0 Thank you Brendon Giblin for joining the BRA Morning Zoom

Brendon Giblin joined BRA from Southborough, MA – alongside his 11-year old son.  He is the CEO and second generation principal of Brendon Properties – a custom homebuilder in MetroWest for the past 45-years.  Brendon entered the business 20-years ago and talked to the real estate minded crowd about the importance of learning all facets of the business – acquisition, land, foundation, framing and everything else through the inspection process.

The two-time Boston Marathon runner reflected back to Adams Farms, a development that was a success until the 2008 financial crisis.  Prior to the infamous September day, they were “hitting it” with 40+ presales.  The following 12-months produced 6-sales.  That experience taught the award-winning homebuilder to stay nimble and conserve powder.  While Brendon admitted to some similarities between 08’ and today, he said that the biggest difference is the inability to produce events.  Today, they are focused on individual messaging, while still creating a memorable experience.

Mr. Giblin reminded the virtual group that location is still the number one criteria when selecting a site or a home.  He also said, “Homes are a series of compromises.  What do you really need?  That ‘need’ is different for everyone.”  Brendon explained that his company builds quality homes with a value between $400,000 and $7 million – and that the number one customer request is home automation tools.  Brendon also told us that he is an investor in a few developments in Florida and of the items that they do well in Florida is a “focus on the entrance” – something that he intends to bring to Massachusetts.

Lastly and likely most valuable, we spent time on the importance of philanthropy.  Brendon explained that giving back was a huge part of his father’s life.  Brendon is active with One Mission and Spectrum Health, as well as manages the Giblin Family Foundation, with a focus on helping women, children and families.

0 Boston CRE Doyen Ron Druker: “We’ll Come Back From This”

By Dees Stribling | Bisnow | May 13, 2020

“What keeps you up at night?” a Bisnow webinar audience member asked Ron Druker, Boston commercial real estate luminary and president of The Druker Co.

“Right now, my dog keeps me up at night,” Druker said. “The answer is — I can only control what I can control. Our real estate is good real estate, and even in the depths of all the other recessions, we’ve come back. We’ll come back from this.”

Bisnow’s Boston webinar, A Discussion With Druker Co. President Ron Druker, covered a lot of ground on Tuesday: occupancy and rent collections at the company’s varied portfolio, the history of U.S. economic dislocations going back to World War I, the 1918 Spanish Flu and what landlords should do — and should not do — to meet post-pandemic standards, and his thoughts on the crisis.

“It’s important that we recognize everyone that’s putting themselves on the line, whether it’s truck drivers, UPS, FedEx, nurses, doctors — all the people who are up front,” Druker said. “I think we’re going to be at this for a while.”

The Druker family has been part of Boston real estate for more than a century. Ron Druker’s grandfather, John, got the Drukers into the business nearly 120 years ago, developing the Hotel Kenmore and the Braemore Hotel in Kenmore Square. His son Bertram followed, building the Colonnade Hotel on Huntington Avenue and affordable housing in various parts of Massachusetts.

Ron Druker has carried on the family development business. In the 1980s, his Heritage on the Garden condos were an important part of Back Bay’s resurgence, and in the 2000s, the Atelier 505 development was part of the South End’s revitalization. Most recently, Druker Co.’s 350 Boylston development received approval from the Boston Planning & Development Agency.

Druker, along with co-moderator Wil Catlin of Boston Realty Advisors, spoke about the day some years ago when a startup with big plans wanted to lease an entire building in the Druker Co. portfolio.

The deal gave Druker pause. For one thing, the tenant improvement allowance was about $200/SF, with $70/SF for the lobby and $130/SF for the rest of the space. As an older building, Druker Co. would have also had to spend money on the HVAC system. Those expenses weren’t the worst of it, however. Druker was worried about the company’s long-term staying power.

“I didn’t like the credit, and as it turns out, I’d rather be lucky than good, because they are where they are now,” Druker said.

