Page 1

Second Quarter


A real estate-focused publication from your Chapter No. 29 of the Institute of Real Estate Management

Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -1-


issue: PAGE



President’s Message



Chapter News & Events


Office Chatter


2017 Officers, Board of Directors & Committees


Medical Office & Rich Deals?


2017 IREM® Education


New Research on the Office & Apartment markets




Inside the World of Retail


IREM® Event Highlights!


The Last Bastion of the Department Store has Fallen


2017 IREM® Silent Auction Highlights!!


Second Chances: Retail




Back to School—in person Visits preferred!


TOP 10 Real Estate Issues For 2017 & 2018 Part 1—2




Everything MultiFamily


Fun Facts: Crown Point & Vista House


This is the way the College Bubble Ends!


Uber: Why did I get less than 5 stars??

51 53

2017 IREM® Industry Partners Program


A call to Action: Legislative Efforts


Portland’s Painful Rental Market


One Apartment Application Process Coming!


Is Pot the new Pet?

Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Relocation Assistance

Shout out for Articles!

Page -2-


Valorie Cochran, CPM®

2017 President IREM® Oregon-Columbia River Chapter No. 29

Dear IREM® Members, Industry Partners & Colleagues: 2017 marked significant change for the annual IREM® Leadership and Legislative Summit, traditionally held in Washington, DC each spring. This year, chapter representatives attended a “Super Regional” conference in Costa Mesa, California (one of four super regional conferences in the country). Representatives present from our Chapter included myself (Valorie Cochran CPM®, Chapter President, Melvin Mark Companies; Tara Platt CPM® , President Elect, Specht Properties, Inc.; and Chris Pasteur CPM®, ARM®, VP Finance, Sequoia Equities). We were joined in Costa Mesa by representatives from other IREM® Chapters in our region including Alaska, Idaho, and Western Washington (Seattle). The conference provided multiple opportunities to further IREM® education, to networking with our peers and of course, celebrate! This year’s key note speaker was Doug Lipp, Author of Disney U and former head of the Disney U training team where they trained 80 – 90 new hires each and every Saturday during the annual spring hiring season. He delivered information on Disney U’s focus on behaviors, tools, and attitudes that represent cultural excellence, and organizational traps that undermine companies and impede their ability to build a thriving and sustainable culture. I’d like to share with you, some of my “take-aways” from his presentation: SIMPLIFY THE COMPLEX: Have crystal clear priorities, not only for managers but for front line employees (day porter, vendors, engineers, etc.). As leaders it’s our job to simplify expectations so they are crystal clear. Think of one more step we can take to simplify a process… Vision and Mission statements are often fuzzy words. Disney U condensed theirs into four words – SAFETY, COURTESY, SHOW, and EFFICIENCY. PLUS THE SHOW (SHOW IMPROVEMENT): Identify something that is already good/great and make it even better. 1. Be out there in the field – Walt was always in the park, riding the rides, talking to employees, patrons, and customers at Disneyland to learn what was going well and what could be done better. Continued…. Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -3-


….Continued from previous page

Valorie Cochran, CPM®

2017 President IREM® Oregon-Columbia River Chapter No. 29 1. 2. 3. 4. 5.

Give and receive feedback from people in the field. How do we respond – actionable items? Get out of the rut of being complacent. Where is an area you can do a bit better? Full length mirror – check yourself – are you show ready?

GOOD SHOW/BAD SHOW: Disneyland puts on a massively complex show every day and all employees have to be sure that it is flawlessly executed. Do the ordinary thing in an extraordinary way every day. Remembering that our internal customers (employees, coworkers, etc.) are the most important, and what they receive (respect, courtesy, fulfillment) is what they are going to give. Property management is a daily grind. To run the ‘happiest place on earth’ we have to focus on the way we treat people in the back of the house – because that will determine how people are treated at the front of the house. What happens backstage will end up on stage. Acknowledge each other – smile and saying good morning. These attitudes will influence how we treat our guests, clients, and customers. LEADERSHIP DEVELOPMENT MEANS GETTING OUT OF OUR COMFORT ZONE and developing our non-dominant hand. QUALITY: 1. Continual pattern: “get the right people on board”. 2. Welcome each one and train – it’s not a vaccination or a one-time thing – it’s ongoing. 3. Hire right, train right, treat right. 4. Send people into a healthy culture. 5. Create a culture of trust that will nourish and keep people from burning out. 6. Courtesy - acknowledge one another, treat others with respect and dignity. 7. Don’t rest on your laurels. 8. How do you differentiate? 9. Create a culture of fun. Continued…. Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -4-


….Continued from previous page

Valorie Cochran, CPM®

2017 President IREM® Oregon-Columbia River Chapter No. 29

10. Know what good service looks like and what bad service looks like. 11. Laser focus in on goals and priorities. Walt Disney was known for being a very stern leader that demanded excellence. He wasn’t known for giving praise directly – but he would give praise by talking about a person’s accomplishments to others in the organization. He would give criticism and there were consequences for under-performance. If anyone sat on their laurels he would show them the door. He believed that Disneyland would never be finished, and that it would always be better than before. He believed that all our dreams come true if we have the courage to pursue them. We’ve got some great events coming up, including the CPM® Capstone Track which will be offered in Portland August 14 – 18, at Montgomery Park. This offering is not always held in Portland, so please take advantage while it’s here!

Scholarships are available both at the local Chapter and National level and we are eager to award them to deserving members! Do you have an interest in volunteering with the Chapter? We are always on the lookout for enthusiastic volunteers! There is no better way to connect with your Real Estate peers. Please contact me at 503.546.4517 /, our chapter administrator at 503.228.0002 / or any of our many Chapter board and committee members. We can help you find a role that will showcase your talents and, in turn, benefit our Chapter. “THANK YOU” once again to our members, volunteers, and IREM® Industry Partners, for all your great work to make our Chapter successful! Have a fantastic summer! Valorie Cochran, CPM®, 2017 IREM® Chapter President Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -5-


Chapter news and items of interest in the

Pacific Northwest

Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -6-


2017 Officers and Committee Chairs: OFFICERS





Valorie Cochran, CPM®

Melvin Mark Companies


Tara Platt, CPM®

Specht Properties, Inc.


Chris Pasteur, CPM®

Sequoia Equities


Jennifer Tyler, CPMC®

Unico Properties


Newmark Knight Frank


Jaima Coleman, CPM®



Tammy Mills, CPMC®, ARM®

Fortress Property Management


Tracey McCauley, CPM®

Colliers International


David Genrich, CPM®

Jones Lang LaSalle


Cammie Allie, CPM®, ARM®

Fortress Property Management






David Genrich, CPM®

Jones Lang LaSalle


Cynthia Sparks, CPM®

Enterprise Comm Asset Mgmt


Mark St. Pierre

Interstate Roofing


Jim McDonald



Caroline Karl, CPMC®

C & R Real Estate Services


David Genrich, CPM®

Jones Lang LaSalle


Tara Platt, CPM®

Specht Properties

Specht Properties, Inc.


Nicole Koen. CPMC®

Menashe Properties


Cristin Bansen, Assoc.

TMT Development


Carmella Byers, CPM®

Jones Lang LaSalle


Tammy Mills, CPMC®, ARM®

Fortress Property Management


Kristi Carver, CPMC®

Interurban RE Group


Julie Muir, CPM®

Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -7-



2017 IREM Education: Ready, set go! Is 2017 the year that you finish your IREM® education and earn that coveted CPM® or ARM® designation? See below for the courses being held for the remainder of 2017! All of our courses will be held at the beautiful Montgomery Park building in Northwest Portland. Our sincere “thanks” to the Bill Naito Company, for graciously allowing IREM® to hold our classes at this location in 2017! Remember, anyone can retake a course for HALF PRICE! And, with CE credits available, why not take a refresher?




"Management Plan Skills Assessment" (MPSAXM) 8/14/17—8/18/17 "CPM® Certification Exam" (CPMEXM)

For more information, or to register for any of our courses, visit :

Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -8-

Look no further!!

Need a Scholarship to Fund your Education?

Take advantage of IREM® Scholarships to fund your education and help you on your way to earning an IREM® Credential! The IREM® Foundation has several to choose from, as does our local Oregon-Columbia River Chapter No. 29: (Steve Barber [for ARM® Education] & Jack Stevens [for CPM® Education]) ! Apply today!* Questions? Contact our Scholarship Chair: Kristi Carver at: or the local IREM® office at (503.228.0002). Apply Nationally at: Apply Locally at: *IREM®Foundation Scholarships are available for use during the Calendar year awarded. Applications are accepted throughout the year, except for the last quarter (October though December).



