As many of you  prepare to descend upon New Orleans for World Workplace 2014, you may have noticed a visual shift in the brand identity of your local Boston Chapter of IFMA.  It’s true, IFMA Boston has officially begun transitioning its logo, and signs of this exciting change are popping up all over!

Take our New Member welcome package for instance (shown below):  this important document makes a good first impression with new members by introducing them to the many educational, networking and volunteer opportunities that are available to members of our growing Chapter.  From attendee name tags, to event signage, to the Chapter website and our own mobile app, the addition of the new logo and image is helping to propel our professional organization forward and allow us to continue to fulfill our mission of supporting the community of built environment professionals through  career development, advocacy and networking.

One year ago, at World Workplace in Philadelphia, IFMA International formally introduced the revamped image.  At the start of this year, we shared a sneak peak at that new logo.  Since that time, the IFMA Boston Board of Directors along with the volunteers of the Marketing & PR Committee have been planning the roll out of the new brand identity which is being released in phases.  After 30 years in the industry, the Boston Chapter has built strong reputation in the Northeast and it was important to thoughtfully adapt our image to remain in unison with our colleagues around the world, while maintaining the local pride that makes us who we are here in Boston.

As you attend Chapter events and frequent our site throughout the fall, be on the lookout for the new logo and let us know what you think!

-Tom Palange, VP of Marketing & PR – IFMA Boston

(Follow me on Twitter: @IFMA_BOS_PR)

Example of the new IFMA logo on display in the Chapter's New Member Welcome Package

Example of the new IFMA logo on display in the Chapter’s New Member Welcome Package





By: Bill Pastuszek, MAI, ASA, MRA , heads Shepherd Associates LLC, Newton, Mass.

Several surveys by major brokerages
contain statements such as,
“Investors are once again proving
that their confidence in commercial
real estate remains steadfast… a majority
of investors expect both core
fundamentals and property values to
continue to rise in the coming year.
That positive outlook is fueling a
desire to further expand real estate
holdings.” Another survey shows
a steep positive trend since 2010.
Yet another survey suggests that
markets like the U.S. are generally
safe havens (at least, certain cities
and regions) but significant uncertainty

If one is to be in real estate, commercial
real estate (CRE) is surely a
nice place to live right now.
A major survey recently noted that
investors are “excited” about continued
positive trends in commercial
real estate (CRE). Many investors
would note a lack of quality product
characterizes many strong markets
with Boston among those. However,
it notes some concerns about the use
of “aggressive” residual capitalization

What is the difference between
a capitalization rate and a residual
capitalization rate? Aren’t you glad
you asked?

There are many capitalization rate
flavors out there. Everybody has an
opinion as to what the “cap rate” is,
could be, or might have been.

A cap rate is used to capitalize
income and represents the relationship
between income and value/
sales price. Thus, most commonly,
Net Operating Income (NOI) is capitalized
(i.e., divided) by the “cap”
rate to arrive at a value. Also, a cap
rate can result by dividing NOI into
a sales price or value. NOI is income
remaining left over after operating
expenses and vacancy/collections
are subtracted from gross income.
Getting to NOI can in itself be an
artful struggle: disagreement can
arise between otherwise qualified
professionals as to what should be
included and excluded to get NOI.
Without further discussion about
NOI, cap rates arise based on current
income, trailing historical income,
average income, anticipated income,
pro forma income, and so on. Most
discussions regarding cap rates
begin with defining what income
and assumptions about the income
hold true.

A residual cap rate is a rate used
in discounted cash flow analysis
(DCF), another form of processing
income to produce value. DCF analysis
processes income flows forecasted
over a holding period – say,
10 years – rather than “capitalizing”
one year’s NOI.

Many investors, appraisers, and
lenders find DCF crucial in evaluating
properties with irregular income
patterns or shifting lease characteristics.
Many believe DCF provides
an extremely accurate model of the
anticipated behavior of a piece of real
estate. This may be true, as long as the
assumptions reflect what investors
think will happen. As with anything
that makes assumptions about the
future, rosy feelings about the future
lead to unrealistic assumptions and
an uncooperative economy can put
DCF models on their heads.
One key assumption in DCF is the
terminal rate. This rate capitalizes
the final year’s NOI to create a reversionary
value at the investment’s
end and whose present value (a value
that accounts for the time value of
money) is added to the present value
of the cash flows.

