Charlotte NC Commercial

by Rob Cassam, CCIM

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)

Is High Risk Commercial Property Right For You

Written March 4, 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 Secure Is Your Commercial Building?

    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)

    • Important Things To Check With Ground Leases

    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 Use Of Other Peoples Money

    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……(more)

    • Is High Risk Commercial Property Right For You

    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)

    • Loans For Land Development

    When an investor purchases land to build on, the next step is land development and financing. “Land development” cannot be precisely defined; generally, it refers to the physical, legal, and engineering processes needed to convert raw land to land (or lots) on which buildings can be placed.
    Land development can be classified into the following six stages…..(more)

How To Invest In Neglected Commercial Property

Written February 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

    • Good 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.
    Here are some other ideas……(more)

    • How To Invest In Neglected Commercial 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)

    • Advantages and Risks For Single Tenant Properties

    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)

    • Space Sharing For Executive Suites

    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.
    Solving Tenant’s Needs…..(more)

    • Help With Investment Real Estate

    When you have searched for new real estate investment opportunities, with values that have been changing, you know that finding and evaluating them is becoming more sophisticated and complex. More investors are turning to real estate consultants as a means of providing a sounding board for their ideas as well as expertise in the planning and construction stages for their projects.
    Today’s investor in real estate must have a grasp of market conditions and potential that is usually beyond their own available time to attain. Investors need assurance about the true condition of the market. With increased competition, the market place is becoming more complicated…..(more)

Money Making Commercial Property Management Strategies For Your Real Estate

Written January 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

    • Investment Property Inspections

    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)

    • ​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)

    • Upgrade And Modernize The Property

    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: physical deterioration, functional obsolescence, or economic obsolescence……(more)

    • Tailoring A Management Plan

    Real estate investments can be set up to generate one or more types of returns…….(more)

    • Help With Investment Real Estate

    When you have searched for new real estate investment opportunities, with values that have been changing, you know that finding and evaluating them is becoming more sophisticated and complex. More investors are turning to real estate consultants as a means of providing a sounding board for their ideas as well as expertise in the planning and construction stages for their projects.
    Today’s investor in real estate must have a grasp of market conditions and potential that is usually beyond their own available time to attain. Investors need assurance about the true condition of the market. With increased competition, the market place is becoming more complicated…..(more)

The Benefits of Commercial Condos

Written December 1, 2019 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

    • Developing A Preventative Maintenance Program

    Preventative maintenance is one of the most important components of successful property management. An aggressive preventative maintenance program should be developed for both large and small properties, regardless of whether building staff consists of only a part-time maintenance worker or a larger number of employees supported by a computerized maintenance program. Aggressive maintenance means trying to foresee any problem. Maintenance of any commercial or apartment building should be handled as much as possible on a routine basis rather than on an emergency one. Preventative maintenance must be performed on a regular basis to keep the level of service at the property high and to reduce equipment breakdowns and service interruptions. Toward this end, the maintenance staff and on-site manager should make regular inspections for the repair and replacement of items before problems occur. Preventative maintenance reduces the number of emergencies by anticipating wear and tear that the property, buildings and equipment will undergo……(more)

    • ​An Emergency Plan In Your Building

    Building owners and managers are becoming aware of their obligations to prepare for emergencies that can happen in buildings. The examples of the terrorism emergencies or fires throughout the country and the world are reminders of what can happen. Emergencies happen when least expected, so office building and apartment managers must be ready in advance and have a plan prepared. Things that can happen are fire, power failure, bomb threat, crimes and civil disorders. Here are some components of a plan of preparation for emergencies in buildings.
    …….(more)

    • Possibilities For Increasing 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. Of course, if any structural changes need to be made, or changes that would be affected by zoning regulations, etc., proper permits need to be secured, and contacts with the government agencies that would be involved should be made in advance…….(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)

    • Help With Investment Real Estate

    When you have searched for new real estate investment opportunities, with values that have been changing, you know that finding and evaluating them is becoming more sophisticated and complex. More investors are turning to real estate consultants as a means of providing a sounding board for their ideas as well as expertise in the planning and construction stages for their projects.
    Today’s investor in real estate must have a grasp of market conditions and potential that is usually beyond their own available time to attain. Investors need assurance about the true condition of the market. With increased competition, the market place is becoming more complicated…..(more)

How To Control Property With Purchase-Option

Written November 4, 2019 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 Control Property With Purchase-Option

    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)

    • ​Cooperative Land Development

    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. This may be accomplished by the following……..(more)

    • Why Warehouses Are A Great Investment

    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……..(more)

    • ​Real Estate Investment Guidance

    Which way is the right way in real estate investments in 2020? 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)

    • Costly Mistakes To Avoid 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)

Investment Opportunities In Commercial Real Estate

Written October 10, 2019 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

    • Investment Opportunities In Commercial Real Estate

    nvestors in real estate may have become fixed on one type of commercial property. There are a wide range of opportunities out there. 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)