Bette Fears Scholarship for ARM® Education

Bette Fears, ARM® served as the community manager for ParkPlace Apartments in Coeur d’Alene, Idaho. ParkPlace Apartments was a member of Tomlinson Black Management Inc., an ACCREDITED MANAGEMENT ORGANIZATION® Bette was an active member of IREM ® Inland Northwest Chapter No. 49, serving in local, regional and national positions within IREM. As a member of the Foundation’s Scholarship and Grant Committee, Bette brought a sense of caring for all applicants as they exhibited a desire to advance careers in multi-family housing.

Donald M. Furbush SCHOLARSHIP for cpm® education

Donald M. Furbush, CPM® was senior vice president for BRE Properties, Inc. of San Francisco, heading the company’s asset management department. He served as IREM® President in 1990, which capped a leadership commitment that began as president of IREM® San Francisco Bay Area Chapter No. 21. Mr. Furbush also held the Counselor of Real Estate (CRE) and the Real Property Administrator (RPA) designations. He was a member of the Society of Real Property Administrators, Building Owners and Managers Association of San Francisco, and the International Council of Shopping Centers.

Diversity Outreach Scholarship for all designations

The Foundation is committed to helping the Institute increase diversity in the real estate management industry and within IREM ®. The purpose of the Diversity Outreach Scholarship is to assist individuals from underrepresented population groups with the cost of tuition associated with achieving an IREM® credential.

Paul H. Rittle, Sr. Memorial Scholarship for Acom® educaiton Institute of Real Estate Management Oregon-Columbia River Chapter No. 29

Paul H. Rittle, Sr., CPM® was president of the Pittsburgh real estate firm of Rittle-Rosfeld, which he founded in partnership in 1945. He served as IREM ® President in 1972. He played an active role in local and national real estate organizations having served as president of the Pittsburgh Board of Realtors and chaired the NAREB Make America Better Committee for the state of Pennsylvania. In 1967 he was selected Realtor of the Year by the Pittsburgh Board. 2nd Quarter

Page -9-

IREM® Event Highlights


Vacasa Unveiled was well-attended and held in a unique space in NW Portland! Thank you to our sponsors Oregon-Aire and Interstate Roofing!


FIN402 was held in Portland this year and taught by Natalie Brecher, CPM®. And, she’ll be back to teach our Capstone Course in August!

It was a great day to celebrate!

Cristin bansen with two of our coveted Friends, steve platt with American building maintenance and Matt Korshoj of servepro!

Energy Data Workshop - a GREAT morning filled with valuable information! Todd Feist from IREM® Headquarters was in the house along with Chris Lowen of Glumac, Vinh Mason with the Portland Bureau of Planning and Sustainability and Dora Taylor of the Energy Star Program.

Thank you to our sponsor: Pacific Landscape Management! Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -10-



Over $3,800 was raised for Rebuilding Together Portland at our Annual Silent Auction, held at McMenamin’s Kennedy School on June 28, 2017!! THANK YOU to everyone who donated and participated in the auction! Your GENEROSITY was appreciated and will help many people in need, remain safe and worry-free in their homes!!

THANK YOU: LANDCARE & Malaina Kinne Photography for your Sponsorship!!

Lots of SMILES & tons of GREAT deals were had by all! Institute of Real Estate Management Oregon-Columbia River Chapter No. 29

The Silent Auction Committee: From left to Right

Kristi Carver, Julie Muir, Chris Pasteur, Carmella Byers, Tara Platt, Steve Platt, Jennifer Tyler, Cynthia Sparks and President Valorie Cochran 2nd Quarter

Community Service Chair, Cynthia Sparks, CPM® made it all happen!! Thank you Cynthia!! Page -11-


IREM®‘s 2017 Forecast Breakfast Please join us at our 30th Annual IREM® Forecast Breakfast to be held this year on Thursday, December 7, 2017 at the Oregon Convention Center!

A breakfast like no-other in the nation, we’ve planned a very special celebration to mark such a milestone occasion while delivering market data straight from the experts! MARK YOUR CALENDARS YOU WON’T WANT TO MISS THIS ONE!

Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -12-


The Top 10 Real Estate Issues for 2017 and 2018

Part 1... Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -13-


The Top 10 Real Estate Issues for 2017-2018 (Part One of Two)

The Counselors of Real Estate has come out with its annual list of the top 10 issues facing the real estate industry: those that will “have the most significant impact on real estate in 2017 and 2018.” The list was unveiled earlier this month by Chairman Scott Muldavin, CRE, at his keynote address during the annual conference of the National Association of Real Estate Editors in Denver. In this first of a two-part blog, we’ll highlight the top five issues Muldavin identified. which is: 1. Topping the list is Political Polarization and Global Uncertainty. Muldavin said in a statement following the address that this issue impacts “decision-making at every level of government and throughout the business community. “Even at the local level,” he continued, “there is continuing and intensifying polarization between and within political parties, making it virtually impossible for representatives to find the common ground needed to resolve differences and move ahead… If people struggle to express and hear divergent opinions, it will be nearly impossible to address existing and emerging problems.” Drilling down from the macro, the impact on real estate is both immediate and long-term. While uncertainty about immigration impacts cross-border trading, Muldavin said, “Longer-term implications could be much more severe, as polarization prevents long-term fixes to issues such as infrastructure, affordable housing, local and state pension liabilities and education.” Continued…. Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -14-


….Continued from previous page


Next on the list is the Technology Boom, specifically, “an unprecedented wave of commercial real estate technology innovations that are expected to change the way real estate is bought, sold and managed.” In fact, Muldavin pointed to MIT’s real estate innovation lab, which has “identified 1,600 real estate tech startups worldwide.” Robotics are part of the picture, and not just for the industrial and retail markets. For instance, 30% of banking jobs are expected to disappear in the next 10 years. Big data, autonomous vehicles and new retail formats will all have a hand in the future of real estate construction, and “smart lenders and investors are already insisting that new construction reflect future demand patterns, not those with which we are currently familiar,” said Muldavin. 3. We couldn’t get too far into the list of major issues without touching on Generational Disruption. While boomers are opting to free themselves from the burden of lawnmowers and house repair, millennials are gaining in earning power and looking to set down roots in homes, according to Muldavin. “Real estate developers, investors, owners and builders will need to understand not only the location preferences of each group, but the design and amenity features of housing units, whether rental or owner occupied,” he said. And on the workplace side, changes are coming in how and where we work. While boomers as a class prefer traditional offices, millennials lean toward open and collaborative workspaces. But the two must co-exist, at least until the older group fades away. “The challenge for builders, landlords, owners and tenants alike will be in finding an acceptable design balance that appeals to the contrasting audiences they serve,” Muldavin advised. 4. We touched on retail (and did so as well in my last blog), but Retail Disruption got its own category as number four on CRE’s hit parade. Simply put, faced with such new-age concepts as creating a “retail experience” and omnichannel shopping, retailers must adapt or die. Continued…. Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -15-


(Part One of Two)

….Continued from previous page

And while we have seen evidence of this in some of the bad news we read (can anyone say “Sears?”), there is good news here. “As retailers refine their inventories, distribution methods and fulfillment models,” Muldavin predicted, “the retail market will survive and even prosper—but will do so in fresh, new ways.

5. Rounding out the top five issues is another popular theme in this postelection season, Infrastructure Investment. This issue is loaded with good news for jobs and for companies leaping on the infrastructure bandwagon, such as Blackstone, which is planning to create a $40-billion infrastructure fund. “How the infrastructure challenge is met—or not met, as the case may be—will have major real estate implications,” said Muldavin. “Reliance on public -private investment means projects must have strong revenue-generating capacity to be funded, something most rural projects and many water, electricity and road undertakings cannot achieve, particularly in struggling communities.” He also pointed out the sheer volume of need as another issue. Indeed, where to start?


Continued…. Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -16-


The Top 10 Real Estate Issues for 2017 and 2018

Part 2... Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -17-


The Top 10 Real Estate Issues for 2017-2018 (Part two of Two) In our last blog, we highlighted the first half of the Top 10 issues facing the real estate industry as we begin our approach to 2018. These as seen through the eyes of the Counselors of Real Estate. Chairman Scott Muldavin, CRE, unveiled the list at the recent conference of the National Association of Real Estate Editors in Denver.

The top five touched on everything from the dicey political climate to the generational divide and technology’s disruption. Now, let’s take a look at issues six through ten.

