Core, Core Plus, Value Add, and Opportunistic – 4 Commercial Real Estate Strategies

Source: ActiveRain.com By Joseph Cacciapaglia

January 10, 2011 02:01 PM

As I mentioned in an earlier post, there are lots of terms used by commercial real estate investors that often confuse or intimidate novice investors.  I promised to define some of these terms in occasional blog posts.  Well today is your lucky day, because I decided to define four related terms: Core, Core Plus, Value Add, and Opportunistic.  These are the four investment strategies, and most commercial real estate investors will focus one or two of these strategies when investing.

Core:These are fully stabilized properties with credit quality tenants on long term leases.  These investments are well located in primary and secondary markets.  Usually these properties are purchased by institutional investors that are looking for a a safe reliable return.  Core investments in commercial real estate are often purchased as a way to diversify an investment portfolio.

Core Plus: Investors who generally want a safe return, but are looking for a little bit of upside prefer Core Plus.  These properties are match the physical description of Core investments, but usually have some opportunity to increase NOI.  A common Core Plus investment would be a class A office building in a CBD in a primary market.  The property would have good tenants, but might have a lot of upcoming lease roll.  Core investors would see this lease roll as a threat to their reliable income, but Core Plus investors might see this as an opportunity to increase rents.

Value Add:This strategy is exactly what it sounds like.  Value Add investors are looking for the opportunity to increase the value of their commercial real estate investments.  Often these properties will have a high vacancy rate or some physical obsolescence.  Value Add investors will buy these properties at a discount, and work to increase the occupancy or fix the physical deficiencies.  Once the property has been stabilized, these properties may be sold to Core investors.

Opportunistic: There are a lot of different types of investments that fall into this category, from ground up development, to adaptive re-use, to emerging markets.  The unifying principle is that the investor is willing to take entrepreneurial risk to achieve out-sized returns.

These are not strict definitions, just broad guidlines.  When I’m helping investors in Reading, PA, I always like to start off by asking which investment strategy they prefer.  Feel free to comment below and let me know which investment strategy you prefer.

20 years ago, Alabama’s auto industry started rolling with first M-Class

Source: madeinalabama.com By:Dawn Azok

TUSCALOOSA, Alabama – Twenty years ago today, the first customer-ready M-Class SUVs began rolling off the Mercedes-Benz auto assembly line in Tuscaloosa County, launching new eras for both the automaker and the state of Alabama.

For Mercedes, the M-Class was the first mass market SUV, and its success helped spin off a full range of similar models for the premium German automaker while also influencing the offerings from competitors.

For Alabama, the start of M-Class production was also the start of the modern auto industry. Minivans, sedans, pickups and more SUVs have followed, as Honda, Hyundai, Toyota and hundreds of suppliers set up shop in the state.

“In the 20 years since Mercedes began producing vehicles in Alabama, our partnership with the company has grown stronger today than ever before,” Governor Robert Bentley said.

The first dealer-ready M-Class — Job 1 — is readied for the assembly line at Mercedes’ new Alabama plant in 1997. (Image: Mercedes) The first dealer-ready M-Class rolled off Mercedes’ Alabama assembly line in 1997.

The Mercedes M-Class was the first vehicle produced in Alabama, beginning 20 years ago. Mercedes began production of the M-Class SUV in 1997.

Mercedes workers celebrate the 400,000th M-Class off the line. The Alabama plant has now produced more than 2.5 million vehicles. (Image: Mercedes-Benz)

Mercedes gave its pioneering Alabama-built M-Class SUV a new name — the GLE. (Image: Mercedes) GLE 500 e (Plug-In Hybrid) W 166, 2015 Exterieur: Diamantsilber Metallic, AMG Line Exterieur Exterior: diamond silver metalic, AMG line exterior

Mercedes is investing $1.3 billion to expand SUV production at its Alabama plant. The rendering shows the plant area including the planned expansion (white surfaces). This includes a new Body Shop and major enhancements to the SUV Assembly Shop. (Image: Mercedes-Benz)

Jason Hoff, head of Mercedes’ Alabama operation, speaks at a topping out event tied to the automaker’s expansion. (Image: Mercedes)

“The confidence that Mercedes has shown in our workforce and in the positive business climate we have created in the state has allowed the auto industry to continue to grow in the city of Vance and beyond, making Alabama one of the top auto-producing states in the country.”

