CDC Outlines New Ban on Apartment Evictions

Earlier in the pandemic tenants and landlords may remember layers of complicated executive orders which outlined when tenants could be evicted for non-payments. At a federal level the evictions were for all apartment tenants whose landlord’s had a federally backed loan that lasted until the end of July of this year. On top of that, in New Hampshire, an eviction ban for all property types ran through June. 

Under both of these programs it was noted that the rent money was still due even though there was an eviction ban in place.  However, there was concern that tenants who were in economic trouble would see their rent accrue and be faced with a lump payment at the expiration of these moratoriums. To combat this, Governor Sununu used some of the CARES Act funding to put direct payments into the hands of tenants who found themselves in these situations. The total funding amount was $35 Million, with just some of those funds making it out as of September.

Now another moratorium from the federal government has been issued. This time from the CDC, which outlines that tenants of apartments cannot be evicted for nonpayment alone. It only applies to tenants who earn less than $99,000 individually or $198,000 jointly. Additionally, they have to illustrate that they have exhausted all other assistance opportunities and that their inability to pay is based directly upon COVID. Much like the other eviction bans outlined above, this new program does state that the rent is still due.

This program is still new and it will take time to work out. Based upon what we are hearing, there are various housing groups lobbying around the order, which may result in further modifications or legal challenges. In the short term the ban is in effect and landlords should read in detail prior to taking any action against any tenant.

What The Results Of The NH Business Resiliency Survey Mean For Commercial Real Estate

In June, the University of New Hampshire Survey Center worked on behalf of the NH Small Business Development Center to conduct a survey of over 1,500 small businesses in New Hampshire. The survey was distributed through over 50 business organizations throughout the state, and the highlights can be found here https://www.nhsbdc.org/2020surveyresults. The questions asked in the survey were specific to the economy and COVID-19.  

We wanted to share our thoughts on the results, as it impacts commercial real estate.  Let us start with the more empirical data from the survey, as questions relating to a business owners belief or concern can be heavily swayed by many subjective items.

Employment is a key driver of real estate consumption. For office space, a full time employee will need 200 to 300 square feet of space in an office environment, though there is less of a clear correlation in the retail and industrial markets.  In February of this year a similar survey noted that all businesses in the data set averaged 22 employees, while the June survey resulted in 18. However, a positive sign is that the decline in employment was centered on only 40% of the businesses surveyed.

The suggestion from this correlates with the essential/non-essential data. Just over half of all of those surveyed were deemed non-essential. These were a wide range of retail, hospitality, and some service businesses.  It remains to be seen, but it appears that the steep decline in employment was centered on the non-essential businesses within the retail facing world. Largely speaking, office employment appears to remain steady. 

In addition to employment data, the survey also drew inference on businesses ability to meet their other commitments, such as paying rent. Close to half of all businesses surveyed claimed their revenue dropped by 50% or more. What is alarming is a majority of the businesses surveyed were unable to defer or modify any payments to vendors, such as landlords. Clearly this would create a huge imbalance that is not a surprise to anyone.

To reclaim these lost revenues, businesses sought new funds from various services to meet obligations.  Of the relief programs supplied by the Federal Government or the State, the Payroll Protection Program was utilized by 60% of all of the businesses, the Main Street Relief was used by about 40%, and the Economic Injury Disaster Loan was used by about 25%.  To get into the numbers, it appears that food service and hospitality were more likely to take out the EIDL Loans or the Main Street Relief Funds. These are the same businesses who were more likely to have their employees go onto unemployment while their businesses were deemed non-essential.

More subjectively, a majority of business owners feel that the NH Economy will recover within the year. But, business by business, there is concern about the forthcoming changes. A strong majority see work from home being a key focus of their business planning, along with changing a physical location. The data does not go into more specifics, but it is clear that we all are looking at ways to be more flexible with our space. It remains to be seen if this translates into a lower demand for office square footage.

Of note on the retail side would be that close to two thirds of all respondents see the need for curbside pickup and the same amount for delivery. In a practical sense, what will that mean for civil engineering moving forward? Do we need new lanes and parking spots to accommodate the quick in and quick out that these concepts demand?

The data is always to be taken for the snap shot it is. Commercial real estate is slow moving, as leases, purchases, and developments take time. It remains to be seen how these statistics will impact the details of the commercial real estate deal.

Major Changes Coming To Rental Property In New Hampshire On July 1st

Beginning on July 1 there will be major changes to the prior eviction stays in New Hampshire that were put in place through Executive Orders earlier in the pandemic. However, apartment tenants who have concerns about rent payment should be able to access the new $35M fund that will be set aside for assistance.

On the apartment rental side, throughout the pandemic there has been some concerns about payment of rent from both renters and landlords. While unemployment rates have risen to historical highs, renters without jobs have been concerned about payments. Offsetting these concerns has been an infusion of additional funds from the federal government to increase unemployment benefits. The net result has been that tenant defaults and rent contraction has yet to surface in a major way. However, with the expiration of the expanded unemployment benefits, there is concern of some folks losing their ability to pay.

