How To Choose The Right Commercial Investment Property

In this issue

    • Choosing The Right Investment Property

    ​No single property can fit all of the investment goals and rules an investor has set. Even if the investor tried to build a property to specifications, he would find some things “not quite right”. The investor is, therefore, wise to anticipate problems and have some basic strategies for dealing with them. Here are some suggestions to help the investor devise other approaches to meet special needs:….(more)

    • Lease Negotiations With A Corporate Team

    A few years ago, senior corporate managers were able to make major real estate decisions by themselves. Now, a negotiating team will negotiate leases. This team may consist of legal counsel, finance department representatives, outside specialists such as real estate brokers or tenant representatives, design and engineering consultants, and others…..(more)

  • Drafting The Shopping Center Lease

When leases for shopping centers are being drafted, they can be more difficult than most other commercial leases. In a shopping center, the owner wants the leases to be as uniform as possible, but knows that each lease must have variations to meet the individual tenant’s particular problems in business and in certain size or shaped spaces. Here are some suggestions of items that should be covered in your shopping center leases…..(more)

  • Updated Information For The New Property Manager Improvements

There may be lengthy negotiations between the owner of a property and the management company before a management contract is signed. When the management plan has been worked out between them, the management company is hired and the manager takes charge of the property. At this time the manager must collect great amounts of information necessary to manage and control the property. Some should have been available from the owner, but all files must be updated and appropriate information collected, such as:…(more)

  • Your Real Estate Investment

​Knowing what you can do in some investment situations can be the difference between an annual profit or loss in your currently owned commercial property or the one you intend to acquire. How you acquire it can be important….(more)

How To Invest In Land For Long Term Profit

In this issue

    • Turn Cash Flow From Negative To Positive

    In investment properties, when cash expenses are more than cash receipts, there is negative cash flow. Most investors avoid properties where this is the situation, unless there are strong underlying economic factors that indicate the cash flow can become positive….(more)

    • Investing In Land For Long-Term Profit

    Land is always a good investment for the long term. In past years when investors made real estate investments, one consideration was the tax shelter of certain investments. Now, with fewer shelters, real estate investments must make sense as a dollars and cents return on capital, and must stand alone as a good business move. Land has never been a tax advantaged investment and should be worth considering as a way to increase wealth. The trend has always been up. In most cases, the land investor spends money each year with virtually no income from the investment. He has expenses of property taxes, clean-up and maintenance costs, expenditures for travel to check on the property. The opportunity for income from the land is minimal……(more)

  • Convert The Use Of Buildings For Profit

There is a big difference between investing in the rejuvenation of real estate projects and investing in stocks, bonds and other securities. When you invest in securities, you have no control of any factors that can enhance the value. In real estate, you have control of the investment yourself….(more)

  • Keeping Key Employees Happy

Key executives were the ones who always had the “office with a view”. Now, however, on modern buildings built in the past few years the atrium is one of the most popular (and expensive) amenities. It is popular because virtually every office can have a window view, either toward the conventional view, the outdoors, or toward the spaciousness and openness provided by the atrium. It is an example of “keeping key employees happy”….(more)

  • Contact Your Property Manager In Advance

If you are about to acquire an income property, consider contacting the management company in advance. The ability to estimate income and expenses and a keen knowledge of the market makes the manager a valuable asset during the preacquisition process. The property manager has the background necessary to provide significant assistance in determining both the location, desirability and economic feasibility of a property….(more)

    • Your Real Estate Investment

    Knowing what you can do in some investment situations can be the difference between an annual profit or loss in your currently owned commercial property or the one you intend to acquire. How you acquire it can be important…(more)

Commercial Condo vs. Freestanding Building- Which Is A Better Investment?

