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Real Estate Dorota Dyman and Associates blog: 7 bold commercial real estate predictions

Real Estate Dorota Dyman and Associates blog: 7 bold commercial real estate predictions | Dorota Dyman & Associates Real Estate |

The death of shopping malls and the rise of smart buildings are some ways the real estate landscape will change by 2039. Here's a glimpse of tomorrow.

Jeanne Jones's insight:

Conjuring the future of commercial real estate begins by conjuring our future. How will we work, live, shop or do business? Perhaps no other investment sector is so closely tied to people's most fundamental needs and behaviors; its evolution, to a large extent, follows ours.


Take it from Peter Linneman of Linneman Associates and the Albert Sussman Emeritus Professor at The Wharton School of Business, who pioneered the academic study of real estate and was named by the National Association of Realtors as one of the 25 most influential people in the business. Commercial real estate, he said, "exists to service the economy and society. That's all we do."


Over the next 25 years, say Linneman and other key players in the industry, commercial real estate will be buffeted by changes in demographics, technology, globalization, economic and environmental realities and a host of other trends. Some pieces of the trillion-dollar global industry will adapt; others will fall away. It will still be a cyclical business, but no matter how it changes, commercial real estate is expected to be thriving in 2039.


Here are seven bold predictions about U.S. commercial real estate in 2039.


1. Most shopping malls will be extinct.
The world of the American shopping mall, said Kenneth Riggs, president and CEO of Real Estate Research Corp., "has been a Darwinian environment since the 1990s with the advent of big-box retail and the 'Wal-Marting' of the world—and it will stay that way." In other words, expect malls to continue their decline due to the rise in e-commerce, with only those consistently producing very strong revenues still doing business in 25 years.


"As the J.C. Penney's and Sears continue to lose market share to online retailing, you're going to see more dead malls where the anchors go dark and ultimately are worth only the land they're built on," said Tom Bohjalian, executive vice president at Cohen & Steers, which was the first investment company to specialize in listed real estate.


Teardowns may not be the only way to capture value in defunct malls, though, said Rick Fedrizzi, president, CEO and co-founder of the U.S. Green Building Council. He predicts that with repurposing, they'll be a useful resource when our way of life swings back to revolving around more compact communities. "Established places like shopping malls will become like town centers, where people can come together, where their doctors and day care will be, where they can gather after major devastations."

2. Brick-and-mortar will go tech—and warehouses will go back to the drawing board.

As consumers increasingly shop on their computers and phones, brick-and-mortar retailers will need to adopt the attitude 'If you can't beat 'em, join 'em' in order to survive. Innovation will be key, making use of technology that integrates omnichannel shopping into the physical experience of being in a store and matching the logistical advantages of online merchants.


"People want to look and touch; they want instant gratification, too," said Maria Sicola, an executive managing director at real estate services firm Cushman & Wakefield, even as selling floors become smaller. "Perhaps there will be the equivalent of a mini warehouse within the store so you can go in the back room and buy what you want."


Apple is one retailer already using this forward-thinking approach in its stores. Its sales floors feature products that people can touch and try on their own, spending as much time as they'd like. They can buy and take home merchandise if they choose, or they can go home, do further research and buy online—with free overnight shipping. This may be a model other retailers will emulate.


Efficient distribution will be key, and the increasing importance of logistics and automation will impact warehouses across the country, many of which are obsolete even now, lacking up-to-date technology and adequate clearance height and often too remote to accommodate same-day delivery. That will add up to a lot of activity in the industrial sector in coming years, with old warehouses being retrofitted or new ones being built.




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A key to housing recovery? Out-of-court foreclosures

A key to housing recovery? Out-of-court foreclosures | Dorota Dyman & Associates Real Estate |
Home real-estate markets have bounced back significantly faster in states where the law allows foreclosures to move ahead quickly, putting houses into new owners’ hands sooner.
Jeanne Jones's insight:

Dorota Dyman & Associates Real Estate


WASHINGTON — Why have many of the local housing markets that were hit hardest during the bust — especially in California — bounced back so vigorously and quickly, with prices close to or exceeding where they were in 2005 and 2006?


