The Reata BizBlog

How Bad Will It Get for Commercial Real Estate?

Bob Gibbons (Reata Commercial Realty, Inc.) — Wed, 11 Nov 2009 10:40:02 -0600

While at a party for tenant rep brokers thrown by a large office and industrial property owner last night, the CEO of the owner said that he thinks things are about to be worse than they were in the late 80's & early 90's. He's a smart guy so I don't discount his opinion, but we're still nowhere near those days….at least not yet. I started in the commercial real estate business in February of 1984 so I've been through a few cycles now.

Things will have to get dramatically worse to come close to the 80's/90's. Then, there were only 2-3 groups bidding on property – one of them was that CEO. Prices got ridiculously low - $20.00 per square foot for high-rise office buildings in some cases. The last company I worked for was one of the other buyers at that time. We bought buildings in the $30's and $40's which later rented for $18 to $22.

Today, there are dozens, if not hundreds, of buyers with war chests in the billions waiting to pounce on distressed assets. That difference by itself should keep prices far higher than the 80's & 90's. Time will tell. Stay tuned.

Just published in 10-23-09 Dallas Business Journal.

Bob Gibbons (Reata Commercial Realty, Inc.) — Mon, 02 Nov 2009 14:06:39 -0600

The Dallas Business Journal published a commentary I wrote on the commercial real estate market. The article discusses why residential real estate is a leading indicator of the economy while commercial real estate is a lagging indicator. Here is a link to it - http://dallas.bizjournals.com/dallas/stories/2009/10/26/editorial1.html Let me know your thoughts.

Passive Income for Realtors While Being a Hero to Your Clients

Bob Gibbons (Reata Commercial Realty, Inc.) — Thu, 04 Oct 2007 09:59:06 -0500

So you have a client who buys or sells a house. What's the average commission going to be? In my area of Dallas/Ft. Worth, one side of the transaction will generate a commission of approximately $5,000 assuming an average sales price of $170,000. So you the client on your marketing list and send them stuff for the next 6 years until they are ready to buy or sell again.

What if you could get another $5,000 from that same client without any additional work? Sounds good, doesn't it?

Well it's possible. Most residential agents get to know their clients fairly well during a transaction - where they work, what their hobbies are, the names of their kids and what sports they play, etc. This information can be useful in earning additional income.

I'm not talking about selling your customer's name to a telemarketer. I'm talking about arranging for an additional service for your clients that they need anyway.

Corporate Real Estate Services. Companies hire Corporate Real Estate Advisors or Tenant Reps to represent them when they lease or buy commercial space for the company to occupy. Office buildings. Warehouses. Retail stores. Medical office condos.

A commercial real estate agent who specializes in providing real estate services to companies is an expert at searching for space and negotiating with commercial landlords and sellers. An office lease, for example, can easily be 50 to 100 pages or more and contain language that most people have never heard of. Corporate Real Estate Advisors deal with this all the time and undestand the process, the language, the differences from one product type to another, and can guide companies through the maze.

Realtors often feel intimidated by the complexity of corporate real estate and don't ever even think about it. But they are leaving money on the table.

So how do you make money from corporate real estate? Referrals.

Your referral to a Corporate Real Estate Advisor could result in a 20% referral fee. So to get your additional $5,000, here's the math.

You introduce your client who works for a small, local company to your Corporate Real Estate Advisor referral partner. The client introduces the Corporate Real Estate Advisor to the company owner or manager and gets hired. Let's assume the company occupies 6,000 square feet of office space and after researching the market and negotiating with their landlord, they renew their lease for 5 years at an average rental rate of $18.75.

The total lease value is then $562,500 - 6,000 SF x $18.75 x 5 years. Let's assume the Corporate Real Estate Advisor negotiated a 4.5% cashout commission making the total commission $25,312. You get 20% for a simple introduction and you get a check for $5,062.50.

Sweet. And the best part is that you have provided your client with an additional service that they really needed. Guess who the hero is?

The $5,000 is just an example. The actual number could be smaller or higher depending on the size of the deal, the rental rate or sales price, the number of years on the lease, etc. I've seen referral fee checks as small as $500 and as large as $250,000.

As you have probably guessed by now, I am a Corporate Real Estate Advisor and I want to be your referral partner. My clients are all kinds of companies in every industry type you can think of - doctors, lawyers, high tech, insurance, retail, distribution, restaurants, manufacturing, financial services, even residential real estate. I only represent the corporate users. I don't have any landlord listings so I can be totally objective in the recommendations I make to my clients.