In this issue

    • Commercial Condo vs. Freestanding Building

    Which is the better investment — a freestanding commercial building or a commercial condominium within a larger complex? Each has its own unique set of attributes, and so the answer really depends on the needs, goals and characteristics of the investor…..(more)

    • Negotiating The Sublease

    With changes in business strategies, a major existing tenant wants to sublease all or some of their rented office space to eliminate some locations and shrink operations in others. In this situation, the problem for landlords is whether it is a better strategy to enforce lease restrictions against subleasing or to work with tenants on the theory that the sooner cheap sublease space is filled, the better for all. (In addition, another problem could be whether landlords should insist on sublease restrictions in new leases being negotiated now.)……(more)

    • Unusual Real Estate Properties

    In many metropolitan areas, commercial land for development is in very short supply. Developers are converting older warehousing to shopping areas, demolishing existing buildings to build new projects in areas in transition. However there may be many hundreds or even thousands of unusual parcels of property that have been overlooked. Many are ready for commercial development close to downtown areas, suburban commercial developments, and densely populated areas. Owners of many of these properties consider the property as “surplus” and have not considered development.
    Some of these properties are in the inventories of city, county and state ownership and are surplus parcels that were unused in street, highway and freeway development. Others are owned by railroads….(more)

    • Things To Check With A Ground Lease

    Landowners may choose the ground lease as a way to benefit an easy and risk-free investment vehicle and as a way to secure the long-term appreciation of the property. Sometimes a ground lease can put the lessor at risk. That is because the deal centers on the concept of sharing economic returns. The lessor becomes a partner of the lessee because the total rent is usually determined by the lessee’s net operating income or net cash flow. If the lessee does well, the lessor does too. However, if the lessee’s business is a loser, so is the lessor….(more)

    • Extra Income From Campus Apartments

    When an owner has an apartment property near the campus of a University, there are particular problems. The competitive situation dictates that leases be offered for one semester of nine and a half months. A twelve-month lease for students is virtually unheard of. That means there are lots of vacancies as soon as final exams have ended. (This does not apply to a few University communities where there is always an apartment shortage. In those few places, the student must lease for 12 months or have no lodging.)…..(more)

      • A Step-Down Rental

      Tenants understand the need for step-ups in their leases because they recognize the inevitable upward trend of costs. There is no reason for elaborate set of definitions in the lease. The lease simply needs to spell out in a schedule the applicable period and the rent to be paid during that period…..(more)

      • Selection Of New Tenants

      The property manager provides the tenant applicant with the lease application which must be filled out for the interview. A leasing agent may assist during the review process, but the final selection of tenants is ultimately the property manager and owner’s responsibility. All leasing personnel should be informed that the company does not discriminate on the basis of an applicant’s race, sex, color, creed, or national original….(more)

Is A Sale Leaseback A Good Investment

In this issue

    • The Security Of A Commercial Property

    The problem of security is a major concern of owners or managers of office buildings or other commercial properties. There are many things to check both inside and outside of a property. Particular attention must be given to the perimeter of the property, as this is where an intruder will make the first contact…..(more)

    • Value In Good Management

    Investors purchase residential and commercial income producing real estate to make money. There are two obvious ways of making money from a property. First, the owner takes a share of the annual operating profit generated by the investment, and Second, profits from increasing the market value of the investment beyond what it would be because of inflation alone.
    Apartment properties lend themselves to the second way of making profits better than many other types of investments. Increasing the market value of rental units does require know-how, absolute understanding of the market values of this type of property and excellent management…….(more)

    • Sale/Leaseback – A Good Investment

    When an investor is looking for a management free investment, nothing can beat a sale/leaseback. This is the ideal investment for an absentee owner because the tenant pays all the operating expenses and the investor-owner usually has a completely management-free and trouble-free investment. Typically, the tenant–who is the former owner–will take care of the property. Therefore, a sale-leaseback can be an excellent investment. Watch out though! Make sure that the tenant is dependable and able to pay the rent regularly and promptly….(more)

