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Wilmington-based Thomas Construction Group has announced the addition of several new employees, according to a news release.

Kyle Brooks, Kramer Joyce and Jake Connor have joined the general contracting firm.

Brooks is a senior estimator with 10 years of experience estimating jobs ranging from $2 million to over $50 million in value, stated the release. He will play a vital role in the preconstruction department and has performed estimates on office buildings, warehouses, medical office buildings, mixed-use facilities and multi-family projects.

He earned a degree in construction management from Utah Valley University.

Joyce (right) is a superintendent with the firm, and will be responsible for assisting the on-site team with subcontractor management, meeting milestones, cost management, client communication and overall project safety.

He graduated from Pitt Community College with a degree in building construction technology.

Conner has joined Thomas Constructions accounting department as a project accountant, responsible for working with project managers and superintendents to maintain project costs.

Conner (left) earned an undergraduate and graduate degree from the University of North Carolina Wilmington.

While earning those degrees he interned with a Raleigh firm and pursued his CPA license.

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New employees join Thomas Construction Group - Greater Wilmington Business Journal

Vacant land across from South Windsors Evergreen Walk shopping center will soon become home to a four-building complex with a mix of medical office and retail space.

Farmingtons Metro Realty Group is leading the project aiming to construct 50,400 square feet of medical office and 38,880 square feet of retail space on Buckland Road across the street from LA Fitness.

South Windsors planning and zoning commission recently granted key land-use approvals for the real estate developer, which acquired the vacant land for an undisclosed sum in Sept. 2019, and filed applications for the development months later.

Tenants have not yet been selected for the so-called Gateway Boulevard development, town records show. The mixed-use property is expected to join a new Chase Bank branch and Aldi grocery store as new additions to the corridor. Metro Realty is also leading those projects, officials say.

Its not clear when construction will begin on the development, or how much it will cost to build. Metro Realty declined multiple requests for comment.

Town Planner Michele R. Lipe said Metro Realty, one of Connecticuts largest medical office developers, still needs certain environmental approvals before it can break ground.

image | Contributed

Metro Realty Group plans to construct a four-building development across from South Windsors Evergreen Walk with a mix of medical office and retail space.

According to plans filed with the town, the complex will house two retail buildings near the well-traveled Buckland Road corridor. A combination of restaurants, with outdoor seating, and clothing retail tenants would be ideally suited for the buildings, officials say.

Another two medical-office buildings are to be constructed at the rear of the property. A total of 486 parking spaces and several electric car charging stations are planned for the development, plans show. There will be more than 600 parking spaces if the Aldi and Chase buildings are included.

A map of the development on Metro Realtys website shows the office buildings will comprise 25,700 square feet and 30,000 square feet. Forteen retail units in the other two buildings mostly range from 2,495 square feet to 4,050 square feet.

A second phase of development is currently being eyed on a small piece of land just north of the property also controlled by Metro Realty, town officials have said. Construction on the Chase branch has already begun, and work on the Aldi supermarket is expected to begin soon, town records show.

Metro Realty will also create a four-way intersection and crosswalks where Buckland Road, Cedar Avenue and the new Gateway Boulevard meet.

The office-retail development will compete with its neighbors across the street at The Promenade Shops at Evergreen Walk. The outdoor shopping center spans more than 374,979 square feet, and is home to many specialty retailers and restaurants including Anthropologie, Brooks Brothers, Banana Republic, Old Navy, Teds Montana Grill, Red Heat Tavern, Sakura Garden and Omaha Steaks, among other storefronts.

Headquartered at 6 Executive Dr. in Farmington, Metro Realty owns and operates more than 30 medical office, industrial and multifamily buildings around Connecticut, according to its website.

Last year, it sold a 29,000-square-foot medical office building on Middle Turnpike Road in Manchester for $11.3 million, and is looking to invest $2.4 million to construct a 16,200-square-foot, one-story medical building on Cromwell Avenue in Rocky Hill.

A Southington industrial building on Clark Street has sold for $840,000, brokers say.

New York-based 339 Clark LLC recently sold the 16,020-square-foot building to Marion-based Mantz Auto Sales and Repair Inc., according to broker Sentry Commercial, which was the sole broker in the deal.

Mantz Auto Sales and Repair is planning to relocate and expand at the facility by year-end, Sentry Commercial said.

Marlboroughs Two Brothers Auto LLC has acquired more than 2.3 acres in Bloomfield for $80,000, according to Sentry Commercial.

Alice Leshem was the previous owner of the property at 15 Highland Park Dr. Sentry Commercial said its not yet clear how the auto service business plans to use the property.

Joe Cooper is HBJs web editor and real estate writer. He pens The Real Deal column about commercial real estate.

