Tuesday, June 26, 2007

Face It...Leominster residents don't want day spas in their back yards

After several months, numerous planning board and city council meetings, and quite a bit of ink in the local papers, Beth and Frank Novak have apparently withdrawn their petition to allow a day spa or "wellness center" to operate in a residential zone with a special permit.

I think this could have been a landmark decision had the city council been given the opportunity to actually vote on the petition. Please refer back to my earlier post; Day Spas, Doctors, and a Disappearing Councilor for some background on what the Novaks were trying to do. Basically the Novaks, who currently own Face It Day Spa on Hamilton St in Leominster wanted to purchase a beautiful old Victorian house and relocate their day spa there. The problem was that the house they wanted to purchase was just that, a house. It's not a commercial building. The street they were looking to relocate to is zoned residential and according to Leominster's zoning ordinance, businesses are not allowed in residential neighborhoods. Their are exceptions such as home offices but a home office is typically a one-man shop with maybe one employee and very low impact and their are several specific ordinances that define a home office and how it can be run. Their Day Spa is a business with several employees, a large and growing clientele, and not well suited for a residential neighborhood

Sure their day spa may have fit in nicely into this particular neighborhood considering their is a doctor's office on the street, a real estate company one street over, and another real estate company one street over but as I stated in my previous post, a zoning change is not meant to accommodate a single person or company. What about the other residential neighborhoods on the other side of town that don't currently have any businesses there? It's a change that affects the entire city. I know both Beth and Frank Novak and I wish them the best with their business but I have to say that I don't think any commercial business should be located in a residential area. Yes, there are examples of commercial businesses in residential areas all over town and there isn't much we can do about it, these are pre-existing, non-conforming uses.

What that means is that these businesses were up and running prior to the creation of the current zoning ordinance so they were grandfathered. People that move into a neighborhood with a commercial business already there make that move with full knowledge of the business being there. To now allow a business to move into a residential neighborhood, you are asking the residents of that neighborhood to accept this change after they bought their properties. Maybe Joe and Jill Homeowner don't want the traffic and noise a commercial business brings with it. When they bought their house their were other houses around, not businesses.

Back to my earlier statement about it being a landmark decision, I'd be curious to know how other communities would handle this type of petition. Can someone in Anytown, Illinois that wants to open a business in a residential neighborhood just go ahead and do it? Don't cities and towns in other states have similar zoning plans and zoning ordinances. Had Leominster's City Council voted to approve the zoning change and allow a Day Spa to operate in a residential neighborhood, would other cities and towns in Massachusetts and other states follow suit?

I think it's a slippery slope and there could be a case made for several other quiet businesses that want to operate in residential neighborhoods such as doctors, attorneys, accountants, massage therapists, etc...where do we stop? Residential neighborhoods are just what their name implies; neighborhoods made up of peoples residences. Businesses have their choice of commercial zones and industrial zones and probably a bunch of other fancy names in other areas of the state and that's where businesses belong.

I think the citizens of Leominster made their thoughts and opinions clear with respect to this petition and the Novaks did the right thing by withdrawing. They may very well come back to the City Council at a later date with a new petition but hopefully they can find a building that is zoned commercial that fits their need...and Beth, I'm available if you would like help finding a property...

Wednesday, June 20, 2007

Leominster Commercial Real Estate - Office Space For Lease - Part 2

In this second part of my four part series on the
Leominster office market, I want to focus on the
Erdman Way Business Park located across the
street from Staples just off Route 12 at the
Interchange of Routes 2 and 12.

With a total combined leasable area of close to 120,000 SF, the Longview Corporate Center and the Commerce Place Corporate Center represent two of the five Class A office buildings in Leominster and represent the two largest office properties in the area. In the first part of this series, I highlighted the Woodblock Building and 14 Manning Ave, two of the other Class A office buildings in Leominster.

The Erdman Way Business Park is also home to the Four Points Sheraton Hotel, Bj's Wholesale Club, and The Center for Digestive Wellness. Access to the park is convenient for visitors who can take Exit 31B off of Route 2. Erdman Way is a right turn off of Route 12 at the first set of lights.

Some of the many amenities of the Corporate Centers include on-site professional managment and maintenance services, executive office suites built out to tenant's specific needs, ample parking for employees and guests, and convenient access to the area's services including restaurants, public transportation, shopping, and a first class hotel directly across the street.

