Monthly Archives: April 2016

‘Giant Gray’ tracks anomalies to spot danger

When it comes to fighting physical and cyber-type crimes, the recent International Security Conference &Exposition (ISC West), Las Vegas had more technology and knowledge concentrated in one location than any other place in the world.

And while there have been some minor improvements in security camera resolutions, cloud-based file storage and system connectivity, there were only a few novel ideas displayed by the nearly 920 vendors at the event.

One of the biggest advances comes in the form of “multi-sensor fusion technology,” developed by Giant Gray Inc. The product is the first for Behavioral Recognition Systems Inc., the successor to BRS Labs in Houston. Giant Gray builds on 10 years of innovation funded by more than $100 million in venture capital.

The company, which has contracts with nearly a dozen mass transit authorities, waste water treatment facilities and the five major oil and gas producers, is looking to expand into theft prevention for big box retail.

This technology could make the Strip, McCarran Airport and other major gathering spaces within our community, a lot safer in the future.

In simple terms, Giant Gray has developed software that attaches to the back end of any monitoring system. The software then spends a short period of time learning what is normal for the environment that it is monitoring and then identifies abnormal incidences, tags the anomaly and sends a clip of the incidence to someone who is assigned to take care of the problem.

The technology behind the ability to learn is called “artificial cognitive neurolinguistics.” The key is adaptive and self-learning software based on algorithms that enable the computer to see anomalies that are perhaps very visible but hidden behind oceans of data.

The system is not only designed to identify visual anomalies that are picked up by security cameras but also works well with computer monitoring systems that you might find in a large processing or manufacturing environment.

In a real world application such as Las Vegas, the Giant Gray system has the capability to monitor thousands of cameras at once. It can recognize instances such as altercations between people, packages that are dropped and left and loitering behavior. Where humans in monitoring stations would miss many of these types of behaviors, the computer does not blink, take a sip of coffee, take calls or otherwise become distracted.

Once an instance is identified, a screen shot is captured and sent by email or text message to a designated person. That person can look at the photo to immediately determine the action needed in nearly real-time response.

“The system was designed from the ground up to detect the unexpected — and do so at an extreme scale,” said Steve Sulgrove, president and CEO of Giant Gray.

The system is also capable of monitoring the systems controls in a large building or at a utility plant such as a casino, Southwest Gas, Southern Nevada Water Authority or NV Energy. In this type of application, the computer software analyzes subtle anomalies that could be precursors to events such as power outages or line breaks. The system can also detect cyber-intrusion.

While this type of advanced technology may not be right for every business, it could be the next advancement in the world of homeland security.

On a large scale, the system can be integrated into traffic cameras and other surveillance systems for around $150,000, plus an additional per camera fee.

On a smaller scale such as a retail store, the system will monitor a dozen cameras and the computer system for cyber-theft starting at around $25,000.

Xceligent works hard to get numbers right

Identifying, cataloging and listing the vast amount of retail, office, industrial and multifamily properties that are for lease and sale in the Las Vegas Valley is no small task.

Unlike the residential market which has the Multiple Listing Service (MLS) that acts as a centralized record-keeper for all residential sales, information for the commercial markets must be gathered and, more importantly, verified.

This is where companies such as Xceligent, LoopNet, CoStar, PropertyLine, Catylist, Showcase and City Feet enter the picture. Each of these companies tries to gather information and compile lists of commercial properties that are for sale or lease; some do a better job than others.

According to Soozi Jones Walker, president of the Commercial Alliance Las Vegas, Xceligent is the most accurate and comprehensive listing and reporting service of commercial real estate and industrial properties that are for sale or lease.

“We chose them because of their extensive peer review process and the fact that Xceligent reviews each commercial real estate transaction to make sure that it is accurately reported,” said Walker.

In addition to building a comprehensive inventory of commercial properties within a given market, the firm also identifies buildings that are available for lease and sale, tenant information, historical trends on lease rates and building occupancy, sales comparables and provides market analytics and demographics.

To accomplish this monumental task, Xceligent, which is headquartered in Kansas City, Missouri, has more than 1,100 researchers, IT and field personnel who maintain regular contact with commercial real estate brokers and property management companies in all of the 42 markets the firm serves.

One of the trademarks of Xceligent’s business model is its extensive verification process. When the firm first enters a market, it uses tax assessor files to create a baseline of commercial properties. They then identify the broker or property management company representing each building and contact them to verify and match tenant records to each property.

Once a market baseline is established, Xceligent proactively calls each listing representative on a 30 to 45-day cycle to make sure their data is up to date.

This issue of the Las Vegas Business Press marks the debut of the Quarterly Commercial Real Estate Review, in which Xceligent data will be used to tell the story of the health of the Las Vegas commercial market.