The CARES Act, passed by Congress, also afforded each state with so called Flex Funds. New Hampshire’s share was $1.2B, and it has been used for various COVID related challenges. One recent announcement, was that Governor Sununu will be taking some of those funds and directing them to housing assistance:

“Governor Chris Sununu has authorized the allocation and expenditure of $35 million from the CARES Act Coronavirus Relief Fund (“flex funds”) to support families or individuals in need of housing assistance as a result of COVID-19. Of the allocated $35 million, $20 million will be initially expended, with $15 million being held in reserve, for rent stabilization and housing support.”

The goal of the program is to provide assistance for those folks who may not have the funds to pay, or may otherwise have back payments on their apartments that they may need to clear up. More on the fund can be found here: https://www.goferr.nh.gov/covid-expenditures/new-hampshire-housing-relief-program.

The goal is to have the funds and the distribution set up by July 1, which coincides with the reopening of evictions.

On March 17, the Governor announced that he was putting a freeze on evictions throughout the pandemic. While there were a narrow band that could move forward, non-payment evictions were stopped. As a practical matter, with the court system shut down, there was no channel for the process to go through. This stay on evictions was for all asset classes. Office, Industrial, Retail, and Apartments, were all collectively stayed on having evictions. As of July 1 this is being lifted as a result of Executive Order 51. More info on this can be found here: https://www.governor.nh.gov/sites/g/files/ehbemt336/files/documents/emergency-order-51.pdf

It is clear that the goal is to soften the concern of non-payment by providing some floor of support to those in need through the $35M flex funds, and dove tailing that with the lift on the eviction freeze. It is worth noting that many landlords and tenants on the commercial side have worked through payment plans, and the hope is that the landing this summer, for all asset classes, will be as soft as it can be.

Landlords and tenants alike should also take interest in the fact that the Executive Orders are not the only governing documents relating to evictions. As part of the CARES Act, the federal government did put a stay on evictions for certain federally backed mortgages on apartments. All parties should research accordingly.

July 1 is right around the corner, and it is very important for all parties to read about the funds, understand if there is appropriate access to them, and see how these new orders affect them, their families, and their businesses.

Contrasting Boston's Return to Work With New Hampshire's, And How It Could Affect The New Hampshire Office Market

On Memorial Day week, Boston City Mayor, Marty Walsh, announced the Return to Workplace Framework for Commercial Spaces the full details of which can be found here: (https://www.boston.gov/news/return-workplace-framework-commercial-spaces-boston).

Today we contrast this with the Stay at Home 2.0 initiative by New Hampshire Governor Chris Sununu and speculate what Massachusetts’ policy means for office space, particularly along the corridors to New Hampshire.

It is worth acknowledging by almost any standard, Massachusetts has been harder hit by COVID-19 than the Granite State.  Reopening standards and regulations surrounding masks and social distancing tend to be stronger in the Bay Stay. As it relates to office space in New Hampshire, the standards for the Universal Guidelines have been set by the corner office, and no additional local regulations have superseded it. However, to the South, there is a statewide standard for office space, and in this case the Mayor of Boston has added additional layers to that standard.

When the stay at home orders are lifted in New Hampshire, office employers and their staff who were previously “non-essential” can start going back to their bricks and sticks offices.  Currently, the regulations on these businesses are centered on the employees and employers, not the built environment. For example, the standards discuss temperature checks and Q&A with people entering the building.   Some in New Hampshire are receiving guidance from the Re-Opening Taskforce and then subsequent guidelines endorsed by the Governor that is more specific to that industry.  So, for example, hair stylists have specific standards that really apply to just their niche, and the task force has addressed this.

However, in Massachusetts the guidelines for office users are in place and very clear. When they reopen the State has stated that, “businesses and other organizations shall limit occupancy within their office space to no more than 25 percent of the maximum occupancy level.” Keep in mind, for standard office build out with mix of cubicles and hard offices, the average demand is 4 people per 1,000 square feet (sf).  That is a rule of thumb and you should consult your local code to check what is appropriate for your business. So, the standard would be 1 person for every 1,000 sf under the new reopening order.  

In addition, the statewide orders would ask for cubical barriers to be taller than a standing person, that common areas be reconfigured, and other broad based social distancing goals. Within Beantown, further restrictions are in place, such as requirements for elevator density, lobby and reception areas, as well as cafeterias. These guidelines are very specific.  As most of the office environment is multi tenanted in the city, the reading of these does create a challenge for both tenant and landlord as to the compliance.

While these specific standards for office space have not yet been released in New Hampshire, we do know that in both New Hampshire and Massachusetts there is a phased approach for these reopening’s. As metrics of COVID-19 improve (or god forbid worsen) the standards may change over time.