Below is a breakdown of the two Corporate Centers:

Longview Corporate Center, 80 Erdman Way

  • 53,000 SF Class A Office Building
  • Current tenant mix includes several medical users, the Registry of Motor Vehicles, insurance companies, and a mix of other professional businesses.
  • Lease Rates typically range from $16/ - $18/SF Gross - A little more for Medical Users
  • Fully ADA compliant with dual passenger elevator access to all three floors
  • Executive level finishes
  • High Speed Internet Service

Commerce Place Corporate Center, 100 Erdman Way

  • 60,000 SF Class A Office Building
  • Current tenants include MWCC, North Central Mass Career Center, United States Armed Forces Recruiting Center, and several other professional businesses such as attorneys, accountants, and mortgage companies.
  • Lease Rates ranging from $16 - $18/SF Gross
  • Fully ADA compliant
  • Executive level finishes
  • High Speed Internet

Unlike downtown properties, the Erdman Way Business Park offers its business clients a different setting with more convenient access to the highway system. Parking at the Corporate Centers can be found in two adjoining on-site parking lots or in a third auxillary parking lot just across Erdman Way. Even though Erdman Way isn't downtown, to get there is a merely a straight shot down Route 12. Access to Erdman Way for clients coming from Fitchburg is just as easy considering Route 12 is one of the major routes residents of Fitchburg must travel to access Route 2.

The park's proximity to UMass Medical Center's Leominster campus (Leominster Hospital as the locals still say) make it a great location for medical users that aren't able to locate their office within the hospital. Nearly half of all tenants at the Longview Corporate Center are currently medical users.

As far as office space goes, the Corporate Centers are considered the flagships of the Leominster market. Originally built in the late 1980's, these two properties have undergone extensive renovations including upgrading to the latest, modern, energy-efficient HVAC systems, ongoing site improvements to improve on and add to the existing parking infrastructure, and ongoing interior upgrades including painting, flooring, and numerous capital improvements.

If you're not fan of the congestion of the downtown, and want to locate to a first class professional building, Erdman Way is the place to be...

In the third installment of this series, I'll focus on the smaller sub-office markets including the Rte 12 corridor from Sterling to downtown Leominster and the Rte 117 corridor from Lancaster to downtown Leominster as well as some of Leominster's Class B & C properties.

See also: Leominster Commercial Real Estate - Office Space For Lease - Part 1

Sunday, June 17, 2007

Leominster Commercial Real Estate - Office Space For Lease - Part 1

Are you looking to lease office space in Leominster?

Are you aware of all of the options there are
in Leominster to lease office space?

I'd like to provide you a breakdown of the different options there are in Leominster for leasing office space. The Leominster commercial real estate market is competitive when it comes to office space so you are going to need to act fast. You may want to consider a downtown property, a property with good highway access, or maybe you want to be close to the hospital because you're a doctor.

In this first of a four-part series, I'll focus on the downtown area and all that it has to offer. I have separated the downtown into two sub-markets. The first being Main St and the surrounding commercial properties heading up Merriam Ave towards from the Post Office to the court house and extending South from about the Post Office down Main St to the BankNorth building and the second being the Woodblock building and 14 Manning Ave.

Main St/Courthouse area to BankNorth building

  • Relatively low rents typically between $10-$12/SF Gross
  • Older buildings, most without elevators so upper story offices are not ADA compliant
  • parking can be found in the municipal lot behind the post office, in the garage next to the police station, or on street in a metered space. There are limited off street spaces available in a couple of privately owned lots
  • Current mix of downtown businesses include several attorneys, staffing agencies, bank branches, and a few food and drinking establishments
  • Biggest benefit of being downtown: Short Walk to all necessary services such as post office, drug store (new Walgreen's coming to town), coffee shop, etc...
  • Biggest Drawback: Not easily accessible for clients especially for businesses in the middle of Main St on a second or third floor, and highway access is better elsewhere in town.

In general, the Main St office market is a love it or leave it type of location. If you're down there you love it and if you aren't you never want to be down there. Attorneys love the downtown because of the proximity to the courthouse. Staffing agencies, as I recently learned when I was out with a staffing agency looking for office space, love to be on Main St because there is basically a stream of job seekers that start at one end of downtown and walk to the other end hitting all of the staffing companies looking for work. Their clientele generally take the bus so the downtown is a convenient location for the temporary staffing industry.

You find very few medical professionals in the heart of downtown since the majority of the leasable space is in buildings without elevators so there is a problem with ADA compliance.

