Moving from NYC to NJ???

Come In, New York, Come In: COVID Has Companies Thinking Satellite Offices
Some firms have already relocated to the suburbs from NYC, but most are awaiting how the pandemic plays out
BY AARON SHORT SEPTEMBER 29, 2020 9:57 AM REPRINTS
A man sitting at a desk with a dog next to him, and the man has a satellite dish around his head.CREDIT: KEVIN FALES
When Mayor Bill de Blasio issued a state of emergency in mid-March in anticipation of a deadly contagion’s spread, some business leaders began to consider whether staying in New York was worth it.

SEE ALSO: Baltimore-Area Office Campus Adds Anne Arundel County Health Department
In the weeks that followed, office towers shuttered as companies prepared workers to work from home indefinitely. Subway ridership plummeted 92 percent while commutes on the Long Island Rail Road and Metro North bottomed out to almost nothing.

Those who ventured into Midtown and Lower Manhattan resembled a Cameron Crowe film shoot with restaurants and theaters padlocking their doors and retail stores encasing their shops with hurricane-strength plywood.

The dire scene led hundreds of thousands of residents to decamp for second homes, crash with relatives, or score temporary suburban rentals for the summer and fall.

Suddenly the leafy lawns, car-dependent thoroughfares, and languorous nightlife seemed appealing for New Yorkers freaked out by the pandemic and burned out by the city’s cost of living. By May, stories about an urban exodus to the suburbs in the tri-state area and beyond began appearing with a trove of “Why I left New York” essays as well as the inevitable backlash essays from those who love New York and remained.

But speculation that the suburban migration was more than temporary began to rise along with housing prices in New Jersey, Westchester County and Connecticut. A spate of stories contemplated that companies would soon follow their workers and open sparkling satellite offices or new headquarters outside of the city.

One of COVID-19’s lasting effects could be companies with massive office footprints in Manhattan’s pricier business districts downsizing to cheaper locations elsewhere, a Moody’s analysis contemplated in May.

“Will the COVID-19 crisis and the quarantine experience represent a shock that will be relatively transitory, forgotten quickly once the economy reopens?” Moody’s asked. “Or will the effect be longer lasting, perhaps representing a permanent negative shock to demand for office space?”

Either way, it was the end of business as usual. New York’s agglomeration economy, in which top firms in technology, finance, law, accounting, health care, media and the arts cluster and create additional opportunities for a highly educated workforce, seemed at risk of dilution.

But few companies so far have made the move to leave the city.

“People are doing a lot of looking around and seeing what’s available but there has been very little momentum and decision-making,” Nicole LaRusso, director of research and analysis for CBRE tri-state, told CO. “We’ve been watching closely to see if this trend is materializing, and so far it has not. It’s an evolving situation.”

Instead, employers found that having its workforce log on remotely over the last few months has been more successful than anticipated. That has allowed many firms to decelerate making plans for the future until uncertainty over COVID-19 and its effects on the economy dissipates.

“There are many questions about work from home over the long horizon but the question of whether it works over a shorter horizon has been answered,” Gabe Marans, a senior managing director at brokerage Savills, said. “Most industries, including tech, publishing and finance have maintained a wait-and-see approach.”

The proof is in the numbers and the relative dearth of deals. Suburban office space in the New York area remains up for grabs. Leasing in Fairfield County fell to a record low of 136,591 square feet in the second quarter of 2020, for instance, a 50 percent drop from the first quarter and a 56 percent tumble from the second quarter of 2019, according to a CBRE report. The lack of demand led to a 25 percent increase in availability for commercial space in the second quarter of 2020 despite an average asking rent of $34.35 per square foot that is roughly half of the average asking rent in downtown Manhattan, the report said.

That doesn’t mean everyone has stayed put during the pandemic, though the number of leases isn’t all that large.

Hedge fund and private equity executives made some of the first moves to swap space in Manhattan for smaller offices in Greenwich, which happen to be both closer to where they live and less expensive. Prices for Class A office space in the tony Connecticut town were about $49.90 per square foot in Q2 2020 compared with the average asking rent in August of $82.98 in Midtown, according to Cushman & Wakefield.

“These firms are small boutique financial companies that usually don’t have a large corporate structure,” Bob Caruso, a CBRE senior managing director, said. “The head of the company decides he wants people in the office so he’ll go lease space as opposed to going through a long process of analysis and consensus building. They look at facts, they make a decision, and they execute.”

