With Terry Story, 28-year veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL
Commercial Real Estate Technology
In this week’s talk with veteran real estate agent Terry Story, we cover trends in commercial real estate technology and the technological forces driving change in commercial real estate, as well as questions about urban chickens and the hazards of pet ownership for home sellers and buyers. The conversation starts with an open-ended question from Steve about how new technology is impacting or leading new trends in commercial real estate. Terry affirms that technology is changing the game in a number of areas and begins an overview of these impacts by noting that many retailers are collecting data from their shopper’s cell phones when they are in the store. This data is used not only for marketing purposes but also to guide decision making about store locations and floor layouts. Retail brand apps that offer coupons and promotions have become an important marketing channel as well. Some apps customize offers based on consumer behavior in stores and online, and, on the back end, this data can again be used to inform future business decisions.
E-commerce Distribution Centers
Terry brings up another trend where technology is affecting commercial real estate—the location of eCommerce distribution centers. The phenomenal growth of online shopping has led to new challenges on the industrial side of retailer strategy, namely how to build distribution facilities in closer proximity to major markets and transportation infrastructure like rail, trucks, freights, etc. Until recently, large eCommerce companies built distribution hubs outside of urban areas, where land, labor, and access to transportation resources are cheaper. In an era of same or next day shipping, when speed of delivery is a key competitive benchmark, distribution needs to migrate closer to customers. This shift is affecting commercial real estate demand and prices in formerly under-utilized industrial areas.
Terry’s final example of technology-driven change is the emergence of so-called “micro-unit” apartments around 350-500 square feet. This trend is fueled by the high costs of urban living, and the apartments are generally priced for recent college grads, especially for those with expensive student loans. Many of these buildings are mixed use, with apartments situated above commercial property. While 350 square feet would feel claustrophobic to many, younger renters appear more willing to accept it as a tradeoff for living in hip urban areas.
From today’s grab bag of real estate questions, Steve picks a letter from someone living near a neighbor with a rooster. The poor guy seems to be on his last good nerve, what with the rooster starting his crowing before dawn. Steve asks Terry what this guy can do short of buying a gun to deal with the problem. Terry’s first recommendation is to talk with the neighbor. If the neighbor is unsympathetic, check with the homeowners’ association, if you have one. The association can lean on the rooster owner and will probably have the support of all the other neighbors as well. If you’re not a member of an HOA, or if that fails to solve the problem, check in with the code enforcement division of your city. Most will have statutes against agricultural animals in urban or suburban areas, and if you bring a violation of these laws to their attention, they will force the rooster out of the neighborhood (or into a pot of soup, as the case may be). The last resort would be a lawsuit, but, of course, that’s not ideal because of the cost, even when you know the law is on your side.
Pet Friendly Real Estate
Finally, Steve segues to a question about pets and pet owners and the apparent increase in the number of pet owners who place their love of their pets above most other considerations when it comes to moving into a new home. Terry quotes some stats which give weight to this trend, for example, that 89% of pet owners would walk away from a home purchase if the property had restrictions against pets. 61% would not buy a home or have it altered if they believed that it was not a pet-friendly environment. Terry highlights the irony that many so-called pet lovers will not buy a home if they perceive the presence of pets (owned by the seller) living in the home. For home sellers, it’s key to hide the presence of your pets when potential buyers are touring the house. It’s a bit of a tightrope to walk, if not outright deceptive, but sellers should conceal evidence (food and water bowls, scratched furniture, etc.) of their own pets while maintaining that the property and neighborhood are pet-friendly. On the other side of the equation, buyers with pets should reconsider the minor hypocrisy of walking away from a home for sale just because there are traces of other people’s pets.
Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital. Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.
Steve Pomeranz: It’s time for real estate round-up. This is the time every single week we get together with noted real estate agent Terry Story. Terry is a 28-year veteran with Coldwell Banker located in Boca Raton, Florida. Welcome back to the show, Terry.
Terry Story: Thanks for having me, Steve.
Steve Pomeranz: Technology is taking over everything. It’s changing everything I should say that. It’s even changing commercial real estate and that there are some new trends to watch. What are they?
Terry Story: That’s right. You know, Steve, anytime you go into a store they’re always collecting data from you. You know how all of a sudden there’s an app, and then you’re getting pushed coupons for different stores? Well, the retailers are taking this information, and it’s influencing them in making decisions as to where they should have their physical location and their configuration of their storefront sites. That’s one big trend.
The second thing is the industrial side of things—new demands for eCommerce distribution centers. It used to be they would go to industrial warehouses where costs were lower.
Steve Pomeranz: Yeah, way out of town kind of thing.
Terry Story: Yeah, way out in the boonies.
Steve Pomeranz: Yeah.
Terry Story: Now what’s happening is people are shopping so much more online. They want to get these items sent to the consumer quicker. They’re looking at different spaces closer to the metro area so that they can have better access to trucks, rails, freights, seaports.
Steve Pomeranz: If they’re going to be delivering on the same day, they’re going to have to have a distribution center that’s very close like, let’s say, near New York City and the like, so they can just get it there quick if they’re way out on the island or something.
Terry Story: And then multiple distribution centers too, you know? Instead of that one out in Kansas in the middle of nowhere.
Steve Pomeranz: That’s right. Interesting.