What will this mean for the office market moving forward in New Hampshire and Boston? Many have speculated, and we have commented, that there could be dramatic impact from COVID on the office leasing market. Some bloggers have stated that larger offices, with only 1 or 2 people per 1,000 sf, will be the new norm, and office demand will rise. While others have said that only a skeleton crew will go to offices, while most work from home, and office space will plummet. But these trends are too early to tell. The only clear piece of data is that for those employers who are looking to get back into their buildings, there is exploration of new office furniture such as the aforementioned taller cubicles.

However, in light of our headline, we should discuss what these guidelines will do to the cross border tenants. Estimates are around 80,000 people travel from New Hampshire to Massachusetts each day.   It is not out of the question to believe that regardless of what standards are created in New Hampshire, that some employers who see benefits of in person office space versus work from home may open satellite locations in New Hampshire, rather than have team members commute. 

In the long run, it will be curious to see if this speculation will play out on a broader scale in the office market, with more New Hampshire based satellites. The corollary would be in the residential real estate market, where there is speculation of a lasting impact on people leaving more densely populated areas to live in more rural environments. If this is true, would it not also follow that the same is true for employers and lessees of office space?

There is much that is speculation, and aside from anecdotal stories about which office users will be opening up when, it is too soon to predict long term trends. Until then we will watch the Stay at Home 2.0 orders as well as the subsequent phasing levels and see how tenants and landlords react.

Looking At The HEROES Act And Its Potential Additional Funding For Real Estate

The Coronavirus Aid, Relief and Economic Security Act (CARES Act) was passed into law on March 25, 2020.  The Act had a number of large sweeping investments into states, businesses and individuals. The main ones that we have focused on in these blogs are those impacting real estate and small business. Tools within the Act included the Paycheck Protection Program (PPP) and Economic Injury Disaster Relief (EIDL).  Recently the State of New Hampshire has announced that the Flex Funds provided to the State within the CARES Act will in part be used for a Main Street Relief Fund, which was just put in place on May the 15^th. 

However, with all of these funds it is clear that the American economy is hurting even as states start to reopen. It should come as no surprise that many people started pushing for additional rounds of stimulus.  And so it came to pass out of the House of Representatives that the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act was passed on the same day Governor Sununu announced the Main Street Relief Funds. The act outlines a number of spending and investment priorities for future relief for Americans. However it is a long way off from becoming law.

The $3 trillion dollar bill passed the Democratic controlled house by a vote of 208 to 199. In order to move forward the bill would have to pass the Republican controlled senate, where Senate Majority Leader Mitch McConnell has said that we should wait until we see how prior rounds of stimulus investment play out prior to passing new investments. Specific to the HEROES Act, he described it as a, “big laundry list of pet priorities”. It is clear that as written this bill is not going anywhere.

It is with that caveat that we jump into this writing to explore the “pet priorities” in the act. If, and when, future rounds of stimulus come, it will have to pass through the House and some of these fingerprints may be left on the commercial real estate industry.

The bill takes aim at expanding the aforementioned PPP and EIDL Loans. The former would be extended through the end of the year, with carve outs to ensure that some loans are given to small businesses. The latter would be given an additional $10 Billion worth of funding after those loans have seen their funding sources shrink.

The SBA 504 and 7A programs would see their loan limit increase to $10 Million each, which are currently at a fraction of those levels.

A proposed moratorium on evictions of non-paying apartment renters for 12 months after the acts passing would be one priority that would impact landlords.  In addition there would be $100 Billion of funds for rental assistance.

These are but a fraction of the priorities outlined in the $3 Trillion bill. Additional changes for personal and corporate tax structures are detailed as well as additional investments for states and schools. All of this discussion on stimulus is clearly theoretical. None of this has a chance of reaching the President’s desk for a signature as written. Keeping an eye on the text is important to understand what items could be coming down if we see yet another round of stimulus.

Leases In The Time Of COVID-19

COVID-19 has had a giant impact on our way of life, though at his point that doesn’t need to really be said. But with every day that brings us a new normal that we have to adjust to, it also brings new repercussions. That is also true for the commercial real estate sector, particularly commercial real estate investors and users.

As more and more businesses begin to shut their doors to work from home, or because of government mandates, questions have begun to arise for both owners of commercial spaces and their tenants. The biggest question of all, “do tenants have a right to stop paying rent due to the coronavirus?” This is a complicated question, one that, depending on how long the pandemic lasts, might be answered by the state, if not federal, government.

The answer to the question is, in most cases, no. Whether a tenant has a right to stop paying rent due to “force majeure” or any other number of clauses is ultimately based upon the specific language and terms laid out in each specific lease agreement. This, though, does not take into consideration if a floor or entire building is closed down by either the property manager or owner. Before mandating a floor or building closure, landlords and property managers should carefully review all possible impacts that decision could have.

While the legalese of each specific lease will ultimately determine whether a tenant is required to pay rent, landlords and tenants should still review their leases to ensure they understand their rights in these unprecedented times. 

At the end of the day though, due to the stress that many tenants, especially those in retail and hospitality, will be feeling at this time, the government may see it fit to step in and take extraordinary measures to ensure that businesses and people survive the financial impacts of the pandemic. For multifamily owners and tenants there have already been discussions within government of suspending rent payments, and some states, including New Hampshire, have already suspended evictions. This is also inclusive of commercial evictions as well.

