Tag Archive for: #commercialrealestate

The casual dining sector is evolving rapidly due to changing consumer preferences and technological advancements. These shifts are going to start having an impact on property values, making it essential for commercial real estate investors to understand how these trends influence investment potential. By aligning investments with the current trends shaping the casual dining landscape, investors can ensure long-term value growth and portfolio resilience.

1. Enhanced Customer Experiences and Property Value

Today’s diners seek more than just good food—they want memorable, immersive experiences. In response, casual dining establishments are investing in ambiance, expanding outdoor seating, and incorporating entertainment features. Properties that can accommodate these elements can help to increase the value, as they allow tenants to cater to the demand for experiential dining. For investors, choosing adaptable spaces that enhance customer experience can attract tenants who are willing to pay higher rents and sign longer leases. This ultimately boosts the property’s income potential and enhances overall asset value.

2. Digital Integration as a Value Driver

The adoption of digital solutions such as online ordering, delivery, and contactless payments has become a standard in casual dining. Properties with robust digital infrastructure—like high-speed internet and dedicated pickup areas—are increasingly appealing to tenants who want to stay competitive in the digital age. Doug Roland, investment advisor at Sands Investment Group, notes that with the rise of platforms like Uber Eats and DoorDash, operators have been able to “utilize smaller square footage, less parking, and reduce labor costs. This setup makes for more stable tenants which ultimately reduces investor risk.” Working with SIG investment advisors allows investors to have access to key insights into which tenants and operators are taking advantage of technological advancements and which are not.

3. Sustainability Enhances Appeal and Long-Term Value

Environmental consciousness is rising among both consumers and businesses. Casual dining establishments are thus seeking eco-friendly, energy-efficient properties. Buildings that offer sustainable features often command higher values because they align with tenants’ goals of reducing environmental impact and operational costs. Sustainable properties attract tenants willing to pay a premium for green features such as solar panels, gray water recycling, and LED lighting, which in turn strengthens tenant retention and supports long-term value growth. Investors who focus on sustainability not only meet current market demands but also mitigate potential risks associated with future environmental regulations, adding to their properties’ resilience.

4. Multi-Use Spaces Increase Versatility and Value

Casual dining establishments are increasingly interested in spaces that can serve multiple purposes beyond dining, such as hosting events or providing co-working areas. Multi-use properties that offer this flexibility tend to have higher market values as they can cater to diverse tenant needs and adapt to shifting demands. For investors, this versatility translates into greater revenue potential, as such properties can attract a broader range of tenants looking for spaces that maximize both utility and adaptability.

5. Prime Location and Accessibility as Core Value Indicators

Despite the rise of delivery services, location remains critical for casual dining success. Doug Roland emphasizes that “geography is very important, as properties in high-traffic areas with easy access to parking and public transit continue to attract a steady flow of customers”. For investors, focusing on properties in strategic locations helps maintain strong rental rates and consistent tenant demand. By choosing locations with prime accessibility, investors increase their chances for not only stable income but also long-term property appreciation.

6. Menu Innovation and Its Influence on Property Value

Menu innovation is another trend influencing casual dining real estate. Diners today are more adventurous, favoring unique, high-quality, and often health-conscious options. Restaurants focused on menu innovation often require adaptable kitchen spaces that can accommodate evolving culinary trends and specialized equipment. Properties with flexible layouts or potential for kitchen expansion appeal to tenants who prioritize menu creativity as a way to differentiate themselves. Investors who recognize this trend can select properties that cater to forward-thinking tenants, enhancing both rental income and property value.

How SIG’s Investment Advisors Provide Value to Investors

Our investment advisors bring valuable insights to investors in casual dining real estate by aligning investment strategies with key market trends. Through expert analysis, we identify properties that are adaptable, digitally integrated, and sustainability-focused, ensuring these assets meet current tenant demands and support long-term growth. By leveraging their deep knowledge of prime locations and multi-use property potential, our investment advisors help investors make informed decisions that optimize property value, attract quality tenants, and enhance portfolio resilience. This strategic guidance positions investors to navigate a dynamic market effectively and secure sustainable returns.