More than a half-dozen firms have already taken the plunge near the banks of the Long Island Sound. That includes iCapital Network, which leased 12,000 square feet at 2 Greenwich Plaza for 11 years and a firm connected to hedge fund titan David Stemerman, who once ran for governor in Connecticut. That firm finalized 3,500 square feet in Greenwich’s central business district, according to sources.

Several financial and insurance companies have begun exploring satellite offices in New Jersey, too, while a handful have temporarily relocated. AIG made the most significant move, taking 230,000 square feet at 30 Hudson in Jersey City, where prices hover at $45.83 per square foot—although AIG’s plan to consolidate its New Jersey operations there was underway before the coronavirus struck. A small reassurance company left Manhattan for a sublease in Woodbridge, N.J., and a financial company also took a short-term sublease in Short Hills, N.J., brokers with Cushman & Wakefield said.

Companies are waiting until next year to make any significant moves, Jason Price, Cushman & Wakefield’s tri-state suburban director, said.

“It depends on where the employees live, who needs to work from home, and how often,” Price said. “Some will be attracted to Jersey City because of the proximity to New York, and it’s a newer inventory overall compared with most of the state, while others will look to suburban parks. If you’re only going to have executives and management go to the office, then you wouldn’t need as much space.”

Companies serious about moving from the city are likelier to favor renovated offices in walkable downtowns near mass transit than the office park campuses that dotted the Northeast in the 1980s and 1990s, several brokers said. Those sites, like the former General Electric headquarters in Fairfield, have instead found new life as higher education campuses and medical offices.

The trend of a suburban office migration won’t be fully realized until the plentiful supply of Class A office towers in Stamford and Jersey City starts coming off the market, brokers said. Developers are preparing for an onslaught of inquiries anyway by ensuring these spaces are flexible for a multitude of uses and safe for in-person work.

“Landlords have upped their game when it comes to cleaning, air filtration and circulation within the building,” Tom Pajolek, a CBRE executive vice president, told CO. “It’s very important for the workforce to feel comfortable for corporations to bring people back. They want to come to a healthy, well-attended-to situation.”

Meanwhile, most New York City offices remain closed or operating at a significantly reduced capacity but some workers are starting to return. And those who temporarily left the city may find their landlords are open to renegotiating rental leases as housing prices fall. But business leaders caution that city officials must not be complacent about New York’s core industries—or it risks losing them to cheaper, more spacious suburbs.

“If New York City politicians want to keep companies from moving jobs out of the city, they can stop talking about raising taxes, they can stop opposing private efforts to create jobs, and they can reduce regulations and laws that make NYC a very expensive and difficult place to employ people and run a business,” Kathy Wylde, president and CEO of the Partnership for New York City, told CO. “Companies will only reduce their footprint in NYC if they see the political and business climate of the city become totally inhospitable.”

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Is your warehouse building healthy?

In a typical year you will take two million breaths in your office. This, however, is not a typical year. The pandemic spawned by the novel coronavirus has forced a global reckoning with the awesome power of infectious diseases to grind economies to a halt. The forced lockdowns and retreat into home isolation has also given us a heightened awareness of the role our surroundings play in our health and wellbeing. COPYRIGHT © 2020 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. 2 While no one could have predicted the exact nature of the outbreak that is now upending our lives, many of us working in public health have been urgently advocating for organizations to invest in healthier buildings for some time. History tells us that buildings play a central role in the spread of disease. From measles to SARS to influenza and the common cold, the scientific literature is full of examples. But, as much as buildings can spread disease, if operated smartly, they can also help us fight against it. Amidst the chaos, one thing is clear: We will all go back to work with new expectations about the buildings where we live, learn, work, and play. Buildings that Fight Disease and Promote Health For our book, Healthy Buildings: How Indoor Spaces Drive Performance and Productivity, the two of us have spent the last three years speaking to executives across the business spectrum who oversee real-estate portfolios that cover several billion square feet and contain millions of employees. We aimed to better understand how to drive healthy building science into practice. Locked in a global battle for talent, the business leaders we spoke with were eager to find new ways to attract, retain, and enhance the performance of their employees. Few of them realized that their buildings could play a vital role in the health of their business. In response to Covid-19, that’s rapidly changing. CEOs from companies large and small have come out of the woodwork to engage with us on how to design, operate, and manage better buildings. Calls are also coming in from groups that run medical offices and dental clinics, hotels, schools, airports, and theaters, as well as mid-size law firms and small businesses in both small towns and major metropolitan areas. The question on the mind of every business and organizational leader is this: When the time comes, how do I re-populate my buildings and restart my business? Re-Populating Your Buildings As you prepare for the return of your employees, remember that the scientific models on the spread and containment of SARS-CoV-2 indicate this is a problem we will be dealing with for at least 12 months. Likely approaches to controlling the spread and damage from the virus include a combination of widescale testing, and periodic isolation and quarantine. Some cities and regions will begin re-populating their buildings over the next few weeks, and some will likely be hit with repeated cycles of social distancing. In either case, as employees return to offices, there is a framework companies can deploy to keep people safe without crippling their businesses and our economy. First, we all have to understand — and communicate to employees — that there is no such thing as zero risk. The goal is to minimize risk, and we can get there using a layered defense approach by applying what is known in public health as the hierarchy of controls. COPYRIGHT © 2020 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. 3 The hierarchy of controls is how the field of occupational health thinks about protecting workers from any hazard — biological, chemical, or otherwise. There are five types of controls, moving from the most e†ective at the bottom to least e†ective at the top