And why have many others along the East Coast and in the Midwest had a slower move toward recovery, with sluggish sales and gradual increases in values?


Though multiple economic factors are at work, appraisal-industry experts believe they have isolated a crucial and perhaps surprising answer: Real-estate markets rebound much faster in areas where state law permits foreclosures to proceed quickly, moving homes with defaulted loans into new owners’ hands expeditiously, rather than allowing them to sit and deteriorate, tied up in court procedures for years.


Prices of foreclosed homes in such areas typically are depressed and negatively affect values of neighboring properties, but they don’t remain so for lengthy periods because investors and other buyers swoop in and return them to residential use rapidly.


By contrast, in states where laws allow large numbers of homes in the process of foreclosure to remain in legal limbo, often empty and unsold, home-price recoveries are hindered because lenders are prevented from recovering and reselling the units to buyers who’ll fix them up and add value.


Pro Teck Valuation Services, a national appraisal firm based in Waltham, Mass., recently completed research in 30 major metropolitan areas that dramatically illustrates the point.


All the fastest-rebounding markets in October — those with strong sales, price increases and low inventories of unsold houses — were located in so-called nonjudicial states, where foreclosures can proceed without the intervention of courts.


All the worst-performing markets — where prices and sales have been less robust and there are excessive numbers of houses available but unsold — were located in judicial states, where post-default proceedings can stall foreclosure completions for two to three years or even more in some cases.


Among the best-performing areas were California markets such as Los Angeles and San Diego. California is a nonjudicial state. So is Washington state.


Among the worst performers were Florida markets such as Tampa and Fort Myers, as well as parts of Illinois and Wisconsin. All of these are judicial states


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Real Estate Dyman $6,000 Per Square Foot: Paris Mansion Asks $47.4 Million

Real Estate Dyman $6,000 Per Square Foot: Paris Mansion Asks $47.4 Million | Dorota Dyman & Associates Real Estate |
La Jolla estate of San Diego newspaper family goes on the market for $28 million; Hamptons home sells for $21 million; Louis Vuitton CEO Michael Burke buys in Miami Beach for $11.7 million
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La Jolla estate of San Diego newspaper family goes on the market for $28 million; Hamptons home sells for $21 million; Louis Vuitton CEO Michael Burke buys in Miami Beach for $11.7 million.

A mansion in Paris' fashionable Sixth Arrondissement has been listed for $47.4 million (,according to listing agent Xavier Attal of Immo Best International.

The four-story house is about 7,800 square feet with 3,700 square feet of outdoor space, including a garden and several terraces. It has nine bedrooms and six bathrooms.

While the décor is contemporary, Mr. Attal said, original details remain. Located on Rue Vavin, the house is about 20 yards from the Luxembourg Gardens in Saint-Germain-des-Prés.

Built in the 19th century, the building was later divided into four apartments. The current owners bought each one and reunified the space, Mr. Attal said.

Mr. Attal declined to identify the owners, but said they purchased the home about 20 years ago and renovated it in 2011, adding an elevator and a sculptural wood-and-iron staircase.

The owners are selling because their children have moved out of the house, he said, and they no longer need so much space.

With its historic character and high-end shopping, the Sixth Arrondissement has the most expensive residential real estate in Paris.

The area around the Luxembourg Gardens in particular "is the most exclusive real estate in Paris," said Mr. Attal.

La Jolla Estate of San Diego Newspaper Family Is Placed on the Market for $28 Million

The hilltop estate of a prominent San Diego newspaper family has hit the market for $28 million, according to listing agent Greg Noonan of Berkshire Hathaway Home Services.

Called "Fox Hill," the 8¼-acre La Jolla estate was the home of the Copley family, longtime owners of the San Diego Union-Tribune. Their company, the Copley Press, at one time owned about 15 newspapers in California and in the Midwest, but publisher David Copley sold most of the company's assets before his death in 2012. Fox Hill is being sold by his estate, which is held by the David C. Copley Trust, according to trustee Dean Dwyer, who is president of the Copley Press.

