Existing Conditions: It’s All about Marketing

by Ahmad Oloumi



With tightening budgets, vacancies on the rise, and more sublease space hitting the market each day, real estate professionals today are faced with many challenges when marketing space.

What do you do with the existing construction - also called "as-builts" or "existing conditions"- once a space is vacated? Traditionally, a landlord may have opted to demo the existing layout and offer pre-builts or to pay for a new design to entice a prospective tenant. However, with tighter budgets these extras are not always possible, so it's all about working with your existing conditions.



It is clear that cost-cutting is part of everyone’s strategy at the moment, and tenants want to take advantage of better deals in the market. As-builts create a new market for these deal-grabbing, potential tenants and also provide more opportunities for the landlords. Given the competitive market we face, it is crucial to ensure that the prospective tenants are aware of this product in the most effective way possible .

It is vital to include as much specific information as possible when marketing a space. Given the growing market for existing conditions spaces, the importance of having as-builts included in your digital floor plan library cannot be unstated. Working with companies that specialize in marketing existing conditions, such as Real Data Management, will guarantee proper exposure of the space. Not only does having up to date and detailed drawings assist in the marketing of a space, but also can be beneficial for Local Law 26 and Local Law 5 EAP/Fire Safety Plans purposes. Investing in as-built floor plans will go a long way.

In unfavorable times, we have to remain optimistic and, more importantly, clever about marketing the products we already have. The potential clients are out there and all they need is appropriate information about the existing conditions spaces available to them.

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New Equilibrium: NYC Rental Housing Market

by Kasia Janczura


I’ve lived at the same Greenwich Village place for two years, with rent steadily increasing. I wonder what my contract for next year will say. On average, rent is decreasing in the boroughs of New York, which is causing many to relocate. Those living in the surrounding areas of Manhattan are finding it manageable to move back to the island, without sacrificing an arm and a leg. But what is this really saying about the real estate market at the moment?

“I’ve been an observer and a player in this market for 50 years,” Mr. Silverstein says in a NYT article, “and there has never been a surplus of rental housing.” According to Mr. Silverstein, “there is an insatiable need — insatiable — for rental housing in New York.” The equilibrium of rental housing market is contingent on the elasticity of demand for rental housing, which indeed is relatively less elastic for NYC real estate. However, given the critical condition of our economy and people’s uncertainty as to their future income stream, settling on what seems to be an attractive apartment might not be ideal. Some might be afraid to sign a lease for a year not knowing if they will have a job half a year from now. No wonder many are increasing housing options, considering moving back home.

The price adjustment on rental housing that has been taking place is an indication of a surplus. I know many individuals who have their rents lowered for next year relative to current year, and I know of management companies facing difficulties in finding new tenants for the upcoming year. There might be an “insatiable need” for rental housing in New York when the price is right, and that price will always be reached at some point in time. According to The Real Estate Group of New York’s Manhattan Rental Market Report, rents have been falling for the past year, with non-doorman apartment rents falling on average 6.00% since 2008, and doorman apartment rents falling on average 7.7%. The market seems to be reaching equilibrium, most likely since people have reevaluated their options given the uncertain times.

With substitutes increasing (like moving back home), with the high percentage of income that housing encompasses given stagnant or decreasing real wages, and due to the long period of inflated market prices, the rental housing market might not be as immune to the economic situation as some might assume. We are in a buyer’s market, and people’s preferences change, especially when facing critical conditions.

Remaining optimistic about the long run, however, is required to efficiently reach new equilibrium that will ensure the supply in the market meets its demand. After all, we all know that increase in housing is inevitable given the increase in population that is eager to live in one of the most opportune locations in the world.

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RDM Demystifies National Building Measurement Methods

by Peter Boritz

In Real Estate no square foot is the same. When it comes to commercial property, everyone measures space differently, and depending on the measurement method used the same property will have different square footage calculations. RDM, the leading provider of building measurement solutions for over 25 years, recently has written a white paper demystifying the national building measurement methods.