Elimination of exposure. The first, and most e†ective control, is to minimize social interaction. Of course, you could keep everyone 100% safe by keeping them at home for the near future. But this will COPYRIGHT © 2020 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. 4 come at a great cost to your company and the economy. In time, you will need to begin re-populating your building. This means you will be accepting some degree of risk. Substitution activities. This brings us to level two of the pyramid: “substitution.” Evaluate critical, core workers who need to be onsite and create work teams that can be physically isolated from one another. That way, if one employee gets sick and their close contacts need to self-quarantine, you can shut down that one group for two weeks without shutting down your entire company. Engineering controls and healthy building strategies. The next step is to boost your building’s defenses against disease. This means immediately enacting some key healthy building strategies. At the room level, consider using portable air purifiers and looking into new technologies like touchless entryways, elevators, sinks, and toilet flushes. In addition, having an enhanced disinfection protocol in place that clearly spells out the locations, timing, and frequency of cleaning is critical, as well as training cleaning sta† on these new procedures. Most importantly, at the building level, focus on improving these 9 Foundations of a Healthy Building: • Ventilation • Air quality • Thermal health • Moisture • Dusts & pests • Safety & Security • Water quality • Noise • Lighting and views These were distilled from 40 years of scientific evidence at Harvard’s Healthy Buildings lab, and improving them will serve as a long term preventative measure. While some of these you might have expected, like better acoustics and lighting, we suspect you haven’t been thinking about how humidity, temperature, furniture, carpeting, and even dust can impact employee health — and even beyond health, performance. But consider just a small smattering of the evidence: One study of young adults found that every 1°F deviation from an optimal indoor temperature came with a 2% decrease in output. In another study, researchers found that every time you double the rate of outdoor air delivered into an office, worker performance improves by 1.7% across four simulated office tasks: text typing, addition, proofreading, and creative thinking. It’s no surprise, then, that an analysis of sick leave data for more than 3,000 workers across 40 buildings found that 57% of all sick leave was attributable to poor ventilation. COPYRIGHT © 2020 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. 5 Of course, it’s not just air quality that drives health and performance. A study of workers found that they reported more headaches and worked 6.5% more slowly on a typing test when they were in an office with a pollution source. The “pollution source” in question? A dirty carpet. The amount of indoor nature and views matter, too. Young adults in an office designed following biophilic design principles had lower blood pressure, lower heart rates, and better performance on short-term memory tests. Making sure each foundation is up to par with our current healthy building standards is key to both stopping the spread of infectious disease, and setting up a successful workforce. Administrative controls. Here, the big picture focus should be on de-densifying your buildings and maintaining social distancing (e.g., staying six feet apart). You can do this through both time and space. By limiting who comes to your office (substitution), you’ve already taken one step. You can do more by getting clever with your scheduling. Consider extending operating hours and asking employees to come in shifts. Running a two-shift operation — say, six a.m. to 12 p.m., and one p.m. to seven p.m. with an hour of deep cleaning in between, instantly cuts the occupant density by half. Not everyone needs to arrive right at the start of their shift. Staggering arrival and departure times, even by 10 minutes, can prevent traffic jams at the elevators and common areas. Another option is to alternate work-from-home and office days, using A/B days, so that only half your company is in the building on any one day. This tactic also mitigates exposure to rush hour crunches in public transportation. In addition, because one unfortunate fallout of the virus is an economic slowdown, layo†s may lead to higher vacancies in office space, retail stores, restaurants, hotels, and more. This means there is a lot of “unused” space in most commercial buildings, and now is a good time to repurpose it. Move desks into conference rooms and common areas to spread out your workforce. In terms of meetings, any gathering with more than 10 people should be virtual for the near term. For essential in-person meetings, you can slide your chairs back and keep to the edges of the room. If you’re at a conference table, leave a chair open between each person. Skip the handshakes, and wash your hands immediately before and after each meeting. Personal protective equipment (PPE). The last, and least e†ective control measure, is personal protective equipment. Employees should be wearing a mask on their way to and from work, and also as they enter the building and walk through common areas and take the elevators. Wearing a mask protects others and the wearer. Finally, remember that no one control strategy is sufficient. You have to think about this in terms of a layered defense, doing everything you can to minimize the risk. COPYRIGHT © 2020 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. 6 How Can You Measure Success? If you wait for people metrics to show you success — like the number of sick or absent employees in a given time frame — you are acting too late. Like a doctor at the start of an exam, if you want to protect your workforce, you should be regularly checking the health of your building, not just your people. It’s common for organizations to measure the life of their workspaces in terms of years, when visible decay and wear and tear become noticeable. But buildings change on a much shorter timescale and the e†ects are not always visible. Every business tracks key performance indicators so they can keep tabs on their progress. But very few track what we’re calling Health Performance Indicators, or HPIs. At a fundamental level, health drives human performance. This means that building performance is a critical metric that every business should be tracking. HPIs can be used to measure indoor environmental quality, or what we call “the pulse” of your building. We have divided them into four quadrants: leading and lagging indicators, and direct and indirect indicators. Direct indicators measure people, while indirect indicators measure the building. Leading factors are those that can be measured — and caught — before an issues arises, whereas lagging ones can only be measured after the fact. For example, “commissioning” your building, which is akin to giving your car a tune-up, can help you identify problems with your ventilation system before anyone is actually in the space. As such, “commissioning” is leading factor and an indirect indicator.

