Charlotte NC Commercial

by Rob Cassam, CCIM

How To Choose The Right Commercial Investment Property

Written July 6, 2018 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

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

    • 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:Energy saving potential is more important than style or appearance. Given increasing shortages of natural gas and rising prices of fuel, energy saving has become paramount for successful real estate investing….(more)

    • How To Handle First Stages Of 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: Property Description; including a detailed physical description, physical layout and plan, inventory records, equipment lists, and mix and size of units…(more)

    • How To Conduct 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)

    • 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 Professional Management Increases Value

Written May 23, 2018 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 Professional Management Enhances Value

    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)

    • Pre Leasing to Secure Construction Financing

    Banks will be making some loans on real estate during this year. The borrower will have to have documentation on everything. The loan application must be perfect…..(more)

    • Dealing With 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.
    When initial notification of the delinquency does not help, the property manager should review the lease’s termination rights and consider possible legal action against the tenant. Should a delinquent tenant suddenly vacate the premises, late charges and legal fees should be deducted from the security deposit…..(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 and for air conditioning….(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)

Why A Commercial Condo vs Free Standing Building

Written April 16, 2018 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

    • Hidden Profits In Unusual 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. 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….(more)

    • Commercial Condo vs Free Standing 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)

    • Important Considerations When Negotiating A Sublease

    With changes in business strategies, some existing tenants wanted 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)

    • How To Acquire Land For A Project

    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)

    • How To Screen Prospective 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)

Why The Land Under A Business Is The Most Valuable Asset

Written March 16, 2018 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

    • Convert And Upgrade For A New Potential

    One of the ways to increase income and value is to upgrade an older property. In every community, anyone who looks can usually find a number of commercial buildings, apartments or offices that need to be modernized. Some are for sale because the present owner may not recognize the increased return that they could get or do not want to make a further investment. The property might be purchased at a bargain price that is based on the current cash return. Don’t overlook properties that are still productive, but may have a much greater potential after a conversion. Factories have been converted to shopping centers all over the country. Old Movie theaters have been converted to multi-screen facilities. Garages have been converted to condominium parking buildings. Seeing potential profits in older buildings takes imagination….(more)

    • Why The Land Under A Business Is The Most Valuable Asset

    Anyone who owns a home that was located in a hot housing market a few years ago knows that the land can be worth more than the actual home. Now many companies are figuring out the same about their own real estate holdings. Many entrepreneurs spend their adult lives building a business up so that it can be sold at their retirement or passed down to their heirs. Now many of them are finding that the land under the business is worth far more than the business itself….(more)

    • Important Considerations In Ground Leasing

    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.
    Therefore, the lessor must consider the financial feasibility of the project. Independent analysis should show that the project represents the correct improvement of the site and that the projected payments will actually be received by the lessor….(more)

    • How To Restructure Troubled 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.
    Have you seen: An empty office building. A remodeled apartment house or hotel that has an excessively high level of vacancy. A large tract of undeveloped land that no developer has become serious about wanting to develop. These are examples of troubled property–property that is a definite financial burden to continue to hold but which also is unattractive property to some prospective buyers. Unattractive, that is, until very recently….(more)

    • Commercial Real Estate Representation

    There are a number of ways to buy, sell or exchange investment or commercial real estate. Having the knowledge of what you can do in some tax situations can be the difference between an annual profit or loss in a property that you intend to acquire or one that you already have in inventory. The professional commercial real estate broker is in the position to represent clients in real estate transactions by setting up sales, exchanges, leases, purchase and sales of options, and management of real estate. A professional real estate practitioner must stay aware of current tax laws and court decisions in order to structure transactions, but does not give legal or tax advice (unless he/she is also an attorney or a certified public accountant). In any complex transaction that might result in changes in any owner’s legal or tax situation, the other members of the “consulting team” should be the owner’s attorney and CPA. We always recommend meeting with these other professionals during the planning and closing of major real estate transactions…..(more)

How To Perform An Adequate Market Analysis Before You Invest

Written February 15, 2018 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

    • Neglected Investment Property

    It is hard to believe that someone can totally neglect a valuable investment property like a multi-unit apartment. 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 of Single Tenant Properties

    Around 25% to 35% of the value of commercial properties are single-tenant properties (STPs). 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)

    • How To Perform An Adequate Market Analysis Before You Invest

    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)

