Charlotte NC Commercial

by Rob Cassam, CCIM

Real Estate Options- A Powerful Investment Tool

Written January 8, 2021 by
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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

    • Condos – Developments And Conversions

    Most anything that can be subdivided to be sold or rented can be developed or converted to condominiums. When we say “condo” maybe the apartment might come to mind first. Then, you may think of the commercial office building that was converted to condominium offices. Less common are the other, unusual types of condo developments such as condo parking garages, boat marinas, and other properties that are usually rented. Here are examples…..(more)

    • Real Estate Options- An Investment Tool

    ​​​​​​​​​​​​An option on real estate is an extremely versatile investment tool that comes in a variety of forms that can be used for a variety of purposes. The primary use of the option is that it gives the optionee (the party holding the option) control over property (in the sense of the right to buy it) for very little cash. It gives the most leverage and conserves cash, both very desirable for investors. An option gives the holder the right to buy a specific parcel of real estate at a specified price, on specified terms within a specified period. An option can be compared to (1) a contract of sale with a liquidated damage clause, (2) a sale with a nonrecourse purchase money mortgage, and (3) a lease containing an option to purchase……(more)

    • ​​​​Percentage Lease And The Seasonal Business

    The choice of the type of lease for commercial space leased by a retail business is usually a percentage lease, meaning that the rental amount is determined as a percentage of the gross receipts of the business. The investor-landlord, in effect, takes a stake in the success of the tenant’s business and shares its ups and downs. Whether it is a hardware store, a furniture store, an ice cream and confections store, a supermarket, or a variety store, the percentage rental will depend on the turnover of merchandise, the margin of profit, and the cost of operating the business……(more)

    • Changes In Shopping Centers

    Shopping centers have been changing. Increased spending power in the population is supporting new mall construction and the renovation of existing centers.
    Now the newer and renovated centers are becoming more mixed use, with hotels and office buildings being incorporated into the plans. Larger malls are providing more than just shopping. We are seeing more cultural attractions, medical clinics, health clubs, spas, and other facilities locating there……(more)

  • Owners And Tenants Must Have Insurance

​​Insurance coverage must be addressed by both landlords and commercial tenants. For the run-of-the-mill daily problems, a landlord must have the maximum coverage for the building and the tenant’s leases. The tenant must cover the business with coverage that will protect his business. What if you have a small disaster that is easily repaired, but you lose a tenant because he was not covered for the damage inside the business?……(more)

The Professional Approach To A Lease Renewal

Written December 1, 2020 by
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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

    • Build To Suit and Flex Buildings

    There has been a move on the part of industry to relocate from the cities to the suburbs during the past few decades. The result of this has been the establishment of industrial and office parks in those suburbs. Many of these have been planned and developed by private investors; others have been planned or sponsored by public agencies. Preparation for construction of an office or industrial park is expensive. It includes plotting, grading, and installing streets, utilities, rail connections and other facilities. With the increasing difficulties in securing clearances and permits, speculative development in building these facilities is down……(more)

    • The Role Of An Asset Manager

    ​​​​​​​​​​The institutional investor has found that income property must be placed under the supervision of professional, experienced and innovative managers. With more property moving into the ownership of institutions and real estate investment trusts, the need for asset managers increases……(more)

    • ​​​​Office Building For Attorney Only

    Property managers must show some imagination to keep a property fully rented. One way to keep an office building occupied is to consider specializing–renting to members of one professional field…….(more)

    • The Professional Approach To Lease Renewals

    No matter what the current vacancy factors are in any area, tenants feel they can negotiate with the landlord, whether in an apartment building, an office building, or commercial center.
    With other space available in the local rental market, the tenant will certainly be aware of all the possible terms for a lease renewal. If the owner or manager of the property is inflexible and unreasonable, tenants know they will have no trouble finding available replacement space in a building nearby. A professional manager is aware that a prolonged lease negotiation can quickly result in a vacancy. In an eagerness not to lose prime tenants, landlords may try to sweeten the pot by offering new amenities or higher levels of service than tenants actually would ask for. These promises may not even be necessary……(more)

High Leverage Benefits With Options

Written November 20, 2020 by
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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

    • Leased Property- An Estate For Years

    There are real estate investors who specialize in making profits, sometimes big profits from properties that they lease and do not own. This cash flow from a lease can be extremely interesting. Often the lessee making a huge profit has a relatively small cash investment in the property…….(more)

    • High Leverage Benefits With Options

    ​​​​​​​​​​Leverage is the use of borrowed money to control something of value. Real estate investments for many years have afforded the investor some extreme leverage situations. Let’s examine leverage. If double-digit inflation returns, controlling the maximum amount of real estate may be extremely desirable……(more)

    • ​​​​Land Acquisition Plans

    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……(more)

    • The Future Of Investments

    Which way is the right way in real estate investments in 2021? 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……(more)

How To Understand The Different Commercial Lease Types

Written October 1, 2020 by
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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 Understand The Different Commercial Lease Types

