A Twitter Toolbox for REALTORs

(Published in the SIOR Professional Report)

Tweet! I can’t think of a more irritating description for the phenomenally popular 140 character “mini-blog” found on Twitter.com.

What is Twitter and why Tweet?

You’d have to have your head buried in the “cyber-sand” not to have noticed the impact Twitter is making on the world of social networking, and possibly the world in general. This was evidenced by the Twitter traffic in Iran during the recent violent uprising and the current campaign by www.barackobama.com to “tweet your senator in support of health insurance reform”. Not to be outdone, the conservatives have many tweeple (people who tweet) that keep their tweeps (followers) posted on the enemies on the left. One good example is RedState, http://twitter.com/RedState which provides conservative news and community information. Strange, but as I write this, a tornado is ravaging the area and a local record store is currently tweeting storm damage updates to their tweeple! Time Magazine recently reported that there are 32 million Twitter accounts.

That said, I thought it necessary to link this popular web-based communication tool to the business of Commercial Real Estate, by presenting real world examples, techniques and applications that will likely have you adding Twitter to your arsenal, as you navigate a most difficult marketplace.

Twitter 101 and 201

This is a link to a short 2:23 video that does a great job of describing what Twitter is and how to get started. I would recommend every “newbie” take a look. (www.commoncraft.com/twitter)

Basically, think of Twitter as another form of electronic communications that allows you to post (and read) very short messages in plain text or often provide links to Websites, articles, photos, videos and or audio files found on the Internet. You cannot attach files, photos, etc. to a Tweet, but you can link to just about anything you can normally send by email or find on the Web.

I was asked not to make this article a “how-to”, but want to emphasize the ease of setting up a Twitter account, and why you should do that ASAP. According to Nielsen, Twitter is growing exponentially 1,382% from February 2008-2009! This means the best Twitter account names are being snapped up much like domain names were in the late 90’s. Since Twitter accounts and their names are free, I would get one before someone gets the name you desire (including yours!) It takes less than five minutes to get started, but I’d suggest you set up a complete profile, which will take a little longer.

A Twitter account allows you to tweet (or post) a message to anyone who decides they want to follow you. This is similar to Facebook in that you see all posts from your “friends” when logged into Facebook, on Twitter you will see all of the tweets from those you elect to follow.

The big difference is as: with Facebook, you have the opportunity to confirm a “friendship” and allow or not allow access to your posts. With Twitter, you can be as open as you want in allowing access by “followers”. You can approve or block them, but you are usually found by like-minded people who are interested in what you have to say. They aren’t really called “friends” as in Facebook, because you might not know them at all. This may be one of the key benefits for a business or real estate practitioner. Just think of the possibilities.

Search

Twitter has a powerful search engine that allows you to search for key words or people throughout the entire platform. This means you can search and find people, businesses, jobs, posts, articles, videos, photos, etc. using a simple key word search with results in the account information, the account holder descriptions and tweets or posts by the 32 million current Twitter users. Again, think of the possibilities.

Real Estate Twitter Ideas

Linking: Twitter allows you to post one link to a Website of your choice. This is a very powerful feature, as it lets you link back to a myriad of market making or service oriented sites. You can link to:

• A company or personal Website
• Your blog
• Your LinkedIn profile
• Your Facebook page
• Your listing
• Your Charity
• An article you authored or were featured in
• A real estate organization (SIOR, CCIM, Colliers, etc.)
• Your community
• A development project

I’m sure you can think of many more, but you get the picture.

Email/Messaging:

Twitter accounts are linked to an email address. This allows you to get responses and direct messages, track followers and/or manage follower requests. Again, think how cool it would be to get an email from a Tenant, User, Investor, Seller, Landlord, Applicant, Employer, etc. who liked what they see on your Twitter page and contact you out of the blue for an opportunity. The reverse is also true. Twitter users expect followers that they do not know to track their tweets and get to “know” them. You could reach out to the aforementioned with a direct message which could be text, links, photos, etc., since the message is, and acts, exactly like a tweet. Can you see some applications yet?