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Office, retail development coming to South Windsor's Evergreen Walk area - Hartford Business

At-home health testing service LetsGetChecked began 2020 growing at a fast clip and with plans to find a location for its next customer call center office. Then came Covid-19.

The New York City- and Dublin-based startup moved fast--it raised $71 million in the spring to develop an at-home Covid test and won FDA approval for it in May. As of July 2020, LetsGetChecked is seeing more than 800 percent year-over-year revenuegrowth. While the company has begun to rapidly expand its customer care team, the virushas kept staffremote. ButLetsGetChecked is continuing its search for office space, trying totake advantage of shifts in the commercial real estate market that have createdopportunities for businesses not available even six months ago.

In the second quarter of 2020, office vacancies nationwide hit 13 percent.Available subleases made up 2.7 percent of all available space on the market, reaching a level not seen since 2010,according to an analysis by commercial real estate firmCBRE. BetweenCovid's severe curtailing of economic activity and the increasing number of employeesworking from home, manycompanies are downsizingtheir offices.Uber, Square, and Dropbox have all listed portions of their San Francisco offices for subleasing in recent months. REI is looking to sell its never-been-used new 400,000 square-foot headquarters in Seattle.

Asking rent prices have yet to fall, which is typical in a down cycle as landlords try to hold out as long as possible, says CBRE chief economist Richard Barkham. At the same time, Barkham says, landlords are eager to fill space, so they're willing to offer a bevy of concessions to the right tenants, including rent-free periods, build-out expenses, and flexible lease terms.

"The more the balance of power has slipped between landlord and tenant, the greater the opportunity for a bargain," Barkhamsays.

That's precisely what LetsGetChecked is banking on. "There's so much uncertainty. We're hiring a large number of staff in Tampa, but we're not sure how big we'll get or how soon," says Ronan Ryan, the COO. "So we need the flexibility of, say, starting with 15,000 square feet with an option to add another 15,000 square feet in the same building in the future. Before [Covid], landlords weren't as ready or willing to give that."

Where to look

Not surprisingly, in the past quarter the biggest shifts in the commercial real estate market have occurred in tech hubs and metropolitan areas heavily dependent on mass transit. Austin saw the biggest decline in demand, with a net absorption rate of -2.3 percent, according to CBRE's Q2 office report. Net absorption measures the total new square footage leased minus the total square footage tenants no longer occupy, overa given time period. California, Texas, and New York markets have all seen the biggest drops, with previously hot metropolitan areas like San Francisco, Los Angeles, New York City, Boston, and Houston all ranking in the top 20 for negative net absorption (see the graphic below for more detail).

"I'd look for opportunities in downtown areas. Austin, San Francisco, L.A.--it's been very difficult to get space in those cities in the past 10 years," Barkham says. "This is a once-in-a-decade opportunity to acquire prime space in San Francisco."

Another way to consider opportunities is to look for areas with large inventories of new construction space about to hit the market. Currently, 134 million square feet of office space is under construction in the U.S., which makes up 2.5 percent of total office inventory, says David Smith, head of occupier research in the Americas at real estate firm Cushman & Wakefield. But certain markets that were in high demand pre-pandemic, like Seattle, Charlotte, and Nashville, have reached 5 percent. That's a lot of vacant space that's going to need to be filled.

Similarly, since the pandemic started, millions of square feet in subleased space have flooded the market, says Cushman&Wakefield executive managing director Nathan Piehl. From last December through June, available subleased space across the country is up 21 percent.

"For growth businesses still in the startup phase or even mature companies starting in new markets, sublease opportunities are economically advantageous," says Piehl, who specializes in tenant representation. "They require minimal capital, often they're furnished, and you're dealing with what's already been negotiated."

Prior to Covid, LetsGetChecked had zeroed in on Tampa as an ideal location for its next customer call center because of its labor force skills--the area boasts a large number of nurses. Post-Covid, Ryan says the increase in available subleaseshas been substantial. "Companies took these large amounts of office space thinking they'd grow into them, and now they're quite urgently putting them out to market as subleases," he says.

The company has not yet signed a lease, but Ryan says it aims to do so in the next 60 days. Needing to staff up remotely in Tampa before selecting a space has had its advantages. Whereas the company previously thought a downtown office would be fun and convenient for its staff, Ryan says they've learned through feedback from new employees that a more suburban location nearer to the city's nursing colleges would make more sense.

How to sweeten the deal

As LetsGetChecked considers its options, it's also trying to time a deal to take the fullest advantage of the moment. In addition to more flexible lease terms, Ryan says, the company is already seeing a willingness from landlords to offer rent-free periods and to cover some build-out costs.