It is vital for the commercial real estate industry to have accurate property measurements in order to ensure maximization of revenues, especially in the current uncertain market. RDM’s White Paper aims to provide the reader with valuable information on building measurement methods, such as BOMA, Modified BOMA, and REBNY, and where each is to be used and why. It discusses trends in distinct markets in the United States and the importance of having the appropriate property measurements portfolio-wide.

The more informed you are about the methods of building measurement the more aware you are of how to maximize your gains.

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Let's Speculate

by Kasia Janczura

Given historical trends, the housing most likely has not hit bottom. As stated in the latest issue of the Economist, “the housing market started the crisis so it is natural to think that house prices must recover before it ends.” Given that the current recession is expected to be the worst since the Second World War, the odds favor the fact that the bottom has not yet been reached. That means we should be examining the market with caution and speculating the right time to jump back into the game.

So while the drastic decrease in prices looks attractive, it is time to wait for some of the sellers to adjust to buyers’ expectations. It might take a while for Bobby Abreu or Flavio Briatore to lower their stupendous penthouse price tags and the more uncertainty we have in the market, the more risk-averse we become, and less willing to start buying. Seeing that some sellers have yet to acknowledge the grim consequences of the house bubble bursting, buyers won’t leap in until prices reflect the true value of the assets.

New York City’s eye-catching real estate playground is yielding to current times by slashing the prices of once fervently sought-after real estate. The assets that are selling are those which successfully manage buyer’s expectations, such as Williamsburg’s recent development Mason Fisk. Green developments are following the trend, with Sterling Green Condo in Prospect Park presenting affordable prices to prospective buyers. Manhattan’s real estate has welcomed back $200,000 studios in certain areas of the island. Further, Julian Schnable’s Palazzo Chupi’s price fell down 7% since January, William Ackman lists his sweet place for $10 million instead of $12 million, and the 11 E. 74th Street Mansion falls from $35 million in 2007 to the current mere $15 million. Better yet, some sellers are resorting to auctions to spur interest amongst the buyers. The cards are in the hands of the buyers, and sellers are accepting this.

While the inflated market prices adjust, let’s speculate when the actual bottom will hit. The uncertainty in the market, which has an impact on the guarantee of a steady income, will keep many buyers out. But those who do reenter at the right time will have a surplus of supply of which to take advantage. Let us wait.

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Twitter + Real Estate

by Peter Boritz

It is vital for the Real Estate industry to take advantage of all the tools available in the market. Especially those free of charge.

All the rage today is this program Twitter. Twitter is a social networking site that allows you to communicate to large groups of people instantly using your PC or text messaging. The website’s original purpose is to provide “a service for friends, family, and co–workers to communicate and stay connected through the exchange of quick, frequent answers to one simple question: What are you doing?”

With Twitter’s exponential growth reaching 131% in March, no wonder nearly every industry is on Twitter, from governmental agencies such as the SEC keeping people informed about its actions, to entertainment industry with celebrities including Oprah and Ashton using it as a platform for brand exposure and keeping in touch with their fans. Seeing the revolutionary approach to real-time news and the benefits that come with it, businesses, small or large, have picked up on this great tool.

But is it good for the Real Estate Industry? The answer is YES. Imagine if you can broadcast your information quickly, about a vacancy, a listing, or some special intel that you just received and want to get out quickly to your entire team. You don’t have to go to voicemail or separate emails in order to access your network. With Twitter all you need is one short message that you can distribute to everyone at once. You can use Twitter for your colleagues, business associates, and prospective tenants that you are approaching. The extensiveness of the network, and the ability to reach out to it instantly is a great way to stay connected. People want news immediately, and what better way to supply it to them than with Twitter.

Some Real Estate businesses have picked up on this. Coldwell Bankers, Colliers International, and CBRE to name a few have created accounts to stay on top of the changing trends in society. The exposure theses businesses get on Twitter is unmatchable as every person following their account is updated with posts in real-time. Given that Twitter works with Blackberries and iPhones adds onto to the marketing revolution.

Twitter is a free and easy to use solution to stay connected to your network at all times. It may be the future of marketing and networking, and given real estate industry’s commitment to both, it is important to take advantage of the opportunity.

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