The outskirts of the downtown market offer older triple deckers that have been nicely converted into office buildings catering to small businesses looking for an inexpensive, small private office. You'll find real estate companies, massage therapists, attorneys, and several other local professionals within these buildings.

If you're looking for a place to grab a sandwich at lunch or a drink after work, you can walk to any one of several downtown eateries and drinking establishments such as La Tazza or Roma Bakery.

14 Manning Ave & Woodblock Building

  • Higher than average rents in the $18/SF range but quality of space is reflected in price
  • Class A space, fully ADA compliant, many modern amenities
  • Plenty of off-street parking in two adjacent municipal lots as well as privately owned off-street lots
  • On-Site professional management and maintenance services
  • The #1 reason to locate to the Woodblock or Manning Ave locations: Owner's commitment to excellence apparent throughout both properties -worth every dollar...
  • The biggest drawback to leasing here: Owner has a relocation provision in all leases which can be inconvenient if you are having to move every few years even if he is paying for the move.

The Manning Ave and Woodblock buildings are two of the five Class-A office buildings in Leominster. The tenant mix in these properties include attorneys, mortgage companies, engineering firms, real estate companies, and several other professional businesses. Being owned and professionally managed by a local investor, the properties are maintained and kept up to the highest standards so if you are looking for that executive feel in a downtown property, these buildings offer you both. The best reason to locate to the Woodblock Building, in my opinion, is the well known watering hole on the first floor, The Monument Grill. (They serve some exeptional food as well...)

If the downtown is where you want to be, there are several options to consider. Should you need further information on any particular property downtown or should you require any additional information, as I always say, please contact a qualified buyer's agent to represent your interests. The leasing market in Leominster is very competitive and virtually every property you might consider has professional representation on their side so why shouldn't you???

The second part of this series will focus on the Erdman Way office park located just off Route 12 at the Route 2, Exit 31B interchange. This area offers a different set of benefits and drawbacks and caters to a lot of different types of businesses.

See also: Leominster Commercial Real Estate - Office Space For Lease - Part 2

Friday, June 15, 2007

Commercial Real Estate Terminology - What does this stuff mean???

For those of you looking to get into commercial real estate investment there is a whole set of "commercial real estate words" you are going to need to know before you get started. There are actually whole books published on commercial real estate terminology but here are a few of the more commonly used terms as simply as I can put them.

NOI - Net Operating Income - How much money you earn usually expressed on an annual basis after you pay your expenses but before you pay your mortgage or your income taxes

Cash on Cash Return - Expressed as a percentage, it's the rate of return you earn on the actual cash you put as a down payment. Divide the NOI (see above) by the amount of cash you put as a down payment. $10K NOI divided by a $50K cash down payment = a cash on cash return of 20% (not too shabby)

Cap (Capitalization) Rate - A term used to express the value of a property assuming it was an all cash purchase. As an example, from the buyer's standpoint if you want to earn a 10% return on your investment and you have $1M cash to spend, you would buy a property with an NOI (see above) of $100K/year. $100K NOI divided by a 10% Cap Rate = $1M in value. Now the same person with $1M to spend but wants to earn a 15% return would need to find a property that makes $150K/year.

GRM (Gross Rent Multiplier) - A useless term as far as any investment in New England goes from what I can tell but in case you are outside New England and you see it, here goes...basically it's a way to value a property by taking the gross annual rent (assume for now the rent will never increase or decrease) and figuring out how many years the property will take to pay for itself. A property purchased for $1M with $200K of annual gross rent will take 5 years to pay for itself so it has ha GRM of 5. Another property that is also on the market for $1M but only has annual gross rents of $100K will take 10 years to pay for itself so the GRM is 10. The lower the GRM the better so the first investment is the better option.

Debt Service - The total dollar value of all your mortgage payments for a whole year including Principal and Interest. It's the amount of money needed to "service" the annual debt of the property

LTV (Loan to Value Ratio) - The ratio of the overall value of the mortgage to the overall value of the property. $1M property with a $750K mortgage has an LTV of 75%

Again...there are literally thousands of terms that you will come across in your analysis of commercial real estate investments so my advice is to start reading...read everything you can and then read it again...

Please don't buy commercial real estate or any real estate for that matter without first seeking out the help of a qualified real estate professional.

Thursday, June 14, 2007

Renovating "Flipper Uppers" for profit

A few things to consider if you are looking to get into flipping houses for profit...

