Articles About Commercial Real Estate
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Posted by: Roger L.
Everybody I meet these days is always asking me "How is the real estate market doing today". It is not a secrete we are in a buyers market these days. With the influx of homes that we have been experiencing for the past couple of years, and the rogue signing of foreclosures the banks have done; home prices have fallen nation wide. Even with this news in Central Ohio home prices have stabilized and even improved. According to the Columbus Board of Realtors there were 1605 homes sold in August which is 8.2% more homes sold then July. Homes sales for the 1st 8 months of 2010 are 9.2% higher then 2009. The average sale price of a home is up from $145,993 in January to 169,959 in August.While this is all great news it doesn't mean we are out of the woods yet.
So the question is What makes a home sell and what keeps a home from selling?
Alot of factors come into play when we ask this question. Including
- Location
- Condition
- Time of year the home is on the market
- And who is trying to sell the home
With location if the home is in a area that home prices are appreciating; time on the market is going to be less;because buyers see value and don't want to miss out on it. If the home is located in a depreciating market; buyers do not see value, and think they should wait for a deal so the home sits on the market.
Condition comes into play because if the property needs alot of repairs done before the buyer can move in. It may not meet the buyers time line,or their budget, or they may not be able to get financing for the property.
Certain times of the year can also be a factor when selling a home. Such in December sales are typical down because of the holidays and people are busy. January and Febuary were affected this year because of weather and the snow. May and June are good months for sales; because kids are out of school for summer break and families have not started vacations and are out looking at houses.
Another important factor to consider when selling is exposure or who is selling your home. if people don't know your home is for sale they don't know they can buy it. That is one reason why www.sellingyourcolumbusohiohome.com advertises on 22 diferent websites and uses a mapped out marketing plan with every listing. (to get details on marketing plan go to website and click on marketing tab)
We have covered the Columbus Market and why some home sell and other don't. To watch this blog in video format go to http://www.youtube.com/watch?v=b0jIr12av9w
Last updated: 11.01.2010 12:42 AM
Posted by: Bob F.
In our current economic downturn, it makes more sense than ever to intelligently explore used and refurbished furniture options for your office. Given the high cost of brand new modular furniture (i.e. cubicles), used or refurbished furniture represents one of the best opportunities to save a bundle when you set up your new office. Not only can you save a significant amount of money (up to 90% off of manufacturer’s list prices), but the green aspect of utilizing components that might normally end up in a landfill can’t be denied.
In most cases furniture remanufacturers tear off the original panel fabric and replace it with new fabric. Typically all of the trim surfaces such as top-caps, side-rails and base-plates are stripped and refinished as well. Fully remanufactured furniture usually appears brand new, but at a huge savings.
For even more savings consider purchasing “as-is” furniture, where typically the fabric is not replaced but rather steam cleaned to freshen it up. Most of the larger manufacturers (i.e. Haworth, Steelcase, Herman Miller) build a solid product that is very robust. Fabric can be replaced, trim can be painted, but the basic core of most panels and laminate work surfaces usually lasts a very long time.
These days you’ll see lots of postings for inexpensive or free cubicles on web sites like Craiglist . If the cubes are being sold by an end-user, one of the most important things to be aware of is that the layout or space plan for their cubes needs to be very similar to your desired layout. Otherwise, you may end up having to find and buy lots of parts and pieces to make those cubes work in your particular space. These components can be difficult to source and may be expensive, so consider the value of your time before jumping at an offer for free or cheap cubes from any source other than a qualified remanufacturer. Unless you’re an experienced facilities person, most people don’t understand the process involved in buying used or refurbished cubes, and it can be a downright frustrating experience if you haven’t thought about some of the basic details your furniture vendor may need. Towards that end, the following checklist will go a long way towards saving you time and money before you engage a used or refurbished furniture vendor.
Key Questions to Ask Yourself:
- Approximately what is my budget?
- Do I have a layout & design completed yet, or do I need help with this?
- Are their specific colors of fabric & laminate that I must have, or can I be flexible in this area, which might possibly save some money?
