May 23, 2017

The Gig Economy is Changing the Corporate Landscape

Posted in Integrale Advisors LLC, Keith Knutsson, Real Estate tagged , , , , at 2:14 am by Keith Knutsson

According to a survey, 85% of people are dissatisfied with their jobs (Cushman and Wakefield, 2017). “Flexibility is the driving force today for choosing a dream workplace” said Keith Knutsson of Integrale Advisors. Free communication channels and globalized networks, have allowed for the fast growing “Gig Economy,” which consists of 20-30% of the working population worldwide.

The term “Gig workers” refers to consultants, contractors, or temp workers. The following professions are changing the corporate landscape. Nowadays, companies can easily hire non-permanent employees (temps) on an as needed basis. These “independent workers” are enjoying a balance of freedom, flexibility, and work life. However, there are some consequences. Gig workers lack healthcare benefits and job security.  Nevertheless, it is predicted that 40% of the global workforce will be independent contractors and ‘solopreneurs’ by 2020.

The impact of the gig economy will have a direct effect on workplace of the future. Globalization of work, global trade, and technology shifts have contributed to the rising gig economy.

Reasons for workers to choose independent work:

  • Ability to turn down projects if uninterested.
  • Freedom to choose type of work.
  • Flexibility; when and where to work.
  • Versatility; working on multiple projects for different clients.

Reasons for companies to hire independent workers:

  • Lower office space costs.
  • Reduced cost of healthcare and benefits.
  • Ability to bring in skilled workers/expertise when needed.
  • Scalability; ability to hire workers when necessary.

Analyzing the effect on the corporate environment: 

Firms are redesigning their offices to provide fewer private offices and cubicles, and more open and collaborative space. There are two goals: 1) provide workplaces that facilitate collaboration and 2) decrease the firm’s overall rent expenses by providing less physical space per worker.

Companies have leased several million square feet of space in the past few years and that trend is expected to continue with the growth of the “gig” economy. This economy also impacts traditional corporate culture and the engagement of employees. When all employees are engaged, they are more likely to commit themselves to company goals and achieve higher levels of productions.

According to analysis by Cushman and Wakefield, “65% of today’s school students will be doing jobs that don’t exist yet.” In addition to millennials rejecting traditional employment and choosing to work independently, artificial intelligence and robotics will also be more prevalent in the future. Businesses that will be successful in the future will be those who encourage adapt well to change.

May 22, 2017

US retreat from global financial system

Posted in Integrale Advisors LLC, Keith Knutsson, Real Estate tagged , , , , at 3:47 am by Keith Knutsson

Borrowers now have access to the savings of the entire world if they can show lenders that they can make effective use of their money. It should also mean that lenders can search, on a global level for the opportunities that give them the best return for the risk with which they are most comfortable. The following should benefit both lenders and borrowers.

For borrowers, the cost of a capital loan should be lower than that on offer in smaller domestic markets. On the other hand, creditors’ returns should be far more attractive since they have more options for where to put their money to work. Since the global financial crises, there has been some negativity in the air. This negativity has greatly increased in recent months. Some regulators and financiers moved away from embracing globalization, further claiming that it led to the crisis. However, there is potential for a turnaround; especially if less developed nations and financial markets can improve the way they allocate capital.

Leading up to the crisis, capital inflows and outflows moved in obstructive ways. It transitioned from higher growth emerging markets to slower growth developed markets. Much of these flows went into US Treasuries to strengthen reserves in the aftermath of the 1997-1998 crises. Those capital flows to the US and to the dollar, the world’s reserve currency, meant that Americans could pay for larger properties with money that was cheaper than it once was. European banks continued to borrow those dollars in wholesale markets rather than relying on deposits to fund their own activities. This resulted in what international bankers are calling “the transatlantic banking glut”.

Globalization, all in all, meant poor capital allocation of debt and a huge accumulation of unsustainable debt. This resulted in a rolling crises as investors sought high returns in short-term securities, whether in emerging markets, the US, or Europe.

Central banks in developed nations responded to the crises by implementing easy monetary policies. Thus, triggering an artificial rise of asset prices, which led to an increase in capital outflows into emerging markets as yields were driven down at home. “The Fed should remember that when it makes monetary policy it should take into consideration the impact on the rest of the world,” stated Gao Xiqing, the former head of the Chinese sovereign wealth fund. A decline in globalization would result in a retreat from the dollar and from the US-centralized global financial system. The U.S. had advocated for policies regarding this that would in effect extend US control beyond its shores, especially as the new administration is attempting to limit terror financing and money laundering. The rules have become so burdensome for foreign banks that some have closed their US branches.