Greg Canfield, secretary of the Alabama Department of Commerce, said the impact of Mercedes on Alabama’s auto industry cannot be overstated.

“It was this company’s vision, to build an entirely new kind of vehicle in its first U.S. manufacturing plant, that led to the growing, innovative automotive operations we have throughout the state today,” Secretary Canfield said.

“Last year, for the second year in a row, workers at our three auto assembly plants combined to produce more than 1 million vehicles, and that all started on Feb. 14, 1997, with the first Mercedes-Benz M-Class made in Alabama.”

2.5 MILLION+ VEHICLES

After multiple expansions, the Mercedes plant, known as Mercedes-Benz U.S. International Inc., has seen investment valued at more than $4.5 billion. There are 3,500 team members who continue to produce the M-Class, which was renamed the GLE two years ago; they also build the GLS full-size SUV, C-Class sedan and GLE Coupé.

“Our local economy now has a decidedly international focus and the experience has taught us to embrace international trade, not fear it.”

MBUSI is responsible for more than 24,500 direct and indirect jobs in the region, with an estimated $1.5 billion annual economic impact on the state. It is consistently Alabama’s largest exporter, and in 2015 alone, shipped more than $5 billion in products to 135 markets around the globe.

Roughly two-thirds of the components in MBUSI-built vehicles come from North American suppliers, 30 of which are now located in Alabama. Since that first M-Class rolled off the line, more than 2.5 million vehicles have followed it.

And more growth is on the horizon. MBUSI is in the middle of a $1.3 billion, 300-job expansion that is setting the stage for the production of its next-generation vehicles.

The plant has changed the trajectory of the surrounding economy, said Dara Longgrear, executive director of the Tuscaloosa County Industrial Development Authority.

“Our local economy now has a decidedly international focus and the experience has taught us to embrace international trade, not fear it,” he said. “Tuscaloosa County and our region of Alabama enjoy a prominent place in the world’s luxury automotive sector as a primary contributor to our state’s No. 1 export by dollar volume, automobiles.”

Longgrear added that the local supplier network which has grown over the past 20 years includes companies from the U.S., United Kingdom, Germany, France, Spain, Japan, China, India and Mexico.

MARKING MILESTONES

The GLE/M-Class will be celebrated by Mercedes officials and Alabama workers with a series of events over the next six months.

They’ll recognize several 20-year milestones, including the SUV’s production startup and market debut, as well as the grand opening of the Tuscaloosa County plant.

MBUSI President and CEO Jason Hoff said the first-generation M-Class represented a new direction for the automaker’s lineup, which is now heavily populated with SUVs. (The company did have the G-Wagen back then, but it was a very small niche model.)

“The M-Class at that time was our entrance to the SUV market, and if you look at how SUVs in general have exploded since then, it was obviously a key milestone and a huge step for our product portfolio. Now we have the GLA all the way up to the GLS,” he said.

“It was this company’s vision … that led to the growing, innovative automotive operations we have throughout the state today.”

The GLE remains a key player in that lineup, even two decades later, Hoff continued. It’s one of the company’s larger volume vehicles, holding its own among popular sedans such as the E-Class and C-Class.

Last year, U.S. sales of the GLE/M-Class model line topped 51,000, making it Mercedes’ No. 2 seller in the market, trailing only the C-Class.

“It continues to meet customer demands from multiple aspects, from size to features,” Hoff said. “It’s still a true off-roader, and I think that’s one of the things a lot of people forget. It also has an off-road option that gives it even more capability.”

NEXT CHAPTER

The GLE continues to be the flagship vehicle of Mercedes’ growing Alabama operations.

Hoff said the current expansion is going well, and everything is on schedule.

The project includes a new Body Shop, major enhancements to the SUV Assembly Shop and upgraded logistics and IT systems that will make the plant one of the “smartest” automotive facilities in the world.

“We are coming to the close of building construction, and the next step is installation of the equipment,” he said. The facility is expected to be put into full production in 2019.

While the plant’s annual capacity will remain at 300,000 vehicles, the new additions will allow the company to better prepare for future generations of its SUVs, which are gaining popularity worldwide.

In 2016, Mercedes won the global luxury sales crown, topping rival BMW. Mercedes’ overall sales rose 11.3 percent to more than 2 million, while sales of its SUVs alone grew 34 percent.

At the launch of the redesigned and renamed GLE two years ago, Mercedes officials in Germany emphasized what the model has meant to the brand.