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Mack Cali sells another building

Shedding another suburban office building, Mack-Cali Realty has sold a Florham Park, New Jersey, property to The Birch Group.

Mack-Cali, a Jersey City, New Jersey-based real estate investment trust, is in the process of selling office properties that are not on the Hudson River waterfront. Terms of its deal to divest 325 Columbia Turnpike, a 168,144-square-foot, three-story office property, to Birch Group weren’t disclosed.

The single Florham Park building attracted a lot of investor interest and tour activity because of its location and size, according to the broker on the sale, Cushman & Wakefield.

“Despite significant near-term rollover risk, we remained confident in our ability to implement a value-add strategy,” Mark Meisner, president of Nanuet, New York-headquartered Birch Group, said in a statement. “This is a great building in a location that is extremely convenient for its occupiers, evident by exceptional historical occupancy figures.”

Mack-Cali just closed on its roughly $160 million sale of 10 office buildings totaling 1.5 million square feet in Morris County, New Jersey, to Woodbridge, New Jersey-based Onyx Equities and its partners.

The Florham Park property is located on a 15-acre site and is 85% leased to 13 tenants. It has a renovated cafeteria, a sky-lit atrium lobby, on-site tenant storage units and executive covered parking.

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Massive Morristown Lease Deloitte

MORRISTOWN, N.J. — Accounting firm Deloitte has preleased a 110,000-square-foot office space at M Station, an office redevelopment project in Morristown. SJP Properties and Scotto Properties plan to convert the Midtown Shopping Center strip in downtown Morristown into two office buildings totaling 400,000 square feet. Deloitte’s lease is contingent on SJP and Scotto receiving full municipal approvals for the project. The company plans to relocate from its previous office in Parsippany and will occupy floors two through six of M Station East. The building will also include 10,000 square feet of ground floor retail. M Station West is planned to be seven stories and approximately 253,000 square feet, which will include approximately 230,000 square feet of office space and 23,000 square feet of retail space. David Stefancic, Lexis Livengood, Ben Brenner and Josh Cohen of Cushman & Wakefield represented Deloitte in the lease negotiations. Robert Donnelly, Robert Donnelly Jr. and Brian Decillis of Cushman & Wakefield represented SJP and Scotto. Gensler designed the project.

