereby the landlord (i.e., lessor) pays for all property charges usually included in ownership. These charges can include utilities, taxes, and maintenance, among others.
22. Holdover Tenant
A tenant who remains in possession of leased property after the lease term expiration.
23. HVAC
An acronym for "heating-ventilation-air-conditioning" system. In a commercial building, the landlord generally is responsible for maintaining the HVAC.
24. Joint Tenancy
Ownership of real property by two or more individuals, each of whom has an undivided interest with the right of survivorship.
25. Judgement
A formal decision issued by a court relating to the specific claims and rights of the parties to an act or suit.
26. Lease
An agreement by which the owner of a property (the "lessor") grants the right of possession to a tenant (the "lessee") for a specific period of time (the "term") for a predetermined amount of money (the "rent"). A "leasehold estate" is the space occupied by the tenant. Common types of leases include:
• A straight, or flat, lease, which stipulates that the same periodic payment (usually monthly) be made for the entire term of the lease.
• A percentage lease, which uses a percentage of the net or gross sales to determine the monthly rent. This is most often used in retail properties and with a minimum base rent.
• A net lease, which requires the tenant to pay maintenance, taxes, insurance and so on, along with a fixed rent. This is also called "net-net-net" or "triple net."
LeaseholdThe estate or interest a tenant has as stated in the tenant's lease.
27. Lessee
An individual (i.e., tenant) to whom property is rented under a lease.
28. Lessor
An individual (i.e. landlord) who rents property to a tenant via a lease.
29. Letter of Intent
An informal, usually non-binding, agreement among parties indicating their serious desire to move forward with negotiations.
30. Lien
A legal claim filed against a property for payment of a debt or obligation. If a property owner fails to pay a creditor, for example, the creditor can place a lien on the property. A lien can halt the sale of a property.
31. Listing
An employment contract between principal and agent that authorizes the agent (such as a broker) to perform services for the principal and his property.
32. Loss Factor
What percentage of the gross area of a space is lost due to walls, elevator, etc. Rule of thumb in Manhattan is approximately 15%.
33. Market Price
The actual selling or leasing price of a property.
34. Market Value
The expected price that a property should bring if exposed for lease in the open market for a reasonable period of time and with market savvy landlords and tenants.
35. Net Lease
Also called triple net lease (NNN). The lessee pays not only a fixed rental charge but also expenses on the rented property, including maintenance.
36. Non-Disturbance Agreement
The tenant signs this to prevent himself from being evicted if the property owner does not pay its mortgage to the bank.
37. Open Listing
A listing given to any broker without liability to compensate any broker except the one who first secures a buyer who is ready, willing, and able to meet the terms of the listing, or secures the acceptance by the landlord of a satisfactory offer; the lease of the property automatically terminates the listing.
38. Option
A right given to purchase or lease a property upon specified terms within a specified time. If the right is not exercised, the option holder is not subject to liability for damages. If the holder of the option exercises it, the grantor of option must perform the option's requirements.
39. Percentage Lease
A lease of property in which the rent is based upon the percentage of the sales volume made on the specific premises. There is usually a clause for a minimum rent as well.
40. Principal
The employer (e.g., landlord) of an agent or broker. This is the agent's or broker's client.
41. Revocation
An act of rescinding power previously authorized.
42. Sale-leaseback
A transaction in which an owner sells a property to an investor, who then leases the property back to the original owner under prearranged terms. Sale-leaseback deals offer the original owner freed-up capital and tax breaks and the investor a guaranteed return and appreciation.
43. Sublease
A lease given by a tenant for some or all of a rented property. For example, if a tenant rents 20,000 square feet but only ends up needing 10,000 square feet, they may want to sublet the extra space for some or all of the remaining term of the lease, providing they continue to occupy and pay rent for the property.
44. Tenant Improvements (T.I.’s)
Work done on the interior of a space, can be paid for by landlord, tenant, or some combination of both, depending on the terms of the lease.
45. Tie-in Arrangement
A contract where one transaction depends upon another transaction.