“State-of-the-art and efficient drive technology, combined with superior ride quality and the versatility and robustness typical for SUVs — the new GLE has all the ingredients to continue the success story of our best-seller,” said Ola Kaellenius, member of the Board of Management of Mercedes parent Daimler AG and a former head of MBUSI.

“Often copied, rarely equaled — the M-Class established the segment of premium SUVs in 1997 and since then has been one of the most successful models in the world,” he said.

HudsonAlpha Breeds Serial Entrepreneurs

Source: Businessalabama.com Written by Nancy Mann Jackson

A flare for growing biotech companies is a characteristic of the genomic researchers of the HudsonAlpha Institute. The co-founder and one of his first associate entrepreneurs are good examples.

TEXT BY NANCY MANN JACKSON • PHOTO BY DAVID HIGGINBOTHAM

Nurtured in his science and business by HudsonAlpha Institute’s founder Jim Hudson, Jian Han has followed Hudson’s footsteps as a serial entrepreneur of biotech firms.

When the HudsonAlpha Institute for Biotechnology opened in Huntsville in 2009, it promised to boost genomic research, economic development and educational outreach.

The institute has delivered on all three counts, bringing together some of the world’s leading thinkers in genomics with innovative entrepreneurs and educators. Together, they are working to improve human health and quality of life by participating in ongoing genetics research and developing products, services and companies that make that research accessible and available to improve people’s lives.

HudsonAlpha’s campus spans 150 acres and now includes three buildings housing 27 growing companies and approximately 300 employees in the companies and the nonprofit research center. While the institute’s success relies on strong research and viable products and services, the most important ingredients are passionate entrepreneurs who have a vision and dedication to see it through. With a number of successful startups under its belt, HudsonAlpha has become a breeding ground for visionaries who often start not just one company but many companies in succession. Here’s a look at two of those prolific business-makers and what keeps them going.

Jim Hudson

Born and raised in Huntsville, Jim Hudson was the son of an entrepreneur. His father was his partner in Hudson’s first businesses, which were an iron and aluminum foundry and an antenna company. But Hudson’s first love was science, and after selling those businesses in 1981, he returned to school to pursue a master’s degree in molecular biology.

“While I was a scientist first, I was always looking for business opportunities that tied in with my research,” he says. Eventually, he founded Research Genetics, a Huntsville company that produced arrays of artificial DNA for use in genetics research. As the company grew, Hudson began working toward incubating other biotechnology companies. He would encourage his employees to launch their own businesses and in return for being a co-founder of those companies, he provided office space, supplies and business services at no cost.

When Hudson sold Research Genetics in 2000, it had grown to 260 employees and $28 million in revenue. When the new owner relocated Research Genetics to California in 2002, many of those employees were laid off.

After spending so much time and effort to build a strong community of biotechnology professionals in the Huntsville area, Hudson didn’t want to watch it fall apart. He formed the Partnership for Biotechnology Research to “keep the community together,” bringing in speakers from all over the world for quarterly meetings.

As a founder of HudsonAlpha Institute for Biotechnology, Hudson continues to invest in new companies and serve as a mentor and supporter of other companies based on genomics research. “I’m a scientist by nature, but I have a desire to take my education and use it in business,” Hudson says. “I continue to believe that biotechnology is second only to electronics in its potential to improve life for all of us.”

Garrett Dunn, a lab technician, loads cartridges into a reader in Han’s lab so the software can process data from it.

HudsonAlpha’s unique combination of nonprofit research and commercial businesses makes it an ideal place for biotech entrepreneurs, and past success seems to be building a generation of serial business owners.

“When you experience success and make enough money so that you’re no longer worried about your own financial picture, then you want to start more companies to make a difference in the world,” Hudson says.

“We believe capitalism is the best way to bring our research to make a difference for the most people. Here, we have a truly dynamic, supportive environment. We meet together every week and share ideas and root for each other.”

Jian Han

Growing up in China, Jian Han was the son of a leading Chinese physician and researcher. His father introduced many new technologies in China surrounding infertility treatments and genetics testing. For instance, he invented
chorionic villus sampling (CVS), a prenatal genetics screening procedure.

Because of his father’s passion, Han decided to come to the United States to study medicine. After his father’s death, while Han was a student at the UAB School of Medicine in Birmingham, he felt driven to launch a company to bring the work of his father’s lifetime to the marketplace.