Popcorn belongs in a bowl with butter - It's great to snack on during a movie or while watching a marathon of Soprano's reruns but it looks terrible hanging from the ceiling

Wood Paneling - It's fine as long as the walls it covers happen to be in the smoking room.

Shag Carpet - Leave it in the van...

Crack Kills - Whether it's the plumber's version, or the kind you find in a foundation, either way it's bad news.

Lastly...Don't ever ask Casey Serin for advice!!!

Follow these simple rules and you will be a millionaire in less than 18 months...
(No guarantees on the millionaire thing though)

I'm King of the (Google) World!!! almost...

I'm finding that it's actually not terribly difficult to climb close to the top of Google's search results for certain keywords pertaining to my geographic area. SEO Companies charge lot's of money to get high keyword rankings and you can see that with a company like Active Rain in your corner, you can get the high rankings without the SEO companies help.

The key is getting my personal blog to the top of the search results page as well...

One example is Leominster commercial real estate agents

I'm also 2nd for Leominster commercial real estate

My goal is to make it up to the top for Massachusetts commercial real estate but this is a pretty broad and popular keyword that's crowded with national real estate listing services, and regional/national brokerage companies.

There are three things I believe new bloggers need to focus on get to the top of the google world and to ensure they aren't grouped in with the majority of blogs out there that don't last through the first year:

  1. Continue to post every day and if you can't post every day post as often as you can on a regular basis.

  2. Stay away from posts that involve the hottest news or the latest trends unless they are specific to your geographic area. There are too many successful blogs out there writing about the big national news headlines so the likelihood of your blog getting noticed diminishes when you try and follow in the big guys footsteps.

  3. Make sure you know a lot about what you are writing about...you can't fake it. The more you come across as an expert, the more people are going to read your blog and start linking to you and you'll build up some clout with Google.

If only I could master rules 1, 2, and 3 I'd be a successful blogger.

Feel free to add to my short list of tips for new bloggers. I'm sure I can use the advice as well...

Wednesday, June 13, 2007

Office Available For Lease - 267 days and counting

Not all office space is created equally...

For those of you working in commercial real estate that may have a client/property owner with office space that they want you to lease for them, one of the first things you do is go out to the property and take some photos.

For future reference...don't bother taking a photo at all if the office looks like this. This office needs a quick face lift with some paint and flooring and hopefully the old desk and debris will be gone before somebody even considers leasing the space.

Convince the property owner to spend minimal dollars to give the office a neutral coat of paint and and hire a company to haul away the trash. If you were listing a house and this was a bedroom in the house do you think a young couple with a small child would fall in love with the house based on this photo???

There are actually two problems with the photo...

  1. The listing agent actually took the photo, reviewed it, and added it to his listing thinking it would attract a business owner to the property.
  2. The listing agent was either not upfront with the property owner about the need to clean up the office before listing it or despite the owner's unwillingness to do just that, the listing agent still took the listing and actually thinks he is going to attract a business owner to the property.
Think about this the next time you go out on a listing appointment.

Day Spas, Doctors, and a Disappearing Councilor

Before the Leominster City Council is a petition to allow a Day Spa to operate in a residential neighborhood. At face value, it seems like a reasonable request; a quiet business, not much traffic...what harm could there be? Quite a bit unfortunately...

The basis of whether or not to pass the petition has nothing to do with whether or not the business owners are nice people as Councilor Dave Rowlands expressed in his well-spoken comments. I don't usually agree with Mr. Rowlands views but in this case I think he hit the nail on the head. Councilor Marchand made the argument that because he knows the business owners personally, and they are great people the petition should pass. He had other arguments as well, but none as flawed as that one.

Another argument is that since there is a doctor on the street already and a couple other businesses in the area, the day spa will fit in nicely. Wrong! Sure this particular street (Orchard St) has a few businesses on or around it and a day spa may fit in nicely but what about some of the residential neighborhoods on the other side of town with no businesses at all? What happens when day spas start to pop up there? Then somebody else will come before the council to explain that because there is already a day spa in the neighborhood they want to open a tanning salon. The two businesses could work well together. Next somebody wants to open a hair salon, a nail salon, a Curves...you get the point. Where does it end???

Should the City Council set this type of precedent? Are they opening the door for many other types of businesses to come before them wanting to open up in a residential area? If one type of business is allowed and not another is that grounds for a lawsuit? It probably isn't but as the saying goes...anybody can be sued at anytime for an reason.