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New Medical Building in Montclair

Glen Ridge and Montclair, N.J. – A ribbon cutting ceremony was held on Thursday for a three-story, 45,735-square-foot state-of-the-art medical office building at the former School of Nursing site across from Hackensack Meridian Health Mountainside Medical Center on the border of Glen Ridge and Montclair, N.J. Developed by The Hampshire Companies with Circle Squared Alternative Investments (Circle Squared) serving as the project advisor, the modern medical office building is anchored by Hackensack Meridian Health. The project enhances the scope and quality of comprehensive healthcare services and brings additional economic and quality-of-life benefits to the communities Mountainside Medical Center serves.

Jon F. Hanson, James E. Hanson II, and John Durso from The Hampshire Companies and Jeff Sica of Circle Squared Alternative Investments were joined by top local and hospital officials to celebrate the milestone event including John Fromhold, FACHE, CEO of Mountainside Medical Center, Robert C. Garrett, CEO of Hackensack Meridian Health, , David Vandewater, CEO of Ardent Health Services, Frank Fekete, Chairman of the Hackensack Meridian Health Mountainside Medical Center Joint Venture Board, Tim O’Brien, COO of Mountainside Medical Center, and Glen Ridge Mayor Stuart K. Patrick.

The state-of-the-art facility will provide increased access to quality care for the community providing a home for a variety of Hackensack Meridian Health’s specialty groups at Mountainside Medical Center including obstetrics and gynecology, internal medicine, family medicine, urology, general surgery, cardiology, orthopedics, ENT, pulmonary, GI, endocrinology, pediatrics and pediatric subspecialists from the John M. Sanzari Children’s Hospital at Hackensack University Medical Center.

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Why Use a Tenant Representation Broker as Opposed to Looking on your own?

Tenant Representation: No Conflicts of Interest
Whether you’re relocating your business, expanding to another location or finding a home for your start-up, the commercial leasing process can be lengthy and difficult. Having tenant representation can help to simplify the process, but it’s important that you choose the person who will be by your side throughout the process carefully. Many companies make the mistake of thinking that all tenant representation is the same, but that’s simply not the case. These key points will help you understand the differences between tenant representation options.

Tenant Reps and Brokers are Not the Same
Tenant representatives and brokers both assist with the commercial leasing process, but the terms are not interchangeable. Both types of professionals can help you find office, retail, warehousing or industrial space and act as an assistant during the negotiation process, but who these individuals represent differs.

Reps Work for You
Brokers work for both you and the landlord. The key difference between tenant reps and brokers is for whom they work. A tenant rep serves as the advocate for the tenant only. A broker works for both the landlord and the tenant.

Brokers May Tell You That You’ll Save Money if You Skip Using a Rep
Often, brokers who are eager to secure the business of a company will say that using a tenant representative for tenant representation will make the process more costly. This is because the landlord pays the fees of the tenant rep. While at face value this may be true, brokers also are paid a fee. Even if the broker’s fees are lower than the rep’s, tenants may still not see the big savings they are promised.

Brokers Often Have a Conflict of Interest
A broker’s job is to fill the landlord’s units, buildings or offices with tenants. As a result, he or she may recommend properties that are not completely in line with tenants’ needs or that are not priced fairly in respect to current market trends.

Choosing a Rep Frees You of Conflict of Interest Concerns
With a tenant representative, you can feel confident that your interests are being looked out for. Because a tenant rep works solely for you, he or she will be most concerned with finding you the right space for your needs and helping you negotiate the fairest lease possible. That’s why even if a rep’s fees are higher than a broker’s and the landlord folds some of those fees into your rent, you still have the potential to save money when you opt for a rep to serve as your tenant representation.

Doing Background and Reputation Checks is Key
While tenant reps are the smart choice for tenant representation, keep in mind that they’re not all the same. Before you enlist the help of a particular rep, do some Internet research to get a feel for his or her reputation in the area.

AND his or his service and expertise will be FREE to you.

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3 Technology Trends That Will Shape Commercial Real Estate In 2019

3 Technology Trends That Will Shape Commercial Real Estate In 2019
By Don Catalano

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2018 has seen a lot of transformative movement in commercial real estate. The year witnessed a competitive home buying market, and many observers expect a correction in the coming year. In a year that has witnessed a steady growth in commercial real estate low interests, it is important to examine the technology changes that may disrupt this market.

