Tech Talk: Spring Cleaning Kitchen Appliances
Spring is finally here! Here are a few reminders that might be helpful in your spring cleaning.
- Pull out the refrigerator, clean up the back, and vacuum under to remove any dust and food particles that have accumulated.
- If you have an older fridge, be careful around any uncovered coils in the back or beneath!
- For the stove, pull it out, clean behind it, underneath and on the sides. I suggest using a kitchen cleaner, like 409 or Lysol Antibacterial, to remove any grease that has fallen down the sides.
- Check all electric and/or gas connections for the stove and oven.
We know spring cleaning isn’t always fun, but I hope these tips help the process go a little smoother!
Gaughan Tech Talk: Air Conditioner Care
Now that warm weather is approaching, it’ll soon be time to turn on the air conditioner. Here are a few tips on air conditioner care so you can keep your A/C in top working condition.
- Replace the pleated air filter every 3 months.
- Remove any sticks, leaves, grass, etc. from the condenser unit located outside. Debris on the outside of the unit will drastically affect performance. (I recommend an annual cleaning by an HVAC technician.)
- To clean the outside of the unit, use a little car polish on the box; that will shine it up. On the inside of the unit, a water hose and coil cleaner are used to clean the condenser coil.
- Do not cover the condenser with a cover or tarp in the off season. This will hold in moisture.
- Indoors, check the evaporator drain line to make sure it isn’t plugged. This removes condensation from the air handler, and it must be kept clear.
- It is a good idea to change the thermostat batteries at the start of every cooling season.
These are just a few things you can do to help your air conditioner run efficiently this season.
Prepare for Summer with these Spring Cleaning Tips
It’s that special time of year in Minnesota when the sun starts to shine a little brighter, a little longer and a little warmer. Spring is here! While everyone is enjoying the weather, many are also anxious to get their home ready for summer. While spring cleaning the inside of your house is good, spring cleaning the outside is equally as important.
On the outside of your house, remove all of your holiday decorations and lights as the weather permits. One of the best components of an association is the feel of a close and well-kept community. If it applies, a good outdoor spring cleaning might include washing all exterior windows to get rid of any dirt on the outside and cleaning cobwebs off of light fixtures. Lastly, to prepare for the coming summer weather and activities, clean up the grill, wipe off all outdoor furniture, and prep the garden by tilling.
With summer around the corner, people are more likely to entertain inside, too. Now is a great time to scrub all walls and baseboards to give each room a fresh feel. Replace water and air vent filters in order to get rid of what has built up over the last year. In the same way, it’s important to clean out all faucets and showerheads of rust and calcium deposits with a water and vinegar solution. Also, remove lint from the dryer vent inside and outside. This is one good prevention against residential fires. Most importantly, test all of your smoke alarms.
For more tips on what to clean, how to clean, and what products to use, check out this article from the Today show and this article from the DIY Network.
-Sarah Crawford
Gaughan Roofing Tech Talk: Downspout Problems
Although the snow can be beautiful, Minnesota winters can cause a lot of damage to a property. Avoid downspout problems through upkeep of all gutters and downspouts. It will minimize the negative effects of winter on a property’s outside drainage system.
Here are a few upkeep tips:
- Twice a year do routine inspections of roof-to-ground downspouts.
- Inspect general operation; clean out sticks and debris stuck in downspouts.
- Check straps. Are they still secured to the wall? Are screws missing?
- Are they damaged to a point that a new full or partial downspout is required?
- Get these repaired or replaced as soon as possible to avoid other associated problems.
Employee Attraction and Retention Tools
We all know someone who loves or hates their workplace. Every day, thousands of workers quit one job only to rush to another one for any number of reasons. Let’s take a look at what companies are doing to attract and retain talent.
Most people think of money when they consider a new job. Questions often pondered are, “Will this increase in salary improve my living conditions,” or maybe, “Will this new salary be enough to support a move to the neighborhood I’m eyeing?”
Although salary is a huge draw, there are many other things that companies are using to lure the best talent. After a prospective employee is decided upon, the company will consider where that future employee is currently living. If he or she isn’t within an hour’s drive of the office, it’s time to consider a relocation package.
A good relocation package will pay for a percentage of closing costs on both the old home and the new one. It will often pay for movers, and if the employee needs to report onsite before his or her family can arrive, then the company may also pay for temporary housing.
