Understanding Key Financial Metrics in Commercial Real Estate: NOI, CAP Rate, and Cash on Cash Return When diving into the world of commercial real estate, understanding essential financial metrics is crucial for making informed investment decisions. Three key terms you need to know are Net Operating Income (NOI), Capitalization Rate (CAP Rate), and Cash on …
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When it comes to leasing property, one type of agreement stands out for its unique structure and long-term implications: the ground lease. Ground leases offer a distinctive arrangement where tenants can develop and use a piece of land almost as if they own it outright. This blog post delves into the specifics of ground leases, …
When navigating the world of commercial real estate, one often encounters various types of lease agreements, each with its own set of terms and conditions. Among these, the modified gross lease stands out as a balanced approach, offering a middle ground between the extremes of gross leases and net leases. In this blog, we will …
When navigating the world of commercial real estate, one of the terms you may come across is NNN or triple net leases. As an individual or an enterprise, this may seem daunting at first, but understanding how it works can potentially help you save a significant amount. What is an NNN Lease? A NNN …
Understanding Full Service Leasing If you are an entrepreneur, small business, or large corporation looking to free up their capital while staying current with the latest equipment and vehicles, Full Service (FS) Leasing offers a convenient solution. This lessor-lessee arrangement isn’t just about borrowing assets; it also covers extensive services ranging from maintenance and insurance …
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How Interest Rates Shape the Commercial Real Estate Landscape 1. The Price of Borrowing Interest rates profoundly affect the cost of borrowing. For instance, high rates ramp up loan costs, making it pricier for prospective investors and businesses to finance commercial property purchases. Consequently, it could curb demand, leading to a potential dip in …
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The Impact of the Business Environment on Commercial Property Costs Understanding the Macro Factors The costs of commercial property operate within a broad economic context, determined by a series of macroeconomic indicators. These indicators reflect the overall health of the economy, influencing supply and demand dynamics in the commercial real estate market. Let’s break …
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Unraveling Market Conditions: Their Impact on Commercial Property Costs 1. The Play of Supply and Demand Supply and demand form the bedrock of market conditions that shape commercial property prices. An imbalance between supply and demand can push prices upward or downward. For instance, when demand outpaces supply, prices are likely to rise. Conversely, …
Key Considerations in Commercial Property Costs: An In-Depth Look The Complexity of Location In real estate, commercial or otherwise, location is everything. Properties are often priced higher if they are situated in business districts, areas with significant foot traffic, or near transport links and amenities, all of which can attract more customers or clients. …
The Power of Location in Property Valuation Understanding commercial real estate prices can be a complex task. But for the most part, one rule remains constant – the adage “location, location, location”. The local attributes of a property can have a substantial effect on its price. Here’s how: Demand Drives Pricing Properties situated …
Unraveling Commercial Real Estate Prices: A Deep Dive into Seven Market Trends Shaping Property Values Understanding the world of commercial real estate prices is not a matter of chance but of keeping a constant eye on the ever-changing market trends. Here’s a deeper dive into seven key market trends that significantly impact the price …
Understanding Zoning Laws: Restrictions and Implications on Commercial Developments Defining the Borders: Zoning Laws Zoning laws, by and large, serve as an invisible fence to commercial development. Instituted to regulate land use, maintain harmony with the neighborhood, and promote public welfare, zoning laws impose numerous restrictions that developers should keep in mind when envisioning …
Navigating the Zoning Maze: Impact on Commercial Real Estate Let’s begin by understanding the concept of zoning. Firstly, zoning, put simply, refers to segmenting a municipality into different areas, each with its unique set of land use rules, building regulations, and restrictions. The zoning map of a city or town, essentially a masterplan, is established …
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The A to Z of Commercial Zoning Classifications Unraveling the Layers: Commercial Zoning Classifications Zoning is tailoring a city suit; different zoning classifications playing as the sleeves, collar, buttons, and belt that together form a coherent and functional garment. And just like the suit’s pieces come in various shapes, colors, and materials, zoning classifications …
CRE Classification Guide: Class A, B, & C Properties Commercial real estate jargon can sometimes feel as if you’re navigating through a dense fog. Amidst the various terms and classifications, Class A, B, and C categorizations often pop up, creating an ambiguous environment for those unfamiliar with commercial real estate lingo. Fear not, in …
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Key Factors to Consider Before Investing in Commercial Real Estate Paving your way into the realm of investing in CRE (Commercial Real Estate) can be a consequential venture. Every property comes with its unique ecosystem of advantages, challenges, and financial implications. Here are some crucial factors you should consider before committing to a property: …
