Gold Circle Award Winner Profile: Krystal Kurinsky

Krystal Kurinsky pic

Krystal Kurinsky,  MB Real Estate Services, Inc.

Krystal Kurinsky, Senior Vice President/General Manager with MB Real Estate Services, Inc. at 181 West Madison, is the recipient of BOMA/Chicago’s 2017 Property Management Professional of the Year.

How did you get started in the commercial real estate industry?

By accident (luck).  I moved to Chicago after college and answered an ad placed by a headhunter.  They sent me on an interview with LaSalle Partners (now JLL) for a Tenant Service Coordinator position at O’Hare Plaza.  My headhunter had to beg them to see me since they were done with their interviews and were ready to make a decision.  My interview was with Ronald Reagan and George Bush.  Seriously, the leasing brokers at the building (Paul Petricca and Don Polishuk) put on President masks and came into the interview that way.  Being from Sterling (next to Dixon which is Ronald Reagan’s home town) I acted like Ronald was an old friend of mine.  I got the job in one interview.

You recently opened a 14K square foot Wellness Center for your tenants. Were there any lessons learned you can share about the buildout itself? What were some marketing strategies you used to engage your tenants?

For the buildout – get everyone involved from the start.  Hold weekly meeting with the trades, the fitness center operator, audio/visual, IT etc.  Talk through what each group is going to need and then who is providing it from the beginning.  It is like building a house, it will take longer and cost more than you planned.

As for marketing, these steps were effective in achieving Tenant engagement:

  • Host an open house followed up by more open houses
  • Schedule one-on-one meetings with each Tenant and the Fitness Center operator.
  • Allow Tenants to try it for free
  • Set up an informational booth in the lobby during lunch hour passing out promotional flyers and free trial offers
  • Have tenant seminars (unrelated to fitness) in the Fitness Center
  • Offer non-member classes occasionally to give non-members a taste
  • Meet continuously with your Fitness Operator to make sure you are servicing the Tenants’ needs.

Your building is enrolled in ComEd’s Smart Ideas Retro-Commissioning Program. What are some of the benefits your building has experienced with this program?

Our mechanical/engineering/plumbing engineer, Environmental Systems Design, identified, measured, and verified 417,125 kilowatts of annual electricity savings through implementation of four low-cost retro-commissioning measures that included:

  • Supply static pressure reset
  • Lower night setback temperature
  • Enthalpy economizer control
  • Condenser Water supply reset

The combined implementation cost of all four measures was $22,659, which included our BAS contractor and in-house labor costs. Since ESD’s retro-commissioning study fee was paid for by ComEd, the simple payback of this project was just under one year and we benefit from the energy reduction to a tune of $37,866 annually.

What piece of advice would you share with our emerging leaders who want to manage their own building?

Learn everything you can:

  • Sit in on every meeting
  • Learn every procedure
  • Listen in on lease negotiations
  • Volunteer for committees
  • Try something new (get out of your comfort zone)
  • Do a portfolio service contract bid
  • Walk your building every day
  • Understand accounting
  • Listen and then ask a lot of questions

What is some of the best advice you have received?

Prepare, Listen, Ask Questions.

 

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Randy Waites with Avison Young Joins BOMA/Chicago Board of Directors

randel-waitesFirst appointed nearly ten years ago, Randy Waites, principal at Avison Young, is the newest member of BOMA/Chicago’s Board of Directors.

Randy jokingly says he “feels vindicated” after his original appointment in 2007, since shortly thereafter he accepted a position with John Buck International based in Abu Dhabi, and was unable to serve on the Board.

Randy moved to Abu Dhabi to work on al Maryah Island (previously known as Sowwah Island), a 90 hectare island, which serves as Abu Dhabi’s central business district. “We were there to not only build American buildings but also to infuse an American management style,” he explained.  As Chief Operating Officer, he developed asset and property management platforms, and compiled a property management and consulting portfolio of approximately 10 million square feet of office, retail, mixed-use and university facilities.

Randy is no stranger to working and traveling internationally. After living in Australia with his family where he attended high school, he later graduated with a Master of Business Administration from the Thunderbird School of Global Management in Arizona with the intention to become an expat. Instead, his love of skiing and entrepreneurial spirit inspired him to build a 10-unit ski lodge in the Southern Rockies. He also owned and managed several businesses, including rental car agencies, deli and a grocery store, which he later sold in the 1990s. Taking advantage of the unique introduction to real estate that he acquired as a small business owner, Randy returned to Chicago and began his career in the commercial real estate industry.

