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PropTech Predictions were recently covered by PropModo:

2018 was the biggest year ever for PropTech, both in the adoption of technology and the amount of funding that poured into the space. There has been a snowball effect that has quickened the pace of innovation to new heights. Predictions are that PropTech adoption will continue to accelerate in 2019.

There has been a noticeable increase in investors’ and property owners’ PropTech products. In 2019, it is expected that we will see more companies moving quickly to pilot on a product. Naturally, if the product demonstrates ROI, they will implement it more widely. Moving into 2019, the DNA of Real Estate Tech is changing. In the past, PropTech startups were often started by Real Estate professionals who saw pain points in the industry that could be addressed by technology. We are now starting to see seasoned tech entrepreneurs building companies focused on the CRE industry because they see an enormous market opportunity.

We will continue to see an influx of high-level technology talent entering the PropTech world that will help accelerate the pace of innovation. AI and machine learning applied to the vast amount of real estate data will begin to show value. New technology products aim to make sense out of all the data and provide property owners and occupiers with valuable insights. For example, Skyline AI leverages proprietary artificial intelligence to source, analyze, acquire and manage institutional-grade property investments.

In 2019, it is expected that mobile applications that enhance the experience of those who work in commercial office buildings by providing easy access to the building and to a variety of in building and local services will have a major surge. All in all, the changing DNA of PropTech startups, the rise in the utility of AI-Driving products, as well as the demand to improve the tenant experience with technology are some of the many positive trends that will drive the adoption of new products in this category in 2019.

Read more on PropModo.

What Asset Managers Want was recently covered by Commercial Property Executive:

There are many ways property managers can add value to their colleagues in asset management. First and foremost, asset managers are looking for property managers to understand the investor’s strategy. If a property manager can speak the language of finance and real estate management, it helps lend credibility to themselves. It is important for a property manager to grasp the client’s investment strategy.

Since creativity is another prized quality, asset managers look for the value property managers can add by providing market insight such as the granular, on the ground knowledge that extends beyond generic third-party reports. Usually, asset managers need property managers to transform data into actionable information.

Lastly, asset managers look for a property manager that can defuse tensions between the client and a service provider. Property managers should think boldly, take the initiative and act as a partner. In short, they should be boosting the bottom line.

Read more on Commercial Property Executive.

High Industrial Demand was recently covered by BisNow:

In Silicon Valley, the East Bay, Tri-Valley, and Central Valley, industrial markets are reporting historically low vacancy, high demand, strong growth and a healthy pipeline of new development. Cushman and Wakefield reported 4.8% vacancy in East Bay/ Pleasanton market and the Central Valley reported 3.5% last quarter. In the past, vacancy below 10% was a landlord’s dream. Short term, developers continue to push forward with projects in markets with many tenants seeking high-quality space. Even though vacancy is very low across Northern California’s industrial markets, the third quarter marked the sixth quarter of negative absorption in the East Bay, largely driven by tenants moving into Class-A space and leaving Class-C space vacant.

Recent studies have shown that rent growth is expected to become more modest than the 30% per year reported in the past. Although, the industry should expect 3% to 5% rent growth each year. The Central Valley is starting to benefit from warehouse distributors and manufacturers leaving the 880 corridor and moving toward the tri-valley area, where they don’t have to compete with Apple, Facebook, and Tesla for employees. In addition, the Central Valley has added significant build-to-suit properties in the last 2 years, adding 18M SF to the market. With all of this progress, labor costs are rising, especially since much of the labor force coming into the 880 corridor doesn’t live close by and often commutes from the Central Valley.

Year-over-year, industrial transactions are up 26% nationally, compared to retail transactions up 1% office transactions down 13% and apartment transactions up 8%. Industrial users, especially smaller users in 20K to 50K, are having trouble hiring and retaining qualified employees, especially since employees don’t have housing options close to these industrial employers. In addition, infrastructure around any industrial building also must endure heavy traffic, which typically includes trucks 24 hours a day, which makes it difficult to build near any residential area. Many cities perceive distribution, fulfillment and logistics jobs as not being high-wage, highly educated jobs that many would prefer to bring into their cities. The perception remains that warehouses are just large boxes with a few employees in them that don’t act as economic drivers that bring high-wage earning individuals into their communities.

Read the full story on BisNow

2018 California CRE Propositions was recently covered by BisNow:

There could be a boom in affordable housing in the coming years based on the way California voted in the 2018 midterm election. There were a number of propositions and measures that Californians voted on that will affect commercial real estate in the next few years.

California State Proposition 1: Authorizes bonds to fund specified housing assistance programs.

Results: Approved 54% to 46%

Prop 1 will allow California to issue $4B in bonds to fund affordable housing and veterans programs.

California State Proposition 2: Authorizes bonds to fun existing housing programs for individuals with mental illness.

Results: Approved 61% to 39%

Prop 2 will allow the state to sell $2B in bonds to fund the construction of housing and support services for mentally ill and homeless people, or those in need of mental health services on the brink of homelessness.

California State Proposition 4: Authorizes bonds funding construction at hospitals providing children’s healthcare.

Results: Approved 61% to 39%

Prop 4 will authorize California to sell $15B in bonds to fund grants for construction, expansion, and renovation and other capital improvements of children’s hospitals and other hospitals that provide services for children.

California State Proposition 5: Changes the requirement for certain property owners to transfer their property tax base to the replacement property.

Results: Rejected 58% to 42%

A yes vote on Prop 5 would have allowed seniors who are age 55 and over, severely disabled individuals and those whose property has been impacted by a natural disaster to carry over their home property tax assessment to a new home regardless of price.

California State Proposition 6: Eliminates certain road repair and transportation funding.

Results: Rejected 55% to 45%

A yes vote on Prop 6 would have repealed the 2017 road repair and accountability act transportation law and made it harder for the state legislature to enact measures that increase taxes on gas and/or diesel fuel.

California State Proposition 8: Regulates amounts outpatient kidney dialysis clinics charge for dialysis treatments.

Results: Rejected 62% to 38%

A yes vote on Prop 8 would have limited dialysis clinics’ revenue cap to 115% of specified direct patient care service costs and healthcare improvement costs.

California State Proposition 10: Expands local governments’ authority to enact rent control on residential property.

Results: Rejected 62% to 38%

A yes vote on Prop 10 would have repealed the 1995 Costa-Hawkins rental housing act and expand local cities and authorities’ ability to enact rent control.

San Francisco Proposition A: Embarcadero Seawall Earthquake Bond

Results: Approved 82% to 18%

Prop A will allow the city to issue $425M in bond debt for the construction, reconstruction, improvement, seismic strengthening, and repair needed on the Embarcadero Seawall.

San Francisco Proposition C: Additional business taxes to fund homeless services

Results: Approved 60% to 40%

Prop C will impose additional business taxes, a “homelessness gross receipts tax” that averages less than 0.5% for San Francisco businesses with more than $50M in gross receipts. The funds will be used to house the homeless and expand shelter beds, fund legal assistance, and rent subsidies and fund mental health and substance abuse services.

Berkeley Measure O: Affordable Housing Bonds

Results: Approved 76% to 24%

Measure O will create and preserve affordable housing for low-income households, working families, and individuals who qualify.

Berkeley Measure Q: Rent Amendments

Results: Approved 69% to 31%

Measure Q will make accessory dwelling units exempt from rental control on properties that are owner-occupied.

 

Read more on BisNow