Africa and middle east: Tailor-made relocation

first_imgAnycompany relocating a key member of staff to its African or Middle Eastoperations needs to get the details right from the outset to ensure a smoothtransition. Alan Hosking reportsRelocatingstaff to a place of work in an African or Middle Eastern country where culturesare very different from those they are used to must be done right withprecision as first impressions are everything. Get the assignment off to a badstart and it’s just a matter of time – and money – before those same peoplehave to be repatriated at considerable expense to the company. Not to mentionloss of productivity and loss of revenue.Forthis reason, when considering relocating staff to Africa and the Middle Eastwhere cultures differ substantially from those of Western, developed countries,it is best to follow the outsourcing route and make use of one of thespecialist global relocation companies which have the infrastructure andnetwork to make relocation as seamless as possible. They have the capacity topartner you through the whole relocation process, advising and supporting youalong the way in order for the assignment to be completed successfully.Servicesof relocation companies vary and, like any case where you’re shopping forservices, it is important to take note of the old adage, Caveat Emptor – letthe buyer beware. Some provide more comprehensive services than others and youpay for what you get. It is therefore important for HR executives planning aninternational assignment for a member of staff to make full use of the servicesof a company that can tailor its services to meet their specific needs.Youcan generally expect a good relocation company to provide assistance in fourphases:–Before the assignment is initiated–The actual relocation and initial entry into the country–Everyday living during the course of the assignment and–The repatriation at the conclusion of the assignment.Reputablerelocation companies offer a range of services and support which start wellbefore the expat has left for their assignment and end with their return totheir home country. It is advisable to call on their services well before theassignee is even presented with an offer letter for the assignment, as therelocation company will be able to advise on the contents of the letter whichshould include details on compensation, allowances, vacation benefits, healthplans, shipment of personal effects, transportation, travel, tax, work permits,housing/accommodation and repatriation at the end of the assignment.Theycan also be expected to provide reliable information regarding local conditionsrelating to political activity, levels of crime and personal safety in the formof what one company calls a City Location Evaluation Report.Theyshould be able to comment on the advisability and safety of working in certaincountries backed up by current “on the ground” information regardinglocal conditions.Onecannot rely on newspaper reports only to determine whether a region is stableor not. The recent suicide bombings in Israel, for example, need not mean thatthe whole Middle East region is unsafe. By the same token, while it isdefinitely not safe for white people to be sent to Zimbabwe in the light ofMugabe’s open aggression and his complete disregard for any legal processeswhich do not suit his political agenda, numerous other African states are quitestable and getting on with life quite normally. National borders are generallyintact and must not be viewed merely as state lines where what’s happening inone country is easily allowed to affect the stability of neighbouring countries.ExperiencedHR managers agree that a high level of assignment failures can be attributed tothe unhappiness of the spouse and/or children for some or other reason, sorelocation of staff where families are involved is a bit more complicated, andthe interests of all family members no matter what their ages, should beconsidered. One does not want to have a highly competent, highly skilled andexperienced executive wanting to bail out of an assignment because ofunhappiness in the home.Accurate,up-to-date information which affects family members is critical to the successof the assignment. For instance, parents who have a natural concern for theirchildren’s schooling need to be given accurate information about appropriateschooling options in order for them to be able to make informed decisionsregarding whether it is best to place children in boarding schools back home orwhether they can send them to a local school.Assistancebefore the assignment is initiated includes legislation requirements and workpermit applications, orientation seminars and cultural training, structuringexpatriate salary and benefit packages, tax efficiency considerations for thehome and host country, medical care and medical insurance details, emergencyevacuations, and pre-schools and schools. Assistance during the actualrelocation and initial entry into the country includes travel and transportarrangements, custom clearance of personal belongings, hotel accommodation,finding a suitable residence, banking, personal security, vehicle lease orpurchase options and vehicle registration.Furthersupport provided to make everyday living more comfortable includes local homerental or purchase, community information, entertainment options, places ofworship, doctors’ and hospital addresses and telephone numbers plus 24-hourpharmacies. To smooth the arrival further therelocation company should be ableto help with home furnishings and/or referral to suitable interior decorators,house maintenance referrals and installation of utilities. Otherinformation which can be invaluable is of recreational or sports clubfacilities, domestic help recruitment, subscription to a satellite serviceprovider, Internet service provider, mobile phone company and/or how to gethold of local or international newspapers and magazines.Atthe end of the assignment the expatriate should be given assistance withwinding up all matters such as the sale of the house and vehicles or conclusionof house rental, cancellation of all subscriptions and arranging for finalpayments, as well as shipment of all belongings back to home.Inthe light of a trend towards outsourcing a number of the HR functions, it seemsto make sense to take that route when undertaking the complex and risky processof relocating valuable and talented staff to regions which do not necessarilyprovide all the comforts and conveniences of the home country. By including apartner in this process, one is going to save time and money, as well as ensurea greater chance of the assignment being completed Africa and middle east: Tailor-made relocationOn 1 Oct 2001 in Personnel Today Previous Article Next Article Related posts:No related photos. Comments are closed. last_img read more