While still at UAB in 1996, Han launched Genaco, which commercialized the technology his father developed and earned Chinese FDA approval. As the business grew, it drew the attention of Hudson, who owned Research Genetics at the time. “He asked me to come to Huntsville and offered free space, free Internet access and other perks,” Han says. “You can’t get much better than free.”

Han relocated Genaco to Huntsville and, in 2006, sold the business to Kiagen, a German company. By then, he was hooked on Huntsville and on biotech entrepreneurship. In 2007, Han launched iCubate Inc., a molecular diagnostic company, to market his proprietary technology that allows users to rapidly detect multiple pathogens in one test. Two years later, he launched iRepertoire, which commercializes applications of arm-PCR technology, which Han developed for infectious disease diagnosis and immune repertoire analysis.

“Most people who start several businesses have a passion to solve a problem; they recognize the need in the marketplace and feel driven to do something about it,” Han says. “For me, it started as a way to finish the story my father started.”

And the Huntsville community and HudsonAlpha have been instrumental in Han’s continued work to build and grow biotechnology-based companies. “Huntsville has a lot of business activity and entrepreneurial spirit, and a nice angel network,” he says.

Han says it’s almost a tradition in Huntsville to invent a technology, get it recognized by a larger company, and then sell it, satisfying investors and freeing the entrepreneur to move on to the next big thing.

“It’s like raising a pig,” he says. “Once you grow a company to a certain size, you let it go.”

Nancy Mann Jackson is a freelance writer for Business Alabama. She lives in Huntsville.

Office Construction Completions Expected to Hit Peak in 2017

Source: costar.com Written by Randyl Drummer

Vacancy Rates Likely to Increase in High-Construction Markets as Infusion of New Supply Hits Markets from San Francisco to New York City

Apple plans to start moving 12,000 employees into its new 2.8-million-square-foot “Spaceship” campus this year.

Steady growth in office-using employment over the last few years and rising demand from big employers for a diminishing supply of newer high-quality office space have combined to create a fertile environment for new office construction, and developers are ready to deliver.

This year will likely be the peak in the cycle for the delivery of new office projects, according to CoStar Portfolio Strategy forecasts. The U.S. office vacancy rate has continued to steadily decline, moving from 10.7% in 2015 to 10.4% in 2016. Vacancies are expected to hold fast at 10.3% in 2017 amid ongoing demand for existing space from tenants, according to analysts presenting CoStar’s State of the U.S. Office Market Q4 2016 Review and Forecast presentation.

“The big news in 2017 for the office market is that we’re expecting a 55% spike in construction deliveries, increasing from 58 million square feet of new office space in 2016 to over 90 million square feet this year,” said CoStar Portfolio Strategy Director of Research/Office Walter Page, who co-presented the review and forecast with Managing Director Hans Nordby and Managing Consultant Paul Leonard. “While some of those will be projects that were pushed back from last year, we’re just at that point in the market cycle where it’s time for new supply.”

The hefty totals projected for this year are the result of the large number of new office projects started in 2015. The 129 million square feet of new office space started in 2015 included such massive mixed-use developments as 30 and 55 Hudson Yards, and the $1.2 billion One Manhattan West office tower in New York City. An even larger total of 138 million square feet of new office space was under construction as of Jan. 1 of this year.

For the most part, major construction is concentrated in a handful of large metros. New York City has seen a jump of 107% while Southern California, where construction has started to pick up substantially for the first time since the recession, is up 27% in two years time. Texas office construction is down 35% since 2015, largely due to the construction shutdown in Houston, where energy sector tenants have put large blocks of space on the sublet market.

The 138 million square feet under way is still significantly lower than the 2000-2001 period, when over 200 million square feet was under construction. This has allowed national office vacancies to remain well below long-term averages, Page and Leonard said.

“We’re expecting that 2017 will be a peak year for this cycle, but we’re not going back to the levels we saw during the last cycle,” said Leonard.

That being said, most large markets are seeing construction levels as a percentage of total office inventory that are well above their historical averages. In the San Jose market, for example, construction totaling 9% of total office inventory, 10 million square feet, is under way, compared with 1.4% nationally. While pre-leasing is quite strong, potentially rising levels of backfill space that may become available when companies move into their new quarters is a concern, Leonard said.

New York City, which rarely registers among the construction growth leaders based on percentage of inventory due to the massive size of its base, currently has 19 million square under way, with the massive Hudson Yards comprising roughly half of that total.

