Tuesday, May 16, 2017

Seller STILL Unrealstic? Try This. TUESDAY Traffic Tips





Last week we discussed UN-REALISTIC sellers and allowing the market to be the bad guy. You've now done that and the seller REMAINS unrealistic. So, what should you do? Really, it boils down to one of a couple of options. I discuss this and much more on this week's VIDEO for commercial real estate professionals.



Seller STILL Unrealistic? Try This. TUESDAY Traffic Tips.

Thursday, May 11, 2017

5 Hidden Land Mines in Commercial Real Estate Deals

Image Attribution: www.gppreview.com
Land mines are generally buried beneath the surface so that the unwary happens upon them and before they can react, BOOM! A significant amount of damage is inflicted upon the unsuspecting.

Similar "land mines" can exist within a commercial real estate deal. Although bodily injury may be avoided, the fall out created is nonetheless painful. Its important to recognize where these land mines might be hiding.

So, let's discuss the most common land mines you will encounter when buying or selling a building.

Environmental. Generally, buying a building includes borrowing money. An environmental assessment will be a part of your loan approval. Unseen, but lurking under the soli may be environmental contamination. An examination of current and previous uses of the building along with a review of local and regional conditions is undertaken to determine if any sub surface testing is recommended. If there is cause for concern, soil borings are collected, tested and a course of action pursued. Based upon the findings, your deal may be delayed or completely derailed. 

Entity status. Typically, ownership of commercial real estate is vested in an entity other than an individual. Most common among ownership entities is the limited liability company, or LLC. In order for the LLC to conduct business - i.e. sell real estate - the entity must be active in the state in which the entity operates. All tax returns must be current, and taxes - if any - paid. The entity must pay its annual filing fees. And, a statement of information must be on record with the state. If any of these boxes are unchecked, the entity may be suspended. A laborious process to revive the LLC must be undertaken. Searching in Corporation Wiki or the Secretary of State should tell you the status of your entity. 

Loan re-conveyance. When a loan is paid in full, a re-conveyance is necessary. Otherwise, the loan balance will still be recorded against the property. Owners incorrectly assume once the loan is paid, they are done. Wrong. Re-conveyances are easy to accomplish at the time the loan is satisfied. Not so easy if attempted years later. 

Clouds on Title. Mechanics liens, tax liens, Lis pendens - nasty little critters that prevent a seller from deeding property. Frequently, sellers of commercial real estate are clueless about matters affecting the title of their property. Before considering selling a building, its best to order a preliminary title report and have your title officer review it with you. 


Insurance. Your purchase will require insurance. Get your insurance professionals working on binding a policy early in your escrow. If you wait until you're at the closing table, the process will screech to a halt until this condition is fulfilled. 

Tuesday, May 9, 2017

An UNREALISTIC Seller - Now What? TUESDAY Traffic Tips





We've all had them. I've one now. So what should you do? Not take the assignment? Try to convince him his asking price is ridiculous? Today, I discuss unrealistic sellers and a way to get them to see the light. This and much more on this week's VIDEO tip for commercial real estate professionals.



An UNREALISTIC Seller - Now What? TUESDAY Traffic Tips

Tuesday, May 2, 2017

Use THIS to Solve ALL the Deal's Problems. TUESDAY Traffic Tips





Very early in my career I received some advice from one of my mentors, Paul Earnhart. The advice went something like this - solve all the deal problems or you won't get paid. So how do we know just how far to go in solving a deal's issues? I discuss this and much more in this weeks VIDEO TIP for commercial real estate professionals.



Use THIS to Solve ALL the Deal's Problems. TUESDAY Traffic Tips

Friday, April 28, 2017

Buying Commercial Real Estate – The Mechanics

Image Attribution:www.icdam.com
Your reasons for buying commercial real estate may vary. Currently, your business home is rented and you’ve decided now is the time to buy a building and become your own landlord. 

Or, a portion of your income is received from the rent generated by a commercial real estate asset and you’ve decided to buy another building. 

Regardless of your reasons for buying, the mechanics of the transaction are similar. Today’s post is focused upon the process most buyers undertake to buy commercial real estate.

Search. Chances are you will engage a commercial real estate professional to expose you to the market and the current availabilities that fit your search criteria. In these days of short supply, plan on this taking a bit more time than you anticipate. As we’ve recently discussed, commercial searches are more challenging than residential because information on commercial availabilities, comps, and data are not readily available on-line. You will need a tour guide with a key to the walled garden in order to see most of what’s out there.

Negotiation. Once you select the building you want to pursue, a round of negotiations ensues. Because we are steeped in an owner’s market, it’s common for there to be multiple suitors that result in multiple offers. Sellers want certainty. The highest offer, but with a questionable buyer, will often lose out to a solid buyer with a lender pre-qualification letter or better still, no financing contingency. The more convincing your need for the purchase and your ability to communicate your story will bode well for your success.

