12
Haub School of Business Real Estate and Construction Survey Philadelphia and Delaware Valley 2017 YEAR END RESULTS 2018 MARKET EXPECTATIONS MARCH 2018
Haub School of Business
Real Estate and Construct ion Survey
Phi ladelphia and Delaware Val ley
2017 YEAR END RESULTS
2018 MARKET EXPECTATIONS
MARCH 2018
We are proud to bring you the second in a series
of research reports from the Haub School of Business
Real Estate Program at Saint Joseph’s University.
The research series will focus upon topics that
impact the Real Estate community in the Greater
Delaware Valley area. This year’s survey summarizes
the current real estate trends and provides insights into
technological developments affecting the Philadelphia
and Delaware Valley’s Commercial Real Estate market.
We would like to thank our Advisory Board of distin-
guished real estate practitioners in the development,
legal, construction, brokerage, and financial areas, for
invaluable guidance and assistance with this endeavor. Our goal is to become a resource to the community by
exploring ideas that are on the cutting edge of Real Estate Development. We encourage your input and if you
wish to recommend topics for further research please do not hesitate to contact me at [email protected].
Thank you for your interest in our program and we look forward to serving your needs.
Joseph A DiAngelo, Ed.D.Dean, Haub School of BusinessSaint Joseph’s University
A Message from Joseph DiAngeloDean, Haub School of Business
A Message from Joseph Kessler Saint Joseph’s Real Estate and Construction Alumni Board
The faculty in the Finance Department of the Haub School of Business has
produced a second, with hopes of many more, annual report reflecting the input
of the attendees at the December SJU Real Estate and Construction Annual
Luncheon. In addition to market results and forecasts, this edition looked at the
local industry’s use of certain aspects of technology and innovation. In working
with the talented students at SJU, the REC has gained an insight as to how the
next generation of business leaders sees their future in the world of technology
and innovation. Attracting, developing and retaining talent will pressure the
industry to take advances that prior generations did not consider mainstream.
Our role at SJU REC is to provide that talent to the real estate industry by
mentoring, providing real life experiences, as well as internships, but also to listen
as to how students see the future. Please do not hesitate to contact me so that
SJU can provide that talent for your business.
Joseph F. KesslerDilworth Paxson LLP
School of Business
Real Estate and Construct ion Survey
Phi ladelphia and Delaware Val ley
2017 YEAR END RESULTS
2018 MARKET EXPECTATIONS
MARCH 2018
2 REAL ESTATE AND CONSTRUCTION SURVEY
Over the previous twelve months,business at your firm has ___?
Overall, 75% of the respondents indicate that business
increased during 2016, with approximately 20% indicating
that business had remained flat. Close to 5% indicated that
business decreased in their respective markets. For Regional
and National firms, 70.00% and 83.33%, respectively, of
respondents saw business increasing during 2017.
Similarly, for Small and Large firms, 68.75% and 81.48%,
respectively, of respondents saw business increasing
during 2017.1
The overwhelming majority of respondents reported increasing business activity for 2017.
100% of Property Owners, Banking, and Appraisers reported increases in business.
The largest segment represented in the survey, Agent/Brokers, reported an increase of 79%.
1. Actual data and responses available upon request.
Agent /Broker
Construction
Development
Property Manager
Property OwnerFin & Acct
BankingArchitect
AppraiserLegal
Insurance
Other
SAINT JOSEPH’S UNIVERSITY 3
In the next twelve months,business at your firm will ________?
Overall, 70% of the respondents expect that business
will increase during 2018, with 27% indicating that
business will remain flat. Only 3% indicate that
business will decrease in their respective markets.
For Regional and National firms, 59% and 85%,
respectively, of respondents expect business to increase
in 2018. Similarly, for Small and Large firms, 59% and
80%, respectively, of respondents expect business to
increase in 2018.2
The overwhelming majority of respondents expect a similar picture with increased industry
growth predicted for nine of our 12 industry areas. Property Owners having the highest
proportion of respondents (89%) projecting an increase. None of the industries expects a
significant decrease in business.