46. Triple Net Lease (NNN)
A lease requiring tenants to pay all utilities, insurance, taxes, and maintenance costs.
47. Variance
Government authorization to use or develop a property in a manner which is not permitted by the applicable zoning regulations.
48. Work Letter
An amount of money that a landlord agrees to spend on the construction of the interior of a space per the lease, usually negotiated.
49. Zone
An area, delineated by a governmental authority, which is authorized for and limited to specific uses.
50. Zoning Ordinance
A law by a local governmental authority (e.g., city or county) that sets the parameters for which the property may be put to use.
A written report by a state-licensed professional that includes an unbiased analysis of the property's value and the reasoning that led to that opinion. An appraisal report is required for any property sale.
2. Assignee
Individual to whom a contract is assigned.
3. Assignor
An individual who transfers a contract to another individual.
4. Broker
An agent who brings together a buyer and a seller, or a landlord and a tenant, in a real estate transaction. All brokers must be licensed by the state in which they work. Most work on commission, and the landlord or seller usually pays the fee.
5. Build Out
The construction or improvements of the interior of a space, including flooring,walls, finished plumbing, electrical work, etc.
6. Build-to-suit
A method of leasing property in which the landlord makes improvements to a space based on the tenant's specifications. The cost of construction is generally factored into the lease terms. Most build-to-suit provisions apply to long-term (10-year) leases.
7. Cancellation Clause
A provision in a contract (e.g., lease) that confers the ability of one in the lease to terminate the party's obligations. The grounds and ability to cancel are usually specified in the lease.
8. Capital Improvement
Any major physical development or redevelopment to a property that extends the life of the property. Examples include upgrading the elevators, replacement of the roof, and renovations of the lobby.
9. Certificate of Occupancy (CO)
The government issues this official form, which states that the building is legally ready to be occupied.
10. Common Area Maintenance (CAM)
This is the amount of additional rent charged to the tenant, in addition to the base rent, to maintain the common areas of the property shared by the tenants and from which all tenants benefit. Examples include: snow removal, outdoor lighting, parking lot sweeping, insurance, property taxes, etc. Most often, this does not include any capital improvements that are made to the property.
11. Concessions
Benefits or discounts given by the seller or landlord of a property to help close a sale or lease. Common concessions include absorption of moving expenses, space remodeling, or upgrades (also called "build-outs"), and reduced rent for the initial term of the lease.
12. Contiguous
Touching at some point or along a boundary (most often seen with two or more suites).
13. Contingency
A requirement in a contract that must occur before that contract can be finalized.
14. Deed Restriction
An imposed restriction in a deed that limits the use of the property. For example, a restriction could prohibit the sale of alcoholic beverages.
15. Delivery
Transfer something from one entity to another.
16. Escalation clause
A clause in a lease that allows the landlord to increase rent in the future. Rent increases dictated under an escalation clause may be charged in various ways, including:
• A fixed increase over a definite period (usually 3% annually)
• A cost-of-living increase tied to a government index, such as the tax rate
• An increase directly related to increases in operating the property
17. Exclusive Agency
An agreement in which one broker has exclusive rights to represent the owner or tenant. If another broker is used, both the original and actual broker are entitled to leasing commissions.
18. Fiduciary
A person who represents another on financial/property matters.
19. Fixtures
Personal property so attached the land or building (e.g., improvements) it is considered part of the real property.
20. Grace Period
Additional time allowed to complete an action (e.g., make a payment) before a default or violation occurs.
21. Gross Lease
A lease of property whereby the landlord (i.e., lessor) pays for all property charges usually included in ownership. These charges can include utilities, taxes, and maintenance, among others.
22. Holdover Tenant
A tenant who remains in possession of leased property after the lease term expiration.
23. HVAC
An acronym for "heating-ventilation-air-conditioning" system. In a commercial building, the landlord generally is responsible for maintaining the HVAC.
24. Joint Tenancy
Ownership of real property by two or more individuals, each of whom has an undivided interest with the right of survivorship.
