From Good to Great
How to run a successful business 

Step one. Get the right people on the bus

Step two. Get the right people in the right seat on the bus

Step three. Drive the bus

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“Blessed is the one who does not walk in step with the wicked or stand in the way that sinners take or sit in the company of mockers, but whose delight is in the law of the Lord, and who meditates on his law day and night.”‭‭Psalm‬ ‭1:1-2‬ ‭NIV‬‬


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Big Data Is Changing Commercial Real Estate

The commercial real estate industry is embracing big data. The financial and health care industries have already used big data to solve problems and predict consumer behavior. Now the commercial market is finding ways to use big data to help with anything from designing better office spaces to improving the building management process to responding to a prospective buyer’s concerns about a property.

“Big data is making the commercial real estate industry more transparent,” Ely Razin, CEO of CrediFi recently told CNBC. “It becomes a partner to the players to the community, whether they’re brokers, lenders, investors or owners.”

Here are three ways the commercial market is embracing data:

Streamlining financial processes

The commercial industry is adopting big data technology to improve the financial decision-making process. For example, CrediFi, a big data commercial real estate platform, uses credit risk algorithms to analyze large public data sets to produce risk scores for regional real estate. Big data platforms can also analyze a building’s structure and whether it’s been renovated recently, as well as the financial status of the owner, in order to help commercial real estate pros make smart investment decisions.


Getting a read on prospective buyers

Those in commercial real estate now have access to smartphone apps that can predict responses and sentiment from potential buyers. A new start-up VTS, which stands for “View the Space,” is aimed at the real estate industry and makes the negotiating process smoother by making it easier to get quick feedback about properties.


“If 80 percent of prospective tenants aren’t moving forward and giving you a proposal because they feel the space is priced too high, or the image of the space is wrong for them, like issues with the height of a ceiling or the size of a room, we capture that information directly,” says Ryan Masiello, co-founder and chief revenue officer of VTS.


Making building management smarter

Investing in big data also simplifies the building management process. Big data and the “internet of things” help building managers speed up the wait time when fixing problems, as well as cutting expenses.


“We’ve put sensors on the equipment in a building, for example, and every 15 seconds we get a read on the air temperature, if the fan is on or off,” says David Kollmorgen, international director and head of business intelligence at Jones Lang LaSalle. “Then we can feed data into algorithms, like if this fan is working, then it shouldn’t generate a work order to fix it. We can also figure out, is weather data correlating to x, y or z.”


The cost of investing in smart technology and big data can be pricey and time-consuming, but big data is on its way to help the commercial industry make better decisions.


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Multi-Family Housing Starts, Building Permits Soar

Building permits for single-family and multi-family construction surged to an eight-year high in June, signaling a pick up in home building is on the horizon, the Commerce Department reports.

Permits for future home construction rose 7.4 percent to a 1.34 million unit pace in June, the highest level since June 2007.  All four regions of the U.S. – Northeast, Midwest, South and West- reported gains in housing permits.

Multi-family permits posted the largest increase at 15.3 percent in June, while permits for buildings with five units or more increased to the highest level since January 1990.  Permits for single-family home building also rose, increasing  0.9 percent last month.

Economist point to a rise in household formation and an improving labor market that is prompting more young adults to leave their parents’ home and spark a rise in demand for housing, notably apartments.

A rise in multi-family production helped push housing starts 9.8 percent higher in June month-over-month, reaching a seasonally adjusted annual rate of 1.17 million units, according to the Commerce Department.  Multifamily production surged 29.4 percent last month, reaching a seasonally adjusted annual rate of 489,000 units.

“The multi-family gains this month are encouraging and show that the millennial generation continues to be drawn to the rental market,” says Tom Woods, chairman at the National Association of Home Builders.

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4 Vital Tips for Managing Contractors

Cover yourself with contracts and a paper trail.

Keep communication clear, and provide a record of who said what when- this could help iron out disputes later on.

