Working In The Cloud

Well… I did it. I went Back to the Future! I now own a Motorola Xoom. This is a fully functional tablet pc that looks like a giant Android-based phone. It has a 3g/4g active connection via Verizon Wireless for data service that can, in the right environment, be used for voice service with the right software on both ends (google talk, skype, etc).

Why did I do this? Well… because for one my laptop is close to 3 years old at full capacity and slowing down. For two, I love it when I don’t have to be tied to a desk. On occasion, I’ve been known to sneak off to the ballpark to watch a day game… but, who would know since I’m fully online and responding to email, cranking out proposals, etc?

I’ve gotta say, though mobile since the late 90’s, nothing I’ve owned compares to this device.

And, the Back to the Future part? In a galaxy not so long ago and pretty close by, the world of computing was ‘main frame’ based. I remember the first MLS service that was computer based. You leased this funny looking keyboard device that looked like a weird typewriter and had a roll of thermofax paper inside and a couple of cup holders attached to the side (monitors had not been invented yet). So, you took your phone and ‘plugged’ it into those cup holders, then typed in some coded information and before long out came this long roll of faintly printed thermofax paper that was the results of your property data search. The cup holders were a modem jack and the code was before MS DOS, probably Basic or Cobalt or something.

So, in those days (late 70’s ok?) nothing was stored on your local hard drive including software because there was no software and there was no hard drive. There wasn’t even a floppy drive… remember those?

Today, Cloud Computing allows us to use a device like my new Xoom to connect to everything ‘out there’ (shades of Captain Kirk on that remark) and not have to own software, deal with updates, worry about data loss, file corruption and slow speeds due to registry gunk, viruses and all that sort of techie stuff nobody really cares about anymore….

I can store and access my data on someone else’s hard drives and rent the software at a low fee. Redundancy is king and power is almost always uninterrupted. (I have a data center property for sale – I’ve learned lots about that environment).

Now, I confess I did purchase the razor thin, slightly shrunken but fully functional wireless keyboard to go with the Xoom but, in a pinch, I can use the touch version on the screen if I need to.

Now if only Microsoft Office 365 and a whole bunch of other software makers get their ‘cloud act’ (clown act?) in gear… I will be able to work in the cloud from anywhere, anytime, 365 with any device that connects through the internet anywhere in the world and all at a pretty unbeatable price!

How cool is that? Way cool!

Intellectual Commercial Real Estate Services

Here’s A Prediction:

Those of us who form our services around a consultative approach to clients necessarily find ourselves in the intellectual realm. Those who are primarily driven by ‘marketing property’, as in day to day transaction brokerage, necessarily find themselves focused on cold calling, pretty brochures and a lot of gab.

I expect this statement to be received as bold, perhaps offensive to some. But the truth is there is nothing wrong with either approach as long as the client knows what they are getting!

I find commercial real estate brokers and agents who promote themselves as ‘advisers’, generally aren’t very good at it. In my neck of the woods, marketing brokers nowadays have limited depth of understanding of how to even determine the value of property much less understand the elements of a capitalization rate. That means clients are unwittingly deceived when they are told things like ‘now is a good time to buy’… when there is really no way of knowing that to be true or false. And, most factual data at the moment is actually pointing to buying now as being a bad idea…

As the world turns, the divide between the intellectual approach and the marketing approach will become greater. The internet is the great equalizer because it acquires and makes available loads of information. What clients will need when brokers no longer control the listing services (and that day is coming) are those service providers whose intellectual services facilitate informed decision making. And, payment for those services won’t be based on a percent of the transaction price. I expect that clients will insist that method of payment has no relationship to any valid measure of value for service.

The Prediction? Those of us who continually adapt cutting edge technology and are the most fleet afoot combined with a true understanding of real estate and business economics are the ones who will be growing their businesses going forward. The other guys? Remember all those travel agents you once knew?

Next up: Working in the Cloud!

CitiBank Closes Call Center ~ Creates Virtual Workforce

How interesting it was that CitiBank decided to close a call center located here in Albuquerque and move 700 workers into their homes, creating as many virtual offices in the process. As I recall, the facility was about 100,000 square feet… meaning each worker averaged about 133 square feet of space each.

So, adding another 100,000 square feet of vacancy to the total without any new absorption adds the need for another 700 traditional workers in order to get 100,000 square feet of traditional real estate space filled.

Of the 3100 new jobs forecast by UNM/BBER for 2011, recognize that those jobs will be divided among the industrial, office and retail disciplines. And, some aren’t going to really take up the slack of vacancy because they are going to be virtual jobs or fill ‘shadow space’.

Might we then imagine that this does nothing to improve the prospects of commercial space in the coming year to speak of?

If you are beginning to hear the songs of traditional real estate brokers promoting what a great year it is going to be economically and that now is as good a time as any to invest in commercial property… please… I implore you to listen carefully to their tune!

