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

December 13, 2016

Should You Invest in Commercial or Residential Properties?

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

Real estate is a great place to invest. One of the first questions I, Keith Knutsson, get asked by potential investors is commercial or residential real estate? There are pros and cons to both ventures, so here are some tips to help you decide which one suits your personality, talents, and goals.

Commercial Real Estate

When most people think about investing in real estate, their minds immediately jump to residential. Commercial real estate has additional benefits however, that can really increase your net worth. The biggest benefits to discuss are more financing options, less competition, and a more favorable valuation.

  • More financing options. While there are plenty of traditional, hard-money lenders to get a mortgage payment from for residential loans, there aren’t a lot of other options for financing. With commercial real estate, there are plenty of other sources, like small private equity firms, joint venture partners, and even other commercial real estate investors you can partner with to raise the amount of capital needed. Access to more money means that you can get a higher rate of return. It’s the adage “spend more to make more”.
  • Not as much competition. For some reason, most people try to make a name for themselves in real estate through the residential route. That means that commercial real estate is an area of real estate with less competition from other investors. This is especially true if you are shopping for smaller commercial opportunities. Most big time commercial investors are going after properties worth more than $5 million, and anything less than that is out of reach for most residential investors. This is a great niche for someone with the work ethic to make a name for themselves.
  • A More Favorable Valuation. The main way that residential real estate is valued is by basing it off square footage, rooms, bathrooms, upgrades, lot size, etc. compared to other homes in the area. This method makes sense for this sector, but it can hurt your bottom line when the market isn’t performing well. With commercial buildings, the valuation is based off current leasing/renting income. In simple terms, the amount of money being generated from the property is how much it is worth. Small improvements and great marketing can increase the value of commercial property easily, unlike in the residential realm. Therefore, it’s easier to make more money from commercial properties.

This isn’t to say that commercial real estate is an easy, definite way to make millions of dollars. If it were that easy, everyone would do it. The main downfalls to investing in commercial real estate are more risks, high costs, and zoning laws.

  • More Risk. Commercial properties see a lot more traffic from customers or residents, parking lots, and possibly multiple businesses running out of one location. Insurance costs are much higher because of all the risks involved with safeguarding against accidents and injuries to any of these people or the property.
  • Higher Costs. While most investors know that the money upfront is going to be higher in commercial real estate than residential, the maintenance bills are also larger. It costs more to maintain professional looking businesses, and repairs have a higher price tag. Just a few examples could include a new roof, multiple furnaces break, one accident causes various damage in more than one apartment in the building. There are all kinds of costs that arise during commercial that are different and require a lot of money as the investor. All repairs must be done professionally too, so there aren’t quick do-it-yourself fixes for these problems. It also costs more to hold on to a vacant office space than a vacant house.
  • Zoning Laws. The government is very interested in maintaining zoning and regulations for commercial areas. Buying a building in the manufacturing area or an apartment building, all the uses you intend the building for is already decided. If you intend to lease the space out to another business, your pool of possible renters is limited. Depending on the city, it is possible to change some of the requirements in zoning, but it requires a lot of work and usually a legal team.

Residential Real Estate

Residential real estate is not a bad way to make money as an investor. There are definitely still benefits to going this route over the commercial arena. The biggest three benefits to going the residential path are more availability, the option to flip, and less money required to get started.

  • More Availability. There are more homes to choose from when you start looking for an investment property. Commercial real estate properties and buildings are not always available, especially if you’re looking in a certain part of town. Even when new residential neighborhoods start popping up, the homes in older neighborhoods are still desired. The turn-around time for houses are much faster, so if you’re looking to find a home in a certain area, one will show up if you wait long enough.
  • Option to Flip. If you want to make money flipping houses rather than holding and renting, you still have that option. You can flip a house, sell it, and be done with it much faster than other real estate ventures. While the money required to do repairs is an issue for some investors, it is usually recouped at selling time, plus a little more.
  • Less money required. A down payment is really all you need to start. While there are more financing options for commercial real estate, to start can be difficult. To buy the first residential investment, you need to qualify for the amount and have a down payment. The qualification process is usually easier because having a renter pay the mortgage payment each month isn’t too hard to find.

There are three fairly well known hardships to owning residential properties as an investor; dealing with bad renters, a variable market, and bringing in property managers.

  • Bad renters. While most people renting a home are going to treat it well, the fact is it isn’t their house. Some people see this as an opportunity to not have to take care of it, and in some cases, trash it. The costs can really add up to fix problems that bad renters can cause. If neighbors start getting bothered by renters, that causes an entire other set of problems.
  • Variable market. Ideally, most investors want to buy when the housing prices are down and then sell when they are highest. This is harder to do though since home prices change slower and less consistently. As a Real estate investor, and CEO of Integrale Advisors LLC, I, Keith Knutsson, see how there are predictable cycles for real estate, but times always vary on how long each cycle lasts. This makes investing trickier because it’s always changing.
  • Bringing in property managers. Managing multiple properties is hard for one person to do. It’s also difficult to be a great real estate investor when you don’t live around the properties and cann’t check on them often. The best way to handle both of these scenarios is to hire a property manager. While this makes life easier for you, it cuts into your profits and requires trusting a lot in someone else.

As you can see, investing in real estate is a great option whether you choose commercial or residential. Knowing your end goals and ability to handle different situations, you have two very different paths to take if you decide real estate investing is right for you.

October 23, 2016

Real Estate Terms Every Investor Should Know

Posted in Integrale Advisors LLC, Keith Knutsson, Real Estate tagged , , , , , , , at 11:38 pm by Keith Knutsson

realEstateTerms.png

If you are interested in investing in real estate, there are several-key terms that you should have a complete knowledge of. These are necessary terms if you want to understand the ins and outs of the property you are looking at to purchase. Both real estate and investing are industries that come with their own specialized jargon. In order to make lucrative purchases, it is crucial to understand the basics related to the industry.

Keith Knutsson explains the key terms to help you make a successful transaction. This is a basic list that will help you get started and understand the bigger picture: Read the rest of this entry »

September 23, 2016

Keith Knutsson Discusses the Latest Effects of Brexit on the UK Real Estate Market

Posted in Integrale Advisors LLC, Keith Knutsson, Real Estate tagged , , , , at 12:30 pm by Keith Knutsson

Keith Knutsson

Keith Knutsson Brexit Vote

The world has been paying close attention to the effect that the Brexit vote is having on the European Union. The vote to leave has thrown the EU into economic uncertainty, and the financial service industry is starting to see a decline, which is the largest, according to data that has been collected and reviewed since 2009. Read the rest of this entry »

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 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/

Know more about the real estate advisor – Keith Knutsson:

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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

Know more about the real estate advisor – Keith Knutsson:

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