But I used to be a landlord for the first 20 years of my career. So I understand how landlords think, what motivates them and what they will typically agree to in a lease. I was the guy who signed the leases for the landlord on over 6 million square feet of deals throughout Texas and the Southwest in my last company.

Feel free to check out my website - http://www.ReataCommercialRealty.com/ - and feel free to call me to discuss this further. Thanks so much.

What is Your Real Estate Agent's Specialty? Should you Care?

Bob Gibbons (Reata Commercial Realty, Inc.) — Mon, 08 Oct 2007 10:23:55 -0500

Several years ago I was talking to a friend and mentioned that I had sold my house as a For Sale By Owner (FSBO). He was surprised that it was possible to buy or sell a house without a residential real estate agent. I was shocked that he didn't know he could trade real estate without a broker - however ill-advised that might be.

Brokers can only negotiate the sale or purchase of a house, right? Aren't they all the same since they have access to the MLS? Even though I've been in the real estate business for 23 years now, these misconceptions surprise me. I didn't have access to the MLS until 2 years ago and I've almost always hired a residential agent when buying or selling the homes I've lived in.

Real estate brokerage has evolved in the last 25 years to become a highly specialized industry. Many brokers have essentially become real estate advisors providing financial analysis, demographic studies, market analysis, site selection research, business planning, portfolio analysis and management, marketing plans, and even construction management in some cases. This is more the case for commercial brokers, but residential brokers have also become specialized.

For example, residential agents usually specialize based on geography first and then by the price range of the house, type of house (single-family, high-rise condos, etc.), type of client (owner-occupant or investor, buyer or seller), and type of service (sales or property management). Many will be a combination of these specialties - seller agent for high-rise, luxury condos in the Uptown area of Dallas.

Commercial brokerage is for more specialized than residential. Agents will often specialize based on 4 factors. First, by geography. Dallas or Phoenix. Arlington or McKinney. Second, by product type. Office, industrial, retail, hospitality, or multifamily. Third, by client type. Seller or buyer. Landlord or tenant. And finally, fourth, by service provided. Investment sales, tenant rep, project leasing or property management.

These criteria can be cumulative, of course. So an agent may focus on McKinney, retail properties, for landlords, for lease. One broker I know only represents church properties, but does so throughout the country. Another only sells large office buildings on behalf of owners in Dallas. While yet another handles only corporate real estate services for corporate tenants in Collin, Dallas, Tarrant and Denton counties.

The degree of specialization is often a function of the size of the market. For example, a commercial broker in Amarillo may have to represent both owners and users of several product types because there isn't enough business in any one to make a living. In Chicago, on the other hand, it's more likely that a broker would focus exclusively on owners or users with further specialization by product type.

Rarely do you see brokers cross the residential/commercial line though many of the national residential brokerage companies are trying to set up commercial divisions.

The good news is that owners and users of real estate have an incredible array of options when hiring a broker to represent their interests. The greater the specialization, the better the quality of service in most cases. It's important to find an agent who specializes in the area, product type, client type and service that fits your assignment. The agent must be of impeccable integrity, be willing to listen to your needs, and have the time to focus on your assignment. Don't be afraid to use one broker to help your company lease space, another to find a house to buy, and yet a third to handle your investment property. Ask for referrals even from a broker you have used.

Oh, and by the way, there is no law saying you have to use an agent at all.

Bob Gibbons is a Corporate Real Estate Advisor - Tenant Rep - with Reata Commercial Realty, Inc. based in Plano, Texas - http://www.reatacommercialrealty.com/. You may contact him by email at bob@reatacommercialrealty.com or by phone at 972-679-1142.

Need Flexibility in Your Office Space?

Bob Gibbons (Reata Commercial Realty, Inc.) — Fri, 09 May 2008 09:53:41 -0500

So you need an office space quickly, but need flexibility and don't want to be tied into a long-term lease. What are your options?

There are times when flexibility is critical to an organization - entering a new market, acquiring or merging with other companies, launching a new product or service, or growing dramatically in the short term.

In these cases, you should first find a corporate real estate advisor who can help guide you through the process and then find and analyze the options. These professionals work for you, but they are paid by the landlord, so they are effectively a free service. Their expertise and involvement also frees you up to stay focused on your business.

So here are four options that you should consider to solve your need for flexibility.