Now with over twenty years of industry experience, Randy has provided executive oversight of more than 50 million square feet of office, industrial and retail properties. He has developed expertise in overseeing property, facilities and assets under management while specializing in agency leasing. He has also participated in a number of notable acquisitions and dispositions, supporting a full array of globally integrated services.

Randy has also been an active member of BOMA/Chicago over the years, serving on the Labor Committee among others and contributing to the development of the organization’s energy smart grid initiative. Once electricity deregulation occurred, Randy was one of the first to take advantage of the new competitive market to identify and attain cheaper and better power sources for his buildings and tenants. Randy continues to pursue sustainability opportunities at Avison Young for his clients, and is especially interested in efficiencies and cost-savings derived from demand response programs.

Randy also has an appreciation for the professional development BOMA/Chicago offers. While in Abu Dhabi, Randy quickly understood that the absence of a BOMA local association made it even more difficult to navigate through so many language, cultural and educational barriers. “It was a relief to return to the states with a professional institution like BOMA/Chicago in place that supports educated management professionals.”

Randy points to BOMA’s advocacy efforts on critical issues like taxes and collective bargaining advocate building owners as his strongest interests – issues that impact property owners’ bottom line. “Ultimately, the greatest value of BOMA/Chicago is its collective voice on behalf of building owners and managers.”

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What Exelon and ComEd Don’t Want You to Know

With electricity costs making up the first or second largest expense for BOMA/Chicago buildings, it’s crucial that we continue shedding light on Exelon and ComEd’s proposed legislation which, with its latest proposal introduced on November 15, would raise electricity rates $24 billion statewide over the next 23 years. BOMA/Chicago buildings alone – making up 5% of ComEd’s energy load – can expect to pay an increase of an estimated $417 million during that time.

More than likely you don’t have time to pour through the tedious and complex legislation (the most recent amendment was 446 pages in fact) so here are some basic facts that we suspect Exelon and ComEd don’t want you to know:

  1. Exelon is a publicly-traded, profitable company demanding a bailout. Buildings certainly don’t get a bailout, so why should a massive corporation that profited $2 billion last year and increased shareholder profits get one?
  2. Exelon’s plants have secured billions of dollars in contracts and subsidies. Despite claiming poor-performing nuclear plants, Exelon has secured over $4 billion in long-term contracts and subsidies for its nuclear plants.
  3. The numbers aren’t there now and won’t ever be if the rate increases are passed. Not only has Exelon failed to be forthcoming with all revenues at its nuclear plants, the rate increase proposal erodes public disclosure mandates and allows Exelon to keep ratepayer bailout money even if their nuclear plants are profitable. No true-up based on actual profitability would be required.
  4. ComEd will now profit from customer-funded sustainability incentives. Today ratepayers pay a 2% assessment on all electricity bills which is set aside in its entirety to fund or rebate various customer energy efficiency initiatives. This legislation would allow ComEd to profit through a “rate of return” when using dollars designated for energy efficiency – ultimately increasing costs to all customers.
  5. ComEd only makes money when electricity meters are spinning. Current law mandates that ComEd meet statutory goals for energy efficiency reductions – goals that ComEd has yet to actually achieve. The current statutory goal would be decimated, as this new legislation provides the utility with waivers to avoid meeting those requirements.
  6. Bottom Line: Chicago’s businesses will have to foot the bill. BOMA/Chicago buildings house more than 10,000 tenants who will ultimately pay the bill on top of a series of hefty property tax increase and fee increases the city has recently implemented . We have to wonder – how much more piling on will they tolerate?

BOMA/Chicago was just in Springfield to testify against the legislation and continues to work closely with a coalition of opposing organizations to educate legislative leaders and the Governor’s Office about the negative impact this legislation will have on our buildings and tenants. As always, it is the goal of BOMA/Chicago to mitigate any potential threat to our members and ensure that any impacts are as minimal as possible.

>>TAKE ACTION: Click here to contact your legislators today to ask them to oppose this legislation.

