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)

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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)

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Real Estate

Buying and selling commercial real estate can be an extremely lucrative venture; however, it can also spell financial disaster if you make a mistake. Often, investors make the mistake of assuming that selling a piece of commercial real estate is basically the same as selling residential real estate. In reality, they are very different. Typically the buyers, laws, procedures and financing are all different when commercial real estate is involved. Consider the following tips if you plan to sell commercial real estate:

• Setting the right price is crucial, yet complicated, with commercial property. Numerous factors affect the price including location, improvements, neighborhood trends, and zoning. Having a professional market analysis done is a good idea.
• Know the zoning laws. Zoning is everything when it comes to commercial real estate. Zoning laws are also subject to change—and do change—on a regular basis. Make sure that you consult with someone who knows if the laws have recently changed or if there is any legislation pending that might change your property’s zoning in the near future.
• Be an advertising guru, or hire one. Advertising is always an essential component in the sale of property; however, because you are trying to reach a much smaller market of potential buyers when selling commercial property, advertising is even more important.
• Make sure you understand the process. Buyers in the commercial real estate market are typically seasoned veterans. Sometimes, this means they will not hesitate to take advantage of someone who is not. If you do not know the process inside and out, make sure that you retain the services of someone who does in order to avoid this possibility.
• Be prepared to wait. Of course some commercial property is snatched up the moment it is listed for sale, but as a general rule the commercial real estate market moves at a slower pace than the residential market.
• Be certain that you understand the legalities. Contracts for any sale can be complicated. Contracts and the supporting documents that go along with the sale of a commercial property can be very complicated and verbose. If you have any doubt about your ability to understand them, use a professional for the transaction. Given the amount of money that is likely at stake, this is truly one of those situations where it is better to be safe than sorry.

If you choose to go it alone, heed the preceding tips when selling a commercial property. Your best bet, however, is often to use a professional who specializes in the sale of commercial property. As always, contact me with any questions. Rob Cassam  

Real Estate