Why It's a Great Time For Your Association To Look for Real Estate
We were delighted to have Mayor Vincent Gray kick off Bisnow's second annual Real Estate Strategies for Associations and Law Firms event last week at the Mayflower.
Mayor Gray touted the city's amenities, from its famous address, to its talent pool (including his alma mater, GW), to the federal government. The population jumped by 160,000 in the last decade (and is gaining 1,000-1,200 more net per month), with one third under age 35. Gray says the economy will grow by generating an additional $1B in tax revenue and creating 100k jobs. The strategy debuted November '12 and generated 18,000 new jobs and $281M in new tax revenue in its first year. Businesses are responding, he says, citing UNCF's move from Fairfax to Progression Place, where it's the anchor tenant.
The world is the tenant's oyster and that won't change for the next 12-18 months, says JLL managing director Joe Judge, right. He's joined by TD Bank commercial banking team leader Patti Lenahan—our moderator, National Association of Counties CFO David Keen, and National Association of Manufacturers SVP Rick Klein. Joe added that associations and nonprofits are focusing more on collaboration, efficiency, and culture in real estate. David's association is working on co-locating with another association to improve collaboration and economies of scale.
OTJ Architects partner Heather Nevin says there's "no more powerful communication tool than how you use your space. When people come in, what are you telling them?" (Rick's association is a good example—NAM recently moved from a building on Penn Ave where it had been for 20 years, to a newer space, to reflect modern manufacturing.) Since '08, Joe says relocations have doubled. In '08, one in nine associations and nonprofits occupied Class A space; now it's one in three.
On the financing side, Patti says there's a lot of cash to lend, huge demand, and low rates. On a taxable basis, you can get a 10-year term and the cost of borrowing can be under 5%—if you're a 501(c)(3) and can borrow on a tax exempt basis, that rate is cut by about 70%. We snapped her with Rick, who says the most important thing when making a move is to look at it as a strategic planning process.