Branding:

Twitter allows you to personalize or modify your Twitter account site. This allows you to add links, information, marketing, phrases, logos, photos, colors and contacts that can be viewed by anyone who visits your Twitter site. There are so many marketing and business applications to this feature that I’ll leave it to your imagination. Your Twitter account site is like a miniature one-page Website that showcases your tweets alongside your brand.

Biography

Twitter allows you to include a 160 character biography or description of you, your organization, company, development, property, charity, etc. This list is endless. One thing I’ve noticed is Google loves Twitter! Soon after setting up my Twitter account(s) I found that Google indexed the accounts almost immediately and when I searched for my company or my name, my Twitter accounts were ranked ahead of my previous Web placements, even if the prior result was on the Internet for many years and had had significantly higher ranking. I am not an expert on Search Engine optimization (SEO) but if Google finds Twitter extremely relevant, who am I to argue? Factoid: Google had 76.8 Billion searches in July, 2009. They command 67.5% of the market. I’d suggest you write a description that encompasses key words or phrases that best and succinctly describes whatever your Twitter account or site is trying to accomplish. This is a very powerful feature and it is free!

Tweets for Real Estate

I think you should consider setting up two (or more) Twitter accounts. One for business and one for fun. Why? Your business Twitter account can (and should) be an extension of your business. I don’t think you need to shut down the personal side of your life on Twitter, but think you will have a separate set of followers for your personal life, which can be much different than those who follow your business tweets. Do you really think your business followers care to know your daily habits and thoughts on issues not normally part of the business world? There is nothing worse than reading a tweet like “I’m eating a ham and cheese sandwich”. All tweets ought to assume that followers will read it and they give a rip.
Some business tweet ideas include:

• Post a new listing
• Ask for advice
• Find or seek an employee or a job
• Provide a link to your blog
• Announce a closing
• Herald a success
• Provide a link to an article
• Link to a pertinent Web Site
• Promote a new …
• Praise a client or colleague

If you are consistent in tweeting this type of content, mixed with a smidgen of your real or private life, I guarantee you will accumulate followers that in turn can generate business opportunities.


Brand/Reputation Tracking

Twitter is used by many companies, organizations, politicians, celebrities and ordinary people to track what is being said about them in the “Twittersphere” (another irritating word). In today’s litigious society it is always a good idea to keep track of what people are saying about you. Additionally, awareness of your brand is a key component of your overall marketing strategy. Why not leverage the power of Twitter to enhance your brand awareness, at no charge?!


Twitter Applications, Add-ons and Tools

Early on, Twitter, like Apple’s iPhone, opened up their API (Application Programming Interface) to developers and third parties to allow for better and easier usability of Twitter. This has produced a seemingly never ending list of applications, add-ons and tools that can enhance your Twitter experience. Here is a list of six tried and true Twitter applications along with brief descriptions.

HootSuite: (www.hootsuite.com)

A twitter client that manages multiple
Twitter accounts or profiles, schedules tweets and measures your Twitter effectiveness. Hootsuite links to Facebook.

TweetDeck: (www.tweetdeck.com)

A Twitter client that allows you to organize, update and react to all of the tweets, direct messages, retweets, etc. that you get over multiple accounts. Tweetdeck also interfaces with Facebook and offers a free iPhone application.
twitpic: (www.twitpic.com) A photo interface to share photos on your Twitter accounts.

Back up my tweets: (www.backupmytweets.com)

Hackers, bad guys, viruses oh my! Yes even Twitter can be taken down. You might need one of (or all of) your tweets for future reference. This free service will back up multiple Twitter accounts, just in case.

GroupTweet: (www.grouptweet.com)

Broadcast messaging to your private group of "tweeps". This handy application can be used for a company, organization, brokerage team, office building, etc.

TweetLister: (www.tweetlister.com)

This is a Real Estate listing service that allows you to post properties for sale or lease, complete with forms that are similar to those used on other Web based listing services. Did I mention that it was free?

There are many tools to enhance your Twitter experience, but you’ll have to try them for yourself. I have added a long list in the footnotes of this article.


Is Twitter a Fad?

