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A Ban on Dual Agency Fails…For Now

Post By : admin 16 January 2018 Leave a comment

As you probably know, at REATA, we only represent users – companies that lease or buy office and warehouse space. We won’t take landlord listings for lease because it has the potential to create conflicts of interest.

Furthermore, we don’t think that real estate companies should be allowed to represent both sides of a transaction. That would mean that one agent in BrokerageCo (made up name) shouldn’t be allowed to represent the landlord or seller while another agent in the same BrokerageCo represents the tenant or buyer.

Fortunately, some powerful forces in the industry are starting to agree with us and take action to make this mandatory.

California Assembly Bill 1059 is legislation that was crafted to end “dual agency” (it’s called “intermediary” in Texas). While the specific provision ending this practice was removed from the bill before it made it to committee, the good news is that it was considered at all. It has to be discussed a few times before it actually becomes law.

This all began in 2007 when a Hong Kong businessman sued Coldwell Banker and its agents. He had been represented by a Coldwell Banker agent as had the seller. When a giant discrepancy was found in the size of the property he purchased (long after closing), he filed suit. It went all the way to the California Supreme Court which determined that Coldwell Banker failed in its fiduciary responsibility to him. That was a lightning bolt decision.

The United Kingdom is ahead of the USA on this issue. The Royal Institution of Chartered Surveyors (think of them as the UK version of the National Association of Realtors) in early 2017 created a policy statement with strict conflict-of-interest requirements which specifically bans the practice in the UK.

So the government and industry groups appear to be moving in the right direction. It will likely take several more years, but we’re hopeful that all concerned will do the right thing for clients whether legislation requires it or not.

A more-comprehensive article is available here if you want to learn more.

Bob Gibbons is a Real Estate Advisor & Tenant Advocate with REATA Commercial Realty, Inc. which is a tenant advisory firm based in Plano, Texas. Bob serves companies in Plano, Frisco, McKinney, Allen, Richardson, Addison, Dallas and the surrounding areas and specializes in companies which lease or buy office and warehouse properties.

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Tax Reform – Another 1986?

Post By : admin 21 November 2017 Leave a comment

Our government is talking about major tax reform. That will make you really nervous if you were in the commercial real estate business in the 1980’s. You will remember how a Republican president signed into law a tax law which killed our industry for 10 years.

Sure, much of the changes in that law were necessary and appropriate. But they changed the rules retroactively and that’s not fair. That meant that anyone who invested expecting a certain tax treatment got something totally different. When new laws are enacted, they should be for the future and not undermine and unravel everything that came before it.

The industry was building far too much in the way of supply given the demand back then. We haven’t seen supply and demand out of whack to that extent since. But talk of tax reform justifiably makes commercial builders and investors jittery so they are keeping a close eye on what’s going on in Washington.

Steve Brown of the Dallas Morning News quoted Ross Perot Jr. in an article recently (full article) saying, “all of us need to watch this tax code for unintended consequences.” We can’t trust the government to truly understand the consequences of the laws and codes they enact. So it’s the unintended consequences that make us most nervous.

With the president being a commercial real estate guy, hopefully he’ll have some clue as to the unintended consequences and won’t sign anything that will put us in recession like in 1986.

Stay tuned though.

Bob Gibbons is a Real Estate Advisor & Tenant Advocate with REATA Commercial Realty, Inc. which is a tenant advisory firm based in Plano, Texas. Bob serves companies in Plano, Frisco, McKinney, Allen, Richardson, Addison, Dallas and the surrounding areas and specializes in companies which lease or buy office and warehouse properties.

Categories: Uncategorized

Working from Home – Does It Work?

Post By : admin 10 October 2017 Leave a comment

One of the pioneers of allowing employees to work from home is IBM. They started doing it in 1979 and had 2,000 IBMer’s working from home within 4 years. By 2009, 40% of their 386,000 employees in 173 countries didn’t have an office.

IBM even sold buildings which they owned or in which they had an ownership interest. I used to work for a company which was one of their partners. That company built many buildings throughout the US with IBM as a major tenant and partial owner. Those buildings were sold as IBM reduced their occupancy.

So it was a surprise when IBM announced earlier this year that they wanted many of their employees back in the office. All of this according to an article in The Atlantic.

Is this the first sign of a trend toward putting employees back into an office where they can collaborate and increase productivity? According to a Gallup poll quoted in article, 43% of US employees work remotely all or some of the time. Various studies have shown this to increase productivity while others show just the opposite – proximity boosts productivity.

Perhaps there isn’t a one-size-fits-all when it comes to working from home or the office. Some functions require proximity to working in teams or having access to tools. Others require interaction in the field with clients or other offices of the company.

Lots of technologies have been created to aid in communication for a decentralized workforce – email, teleconferencing, Slack, Skype – again, with mixed results.

I have clients who have consolidated employees previously working in the home to an office and other clients who have sent everyone hone. Again, mixed results.

What has worked for you?

Bob Gibbons is a Real Estate Advisor & Tenant Advocate with REATA Commercial Realty, Inc. which is a tenant advisory firm based in Plano, Texas. Bob serves companies in Plano, Frisco, McKinney, Allen, Richardson, Addison, Dallas and the surrounding areas and specializes in companies which lease or buy office and warehouse properties.

Categories: Uncategorized