This Weeks Articles...

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U.S. Sen. Cory Booker (D-N.J.), Rep. Emanuel Cleaver (D-Mo.), and Rep. Ron Kind (D-Wis.) are calling on the Treasury Department to take a close look at the process by which opportunity zones have been created.

The move comes after reports of zones created that do not meet the eligibility criteria. One in particular, in Downtown Detroit, purportedly benefits properties owned by billionaire Dan Gilbert, chairman of Quicken Loans and owner of the Cleveland Cavaliers, ProPublica reports. Gilbert previously donated $750K to the inaugural fund of President Donald Trump.

Development Matters

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RSK: Always some politico involved somehow, somewhere.

Ken Notes: I did my radio show, Development Matters, last week on Property Zones and while there are Funds that individuals (who have capital gains) can invest in, this program is for the investor or developer who has professional guidance and substantial capitol gains. So yes the wealthy and uber wealthy will benefit most. The question is are they creating jobs and improving neighborhoods.

The company confirmed plans for a new store format after job openings were posted Monday.

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RSK: This will be interesting to follow to see what prototype they come up with. The grocery business is a small margin business based on volume no matter how you slice and dice it.

Ken Notes: I was a Mayor when Walmart came to a conference and announced they were entering the grocery space and boldly predicted they would have 10% of the market in five years. We laughed -- today they have 23%...

Among his accomplishments, Casey Cartier, president and CEO of Jokake, has been named ASA Superintendent of the Year, voted Top 20 Under 40 Construction Leaders by ENR Southwest Magazine, and has led one of two construction divisions for Ryan’s Southwest regional office.

Now at the helm of Jokake’s Southwest regional construction divisions, Cartier manages corporate operations and keeps his eyes firmly fixed on the latest trends in commercial real estate. And, according to Cartier’s future commercial real estate scan, e-commerce will lead the way into the new year, with manufacturing and data centers trailing close behind.

“We are certainly focused on the industrial and manufacturing sector, with an intense focus on e-commerce opportunities,” Cartier explains. “One of the secondary areas of growth we’ll see in the Greater Phoenix area, in particular, is the Phoenix-Mesa Gateway Airport market.”

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RSK: This is worth the read. And yes, Tech will be very important!

A clear picture of the opportunity zone program remains out of reach, but more information trickled out of the Internal Revenue Service at the end of October.

The IRS released a draft version of Form 8996, the filing document for qualified opportunity funds and their investors, containing additional requirements for reporting opportunity zone-related income, Bloomberg Tax reports. 

If the current version is finalized, Form 8996 would require a QOF to disclose how it is structured, as well as all of its assets and their respective census tracts. The census tract, employer identification number and assets will be required for any qualified opportunity zone businesses that are listed among a QOF`s assets...

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RSK: On a similar note....

Ken Notes: Remember you an search CirexNews and there are dozens of articles on opportunity zones starting the day they were created to this one...

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Our focus is your focus, our goals are your goals.

Novel Coworking offers cost effective private offices and suites with flexible lease terms. Variety of office sizes (1-2 person, 3-4, 5-6+; suites 1,200sq ft - 2,200sqft), coworking and dedicated desks. Features: 24/7 access, on-site covered parking garage, office furniture, direct fiber and WiFi, on-site espresso bar, conference room, kitchen/break area and community lounge areas.

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Fully functioning restaurant for sale. Building updated, Newer equipment, established clientele.

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It’s not all just free LaCroix and cold-brew.

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RSK: I think maybe we will do a comparison of the Co-Working spaces here in Madison just for the fun of it.

Ken Notes: I have been to several in Madison and there is far more variety here than in other cities. 100State starts at $150 and Spaces provides a capitol view for a little more Regus will provide walls and a desk as needed. StartingBlock has investors involved and Industrious is very nice. I added an article on Madison options but it needs to be updated because this is a dynamic field...

Housing hasn’t traditionally been a hot topic in presidential elections, but with homeownership financially out of reach for many Americans, the candidates vying for the Democratic nomination have been eager to discuss the issue.

On Thursday night, candidates on the debate stage answered a question about affordable housing for the first time this election cycle. MSNBC debate moderator Kristen Welker asked billionaire hedge fund manager Tom Steyer whether he was the best person to address this issue, citing the housing crisis in Steyer’s home state of California.

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RSK: The real problem is putting the tax burden on homeownership. My taxes on my home are $1200 per month and will only go up. My house payment is $500 and almost paid off...see the problem here?

Ken Notes: I would like to see us build homes that are affordable not "Affordable Homes". When we do not create ownership and neighborhoods we create problems.

Sometimes, innovation looks like a baby stroller/e-scooter hybrid. Other times, it resembles a giant box standing awkwardly in a New Jersey meadow.

But what warehouses lack in aesthetics, they make up for in utility. These large sheds, containing all the items you’ve ever bought online, form the skeleton of an exploding e-commerce sector.

• U.S. consumers spent a record $850 billion during the 2018 holiday shopping season, a 5% bump over 2017 driven almost entirely by online sales.
  
  
• Every day, more than 1.5 million deliveries are made to NYC homes, a ~4x increase over 2009.
  

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RSK: As long as there is 1 and 2 day shipping for the last mile, this will only continue to grow. And adding to this demand is reverse logistics... that`s right... those dreaded returns of products.

