Best Of Bisnow 2018: The Year's 20 Most-Clicked Articles
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There was more to 2018 than Amazon ... sort of.
A big chunk of Bisnow's most-clicked stories of 2018 were related to HQ2, but our readers were also particularly interested in open offices, housing affordability, Chick-fil-A and lawsuits. Check out the 20 stories that most resonated with Bisnow readers this year.
Cushman & Wakefield cracked down on its travel expenses this year, and Executive Vice Chairman Peter Hennessy wasn’t happy with the new policy. He sent an “excessive” and “harsh” email calling out newly appointed C&W CEO of the Americas Shawn Mobley to 20 to 30 C&W employees, and shortly thereafter, around the end of February, the company let him go without explanation.
The drama between Mattress Firm and Colliers International, which began with the company filing a fraud and bribery lawsuit against its former brokers in November 2017, kept coming this year. In March, former Colliers International Atlanta executive Alexander Deitch countersued the retailer, saying executives knew and encouraged the deals they are suing their former real estate team over.
“Mattress Firm essentially weaponized the real estate department and its brokers to advance the larger agenda of removing all competition it could,” his countersuit read.
Rising homelessness in the Bay Area is hurting tourism. Street conditions are worsening — reports of feces, litter and human encampments rose sevenfold in five years — and that could have a significant impact on travel to the area.
Commercial real estate data giant CoStar filed seven lawsuits in early October against individuals who were sharing their CoStar user names and passwords, giving people who had not paid for the platform access to its database. CoStar is known for being litigious in its pursuit of protecting the information it has gathered, and it announced in an April earnings call that it estimated there were 10,000 “freeloaders” using the database without paying for it.
Some communities are pushing for landlords to be penalized for allowing retail vacancies to stack up. Vacancy taxes, fees assessed by the city for each storefront not occupied each year, are already in place in a few cities around the U.S. Arlington, Massachusetts, which began the program in 2017, has seen early success — at the beginning of the year, there were 17 empty storefronts in Arlington Center. Only six remained by the end of the year.
Though developers say they are unnecessary government interference that doesn’t consider the changing state of retail, similar financial penalties are being considered in larger cities, including Boston and New York.
In a lawsuit filed in March in U.S. District Court in Los Angeles, CBRE alleges Richard Rizika and several members of the South Bay Retail Services team stole about half a million documents containing proprietary information and trade secrets. Rizika left CBRE in 2017 to create his own firm, Beta Retail Agency, taking 13 CBRE employees with him.
The commercial real estate industry is chomping at the bit to start taking advantage of the tax breaks of the new Opportunity Zone program, but the initial roll-out raised a lot of questions. When the Department of the Treasury released new regulations and clarifications in October, the industry ate the information up. A new iteration of the program with even further clarification has been promised by the end of the year.
It has been a hot few years for multifamily deliveries, which are anticipated to peak in 2018. Dallas topped our January list of the markets with the lion’s share of the 360,000 units in the pipeline for 2018. Data released in July said multifamily construction may actually have peaked in 2017. One way or another, experts expect 2019 will be a little slower (and a little healthier) for the sector.
In the 10 years since the Great Recession began, job growth has roared back. We now have 4% unemployment, the lowest rate since the 1960s. But wage growth hasn’t kept pace, and as developers increasingly are pushed by land costs and financiers to build high-end product, housing affordability is becoming a greater problem for the country each year.
Amazon HQ2 was THE story of 2018, and the final decision in mid-November was stunning — rather than the promised 8M SF second headquarters with 50,000 jobs in one city, Amazon decided to create a second and a third HQ, each getting about 25,000 jobs. Long Island City, New York, and Crystal City in Arlington, Virginia, are now furiously preparing for their new Amazon campuses. Amazon simultaneously announced it would build a 5,000-employee operations center in Nashville.