… in brief

first_img Previous Article Next Article This month’s news in briefFixed Term Employee Regulations in force The Fixed Term Employees Regulations came into force this month, making itillegal to treat staff on fixed-term contracts less favourably than theirpermanent counterparts. EEF wants skilled temps excluded from directive The Engineering Employers Federation is pushing for an amendment to theagency workers directive that would exclude highly paid, skilled temps from therules as long as they earn more than average earnings. Parceline delivers on move to cut payouts Postal company Parceline has slashed payouts for unfair dismissal by 80 percent after increasing manager training to help them handle disciplinary andgrievance issues more consistently and professionally. From 1997 to 1999 theaverage annual payout for claims was £67000 but this has now been cut to£13000. Companies lag behind with equality training Many employers are becoming complacent about equality and diversity and arefailing to keep up with legislation, according to a survey by law firm PinsentCurtis Biddle. More than 30 per cent of firms don’t review policies regularlyand only around 53 per cent provide diversity training. Temps directive ‘will damage business’ More than 70 per cent of employers believe the EU directive on temporaryworkers will damage their business. Seventy-nine per cent forecast it willincrease staffing costs and 68 per cent say they will use fewer temps,according to a survey by Personnel Today and Manpower. More than two-thirds saythey pay their temps the same or more than an equivalent permanent employee. Comments are closed. … in briefOn 1 Oct 2002 in Personnel Today Related posts:No related photos.last_img read more

Government must clarify the role of union learning reps

first_imgGovernment must clarify the role of union learning repsOn 25 Mar 2003 in Personnel Today Legislation allowing trade unions to appoint union learning representativesin the workplace is due to come into force any time now. But for employers manyvital questions still remain unansweredImagine the following scenario. One of your employees tells you: “Iwant half a day with pay to go through my training requirements with John Smithnext week. OK?” John is one of your shopstewards, and you’ve only just received a letterfrom his union advising you that it has designated him as the union learningrepresentative (ULR) for your location. Now four managers come along tellingyou that they’ve had this request from the employee. So what do you do? It would be straight-forward if you had some guidance –but you don’t. The new law entitling trade unions to appoint ULRs in workplaceswhere they are recognised is due to come into effect this Spring, yet there isstill no guidance from the Government on how it is supposed to work (News, 25February). At the Employers Forum on Statute and Practice (EFSP), we hold sessionsdesigned to help practitioners understand what new laws require, and offeradvice to those who frame regulations to make the whole thing more practical. Normally, everyone wins. Members get advance warning of what is coming andraise any problems, the regulators are forewarned about unintendedconsequences, and the eventual legislation hits its target. But not this time. There was consultation a couple of years ago. Then,however, the Government was suggesting that ULRs might have a useful role toplay in tackling the real problem of adult literacy in the workforce, bothwithin and beyond the ranks of union members. The idea was that people who werefearful of admitting to their employer that they could not read or write, orlacked basic numeracy skills, might feel more confident about seeking thenecessary training with the support of a union representative. EFSP and others applauded this objective, but questioned whether this wasthe best way of attaining it, since research shows that such people typicallywork in small firms where unions are not recognised. These points were ignored.Instead, the legislation that emerged last year vastly extends the scope ofwhat the learning reps can do. Their role now seems to cover the completetraining agenda, at all skill levels. Another surprise was that theiractivities are to be limited to helping their own members. Since then, there has only been silence – except for an update of the Acascode on time off for trade union duties and activities. Acas has done the bestit can, but it cannot read the legislators’ minds. So vital practical questions remain unanswered. How many learningrepresentatives can a union appoint in a workplace? What are they going to do?Are they going to try to add training to the negotiating agenda? How muchtraining will they need to carry out their own role? What are they meant totalk to their members about? How often and for how long should members beentitled to see them? Can they commission staff training and, if so, at whoseexpense? Are there circumstances in which employers can turn down theirrequests for such training? It is all very worrying for employers. There is a mass of new legislationcoming through. The work-life balance changes – statutory paternity leave,adoption leave and the right to request flexible work – are imminent. So areregulations on equal pay questionnaires. Major proposals on information andconsultation are due this summer. TUPE revisions are promised. It will become unlawful to discriminate ongrounds of sexual orientation. And finally – and participants in our sessionsanticipate all sort of problems here – the Government must legislate to outlawdiscrimination on grounds of religion and belief (just in time for Christmas). In the short-term, let us hope that we get some guidance on ULRs. Comments are closed. Previous Article Next Article Related posts:No related photos.last_img read more