The reason why there are so many veterans living in the streets varies, and this homelessness is a serious national issue needs to be addressed with urgency.

According to data from the U.S. Department of Housing and Urban Development, there are more than 40,000 homeless veterans in the country on any given night....

...One of the organizations that took this step is a non-profit called Clara White Mission in Jacksonville, Florida.

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RSK: This could work for many homeless... even works for those who have a good job but their student debt is hurting them...like a condo.

Ken Notes: I have been saying this for years, and we have great working models in the form of student housing here in Madison and village for vets in Milwaukee. We need to add micro to our quiver, it is not cure all it is a cure some and solutions come one individual at a time.

NEW YORK (Reuters) - Sears told Reuters on Thursday it had won a $250 million lifeline from lenders that include billionaire owner Eddie Lampert, and will close additional stores, as mounting losses strain the beleaguered U.S. department store chain’s finances.

The new loan, put together in recent weeks, increases by roughly $100 million the $150 million of financing that Sears raised several weeks ago, said people familiar with the transaction, who were not authorized to discuss publicly some aspects of the deal...

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RSK: I think the name is part of the problem. If they changed the branding somewhat they may make it. Need to get the Millennials on board.

Ken Notes: I am blown away by the fact that the company that had it all is now failing in a market where they should be king. I would think Amazon would buy them just to use the brick and mortar as distribution centers.

As WeWork struggles to restructure its business, other leaders in the flex space sector believe there’s still room for their own growth for the increasingly popular concept.

According to the Real Estate Board of New York, co-working space currently accounts for 12-15 percent of the city’s market and recent industry reports have suggested the sector will do well even in an economic downturn.

But slow and steady will win the race, according to the experts who spoke at a “Future of Flex” seminar hosted by Convene yesterday (Tuesday).   ...more

RSK: Again proving the concept is real and WeWork failed because of leadership.

Regus has been around for a while, is global, and makes money...

• Amazon and the proliferation of online shopping have led to the demise of many brick-and-mortar stores, whose customers are turning to the internet for their purchases.
  
  
• In a popular thread on Reddit, users were recently asked what businesses and stores they miss the most have been "killed" off by the internet.
  
  
• From Blockbuster to music record stores, these are some of the retailers that Reddit users wish were still around.

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RSK: I miss several of these myself especially Radio Shack...just don`t mess with my hardware stores!

11-23-19 – Development Matters – Hour 1

Phil Sveum - Coldwell Banker Success calls host Ken Harwood to discuss the Terravessa development in Fitchburg, smart code zoning, the cost of housing relative to real estate development and ideas to reduce cost....    ...more

Ken Notes: Phil was my guest on my Saturday Radio Show Development Matters. We talked about new zoning options and building some lower cost housing. Let me know what you think... Also if you have something to talk about call my cell at 608.334.2174 or talk to Ralph...

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Madison Lifestyle Office Portfolio comprises 16 Class A properties totaling over 1.7 million square feet of leasable area and an additional 8.3 acres of development land. The portfolio is located on the west side of Madison, Wisconsin.

• Companies from Microsoft to Shake Shack have experimented with a four-day workweek to improve productivity and work-life balance.
  
  
• Some of these companies have said the shorter week has made it easier to focus on important tasks.
  
  
• Others, like educational coding startup Treehouse, found that it made it challenging to uphold a solid work ethic.

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RSK: I personally have never been an hour or day person but more of a task man. Whatever it takes to get the task completed but this seems to work for many companies.

Ken notes: It drove me crazy during the last recession to see companies lay off 20% of there workforce rather than to go to a 4 day week across the board and retain most of their workers. I believe a company should not be able to layoff workers until everyone in the companies receives a pay cut especially senior management. The studies coming out of the 4 day are very interesting, increased productivity, less sick time used, easier to recruit better talent. Hospitals, fire departments etc. have been doing this for years!

The U.S. Securities and Exchange Commission has launched an inquiry into WeWork to determine if the company violated reporting rules ahead of its doomed planned public offering.

Citing two unnamed sources, Bloomberg reported that SEC investigators are scrutinizing disclosures made to investors while the company embarked on aggressive fundraising efforts and completed transactions that posed potential conflicts of interest.   ...more

RSK: More to come I am sure!

Black Friday, the annual shopping bonanza that officially kicks off the strongest retail sales period of the year, has morphed into a confounding ordeal for U.S. retailers. 

From the rise of e-commerce to the mass shuttering of stores of all stripes to Amazon Prime Day pecking away $2B in sales earlier in 2019, Black Friday’s ironclad grip on shoppers is slipping.

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RSK: This is good. Actually 4 articles in one. You can click through to each one in the main article and get more in-depth information.

Imagine how you feel in a generously windowed room, one infused with natural light. Now compare that sensation to one you might experience confined to a bleak, windowless dungeon. If your preference leans toward the natural light option, consider yourself in good company.

New York City-based research firm Future Workplace, along with technology company View, recently unveiled a research project titled “The Workplace Wellness Study.” Surveying 1,601 U.S. and Canadian workers between April 23 and 29, 2019, the study released in August found next to air quality, comfortable lighting was the factor most often cited by workers as contributing to a health-supporting workplace. Despite this, 6 in 10 respondents said their employers don’t provide the level of light they need to summon their best job performance. The study also found when it comes to emotional wellness in the workplace, folks place a workplace fitness center or a pet-friendly policy lower in priority than oft-overlooked light-oriented qualities, such as natural light and outdoor views.