The most important thing for tenants and owners to do right now is open up communication channels to discuss issues both tenant and landlord face, and come up with creative solutions that benefit both parties. For example, relaxing enforcement of continuous operation covenants, or, if a tenant comes to a landlord needing rent relief, entering into short-term arrangements that provide partial base rent abatement.

While challenges do indeed lay ahead, they can be overcome. By understanding that we are all feeling financial and personal stress right now, and finding ways to work with each other, we can come to a common ground that is fair to both parties. Taking this approach in life, and in real estate, will make dealing with the effects of COVID-19 at least a little easier to handle.

Maintaining The Health Of Your Investment Property During COVID-19

The COVID-19 Virus has made a giant impact on the health of people around the world. We encourage everyone to be vigilant and follow the guidelines in place to protect oneself. Not to minimize the health effect, these articles will be about COVID-19’s impact on real estate, which is our expertise. The stock and bond market is widely transparent on a minute by minute basis and we hope to provide a transparency into the real estate market.

COVID-19 has thrown us all into unprecedented times. We’re all getting used to a new normal, and that is also true for commercial real estate investors and users. With the highly contagious nature of COVID-19, and its ability to live on different surfaces for multiple hours, and sometimes days, the cleaning of work spaces and common areas has never been more important to maintain the health of building tenants and guests.

But, responding to this pandemic starts with awareness. Owners and property managers should consider educating their tenants on steps that they can take to limit the chances of others getting sick. Spreading information through emails, mailers, and posted notes can be done to ensure that tenants are aware of what the disease is, how to prevent it, and how landlords and property managers are monitoring the situation and keeping tenants informed of updates, and especially what precautions are being taken.

Awareness is only part of the battle, though. Landlords and property managers should be proactive about disease control measures. The frequency of regularly scheduled cleaning could be increased, with a primary focus on making sure that regularly touched surfaces, such as door handles, counters, devices, etc. are cleaned as frequently as possible. Consider stocking up on disinfectants and supplies, and hand sanitizer and disinfecting wipes could be made available in all common areas.

According to some experts, though, the first line of defense against COVID-19 is improving a building’s air quality. Improving air quality is not only the best way to improve a building’s health, but also give it its biggest ROI. Owners or facility managers could consider running the fans, upgrading the filters, and keeping the filters clean. Also, by letting in fresh air in large quantities, owners and property managers can help dilute airborne contaminants, reducing the risk of infection.

If improving air circulation is not an option, then investments could be made on improving air circulation. By upgrading filters to what’s known as an MERV rating of 13 or higher (which is what hospitals use) filtration systems will be able to catch more than 80 percent of viral particles. Higher humidity ranges, between 40 and 60 percent, are also optimal for lessening a virus’ ability to spread, but tenants’ comfort level should be kept in mind when exercising this option.

In the event that a guest visiting the building has been diagnosed with COVID-19, owners do have an obligation to notify all other tenants and occupants of the building that a person who has entered the building has tested positive for the virus, and what steps are being taken to ensure tenants’ health and well-being. All common areas should be, if possible, closed off for a deep clean and disinfection. Depending on the terms of the lease the tenant signed, owners and property managers may or may not be responsible for the deep clean of the tenant’s space, and that includes any extra precautionary cleaning as well.

Owners, property managers, and even tenants, can no longer sit idly by and hope that COVID-19 doesn’t affect them. It is all of our responsibility to help flatten the curve, and that begins with being proactive about the health of a building. The sooner we flatten the curve, the sooner we can get back to normal.

COVID-19 and Investment Real Estate: Apartments

The COVID-19 Virus has made a giant impact on the health of people around the world. We encourage everyone to be vigilant and follow the guidelines in place to protect oneself. Not to minimize the health effect, these articles will be about COVID-19’s impact on real estate, which is our expertise. The stock and bond market is widely transparent on a minute by minute basis and we hope to provide a transparency into the real estate market. Check back each week for a new look into how COVID-19 is affecting the commercial real estate industry.

In a retrospect, it will be easy to see how the path for COVID-19 was forthcoming, and took some time to hit domestically. But, from the reaction of the stock market, it felt like the impact was overnight. The week that followed was a rollercoaster, but the same cannot be said for the investment real estate market. The reality is that until we see a string of real estate closings we will not be able to pin point the actual market in the investment world. For many apartment owners though, it’s business as usual.

The investment world of commercial real estate has long been a hot market. Nothing speaks that fact truer than apartments. Fueled by historically low vacancy and interest rates, investors have flocked to that asset class, which has driven up the per door price, and driven down the capitalization rates.  In addition, apartments have been seen as an investment class that is protected from some of the concerns in the larger real estate economy. “Everyone needs a place to live,” and, “Amazon cannot take away the need for apartments,” have been phrases of conventional wisdom.