1. Executive suites

While this option will almost certainly be the highest cost on a per square foot basis, it offers the greatest flexibility, speed and features. The executive suite operator can often arrange for secretarial services, high-speed internet, fax, phones, copier, printer, receptionist, voice mail, and furniture rental, all in the matter of a few days. Some of these services are included in the base rent and others cost extra. You also get to enjoy shared amenities including a kitchen, conference room and video conferencing in some cases.

Rents in executive suites often start around $600-$700 per month for a standard size, interior office. The nicer the building, the higher the price, of course, so the price for a big corner office in a class A high-rise can easily be $1,500 or more. But the price will also vary with the length of the lease term (3-6 months is usually the minimum) and the number of offices you lease.

2. Sublease

When companies vacate their space prior to the lease expiration they will often offer it for sublease to reduce their remaining lease obligation. The rent is usually discounted from the landlord's asking rent depending on the amount of time left on the lease and whether any furniture is available. For example, a sublease in a building where the landlord is asking $24.00 may go for $18.00 - $20.00. The shorter the remaining lease term, the lower the price.

If you need a longer term than what is left on the lease, you can often negotiate a wrap lease with the landlord. That is a direct deal which commences upon the expiration of the sublease. It allows you to enjoy the lower cost of the sublease and the certainty that you can stay in the space for a longer term.

Subleasing can be risky, however. If the prime tenant is not financially stable and the landlord doesn't get the rent, you could be evicted even though you were paying the subrent to the prime tenant. Subleases usually are leased in an as-is condition so any changes needed to the space would be your cost. That is negotiable, of course. Finally, the landlord must approve the sublease before you move in. If the business you are in does not mesh with the landlord's desired tenant mix or another existing tenant would be your direct competitor, you may be denied.

3. Space sharing

Sharing space with another firm can provide flexibility as well. It is sort of a hybrid between an executive suite and a sublease. Like an executive suite, you may share services like a kitchen, conference room, copier, etc. Because this is technically a sublease, it comes with the same risks as mentioned above, but with one additional issue - getting along with and trusting your roommate. You must trust the people in the other company and have compatible business styles. You wouldn't want to have a law firm share with a dot com or a credit restoration company share with a high-end financial planning firm. All these companies are office users, but they use that space very differently.

4. Direct Lease

Don't overlook the opportunity to lease space directly from a landlord. While they typically prefer a 3-5 year lease, I have seen them be very flexible when a prospective tenant explains the business reason behind the request. For example, a lender foreclosed on a company which occupied office space owned by a separate entity controlled by the former business owner. So the foreclosed business had to move quickly. We were able to find a few landlords who were willing to sign a one-year lease while the lender stabilized the business and found a buyer. We even got a 5-year renewal option at a pre-determined rental rate so the buyer of the business would know exactly what the lease terms would be if they kept the space.

In the final analysis, business owners and managers will always have to evaluate the trade-off between their desire for flexibility and the risks and costs of actually having it.

Bob Gibbons is a Corporate Real Estate Advisor with Reata Commercial Realty, Inc. based in Plano - a suburb of Dallas, Texas. You can learn more at www.ReataCommercialRealty.com.

Useable vs. Rentable - What's the Difference?

Bob Gibbons (Reata Commercial Realty, Inc.) — Mon, 19 May 2008 16:45:00 -0500

Useable and Rentable are both used to describe the number of square feet (SF) in a lease space. Useable is the space that is actually available for the tenant to use exclusively. This is space in which you can put desks, employees, files, conference rooms, merchandise, etc.

Rentable, on the other hand, is the amount of space for which you pay rent. Shouldn't these two numbers be the same? Well in a retail space, flex buildings, or office condos, they usually are the same.

But if you are in a multi-tenant office building, you share common areas like restrooms, elevator lobbies, electrical rooms and corridors with other tenants. So a small portion of those common areas - also known as the "building core" - is added to each lease.

You may have heard the term "core factor" or "add-on factor" used. This is simply the percentage added onto the useable SF to arrive at the rentable SF.

So if you leased 5,000 useable SF and the core factor was 15%, you would actually pay rent on 5,750 rentable SF.

For other real estate terms, see the Glossary on Reata's website.

Recapture Clause in Lease Can Kill Business Sale

Bob Gibbons (Reata Commercial Realty, Inc.) — Wed, 21 May 2008 09:36:36 -0500

Recapture is a term used for the landlord's right to terminate a tenant's lease for all, or a portion, of the premises in order to prevent a sublease or assignment.

