Lance-Kashian & Company’s development of major commercial projects in the Fresno area, including the River Park and the forthcoming Fancher Creek and Campus Pointe communities, has been a major part of Fresno’s evolution from a mid-size farming city to major California metro area with amenities aplenty. Whether it’s a shopping center, office park, or a unique residential community mixed close to services and conveniences, each Lance-Kashian project is approached with a creative, out of the box approach. If you’ve ever driven through once-rural Fresno on Highway 41, you probably noticed the Marketplace at River Park, Shops at River Park, and River Park Plaza, clearly visible from the highway. Anchored by national tenants and highly trafficked by Central Valley residents for shopping and dining, the properties are a clear commercial destination for the region. An Edwards Cinema 21-screen theater, located at the Shops at River Park, is among the nation’s top ticket sellers, drawing up to 5 million visitors a year. Generating foot traffic has never been a problem here. Nevertheless, the developer supports regular events like a farmer’s market, live music and dancing entertain shoppers and create a fun and festive ambiance. The company has also made it a point to assist area nonprofits. Lance-Kashian covered the rent and electric bill for an ASPCA pet adoption center at the River Park. During two and a half years, more than 2000 pets went to loving homes. One of Lance-Kashian’s newest contracts, a senior/student housing project with a connection to Fresno State University, will be especially unprecedented. The intent is to attract active older adults who aren’t ready to stop learning, but do want to downsize to apartment-style living. The student residents will live nearby the senior living area and share common shared outdoor community spaces. When they get to class, they might see some of their older neighbors – senior renters will be able to attend classes at Fresno State for free, and an on-site movie theater will cater its programming to their tastes. The commercial part of the development will bring in some of the best of Fresno’s favorite local restaurateurs, which will likely attract diners of all ages for great Mexican, Chinese and Armenian food. The development will also feature work-force housing and a hotel. “Where you can dine and hang out and live all in one spot, it’s pretty unique for Fresno,” said Tracy Kashian, Marketing and Event Coordinator at Lance-Kashian. Lance-Kashian also has another long-awaited project in the works. Fancher Creek, a southeast Fresno project that will include commercial, housing, offices and industrial development, is expected to move forward this year. Fresno’s residential development is pushing east with the extension of Highway 180, and the Fancher Creek shopping center will serve those residents. Apartments will be located above some of the retail stores, and the restaurants will be located around a central lake, like a smaller-scale version of Las Vegas’ Bellagio. Sounds like an exciting time to be living in...
Learning from the Stars...
Lessons from industry achievers
The commercial real estate industry can learn a lot from its rising stars. Still young enough to be idealistic and take advice from their mentors, industry under-40—and sometimes under-30—achievers are able to turn it into successful business. Unfortunately, it is human nature to forget or lay aside ideals with age and experience—but doing so may result in unwittingly also passing up potential for even better performance in the long term. Years of interviewing industry up-and-comers has brought to my attention the fact that in reality there are only a few basic tenets that come up again and again, regardless of property sector or business segment: Aside from the obvious hard work and development of market knowledge, these include such characteristics as taking an ethical approach to business (honesty counts); seeking to build relationships with clients over the long term rather than focusing on the deal at hand; striving to please not just the client, tenant or customer but the other side of the table as well—along with passion, creativity, teamwork, accountability, attention to detail and a continued interest in learning and growing. Twenty years ago, such concepts might have been brushed aside as impractical and idealistic. Today’s more sophisticated strategies probably lend themselves better to retaining such a list and making it part of regular business practices. A holistic approach to corporate clients that includes saying “no” to bad or unnecessary deals as well as “yes” to those that may be less lucrative for the broker but smarter for the client pays off in the long run in the form of a longer and bigger relationship. Likewise, a more holistic consideration of a building’s or even a portfolio’s processes can result in greater efficiency and therefore lower cost of operation. Leasing to the right...
Jody Bankston
CBL & Associates
If you told a teenage Jody Bankston that he’d grow up to be an expert in business intelligence for a commercial real estate company, and spend free time doing intense CrossFit workouts that would make even a top athlete cringe, he probably wouldn’t have believed you. “My life has been a little bit strange,” says CBL & Associates’ Manager of Strategic Transformation. Jody tells us that his cool title is really just an alternative to “special projects,” but that he essentially works at the intersection of accounting, IT and property management. His experience working as a controller, business consultant and at several start-ups, as well as a MBA from Emory University, gives Jody a diverse background that makes him a perfect fit for his role at CBL. He’s based at the company’s headquarters in Chattanooga, Tenn., which also happens to be where he grew up. One of Jody’s first projects at the company was to develop a data warehousing system that now provides easy access to transaction records and property data. It also makes report writing a breeze. The next step? Taking access to that data warehouse mobile. Using the BusinessObjects platform and an app called Explorer, Jody told us about how he could easily access information about a Payables check or invoice or a tenants AR balance – while out of the office at lunch and using his iPad. A big fan of Apple’s popular tablet computing device, which he has beta tested extensively for CBL use, Jody says the device has been a good solution for a large company with a small IT department. “We have to pick a platform that’s as standardized as possible. The nice thing with the iPad is you don’t have to worry about ‘which model, which carrier,...
Commercial Projects: Controlled but Creative...