In speaking with investors this past week, these thoughts still prevail. They feel that, in the long run, apartments are one of the safer asset classes out there. Some investors have even made plans in this low interest rate environment, to free up capital for more acquisitions. Others are staying put, waiting to see how the market plays out. 

There are facts that everyone agrees on, though. One is that no one is a seller right now. It is not out of concern that the market is down and investors won’t get their value, but rather that investors do not want to put their money elsewhere. The second is that investors/landlords will need to work through the next few months with their tenants with compassion, with payment plans being one solution, particularly for those tenants with jobs in hard hit industries.

When investors were asked about the impact of the order by the Governor to put off all evictions in the State of New Hampshire, again there was some common ground. Most folks believe that the tenants who will pay are going to pay, and those who will not, won’t. In the end, investors feel the impact of COVID-19 will take a little time to work through the system.

So far folks have not seen changes to their income stream, with some investors noting that they are still getting rental applications. Time will tell, but it appears that the initial reaction from the apartment sector is that the impacts have not been felt.

Are you a landlord? Let us know how the pandemic has been affecting your multifamily/apartment investments in the comments below.

COVID-19 and the Overall Real Estate Market

The COVID-19 Virus has made a giant impact on the health of people around the world. We encourage everyone to be vigilant and follow the guidelines in place to protect oneself. Not to minimize the health effect, these articles will be about COVID-19’s impact on real estate, which is our expertise. The stock and bond market is widely transparent on a minute by minute basis and we hope to provide a transparency into the real estate market.

What at first appeared to be a slow moving pandemic, snapped across our domestic world quickly to start the month of March.  Many of us faced choices on if our businesses would enforce work from home policies, and where our children would be educated and cared for during the school day.  These questions are still playing out and changing on a daily basis. 

The investment markets are in a state of flux. Stocks continue their up and down pace while investors try and get a sense of the next steps in the market. The same rapid movement cannot be said of the real estate market. By nature the real estate cycle is slower. It is a less liquid asset and it takes time to sell and have the market react to external factors. In place leases impact value, and those too take time and have long term. Finally the debt markets impact value, and again, that takes time to work through the system.

At our offices the reaction from users of commercial space have been mixed. Since the week of March 9, 2020 we have seen some folks pull back.  Some of them were expansion tenants, while others were user/buyers with new locations.  For each story of someone delaying plans there is another story of someone moving forward.

•         National users of space, with multiple leases expiring, continue their review to look at the longer picture on relocation choices. They are in the market.
•          Local users, with multiple businesses or divisions, are shifting their focus to those businesses less impacted by recent events that are in need of space. They are still in the market.

These examples may shift overtime, but they do illustrate the types of people who have businesses impacted by COVID-19, but remain in the market to find new lease space.

We will explore more of the investment real estate market over time, but the immediate reaction is, again, mixed. Some investors look at the dip in the stock market and assume that real estate should be at a discount as well, while others see a premium in the asset because of the volatility on Wall Street.  History has shown us that one week is too short of a time to take any meaningful conclusions away, because of the aforementioned speed of the real estate market. 

Certain sectors of the investment market will likely remain strong, such as those properties with apartments, grocers or medical practices. Services that are needed no matter the state of the economy. Additionally, the quality of the income stream is always important, but more so in this past week, as conversations regarding franchisee or franchisors signing of leases is becoming crucial.

This is the first of many articles we plan on distributing to our clients, customers and friends. We are all in this together, and we hope to empower you during this unprecedented time with our collective knowledge.

How The 2020 Session Of Congress Could Impact Commercial Real Estate

It’s the first quarter again, which means a new year and a new session of Congress. Don’t worry, we’ll leave the politicking to the politicians. In this month’s blog we want to take a look at a few issues that will be working their way through the House and Senate at some point on a federal level, and are poised to have an impact on the commercial real estate market.

The first issue we’re going to look at is that of the extension of the National Flood Insurance Program (NFIP). While originally scheduled to lapse the first week of 2020, Congress’ latest budget bill extended the program through September 30^th.  Allowing time for Congress to work toward a long-term reauthorization of the program.

Getting that extension through was huge. If the NFIP lapsed it would have prevented the program from selling new policies or renewing existing ones. This could have caused a major logjam for sales of properties that required flood insurance. The last time Congress allowed the program to lapse was in 2010, and the National Association of Realtors said up to 40,000 property sales were put on hold during the almost a month it took for Congress to put together an extension.

While we tend to think of flood insurance as a need for the areas around the Mississippi, the reality is that there are many commercial buildings in the Granite State that are along rivers, and tidal bodies that require flood insurance to obtain a mortgage.

Another program that was set to lapse this year but got a last minute extension is the Terrorism Risk Insurance Program (TRIP). TRIP was established after 9/11 as a response to the period of disarray in insurance markets that ensued in the aftermath. The program requires certain private insurers to offer coverage against acts of terror and in return the government acts as a backstop in the event the insurance company is required to issue a payout due to a terrorist attack.

If NFIP and TRIP were to have lapsed with no alternative in place, it’s fairly safe to say that stability would have been disrupted in not only the insurance markets, but the real estate and commercial mortgage lending markets as well.