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RSK: I agree that natural light helps productivity and the well being of employees and employers alike.

Ken Notes: I recently had meetings in the co-working facilities at Starting Block and Spaces located on East Washington and was amazed at how much difference the natural light and view made.

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In the nearly two years since the passage of a federal program aimed to spur economic development in low-income and distressed neighborhoods, there have been roughly 30,200 commercial real estate transactions in the designated opportunity zones in California. 

In the two years prior to the program, there were more than 32,200 commercial real estate transactions in the same zones in the state, according to CRE data site Reonomy...

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RSK: One begins to wonder if this was such a good idea. Seems it just might be inflating the value of properties in the Zones.

Ken Notes: It depends on who is running the show. They are a GREAT idea if you can invest in an area where you will see gains during the investment period. In California they are more risky because you can "do better" outside the zone. You need to be very smart to make them work for you.

On a cold and blustery afternoon in the South Bronx, about a dozen high school students were roaming the streets of their neighborhood, but they weren’t just hanging out. They were figuring out values, calculating capitalization rates on multifamily properties and scouting out investment opportunities.

They are part of Project Destined, a nonprofit program that teaches inner-city students the fundamentals of real estate development and investing, right on their own streets. The program then lets them participate in and gain financially from the profits on real deals in which Project Destined invests.

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RSK: Kudos to all involved in this...great idea and program.

I wrote in October 2017 that co-living was here to stay, and that hasn’t changed over the past two years. With the bulk of Generation Z now out of college and joining a significant percentage of the expected 76 million millennials who have chosen to settle in America’s urban core, their approach to live, work, play is shifting the housing landscape in major cities across the U.S.

Three things in particular are driving the demand for co-living:

1. All U.S. gateway markets — i.e., major international cities that serve as an entry point into a country — are experiencing an affordable housing crisis...

2. The 2018 Cigna Loneliness Index reported that millennials and Gen Z survey respondents experienced loneliness more often than any of the other generations surveyed...

3. Young people often have a desire for disposable income and experiential lifestyles....

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RSK: CO living isn`t for everyone but it does give you flexibility and lower rental costs. Investors seem to be attracted to this concept.

• Papa John`s founder and former CEO, John Schnatter, slammed the pizza chain in an interview with WDRB News, a Fox affiliate in Louisville, Kentucky.
  
  
• "I`ve had over 40 pizzas in the last 30 days," Schnatter told WDRB News. "And it`s not the same pizza. It`s not the same product. It just doesn`t taste as good."
  
  
• He also slammed Papa John`s leaders, saying that they had "destroyed the company" and that "the day of reckoning will come."
  
  
• Schnatter resigned as Papa John`s chairman in 2018 after admitting to using the N-word during a company conference call earlier that year.
  

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RSK: That`s a lot of pizza but I agree some of them are darn nasty tasting. Probably will be shakeout soon especially with ghost kitchens coming online. Ironically he sells a boatload of his shares.

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The Gialamas Company`s premier development. The park has over 57 buildings containing 200+ companies, occupying over 3.0 million square feet.

The home-sharing platform has offered several novelty lodging opportunities lately, like a stay in Barbie’s mansion or a night in the Goodyear blimp. They earn headlines, and that’s the point.

It was a warm August evening in Evanston, Ill., just north of Chicago, when the Wienermobile rolled out the red carpet for a sleepover.

Actually, the carpet was green, and not so much carpet as artificial turf.  Inside the Wienermobile, the meat brand Oscar Mayer’s signature marketing machine, there was a pullout bed and a mini fridge. There were hot dog sunglasses, hot dog onesies and actual hot dogs with all the accouterments. (But no ketchup: Chicago doesn’t really do hot dogs with ketchup)...

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RSK: Is nothing sacred?

Creative brands are seizing opportunities in repriced storefront spaces.

Despite worries of retail doom and gloom, stabilizing rents along the city’s “high street” markets are putting store leases — now with brand-friendly pricing — back in play. According to Cushman & Wakefield, rents dropped in seven of 11 market strips at the end of 2019’s third quarter, paving the way for leasing velocity to rise 12.3 percent.

Nascent labels are eager to take advantage of the retail reset to test their online concepts in real life via pop-ups and longer deals. The opening of Nordstrom at 225 W. 57th St. last week is poised to invigorate Billionaires’ Row the way Neiman Marcus at Hudson Yards did to the West Side. And shops with “experiential” elements that accommodate social media-savvy consumer behavior have....    ...more

RSK: I guess you can make things work at $359 to $400 per square foot if you have the right density and products but beyond me.

WASHINGTON, D.C. — As WeWork tries to right its ship following its disastrous IPO attempt, it is opening several large, new spaces in the D.C. market that will add hundreds of thousands of square feet to its portfolio.

As it attempts to fill those spaces, it will do so with a radically different corporate outlook: The company is laying off 2,400 employees, has a new chairman and co-CEOs and is grappling with mounting losses: $1.25B in the third quarter alone. 

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RSK: We knew this was coming. That is a load of space to lease-up.

• The role of the modern mall Santa is evolving as rapidly as the retail landscape itself.
   