“The Hudson Yards project alone is almost equivalent to the entire under-construction supply in the San Jose market,” Leonard said.

Click to Expand. Story Continues Below

The impending wave of new supply will have an impending ripple effect on demand fundamentals such as net absorption, occupancy and rental rates in several large markets in coming quarters. Absorption totals for newer 4 and 5 Star office properties, which has fallen from 64 million square feet to 42 million square feet nationally over the past year, is expected to rise this year as several large build-to-suit projects, including large projects by Google and Apple, including Apple’s 2.8 million-square-foot “spaceship” headquarters campus, finally reach completion.

Office vacancy rates for newer buildings could shoot up to 25% in San Francisco, while vacancy rates for newer vintage buildings could potentially double in Denver and rise significantly in New York City and Los Angeles.

Click to Expand. Story Continues Below

Meanwhile, high levels of construction in CBD submarkets are causing rental rates in the urban core to slow, narrowing the rent gap between downtown and suburban properties. In markets like Chicago, downtown construction comprises 75% of total construction within the entire metro, while urban core property makes up 40% of total stock within the Chicago metro. The same trend is occurring in New York City, Denver, Seattle, Washington, D.C. and Los Angeles, restricting rental rate upside in those CBDs.

“High levels of construction are beginning to put a limit on rent upside,” Page said.

However, strong demand growth markets that have had relatively little construction since 2006 such as Tampa, Orlando, Minneapolis and San Diego may present windows of opportunity for developers. But that window could close fast.

“The next developer to build a building in those markets is probably going to do pretty well, but for the third or fourth outfit, they’re probably too late,” Nordby said.

Breather, the App That Lets You Rent Office Space by the Hour, Is Expanding to New Cities

Source: Entrepreneur.com Written by: Carly Okyle

FEBRUARY 10, 2016

Flexible work spaces are super hot right now. And, for one big name in the space, things are about to get hotter.

Breather, an app that allows entrepreneurs, freelancers and other flexible workers to rent classy, curated office spaces by the hour, announced today that is expanding to new cities. The move is the result of a deal with commercial real-estate firm Cushman & Wakefield, which has signed on as Breather’s exclusive broker.

The company plans to break into Los Angeles, Chicago, Washington, D.C., Toronto and London this year. Right now, it’s in New York City, Boston, the San Francisco Bay area and Ottawa, Canada.

Traditionally, entrepreneurs have either had to sign long-term leases for office space or work out of coffee shops. In the last few years, alternatives such as Breather have created on-demand solutions, offering workers rooms for meetings and other events with the swipe of a finger.

“We’ll never eliminate the office, but the office needs to adapt to the person,” says Breather’s co-founder and CEO Julien Smith.

Image Credit: Breather

Things have been moving quickly for Breather, which has raised more than $25 million in venture capital since launching in 2012. Two years ago, the Montreal-based company offered just three spaces for rent in New York City. Today it offers 50, says Smith.

In total, Breather says it currently has 100 spaces available for rent across North America and hundreds of thousands of users. Rates vary by city and space; in New York, a room can be rented for anywhere from $25 to $100 an hour. The average customer books a room for between two and five hours, according to Smith. Rooms can also be rented for up to a few weeks.

Related: How This Company Is Helping Businesses Make the Most of Excess Office Space

Breather is not alone in taking advantage of the demand for flexible work environments. LiquidSpace, available in 46 states as well as Australia and Canada, has raised $26 million since Mark Gilbreath and Doug Marinaro founded it in 2010. The company offers a variety of short-term options, as well as options that can last for a year or more. Co-working space WeWork has raised $1 billion from investors. WeWork, which offers month-to-month rentals, is in 14 cities in the U.S., plus Israel, the U.K., Canada, Netherlands and Germany.

Image Credit: Breather

For Breather’s CEO, the next up and coming area is Asia, although the company hasn’t announced any formal plans to expand there yet.

As the company grows, Smith hopes to make Breather the go-to spot for the flexible workforce. “Freelancers are a big portion of the population now. I really think that we can be a big part of the everyday worker’s existence,” he says.

Silicon Valley’s Real Estate Crunch Is A Golden Opportunity For Other American Cities

Posted Jul 10, 2014 by Kim-Mai Cutler (@kimmaicutler), Contributor

When Curse CEO Hubert Thieblot told his employees last year that he was moving the company’s San Francisco headquarters to Huntsville, Alabama last year, they thought he was crazy.