- Do I know specifically what components I need in each of the cubes (i.e. shelves, flipper doors, pedestal files, tack boards, task lights, etc.), or do I need help with this?
- If I find an inventory for sale directly from another end-user (i.e. on Craigslist), do I have the time, knowledge and patience to make their furniture work in my new location?
- What is my critical date to have the product installed and therefore, when do I need to make the decision on a vendor?
- Am I the only decision maker on this purchase, or do I need to involve others in the process before making a final decision?
Key Questions to Ask Potential Vendors:
- How long have you been in business?
- I have a critical date to meet for completion of this job, what kind of control do you have over the entire process to ensure you’ll be able to hit my date?
- Are you a broker who simply searches for used inventory and makes arrangements to have it torn down, transported and installed at my location, or do you have this product in your warehouse, now, waiting to be installed?
- Does your company do the installation itself, or do you hire that service out?
- If I need space planning services, can you do that for me? If so, how much will it cost?
- Do you sell “as-is” products only, or can you refurbish the product with a different color fabric, trim color or laminate before delivering it to me? Do you do the refurbishing yourself, or do you hire that service out?
- If I buy an “as-is” product from you, in what kind of condition can I expect this product to really be in? Will you clean & paint it first as needed, or will it simply be transported from someone else’s office to mine?
- Can you break down your quote into separate line items for each of the individual components, including installation and labor fees, so I can make an apples-to-apples comparison with other vendors, or remove certain items if my budget changes?
- If I need to add more cubicles at a later date, is the fabric you’re going to sell me likely to be available at that time?
- If I need additional components like shelves, flipper doors, task lights, etc., at a later date, will you have components in stock in the colors I need to match what I already purchased?
- Can you show me photos of recent jobs, or can I go out and see some of the jobs you’ve done, so I can get a sense of what my job might look like when completed?
- Can you put me in touch with any of your recent customers, so I can determine their satisfaction level and overall experience?
Last updated: 10.29.2010 05:16 PM
Posted by: Curt B.
Does your new office lease require a clause for General Liability Insurance or Commercial Property Insurance? Sometimes referred to as a BOP or Business Owner Policy, these policies are comprehensive providing coverage for Liability--Bodily Injury to persons, property coverage, employee coverage.
Know what you are buying, not all BOP Policies are the same:
There are two commercial general liability coverage forms, the occurrence form and the claims-made form. The difference between them lies in the way claims are handled under the two forms. While the occurrence form covers bodily injury or property damage claims that occur during the policy term, the claims-made policy form only covers claims made against the insured during the policy term.
Deductible: We write many policies for new small business owners for as low as $350 to $500 year, if a lap top is missing with critical information, you can receive replacement cost/new laptop with a low deductible. As the deductible goes up, the rate or premium will go down, compare rates and be informed on how much you are prepared to pay out of pocket or "self-insure" for a loss. Don't let a loss put you out of business.
Liability coverage is provided for injury or damages arising out of goods or products made or sold by you, the insured, if you are in a consulting type business or a service business you may need specific Errors and Omission Insurance or Officers and Directors Liability Insurance. Do not assume that the "general liability clause" in the policy will cover everything you do in the course of your business.
Last updated: 10.29.2010 05:12 PM
Posted by: Jesse W.
My team represents more than two dozen properties for sale in Fairfield County Connecticut. Sophisticated buyers have been the first to move on deals, knowing that the buzz of investing in commercial real estate at these prices is bound to hit soon. Now is the time to purchase at decade low sale prices of $120psf. Office buildings, commercial houses, medical properties, industrial redevelopment zones, and retail strips are all available at below-market prices.
To track my 2010 success so far:
- Closed first sale of the year - 9/28/10 - 4,000sf Commercial house at 28 First Street in Stamford for $825,500.
- Went to contract on Medical Building - 10/1/10 - 2,500sf Building at 107 Glenbrook Road in Stamford (asking $1MM).