• Today`s professional Santas are expanding to alternative retail spaces that go beyond just the mall, while seeking out ways to supplement their unique talents through Hollywood acting gigs and entrepreneurial ventures.
  
  
• "I enjoyed working in the mall, but I wanted to do different kinds of work," Santa Ed Taylor told Business Insider. "There were a lot of times where it was slow and not a lot of foot traffic and that was kind of boring to me."

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RSK: Yes Virginia, there is a Santa Claus...but read to the end because it is a bit touching.

Starbucks Coffee Company is opening its largest location ever, a 35,000-sq.-ft. location in Chicago, on Friday. 

The new Starbucks Reserve Roastery, housed inside Crate & Barrel’s former flagship on Michigan Avenue, marks the company’s sixth location of its upscale roastery format, an experiential concept that specializes in premium small-batch roasting coffees. Designed to celebrate the company’s heritage, the roasting and craft of coffee and the locale, the five-floor Chicago outpost boasts three coffee bars, a cocktail bar and a bakery and cafe.

“The design of the Chicago Roastery was inspired by the iconic Chicago landmark, and the city itself,” said Jill Enomoto, VP of Roastery design & concept for Starbucks. “We embraced the building’s natural light, married it with shades of classic Starbucks greens and intentionally wove in design features to encourage customer exploration and highlight the love and respect we have for coffee.”

Here are eight things to know about the new Roastery...

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RSK: Wow! Yet another reason to visit Chicago and Michigan Avenue.

Ken Notes: It is about destination retail, I want to go here and I am in Madison!

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RSK: I am sure there are more to come.

As the bloodiest year for store closures in retail history nears its end, the holiday shopping season is just beginning, and with it, a chance for some brands at risk of bankruptcy to pull themselves back from the edge.

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RSK: Some inevitable closings on the horizon. At least Kohl`s isn`t mentioned this time around.

In 2012, a trio of real estate professionals decided to jump on the brand-new trend of real estate crowdfunding.

The company they founded, Sharestates, hoped to help emerging developers secure loans of a few hundred thousand dollars to renovate and flip buildings in markets where banks wouldn’t tread. Investors could buy into a project with as little as $5K. 

Seven years later, Sharestates has smashed its original goal — and several goals beyond that. The company has funded a combined $2.19B in deals and has increasingly taken on larger projects, with some loans exceeding $10M. The average Sharestates investor now places $125K into the platform...

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RSK: This is good news in many ways. First, it gives smaller investors a chance to invest in commercial real estate. Second, it gives the project owners an opportunity to have access to funding that may otherwise be hard to secure even if it is just a bridge loan. In the long run, many owners will stay with the crowdfunding source for up to 10 years. Just do not invest money in real estate that you cannot afford to lose such as your kid`s college education fund.

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High Point Office Park is an 11-building, 217,418 square foot office park located in one of Madison, Wisconsin’s finest western locations.

During Simon Property Group`s Q3 earnings call, CEO David Simon told analysts he believes the worst of this most recent wave of retail closures is over.

"I think ... who knows, but I think we`re kind of reaching bottom of that stuff," Simon said. "It`s rivaling what happened in `17. So it`s not like something that we haven`t experienced before, but we know what we have to do."

Perhaps aiding that optimism is recent news that Forever 21`s bankruptcy may not result in as many closures as initially thought. The fast-fashion retailer has been able to get rent discounts from its largest landlords as it restructures in the wake of filing for Chapter 11 bankruptcy, National Real Estate Investor reports.

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RSK: For some reason, I do not think so...with a late Thanksgiving, retailers will have one less week for the Christmas shopping season.

• More than 10 US states have seen their homeless populations rise in the last decade.
  
  
• We`ve rounded up the states with the largest share of homeless residents.
  
  
• Washington, DC ranks highest, followed by New York and Hawaii.

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RSK: Ok, but we still have not addressed the "why" in all of this. In order to correct a problem you just can`t put band-aides on it...need to get to the cause and circumvent it.

• American malls are closing all over the US as the retail apocalypse continues.
  
  
• A report from Credit Suisse in 2017 estimated that 20-25% of malls would shutter between 2017 and 2022, largely because of store closures.
  
  
• Retailers have announced more than 8,600 store closings in 2019 so far.
  
  
• These haunting photos show how some malls have fallen into ruin after being forced to shutter.
  

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RSK: Some of the Malls have already been repurposed.(I like that phrase lol)

Ken Notes: So far Madison has been very lucky finding businesses to backfill much of it`s mall vacancies but this is not over just yet...

Minutes of the Federal Reserve’s last policy meeting reinforced the central bank’s message that it may be done cutting rates barring economic weakness.

WASHINGTON — Federal Reserve officials do not plan to cut interest rates again unless economic data begins to show cracks, a message reinforced by the minutes from their October meeting.

After the Fed cut interest rates last month — its third reduction this year — most officials thought that policy “would be well calibrated” to support the economy, according to the minutes, unless something were to cause “a material reassessment” of the outlook.

A “couple” of officials even thought that the Fed should make it clear that another rate cut was unlikely “unless incoming information was consistent with a significant slowdown in the pace of economic activity.”...

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RSK: Honestly I do not think they can go lower. Home sales jumped a bit since the last rate drop and that is what the Feds needed among other things.