    Whether times are good or bad, lenders always have foreclosed properties in inventory. During a recession the inventory may be high. One of the problems that banks and insurance companies have is disposing of this real estate owned (REO). They are faced with the decision of whether they wish to dispose of the property immediately or hold it for a period of time to hope for an increase in value. They would like to see the value of the REO increase to equal the loan amount……(more)

    • Lenders and Property Managers A Service Joint Venture

    With the 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. Teleworking with computers, faxes and e-mail have substituted for leased office space. Office personal are working from home or a small office near their home and coming into the office once in a while for a meeting. Managers are more willing to grant favorable lease terms to operators of shared space…….(more)

    • ​​​​Prospective Tenants For Commercial Centers

    Owners must think about vacancies when checking a prospective tenant. Will the tenant’s business survive? When you have a prospective tenant for a commercial center, you must consider whether that prospect would be a good tenant. There are two key standards to apply; (1) the prospective tenant’s financial stability; and (2) the prospective tenant’s potential for success…..(more)

    • Providing Rentals For Seniors

    Not all retired people want to own their own home. Many prefer to be tenants. Many feel that the proceeds from the sale of their old home can be used to supplement their pension and social security, rather than reinvested in another home. The money can be used for travel, visits to children and grandchildren or for medical expenses……(more)

How to Determine Market Value With Appraisals

Written September 1, 2020 by
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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 Determine Market Value With Appraisals

    The purpose of any real estate appraisal is to determine the market value of the property being appraised. The handbook of the Appraisal Institute defines market value as……(more)

    • Creative Management And Other Ideas

    With the 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. Teleworking with computers, faxes and e-mail have substituted for leased office space. Office personal are working from home or a small office near their home and coming into the office once in a while for a meeting. Managers are more willing to grant favorable lease terms to operators of shared space…….(more)

    • ​​​​Filling Vacancies In Office Buildings

    Office buildings are excellent commercial properties to own. One of the most important jobs of a leasing agent for a building with available space is to analyze other buildings to see if any tenant could be induced to move. Newer buildings may fill up at the expense of older buildings. Since new buildings cost more to build than the older ones,rents may be higher. The actual dollars-per-square-foot costs must be compared, along with other benefits that the tenant may receive, before a final decision is made by the tenant on staying or moving. Here are some of the items for comparison……(more)

    • Climate-Controlled Self Storage

    A feature that developers and owners of self-storage properties are adding to increase the appeal to more users is climate-controlled space for storage of microfilm, computer records, antiques and other sensitive materials…….(more)

How To Control Property With A Purchase Option

Written August 1, 2020 by
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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

    • Controlling Property With A Purchase Option

    A purchase-option contract lets the buyer-optionee purchase a property at a specific price within a certain period of time. If the option is exercised, a closing is held and the property is purchased at the price previously agreed upon. There is no legal obligation to buy the property. But, if the optionee does not exercise the option, the deposit paid to the seller-optionor is forfeited.The biggest differences between the purchase-option and direct ownership may be two advantages from the viewpoint of the investor: First, the short term (6 to 24 month) purchase option contracts can be an outstanding way to control property without assuming the responsibilities of ownership. Second, the contract enables the optionee to receive all of the benefits from appreciation in market value of the property……(more)

    • Investing In Apartments

    ​​​​​​The demand for apartment rentals remains very strong, but good management has always been the most important point in increasing or maintaining annual operating profits. Being a skillful manager requires intelligent handling of the functions of buying and selling properties, rent collections, maintenance, leasing, controlling expenses, refurbishing, management accounting and more. All of this requires long “hands-on” experience in the field with plenty of assistance from the latest in operational and administrative hardware and software. Professional management companies usually do a much better job than owners and more than earn their fees. Here are a few tips on types of apartments and ways to invest in them…….(more)

    • Acquiring Investment Land

    Land is one of the top investments by real estate professionals. Before any building project can be planned, the land must be available. At all times, real estate assemblers are looking at and acquiring under-utilized sites within cities or in suburbs. Here are some ideas on how those professionals do it……(more)

    • The Upkeep On Your Rental Property

    Keeping your property in top condition is not difficult if it is a continuing effort. There will be a plan in place for making ongoing improvements by investing a portion of each year’s income. Failure to do this will result in a neglected property. Many investment properties suffer from improper care and neglect. Getting started on the program of enhancing the value should focus first on three areas. These three will immediately make an office or apartment building begin to stand out…….(more)

    • The Multi-Screen Theatre In A Shopping Center

    The key tenant in a shopping center is often a store from a nationwide chain that carries a wide variety of quality, brand-name items. But the multi-screen movie theatre may attract more people, more often than any type of store. Instead of signing just a department store as the anchor tenant, some shopping center owners and operators have decided that a movie theatre is a better drawing card for shoppers and have signed up both as key tenants. Either before the movie begins or after it is over, people can and will shop. Usually, all of the family members will come to the theatre, although not all together or at the same time. It has appeal for the whole range of spenders, from Mom and Dad to teenagers and their friends. By encouraging people to “get out of the house”, movies also encourage these people to combine a shopping trip with a few hours of movie entertainment…….(more)

How To Anticipate Problems In Choosing Investment Property

Written July 6, 2020 by
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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