A private plane piloted by Category III Development CEO Scott Shepherd crashed in August, taking the life of Shepherd and four other people, including three other real estate professionals. The five passengers were flying to a real estate conference but crashed in a Staples parking lot.
Two former Cushman & Wakefield high-ranking executives filed separate lawsuits against the brokerage, each alleging discrimination.
Former Cushman & Wakefield President of Valuation & Advisory Americas Monica Nicole Urquhart-Bradley filed a lawsuit against Cushman & Wakefield in September with the United States District Court for the District of Columbia claiming discrimination based on gender and race.
Bryan Younge, formerly a managing director and national practice leader for Cushman & Wakefield’s Sports and Entertainment Group, continued a legal battle that began in November 2017 against Cushman & Wakefield and two executives — Eric Lewis and Michael Schaeffer — alleging they implemented a “bogus” performance improvement plan that ultimately led to his forced resignation. A judge in July denied the company’s request to throw out that suit.
A Whole Foods’ closure in Northwest Washington has created pain for the whole community, and especially retailers that once surrounded the store. As foot traffic in the area has suffered since the closure in March 2017, residents are rallying to get a grant that will support the stores and restaurants that remain.
It may be “a cult thing,” but people cannot get enough of Chick-fil-A, and landlords are taking notice. The chicken chain was the seventh-largest American fast-food company at the end of 2017, and it is poised to advance to third by 2020. Its locations generate more revenue than any other fast-food restaurant in the U.S. And the chain once dominated by Southern, suburban locations is urbanizing, opening stores in New York City, Chicago and Boston.
Through the 14 months between Amazon’s initial announcement it would open a second headquarters and its selection of two East Coast cities, the nation couldn’t get enough of reading tea leaves. When Amazon posted a job listing in July seeking a D.C.-based economic development manager, people took it as a sign the city was winning HQ2. Turns out the prediction was mostly right.
Forget breezy, bright collaboration spaces. No, really, forget them — employees hate them, and open floor plans are making employees withdraw from their colleagues. That was the finding of a Harvard Business School study that measured how productive workers were before and after a switch to open offices.
“In short, rather than prompting increasingly vibrant face-to-face collaboration, open architecture appeared to trigger a natural human response to socially withdraw from officemates and interact instead over email and IM,” the authors said.
Amazon HQ2 has had plenty of critics, and Starwood Capital Group CEO Barry Sternlicht is one of them. He was disappointed in the choice of New York and D.C., two markets that he said didn’t need the investment, and he disagrees with giving such a large and profitable company so many incentives. In the explosive interview, Sternlicht also took on the multifamily market, President Donald Trump, construction costs and the United States’ relationship with China.
Well, Lois called it ... sort of. In January, 10 months before Amazon declared Arlington, Virginia, and Long Island City, New York, as winners of new headquarters campuses, Bisnow columnist Lois Weiss said the D.C. area was the clear choice for HQ2. She cited Bezos’ home in the area and his ownership of the Washington Post, and echoed the frustrations felt around the country that Amazon always wanted to be in those gateway markets and simply used the 14-month search to drum up further incentives.
She even foresaw the play to put warehouses and operations centers in cities that competed for but didn’t win HQ2 — besides the operations center in Nashville, it has announced other big industrial and office expansions in HQ2 finalists like Dallas and Chicago.
Ah, back when so many had hope! Amazon whittled down to 20 finalists for HQ2 in January, and in June, Attom Data Solutions analyzed each city in terms of Q4 2017 median home price, five-year home price appreciation, price-to-income ratio, average school score, crime rates compared to the national average and effective property tax rate. Its top-ranked city was Raleigh, North Carolina. Winners Northern Virginia and New York ranked ninth and 18th, respectively.
Joshua Kurstin, at the time an office tenant rep for JLL in Northern Virginia, was charged Nov. 29 with fourth-degree burglary and second-degree assault for allegedly entering his neighbors’ home in September and threatening to kill their dog. JLL has since let him go, and he is facing 13 years in prison.