2. Results and data available upon request.
Agent /Broker
Construction
Development
Property Manager
Property Owner
Fin & Acct
Banking
Architect
Appraiser
Legal
Insurance
Other
4 REAL ESTATE AND CONSTRUCTION SURVEY
Impactful Innovations
Our respondents indicate that Technology and Infrastructure are the leading innovations influencing
the Greater Philadelphia Real Estate Industry, followed by Coworking, Talent, and Tax Abatement..
The three areas with the highest need for innovations in Real Estate are Customer Relations
Management with 25% of the responses, followed closely by Marketing (24%) and
Project Management (18%).
Where is Innovation Needed?
SAINT JOSEPH’S UNIVERSITY 5
Roadblocks to Innovation Implementation
Budgetary Constraints, Lack of Awareness of Technology, and Lack of Skilled Personnel were identified across all types
of firms as three substantial roadblocks to technological innovation and its implementation. It is interesting to note that
Budgetary Constraints and Lack of Skilled Personnel appear to influence all firms, regardless of size or market. Lack of
Awareness of Technology was recognized as a roadblock for all firms except the Small National firms. However, the Small
National firms recognized the technological constraints as their second largest roadblock.
Large National Large Regional Small National Small Regional Grand Total
6 REAL ESTATE AND CONSTRUCTION SURVEY
Marketing Channels
The vast majority of firms in our sample appeared to have already adopted the most mainstream marketing techniques, in the form of email marketing, with social media marketing (i.e. Facebook, Twitter, and so forth) coming in second place. Fewer firms, about 30% to 56% of the sample, report using website ads as a marketing channel. “YouTube Ads” is the only category where a significant number of responses indicate that such a method of marketing does not apply.
The nontraditional marketing channels, in the form of Instagram Stories, Mobile Media/Application Ads, and Geo Targeted Ads all report significantly lower adoption rates across all firm categories. It is interesting to note that the number of responses in the “unknown” category for all of these nontraditional channels is substantially higher than for the more traditional marketing methods. This could indicate a potential opportunity for firms to better market their services by under-taking ad campaigns utilizing these methods, possibly reaching a larger share of the millennial audience in doing so.
Descriptions of Popular Marketing Channels
Email Marketing: Email marketing involves sending current and potential customers messages or advertisements electronically to a personal or corporate email address. It is also an excellent way to measure marketing effectiveness by tracking the number of website hits after a mass mailing.
Social Media Marketing (FB, Twitter): Social Media Marketing involves creating and sharing content on social media networks like Facebook, Twitter, YouTube, Instagram, and Pinterest, as a way of driving audience engagement and achieving your branding and marketing goals.
YouTube Ads: YouTube advertising is one of the most popular platforms of video advertising. It is a way to build and reinforce brand awareness by gaining the attention of prospects. Advertisers can reach viewers based on their google search history in addition to their viewing behavior.
Website Ads: Website Ads, also known as banners, are the best-known form of advertising. Banners are image-based ads that often appear alongside a website page or on the top and bottom of a website. Marketers buy these spots to advertise their content similar to advertising in a newspaper.
Mobile Media/App Ads: Mobile Advertising works through a mobile device that has a wireless connection. Advertisers buy advertising spots from the mobile app developers to reach their targeted demographics. It’s estimated that Smartphone users spend at least 3 hours per daily on their phones and about 88% of that time inside applications allowing for another way of increasing company visibility.
Instagram Stories: Instagram Stories are 24 hour self-destructing photos or video streams that appear on the top of a user’s Instagram feed. Instagram story ads allows businesses to insert a short 15-second full-screen adver-tisement in between user’s stories.
Geo-Targeted Ads: Geo-Targeted Ads enable a business to create customized and targeted marketing campaigns geographically to prospective customers on their PC or mobile devices.