"Landlords are going to try to hold face rates for as long as they can," Piehl says. "So you're going to see more rent abatement, tenant improvement allowance packages, moving allowances, furniture and equipment allowances--these are all things you can ask for now that you couldn't ask for six months ago." Plus, you can consider non-monetary concessions, such as the ability to revisit market rents in a year or two, he adds.

LetsGetChecked is going to need at least five to six months to do a build-out for its new Tampa space, which pushes its soonest move-in date to early 2021. The space will likely be configured with more than six feet of space between employees, larger meeting spaces, and plexiglass partitions for safety.

When the office is ready, the company is at a greater advantage than most as it plans for employees' reentry: Since LetsGetChecked makes Covid tests, the startup can do all of its testing in-house, and its on-staff clinical team can advise on how best to set up the space.

Q2 2020 negative net absorption by region

Below are the 20 U.S. markets that saw the biggest drop in demand in the second quarter of 2020 for office space as measured by their net absorption rate, or the total new square footage leased minus the total square footage tenants no longer occupy in a given time period.

Source: CBRE Research, Q2 2020

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The Office Isn't Dead Yet. And Now's the Time to Get a Sweet Deal - Inc.

Free Rent, Tenant-Improvement Allowances On The Rise

The impact of these concessions is evident in the second quarter's 6.6 percent, year-over-year decline in net effective office rent in the 15 largest U.S. markets, according to CBRE. Net effective rent takes into account financial concessions (periods of time that a tenant does not have to pay rent, contributions toward the construction of a tenants space, etc.) that will be subtracted from a lease's contracted base rent. In comparison, base rent - before concessions - declined by only 1.1 percent in the second quarter from a year earlier.

Meanwhile, the average length of free-rent periods provided to induce a new lease signing or renewal in the second quarter amounted to 10 months. That's a 13.7 percent increase from the first-quarter average.

Another measure of concessions - tenant-improvement allowances - increased by 5.1 percent in the second quarter from the first to $75.57 per square foot. Landlords provide tenants these allowances to build out their new space to their individual needs. That percentage gain might have been greater if not for declines in construction pricing.

"Overall, U.S. office-leasing activity declined by roughly 43 percent in the second quarter from a year earlier, so it is to be expected that building owners would need to occasionally use some sweeteners to nail down a new lease in this tough environment," said Whitley Collins, CBRE Global President of Occupier Advisory & Transaction Services. "This means that office tenants can find some advantageous terms in many markets, at least until the U.S. economic recovery gains more momentum".

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COVID Forcing Office Landlords Nationwide to Grant More Concessions to Secure Tenants - World Property Journal

One of greater Portlands largest-scale apartment developments in recent memory will open the first of four buildings this fall.

PM Construction Co. of Saco is managing the large-scale construction of the Latitude at South Portland. The apartment complex will consist of four buildings each 68,500 square feet a total of 256 units, mainly one- or two-bedrooms. Each building includes a lounge, conference room and fitness center. There will also be two outdoor kitchen/grilling spaces on the property. Design is a collaboration with Archetype Architects of Portland. Northeast Firestopping Solutions was the firestop contractor at the Latitude.

Photo / Courtesy Firefly Aerial Solutions

An aerial view of the Latitude at South Portland apartment complex.

Elsewhere, PM Construction is managing construction of the Samuel L. Cohen Households at the Cedars, senior-housing housing in Portland, at 620-640 Ocean Ave. It also has some non-residential projects in the works:

Great Falls Construction of Gorham is finishing what it calls its 5 in 5 accomplishment, construction of five maintenance and public works facilities in five years. The most recent is Sacos Public Works Facility, which will be 30,000 square feet. It will be completed this fall.

The other four builds were in Windham, a vehicle maintenance facility of 27,000 square feet; MDOTs maintenance-and-operations facility at the International Marine Terminals Eimskip site; South Portlands municipal services facility, 82,000 square feet; and Westbrooks 33,500-square-foot facility for public services, school transportation and fleet maintenance.

Photo / Courtesy Great Falls Construction

Great Falls Construction built a maintenance-and-operations facility for MDOT in Portland.

Thats not all. Great Falls is also building fire stations for South Portland and Lewiston. In Casco, its doing a school addition and renovation. In Old Orchard Beach, its building an administrative facility for the wastewater treatment facility. Finally, its building the York Toll Plaza at mile 8.8 of the Maine Turnpike.

DeStefano & Associates Inc. and CWS Architects have completed the design and construction of the Main Beach Bathhouse, offering public facilities in Ogunquit. Its 2,500 square feet and includes 700 square feet dedicated for lifeguard use. DeStefano is based in Portsmouth, N.H. CWS is based in Scarborough.

Jewett Construction promoted Alain LeBlanc to director of field operations. He has 16 years of experience in construction. Hell oversee field ops and staff for all projects from Maine and New Hampshire offices. Jewett is based in Raymond, N.H., and has an office in Scarborough.