Never pay ahead of the work.

Many contractors will tell you that they can’t start on the project until you pay them some amount of the total cost upfront.  This is backwards.   If your contractors ever walk off the job or fail to show up for work, you’ve paid more than the work that’s been completed, and you lose money. Instead, your contractors should be working ahead of your payments, not the other way around.

Make sure you visit the job site at least a couple times a day, make sure you “drop in” by surprise.

If you have a trusted crew that you’ve worked with in the past, this may not even be necessary. But, if you’re not going to be at the property full-time, make sure you at least check in a couple times a day — on surprise visits.

Go into it as a life long relationship, be a good customer and pay fast.

One of the best ways to get quality work out of your contractor is to make them enjoy working for you.  Which means being decisive with the contractor- and giving him a check promptly at the agreed-to points in the project.

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Property Investors Tilt to Flipping

Home flipping continues to inch out a hold-to-rent strategy among investors who bid on properties at auctions, according to Auction.com’s Second Quarter 2015 Real Estate Investor Activity Report, which is based on survey results of real estate investors nationwide.

ef-psef5u90 46“Rounding out the first half of 2015, most of the country and most investor segments performed in a manner very consistent with what we’ve been seeing for about a year,” says Rick Sharga, Auction.com’s executive vice president.

“We’re seeing two major trends that are driving these numbers. First, we’re seeing a return of the ‘mom and pop’ investor in the single family rental space – smaller investors with an intimate knowledge of their local markets, who are willing to buy properties that deliver long-term returns based on monthly cash-flow. Second, investors focusing more and more on flipping properties in regions where prices have rebounded from the 2008 crash and inventory of homes for sale remains scarce – an almost perfect scenario for investors looking for a short-term profit.”

The survey revealed that investor respondents who were making a one-time purchase strongly preferred a hold-to-rent strategy, while respondents who identified themselves as “full-time real estate investors” favored flipping.

Whatever your real estate need or strategy, we at Landmark Group are here to help. We are here to help you buy, sell or rent residential, retail, office, wholesale or industrial property.  We can also help you maintain, renovate or manage your property. Just give us a call.


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Micro-Apartments Are Coming to the Midwest

Bloomberg business contacted us in regards to the recent trend of Micro Apartments popping up in the Midwest.  See the article here: http://www.bloomberg.com/news/articles/2015-07-16/micro-apartments-are-coming-to-the-midwest

Photographer: Elaine Thompson/AP Photo

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Office Buildings Filling Up – Slowly

Reis Inc., a real estate research service, reports that companies took on 8.2 million square feet of additional office space in the second quarter, marking one of the stronger periods since the recession but a relatively modest expansion by historical standards.

The increase left the overall office vacancy rate flat for the quarter at 16.6%, which is just below the peak of 17.6% reached in 2010, according to Reis, which tracks 79 markets. Rents rose to an average of $24.60 a square foot, up 3.2% over the past 12 months.

“I don’t think we’re in the clear yet, but we are definitely heading in the right direction,” said  Ryan Severino, an economist at Reis. “It has taken a little bit longer than usual to get back to where we’d like to be.”

The still-sluggish growth contrasts to some other economic indicators, such as job growth. While the U.S. recovered to its prerecession employment level a year ago, employers occupy about 36 million square feet less than they did at the peak in 2007. That is about a year’s worth of growth at the current rate.

Many analysts believe the biggest factor in the sluggish recovery is that employers are pushing into denser spaces, jettisoning private offices and large cubicles for a cozier layout. Others believe employers simply have been more cautious about expanding in this cycle. Overall, the office market is a patchy one, highly dependent on the strength of local economies.

Leading the way in terms of rent and occupancy growth are regions driven by the technology sector. The Seattle area registered as the strongest in terms of rent growth over the past 12 months, with rents rising 7.2% to $26.84 a square foot, including landlord concessions. Seattle was followed by the San Francisco area, where rents rose 6.3% to $40.18 a square foot, and the San Jose area, where they increased 5.9% to $28.28 a square foot.