In addition to these items, a company needs to consider the overall health and well-being of the employee. Paid time off, offering good medical insurance, dental and vision, short and long term disability plans, profit sharing and 401K plans should be part of each company’s benefits package.
Some companies are large enough to include a workout area in their plaza. Others may staff this area with health and fitness promotion workers who can offer suggestions for diet and workout programs in order to improve the health of the employees.
After the employee is acclimated to the new job, a challenge lies in trying to keep the employee happy at work. A good company recognizes that their workers are human and that things come up, such as having a child get sick or repairs needing to be done at home.
Flex time or telecommuting is a nice plus. Some employees can’t always be at the office from 8-5. If management can offer a small flex work or telecommuting schedule, the employee can still see to his or her personal needs without having to call in or take a personal vacation day.
Having a great relationship with an immediate supervisor and manager is key to an employee’s happiness. A good company will empower an employee to make certain business decisions up to a point. If a supervisor needs to have the final word, then it’s important that this person be accessible whenever needed. It’s also important that the supervisor supports the employee when dealing with other in-house departments and the public.
In addition, the best companies go a step further and reward employees who put forth their best efforts. If an annual bonus is offered, it is often based on performance review. A good company will hold weekly one-on-ones between supervisor and employee so that the employee understands how well he or she is doing in the position.
Besides an annual bonus, a company that focuses on employee retention may also have programs such as internal recognition or employee recognition day. These companies also realize that if it’s possible to promote within, then they should do so. Otherwise, their employees may feel that they’ve been overlooked and will want to head for another place where they will feel appreciated.
Finally, continuous improvement is another effective employee retention tool. A company may offer to pay a part or the entirety of classes at the college level that will aid a worker in his or her job. The company will also offer in-house training and some will even give workers a chance to take classes on-site or intern in other departments for a few weeks.
Changing jobs or keeping the one you have is always challenging. Everyone wants to make sure that he or she is getting the most value in exchange for his or her efforts. The best companies will recognize and respond to this and will go out of their way to promote employee retention. As a result, their bottom line looks great and their workers are happy, which creates a positive workplace.
Gaughan Companies is committed to building strong communities and creating good relationships within those communities. That includes our workplace. Our core values are honesty / integrity, priority focused / accountable, positive / solution-based, strong communication, and hardworking.
-Patrick Gaughan
Top Ten Commercial Real Estate Trends
2016 is showing great promise in both updating commercial real estate trends, and adding new ones. The following are things to watch for this year:
1. Overseas Investment into U.S. Commercial Real Estate
The U.S. property market is among the most stable and transparent in the world. With growth slowing in Europe and China, foreign investors are flocking to back U.S. projects. According to the Commercial Real Estate Development Association, $91.1 billion was spent by overseas investors on U.S. transactions in 2015. That accounts for 17 percent of all deals. Most of the investors are from Canada. Since that country is lacking in dense populations and has limited resource investment, their citizens’ view the U.S. as a lucrative way to leverage their buying power.
2. Global Urbanization and Its Reverse
Millennials and Baby Boomers have something in common. They both want to seek out living space in metro areas. As they move away from the suburbs, they are looking for affordable units to rent or purchase. In addition, they need to find places to buy their groceries, get some exercise, and shop for household items and apparel.
Generation X and Millennials with children, however, are either staying in or moving to the suburbs. Promises of more house for the money, large green lawns and local parks and playgrounds are drawing them out. Once they relocate to the suburbs, they also need to get groceries, find places to exercise, and shop for household items and apparel.
Commercial real estate has an edge in both urban and suburban areas as builders try to meet the demands of bringing grocery stores, parks, gyms, recreation sites, and houses of worship, coffee shops, bookstores, and more to the market.
3. New Commercial Construction will be More Limited
Building new multi-family dwellings is diminishing. However, the need for senior and student housing is increasing. As these demographics look for affordable housing, they are considering new options such as the tiny house movement. In addition, cities are taking old abandoned big box stores and malls and are re-purposing them for uses that better fit this day and age. Gyms, recreation facilities, and even government offices now sit where old eyesores used to reside. The city leaders realize that often it’s much more cost-effective to remodel an existing structure, rather than invest in new construction.