Terry Story: Then the third thing is this whole concept of multi-family. The micro-unit apartments in urban areas where the concept of live, work, play lifestyle where you can have it all in one place, but the reality is to live in a metro area—especially if you’re a first-time home buyer or you’re coming out of college—it’s extremely expensive. They’re doing this experimental stuff. There’s a place called Indy Apartments in Austin, Texas for example. There’s 138 apartments that they’ve built that are 350 to 520 square feet.
Steve Pomeranz: Wow.
Terry Story: These buildings are used for commercial space as well. Downstairs there may be a restaurant and then above are these micro-units.
Steve Pomeranz: What can you get into 350 square feet? I remember when I was young I had a 1,000 square foot apartment. It was two bedrooms and it was pretty—it felt really pretty small. I think it’s kind of more of the standard size these days, but 350 square feet.
Terry Story: That’s small.
Steve Pomeranz: That’s very small.
Terry Story: 10×13 room.
Steve Pomeranz: Why don’t they just call it a closet with a kitchen and get over it. All right, here’s the new one. I love this one. Neighbors and roosters: what to do about the noise. Here’s the question. “Several months ago, our neighbor bought a rooster and chickens. We live in a block of regular houses, not in a farming area. Now every morning before the sun comes up, the rooster starts crowing and doesn’t stop for hours on end. I’m about to lose my mind. What can we do?” (My first thought was, “Get a gun.”)
Terry Story: Right.
Steve Pomeranz: Short of getting a gun and doing that, what can they do?
Terry Story: Pot of soup ready for the chicken to be tossed into it. I’ve actually seen this stuff before. First, try to talk to the neighbor. That would be the first approach. Tell them that this is bothersome to you and see if that resolved the problem.
Steve Pomeranz: Sure.
Terry Story: If you live in a homeowner’s association, check with the rules. There’s a very strong possibility that they don’t allow agricultural animals. To be honest with you, most cities don’t either. The area that we are in Boca Raton, I’ve read the rules. You are not allowed agricultural animals. No pigs, chickens, roosters are permitted. Go through the association. You can put the association on that person. Believe me, the whole neighborhood will hear the rooster. You won’t be the only one complaining. The city, go to the code enforcement department and bring it to their attention that there’s a rooster.
Steve Pomeranz: Okay. What if nothing of that stuff works? What should you do, lastly?
Terry Story: Lastly, I hate to say it, but you’re looking at a law suit. That gets really dicey. Again, you just have to follow the rules. There’s a strong possibility you’re not even allowed a rooster in the area if it’s a regular neighborhood and not out on a farm.
Steve Pomeranz: I remember a few years ago I was in Rome and had an apartment on one of the side streets. Every morning at the break of dawn there would be a rooster crowing. This is the middle of Rome. This is in the middle of the city.
Terry Story: Yeah, they start at 4:30 in the morning.
Steve Pomeranz: They do. They do. I don’t think they actually start when the sun comes up. Being a city boy …
Terry Story: No, it’s before the sun.
Steve Pomeranz: Yeah, before the sun comes up.
Terry Story: I had that happen to me in Peru. I was in a nice resort. Next thing you know I hear all these animals. I’m like, “What is going on?”
Steve Pomeranz: Talking about pets. How important are pets these days to buyers and sellers? Everybody seems to have a pet. So many people are absolutely crazy about their dogs or cats.
Terry Story: Absolutely.
Steve Pomeranz: How important is that in your business these days?
Terry Story: You know, it’s really important. 99% of pet owners say it’s part of the family. I get it. I’m a pet owner. We all love our pets, but it becomes a problem when you’re trying to buy and sell real estate. On the buy side, according to this report, 61% will alter their home, not buy a house because it’s not a pet-friendly environment. Then 89% of them, I believe, will go ahead and not purchase a home because of the restrictions of pets. Pets are high priority.
One of the big pet peeves that I have with pets has to do when it comes to selling the house. Steve, if 60-something percent of the people have cats and dogs, it’s important to understand pet lovers love pets, but they only love their pets. When they’re going into a house to buy a house, they’re the first ones that criticize and say, “Oh, I smell dog.”
Steve Pomeranz: Yeah.
Terry Story: As a seller of a home, with a pet, it’s really important to make sure that the house is kept super clean, smells fresh, and take the pet out. Make arrangements with the realtor that if the house is to be shown that somebody comes and takes the dog for a walk. You don’t want any visible signs of pets. You don’t want the dog bowls, the kitty litter, any of it. They don’t want to know that there’s a pet there, but they also want to know that it’s a pet-friendly neighborhood and pet-friendly yard.
Steve Pomeranz: That’s kind of funny.
Terry Story: Paint. If the dog chews on baseboards or whatever, take care of all those things. Don’t let the house look like it’s lived in by pets.
Steve Pomeranz: I get it. The idea is that there’s a little bit of a hypocrisy there. I don’t want to smell your dog because my dog doesn’t really smell.
Terry Story: Right. My dog’s special.
Steve Pomeranz: Yeah, exactly. It reminds me of the movie Must Love Dogs. One line from Janeane Garofalo was, she was on the radio and she goes, she says to the listener, “You must love your dog. Just don’t love your dog.” She was making reference.
My guest, Terry Story. Terry is a 28-year veteran with Coldwell Banker located in Boca Raton and she can be found at terrystory.com. Thanks, Terry.
Terry Story: Thanks for having me, Steve.