I saw this happen one time on the day before a business sale was expected to close. It was really the fault of the seller of the business who was the tenant in an office building. The buyer came to the landlord to let him know of the sale. The landlord referred the buyer to the sublease and assignment clause of the lease in which all subleases or assignments had to be approved in writing by the landlord. Furthermore, that clause gave the landlord the right to terminate the lease if he chose to do so.

In this case, the market rent for the office building had gone up by about 25% since the lease had been signed and there was very little vacancy in the submarket. So the landlord terminated the lease because he knew he could get more rent for someone else.

Of course, the buyer of the business needed a place to conduct business and he didn't have time to move. So he asked the landlord if he could lease the space. The landlord agreed but at a rental rate 25% higher. The business no longer had the same value since the expenses had gone up and the net operating income had gone down. So the buyer went to the business seller and demanded that the purchase price be reduced by the amount of additional rent. The seller accepted the deal and walked away with far less cash in his pocket than he had planned.

Now this situation could have been avoided in two ways. First, the seller of the business could have approached the landlord long before the day before the sale to determine his attitude about assigning the lease. He could have then used that information to plan the sale better and get a more accurate estimate of the business value. Someone should have been watching the lease or consulting their corporate real estate advisor.

Second, the business seller who was the tenant in the office building lease should have addressed the landlord's recapture right when he signed the lease in the first place. If that had been negotiated out of the lease years before, he would have kept the extra money he lost.

If you know of someone thinking of signing a lease, you might mention that they look at the sublease/assignment clause carefully. Or if you know of someone thinking of selling or buying a business, please tell them to read this clause of the lease carefully. Or better yet, have them contact their corporate real estate advisor.

Bob Gibbons is a Corporate Real Estate Advisor with Reata Commercial Realty, Inc. in Plano, Texas - a suburb of Dallas. You can reach him through his website at www.ReataCommercialRealty.com.

Take Notes or Send an Email Without Typing

Bob Gibbons (Reata Commercial Realty, Inc.) — Fri, 23 May 2008 11:29:41 -0500

I used to carry a micro-cassette recorder so I could make "notes" to myself when I was driving. When I got to the office I would listen to the recording and write down my To Do list.

Then mobile phones and voicemail came into the picture and I would then just call my office phone and leave a message with the reminder. But I'd still have to listen to it and write it down.

Well all that is behind me now. I now use www.Jott.com - a free service which converts my voice memos into emails both to myself and others. So here's how it works. I call a toll-free phone number using a speed dial button on my mobile phone. The Jott system recognizes that it's me calling (I guess it uses caller ID to know it's me) and asks me, "who do you want to Jott?" I say, "me" and it responds, "Jott yourself." After the beep I leave my message and hang up. The voice memo is then converted to text and an email is sent to me automatically. I can Jott my wife, one of my agents, or even a group all at once and emails go directly to them. I could make a call to them just as easily, but sometimes I don't have time for a conversation and just want to send a quick message.

You can sign up for Jott for free. It takes a couple of minutes, but will save you lots of time, keep you from crashing your car while taking notes, and prevent forgeting something that's really important if not written down that second (maybe that one is just me). There are other services that do this as well, but I haven't used those. CopyTalk (www.CopyTalk.com) is one of those. It requires a fee but then it probably offers additional services or features.

Bob Gibbons can be reached at bob@reatacommercialrealty.com.

Marketing - Not just Sitting Around Thinking.

Bob Gibbons (Reata Commercial Realty, Inc.) — Wed, 28 May 2008 10:01:36 -0500

Some people are just natural marketers. I'm not sure I could ever be this creative.

Fame or Friendship - Which Do Clients Value the Most?

Bob Gibbons (Reata Commercial Realty, Inc.) — Sun, 01 Jun 2008 13:44:14 -0500

I came across the following quiz and thought it put things in perspective fairly well. I don't know who the author of this was, but I like it. Your thoughts?

Take the following quiz:

1. Name the 5 wealthiest people in the world
2. Name the last 5 Heisman trophy winners.
3. Name the last 2 winners of the Miss America contest.
4. Name 10 people who have won the Nobel or Pulitzer prize.
5. Name the last 6 Academy Award winners for best actress.
6. Name the last decade's worth of World Series winners.

How did you do? The point is, none of us remember all the headliners of yesterday. These are no second-rate achievers. They are the best in their fields. But the applause dies. Awards tarnish. Achievements are forgotten. Accolades and certificates are buried with their owners.

