VOLUME 32, NUMBER 5
©2016 Law Bulletin Publishing Co.
May 2016
Four benchmarks for evaluating new hotel projects by John Petrovski
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New study shows that co-working, flexible office space is on the rise by Dan Rafter
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.S. office buildings are more frequently offering tenants co-working space today, office space that employees from several different companies share as a way to save on the cost of space and equipment.
According to the 2016 Flexible Workspace Review released in May by The Instant Group, co-working grew more than 10 percent across the United States last year. Office buildings offering co-working space and executive suites — offices that independent contractors or other workers can Space to page 16
he hospitality sector is in the sixth year of a bull run after the 2009-2010 economic downturn. Most markets across the country are enjoying recordhigh occupancies, while daily room rates and top-line revenue growth have been strong. It’s been exciting times and all good news, but there’s more downside risk today than there was a few years ago. Now, greater deal selectivity is prudent, and the best developers and operators will outshine the competition. Petrovski In the midst of a boom market, it’s easy to believe that the market can only continue to grow. That may be leading some developers to be overly aggressive in entering new markets and pursuing new hotel developments. But considering that the typical upcycle for the hospitality industry is about three to five years, the current bull market is bound to run out of steam sooner rather than later. Depending on the conditions specific to a particular market, developers could be better served by Hotels to page 18
Associated Bank’s Schmidt: People matter when it comes to commercial financing by Dan Rafter
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innesota Real Estate Journal spoke with Paul Schmidt, head of commercial real estate in the Minneapolis office of Associated Bank, about what it takes for investors and developers to qualify for commercial financing today. The key, Schmidt says, is the people behind the financing requests. Minnesota Real Estate Journal: For years now, the multifamily sector has been red hot. Are you still
seeing an abundance of financing requests from customers looking to buy or build apartment buildings throughout the Midwest? Paul Schmidt: We are still seeing a lot of requests for multifamily financing. We really hit the peak about a year ago. Back then, it seemed that was all we were lookSchmidt ing at. It has started to slow a bit, though. In a lot of the markets, the low-hanging fruit has already been developed. Developers and investors
are now being a bit more selective. That said, the multifamily market continues to be strong. The market fundamentals continue to be strong in terms of the number of people wanting to rent versus buy. The country is seeing solid job growth. We have to find places for all these people to live, and renting remains a top choice for many. MREJ: You mentioned that a year ago, it seemed that the vast majority of your lending requests were Schmidt to page 20