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Monthly Archive for: ‘March, 2012’

  • NAIOP 2012 Gov’t Affairs

    Just got around to reading the initiatives from NAIOP with our federal government and thought I would share them.

    (*Note* – I am a member of NAIOP and have access to this information. I assume this is public info that is worth sharing.)

    TI depreciation – A bill just expired that allowed landlords to depreciate TI expenses over 15 years instead of 39. NAIOP wants to reinstate the bill in order to save costs for building owners.

    Brownfield Remediation Expensing – Allows for expenses incurred by a developer in the cleanup of a brownfield site to be expensed immediately, allowing for advantageous taxes when income may be years off.

    Carried Interest Taxation – NAIOP opposes changes to tax treatment of carried interest that would change Capital Gains Tax from 15% to as much as 35%.

    Internet Sales Tax – States are losing billions each year in uncollected sales taxes from internet sales. NAIOP is supporting enforcement of tax law on online transactions.

    NAIOP opposes arbitrary energy efficiency requirements for buildings.

    New public-private partnerships should expand and new revenue sources should be explored to address congestion issues.

    NAIOP supports increased federal funding of port expansion to relieve congestion.

    For regulations and coding on wetland and environmentally-sensitive land, NAIOP supports a balanced approach to simplify the process for landowners and not bog down the system with over-regulation.

     

    Why this is Interesting –

    Seems to me like regulation and law-making have a crucial role in the future of our business. If general partners get taxed out of a deal and TIs depreciate about half as quickly, investors and owners and going to suffer. I may even go so far as to say that staying abreast of current legislative issues is a crucial tool for the aspiring commercial property professional.

    Food for thought.

    – Duke

  • 42 Floors

    42floors.com

    Check these guys out. They are taking the San Fran office market by storm using the right integration of technology and aesthetics in the website.

    I will give some more input on their model and site later, but for now I wanted to pass along some press and praise for the guys in SF:

    Washington Post Article

    SF Gate Article

    TechCrunch Article

    VentureBeat Article

    More to come.

    – Duke

     

  • Clean Slate Project – Tools

    flickr-user-derrick

    Image Courtesy Flickr user Derrick

    I have been brainstorming on the whole “Clean Slate” business and I have found that one of the major stumbling blocks is presenting our findings/analysis/voodoo. If I can’t find an interesting and aesthetic way of presenting it, then there isn’t much point in traveling down this long path.

    So, the question becomes: How can I build a cool 3D model of Atlanta Prime that will show Atlanta’s current topography and can host the new (and existing) structures we have to build this city?

    Auto-CAD may be an option, but it is expensive, and frankly I don’t have the time to learn it.

    Enter Google.

    The King of Interwebs, has a free tool called Google SketchUp. It’s just a basic 3D modeling tool for anything from a toaster to a skyscraper. The basic version is free and will allow you to create moderately detailed images or models of buildings and landscapes.

    Seems like a logical place to start when building a virtual city.

    Anywho, I downloaded it to my desktop and will be tinkering with it over the next few weeks so I can get accustomed to the interface. I will try to learn a few tricks and basic functionality before it’s time to start modeling.

    In the mean time, check out the gallery at Google and be sure to check out the Skyscraper Page. Both sites have some cool examples of what building models can look like.

    Hasta,

    – Duke

  • Book Review: Atlas Shrugged

    Image Courtesy Amazon.com

    You may ask why a site about commercial real estate would need a review of a book by Ayn Rand. Fair question.

    I would argue that Ayn Rand is not really an author. She is a philosopher, and, more specifically, an economic philosopher. She happened to write a few books in her career, but her main occupation was philosopher. Her magnum opus, Atlas Shrugged, is essentially a treatise on economic theory and the free market economy. Therefore, this book is extremely relevant to commercial real estate and all of the industries interconnected with it.

    Let me begin my review by saying that I think Rand is an exceptional philosopher and an amazing woman. I have written about her before and I hope that I conveyed how exceptional she truly was while she lived. Whatever I may say about her book, she was one of the more gifted philosophers of the past century and deserves credit.

    Having said that, I’m not sure I would ever read Atlas Shrugged again. It was interesting and entertaining . . . for the first 500 pages or so. Actually, I listened to it in my car on 50 CDs. So I should say that it was interesting for the first 25 CDs.