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Building Business: Clarks Pond apartment complex to open first units this fall - Mainebiz

A development partnership between San Francisco-based investment firm Sansome Partners and an affiliate of Hunter Properties nabbed $155 million in commercial mortgage-backed securities (CMBS) debt to refinance a section of a sizable new suburban office complex in San Jose, Calif. thats fully leased to media and streaming company Roku, according to Fitch Ratings.

The financing originated by Goldman Sachs and Deutsche Bank refinanced $140.5 million of existing debt, funded $7.7 million of reserves upfront, provided about $2.3 million of cash equity to the sponsor and paid $4.5 million worth of closing costs, per Fitchs analysis. The deal closed on Aug. 7.

The 10-year, interest only loan pays interest at a rate of 2.8 percent and is part of the $630.8 million DBJPM 2020-C9 CMBS transaction, in which a $30 million note is included the remaining $125 million will be securitized in future deals.

Designed by Gensler, the property is called Coleman Highline, a massive mixed-use Silicon Valley office development that will eventually comprise around 1.75 million square feet of office, residential and hospitality space. The collateral in this CMBS deal spans 381,000 square feet across two office buildings that make up a portion of the overall development as well as a third 22,889-square-foot amenity building that accompanies them; it includes a gym and a 1,182-space parking garage. Fitchs as-is appraised value of the assets in this deal was pegged at $301.1 million, while its stabilized value was set at $305.2 million. Roku has leased all of Coleman Highline Phase I, which has two other office buildings that are not included as collateral in this transaction; altogether, itll span more than 738,000 square feet of space, according to Fitch.

The property was completed in 2018, according to Ftch, and is fully leased to Roku, which will utilize it as its U.S. headquarters once social distancing and mitigation mandates eventually soften in the area. The development is located at 1155 Coleman Avenue in San Jose, directly next door to Avaya Stadium, the home of Major League Soccers San Jose Earthquakes. Roku is relocating from its former home in Los Gatos, which is an area about 10 miles south of downtown San Jose. The JV wrapped construction of the collateral in this deal at a cost of around $250 million, according to Fitch, which, with this CMBS loan, points to around $95 million in equity that still exists.

Nearly a month before this financing closed, it was reported that the JV had put the Roku-leased assets on the market for sale, according to a report in the San Jose Business Journal. Last summer, the joint venture also inked Verizon to 640,000 square feet at other office developments within the complex, with plans to partner with the telecommunications giant to build out its space, which will eventually house 3,400 employees.

Fitch highlighted Rokus scheduled investment in the property as one of the strengths of this deal as the media company has leased the property through September 2030 with annual rent increases set at 3 percent; Roku is planning to inject about $43 million, or $120 per square foot, of its own capital into its space as well as $29 million in tenant improvement allowances, per Fitch. The lease has one seven-year extension option and no termination or contraction options. The ratings agency also noted that the pandemic has benefited Roku given that demand for online streaming services has skyrocketed as a result of more people being confined at home.

Before COVID-19 set in in March, Roku had begun moving into one of the buildings in this deal, with a plan to have its employees in both by the end of this year. Now, the media company is aiming at moving its employees back into one non-collateral office building as well as finish its build out of the aforementioned asset to be occupied by this fall. Despite any challenges, Roku has not requested any lease modifications, according to Fitch.

The larger Coleman Highline development will eventually feature 1.75 million square feet spread across seven office buildings and multiple amenity buildings. The collateral in this deal is officially Phase II of the development. The developments third phase fully leased to Verizon is slated to wrap by 2021. There will also be a 175-key hotel that is scheduled for delivery next year as well as 1,600 residential units, which still happen to be in the early stages of planning.

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JV Gets $155M CMBS Refi on Silicon Valley Office Leased to Roku - Commercial Observer

The spread of the coronavirus has had a devastating impact on the U.S. and worldwide economies. But that spread also created health and wellness scenarios for the built environment that lend themselves to reconstruction and renovation, say AEC firms.

I anticipate an increase in renovation/reconstruction as buildings are adapted to COVID-required standards, says Guy Geier, FAIA, FIIDA, LEED AP, Managing Partner with FXCollaborative.

Darren Burns, a Vice President at Stantecs office in Vancouver, B.C., says many of his firms clients areredefining normal. And those that are financially strong are positioned to take advantage of a distressed market.

Long-term, we see a reset from traditional thinking around work-at-home opportunities and the reality of the traditional office, says Burns. All sectors will be looking to adapt and prioritize health and safety. We believe the reconstruction market will grow in strength as we look to creatively adapt and reuse leftover spaces into a new purpose.

