Monday, January 19, 2009

Stepping up


The United States and New York City currently sucks at how it uses energy.

Did you know that “WE” currently waste 56% of all the energy in the U.S. Economy. (Those numbers are from the New York Times)

And that for each dollar of economic product, the United States spews more carbon dioxide into the atmosphere than 75 of 107 countries tracked in the indicators of the International Energy Agency.

Those doing it better than us include not only cutting-edge nations like Japan but low-tech countries like Thailand and Mexico.
(Could you imagine any of those countries beating us in the Olympics?)

True, energy efficiency has improved, especially in states like California. But American drivers, households and businesses still use more energy than those in most other rich countries to do the same thing.

Over 35% of all electricity used in a typical building goes towards lighting according to the EPA. Yet we are hardly doing anything significant in this area and we probably have some of the most inefficient buildings on the planet.

The nation has over 5 Million commercial, industrial, and institutional buildings and they spend over $35 billion a year just in electricity bills to operate their lighting systems alone.
Surely, we can do more with less in this area.

The United States spends more energy to produce a ton of cement than Canada, Mexico and even China. It is also one of the most energy-intensive makers of pulp and paper, emitting more than three times as much carbon dioxide per ton as Brazil and twice as much as South Korea.

Per-capita carbon dioxide emissions by households in the United States are the highest in the world and the energy efficiency of electricity production from fossil fuels is lower in the United States than in most rich countries and even some poor ones, mainly because of the higher share of coal in the mix.

A study by McKinsey & Company last year argued that most of the carbon abatement needed between now and 2030 could be achieved with existing technologies.

Technologies like insulating homes, improving Fuel, Lighting, Wiring, Refrigeration and HVAC efficiency.

A quantum jump in energy efficiency will still require political leadership.

We are getting that tomorrow with Obama and we are also lucky in NYC by having Bloomberg as Mayor but we are just at the beginning of this journey.

Cheap energy has kept America from making the necessary investments. Yet they must be made; neither the country nor the atmosphere can wait for high tech to ride to the rescue.

To paraphrase Obama:

“We must be the change we are waiting for”

I am setting up a new venture called Pentacle Energy to focus on these areas in the Commercial Real Estate here in NYC.

Time for me to walk the talk – What are you going to do to make America and the world a better, cleaner place to live?

Friday, January 2, 2009

2009 - No one takes a New Year lightly

The real estate industry is facing turbulent times.

It matters little now what 2008 was or what you think 2009 should be. But I can tell you this - there will be more fireworks. (Hope you like the pic of my old home town)

The fact is, what’s unfolding in the marketplace is nothing like you or anyone else could have ever imagined a few years ago.
As a result those that are going to survive and prosper must implement new strategies, new business plans and new revenue models.
Those who don't...................

I’m making a major shift on what I will be focusing my energy and efforts on in 2009.

What are you going to do differently this year?

In this financially constricted and challenging time I have a new strategy that will enable my clients, contacts and prospects to save a lot of money and improve the valuations on their buildings and their company’s balance sheets.

I will get in to the specifics more next time.

One thing I know for certain about 2009 is that no one can recycle or reuse wasted time, wasted energy or wasted money.

Wednesday, November 26, 2008

Thanksgiving



We often give thanks for the things we are blessed with but I read this quote and wanted to share it as it to speaks to me about the spirit of Thanksgiving


Aspire not to have more, but to be more - Oscar Romero, Patron Saint of El Salvador


Live and Love Large this Thanksgiving.


Chris

Wednesday, November 12, 2008

Sigmund Freud and New York Real Estate


A State of Denial

It’s been a little while since my last post, since that time have had a number of meetings with developers and colleagues who work directly with sponsors.
Wish I had a great story to tell.

What we have found is that across the board there is still a huge number of developers and sponsors who are in denial when it comes to their projects.
And for those reading who like Sarah Palin think “de nile” is in Africa then let me refresh your memory via way of Wikipedia.