Slower pace, remarkable projects
One very positive response to the U.S. recession has come from what may perhaps seem a surprising quarter: While the movie “Field of Dreams” gave voice to the commercial development mantra “If we build it, they will come,” in the past few years this generally enthusiastic group has been admirably cautious. In fact, having contributed to the late ‘80s/early ‘90s recession with so much office development that the term “see-through buildings” became part of the real estate lexicon, this time around developers have significantly slowed the pace of new construction to the point, arguably, of helping to keep vacancy rates under control. Office property, in fact, has exhibited the most noticeable drop-off: The amount of property under construction fell from 172.4 million square feet at the end of 2008 down to 60.7 million square feet at the end of 2011 (and 56.4 million as of Jan. 29, 2012), according to CoStar Group data. Year-over-year, the office total grew last year, but only by 3 percent. Also significant but not as extreme have been shifts in the growth of industrial and retail construction, with the industrial sector reducing its pace of construction from 170.9 million square feet at the end of 2008 to 46.8 million square feet three years later, while the amount of retail under construction dropped from 145.1 million square feet to a mere 34.3 million. Indeed, Deloitte’s report titled “Real Estate Outlook: Top Ten Issues in 2012,” released in October, found that commercial real estate is being leased or purchased faster than new units are being completed, thanks to record low levels of construction activity. Office vacancy rates averaged 12.3 percent nationally in fourth quarter 2011, according to CoStar, which predicts a drop to 11.7 percent by the same time next year....
Trends in Investment Management
Rob Teel Talks Commercial Real Estate
We talked to Rob Teel, Vice President, Yardi Global Solutions, about his thoughts on current trends in investment management, specifically commercial real estate portfolios. What’s hot? As a result of the global financial crisis, investors and portfolio managers are taking a heightened interest in three things: Cycle time, transparency, and risk analysis, before and after committing large amounts of capital to investment managers. Let’s break it down. Cycle time – The time between the end of the quarter and the production of investors’ returns and reports is crunch time. Shortening that cycle from weeks to days is a crucial component of keeping investors happy. Banks and investors are now asking for more frequent valuations of real property, which can be costly and time-consuming. Investors are also looking for forecasts, so they can anticipate the value of their investment in the years ahead. Yardi VMF creates full portfolio valuations, in an automated, accurate and repeatable way, quarter after quarter, or any frequency desired. Transparency – Investors and investment boards now want a heightened level of detail about how their commercial investment properties are doing, down to the level of tenant health. They aren’t satisfied with the pretty pictures of the assets traditionally included in quarterly reports, and want to drill down to find outstanding receivables and other property-specific information. Yardi Investor Portal provides a technology tool for frequently-published, data rich reports. Risk analysis – Successful investment management means monitoring a portfolio closely for potential trouble spots. Portfolio managers can choose the attributes they’ll monitor to keep close tabs on portfolio assets. Producing the best possible business intelligence platform for risk management is one of the goals of Yardi Orion, which uses Microsoft Sharepoint built on an OLAP data cube to give instant access to investment data. Wait, I can’t use Excel to manage my clients’ portfolios? In a word, no. Investors and institutional investment management boards – which oversee multi-million dollar funds on behalf of private individuals and trusts, retirement systems, and other investment entities, are asking for more intelligent business software solutions to ensure that their investments are monitored wisely. Investment managers need to account for accounting controls, risk controls, operational controls with a smart technology choice. You will not get institutional funding if you are running on an Excel spreadsheet. What’s next? The investment management industry should be focused on automating all aspects of the real estate life cycle, from end to end. That should include property operations, acquisitions, dispositions, monitoring, and risk analysis. All of the processes that are required can be automated, from the time you acquire that asset and attract new investors that help you acquire it, to the time you’re monitoring it, looking for outliers and patching up the health of your portfolio, to the time you need to dispose of it, get the right value for it and close it out....
Greener Building Design...
Commercial gets eco-friendly
Building design has taken a big leap forward in the past decade. There is more attention paid to sustainability and efficiency, and buildings are better integrated into their environments, which by default makes them more attractive than the box-like and sometimes fortress-style structures of the ‘70s and ‘80s. However, such efforts still have a long way to go, and building owners and developers need to play a much bigger role in how properties are designed in order to achieve the increased sustainability and efficiencies that will be demanded by tenants and even required by municipalities in the years to come. Indeed, engineering firm Syska Hennessy Group co-presidents Gary Brennen and Cyrus Izzo believe there needs to be a much more collaborative approach to development than tends to be the case today. The owner, design team, contractor and even facility operator tend to be “in various corners, kind of staking their claim and watching just their areas of interest,” noted Izzo. But ensuring the “right partner DNA,” aligning their interests from the beginning and sufficiently involving the owner/developer in the decision-making process is critical to what Brennen describes as “engineering the architecture.” “Sometimes you get trapped with the aesthetic, but performance matters in these kinds of high-performance, sustainable buildings,” he noted. Owners need to ask questions like: How is the building massed? How is it oriented? What’s the glass and daylight condition? How do I keep solar gain out but good daylight in? “You’ve got to tune the design from day one … and then continue to tune the building after you occupy it to get the kind of results you want.” That may require a 180-degree shift in thinking from the current tendency to check off the items needed to achieve a LEED rating....