25. Judgement
A formal decision issued by a court relating to the specific claims and rights of the parties to an act or suit.
26. Lease
An agreement by which the owner of a property (the "lessor") grants the right of possession to a tenant (the "lessee") for a specific period of time (the "term") for a predetermined amount of money (the "rent"). A "leasehold estate" is the space occupied by the tenant. Common types of leases include:
• A straight, or flat, lease, which stipulates that the same periodic payment (usually monthly) be made for the entire term of the lease.
• A percentage lease, which uses a percentage of the net or gross sales to determine the monthly rent. This is most often used in retail properties and with a minimum base rent.
• A net lease, which requires the tenant to pay maintenance, taxes, insurance and so on, along with a fixed rent. This is also called "net-net-net" or "triple net."
LeaseholdThe estate or interest a tenant has as stated in the tenant's lease.
27. Lessee
An individual (i.e., tenant) to whom property is rented under a lease.
28. Lessor
An individual (i.e. landlord) who rents property to a tenant via a lease.
29. Letter of Intent
An informal, usually non-binding, agreement among parties indicating their serious desire to move forward with negotiations.
30. Lien
A legal claim filed against a property for payment of a debt or obligation. If a property owner fails to pay a creditor, for example, the creditor can place a lien on the property. A lien can halt the sale of a property.
31. Listing
An employment contract between principal and agent that authorizes the agent (such as a broker) to perform services for the principal and his property.
32. Loss Factor
What percentage of the gross area of a space is lost due to walls, elevator, etc. Rule of thumb in Manhattan is approximately 15%.
33. Market Price
The actual selling or leasing price of a property.
34. Market Value
The expected price that a property should bring if exposed for lease in the open market for a reasonable period of time and with market savvy landlords and tenants.
35. Net Lease
Also called triple net lease (NNN). The lessee pays not only a fixed rental charge but also expenses on the rented property, including maintenance.
36. Non-Disturbance Agreement
The tenant signs this to prevent himself from being evicted if the property owner does not pay its mortgage to the bank.
37. Open Listing
A listing given to any broker without liability to compensate any broker except the one who first secures a buyer who is ready, willing, and able to meet the terms of the listing, or secures the acceptance by the landlord of a satisfactory offer; the lease of the property automatically terminates the listing.
38. Option
A right given to purchase or lease a property upon specified terms within a specified time. If the right is not exercised, the option holder is not subject to liability for damages. If the holder of the option exercises it, the grantor of option must perform the option's requirements.
39. Percentage Lease
A lease of property in which the rent is based upon the percentage of the sales volume made on the specific premises. There is usually a clause for a minimum rent as well.
40. Principal
The employer (e.g., landlord) of an agent or broker. This is the agent's or broker's client.
41. Revocation
An act of rescinding power previously authorized.
42. Sale-leaseback
A transaction in which an owner sells a property to an investor, who then leases the property back to the original owner under prearranged terms. Sale-leaseback deals offer the original owner freed-up capital and tax breaks and the investor a guaranteed return and appreciation.
43. Sublease
A lease given by a tenant for some or all of a rented property. For example, if a tenant rents 20,000 square feet but only ends up needing 10,000 square feet, they may want to sublet the extra space for some or all of the remaining term of the lease, providing they continue to occupy and pay rent for the property.
44. Tenant Improvements (T.I.’s)
Work done on the interior of a space, can be paid for by landlord, tenant, or some combination of both, depending on the terms of the lease.
45. Tie-in Arrangement
A contract where one transaction depends upon another transaction.
46. Triple Net Lease (NNN)
A lease requiring tenants to pay all utilities, insurance, taxes, and maintenance costs.
47. Variance
Government authorization to use or develop a property in a manner which is not permitted by the applicable zoning regulations.
48. Work Letter
An amount of money that a landlord agrees to spend on the construction of the interior of a space per the lease, usually negotiated.
49. Zone
An area, delineated by a governmental authority, which is authorized for and limited to specific uses.
50. Zoning Ordinance
A law by a local governmental authority (e.g., city or county) that sets the parameters for which the property may be put to use.
