Monthly Archives: July 2011

Everywhere a Sign

By Ken Ashley

(ATLANTA) July 18th, 2011

It was a different time. In the early 1970’s the hippy movement was in full swing, and an unemployed 25 year old singer in a rock band in Ottawa, Canada sat down one day, mad at the world. The results of his youthful anger – the song “Signs” –

Oh wow - those pants rock, Dude!

would become a powerful anthem for those who were changing our culture from a strict para-military rules following people to a new generation of free expression.

The song debuted as the “B” side of  an unsuccessful single record in 1970, but without warning, Signs became a huge hit for The Five Man Electric Band. Lead singer and writer Les Emmerson, still living in Ottawa today, now makes a healthy living in large part from the 2006 hit “Don’t Let The Man Get You Down” by the hip-hop (later version of hippy?) artist Fat Boy Slim. Mr. Slim sampled Signs, and therefore Les gets good mailbox income. Maybe signs aren’t such a bad thing after all – if you sing about them.

What’s Your Sign?

Before you warm up  GarageBand on your Mac and start penning your own ode to the hippy generation, maybe you can become more successful by

Thanks Officer!

working on signs for your hip new offices.

One of the big reasons companies invest millions in their digs is to make an impression on customers and prospects.  Occasionally, businesses want to keep a lower profile because, for example, they are in industries related to defense or conduct research that is deemed secret. However, the vast majority of corporations are interested in getting their name out there.

Over the years, we’ve worked with a number of companies interested in maximizing their marketing dollar by obtaining prominent signage. We’ve encountered those who desire top-of-building exposure with relatively small office space requirements, all the way to big name companies  who look not only for building signage, but campus level branding. And of course, we’ve worked with those who have smaller office requirement but simply want to maximize their exposure package. We’ve seen many approaches to using someone else’s real estate as a billboard. There is no doubt about it, a major top of building deal can be worth millions in advertising dollars and can message consumers every day.

As you think about signage needs for your business units  – and they certainly don’t have to be just headquarters locations  – we advise you first consider the type of signage package you want.  Then determine how all the operational considerations will work to keep your really cool sign bright and beautiful.

Levels of Signage

Lobby and Suite  

- Signage in the lobby and on the premises. While this is fairly standard,

45 MPH, huh?

think about the use of your company logo on the entrance to your suite. Determine up front how the signage can be changed if your name changes, and determine in advance if you want Principles or Partners names to be posted on the sign in the lobby.

Exterior Monument – Confirm what position will you be on the monument, and get landlord agreement that you will have that level throughout the term and any renewals. Also, be aware that some properties have more than one monument at different street entrances. Make sure you have the same rights on all monuments.

On Building – Signage that is on the side of the building, but may not always be at the top. Some properties offer street level fascia signage that is very valuable, especially in dense urban settings. Of course, the ultimate physical location on the building is important.  You may not get exclusivity on the building. but you should be able to negotiate restrictions on competitors’ signage.

Top of Building  – Same considerations as On Building, but you have a much stronger case for exclusivity. In some jurisdictions, only one sign can be at the top

Please!

of the building (this helps the fire department, for sure), but confirm that you have the only top of building sign. In both On Building and Top of Building cases, you will want to put up your sign as soon as possible. You should take responsibility for its maintenance because the landlord is not in the sign business. You care about your sign more than anyone else, so take care of it.

Campus A campus package likely includes all of the above. As the major or dominant tenant, you can get other goodies, such as the right to name roads interior to the campus or display your product on the property, if applicable. Think Disney in the office environment.

Other Considerations

Exclusivity  – Mentioned earlier, but this is a major issue. For example, can others put signs up (including on the side of the parking deck) in the office park?

Who’s Tab?- Who pays to put the sign up and when can it be installed? Can the sign be paid for out of a tenant improvement allowance?

As far as maintenance, with the hot sun and hail damage, there will always be a need to baby your sign. Negotiate in advance for wide permission for your sign crews to change electronics or signage material. Make sure you have permission to get up on the roof in the event a major replacement is needed.

Party Over – Who pays to take it down? When your lease is up, you will likely have a restorative obligation. Make sure to address the particulars of what you need to restore. If you are patching a few holes, that’s likely OK, but be careful that you don’t have to replace an entire roof or part of the building siding. Also, in the event that another tenant is going to install a replacement sign, perhaps you can mitigate your requirements to actual repairs after the new sign is installed.

Lighting– You paid all that money for your lease and the beautiful sign. Don’t give up 12 hours a day of exposure. Negotiate sign lighting in the lease agreement.

Civil Disobedience

Additional Considerations – What happens if you shrink? What happens if you sublease space? How long can you keep the sign? You’ll have the most leverage during the initial lease negotiations, so address flexibility upfront.

Also, who runs the traps on government approvals? You and the landlord should jointly discuss approvals with the municipality. Don’t be afraid to retain a good lawyer who is an expert in this area. It can make a huge difference in terms of your time and the ultimate approval of your project.