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Six Surprising Facts about the Exelon/ComEd Rate Increase Proposal

Exelon and ComEd have introduced a new legislation (House Amendent #2 to SB 2814) to drastically raise commercial and residential electricity rates and add new charges that will total $24 billion over twenty-three years. While Exelon and ComEd have claimed the rate increases and new charges are necessary to bailout its financially stressed nuclear plants and develop and enhance its “grid reliability,” it’s important that you understand the facts and adverse effects these changes would have on the commercial real estate industry and our tenants.

Below are six key reasons BOMA/Chicago has serious concerns regarding this new energy proposal by ComEd/Exelon:

  1. BOMA/Chicago buildings make up approximately 5% of ComEd’s energy load, and can expect to be billed an estimated $417 million of the projected increase. This increase will be passed through to businesses across the city, adding to the ever-increasing cost of doing business here.
  2. Exelon made more than $2 billion in profits last year. Despite massive revenues and increased shareholder profits, the company has repeatedly threatened to shut down its Quad Cities and Clinton nuclear power plants if their bailout proposal doesn’t pass.
  3. Despite claiming poor-performing nuclear plants,recent power auctions garnered Exelon an extra $1.7 billion for its nuclear plants. Though Exelon claims their nuclear assets aren’t economically viable, they were a big winner in last year’s annual capacity auction, where power producers bid for long-term contracts to supply electricity.
  4. Exelon’s total rate hike proposal statewide is estimated to be $24 billion over the next 23 years.The tax hike burden will fall on government, businesses and consumers.
  5. It’s estimated that ComEd and Exelon will secure $1 billion in profits over the next 10 years from the proposal.That doesn’t include the $2.6 billion subsidy Exelon’s struggling power plants would receive over that same time period.
  6. Customers have already paid twice for those nuclear plants.Not only did customers pay for construction of the same nuclear plants through regulated rates, we also paid over $10 billion in customer transition charges to the profitable publicly traded Exelon.

At this time, BOMA/Chicago is still not convinced that all income from Exelon’s Quad Cities and Clinton plants has been included in determining whether those plants are profitable, or of Exelon has considered all alternative options other than raising rates on Illinois energy consumers. On the cost side, ComEd and Exelon have only provided BOMA/Chicago with preliminary data to estimate the financial impacts to commercial customers.

BOMA/Chicago was just in Springfield to testify against the legislation and continues to work closely with a coalition of opposing organizations to educate legislative leaders and the Governor’s Office about the negative impact this legislation will have on our buildings and tenants. As always, it is the goal of BOMA/Chicago to mitigate any potential threat to our members and ensure that any impacts are as minimal as possible.

>>TAKE ACTION: Click here to contact your legislators today to ask them to oppose this legislation. 

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CRE Insights & Advice from Three Emerging Leaders

BOMA/Chicago’s Emerging Leaders Network provides career development, education and networking opportunities for BOMA/Chicago Building and Affiliate members with a recommended seven years or less of experience in the commercial real estate industry.

el-headshotsWe asked three emerging leaders to describe their professional backgrounds and to give us their insights on CRE. Read the responses below from Angela Oh, JLL; RJ Parrilli, Midway Building Services, and Ebony Andry, Sterling Bay.

As an emerging leader in commercial real estate, what are some of the top industry issues you believe your peers should be aware of/focus on?

Angela Oh: The need for permanent office space is diminishing due to flexible work environments. The modern workforce is doing business off-site, from a remote location and working hours are not the typical 9 to 5.

RJ Parrilli: We have an aging work force in the field and there could potentially be a labor shortage with the amount of people in our generation entering into the trades. There may be a shortage of skilled tradesmen as you look at the current demographics.

Ebony Andry: Tenants are now using space differently and looking for more amenities and common space in buildings. We should be aware of these increasing demands, and in some instances requirements for things such as tenant lounges, fitness centers, creative spaces and bike rooms.

What is your vision for the future of CRE? How do you expect the industry will change in 5/10/20 years?

Angela Oh: The CRE industry will likely evolve to cater to the demographics of the younger workforce.  Many of the traditional offices and spaces will be redesigned for more collaborative settings.

RJ Parrilli: With the baby boomers exiting the commercial real estate industry, there could be a pivotal change with gen x,y, and millennials leading the ever changing industry. With more of a focus on a work- life balance, it could change the landscape of the suburbs to become more of an urban center focused on a better quality lifestyle.