    • How To Get More Tenants In An Over Built Market

    When an investment property is located in an overbuilt market, the marketing effort 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)

    • Why Apartments Continue To Be A Favorite Investment

    Investors purchase income producing real estate to make money. Apartment properties, as always, continue to be the favorite investment property for many investors. It is possible to reap substantial rental income from a relatively small investment, with a large amount of the purchase price being financed by first and second mortgages. An advantage that apartment property offers a buyer is the usual higher ratio of building to land value that means that more of the capital investment can be depreciated. The depreciation life of residential income property is shorter than other commercial properties. Straight-line recovery for buildings is claimed over a period of 27.5 years for residential rental property vs. 39 years for nonresidential real property…..(more)

A Lease Closing Checklist

Written January 10, 2018 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

    • Lease Closing Checklist

    When all of the negotiations have been completed, broker and the commercial 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 than must be produced, examined and approved, the closing can be held up because of a forgotten document….(more)

    • Apartment Property Considerations

    There are totally different types of tenants in different kinds of apartment units. When looking at an apartment property for investment, choose the type of property you want to own, and think about where your tenants will come from….(more)

    • Critical 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…..(more)

    • Who Are The Real Buyers 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)

    • The Singles Apartment Market

    Investors who can provide the housing that satisfies the needs of the single tenant will stand to profit. We all know that the number of persons living alone has increased. Figures from the census bureau show that households that contain only one person have increased 90% since 1970. There are now more than 20 million people who live alone, more than twice the number of twenty years ago. This trend is expected to continue…..(more)

Seven Ways To Increase Investment Income

Written December 9, 2017 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

    • Emergency Planning For 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)

    • How Preventative Maintenance Reduces Major Problems

    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 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)

    • Seven Ways To Increase 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)

    • 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…..(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)

Why Warehouses Are A Great Investment

Written November 9, 2017 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

    • 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. 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)

    • How To Control But Not Own Property With An 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)

    • What You Must Know About Tax Deferred Exchanges Before Buying or Selling

    The following are points that participants in a tax-deferred exchange should keep in mind when starting an exchange transaction: Even though an exchange may be tax-free at the federal level, it may be taxable at the state or local level. …(more)

    • How To Avoid Costly Mistakes In Commercial 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)

    • What Really Is Commercial Real Estate Representation

    There are a number of ways to buy, sell or exchange investment or commercial real estate. Having the knowledge of what you can do in some tax situations can be the difference between an annual profit or loss in a property that you intend to acquire or one that you already have in inventory. The professional commercial real estate broker is in the position to represent clients in real estate transactions by setting up sales, exchanges, leases, purchase and sales of options, and management of real estate. A professional real estate practitioner must stay aware of current tax laws and court decisions in order to structure transactions, but does not give legal or tax advice (unless he/she is also an attorney or a certified public accountant). In any complex transaction that might result in changes in any owner’s legal or tax situation, the other members of the “consulting team” should be the owner’s attorney and CPA. We always recommend meeting with these other professionals during the planning and closing of major real estate transactions…..(more)

How to Pick the Right Asset Class For Commercial Real Estate Investment

Written October 6, 2017 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

    • Benefits Of A Small Shopping Center

    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)

    • Why Flex Buildings Are Attractive Investments

    A high percentage of speculative low-rise industrial buildings today are flex buildings. Developers are favorable toward the flex building as it will meet the needs of many modern sophisticated industrial building users….(more)

    • 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 Wide Range Of Opportunities In Commercial Real Estate

    Investors 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……(more)

    • The Buyer Pool For Commercial Property

    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)

Who will buy when you want to sell your commercial real estate

Written September 17, 2017 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

    • Who Will Buy 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…..(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)

    • Condominiums Built 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)

    • Suburban Office Buildings

    With investment capital becoming available, demand for commercial real estate continues. Suburban office buildings remain many investors primary acquisition target…..(more)

    • Exchanges Of Mortgaged Property

    In the straight equity for equity exchange of properties that are of like kind and held for investment or business use, there is no income tax liability at all. But there can be a tax liability when the exchange involves mortgaged property unless the right, tax-saving technique is used…..(more)

    • Investment Decisions – High Rise Or Garden Apartments

    There are distinctions between garden and high-rise apartment buildings when viewed as investments…..(more)