CRE News: What We’re Reading the Week of April 23

Each week, The Elevator Speech summarizes news related to some of the key industry trends, buildings, deals and dealmakers that shaped headlines. Here’s what caught our attention the week of April 23:

The Chicago Board of Trade Building at 141 W. Jackson Blvd. in the heart of Chicago's Financial District.

• Chicago-based CME Group Inc. sold two of three buildings that make up the Chicago Board of Trade Building Complex for $151.5 million. The new owners are a joint venture between GlenStar Properties, LLC and USAA Real Estate Co., and will own the north and south towers of the CBOT Building at 141 W. Jackson Blvd.

• A first quarter market report by U.S. Equities Realty found that the Chicago office market saw direct vacancy drop by 0.9 percent since one year ago. According to the report, direct vacancy dropped to 14.1 percent in the 140-million-square-foot downtown market, from 15 percent in the first quarter of 2011.

• The owners of the site at 300 W. Washington St., the location of the former Chicago Mercantile Exchange, have plans to build a one million-square-foot office building in the vacant lot. The billionaire Crown family, in partnership with Tishman Speyer Properties, are gearing up for the slowly improving office market in Chicago.  Chicago-based architecture firm Krueck and Sexton Architects was hired to draw up plans for the new building.

181 W. Madison St.

• Toronto-based insurer Manulife Financial Corp. is paying nearly $105 million for the 41-story office tower at 150 N. Michigan Ave. Manulife is paying less than the $113.2 million SEB paid for the building in 1999 due to its 80 percent occupancy rate and the slow office investment market in Chicago.

• General Electric Co.’s pension fund will sell the 50-story office tower at 181 W. Madison St. The 936,683-square-foot building is expected to sell for more than $300 million.

What headlines caught your attention this week? Leave us a comment and let us know.

Crisis Communications for Building Owners and Managers During the NATO Summit

By Nick Kalm, president and founder, Reputation Partners, LLC

In my nearly 30 years of crisis communications, I’ve helped address many issues and crisis situations affecting the commercial real estate industry. Although the communications strategies differ for each crisis, it’s clear the organizations that actively communicate and have the most robust crisis communication plans maintain the best reputations. And as Warren Buffett famously said, “It takes a lifetime to build a reputation and only a few seconds to destroy one.”

A demonstration in downtown Chicago

For building owners and managers specifically, reputations are sacred. Ineffective communications during an incident can lead to a loss of current and prospective tenants and employees, financing, pending deals and credibility. Owners and managers of Chicago’s downtown commercial buildings are likely going to be put to the test next month during the NATO Summit in how they communicate to key stakeholders.

There are many crisis scenarios that may involve your building during the NATO Summit, such as:

• A peaceful demonstration could escalate into a volatile, potentially violent protest outside of your building, prompting local news crews to arrive seeking comments;
• The City of Chicago could issue an extreme security threat alert and shut down all public transportation (including Amtrak, CTA, Pace and Metra), stranding tenants and employees in the Loop;
• A man with a crude bomb in his backpack could enter your lobby and demand access to a tenant company.

The steps you take now will determine how and how well you communicate during a potential crisis situation next month, next year or 10 years from now. Best practice crisis communications for building owners and managers is a three-part process: Prepare, Execute and Recover.

Prepare: Preparation is the single best way to ensure your reputation stays intact during and after a crisis. With less than one month before the NATO Summit, building owners and managers should have a crisis communications plan in place for various issues that may arise. A strong plan contains a vulnerabilities assessment such as potential communications and operational breakdowns.

Preparing materials in advance of the NATO Summit ensures you won’t have to scramble for data and resources during a crisis. Some materials for Chicago building owners and managers to consider developing include:

• Building fact sheet, including the year built, construction materials, number of floors, life safety attributes, number of building staff, etc.;
• Full contact lists of Chicago Police Department, employees, tenants, building staff, local media, partners, legal counsel and insurance brokers;
• Streamlined response/communications protocol, including who will be appointed spokesperson to address various stakeholders should an incident occur;
• Template press releases and tenant notifications; and
• Rules of engagement with the media.

Stay informed of developments and news related to the NATO Summit by monitoring local media, BOMA/Chicago’s dedicated web page, protestors’ blogs, NotifyChicago alerts and Chicago’s Public and Private Partnership (CP3). Consistent monitoring will help identify warning signs such as unusual activity or a heightened interest in your building by the media and/or protesters.

Execute: In the event that a protest or threat escalates into a crisis situation, building owners and managers must effectively communicate to key stakeholders. This includes updating your building’s website, issuing statements and sending notifications to tenants, employees and staff. If possible, all communications during a crisis should contain updated information incorporating new developments and corrections to any false statements or rumors. Building owners and managers can work with the Chicago Police Department to gather accurate information needed to provide timely updates whenever possible.