He nixed the deal. The would-be tenant: WeWork. “They create single-purpose space,” Druker said. “So I guess we were lucky in looking at it the way we did at the time.”

In a less real estate-related anecdote, Druker also mentioned the time he met songwriter and record producer Mark Ronson at a small restaurant in Tokyo, and another time he talked with Keith Richards for two-and-a-half hours at a resort bar in Turks and Caicos. “Two old grandfathers sat and talked about life,” Druker said.

Druker said that in his company’s portfolio, rent payment during the pandemic has varied according to property type. Residential payments have been about 99%, while office payments are in the mid-90% range. Retail, on the other hand, has been at about 50%.

“We’re working with our retail tenants,” he said. “There are smaller retail tenants, some of them real mom-and-pop operations who pay rent predicated on how they did the month before, and we’re working with them. There are other more nationals, and we’re working with them as well.”

With some of the smaller tenants, Druker Co. has specifically tried to help them avail themselves of some of the public subsidies on offer.

“Because we’re not highly leveraged, our portfolio is in good shape, but it’s work,” Druker said. “I’m spending 12 hours a day at my desk. Most of the people I talk to are working harder [than before].”

Regarding the 240K SF project at 350 Boylston, Druker said that his company is making proposals via Zoom, and so far has received two requests for proposals that the company has responded to.

“There’s interest in the building,” Druker said. “The advantage that we have now is that we’re taking steps to make the building more hygienic.”

With only one to four tenants, he said, 350 Boylston will be relatively simple to enter and leave, and that ought to be an advantage for the building as well, he said.

On the other hand, it is possible to go overboard with building modifications in response to the pandemic.

“The protocols relative to cleanliness and social distancing … make sense today,” Druker said. “But to make major physical alterations to a building for something that … will be short term, we don’t believe makes sense.”

0 Bisnow Webinar : How to Get Boston Construction Back Underway

Since Mayor Walsh placed all non-essential construction projects on hold, many contractors and construction workers are still without a clear direction. Recent safety tips advised by the city require 6 feet of social distancing, hand washing accessibility, protective gear, etc. However essential projects have still been actively underway without consistent guidelines of how they need to be managed.

Many are looking to leaders currently on the ground for how they are managing essential projects, crews that are currently out of work and what they need in order to transition back into completing projects.

Join Bisnow May 14 as Bill Olson, director of construction of Wise Construction, Bryan Northrop, executive vice president & general manager of Skanska and Frank Callahan, president of Massachusetts Building Council dive deep into how they are managing crews, handling projects deemed essential and what they believe is needed to get construction back underway.

During this webinar we will discuss:

— How to protect crews for projects currently underway?

— How are leaders managing crews that are out of work while construction is on hold?

— How are leaders managing crews that are out of work while construction is on hold?

— What policy changes are needed for workers and contractors to get hammers swinging?

— What can be done right now to prepare for projects opening up again?

Register HERE.

0 Thank you Manolis Kellis for joining the BRA Morning Zoom

Manolis Kellis, a Computational Biology Professor at MIT took us all to school as he shared his screen to display what the virus genome looks like and how he and his team have been mapping the RNA of the Covid Virus.  The Greek born Biologist spent time reviewing how this virus gets weaker as it mutates, expressed that people with antibodies are in a good place from a risk perspective, and detailed the different types of strategies for vaccines and cures.

The professor said that while we know what the enemy is, we are not at war yet.  He explained that we are currently under siege, and that the war will begin when we return to work.  Dr. Kellis shared his opinion saying that the trillion dollar bailout should have been a billion dollar spend on PPE.  He called it, “Billion dollar wise and trillion dollar foolish.”

0 Even After Your Office Reopens, You May Not Be Going Back

By Paul Singer | WGBH | May 4, 2020

Whenever non-essential offices reopen, here’s the first thing to remember: About two-thirds of us probably won’t be going back in. At least not for a while.