Large National Large Regional Small National Small Regional Grand Total
Email Marketing ImplementedPlanning to ImplementDoes not applyUnknown
Social MediaMarketing (Fb,Twitter)
ImplementedPlanning to ImplementDoes not applyUnknown
Website Ads ImplementedPlanning to ImplementDoes not applyUnknown
Instagram Stories ImplementedPlanning to ImplementDoes not applyUnknown
YouTube Ads ImplementedPlanning to ImplementDoes not applyUnknown
Mobile Media/ AppAds
ImplementedPlanning to ImplementDoes not applyUnknown
Geo-Targeted Ads ImplementedPlanning to ImplementDoes not applyUnknown
SAINT JOSEPH’S UNIVERSITY 7
Technology Implementation
Survey results show technological implementations represent the greatest potential area for impactful
innovation in the real estate industry. The most likely areas where technological innovation can make
an impact appear to be centered around advanced visualization and reporting technologies, AI chat
bots/virtual realtors, predictive analytics area, and 3-D modeling applications. All of these technologies
report high percentages of “unknown” responses, which indicate that adoption of these technologies
into the real estate area has been slow.
Mobile Applications: Mobile Applications designed to run on mobile or tablet devices, serve a similar purpose of providing information and services to users that are accessible via PCs. Each app provides an isolated function-ality such as a web browser, game, calculator, etc.
3D Modelling/Printing: 3D Modeling is the process of creating three-di-mensional representation of any surface or object. 3D Printers can range from desktop printers that use melted plastic to industrial machines that use laser to melt metal.
Cloud Data Storage & Computation: Cloud Computing allows organizations to outsource some or all of their existing IT infrastructure and operations to a third party who will build servers, manage storage, or protect data. The firm will then have access to a greater array of IT and computing resources.
Visualizations & Reporting on Cloud: Cloud Based Visualization Tools such as BigML, Roambi, Tableau, etc uses pictures, graphs, and charts to help interpret data. It allows a business to identify opportunities while reducing the need for expensive business intelligence suites and consultants to implement and maintain them.
AI Chatbots/Virtual Realtors: An Artificially Intelligent Chatbot is a computer program designed to interact in a way that imitates a human conversation using a dialog bot or a chat box.
Predictive Analytics/ML & AI: Predictive Analytics is a technique that collects current and historic data and analyzes that data to make predictions about future trends and uncover new opportunities. Examples of predictive analytics tools are SAS Predictive Analytics, RapidMiner, SAP Predictive Analytics, IBM Predictive Analytics, TIBCO Analytics, etc.
Descriptions of Technological Implementations
Large National Large Regional Small National Small Regional Grand Total
3D Modelling ImplementedUnknownDoes not applyPlanning to Implement
Advanced Visualization &Reporting Technologies
ImplementedUnknownDoes not applyPlanning to Implement
AI Chat bots/ VirtualRealtors
ImplementedUnknownDoes not applyPlanning to Implement
Cloud Data Storage &Computation
ImplementedUnknownDoes not applyPlanning to Implement
Mobile Applications ImplementedUnknownDoes not applyPlanning to Implement
Predictive Analytics & ML ImplementedUnknownDoes not applyPlanning to Implement
8 REAL ESTATE AND CONSTRUCTION SURVEY
Type of Firm
The companies examined in our sample consist of Small (under 50 employees) and Large (over 50 employees), as
well as Regional (the majority of a firm’s business is within the Delaware Valley and tristate area) or National (the
majority of the firm’s business is not within the Delaware Valley or tristate area). The sample is split fairly evenly,
with 29% of our firms falling into the “Large National “category, and 24% of the firms falling into the “Large
Regional” category. “Small Regional” and “Small National” account for 34% and 13% of the sample, respectively.
Respondents’ Demographics
The five largest professions represented were Agent/Broker (28%), Construction (21%), Property Manager (14%),
Development (12%) and Property Owner (9%).
Survey Information and Methodology
Authors: Karen Hogan, Ph.D., Dan Jubinski, Ph.D., Abhishek Kanaparthi, M.S., and Rajneesh Sharma, Ph.D.