    I read my fair share of books. Last year I finished more than 20 different titles. So I have learned over time that there are certain writing styles I prefer. For example, all of the books that I read not named “Harry Potter” are non-fiction and business books. So I tend to enjoy a writing style that is heavily factual and balances interesting anecdotes and facts (think Michael Lewis and Malcolm Gladwell).

    Therein lies my problem with Rand.

    Atlas Shrugged (and The Fountainhead) is a work of fiction. All of the characters and situations came from Rand’s vivid imagination. She has an exceptional talent for detail and description. She can take your breath away with her knowledge of the steel industry down to the grittiest detail of bolt sizes on industrial smelters.

    But I don’t really care about the bolts.

    I just want to know what Francisco and Hank Reardon are doing at the mill when one of the smelters over-heats and threatens the entire mill. Just tell me what happened, what they did, and why. That’s all I need. All of the superfluous details are . . . superfluous. Remember, I’m a business book reader. I want a quick anecdote, lessons learned, and how to apply it to my life. If Dagney’s lapels match the bluest hydangea on a wet spring day . . . I don’t really care. I want facts and lessons and I want them in as few words as possible. I highly value brevity and, as a writer, appreciate the skill it takes to develop the balance between description and brevity.

    Maybe the simplest way I can critique her is as follows: Rand is an exceptional philosopher and an average writer.

    You can probably tell that this isn’t necessarily a problem with Rand. It’s just my preference. I simply don’t prefer her writing style.  As I said, I value brevity and concision. She doesn’t. I only need Jim Taggert to speak a few times to know that he is an idiot and a dangerous man. Rand has him speak 200 times and beats that dead horse. To each her own.

    So, while I may not prefer her writing style, I strongly admire her philosophical reach and wisdom. She ardently promotes individual achievement while vehemently condemning those who would bring down the achievers around them. She abhors people like Jim Taggert who believe they are entitled to success and money and need only bring giants down to make themselves feel tall. I agree with her.

    She would hate that the top 5% of income earners in the US pay 60% of all taxes. She hates Robin Hood.

    Frankly, I can understand where she is coming from. As an aspiring high-achiever, I would be pretty peeved if I worked my hands to the bone to make a small fortune and then was made to feel guilty for my success, called greedy, called privileged, or called lucky. That would probably piss me off. I’m not trying to make a political stance or anything, but I can see how you would be upset if you worked that hard only to be called “lucky.”

    I can also see how it would be frustrating to have Uncle Sam take a disproportionately large chunk out of my income apple. The country is telling me:

    Hey! You! Successful rich guy/girl! You owe us a big piece of those huge paychecks you are bringing in! That’s our money! We know how to use it better than you would anyway!

    Yeah, it’s safe to say that would make me pretty unhappy. Rand gets that. And the whole premise of her book is: What if those high achievers and successful leaders refuse to cooperate? What if they just all walked away? What if the best and brightest people on the planet all quit and walked away because they were tired of the government taking their money and then changing the rules of the game they play? What would you do then? Who would you tax to pay your government bills?

    Interesting concept, right?

    I thought so too. And Rand does a fine job of taking that question to its most extreme conclusion. To ruin the ending for you: they all do quit, the world “stops”, many people die, and then the do-ers have a clean slate to start over with. You know they will build something great, because that’s what do-ers do.

    Rand has recently seen a burst in popularity as the current political party in the White House has been promoting regulations and ideas that tout “social benefit” or “the greater good” or “helping the less-privileged” while seemingly hampering individual achievement (cough, rights, cough). Rand uses weasels like Jim Taggert and Orin Boyle as the hideous underbelly of “social responsibility” and uses Dagney Taggert, Hank Reardon, and John Galt as her ideal men and women who value achievement and individualism above all else. When you learn the difference between these two groups of people, it’s easy to see why her popularity is peaking.

    So, in that sense, I’m glad I read the book. There are some deep philosophical waters to wade through in Atlas Shrugged and I enjoy discussing them with others who have read it. The $29.99 question is: Should you read it?

    Maybe.

    If you have more patience than I do, enjoy ornate descriptions, or just have an unhealthy obsession with philosophy, Atlas Shrugged is probably worth the price. If not, take this review and other reviews, get the main point, and apply it to your own life however you please.

    Either way, beware of Robin Hood and those who wish to punish the successful.

     

    Atlas Shrugged in Two Sentences: What if all of the achievers and brilliant men and women of the world went on strike? What would happen if they stopped the engine of the world and left it to people who make a living off the greatness of others or off the guilt of the successful?