The 14,000-square-foot, seven bedroom, 9½-bathroom French Country manor is located on Country Club Drive on a hill overlooking the ocean, Mr. Noonan said. It has a gym, a guesthouse, a courtyard with a pool and a pool house. The grounds include a large circular motor court and two garages with space for 12 cars, as well as an orchard, vegetable and flower gardens and wooded paths.

The house was built in the 1950s by Union-Tribune publisher James Copley, Mr. Noonan said. After James and his wife, Helen, died, David, their son, restored the home and added a new wing in 2012.

The Copley Press owns 24 acres of land adjacent to Fox Hill, Mr. Dwyer said. That acreage is in the process of being subdivided for potential development and isn't listed for sale, but the company would consider selling it. It had been listed in 2009 at $22 million, then taken off the market, he said.

La Jolla has few large residential parcels, Mr. Noonan said, adding that if someone were to buy Fox Hill and the adjoining 24 acres, the result would be the largest residential parcel in La Jolla.

A Newly Built, Nine-Bedroom Hamptons Home on About 4 Acres Sells for $21 Million

A newly built Hamptons home has sold for $21 million, according to the builder, Michael Davis of Michael Davis Design & Construction.

The shingle-style home, located on Parsonage Lane in Sagaponack, had been listed with Terry Cohen and Diane Saatchi of Saunders for $23 million, Mr. Davis said. The home was listed in March, he said, and closed in December.

The house has nine bedrooms, 10 full bathrooms and three half baths. It measures about 8,400 square feet, plus a finished 3,900-square-foot lower level containing a gym, sauna and steam room, home theater and wine room.

The home has wide-plank wood floors salvaged from old barns and limestone fireplaces imported from England in the kitchen, living room and family room. There's a rooftop observation deck, bluestone terraces, a built-in barbecue and a covered porch with a fireplace. On the grounds, there's a tennis court, a saltwater pool and a pool house outfitted with a kitchenette, rec room, sauna, steam room and laundry.

The property, which is just under 4 acres, was formerly a farm, Mr. Davis said. He purchased it in 2010 for $5.65 million and moved a small, older home on the property to another location before beginning to build this house.

Mr. Davis said he was attracted to the site because of its size—most parcels in the area are about 2 acres.

"It's rare to have a 4-acre lot," he said. "The appeal was to make an estate."
Mr. Davis declined to disclose the identity of the buyer, but said the purchasers were a couple with grown children.

Louis Vuitton CEO Michael Burke Buys in Miami Beach for $11.7 Million

Michael Burke, chairman and chief executive of the fashion house Louis Vuitton, closed this week on an $11.7 million home on Allison Island in Miami Beach, according to listing agent Kevin Tomlinson of One Sotheby's International Realty.

With a private dock, pool, guesthouse and tennis court, the 1-acre property was listed about six months ago for $13 million, Mr. Tomlinson said. Near the tip of Allison Island, the waterfront property has views of nearby La Gorce Island.

Mr. Burke, who was represented by David Lombardi of Lombardi Properties, plans to build a new home on the site, Mr. Lombardi said. The existing house is already in the process of being demolished. Mr. Burke declined to comment.

The deal is the highest residential sale price to date on Allison Island, a gated community, Mr. Tomlinson said. Home prices there have traditionally been less expensive than areas such as Star Island and North Bay Road, Mr. Tomlinson said, "but with land at such a premium, Allison Island has been surging."

Mr. Lombardi said the property was attractive because it has about 200 feet of waterfront, which is larger than most lots have.

The sellers, Frank and Phyllis Bramson, had lived there for more than 35 years. Mr. Bramson, a retired general contractor and real-estate investor, said he and his wife are downsizing now that their children are grown.

The existing house on the site was built in 1962, Mr. Bramson said, and the idea to demolish it was his.

He had started the process before the property was sold. "If I hadn't torn it down, somebody else would have," he said.

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