For the past eleven years the Saint Joseph’s University (SJU)
Real Estate and Construction Advisory Board has held an
annual December luncheon to bring together the
Philadelphia and the Delaware Valley’s Real Estate
professionals. The luncheon has grown significantly over the
years and is a “go-to function” for real estate professionals
working in the Philadelphia and Delaware Valley markets.
The overwhelming majority of attendees were non-SJU alumni.
This survey is the second annual installment and was designed
with the purpose of summarizing the current real estate
trends and providing insights into technological developments
affecting the Philadelphia and Delaware Valley’s Commercial
Real Estate market.
We analyze the survey responses of 103 individual members.
The survey results represent roughly 20% of those attending
the luncheon. However, many of the attendees were at
tables of 10 persons representing their corporations and thus
some of the responses were most likely a group effort for
the table, thus skewing the number of responses down. The
overwhelming majority of the respondents conducted business
within the city of Philadelphia or the Philadelphia suburbs.
The survey consists of nine questions and asked the
respondents to review past (2017) business conditions, and
provide guidance as to the future state of the Real Estate
market over the forthcoming year. The overwhelming majority
of respondents, regardless of location or profession, reported
that business increased in 2017, and indicated that overall the
Philadelphia and Delaware Valley’s Real Estate market would
continue to grow in 2018. Budgetary Constraints, Lack of
Awareness of Technology, and Lack of Skilled Personnel
were identified as three main roadblocks to innovation
implementation. The three areas with the highest need for
innovations are Customer Relations Management with
25% of the responses, followed closely by Marketing (24%)
and Project Management (18%). Traditional marketing
channels like email have been incorporated into the business
model, but non-traditional forms of marketing such as
Instagram stories, mobile media/application ads, and
geo-targeted ads have not taken hold at this point.
Technological implementations represent the greatest potential
area for impactful innovation in the real estate industry.
Special thanks to Raelene, McCarthy, Joseph Kessler and the
REC Advisory Board for all their help in designing the survey.
Also, a special thanks to Vinnu Panwar for her help in defining
marketing channels and technology implementations.
School of Business
The Real Estate Finance Program offered through the
Finance Department in the Haub School of Business (HSB)
gives students the opportunity to gain an understanding of
the theory and practice of the real estate industry.
Students complete a rigorous six-course program of study
with classes covering topics such as commercial real estate
valuation, residential loans and investments, and commercial
real estate development. As part of their course of study,
students enrolled in the program will receive training
in ARGUS, a software tool commonly used for valuing
commercial properties.
Beyond the course work, students also interact with Real
Estate Industry Professionals. The SJU Real Estate and
Construction Advisory Board is a strongly engaged network
of influencers in the industry who work with SJU students
to obtain internships and career opportunities. In the past,
our students have participated in the ARGUS challenge, Real
Estate Development course case competitions, obtained schol-
arships from the CREW, internships and full time positions.
On campus there is a real estate club, which organizes events,
guest speakers and networking opportunities for students.
For more information contact:
Dr. Daniel Jubinski at [email protected] or the Finance
Department Chair: Dr. Karen Hogan at [email protected]
Program in Real Estate Finance
Board Members in photo:
Left to Right Back Row: Brian J. Campbell, Anthony A. Nichols, Sr., George J. Alburger; Dennis M. Durkin, Adam M. Duffy, Brian J. Murphy, Joseph F. Kessler, Esq., P. Daniel Jubinski, Ph.D.
Left to Right Front Row: Pete Davisson, Karen M. Hogan, Ph.D., Brenton P. Hutchinson, Raelene V. McCarthy, Denise Viola-Monahan, Elizabeth M. Convery, Dean Joseph A. DiAngelo, Ed.D., John P. Morrissey
Other Board Members: Kathie M. Carr, Caitlin A. English, James M. Galbally, Patrick S. Gallagher, Michael J. Hare, Paul J. Leis, Corey E. Lonberger, John S. McManus, Rajneesh Sharma, Ph.D.