Gov. Charlie Baker has assembled a team to begin talking about reopening the economy, and of course everybody is anxious to get back to work. But it turns out that reopening the economy probably means only reopening offices to a very limited stream of workers for the foreseeable future.

For most offices, “the target occupancy is probably going to be no more than 30 percent,” said Arlyn Voglemann in the Boston office of the global design firm Gensler. “And people will achieve that in many different ways — who knows how long it will last.”

Gensler is working with building owners and tenants around the region to figure out the best way for people to return to work. And for many people, the best way to return may be not to return just yet.

The whole goal is keeping your distance. And while renovating or redesigning office spaces is a longer term project, in the short term, existing office space is likely to be used very differently, Vogelmann said. She cited conference rooms as an example.

“If a conference room has six or fewer seats, you’ll only have one person in there,” she said. “If it’s larger than that, you can have a couple of people in there, but no more than 10 occupants in any space at one time.”

Staff may be switched to shifts so all the desks in an office are not filled at the same time. And people are not going to be sharing keyboards, telephones or other technology for a while, Vogelmann said. Even if people are working in shifts, they are very unlikely to be sharing desk space.

“If you’re phasing your work approach, and you’re only going to come in on Mondays, Wednesdays and Fridays, you don’t want Bobby sitting at your desk Tuesdays and Thursdays,” said Patrick Schmidt, principal and VP at Avison Young, a commercial real estate firm. “You’re not going to trust whoever your cleaning person is, no matter what the protocols are, that they’ve properly sanitized the workstation. So everyone’s going to want their own spot.”

Peter Conway of the real estate firm Lincoln Property Company puts it this way: “Now the idea of shared is so toxic — I don’t know if it’s the best word to say it — but shared almost equals risk in a lot of people’s eyes.”

Conway said this may be a serious problem for WeWork and similar co-working companies that have seen huge growth in the Boston market over the past few years. These companies rent space in bulk from office buildings and then convert it into smaller spaces that offer tenants more flexibility. This allows a small company — or a small unit of a big company — to sign a short-term lease just for a desk or a room and share the kitchen and conference rooms with other tenants.

Shared workspaces have gone from basically nothing to 2.8 million square feet of office space in Boston over the past decade, according to research by Colliers International, a real estate services firm. Aaron Jodka, Colliers’ research director, said the profit margin for many co-working operators is based on reducing the square footage allocated to each worker in the space or renting each desk multiple times under the theory that workers will not all be in the office at the same time. But with concerns about infection now at the forefront, “the idea of packing in as many people as you can is not safe,” he said.

But Tim Rowe, the founder of CIC, which operates several shared office spaces in the Boston area, said he thinks coronavirus is not a threat to shared offices. In fact, he said, it’s the opposite. He thinks the success of the massive “work-from-home” experiment of the past few months will increase demand for shared office spaces in the near future.

After a few months of having most employees work from home, Rowe said, “companies will say, ‘Gee, instead of having 100 people in a traditional office, I’m going to have a shared office and I’ll have 10 to 20 people that come in. Everyone else will work at home.'”

For those who do return to the office, it is going to be a very different experience.

Rowe says CIC is taking numerous steps to ensure the safety of their offices when they reopen, including asking everyone to check their temperature and confirm they do not have symptoms before they come to work. They are also going hands-free where possible.

“We’re converting our buildings to be touchless.” Rowe said. “We don’t think touch is a major vector, but we know that people are concerned about it and we’re not sure. So why not do that? So that means that we’ve found a way for every single thing, you know, you need to do in the office to be something you don’t have to touch with your hand. “

That means everything from touchless faucets to doors that can be opened with your foot to handing out a little wands that can be used to push elevator buttons.

Every conversation about the future of office space seems to return to the question of the elevator. Jim Roosevelt of the law firm Verill helped the Pioneer Institute assemble a “return to office” checklist for employers and building managers, and the elevator is high on that checklist.