There is a lot of rave surrounding Augmented Reality (AR), Virtual Reality (VR), Artificial Intelligence (AI), Blockchain, Autonomous vehicles and other emerging technologies which we covered in the top 6 technology trends impacting commercial real estate in 2018. The past discussion of these emerging technologies has been more of an awareness, but there is a move towards action as builders are now becoming more creative through the use of technology.

As these emerging technologies get deep into commercial real estate, they are producing opportunities, as well as challenges. In this article, we are going to explore these technology trends:

1. Proptech
Property technology (proptech) is already in the commercial real estate mainstream. According to CB Insights, it is expected to bring in a new $3.4 billion USD in 2018 across 454 equity deals. Proptech covers everything from investment platforms and digital brokerages to new lending services and real estate apps. As demographics shift and tenant and customers behaviors evolve, this trend will only intensify.

With the provision of flexible leasing options with features like networking opportunities, events, and other business services, proptech sees a major impact from real-estate-as-a-service and collaboration spaces.

2. Increased Rise of Artificial Intelligence
Artificial intelligence has been garnering hype for years now. We talked about it in the 2018 article on technology trends in real estate. Tech startups have started integrating AI into their market analyses, but the most relevant use of AI and other emerging technologies will be in building management, design, and organization. For example, companies like The Edge, which are into smart buildings have already discovered a big potential in analyzing the behavior of users in their shared office space. The use of the data in redesigning their workspace layout, refining their offerings and creating a virtuous feedback loop.

For commercial real estate, ULI reports that artificial intelligence offers building safety and efficiency, as well as property access and security.

3. Cyber Risk Management
In the commercial real estate, risk management seems to focus on tenant risk, interest rate, and to a degree, portfolio risk. Technology has expanded the scope of risk with evolving business complexities. Hence, there is an increasing concern over information security and data privacy; and, many commercial real estate companies are struggling to balance efforts on investments and handling of cyber attacks.

As a result, in 2019, there will be an increased demand for cyber risk management. Commercial real estate owners may need to assess their employees for exposure to cyber risks, and also train them in understanding the potential threats and implications of cyber attacks and crimes.

2019 will soon be upon us. Is your company positioned properly to benefit from the top three technology trends that will shape real estate in 2019?

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What’s the difference between a listing agent and tenant rep agent?

What’s the difference between a listing agent and tenant rep agent?

What’s the difference between a listing agent and tenant rep agent?
This post originally appeared on tBL member Michael Kushner’s blog Omni Realty Group and is republished with permission. Find out how to syndicate your content with theBrokerList.

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The use of the term real estate agent casts a broad umbrella under which people tend to lump all real estate professionals into the same category. The truth is that there is a big difference between the role of a listing agent and a tenant/buyer agent. While both might be referred to as simply a “real estate agent,” it’s important to understand when and how you would use each when it comes to buying or selling real estate.

Listing Agent – A listing agent might also be referred to as a seller’s agent. This is the person who represents the seller or landlord in a deal. His or her job is to list and market the property to attract potential buyers, then negotiate an acceptable deal on behalf of the seller.

Tenant/Buyer Agent – On the other side of the deal you have the tenant/buyer agent. This is the person who represents the tenant or buyer looking to lease or purchase property. His or her job is to find and bring a tenant/buyer to properties which meet their criteria, then represent them in a deal to ensure terms and pricing is fair to the buyer.

How is a listing agent compensated?

Most commonly, a listing agent signs an exclusive right-to-sell/lease listing with the seller/landlord, meaning only the listing agent’s brokerage is entitled to an agreed upon commission upon the sale or lease of the property. The brokerage then typically shares the commission with the agent. Exclusive listings are bilateral agreements between a broker and a seller/landlord. It’s important to know that a listing actually belong to the broker or brokerage, not the listing agent unless he is also owner of the brokerage. However, it is important to make the distinction between a tenant/buyer agent and a subagent of the seller/landlord. If the tenant/buyer does not have a formal written agreement with the tenant/buyer agent then the agent who is showing the property and providing information to the tenant/buyer is considered a subagent of the listing agent and is not representing the interests of the tenant/buyer.

How is a tenant/buyer agent compensated?

Generally, the listing agent cooperates with the tenant/buyer agent and shares a portion of the earned commission in exchange for bringing a tenant/buyer to the table, if that tenant/buyer then submits an offer that the seller accepts. This is referred to as a “co-op” commission. It’s important to note that a tenant/buyer agent is at no cost to the tenant/buyer.

