How is Virtual Reality REALLY Going to Impact CRE

Male and Female Architects Wearing  Augmented Reality Headsets Work with 3D City Model. High Tech Office Professional People Use Virtual Reality Modeling Software Application.

Male and Female Architects Wearing Augmented Reality Headsets Work with 3D City Model.

Virtual reality (“VR”) will create opportunities for everyone. In an excellent article on the topic by The Counselors of Real Estate (read it here), they explain how the use of virtual reality could change every aspect of deal making.

“One of the main uses of VR for real estate is marketing. While the cost of a virtual model may seem high to some, the cost can be offset through the reduction of other marketing spend, a reduction of holding costs by compressing the transaction cycle and accelerating cash flow, which also reduces the risk of closing. The model can also be repurposed for use in facilities, asset and property management. A VR model can save time and money in terms of making design decisions more quickly and avoiding mistakes during the build out of a space. Similarly, VR models can be used to facilitate and make planning meetings or economic development agency initiatives more accessible and efficient by putting models online to help make real-time changes, by any or all of the stakeholders.”

“Transaction friction can also be reduced, as potential buyers or tenants can “see” a range of properties without having to travel to each location. Imagine the productivity gains over the course of a year from being able to see ten properties without leaving one’s office in the time it would take to drive to and from just one property. The use of a VR model can also expand the market for buyers, as the entire globe is now able to see the property. Brokers are able to measure reaction in real-time via embedded audio and video capabilities. This also makes brokers more efficient, as they do not need to coordinate logistics for and host extensive property tours that undoubtedly will include properties that are not given any consideration by the client.”

Let’s take a deeper look at how VR is going to impact CRE.

You’ll be able to visualize developments and properties in completely new ways.

We’ve seen this concept commercially with Lowe’s VR design service, where a customer can see the color of paint in a room before they commit to it. “Developers will be able to complete showroom experience to local and remote clients that allows them to select their own finishes, furnishings and other amenities — before groundbreaking.

Buyers/tenants can instantly see themselves in the space the way they want it, creating the opportunity to shorten sales cycles and sellout periods as well as reduce holding costs,” explains an article by The Counselors of Real Estate. One of the most profound ways they list that leasing brokers and owners will be able to “use VR tools to complete test fits of spaces for potential tenants in real-time, online or on site, without the need to wait for an architect.” Property and asset management can utilize VR for  property and space availabilities, occupancies, maintenance requests or records.

Virtual Reality expedites stakeholders’ decision-making.

An article for Bisnowexplains that “one of the biggest benefits of VR technology is that it enables owners, brokers and tenants to envision a potential master plan, building or interior space quicker and easier than ever before; the immersive experiences allow critical team members to make quick decisions and get the project moving.”

In the article, GA director of virtual design and construction Michael Schroeder says that “with the VR technology, I can engage all the important stakeholders in the process on their own schedule.”

“The technology allows the process to move forward at a quicker pace, enabling crucial decisions to get the consensus response they need. It’s a vital step in saving time for all parties involved.”

Virtual reality allows everyone to be in one place at once.

In CREtech’s articleabout ways virtual reality is changing commercial real estate, they explain that “as foreign investments in U.S. properties continue to increase, being able to make deals remotely is imperative. VR technology allows brokers and agents to show a space to potential clients on the other side of the globe in real-time and as if they are actually walking through the space. Showings are no longer limited by space and time which is resulting in a limitless global base of potential clients.

New Listing – 15 acres of land along Rt. 61 in Ontelaunee Township

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Bryan Cole and John Buccinno of NAI Keystone Commercial and Industrial have been retained to exclusively represent Greater Berks Development Fund (GBDF), an affiliate of the Greater Reading Chamber Alliance, in the Sale or Lease of approximately 15 acres of land along Rt. 61 in Ontelaunee Township.

GBDF purchased the land, which was originally 22 Acres and is in the process of subdividing 7 acres which will be sold to an End User.  The remaining 15 acres is ideally suited for industrial or manufacturing users.

The concept plan shows the potential for a two-building site. The site can accommodate users from 10,000 square feet to 140,000 square feet and is located at the lighted interchange of Rt. 61 & Rt. 73 which provides easy access to I-78 and Rt. 222.

“GBDF and GRCA are committed to helping Berks County employers grow and expand their business and local workforce,” said Randy Peers, GRCA President & CEO. “Industrial and manufacturing companies play a large role in our local economy, and the availability of more sites like this one help support existing business growth as well as our business attraction efforts.”

NAI Keystone Commercial & Industrial, which maintains a prominent market share in Berks and Schuylkill Counties, Pennsylvania, specializes exclusively in commercial and industrial properties. In addition to property management and receiverships, NAI Keystone provides brokerage services such as Tenant/Landlord and Buyer/Seller representation, lease administration, commercial financing, consultation services, 1031 Tax Exchange, environmental surveys, and investment sales.