A responsible approach

first_img Comments are closed. HR and IT must work together to implement practical technology and policiesfor staff e-mail and internet use. Sue Weekes reportsIn the time it takes you to reach the end of this sentence, around three millione-mails will have flown out of in-boxes across the UK. According to figuresfrom the London Internet Exchange, 1.3 million are sent every second in thiscountry, with the average person receiving a new e-mail every five minutes –and some of us far more than that. “A bulging in-box has become the equivalent of a male posingpouch,” says Monica Seeley, co-author of the recent book, Managing E-mailin the Office. Without doubt, e-mail provides organisations with the most powerful communicationstool there has ever been. Like every other department in the organisation, HRcan reap the benefits of this business-critical medium, but it also delivers aminefield of issues right on the profession’s doorstep. Leakage of sensitive corporate information, staff being abused incolleagues’ e-mails, harmful viruses entering the network via attachments andloss of productivity due to high volume of personal e-mailing, are no longerjust issues to be debated. They are actually happening in the workplace everyday of the week. If Jo Moore’s ‘bury bad news’ message wasn’t enough to convince HRprofessionals of the potential perils of careless e-mailing, then BBC2’sE-mails You Wish You Hadn’t Sent repeatedly demonstrates the disruption anill-judged piece of digital correspondence can bring to the workplace. It is no longer just about anecdotal evidence and supposition. A survey of212 employers carried out by Personnel Today and KLegal last September revealedthat there were 358 disciplinary cases for internet and e-mail use comparedwith a combined total of 326 for dishonesty, violence and health and safetybreaches. Disciplinary procedures This is despite a fifth of employers monitoring e-mail usage on a dailybasis, compared with 11 per cent 18 months ago. The rise in figures clearlydemonstrates that HR can no longer abdicate its responsibility for tacklingthese issues to IT. “The whole topic has been dominated by the IT function and HR has letIT lead,” says Jonathon Hogg, a member of the management group at PAConsulting Group. “But now it’s swinging towards HR because of thedisciplinary procedures that need to be put in place.” Hogg’s views andthe survey’s findings are backed up by the practical experience of barristerJonathan Naylor of the Employment, Pensions and Benefits Group at business lawfirm Morgan Cole. “HR and IT have different perspectives and there can be a mismatchbetween their needs,” he says. “But we have definitely seen anincrease in the number of people being disciplined for such offences in thepast six months. This is leading to a greater awareness on the part of HR andthe decision to tackle it rather than sweep it under the carpet.” However, this is perhaps easier said than done. For a start, while a raft ofclever security, monitoring and filtering software exists to imposerestrictions and controls, current legislation such as the Human Rights Act(1998), the Data Protection Act (1998) and the Regulation of InvestigatoryPowers Act, currently conflict each other when it comes to e-mail. For instance, the latter was brought in last year, and allows employers tomonitor staff phone calls, e-mails, faxes and internet use in certainsituations; yet the Human Rights Act throws this into a grey area as it statesindividuals have a ‘reasonable expectation of privacy’. It is hoped that thecode of practice being set out by the Information Commissioner’s Office (ICO)will bring some clarity to proceedings, but this remains to be seen. Legislation is important in such a discussion, but HR and IT’s mission is toput preventative measures in place that eliminate problems before they get tothe legal stage. Typically, these will be policy and procedural-based, and willbe supported by appropriate technological controls, such as firewalls andencryption software. Your organisation may already have an e-mail policy in place, but rapidtechnological advances emphasise the importance of revising this regularly. Ifyou have not yet established an internet usage policy, it is a good chance tobring the two together as Scottish Water did after its merger (see box). Disciplinary procedures Geoff Haggart, vice-president of EMEA at internet security company Websense,which specialises in employee internet management solutions, says the e-mailmonitoring market is more mature than internet monitoring, but there is everyneed for policies to be reviewed constantly to keep abreast of what is nowpossible at the desktop. “We have things such as instant messaging and personal storage sitesnow, for example, and the use of attachments is much bigger now,” he says.Similarly, the use of web-based e-mail such as Hotmail and Yahoo accountshave grown rapidly in recent years, and were cited by IT professionals as oneof their top three concerns, along with personal web surfing and softwaredownloads in the Emerging Internet Threats survey, conducted by Websense andInfosecurity Europe 2003 (the latter are organisers of Europe’s largestinformation security event). Other worrying statistics highlighted by the survey, which focused oninternet usage rather than e-mail, was that 94 per cent of IT departmentsadmitted to dealing with security issues as a result of employees’ use of theinternet, and 71 per cent of policies made no provision for guidance on the useof personal storage sites – potentially a lethal area when it comes tobreaching corporate security, Haggart believes. “An employee could save a Word document to a personal storage site sothey could work on it from home, and in doing so, allow a confidential documentto go out on the web,” he explains. “HR needs to brush up on theavailability of things like this when putting policies together.” HR cannot be expected to get to grips with every facet of cybervulnerability any more than it can be expected to know the pros and cons of thevast range of products available to combat it. What it must do, is consult withIT about the main areas of concern, and return to IT once a policy is