• Millennials still hope to buy homes one day, but the number of those who expect to be able to do so is dwindling.
  
  
• Nearly one in five millennial renters said they expect to rent indefinitely, according to a new survey by Apartment List.
  
  
• Down payment affordability is the biggest barrier to home ownership among millennials.
  
  
• But there`s also variation among races when it comes to home ownership difficulty: White and Asian millennials are more worried about saving for a down payment, while black and Hispanic millennials are more concerned with mortgage denial due to poor credit.
  

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RSK: Since real estate is a supply-demand on pricing industry this will mean the lowering of value on homes in the long run. Fewer buyers means lower pricing and demand.
Ken Notes: If companies are looking to retain employees an down payment program may make some sense...

Innespace, coming next spring to the Gravity development in Franklinton, is designed as a co-working space for professionals including psychologists, psychiatrists, marriage counselors, substance-abuse counselors, and business and life coaches.

Along with growth in suite-rental and co-working spaces, of which commercial real estate firm CBRE found 126,000 square feet under development in central Ohio this year, comes increased specialization in the field.

Just as Columbus-based Salon Lofts helped pioneer the idea of independent hair stylists renting suites and sharing support services in larger locations, newer co-working spaces are now available locally for women, artists, craftspeople, technology businesses and food startups....

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RSK: We see this in some of our office buildings as well. Some professional comes in and leases a larger piece of space and then sublets space back to the others in related fields.

Holiday Party

Registration Deadline is Wednesday, December 4, 2019

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RSK: Basically not much change for CRE momentum in 2020 other than deals will become more scarce at good cap rates....in other words it will no doubt peak out.

Shopping malls and similar venues present attractive, big-time opportunities as potential sites for grid-connected solar power, energy storage and intelligent, highly energy-efficient facilities management. A growing, international host of big-box retail, shopping mall owners, architects and building-integrated solar (BIPV) and energy management specialists are joining forces so as to capitalize on the benefits.

Asked about market growth and why every big-box retailer and mall rooftops and parking lots aren’t covered with solar-plus-storage and converted into distributed, grid-connected, emissions-free power plants, Drew TorbinSolar Magazine Interviewee Avatar, co-founder and CEO of U.S.-based Black Bear Energy had this to say: “The scale is ramping up.”...
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RSK: As technology in this field grows it will become inevitable as the author says. It is just a tough sell at the moment in the northern climes where solar doesn`t have as great an impact and wind may be more of an option. Hard to say right now.

WeWork’s finances have grabbed all the headlines, but while the U.S. giant was trying and failing to raise money in an IPO, two smaller UK coworking companies entered insolvency proceedings.

One of them, The Clubhouse, has been bought by global giant IWG, which has taken over its four London sites. But the report by administrators at RSM into its demise paints a picture of how the company ended up in administration, and can serve as a cautionary tale for landlords when assessing the financial strength of coworking operators looking to lease their space. 

IWG is also in talks to take over the operations of the other firm in administration, Central Working.,,

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RSK: It is not just WeWork...I think anytime you throw a lot of money at an emerging company and trend, bad things happen. I t is like giving a kid candy after candy and then being stuck with a huge dental bill for all those cavities.

The large panel of wood that hovered in the air above a De Haro Street construction site last Friday was something never seen before in the city.

It’s formed from seven layers of black spruce grown in Quebec, 24 feet long and 8 feet wide, each layer glued one-to-the-next and then pressed together like a panini. A crane slowly lowered it into place atop thick wooden columns and beams — the first of hundreds of panels that will be an integral part of the structural frame of a four-story, 60-foot-high commercial building.

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RSK: Cool concept!

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With the largest Real Estate Practice of any law firm in Wisconsin, Reinhart offers clients custom-tailored real estate insight.

• Residents let Insider into their tiny homes to show what tiny house living is really like. Some of it isn`t so glamorous.
  
  
• Lofts, which are an important feature in tiny houses, can be cramped, hot, and hard-to-access.
  
  
• Appliances like stoves and bathroom sinks are considerably smaller than what many homeowners are used to.

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RSK: Tiny houses are not for me...I would need about a 1,000 sf and at least a partial basement and at my age crawling up and down in the middle of the night to go to my tiny bathroom...well that "ain`t going to happen" as they say.

Ken Notes: I know hundreds of snow bunnies that live out of small campers for months or years at a time, it is a lifestyle and it is NOT a lifestyle for everyone. Imagine walking into our dorms room back in the 70`s. We could take pictures that would turn stomachs, yet we thought we were living the dream (man)...

It’s getting hard to find new superlatives to describe the strength of the market for warehouse space in the Chicago area.

Fueled largely by the e-commerce boom, the local industrial vacancy rate dropped to 6.15 percent in the third quarter, down from 6.25 percent in the second quarter and 6.4 percent a year earlier, according to Colliers International. The local vacancy rate hasn’t been that low since the beginning of 2001.

“The demand has just been unbelievable,” said broker Fred Regnery, principal in Colliers’ Rosemont office.
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RSK: With our proximity to Chicago and Milwaukee, even we are seeing tighter demand. SE Wisconsin can`t build space fast enough.

Abdul Mannan was perched on a stool, scrolling through his phone, on a recent afternoon at Lakeforest Mall in suburban Washington. He was two hours into his shift at a jewelry kiosk and had yet to exchange words with a single customer.