Contact our restaurant team today to learn more about our services and how we can help you achieve your financial goals.

The early education sector is emerging as a hotbed of commercial real estate investment, driven by profound demographic shifts and economic changes. Despite disruptions during the pandemic, demand for modern early education facilities continues to grow, making the future of this property type promising for savvy investors. Let’s explore the key factors shaping this opportunity and why now is the time to invest in the future of early childhood education.

1. Shifting Demographics & Post-Pandemic Recovery

Urban and suburban areas are seeing a surge in young families seeking quality early education for their children. While COVID-19 caused enrollment to plummet—dropping from 54% to 40% for 3- to 4-year-olds between 2019 and 2020—there’s been a steady recovery. By 2021, enrollment climbed back to 50%, and the trend continues upward.

Adam Bridges, Senior Investment Advisor at Sands Investment Group, notes, “We’ve seen a strong bounce back in childcare enrollments post-pandemic, which is encouraging for investors looking at performance at the unit level.”

This recovery presents an opportunity to meet the growing demand for innovative, high-quality facilities, especially as more parents re-enter the workforce. With young families and strong employment rates driving the need for modern learning environments, now is the time to invest in this resilient market.

2. The Impact of Expiring Pandemic Funding

As pandemic-related financial support for early education facilities ends, there’s a shift towards long-term sustainability. During the crisis, many centers relied on federal grants, but now the focus is on operators who can thrive independently.

Bridges explains, “When underwriting a center, we factor out pandemic grant money to ensure long-term viability. Investors need to pay attention to tenant resilience—especially as federal aid is phased out.”

For investors, this makes tenant stability a critical factor. SIG’s research highlights the importance of partnering with operators who are self-sufficient and able to provide stable cash flows. The right tenants will ensure a robust return on investment in a post-pandemic world.

3. Dual-Income Households & the Rising Demand for Reliable Childcare

With both parents working in most households, childcare has become a necessity. This societal shift has transformed early education facilities into essential infrastructure, especially in suburban areas where childcare options are scarce.

“Childcare is no longer a luxury—it’s essential for dual-income households,” Bridges emphasizes. “Investors who cater to this need are not only filling a market gap but also providing a vital community service.”

Investors who develop or repurpose properties into early education centers are addressing a growing societal need while securing solid investment returns. Facilities offering full-day programs that align with parents’ work schedules are in high demand, making them attractive both socially and economically.

4. Economic Resilience & Stability

One of the most appealing aspects of investing in early education is its economic resilience. Unlike other commercial real estate sectors that experience fluctuations, early education remains a steady and essential service. Parents consistently prioritize their children’s education, even in tough economic times.

“Early education is a stable product type with growing operators nationwide,” says Ryan Sompayrac, SIG’s Investment Sales Advisor. “We’re seeing expansion and development in the number of operators and facilities in the education space, making this sector a solid choice for growth-oriented investors.”

How SIG Helps Investors Navigate the Early Education Market

At SIG, we understand the complexities of investing in early education. Our team offers expert guidance in identifying high-quality tenants who can operate independently of short-term financial aid. We closely monitor market trends and policy changes to help investors make informed decisions.

Bridges further highlights, “SIG’s national platform allows us to connect our clients with out-of-state buyers willing to pay a premium, helping them maximize their investment returns.”

By partnering with SIG, investors can confidently navigate the evolving landscape of early education facilities and capitalize on the rising demand in this sector. Whether you’re a seasoned investor or new to this market, our team is here to help position your investments for long-term success.

Contact us today to learn more about our services and how we can help you achieve your financial goals.

