Market Outlook, Real Estate Investment
Businesswire | July 06, 2023
Workspace Property Trust (Workspace), the preeminent US suburban commercial office property owner and partner for the Fortune 1000, announced today that it successfully modified and extended its approximately $1.3 billion CMBS facility, securing a two-year extension for loans supported by its nearly 10 million square foot portfolio of 146 suburban office and light industrial, R&D and flex industrial properties in 14 major metropolitan markets across the US. In additional to this portfolio, Workspace owns an additional nine million Class A square feet of commercial office portfolio across 59 properties in the US.
The successful refinancing of this Workspace’s Class A portfolio is a major accomplishment in one of the most difficult commercial real estate and capital market environments in decades and reflects the strength, experience and operating performance of the Workspace management team. Iron Hound Management Company LLC served as financial advisor to Workspace.
Workspace Strengthens Its Balance Sheet To Invest in Growth
“We are thrilled to have successfully modified and extended our $1.3 billion CMBS facility with a two-year extension and significant equity participation,” said Thomas A. Rizk, co-founder and CEO of Workspace. “Getting this deal done in what many have described as the most challenging real estate market in decades was no small feat and is testament to the underlying strength of our portfolio, the resilience of the suburban office sector, the promise of our pipeline and the capabilities of Workspace’s vertically integrated national platform. With the strengthening of our balance sheet, we are now in the enviable position of driving growth by investing in our leasing operations and deploying state-of-the-market enhancements in key market locations as we double down on the opportunities in the suburbs. We appreciate the support of our lenders, partners and investors and are focused on the tremendous opportunities in front of us.”
Workspace owns and operates suburban office buildings in 14 of the top 20 US metropolitan areas, including Atlanta, Philadelphia, Dallas, Charlotte, Tampa, Phoenix, Silicon Valley, South Florida, Houston, Portland, Seattle, Minneapolis, Chicago and St. Louis. Approximately 40% of the Fortune 500 have headquarters in Workspace markets and nearly seven million square feet of the Workspace portfolio is leased by companies included in the Fortune 1000.
Workspace Suburban Markets Outperform Central Business Districts
In addition to the financing news, Workspace also released the findings of a recently conducted analysis of national real estate data that highlight the meaningful outperformance of suburban commercial office markets over downtown commercial office locations. The data set, compiled for Workspace by CBRE Strategic Investment Consulting, a global leader in commercial real estate services and investments, underscores the strength, vitality and energy of suburban office markets as employers across the country reinvent how and where people work today.
At the national level—and in key markets driving US economic growth— suburban office submarkets have outperformed central business district submarkets during each of the past three economic downturns, with smaller declines in rent growth and absorption rates and much steadier vacancy rates. This pattern has been particularly pronounced since the onset of COVID-19 and is leading to a fundamental reset in how corporate America is thinking about where and how their people should work. Based on the CBRE data, this resiliency is largely expected to persist through the current cycle, as many suburban locations continue to benefit from a rising number of occupiers and employees prioritizing the value of working closer to home.
“Workspace Property Trust is differentiated by our proven core strategy – to provide innovative and responsive real estate solutions to the Fortune 1000 in fast-growing, highly desirable suburban commercial markets across the country,” said Roger W. Thomas, co-founder, President and COO of Workspace. “In the last year, we transformed our business by doubling our footprint to more than 19 million square feet of commercial and light industrial assets in some of the most vibrant markets in the US, offering our customers lifestyle oriented, community-based working environments that are fundamental requisites for corporations today. The CBRE data we are highlighting today is a clear and resounding affirmation that today’s most progressive companies – large and small – are investing in suburban markets, reversing decades of legacy thinking.”
Mr. Rizk further stated, “New patterns of work and new demands by our tenants and their employees directly translate into the need for new long-term real estate innovation. We know the biggest single issue for our tenant partners is reducing the commuting time for their employees, allowing them to spend more time with their families. Our commitment to service and convenience and relentlessly focusing on delivering on our promise of “Work. Life. Balanced.” has solidified our partnerships with a number of Fortune 1000 organizations as they double down on their suburban footprints, investing significant dollars and resources in the lives of their team members. When Roger and I started Workspace, suburban office was a contrarian bet. The CBRE data validates what we’ve been experiencing on the ground over the last few years coming out of the pandemic: suburban office is benefitting from a foundational demographic shift to suburban submarkets in gateway metropolitan areas across the country where the quality of the work experience is the defining factor in leasing decisions.”