Here is another quiz. See how you do on this one:

1. List a few teachers who aided your journey through school.
2. Name 3 friends who have helped you through a difficult time.
3. Name 5 people who have taught you something worthwhile.
4. Think of 3 people who've made you feel appreciated or special.
5. Think of 5 people you enjoy spending time with.
6. Name half a dozen heroes whose stories have inspired you.

Easier? The lesson? The people who make a difference in life are not the ones with the most credentials, the most money, or the most awards. They are the ones that care. Which are you to your clients?

Subleases in Plano and Far North Dallas

Bob Gibbons (Reata Commercial Realty, Inc.) — Fri, 13 Jun 2008 14:36:31 -0500

We have just added a new page to our website which features listings for the excess space which our clients no longer need. These properties may be for sublease or sale. The current inventory includes a 2,226 square foot office condo in Plano near Coit & Legacy, a 1,442 SF retail store in Plano at 15th & Custer and a 2,115 SF class B office space on The Tollway in Far North Dallas.

If you know of a company which needs inexpensive space, please go to our website at www.ReataCommercialRealty.com and click on the Properties menu option to see what's available.

If you know of a company which has more space than they need, we'd like to talk with them about how we can sublease their space and save them money.

Estoppel - Do You Need a Medicated Cream to Clear It Up?

Bob Gibbons (Reata Commercial Realty, Inc.) — Thu, 19 Jun 2008 10:03:03 -0500

Estoppel. Sounds like a medical condition you don't want to talk about in polite company. Or something you'd need a medicated cream to clear up. Think of the embarrassment of checking out at the grocery store when the cashier gives you that knowing smirk.

But an estoppel is really nothing to fear or worry about. It's actually just a document signed by a tenant at the request of a landlord which confirms the terms of the lease and that they are in effect with no default by either party. So it simply says that the lease is still in effect and nothing is wrong. Seems kind of silly to have a legal document which confirms another legal document you already signed, but that's pretty important information if you are buying a building or giving a loan on one with a bunch of tenants in it.

Estoppels are, therefore, required by investors when buying buildings with leases in place. Lenders also want them when they refinance a building or make a new loan. Leases are the documents which create value in buildings so buyers and lenders want to ensure that they are in full force and effect and that the value is real.

If you know someone who receives an estoppel, please have them contact their attorney. Or better yet, have them contact Reata Commercial Realty, Inc.

For other real estate terms, see the Glossary on Reata's website.

Reata Commercial Realty, Inc. is a corporate real estate advisory company which represents commercial tenants when leasing or buying buildings for their company use. These include office, warehouse, medical and retail building. Reata is based in Plano, Texas - a suburb of Dallas.

How to Market Commercial Properties for Lease

Bob Gibbons (Reata Commercial Realty, Inc.) — Thu, 19 Jun 2008 11:02:12 -0500

I recently saw an email from a guy in Knoxville, Tennessee asking about how to market an office building for lease which hadn't been built yet. He had received a lot of advice about how he should canvass all the businesses in the area, mail flyers to the businesses, and generally waste his time in other creative and wasteful ways.

Here is the advice I gave him:

"Knoxville is probably like most other cities in America where 90% of new tenants in office buildings are represented by a corporate real estate advisor (tenant rep broker). Therefore, it makes much more sense to concentrate your marketing efforts on the tenant rep brokers in your city than on the tenants themselves.

Here is my logic. There are dozens or hundreds of those tenant reps depending on the market whereas there are thousands or 100's of thousands of companies. The tenant reps are beating the pavements every day trying to find companies which need to renew or relocate. Your chances of finding a company directly that needs your space is incredibly small.

So here's what I recommend. Call the top manager of each of the tenant rep companies in your market. Ask if you can bring bagels or donuts or sandwiches to their next sales meeting and make a presentation on your project. Do this for every tenant rep firm in the market. There probably aren't more than 5-10 with more than 5 agents. But by doing this, you will have reached the equivalent of 50-75% of the true prospects in your market.

Be sure to get a list of the agents in each company and follow up with email flyers of your property which include floor plans, pretty pictures, a map, rental rates, etc. This will make it easy for them to forward the info to their prospects.

You also much keep your property info updated on all the listing services - Xceligent, LoopNet, CoStar, etc. Tenant reps will often be online during the lunch hour, at night or on weekends or may be pressed for time putting together a tour package. You don't want to be left out because you didn't take a few minutes to update your info online.