Another topic nationally is marijuana legalization. Starting January 1^st Illinois became the 11^th state to legalize marijuana for recreational use. As more and more states legalize the sale of marijuana, companies and industries that interact with the cannabis industry are finding themselves walking a tightrope between the state and federal government. While New Hampshire has not endorsed recreational marijuana, many of our neighbors have. For those who are interested in being landlord’s to industries in this space this is an important topic to follow.

As a way to protect commercial real estate and other industries as they do business with cannabis companies a bill was introduced called the Secure and Fair Enforcement (SAFE) Banking Act. The bill would protect businesses from federal prosecution for dealing with cannabis related businesses (CBR) that are legal under state law, such as leasing space for a recreational cannabis store or industrial facility for cultivation.

Currently, as marijuana is still illegal on the federal level, any company that does business with a cannabis related business is at risk to be prosecuted. This is along with the fact that most banks won’t do business with cannabis related businesses, which means any transactions done with a CBR are cash-only transactions, which puts employees at risk and opens up opportunities for white-collar crimes.

Unfortunately, though it has the backing of the National Association of Realtors, Credit Union National Association, the Real Estate Roundtable, and other various organizations, the SAFE Banking Act may be doomed. It’s been three months since the bill passed the House, and many Republicans in the Senate, including the chairman of the Senate committee on banking, Mike Crapo, have spoken about their significant concerns with the bill. Concerns that could derail it entirely.

These are just a few of the issues being talked about on Capitol Hill that could have major effects on the commercial real estate industry as a whole and could affect you as an investor or user. What are your thoughts on these issues? Is there a bill we didn’t talk about here that you think could is an important issue for those involved in the commercial real estate sector to be aware of? Let us know in the comments.

As the year goes on make sure to stay tuned to our Facebook, Twitter, and LinkedIn pages for updates on these issues and follow-up blogs on the happenings in Washington and how they might affect the commercial real estate industry.

Investors Buying Office Space in Bedford NH

Bedford NH - NAI Norwood Group is pleased to announce two recent office sales in the Bedford NH market. 10 Chestnut Drive is a 13,690+/-sf two story office building off the busy Route 101 corridor comprised of a number of small, local businesses. According to the registry  of deeds it sold for $790,000. 116 South River Road Building B was a 7500+/-sf two story, steel framed, brick façade condo that sold in the prestigious Coldstream Office Park at 116 South River Road. According to the registry of deeds it sold for $870,000.

“It is clear that these sales are a testament that a Bedford business address continues to be highly desirable.” Noted Louise Norwood, Principal at the firm. “With so much new development in town, along with the low interest rates, the demand remains high.”

“Both of these assets were sold to investors.” Added Chris Norwood, President of the firm, “With an additional sale of a small condo unit earlier in the summer, this marks our third investment product sale in Bedford in the last 60 days. While the owner occupant market is strong, the proof is here that investors are still seeking sound real estate as diversification to their other investments.”

NAI Norwood Group is an affiliate of NAI Global, the world’s leading managed network of independently owned commercial real estate brokerage firms.  Through this network of 400+ offices and 7,000+ professionals, NAI Norwood Group is able to leverage their 45+ years of dedicated local experience around the world. With our extensive background and strong local contacts, we are able to assist individual corporations in negotiating leases, sales, business brokerage, investments, relocation, site selection and development. For more information please visit www.nainorwoodgroup.com. Or contact one of our offices: 116 South River Road, Bedford, NH 03110, (603) 668-7000 or 28 Deer Street Suite 301, Portsmouth, NH 03801 (603) 431-3001.

NAI Norwood Group Sells Land in Kittery for One Million Dollars per Acre

Kittery ME – NAI Norwood Group is pleased to announce the sale of 1.96+/- acres located at 275 US Route 1 in Kittery, Maine. The site was the former home of Maine’s original outlet center. Greg Whalen of NAI Norwood Group represented the seller, KTP Shops LLC, in the transaction. It closed on July 27, 2017 in the amount of $1,960,000.

The site will be the new home of a Hampton Inn and Suites. The 32,000+ retail building currently residing on the site will soon begin the demolition process. This project has been a long time coming. It went under agreement nearly three years ago and has fought a long, hard battle through Maine’s court system. For full details on the site renovation or the court case, please contact Greg Whalen at 603-431-3001 or gwhalen@nainorwoodgroup.com.

NAI Norwood Group is an affiliate of NAI Global, the world’s leading managed network of independently owned commercial real estate brokerage firms.  Through this network of 355 offices in 55 countries, NAI Norwood Group is able to leverage their 45+ years of dedicated local experience around the world. With our extensive background and strong local contacts, we are able to assist individual corporations in negotiating leases, sales, business brokerage, investments, relocation, site selection and development. For more information please visit www.nainorwoodgroup.com. Or contact one of our offices: 116 South River Road, Bedford, NH 03110, (603) 668-7000 or 28 Deer Street Suite 301, Portsmouth, NH 03801 (603) 431-3001.