There is no better depiction of US policies putting a strain on the global economy than in recent Federal Reserve Board actions regarding “swap lines.” A swap line is another term for a temporary reciprocal currency arrangement between central banks. The central banks of two nations agree to keep a supply of each country’s currency available to trade to the other central bank at the going exchange rate. The Fed maintains lines with Japan, the Eurozone, the UK, Switzerland and Canada.

As the US steps back, we see an emergence of other developed nations are filling the role. China, the economic powerhouse, is taking a greater role on the global financial stage. The rest of the world is trying to circumvent the uncertainty of central bankers, US regulators, and politicians.

Although large companies will always have access to global markets, cross-border investment has become increasingly more difficult due to protectionist measures. As a result, this is expected to produce a smaller demand for capital intensive goods and services. If companies are forced to look domestically for funding, that could be a good thing if governments are more effective in making sure capital is properly allocated. However, there is currently little evidence this will be the case.

Submitted by Keith Knutsson

September 15, 2016

Keith Knutsson Discusses the Benefits of Investing in Real Estate

Posted in Integrale Advisors LLC, Keith Knutsson, Real Estate tagged , , , , at 2:05 am by Keith Knutsson

Keith Knutsson Real Estate Investments

There are a number of people out there who would like to put their hard-earned money into an investment, but are unsure what the best way to invest their money may be. Ask any savvy entrepreneur and they’ll tell you that there are several advantages in investing in real estate. Although being a real estate investor isn’t always glamorous, it is one of the best ways to build your wealth in the long run. Read the rest of this entry »

September 3, 2016

Keith Knutsson on Sweden’s Real Estate Market

Posted in Integrale Advisors LLC, Keith Knutsson, Real Estate tagged , , , , , , at 12:00 pm by Keith Knutsson

Stockholm Scene Keith Knutsson

Looking to diversify your investment portfolio? Want to get more financial security through international real estate investments? Investing in foreign real estate markets offer investors potential benefits. Read the rest of this entry »

August 22, 2016

Keith Knutsson Explains How the Brexit Vote Will Affect European Investments

Posted in Integrale Advisors LLC, Keith Knutsson, Real Estate tagged , , , , , at 12:00 pm by Keith Knutsson

Keith Knutsson on Brexit

What is “Brexit” and how will it affect European Investments?

To put it lightly, that’s a very complex question that needs to be considered from every angle. It’s important to look at the factors that led up to the current situation as well as the predictions and forecasts for the future.

It is the merging of the words “Britain” and “exit” to get Brexit, in the same way that Greece’s potential exit from the EU was dubbed Grexit in the past. Read the rest of this entry »

July 5, 2016

Brexit vote could heat up Canadian real estate market

Posted in Integrale Advisors LLC, Keith Knutsson, Real Estate tagged , , , at 9:46 am by Keith Knutsson

web-rb-cd-realestate-brexit

Realtors in Toronto and Vancouver are pitching Canadian cities as relatively safe property havens now that London, for years one of the world’s leading targets of foreign capital, suddenly looks a lot riskier. Blame it on Brexit.

“Brexit’s good for us, not for them,” said Anita Springate-Renaud, owner of Engel & Volkers’ brokerage in Toronto, who expects to field calls from clients seeking to redirect their investments. “We are a safe bet.”

If Ms. Springate-Renaud is right, there may be heightened demand from moneyed clients for homes and condos as well as office towers in two of Canada’s hottest real estate markets, which already have seen prices soar from an influx of foreign money. There’s a record $443-billion (U.S.) in global capital allocated to commercial property that wealthy investors haven’t deployed, according to figures from Cushman & Wakefield Inc.

Within hours of the stunning Brexit outcome, Brian Kriter, an executive managing director of valuation and advisory at Cushman & Wakefield, was on a 6:30 a.m. call from his home in Toronto to discuss the potential ramifications of the referendum with colleagues in London and New York.

In the days since, Mr. Kriter has met with one Asian commercial real estate lender who decided to freeze plans for a multimillion-dollar financing deal in London and is considering channelling that money to North America instead. Cushman & Wakefield is organizing a client day in July, potentially in New York, to discuss the early implications of Brexit’s fallout.

“You have this phenomenal amount of capital that’s looking to be placed in commercial real estate, and it’s very fluid,” Mr. Kriter said. “Foreign investors view Canada as an island of certainty.”

