Cool new things we love – The Tenant Advocate

The Evolution of the “Comp”

Remember the “telephone game” when you were a kid?

You’d whisper, “I had ham and eggs for breakfast this morning,” to the person to the right and by the time it made its way around the circle the last person would say, “Santa has ham for legs and just installed new flooring.”

Well the same thing happens when real estate comps are traded.

In commercial real estate brokerage the lease comparable or “comp” is a summary snapshot of a transaction that includes all the relevant deal points such as the rental rate, square footage, length of term and concessions. Simply put, it is one of the most accurate real-time indicators of what tenants are willing to pay to lease space in a market at a specific point in time.

Comps are traded predominantly amongst brokers, landlords, lenders and appraisers, however there is no central repository for this information. Each party or their respective company or firm maintains their own proprietary database where this comparable information is kept; and this comes with its own challenges.

With such a fragmented method of assembling, compiling and maintaining this data it’s impossible to warrant its accuracy. For example, I’ve received comps for the same transaction but from different brokerages, and they have all had conflicting information – inconsistencies in the lease expiration date, tenant improvement package, rental schedule,etc.

Also, there are severe limitations to only being able to search your own firm’s database. What if the data you need existed somewhere out there but your firm didn’t have it? Well then you’d just have to hunt around until you found it, which can be very time consuming.

CompStak is a new, crowd-sourced model that allows CRE professionals to contribute lease comps and then earn points for what they’ve submitted. They can then trade the points that they’ve earned for details on other comps that are more relevant and important to them.

This is huge for a few reasons. First, having a centralized database that everyone contributes to encourages data integrity and market transparency. Simply put, verified, accurate data benefits everyone involved. Second, being able to magnify the scope of a search by accessing a much larger, more robust database makes me a better-informed broker and ultimately, allows me to provide better service to my clients.

CompStak is currently available in San Francisco and Manhattan, with plans to eventually go national. Personally, the service has already proven its worth in at least two recent transactions and I look forward to their continued success.

Hopefully now when I say, “three months free with $25 per square foot in TI’s,” it doesn’t get translated into, “tree trunks free with $25 in bacon flavored toothpaste”.

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What I Learned While at 42Floors

Yesterday, I wrapped up a one-month consulting position with San Francisco-based 42Floors.com. As a tenant rep advisor that’s passionate about commercial real estate and technology, I jumped at the opportunity to join the team and get a feel for what it’s like to work within a fast paced startup in the midst of SoMa’s exciting technology boom.

In a nutshell, 42Floors is a free search engine for office listings in San Francisco and New York, wrapped up in a gorgeous user interface. The model itself isn’t exactly groundbreaking, except for the fact that their current focus is not on monetization, but on creating the absolute best user experience possible.

Here’s how it works. The user searches active office space listings and when they find something they like, they submit their contact information and the handoff is made to the listing broker, who then follows up with them to schedule a tour of the space. Nothing revolutionary there. Where 42Floors really sets itself apart, however, is with their Concierge; a human being that uses a telephone to actually call you. How many companies actually do that anymore, and for free? Their only task is to make sure you’re happy, answer questions about the market and commercial real estate, and ultimately, that you’re successful in finding your new office space online through their website.

Don’t get me wrong, there are plenty of other great features that elevate the user experience, like robust filtering options, photo-intensive listings and rental estimates for properties that don’t publish their asking rents, but the Concierge addresses a gaping hole in the online listing arena: tenants not only need but deserve the advice of an expert that’s looking out for their interests. This is something that gets lost when a tenant uses the internet to find an office space online and then cuts a direct deal with the landlord without being represented by an advisor. With 42Floors Concierge, the tenant can receive guidance and assistance from a professional they can trust.

My big takeaway from my experience with helping 42Floors develop their concierge program, is that tenants will always need a human advocate, and 42Floors understands that.

Just like WebMD.com will never replace the role of the doctor, 42Floors.com will never replace the role of the tenant advisor – they exist to enhance and compliment the process, be it a trip to the hospital or signing a new office lease.