How Property Types Influence Investment Potential in Commercial Real Estate The world of commercial real estate (CRE) offers an array of property types, each carrying its own unique blend of profit-making potential and associated risks. From swanky office spaces to bustling retail outlets to sprawling industrial complexes, the type of property can significantly sway …
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What Are 1031 Exchanges and How Are They Used? In the intricate landscape of commercial real estate, one term that often surfaces is “1031 exchanges.” This tool derives its name from Section 1031 of the U.S. Internal Revenue Code, presenting a unique opportunity for investors to navigate the complexities of capital gains taxes. In this …
Things to Consider When Looking for Industrial Space When it comes to searching for the ideal industrial space, the journey can be an intricate one. Whether you are an experienced player in the commercial real estate field or a business owner on the cusp of expansion, numerous factors should be considered during your search. Finding …
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Things to Consider When Looking for Retail Space Securing the perfect retail space can be a challenging endeavor given the countless elements at play. Whether you’re a budding brand, or a seasoned retailer exploring a new spot, there’s a variety of considerations that can guide your decisions. Here, we outline the paramount factors that will …
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Things to Consider When Looking for Office Space Searching for the right office space can be a daunting task when you’re faced with various options. Whether you’re the owner of a small business, a thriving startup, or a well-established company looking to relocate, there are a number of factors to keep in mind throughout your …
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How to Determine Which Commercial Space is Best for Your Business Embarking on the journey to find the perfect commercial space is not only exciting but a critical decision that can help shape the future of your business. In partnership with a dedicated commercial real estate agent, this process can be seamless, educational, and even …
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Office Space: When to Buy vs When to Lease When it comes to acquiring office space for your business, one of the fundamental decisions you’ll face is whether to buy or lease. Both options come with their own set of advantages and considerations, making it crucial for you to understand the factors that influence this …
Leasing commercial space can be an exciting step for businesses looking to establish a physical presence or expand their operations. Whether you’re a startup, or an existing business looking to relocate, leasing commercial space offers numerous benefits such as flexibility, cost-effectiveness, and access to prime locations. However, before you sign that lease agreement, it’s crucial …
Leasing commercial real estate is an attractive option for businesses and individuals that are looking for lower upfront costs, but lessees must be aware of the various lease types and their benefits. Leases go beyond monthly rent payments, and can include additional expenses such as property taxes, property insurance, and certain maintenance costs. It’s important …
Commercial real estate companies cover a wide range of services related to commercial property ownership and management. Services include tenant representation, landlord representation, buyer representation, seller representation, property management, commercial lending, and CRE development. These varying services are important because they provide a range of options that can meet the needs of all types of …
Established in 1987, the Saguaros is a philanthropic and social club dedicated to supporting local Arizona non-profit organizations. The club takes great pride in giving back to the community and making a positive impact on children’s charities through their three main fundraising events: NiteFlite, Brokers for Kids, and Agents Benefiting Children. Brokers for Kids, an …
Cap Rate (Capitalization Rate) is one of many real estate metrics used to measure the rate of return on a real estate investment property. It is calculated by dividing the first year’s NOI (Net Operations Income) of the property by the Current Market Value of the property. Cap Rate = NOI (Net Operations Income) / …
What is Commercial Property Management? Commercial property management is the process of leasing, operating, and maintaining commercial real estate on behalf of an owner or investor. Similar to residential property management, commercial property management encapsulates the tasks and responsibilities of operating an income producing property. What Does a Commercial Property Manager Do? The primary role …
We are frequently asked about the benefits of using the services of a Commercial Broker versus working unrepresented in your commercial needs. In this blog we want to share some of the many benefits of using a Broker whether you are looking to buy, sell, or lease commercial real estate. We will cover the top …
A full-service lease is a lease that has one, all-inclusive rental rate which includes both the base lease rate and the operating expenses combined into one figure.
A modified gross lease is a lease where the tenant pays base rent at the lease’s inception, but it takes on a proportional share of some of the other costs associated with the property as well, such as property taxes, utilities, insurance, and maintenance.
A triple net lease is a lease agreement on a property whereby the tenant or lessee promises to pay all the expenses of the property, including real estate taxes, building insurance, and maintenance. These expenses are in addition to the cost of rent and utilities.
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