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Vuelo Brief 7.22.24
Vuelo Ventures: Noteworthy Updates
Waypoint Property Management, a Vuelo Venture, is excited to announce an evolution of leadership within the company. Rob Hoffman has been elevated to department manager for the property management team.
Additionally, Waypoint is excited to announce the addition of Bruce Gouker, who is assuming the role of director of property management. An industry veteran, Bruce brings incredible expertise to Waypoint and will focus his efforts on continual process improvement and client service provided by our property management and maintenance service teams.
Strategy Spotlight
By Drew Yancey, Operating Partner
The Problem With Priorities
The term SMART objectives is being referenced often by leadership teams. What are people talking about? Traditional strategic planning often fails due to an overemphasis on long lists of priorities without clear execution plans. Leaders should limit priorities to five annual goals, define them with S.M.A.R.T. objectives, and create detailed execution plans to ensure real-world impact. View the full article to learn how to turn strategic priorities into successful outcomes.
Key Business Issue Spotlight
What Vuelo Is Tracking (...and Thinks You Should Be Too)
Building owners, developers sue to stop Denver, state building energy standards
Trade associations for Colorado apartment building owners, hoteliers and commercial real estate professionals have filed a federal lawsuit to overturn state and Denver rules requiring large buildings to slash their greenhouse gas emissions. (Read the Denver Business Journal article here)
Vuelo's Takeaway: We need a balanced approach.
Protecting our environment and securing a healthy future for our kids is something we can hopefully all agree on. Further, we need to acknowledge that to change the way we do things will require an investment (i.e., change will not come without a cost). However, change needs to be implemented in a balanced manner—balancing the ‘‘carrot-and-stick” approach.
Code needs to evolve, but if such evolution is not done mindfully, mandates could layer undue cost burdens onto a business/real estate community already navigating crushing cost inflation. Further, a one-size-fits-all code approach has the potential to thwart the most environmentally conscious approach in real estate: the adaptive reuse and revitalization of old buildings and infrastructure (i.e., use what is there rather than build new).
The recipe for success is a process of balanced, reasonable code changes implemented over time, paired with the “carrot” approach of incentives and the potential for longer-term energy cost savings from better-performing buildings.
If you own commercial or multi-family real estate in Fort Collins, your investment will be affected by these BPS. If you are interested in learning more about this, please reach out.
Stats We're Watching
What's Driving Our Investment Decisions?
According to an article by CoStar, retail landlords have significant control in a tight property market, largely due to a shortage of high-quality retail space and cautious development practices following years of overbuilding. This scarcity has driven up rental prices and made well-positioned retail spaces highly sought after, with such spaces often receiving multiple offers. Additionally, despite economic uncertainties, there is a positive outlook on retail investment sales, with investors keen on profitable opportunities and retail properties maintaining strong valuations.
Vuelo's Takeaway: The cost to build new retail (all in) is approaching$700/SF, particularly if there is medical or restaurant buildout involved. The market will remain supply-constrained and will demand crushing lease rates to support new construction. If purchased at a significant discount to replacement cost, existing, well-located property will prove to be a smart buy.
Page Turners
Measure What Matters, by John Doerr
Measure What Matters, by John Doerr is a guide to the Objectives and Key Results (OKRs) framework, which helps organizations set and track goals to drive success.
Using real-world examples, Doerr shows how OKRs foster focus, alignment, and growth by defining clear objectives and measurable key results.
Measure What Matters
emphasizes the importance of transparency, accountability, and continuous improvement in adopting this system.
Vuelo's Takeaway: The introduction of tracking OKRs has been instrumental in Vuelo’s businesses.First, identifying what really matters in the performance of our businesses (i.e., setting our priorities andgetting everyone rowing in the same direction). Then, executing with a way to accurately measure keyresults.