    Pros: Very interesting philosophy on economics and free market capitalism, very detailed descriptions of industries like railroads and steel, well written dialogue

    Cons: Loooooooooooooooooooooooooooong, at times redundant

    Target Audience: Anybody in any country over the age of 16, I suppose

    This book is best for: Readers interested in philosophy and economics and who have the patience to learn about it through the medium of business fiction

    Overall Rating: ♦♦ (out of 5)

     

    Ratings Guide
    ♦ = Not worth your time
    ♦♦ = May be worth your time if it is specific to your industry or interests
    ♦♦♦ = A decent book and worthy addition to your library depending on your interests
    ♦♦♦♦ = A great book and an excellent addition to your library.
    ♦♦♦♦♦ = One of the all time classics. A must-read for anyone and everyone.
  • Random Thoughts

    flickr-user-extranoise

    I have hit a wall this afternoon and need to unload.

    You get to reap the benefits.

    It’s random time!

    1. I think ABC, Fox, NBC, et al, need to stop creating CGI-heavy show concepts. Any time I see a dinosaur or magical creature in one of those shows that is VASTLY inferior to Spielberg’s creations in Jurassic Park from 18 years ago, I lose a little, er, a lot, of respect for network execs.

    2. Now I feel old. Jurassic Park blew my mind back in the day and it is 18 years old. Jurassic Park is old enough to buy cigarettes.

    3. While we are on the topic of Spielberg movies, JAWS is the scariest movie of all time. Period. If you have seen that movie, it is in the back of your mind every time you put a foot in the ocean. You may have the occasional bad dream about bleeding walls or demon-possessed children, but the threat of a graphic shark attack is always there when you are in the ocean.

    4. I don’t think I could ever live in VA Highlands. Since I’m not a single guy looking to walk to bars, it has little appeal. I love the older houses, but the roads are tiny, the parking is the worst in the city, everywhere is crowded, and it just smells like hormones. No thank you.

    5. Similarly, what happened to Decatur? That place is awesome. When I was growing up, Decatur was the putrid swamp donkey of Atlanta neighborhoods. You only went there if you had a relative who made you. Now, there is a solid collection of unique restaurants (Iberian Pig!) and cool spots to hang out. It might be one of Atlanta’s most walkable neighborhoods. What the flip?

    6. I like the idea of Jamestown’s pop-up park near John Marshall. Maybe I’m old fashioned, but it’s nice to see a huge CRE investment firm creating public green space. Seems very Mayberry, or something.

    7. Speaking of Jamestown, I saw that they got the redevelopment deal of the year in the Business Chronicle for Ponce City Market. How can you get an award for a deal that isn’t finished? You get awards for good ideas? If so, I better get some medals for those winners I am cooking up for 2025!

    8. Does any one else miss watching the X-files? I grew up watching Mulder and Scully, and I miss them a little.

    9. My boss said “if you are a developer for long enough, you will eventually file for bankruptcy. ” Hmmm. Ok. Then I won’t be a developer. I will be a real estate investor who happens to develop from time to time. Take that!

    10. The borrower really is slave to the lender. Trust me. I have first hand knowledge of what happens when creditors and debtors face off. Debtor = Bug. Creditor  = Windshield. Careful what debt you get yourself into!

    Have a killer weekend.

    – Duke

  • Goal Setting: The Ideal Day

    flickr-user-wolfgang-staudt-3

    This may be unique to me, but I think an integral part of setting goals for yourself should include your time.

    That is, I think you should plan for what you want your ideal day to look like in addition to what you want to accomplish or who you want to be.

    Most of us focus on deals we want to do, money we want to make, or roles we want to acquire as our career progresses. But, how many of us plan for how we want to spend our time in an ideal work setting?

    Maybe the simplest way I could ask it is as follows: Suppose I were to give you $100 Million, no strings attached, and you realize that you still want to have a career. How would you spend your time in those work days?

    For this thought exercise, let’s assume that careers have more intrinsic value than the basic need to make money. People like you and I are accomplishment-oriented and, as the great JoePa noted, there is only one major life event after retirement. We don’t stop being achievers when we have a bunch of money. Think about it. Think of all the start-up and business success stories you have heard about the entrepreneur who struck it rich and made so much money that they never had to work again. How many of them actually never worked again?

    Maybe 5%? Maybe less?