Suburban Markets Outperformance: National and Local Metrics
Nationally, suburban commercial office outperformed central business district commercial office in several key metrics, including vacancy, net absorption and rent growth. In 2022:
By year-end, the national vacancy rate for suburban office was 17.2% vs. 17.6% for central business districts, the first time the suburban rate has been tighter since 1989.
On net, the amount of suburban office space absorbed by occupiers in 2022 was equivalent to 0.3% of total suburban inventory. Meanwhile, downtown space was put back on the market (negative net absorption) at an amount equivalent to 0.2% of downtown inventory.
Year-over-year rent growth in the suburbs was a full percentage point higher than in central business districts -- 1.6% vs. 0.6%.
Additionally, when ranking U.S. suburban office markets across a variety of performance metrics, every Workspace market was represented within the top 15 for at least one metric, with several markets ranking in the top 15 multiple times. For example, over the past two years (Q4 2020 – Q4 2022):
Fort Lauderdale and Miami tied for the sixth-highest increase in post-pandemic rent growth among all suburban office markets, with asking rent increases of 1.7% in both markets.
Charlotte and Phoenix tied as the 11th highest in rent growth, with increases of 0.8% in both markets.
San Jose ranked second for the most square feet of suburban office space absorbed and seventh for absorption as a share of total inventory.
Other Workspace markets appearing in the top 15 for one or both of these absorption metrics were Chicago, Atlanta, Fort Lauderdale, and Miami.
Based on forecasts for the next two years (Q4 2022 – Q4 2024):
Workspace markets represented five out of the top eight suburban markets with the strongest near-term rent growth projections.
These markets include Milwaukee, Phoenix, Houston, Miami and Fort Lauderdale.
Dallas was the third-highest ranking market for the expected gap between the suburban and central business district vacancy rate – 22.4% in the Dallas suburbs vs 27.1% in the Dallas CBD.
Other Workspace markets in the top 15 across this metric include Seattle, Houston, Kansas City, St. Louis, Fort Lauderdale and Minneapolis.
About Workspace Property Trust
Workspace Property Trust is a privately held, vertically integrated, full-service commercial real estate company specializing in the ownership, management, leasing and development of office and light industrial, R&D and flex space across the US. Founded in 2015, as combined Workspace owns and operates approximately 19 million square feet of suburban office and light industrial, R&D, Flex (IRDF) properties in markets across the country, including 14 of the top 20 US metropolitan areas. For more information on Workspace, please visit www.workspaceproperty.com
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Home and Design
EasyKnock | August 17, 2023
Ribbon, powered by EasyKnock, announces today that RibbonCash – its pioneering cash offer solution – has relaunched in Atlanta and Charlotte.
As one of the pioneers of powerbuying solutions, Ribbon has considered Atlanta and Charlotte as its historical home base, driving the company’s success since its founding in 2017. Ribbon’s product reached around 2 percent of the overall closings in the Atlanta market in 2022, an achievement indicative of the appetite for homeownership.
“The EasyKnock and Ribbon teams could not be more excited to announce the return of RibbonCash to Charlotte and Atlanta,” said Jarred Kessler, CEO of EasyKnock. The Southeast in general remains competitive according to Bankrate’s Housing Heat Index. According to the index, despite price declines elsewhere in the United States, the Southeast has held steady due to comparatively affordable prices. Ribbon aims to tap into this reality for everyday homebuyers who seek ways to achieve homeownership for themselves or their family.
“We believe the Southeast maintains a culture of homeownership that withstands shifts in the market. Mortgage rates and inventory may ebb and flow, but achieving homeownership - and seeking the leading tools to compete - has not,” Kessler said.