Revitalizing Retail: Innovative Strategies for Shopping Center Success

As the retail landscape continues to evolve, shopping centers must innovate to remain relevant and profitable. The rise of e-commerce presents significant challenges in that consumers have more variety and access to products than ever before, potentially making shopping centers redundant. However, with the right strategies, these challenges can be overcome and lead to growth and success. At SIG, we’ve guided numerous clients through these industry shifts, helping them to capitalize on emerging trends and ensuring their investments yield robust returns. The key to revitalizing retail lies in embracing innovative strategies that cater to contemporary consumer demands while optimizing for long-term financial performance. Read more →

August 15, 2024 – Austin, TX | In 2022, as the restrictions from COVID pandemic waned, investors acted with a renewed sense of energy and optimism. A flood of new capital hit the markets pushing cap rates down to historic lows for all types of credit. This unprecedented situation saw bidding wars within hours of a property hitting the market, giving sellers a unique opportunity to maximize the value of their Quick Service Restaurant (QSR) properties. However, this ideal phase for sellers was short-lived. In 2023, stronger credit and corporate QSR brands achieved higher values, driving cap rates up for franchise credit deals. Combined with rising interest rates, this created the current market conditions. Overall sales volumes declined after peaking in 2022, and the sale-to-asking price gap widened as buyers’ and sellers’ expectations remained fixed. Read more →

Inflation continues to significantly impact the commercial real estate (CRE) market in the United States. It’s no surprise that high inflation rates coupled with increased interest rates has put consumer spending under pressure in recent months. Rising costs in goods, services, and gas has already had far reaching consequences in the CRE space. At SIG, our Investment Advisors are aware that as prices rise, while we may face challenges, significant opportunities continue to emerge for investors, developers, and tenants. We’re paying close attention to the impact of increased insurance costs in the United States and the effects of rising inflation on the market.

Inflation’s Impact on CRE

Rising Construction Costs: One immediate effect of inflation on the CRE market is increased construction costs. With construction costs expected to rise by as much as 6% this year, prices for raw materials like steel, lumber, and concrete are soaring, raising the cost of new development projects. This can delay or halt new construction, tightening the supply of commercial properties and driving up rental rates for existing properties. For example, in the industrial sector, average net rents are projected to increase at a pace of 5% over the next three years.

Higher Operating Expenses: Inflation also affects day-to-day operating expenses, including utilities, maintenance, and labor costs. Property owners may pass these costs along to tenants through higher rents or operating expense pass-throughs, impacting tenant retention and leasing activity. Proper underwriting and market knowledge is where brokers like SIG can add value to help investors see around the corner. If you know what can happen, you can prepare for it.

Interest Rates and Financing: As inflationary pressures mount, “the Federal Reserve’s decision to maintain the target interest rate at 5.25%-5.50% reflects a cautious strategy in the face of inflation”, reports The Global Treasurer. With current interest rates potentially near their peak, investors are anxious for a rate cut. High interest rates have large impacts on new acquisitions and refinancing of existing properties, slowing down transaction volumes in the CRE market.

Opportunities Amidst Inflation

Despite these challenges, there are opportunities for savvy investors:

Adaptive Reuse Projects: With new construction costs rising, adaptive reuse of existing buildings can be a cost-effective alternative. Converting underutilized or obsolete properties into new uses can provide investment opportunities while mitigating high construction costs.

Strategic Investments: Investors can take advantage of inflation by focusing on resilient property types and locations. For instance, industrial properties, in high demand due to the growth of e-commerce, may offer more stable returns compared to other sectors. Our team of Investment Advisors are experts in assisting investors make strategic investment decisions that will maximize the performance of their portfolios.

Value Retention in Hard Assets: Commercial real estate tends to retain value better than some other investment types during inflationary periods. Investors seeking to hedge against inflation might find CRE attractive, as it provides income through rental payments over a longer term period, and has a stronger chance of potential appreciation in property value.

Rising Insurance Costs

The country is facing unique challenges regarding inflation, particularly in insurance costs. The impact of climate change has made multiple regions prone to natural disasters such as hurricanes, floods and tornadoes which is significantly impacting insurance premiums.  According to the credit rating firm, AM Best Co. Inc, commercial real estate insurance costs skyrocketed to nearly five times the national pace. Inflation exacerbates this issue in several ways:

Specifically, investors in the Southeastern USA, or those looking to invest in the region, need to be aware that rising insurance costs exacerbates the issue of inflation because of the rise in hurricanes and floods. Inflation increases costs of materials and labor, thus the cost of repairs to damaged properties rise. High risk areas carry higher insurance premiums which drive up operating costs and impact bottom line profitability.