    Most of us love the rush of working and accomplishing things. That basic desire may change slightly, but it doesn’t fade when we get rich. It is still there and even the one-hundred-millionaire will want to work toward some goal every day.

    So, for this exercise, let’s assume you have enough money to do whatever you want whenever you want to, but you still yearn for accomplishment and efficiency. How will you spend your day?

    Do you see why this is a crucial question to ask of yourself? If you only focus on deals, money, and titles, you will work yourself to death and ruin your health and your relationships. I think you need to build some time into every day working on your life plan, not just your business plan.

    Consequently, what are the things you would like to do every day to have an ideal life? If your life were “perfect”, what would you spend your time doing every day? I’m not trying to dig too deep philosophically, but if you don’t think about what the perfect version of your life would look like, then how do you know what to aim for?

    So, back on point, what would your perfect work day look like?

    Here are a few questions to consider . . .

    What types of things would you accomplish?

    What time would you wake up every morning?

    How many hours of sleep would you get?

    How would you spend the majority of your time?

    How much of the day would you spend in the office vs your home?

    How often would you be on the phone?

    How much time would you spend meeting with people?

    How much time would you spend with family?

    How would you fit in your exercise?

    What else would you like to spend your time doing?

    How many days per week would you work?

     

    All of these answers are unique to each person and no one can tell you what you “should” be doing. You have to figure that out for yourself and I can almost guarantee that these answers will change over time as your temples gray. But you MUST have a plan on how to spend your time.

    When the shadows creep in, all we have is a collection of moments in our life. The greatest regret of a dying man may be to look back at his life and realize he wasn’t intentional with the way he used his moments. Those are the times when you hear men talk about “wasting their life.” That’s just a way of saying they wasted the time they were given on this earth since they didn’t intentionally plan how to spend those moments.

    Don’t you be like that. Have a plan for your time and how you want to spend it. I bet that you will realize that there are changes you can make today in your current life stage to get you closer to that ideal day. You certainly don’t need $100 Million to make the first steps in that direction.

    Take a few baby steps today and every year for the next 5 years and I am betting that you will find yourself much closer to that ideal day than you ever imagined you could be. You may just find that the $100 Million is an irrelevant consideration and that control of your time is more valuable to you than a huge paycheck.

    Lest I be accused of being a philosopher, here is my practical application. My ideal work day and week is below. Take note of how much time I spend doing each of my activities and how I answered the above questions. That should tell you more about my priorities and lifestyle desires than any long-winded rant could. I put a few notes at the end of the schedule.

    And here it is (click to enlarge) . . .

    Notes –

    7.5 hours of sleep every night. Reading at least twice a day. Running everyday. Goal time at the beginning and end of every week. Answer emails ONLY 3 times per day. Plenty of practice on delegating tasks and organizing. Three networking lunches every week. Three afternoon lifts every week. Mentoring or coaching every single weekday. Two bible study/small group sessions every week. Date with the wifey every week. About 11 hours every week with the family in the evenings. 40 1/2 hour work week with most of my time spent on making deals, driving markets, and visiting properties.

     

    Seems like a fun week and, frankly, a very efficient one. Notice how my goals conform to this ideal schedule. I need to find a role in which I am a deal-maker by phone and in person. I need to develop my organizational and delegation skills. I need an office that is close to a gym and close to my home. I need outlets through which I can coach and mentor young men (or my children). I need to stick to my networking in order to know the right people to call and visit property with during my day. And on and on and on. I can glean crucial data points to aim for now that I have this written down and recorded. If this is how I want to spend my days, I can now figure out what skills I should acquire and what contacts I need to make in order to get there.

    Anyway, that’s what my ideal day and week look like. What does yours look like?

    Visit this site and download the printable hourly calendar (I downloaded it to Word for editing). Fill out what your ideal week would look like and then take notes on what you are spending your time doing. How does that align with your priorities? Can you implement any of these changes right now? As I said above, start working toward that goal little by little and you may find that you have an ideal schedule before you ever become a high-powered executive. You may even want to show this to your boss. If he or she is a good boss, they will understand what you are doing, why you are doing it, and they will help you move toward your goal.

    Use this tool and these ideas in any way you please. Let us know what you come up with in the comments and remember that your time is your most precious resource and if you don’t plan how you are using it you may look back and wonder what might have been.

    Happy planning.

    – Duke

    (Hat tip to StudentHandouts.com for the great, free resource)

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