How can drones, 360 photography, 3D visualization, and virtual reality add value to your next project?

In-person meetings are irreplaceable, and no matter the challenges, communication is paramount. But what if your project team is in multiple cities, across multiple companies, located all around the world? A project team needs to maintain clear and constant communication, and transparency in collaboration is a must.

At Stantec, our project teams have found tremendous value for our clients and their projects through leveraging technology like unmanned aerial vehicles (UAS or more commonly, drones) and virtual reality (VR) to better capture, analyze, and communicate site design information.

Read the entire article here

BoyarMiller Capital Markets Breakfast Forum

Takeaway: The local and national economies are hot, but prudent businesses are thinking and planning ahead to be ready for the next (inevitable) recession.

Where are we now in the economic cycle?
• Economy is still expanding but is in the late stage of the current cycle, which has lasted ten years so far
• There is a lot of borrowing going on and businesses are feeling comfortable taking risks-lending/borrowing has been ‘cheap and easy’
• There are lots of mergers & acquisitions (M&A) going on, but buyers are paying full price and more, hoping to improve productivity of acquired company
• The Feds are slowly raising historically very low interest rates to head off possible inflation, which puts a damper on business values because more cash will be needed to service debt
• Many businesses are experiencing ‘their best year ever’ and there is lots of momentum going forward, with a 4% growth rate in the national economy
• We are in an inflated market, with values 5-15% too high-business owners / managers should prepare now for recession so they do not panic when it hits
• There is over $1.5 trillion buying power on the sidelines looking for yield, a huge overhang of excess capital
• New funds are having an easy time raising money

When will the recession come, and what should one do to plan for it?
• The recession could hit mid-to late 2020 but no one really knows
• M&A activity usually has a six year cycle-we are in the 8th year
• Old stodgy established brand companies are looking for groovy new acquisitions to show they are still in the game, and can continue to appeal to contemporary customers
• If the Feds raise interest rates quickly, that could hasten the recession, and vice-versa
• Now is a good time to sell your business while buyers are paying premium rates-thorough preparation is critical in packaging your company to take it to mark-remove any question marks a buyer may have in advance of putting it up for sale
• Operating businesses should establish a cash cushion to carry them through the unforeseen circumstances which always accompany a downturn
• Give your business a stress test now: what would happen if suddenly you lost one or more of your best customers, or hit other major snags?
• Every economic bubble stems from relaxing of discipline, and so far no great departure from discipline has made itself visible in our economy
• Business owners are people of action and when a recession hits, sometimes they take hasty and unwarranted actions which increase the negative impact-best strategy is to prepare, wait and see, and look for opportunities that can be picked up at favorable prices
• The onset of a recession is not a time to panic and to depart from your established successful business plan-avoid knee-jerk reactions

What will be the impact of tariffs on the economy and business climate in general?
• So far minimal, but the initial tariffs have not yet had time to filter down, nor have other countries gotten all of their reciprocal tariffs against us in place
• They are worrisome and concerning since they don’t seem to be part of a cohesive plan and in past business cycles imposition of tariffs has not had a happy ending for the US or world economies
• The administration is playing with fire
• They create new and un-needed risks for the economy going forward

Read this forum in PDF format here

O’Connor Office Forecast Luncheon – Speakers: Bryant Lach, JLL; Kevin Wyatt, Lincoln Property Company

Takeaway: Houston has a 24% vacancy of office space, including primary and sub-lease inventory, and it is not going away any time soon, as companies down-size, and, “right-size”, learning how to make do with less space than before the downturn in 2014.

Read the detailed forecast here

Breaking it down with Burgher Haggard: How outsourced accounting can save money


Real estate is a survival-of the-fittest kind of industry, rewarding those who are efficient with their capital and operations while punishing those who aren’t. Burgher Haggard, a firm
that specializes in outsourced accounting and administration, considers their clients to be in the former group. “Beyond providing a service platform that centers around people, process and technology, we give our clients flexibility to expand and contract their accounting function with the cycles of their business,” says Clint Haggard, President of Burgher Haggard. “This is a great alternative compared to having an internal team that you have to pay whether you’re busy or you’re still waiting for your next deal to close.”

The company is, at its core, an accounting outsourcing firm for clients across the country with complex assets, handling services in a more efficient manner than might be possible within the client’s organization. Burgher Haggard focuses on financial administration, consolidated reporting and consulting. The company is currently responsible for the accounting and administration of roughly $4 billion in assets, half of which is related to clients who are real estate investors and developers.

“From high-potential startups to companies worth hundreds of millions, our real estate clients come in all shapes and sizes,” says Jeremy Sweek, Managing Director of Real Estate Services for Burgher Haggard. “Sometimes our clients have internal resources such as a CFO or a construction coordinator that we work with, and other times we are the complete accounting solution for our clients.”

Sweek, a CPA who started his career in public accounting and then gained many years of finance and accounting experience with Crescent Real Estate, has spent the past eight years building the real estate practice for Burgher Haggard.

“I’m so proud of the team, the processes and technology we have today,” says Sweek. “Anyone who has ever established an internal accounting department can appreciate how much time and resources are required to do that well.”