There are many who think Twitter is a complete waste of time and possible a fad. They may be right! If Twitter is used only as a way for friends to keep in touch and let each other know what they are eating, I think it will end up getting crushed by Facebook. Facebook has over 250 Million users and is consistently enhancing its’ website to compete with Twitter and MySpace. This competition will cause Twitter to either step up and provide better service, more enhancements, quality add-ons and most importantly, a clear way to bring in revenues. If not, we’ll add it to a long list of once powerful entities of the digital world. Do you remember? Compaq, Netscape, Prodigy, Wang, Commodore 64, InfoSpace, WebCrawler, Inktomi, MapBlast, Visio, Sperry Corp., Burroughs Corp., and on and on and on...

Final Thoughts

As with any tool, you need to use it to get any value from it. Twitter is an amazing application tool that can be used to expand your digital footprint and potentially your business, network, opportunities and ultimately your revenues. Oh, did I say it is free?


List of 11 Good Twitter Tools and Add-ons:

•Mr. Tweet: http://mrtweet.com/?v=20 Helps you find people relevant to your interests.

•add a tweet: http://www.addatweet.com/ A plug-in that allows you to Tweet a remark about any web page you are viewing.

•tweetbook.in: http://tweetbook.in/index.php You can create instant .PDF “e-books” of your or your favorite tweets.

•Tweepler: http://www.tweepler.com/ Allows you to add groups of followers quickly.

•monitter: http://monitter.com/ Keep track of what is being tweeted about your business within 100 miles.

•bubbletweet: http://www.bubbletweet.com/ Add a small video “bubble” that pops up on your Twitter Site.

•twitter gallery: http://twittergallery.com/index.html/ Choose from a ton of sweet twitter backgrounds.

•Future Tweets: http://futuretweets.com/ Tweet and set for future scheduled delivery.

•trackthis: http://www.usetrackthis.com/ get tweets updating you of package movement status from UPS, FedEx, USPS, DHL etc.

•twibs: http://www.twibs.com/about.php Allows Twitter users a place to find businesses on Twitter.

•1,000 Twitter Apps and Resources: http://botw.org/articles/twitter-apps-and-services.html

Five Indicators of the Bottom of the Commercial Real Estate Market

As a commercial real estate broker and investor, I am often asked about the arrival of the low-point of the stressed, distressed, value-add and opportunity property market. "When will we be at the bottom? Are we there yet? Is it this year? Will it be next year? Will the pending CMBS mess push property values lower? When should I get in?" are just a few examples of questions I am fielding. Funny thing is, I don't think we ever actually see the bottom before it passes us by.

That said, I think we are darn close, if not already there. Here are five indicators that it may be time to get into the pool before it is too late:

1. CMBS Mortgage Pools are Selling. Not only are these pools selling (some which contain so called "toxic loans"), but the yields are dropping. GlobeSt.com recently reported: "Spreads on AAA-rated CMBS have narrowed by 100 to 150 basis points as a rally in these securities continues for the second straight month, particularly in five-year triple-A paper, according to a new report from Trepp. Predictably, the spreads have narrowed more on loans backed by stronger collateral, Trepp says. The narrowing has occurred even amid what the CMBS information provider calls "continued negative headlines." Today, the Fed announced a six-month extension to the TALF Program, which is only good for newly issued and legacy triple-A-rated CMBS loans, but they left the door open to include other issuance's if the economy requires it. This trend will open up the debt market, as long as the investors see enough reward in the risks they are taking.

