Tag Archives: properties

Another One Bites the Dust

Post By : admin 1 July 2018 Leave a comment

The Houston Chronicle reported on Friday that yet another tenant-rep-only firm has sold to a full-service firm. Jackson & Cooksey has been a commercial real estate firm solely focused on representing users (tenants & buyers) of commercial real estate since 1982. They have agreed to be purchased by Newmark Grubb Knight Frank (NGKF) with a full-service firm which has gobbled up many firms over the last several years.

Why should you care? It’s just another step in the consolidation of the commercial real estate industry. Bigger-is-better seems to be the belief. The problem is that these giant conglomerations (CBRE, Cushman & Wakefield, Colliers, JLL, Transwestern, NGKF) try to represent all sides of a transactions.

Many of them have entities which own buildings, others that finance the purchase, another that manages the buildings, another to lease the building, another to appraise the building, another to sell the building…AND yet another to represent the tenants that lease in those buildings.

Does this sound reasonable?

Law firms know that the same firm can’t represent both sides to a transaction. So what’s different about commercial real estate firms? How can they do it?

The giants will tell you that they have walls internally that protect clients and won’t allow the different divisions to share information. But I can tell you from personal experience, that’s not always true. When I was an asset manager for a large property owner, some of these giants made proposals to me to lease my buildings and offered to put a tenant rep on the team. One of those giants, was a competitor in raising capital from college endowment funds, and yet their leasing division was pitching me to lease my buildings and were offended when I suggested that might create a conflict of interest!

Bottom line: giant companies look like a good solution to giant clients because they have a single point of contact. But the more everything goes to one party, the more risk that creates and the less trust you can have that your interests are truly being protected.

If you lease or buy buildings for your company or non-profit to occupy, use an advisor that ONLY represents the user. If they represent any landlords or own any buildings, do not consider them any further.

REATA is a member of the Alliance of Tenant Representatives. To be a member of this international group of commercial real estate companies, each member must pledge to never represent landlords.

Bob Gibbons is a Real Estate Advisor & Tenant Advocate (also known as a tenant rep) 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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US Office Vacancy Lowest in 10 Years

Post By : admin 23 March 2018 Leave a comment

According to a report produced by Transwestern, office vacancies in the US as a whole are at their lowest in 10 years. That’s pretty amazing when you consider that they also report that 70.7 million square feet (SF) of new construction has been started during that same period. But office demand follows job creation so with unemployment at 4.1%, the lowest since late 2000, this makes sense.

The top 10 markets for net absorption (the net change in the total SF of office space occupied) were lead by Dallas/Fort Worth with over 5 million SF absorbed, followed by San Jose/Silicon Valley with about half that, then Settle, Northern Virginia, Austin, Phoenix, Detroit, Las Vegas, St. Louis and Baltimore.

Notwithstanding the top absorption markets, the top 10 markets for rent growth looked different: Boston at 15%, followed by San Francisco, Charlotte, Orlando, Raleigh/Durham, Oklahoma City, East Bay/Oakland, Phoenix, Los Angeles and Portland. Some of those intuitively make sense because they are land-constrained cities with a huge tech presence. Others were a surprise.

The cities with the most new space under construction are New York with over 16 million SF underway, Dallas/Fort Worth with over 8 million SF coming, Washington, DC at 7.6 million SF, San Francisco at 6 million SF, and Denver at 5 million SF.

The future looks bright for the national office market so long as jobs hold up. If there is a downturn in the economy and companies stop hiring and start laying workers off, things will change.

For the rest of the report, click here.

Bob Gibbons is a Real Estate Advisor & Tenant Advocate (also known as a tenant rep) 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

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.

Categories: Uncategorized