So, peace, love, happiness, flowers and children have been good to Les Emmerson. Get your dream sign installed correctly, and they’ll be writing songs about you. Dude.

Git-R-Done; Time To Move Those Deals Forward

By Ken Ashley

ATLANTA (July 5th, 2011)

Disney’s acclaimed Pixar unit recently released Cars 2 with “co-stars” race-car Lightning McQueen (voiced by Owen Wilson) and tow-truck Mater (voiced by Larry the Cable Guy). In the movie, the characters head to Europe and Japan to compete in the World Grand Prix, but of course get side tracked with all manner of problems, including international espionage.

While the new movie is a hit, we like the original Cars movie better as it’s seemingly innocent humor is classic and truly funny. Our favorite character, Mater, resembles an International Harvester mining “boom-truck” from the 1950’s. The vehicle that is the inspiration for his appearance sits at a diner in the former lead mining town of Galena, Kansas – population of 3,287, which is down from nearly 80,000 in the late 1800’s. The town, appropriately for the original Cars movie setting,  is on the eastern end of the famous Route 66 (You can also take a spin in the 1951 vehicle, the owners proclaim; it still runs!). Back at the diner, you can purchase sandwiches, clay models of Mater, and learn about the plans for a bed and breakfast (we’ll see about that).

Shoot! You're in Radiator Springs, the cutest little town in Carburetor County

Part of Mater’s charm is the personality of comedian Larry the Cable Guy (aka Daniel Whitney),  who speaks with a thick Redneck Southern accent. Larry’s character brings an often hilarious spin, explaining that his name is like “tuh-mater without the tuh,” telling the audience he’s “happier ‘n a tornado in a trailer park,” and proclaiming that

Shucks, you can call me Larry

he’s  the “world’s best backwards driver.” He attributes this skill to his rear-view mirrors and his own”guiding” philosophy: “Don’t need to know where I’m going, just need to know where I’ve been.”

“I knew it! I knowed I made a good choice!”

Mater’s philosophical musings may go a long way to describing the plight of those on the user side of commercial real estate these days. We certainly know where we have been – in one of the best markets for tenants in a generation. But if we keep our focus on the past, we too could end up being the world’s best backwards driver in terms of real estate deals.

As a very insightful article in the latest Real Estate Forum (@RealEstateForum)
entitled a Rebound By Chapters explains, the real estate recovery is happening at different paces in major metros. The piece, by John Jordan, quotes Cushman & Wakefield’s Ken McCarthy, stating that office leasing reached a six year high in the first quarter of 2011. CBRE Econometric Advisor’s Arthur Jones characterizes the current national office market as “weak but stabilized.” Dennis Friedrich of Brookfield, a publicly traded developer and owner with a portfolio of 78 million square feet, believes that the recovery is “sustainable and will lead to single and double digit rent growth in some US cities in the near future.”

Perhaps the biggest indicator of coming office recovery is the appetite that many major investors have. They are putting their money where their mouth is and now have an interest for office product once again. For example, Joe Oglesby of Wells Real Estate says in the article that his company is “planning to have a very active second half of 2011 in terms of buying buildings.” Pay attention when experts in a market start to acquire new assets.

“I tell you what, buddy; it just don’t get better than this.”

For nearly three years now, tenants have experienced a market in which they could take their time in decision making, and have their every demand met by landlords who were very desperate for their business. It’s been a very good time to be on the user side of things and many have deals have made corporate heros of executives who capitalized on depressed conditions.

We are certainly not suggesting that this environment will change immediately, but in certain cities and submarkets we are beginning to see the market tighten. Many make the mistake of thinking that markets have to actually be in recovery for real estate to cost to rise. What actually occurs is that an asset manager feels a sense of optimism (or feels less fearful as it were) based on what he or she perceives is happening. Then the order is issued to  the leasing brokers to be more conservative on the economics and offer lesser concession packages.

Our advice is to move ahead on projects on the board, and in the vernacular of the wise one, Mater, “Git-R-Done.” Lease early, lease often and with flexibility, and be prepared to accelerate the speed of decision making. If you decide to engage in a real estate project, a best practice is to get senior management or your board to approve a set of parameters and let you go get the deal teed up. If they want to look at it one more time before you sign the lease, so be it, but speed is your ally in a recovering real estate market.

The deal is more than the face rate, of course. Keep in mind that many real estate stats quote growth of “asking rental rates.” This is like suggesting a change in the automobile industry based on the sticker price on new vehicles. Clearly there are many factors to consider in a transaction as complicated as a major real estate deal. So while the rental rate may change upward, a good credit tenant that knows what it wants and is prepared to move ahead with reasonable speed can still make a very good deal in most every major market in the United States.

So, unlike our friendly character Mater, look forward not backwards and be aware of the perception as well as the reality of the real estate markets. It’ll make you look like a real estate hot rod!

Lightning McQueen: Will you stop that?
Mater: Stop what?
Lightning McQueen: That driving backwards. It’s creeping me out. You’re gonna wreck or something.
Mater: Wreck? Shoot! I’m the world’s best backwards driver! Just watch this right here, lover boy.