About 20 of his employees quit because they didn’t want to relocate.

“It was very controversial,” said Thieblot, who had lived and run the company out of San Francisco for at least five years. “A lot of people did not like me for that decision.”

But today, the profitable, 110-person person company operates out of an Alabama city with a population of just under 200,000 people and the highest number of Ph.Ds per square mile given Huntsville’s history with NASA as the nation’s “Rocket City.” Curse just closed $16 million in funding earlier this week too from the China-centric venture firm GGV Capital.

“If you want to build a long-term company, you might have a better chance of keeping people outside of San Francisco,” Thieblot said. “The job market is too crazy here.”

Indeed, the cost of living and commercial real estate is also pricing smaller startups out of San Francisco. I’m seeing bootstrapped founders, who have yet to a take full round of funding, trickle into surrounding cities like Oakland, Daly City and the Bayview neighborhood of San Francisco, if they’re not considering urban hubs in other parts of the country altogether.

Jon Wheatley, a British entrepreneur who co-founded DailyBooth, wrote a good post about this when he decamped for St. Louis, Missouri to dream up new projects.

“If you’re trying to bootstrap, being based in San Francisco is awful,” he said. “The leading cause of startup death is running out of money. Moving to a cheap city and doubling (or more!) your company’s runway will more than likely vastly increase your chances of eventual success.”

Are we supposed to cry for these entrepreneurs, like the teachers, public servants, artists and the elderly who have already faced several decades of gentrification in San Francisco?

Um, no. Not really.

From a national perspective, it’s a good thing to see these job opportunities become more geographically diversified. (I mean, did you see the first quarter U.S. GDP numbers?! The economy contracted at an annualized pace of 2.9 percent.)

While the rest of the country is only starting to see the kind of job recovery that may make the Federal Reserve finally raise interest rates later this year, the San Francisco Bay Area is bursting at the seams.

The city is at its highest employment levels ever and the population is expected to reach 1 million people by 2032. The city grew by 32,207 people between 2010 and 2013, but only added 4,776 housing units in the same period. Hence, our housing crisis.

Similarly, commercial rents are nearing dot-com period highs. The Information reported last week that the average price per square foot for so-called Class A office space in San Francisco is $64.45, just shy of the dot-com bubble peak of $67.20 in the third quarter of 2000.

Commercial real estate developers are all scrambling to get their projects entitled as quickly as possible before they run into a nearly twenty-year-old San Francisco law called Prop M, that caps the amount of office space that can be built in a given time period.

Many startups are coping by operating distributed teams, with one founder here in Silicon Valley and another working with engineers in a different part of the country (or world).

Jason Citron, a veteran founder who sold OpenFeint to GREE for $104 million two years ago and is backed by Benchmark in his new hardcore tablet gaming company Hammer & Chisel, works in Burlingame while his co-founder Brandon Kitkouski is based around Dallas.

“His family’s in Texas. He’s got a nice house. If he had it in the Bay Area, it would cost millions of dollars,” Citron said. “He was commuting for awhile, but that was hard. The Bay Area is at capacity. It’s freaking expensive.” (And by the way, why is housing affordable in Texas? Houston had more housing starts than all of California in the first quarter of this year. Am I saying we should be Houston? No. I’m just pointing out policy trade-offs.)

Similarly, Jen Lu, who started YC-backed toy company ZowPow, splits her startup between San Francisco and Portland. Her co-founder Brian Krejcarek moved back to Oregon after living in San Francisco for many years.

“It’s been a good thing for us,” she said. “We’ve been looking to hire engineers and it’s just really hard to do it here because it’s so competitive and expensive. But he has a network and is able to find talent there.”

Some of the Valley’s best-known investors are also encouraging geographic diversification. Andreessen Horowitz is incubating a startup called Teleport, which will help knowledge workers improve their quality of life by moving to places that maximize the difference between their cost of living and take-home pay. Marc Andreessen recently published an essay in Politico, arguing that other regions across the U.S. should remove regulatory hurdles around specific technologies they want to attract — be they self-driving car, stem cell or Bitcoin-related startups.

Is this bad for the Valley over the long-run?

Between giants like Google, Facebook and Apple and then later-stage companies like Uber, Square, Dropbox and Twitter, the region has a healthy mix of employers.