draftedto find out whether the technology exists to support its aspirations. It would seem that ‘being reasonable’ in both technical and policy-relatedapproaches to e-mail controls is the key to success. Certainly when it comes topersonal e-mail or internet use, you just have to accept that staff will use itfor personal reasons on occasions, just as they use the company phone. Banningit completely is hardly a management vote-catcher, and is more likely to damagethe company brand than yield any positive results. If workers are told their e-mails may be monitored, and company policydetails that they may be liable to disciplinary action if caught abusing thesystem, this will be enough of a deterrent for much of the workforce. Acceptable use Drafting a policy with the help of the legal department, then gettingemployees to agree to it (typically by clicking an ‘I agree’ box when they logon to the system) isn’t necessarily difficult. The problem lies in making staffaware of the policy’s details and ensuring it is being communicated andenforced by line managers as well as the HR department. After all, who hasn’tclicked an ‘I accept’ box when loading software without reading it? “At the moment, the vast number of companies have an ‘acceptable use’policy in place, but they have to consider whether that policy is reallyeffective and whether it is being enforced,” says Naylor. “The HRprofession is generally aware of the relevant legislation, but it has to beproactive in distilling information down to line managers who don’t always knowthe law.” The security and misuse issues that surround e-mail are big enough for HR todeal with, but they should also be aware that the extent to which this vitalcommunications channel has entered our lives and culture is also changing theway people work and operate – and it isn’t something that can be controlled bypolicies and software. What is required is a roadmap to help bring some order to the way we usee-mail so that you manage your in-box, rather than the other way round.Otherwise, we all run the risk of becoming little more than e-mail responsejunkies. Case study: Scottish WaterWhen North, East and West of ScotlandWaters merged into Scottish Water, it gave HR director Paul Pagliari anopportunity to develop a single e-mail and internet usage strategy to replacethe mixture of different policies that he had inherited. There is no greatmystery to putting an e-mail policy in place, he says. The key is ensuringthere is “no ambiguity in the policy”. “It’s about being upfront with people, and being honestand reasonable, ” he adds.Scottish Water accepted that it had to allow reasonable use ofthe web and e-mail for personal reasons, but staff have to ask their linemanager for permission to register for it. This is a one-off request, he says:”It requires a positive act of communication and therefore is far morememorable.”On registration, staff can read the policy on screen and mustclick an ‘I accept’ button. Afterwards, a screen with the policy set out popsup whenever the computer is idle. “We follow this up with occasionale-mail monitoring,” says Pagliari. “We haven’t had to discipline anyemployee, but make it clear  we wouldhave no hesitation in following through with action if we needed to.” So what technology is available?Monitoring and security products canbe broadly grouped into three different levels: those that work on the outerperimeter of a company network, such as firewalls, which can block everythingfrom internet shopping to e-mails with a specific word in them; those that workon server level, and those that work at desktop level, which are often largelyanti-virus products. It is likely that you will decide to engage an externalspecialist along with IT. Computer Associates (CA) is market leader in what iscalled the 3A market – which stands for authentication, authorisation andadministration (of all kinds of data). Simon Perry, vice-president of CA’s security strategy, explainsthat the company is typically called in to tell HR what is technicallypossible, but warns that “perfect security most likely comes throughabsolute inconvenience,” he says. “We sometimes have to suggest thatpeople ratchet down a bit.”Implementing controls is one thing and measuring how effectivethey are is another, but Clearswift – which has a 23 per cent share of theglobal content-filtering market – recently launched what it describes as theindustry’s first ‘black box’ service to check corporate e-mail security.Called ClearDetect, it establishes any areas of vulnerabilityby scanning e-mail traffic via the black box which sits alongside the corporatenetwork. Data collected can include the volume of e-mail traffic (includingattachments), and compliance and confidentiality violations. “In beta-testing, trial customers who thought they weresafe found pornography, sensitive information being leaked and even employeesrunning their own businesses,” says Clearswift chief marketing officer,Paul Rutherford.www.clearswift.comwww.computerassociates.comThe eight principles of data protectionThere are eight enforceableprinciples of good practice outlined by the Information Commission. Anyoneprocessing personal data must comply.Data must be: 1 Fairly and lawfully processed2 Processed for limited purposes 3 Adequate, relevant and not excessive4 Accurate5 Not kept longer than necessary6 Processed in accordance with the data subject’s rights7 Secure8 Not transferred to countries without adequate protection. Personal data is defined as facts and opinions about theindividual and includes information regarding the intentions of the datacontroller (usually the employer) towards the individual, although in somelimited circumstances, exemptions will apply. Processing now incorporates theconcepts of ‘obtaining’, holding’ and ‘disclosing’. Source: the Information useful websitesFreedom of InformationThe Lord Chancellor’s department’s site has all you ever wantedto know on the Freedom of Information Computer Society (BCS)Get the BCS’ view on the impact the European Union Directive onData Protection will have on Related posts:No related photos. Previous Article Next Article A responsible approachOn 6 May 2003 in Personnel Todaylast_img read more