Such adaptations, say AEC sources, are likely to include improvements in buildings technology infrastructure, as well as their HVAC systems with better air filtration and the functionality to let in more outdoor air.

DPR Construction is among the firms that are also seeing increases in requests for all things touchless, says Scott Sass, DPRs Special Services Group Leader, ranging from automatic door openers, occupancy sensor light controls, and touchless kitchen and breakroom equipment.

Just how quickly the demand for reconstruction recovers, though, is a matter of debate. Burns points out that, unlike previous recessions, the recent retraction in new development is primarily the result of uncertainty about future revenue streams and financing. This could set us up for a slingshot recovery, if the stimulus spending heavily overlaps with a return to normalized commercial markets, he speculates.

Sass says DPR saw a slowdown in office reconstruction projects, as developers were waiting for more certain guidelines from government and health agencies. His firm, though, expects reconstruction, in general, to see an increase in demand, as many customers are making due with what they have, and are putting off major capital expenditures.

One of McCarthy Building Companies recent reconstruction projects is the 120,000-sf, two-story St. Louis Aquarium at Union Station, thats built inside the footprint of a 19th-Century iron umbrella train shed. The aquarium, which was designed by PGAV Destinations and completed last November, includes a 250,000-gallon shark habitat and five overhead viewing areas. Photo:Sam Fentress Photos

AEC firms are concerned about their clients abilities to locate financing to initiate reconstruction projects. FXCollaboratives Geier thinks this could create an aggressively competitive bidding environment that leads to lower construction costs.

John Buescher, McCarthy Building Companies Central Region President in St. Louis, cautions that projects put on hold when the COVID-19 crisis began could stay delayed till early next year. Until political and economic climates stabilize, clients are more likely to make conventional, low-risk real estate decisions,he says. Even projects moving forward must contend with product and labor shortages, construction financing issues, and potential delivery delays.

Still, McCarthy is projecting strong demand for the reuse of existing buildings, be they office renovations or the repurposing of historic buildings. One of McCarthys recent reconstruction projects was the St. Louis Aquarium at Union Station, a 120,000-sf, two-story attraction built within the footprint of a 19th-century iron-umbrella train shed. The PGAV Destinations-designed aquarium is a signature element of the $187 million redevelopment of St. Louis Union Station, a National Landmark structure that Lodging Hospitality Management (its owner since 2012) has been transforming into a family entertainment and tourist destination.

While COVID-19 has consumed the AEC and development worlds, it isnt the only trend thats prevalent in reconstruction.

More firms, for example, are considering alternative building materials and delivery systems for these projects. Stantec and McCarthy are among those that have turned to prefabrication and modular construction to get projects completed faster, improve the quality control of that reconstruction, support jobsite health and safety requirements, and ensure efficiency at a time when labor availability remains dicey in some markets.

The Building Team for the BEAT office and industrialproject includes Stantec and ADD Inc. (architects), Norblom Company (developer), Copley Wolf Design (landscape architect), and AHA Consulting Engineers and McNamara Salvia (engineers). Courtesy Stantec

Stantecs Burns adds that, in many markets, mass timber continues to grow as a building product of choice because of its low-carbon, lighter-weight properties. New approaches to building systems will be critical as we navigate the importance of healthy building environments, post pandemic, he says.

To that point, one of the more prominent projects under construction is the $930 million reconstruction of Key Arena in Seattle, which when it reopens next summer will be home to the WNBAs Seattle Storm and an NHL franchise. In June, Amazon bought the naming rights and will call the building Climate Pledge Arena. It will be the first net-zero-carbon-certified arena in the world. (The building team includes design partner Populous, project manager ICON, construction partner Mortenson, and Rockwell Group, which designed the buildings seven amenity spaces.)

DPR is seeing a big move toward reconstruction that makes buildings smarter, says Sass, by increasing monitoring, automation, and the controllability of equipment and fixtures. He adds that the smart-building movement is driving an increase in low-voltage and network systems in buildings to handle the demand for wired and wireless networks.

In Dorchester, Mass., Stantec and developer Nordblom Co. are repositioning the 16.6-acre former Boston Globe headquarters into a 750,000-sf multi-tenant mixed-use innovation hub called The BEAT (for Boston Exchange for Accelerated Technology).

CallisonRTKL designed Canadas first 5G-ready store, Rogers 302, a technology retail hub and flexible event space that allows for immersive, digitally enabled experiences. Photo: Richard Caden Photography, courtesy CallisonRTKL Read the article

The BEAT will contain 360,000 sf of office space, 300,000 sf of flex/industrial space, retail, a 10,000-sf fitness center, 868 parking spaces, and 200-plus bike storage spaces. A multimode path is planned to connect the site to transit lines and adjacent neighborhoods. Burns notes that Stantec and Nordblom capitalized on maintaining the existing building to accelerate preconstruction and to retain the buildings character and history.