Contingent Escrow. The agreed upon terms are memorialized in a Purchase and Sale Agreement. A signed PSA along with your deposit is forwarded to a neutral holding company (escrow) for processing. Once escrow is in receipt of the documents and deposit, your contingency period begins. These periods can range from a minimum of 30 days to as many as 90 days. During this time, your deposit is generally refundable if you change your mind or find something untoward with the purchase. Use this time wisely to secure your financing, check title, perform a physical inspection of the building, make sure the soil is clean, review all of the tenant leases if any, take a look at the contracts for services such as landscaping, make a visit to the city to make sure there are no issues with your use of the building. If you encounter an issue, you will need to notice the escrow company, seller and seller’s broker. There are some remedies available to you to resolve problems. We will leave those remedies to another column, however.

Perfected Escrow. Now you’ve checked all the boxes – your loan is approved, the city will welcome your business with open arms, and you cannot wait to close. After you waive your contingencies and prior to close, your deposit is non-refundable. You can still walk away if you change your mind – but at a cost. Perfected escrow periods precede the close and typically last two weeks to thirty days. During this time, the banks is preparing loan documents for your signature, the seller is signing and notarizing the grant deed, and assignment of leases are being prepared for the transfer. Don’t forget to put insurance in place for your new building.

Close. You sign an estimated closing statement. Money then flows into escrow from you and your lender. The grant deed is recorded and voila, you own a building! Now the heavy lifting of moving your operation commences.

Tuesday, April 25, 2017

It's not ALL about the Market. TUESDAY Traffic Tips





I believe we would all agree the way to repeat business from your clients - aside from doing a great job for them - is to stay top of mind and relevant. Today, I discuss a great way to do those things. This and much more on this week's VIDEO tip for commercial real estate professionals.



It's not ALL about the Market. TUESDAY Traffic Tips.

Tuesday, April 18, 2017

Your Deal has ISSUES! TUESDAY Traffic Tips





Whether you've been around 20 minutes or 20 years, you know transactions encounter problems - they have issues! Today, I discuss a simple way to insure you are positioned to solve ANY problem that arises. This and much more on this week's VIDEO tip for commercial real estate professionals.

Your Deal has ISSUES! TUESDAY Traffic Tips

Friday, April 14, 2017

Are 1031 Exchanges a GONER?

Image Attribution: www.AvenueRealtyGroup.com
One of the first questions we are asked by owners of commercial real estate contemplating a sale of their building – what will we do with the money? 

You see, upon the sale of a commercial real estate asset – an office building, industrial plant, retail strip center, apartment complex, unimproved land, etc. – the tax man is seated at your dinner table.  In fact, several tax men – state and federal – want a taste. 

Briefly, this “taste” can consume close to half of the sale proceeds once capital gains taxes, depreciation recapture, affordable care act percentage, and state taxes are deducted. Ouch! That's a big bite.

So, you may be asking – why would anyone sell if faced with half the sale proceeds going bye bye? Good question. Enter the 1031 tax deferred exchange. 

Since 1921, tax deferred exchanges have allowed owners of income producing real property to defer the taxes a sale would create. Through a widely used mechanism, the seller may purchase a “like kind” income property and defer the gain. 

The process is fairly simple so long as certain rules are followed – a period of time is allowed to identify and purchase the new property or properties, a middleman called a qualified intermediary must affect the exchange, and you must spend an equal or greater amount of the property you sold. Easy, right? In fact it is, and thousands of small businesses and investors employ the strategy each year. 

A tremendous amount of transactional volume is created which results in a great economic driver. Benefiting from tax deferred exchanges – in addition to small businesses and investors – is a cadre of brokers, escrow holders, qualified intermediaries, title companies, accountants, attorneys, contractors, lenders, building inspectors, environmental engineers to name a few. I once calculated, approximately sixty people touch a transaction of this sort. Amazing!

Storm clouds are starting to rumble on the horizon, however. Several proposals now massing in the sub committees of Congress, include an elimination or a drastic gutting of 1031 tax deferred exchanges. I can hear the collective cries of – Noooo! But, it could really happen. As suddenly as a clap of thunder, these umbrellas of tax deferral and drivers of economic activity could be gone.


What can be done? Let your elected officials hear from you. You might even invite them to dinner. 

Tuesday, April 4, 2017

100% of you have DEALT with this. TUESDAY Traffic Tips





You've done your best. You've made a great presentation. You forward a standard agreement for your prospect to sign. And then, those dreaded words - I'll have my attorney review it and get back to you. Boom. Buzz kill. Is the prospect REALLY concerned about the legal ease or is there something else? I discuss this and much more on this week's VIDEO tip for commercial real estate professionals.



100% of you have DEALT with this. TUESDAY Traffic Tips

Friday, March 31, 2017

Your Rent is Above Market - Now What?

Image Attribution: www.emeraldhs.com
Recently, I've encountered several situations involving an occupant paying an over market rental rate. The occupant's desire is to remain in the building and renew their lease. But, there is a problem. Storm clouds are rumbling on the horizon and a face off between owner and occupant is quickly approaching. So now what?

First, let's first determine how the over market rent occurred?

Leases originated before the financial meltdown of 2008 were inked at the prevailing market rents. These rents were at a high water mark.