There was a time, he says, when business was brisk, and the Gaithersburg, Md., shopping center teemed with shoppers. But that was before the J.C. Penney at the end of the corridor closed this summer. The Lord & Taylor went dark a few months later, and soon Sears will be gone, too...

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RSK: There almost always is a reuse for well-located real estate.

The U.S. restaurant industry and the real estate it occupies are being reshaped by fundamental industry shifts including the rapid growth of third-party, meal-delivery services, increasing adoption of in-store automation, and the ongoing proliferation of fast-casual concepts, according to a new report from CBRE.

CBRE’s report highlights eight trends, also including the spread of small-format, “eatertainment” concepts, to examine their impact on the food-and-beverage sector and its real estate. Restaurants now account for 17 percent of U.S. retail sales, more than any other retail sector, and restaurant sales growth has outpaced overall U.S. retail sales gains in recent years.

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RSK: This is right on. All the local frenzy right here.

Amazon`s invasion of the grocery store industry could begin in earnest next year.

The e-commerce world-conqueror has been testing a 10K SF version of its cashierless Amazon Go convenience store in Seattle`s Capitol Hill neighborhood, and could roll out the concept in a nationwide expansion as soon as the first quarter of 2020, Bloomberg reports. The new format could reportedly apply to stores as large as 30K SF, the size of many grocery stores.

Since the first Amazon Go opened on Amazon`s Seattle campus around two years ago, the concept`s national store count has risen to 21, with an average footprint of 2,500 SF. Amazon Go stores sell exclusively prepared and packaged items that are relatively simple for the store`s array of cameras and sensors to identify and charge to customers` Amazon accounts, allowing for shoppers to walk straight out of the store once they have selected their items.

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RSK: State Street or the Square would be a convenient place for this....and it is coming believe me.

The real estate sector built around cannabis is already worth tens of billions, and could be worth much more as the sector grows. 

Many lenders want to get in on the ground floor of the booming industry, but even the most adventurous banks are treading carefully as they make inroads into the world of cannabis real estate.

“We’re trying to approach this thing wisely,” Radius Bank Senior Vice President of Commercial Real Estate Adam Dubeshter said. “We’re not rushing in. We’re taking strong sponsors and managing our exposure in the industry.”

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RSK: It will continue to grow...literally since States will sniff tax money going up in smoke.

New Year’s Day 2020 will usher in a new era in Illinois. On that date, the limited sale of recreational marijuana will be legal—a move that will have wide impacts not just on society but the commercial real estate industry as well.

Medical marijuana has been legal in Illinois for more than six years, but the deregulation of recreational use will alter the landscape. Who will operate these new dispensaries? Will property owners and nearby residents balk at this expanded entry into the retail ecosystem?

“As everybody understands this better, and as the regulations and requirements become clearer, I think we will become more nimble,” said Deena Zimmerman, vice president at SVN Chicago Commercial. “I think it will be a slow and steady rollout, but I see it being really successful if it’s done the right way.”

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RSK: Hmmm, let`s see...what could be wrong with this picture? What state is this in again? Oh, yes, that`s the reason. Maybe they won`t mess this one up? Naaa...it will be a mess. More to come I am sure.

Ken Notes: I have been following the licenses and they just approved a store in South Beloit, my guess is it will be called, "Welcome Wisconsin"...

The persistent myth that New York is experiencing a retail vacancy “crisis” has once again captured the attention of some elected officials who are once again floating a new commercial rent control plan. The latest proposal was met with swift opposition from business leaders and homeowners throughout the city – and for good reason. 

The Brooklyn, Queens and Manhattan Chambers of Commerce, business improvement districts, along with advocates representing cooperative and condominium homeowners believe strongly that commercial rent control would have adverse effects on New York City, with severe unintended consequences. 

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RSK: Not sure that rent control for retail will solve the ongoing problem myself.

CBG Annual Holiday Party & Meeting
Date: Tuesday, December 10th, 2019
Time: 04:00 PM

Event Details:
Save the date of Tuesday, December 10, 2019 for our annual Holiday Cocktail Party & meeting with hors d`oeuvres and alcoholic refreshments. We`ll meet at Buck & Honey`s, 800 West Broadway, Monona, Wisconsin. We hope you can join us from 4 p.m. to 7:00 p.m. The location is to be determined. This is one of the most well attended events of the year for CBG members, affiliates, and their guests. We`ll have a short meeting and then it will be time to celebrate with your friends and colleagues.

2018 DOY Presentation with Photos is Here!

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Uber’s ex-CEO Travis Kalanick disrupted food delivery in 2014 when he launched Uber Eats. He’s going even deeper with his new venture, CloudKitchens, which received a $400 million infusion in January from Saudi Arabia’s Public Investment Fund, the WSJ reported. It could be valued at about $5 billion. 

• This marks the fund’s first known investment in the Bay Area since Saudi operatives murdered journalist Jamal Khashoggi in Oct. 2018.

CloudKitchens is a “ghost kitchen” operator. It takes advantage of tax incentives and cheap property to buy real estate, then builds kitchens for delivery-focused restaurants. 

• Thousands of restaurants are experimenting with virtual kitchens, from delivery-exclusive operations to traditional sit-down spots...