    • Important Variations in 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. There could be many more depending on each property……(more)

    • Important Information For The New Property Manager

    ​​​​​​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)

    • Investing In Land For Long-Term

    ​​​​​​​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. When an investor puts money into land it is for the potential payoff when the land is sold. It is a very worthwhile investment when the land’s price skyrockets and the “cheap” land becomes highly treasured property……(more)

    • Lease Negotiations With Large Corporations

    ​​​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)

    • A Comfort Zone With Loans and Investments

    Each investor has a “comfort zone” about loans. The leverage seeker wants the largest loan that is practical. Others may have experience or training that calls for no loans at all. They must have the property free and clear. Most of us have a loan comfort zone somewhere between these extremes. Nearly everyone accepts the idea of some sort of mortgage. The use of OPM (other people’s money) makes sense. The comfort in loans may affect the type of investment. Many of these “free and clear” owners prefer land as the investment. They want no improvements on it, just the bare land……..(more)

    • How To Anticipate Problems In Choosing 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)

How To Turn Cash Flow From Negative To Positive

Written June 1, 2020 by
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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 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.
    One six-tenant office building was leased out several years ago. After a few years operating expenses rose sharply and exceeded the gross rental income. However, the leases on all the units will soon expire and there are no renewal provisions. That means that there will be new leases negotiated. Leases that provide for higher rentals will replace the old below-market leases. The building’s negative cash flow will soon become positive…..(more)

    • Pre-Leasing For Construction Loans

    Whether it’s a new office building, industrial warehouse, retail shopping center, or high-rise residential apartment building, investors and lenders increasingly demand to see a substantial portion pre-leased before they are willing to put up construction money. Purely speculative construction projects are rare in today’s real estate market.
    People are reluctant to invest in buildings that do not have good strong prospects for leasing. The old days when developers and investors would go in and spec a building really are rare. Now developers and investors expect to have a tenant going in and taking away some of the risk. The trend away from speculative building without pre-leasing is having a profound impact……(more)

    • Investing In Land For Long-Term

    ​​​​​​​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. When an investor puts money into land it is for the potential payoff when the land is sold. It is a very worthwhile investment when the land’s price skyrockets and the “cheap” land becomes highly treasured property……(more)

    • Contact Your Property Manager Before Your Investment

    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. The usual way that a property management company comes upon the scene is when the owner of a building makes a contact. Often the owner has just acquired the property through a purchase or exchange, then looks for a manager……(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”. Trends in the newer buildings being built and refurbished today are to make the tenants happy and content. Part of this is doing everything to make the tenant’s employees content and happy also. Skilled employees are not tied to employers as they were in the past……..(more)

How Professional Management Enhances Revenue

Written May 8, 2020 by
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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

    • Professional Management Enhances Revenue

    All owners want their properties to have increased income and so increase in value during their period of ownership. The first-rate property will command the highest price when it is sold. To achieve these goals, income property must be properly managed. The major error that can be made by an income property owner is saving money by self-management. The professional investors know that enhanced value usually comes from professional management. Since professional management teams have experience and training in the field, they will usually increase revenues and cut costs. Since the value of a building is based on the condition of the property and the cash flow, this management should increase the value and keep it at its highest potential. The difference is the professional’s ability to define and execute management duties…..(more)

    • Changes In The Workplace

    Working from home is now becoming a trend. The growing popularity is remaking how we work, the tools we use for that work, how we communicate at work, and even the hours we work.
    A major benefit to the worker is that they can buy a home or condominium outside of the business area in a suburb or at an ocean resort with the great locations that they desire and not have to think about what the daily commute will be…….(more)

    • Profits Found In Conserving Energy

    ​​​​​​​Any savings in expenses that have already been budgeted can be turned into spendable income. One expense that can be controlled to some degree is the energy used for lighting, electronics and air conditioning……(more)

    • Controlling Overdue Rents

    Acquiring land for development is necessary no matter what kind of market we are in. Professional real estate assemblers are always looking at and acquiring under-utilized sites within cities or in suburbs. Here are some ideas on how those professionals do it……(more)

    • Investing In Industrial Properties

    If you haven’t considered industrial properties as an investment vehicle, it may be time to take a look. Warehouse and distribution (W&D) properties are of interest because their standard layout suits a wide range of users, in contrast to specialized manufacturing facilities. Industrial properties look good for the following reasons:
    The market for industrial property is doing well with vacancy rates nationwide below those of other commercial buildings……..(more)

How to Acquire Land for Development

Written April 11, 2020 by
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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

    • 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. Below is a comparison of each building type based on certain property characteristics, which hopefully will shed some light on the right property profile for your situation……(more)

    • Important Restrictions On 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…….(more)

    • Unusual Pieces Of Real Estate

    ​​​​​​​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…….(more)

    • Acquiring The Land For Development

    Acquiring land for development is necessary no matter what kind of market we are in. Professional real estate assemblers are always looking at and acquiring under-utilized sites within cities or in suburbs. Here are some ideas on how those professionals do it……(more)

    • Screening For 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……(more)