Beyond the merits of the petition and the somewhat intelligent debate, another issue came up during the meeting. The councilors, in front of a live audience and in front of a televised audience, started to count their votes and actually tried to manipulate the process when it was discovered that there may not be enough votes to swing the decision one way or another. Now I don't know about legality, but at a minimum you have to question the ethics and the integrity of the councilors involved...

In short it went down like this...

(FYI...I have read between the lines of what was actually said so you can see what they meant to say)

Councilor Rowlands makes a motion to give leave to withdraw without prejudice. Motion is denied.

Councilor Dombrowski makes a motion to grant the petition...discussion follows

Councilor Rosa brings up the fact that Councilor Lanciani is not there so since we need a 2/3 vote of the council to pass the petition, we may need his vote (this is where I read between the lines)


Councilor Dombrowski decides to change his motion to further time

Councilor Freda thinks the whole process is flawed and treading on illegal and unethical. Thank you Claire for speaking out against what you saw happening...

Councilor Tocci opens her mouth for the first time since joining the council and publicly accuses Councilor Dombrowski of doing what everyone else there knew he was doing but were afraid to admit.

more discussion...the council argues, banters, looks like fools...Councilor President Marchand loses control of the council for a minute but quickly brings the group back under control.

more discussion...

The initial motion to pass is withdrawn and a motion is made to give further time

Motion passes...

For the first time in history, as far as Councilor Freda knows...the councilors successfully manipulated the outcome of the petition and now the deciding vote on whether or not this petition ultimately passes is in the hands of Councilor Lanciani who was not present at the meeting due to unknown circumstances.

Am I the only one who thinks this is funny? These are the people elected to represent us as citizens...

So for now the fate of the Day Spa is hanging in the balance. How many phone calls and emails are there going to pass between the councilors over the next two weeks about this petition creating a violation of the open meeting laws?

For the record, I am against this petition passing because of the simple reason that it sets bad precedent. I don't care about a day spa opening up next door to my house but I do care about the next business that wants to open up on the other side of me since there is already a day spa on my street...

Does this type of thing happen anywhere else or just in Leominster?

Monday, June 4, 2007

Pink Flamingos...On the Verge of Extinction

What does the future hold for the plastic pink flamingo? If you didn't have one in your front lawn growing up, you surely had a neighbor that had six of them on their front lawn. They first appeared on the scene in 1957, dissapeared in the 70's, made a reappearance in the 80's, and now are on the verge of dissapearing from the world's front lawn forever.

Did you know that as of November 1, 2006 the original manufacturer of the plastic pink flamingo has stopped manufacturing these iconic lawn ornaments?

Did you know they had been manufactured in Leominster, MA for nearly half a century until the plant shut off the molding machines for the last time and shut their doors just about 7 months ago? I know this because I live in Leominster. It's been a sad few months since their closing but we'll all pull together and move on, I promise you that.

Don Featherstone, a young artist, was hired by Union Plastics in Leominster to redesign their two dimensional lawn ornaments into a three dimensional version. His first project was a plastic duck but his fame came when he redesigned the pink flamingo into a three dimensional masterpiece. Little did he know his simple design with the yellow beak and black tip would turn into such a symbol of suburbia and americana with movie features like 1972's Pink Flamingos, websites, fan clubs (maybe not fan clubs but you get the point)...by the way you know it's an original Flamingo by the Don Featherstone signature under the tail. If you don't see that, just turn and run!!!

Back in the seventies cities and towns across America started banning the tacky treasures and as a result of these bans, Union Plastics (later became Union Products) started manufacturing a blue version of the flamingo. Cities and towns caught on and actually expanded their ban to include flamingos of all colors...to think about the amount of time and taxpayer dollars that were actually spent back then on this legislatioin is amazing!!!

What does this have to do with real estate you ask???

And what does this have to do with commercial real estate???

Well it just so happens that the plant where these plastic pieces of American history will be sold at public auction on June 22nd. The former Union Products facility at 511 Lancaster St, Leominster MA sits on over 8 acres of prime commercial land. Sure the price tag will be close to $2M but the development possibilities for this site are endless.

Unfortunately, the molds were sold to a company from New York that intends to resume manufacturing so if your thoughts were to bring this flourescent phenomenon back you're outof luck. I do have to say it just won't be the same when these blow mold beauties start coming off of a different assembly line than that of their original place of origin.

Fear not...you can still find these legends of lawn decoration on Ebay and several other online shopping sites but remember to always ask if the flamingo you are purchasing features the Don Featherstone signature under the tail.