“We continue to be bullish on Atlanta, Charlotte, and the Southeast overall.” By working with real estate agents and loan officers, and not competing with them as a direct-to-consumer offering like iBuyers, Ribbon sustains its reputation for empowering the real estate ecosystem.
EasyKnock acquired the assets of Ribbon in 2023. Both EasyKnock and Ribbon have forged strong partnerships in residential real estate by using best-in–class technology that connects consumers with loan officers, real estate agents, and other participants in the homebuying and home selling experience.
Together, Ribbon and EasyKnock are ushering in a new chapter for the real estate industry, creating a one-stop shop for financial solutions that serve homeowners, buyers, and sellers across the country.
About EasyKnock
EasyKnock is the first-to-market, technology-enabled residential sale-leaseback company in the U.S. Through innovative and accessible solutions, American homeowners who sell their property to EasyKnock can remain in their homes as renters while still getting the cash they need to pursue their financial goals. Headquartered in New York City and founded in 2016, EasyKnock has team members nationwide working to help homeowners unlock their financial freedom through non-loan programs so they can pay off debts, buy their dream home, fund a venture, and more - all while maintaining the ability to stay in their homes and communities. In 2023, EasyKnock acquired the assets of Ribbon Home and continues to offer Ribbon products to customers.
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Real Estate Advice
Businessiwire | August 11, 2023
SmartRent, Inc. (“SmartRent” or the “Company”), a leading provider of smart home and property operations solutions for the rental housing industry, has entered into an agreement with ADI Global Distribution, a Resideo Technologies, Inc. company, to serve as its preferred distribution partner.
A leading distributor of security, AV and low-voltage products, ADI's expansive network allows for efficient and timely order fulfillment for SmartRent’s 500+ rental housing customers, fortifying the Company’s inventory and distribution activities, and enabling it to streamline inventory management and enhance product availability.
“Demand for our solutions remains robust, and it’s imperative that we are able to meet the needs of our customers while continuing to prioritize the innovation and product enhancements that keep us at the forefront of the industry,” said SmartRent CEO Lucas Haldeman. “ADI is one of the most trusted names in the space, and we are proud to partner with them to meet our fulfillment needs and exceed customer expectations. This expanded relationship with ADI strengthens our overall partnership with Resideo.”
ADI was selected for its best-in-class operations, extensive product portfolio and local inventory availability. ADI has been supplying SmartRent with more than 100,000 Resideo thermostats per year, and this agreement will expand across the full product offering. In addition to prompt order fulfillment, the multiyear agreement provides SmartRent with needed hardware on demand while reducing its cash investment in inventory. Over time, SmartRent anticipates the decrease in on hand inventory will increase its cash balances.
"ADI is committed to serving as the indispensable partner of choice for our customers," said Rob Aarnes, President of ADI Global Distribution. "We're excited to expand upon our relationship with SmartRent to help them navigate their product needs and drive toward long-term business goals, while also resulting in incremental revenue growth for ADI."
About SmartRent
Founded in 2017, SmartRent, Inc. is a leading provider of smart home and smart property solutions for the rental housing industry. The company’s unmatched platform, comprised of smart hardware and cloud-based SaaS solutions, gives operators seamless visibility and control over real estate assets, empowering them to simplify operations, automate workflows, benefit from additional revenue opportunities and deliver exceptional site team and resident experiences. SmartRent serves 15 of the top 20 multifamily owners and operators, and its solutions enable millions of users to live smarter every day.
About ADI
ADI Global Distribution, a Resideo company, is a leading distributor of security, AV and low-voltage products serving more than 100,000 customers across North America, Europe, Middle East, and Africa. Leading pros rely on ADI for our wide selection of top brands, immediate product availability, knowledgeable sales staff and our product, design and support. Customers can shop ADI through its Digital Branch, mobile app and in more than 200 stocking locations. ADI solutions include Intrusion & Smart Home, Fire, Video Surveillance, Access Control & Communications, Residential AV, Pro AV, Networking, Data Communications, Power, Central Vacuum, Structured Wiring, Wire & Cable, and Tools & Hardware.
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