“Denial is a defense mechanism postulated by Sigmund Freud, in which a person is faced with a fact that is too uncomfortable to accept and rejects it instead, insisting that it is not true despite what may be overwhelming evidence.”

What has this got to do with Real Estate?


Let me share one story that sums it up for me.

Recently I took a well qualified buyer to see a development that still has a third of its inventory unsold.

This project hasn’t sold almost anything in months but when it came to their pricing still wanted $2000+ a square foot!

Sure it was nice project, high floor great finishes but there is no ways in God’s green earth are they going to achieve anywhere remotely near that number.
(My guy was thinking "south of $1000 a foot)

Maybe they “can negotiate” you say…..well my experience is that any time opening positions are so far apart to begin with then the negotiation is destined to fail.


That is reality and research in the area of negotiation bears that point out.

If this was a one off story we all could just have a laugh but it isn’t.


All too often we hear “my project is different” “my project’s location set’s it apart” or “this is much higher quality than the competition”.

No one is immune to market forces those who don’t get a head of the curve when it comes to pricing i.e. cheaper than their competition and who can’t stand out and get qualified traffic in to see their inventory/product are going to get 100% of nothing rather than a percentage of something.

We are in the worst downturn in at least 15 years some say even longer that is our economic reality.

Cut your losses, reconsolidate, get some cash in, work with your lenders and prepare for the next round.

No point in continue to “fight” a battle you cannot win with a price point that was where the market use to be.

Those days are gone.

Friday, October 10, 2008

NYC's 3rd Quarter Results - Just the Numbers

The Bad News

 The number of sales dropped 24.1% from the prior year quarter to 2,654.
 Listing inventory increased 34.6% compared to the same period last
year to 7,003 units.
 The average days on market was 134days, 11 days longer than the 123 days of the prior year quarter.
 The listing discount increased modestly to 2.6% from a discount of 2.0% in the prior year quarter.

The Good News


 The average sales price of a Manhattan apartment remained above the $1,000,000 threshold.
 The average sales price increased 8.1% since the prior year quarter to $1,480,363.
 The median sales price increased 7.4% above the $864,397 median sales price achieved in the prior year quarter, reaching $928,263.
 The average price per square foot rose 4.3% over the same period last year to $1,193

More Facts

http://www.prudentialelliman.com/NYCPhotos/retail_reports/mmo2008q3locked.pdf

(Prepared by Jonathan Miller – NYC’s #1 Appraiser)

Monday, September 29, 2008

Applied Creativity 2008



This past Sunday the The New York Times ran an article that was about how brokers now had to get creative to “seduce buyers”.

DUH! – talk about being masters of the obvious!

Of course things need to be done differently we are only in the worst financial crisis of our era.

Some of the tactics sounded interesting and fun and like they achieved their preliminary objective which is to create more awareness.

What wasn’t directly stated was the fact that we are now are competing for fewer buyers than what previously existed and the first thing that needs to be done is catch their attention.Some brokers are hustling for their clients and going above and beyond.For those who are going the extra mile and trying something new and something that you haven’t done before then I applaud you.

A condo or a project needs to stand out from the pack, the more people know about your project the better.

Events, tours are great and necessary but where the game really needs to change is online – and that is where most agents are operating like its 2004 - time to retool, re skill and compete in a new arena.

Do what you’ve always done and today you won’t get what you use to get!

Thursday, September 18, 2008

Blood in the Water



Lehman, Merrill, AIG - Wow! What a week!

I remember thinking just a few weeks ago how tough the economic climate was AND was even quoted in the NY Sun about my perception of where the real estate market was going and how tough it was.

BUT if you were to tell me that those 3 financial giants would be "hammered" so hard that they would either "dead" or unrecognizable then I would've thought you were high.

But the unthinkable happened, the market is fundamentally worse now so where does that leave you, your project and your strategy?

What's Plan B look like or is is C or D?

Where is the smart money going to go?

There is blood in the water and the sharks are circling - what are you going to do now?