This last tip seems so simple you will think I'm crazy for even mentioning it, but it is possibly the most important. Return phone calls and emails quickly. I can't tell you how often I contact project leasing people and never get a reply. Or maybe I'll get it several days or even weeks later. If the real owners of the buildings knew about this, they would flip.

Good luck with your project."

Hold Over - Costly, But Easy to Avoid

Bob Gibbons (Reata Commercial Realty, Inc.) — Thu, 26 Jun 2008 10:53:38 -0500

You signed a lease for an office for your company a few years ago, but it will expire in a couple of months. You really want to either move or at least do a market study to be sure that you get a fair deal if you stay and renew. There is other vacant space in the building so you are sure your landlord won't mind if you stay a little longer than the expiration date.

Everything is working out until you receive a letter from your landlord a couple of weeks after the lease expired. It says that you have to pay twice as much as the normal rent because you are now in holdover. Now the landlord has your attention and your priorities are suddenly different.

When a tenant continues to occupy the leased premises after the lease has expired it is call Holding Over. It can occur with or without landlord consent. The rent is usually much higher during holdover - 1.5 to 3 times higher - and that continues until the tenant vacates or renegotiates the lease.

That is why it's so important to plan ahead for your lease renewal or relocation. I recommend that you start at least 3 months before you must exercise your lease renewal if you plan to stay in the building. A move or purchase may require more time especially if construction is required. Most renewal options require 6-12 months prior written notice to be exercised so I am suggesting that you start 9-15 months prior to expiration. That may seem like a long time, but you should never exercise an option unless you know what the landlord's response will be and you can only determine that if you have done your homework in advance.

There is rarely a time when it makes sense to pay holdover rent. If you are seriously negotiating with your landlord to renew, ask that the holdover penalty be waived. A smart landlord will charge the holdover rent and tell you it will be credited to you if you decide to stay. That way he keeps the pressure on to decide quickly and may give him an economic advantage compared to your other options.

Of course, the smartest thing is to hire a corporate real estate advisor - a real estate broker who exclusively represents companies in leasing or buying commercial property for company use. This advisor is usually a free resource who does all the market studies and negotiates with landlords on your behalf as your fiduciary. He or she will keep things on track to avoid falling into the holdover abyss.

Bob Gibbons is a Corporate Real Estate Advisor with Reata Commercial Realty, Inc. in Plano, TX - a suburb of Dallas.

Peak Oil - This Could Change Everything

Bob Gibbons (Reata Commercial Realty, Inc.) — Wed, 02 Jul 2008 09:51:43 -0500

I just finished reading an article by Jim Gillespie, a commercial real estate coach, in which he discusses peak oil and its impact on the commercial real estate business. But first of all, what does Peak Oil mean?

Jim describes it this way. “When oil fields are new, and petroleum is beginning to be extracted from them, they continue to produce increased amounts of petroleum every year until the production from the field reaches its peak level. Then after this peak amount of production is achieved, the field will only be able to produce lesser and lesser amounts of petroleum every year thereafter. This is the very nature of the petroleum extraction process.”

Jim says that US production peaked in 1970 and says that many experts think that production in Saudi Arabia is peaking right now.

So what, you might say. Well, declining production means less supply. At the same time, demand is increasing rapidly in developing countries like China and India. Put the two together and you have a formula for enormous upward pressure on oil prices. And that means much higher gas prices. Jim’s article quotes an oil industry expert who says it will go to $10 a gallon.

Here are Jim’s thoughts on what impact this might have to real estate.

1. The values of homes and residential rental properties in and closer to major cities will probably do better in the long run versus those located farther away in the suburbs.

2. Office buildings will experience a major increase in heating and air conditioning costs, especially those located in areas with severe winters or very hot summers.

3. Commercial and industrial properties closer to the major cities will...command even more of a premium in the future when compared with commercial space in the suburbs.

4. There will be a need for a much greater amount of housing near the central business districts of major cities.

5. Industrial businesses will transition away from shipping and receiving their goods by truck and towards shipping and receiving them by rail which will be more economical for them.

6. Manufacturing businesses that already have substantial energy costs right now will be hit very hard with the coming increases in these costs and will find it increasingly difficult to remain profitable.”

To read Jim’s full article, go to http://www.realestatesalescoach.com/peakoil.htm. He also has an audio interview here: http://www.realestatesalescoach.com/Energy_Interview.htm.

So what do you think of this? Agree? Disagree? Don’t care? Let me know your thoughts.