6. CRE calls Housing The Big Mismatch. The mismatch exists between need— especially at the workforce and affordability levels—and supply, what Muldavin termed, “a critical disparity. Although improving home prices, economic growth, mortgage accessibility and rental development have improved housing access and affordability in many areas, a confounding series of supply-demand mismatches continues to severely impact markets worldwide.” Much of the problem is caused by a rise in earning power of participants in such fields as tech and finance, and stock rushing to fill that gap. The result is a dearth of affordable housing for workers who can’t claim equal earning power. “Developers have only begun to address the potential for starter-home construction (as was done in the 1940s and 50s),” he said. “Land and construction costs (as well as regulatory constraints) have created price points that are simply too high to interest those who might otherwise build or invest in entry-level housing.”

Continued…. Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -18-

OREGON-COLUMBIA RIVER CHAPTER NO. 29 ….Continued from previous page

(Part two of Two)

7. Number 7 on the list is what CRE calls the Lost Decades of the Middle Class, whose incomes still fail to reach pre-recession levels. “Battered by automation and outsourcing, middle-class jobs are still under pressure as the US economy transitions from manufacturing to services,” Muldavin stated. As if that were not enough, most of the store closures referenced in Part 1 are occurring at the middle-class level, while “malls with tenants serving highincome buyers are faring relatively better.” And in so doing, creating just one more factor in the higher cost of living for this beleaguered group. 8. Next off the list is Real Estate’s Emerging Role in Health Care. Here’s a sad fact: “The US spends over $3 trillion each year on health care, or nearly $10,000 per person,” according to Muldavin. “That’s double the average for developed countries worldwide, but US health outcomes and efficiency are poorly ranked in comparison to the rest of the industrialized world.” Of course there is a political aspect to this, but there’s also a private-sector, specifically real estate-related solution, along with a growing trend toward clinics and other freestanding facilities for health services. “Most major real estate professional groups have recently ramped up their focus on healthy buildings,” said Muldavin. “Designing buildings to specifically address health behaviors has become the most transformative and rapidly growing sub-trend of the health-and -well-being” macro-trend. The chairman pointed out that there is a serious overlap in many of these issues, as we saw previously with technology and retail. We witness it as well between the political climate and Issue #9

Continued…. Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -19-


….Continued from previous page

9. Immigration. “The Trump administration has attempted to enact more restrictive immigration laws, emphasizing concerns about security and terrorism while appealing to a voter base concerned about jobs lost to illegal immigrants,” Muldavin stated. “In the meantime, companies ranging from tech firms to real estate finance companies bemoan the lack of qualified workers.” The group also argues that immigrants form a key part of the US real estate engine, through such activities as single - and multifamily housing demand. “Longer term, if the entry of immigrant populations that tend to have larger households is curtailed,” said Muldavin, “there will be a limit on the so-called demographic dividend for economic growth, with less of a labor force to support an aging population.” 10. And finally we come to one more politically charged issue: Climate Change, with a particular eye to rising sea levels. Muldavin cited a National Oceanic and Atmospheric Administration report that predicted a potential sea-level rise “by 6.6 to 8.6 feet by 2100.” The result would be catastrophic flood damage that would threaten cities such as New York, New Orleans and Boston, locales that buckle under rising tides of only 14 inches. “The implications of potential sea-level rise and related flooding on real estate values is positioned to explode due to dramatic increases in the volume and accessibility of information on the consequences of sea rise,” he said. “Employers and commercial real estate investors, thanks to hurricanes Katrina and Sandy, can now access municipal and state reports that detail potential risks of sea rise and efforts to mitigate such risks.” He noted that there are serious value implications there, and not just for coastal housing and businesses. “Values of all properties will be affected if airports, transportation infrastructure and other community amenities are negatively impacted,” he warned. “Commercial properties and local economies in coastal regions will suffer if tenants concerned about community resilience or related tax consequences go elsewhere.” Courtesy: Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -20-




Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -21-


An URGENT message from our Legislative Chair

David Genrich, CPM® 2017 Legislative Chair 2017 2nd Member at Large

As real estate practitioners we often have to deal with legislative changes that are counter-productive to both our clients and our profession. As some of the more controversial issues are discussed, we often feel the need to reach out to try and stop some of the insanity before it starts. The problem (many times) is that we do not have a clear message (or elevator speech) when trying to explain the negative ramifications of pending legislation in our industry, nor do we have direct access to those on the legislative lines who can help.

The path most typical is: We learn of pending legislation or hear of language in a bill and we place an urgent call to our legislator, with the ultimate goal of garnering support of our position on said legislation. Very few of us have long-term relationships with our elected officials and don’t often get to speak directly to him or her. Instead, our call and position is merely logged by a staff member.

Individually, we’re very small fish in a very large voter pond. To ensure that our position isn’t lost in this pond, I’m suggesting that we embark on a very different path, that will have a much higher level of success. Here are a few, very simple “grass roots” steps YOU can take to ensure that our industry (and our opinions and positions) are heard:  Step One: Open the two links provided and find your State Representative and Senator. You will have to know or research beforehand to find the district in which you live. Continued…. Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -22-


….Continued from previous page

David Genrich, CPM® 2017 Legislative Chair 2017 2nd Member at Large

 Step Two: Call the appropriate legislator’s office and leave all of your contact information. Let the staff person know that you are a Real Estate professional in their district and would like to speak to him or her by a certain date, or when they have time.  Step Three: Repeat, repeat, repeat until you get through.  Step Four: When you do get that return call, first thank them for their public service. Next, explain why you’re calling, explain the basis of your position on the legislation at hand and then offer your services. Yes...offer your services. Meaning,… become an asset rather than a liability. Offer to provide your expertise and experience relative to any real estate related legislation that may be pending. The concept is clear: instead of calling to complain or perhaps even be perceived as a liability, become their ally and an asset.  Step Five: The next time a bill is forming that may be either detrimental or a blessing to our industry, place that phone call. The prior steps you’ve taken may be the jumpstart to a more solid relationship. A relationship from which you can offer guidance and influence on real estate related matters, and get the results you’re seeking too. There’s a pretty good chance that we might never fully align with any of our elected officials. But they are our only link to the larger process and our best chance of making a difference and enacting change. I challenge you to start the process as soon as you can and keep your contacts updated. Sometimes, the simplest of actions can produce the greatest of outcomes. Good luck! David Genrich, CPM® General Manager, Jones Lang LaSalle OREGON STATE REPRESENTATIVES OREGON STATE SENATE Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -23-


Portland's Painful Rental Market Keeps Softening as New Apartments Arrive Your wallet may not be feeling the impact yet, but Portland economist Joe Cortright says there are significant signs of relief emerging for local renters. "In the past year, there are growing signs that the surge in rental inflation has peaked," Cortright writes at City Observatory's blog. "According to Zillow's estimates, the average price of a two-bedroom apartment in the Portland area ($1,495) is almost exactly the same as it was a year ago. Rental price inflation has dropped from nearly 20 percent a year ago to effectively zero in the first few months of 2017." As the chart shows, Portland's rental inflation spiked after the end of the Great Recession. That spike stemmed from the fact that very little got built during the economic downturn but people continued to move to Portland. Now, nearly four years into a red-hot market, the pace of construction is outstripping demand. Cortright cites a real estate industry report that there are 25,000 apartment units in the pipeline in Portland. Even that tsunami of supply, however, is not enough to put a smile on the economist's face. "The big uncertainty in the years ahead will be whether the policies the city has enacted (inclusionary zoning) and others that it is considering (rent control) will choke off future investment in local housing supply," Cortright concludes. "Once the current inventory of permitted housing is built (and much of it was permitted just prior to the new inclusionary requirements taking effect), its far from clear that developers will find Portland as attractive a marketplace for new apartments as it has been in the past few years." Courtesy: Willamette Week

Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -24-


One Apartment Application Process Coming !! Portland, Oregon, is about to make it easier for apartment residents to apply for affordable housing. Mayor Ted Wheeler has included $125,000 in next year’s city budget to fund, which allows potential residents to fill out one application—and pay one fee—and then see all of the apartments for which they qualify. was created by Tyrone Poole, who after suffering a major injury lost his job and became homeless. He eventually qualified for a housing voucher, but he struggled to find an apartment community that would accept him. He says that over four months of apartment hunting, he paid almost $500 in application fees and was rejected at least 10 times. After his experience, he created, which allows apartment hunters to pay one $35 application fee for a background check, after which they can see the available apartments for which they qualify—all online. The fee is valid for 90 days. Portland has changed the site’s name to, which will launch this fall, covering 18,000 affordable housing units over the next 18 months. The site will eventually expand to market-rate apartments as well, and Poole plans to take the concept nationwide. Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -25-