If an incident occurs during the NATO Summit that involves a commercial building, it’s possible that the building owner and/or manager will be contacted by the media for comments. In this scenario, spokespeople must effectively communicate as much relevant information as possible, but should not speculate or unnecessarily heighten the situation. When working with media, it’s best to keep answers brief: Speak in headlines and speak slowly and clearly. This avoids message misinterpretation.

Recover: Crisis communications is ongoing. After an incident, building owners and managers should update their crisis communications plans as soon as possible to reflect what was successful and what needs reevaluating. In addition, proactive communications with key stakeholders like tenants, employees and media will ensure the building’s reputation is solidified for years to come.

A crisis situation during the upcoming NATO Summit in Chicago may or may not occur, but the event merits that all local building owners and managers are prepared. Effective crisis communications will not only ensure the safety of your tenants, employees and staff, it can also build and protect your reputation as an effective leader in Chicago’s commercial real estate industry.

What steps have you taken to prepare for the upcoming NATO Summit?

CRE News: What We’re Reading the Week of April 16

Each week, The Elevator Speech summarizes news related to some of the key industry trends, buildings, deals and dealmakers that shaped headlines. Here’s what caught our attention the week of April 16:

200 N. LaSalle St.

• Omni Group purchased the 30-story tower at 200 N. LaSalle St. for $101 million. The tower totals 645,170 square feet and includes tenants such as law firm Schiller DuCanto & Fleck LLP.

• Starbucks signed its first lease with the Chicago Transit Authority to place a store within an “L” station. The North/Clybourn Red Line stop will have that distinction. The CTA, which has about 89 leased spaces for the line, assigned Jones Lang LaSalle last year to find national tenants to lease retail space at rapid transit stations.

• Tribeca Flashpoint Media Arts Academy will expand its space by 76 percent in the Burnham Center at 111 W. Washington St. The film and video gaming school anticipates its enrollment to double, and will add 65,000 square feet to its space.

The former Apparel Center at 350 N. Orleans St.

• The former Apparel Center at 350 N. Orleans St. will transition to an office building. Tenants with apparel showrooms will leave the building by May 31, and most tenants will move across the street to the Merchandise Mart.

• A report by Cassidy Turley on the first quarter of 2012 found that the office sector is constantly improving. Although the improvement is far from robust, U.S. office vacancy rates fell to 15.9 percent.

What headlines caught your attention this week? Leave us a comment and let us know.

Commit to Yourself and Your Future in Commercial Real Estate: Earn a Degree

By Lisa Bluhm, BOMA/Chicago Director of Education

Office buildings and other commercial real estate require the services of smart, educated business people to make sure the properties are managed well and operating efficiently.  After all, commercial properties are investments, and in the United States those investments have been estimated to be valued in the trillions of dollars.

National Louis University Staff met in person with BOMA/Chicago members at a Brown Bag seminar.

Higher education is the best way managers can keep in step with today’s business environment, grow as a commercial real estate professional and help ensure a brighter future for themselves and their families.  A 2011 report from the U.S. Bureau of Labor Statistics also reveals this important statistic: Workers who have earned graduate or bachelor’s degrees earn far more on average than those who don’t.

Want details?  The report stated workers with master’s and bachelor’s degrees earned on average $1,262 and $1,053, respectively, each week.  That’s compared to $768 weekly for workers with associate degrees.

Through a new program launched this spring with National Louis University (NLU), BOMA/ Chicago members – and members of their immediate family – can earn their bachelor’s or master’s degrees, a great step forward toward a more fulfilling and rewarding career.  The program includes three degree options and offers tremendous incentives for participants.

At NLU, an independent institution that just celebrated its 125th anniversary, BOMA/Chicago members can earn a Bachelor of Science in Management (BSM), Master of Science in Management (MSM) or Master of Business Administration (MBA).  The following benefits are offered to BOMA/Chicago members:

• 

  The National Louis University and BOMA/Chicago partnership includes three degree programs.

  Tuition Discount and Scholarships.  BOMA/Chicago members can enjoy a 15% tuition partnership grant for themselves, their spouses and their children throughout their entire enrollment in the above programs.  And, there are additional scholarship options for undergraduate transfer students.

• Flexible Credit Transfer Policy.  NLU will allow undergraduate participants the ability to transfer academic credit for certain technical training, work and military experience, and even courses required for industry certifications like the RPA or FMA.
• No Prerequisite Examination.  NLU does not require that participants take the Graduate Management Admissions Test (GMAT) or the Graduate Record Exam (GRE) to enter the program.
• Locations and Online Options.  Students can attend classes at one of five NLU campuses throughout metropolitan Chicago, including Downtown.  And, some programs allow a combination of in-class and online study.