4. Tearing Down Parking Lots and Garages
As metro consumers get used to using mass transit, more and more of them are ditching their autos and relying on goods and services that can be obtained through delivery or by walking directly to the retailers. They seek communities that are made up of mixed use dwellings, such as having a retailer on the bottom floor, and housing on the top floors. In addition, green space has become very important for city dwellers. They want a place to play with their kids, walk the dog, bicycle and roller skate. Since land space is limited, parking lots and garages are often torn down in order to make room for more buildings.
5. Increasing Stress on Retailers
The average consumer is having to pay more these days to use their credit card, and merchant processing fees are higher too. Reports suggest that on-line sales have triumphed over in-person sales, especially around Thanksgiving weekend. In order to combat this trend, retailers will have to create virtual shopping that combines with physical shopping. Major retailers are already being threatened by discount stores that carry quality, off-brand merchandise. Almost monthly, we hear about large companies such as Macy’s, K-Mart, and JC Penney that are closing stores. However, it seems that chain restaurants are expanding. Commercial real estate experts need to move quickly to fill those properties that have been abandoned.
6. Rising Interest Rates
If the Federal Reserve continues to raise the interest rates, the market will become more stable. However, it will also rule out the small business person who has dreamed of opening a small brick and mortar store. According to the Small Business Administration, small business owners own or lease between 30 and 50 percent of all commercial real estate space in the U.S. However, if these entrepreneurs and franchises can’t afford the rent, these properties will remain vacant.
7. Drop in Energy Prices
The price of oil has dropped several times this year. This draws consumers out of their homes, and encourages them to travel. Hotels, restaurants, attractions and city tourism benefit because they are hosting more guests. As for running businesses, consumers are seeing more profit in part, because their heating and air conditioning bills are dropping. This gives additional buying power, and they tend to want to go out to enjoy their surroundings more. This affects commercial real estate experts because they need to be sensitive to those establishments that are ready to add on to their existing properties.
8. Changes in Office Landscape
Americans are seeing change come to their workplace. Several companies support telecommuting. Others support desk-sharing. It seems that the bigger companies such as AT&T are doing away with the cubicles of yesterday, and are instead embracing a collaborative work space environment. Huddle rooms, quad shaped desk rounds that hold 4-5 workers, and a lack of dividing walls and walkways have become the norm. Commercial developers are watching this new trend, and need to be quick to respond with proposals for interior remodeling.
9. The Introduction of LEED
Along with the new trends in the workplace environment, companies are embracing “going green.” They are installing energy efficient thermostats, and water savings devices that will cut down on their carbon footprint. They are also trying to continue to go paperless and rely on a digital environment.
LEED stands for Leadership in Energy and Environmental Design. It uses 3rd party verification to verify that a building is “green.” In addition, companies are installing green space inside of buildings, and planting vegetation. Commercial real estate companies need to understand this trend and be ready to respond with sub-contractors that are knowledgeable in these fields.
10. The Advancement of the Internet of Things
Pretty soon, getting to the office, turning on the lights and heating up the coffee maker will be things of the past. With the internet of things, more and more “smart buildings” are being created. Special wiring will interface with digital technology to make the life of the consumer even easier. A worker will be able to turn on the lights in the office, start the coffee maker, and pan the security cameras from the comfort of his home. If he does decide to go into the office, he can remote in to his kid’s daycare, start the oven or the crock-pot at his home, and start his car, all from the touch of button.
As commercial real estate companies continue to study this trend, they need to be able to respond by having sub-contractors who are well versed in creating apps that allow building managers to remotely control the building resources and respond to requests to restock or send janitorial services on demand.
The world and its resources are changing around us every day. We, as commercial real estate industry professionals, along with our partners, are developing plans to meet and stay ahead of these trends and demands. We aspire to be the new leaders on the information superhighway and community advancements of tomorrow.
Rent By Choice
According to the U.S. News and World Report, more and more Americans are choosing to rent instead of buy. For Millennials, young families with small kids, and Baby Boomers who have reached the retirement and empty nest stage, the idea of renting instead of buying has garnered strong appeal.
Although it would seem that the demographic groups mentioned above would be vastly different in their housing needs, they actually have a lot in common.