“You can’t really socially distance more than a couple of people in an elevator,” Roosevelt said. “I’m not even sure you can do a couple in most elevators; in some elevators you’ve gotta do one. Even before they get in the elevator, there is the question of, ‘is it safe to have lots of people touching the elevator buttons?'”

That means there is likely to be some kind of traffic control in the elevator lobby, like a security guard limiting riders, making sure everyone is wearing a mask and creating safely-distanced waiting lines at busy times.

But the best traffic control strategy is to just work from home.

Nevertheless, even with concerns about contagion and the inconvenience of waiting on an elevator queue, people are itching to return to an office environment, said Wil Catlin, managing director of Boston Realty Advisors. What has been lost in the work-from-home experiment, Catlin said, has been “the organic hand-off of information that occurs from person to person, department to department, because they’re co-habitating, coexisting underneath one roof in one office.” When employees are scattered, he added, “everything is scripted. Everything. You’ve got to schedule a Zoom call. You’ve got to text. You can’t just like walk down the hall and say, ‘Hey, I’ve got a question about this.'”

That’s why Vogelmann says one of the long-term effects of the pandemic may be a move to more collaborative workspaces in office suites, and fewer closed doors.

“I used to go into my office five days a week,” Vogelmann said. “Let’s just say I’m going to shift to two or three days a week and I’m going to work from home for the remainder of that time. I’m going to do more kind of individual work from home or stuff that I don’t need my full team there for. And we’re going to prioritize our time when we’re in the office to get that group going.”

0 Tenants Returning to Boston Offices Will Find A Strange New World

By Dees Stribling | Bisnow | April 27, 2020

Most Boston commercial space is now empty, but the time is approaching when many or most workers return, perhaps in shifts or only a few days a week.

Property managers are already trying to sort out the transition, speakers on Bisnow’s health and safety in property management webinar Thursday said. The details of bringing people back into commercial space in an orderly and safe way aren’t clear. One thing is clear: It won’t be easy.

Most space in Downtown and in Cambridge is empty, with commercial occupancy below 5%, though occupancy is higher than that in a few pockets, such as life science space, Lincoln Property Co. Vice President of Property Management Scott Rickards said.

“We’re planning for re-occupancy at some point after May 4,” Rickards said. “Could be sooner, we hope. We’re fielding an increasing amount of questions every day from tenants about what they can expect.”

Personal responsibility is going to be critically important to making re-occupancy work, Rickards said.

“We all know people who go to work sick, and that’s what we really can’t have,” he said. “Every company has to be responsible for its employees, and every individual responsible for themselves.”

The focus now, EBI Consulting Director of Environmental Health & Safety Karla King said, is how company policies can evolve to address the future re-entry. Some companies have specific issues, such as those needing to deal with COVID-19 cases at their buildings, while others are simply trying to devise forward-looking planning.

“We’re working closely with some of our clients, evaluating current housekeeping and programs and getting an understanding of high-touch and common spaces,” King said.

In the case of a building with a suspected COVID-19 case, each instance is evaluated based on when it happened and how isolated the space is, King said. Then her company works with the client to identify or evaluate a cleaning company, looking closely at its cleaning products and protocols.

Even without a COVID-19 case, tenants who plan to return need to formulate detailed plans, King said.

“What PPE are people going to be bringing or wearing to the office, mandated by state or federal officials, or by their own choice?” she said. “Where are they going to dispose of their PPE?”

Boston Realty Advisors Managing Principal Wil Catlin, who moderated the webinar, asked whether some landlords will have stricter requirements regarding PPE than others.

“At some level, there needs to be baseline standards,” he said.

PPE use will vary according to the use of the space and how much common space there is, King said, adding that common areas and high-touch spaces are going to be the biggest areas of concern for property managers.

“That’s one thing to communicate to tenants: the importance of everyone controlling their space,” King said.

Property managers can’t be responsible for the cleanliness of every specific desk or other personal area, King said, since it is largely out of their control. Instead, they will be more concerned with common spaces, such as gyms, cafeterias, restrooms and reception areas.