When it comes to vacancies and absorption, it is important to know that those figures are verified by a local Xceligent field representative who canvasses the market to distinguish when blocks of space become physically vacant versus being marketed as available. And if a company simply moves from one space to another, the absorption rate does not change unless they acquired a larger space or downsized and then the difference is reported.

While the housing market is tabulated by MLS (except for sale by owner listings), and the sale prices reported are relatively straightforward. The commercial real estate numbers, on the other hand, are often more complicated. Each month, reported sale prices in the Las Vegas market are reviewed by a representative of Xceligent and CALV member brokerage firms. If a dollar amount seems out of line, that transaction is flagged and a call is made to the brokers that represented the buyer and seller to verify the actual dollar amount.

A lot of time and money is spent on gathering information, verifying the facts, and analyzing the market. This information benefits the property owners, business owners, brokers and property managers by letting them know the types of office, retail and industrial products that are popular and in short supply, as well as the type of products that are trending, in various sections of the valley. This type of information works to keep the market from overbuilding a particular type of product which in turn stabilizes the leasing rates.

On the other side of the coin, if the quarterly reports show that Las Vegas is underserved by a particular type of office or industrial product, it could mean that we are missing an opportunity to bring new businesses to our community and triggers the developers to build the missing component.

While it may seem that these numbers are only relevant to those persons directly involved in the commercial real estate industry, when combined with other economic numbers such as state revenues, retail sales and cost of goods, these numbers help local analysts to easily predict the near future of the local economy.

Office space comeback has long way to travel

The Las Vegas Valley’s long-troubled market for office space is staging a small comeback.

A bit more than 169,000 square feet in total were absorbed during the first quarter. Total vacancy rates have dropped to 18.4 percent, down from 18.8 percent in the previous quarter. Direct absorption for first quarter is reported at just over 159,000 square feet while direct vacancy is 17.5 percent.

Within Southern Nevada, which is broken down into sections, there are 1,991 commercial office buildings containing 43,662,011 square feet, categorized as Class A, B or C space. More than 8 million square feet of that space remains vacant.

According to Xceligent, a firm that tracks all commercial real estate sales and leases, the tenants accounting for the majority of the lease expansions signed during the first quarter were mortgage companies, law firms and service companies.

United Health Care, which gave up 43,580 square feet of space in the northwest, consolidated its operations into 100,625 square feet in the Central West. JSA Healthcare also acquired 38,624 square feet, accounting for two of the largest square footage acquisitions.

Companies such as B.O.N. Labs, Component Assembly Systems, Spectrun Services and InCorp Services gave up a little more than 54,330 square feet in the past quarter.

Tenants in the Southern Nevada market are agreeing to longer-term leases due to the lack of new speculative development in the office sector. According to Xceligent, the high cost of land prices along with high construction costs are the cause of low speculative development.

Robert “Bob” Potter of Affordable Concepts, a local commercial contractor agrees. “The cost of building materials such as asphalt, concrete, steel, etc., is going up by 3 to 7 percent each month. Also, because of the labor loss during the recession, there is now a shortage of experienced construction workers. It used to be that a contractor would write off the labor, but now they are building it into the price,” said Potter.

The area with the highest vacancy rate is Henderson North at 25.8 percent and the lowest is Henderson South at 12.5 percent. Those figures are even more impressive considering that Henderson South has a total of 4,418,508 square feet of total inventory and Henderson North has only 1,793,861 square feet of total space to fill.

The West section of the valley has the highest inventory of developed property at 7,682,189 square feet, divided among 331 buildings, and the third lowest vacancy rate at 16.4 percent.

The Airport section has the third-highest amount of developed property at 5,581,477 square feet divided among 238 properties. It has the second-lowest in vacancy rate at 15.1 percent.

To prove how numbers can be deceiving, the north part of the valley, which ranks No. 6 in vacancy at 17.2 percent, falls into last place for the amount of developed commercial properties at 1,218,475 square feet, divided among 89 buildings.

The average weighted asking rates range from $1.34 up to $2.23 per square foot.

It is no surprise that the highest rates are in areas with the least percentage of available Class A and B office space.

Downtown Las Vegas has the highest demand for office space and one of the lowest vacancy rates but ranks No. 8 (out of 10 markets) for the total available office square footage. Because of the supply vs. demand factor, Downtown Las Vegas garners the top lease rate of $2.33 per square foot, followed by the Southwest at $2.04, and the West at $2.02.

Though the number is low, there is 231,555 square feet of new construction being built in the West, Southwest, North and Airport areas of the valley. How the new space affects the occupancy rates will play out in the coming quarters.

Not every building in the Las Vegas Valley is included in this report. The Las Vegas office tracked set consists of all existing single and multitenant office buildings larger than 5,000 square feet, excluding government buildings, medical buildings and office condo buildings.

Also, the average weighted asking rates are expressed as a full-service/gross rental rate and weighted on total direct available square feet. Nonfull-service rates (such as NNN) have been grossed up to reflect a full-service/gross rate.