In the past decade, central London saw the biggest increase in residential property prices of any major city as the favoured destination for global capital seeking a stable sanctuary. Nearly three out of every four newly built homes in 2013 were bought by foreign buyers, half of them from Asia, according to Knight Frank LLP. Similarly on the commercial side, 70 per cent of central London purchases were by foreigners in 2015.

Britain’s decision to leave the European Union may not necessarily change that overnight. The pound’s record plunge could attract buyers seeking a bargain, said Brad Henderson, chief executive officer of Sotheby’s International Realty in Canada. The vote may ironically bring more predictability to Britain, but export uncertainty to the rest of Europe, Mr. Kriter said.

But with China among Asia’s most vulnerable economies to Brexit risk, there could be an even greater appetite from mainland buyers for North American assets, such as Anbang Insurance Group Co., which has snapped up multimillion-dollar assets in New York, Toronto and Vancouver.

A record $18.3-billion flowed out of China globally in 2014 and nearly half of that went to just three markets: London, Manhattan and Sydney, according to a March report from Colliers International Group Inc., the Toronto-based real estate firm. That flow has since diversified to other markets with Canada increasingly a beneficiary.

In the six months to February, foreign investment into Canadian commercial real estate surged to $1.4-billion, more than double a year earlier, the brokerage said in a separate March report. Of that, 42 per cent came from China, compared with just 5 per cent in the previous period.

Royal LePage is advising clients that Brexit is likely to cause the Bank of Canada to hold interest rates lower for longer, which will stoke demand in the residential market, said Adil Dinani, a Vancouver agent for the unit of Brookfield Real Estate Services Inc.

Any additional trickle of demand into Vancouver and Toronto could prove a headache for Canadian policy makers seeking to damp record high home prices. In recent weeks, the International Monetary Fund, Organization of Economic Co-operation and Development and Bank of Canada have all flagged the increasing risk of a potential correction.

“It’s something we’re going to have to talk about because there are concerns about overheating,” Royal LePage’s Mr. Dinani said. “We’ll likely see more capital inflows into these cities, so what is that going to look like? Are there going to be policy tools put in place to protect the market from further increases?”

In Vancouver, the price of a detached home rose 37 per cent in the past year to $1.5-million (Canadian). In Toronto, the average price of a detached property rose 19 per cent.

“We’re in early days – it’s hard to sift through how the variables are going to play out,” Sotheby’s Mr. Henderson said. “But capital will look for more attractive, stable markets. And Canada is still very much a bargain.”

Source: http://www.theglobeandmail.com/real-estate/vancouver/brexit-vote-could-heat-up-canadian-real-estate-market/article30745801/

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July 4, 2016

What are the Positives & Negatives of Investing in Real Estate?

Posted in Integrale Advisors LLC, Keith Knutsson, Real Estate tagged , , , , , at 8:48 am by Keith Knutsson

Oceana-Aegean-on-Palm-Jumeirah-Dubai-Durise-600x337

Real estate investor and philanthropist Louis Glickman is famously known for saying “the best investment on earth is earth.” As a man who made his fortune in real estate, it’s safe to assume that he knew what he was talking about. But, does his wisdom carry over to the general population? Let’s take a look at some of the positives and negatives of investing in real estate, and then you can decide for yourself.

POSITIVE – Real estate is a tangible asset

You can touch and see your investment. It’s a physical property, not a display on a computer screen or on a TV-news ticker as with stock market investments. If you’re a hands-on type of person, you’ll likely feel much more in control when investing in real estate.

NEGATIVE – Homes can be a hassle

Your real estate investment will likely require emergency repairs, as well as regular maintenance and upkeep. This can require some serious time investment, depending on the property, as well as additional financial investment, especially if you rely on subcontractors to handle the work for you.

POSITIVE – Source of steady income

Keeping your real estate investment properties filled with good tenants guarantees a steady and consistent monthly income. Those regular checks can be a real boost.

NEGATIVE – Not a liquid asset

Money kept in a back can be withdrawn at any time. The stock market is a quick, buy-and-sell environment. Real estate investing, however, is a very time-intensive process. Even if you are lucky enough to find a buyer for a home you’re planning to flip on the same day you purchase, you’ll have to first go through the entire paperwork process, which frequently takes several weeks. In order to get cash out of your investment property, you’ll need steady renters, or you’ll need to borrow against the equity.

POSITIVE – True value, regardless of economic climate

There is always value in real estate. It fulfills a basic need. Even when the economy is at its lowest of lows, people will always need a place to life. It is certainly possible to lose money in real estate, but any property that you own free and clear is an asset with true value.