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RSK: I am thinking "Ghost Kitchens" are here to stay for a while.

Ghost kitchens are growing in popularity in most major metro areas throughout the country, and Dallas-Fort Worth is no exception.

A ghost kitchen, also known as virtual or cloud kitchens, are basic commercial-grade kitchens with no dine-in space. This allows the space to be located in virtually any commercial area with access to high residential and daytime populations. They do not need co-tenancy or expensive finish out. And therefore, they are significantly less costly to operate than a full-service sit-down restaurant...

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RSK: In my opinion no! Embrace them and use them to promote your brand and bottom line. People will still want to eat out in well designed and entertaining venues.

Ken Notes: Sort of like food carts, ghost kitchens will provide a lower cost startup and the great ones will develop into brick and mortar.

In 1999, 20th Century Fox released the American workplace classic Office Space. The film highlighted everything that was wrong with the office culture of the day, from claustrophobic cubicles to dull common spaces featuring nothing more than a water cooler and an old coffeepot.

While the modern workplace might have evolved of its own accord, the film became something of a lightning rod for a revolution in office culture.

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RSK: I will have to go and Netflix this movie.

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RSK: Rents may be lower but vacancy is less so is the cash flow the same?

Broker Jingle Bus Tour – #westowngetslit

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RSK: Wonder what will happen as the economy cools down. Will it still be a darling for investors?

In an increasingly competitive office market, landlords continue to search for new amenities that appeal to tenants. One of latest trends popping up is providing services that bring new lunch options for workers.

Many office buildings outside the downtown core don`t have lunch options that can be reached without a car, and some busy employees in the restaurant-filled central business district would rather have a delivery service bring food to their building rather than having to walk and wait in line....

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RSK: Find a need and fill it. I just wonder how SweetGreens will do if they were betting on WeWork locations.

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RSK: I think co-working will survive but not sure about WeWork....Soft Bank has a mess on its hands.

When the 26-year-old was fed up with her roommate and paying expensive rent, she decided to look into a co-living space in Williamsburg, a house with communal living where she wouldn`t be locked into a lease.

“I was paying $3,500 a month for a crappy room in a two-bedroom apartment with a roommate that I hated, and when I was there I never left my room,” Healy told FOX Business of her former apartment in the Gramercy neighborhood of Manhattan...

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RSK: Interesting idea and it seems to be gaining popularity especially with seniors and divorced people.

Ken Notes: this is being done in Madison but a network of availability is more student centered...

In recent years, there has been a small but persistent number of such bans or moratoriums nationwide, from cities as large as Birmingham, Alabama, to smaller towns like Milford, Connecticut, Nampa, Idaho, Margate, Florida, and Vancouver, Washington.

Last year, Denver banned self-storage within a quarter-mile of any light-rail train station, and this year Sacramento is considering banning it in parts of the city.

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RSK: I agree with this...but take a look at the picture of the building....slapping a new front on an old building like that may be part of the restrictions in itself!

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RSK: Yes, landlords will now start to share in the rewards as well as the risks.

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With over 350 experienced real estate professionals, Knight Barry provides exceptional support and service. Visit our website for more information about our 50+ commercial and residential offices throughout Wisconsin, Michigan, and Minnesota.

MADISON: 2450 Rimrock Road, Suite 204, 608-255-2700
CAP SQUARE: 44 E. Mifflin Street, Suite 101, 608-255-2700

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RSK: I think the last lines sum this phenom up perfectly "The younger crowd has the energy and wants the excitement of being with the crowd. they want to be part of the action because they are the action"

• Kohl`s just reported third quarter earnings and sales that missed analysts` estimates.
  
  
• The company said on Tuesday that sales at stores open at least a year grew 0.4% in the most recent quarter.
  
  
• We visited a Kohl`s in August and saw why the retailer poised to take on the retail apocalypse might not survive after all.
  

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RSK: I shop at the Kohls on the Westside of Madison and it always seems orderly and neat with some great values. I hope it doesn`t go the way of SEARS.

A few years ago, mixed-use multifamily developments were all the rage.

It seemed like every multifamily developer in Orange County, Los Angeles and throughout the Southern California region was placing ground-floor retail in its developments.

But fast forward to 2019 and it seems the retail portions of many of those mixed-use properties are not doing as well as many had hoped.

"From my perspective on the lending side, we`ve seen a lot of the retail never come into fruition," Bellwether Enterprise Senior Vice President Jason Krupoff said at Bisnow`s Orange County Multifamily Summit. "The apartments always do well but rarely will retail do well."...

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RSK: I would say the same thing is happening here. Often times multi-family locations are not a good retail location but the city planners want it. Wonder if any of them would put a business in that second or third tier retail location.

Our roster of restaurants reads like a who`s who of Madison`s favorite eateries: From Monty`s Blue Plate Diner, to The Avenue Bar, to Steenbock`s on Orchard, each is unique in its atmosphere and menu and each is the best at what it does!
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Great opportunity to lease 19,800 sf warehouse building located on Madison’s north-east side with rapid access to the total highway system, including Hwy 151, 51, 113 and I90/94. The building accommodates a 17,800 sf heated warehouse and 2,000 sf office space. Ideal for warehouse and distribution.

Also for SALE here...