As advisors, we understand that rising insurance costs can influence investment decisions, as higher operating expenses may affect the attractiveness of certain properties or markets. Investors might seek regions with lower insurance costs or properties with robust mitigation measures to reduce risk and control expenses. Our wide range of inventory allows our expert Investment Advisors to recommend assets that fit your risk profile and investment goals.

While rising costs and interest rates pose challenges, strategic investment, and adaptive management can help mitigate these impacts. In the disaster prone regions, the added dimension of escalating insurance costs requires careful consideration and proactive risk management.

At SIG, our Investment Advisors are well-versed in navigating the complexities of the current inflationary environment, providing insights and strategies to help our clients make informed decisions and capitalize on opportunities in the commercial real estate market. By understanding the nuanced effects of inflation and employing targeted investment strategies, SIG remains committed to delivering value and stability to our clients amidst the evolving economic landscape.

There is no doubt that digital technology is having a very real impact on the CRE industry but this might be in ways that surprise you. This advancement is creating opportunities and value in new areas for investors and brokers.

Ways Technology is Changing CRE

The impact of technology on real estate is ever changing and in many cases, there are new property types that are created by this evolution. If you look back to the early 1980s, property types like data centers, electric vehicle charging stations, and the smart factories did not exist. We did though have a lot of Blockbuster video stores, Barnes & Nobles bookstores, and RadioShacks covering the map. Human needs change based on what is available and prevalent today and you can’t overlook the real estate component of these changes.

Another example is the rising demand for last-mile logistics and the impact this is having on the industrial sector. The last-mile delivery market is set to grow by 15% through 2027, adding $62.7 billion in value between 2023 and 2027 according to Research and Markets. This growth is taking place along transport hubs and links, and is following the migration of people to secondary and tertiary markets, and even into rural areas. We think there are some great new opportunities in unexpected markets for investors seeking that diamond in the rough property to add to their portfolios. And for sellers in secondary and tertiary markets, there is the chance to reach a new base of buyers, alert to the value to be found off the beaten track. 

A third example comes from the restaurant sector. Consider how quick-serve restaurants (QSR) have changed between 2020 and today. During the pandemic, successful QSR brands adopted third-party delivery app services to reach their customers in a low-touch way. There was also an increase in virtual kitchens – restaurants that only exist to service deliveries and takeaways, and do not cater for seated customers. As the pandemic ended, QSRs started rethinking their digital channels to avoid the high third-party costs, but to continue to offer their customers convenience. New developments included drive-thrus and online ordering kiosks on their premises. Each technological evolution impacts the property layout, and ultimately the brand’s ability to expand and grow. Savvy brands with the flexibility and agility to accommodate these changes have gone from strength to strength and grown their footprint, seeking to acquire new, similar premises from property investors.

It Starts With Data

To advise our investors on trends like these – and any trends and opportunities in CRE – we need access to data, and the ability to quickly transform that data into something meaningful for our clients. Whether you are a buyer or a seller, you need this information fast. This allows you to make the most appropriate decision at that time – whether that is to buy, sell, or hold.

Today, conversations around digital transformation involve concepts such as big data, predictive analytics, artificial intelligence (AI), and machine learning (ML). But we believe this is only part of the picture, and that today CRE companies should already be using available tools to work better, faster, and be more helpful to their clients. For us, this means collaboration, and the speedy and clear communication of accurate, well-informed insights so that our clients can make the right decisions. This is followed up with the ability to execute decisions quickly and effectively to make the most of the opportunity in days, rather than weeks or months.

The reality is that AI and ML-powered tools are already here. At SIG, we use these tools for everything from capturing call notes and action items to extracting lease data, creating proposals, summarizing legal documents and reporting on complex financials.

Today, anyone has access to the ability to analyze data without being a software engineer. All it takes is a willingness to learn, and an environment and culture conducive to innovation. Companies that have a digital-first approach certainly have an advantage here. In our case, we started SIG as a national triple net lease brokerage firm and because of that it was vital that we could reach investors across the country to find the best deal for our clients and the only way to do that was to be a digital-first company.

Introducing the Robo-Broker?