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Energy Management Apps Any Organization Can Afford

By Ashley Halligan, an analyst at Software Advice

As environmental policy, benchmark reporting laws, and a general social awareness become more common practice in day-to-day business practice, new technologies are being designed and implemented by slews of organizations to measure their environmental performance and overall impact. Software developers are designing entire suites centered around benchmarking performance, suggesting upgrades, identifying operational inefficiencies, and even gamifying occupant behavior to encourage compliance with an organization’s goals.

Some organizations may not have the capital to immediately invest in such systems, but still want to get on board with responsible consumption–and identify inefficiencies before they become too problematic or expensive to overcome. For those organizations able to implement full suites dedicated to such features, that’s fantastic. For others, however, there’s a slew of applications seaping into the market, making similar tools available to literally any organization. Addressing everything from holistic energy audits, to measuring air quality, and even providing ENERGY STAR benchmarking, here are two affordable–and one free–application, all organizations should know about.

Recently awarded second place in the Environmental Protection Agency’s Apps for Energy contest, Melon Power was designed following the White House’s Green Button initiative–encouraging energy providers to make consumption data widely available–both residential and commercial–to their customers. At $500 per building, this Web-based application takes Green Button distributed data covering a 12-month benchmarking period, calculates an ENERGY STAR score, then reports that data to the EPA’s Portfolio Manager, in compliance with state laws that have been rolled out thus far.

Another powerful app–ecoInsight Mobile Audit for iPad–performs full energy audits of a building’s performance following user-inputted data collected while doing a thorough walk through. This free application is a powerful tool allowing operators to input operational measurements such as area, space, light wattage, etc. Once a walkthrough is complete, data is uploaded to ecoInsight’s site–where upgrades are suggested and customer proposals can be drafted.

Lastly, the American Society of Heating, Refrigerating and Air Conditioning’s (ASHRAE) offers their HVAC ASHRAE 62.1-2010 for $19.99 which performs ventilation calculations based on user-entered data. This app distinguishes whether a building meets the industry-accepted ASHRAE standard for indoor air quality (IAQ) in commercial spaces. Additionally, given that IAQ is of importance in achieving certain LEED credits, this application can help an operator understand their current benchmark and if improvements need to be made to achieve the necessary credits.

These applications provide a great launching point for organizations wishing to assess and improve performance–whether for legal compliance, LEED certification–or simply, to demonstrate corporate social responsibility and a commitment to environmental performance. Read more about the applications and their features on the Software Advice blog: 3 Energy Management & Environmental Performance Apps Any Organization Can Afford. Feel free to reach out to me via ashley@softwareadvice.com with any suggestions or comments, or leave them below.

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Office Towers Made From … Wood?

I’m not going to lie; when I first heard about CREE Buildings and their efforts to erect skyscrapers made from wood, I was more than just a little skeptical. I couldn’t help but recall the story of the Three Little Pigs and the image of the wolf…huffing, puffing, and blowing down the house.

But, seeing is believing. In November, 2012, CREE Buildings opened its doors to LCT ONE in Dornbirn, Austria – the world’s first 8-story timber hybrid building. The office tower was built using glulam wood beams as the primary building material and combined with a limited amount of concrete, using a process called the LifeCycle Tower system. (It took only 8 days to erect 8 stories – check out the time-lapse video below.)

Put simply, they’re scaling the already familiar pre-fab, modular construction model and applying it to industrial office construction to buildings as high as 30 stories. The benefits of prefabricated construction are many – shorter construction times, reduced construction waste and fewer resources used throughout manufacturing, to name a few.

I caught up with CREE’s CEO, Michael Zangeri, at GreenBuild in San Francisco recently, where he converted me from skeptic to evangelist.

Cree LifeCycle Tower systems deliver tall commercial green buildings, up to 30 stories with 90% fewer C02 emissions, reduced costs, and 50% shorter construction time.

One of my first concerns was related to my perception of wood being more dangerous in a fire than steel. Well, apparently wood is safer in a fire than its unpredictable counterpart, which can collapse instantly and without warning in high temperatures. Wood on the other hand has a predictable burning rate.

From a sustainability perspective, wood is just about as an abundant and renewable raw material you can find. Unfortunately, the same cannot be said of steel and many other building materials.

And what does a skyscraper made from wood look like? Absolutely nothing like you’d expect. Aesthetically, they’re gorgeous. Check out the pics below and see for yourself.

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