John Buccinno and Bryan Cole complete 146,324 SF lease at former VF Outlet

 

NAI Keystone’s John Buccinno and Bryan Cole have executed the lease of a 146,324 SF office space lease on 15 acres at the former VF Outlet in Wyomissing. The lease which has a total value of over $61 million was finalized the end of last year.

There is 19 acres of land remaining for build-to-suit office or flex space opportunities from 10,000 SF up to 100,000 SF. For more information on these availabilities please contact either Bryan Cole at 610.370.8502, bcole@naikeystone.com or John Buccinno at 610.370.8508, jbuccinno@naikeystone.com.

NAI Keystone Commercial & Industrial, which maintains a prominent market share in Berks and Schuylkill Counties, Pennsylvania, specializes exclusively in commercial and industrial properties. In addition to property management and receiverships, NAI Keystone provides brokerage services such as Tenant/Landlord and Buyer/Seller representation, lease administration, commercial financing, consultation services, 1031 Tax Exchange, environmental surveys, and investment sales.

Sly Fox Brewing Co. Moves into VF Outlet Center

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NAI Keystone is pleased to announce the completion of the lease of the former Dooney & Bourke outlet located at the former VF Outlet Center, now known as The Knitting Mills, in Wyomissing to Sly Fox Brewing Co. NAI’s John Buccinno represented the landlord, Equus Capital Partners while NAI’s Kyle McKechnie represented the tenant, Sly Fox Brewing Co.

The Pottstown-based brewing company has plans to open up a restaurant in their approximately 5,900 SF space located in the front half of the building. The restaurant’s preliminary plans state they hope to be open by late summer or early fall.

Since the inception of this revitalization project at the VF Outlet Center, and in addition to Sly Fox Brewing Co., NAI Keystone has found a home for UGI Energy Services new headquarters in the old outlet’s ‘Blue Building’ and represented Equus Capital Partners in the sale of the 20,000 SF building formerly used by Rawlings to Orthopedic Association of Reading.

NAI Keystone Commercial & Industrial, which maintains a prominent market share in Berks and Schuylkill Counties, Pennsylvania, specializes exclusively in commercial and industrial properties. In addition to property management and receiverships, NAI Keystone provides brokerage services such as Tenant/Landlord and Buyer/Seller representation, lease administration, commercial financing, consultation services, 1031 Tax Exchange, environmental surveys, and investment sales.

SOLD – 606 Court Street Reading, PA

NAI Keystone is pleased to announce that Vice President of Sales & Leasing, Kyle McKechnie, has successfully represented Baker College on the sale of 606 Court Street in downtown Reading, PA. The centrally located 26,360 SF office building was most recently used as a satellite location for the college. The property settled on Friday December 15th and was purchased by the Greater Berks Development Fund. The organization, which is an affiliate of the newly formed Greater Reading Chamber Alliance, plans to use the property for operational purposes.

NAI Keystone Commercial & Industrial, which maintains a prominent market share in Berks and Schuylkill Counties, Pennsylvania, specializes exclusively in commercial and industrial properties. In addition to property management and receiverships, NAI Keystone provides brokerage services such as Tenant/Landlord and Buyer/Seller representation, lease administration, commercial financing, consultation services, 1031 Tax Exchange, environmental surveys, and investment sales.

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Steve Willems, SIOR, Notable Transactions

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NAI Keystone’s Steve Willems has just listed 1700 Industrial Blvd. in Pottstown, PA. The 23,036 SF building was former home to Antonelli Institute for the last 31 years and will now be For Sale for $300,000. For more information on this building please contact Steve Willems at swillems@naikeystone.com or 610.370.8506.

Willems represented buyer, Highwood USA, in the purchase of 64 Conahan Drive in Hazleton, PA. The 146,000 SF building will be used to house Highwood USA’s fabrication and supply-chain units. The company extrudes synthetic materials for a multitude of uses and has its headquarters in Schuylkill County, PA

NAI Keystone Commercial & Industrial, which maintains a prominent market share in Berks and Schuylkill Counties, Pennsylvania, specializes exclusively in commercial and industrial properties. In addition to property management and receiverships, NAI Keystone provides brokerage services such as Tenant/Landlord and Buyer/Seller representation, lease administration, commercial financing, consultation services, 1031 Tax Exchange, environmental surveys, and investment sales.

NAI Keystone’s Principal, Bryan Cole, SIOR, talks about the Medical Office Space in demand in Berks County!

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http://www.readingeagle.com/business-weekly/article/medical-office-space-in-demand-in-berks

A recent report by a national commercial real estate firm indicates an increased demand for medical office properties nationwide driven by an aging population, pressures to cut health care costs and new technologies.