As much as we are fans of using technology to do things better and faster, we don’t see the robo-broker as the next evolution. It is unlikely that a robot will ever outperform a human broker that is powered by technology. A human’s ability to connect, build relationships and understand nuances is needed to complement and mediate the data delivered by technology to arrive at and execute on the best deal.

“We can all gain efficiency, effectiveness and accuracy by using technology,” says Ryan Passe, SIG Chief Operating Officer. “Overlaying this with people who understand what they are looking at, can harness the information, and do something with it is where value is created. People can understand the human impact, and build the deep, lasting relationships required to navigate the unexpected and work through tough issues. If you pair this with the technological innovations of the world we live in, this is a great recipe for success for our brokers, our clients and our company.” 

Contact SIG today to make your investment goals a reality.

When we say SIG is a values-driven business, this really comes to life with SIGives, our charitable giving arm. Through donating a combination of our time, energy, and treasures, we acknowledge that beyond the commercial real estate bubble, there are bigger things that require our attention, and that with knowledge comes responsibility.

This idea that SIG is bigger than any individual, and should have a positive impact in the world, but most significantly, within the communities where we work, predates the founding of the company. Back in 2010, when Chris and Liz Sands started SIG in Santa Monica, CA, they infused their own values associated with giving and service into the company’s DNA. They recognized that real estate brokerage can often be very self-focused, overly individualistic, and cut-throat, core traits that they wanted to avoid and why they wanted to do things differently with SIG. This alternative way of looking at the world and doing business has taken hold at SIG and has become such a fundamental pillar in our success, that the quarterly community outreach projects are no longer mandated but rather motivated and self-propelled by each of our current seven offices.  

“SIGives is absolutely the epitome of our culture and values, particularly collaboration, gratitude, and giving back. On more than one occasion, I’ve heard from candidates and new hires that the SIG culture and SIGives sets us apart and is a key reason why people want to work for us,” says Liz Sands, SIG co-founder.

SIGives Today

While we donate our time as part of SIGives, we also know that many of the organizations that we work with need more than just volunteers which is why we give a percentage of our revenue to organizations that are working to improve the communities in which we operate. In 2022, we proudly hit the milestone of $1 million donated in a year. 

When it comes to giving our time, each office location comes together quarterly for a day of giving back where we spend time volunteering with the causes closest to our hearts in our local communities. Recent examples are a local animal shelter in Austin TX and a beach clean up in Charleston, SC.  

Finally, it’s important to us that SIGives extends to our own team members. When someone has a cause that is near and dear to them, they just need to ask and we contribute to any charitable initiative that our team member is involved with in their personal capacities. 

SIGives in 2024

Our recent SIGives office activities included:

• Cleared invasive plant species from several acres of Valley Forge National Park – Philadelphia, PA
• Beach clean up on Sullivan’s Island – Charleston, SC 
• South Florida Broadcaster’s Celebrity Golf tournament in association with the My Family Matters foundation – Fort Lauderdale, FL
• Volunteered at Central Texas Food Bank – Austin, TX

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Events we are involved in this year: 

• We’re a headline sponsor of the Special Olympics Bocce Bash – Charleston, SC 
• Habitat For Humanity – Austin, TX
• CHOP event, Philadelphia, PA

Habitat for Humanity and the Special Olympics 

Long-standing beneficiaries of SIGives are Habitat for Humanity and the Special Olympics. Working in real estate, our support for Habitat for Humanity is apt. At ribbon-cutting ceremonies for newly built Habitat homes, we have met the new residents of homes we have helped build, which gives us our team a humble reminder of what real estate is really about and continues to fuel our passion for what we do. 

With Chris and Liz’s backgrounds as competitive athletes, the Special Olympics holds a special place in our hearts  – we believe that everyone should have access to the benefits and enjoyment that sports and competing gives you. Our teams have volunteered at games and we’ve sponsored events that have resulted in hundreds of athletes being able to compete at the Special Olympics.

“Donations from companies like Sands Investment Group are the lifeblood of Special Olympics South Carolina. Their loyal support over so many years has made our mission possible, and while they may not know you by name, our athletes carry thanks in their hearts for your contributions.”   