Do I really need to work with an agent?

Legally, no. You are not required to work with an agent and can opt to list your property as a For Sale By Owner (FSBO). But there are benefits to working with a listing agent. Foremost, it becomes their responsibility to market and sell your property in a timely fashion and for an agreeable price. They will schedule showings and handle all of this for you. Many sellers benefit from working with a listing agent because their property may sell faster and at a higher price point than if they decided to go it alone. Also, many people value having a professional to take these time-consuming tasks off their hands.

If you are on the other side of the deal as a tenant/buyer, again you do not legally need to work with a tenant/buyer agent in order to buy or lease a property. However, similarly to the points regarding working with a listing agent, a buyer may also experience benefits when working with a tenant/buyer agent. Foremost, you will have their knowledge and expertise to guide you through the buying/leasing process, and someone who will represent your best interests. A tenant/buyer agent can also make your property search less time consuming by showing you only properties that they know fit your criteria. Think of them as your tenant/buyer “concierge.”

Can the listing agent also be the selling agent?

Simply stated, no. A listing agent should not be the selling agent within the same deal. Why? Because there is a major conflict of interest in doing so. Think of it like having the same lawyer represent both the defense and the prosecution in a case. Neither side will receive fully unbiased, honest representation, and the counsel walks away with twice the compensation. In fact, states such as California have gone as far as making such “dual agency” practices illegal.

Too often, a tenant/buyer begins looking at property without hiring a selling agent (aka tenant/buyer agent) to exclusively represent them. Usually they do not realize that a selling agent is not at the cost of the tenant/buyer, since the tenant/buyer agent will normally co-broke a commission with the listing agent. A tenant/buyer agent is compensated by splitting the commission with the listing agent. So, the client gets representation at no cost. The commission arrangement between the owner and listing agent will be paid whether or not the tenant/buyer has representation.

Without representation, tenants or buyers often find themselves needing the expertise, advocacy and unbiased advice of a listing agent. This can result in a number of troubling issues and frustrations for the tenant/buyer. These include losing the upper hand in negotiations, being subject to unfair pricing and unsatisfactory terms and too late realizing that things could have gone far better if they had a professional dedicated solely to representing their best interests.

When it comes to understanding the differences between a listing agent and a selling agent (aka tenant/buyer agent), the most important take away is that whatever side of the deal you’re on, you want to be sure you have your own representation to advocate for your best interests and negotiate a favorable deal.

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No Office Tenant Rep? Don’t be Stupid!

No Office Tenant Rep? Don’t be Stupid!
Jim OsgoodMay 29, 2018
It’s time to make that big move, a larger rented office space. This is good news, because it means your business is growing, but it’s a frightening prospect, to take on that much more commitment and responsibility. You know, when you were purchasing the house that you now live, that the services of a realtor were essential to the successful conclusion of the purchasing process. Believe it or not, the same is true when you are seeking an office for rent, and for many of the same reasons and why you need an office tenant rep to help you.

As you know from your own experience with a residential home purchase, there are realtor commissions built into the sale. The same is true with commercial transactions and tenant representatives, which means that it is always worth your time to engage the services of a tenant rep; those services cost you, the renter, nothing extra. It is FREE
Like a home realtor, an office tenant rep has the experience and knowledge to successfully negotiate the varied and complicated processes involved with successfully researching, negotiating and closing on a lease for commercial office space.
An office tenant rep will be able to answer all your questions and help you understand the consequences of the choices that you will need to make during the process. In addition to the obvious questions, such as location, cost and length of lease, there are a number of other factors which need to be considered when renting office space. A good office tenant rep will help you recognize those issues and make the best decisions for your company’s future success.
As with any negotiation, experience and expertise are key to a successful outcome. Tenant reps negotiate on behalf of hundreds of small business owners such as yourself, meaning that they understand all the critical issues and know how to negotiate on your behalf for the best possible outcome.
What does an Office Tenant Rep do?

Let’s hear it directly from them. The following is from our OfficeFinder LinkedIn group discussion on the most important activities Tenant Reps provide their clients in addition to just finding space:

“I believe the top Time & Money saving services that we provide to clients all revolve around the Transfer of Specialized Knowledge to the client, so that they may make the most informed decision. Up to date market information, understanding the players involved, defining and executing the process required for a successful outcome and most importantly, proactive advocacy, each individually represents significant savings for a client.”

