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20C— February 26 - March 10, 2016 — Commercial Office Properties — M id A tlantic
Real Estate Journal
C ommercial O ffice P roperties
Interest from Fortune 500 driving co-working expan- sion, CBRE study finds
Deerwood’s Yaakov Leiser negotiates the deal Deerwood closes $9m bridge loan on Jersey office property
ibility of the model and lower costs as average office asking rents have been on the rise nationally, jumping 4.8 percent year-over-year, as of Q3 2015, according to CBRE. This demand has spurred growth in cities such as Wash- ington, DC and New York City, where the amount of co-working space has doubled in the past five years. The sector has also piqued the interest of landlords looking to reposition ailing, often older office buildings as creative office space popularity is soaring. Many owners are reimagining and subsequently repositioning class A buildings to attract more diverse and dy- namic tenants and uses. This increasingly diverse de- mand from occupiers and land- lords suggests the co-working sector is better equipped to withstand a downturn than it was during the dot-com bust and the subsequent recession. With the growth of co-working spaces in the US estimated to be experiencing a five-year com- pound average annual growth rate of 21%, the CBRE report also identifies megatrends driv- ing this growth and long-term sustainability of the co-working model. Among the megatrends are economic uncertainty, which affects long-term real estate decisionmaking; technol- ogy and the ability for people to work from anywhere, anytime; the desire for community in the work environment, particularly among millennials; and cities, particularly gateway cities where the cost of real estate continues to increase. CBRE collaborated with LongviewGlobal Advisors on the production of this report. n 5 Paragon Dr. The company is relocating from its previ- ous offices at 69 Spring St. in Ramsey, NJ. The interior renovation proj- ect will entail a gut renovation of the entire second floor and a portion of the first floor. JLL was selected as proj- ect manager for the interior renovation effort, as well as to provide energy and sustain- ability services to assist FC USA in meeting U.S. Green Building Council standards for Leadership in Energy and Environmental Design Silver Certification for Commercial Interiors. The effort will be led by John Vivino , vice presi- dent, and Jasmine Amoso , senior project manager, both with JLL. n
PHILADELPHIA, PA — The number of co-working spac- es in office markets around the country is likely to rise in 2016 as more companies, including Fortune 500 enterprises, are taking space at these types of facilities, according to a new report from CBREGroup, Inc. Forty percent of respondents in a recent CBRE occupier survey said they use or are con- sidering using shared space, including co-working space. While co-working spaces have typically appealed more to startups and freelancers, large enterprises are starting to take space in co-working facilities, according to the CBRE report, the first in a four-part series. “As the nature of work gets redefined, many professionals are embracing co-working spac- es,” said Lauren Koshgarian , senior research analyst. “These innovative, entrepreneurial communities have created and driven a new collaborative ecosystem. As more freelanc- ers, traveling professionals, and companies of all sizes seek new and collaborative places to work, the amenities, locations, and spaces will reflect this demand and drive utilization upward.” While interest from large corporations remains limited, co-working spaces – typically updated versions of executive suites in which tenants share workstations and amenities such as kitchens and confer- ence rooms – can present op- portunities, particularly as companies are venturing into new markets. Demand for co-working spac- es by companies small and large is in part driven by the flex-
M ONTVALE, NJ — Deerwood Real Estate Capital , a
100,000 s/f multi-tenant office building in Montvale, NJ.
petitive terms than initially agreed upon. The loan was funded at 80% of the pur- chase price and an additional future-funded amount of 100% of leasing cost and capital expenses. n
commercial real estate advi- sory firm based in Englewood Cliffs, NJ, closed a $9 million non-recourse bridge loan on a Launch of SwingSpace will transform commercial real estate leasing Despite significant delays and difficulties caused by the seller, Deerwood kept the lender focused on the deal and closed at even more com-
ficiencies within the mainte- nance organization can result in conflicting priorities and confusion. Response time: Response time to problems may be han- dled more rapidly in-house when compared with a phone call to an offsite vendor when dealing with specialty con- tracts. The company must balance the needs of the site against the decision to out- source this work. The company must negotiate an acceptable response time, such as 24 or 72 hours or whatever is required. A longer response time can equate to more downtime and lost production. The commercial property management/ownership must determine the cost-effective- ness, control, flexibility and focus required at their unique DC is the second largest office market in the nation with almost 470 million s/f of space. SwingSpace estimates that as much as ten percent of that -- or four to five mil- lion s/f -- is “phantom space,” the leases themselves, into one turn-key service. “Finding space for small or- ganizations is transformed by SwingSpace’s groundbreaking soup-to-nuts leasing model,” said Richard McBride , co- founder and CEO of Swing- Space. “Washington is home to scores of pop-up advocacy and political campaigns as well as non-profits with extra space, making it the ideal city to launch SwingSpace.”
sites to properly manage their maintenance function within their particular budgetary constraints and to meet their strategic objectives regard- ing property maintenance. Outsourcing does not mean management no longer has responsibilities. In fact, out- sourcing requires dedicated management personnel to oversee, coordinate and col- laborate with the outsource organization. The decision requires a detailed evalua- tion of all factors to determine whether the most strategic choice for commercial property maintenance is outsourcing or performing it in-house. Glenn Ebersole, Jr., P.E. is strategic vice president of business development/ marketing at Hollenbach Construction, Inc . n Making SwingSpace’s list- ings even more comprehensive are partnerships with com- mercial real estate brokers, landlords and other profes- sionals including Cushman & Wakefield, Transwestern, Summit, McBride, Newmark, West, Lane & Schlager, JBG, Douglas Development, Lib- erty Property Trust, Borger Management, Fox Architects, Bialek Environmental and Palm Facility Services. n which are suites and desks that go unused by office ten- ants for extended periods of time. SwingSpace creates a way for organizations to eas- ily market and sublease their underutilized space.
higher cost in the long run. Staff turnover: In-house employees tend to have more years of service at a facility than contractor employees and have a higher understanding of the business and its expecta- tions. The outsourced work- ers may not possess as much allegiance to the company. Therefore, the knowledge that the outsourced staff possess re- garding the site’s maintenance function, equipment and busi- ness operation is more easily lost if and when they leave. Redundancy inmanagement roles: Roles may be duplicated within a client and contrac- tor organization and this will contribute to the overall cost of maintenance. If roles and responsibilities are not clearly defined and understood inef- SwingSpace brings the ben- efits of the shared economy to commercial real estate by offer- ing highly customizable office space searches, with vibrant photos and first-of-its-kind vid- eo tours shot by SwingSpace it- self. Potential tenants can find traditional office suites as well as extra office space, including sets of desks, in an existing tenant’s space. SwingSpace collapses all aspects of the of- fice leasing process, including WASHINGTON, DC — SwingSpace , a new online market for leasing small office space, launched in Washing- ton, DC, offering both tenants and landlords a simplified and faster leasing experience.
Commercial property maintenance: Outsource or. . . continued from page 2C
JLL Secures 70,863 s/f for FC USA MONTVALE, NJ — JLL has completed a new, direct transaction for FC USA Inc. with building owner Lone Star Funds at 5 Paragon Drive in Montvale. The company signed for 70,863 s/f at the class A, 119,254 s/f commercial office building.
The tenant, FC USA, was represented by Phillip Lip- per, executive vice president, and Thomas Reilly and Scott Lesh , managing directors, all with JLL. Building owner Lone Star Funds was represented by Gregory Barkan , senior vice president, with CBRE Inc . FC USA signed a 15-plus- year lease for 70,863 square feet of office space and will oc- cupy a portion of the first floor and the entire second floor at
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