Industrial Regions' NNN Lease Rates
A few days ago I completed a small project outlining the different NNN lease rates in the six industrial regions in the Salt Lake County. I thought I would share my findings here. When looking at my report, remember to compare the lease rates only with similar sized buildings (apples to apples). For example, in the report, we can see that if you were looking to lease a building 10,000 - 20,000 SF, the least expensive region to lease in would be the North West region with an average NNN lease rate of $0.48 psf. Conversely, the most expensive region to lease a 10,000 - 20,000 SF building would be the South East region at $0.76 psf. Generally, industrial buildings in the South East region come with a lot of office space as well, bumping up the blended lease rates.
I have this report in a clean pdf format. If you'd like a copy, please email me at jasonh@naiutah.com
Friday, November 7, 2008
Use Google Earth for taking pictures of Commercial Buildings
For my first post, I thought I would start out with a tutorial. In my "Useful Tools" links, there is a link for Google Earth. Google Earth is an amazing tool I use every day in my line of work. Today I will show you how to take a picture of a building without ever leaving your office.
Once you have downloaded Google Earth onto your computer, open it up and fly to Salt Lake City. Zoom down and find 900 West and 2610 South. There is a big building on the southwest corner of that intersection. Look across the street and you see another building. The building south of that one is the one we will focus on. It has grass on either side of it. (marked in blue on the picture).
Open up your basic Paint program and hit Ctrl+V to paste the screen shot. Select the dashed rectangle "select" tool at the top next to the dashed star and crop your image so that only the picture is in the selection (you may have to scroll down and to the right a bit to get the full image in screen). Hit Ctrl+X to cut the image, hit Ctrl+N to open up a new window, hit Ctrl+V to paste your cropped photo, and finally go to File, Save As, and save your picture. You should end up with something close to the photo on the right. 
It's a little crude, but it sure beats driving around all day long gathering pictures for your database or reports.
P.S. The Office Max building is for sale. Contact Jim Sheldon at NAI Utah Commercial Real Estate for more details.
Once you have downloaded Google Earth onto your computer, open it up and fly to Salt Lake City. Zoom down and find 900 West and 2610 South. There is a big building on the southwest corner of that intersection. Look across the street and you see another building. The building south of that one is the one we will focus on. It has grass on either side of it. (marked in blue on the picture).Now, in Google Earth, go to Tools, Options and set your "Show Lat/Long" to Universal Transverse Mercator and hit "Apply" at the bottom. Using our latitude/longitude coordinates, we hover our mouse over the center of the building and we see it is located at 422587/4507382, give or take a few degrees. (I gather the lat/long coordinates on every single building in my database).
Now that we have the correct building, lets quickly grab a picture of it. To your left, you should see the Search, Places, and Layers tabs. Go to the Layers tab and select the Street View option. You should see a bunch of camera icons pop up on the screen. Zoom in a bit and select a camera icon that is in front of the building (there will be coordinates associated with each camera icon; choose the icon that shows 2688 S 900 W). Double click the camera icon and you should fly down into a 360 degree street view photograph. Pan around to your left and you will see the Office Max building (it has a sign out front). Center the building in your screen like you are going to take a picture (I like to get both outside corners in the frame) and on your keyboard hit "Print Screen".
Open up your basic Paint program and hit Ctrl+V to paste the screen shot. Select the dashed rectangle "select" tool at the top next to the dashed star and crop your image so that only the picture is in the selection (you may have to scroll down and to the right a bit to get the full image in screen). Hit Ctrl+X to cut the image, hit Ctrl+N to open up a new window, hit Ctrl+V to paste your cropped photo, and finally go to File, Save As, and save your picture. You should end up with something close to the photo on the right. 
It's a little crude, but it sure beats driving around all day long gathering pictures for your database or reports.There are a ton of uses for Google Earth (more tutorials to come) and street view. Use your imagination and get creative.
P.S. The Office Max building is for sale. Contact Jim Sheldon at NAI Utah Commercial Real Estate for more details.
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