More Women Join Industry
More women are joining the commercial real estate
profession, but men still earn more at comparable age and experience levels,
according to a 2005 Commercial Real Estate Women Network survey. Women comprise
36 percent of commercial real estate professionals, up from 32 percent five
years ago. The financial/professional services sector added the most women, a 7
percent increase over the past five years. Yet female industry professionals
still are clustered in lower-paying positions in all four specializations.
More Offshore Gains
While cheaper labor is the main reason companies take
business overseas, offshoring also is boosting corporate bottom lines through
capital savings, according to a Boston Consulting Groups study. In a rapidly
developing economy, a company can add about 6 percent to the return on capital
expenditures such as manufacturing facilities, researchers found. By using
locally made equipment, companies save 20 percent to 80 percent on fixed
assets, and since labor is cheaper, they use more labor and less or older
machinery. Better productivity is an added bonus as most offshore locations
have six-day work weeks and lower pay for overtime and holidays.
HOSPITALITY - The 3Q05 lodging construction pipeline
increased by only 197 projects over 2Q05, the lowest 2005 quarterly increase,
signaling developer caution, according to Lodging Econometrics.
INDUSTRIAL - Manufacturing's strong fundamentals, lack
of institutional and foreign buyer interest, and limited supply have increased
the sector's investment appeal, especially in technology-heavy markets, says
Marcus & Millichap.
MULTIFAMILY - The National Association of Home
Builders' Multifamily Stock Index rose 2 percent in September 2005, marking a
26 percent year-over-year increase in the total returns of 27 publicly traded
OFFICE - The office market continues to tighten, with
the national vacancy rate falling to 15.1 percent at the end of 3Q05, putting
it at the halfway point to full recovery, says Grubb & Ellis.
RETAIL - Shopping center real estate investment trusts
with assets outside of key Wal-Mart markets outperformed the overall REIT
shopping center sector by 34 percent, and REITs with assets within Wal-Mart markets underperformed
the sector by 15 percent, according to ICSC Research Review.
Hiring for Success
New employees have almost a 50-50 chance of failing, most
because of poor interpersonal skills, but hiring managers must share the blame,
according to a Leadership IQ report. The three-year study of 20,000 hiring
situations predicts that 46 percent of newly hired employees will fail within
18 months because: 26 percent can't accept feedback; 23 percent can't
understand and manage emotions; 17 percent lack the necessary motivation; 15
percent have the wrong temperament for their jobs; and 11 percent lack the
necessary technical skills. More than 82 percent of the hiring managers
interviewed reported that in hindsight they perceived subtle clues to such
problems. But because of their fixation on finding technically competent
employees, they overlooked the signs of potential failure. The most successful
hiring managers emphasized interpersonal and motivational issues in
Seniors Housing Offers Investment Potential
A shakeout among operators and a slowdown in new facility
construction has given the seniors housing market a second lease on life,
according to Marcus & Millichap. Operating averages are up across all sectors
and a clearer model for investment success has emerged: Larger unit sizes,
quality locations, and state-of-the-art amenities
characterize the most sought-after investment properties.
Who's Getting the Money?
Light manufacturing, industrial distribution, and service
companies are most likely to receive funding from lending institutions over the
next six months, according to Phoenix Management Services' 3Q05 "Lending
Climate in America" survey. Health care, retail, and real estate are the
next three most attractive industries. Least attractive are start-ups/new
ventures, technology, and agriculture/forestry/fishing.
Most Closed Hotels Convert to Other Uses
Only one-third of 170 currently shuttered U.S. hotels
will reopen as hospitality properties, according to a Lodging Econometrics
analysis. Of those remaining hotels, 38 are undergoing renovations, with 17
re-opening under the same brand, 16 switching brands, and five converting to
condominium hotels. The remaining 22 will be demolished to make way for new
hotels on the same site. The 110 hotels remaining closed will convert to
residential use or be replaced by another commercial use. Cities with the most
closed hotels are New York, Las Vegas, Miami, Phoenix, and Tampa, Fla.
Multifamily CEOs Top Chart
Chief executive officers of multifamily real estate
companies substantially outearn their compatriots heading real estate finance,
retail, office and industrial, and corporate real estate companies, according
to Construction & Real Estate Leaders 2005 executive compensation report.
Multifamily CEOs earn a median base salary of $550,000, almost 50 percent more
than office and industrial company execs, who post a median salary of $280,000.
They are followed closely by retail CEOs who earn a median of $268,000. Real
estate finance CEOs come in next with $190,000, with corporate execs trailing
at $157,000. Bonuses don't change the rankings, but they boost multifamily
execs ahead another 10 percent.
Independent Grocers Go High Tech
Despite the looming shadow of Wal-Mart, national grocery
chains and other national retailers such as Target are homing in on food-buying
consumers. But independent grocery retailers are holding their own, even
looking toward expansion, and using technology to hone their advantage over the
supermarket big boys, according to Progressive Grocer's survey on technology
and the independent grocer. Real estate plays a big role in their fight to
remain competitive, as most independents cite location and convenience as their
biggest customer draws. In addition, 61 percent expect to expand in the next
three years. While independents have embraced technology, they choose different
tech tools than the large grocery chains. The industry's leading tech
innovation - self-checkout - ranks last among independents, mostly because they
lack the space for it. Instead they are interested in wireless communications -
so checkers don't have to stop checking to answer phones for price checks and
stores can keep better track of home deliveries.