The $300 million reconstruction, which is slated for completion late this year, will include a ground-floor microbrewery and 100-seat restaurant, as well as several outdoor spaces for work and play surrounding the buildings, such as a rooftop coworking lounge by day and movie bar by night, and a backyard for tenants to picnic or recreate. The developer, says Burns, took over the maintenance of the adjacent state park to expand tenant and community use of the outdoor spaces.

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Reconstruction could be COVID-19's silver lining - Building Design + Construction

Skanska has signed a 10-year lease agreement with its own Gothenburg operations to move into just over 5,300 square meters in the Citygate office project in Grda, Gothenburg. The occupancy will begin take place during the summer of 2022.

The office building with its strong sustainability profile will be 36 storeys high, corresponding to 144 meters, and will have a total leasable area of approximately 42,000 square meters. To create additional positive imprint in connection with the project, Skanska, together with the City of Gothenburg, has developed sustainability initiatives where the project takes extensive social responsibility to promote employment among young adults in the neighbourhood. For example, the project has extensive collaborations with schools regarding programs for mentoring and homework assistance. This is a project that also creates healthy workplaces with the ambition to certify according to WELL and LEED.

Skanska is one of the leading development- and construction companies in the Nordics, with operations in building construction and civil engineering in Sweden, Norway and Finland, and developing residential- and commercial property projects in select home markets. The commercial development stream is also active in Denmark. Skanska had sales of about SEK 70 billion and more than 15,200 employees in its Nordic operations during 2019.

For further information please contact:

Jacob Birkeland, Head of Media Relations and Public Affairs, Skanska AB, tel +46 (0)76899 72 69

Direct line for media, tel +46 (0)10 448 88 99

This and previous releases can also be found at http://www.skanska.com.

Skanska is a world leader in construction and project development on select markets in the Nordic region, Europe and USA. Driven by the Group's values, Skanska wants to contribute to a better society. Skanska provides innovative, sustainable solutions for both simple and complex assignments. Skanska has about 35,000 employees, and 2019 revenue totalled SEK 177 billion.

https://news.cision.com/skanska/r/skanska-in-gothenburg--sweden--is-moving-to-the-self-developed-office-project-citygate,c3179084

https://mb.cision.com/Main/95/3179084/1296559.pdf

https://news.cision.com/skanska/i/image-20200825-se-citygate-gothenburg,c2815042

(c) 2020 Cision. All rights reserved., source Press Releases - English

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Skanska : in Gothenburg, Sweden, is moving to the self-developed office project Citygate - marketscreener.com

Mosaic Construction, LLC, a full-service design build firm specializing in commercial, multifamily and residential renovation, remodeling, and building services, announced the addition of Neil Power as Production Manager and Jared Maurer as Project Manager to their rapidly-growing team.

Power brings more than 20 years of experience successfully delivering a wide variety of public and private sector commercial and residential projects, including restoration, mid-rise multifamily developments, and new construction luxury single family homes.

In his role as Production Manager for Mosaic Construction and their sister brand Design Construction Concepts, Power will focus on office build outs, non-profit projects, window and roof replacements, as well as residential kitchens, bathrooms, exteriors, and whole home remodels. "Neil's positive attitude, coupled with a career-long focus on project management steeped in trust and integrity putting client satisfaction at the center of his role, makes him an ideal fit for our team," said Ira Singer, Principal at Mosaic Construction.

Mosaic Construction is also pleased to welcome Jared Maurer who has more than 15 years of industry experience as a builder, designer, and owner's representative. After earning his undergraduate degree in architecture, he worked for architecture firms in Pittsburgh, PA and Wilmington, NC, designing single-family homes and small commercial facilities. In 2011, he shifted his career to leading design-build construction projects in the high-end residential, secondary education and commercial sectors.

In his role as Project Manager, Maurer will be working on Mosaic Construction's Cannabis Facility Construction brand and be responsible for all cannabis specific retail dispensaries, processing centers and cultivation facilities, both locally and nationally.

"Jared's focus on realizing each client's design intent, foreseeing use and maintenance of the final project, and developing relationships with trade partners are qualities we value and know will make a great impact on our business," said Singer. "We're looking forward to having both Neil and Jared on our team as we continue to grow to meet the demands of a busy design-build renovation market."

Mosaic Construction offers commercial, multifamily and residential design-build services and is a brand affiliated with Design Construction Concepts and Cannabis Facility Construction. Led by Andy Poticha, Ira Singer and Mike Frazin, Mosaic's teams deliver uncompromising customer service as they realize client visions in locations across the United States. For more information, visit mosaicconstruction.net, dcc-inc.net and cannabisfacility.net.