Millennials are Changing the Face of Commercial Real Estate

Everyone is talking about millennials today. Economists, pundits, politicians and business people have all weighed in, as their generation became the largest proportion of the overall workforce in 2015.

What effect, if any, is this having on the commercial real estate market?

Many of the most significant effects are driven by this generation's dramatically different habits of work, play and travel. From alternative commutes to remote work, any business that employs millennials needs to address these factors and structure their organizations and real estate accordingly.

The rise of telecommuting

Simply put, millennials love telecommuting and working from home. Deloitte's 2016 Millennial Survey confirmed a few key insights about them:

●     43 percent of millennials currently have the ability to work from home.

●     75 percent would like to and think it would positively impact their productivity.

●     88 percent want the opportunity to work with flexible hours, starting and stopping on their own schedule.

The practical effect of this is a reduced need for office space on any given day. In some cases, employees will share desks or rotate freely through dynamic, open-plan offices. Senior millennials in executive positions are equally enthusiastic about this dynamic - according to Deloitte, 56 percent of those in this category enjoy the ability to work remotely and on a flexible schedule.

Moving forward, scaling up an enterprise and hiring new staff won't necessarily obligate a business to acquire the same square footage they might have needed before. 

New priorities for location and lifestyle

Just because millennials don't prioritize office space the same way, however, doesn't mean that CRE professionals can't market to them effectively. One of the biggest differences between them and previous generations is their decreased willingness to endure long commutes.

Millennials just aren't as car-centric as their parents in general - in fact, a study from the University of Michigan showed that only 60 percent of 18-year-olds now hold a driver's license, down from 80 percent in the 1980s. An analysis of millennials' driving habits versus those of Gen X and Gen Y by a professor at the University of North Carolina found that the reasons for this were varied, but a changing - and largely negative - view of cars was responsible for as much as half of the decrease in total driving miles.

As a result, many young people must be willing to compromise in other areas, including the neighborhoods they live in and the size of their houses and apartments. A business that seeks to hire a significant number of millennial employees should take these factors into account.

In addition, increasing use of mass transit changes the favored location for an office significantly. Spaces near major commuting and transport hub may continue to rise in value, while those located farther afield in places where commuting by car is the best option may see demand drop.

How to tackle these changes

It's time to break with some of the conventional wisdom of how to manage partnerships seeking office space and commercial real estate. Increasingly, these businesses will be staffed, managed or even owned by millennial entrepreneurs.

It's critical to understand your local geography and get a grip on how people are commuting, where they prefer to work and how far they're willing to go.

The market may be changing in several key areas, but that doesn't mean opportunities are going away - you just need to know where to look.  

Sarah Carson, Marketing Director

scarson@nainorwoodgroup.com 

NAI Norwood Group 

NAI Norwood Group Leases Space to Olympia Chimney Supply

Manchester NH – NAI Norwood Group is pleased to announce the lease of 17,000+ SF to Olympia Chimney Supply. Aron Brown, of NAI Norwood Group, represented the landlord and Colliers International represented the tenant.

Olympia Chimney Supply is now located on Faltin Drive in Manchester in a building that was formerly associated with the OSRAM Sylvania facility. Olympia Chimney Supply Inc. is a leading designer and manufacturer of chimney venting systems, liners and accessories. To read more about their new location in New Hampshire visit their website: http://www.olympiachimney.com/press-releases.

NAI Norwood Group is an affiliate of NAI Global, the world’s leading managed network of independently owned commercial real estate brokerage firms.  Through this network of 355 offices in 55 countries, NAI Norwood Group is able to leverage their 45+ years of dedicated local experience around the world. With our extensive background and strong local contacts, we are able to assist individual corporations in negotiating leases, sales, business brokerage, investments, relocation, site selection and development. For more information please visit www.nainorwoodgroup.com. Or contact one of our offices: 116 South River Road, Bedford, NH 03110, (603) 668-7000 or 28 Deer Street Suite 301, Portsmouth, NH 03801 (603) 431-3001.

NAI Norwood Group Wins CoStar Award

Bedford NH - NAI Norwood Group is pleased to receive the CoStar Power Broker Award for being a Top Sales Firm in 2016.

At the end of each year, CoStar tallies the commercial real estate sales and lease transactions that closed during the previous year to determine the winners of the CoStar Power Broker Awards in each market. These awards are presented to both the firms and individuals who closed the highest transaction volume in commercial property sales and leases in their respective markets throughout the year.

Congratulations to all of those that worked so hard last year to achieve this award.

To view all recipients please go to: http://costarpowerbrokers.com/power-broker-award-winners/

Southern New Hampshire Retail Highlights

Southern New Hampshire Retail Highlights Information is accurate as of Q4 2016:

Supply: 29.8M Sqft; Down from 29.9M in 2015

Absorption: -366,100 Sqft; Down from 283,300 Sqft in 2015

Vacancy Rate: Increased to 10.5%; 2015 vacancy rate was 9.6%

City/Town Ranks:  #1 Amount of Retail Space- Nashua

                                #1 Highest Occupancy-Salem

                                #1 Highest Vacancy Rate-Seabrook

Retailer Expansion by SQUARE FEET: #1-FitLab Fitness Club (86,400 Sqft.)

