We've known that 2010 was going to be a pivotal year for the industry," says T. James Molloy. "In fact, our business plan anticipates opportunities in the midst of a challenging market. And when Mary Ann Tighe, chief executive of the New York Tri-State Region for CB Richard Ellis, was interviewed for a New York Times article recently and indicated that 22 million square feet leased in 2000 will expire in 2010 and will create a "decision point" for companies, we wanted to see how different sectors would address the dynamic between falling prices and rising inventories. We interviewed key executives, spoke to our clients, and searched the Web for the most interesting and helpful information. This is what we learned.

CNBC recently interviewed Steve Ross, chairman of Vornado Realty Trust, and Bill Rudin, president of Rudin Management, about their outlook on the New York real estate market. Ross spoke of a "slow motion recovery," with the market still seeking a bottom, maybe in 3-5 years. Rudin seemed a little more optimistic, noting that there has been a dramatic decrease in price of 30-40%, but he is optimistic that things aremoving in the right direction. Rudin points out that tenants aremoving to quality, the "flight to quality," citing as an example moves from 3rd Ave. to Park Ave.

Christina Lewis, writing for The Wall Street Journal, noted "Rent for office space is falling at the fastest pace in more than a decade as vacancies create a glut and landlords slash prices to attract tenants." Her article noted that the biggest office rent declines over the past 12 months were 18.5% in New York, the largest decline among major cities as reported by Reis Inc. The nation's most trusted provider of impartial commercial restate performance information and analysis at the metro, sub market and property level.

While there is nothing new here, she goes on to say, "For tenants, however, falling rents represent opportunities to save. Landlords are offering concessions, in the form of free rent and build-out costs."
The Real Share NEW YORK Conference, held on October 28th, 2009, provided additional insights. A consensus opinion, among the most influential and knowledgeable real estate leaders, was that the commercial market, if not at the bottom, was close to the bottom. Deals were in the works, people were looking, and companies were coming back. One tactic being used by buyer and seller is "blend and extend," extending, for example, a 2-3 year lease at $80/ sq. ft. with a new lease at $40/sq. ft.
A key message was to keep a building occupied and running. It was noted that the cost to get a new tenant, including acquisition, clean up, improvements, downtime, and leasing commissions, could be as much as $100/sq. ft.

This was our hint to explore the notion of creative use, and we turned to an article by Damian Joseph posted October 8 in Joseph decided to contact some of the premier architectural and design firms to answer the question, "What could be done with vacant commercial real estate that would kick start a local or national economy?" The responses were illuminating, once again reinforcing the adage that necessity is the mother of invention.
  • Office as community think-tank. Target local non-profits and community groups to use general multi-purpose space and unused office furniture.
  • Office as hospitality suite. Repurpose space to connect company partners, affiliates, vendors, and interested parties. These "offices away from home" help create business value and goodwill.
  • Employee Health & Engagement. Turn empty space into child play areas, quiet rooms for nursing mothers, or socialization areas. (Source: Gensler, a global architecture, design, planning and consulting firm.)
MINI CASE HISTORY This is not an economy when a landlord can afford to lose any tenants. Strategies to retain tenants include upgrading space and condensing the footprint of existing space. However the space is reconfigured, one absolute imperative is that the tenant must keep working; no downtime can be tolerated. The Advance Group addresses this challenge with an experienced team that knows how to work with other trades and allocate the project into specific phases. On some projects, this means starting to work Friday evening and finishing before the doors open Monday morning. Other projects require the use of swing space, where furniture and electronics are dissembled then reassembled in a temporary location without the least interruption to productivity.

THE ADVANCE GROUP CREATIVE OPPORTUNITIES TEAM We at The Advance Group don't have a crystal ball on the economy, and there are obvious concerns about it. But we've learned that a creative attitude can open new opportunities. That is why we've set up our own Creative Opportunities Team to help our clients explore new options. We're set up to brainstorm ideas, and provide value-engineered solutions from our side of the business.

For example, our furniture installation unit can help with the latest ideas in space utilization and furniture re-deployment. Our storage solutions unit can help identify ways to reduce space needs while also improving compliance. And, our integrated services can produce moving solutions that ensure the best final cost. Contact Anthony Parziale at 1-800-448-4807, ext. 249. It's another way we can help move you into the future.

Jim Molloy Brings Innovation And Efficiency To Moving Industry

Today, after more than 40 years, Jim Molloy’s vision has been defined. The Advance Group captures the essence of his vision to become the favored solutions provider for the most challenging projects from the most desirable corporate clients. This vision was forged from hard work, tempered by the challenges to build and grow a successful business, and polished with a team of successful, driven professionals.

Utilizing Strength Through Efficiency

As Seen in the Real Estate Journal

In a changing market, companies must look for ways to reduce expenses. Right now is the ideal time for managers to examine operations find ways to become more efficient.

One area businesses should examine is the office space they have and use (or perhaps don't use). If space is not used it may be time to consolidate or relocate to more efficient space. Consolidation of space can be accomplished by eliminating unused items including furniture, equipment, records or files or putting inventory into storage. Secure warehouse space is still much less expensive than commercial office space even in today's market.

Reconfiguration of space and using new types of furniture and storage units can also make space more efficient and it may also reduce the amount of space needed.

Businesses should also be aware that landlords may be open to modifying lease terms, reducing space or helping with subleases. In our market we are seeing more businesses renegotiating leases with landlords. Tenants are also working with landlords to reconfigure or discard unused space.