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Fourteen miles outside of Boston, the ground floor of what was a Sears at Burlington Mall has been stripped down to the steel. Renovations scheduled to finished in summer 2020 will transform the space into a “streetscape” of smaller stores and restaurants facing out on to dining patios and a one-acre park. (Consumers who aren`t keen on harsh weather need not worry, the interior connecting hallways will remain open.) The rest of the mall is evolving too, getting a ride-sharing waiting room, a media lounge, and a kids` play area that will also have party rooms.

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RSK: I have been saying these things for years and now someone is finally doing it.

The historic Landmark is a 22,243 square foot mixed use building with 18 apartments and first floor commercial including Bar located in downtown Whitewater. Apartments are mix of studio, 1, 2 and 3+ bedroom units. Numerous recent improvements including a newer boiler, new laundry room addition with 4 coin-op W/D`s and new dumpster enclosure, updated common areas, and all new windows included.

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Prime development opportunity. Approximately 160 acres M/L located within the City of Stoughton featuring frontage along the Yahara River. A concept plan is on file which had received preliminary approval from the City of Stoughton. The potential plan offers 173 sites in a combination of single-family, multi-family, condominium, and office/commercial sites.

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Novel Coworking offers cost effective private offices and suites with flexible lease terms. Variety of office sizes (1-2 person, 3-4, 5-6+; suites 1,200sq ft - 2,200sqft), coworking and dedicated desks. Features: 24/7 access, on-site covered parking garage, office furniture, direct fiber and WiFi, on-site espresso bar, conference room, kitchen/break area and community lounge areas.

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Novel Coworking offers cost effective private offices and suites with flexible lease terms. Variety of office sizes (1-2 person, 3-4, 5-6+; suites 1,200sq ft - 2,200sqft), coworking and dedicated desks. Features: 24/7 access, on-site covered parking garage, office furniture, direct fiber and WiFi, on-site espresso bar, conference room, kitchen/break area and community lounge areas.

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Fully functioning restaurant for sale. Building updated, Newer equipment, established clientele.

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Offering real estate services and design-build construction solutions for growth oriented clients...   ...more

Eclectic Schenks Corners. A bit of old and new mixed in the build out. Up to 2 bays remain 940 sf &1,680 sf. 1,680 sf is perfect for a coffee shop with old brick & beams exposed. Spaces can be combined. Tenant pays utilities. Exposed brick, heating, wood, skylights and more. 2 Units have basement for use.

Also:

Building For Lease: 2015 Winnebago St 101 Madison WI

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Former KFC location. Property only. Vacant. Being sold in”As Is “ Condition. Corner of Oak and E. Wash.. Drive through window. Madison Metro stop at corner. On major E/W route to the Capital. 2nd Picture in Attachments is as it appears today. Co-listed with Ralph Kamps.

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313 East Mifflin Street is a six-unit apartment building located 3 blocks E. of the Capitol Square in the Capital E. District of downtown Madison. There are 4 One Bedroom and 2 Two Bedroom apartments, distinctive finishes and architectural appeal with hardwood floors, high ceilings, open kitchens and large windows enhance rental appeal. Some off st. parking. Upgraded electrical and new boiler.

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Just off E. Washington behind the new Hy-Vee. Many suite options ranging from 150 sf to 1,880 sf with rates from $10.00 to $14 gross, depending on size term and TI`s. Landlord pays all. On bus line. Great for non profits, small office/service reps. Interstate and airport a minute away. Agent interest. Controlled storage also available for pharmaceutical reps, suppliers etc...

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Great Central Beltline Location. Hard to find 1.81 acre commercial site with great linkages to East/West/South Madison and Fitchburg. Located in an Opportunity Zone. Utilities at lot line. Adjacency to Arboretum provides an unique setting for many possible uses.

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3979 square feet total flex space featuring 2558 square feet of office space and 1421 square feet of warehouse with drive-in door.

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Dorn Hardware Plaza belt-line. 3 buildings total 6500 sf, two occupied by owner/seller who will vacate. third rented. great retail, medical, office with finished examining rooms in one building.

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Thanks you for sponsoring CIREX and Cirexnews.com
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Since 1975, Flad Development & Investment Corp. has emerged as a leader in the development of quality commercial real estate projects in Madison and Milwaukee.

Ruedebusch Development & Construction, Inc. is a highly qualified, vertically integrated full service commercial construction, and real estate development company located in Madison, Wisconsin which offers:

• Commercial Real Estate Development
• Design Build Construction
• Commercial Real Estate Brokerage
• Economic Development, Commercial Real Estate, and Facility Consulting

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"The attention to detail, preventative maintenance, and proactive communication exhibited by MIG makes them a true business partner."

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Mid-America Real Estate - Wisconsin, LLC offers the same high level of service in property leasing, asset management, tenant representation and investment sales for which Mid-America has become known.

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Professional Real Estate Management and Sales

Expect Professional Management with a Personal Touch
with every T. Wall Urban Village.

(608) 575-1018 or Contact@TWallEnterprises.com

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IA Management is a full service property management company located in Madison, Wisconsin. Our objective is to be a profitable leader in both commercial and residential real estate.

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Five flex/R&D buildings - 138,000+ sq. ft. - Hwy 51 and Hoepker Road - High End Image - Affordable and Flexible Floor Plans - Warehouse - R&D, Light Manufacturing - Showroom

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