The first thing these groups consider is cost. Millennials are just starting out and most are just getting their career off the ground. For them, flexibility and not being assured that their first job will lead to long term stability, drives their interest away from the burden of buying a home, and then being locked in to long-term payments. In addition, a great number of them are just starting to pay back their student loans, and may not actually have the funds or credit score needed to be approved for a long term housing commitment.
For the young families with small children, they tend to be most interested in trying out different neighborhoods and checking out local schools. Several of them may be adding another child or two to their family unit, and may not really understand their long term housing needs until they reach the point where they decide that their family is complete.
If they are still in the same job that they took right after college, many may also now be eyeing promotions and even opportunities in other companies, because they have gained some work experience and want to increase their salary and benefits. Also, this demographic, along with the Millennials, may actually come out ahead financially by investing extra income that they have, instead of chunking it toward actual mortgage payments.
With the housing market prices fluctuating wildly from year to year, waiting until it shows a period of stability can pay off nicely. Also, the more desirable houses tend to go quickly in some markets, and there may not be much available that fits their budget and ideals. However, apartments, condos and townhomes are typically readily available in all areas of a major city or suburb and are generally ready for possession within a few days of weeks of making application.
By the time their kids get to elementary school, they along with some of the older Millennials tend to feel more settled, and have generally decided where they want to put down their family roots. By having rented for a season, they have had time to establish their credit, and save for a nice down payment on a home that fits their current lifestyle.
Finally, the Baby Boomers are similar to the other two groups, because they too are adjusting to a major life change. If they are experiencing the empty nest stage, then they may no longer need the large home that they lived in while raising their family. Retirement and the idea of travel tend to make them not want to be tied down by things such as maintenance and yard work, and they too may want to add to their nest egg so they can enjoy more freedom to pursue their interests.
Whatever stage of life you find yourself in, a good idea is to talk with a financial advisor and list out your personal ideas of renting versus buying. The nice thing about renting is that you can always change your mind and move up or move on, but once you sign on the dotted line of home ownership, you are committed for the long haul.
Gaughan Companies Partners with Non-Profit Community Changing Thrift Store
Gaughan Companies recently broke ground on the new Family Pathways North Branch thrift store. It will be located on Tanger Drive between the Nike outlet and the North Branch Cinema Theater.
This building is the first stand-alone building for Family Pathways and will serve as North Branch’s local thrift store as it partners with ten other locations in serving our community.
As president of Forest Lake, Minnesota-based Gaughan Companies, Patrick Gaughan said, “It’s fun to be a part of this kind of deal. It means a lot to the city. It brings jobs to the community. So all transactions, big or small, are important.”
Family Pathways is a fast growing non-profit thrift store in East Central Minnesota and Polk County Wisconsin. Proceeds from the thrift store sales go toward community programs that the organization sponsors.
These include Hunger Relief, The Refuge Network Domestic Abuse Programs and Shelter, Aging Services, and Youth Programs.
The mission of Family Pathways is to work with communities to develop supportive, caring relationships to help people meet their basic needs.
Last year saw the organization bring a new quality of life to hurting families by proving food for nearly 19,000 people, assisting in refuge from domestic violence for nearly 2400 victims, and assisting nearly 7500 senior citizens with the means to start or continue independent living.
Gaughan Companies is pleased to partner with this trusted organization and is excited to announce that the opening of this thrift store is on schedule for early 2017. For more information, please visit Gaughancompanies.com, and Familypathways.org.
Gaughan Completes Phase Two of City Center Commons
Gaughan Companies announces the completion of its latest development project called City Center Commons, located along highway 61 on the south side of Forest Lake. The new commercial buildings provide a clean, modern look and feel to the community.
The building will occupy several tenants including Keller Williams in one building, along with Thrifty White and Maplewood Oral Surgery in the second building. There is one additional space available for custom build-out which has the potential for a new franchise restaurant.
“We’re adding residential rooftops to the Minneapolis suburbs again and demand for more commercial and retail space is imminent based on the region’s population growth,” said Patrick Gaughan, in reference to the return of growth in the economy after a post-recession lull.
Gaughan Construction continues to embrace the growth of the economy and the future of the company.
To Own or To Sell: Commercial Real Estate Pros and Cons
Commercial real estate can be an excellent investment opportunity.