    • Things To Check With A Ground Lease

    Landowners may choose the ground lease as a way to benefit an easy and risk-free investment vehicle and as a way to secure the long-term appreciation of the property. Sometimes a ground lease can put the lessor at risk. That is because the deal centers on the concept of sharing economic returns. The lessor becomes a partner of the lessee because the total rent is usually determined by the lessee’s net operating income or net cash flow. If the lessee does well, the lessor does too. However, if the lessee’s business is a loser, so is the lessor….(more)

    • The High Risk Problem Property

    In any market, good or bad, there are always problem properties. Most are only troubled or problem properties because of the current ownership. Some may be neglected only because the present owner has failed to do fairly simple things that can solve the problems. Buying property and solving problems is a profit-making business…..(more)

    • Controlling Delinquent Rents

    A critical indicator of a management company’s success is their effectiveness in controlling overdue rents. A well-run property should not have chronically delinquent tenants. However, when delinquency does occur, immediate action must be taken. A list of all delinquent rents must be prepared showing all tenants who have not paid, or for those who have partially paid rents and other monies due. In addition, a delinquency report recording the manner and date of all collection attempts should be prepared…..(more)

How To Avoid Costly Commercial Real Estate Investment Mistakes

This month’s newsletter has just been released! Check out the latest tips for tenants and users of commercial real estate space.

In this issue

    • The Single–Tenant Investment Property

    Around 25% to 35% of the value of commercial properties are single-tenant properties. This large percentage means that institutional investors such as pension funds, as well as smaller investment groups must consider this type of investment. There are many uses ranging from office to industrial to retail. They can include office buildings, warehouses, department stores, supermarkets and other retail use. There are advantages and disadvantages in this type of ownership compared to multi-tenant properties…..(more)

    • Turning Around A Neglected Property

    It is hard to believe that someone can totally neglect a valuable investment property like a multi-unit office building or an apartment complex. It happens. The run down property may have been acquired from a seller who did not understand real estate investments and failed to manage it at all.
    The professional investor can usually spot the low-priced and currently unprofitable income property that can be purchased, then upgraded with some reasonable expense so that it becomes a cash flow property. That property can then be added to the investor’s real estate portfolio or quickly sold for a profit…….(more)

    • Good Planning & Marketing Gets Tenants

    When an investment property is located in an overbuilt market, the marketing effort for tenants must have good planning and direction. Just throwing large amounts of money into the effort can be a waste. Rather than broad advertising, a narrower action may be required. Keeping the local brokers who specialize in leasing constantly updated about the amenities of a certain building may be the best way to make it more marketable…..(more)

    • Costly Investment Mistakes To Avoid

    Now may be the time to start thinking of the next real estate investment.
    You must pick the right property for you. Sometimes, even the best thought out plans do not work out. Investments in real estate can turn out badly even in the best of times. Investors may then blame the loss on the “real estate cycle” when there were mistakes that could have been avoided by better planning and analysis…..(more)

    • Corporate Shared Office Space

    With the new revolution in communications, building owners must keep up with the changing needs of the corporate tenant. Often the larger, well-organized businesses do not need the space that was necessary just a few years ago. Electronic communications to and from employees have substituted for leased office space. Managers are more willing to grant favorable lease terms to operators of shared space. The operator sometimes receives a monthly management fee for operating the shared space plus a portion of rent revenues over a certain amount……(more)

How To Increase Market Value In Todays Market

This month’s newsletter has just been released! Check out the latest tips for tenants and users of commercial real estate space.

In this issue

    • Modernize An Older Building

    When you want an increased return on an older property it may be time to modernize the property. When you look around a community, you will usually find a number of properties that need to be upgraded. Some existing owners do not recognize the increased return that they could get or do not want to make the necessary investment. Often these buildings can be acquired at a price that reflects the return based on the current condition and income. When you set out to modernize an older building, you will encounter three kinds of deterioration or obsolescence: The first of these, physical deterioration, starts immediately after the building is completed and continues throughout its entire life, unless it is handled along the way with proper maintenance and repair. This type of deterioration usually can be taken care of by routine repairs and replacement of parts. Anytime the acquisition of a run-down building is being considered, the investor must be certain that the deterioration has not become so bad that the building will have to be demolished…..(more)