This is a key assumption. As that
future value is usually a big one,
even discounted from a 10 year horizon,
it weighs substantially on the
value as a whole. Someone feeling
extremely positive about the future
would forecast an aggressive (“low”)
terminal rate which would have the
effect of increasing the value. (It’s
actually one of only several ways
to influence the value upwards, but
that’s for another time.)

Most surveys have continued to
show some form of cap rate compression
almost across the board in
property types. This is true for residual
rates as well as going in rates.
Even in markets that can be
classified as recovered and in expansion,
aggressive residual rates
represent “bets” on the future that
may not come to pass. No one can
predict the future with certainty;
thus, prudent forecasting based on
a sound understanding of the current
environment and the thinking of intelligent
investors must prevail over
the “buy now, worry later” investor

It’s not time to sound alarms. It
is worth considering the effect of
optimistic “short term” predictions
applied to “long term” investments.
Blue skies don’t last forever. A real
estate investment that is held for
ten years is likely to experience
more than a few “bumps” in the
economic road.

A major survey recently noted that investors are
“excited” about continued positive trends in commercial
real estate (CRE). Many investors would note
a lack of quality product characterizes many strong
markets with Boston among those. However, it notes
some concerns about the use of “aggressive” residual
capitalization rates.

This article can also be found on the New England Real Estate Journal Website (NEREJ) :

A Warm Welcome Back from the IFMA Boston President

August 28, 2014

Welcome Back! Fall is my favorite time of year. It’s partly because of the great weather in the season and also because fall brings a sense of a fresh start. Children head back to school, college students return to the dorms and the whole region gets ready to get back to work. Whether you spent […]

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Can Less Be More?

August 24, 2014

By Joe Flynn, CFM, LEED AP, senior associate, workplace strategist, Margulies Perruzzi Architects Businesses are facing difficult choices to remain competitive, not the least of which include real estate decisions, for both the company and the individual employee. Today, companies are “rightsizing” in a very different manner. The intent is no longer to trim the […]

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Fox RPM Teams up with BIDMC to Improve Accessibility Across Campuses

August 20, 2014

Beth Israel Deaconess Medical Center (BIDMC) is undergoing a series of updates to its campuses in order to enhance the user experience for patients, employees and visitors with varying degrees of disabilities. Comprised of a team of well-experienced facilities managers, the BIDMC campuses are undergoing a major face-lift as part of a five-year project, in […]

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Iron Mountain: Workspace Re-Envisioned

August 14, 2014

Iron Mountain: Workspace Re-Envisioned                                                 By Janet Morra, AIA, LEED AP, principal at Margulies Perruzzi Architects   When preparing to relocate its global headquarters from 745 Atlantic Avenue to One Federal Street in […]

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2014 Security Trends

August 7, 2014

End users continue to migrate away from legacy security systems towards technologies that enable them to be more proactive in mitigating their risks. As our IFMA Boston community witnessed first hand, last year’s investigation into the bombing at the Boston Marathon showed the potential waiting to be unlocked in using big data analytics to comb […]

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RDK’s Lean Journey

August 6, 2014

For the past few years, RDK Engineers has taken many steps to start incorporating Lean and its practices into our company. At its core, Lean is a philosophy that seeks to increase client value and eliminate unnecessary waste. By applying systems thinking, Lean organizations see the whole value stream of their operations and find ways […]

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What Tenants Want in a Building

July 29, 2014

By Marc Margulies, AIA, LEED AP, principal at Margulies Perruzzi Architects How do tenants decide which building to take space in? What are the factors that inform the leasing decision? Clearly, cost comes strongly into play, but the financials are often very competitive. The decision may thus be swayed by the physical attributes of one […]

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Schmooze Cruise Pictures

July 25, 2014

Thanks for sailing with IFMA Boston on our annual “Schmooze Cruise”. Big thanks to the New England Real Estate Journal’s, Julie Santos, for posting pictures. Check them out HERE

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