Because of the incredible value found in technology that can aid in the accounting and reporting process, Burgher Haggard hasn’t skimped when it comes to making an investment in tech. “Real estate owners could spend several hundred thousand dollars or more on software, consulting and internal staff time to build out an internal solution comparable to the tools and reports that Burgher Haggard provides,” Sweek says. “This is a really important aspect of our value proposition. Burgher Haggard clients are getting the benefit of all of that technology and intellectual capital on day-one, and at a fraction of the cost.”

“A private equity fund, for example, could have 50 or 100 different investors and the general partner of that fund would be responsible for reporting discrete information to each of those investors such as capital statements and K-1s,” explains Sweek. “That’s a responsibility we handle for our clients through our technology and expertise.”

The experience of the Burgher Haggard team is something that is difficult to measure, yet it’s another valuable asset at the disposal of clients. “We have a lot of shared knowledge when it comes to real estate developers and owners that indirectly benefits our clients,” says Haggard. “For example, if a client is struggling with an issue, we’ve probably seen that before and can help them think through some possible solutions.”

“At Burgher Haggard, every client, regardless of size, benefits from our internal controls and segregation of duties,” says Haggard. “Smaller companies with an internal accounting team could have their controller paying the bills, reconciling the cash and generating the financial statements which elevates a number of financial and business continuity risks for that organization. At Burgher Haggard, we even have an outside firm audit and sign-off on our processes and controls every year.”

“Many investors like to see that separation between the general partner and the accounting function,” adds Sweek. “In fact, another benefit to paying a 3rd party to perform the accounting is the ability to pass along that expense to the limited partners of the investment, whereas it is a much harder argument for the general partner to pass along internal accounting costs that could be viewed as subjective.”

Burgher Haggard also helps with another business-related challenge: managing and maintaining an internal accounting staff.
We have a team of about 40 professionals including 16 CPAs, so managing an accounting staff is central to what we do, but it doesn’t have to be the focus for our clients,” says Haggard. “Let us worry about recruiting, hiring, and training accountants.” In the dog-eat-dog world of real estate, it helps to have a stable of specialists to lean on when needed. Burgher Haggard provides that stable, along with technology and other assets that would be near impossible to match.

“We’re very good at what we do,” Haggard says. “And this frees our clients to work on what they do best – managing and growing their business.”

Read this article in PDF format

Nick Massad Interview: American Liberty Hospitality


RN: Nick, you and I met back in the ‘80s when we were trying our best to weather the Oil Depression and the horrible hotel slump. I never thought to ask you: How did you first come to be in the hotel industry?

Nick: I cooked, waited tables, and worked night audit in hotels in high school and college. I heard about the UH Hilton School of Hotel & Restaurant Management about that time. I moved to Houston, graduated from the Hilton School, and was hired as Food and Beverage Manager at a Sheraton hotel, and was promoted to General Manager there in 1975.

RN: When did you first go out on your own? What were your first developments?

Nick: The owner of American Liberty Hospitality sold the business to me in 1990, twenty-eight years ago. We began managing hotels for others, and then began to acquire hotels. In 1999 we built our first hotel from ground up, Cypress Bend, a golf resort in central Louisiana.

RN: I know one of your hugely successful hotels is the Hilton Garden Inn on Sage in the Galleria. Wasn’t it one of the first Garden Inns to be built? I know you have always been active and have been a big donor of time and money to the UH Hilton School. When did your first relationship with Hilton as a franchisee begin?

Nick: Yes, the Hilton Galleria Garden Inn was one of the first, and it ramped up to break even in only five months, faster than any other hotel we have built. It continues to be very successful, and it was our first hotel under any Hilton brand. The UH Hilton School changed my life and I had always hoped to do business with the Hilton brand. In 2007 our family made a large donation to the college, which was used to build the Massad Family Library and Hospitality Industry Archives, the only one of its kind in the world.

RN: Can you give us a run-down of the existing Houston hotels and brands in your portfolio, and was there any one which was especially challenging to develop?

Nick: In 2010 we began developing hotels in the Houston CBD, including the Embassy Suites, the Sam Houston Hotel, and the Hampton Inn-Homewood Suites. The Embassy Suites next to Discovery Green, with 262 suites, was especially challenging, because it was on a tiny site of 17,500 SF. Our Houston architects Mitchell Carlson Stone ‘shoe-spooned’ the hotel onto the site and it was so accepted by the traveling public that it has won Hilton’s “Connie Award” three times, the highest honor within the Hilton system, named after the founder, Conrad Hilton.

RN: You have a bunch of new developments in the pipeline, including in the Medical Center and the Galleria. Can you give us an early peek at what is on the drawing board?
Nick: Following the success of our dual branded Hampton Inn and Homewood Suites in downtown Houston, we plan to break ground on two new dual brands: one in the Galleria and one in the Texas Medical Center. Combining two hotels within one building is more efficient to build and to operate, since the concept combines two distinctly different hotel products to the traveler-i.e. a regular room and an extended stay room.

RN: Some hotel developer-owners are just asset flippers, but operations are the heart of our industry. The most successful developers love operations instead of thinking of them as a necessary evil. I know you are a family company. Do you have a family member coming up through the ranks?