Retailer Expansion by NUMBER of STORES: #1-Mattress Firm/FitLab (5+ each)

Category Expansion by SQUARE FEET: #1-Grocery Stores (+76,300 Sqft)

Category Expansion by NUMBER OF STORES: #1- Medical/Dental Services (+6)

Summary: 

   

Category                                       2016                          2015                    %Change

Total Market Size (Sq ft)                29,830,500                29,939,900            -0.4%

Total Number Retail Properties      2100                          2100                       0.0%

Total Number Retail Est.                5300                          5400                       1.9%

Retail Store Avg Size                    5600sqft                     5600sqft                 0.0%

Total Market Vacancy Sqft             3,131,800                  2,875,100               8.9%

Vacant Stores                                779                           695                        12.1%

Vacancy Rate                                10.5%                       9.6%                        9.3%

The vacancy rate in the region increased from 9.6% in 2015 to 10.5% at the end of 2016, falling back to 2014 levels. However two-thirds of the increase in vacant square feet resulted from the closing of four (4) Sports Authority stores totaling 170,200 sq ft. Net absorption for the year was a negative 366,100 square feet.

Written by David DeLise, COO, NAI Norwood Group, ddelise@nainorwoodgroup.com

Office Space For Sale or Lease - Suitable for Headquarters

Rare opportunity for a growing corporation to economically purchase its own headquarters with significant room for growth and existing tenants to off set expenses.

This building also has office space for lease. Please contact Brian O'Brien for more information at bobrien@nainorwoodgroup.com or 603-431-3001.

NAI Norwood Group Sells Multifamily in Manchester

Manchester NH – NAI Norwood Group is pleased to announce the sale of a 6-unit multifamily on Dutton Street in Manchester. The 5,000+ SF investment property sold on December 9, 2016 for $360,000 according to the NH Registry of Deeds. Deana Theriault and Mark Dickey represented the seller.

Deana and Mark worked diligently to sell this property for the former owner as it has been on and off the market, unsold, for a time. Their persistence and expertise proved to be advantageous for both the seller and buyer. The seller owns a large portfolio of properties and is currently using NAI Norwood Group’s services to assist in their sales.

NAI Norwood Group is an affiliate of NAI Global, the world’s leading managed network of independently owned commercial real estate brokerage firms.  Through this network of 355 offices in 55 countries, NAI Norwood Group is able to leverage their 45+ years of dedicated local experience around the world. With our extensive background and strong local contacts, we are able to assist individual corporations in negotiating leases, sales, business brokerage, investments, relocation, site selection and development. For more information please visit www.nainorwoodgroup.com. Or contact one of our offices: 116 South River Road, Bedford, NH 03110, (603) 668-7000 or 28 Deer Street Suite 301, Portsmouth, NH 03801 (603) 431-3001.

Renaissance of Route 101

BEDFORD NH - NAI Norwood Group, Inc. recently hosted a “Route 101 corridor” Open House showcasing the listing inventory of various commercial office and retail properties now available on the strip.  The event was held at The Granite State Kitchen facility with Rick Sawyer, Bedford Town Manager, detailing the completed projects and via power point announced the ground breaking of several new businesses coming to the marketplace.

To set the stage, Rick explained that Bedford has a land mass of some 32.8 square miles with a total inventory of properties assessed at 3.25 billion dollars.  Because of the growth pattern spreading out to the Routes 101/114 area, plans are coming to fruition for a five lane traffic expansion from Route 114 to Wallace Road in 2018-2019 with paving improvements from Wallace Road to the Amherst town line.

This Renaissance of Bedford has now jumped from the golden South River Road venue spilling over to Route 101 to keep pace with the commercial demands of the community.  Newly added buildings along the corridor are ….

•       144 Multi Family and Work Force Housing Units
•       The Copper Door
•       Bellweather Credit Union
•       CMC Family Medical Center
•       Wholistic Pet
•       Convenient MD
•       Primary Bank
•       Members 1^st Credit Union
•       Millennium Running

And coming soon ….

• The Bedford Village’s Inn new show stopper “The      Bedford Grand Hotel”Komma Veteriarian Clinic
• Murphy’s 22,265 s.f. Tap Room on the site of the former WeatherVane

The event was well attended by local commercial real estate brokers, bankers, state development planners and other interested parties. Bedford is having its greatest RENAISSANCE since the 1980s. Along with this continually growing economy, the medical community has grown exponentially along South River Road not to mention the extraordinary development of the Goffe Mill Plaza and Market and Main projects. 

We would be happy to provide you with the full e-mail slide presentation upon request along with our full selection of available properties in the Bedford area.

Written by Louise Norwood, NAI Norwood Group, louise@nainorwoodgroup.com