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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...

When an investor is looking for a management free investment, nothing can beat a sale/leaseback. This is the ideal investment for an absentee owner because the tenant pays all the operating expenses and the investor-owner usually has a completely management-free and...

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...

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...

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....

Investors purchase residential and commercial income producing real estate to make money. There are two obvious ways of making money from a property. First, the owner takes a share of the annual operating profit generated by the investment, and Second, profits from...

In recent years, many stores have widened their lines and no longer specialize in only one form of merchandise. Such operations as supermarkets may sell anything from CDs and DVDs to refrigerators, and drugstores are as apt to carry pots and pans as well as pills....

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...

When a landlord and a tenant agree to a commercial lease, it may contain clauses covering things that neither party to the lease ever expects to happen. Occasionally, one of these will happen with costly and damaging consequences to the tenant. One lease clause that...

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...

When you want an increased return on an older property it may be time to refurbish the property. Looking 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...

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...

When there are vacancies in commercial buildings, tenants may feel that they are in a good position to seek concessions from landlords on new leases or in exchange for extending or renewing existing leases. Landlords are apt to make deals for two reasons: (1) The...

For success in achieving the owner’s objectives, there must be open communication between the owner and the management company. The process must be continuing from the onset of the management plan based on the owner’s objectives to the dissemination of monthly and...

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...

Land investment is much more complex than it was a few years ago. Because of expanded regulation and environmental concerns, the development process is much longer and so more expensive. The time from the initial raw land purchase until final sale of completed homes...

Putting a CPI (Consumer Price Index) escalation clause in a lease is to make the lease fair to both the tenant and the property owner. A primary benefit of escalation clauses is they help protect against diminishing purchasing power related to inflation. The CPI...

A high percentage of speculative low-rise industrial buildings today are flex buildings making them a good investment. One of the most appealing aspects of flex space lies within its customizability. For example, if a tenant wants to increase their office space or...

A Prepared Plan Building owners and managers need to be aware of their obligations to their tenants for emergencies that can happen in buildings. Emergencies like fires, power failures, bomb threats, crimes, civil disorders, wild weather are just a few that could...

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...

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...

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...

There are 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...

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...

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...

When all of the negotiations have been completed, the broker and 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...

What happens to nearby property values when a new hospital is built? Usually, the surrounding area feels a ripple effect. No matter how old the buildings that surround a new hospital complex are, land values increase. Developers are quick to provide new space for...

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. The physical inspection of the property could be as important or more important than...

Statistics show business and professional firms are buying offices rather than leasing. While buying or constructing an entire building is an option for major corporations or smaller firms outside metropolitan areas, owning commercial space generally means being part...

At all times, good or bad, we must aggressively search for replacement tenants. A month’s rent from a vacant unit can never be recovered. Just running expensive advertising for this space can be nonproductive. A better way might be to have a professional management...

The following is a useful list of items that should be clarified between the parties in the lease of a commercial building: What is the amount of usable space? Since the rent may be based on a square foot rate, the rate may be quoted on a rentable or a usable area....

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...

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...

Owners, managers, and brokers of new office buildings are usually anxious to fill their space and to do so, they may not be above trying to charm your tenants away, even if your leases still have some time to run. Some new-building owners may offer to find sublessees...

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...

Maintenance of any rental building, either residential or commercial, should be handled as much as possible as a routine rather than an emergency. Preventative maintenance must be performed regularly to keep the level of service at the property high and to reduce...

Conserving energy is important to everyone. Not only does energy conservation save consumers and businesses money, but it also saves precious resources for future use. Saving energy is much easier than many people think. Insulating homes and commercial buildings,...

Parking is not just important at your commercial building or apartment property; it is absolutely crucial for any business. Without it, potential tenants and their customer will reject the building. Parking spaces may be located below, at, or above ground level but...

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...

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...

Owners and property managers must watch the nickels and dimes as well as the dollars that are spent on the property. Save one dollar in operating costs and (assuming a 10% cap rate) the value of the property increases by $10. That is why owners are always looking for...

When a person is either a buyer or a seller of a shopping center, the question of value for a sale is paramount. How do you appraise such a property? In commercial properties, there are three types of methods commonly used to establish a value for appraisal. They...

When an investor is seeking an investment in a new condominium project, the possibility of purchasing an existing rental property for conversion to condominiums should be considered. While building a new property can be profitable, there are many benefits to...

When there are vacancies in commercial buildings, tenants may feel that they are in a good position to seek concessions from landlords on new leases or in exchange for extending or renewing existing leases. Landlords are apt to make deals for two reasons:  (1.) The...

Newer office buildings may fill up at the expense of older office 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...

One or both of the parties to a lease of commercial or office space may want to sever the relationship prior to the end of the lease term. A tenant may want to terminate the tenancy, for example, because his business has grown since he first moved in and he requires...

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)....

A new tenant and an investor share the same first impression of a commercial building or an apartment property. That first impression is crucial. Before marketing the property, think about the outside appearance. The “look” affects both tenants and buyers. The...

One in ten U.S. households now rent a self-storage unit. The growing demand for self-storage in the U.S. is created by people moving (some 40 million people move each year according to U.S. Census data), and by various lifestyle transitions, such as marriage, divorce,...

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...

Whatever the kind of property used, the user has the option of purchasing or leasing. Should you buy the house you live in, or lease it from someone else?  With few exceptions, there would be an overwhelming response to “own it”. The benefits weigh heavily toward...

Suburban office buildings remain many investors primary acquisition target. These investors reason that a suburban office building will almost always be a good buy. Careful choices must be made, as there must be a demand for office space in the area and a gradual...

Since the value of a rental property is based directly on the cash return, adding value means increasing cash flow. When small investors set out to increase real estate values, the steps are in upgrading houses, duplexes, triplexes, etc., enhancing the cash flow and...

When you need professional advice and help in commercial real estate, you must come to our office. We are experts in values and knowledge of the entire market in this area. If you have been looking for a certain type of property, we probably have the full information...

Whether a rental market is weak or strong, lease negotiations can be difficult when the landlord wants concessions that are different from the norm. One situation that happens is when the owner of an office building or other commercial property intends to sell when...

Management of a building is not just handling problems as they arise and renting units, it is making the asset more valuable to the owner by concentrating on every aspect of the property. Some owners of very large income properties still do not take professional...

Building on leased land results in separate ownership of that building and the land. The two owners, one of the land, and one of the improvement come together in one investment parcel. In this situation, the landowner wants someone to develop the land but still wants...

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...

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...

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...

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...

With cheaper land costs and a greater amount of labor sources 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...

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...

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...

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...

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...

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...

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...

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...

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...

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...

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...

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...

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; “The most probable price which a property should bring in a competitive and open market under...

West Virginia appraiser board must provide guidance after rejecting licenses "West Virginia Gov. Jim Justice on March 30 signed HB 4285, legislation that makes technical changes to the state's Real Estate Appraiser Licensing and Certification Act. Now, the state...

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...

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;...

A lease is an integral part of many real estate investments. It should outline all the obligations of the tenant and of the landlord. This sounds simple, but many questions arise. If, for example, property taxes increase, does the tenant pay all of the increase or...