Countdown to skills review

first_img The debate on how UK plc can stay competitive in the global economy has resurfaced with the imminent publication of the long-awaited Leitch Review.Two years in the making, the Treasury-backed report is expected to use evidence from a range of employer groups and other stakeholders to outline the skills profile the UK should aim to achieve by 2020 to support productivity and economic growth. It is expected to be published around the time of Gordon Brown’s Pre-Budget Report at the end of November.Clues as to what can be expected from the full review were found in the interim report, published in December 2005, where the extent of the task was outlined. UK productivity needs to improve, as do the skills of one-third of the UK adult population who do not have basic school-leaving qualifications. More university places need to be found to educate the extra professional and technical workers who will prop up the much-heralded ‘knowledge economy’, while something also needs to done about the dearth of managers.ContentBut in the run-up to publication, the Treasury is staying tight-lipped about the details in the final report, proffering only sweeping statements.“The review will look at the skills situation through an economic lens, taking into consideration the skills stock, as well as its flow, and the likely evolution of the skills base,” said a spokesman.Outside Whitehall, no-one can be sure what to expect, but there are lots of opinions on what the review should include. At the EEF manufacturers’ organisation, senior economist Lee Hopley would like to see recommendations that lead to an education and training system that reflects the needs of business. “We need a system that is demand-led and engaged with business,” said Hopley.David Frost, director-general of the British Chambers of Commerce, agreed. “We want to see the employer put centre stage,” he said. “Employers are concerned that the system is currently driven by training providers and colleges.”Also vital, according to Frost, is that the current confusion over the role of the various public agencies is brought to an end. “There are too many agencies involved in training – the Learning and Skills Council, the Sector Skills Development Agency (SSDA), and the Regional Skills Partnerships. The system is impossible to navigate for employers,” he said.A brokering service that sits between employers and the agencies might be a way forward, Frost said.Mark Fisher, chief executive of the SSDA, agreed that Leitch must simplify the system for employers, and that colleges and training providers should be more responsive to local needs. “But in return, we hope that employers will step up to the mark and invest in the skills of their employees,” he said. WishlistsIncreased employer funding in training that leads to formal qualifications and sustainable skills was one of the five demands the TUC put forward to the Leitch Review team during consultation.Another of high priority for the union body is the introduction of new legal rights for low-skilled workers to paid time off to train, according to Iain Murray, the TUC’s senior policy officer for learning and skills. “Adult employees without a level 2 qualification should have a statutory right to request paid time off, to tackle those employers that refuse to allow their staff to access state-subsidised paid time-off arrangements,” he said.At the other end of the educational spectrum, Iain Cameron, head of research at the careers and diversity unit of Research Councils UK, hopes Leitch will include recommendations that work towards closing the gap between the laboratory and the commercial world. “We would like to see the introduction of courses for PhD students that are aimed at bringing a business awareness to the work they are doing and to help them develop an entrepreneurial sense alongside their studies,” he said.It is clear that Leitch will have his work cut out to incorporate all these differing demands. But there is one thing all the parties are agreed on: the importance of this review, and the dire consequences should the UK remain complacent about the development of skills for the future – concerns best summed up by Frost.“Our productivity does not compare well with competing nations and our skills must improve as we move up the value chain. If they don’t,” he warned, “we are doomed to become a second-class nation.”The Leitch ReviewIn 2004, Sandy Leitch, a former chief executive of Zurich Financial Services and chairman of the National Employment Panel, was commissioned by the government to lead an independent review of skills. In particular, the review was asked to examine the UK’s optimum skills mix to maximise economic growth and productivity by 2020, and consider the different trajectories of skill levels the UK might pursue.The Leitch Review has drawn on evidence from a wide variety of sources, including employers and their representatives, unions, and organisations providing education and training.The review team comprises officials from both the Treasury and the Department for Education and Skills, with an advisory member from the Sector Skills Development Agency. The final report to the government is expected in late November. Comments are closed. Related posts:No related photos. Previous Article Next Article Countdown to skills reviewBy Ross Bentley on 31 Oct 2006 in Personnel Todaylast_img read more