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Mosaic Construction Adds Two Professionals to its Growing Team - Chicago Daily Herald

Tenant demand in the office market has been increasingly favoringshorter-term lease deals, a trend that complicates how much buildings are worth.

This shift hascreated more flexibility for tenants who don'twant to be locked into a long-term lease, and it has helped landlords fill spaces in their buildings that may otherwise sit vacant.

Despite the move toward shorter-term leases,officebuildings still achieve higher valuations when they have the stability of long-term leases, and landlords have had to work to make lendersand investors more comfortable with the flexible deals their tenants crave.

Wikimedia Commons/Hakilon

Lease terms can have a variety of effects on a building's valuation, but experts agreed that buildings with longer-term leases are consistently more valuable than ones with shorter deals. But as the market evolves, somesee a growing acceptance of lease flexibility that could increase the perceived value ofmore flexibleleases.

Short-term leases can make a building more valuable by allowing landlords to raise rents and fill space that may otherwise have sat empty. But when landlords try to finance or sell a building, they face institutional capital sources that want the assurance of long-term cash flow.

The trend toward shorter lease termsfor smaller deals has been occurring for years. According to Cushman & Wakefield, the average lease termfor all deals under 10K SF in the U.S. decreased from 81 months in 2015 to 75 months in 2019, and for the first half of this year, it has been 73 months. These small deals make up a majority of the market, with 74% of all office leases since 2015 measuring 10K SF and below.

The coronavirus pandemic has accelerated the trend toward shorter lease terms across all deal sizes as companies are more uncertain about the future of their business and their workplace arrangement. According to JLL, the average lease duration for all deals in the U.S. office market dropped from 6.4 years in the first half of 2019 to 5.4 years in the first half of this year, a 16% decrease.

"What we're seeing is tenants staking a very defensive leasing posture given the level of uncertainty," JLL Senior Director of U.S. Office Research Scott Homa said. "Deal sizes are shrinking, the duration of the commitments is compressing, and transaction volume is down considerably."

In many cases, these short-term deals are signed in pre-built spec suites or shared workspaceareas that landlords have created in response to the coworking movement. Tenants takingthese spaces will often ink three- to five-year leases, rather than the traditional 10- to 15-year deals.

Cushman & Wakefield Senior Managing Director Lynda Gallagher, who leads the firm's Valuation & Advisory Group in the D.C. region, said she started to see the trend toward spec suites with shorter lease terms about five years ago. At that time, she said it was difficult to getunderwriters and financial partners to feel comfortable with the deals because there wasn't much market evidence to prove the concept works. She said that is now starting to change.

"From the underwriting side, there is much more of a comfort level now," Gallagher said about spec suites with short-term leases. "As it has become more acceptable with the market, there are more and more buildings that have it. I'm now surprised when I see a building that has availability that hasn't gone that route."

The shift toward spec suites and shorter-term leases began largely in response to the explosion of coworking, which showed tenantsthe appeal of a flexible office deals, Newmark Knight Frank Executive Vice President Jane Diven said. She said this was especially true for Class-B tenants that don't look for trophy space with top-of-market rents.

"What I was starting to see was part of the tenant segment of Class-B were being attracted to coworking space because of the perceived flexibility that coworking could give them," said Diven, who is a leader inNKF's valuation and advisory team. "To become more competitive, many of these property owners were beginning to do spec suites with common areas clustered around a common tenant lounge area."

The push for shorter-term leases also happened because tenants saw how rapidly their office needs can change with the advent of new technologies, saidCohnReznick principal Patricia McGarr, who leads the firm's Valuation Advisory Services team.

"Shorter-term leases is a trend we're seeing, and part of it is because there has been this shifting in attitude about how things are changing and you don't want to be locked into a 15-year lease when five years out, they invent something new and you don't need all this space," she said.

Tenants have been asking for shorter lease terms for more than a decade, MRP RealtyprincipalZach Wade said, and he said landlords were hesitant because the capital markets preferredlonger lease terms. But now during the pandemic, he said the majority of tenants looking for space are seeking short-term deals, and landlords don't have a choice but to accommodate them.

"A lot of companies are in flux and trying to figure out what their future is," said Wade, who leads the developer's office arm. "The only longer-term deals currently in the market started pre-COVID ... If you want to be relevant, you have to meet the market."

The Upside

While shorter-term leases don't offerthe future stability of their longer counterparts, they do haveseveral benefits for landlords that can helpboost a building's valuation.

If average rentsin the office sectorare rising, short-term leases give landlords the ability to bring their properties up to the market rate every fewyears, rather than being stuck with a long lease that becomes more of a discount over time.