Ebony Andry:  Technological advances will improve the way we do business and make us more efficient. I envision programs that can merge the various needs of owners, leasing agents and property managers, thus improving overall communication and productivity.

What unique ideas/perspectives can younger CRE professionals bring to the table?

Angela Oh: As the large number of workforce are now the millennials, the younger CRE professionals can relate and contribute to what the tenants needs will be. Having a collaborative and relaxed tenant spaces/lounges equipped with Wi-Fi connectivity will become a necessity and we will need to build out spaces that cater to younger generation (ex. open spaces vs. offices).

RJ Parrilli: We can provide what the younger generation looks for when occupying and using CRE space.  Younger professionals are replacing the baby boomers and will be one of the largest consumers in history. For example, businesses today consider location even more important than compensation. Baby boomers want to live to work, Gen X wants to work to live and the millennials are looking for a work to play lifestyle.

Ebony Andry: Younger professionals bring a unique perspective to the industry, including more efficient ways of accomplishing objectives with the use of technology and innovative ideas regarding tenant amenities.

What do you consider to be your greatest career accomplishment thus far? What are your goals moving forward?

Angela Oh: My greatest achievement was earning the 2014 Reginald L. Ollie Inclusion and Outreach Scholarship and then the RPA designation in 2016. Through this scholarship, I was able to complete my requirements in two years and studied all aspects of property management.  I also had the opportunity to network and expand relationships with my fellow industry professionals.

RJ Parrilli: My biggest career accomplishment is heading up the start of Midway Staffing and expanding Midway into the market of temporary labor services. My goal is to continue the success with this expansion and new ways to add revenue and solutions to the real estate community.

Ebony Andry: In April of 2016, I was awarded the Reginald L. Ollie Inclusion and Outreach Scholarship and this was my greatest accomplishment to date. My goals include completing my RPA, becoming the General Manager of  a 500,000+ square foot building, earning LEED certification and becoming  a great resource and mentor for other professionals in the industry.

What first made you want to get involved in CRE?

Angela Oh: Working as a CRE professional involves a variety of skills and almost forces you to be well-rounded and a good multitasker.  I enjoy the spontaneous events that arise and the impromptu actions you have to take in order for your building to run smoothly.  The unpredictable side of working in this industry may be scary at times, but I welcome the challenges and hope to enhance my skills through these events.

RJ Parrilli: As I found myself working in the insurance field, I was presented an opportunity to help Midway expand their vertical market by putting a focus on multi-tiered relationships. BOMA/Chicago, City of Hope and many other organizations greatly helped me develop relationships which have turned into clients and personal friends which will last a lifetime.

Ebony Andry: What first attracted me to the CRE industry was the great variety in tasks that each day brings. There is nothing mundane about property management. Tasks vary from working on tenant space improvements and building capital projects to creating budgets and conducting fire drills.

Do you have a mentor (within or outside of your company)? How has he/she helped guide you?

Angela Oh:  My General Manager at 71 South Wacker, David Hopwood, has been an integral part of my professional experience.  He has supported me throughout all my endeavors and enriched my knowledge how to make my building the best of the best.  Second, as part of receiving the Ollie Scholarship, I was able to choose Rebecca Miles, Piedmont Office Realty Trust, as my mentor. Becky has been an amazing partner; she made herself available to discuss my progress, assisted me in decision making and provided a different perspective on managing commercial real estate.

RJ Parrilli: Joe Sergi with Clear Height (formerly REX Electric). When I first was thinking of joining Midway, I sat with Joe multiple times and he discussed all the pros and cons of this industry and the potential opportunities of what can lie ahead. He has assisted me in developing my customer base and guiding me in to the right organizations.

Ebony Andry: My General Manager, Bonnie Boden, has been a great guide and advisor. She motivated me to earn my Broker’s License and RPA. She inspired me to set high goals and achieve them. My second mentor, Max Andrews, Matting by Design, is one I gained as part of the Ollie Scholarship. Max has encouraged me to be a resource to others around me and to have courage to ask for help when I need it.

What would be the one piece of advice/guidance you’d pass along to someone considering a career in the CRE industry?

Angela Oh: Be open-minded!  CRE is not just about managing buildings. It incorporates so many aspects of business practices and you are sure to find an area of passion. The network of professionals in Chicago’s CRE market is extensive and a beneficial resource. Also, being part of a great organization like BOMA/Chicago, you are able to network and build great relationships to help you do your job well.