Other cities generally are experiencing slow and steady growth in rents and occupancies.

One exception is Houston, which is facing a drop in demand thanks to the fall in oil prices as well as a surge in supply from builders that started towers when the price of crude was higher. The vacancy rate climbed to 15.6% in the second quarter, up from 14.4% a year earlier.

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Key Items Investors Overlook When Performing Due Diligence

Spending copious dollars and hours on due diligence doesn’t guarantee the right decision on whether or not to pull the trigger on a transaction. It’s  about the quality and not the quantity of information gathered. very buyer is going to have their standard checklists, but persistently blending creativity with pragmatism can yield useful results in a often overly formulaic process.Capture565894

Here are some tips on overlooked items that I’ve found can  improve the overall quality of your diligence.

You will need to get the water, electricity and gas turned on if they are off. Sometimes this isn’t possible (say if the property is winterized or the furnace is missing), but for the most part, you want to check the utilities. By getting the utilities turned on, you can make sure the HVAC system and electrical work and that there are no plumbing
Sewer Lines.  I suggest scoping the sewer line on any property that is more than 30 years old. Broken sewer lines usually cost $3,000 to $5,000 to replace so you want to know about them up front. You should be able to find a plumber to scope them for around $100 to $200.


Old furnace or a/c
Fuse Boxes
Electrical Panels
Condition of Appliances
Dry Rot or Signs of Pest Damage

Ungrounded Electrical – You can easily tell if the outlets have only two prongs instead of the usual three. But be forewarned, some people put three prong outlet covers over ungrounded outlets. Having ungrounded outlets is not the end of the world, but if you do choose to ground it, it will cost a good amount.

 Galvanized Plumbing. This plumbing often rusts and will likely need to be replaced, but not always. If it has galvanized plumbing and the pipes don’t look corroded, check the water pressure and make sure it is sufficient.


 Large Cracks in the Foundation Wall.   If it is more than three inches (you can check this by running your finger along the siding outside and seeing how far the back of the siding is from the foundation wall), this is very concerning and you should get an expert out there to inspect it. If it is moving at all, there should be vertical braces or deadmen in the basement. If there aren’t, you’re going to want to put them in and epoxy any notable cracks. If you are concerned at all about the foundation, it’s worth getting a foundation expert to inspect the property.

Due diligence may be tedious, but it is vital. Any problem you find before closing can be used to renegotiate or back out. If you find it after you close, good luck getting the seller to pay for it. In other words, due diligence can save you a lot of money so don’t let it fall to the back burner. Make due diligence a top priority.



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More Renters May Be Stuck

Millions of Americans may be unwillingly stuck in rental housing. The nation’s home ownership rate has plunged for eight years, currently down to 63.7 percent in the first quarter of this year from a peak of more than 69 percent in 2004.

2242342wegAs the home ownership rate has fallen, the amount of rentals has soared, and so has the costs of renting. Last year, rents climbed at a 3.2 percent rate – double the pace of overall inflation.

Many renters may struggle to save in buying a home as rental costs continue to soar. The share of renters paying more than 30 percent of their income on rent – what is considered “cost burdened” – remains near record highs. Nearly half of all renters were in this category in 2013, according to a newly released report by Harvard University’s Joint Center for Housing Studies.

The number of new rental households has climbed by 770,000 annually since 2004, according to the report. Many of the people living in rentals were once home owners, who lost their homes to foreclosure and cannot yet qualify for credit to buy again yet.

The home ownership rate has dropped by the fastest rates among people in their late 30s to early 50s, according to the Joint Center’s report. Prior to the Great Recession, these age segments were in their prime home-buying years. But when the housing market dropped, many were left with little or no equity.

“People in their 40s and 50s were very hard hit by the housing crisis,” says Chris Herbert, managing director of Harvard’s housing center. “They’ve been a bit of a forgotten generation.”

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