2. The Bad News is At a Crescendo Level. To wit; Reuters; "Commercial property execs expect more bad news", Hernando Today; "Analysts: Disaster looms in commercial real estate", GlobeST; "Property Sales Plummet in First Half of Year", Reed Business Information; "Industrial rents drop on slumping demand", Financial Times; "CMBS delinquencies add $2bn per month"...I could go on and on, but the press and industry insiders and experts are pounding this market day after day with bad news, predictions, and comments, pointing to a pending total industry melt-down and absolute doom. Though this has been like a wildfire jumping from sector to sector, spreading negativity with a "scorched earth policy", I've noticed a marked up-tic in relatively good news. A recent report from the Massachusetts Institute of Technology Center for Real Estate (MIT/CRE), actually goes as far as to say "A commercial real estate price index... posted a staggering 18.1 percent drop in the second quarter. The index, which collects commercial real estate purchase and sales data from leading real estate firms, is now down 22 percent for the year and 39 percent from its peak in Q2 2007" Commercial Mortgage Loans, the author that analyzed the data suggests that "All the bad news, however, is a harbinger of good news. The very best financial professionals know that pessimism is a bullish indicator. A market bottom, by definition, is the moment of maximum pessimism. The sheer magnitude and the incredible speed of the price declines could be an indication that sellers have capitulated and now believe that getting out is more important than getting their price". I find it incredibly interesting that we have to have the lowest of lows in recent history to start our way back up, but this could be true, and good news is starting to trickle out...http://seekingalpha.com/article/153491-commercial-real-estate-record-declines-may-be-good-news

3. The Smartest Players Are Getting Back In The Game: Realty Income (NNN) recently announced that they are back in the acquisitions game. I know the CEO Tom Lewis personally, and think he's one of the most brilliant leaders and thinkers in CRE. When he starts to feel bullish, it makes me think we may be at our near the bottom.

Recently, CB Richard Ellis Investors suggested that the slump in pricing could be over. http://nreionline.com/finance/news/slump_nearly_over_says_cb_richard_ellis_investors_0810/index.html CBRE has access to the best research, real time market activity, have penetrated all financial and real estate segments and have unmatched U.S. and international market coverage. If they think we are at (or near) bottom on pricing...well, who am I to argue? Also, I’ve noticed that some smart retailers and others are taking advantage of the downturn to get access to excellent real estate at fire sale pricing. This type of activity should lead value-add investors into the pool too.

4. U.S. Housing Woes May Have Bottomed Out. Residential experts are predicting an imminent flattening out or an end to the housing financial crisis. Small "shafts of light" are entering the dark depths, such as; pending sales are increasing a smidgen, prices are not falling quite as fast, monthly sales are increasing slightly, activity and pending sales are up a bit, foreclosures are abating a little, builders are building...OK, well that might be a bit aggressive, but nationally the news is improving a titch. Face it; we need a housing financial re-birth to lead us out of our doldrums. Sam Zell recently said, "The key to everything is single-family housing because that's where consumption comes from," Zell said. "If people don't have confidence in their biggest asset, they won't have the confidence to spend." This confidence will drive spending, which leads to jobs-which drive commercial real estate metrics. Keep track of housing or you might miss a big indicator.

5. Capital is Returning to Real Estate. The U.S. REIT and Real Estate Funds markets have had significant success in raising money to pay down debt and for property acquisitions. There are more IPO's to follow. In July and the first week of August there were approximately 25 new registrations alone. This new money is clearly earmarked to buy distressed assets. When the big boys start buying, the bargains may be waning. Recently, I read of competition in the debt market in a Reuters article. I especially like this quote “recent signs of "aggressive" competition to fund office properties, including from insurance companies and foreign banks, mean borrowers could find it tougher to seek breaks on existing loans, the analysts, led by Darrell Wheeler, said in a research note. With more access to funding, they argued, prices would be buoyed, making foreclosures viable alternatives". http://www.reuters.com/article/bondsNews/idUSN1430571420090814 Hines REIT, Brookfield Properties and other big players are eying IPO’s. Cash will be king and the treasures will be there.

There are a myriad of indicators that can and do signal the fall of a market, but there are not as many clear indicators cuing investors of the very bottom. The aforementioned five should be clear hints that we are either at, or very close, and as most savvy investors know, you won’t actually see the bottom until it’s passed you by.

As you consider whether or not to dip your toe into the pool, remember that money is made in down markets, and those most successful are willing to take the additional risks and stand to do the best. When investors are closing deals all around you, it will be too late to be called one of them.

Michael K. Houge, CCIM, SIOR

(Chief)

info@chiefcompanies.com

651-288-0300

Chief Thoughts on Commercial Real Estate Demand

This is the first "Chief Brief".

When looking at the demand in the business of commercial real estate, I think there are a variety of factors to consider. They are:

Leased space demand.
Commercial mortgage demand.
Commercial real estate services demand.
Investment property demand.

