28 Aug 2017

Commercial Property Executive

Commercial Property Executive

KY MOB Changes Hands

Nov 17 2017

New Albany Medical Center
New Albany Medical Center, 2125 State St. in Louisville, Ky.

Everhealth Properties LP—a subsidiary of Everest Healthcare Properties LLC—has acquired the New Albany Medical Center. The company purchased the property as its initial investment in the market-leading, tax-deferred IRS Section 721 program. The program offers investors access to high-quality medical office real estate with the potential of long-term capital appreciation, within a diversified portfolio with an attractive target distribution of 6.5 percent annually.

Located at 2125 State St. in Louisville, Ky., the property comprises a total of 60,000 square feet. The asset is 95 percent occupied, with a weighted average lease term of almost six years and investment-grade tenancy representing 64 percent of total rentable square feet.

“The Everhealth Properties program is a compelling alternative to sellers who desire deferral of taxable capital gains, access to a diversified medical office portfolio and professional asset management,” said David Lynn, president & CEO of Everest Healthcare Properties, in prepared remarks.

Image courtesy of Everest Healthcare Properties

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Co-Working Creeps into Corporate Property Strategy

Nov 17 2017

office spaceThe Urban Land Institute Fall Meeting in October featured a panel discussion titled “What is Creative Office 2.0 and Why Does It Matter?” moderated by WeWork’s Liz Burow with panelists from Microsoft, CBRE and ZGF Architects. The cross-disciplinary panel identified emerging trends in the modern office environment, with emphasis on shorter-term use arrangements to give companies flexibility in how to manage both people and properties.

Growing Demand for Flexible Modern Offices

The traditional office environment is splintering with design elements and use terms that are increasingly customized to the specific needs of the user. Themes such as creative office architecture as well as short-term rentals of office space permeate the environment, particularly for technology companies that want to attract top talent by offering the best amenities; short-term lease arrangements, often referred to as “co-working,” are also increasingly common to give companies flexibility with new projects and to reduce financial risk for both tenants and landlords.

Corporate Real Estate Managers Dive Into Co-Working

The trend toward flexible lease arrangements has been popularized by innovators like WeWork, but demand for customized office terms is now spreading to corporate real estate managers. Office space with flexibility is now seen as playing a key role in dynamically managing a company’s future growth. Corporate real estate managers are using creative office with flexible co-working terms to incubate new groups within a company while they grow. Internal property managers are also using co-working space for projects that might have a finite period of development.

Office Design at Microsoft: Collaborative, Faster & Quieter

During the panel discussion, Microsoft’s corporate facilities manager Jeff Rovegno detailed a shift in how teams of office workers function differently than in the past: Rovegno pointed out that a decade ago Microsoft would commonly see teams meeting as infrequently as once per week to review project status and divide future assignments. But in recent years, Microsoft CEO Satya Nadella has encouraged teams to meet more frequently to speed the product delivery cycle. For Microsoft, this has led corporate managers to design spaces that foster frequent collaboration. Because of faster product delivery cycles and more frequent meetings, Microsoft has discovered that working groups are better-served with small office areas for eight to 12 workers than larger, open areas that are noisier and less private.

Design for a More Perfect Union

The broad architectural trend during the modern era has been toward large, open spaces accommodating dozens of generic cubicles. This simple, open design reduced construction and rent expense while helping to bridge corporate silos often created by many separate offices. After years of open floorplans, workers and designers are now retaining the openness and natural lighting of spare interiors while installing glass and other sound barriers to reduce noise and increase privacy in an open setting. Demographers observe that after the Millennials a new generation of workers known as Generation Z will enter office-using employment; sociologists find that Generation Z is notably different from Millennials because the young members of Generation Z were raised during the Great Recession and are more anxious about the weak economy they face; as a result, Generation Z tends to be more competitive with each other. In addition, Generation Z is expressing a strong preference for more privacy and quiet in the office.

Corporate Real Estate Driven to Greater Efficiency

Companies increasingly view co-working space as an essential portion of corporate facilities needed to accommodate variable demands. As a result, corporations are turning to co-working experts like WeWork for options and are beginning to push within their current properties for flexible terms. In addition, companies recognize that some of their office space should be based on flexible use because projects might only need facilities for a few months. Corporations which dominate office-using employment also see that many of their employees are traveling or working remotely instead of being in the office; surveys of technology firms, for example, reveal that only about half of office workers are present on a typical day.

Doing More With Less

Office real estate managers are caught in a storm of trying to more dynamically manage space amid increasing rents, limited allowances for tenant improvements and pressure to add building amenities that are attractive to workers today. WeWork and other co-working specialists are innovating with flexible spaces in beautiful modern environments to meet these variable needs. As awareness of co-working permeates real estate, more companies are finding ways to adopt a more flexible approach that is cost-effective and adaptive to the needs of today’s complex office environment.