Yet the heated real estate market favors capital-rich, growth-stage companies right now, often at the expense of other kinds of creative experimentation, be it a longstanding artist’s collective or a not-yet-Ramen-profitable entrepreneur. The cost of living and the competition for talent simply doesn’t give startups a lot of time to find product-market fit here unless they’ve raised a lot of capital.

In contrast, Google, founded in 1998, and Facebook, founded in 2004, came of age when the Valley was weathering slower economic times and it was easier and cheaper to form a cluster of AAA technical talent inside any single company.

Is that worrisome? Maybe a little. When you look at other cities that have historically been dependent on a single industry like Detroit, the population declines started after power consolidated to a handful of companies like GM, Ford and Chrysler, which then began distributing their plants around the country in the 1950s to avoid the risk of production disruptions from worker strikes. (These changes predated competition from Asian auto manufacturers by at least a generation.) Ideally, you want a mix of firm sizes, and younger and older companies.

But ultimately, these things come and go in waves, and the Bay Area is an undeniably attractive place to live no matter what. A decade ago, the world’s leading mobile OS was built out of Helsinki by Nokia. Today, both of the world’s leading mobile OSs, Android and iOS, are here in Silicon Valley.

Cities have to maintain a certain equilibrium between people moving out and people moving in. Right now, the escalating costs and sheer limits of Bay Area’s housing and transit infrastructure are tilting that balance back out to the rest of the country.

So if you’re a mayor of another U.S. city and you want to attract jobs, now would be a good time to drop by a Y Combinator or 500 Startups demo day to make a pitch.

We have our hands full.

Are You Creating Meaningful Content?

Source: copyblogger.com Written by Brian Clark

Everyone’s creating all this online content, but does it matter?

More importantly, are you accomplishing your goals with the content you deliver, or are you simply spinning your wheels?

Well, if you’re doing it right, your content is highly effective and tightly tied to your ultimate business objectives. Otherwise, you’re just filling up space on an ignored web page.

Content marketing is the most effective and lucrative form of online marketing, because it not only works, it also builds a media asset at the same time. So it makes sense to understand exactly what makes content effective, right?

The key is meaning.

Effective content is meaningful

The simple definition of content marketing is giving away valuable information in order to sell something related.

Value is a function of perception. You want the people you’re trying to reach to perceive your content as valuable, even if people you’re not trying to reach perceive it as worthless.

This is an important point, even though it seems simplistic.

The snarling enemy of meaningful content is the urge to water it down for the lowest common denominator, in hope to either:

• (A) Reach an unreasonably mass audience, or
• (B) Not offend anyone

The result of that approach is content that means very little to anyone.

Meaningful content is an experience

As Sonia Simone has discussed over the years:

Content (what you say) without copywriting (how you say it) can be a complete waste of otherwise valuable information. But no matter how you say it, what you say has to have meaning to the right people.

Meaning is a function of what people believe before you find them. What people believe is how they view the world, and your content has to frame that view appropriately to be effective.

As a function of belief, meaning is derived from the context in which your desired audience views your content. From there, your content has to provoke a desirable reaction.

For example:

1. Content: 10 Tips for More Productive Writing
2. Context: Your ideal prospect believes productive writing is important
3. Reaction: Your ideal prospect believes he can now write more efficiently

While everything we perceive is technically an experience, experiences begin to become meaningful at the reaction stage. It’s at that point that your content is good.

But is it great (meaning highly effective)?

No.

Meaningful experiences involve action

A higher grade of experience involves active participation from that ideal prospect. So, beyond the belief that your advice is beneficial, your ideal prospect actually acts on your advice.

1. Content: 10 Tips for More Productive Writing
2. Context: Your ideal prospect believes productive writing is important
3. Reaction: Your ideal prospect believes he can now write more efficiently
4. Action: Your ideal prospect implements your productivity tips

The action taken can vary. It can be acting directly on your advice, sharing your content, buying your software that helps implement the advice, buying your book for more details, or hiring you as a personal productivity coach.

At this point, your content is truly meaningful and truly aligned with your objectives. There’s only one level that’s better.

The content holy grail: results

What’s better than action? It’s action that leads to beneficial results.

Now, this won’t happen with every piece of content. In fact, it’s safer to say that reader (or viewer or listener) results happen thanks to the totality of the story you tell over time.

