Of course most business operators know this but, often times they d not have the necessary time to brush up on all the issues.  As I have said before, it does make sense to hire help when dealing in these matters.  In most cases, that help can be an invaluable resource when moving forward with a lease or purchase.

In this newsletter, I remind you to check the market and to find out what is happening in the world of lending. I hope you enjoy this issue, Click Here!

Although there are still products like construction/development loans that have not returned to the market,  investors are eager to lend on commercial properties. Most of the underwriting guidelines are different depending upon the property and loan type, which makes commercial financing more complicated.

So where is a good place to find such information? Contact Alan Mayhew at Capital Mortgage Group, 704-664-3611

When I first heart this, I thought it was something from a fishing show. As I read further, I realized just how important this concept is to real estate buyers.  This describes the predicted shape of the recovery from this recession.  Predicting what may happen can be a huge benefit for investors deciding when and how to get into this market if buying real estate is part of your business plan.

See the different types of potential recovery shapes at this link:
http://en.wikipedia.org/wiki/Recession_shapes

The following business week article discusses the W shaped recovery prospects that we face. I invite you to search the Internet for descriptions of the different recoveries. 

http://www.businessweek.com/news/2010-03-25/ecb-s-wellink-says-global-economic-recovery-could-be-w-shaped.html

The bottom line with respect to recovery shapes is to try and time the market. The good thing regarding the W shaped recovery, it that the bottom may exist at least a couple times and even it you do not time it just right, if you wait long enough, the property will go up in value (as long as your original fundamentals are right)! 

If you do not know the fundamentals of investing in real estate, STOP and do not move forward until you do.

Knowing these options, asking for them and incorporating them into your next transaction will give you the piece of mind needed to navigate these turbulent economic conditions.   I hope you enjoy this edition of the Tenant Buyer Bottom Line Secrets!

Take that number and divide it by 50 working weeks in a year, next divide that number by 40 hours per work week. This figure is what you are worth per working hour.

Time- $_______ (your yearly salary here) / 50 working weeks/ 40 working hours per week = $ _______ THE VALUE OF YOUR TIME

Don’t you think that your time is better spent running your business and not doing something that can easily be out-sourced ???

Don’t forget that in most cases real estate brokers who represent tenants are paid out of commission splits with the property owners leasing agents, that means it costs you nothing! That is the portion of commission you let the listing broker keep if you do your own transaction without professional representation.

On the tenant-buy side of the commercial property equation, it makes sense to find someone, who can help you with respect to making these important business decisions.  My advise is to find someone!

Q How can a broker save me money if I am going to simply renew my lease?
A. The broker should provide the comparable market conditions which result from a complete market study, this will give you the ammunition you need to make sure that your renewal lease is not abusive on the rate. Knowing what other concessions are being offered in the market place helps you get all that you are entitled in the renewal.

Q. What other areas of cost savings exist, other than the lease rate per square foot?
A. Tenant improvement allowances, escalation methods and abatements are key areas available for dollar savings.
Large companies with multiple leases can benefit from real estate consulting services like Workplace Consulting, Information Management, and Program Management. These services can be use to trend occupancy costs downward substantially. Your broker should be able to help you negotiate these items during the relocation or renewal process.

Q. Should I lease or buy?
A. The answer to this question should be answered only after careful consideration of your firms long term goals. In areas where real estate is appreciating (like Charlotte, NC) purchasing can be a very profitable approach. Consultation from a real estate broker, financial planners (CPA’s) and bankers can shed light on all of the key areas to consider before making this decision. The level of active involvement you desire with the investment should be carefully considered.

Q. What if I am short on the down payment needed to make a purchase?
A. There are several great loan programs available today. These programs coupled with SBA loans, can get small business operators into properties from 0-10% down! Many developers and investors will partner with businesses who are able to commit to lease-purchase option or land trust conveyance. Clearly, the nature of your real estate needs will dictate exactly how the deal could be structured. See your broker for details.

It is all included in this months issue of the Tenant Buyer’s Bottom Line Secrets- January 2010 Newsletter Edition

Make certain that the obligation to pay rent and other charges do not begin until the tenant improvements are complete.

Determine whether the landlord will be designing and constructing the tenant improvements at its sole cost (a “turnkey” arrangement) or whether the landlord will be giving the tenant an allowance, with either the tenant or landlord designing and constructing the improvements (an “allowance” arrangement).

Before entering into the lease, in an allowance arrangement, the tenant should have final space plans and estimates for the work so that the tenant is not exposed for the cost of improvements in excess of the landlord’s allowance or, at the very least, will know how much it will have to pay.

In both turnkey and allowance arrangements, the tenant must be certain to work with a competent broker and space planner to make certain that the space will be built out to satisfy the tenant’s needs

.

Where the landlord does the design work, reserve the right to look at, review and approve all designs and materials utilized, and the right to make changes up through the design stage of the tenant improvement design documents.

Additionally, in an allowance arrangement, make sure that the allowance will not be used up for base building work, such as bathrooms located in common areas, asbestos abatement, or sprinkler systems.

Agreement should be made as to the disposition of the landlord allowance if the actual tenant improvements cost less than the allowance. The landlord would like to keep the unused portion of the allowance, but the tenant should attempt to get the landlord to apply the allowance to the costs of other work that is the responsibility of the tenant under the lease or work letter, pay it to the tenant, off-set it against future rent, or allow the tenant to use some portion of it.

Negotiate remedies for landlord-caused delay and carefully define and limit the consequences of tenant-caused delay.

If you are not sure what you are doing, get help! See your attorney or tenant rep broker!

I suggest that the move be broken down into eight easy to manage phases:

1. Inventorying all items to be moved, refurbished or sold.

2. Developing an action plan for the move.

3. Preparing RFP’s and obtaining estimates from the movers and firm bids from other vendors.

4. Selecting a moving company and other vendors to be used in the move.

5. Educating your employees about the move.

6. Packing and preparing your furniture, equipment and contents for the move.

7. Supervising the actual move.

8. Post move follow up.

It is all included in this months issue of the Tenant Buyer’s Bottom Line Secrets- January 2010 Newsletter Edition