Is Pot the New pet I was meeting with a client of mine who has communities in California, and they shared a letter they were sending their residents. The letter was informing residents that, while California had passed a recreational marijuana initiative, the law gave apartment owners the right to declare their property to be marijuana free. The letter went on to inform residents that this company was exercising that right and that any use of marijuana in their apartments would be a violation of their lease and could result in eviction. As a resident of Colorado (one of the earliest states to approve recreational use in homes) and a demand management modeler, this got me thinking. I wasn’t surprised that my client exercised their right; in fact, I expect that virtually all professionally managed communities will do or have done so already. But is that really the right business answer? Perhaps the continued disconnect between these state laws and federal laws makes it the right answer. Perhaps there are indirect liabilities I’m not fully aware of (though not a lawyer, I would struggle to understand how liabilities surrounding marijuana would be any different than what already exists with alcohol consumption)? Or perhaps there are legitimate concerns related to managing issues like the potential for, shall we say earthy, aromas to permeate a building and annoy other residents (more on that later)? All of which reminded me of pets and the late 1990s. Those of you in the industry long enough may remember that few mainstream operators allowed pets (excluding fish and maybe birds). There were legitimate concerns: noise, increased wear and tear on the unit and common area issues like damage to landscaping and owners not responsibly picking up pets’ solid waste. I remember that the company I was with at the time was one of the earlier operators to introduce pet friendly policies (with accompanying pet rent). I was particularly convinced of the validity of our policy when I visited one of our communities. Archstone South Market was right on the edge of San Francisco’s financial district and attracted many professionals in its resident base. As I toured, I noticed a lot of pets. It seemed as if half the residents or more were walking a dog. Continued…. Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -26-

OREGON-COLUMBIA RIVER CHAPTER NO. 29 ….Continued from previous page

I asked the community manager about this, and she told me we were the only community in or near the financial district that accepted pets. In fact, our competitors would refer prospects with pets to us because their company policies (at the time) forbade pets. Imagine that, I thought…by allowing pets (while getting paid for it), we had turned our comps into one of our better sources of leads! Of course, today virtually everyone accepts pets for at least part of their community (if not all). So the competitive advantage no longer exists; but it was sure nice while it lasted! Which brings me to the title of this blog. Could marijuana be an opportunity, like pets, for innovative, early adopters to have a meaningful point of differentiation versus their comps? Sure, there are issues; but there were issues with pets that got solved. Maybe, for example, we start with allowing recreational use limited to a single building (in a garden community) or a single wing (in a high-rise community)? Analogous to pet rent (or for that matter south facing units), we could put a premium on those units and thus get paid for this. As a demand management modeler, I love the idea of this as a possible premium rent segment (just like pet owners); and it doesn’t even have to be as explicit a charge since a unit amenity rolls into the overall rent. I’m sure there are other logistical and/or legal concerns to work out. That’s beyond the scope of this initial blog on the subject. My point is that some enterprising operator is going to take the new law and find opportunity in it rather than the easy, somewhat knee-jerk reaction of simply keeping the rules the same as they have always been. What will you do? Courtesy:

Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -27-


Relocation Assistance:

In Case You Haven’t Already Heard! On February 2, 2017, the Portland City Council unanimously passed an amendment to its renter protection ordinance. The amendment requires a landlord to pay tenants’ relocation assistance if:  (i) the landlord issues an end of tenancy termination notice or fails to renew a fixed term lease upon substantially the same terms; or  (ii) increases the rent by 10% or more in a 12month period and the tenant elects to vacate. The ordinance applies only to dwelling units located within the City limits.

Amount of Relocation Assistance: The amount of relocation assistance depends on the size of the unit:  $2,900 for a studio or single room occupancy  $3,300 for a one-bedroom  $4,200 for a two-bedroom  $4,500 for a three-bedroom or larger.


The new ordinance does not apply to:  week-to-week tenancies;  a landlord who temporarily rents out their princiTermination notice: pal residence during the landlord’s absence of not more than 3 years; If the landlord issues a termination notice without cause (which includes a landlord declining to renew  tenants who occupy the same dwelling unit as the landlord; and a fixed-term lease on substantially the same terms  a landlord who rents only a single dwelling unit except for rent) the landlord must pay relocation assistance not later than 45 days prior to the termiin the City of Portland. nation date.


The ordinance applies to all end of tenancy notices and rent increase notices pending as of February 2, If a landlord issues a rent increase notice of 10% or 2017. To clarify transition issues, the ordinance promore in a 12 month period, and the tenant, within vides: 14 days after receipt of the increase notice, gives • (i) for pending termination notices, a landlord written notice that the tenant will terminate the tenmust, no later than March 4, 2017, either notify ancy, the landlord must pay relocation assistance the tenant that they are rescinding the terminawithin 14 days after receiving the tenant’s termination notice or pay the relocation assistance; and tion notice. Rent increases include all associated • (ii) for pending rent increase notices of 10% or housing cost increases, such as adding utility costs or more, no later than February 18, tenants must increasing a fixed monthly utility payment, garage/ notify the landlord they are electing to termicarport rent, etc. A notice that conditions the renate the rental agreement, and the landlord newal or replacement of an existing fixed-term tenthen has 14 days from the tenant’s notice to ancy on paying increased rent or associated hous- • either rescind the rent increase, reduce the rent ing costs is subject to this ordinance. increase to 9.9% or less, or pay the relocation assistance.

Rent Increase:

Continued…. Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -28-

OREGON-COLUMBIA RIVER CHAPTER NO. 29 ….Continued from previous page

Expiration Date. The ordinance expires on October 7, 2017, unless the housing emergency declared by the Council is extended by a new Council vote.

FAQ’s: Following are some questions we have already received and our best guidance at this time: Q. Does the ordinance apply to a termination notice that expired prior to February 2, 2017? A. No.

• •

(i) give written notice rescinding the rent increase notice; (ii) give written notice reducing the rent increase to less than 10%; or (iii) pay relocation assistance. Based on the language of the ordinance you can elect to reduce the rent increase amount to 9.9% or less without having to issue a new 90-day notice. It is unclear if this complies with the 90-day rent increase notice requirement under state law, but we feel confident a judge would allow the original notice to stand since the rent increase is being decreased and not increased.

Q. If we timely rescind a currently pending 90-day termination notice or pending rent increase no- • tice and the tenant vacates anyways, are we responsible for relocation assistance? A. No. The ordinance allows you to rescind a pending termination notice by March 4, or rent increase notice within 14 days after the tenant notifies you they are terminating, and avoid paying any relocation assistance. However, it is unclear what happens if the tenant vacates prior to March 4 based on a pending termination notice Q. How do we determine if a rental unit is within that expires prior to March 4, which you have the City of Portland? A. Do not rely on street not rescinded as of the date the tenant vacates. addresses or zip codes. Refer to the map of the Based on the language of the ordinance, you city boundaries which can be found at https:// should not have to pay relocation assistance. OnHowever, to be safe, if you are going to rescind ly areas within the incorporated city are subject a notice that expires prior to March 4, we recto the ordinance. ommend issuing the rescission prior to the termination date. Q If a landlord offers to renew a fixed term lease, and any one of the options (including the MTM Q: There is a pending rent increase notice of 10% option) involves a rent increase of 10% or more, or more. If a tenant notifies you of their election and the tenant timely elects to vacate, does the to terminate the rental agreement on or before ordinance apply? A. Yes. The ordinance applies February 18, what are your options? A. You to any rent increase of 10% or more, even if the may either: tenant has the option of accepting a lower Continued…. Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -29-

OREGON-COLUMBIA RIVER CHAPTER NO. 29 ….Continued from previous page

increase under a fixed term option. Q. Does the ordinance apply to a “for cause”, 24-hour or non-payment of rent termination notice? A. No. The ordinance only applies to a “no-cause” end of tenancy notice, or the refusal of a landlord to renew a fixed-term tenancy on substantially the same lease terms, except rent. Q. How must a tenant give notice of his/her election to terminate after receiving a rent increase notice? A. State law requires a tenant to give a written termination notice at least 30 days prior to the termination date. The ordinance does not change this requirement. The ordinance simply says the tenant must give written notice “of the Tenant’s intent to terminate the Rental Agreement”. We read this as requiring a formal termination notice since you must pay relocation assistance based on the tenant actually terminating the tenancy. Q. If the tenant timely elects to vacate after receiving a rent increase notice of 10% or more, must the tenant specify that they are leaving because of the rent increase, as opposed to other reasons, as a condition to receiving payment? A. No, the tenant is not required to provide any reason for terminating. Q. What is the penalty for failure to follow the ordinance? A. The tenant can recover the relocation assistance amount PLUS a penalty of up to three months’ rent, attorney fees and court costs. Courtesy: Bittner & Hahs (503) 445-4302 Andrew D. Hahs was born in New London, Connecticut, April 15, 1956. He has spent his 25+ years of practice developing skills that help owners of businesses and real property succeed. He works with his clients on a wide range of issues including entity formation, employment, business, real property finance, real estate acquisition and sales, and construction claims. The last 20 years he has focused his practice on real estate issues, rental housing, and advising closely held businesses. His ability to develop personal relationships with his clients and anticipate their needs contributes to his professional success and gives his clients confidence that their interests will be protected.

Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -30-


Office Chatter

Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -31-


WILL MEDICAL OFFICE CONTINUE TO SUPPORT RICH DEALS? As foreign investors, REITs and other institutional buyers rush to scoop up medical office building (MOB) space and develop urgent care and other ambulatory care facilities, the growing pool of buyers competing for a limited number of available properties is driving capitalization rates lower.

In an analysis of nearly 23,000 MOB sale transactions from 2008 to present, CoStar found that overall capitalization rates on sales of medical office properties across the U.S. of $10 million or greater, which had spiked to nearly 8.5% in early 2013, have gradually compressed as sales competition and pricing remain robust compared with the early years of the recovery. As of midyear 2017, national cap rates stood at a tight 6.2%, according to CoStar Analytics. Although the overall average remained relatively unchanged last year, only deals with the lowest cap rates saw compression. In the most recently released reports by health-care consulting firm Revista, all tiers of transactions have seen compression. "Combined with off-peak total transaction volume, the numbers seem to reflect

what a lot of us are feeling, which is a very competitive market with more interested buyers than there are opportunities," noted Revista principal Hilda Martin.

Interest in U.S. medical office from global investors is on the rise as they seek diversification and yield plus a hedge against political and currency risk, according to JLL Managing Director Mindy Berman. Chinese capital alone accounted for $2.6 billion in 2016 in sales of North American health care properties, including the $930 million investment by Cindat and Union Life for a 75% stake in a portfolio of Brookdale seniors housing and Genesis Healthcare post-acute care facilities owned by Welltower. "It’s early innings, but it’s a hot topic with investors from Europe, Asia-Pacific, Middle East and the Americas for this formerly 'alternative' asset class," Berman said. "JLL believes the time is ripe for a major medical office acquisition by a foreign investor, given prior investment activity in large-scale U.S. seniors housing." Continued…. Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -32-

OREGON-COLUMBIA RIVER CHAPTER NO. 29 ‌.Continued from previous page

Chad Vanacore, REIT analyst with Stifel Nicolaus & Associates, pointed to a "headlinegrabbing win" for Healthcare Trust Of America Inc. (NYSE: HTA), which emerged as a dark-horse winning bidder of a $2.75 billion portfolio of 78 high-quality properties totaling 6.1 million square feet, including a strong pipeline of assets under development. The portfolio sold by Duke Realty Corp. (NYSE: DRE) closed Wednesday.

"We believe medical office buildings continue to have the most compelling fundamentals among health care REIT asset classes, and we expect MOB-focused REITs to outperform the sector as a whole," Vanacore said, adding the transaction is "transformative from scale and quality perspectives" for HTA. Likewise, Milwaukee-based Physicians Realty Trust's announced purchase of 18 MOB facilities in eight states for about $735 million last month includes prime properties such as Baylor Cancer Center in Dallas, an on-campus 460,000-square-foot medical office, which accounted for $290 million of the portfolio sale. Physicians Realty (NYSE: DOC) expects an unlevered cash yield of 4.7%. HTA, the largest owner and operator of medical office buildings in key gateway markets across the U.S., paid for the deal with $1.5 billion in gross proceeds raised through a public stock offering.

"Medical office buildings have such strong fundamentals," said HTA CEO Scott Peters, noting

that the deal closed at a 5-5.25% cap rate. "Cap rates for MOB continue to come down because of the stability of the earnings, the creditworthiness of the tenants, strong occupancies, and the whole key to real estate, which is same-store growth on an annual basis."

MOB fundamentals are even more favorable based on returns over the past five to 10 years, Peters said, adding that re-tenanting costs for conventional office are higher relative to MOB. "We're not there yet, but as more and more transactions occur and MOBs get more recognition, you'll see cap rates come down the to the mid-4%, where they're comparable to convention office," he added. "Physicians stay, they renew, they get paid in carpet," Peters said. "Health care systems don't move once they've established where they want to be and they're usually good for 15-20 years. Health care REITs were second only to self-storage in compounded annual returns over 10 and 15 year as of 2015 at 12.9%.

Source: Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -33-


What new research tells us about the office and apartment commercial real estate markets: The outlook of the office and apartment commercial real estate sectors paints two different pictures, according to the latest research from Ten-X. In the office sector, a broad national outlook obscures the bifurcation of two types of markets – ones that are lagging (the “left behinds,” as Peter Muoio, chief economist at digital real estate marketplace Ten-X, calls them), and others whose economies are strong (“hot markets,” in Muoio’s words). While the office sector outlook is market-specific, there has been, with some variation, a nationwide trend in the apartment sector: a heavy influx of supply responding to steady but healthy demand and extremely low vacancy rates, resulting in strong increases in rent. A multitude of factors is contributing to these trends on a macro level, including the evolving workspace dynamic, the economic outlook under the administration of President Donald Trump and the aging of millennials. Here’s a closer look at these two commercial real estate sectors.

Office: Ten-X research indicates that on a national level, the office sector is experiencing a tepid recovery that has continued so far this year. “Weak demand, not a lot of supply, little movement in vacancy rates,” Muoio said. But underneath the national level lies two types of markets that are in different places in the recovery cycle. With slow economic growth and job creation, the “left behinds” are in pretty much the same place they were when the recession ended. Much of the Midwest, including Chicago, fits into this category, according to Muoio. So do New York City’s suburbs, which is a reversal of the city/suburb dynamic of previous decades. New supply has lagged in these markets, because demand is weak and vacancies are high, and rents remain low. In the “hot markets” of New York City, the San Francisco Bay Area and the RaleighDurham area in North Carolina, to name a few, strong economies and job growth have led to low vacancy rates and increases in rent. But the stream of new supply that has followed has had a cooling effect on these “hot markets.” “While the demand side still looks good, the supply side is now threatening the continued recovery of those markets as the completions are coming online,” Muoio said, No matter the market, the changing dynamic of the workspace is inhibiting demand. Continued…. Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -34-

….Continued from previous page


Because of open floor plans, people sharing desks and working remotely and cloud servers, there’s simply less office space needed these days. In 2010, according to Ten-X research, the average square foot planned per worker was 225 sq. ft. By 2012, it was down to about 175 sq. ft. The estimate for this year is just north of 150. “In just this cycle so far, you've basically reduced the space per worker by a third,” Muoio said. “So the secular headwind, as we keep referring to it, or the shrinkage of space per worker, works against any cyclical gains you're getting from office job creation.”