NEGATIVE – Your liabilities are high

When you own stock in a company, you are not directly liable for any illegal or underhanded business that company may conduct. But when you own real estate, you are liable for the actions of your tenants, regardless of how they occur. If someone slips and falls on the steps of your investment home, you are the one who will be sued. Additionally, you, as the owner, bear the burden of maintaining proper insurance for the property. As real estate investing involves a hard asset,the risk profile is an inherently different form of investment than early stage investing.

There is also one other side of real estate investing that has emerged in recent years and opened up this form of investment to a much larger pool of potential investors – online real estate investing via crowdfunding. Let’s take a quick look at some of the benefits provided by this mode of investing.

More readily available transparency

The technology of online real estate crowdfunding platforms has changed the expectations of today’s investors. They’ve come to expect a certain level of readily-available information and disclosures. According to Investment Management Services, “Investors want their real estate holdings and relationships to be as accessible and transparent as their online banking and brokerage accounts. They want all the available information at their fingertips, not just the required minimum mailed periodically in a legal document.”

Depth of property and opportunity detail

Online real estate crowdfunding platforms afford potential investors the opportunity to research and explore their potential investment opportunities in much more detail than traditional methods.

Increased communication

Today’s always-connected, 24/7 world has changed the way we communicate and our expectations of communication. In the world of real estate investing, “customers now expect and demand real-time updates on their mobile phones. Transactions are documented instantaneously. Legal disclosures and investment details should be available from almost anywhere with a user-name and password.” (source)

Ability to create a highly diversified portfolio of real estate assets

Investing in real estate through online venues opens an investor up to a worldwide array of possibilities that would otherwise be inaccessible.

Ultimately, deciding whether or not you want to get started down the path of real estate investing is a personal decision that requires much thought, research, and consideration of your current and future financial situation. The highs of real estate investing can be very high indeed, and there is certainly ample opportunity to turn your investments into serious money makers.

Waleed Esbaitah is CEO and founder of the Dubai-based real estate crowdfunding platform, Durise. Waleed has spent the last eight years receiving an education in various countries around the world. After attending Institute Le Rosey in Switzerland for three years, Waleed went on to complete a Bachelor’s Degree in Business and Administration with a focus in Finance from the George Washington University in Washington DC. Waleed has always had a passion for entrepreneurship, venture capital investments, and the tech industry as a whole.

Sourcehttp://www.crowdfundinsider.com/2016/07/87495-positives-negatives-investing-real-estate/

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June 30, 2016

Growth in income lags very far behind rises in rent

Posted in Integrale Advisors LLC, Keith Knutsson, Real Estate tagged , , at 12:15 pm by Keith Knutsson

If you haven’t heard, it’s not easy for renters these days. But the complaints are not an exaggeration.

Examining census data from 1960 to present day, a new report has illustrated the drastic — but very real — drop in housing affordability nationwide.

Though median rents have increased by 64 percent between 1960 and 2014, median household incomes grew by only 18 percent in the same time, according to an analysis by rental listing website Apartment List cited by the Wall Street Journal.

And unless something major happens, the trajectory will continue.

Renters had the worst of it between 2000 and 2010, according to the Journal — thanks in part to a recession and then a housing bust, inflation-adjusted household incomes fell by 9 percent while rents increased by 18 percent during that period.

Economic crises notwithstanding, reasons for today’s challenging housing situation include land-use restrictions, rising construction costs and disproportional migration trends, in which more people are moving to already-expensive cities like New York and San Francisco. Whereas globalization has driven down the cost of other products, housing still relies on domestic resources, according to the Journal.

Predictably, Apartment List cites the worst cities for renters as San Francisco, New York City, Boston and Washington D.C. There are, however, cost-effective options. For instance, in Austin, income growth has matched that of rent in recent years. And not all renters are flailing.

A report by property management software maker RealPage found that the trend of rising rents and diminishing housing supply has little negative impact on mid- and high-earning renters. It’s low-income households that suffer the most from the affordable housing crisis. [WSJ] — Cathaleen Chen

Source: http://therealdeal.com/2016/06/29/growth-in-income-lags-very-far-behind-rises-in-rent-report/

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June 28, 2016

How the UK’s exit benefits US REITs

Posted in Integrale Advisors LLC, Keith Knutsson, Real Estate tagged , , , , at 11:57 am by Keith Knutsson

They are considered safe, and they offer yield. No wonder the stocks of real estate investment trusts ran in the opposite direction of the Brexit-bashed U.S. stock market Friday.