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Peak10 + ViaWest Buys $33M PA Facility

Nov 17 2017

Aerial view of the PA facility
Aerial view of the PA facility

Peak10 + ViaWest has grown its national footprint to more than three million square feet of data center space. The company acquired a 203,000-square-foot, purpose-built facility in Collegeville, Pa. Global Data Center was completed in 2009 and previously owned by GlaxoSmithKline, which is also one of the main tenants. An HFF team secured the acquisition funds, a three-year floating-rate loan of $32.9 million, obtained through Wells Fargo Bank.

The Tier III+ facility is located at 1000 Black Rock Road, near the Benjamin Franklin Highway. The data center has a capacity of 4.6 megawatts of IT power available, with a possible expansion up to 7 megawatts with additional investment. The property features 2N+1 fault tolerant power configuration, N+1 redundant cooling and anti-static raised flooring. The 25-acre plot of land on which the facility is located offers expansion capacity, which could potentially double the amount of raised floor space.

Ongoing growth

We remain committed to growing our company by investing capital that supports our customers’ expanding and increasingly complex IT, colocation and connectivity needs. With these ongoing investments, our customers will continue to benefit from increased scale, a coast-to-coast data center presence and a comprehensive and robust suite of IT solutions,” said Chris Downie, CEO of Peak10 + ViaWest, in a prepared statement. The company recently expanded its Denver data center, adding 88,000 square feet of raised floor space.

The building was designed to withstand natural disasters and man-made risks as well. The security it offers includes a dual-factor authentication process, monitored security cameras, 24/7 environmental infrastructure monitoring and cage security cameras. Other features include a meeting room and 11,000 square feet of leasable office space. The data center is carrier-neutral and will be a hub for the company’s 100-Gigabit fiber network. Peak10 + ViaWest plans to increase network carrier capabilities to more than 80 providers.

Image via Google Street View

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Peak10 + ViaWest Completes Denver Expansion

Nov 17 2017

Peak10 + ViaWest have completed an 88,000-square-foot expansion to its Englewood, Colo. facility. The Compark data center now has a total of 140,000 square feet of raised floor space. A total of five facilities are operated by Peak10 + ViaWest in the state of Colorado, all of them within Denver’s metropolitan area, with the newly expanded one being the largest.

Compark Data Center is located at 8636 S. Peoria St., near the Centennial Airport and Route 470. Its remote location comes as an enhancement on top of the measures already in place. These include five-zone security areas with biometric authentication, 24/7 on-site personnel and monitored security cameras.

Innovative design 

The facility’s overall design makes it capable of delivering 1,500 watts per square foot, at a power usage effectiveness (PUE) of 1.3. It offers potential tenants the choice of customizing the private suites and cages available. The data center has 24-foot ceilings for efficient heat collection and cooling. Its proprietary-design systems can deliver two million cubic feet of temperature- and humidity-controlled air, replacing it entirely every two minutes.

Demand in the Denver area is spiking as our customers’ data needs increase and their infrastructure strategies shift toward a fully hybrid IT model. With our Compark data center, we are breaking the mold of data center design by introducing multiple innovations that help us achieve one of the lowest PUE ratings in the industry, translating to lower operating costs for our customers,” said Chris Downie, CEO of Peak10 + ViaWest, in a prepared statement.

A dual feed power supply delivers a total of 29 megawatts, with fault tolerant diesel generators in place, while an 18-megawatt UPS system with multiple redundancies is installed to ensure against outages. Network connectivity is delivered via a 100-gigabit backbone, with geographic redundancy due to Peak10 + ViaWest’s other Denver facilities. Compark is a carrier-neutral facility with almost 30 carriers to choose from.

Video courtesy of Peak10 + ViaWest

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Economy Watch: Thanksgiving Travel to Hit Highest Volume Since ’05

Nov 17 2017

traffic-jam-1703575_1920Good news for hotels and restaurants: AAA is predicting the busiest Thanksgiving travel season in years. The organization projects that about 50.9 million Americans will travel 50 miles or more away from home this Thanksgiving, a 3.3 percent increase over last year. AAA defines the season as Wednesday, Nov. 22 to Sunday, Nov. 26.

Thus the 2017 Thanksgiving holiday weekend will see the highest Thanksgiving travel volume since 2005, with 1.6 million more people taking to the nation’s roads, skies, rails and waterways compared with last year—especially the roads. Some 89 percent of all travelers – or 45.5 million – are planning a Thanksgiving road trip, an increase of 3.2 percent compared with 2016.

It will cost more to do so. AAA expects most U.S. drivers will pay the highest Thanksgiving gas prices since 2014. This November’s national average price is $2.54 per gallon, which is 37 cents more than last November. The cost for travelers staying in hotels, rather than with relatives or Airbnb, will also be up.

By contrast, according to AAA’s Leisure Travel Index, travelers who fly will pay the lowest average in five years for a round-trip flight for the top 40 domestic routes. At $157, on average, that’s a 23 percent fare drop year-over-year.

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