Nick: You are right-hotels are part real estate and part an operating business, and without a good operator, the ground and building have less value. We are operators at the core. We build for the long hold, selling 5-10 years following stabilization, or longer if a hotel becomes a legacy asset. Vicki and I have three children and they all have active roles in our corporate development and operations teams. We are thrilled that our children all want to follow us in the business, and…all three are graduates of the University of Houston!

Read this article in PDF format

Marketing to Millennials: How retailers are shifting to catch up


As news sinks in that generational mainstay Sears has filed for bankruptcy protection, it’s prompting a renewed examination of the impact younger generations are having on the retail industry and how retailers are responding.

Sears will close 142 stores near the end of the year, along with the 42 it already planned to shutter. The filing is a kind of last-ditch effort to save the company that made it through the Great Depression after getting its start in Chicago more than 130 years ago.

There’s no one identifiable nail in the coffin for Sears; rather a number of factors (and lessons for other large retailers) in an ever-shifting retail landscape.

It’s easy to look at Sears as an example of a brick-and-mortar behemoth that was unable to successfully answer demand when it comes to e-commerce. It did well in specific areas. Its tool sales, for example, landed it as the No. 5 domain in that category in 2017. However, that didn’t translate to big ticket items, such as appliances.

Toys R Us struggled with the same challenges, leading to a bankruptcy filing and the closure of all its locations earlier this year. It barely even attempted to woo online customers. Rather than build a platform of its own, the toy chain shelled out $50 million to Amazon to market its products. That left it with hardly any digital presence.

There is plenty of evidence that a change in approach is not only possible, but rewarded by consumers. Online sales have grown to 25 percent of all business for highend department stores Neiman Marcus and Nordstrom.

According to CBRE, Williams Sonoma now does 52 percent of its sales online. To accomodate that, the chain that offers gourmet foods and professionalquality cookware, had to modernize its supply chain.

Even Walmart, which was predicted to be an early victim of “the Amazon effect,” has learned how to thrive by offering online customers the same variety (or often more) they would find in a physical location with the ease of online shopping.

This does not suggest the death of brick-and-mortar retailers. Receipts don’t lie; people still prefer to buy products in-store. A number
of online retailers (Amazon via Whole Foods, Warby Parker, Huckberry and others) have opted for physical locations to supplement online sales.

Another challenge for Sears was that it became such a juggernaut, it was nearly impossible to change its course. Along with the tools and appliances for which it was known, Sears sold clothing, home decor, shoes, accessories and beauty products. It started offering banking and real estate services.

There was a time when the one-stop shop approach lured consumers. They appreciated the variety and ease that went along with it and we saw retailers such as Walmart and Target capitalize on that.

The shopping habits of millennials, we’ve learned, are considerably different from their parents and
grandparents. They prefer to shop at boutiques, specializing in a specific niche̒. That’s given rise to a new era of mom-and-pop shops opening up and thriving.

In that same vein, younger shoppers are foregoing the promise of convenience and opting instead for retailers that offer an experience. It can be personalized, immersive, responsive or, ideally, all of that. Retailers competing with the online market have to be able to provide something the internet can’t.

Sears failed in this light by refusing to invest a significant amount to spruce up its stores. It ended in a middle-of-the-road scenario: not high-end like Nordstrom and not discount like Walmart.

Even the retailers that have succeeded in creating a niche̒ brand or experience are continuing to evolve. As an example, Barneys New York collaborated with an interior designer to revamp the ninth floor of its flagship Madison Avenue location. The area is now a showcase for Barneys Home and Barneys Kids, even featuring a pop-up space. Walmart, Target and Macy’s have also made considerable investments into refurbishing their stores.

Consider this: the influence of Instagram. If the social media generation can gather post-worthy content in a store, they will visit. That’s also an opportunity for
retailers to let customers do the marketing.

If you examine those department store retailers that have struggled, they also share a crisis of identity. It could be hard to differentiate what makes JC Penney a more contrasting shopping experience than Sears. They both offered a wide range (possibly too wide) of mid-level priced products. They also appealed to older shoppers, but failed to connect with the younger generation.

On the other hand, you have brands such as Neiman Marcus, Nordstrom and Barneys that have staked a claim on the higher-priced end of the shopping experience. Swing to the other side of the pendulum and you’ll find discount retailers such as Walmart, Target and Dollar Tree. Those stores all embrace and foster their identity more than any one brand.

To come back from the brink, Sears would have significant choices to make. Should it give consumers the deals they’re looking for? Will it invest in creating an experience for customers? What kind of online presence can it offer for consumer convenience?

In reality, those are the same questions all of America’s retailers need to answer, if they haven’t already. They are learning that they must find a balance between all of these elements to succeed in an industry that, while having always shifted with the times, has never seen a sea change of these proportions. To survive, they’ll cater to online customers while creating an experience
in their stores. They’ll distinguish themselves as a discount option or a high-end splurge. They’ll create a persona that’s easily marketed, identified and, let’s be absolutely honest, social-media worthy.

Read this article in PDF format