But let’s look at it in its simplest form:

1. Content: 10 Tips for More Productive Writing
2. Context: Your ideal prospect believes productive writing is important
3. Reaction: Your ideal prospect believes he can now write more efficiently
4. Action: Your ideal prospect implements your productivity tips
5. Result: Your ideal prospect is a more productive writer

It doesn’t matter whether or not you know about these results — you’ve now earned a true fan. Odds are, a true fan is going to tell someone.

That’s the fantastic last part of a cycle that repeats itself over and over in social media, all thanks to content marketing.

And all the while, you’re building a media asset on your own domain that has independent value beyond the cash flow you pull in every month.

You are building that asset, right?

Editor’s note: The original version of this post was published on January 12, 2011.

“Who’s Responsible for Ditch Maintenance,” an article from the City of Huntsville –

Source: Huntsville CityBlog, Written by Mark McCarter

You don’t even notice them until you make it a mission to go find them. Then you can’t help see them everywhere you drive, big and small, well-reinforced or bordered by vegetation.

Hundreds of miles of ditches, weaving through Huntsville like the body’s circulatory system, are an unnoticed yet essential part of the city’s infrastructure. There are 250-plus ditches in the city of varying breadth, length and function.

As Joy McKee, Director of Landscape Management for the City of Huntsville, says, “All ditches are not created equal.”

They come with various labels and challenges.

They also come – most important for citizens to recognize — with shared responsibility. The city’s primary task is to keep the water flowing. The residents’ task is to perform whatever landscaping work they might choose.

Likely as not, the ditch in your world is yours. The vast majority of ditches in the city are on private property. They might be 50-50 shared with your neighbor, or maybe just one bank is on your side. It’s your responsibility for mowing and minor upkeep.

Even if it’s, say, a concrete ditch the city has built to alleviate draining problems, it’s yours as far as your property extends, and your choice on how it’s landscaped.

The city is not shirking responsibility. That’s merely common sense at play. But as noted by as Brian Walker, supervisor in the Landscape Management office, the City of Huntsville has often gone above and beyond in helping residents with maintenance.

Let’s take a narrow ditch that slices through English Village. Rows of fenced-in yards line both sides. When the city reinforced the ditch as a small concrete culvert, residents may have believed it had become city property and city responsibility.

However, members of Walker’s staff visited the neighborhood, going door-to-door to explain the situation. Walker then agreed to send a crew into the ditch area to eliminate growth and make it a simple enough task for residents to maintain afterward.

“We try to help everybody when we can,” Walker says.

As with much of City of Huntsville, the operation is a partnership. Maintaining the ditches is shared between Landscape Management, the Department of Public Works and Department of Engineering, each utilizing its skill-set for whatever unique challenge might be presented.

Public Works is called upon to repair ditches threatened by erosion. Because, as McKee puts it, “We don’t have the big-boy toys,” Public Works uses its machinery for major clean-up, like fallen trees or large debris that inhibit water flow. Landscape Management does clean-up work, whether through machinery or the careful use of what Walker calls “low-volatility chemicals.” As he says, “We want to encourage the good grasses to stay and the bad grasses to go.”

The largest ditches are owned by the Corps of Engineers. They’re called “blue-line ditches,” have more water and are most often considered creeks. The city’s role typically involves enlisting contractors to manage them and their larger tributaries, though it’s often difficult to wade through the permit process necessary with federally owned property.

The second group includes the ditches owned by the city. They are natural ditches or concrete culverts, and usually are bordered up to the creek banks by private property. The city maintains the concrete and makes sure there is not debris that obstructs water flow.

The last group includes the majority of ditches, the easements. They are ones that are totally on private property or maintained through a home-owners’ association. The city’s concern with them is the efficient flow of water, and it will take steps to correct that if a problem occurs.

“We do limited amount of maintenance,” McKee says. “All we’re required to do is make sure the water flows. Just because there is vegetation doesn’t mean water isn’t flowing.”

Walker reminds residents that the best avenue to address problems with ditches is through Huntsville Connect, the City’s service request app that filters residents’ concerns and funnels them to the proper departments.

DRM Owen House Groundbreaking

Today we were privileged to attend the Downtown Rescue Mission’s Groundbreaking for the Owen House, a facility to assist area women and children starting in 2018. The building will serve as an emergency shelter as well as transitional housing.

Thank you to the Downtown Rescue Mission for serving our community!

Have You Been to Tate Farms Yet?

Autumn is here in the Rocket City! Have you and your family been to Tate Farms yet?