- Went to contract on Retail Strip - 10/15/10 - 2,600sf Retail Strip at 260 Hope Street in Stamford (9% CAP).
- Went to contract on Office Building - 10/18/10 - 3,200sf Building at 251 Long Ridge Road in Stamford (asking $599k).
These are four sales that will close between 9/28/10-12/15/11.
If you too are interested in buying or selling - contact me at 203-391-6828 or jesse@pyramidregroup. If you're trying to figure out where to put your money, this is at least worth a discussion.
Last updated: 10.19.2010 02:41 PM
Posted by: John P.
What do the top commercial professionals all have in common? That regardless of high commercial vacancy rates and a lack of demand for space, they still outperform others in the industry.
How is this possible?
The top commercial real estate professionals are extremely creative individuals and exceptional communicators. No matter the level of adversity, they evaluate their environment and industry conditions, then, they figure out a way to get space leased.
The common opinion amongst industry professionals is that there is very little demand for space, and when they encounter a tenant actually looking to lease commercial space there is a HUGE disconnect between the pricing expectations of the Tenant and the Landlord, making it extremely difficult to negotiate a commercial lease and come to terms.
Tenants feel that the market is so bad, that they make offers to leasing agents that are sometimes even insulting. But what most successful leasing agents do is brilliant; they welcome these offers and then work with these numbers in a highly creative fashion. They demonstrate to the tenant, that not only do they want them as a Tenant in their commercial portfolio, but are also willing to work with their budget. The leasing agent acts as a creative “bridge” and that makes a pivotal difference.
A property owner asking $2.00 Full Service gross (FSG), per square foot, per month, for a 5,000 square foot space, may get an offer from a Tenant for $1.65 FSG for 36 months. Some would find this ridiculous and insulting; but the successful leasing agent responds with something like, “What if I can get you really close to your $1.65 FSG and at the same time get the landlord the lease rate he wants?” The Tenant may be confused the agent’s statement, but what the leasing agent does next is magnificent! He sends the Tenant a non-binding Letter of Intent (LOI) at a lease rate of $2.00 FSG, per square foot, per month, with a spreadsheet attached. Then the agent explains to the Tenant that the attached spreadsheet is an “Effective Lease Rate Worksheet” and that although the lease rate on the LOI says $2.00 FSG, per square foot, per month, the Tenant is actually paying $1.64 FSG.
The leasing agent’s knowledge of the property owner’s goals are to achieve a face rent of $2.00 FSG, so that the investors are happy, provide no more than 6 months of abated/free rent, and provide nothing more than paint and carpet in Tenant Improvements. The leasing agent explains this to the Tenant and shows how the numbers work out. He points out in the effective lease rate worksheet that the Landlord is charging the Tenant a rent of $2.00 FSG for 36 months with an additional 6 months of abated/free rent spread throughout the lease term (total 42 month lease term) and providing the Tenant with new paint and carpet (estimated to cost $15,000.00).
Once the Tenant understands the math of the total lease consideration, minus the abated/rent and Tenant Improvement concessions, the Tenant then confirms receiving the lower effective rent of $1.64 FSG, per square foot, per month. Click here to view worksheet. This exercise then lubricates the entire leasing process for the Agent and it is much easier to consummate a lease contract. It is almost magical.
Sometimes expectations between Tenants and property owners are so disparate, that there is no solution. However, generally there is little complexity in leasing commercial space, as long as the parties negotiating fully understand the deal and recognize their mutual goals have been bridged. The truly remarkable thing is how the leasing agent has “creatively” bridged the needs of the parties and effectively communicated the financial engineering behind it designed to meet the needs of each party. This is why these commercial real estate professionals close more deals. You can close more deals too.
Written By: John Pierce, Product Experience Director at RateBlend.com
About RateBlend.com:
RateBlend is a free web-based effective lease rate calculator used by commercial real estate professionals to help them close more commercial real estate deals. RateBlend is currently in Beta. Visit www.rateblend.com for more information.
Last updated: 10.01.2010 01:07 PM
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