DBusiness Daily News spoke with Andy Farbman, president of Southfield-based commercial real estate management company Farbman Group, about how the real estate industry is changing, progress in the city of Detroit, and recent industrial and commercial office trends.
1. DDN: With limited available industrial property, how has your company met the demand for space?
AF: The industrial market is really interesting right now because you’ve got manufacturing in the United States at its highest point in years. The assembly of cars and other products made in southeastern Michigan definitely poses a challenge, and then you add the component of the ‘Amazon effect’ on the world. The distribution chains are getting more and more significant, creating a limited amount of supply. Clearly, there is new construction being built, and we have clients developing in Auburn Hills, on the east side, and throughout the region. We’ve had some success in adaptive reuse and we’re going to see that trend more and more as big box retail spaces continue to have challenges. We’re going to see more reuse of existing structures and its definitely creating discussions in every community as to what to do with big boxes (that go empty). One good use is to redevelop the space into clean distribution facilities, which we think is really attractive for filling those spaces.
- DDN: What are some of the latest trends you’re seeing in the office marketplace?
AF: I would say open, collaborative, and dense are the three buzzwords. Open space with collaborative features is really important, whether that’s kitchens or conference rooms or social rooms. The open space offers a more efficient atmosphere … which is clearly seen in any new-age space you walk into today, where it feels fun, it’s interactive, and it feels youthful and tech-y. The average office user also now takes about half the space they once utilized per person.
- DDN: How will autonomous vehicles affect the commercial real estate market?
AF: One thing that we’re seeing now, especially in southeastern Michigan, is our research corridors, whether it’s Farmington Hills down to Novi or Van Buren Township over to Ann Arbor, or the I-275 corridor in north Wayne County that’s the beneficiary of a lot of this new technology. The R&D buildings are doing really well right now, but the more interesting question is what happens when people stop driving cars to work or start using ridesharing programs. And we’re already seeing it. The average suburban office building in southeastern Michigan has (fewer cars in the parking lots) because of the ridesharing that’s going on. It will be more significant as we get into autonomous vehicles and the ability to share vehicles and transportation. But the thing we’re most excited about is that most suburban office buildings are in great locations, to the extent that you don’t need large parking structures, which gives us the ability to add some density (such as stores and restaurants in the surrounding parking lots). Autonomous vehicles will also help address southeastern Michigan’s lack of public transportation, and the urban centers will be the beneficiary of this, because it’s currently expensive to park downtown and it’s hard to get there without a private vehicle.
- DDN: What sets Farbman Group out from its competitors?
AF: We definitely have a locally owned and operated mentality that allows us to treat our customers with a homegrown knowledge base, plus we have access to capital, lenders, and investors. We understand very well that for every transaction we do, a dollar saved is a dollar earned for our clients. We really look for the roots of the business and the nature of the business of our clients. As an investor and operator, we make sure that all of our clients have the benefit of our knowledge base. We feel like Detroit is our core and we’ve got 42 years of experience in the marketplace. We run our company very efficiently, and we run our real estate services as effectively and for as low a cost as possible. That has always been in our DNA. We try to drive that in every market we do business in, and we pass those savings on to our clients.
- What’s driving the trend to live and work in urban areas?
AF: The clear components that we’re seeing is that millennials and the generation after want to be in these brain centers. This is a population that was brought up in the era of coffee shops, shared working spaces, and tech centers. They want high-speed, they want it fast, and they want collaboration. Because of technology, the younger generation really gravitates to urban centers that are a driving force of all things technology. From everything to UberEATS or Open Table, we’re the generation that no longer wants to wait in lines, so adding all those components to urban centers creates this village of urban technology. People don’t want to sit in traffic and the young workforce wants to coexist in urban centers; we see it in Milwaukee, Chicago, and Detroit.
More information about Farbman Group can be found here.