Catlin also asked about security procedures in a post-pandemic environment, specifically how buildings will handle front desks and check-ins. Technology is a longer-term answer to security, Rickards said, and some Class-A buildings probably already have the tech in place to go touchless.

“There are some apps that work with security systems so that your phone has a unique identity, and you can walk into the building, and it knows your app,” Rickards said.

But most Boston real estate doesn’t have that kind of sophistication yet, he said. In many small lobbies, social distancing won’t even be possible.

“So there will be a lot of workarounds, and that’s going to extend the need for PPE,” Rickards said. “You’re going to need to have a mask on, and maybe gloves. Can we come up with a way to show an ID so that no one else touches it? It might be a rudimentary as the security guard doing all the writing. It’s going to be complicated.”

0 Boston Town Hall with Economist Michael Klein: Coronavirus, The Stimulus Package and Economic Forecast

https://www.bigmarker.com/bisnow/BOSTON-TOWN-HALL-WITH-ECONOMIST-MICHAEL-KLEIN

The coronavirus has changed the way that properties are managed and secured. Many tenants don’t know what it will take to transition back into units or how to protect themselves once they’re back inside. Property managers have to reevaluate how to manage and operate properties now that there are new requirements for what it means to provide safe environments for tenants to live, work, play and transition into.

In response, leading property managers have altered daily practices, while also innovating management techniques to proactively protect tenants today and down the pipeline.

0 Thank you Ben Butcher, CEO of STAG Industrial for joining the BRA Morning Zoom

Thank you Ben Butcher, CEO of STAG Industrial for joining our Morning Zoom.

  • Mr. Butcher provided a quick overview of the STAG portfolio and shared that they focus on speed to market, optionality, and cashflow.  They are a big believer in “boots on the ground” and augment their asset management efforts by hiring local and best-in-class property managers, as well as local brokers to lease their assets in all 38-states.
  • He said that he’s extremely optimistic about the future of STAG, mentioning that they own assets equal to about 1.5% of their target market, and thus have a lot of room for growth.  He added that moving forward, they believe that finding secured loans will be difficult, this will limit the participation of small buyers from most deals.
  • STAG does not offer data storage nor cold storage.  Their portfolio mostly caters to single-tenant supply chain companies, like Amazon.  Mr. Butcher predicts a continued shortening and clogging of the supply chain as well as manufacturing coming back onshore – creating more of a need for logistical space generally.
  • He reminded the attentive audience that in order to consider a facility for last-mile fulfillment, the building has to have the ability to receive the product from 18-wheel trucks.
  • Ben stressed the importance of engaging employees via social causes and charitable organizations – a valuable part of developing the corporate culture.

Book Recommendation – The Boys in the Boat: Nine Americans and Their Epic Quest for Gold at the 1936 Berlin Olympics

0 Thank you Adam Baur from Northwestern Mutual for joining the BRA Morning Zoom

 

Adam Bauer has been with Northwestern Mutual for 15-years and leverages his company’s staying power of 160-years.  Here are a few takeaways from his Morning Zoom with BRA.

  • Adam shared his philosophy with the exclusive BRA audience, explaining that clients often approach him with an “Investment Strategy”.  He dials it back and asks his clients to focus on their “Financial Plan”.
  • He reminded folks about the important fundamental rule to save first and shared the company modo – Spend Your Life Living.
  • Adam is a big believer is dollar cost averaging.  He said not to overanalyze and to continue placing money into your financial plan.
  • He is also a fan of the many fintech tools on the market, suggesting Northwestern’s app.
  • Lastly, Mr. Bauer’s tip for the day was to leverage your network – friends from high school college buddies, previous coworkers, etc.  Start by picking up the phone and asking, “How are you?”
    Q&A OF THE DAY:  “WHAT’S YOUR BIGGEST ASSET – YOUR HOUSE, CAR, OR MONEY IN THE BANK?”

    None of the above. The answer is – Yourself and your ability to produce income. Invest in yourself.