Blackstone to acquire life-sciences portfolio for $3.45B

first_imgTagsBlackstone Groupbrookfield asset managementCommercial Real EstateOffice Leasingoffice market The life-sciences sector has been one of the few bright spots for commercial real estate in the pandemic, as most office workers and would-be travelers continue to stay home. Life-sciences jobs often require special equipment and infrastructure, making it harder to work remotely.“You can’t create a new drug from your living room or kitchen. You need to be in physical lab space,” Nadeem Meghji, Blackstone’s head of real estate for the Americas, told the newspaper.Prior to the Cambridge deal, Blackstone recapitalized BioMed Realty, the largest private owner of life-sciences property in the U.S., for $14.6 billion. The firm is also close to acquiring another two life-science buildings in the Boston-Cambridge market for $1 billion, according to people familiar with the matter, the Journal reported.Even before the health crisis, Blackstone was one of the world’s leading investors in life-sciences real estate.“The pandemic has only amplified the need for vital drug discovery and shined a light on the importance of innovation in life sciences,” Meghji said. [WSJ] — Akiko Matsuda Staying ahead on the life science leasing curveLife sciences deal is Washington state’s largest sale everLife-sciences sector proves safe haven for landlords Share on FacebookShare on TwitterShare on LinkedinShare via Email Share via Shortlinkcenter_img Share via Shortlink Blackstone’s Nadeem Meghji (Blackstone, iStock)Blackstone Group has agreed to pay Brookfield Asset Management $3.45 billion for a life-sciences real estate portfolio located mostly in the Cambridge, Massachusetts, market.The 2.3-million-square-foot portfolio of lab buildings is centered on a 30-acre campus next to Massachusetts Institute of Technology. More than 95 percent of the portfolio is leased thanks to strong demand from pharmaceutical and other life-sciences companies that want to be close to MIT students, the Wall Street Journal reported.Read morelast_img read more

After big upstate push, multifamily heavyweight E&M cashes in chips

first_imgEmail Address* Share on FacebookShare on TwitterShare on LinkedinShare via Email Share via Shortlink Share via Shortlink Sources with knowledge of the deal said that the Kingston sale was in part precipitated by Langer’s need to pay outstanding debts to Churchill Real Estate. Last year, he scrambled to secure $26 million in financing for a bridge loan on a 3,000-unit rent-regulated multifamily portfolio.E&M successfully fended off an attempt in 2019 to place some units in the portfolio under rent regulation, after changes to the law at the state level made it a possibility. The high rate of turnover at the Kingston Village complex, which would have been vulnerable to such a conversion, stymied the local rent control effort.All of the units are currently market-rate, and according to marketing documents, the buyers plan to renovate more than half of the apartments over a 32-month period, raising rents an average of $428. According to the marketing materials, the new owners plan to sell the properties to the next buyer with “meat on the bone” — i.e., the possibility of raising rents further.Prior to E&M’s acquisition of the properties, they were owned by Bob Morgan, who the SEC accused of running a “Ponzi-scheme like” scam through his buildings. The charges were ultimately settled.Peter Wolf of Select Real Equity Advisors, who brokered the transaction for the seller, said that interest in the area has increased dramatically since the 1990s. The marketing materials on Crowdstreet tout the portfolio’s proximity to New York City and the influx of restaurateurs fleeing high rents, which started before Covid-19. Inflows to the once-quiet Hudson Valley town have since intensified, according to the documents, making Kingston a particularly desirable destination for people who left Manhattan since the outbreak of coronavirus.Contact Georgia Kromrei 305 Hurley Avenue in Kingston with E&M’s Daniel Goldstein and Irving Langer (Photos via Google Maps; E&M)E&M Management, once one of New York City’s largest landlords of rent-regulated apartments, is selling its massive Hudson Valley portfolio for more than $100 million.A partnership of multifamily firm Aker and investment firm Pearlmark closed on four of the firm’s properties for $81 million, which is $26 million more than E&M purchased them for, sources told The Real Deal. The buyers raised $21.8 million on the commercial real estate crowdfunding platform Crowdstreet.Those four properties, which have approximately 500 units, are clustered around Kingston, an area that has seen significant interest — and rising prices — in recent years. Together with its other holdings in the area, the properties made E&M one of the largest landlords in Ulster County. They were jointly owned by E&M Management’s Irving Langer and Daniel Goldstein, who each held a 50 percent stake.Those four properties are located at 30 Black Creek Road in Highland; 557 Broadway in Port Ewen; and 305 Hurley Avenue and 111 Hudson Valley Landing in Kingston. The Kingston Waterfront property includes 67 existing units, with approvals to develop 54 more apartments and 11,000 square feet of commercial space. E&M acquired the portfolio between 2016 and 2019.A fifth property, the 217-unit Sunset Gardens at 45 Birch Street, is being sold separately, and is in contract at $34.5 million.E&M declined to comment. Aker and Pearlmark did not return requests for comment.Read moreLandlords chase big returns upstateMultifamily giant Irving Langer races to refinance 3,000-unit portfolioHEADLINEcenter_img Full Name* Message* TagsMultifamily MarketTri-statelast_img read more