Last fall, interest in REITs had begun to wane, as expectations of higher interest rates outweighed solid fundamentals in the real estate market. Now REITs, and the real estate underlying them, are the power play for the anxious investor.

“Anything that is going to drive the 10 year lower is a positive for REITs. Three-and-a-half percent dividend yield with 6 to 7 percent earnings growth is pretty darned attractive in this environment,” said Alexander Goldfarb, senior REIT analyst at Sandler O’Neill.

REITs will also benefit from rising commercial real estate values, as foreign investors continue to pour money into the U.S. office, retail and even apartment space. They had been doing that already, but Brexit will only accelerate the pace, especially of Chinese and Middle Eastern money entering the U.S. brick-and-mortar markets.

The continued flight to the safe harbor of American properties in gateway markets like New York and San Francisco reflects persistent economic and political instability in other parts of the world,” said Sam Chandan, founder and chief economist of Chandan Economics. “The U.K.’s decision to exit the European Union underscores the U.S. investment thesis and could trigger a new wave of foreign capital inflows to high-quality, well-located assets.”

New York City office space is already a favorite among foreign investors. Witness the high-profile sale of Manhattan’s former Sony Building to Saudi Arabia’s Olayan Group. The “Chippendale” tower reportedly sold for more than $1.4 billion, netting seller Joseph Chetrit a $300 million profit. New York hotels are also favored in foreign deals.

“Large institutional investors pay for New York, as they look at it more as a store of value. Growth is gravy,” said Goldfarb. “They’re looking to park capital. Foreigners, high net worth, really look to New York. If any sector is going to be the biggest beneficiary, it’s that.”

The kind of commercial real estate international buyers purchase really depends on where they’re coming from.

“The Chinese buyers tend to be very focused on office buildings in high-profile markets like New York and San Francisco,” said Rick Sharga, chief marketing officer of Ten-X, a real estate auction platform. “We do see a lot of multifamily and retail purchase activity by certain foreign buyers, and there are other parts of Asia where the buyers really specialize in hotels.”

As for U.S. REIT exposure overseas, there is not a lot. Prologis, a warehouse REIT, does have exposure in the U.K. and Europe, but, on the flip side, could benefit from a potential increase in imports into the U.S. Simon Property owns stakes in malls in Europe and outlets in Asia, but people are going to continue to go shopping, and the underlying fundamentals in most sectors appear solid.

“Broadly speaking, European logistics is in a good spot. There is a lot of demand. Office or retail, there is a very strong fundamental underlying dynamic. They are not negatively impacted by the U.K. Vacancy rates are significantly below long-term averages,” said Tom Mundy, director of research, EMEA at JLL.

REIT stocks did fall in early trading Monday, but not nearly as far as the S&P and Nasdaq. They continue to outperform broader markets.

Source: http://www.cnbc.com/2016/06/27/how-the-uks-exit-benefits-us-reits.html

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June 27, 2016

After the ‘Brexit’ vote, potential winners and loser in real estate

Posted in Integrale Advisors LLC, Keith Knutsson, Real Estate tagged , , , , at 5:13 am by Keith Knutsson

Brexit - Keith Knutsson

Even before news of a Brexit made its way around the world, high-end brokerages and developers throughout London were already getting inquiries on behalf of foreign buyers hoping to take advantage of the tumbling pound.

The significance of the British exit from the European Union was not lost on anyone. There was an immediate financial impact, as markets took a dive, and there will certainly be many more implications in the days and weeks to come.

Here is a look at some of the predicted winners and losers in the real-estate arena.

WINNERS:

Foreign buyers of London real estate will get increased value in purchasing properties as a result of a depreciating sterling. “This will now create a short-term buying opportunity for U.S. dollar- and euro- based property investors,” said Peter Wetherell, chief executive of Wetherell, a Mayfair-based broker. “For overseas buyers, this big and dramatic drop in the value of sterling will effectively offset the Stamp Duty and tax adjustments and it will make prime London property a lucrative investment for overseas investors bold enough to take a punt despite the market uncertainty.”

LOSERS:

London-based property buyers will face competition from foreign purchasers in addition to dealing with the uncertainty of their own local economy. “A fall in London house prices caused by a Brexit in the long [run] will not benefit many domestic buyers, for example, if a Brexit causes — as predicted by many — wide-ranging job losses and a general slowdown in the economy,” said Martin Bikhit, Managing Director of Marylebone estate agent Kay & Co.

An expanded version of this story was published on mansionglobal.com.

Source: http://www.marketwatch.com/story/after-the-brexit-vote-potential-winners-and-loser-in-real-estate-2016-06-26

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