    • ​Why The Small Shopping Center Is 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)

    • The Legal 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)

    • ​A Checklist For Closing A Commercial Lease

    When all of the negotiations have been completed, broker and the 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……(more)

    • Common Buyer Types Of Commercial Real Estate

    When we represent a seller of a commercial property, we try to determine, as soon as possible in the marketing process, what type of buyer is most likely to be interested in this particular property. We then focus the main appeal on those elements that are most important to that type of buyer. ……(more)

    • Are These Items In Your Leases

    The following is a useful list of items that should be clarified between the parties in the lease of a commercial building……(more)

Are These Items Included Your Commercial Leases

Written September 1, 2019 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

    • Condominiums For Business Owners

    Like apartment dwellers who are finding that it is less expensive to buy than to rent, business and professional firms are moving toward buying offices rather than leasing. While buying or constructing an entire building is an option for major corporations or for smaller firms outside metropolitan areas, owning commercial space generally means being part of a
    condominium structure…..(more)

    • Consider Who Might Be The Buyer When You Want To Sell

    If you are new to investing in income property, you may have made a choice in advance of the type of investment property that you wish to own. There are many good types of investment properties: apartments, office buildings, shopping centers, high rise parking garages in downtown areas, warehouses, resort rentals and many others. Each of these takes a different type of management……..(more)

    • The Appropriate Management Plan

    Real estate investments can be set up to generate one or more types of returns: Cash flow to owners (yield or return on investment). Appreciation of owner’s capital (capital appreciation).
    Shelter of cash flow and/or other income from taxation (tax benefits). Preservation of capital (safety). Once the owner specifies the type(s) of return desired, the mix of returns, and expected timing, the property manager can develop an appropriate management plan……(more)

    • Space Sharing Executive Suites

    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. 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)

    • Quick Profits When A New Hospital Is Built

    What happens to nearby property values when a new hospital is built? Usually the surrounding area feels a ripple effect. Land values increase. Developers are quick to provide new space for offices and stores. The biggest profits are realized by the investors who get involved early (during the planning stages) before or while the hospital is built. In one location in the Southeast, as a new hospital went up, the area around it began to pop its economic seams. Among the new activities that created an abnormal demand on land located near the hospital were: ……(more)

    • Are These Items In Your Leases

    The following is a useful list of items that should be clarified between the parties in the lease of a commercial building……(more)

How To Prepare A Commercial Loan Request Package

Written August 2, 2019 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

    • Preparing A Loan Request Package

    When preparing a loan request package for presentation to the lender, the real estate borrower must be as complete as possible the first time. Insufficient, imprecise, or incorrect data in a loan request package can mean a rejection for an otherwise attractive real estate loan. Following are suggestions on things to include with the loan request package…..(more)

    • Creating An Apartment Sales Package

    ​​​​​​​​​When we are marketing your apartment property, we have a two-fold job facing us. First, we must persuade the prospective buyer to go out to see the property, then, second, get him to see it though your eyes, with its full potential fully realized. Creating the well-conceived descriptive sales “package” or report on the property can help to accomplish both of these aims…….(more)

    • Matching Tenants To Apartments

    Property managers must always think about the type of tenant that is most likely to reside in that particular building. For example, when apartments in a project rent for lower monthly amounts per year, tenants will be concerned primarily with shelter……(more)

    • The Power of An Assemblage Option

    The option is an extremely versatile investment tool that comes in a variety of forms and can be used for a variety of purposes. The best part of an option is that it gives the optionee (the party holding the option) control over property (in the sense of the right to acquire it) for a very small cash outlay……(more)

Land Development Agreements and What You Should Know

Written July 15, 2019 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 of Condos

    Whether the condos are converted from apartments or built from the ground up, the builder-developer, the project lender and even the unit purchaser in a condominium project should all be concerned with the proper management of the project. Without good management, a project can quickly lose its value and begin a downturn….(more)

    • The Corporate Negotiating Team

    ​​​​​​​​​A corporate negotiating team is now part of the major decision making process in the acquisition of real estate and lease negotiations. 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.
    In today’s market, corporate tenants with high credit ratings, who are willing to make long-term lease commitments negotiate from a strong position. Therefore, corporations that formerly treated real estate transactions in a matter-of-fact way have now developed detailed real estate negotiating strategies. The corporate tenant sees these negotiations as a way to cut costs within the company (whether upsizing or downsizing). Landlords, developers, and brokers must be aware of this new style of negotiation. While the real estate executive plays a key role in developing the strategy, the other parties must be ready to respond quickly to requests for information and be prepared to discuss issues that rarely if ever arose in the past……(more)

    • The Value of a Master Lease

    ​​Business leaders are optimistic about the long-term future of corporate development. When new development is occurring in a market and developers are anxious to sell when the construction is complete, use of a master lease may facilitate a sale before the lease-up period is ended. A master lease is a form of seller guarantee that has several specific goals:…..(more)

    • Land Development Agreements

    ​​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)