We are in an era shift. The last time this occurred was when the Industrial Revolution began and workers moved from farms to factories… 200 years ago!

Technology is changing how work is accomplished, the built environment as we have known it is being greatly impacted and things are likely to never be the same again. The ‘old’ may very well be displaced by the new and more efficient… as CitiBank has just demonstrated.

Will there be new opportunities? Of course there will be! Do we need to envision the future differently that we have been accustomed? Absolutely, we do!

Remember George Jetson? Remember him speaking to his boss over a funny looking audio/video monitor? Heard of Skype?

Pay attention… The future is here!

The Relationship of Vacancy to Jobs

The Albuquerque Metro Jobless Report for the end of November, 2010 showed there were 36,600 people looking for jobs (8.8%).

The Albuquerque Metro Vacancy Report combined for Industrial, Office and Retail as of the end of 2010 was just over 10,000,000 Square Feet.

Using an extrapolation from the municipal parking code and a little magic dust, that Vacancy translates to 36,880 jobs that need to be filled in order to fill the vacancy.

Coincidence? I don’t think so.

And, the 2011 prognosis for Albuquerque Metro Job Growth? Around 3,100 say the experts at the University of New Mexico Bureau of Business and Economic Research.

And, will all those jobs fill space? Not likely. The reason? Technology. Virtual offices. Teleworkers/Telecommuters. Etc. Those will not require as much space. In addition, so-called shadow space, that is space companies have on hand without employees filling seats at the moment, will be first to absorb many of those new hires. So, the net result for Landlords does not bode well for 2011.

In spite of great GDP forecasts footnoted with *Jobless Recovery, we remain in a long hard slog… prices will fall further… cap rates will continue to rise…. the strong will survive… the weak will not. I’ve been saying this since Bernanke & Paulson gave their End-of-the-World-As-We-Know-It Speech in September, 2008. The hurrier we get to the bottom, the hurrier we will bounce back!

Press Release

Vic Bruno, SIOR Selected as Market Expert by CRE-Advice.com

Leading Commercial Real Estate Online Resource recognizes Vic Bruno, SIOR Albuquerque, NM USA, January 25, 2011:

Vic Bruno, SIOR has been selected by CRE-Advice.com as a market expert in the Albuquerque, NM market, and more specifically in Industrial and Office Tenant/Buyer Representation services.

Since 1973, Vic Bruno, SIOR has been a provider of Commercial Real Estate Consulting, Advisory, Managerial, and Transactional Services for Corporate America. He is also an experienced Court Appointed Receiver and Turnaround Specialist.

“We are thrilled to select Vic as an expert in the area of commercial real estate brokerage for the Albuquerque, NM market. Vic Bruno, SIOR has demonstrated a proven track record of successful service to his clients. He represents the best that commercial real estate has to offer in the area of industrial and office tenant/buyer representation in the Albuquerque area” according to Mike Myatt, co-founder of CRE-Advice.com.

CRE-Advice.com is an online community comprised of some of the nation’s leading commercial real estate advisors offering commercial real estate advice to investors, owners, tenants, landlords, and asset managers. Exclusive membership is gained by invitation or application only and brokers are vetted and qualify through a thorough screening process.

See http://www.cre-advice.com for information and profiles of selected professionals in cities throughout the United States.

Jobs vs Commercial Real Estate

http://www.youtube.com/watch?v=Cc34vQ0y6Cg (With apologies for the poor video capture … the lighting was terrible!)

Caution Ahead: While economists and their politicians are speaking loudly about a recovery this year, please remember that is a JOBLESS RECOVERY!

To make sense out of it in my local market from a real estate perspective, I figured out a way to convert vacancy to jobs. It’s definitely more art than science, but it gives an indication of how to measure job forecasts against the ‘problem’.

From globalization to the changing nature of the workforce and less bodies to fill space as the Boomer generation retires, the vacancy problem looms large.

I’ve grown tired of brokers and appraisers saying the last comps of any consequence were in the bubble years therefore they don’t know how to value at this time. Many are still using 7 to 8 cap rates with no rhyme or reason as to why other than perhaps to say that’s what REITS seem to be focused on. Well, Equity REITS can take lower yields without the risk of debt service. They are not who everyday investors and corporations should model after!

More about how to value in a down market when I get a round tuit!

The Steam Engine, Personal Computer and New World Order

I’m scheduled to give a public presentation on January 19th at the Albuquerque Museum at the behest of Rio Grande Foundation.  The material will address the catalysts of modern economic eras and will focus on the era shift we are presently in, particularly from a commercial real estate perspective.  I will discuss in detail how long it will take to use up the excess capacity reflected in commercial vacancy, how it takes place and what happens to values in the meantime.

The event will begin promptly at 11:45 and a box lunch will be provided, ending at 1:00 PM.    Advance registration only with a minimum suggested donation to the Foundation of $25 to cover meal and room costs. Register at Rio Grande Foundation.  Please bring your questions!