Apartments: A massive decline in home ownership has led to increased demand for apartments, a trend more national in scope than what the office sector is experiencing, according to Muoio. Home ownership peaked at 69.2 percent in June 2004, the percentage of Americans who own their own homes plummeted to 62.9 percent by the second quarter of 2016, the lowest it’s been since 1965, according to Census Bureau information. Home ownership showed modest recovery to 63.6 percent in the first quarter of this year. “Every percentage point change in that home ownership wave is about 1.2 million households shifting from owning a home to renting a unit,” Muoio said, “so that's been massive across the board.” Even as supply has picked up in the apartment sector, robust demand has kept vacancies low in most markets, hovering just above 4 percent nationally for about two-and-a-half years. There is some variation across markets, though, as the supply uptick has been more dramatic in markets such as New York, Miami, Seattle and the Bay Area. Supply is so intense in these markets that it is straining apartment fundamentals. “We still can't come to grips with there being enough demand to fully meet all that supply,” Muoio said. These markets are dealing with a “digestion issue,” he added. “They're still healthy, there's still a lot of demand, but there's such an intense delivery of units coming on over the next several years, maybe into 2019, that they're going to see bumps in vacancy rates.” Another variation within the national trend is occurring in what Muoio calls the “posthousing bust markets” – Atlanta, Florida, Phoenix, Las Vegas, and Sacramento and Riverside/San Bernardino in California, for example. These markets were hit so hard by the housing bust that they were treated as toxic for years after by lenders and builders. Recovery has been slower in these places, but their economies have started to strengthen, fueled largely by a rejuvenated flow of people moving from the Northeast and Midwest to the Southeast and West. Continued…. Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -35-

….Continued from previous page


Still, the supply pipelines have been slower to fill in the post-housing bust markets, according to Muoio. Construction has picked up, but not with the intensity of hot markets such as New York and Seattle. The posthousing bust markets “are sitting in an earlier segment of their cycle, but they're seeing strengthening demand and not as much supply. Their outlook is much more positive than some of these other markets,” Muoio said. While Muoio predicts home ownership will remain around its current level for another two to three years, millennials could provide a boost, should they move from city apartments to houses in the suburbs. Such a trend could be triggered when these younger folks start looking for the best schools for their children. Countering the desire to put their kids in certain schools, though, is the notion that millennials are jaded by the thought of home ownership – they grew up in the middle of the housing bust, after all. Muoio has his eye on “urban-like suburban markets” – walkable, mixed-use developments near transit hubs. “If we start to see more of these types of developments, the office sector, as well as apartments, would be affected, because businesses would become interested in setting up shop where their potential employees live. “My guess is it's going to be a mix,” Muoio said. “You'll still see rental, but it'll shift perhaps from urban to suburban-like urban, as well as some shift at that later date to home ownership (as millennials get older).”

The Trump effect: Muoio pointed to “several seemingly unrelated federal policies under the new administration” that are combining to drive up construction costs considerably. Under Trump, we are in a rising interest rate environment, and his emphasis on infrastructure improvements and his charge to build a wall along the Mexican border have the potential to drive up demand, and therefore cost, for both materials and labor. A tariff on steel imported from China would also increase the cost of materials. Additionally, changes in immigration policy could limit the number workers available to the construction industry – about 13 percent of U.S. construction workers are immigrants, second only to agriculture, Muoio said. “You have all these very disparate policies, none of which anyone woke up one day and said, ‘Let's drive up the cost of development,’ but combined, could have a very real impact. Rising interest rates work against both buyers and developers, but the materials and labor cost issues change the equation of build vs. buy.” Source: The Business Journals

Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -36-



Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter


Page -37-


years ago, you would have had an impossible time finding high-end cosmetics outside of a department store, let alone on sale. Now, facing assault from both fellow brick-and-mortars as well as online-retailers, the inevitable tide of discounting has reached the department store’s ground floor: after first diluting the prices of nearly everything else, markdowns have finally hit the makeup counter. The beauty bar has been the centerpiece of department stores for decades. In the face of storewide markdowns, luxury cosmetics have outlasted apparel, handbags, and accessories, remaining as dependable merchandise for stores and a pricey splurge for customers.

In addition to brand recognition, the historically high price of luxury makeup is a result of packaging and marketing, with the makeup counter serving as a particularly aggressive form of promotion. Upon entering a store, patrons are greeted by brightly lit, glass-protected products. Sales people stand by to sell the products, which can be tested and returned after purchase. (A former Nordstrom employee told me customers would return half-empty bottles of foundation and used lipstick after months.) In any case, the experience is indulgent, especially compared to a trip to the drugstore. While the move to discount luxury cosmetics is unprecedented, it’s unsurprising. With mass closures and slumping stocks, department stores are the faltering giants in a battered retail industry. Macy’s recently ran a nationwide cosmetics sale, while its daughter store, Bloomingdale’s, began offering loyalty members generous rewards on cosmetics. Stores whose stocks aren’t suffering, like Lord & Taylor, are following suit. And it’s not that people aren’t bothered with nice makeup anymore. Continued….

Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -38-

….Continued from previous page

The Wall Street Journal reports that according to the NPD Group, sales of high-end makeup in the US have increased 11% since last year for a total of $8 billion in sales (paywall).

Rather than Amazon—the thorn in the side of most of the retail industry—it’s good old brickand-mortar stores like Ulta and Sephora that customers are turning to. As department stores continue to swan dive, WSJ reports that 20% of the market share of cosmetics has gone to specialty beauty stores, with department store dominance dipping from 23% to 19% over 10 years. Coupled with the looming threat of e-commerce, cosmetic reductions look a lot like a last-ditch effort by department stores to pull in customers. A study by TAB Analytics found that cosmetic sales were a $13 billion industry in 2015, with over half of the transactions occurring in mass market environments (food, drug, and club stores) and the rest in specialty outlets, including department, specialty beauty, and online retailers.

Within that category, brick-and-mortar beauty and discount stores made up nearly 20% of those transactions, department stores around 15%, and online sellers around 11%.


Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -39-

….Continued from previous page

Here’s the exact breakdown:

Could this mean brick-and-mortar can win out—in the beauty industry, at least? Ulta doesn’t rely on e-commerce, instead depending largely on a strong loyalty program and customers’ ability to test products without the help of a sales person. Moreover, the store’s wide range of cosmetics, from drugstore to prestige brands, has earned it a reputation of being immune to Amazon, which has a less robust beauty department built on third-party sellers with varied delivery times. Ulta was named one of the year’s best stocks but took an unexpected plunge on the news of department store discounts. As a result, the question some investors seem to be asking is if Amazon gets a better grip on beauty, or discounting becomes ubiquitous, could there be a ripple effect that kicks specialty stores too? Former Bloomingdale’s CEO Michael Gould told WSJ that discounting can be addictive—a quick fix with devastating consequences. Apparel retailers relied on markdowns as e-commerce begin siphoning customers, but once they did shoppers stopped bothering to come in unless there was a sale sign in the window.

Courtesu” Quartz Media Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -40-

Second Chances: Shopping Centers Welcome Bold New Uses! Retail real estate centers have long been called a “third place” where people gather away from home, or work or school. But in an age when technology is impacting every facet of our daily lives – with people sometimes looking at screens more than what is in front of them – some might wonder if devices have become our third place. I don’t think so. In fact, I think it’s the opposite and the rise in experiential retail proves it. Based on what I’m seeing, centers are evolving, as they always have, to remain that third place. Human beings crave social interaction. It’s in our DNA. People still need places to go and connect. Retail real estate properties are being revitalized to be those central gathering places for people to shop, learn, stay fit or even live full-time. It all starts with one of the most important ways that people have always connected, over food. For the first time ever last year, U.S. restaurant sales eclipsed grocery store sales. Evolving to stay ahead of this trend, retail properties are shifting more of their space to new dining options. Space for foodservice within existing properties was about 5 percent from a decade ago. By 2025, we expect the proportion of space in shopping centers dedicated to food to reach 20 percent in some markets. Some innovative developers also are bringing the third place closer to where people work, learn and live. Ford Motor Co. moved its engineering and purchasing staff to Fairlane Town Center near Detroit, signing a 10-year lease that made the automaker the mall’s biggest tenant. In Texas, a former mall now owned by Austin Community College is preparing for new apartments and 25,000 square feet of retail in a mixed-use, learning community. Both of these projects are examples of inventive use of space that I expect to be a model for other, similar projects around the country. Continued….

Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -41-

….Continued from previous page

Second Chances: Shopping Centers Welcome Bold New Uses!

A passion for fitness is another thing that brings people together and retail real estate owners are capitalizing on the boom in health clubs. Southdale Center in suburban Minneapolis is known for being the country’s first indoor regional mall. Plans there are underway for a three-story Life Time fitness complex to take over a soon-to-close JC Penney store. Bahram Akradi, CEO of the fitness company, said in an interview that malls can be reimagined as “healthy living and aging village with residences, entertainment, exercise, services and shops.” In addition to the rise in dining out and fitness classes, there is the growing business of health care, and the need to make it more accessible. A decade ago, Vanderbilt University agreed to build a 450,000 square-foot medical center at Nashville’s 100 Oaks Mall. In the decade since, traffic increased at remaining stores, and occupancy rose from 45 percent to 99 percent by the time the property was resold in 2012. Health providers know that the best health care is close to the patient, and giving people that kind of physical presence connects them to the community like nothing else can. All these trends are helping keep industry wide occupancy rates at over 92 percent. They’re also proof that retail real estate has always been and always will be a dynamic industry that adapts and evolves to meet the demands of the consumer. It’s fascinating to see how property operators and other investors are infusing retail real estate with creative energy and new thinking about what a center can be.