Leased space demand.
The crash of the housing expansion and overall residential real estate market has had considerable impact on employment. Unemployment has caused vacancy rates to skyrocket in office and manufacturing space, has had negative effect on industrial, distribution, and warehousing properties, as well as almost every class of retail space. I think that until we experience significant increases in job creation, we will not have demand for further development, in any of the aforementioned classifications, nor will we see a swing back to a meaningful increase in absorption of the current vacancies. Jobs drive commercial real estate demand.

Commercial mortgage demand.
The housing crisis lead directly to the capital markets meltdown. The CMBS debt packages were co-mingled with sub-prime and other “financially engineered” debt products that were soon exposed as significant risk, and in most cases, caused these huge packages to be unable to be effectively underwritten, and thus they became “poison assets”. The buyer pools ran in the opposite direction and the mortgage and investment bankers were left holding the bag-with no buyers. This effectively took the knees out from under the conduit mortgage business which were at that time, originating approximately 65-70% of all commercial debt. No replacement product or program has emerged, and none is in sight. There is an estimated $1.8 Trillion of CMBS debt maturing in the next four years, without a cohesive plan or capital source for refinancing, except a recently coined strategy of “pretend and extend”. Which is a nice way of saying “stick our head in the sand” and hope the values hold up by pushing out the term, and pray that another capital source returns to the market. The demand for quality commercial debt is and will be considerable. My concern is whether a supply will materialize-in time.

Commercial real estate services demand.
As the ancient Greek philosophers said, “The only constant is change”. There will always be a demand for commercial real estate services, as there are, and will always be owners that have no desire, aptitude or resources to operate, lease, sell, manage or finance their assets. The question will be in what area will there be an increase in demand for these services?

With the recent economic deterioration, quality leasing services will be likely be in the highest demand, especially if there is a fallout in leasing agents unable to sustain in a much more “hit and miss market” with a greatly reduced opportunity for earning.

Demand for asset and property management services will likely remain the same, with some of the players being replaced by specialists like receivers, as many properties will go into default and or foreclosure and lenders will want to protect the assets. Demand should also increase for special loan servicers who will assess current property conditions, develop a plan for continued operations, negotiate with borrowers, and make asset based decisions, including the hiring of receivers, property managers, and leasing and sales brokers.

Investment property demand.
Buy low sell high. One would think that this strategy would be more than achievable. Overall commercial property values are estimated to have dropped by 20-40%, so arguably one can “buy low”. The mystery is whether the values will continue to drop, thereby delaying or preventing the rise in value that necessitates the “sell high” part of the old real estate adage.

The current demand for commercial real estate is dimmed by three major factors.

Lack of debt capital. Although debt exists, it is in low supply, the terms are less palatable to investors, and the risks are not in alignment with the current cap rates or pricing. Why would an investor take significant recourse mortgage risk, coupled with the inherent risk associated with commercial real estate in a very unstable and unforgiving economy? Demand is definitely driven by favorable financing.

Lack of market confidence. Until the American consumer feels confidence in the economy, the value of their most significant investment (their home), and do not fear losing their job, they will not shop, which sadly is the driving engine of America’s financial health. Currently there is no confidence to invest in commercial real estate.

Lack of 1031 Exchange activity. Most brokerage metrics put their investment sales figures at 7-20% of 2007 numbers, while 2005-and 2006 were even better. With transaction velocity this low, 1031’s are almost non-existent. Another significant factor is the aforementioned decrease in property values. Even if a property owner sells, he/she is not likely to experience enough appreciation to recognize significant capital gains, which is the main driver of the 1031 tax deferred exchange.

Obviously, institutional investors are less impacted by tax ramifications and debt constraints, but their confidence levels remain low, and they are “staying out of the pool” until they can see the bottom. The same can be said of the riskier, value–add, opportunistic individual investors.

Once we see a long-term, fundamentally sound commercial real estate market, that behaves with a modicum of predictability, we will experience an increase in commercial investment demand.

Michael K. Houge, CCIM, SIOR
(Chief)