And in Berks County, even though signs appear plentiful touting office space availability, overall vacancy conditions are deemed to reflect the national trend with certain qualifications, according to a principal at NAI Keystone Commercial and Industrial LLC, a major commercial real estate firm in Wyomissing.

CBRE Group Inc., a real estate services and investment firm based in Los Angeles, reported an overall 8 percent U.S. medical office building vacancy rate in early 2017 compared to a 13 percent vacancy rate for other market offices for the same period.

Leading the list of markets with lowest medical office vacancy rates were Nashville, Tenn., (2.8 percent), New York (3.2 percent), the San Francisco Bay Area (4.2 percent), Louisville (4.9 percent) and Kansas City (5.5 percent). The strongest medical job growth was pinpointed in Nashville.

“The steep increase in the 65 and over population and anticipated greater need for in-office physician services by this group signals a continued increase in demand for health care services and medical office space in the years ahead,” said Andrea Cross, head of office research, CBRE.

The 65 and older population is expected to double from 2015 and 2055 to more than 92 million and comprise 23 percent of the nation’s population based on estimates by the Census Bureau.

In addition, the CBRE researchers said health care systems nationally are: ” Adopting new technologies in the hope of improving heath care outcomes, reducing costs by relocating services closer to where patients live, utilizing video technology to meet with patients remotely and moving more patient volume away from hospitals – the highest cost facilities – and into lower-cost outpatient facilities, including medical office buildings and urgent-care facilities.”

“I think we are fairly similar in medical office vacancy rates in relation to the types of secondary and tertiary markets of our size,” said Bryan Cole, principal at NAI Keystone. “We, indeed, are reflecting what’s going on overall in the medical field.

“The aging population here is a driving force without a doubt,” he said. “We’ve certainly seen that impact over the past five or six years in the need for health care.

“When you look at the vacancy rates in our area, you see a consolidation happening with multiple practices in one building under one roof. These real estate moves in the health field are often about accessibility and ease.”

Cole said the medical sector locally continues to see growth.

“Several smaller, less efficient medical buildings have been placed on the market for sale or lease, however these facilities are becoming outdated and too small to benefit or attract larger health systems,” he said. “The growth pattern seems to indicate larger, better located facilities, with easy access to customers and better technology.”

In Berks, the medical office growth is stronger in the suburbs and outlying areas as compared to center city, Cole said.

Even though the Berks Community Health Center and a satellite campus affiliated with Penn State Health St. Joseph Medical Center are within the city, the major county health system, Tower Health, is located outside the downtown and so are many other health system satellites and outpatient care facilities.

Older city buildings and fewer competing large health systems overall make for a different medical office vacancy picture in Berks as compared to those larger growing metropolitan centers with competing health systems cited in the CBRE report.

Cole said NAI Keystone doesn’t separately track medical office space, but rather overall market office space in two categories, Class A and Class B. He said the Class A buildings score higher in areas of accessibility, infrastructure, location, amenities, age and specific condition of the properties.

Noting that the local suburban office market was flat through the first three quarters of 2017, Cole said Class A buildings had a roughly 10 percent vacancy rate, while Class B buildings were listed at a 16.98 percent vacancy rate.

In Reading, the 2017 vacancy rate for structures deemed Class A was 7.75 percent, while the less desirable Class B facilities had a 24.50 percent vacancy rate.

Cole said the average rental rates for Class B downtown office buildings are low compared to other markets – $8.50 to $12 per square foot – compared to $11 to $15.50 per square foot for Class A facilities that typically do not include utilities or janitorial services.

In contrast, per-square-foot rental rates for offices in the suburbs are $15.50 to $19.50 for Class B and $19.50 to $24.50 for Class A.

“In our market, we have a lot of clients moving from building to building usually in efforts to increase their footprints (expanded space) rather than going to new locations,” Cole said, noting that new construction in the area has remained flat for the past several years.

While Cole’s report addresses overall office market space versus CBRE’s more narrow breakdown for medical office space, the Class A vacancy rates in both Reading and suburbs were below the national 13 percent vacancy rate for market office space reported by CBRE in early 2017.

Cole cited two building sales, the Teleflex facility along Route 183 and a 200 North Park Road property in Wyomissing, as adding to office vacancy rates in the county this year.

In addition, the V.F. project, which houses many existing tenants, also will probably add additional vacancy space in the next 12 to 24 months, he said.

“At the end of the day, we have a lot of new space on the market today than during the same period last year,” Cole said.

As for commercial real estate signs touting office vacancies, particularly in Wyomissing and Spring Township office complexes, Cole said some of the signs are strategically placed for marketing, but also reflect some tenant movement between buildings or issues involving leasing renewals.

“Basically, yes, I think Berks County is in a good position to meet people’s medical office needs for the future because we have existing structures and land on which to build.

“I’ve seen a lot of real estate reports that come out and blanket everything together, but you have to look deeper at the local situation and account for several factors to get a better indication of what is actually going on,” Cole said.