The Closing: Dov Hertz

first_imgDov Hertz (Photo by Studio Scrivo)Dov Hertz has left an indelible mark on New York’s skyline. Two marks, actually. Over the course of 14 years heading up acquisitions and assemblage for Extell Development, Hertz helped put together the sites for One57 and Central Park Tower — two supertalls that transformed not just the Big Apple’s physical appearance but also set the tone for how the real estate industry catered to the global superrich. Love ’em or hate ’em — and the shadow-casting, so-called “Swiss bank accounts in the sky” certainly have their haters — the buildings Hertz helped create represent a kind of ambition that defined the first two decades of the new millennium in New York. That work is echoed up and down Billionaires’ Row with projects like CIM Group and Harry Macklowe’s 432 Park Avenue, Vornado Realty Trust’s 220 Central Park South and Michael Stern and Kevin Maloney’s 111 West 57th Street. While the first name that comes to mind when you think of Extell is founder Gary Barnett, Hertz was his man on the ground doing the deals. Then, at the age when most people are preparing for retirement, Hertz struck out on his own and founded DH Property Holdings, which focuses on industrial real estate.His development projects include a 350,000-square-foot e-commerce distribution center in Red Hook, fully leased to Amazon, and a 1.3 million-square-foot vertical warehouse in Sunset Park, billed as the largest project of its kind in the U.S.Born: December 4, 1956Lives: Hewlett, Long IslandHometown: Borough Park, BrooklynFamily: Married, six kidsWhat were your biggest takeaways from putting together One57 and Central Park Tower? Every site that I worked on — some of the more famous ones and some of the less — there’s the same rule: Most assemblage work is off-market deals, and to be successful in closing off-market deals, the seller has to understand that you’re not trying to pull a fast one, that you’re trying to work a deal that is mutually beneficial.If there’s a mistake I made somewhere, it’s that I overestimated my hand. And in those instances, I probably didn’t end up making the deal.What are your most effective negotiating tactics? I went into business with a guy named Armand Lasky, and in ’89 we borrowed money from a Japanese bank for a building in Philadelphia. It was a turnaround situation, and we realized our tenant was not covered by a [subordination and nondisturbance agreement]. So if a lender takes back the building, he can wipe out the lease. We knew that our angle to buy out this tenant was to let him know that he had vulnerability in his lease.Then the market crashed and we couldn’t sustain the building but he [the tenant] didn’t believe me, because who buys a building and six months later is giving it back to the bank? So I hired two Japanese actors to walk around and make a lot of noise in Japanese and the guy calls me the next day and he says, “What the hell is going on?” I said, “Well, they flew down from Japan and wanted to see what it is that they’re going to be taking back.” And he was willing to negotiate after that.How has assemblage changed? Pre-internet, it was possible to show up as somebody else and say, “I’m just looking to buy your building.” But those days are long gone.How did you get your start in real estate? My father started off in the insurance real estate business and moved on to real estate management and then investment. My first job outside the family business was as an office broker for a company called Gronich & Karr.They used to do old-fashioned canvassing where you’d walk into a building and find out who the tenants were and when their leases expired. You’d follow a tenant to their space and make conversation: “Hi, my name is Dov Hertz. I’m a leasing broker. Who can I talk to about your leases?” My first week on the job, I walked into an elevator in a building on Third Avenue. There were seven guys all around my age and nobody’s pressing a button, because nobody had anywhere to go. I’m looking around and I’m like, “We’re all brokers?”And how did you meet Gary Barnett and end up at Extell? We went to rabbinical college together but hadn’t kept up. I brought him a deal in Toronto and he offered me a job. He was just getting off the ground and needed a head of acquisitions. I think I was employee number four or five. I ended up staying there for close to 14 years.What was his pitch? I doubt he said, “We’re going to build the tallest condo building in New York.” His pitch was that he couldn’t do it all himself. He was the acquisitions guy, he was the development guy, he was it. We had gotten to know one another a lot better through this deal, and he said, “I’m impressed with your skill set, and I think we can grow this together.” I don’t know that he aspired at that point to necessarily change the landscape. He had a real estate business and he wanted to be successful. Gary is not an ego guy. What about you — do you think you have an ego? I think everybody has pride. You have pride in what you do, you want to be well received in the market, but the question is, what’s the driver? I don’t think it’s my ego that drives me. I want to be successful. I want to contribute. I want to leave a lasting contribution.But you’ve done that — you’ve built these skyscrapers. What are you looking for at this point? I’ve changed product types completely. The focus now is on industrial and primarily urban infill last-mile distribution. When I left Extell and opened up my own shop in November of 2016, e-commerce was really just starting to make noise, and I spent six months doing nothing but climbing into industrial in New York City.You can sell buildings to Prologis, but you’re also competing with them. Andrew Chung [of Innovo Property Group] is out there, too. What is your competitive advantage? There are a lot of good competitors in the market. Any of those guys you just mentioned are formidable competitors. I’ll see something that the other guy won’t, and maybe he’ll see something that I won’t.Do you think the shift from physical stores to e-commerce will change the city’s streetscape? I don’t think it’s going to change the cityscape. You’re still going to have buildings with retail on the ground floor, it’s just going to be the way they’re structured that’s different. For instance, you already see where clothing stores are taking less space; they’re more of a showroom than places people go to buy things.What do you think about the political climate around development now? I don’t understand how the agenda is beneficial for the city. Let’s forget the developer; I understand that no one’s concerned about the developer. But if you’re going to do what’s best for the people, then it has to be what’s best for the city. Amazon [HQ2] in Long Island City, for example, is an example of something that would’ve been good for the city.What do you make of the news that Jeff Bezos is stepping aside? I have no idea what to make of it. No one from Amazon called me and asked me to step into his shoes.If you could go back and do something differently, what would it be? I probably would have started my own shop earlier, because I would’ve had more runway. But then if I had started earlier, I probably would not have ended up focusing on industrial. Who knows what my portfolio would look like through this pandemic?What have you taken away from being a father? Learn to listen. I think that’s true in every aspect of your life. Listen to your children; listen to your employees; listen to your business associates.What do you do to unwind? I have a boat, and I love boating. I don’t like fishing. I just like being out. I love the feel of the speed. I like the ocean. I like the wind, the sun. What made you decide to leave and start up on your own? I was 59. I had always wanted to open my own shop, and I realized that the window was closing and it was either now or never. I don’t know that there are many people at my age who would walk away from a great job. I could’ve stayed there [at Extell] until the day I retired, I assume, and been happy. But I had the dream and went with it.This interview has been edited and condensed for clarity. Billionaires RowCommercial Real Estatedov hertzExtell Development Tags Share via Shortlink Share on FacebookShare on TwitterShare on LinkedinShare via Email Share via Shortlinklast_img read more