This is especially true when signing leases in an economic downturn, like the one the market faces today. Weak demand in the market creates downward pressure on rental rates that could leave landlords with much worse deals than they could get after the market recovers.Average office rents nationwide decreased by 0.2% during the second quarter, according to JLL, and are expected to drop further.

"There is a positive that when you have short-term leases and they're going to roll two to three years from now, depending on where rents are. This allows owners to realign rents to the market," Gallagher said. "The market right now is soft, and so a lot of deals are being made that will be below market in a couple years."

MRP Realty

The "Town Hall" amenity space at MRP Realty's Westwood Metro Tower in Tysons

Not only can short-term leases allow landlords to adjust to the market more often, but they are often leased at a rent premium, Wade said. Four years ago, MRP launched its Town Hall concept in response to tenant demand for more flexibility. The conceptoffers a series of office suites with common amenity spaces, and the leases typically have three- to five-year terms, Wade said.

"When you are accomodating a tenant's request for a shorter-term deal, whether two or three years, they should pay a little bit of a premium for that flexibility, and we've seen that," Wade said. "We've also seen rents go up in Town Hall on the turn of the space."

With elevated office vacancy in many markets, these short-term leases are often filling spaces that would have remained vacant. While longer leases may be better for a building's valuation, having a short-term lease is much better than having no lease at all.

CBRE Vice President Matthew Solomond, part of the firm's valuation and advisory group in Northern Virginia, said he thinks the trend of spec suites with shorter lease terms came in response to elevated vacancy in the market.

"Landlords are sitting on a lot of vacant space," Solomond said. "If they can build some of it out and get it rented and increase the occupancy of the building, that's better for valuation."

Tenant improvement allowances have become increasingly expensive for landlords, and building out spec suites with shorter lease termscan help them keep those costs down, Diven said.

"If a property owner builds out spec suites, they have more control over construction costs, and instead of doing $100/SF in TI, they may be able to do a suitable space with a $75/SF build-out," Diven said. "If it does roll and the tenant doesn't stay, they can refresh and at that point still control the cost."

The Downside

Despite the benefits of short-term leases for landlords, they still lead toa lower valuation than having a long-term lease in the same space, becauseinvestors and financiers prefer the latter. But some experts say they foresee short-term leases becoming more accepted as the market evolves.

Office buildings are valued based on the average weighted lease term of their full rent roll. Solomond estimated that an office building with an average lease term of 10 years would have a capitalization rate around50 basis points lower than one with a five-year average term.

"It's really difficult to finance deals with short-term leases due to the increased risk and re-tenanting cost," Solomond said. "More often you have to re-lease the space, and it costs you more in tenant improvements, commissions and downtime. That's why [investors] look for longer average lease rates."

Many of the investors that buy office buildings are large institutions that are seeking to park their money into a stable asset with little risk, Homa said, leading them to prefer longer leases.

"You have these offshore entities and sovereign wealth funds and pension companies and insurance companies that drive property markets and view real estate as a bond. Theyjust want stable cash flow," Homa said. "It's just a different place within the risk spectrum to be accepting of these shorter-term commitments and variable cash flows and higher volatility."

Lenders also prefer long-term leases, Diven said, makinglandlords want to keep their average term highif they are looking to refinance a building.

"I know from conversations I've had with institutional owners, they would really prefer not to do short-term renewals," Diven said. "Buildings are much more financeable when they have longer average lease terms, so it's a balancing act."

Cushman & Wakefield Executive Vice Chairman Bill Collins said institutional investors can be comfortable with a certain level of short-term, flexible leases in a building, but they typically do not want that level to exceed 10%.

"Would you want your entire building to be three-year leases? No. But some portion of it is good," Collins said. "I think 10% is a no-brainer. If you've got 10 stories, you have one floor you can build out and put leases in there and make it flexible, and they may morph into long-term leases."

Wade said MRP has had tenants in the town hall space sign longer-term deals after their initial short-term period expires. But he also said these flexible deals shouldn't fill an entire building.

"There is a limiting factor on how much of the shorter-term deals you can have in the building, and we do try to keep it within 20% or less of our assets," Wade said.

But Wade thinks that could increaseas capital sources become more comfortable with short-term leases. If a landlord can prove their ability to consistently re-lease space with little turnaround time, he said financiers can have the same typeof confidence in short-term office leases as they do in apartment buildings with 12-month leases.

"In the future, I think there will be a component of the office assets that will be valued similar to apartments and hotels in that they will look backwards on revenue instead of just looking forward on cash flows," Wade said. "They'll look at your performance on the flexible side and make projections based upon that ... as the office building evolves, I believe it will become a component of how buildings are valued."

Continued here:
How The Shift To Short-Term Leases Is Changing The Way Office Buildings Are Valued - Bisnow