Your future is ahead of you, and advanced education can make it all the more promising.  Why not consider one of these three programs offered through NLU?  Classes start the week of June 25.  Do you have a story to share about the value of earning your degree?  Please feel free to share it.

CRE News: What We’re Reading the Week of April 9

Each week, The Elevator Speech summarizes news related to some of the key industry trends, buildings, deals and dealmakers that shaped headlines. Here’s what caught our attention the week of April 9:

The historic Roanoke Building at 11 S. LaSalle St.

• A venture led by Michael Silberberg of Berkley Properties, LLC purchased the loan on the historic Roanoke Building at 11 S. LaSalle St. Additionally, the investor purchased the Civic Opera Building less than two months ago.

• A new report by BMO Harris Bank found that the Midwest is set for an economic recovery in its CRE markets this year. The report noted that commercial real estate demand in the Midwest is driven primarily by job growth, and office and retail space in many Midwest markets are achieving commodity statuses.

• Chicago ranked fourth in the EPA’s annual list of U.S. cities with the most Energy Star-certified buildings in 2011. Commercial buildings that earn the Energy Star designation perform in the top 25 percent of similar buildings nationwide.

• Los Angeles-based real estate firm CIM Group purchased Block 37 from Bank of America for $84 million. Block 37 at 108 N. State St. is about 30 percent leased, and CIM Group plans to lease space to both national and local retailers.

Block 37 at 108 N. State St.

• Onshoring is becoming a long-term sustainable trend in the U.S. manufacturing industry. This will strengthen the outlook for the industrial real estate industry, and will affect the entire U.S. commercial real estate market.

What headlines caught your attention this week? Leave us a comment and let us know.

Earth Day: The Catalyst that Launched the Environmental Movement

Next week, a quiet revolution of sorts will continue in office buildings and other commercial properties, in homes and businesses and in cities and towns across metropolitan Chicago and around the world. It took hold 42 years ago here in the United States, and has grown into a worldwide initiative that will involve a reported one billion people.

We’re referring to Earth Day, the movement many acknowledge as the force that set into motion the modern environment movement here and around the world. Launched in 1970 in the height of the hippie subculture and protest movements, Earth Day has evolved into one of the largest civic observances on the planet. The premise behind Earth Day is simple: Respect the environment and build awareness for ways to make the world we work and live in a better place.

This year, Earth Day falls on Sunday, April 22. But many – including BOMA/Chicago members – are using the week prior to do their part in honoring Earth Day. One way buildings are participating in Earth Day is to collect no-longer-used electronic products for shipment to a qualified recycling company. Cell phones, computers, monitors, printers, radios – virtually anything with a plug – can be recycled.

Earth Day also helped usher in other, more specific movements and practices geared toward recycling and energy savings, as well as new ways of thinking about how we use resources. Since its inception in June 2011, The Elevator Speech has made a priority to publish posts that embody the spirit of Earth Day.

Here are just five of our blog posts dedicated to Earth Day initiatives:

• A report on how to establish a foundation for energy conservation in office properties.
• New ideas on ways office building managers can accommodate bicycles so tenants can bike to and from work.
• A list of BOMA/Chicago Building Members that earned LEED certification.
• Recommendations for implementing a bulb and ballast recycling strategy.
• Tips for property managers to improve energy conservation.

Let us know what is taking place at your property or business to recognize Earth Day. This is one dialogue that will continue for the next 42 years – and hopefully for many generations beyond.

CRE News: What We’re Reading the Week of April 2

Each week, The Elevator Speech summarizes news related to some of the key industry trends, buildings, deals and dealmakers that shaped headlines. Here’s what caught our attention the week of April 2:

• Office vacancies in downtown Chicago buildings declined for the fifth consecutive quarter to 14.9 percent, as big tenants start to make decisions and commitments for space. Tenants are showing more decisiveness amid a gradual economic recovery, and are now seeking long-term leases. However, a report by Studley Inc. found that the average rental rates slightly declined in Q1 2012.

• Honest Buildings, a new social networking site that connects architects, builders, occupants, owners, managers and buildings, launched last month. The site is a platform for the people who use, occupy, design, build and manage buildings to provide transparent building data.

• Chicago is a leading indicator for the overall U.S. real estate market, and is experiencing a “slow but steady growth” as Class A buildings are trading in the 5-6 percent range and big blocks are becoming scarce.

101 N. Wacker Dr.

• Continuing the trend of technology companies expanding in Chicago, Dotomi Inc. tripled its space to more than 80,000 square feet in its move to 101 N. Wacker Dr. The lease is another example of how high-tech companies are leading the office market in Chicago.

• American cities are revitalizing their downtowns to change former perceptions and encourage business and economic development in their CBDs. Newark, Oklahoma City, Miami and Oakland are among many cities taking action to revitalize their downtowns.

What headlines caught your attention this week? Leave us a comment and let us know.