RJ Parrilli: Younger professionals tend to look for a quick advancement. There is a lot of opportunity in CRE to be successful – but it takes time and patience. It is rewarding to see people who you started with working up the corporate ladder and capitalizing on their own opportunities.

Ebony Andry: The CRE industry is both challenging and compelling and the people in it are like a small community, kind and willing to help. Once someone has decided to be a part of the industry, I would further advise them to get involved, increase their knowledge and find someone who will be a helpful and enthusiastic mentor.

For additional information about BOMA/Chicago Emerging Leaders or to be added to the Emerging Leaders email list, contact Beth Halat, Director of Member Services at bhalat@bomachicago.org.

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BOMA/Chicago’s Chief Curmudgeon Enlightened by our Hometown Heroes, the Chicago Cubs

My job as chief staff officer for BOMA/Chicago often involves criticizing and opposing proposed actions that we view as damaging to our members, the commercial real estate industry, and our great city. Sometimes I’m a naysayer and sometimes I go on a rant. But not today.

Today it’s about celebrating our Cubbies in the World Series.

For all that’s wrong and troubling in Chicago these days, it’s incredibly refreshing to have something to be proud about, something that brings honor and celebration to our city, something that so embodies the can-do spirit of our city and our Cubs, something that recognizes this amazing accomplishment by the team, the owners and managers, and the fans.

As BOMA/Chicago’s professional curmudgeon, it’s not often that something as sweet as this brings a smile and a tear of joy to my face. But it did on Saturday night. I’ve never been a huge baseball fan, but I think that many Chicagoans like me became fans on Saturday – at least for a little while, but maybe for a lifetime. So thanks to our Cubs for that.

Please join me and the BOMA/Chicago family by lighting your buildings blue for our home town heroes as they begin the World Series of this amazing season.

 

 

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A Closer Look at the Property Tax Burden on BOMA/Chicago Buildings

At BOMA/Chicago, we’re always advocating on our members’ behalf by regularly engaging in open, productive dialogue with key stakeholders surrounding public policy and fiscal decisions aimed at fostering a thriving Chicago.

While our elected officials at the local, state and federal levels initially come to mind when thinking about policy issues, it’s also important to not overlook another mainstream player – the media. Whether behind the scenes or out front making headline news – as best exemplified in the extensive media coverage Michael Cornicelli outlined in his blog post last year surrounding Mayor Emanuel’s property tax increases – we’re always working closely with reporters, editors and producers throughout Chicago to further educate them on our position surrounding issues impacting our members and the City.

Part of this effort involves sharing information. BOMA/Chicago regularly tracks and aggregates data to help shape our conversations with the media and build solid, mutually-beneficial relationships with key reporters covering our industry.

Last Thursday, Crain’s published an article by Greg Hinz titled “Are property taxes on office towers rising less than on homes?” It centered around property taxes and assessments, in which BOMA/Chicago openly shared pertinent data. Unfortunately, the article incorrectly extended conclusions from the data provided which painted an overwhelmingly inaccurate picture of Chicago’s commercial real estate industry.

It should come as no surprise that the story raised major red flags for all of us at BOMA/Chicago. Bottom line: Crain’s got this one wrong. BOMA/Chicago has already replied publicly with a letter to the editor, and we also wanted to communicate with our members directly to shed some light on where the article missed the mark.

  • Taxes: It was implied that BOMA/Chicago buildings pay less, when in fact our data shows that as a percentage of assessed value, our member buildings paid 18.3% in taxes, compared to 17.4% by all Chicago property.  And most importantly – our member buildings are paying over $842 million in taxes –$94 million more than last year.
  • Tax Burden: The reality is commercial buildings are already assessed at a rate that is 250 percent higher than residential buildings. That means that for every $100 of property value, single-family homes are assessed $10 and commercial buildings are assessed $25.

Understanding the true tax burden on BOMA/Chicago buildings is not only protecting the best interest of our members and the thousands of businesses they house – it’s also protecting the very economic engine that drives Chicago. Increasing property taxes threatens that engine and the economic fate of the city. BOMA/Chicago remains committed to working with  both elected officials and media to help steer the issue in a direction we can all get behind.

 

 

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