Courtesy” Quartz Media Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -42-

For Back-to-school, Shoppers Crave Brick-And-Mortar Stores With back-to-school promotional activity already heating up, back-to-school shoppers say they think they’ll find the best value in brick-and-mortar stores, with 89% saying they plan on visiting stores in person. Despite the impact of Amazon Prime Day, new research from the International Council of Shopping Centers says consumers are committed to deals, with 90% saying sales and promotions influence what they buy and how much they spend, and 40% planning to hold off on shopping until they see sales prices advertised. “Back-to-school is one of the shopping seasons where we really find people looking for specific items at the best price,” says Tom McGee, president and CEO of the trade group, in its announcement about the results. “Consumers are more informed than ever and they research prices and products prior to making a purchase, so it isn’t surprising that so many shoppers are waiting for sales and discounts before buying their back-to-school items.” Omnichannel options are still a major part of the process, with 81% using a mobile device as part of the shopping journey, and 30% of consumers planning to use retailers’ click-andcollect options. (ICSC polled some 1,000 adults in the U.S. for the survey.) And Market Track, a Chicago-based company that monitors traffic trends at malls and shopping centers, believes Amazon Prime Day may have reshaped the timing of back-to-school shopping in physical stores. Unlike holiday shopping, with retailer promotions closely hewing to calendar days like Black Friday and Cyber Monday. “Because it is such a lengthy, balanced shopping season, it can be difficult to drive urgency among shoppers,” says Ryne Misso, Market Track’s director of marketing, in its analysis. “However, a byproduct of Amazon’s Prime Day is the creation of an early-season, single day BTS shopping event.” Intentionally or not, he says Amazon may have kicked the season into high gear with one-day deals aimed at the back-to-school crowd. Market Track predicts that 53% of consumers will do most of their shopping this year at big-box retailers, like Walmart and Target.

Courtesy” Quartz Media

Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -43-


Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -44-


Have you BEEN??? The East Side’s

Crown Point…

Crown Point (also known historically as Thor's Heights or Thor's Crown) is a basalt promontory on the Columbia River Gorge and an associated state park. It is located in eastern Multnomah County, approximately 15 miles east of Portland at exit 22 in near Corbett. Crown Point is one of the scenic lookouts along the Historic Columbia River Highway, providing a panoramic view of part of the Columbia River. It stands 733 feet above the river and is the remains of a lava flow that filled the ancestral channel of the Columbia River 14 to 17 million years ago. The Point was designated a National Natural Landmark in 1971, or in 1974 as seen in the Register of Historic Places. Vista House is an observatory at Crown Point that also serves as a memorial to Oregon pioneers and as a comfort station for travelers on the Historic Columbia River Highway. The building shows great sensitivity to its site in the Columbia River Gorge and is open daily from 9 am - 6 pm, weather permitting Portland architect Edward M. Lazarus intended his extravagant two-story structure to stand as a “temple” to the natural beauty of the Columbia River Gorge. The spot also represents a kind of grand American merger of technological achievement and environmental preservation. Built from 1913 to 1922, the Columbia River Highway was a feat of engineering and civic mobilization. Its two visionaries, lawyer and entrepreneur Samuel Hill and highway designer Samuel Lancaster, saw the tourism potential in an increasingly car-owning population and proposed a major route that would draw visitors while maintaining the integrity of the landscape. Together they shepherded county, state, and federal efforts to build a state-of-the-art highway that remains one of the earliest examples of modern, cliff-face road building. It was Lancaster who suggested the addition of an observatory, citing the need for a resting place where travelers could view the river “in silent communion with the infinite.” With no state funding available, the project was paid for primarily by Multnomah County and partially by private parties, including funds raised by local schoolchildren. A notoriously expensive undertaking, Vista House garnered a reputation as “the million-dollar rest stop.” On-site historians still refer to it by this nickname, though records suggest that construction ran closer to $100,000. The grey sandstone rotunda borrows architectural elements from German Art Nouveau, with the interior decked out in pink Kasota limestone, rare Tokeen Alaskan marble, and finished with green-tinted, opalized windows to complement the green and honey-toned roof tiles. Considering the awe-inspiring location, it’s easy to see why Lazarus felt it was worth the splurge.

NOW, YOU KNOW! Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -45-


For the past few decades, the unstoppable increase in college tuition has been a fact of life, like death and taxes. The sticker price of American college increased nearly 400 percent in the last 30 years, while median household income growth was relatively flat. Student debt soared to more than $1 trillion, the result of loans to cover the difference. Several people—with varying degrees of expertise in higher-ed economics— have predicted that it’s all a bubble, destined to burst. Now after decades of expansion, just about every meaningful statistic—including the number of college students, the growth of tuition costs, and even the total number of colleges—is going down, or at least growing more slowly. First, the annual growth rate of college tuition is at its lowest rate on record. Second, the annual growth rate of student debt is lower than any time in the last decade. Third, the number of college enrollees has declined for five consecutive years. Fourth, the college premium—the extra income one should expect from getting a bachelor’s degree—is higher than it was in the 1990s, but it's stopped growing this century for young workers. Altogether, the numbers paint a clear picture: The highereducation market is not bursting, like a popped soap bubble; but it is leaking, like a pierced balloon. What’s going on? The explanation is a little bit of weak demand, a little bit of over-supply, a big crackdown on for-profit colleges, and, perhaps, a subtle shift in culture.

1. The college pipeline is drying up


Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -46-

OREGON-COLUMBIA RIVER CHAPTER NO. 29 ….Continued from previous page

The United States is running out of teenagers. For two decades, college enrollment grew and grew, bolstered by the coming-of-age of the enormous Millennial generation. But today, the number of young people going to college is in decline. It’s not that today’s teenagers hate higher education; the share of recent high school graduates going on to college has barely budged. Instead, there are simply fewer recent high school grads overall, due to declining birth rates. More than half of colleges and universities say their number of students has declined.

2. There are too many colleges

In the last three decades, higher education has been one of the economy’s most unstoppable growth sectors. In booms and busts alike, the number of two- and four-year colleges kept rising, increasing by more than 30 percent between 1990 and 2010, according to the Education Department. But now, schools are closing. The number of colleges in the U.S. has fallen for four straight years, and the rate of decline is accelerating, as you can see in the graph above. (The graph measures institutions that give out federal aid, which is a useful proxy.) For decades, population growth after World War II fed the demand for new colleges. But with a relatively strong economy, combined with political and social pressure to restrain tuition growth, colleges are finding it hard to attract students at an ever-rising price point. Last year was the worst year for school closings this century. What’s more, with fewer teens going to school, colleges are losing their pricing power and offering discounts to fill the beds and lecture seats. Hundreds of thousands of adults returned to school during and immediately after the Great Recession, using the downtime to buff up on skills to serve them during the recovery. But now adults are working more and studying less. The New York Times reports that at some colleges—particularly small, private nonprofit schools—the discounts are “so deep that, while their sticker prices appear to be rising ahead of the inflation rate, the schools are actually seeing their net tuition revenue decline.” Continued….

Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -47-

OREGON-COLUMBIA RIVER CHAPTER NO. 29 ….Continued from previous page

3. The bubble that’s popping isn’t American colleges, overall—it’s for-profit colleges.

Enrollment at for-profit institutions quadrupled in the first decade of this century, to 1.7 million, at one point accounting for 10 percent of US college students. But they were targeted by education advocates and the Obama administration for their low graduation rates and high student debt and defaults. These schools, some of which ran downright scummy businesses to collect government aid without providing much of an education, often catered to adults trying to update their skills in a fallow economy. So in the last few years, they have faced a double-whammy: a healthy job market took away their student demand, and a federal-government crackdown took away their business. The for-profit implosion has been as dramatic as its rise. Between the 2010 peak and 2015, enrollment at private for-profit colleges decreased by about 40 percent, or 600,000 annual students. (In the same period, enrollment at public colleges and universities only decreased by 4 percent.) Federal loans for undergraduates attending for-profit colleges have also declined by 40 percent. The business model of gobbling up federal money in exchange for delivering a worthless education is drying up. That’s a positive development that is playing an outsized role in negative headlines about American higher ed. After all, research has shown that graduates of for-profit schools see no average benefit in the labor market. What’s the implication for the next generation of college students? It’s possible that we’re seeing a brief, perfect storm with three driving factors—a dearth of teenagers, a growing economy, and the quick implosion of for-profit colleges. These are all measurable forces. But it’s also possible that something less quantifiable has changed—for example, that families have become savvier higher-ed shoppers, or that years of public outcry about tuition costs and student debt have encouraged more public universities to rein in their costs. I’m most interested in how universities use these fallow years to experiment with technology and new ways of delivering education at a cheaper price. For years, colleges and universities were charmed beneficiaries of both demography, with climbing teenage populations, and economics, with a weak economy with growing needs for skilled workers. It’s a truism in economics that most technological change in any industry takes place not during the boom times, but during the downturns, when firms have to be clever to survive. Let’s see if American colleges are smart enough to adapt to the new normal. Source:

Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -48-


Uber is finally making riders explain themselves when they rate a driver below five stars!! Uber is 35 days into its 180 Days of Change”campaign to improve the driver experience. Back in June, the company announced several updates designed to improve driver pay, including the long-awaited introduction of in-app tipping. Today (July 25), Uber is rolling out its next installment of changes. It starts with a better ratings system. It’s no secret that Uber’s ratings are messed up. At the end of each trip, the company asks riders to rate their drivers on a scale from one to five stars. At the same time, rating a driver below five stars could lead Uber to deactivate them—the closest thing to firing an independent contractor—if it drags their overall rating below Uber’s minimum accepted threshold. That minimum rating requirement varies by city. In Atlanta, Georgia, for example, the average driver rating is a 4.8. ”You are encouraged to maintain at least a 4.6 average over your most recent 100 trips,” Uber tells drivers online. ”If your rating over the most recent 100 trips is below a 4.6, your profile may be at risk of deactivation.” The result is that Uber’s ratings inflation is even worse than Harvard’s. Seasoned Uber riders are aware of this fact, but it’s understandable that someone who has never used the app before might not leave five stars on a ride that they considered merely adequate. That’s led drivers to dream up some creative ways to educate riders to their plight. One made a T-shirt. ”Rideshare Rating Guide,” it reads, in bright pink font. ”If you’re alive when you arrive, that’s a FIVE!” Another printed out an explanation and adhered it to the back of his seat:

****”The ride was good, great, legendary, mediocre, average, decent, okay, maybe he

missed a social cue or made a bad joke, but at least he got me where I needed to go, of course he can improve **** This driver sucks, fire him slowly; it does not mean ”average” or ”above average”. Too many of these and I may end up homeless. Continued….

Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -49-

….Continued from previous page


What Uber calls”ratings protection”is designed to protect drivers from rider complaints that have nothing to do with their performance. This is a common problem that has become even more troublesome as companies like Uber push into shared rides. Services such as UberPool and Lyft Line are still developing, which means that the rides are not always efficient or enjoyable. Sometimes riders even order them without realizing it. More often than not that wasn’t the driver’s fault, yet there was no way to indicate so in the ratings system. Now when riders leave a ”bad rating”—anything other than five stars—a screen will pop up asking them ”what could be improved?” Options include ”too many pickups,” ”route by Uber,” and ”co-rider.” Only one of five pre-populated options, ”driving,” goes back to the driver, and it’s last in the list. To be clear, this is not simply an Uber problem—it also happens on Lyft. Back in May, for instance, I was taking a Lyft Line 1.4 miles across Washington DC. The initial ETA for my ride was 18 minutes, but after 25 minutes in the car and multiple reroutes, I was four blocks from where I started and no closer to my destination. I wrote to Lyft support outlining all of this and requesting a refund. I added in the request, ”this is not a driver issue.” When ”Robert” from support wrote back about two hours later, he said Lyft had refunded the charge, given me a $5 ride credit, and ”made sure that you will not be matched” with the driver on future rides. I wrote back reiterating that the driver was not at fault, simply following the Line route that Lyft had assigned to him, and should not be punished. I never heard back, but a ”ratings protection” system along the lines of what Uber just announced would certainly have helped the situation. The other big change is phone support. Drivers have long complained about Uber’s automated help options. The company prefers to route issues through the help section of its app, which isn’t the easiest to access., a popular driver forum, has an entire page devoted to walking drivers through how to get help from Uber. The page includes a 1-800 number for Uber’s pilot phone support program (it began last year in San Francisco) but cautions drivers not to call it unless absolutely necessary. ”Do NOT use unless you have a critical safety issue like an accident or altercation,” the page states. ”They will NOT deal with non-critical issues like deactivation, fare review, general complaints, etc.” Another post on is even more straightforward: ”In general Uber can not be contacted by phone.” Uber said in an email to drivers today that it is rolling out 24/7 phone support, available directly through its driver app. ”Call anytime and you’ll be connected to an agent in under 2 minutes who will listen carefully and help you find a solution,” Uber said. If they aren’t connected in two minutes, will they be paid for waiting? Courtesy: Quartz Media Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -50-


AAA Heating & Cooling, Inc.

American Building Maintenance

Apartment Guide

Benge Industries

Cantel Sweeping

CentiMark Roofing

Coast Pavement Services

Columbia Roofing & Sheet Metal

Crystal Greens Landscaping

Evolve InteriorScapes

Expresso Building Services

FSG Services

HARBRO Restoration

Hunt Painting

Indigo Paint & Contracting

Interstate Roofing

J.R. Johnson, Inc.

Kennedy Restoration


Local Plumbing

Lovett, Inc.

Marsden Northwest

Millennium Building Services

MultiFamily Northwest

NW Tree Specialists


Pavement Maintenance

Perlo Construction

PG Long Floor Covering

Portland Business Alliance

Portland General Electric

Rose City Moving & Storage

Squires Electric

The Oregonian

Township United Building Srvc

Walter E. Nelson


If you’re interested in becoming an IREM® Industry Partner, or know of a company who would benefit from the hundreds of office, retail, residential and industrial property managers who frequent our events, give us a ring! See the following page for a list of benefits! A huge thank you to our new and renewing 2017 IREM® Industry Partners!

Water Solutions Northwest

THANK YOU!! Contact the chapter office at or 503.228.0002 or the 2017 IREM® Industry Partner Co-Chairs, Caroline Karl at, Mark St. Pierre at or Jim McDonald at Thanks! Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -51-


 TWO complimentary tickets plus advertising at the annual FORECAST BREAKFAST held in December of each year.

Your name will be on the IREM® Industry Partner banner, and your name and company biography will be included in the event transcripts. This is an opportunity to showcase your business to approximately hundreds of real estate professionals in our industry!

 Opportunity to provide articles and information in the quarterly InFocus Newsletter.  Annual access to over 300 participants and members of the Institute of Real Estate Management, including Certified

Property Managers (CPM®), Accredited Commercial Managers (ACoM®) and Accredited Residential Managers (ARM®) in the Portland area.

 One complimentary set of mailing labels to the Chapter membership at no charge. (However, we will not send until

requested so the information you receive is as up to date as possible.)

 The ability for up to two of your company’s representatives to attend IREM

member rate (excludes the Annual Awards/Inaugural Dinner).


monthly membership meetings at the

 A special introduction at the first luncheon after your inception date, and each anniversary thereafter if you renew

your sponsorship. ®

Industry Partner name tags for use at IREM® monthly meetings identifying you as an Industry Partner (direct soliciting is not permitted, placement of brochures and business cards at tables however, is acceptable with advance notice).



 Your company name listed as an IREM Industry Partner on our website:  Multiple opportunities to further advertise your company with meeting and event sponsorships and/or donations for

raffle prizes.

 Introduce and recommend a new IREM


Industry Partner office. Once that referral has been approved, your company will be credited $300 off of your next years' program sponsorship PER NEW Partner! The program allows any IREM ® Industry Partner in good standing to bring up to THREE (3) new Partners per company in the calendar year. That's up to $900 off of your following years’ program sponsorship!

Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -52-


Send us Your Articles!!

We know our members are multi-talented and have obtained special skills and knowledge over the years! Why not share that information for the benefit of your fellow industry colleagues?

WE WANT YOU! Let your voice be heard! Send us your ideas and/or articles and we’ll do the rest. You don’t have to know how to put an article together...we can help with that. Just get us the facts and figures and your industry expertise! Show the world what you know and what you’ve learned from your experiences.

Submit your ideas and articles to: today!

PO Box 757 | Troutdale | OR | 97060 503.228.0002 | phone | website | national website Institute of Real Estate Management Oregon-Columbia River Chapter No. 29 2nd Quarter

Page -53-

Q2 2017 InFocus Newsletter  
Read more
Read more
Similar to
Popular now
Just for you