Typically, commercial properties offer more financial reward than residential properties. However in some scenarios, the risks can outnumber the rewards. Understanding the commercial real estate pros and cons is important for any investor no matter if the property was acquired by a sale or inherited. Having the ability to understand the investment and having the knowledge to make a decision if ownership or sale is the best option is crucial.
Commercial properties may refer to retail buildings, office buildings, warehouses, industrial buildings, apartment buildings and mixed use buildings. Mixed use properties feature both residential and commercial tenants in the same building.
Armed with the different types of properties available, let’s take a brief look at some of the pros and cons of owning commercial properties.
Pros
Income potential. Commercial properties generally have an annual return off the purchase price between 6% and 12%. Residential properties usually have a return averaging between 1% to 4%.
Tenant Relationship. Business owners generally take pride in their businesses and it is in their best interest to be successful and keep their business viable. A commercial property is also operated as a business, thus giving the landlord and tenant a common goal. The business-business customer relationship helps foster interactions that are professional and courteous.
Public Image. Retail tenants have a vested interest in maintaining their store and storefront, because this affects their image as well as the landlord’s. For this reason, commercial tenants and property owner interests are aligned, which helps the owner maintain the quality of the property, and ultimately, the value of their investment.
Standard Business Hours of Operation. Businesses that typically operate in a commercial setting are open during normal weekday business hours of 8am-5pm. This allows for the commercial property owner to not have late night issues or deal with tenants after hours. Typical calls are for true emergencies or a monitoring service on the building.
More objective price evaluations. Financial information is easier to acquire for commercial properties so that an evaluation of the property price is based on the current owner’s income statement. The seller should be using an experienced broker so the asking price is set where an investor can earn the area’s prevailing cap rate for the commercial property type they are looking at (retail, office, industrial, etc.).
Triple Net Leases. There are variations to triple net leases, but the general concept is that the property owner does not have to pay any expenses on the property. The lessee handles all property expenses directly, including real estate taxes. The only expense the investor handles is the mortgage payment.
More flexibility in lease terms. Fewer consumer protection laws govern commercial leases, unlike the dozens of state laws, such as security deposit limits and termination rules that cover residential real estate.
Cons
Time commitment. Owning a commercial building with numerous tenants or even just 2-3 tenants, there is more to manage than one would with a residential property investment. Ownership can’t be an absentee landlord and maximize the return on the investment. With commercial properties, there are multiple leases, annual Common Area Maintenance (CAM) adjustments, day to day maintenance issues, as well as potential safety concerns with customers and the general public accessing the property.
Property Management and Hiring Vendors. Some commercial property owners try a self-managed approach, but a more ideal situation is hiring a property management company as the best scenario for both the investor and their tenants. Licensed vendors to handle problems and issues at the building is a smart investment as well. This is an added cost which doesn’t seem ideal but these expenses can be budgeted into the building’s expenses and is well worth the cost. Property management companies can charge between 5-10% of rent revenues for their services, which include lease administration. Once a property is purchased, the investor will need to decide if they will be handling the leasing responsibilities or hiring out a broker to handle those responsibilities. If hiring a broker, be sure to budget in paying out commissions to not only the broker the investor has hired, but if potential tenants are being represented by a broker as well.
Bigger initial investment. Purchasing a commercial property typically requires more up front capital compared to a residential property. Once an investor has acquired a commercial property, they can expect some large capital expenditures to follow. Everything can be running smooth for a few months and then the roof starts leaking and now there is a $20,000 bill to address the repairs. With more customers there are more spaces to maintain and therefore more costs. For an investor, a top concern is that the increases in revenue outweigh the gains in costs, to support purchasing a commercial property.
More risks. Properties intended for commercial use have more public visitors and therefore have more people on the property each day. The more visitors that visit, the greater the chance that someone can get hurt or do something to damage the property. There are a variety of things that make commercial buildings risky such as snow removal (ice for slip and falls), vandals of all types including graffiti or damage to exteriors or landscape, and a variety of other situations. The building must have the proper insurance that can cover a potential lawsuit or building damage is very important so that there are limited responsibilities and out of pocket costs.
If looking for an investment opportunity, commercial property is a great avenue to pursue as long as one is aware of the pros and cons to make educated decisions.