    • Communication Between Management And Owner

    For success in achieving the owner’s objectives, there must be open communication between the owner and the management company. The process must be continuing from the onset of the management plan based on the owner’s objectives to the dissemination of monthly and annual financial reports for the owner’s records…….(more)

    • The Need For Both Asset And Property Managers

    When owners of large portfolios of investment properties need to make strategic business decisions involving management of these properties, they will usually call on asset managers. Areas of concern are overall leasing strategy involving rental rates and tenant concessions, in addition to repositioning or redevelopment, tenant mix, managing bulk service contracts…..(more)

    • Increasing Market Value

    Investors purchase residential and commercial income producing real estate to make money. There are two obvious ways of making money from a property. First, the owner takes a share of the annual operating profit generated by the investment, and Second, profits from increasing the market value of the investment beyond what it would be because of inflation alone……(more)

    • Benefits Of Commercial Condos

    When the word condominium is mentioned, do you always think of residential properties? Of course, most condominiums are ones that people live in. But, let’s consider the other condominiums. There are all kinds. Any type of rental real estate can be converted to a condo. There are a growing number of commercial condos, many of them professional offices. The benefits are the same as owning a free standing building used as an office. A leading benefit is the security of having an owned unit free from any problem of having to move at the end of a lease period. Like owning any commercial property, interest on loans, taxes and expenses can be deductible……(more)

How To Find More Ways To Increase Commercial Real Estate Investment Income

This month’s newsletter has just been released! Check out the latest tips for tenants and users of commercial real estate space.

In this issue

    • How To Find More Ways To Increase Commercial Real Estate Investment Income

    We are certainly all looking for ways to increase income. Sometimes the possibilities for changes are right before us. If you now own a commercial property or an apartment complex, you might try looking at the property with “new eyes” to see if you can spot any changes that could make you some extra rental income….(more)

    • Agreement Between Owner And Developer

    The acquisition and improvement of land is a large-scale operation and requires large amounts of capital. This has created methods of land acquisition that gives the developer access to and control over a large enough tract to make development economical without requiring an initial outlay of all of the capital necessary to acquire such a tract.
    From the point of view of the landowner, the disposal of a large tract at a good price may require a formula that will encourage the developer to commit improvement and development money for part of the tract that will build future value into the entire tract…….(more)

    • ​​​​​Investment Property Inspection

    When a buyer makes an offer on an investment property, it is usually only after a thorough inspection of all of the data that is available on the financial records of the building. Certainly, a good physical inspection is also made. Some investors pay more attention to the data than the structure. The physical inspection of the property could be as important or more important than the rents and expenses. By thoroughly inspecting potential investment property, a buyer may be able to……(more)

    • Land For Residential Development

    Land investment is much more complex than it was a few years ago. Because of expanded regulation and environmental concerns, the development process is much longer and so more expensive. The time from the initial raw land purchase until final sale of completed homes may be as long as 10 years.
    Despite this, the purchase of raw land or partially developed land has the prospect for big profits without the burden of active property management……(more)

    • Investment Planning For Everyone

    A prospective investor may have a problem getting started with a real estate investment because of the great variety of properties that are out there. They may be fearful that someone will “sell” them something – something that is wrong for them. An answer to these problems can be an interview with an interested professional real estate broker who can act as a real estate investment counselor. Each prospective investor can be interviewed in depth to find out specific needs in an income property. At the same time their needs are being evaluated, the broker will also communicate what benefits are available in various properties and how to identify them…..(more)

How To Avoid Costly Mistakes In Commercial Real Estate

This month’s newsletter has just been released! Check out the latest tips for tenants and users of commercial real estate space.