“Avoiding mistakes is very important aspect of why tenant representation is so important for office tenants. We do this every day, just like the landlords and listing agents. Tenants only search and negotiate for office space every few years. Landlords and listing agents love to see tenants coming unrepresented. It makes their business much more profitable than when a tenant is represented by experienced and knowledgeable tenant reps…like the ones we have at OfficeFinder!”

“We provide lease digests and early reminders of important dates i.e. rights and renewal options. We also place these dates on an earlier call up internally so that we remind the tenant that they need to be addressing their real estate needs, even if their intent is to renew. We also assist with renewals. In today’s market the lease signed five years ago is most likely far above today’s market rates.

A 10% discount off of today’s asking rate may sound good however, the market may be giving a 25% discount. Only through the use of their own broker can a tenant gain an accurate opinion of today’s market.

Any business who leases office, retail or industrial space expiring within the next 6 to 18 months should be talking with a broker to represent their interests. This not only pertains to renewals subject to negotiation but also pre-stated rent renewals. This is also a good time to negotiate terms and conditions not included in the original lease.

We have a good system in place and when started at the right time in the renewal process, we have been successful in leveraging our position, procuring rent reductions and changes in other terms beneficial to the tenant. We’ve also been able to facilitate early renewals where the tenant benefits from the negotiated terms and conditions sooner than later.”

“There is absolutley no question as a tenant representative we can all save our clients real money in the transaction and “time” money by not only doing things they would have to do but also the fact we know what to look for in the first place.

We might want to consider the money we can save clients by handling non-transactional issues after the lease is signed. Two examples: 1) client is a 501C-3 teaching museum- eligible for property tax relief. Worked with county and LL-client received over $100K in refunds over 12 years. 2)Client located in Enterprise Zone. Another client/accounting firm specializes in that area of tax. Put them together…anticipate over $500K in saving over next 6 years. There’s a lot more we can do than just focus on the transaction. Just my $.02

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Quest Building new flagship in Clifton

Construction is underway at Quest Diagnostics’ new flagship laboratory in Clifton, a planned 250,000-square-foot facility that is slated to become the largest in its vast portfolio.

Company leaders joined public officials and other stakeholders on Wednesday to mark the official groundbreaking for the facility, which will become part of the mixed-use ON3 campus along Route 3. Slated to open in early 2021, the lab will house more than 1,100 employees and provide enhanced diagnostic information services to more than 40 million people in the Mid-Atlantic.

The complex will occupy about 12 acres within the 116-acre campus owned by Prism Capital Partners.

A rendering of Quest Diagnostics’ new 250,000-square-foot lab facility at ON3 in Clifton — Courtesy: Quest Diagnostics
“Our new flagship laboratory will enable us to empower better health through a comprehensive testing menu, faster turnaround, and additional capacity to serve more patients and clients,” said Steve Rusckowski, Quest’s chairman, CEO and president. “Rooted in innovation, this new lab will also provide our employees with an inspiring workplace.

“This is a major commitment to our presence in New Jersey where we are headquartered, and it is good news for the health care providers and patients we serve.”

The diagnostic services giant, which is based in nearby Secaucus, will be among several companies and institutions that are repopulating the former longtime home of Hoffmann-La Roche, which Prism is now redeveloping and has rebranded as ON3. In fall 2017, the state Economic Development Authority approved a 10-year, $55.2 million tax credit award for Quest aimed at supporting what was an estimated capital investment of $230 million.

In approving the project last year, the EDA said the new building in Clifton would house more than 750 positions that are currently at a Quest-owned building in Teterboro, but were at risk of being moved out of the state. The proposal at the time also called for relocating 269 employees currently in Pennsylvania and Maryland, along with the creation of another 115 new jobs.

Steve Rusckowski, Quest’s chairman, CEO and president, speaks during the groundbreaking for the company’s new lab facility in Clifton
At ON3, which spans Clifton and Nutley, Quest will join the Hackensack-Meridian School of Medicine at Seton Hall University and the biotech company Modern Meadow, which already operate at the campus. Prism has also secured commitments from Ralph Lauren Corp., which will occupy 250,000 square feet at an existing building that will be renovated.

Quest also announced Wednesday that it would make a $15,000 contribution to the Boys and Girls Club of New Jersey.

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