• Sandye Williams, Director of Development, Special Olympics South Carolina

Our Future Plans for SIGives

Looking ahead, we intend to grow and expand SIGives leaning into our CRE capabilities as strategic advisors and deal makers, all the while maintaining the program’s organic, grassroots ethos, where everyone at SIG feels ownership and has the ability to shape our charitable activities. We are honored to work with the organizations we do and proud of how SIGives continues to bring to life our culture, our values-based approach to CRE brokerage, and the SIGnificant difference you experience when choosing SIG.

At SIG, we’ve always done things differently and put our values at the heart of everything we do. And, coming out of a tough 2023 and still achieving above-average growth, we know this difference is what creates success for us. Our core values – honesty, integrity, gratitude, giving back, and growth – have allowed us to grow a measurably excellent CRE brokerage service and a best-in-class company. 

Our Values

Our values mean that we are not a group of real estate brokers who look at each deal through a single-minded transactional lens. Instead, we are strategic advisors who build long-lasting partnerships with our clients. These partnerships are based on honesty and integrity – ensuring the best deals are done, with the best outcome for all involved, while still maintaining a premium quality of service.

Our values also mean that we cooperate and collaborate, internally and externally, to add value and drive growth. This drives better deals for our clients, giving them access to wider databases, more choices, and better outcomes. 

Make no mistake though, our brokers are also fiercely competitive. But uniquely, they work hard and compete in an environment where they can show up and be seen as their whole selves and grow as human beings while also being an integral part of growing our business. 

SIGives – Giving Back

One of our core beliefs for the past 14 years is that SIG is bigger than us, and that with success comes responsibility. This is reflected in our values of gratitude and giving back, and in the work we do to contribute to the wider community outside of the real estate bubble through SIGives.

SIGives is a program that donates a percentage of our revenue to organizations that work to improve the lives of others. This means that when you work with us, you’re doing more than just contributing towards our bottom line.

We also donate our time and effort. Every quarter, our team members in each of our offices go out into the community to get involved with causes making a difference. Some of the community projects we support include Habitat for Humanity, Special Olympics and our local pet shelters.

Why the SIG Difference Matters to You

For real estate investors, wherever you land on the investment spectrum, the SIG difference means we can offer you a full suite of CRE services across industrial, office, medical, multi-family, and shopping centers. We partner with you to understand your investment goals and work across our network to find the right deal for you, with a premium quality service level that delivers results.

Check out our recent listings here

For tenants, our ability to support your business expansion goals extends beyond our net lease specialization to full brokerage services. The quality of service and values-based relationships you already know us for will continue to strengthen this year.

Our team, and CRE professionals who want to work or collaborate with us, can be at the top of their CRE game while cultivating their very best selves, having a voice, and succeeding and growing while staying in alignment with their core values. 

On the topic of our team, we’re growing our office footprint in 2024, so check out our careers page to join SIG. 

So, Why Do We Think This Values-Based Approach to CRE Brokerage Will Work?

Because it already has. We have proven the model over the last 14 years with growth that we are very proud of. Last year we listed and sold almost $4 billion, comprising more than 700  properties – and we plan to continue the growth trajectory in 2024. We have achieved significant traction as we build on our net lease foundation to expand our portfolio of brokerage services: we reached $300 million in industrial deals and $250 million in shopping centers in 2023. We achieved this growth with a small, agile team, and an industry-leading real estate marketing platform. 

But don’t just take our word for it. Inc. Magazine has ranked us in their list of the 5,000 fastest-growing private companies in the US for four years in a row.

Many in the industry might be facing 2024 with trepidation, given the rough ride we had last year. But we are confident that our values-based approach to commercial real estate and our laser-sharp focus on providing the best quality of service, underpinned by our people and platform, will maintain our growth trajectory this year.

April 7, 2020:  When we formed SIG over 10 years ago, we knew that we wanted to build a different kind of brokerage company. One founded on collaboration and contribution. SIGives was born from this and because of you, our loyal client base, we’ve had the privilege of being able to donate more than $1.7M to both global and local charities such as Special Olympics, St. Jude Children’s Hospital, International Rescue Committee, Charity:Water and many others. Read more →