Blackstone, Starwood strike $6B deal for Extended Stay America

first_img Tags Message* Blackstone GroupCommercial Real EstateHotel MarketStarwood Property Trust Blackstone CEO Stephen Schwarzman, and Starwood CEO Barry Sternlicht (Getty)A long-in-the-works deal for an extended-stay hotel chain is finally coming to fruition.Blackstone Group and Starwood Capital Group have acquired Extended Stay America for about $6 billion, Bloomberg News reported. The two private-equity firms are paying $19.50 per share for the hotel operator, according to the report.Both companies have previously invested in the hotel chain. Starwood, headed up by Barry Sternlicht, recently paid $136.8 million for an 8.5 percent stake. Blackstone — which acquired the company in 2004 and then sold it in 2007 — had picked up a 4.9 percent stake in the chain. It was also part of a group that bought Extended Stay America out of bankruptcy and helped it go public in 2013.The deal is the largest since the onset of the coronavirus pandemic, which has wrecked the travel industry. But as vaccines become more prominent, Blackstone and Starwood are betting on recovery.ADVERTISEMENT“Travel and leisure is one of Blackstone’s highest conviction investment themes,” Tyler Henritze, Blackstone’s head of U.S. Acquisitions, said in a statement to Bloomberg News. “And we have confidence in the extended stay model.”Extended Stay America is one hospitality provider that has managed to do well, despite the larger downturn in the sector because of the pandemic. Its revenue has declined, but not by as much as some its rivals, and revenue per available room stayed steady for part of last year.[Bloomberg News] — Sasha JonesRead moreStarwood Property Trust’s Q4 earnings fall 38%Barry Sternlicht predicts “tipping point” for NYCHow Blackstone’s Jon Gray undercut his UK counterpart Contact Sasha Jones Share on FacebookShare on TwitterShare on LinkedinShare via Email Share via Shortlink Full Name* Email Address* Share via Shortlinklast_img read more

Refinance applications hit 7-month low

first_img Email Address* Tags Message* Homebuyers get ready to “spring” into actionHome sales, prices rose in January as inventory hit new lowTexas storm, increasing rates freeze home mortgage market (Pexels)Mortgage applications to buy homes continued to rise last week as refinance applications hit the lowest level in seven months.An index tracking applications to purchase homes increased 2 percent week-over-week, seasonally adjusted, according to the Mortgage Bankers Association. The uptick comes despite historically low levels of housing inventory and skyrocketing home prices.Read more “Activity was up 5 percent from a year ago, as the recovering job market and demographic factors drive demand,” Joel Kan, head of industry forecasting, said in a statement.MBA’s index tracking refinance applications dropped 4 percent last week — the lowest level since September. Kan attributed that to increasing rates.“Rates have jumped 36 basis points since the end of January,” he said.The average rate for a 30-year, fixed-rate mortgage was 3.28 percent, up 2 basis points from 3.26 percent. The average rate for jumbo loans was flat at 3.34 percent.The average purchase loan size last week was $406,200, down from $409,900 the week before.MBA’s indices cover 75 percent of the residential mortgage market on a weekly basis. The report has been running since 1990.Contact Erin Hudsoncenter_img Full Name* Share via Shortlink Share on FacebookShare on TwitterShare on LinkedinShare via Email Share via Shortlink Housing MarketMortgagesResidential Real Estatelast_img read more