In this issue

    • Costly Mistakes In Real Estate

    Investors sometime make investments in real estate that turn out badly. They may then blame the loss on the “real estate cycle” when there were mistakes that could have been avoided by better planning and analysis. Based on data obtained through interviews with more than 200 real estate practitioners, several costly mistakes were identified and discussed. Here are three of them: …(more)

    • Be Ready With Emergency Plan

    Building owners and managers need to be aware of their obligations to their tenants for emergencies that can happen in buildings. Emergencies like fires, power failures, bomb threats, crimes, civil disorders, wild weather are just a few that could happen. Be prepared! Emergencies happen when least expected, so office-building and apartment managers must be ready in advance and have a plan prepared. Here are some components of a plan of preparation for emergencies in buildings……(more)

    • ​​​​​How To Control Property For Maximum Gain

    Some investors look for the short-term investment with less of an emphasis on “doing business” and more pre-investment research on controlling property for the maximum gain in the short term. These investors often use the option or purchase-option. Traditionally, most real estate investors have been attracted to commercial real estate opportunities. Typically these investors have been well rewarded for their investment. Properties that are designed for “doing business” proliferate and succeed as businesses grow and diversify and become more and more profitable. For investors to be successful it is normally important to understand the operation of the particular commercial enterprise involved in the real estate investment…….(more)

    • Why Warehouses Are Money Makers

    When Syndicates, partnerships, investment companies and their individual participants look at investments in commercial properties, many tend to look at properties that have that bewitching charm of glamour in brochures. A beautiful office building or an enclosed shopping center seem to have a more acceptable “status” as an investment property. These buildings can be nice to drive by and point out as “our” investment. Originally, any property designated as a “warehouse” would always be located in areas zoned for industrial use. There is not nearly as much allure in a squat bulky warehouse building. The physical attractiveness is not there in color flyers and photographs. However, as money makers, these bulky buildings can be a very profitable real estate investment……(more)

    • Real Estate Investment Guidance

    Which way is the right way in real estate investments in 2022? What is the future in these investments? An answer to these questions can be an interview with an interested professional real estate broker who can act as a real estate investment counselor. Each prospective investor can be interviewed in depth to find out specific needs in an income property. At the same time their needs are being evaluated, the broker will also communicate what benefits are available in various properties and how to identify them.
    Some considerations should be given to the risk of loss for each age bracket of investor. Should an older investor purchase a property with the smallest down payment and highest leverage position? This will limit cash flow and may cause the property to have a “negative” cash flow. Is this what they want – or do they want cash flow from the property?….(more)

A​ Checklist For Closing A Commercial Lease

This month’s newsletter has just been released! Check out the latest tips for tenants and users of commercial real estate space.

In this issue

    • A​ Checklist For Closing A Commercial Lease

    When all of the negotiations have been completed, the broker and tenant have agreed to the terms of the lease. Now all that is left is the lease closing. Often there are so many back-up papers that must be produced, examined and approved, the closing can be held up because of a forgotten document.
    Following is a checklist that provides basic information on typical documents that may be required at a closing. It is a starter list, and may be expanded so that it is complete for your particular property….(more)

    • How A Small Shopping Center Can Be A Good Investment

    When you are looking at shopping centers, bigger is not necessarily better. While a well-run regional or super-regional shopping center can produce a good financial return, so can a successful small-market shopping center. In many cases, the small town center can turn out a better return. One of the benefits is the control that the owners can have by being “the only game in town”. This can help generate high returns……(more)

    • ​​​​​Definition Of A Shopping Center

    ​​​​We have all kinds of shopping centers from the smallest strip center up to the super centers. In a case in a federal bankruptcy court, the court was required to distinguish between a “shopping center” and other types of retail properties. The federal bankruptcy code did not define the term. The Third Circuit provided the following 14 elements to be used in determining whether a property is a shopping center……..(more)

    • Investment Opportunities In Commercial Real Estate

    There are a wide range of opportunities out there in commercial properties. Commercial properties provide space for businesses, and the kinds of properties are as diverse as the businesses.
    Following are the major categories of commercial properties:……(more)