Difficult economic times require us to look at options and find solutions. Efficiently using the appropriate amount of space can lead to tremendous savings which will strengthen a company's ability to weather the current economic climate.

Jim Molloy is the CEO of The Advance Group, Bethpage, N.Y.

Managing physical assets using digital management programs to improve efficiency

As seen in the Real Estate Journal

Facility and office managers are responsible for a company's physical inventory including all items such as office and lobby furniture, computers, artwork, appliances, office electronics and IT equipment. Managing these physical assets can be a complex logistical challenge. However, this function is vital to the daily functioning of a corporation or business. Larger companies for example, may possess inventories that consist of tens of thousands of items. With the advent of computerized asset management systems, facility and office managers now have the tools to manage inventories more efficiently.

Digital asset management programs are tracking systems that can simplify the management of a corporation's physical assets. For example, the BarScan Asset Management System is a common bar code fixed-asset tracking system. This bar code system is integrated with sophisticated software designed to meet a company's complete asset management needs. Although these types of systems aren't new, they are gaining in popularity in the facility management discipline for their time and cost saving attributes. FITCO, a leading New York furniture delivery and installation company, has been providing this service to its clients since 1996, and the positive feedback has been excellent.

Doing Business In A Transitional Economy

From soaring fuel costs to higher prices for materials we all face difficult times. To handle the many demands placed upon us it is essential to look inwardly at our operations and outwardly to understand our clients' challenges. The Advance Group is challenged with rapidly rising fuel costs. However, we are committed to doing everything we can to insulate our clients from having to pay more. We understand that they are also feeling the pinch and looking for solutions.

However, in trying to hold costs down, companies need to be wary of vendors operating below market value. These operations don't have the structure or assets to weather the economic storm. Such companies will cut corners indiscriminately and are a dangerous liability. Choose to work only with companies that are experienced and reputable and that have structure and assets.

Maintain relationships with detailed customer feedback. This information is the best means of identifying needs and finding relationship weaknesses. Customer service starts from the top down; CEOs and top executives must take part in the process with important clients, thanking them for business or asking for honest feedback, which can keep relationships strong during rocky economic times.

Today we must all focus closely on our current clients; the cost of keeping them is much lower than trying to find new ones, especially during a sluggish economy. Jim Molloy is the CEO and owner of The Advance Group, New York, N.Y.

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Parziale of Advance Commercial Movers is a driving force behind new business development

 Anthony Parziale is vice president of sales for Advance Commercial Movers, a leading
New York moving and storage company, the office moving business unit of The Advance Group which includes FITCO, RecordGuard and Molloy Bros. Moving & Storage. Anthony is a driving force behind new business development for the company.

With a talent for customer service and business acquisition, he has developed a strong reputation for his integrity and professionalism in the relocation and facility management services industry in the New York metropolitan region. During his tenure with Advance, Parziale has been instrumental in securing and managing some of the company's most notable accounts. He has successfully completed projects for companies including Yellow Book, Weight Watchers, Del Labs, Monster Worldwide, Carrier Air Conditioning, United Technologies, Open Link Financial, Rexcorp, Lifetime Brands and RE/MAX of New York, Inc. Recently, Parziale completed a relocation project for the new Museum of Contemporary Art now located in Manhattan's Bowery, spanning more than 50,000 s/f.

This project consisted of relocating thousands of fragile pieces of art from the museum's former location in Soho. Handling the delicate items and establishing security were of utmost importance. The project was completed successfully, and the museum has since opened its doors as scheduled. Since its opening in December of 2007, 130,000 visitors have toured the museum's newly constructed building. Parziale, along with Advance executive Rob Gutmann, also recently completed a major project for Honeywell USA. The move involved a campus of seven buildings totaling 340,000 s/f of office and warehouse space, including complex testing laboratories, with contents that had to be cautiously and systematically packed and relocated. This project was challenging due to the fact that it coincided with ongoing construction. This required having scheduling and logistical flexibility that only an experienced moving company like Advance could manage. Parziale's management and communication skills played a critical part in the on-time and on-budget completion of these projects.

An industry professional, Parziale is a frequent participant in real estate and other industry events in Manhattan and Long Island. He is a member of the Business Information Network (BIN), the Building Owners and Managers Association (BOMA), the Global-Corporate Real Estate Network (CORNET) and the Commercial Industrial Brokers Society (CIBS). Parziale is a founding board member of Long Island Elite, an under-40 networking group that assists members in developing business and supports local not-for-profit organizations. His business acumen and skill were acknowledged in 2005 when he was selected by Long Island Business News as one of the top business professionals under 40 on Long Island. Parziale is known for his ability to bring customers and colleagues together to support local charities and nonprofit organizations. A member of the Commercial Industrial Brokers Society, he volunteers with the organization's annual charity golf tournament and clothing drive. Each year he assists Advance Commercial Movers with its charitable efforts, which have included toy drives for the Marine Corps' Toys for Tots program and recently a program in which Advance filled a tractor trailer with more than three tons of food and 1,500 turkeysfor a local charity that provides support to hungry children and families on Long Island.

In addition, Parziale serves on several committees for Family Residences & Essential Enterprises, Inc. (FREE), a not-for-profit organization dedicated to integrating individuals with disabilities into the community. In 2003, after Advance completed a relocation project for FREE, the organization realized that it was faced with a heavy cost to furnish its new facility. In response, Parziale brought together the management of FREE and a client that was looking to sell or donate a significant amount of office furniture. This meeting resulted in a huge
furniture donation to FREE valued in excess of $500,000.

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