Most, if not all of the leases, contained annual rent escalators which increased the rates over the term of the lease. Shortly after the crash of 2008-2009, market rates plummeted.

So hypothetically, if the lease an occupant signed in 2008 was a five year lease, gold! When renewal time rolled around in 2013, occupants were pleasantly surprised the market had moved in their favor and now rates were cheaper than they were paying. In many circumstances, owners gladly renewed occupants at reduced rates to insure the owner's cash flow would continue - albeit at smaller amounts.

However, if the term of lease was seven to ten years - the opposite is true. Occupants have paid rent in excess of market rates for the term of their lease AND now face renewal in an over heated rental market. Ouch!

Owners, who were anxious to renew leases at cheaper rates in 2013-2014 are now quite bullish and unwilling to budge on the renewal rate they demand. The resulting tug o' war between owner and occupant plays out something like this:

Owners point to the vacancy for industrial buildings in Orange County - 98 of every 100 are occupied - and a better spot will be hard to find. Oh by the way, rents are increasing as evidenced by the recent lease comparables.

Occupants quickly counter with the fact they have faithfully paid an above market rent for the term of their lease and consequently deserve a break - in the form of a rent reduction.

Owners return the argument by reminding their occupant of the cost, disruption, and inefficiency of moving.

Occupants respond with the owner's cost of originating a new lease - down time with no rent, free rent with a new occupant, potential upgrades required by the new tenant, real estate fees.

Now a stand-off akin to wild west saloon gun slingers ensues.

The man who draws first generally wins.

Tuesday, March 21, 2017

Today, I Need your HELP, Please. TUESDAY Traffic Tips





I really need your collective wisdom, today. How frequently should you follow up with a prospect? We generally follow up in the manner we believe is appropriate. But how much is TOO much? If you will kindly leave a comment, I will feature some of your answers next week. This and much more on this week's VIDEO tip for commercial real estate brokers.



Today, I Need your HELP, Please. TUESDAY Traffic Tips

Friday, March 17, 2017

You Goofed! Now What?

Image Attribution: www.whatroseknows.com
I love the Academy Awards!  At a minimum, my wife and I try to see all the movies nominated for best picture. We can then watch the awards show with some anticipation and knowledge of the nominees.

We, like many of you, watched in agony two weeks ago as the wrong movie was announced as best picture.

The chaos that ensued made for great TV but one couldn't help but feel a pang of remorse for the producers of La La Land while feeling stoked that Moonlight was the winner. We witnessed a view from the pinnacle of accomplishment to the depths of despair in seconds. Wow!

So what, you may ask, does this have to do with commercial real estate? Only this. Sometimes, we just goof. We try very hard each day to do our best, represent our clients, market our listings, and cooperate with our fellow brokers. With these good intentions, things can still go awry. Case in point, last week, I missed a meeting because I failed to open a piece of mail that specified the date and time. Oops!

What is one to do when the inevitable goof occurs?

Own it. How many times do we blame others or fail to take full and complete responsibility for our actions? I've found it's best to simply own the goof - admit you made a mistake. Say these words - "I made an error and I take full responsibility."

Make no excuse. No one cares if you were stuck in traffic, didn't open your mail, forgot the meeting, or your dog ate your only marketing brochure. The net effect is the goof happened. How and why it happened becomes irrelevant - and only weakens a sincere apology.

Apologize profusely. A good apology. I'm sorry that I missed the meeting. You must have felt as though I didn't care about your issue. In the future I will make sure to be early. A bad apology. I'm sorry if what I did made you angry. However, you should have called and emailed in addition to sending me the letter with the meeting time - ummm, no.

Take steps to insure you don't repeat the mistake. In my case, I'm not great at opening mail. I find mail mostly junk and anything of importance generally arrives via a different medium - email, text, call, social media, etc. I've now committed to visiting my mailbox once a day, reviewing the contents, and responding to the important things. Seems like a no brainer, right?

Forgive yourself and move on. You've owned it, made no excuses, apologized, and taken steps to insure you don't repeat the error. Ok. Done. Move on. Please don't wallow in the fact that you goofed. After all,  someone wise once opined - "to err is human, to forgive is divine". I believe that even applies to forgiving ourselves.

Tuesday, March 14, 2017

They are TOPS for a reason! TUESDAY Traffic Tips





Ever noticed how you play better when paired with better players? Get to know em. They are the top producers in your field, your office, your profession. If you will adopt this simple strategy, you can take your brokerage business to the next level. This and much more on this week's VIDEO tip for commercial real estate professionals.



They are TOPS for a reason! TUESDAY Traffic Tips

Tuesday, March 7, 2017

Opposites ATTRACT. TUESDAY Traffic Tips.





Today's tip was hatched from a conversation with my friend Natalie Wagner from our Santa Barbara office. Thanks to Natalie! We tend to target too large and prospect too small.  We should do just the opposite. This and much more on this week's VIDEO tip for commercial real estate professionals.



Opposites ATTRACT. TUESDAY Traffic Tips.

Friday, March 3, 2017

5 Things that Happen after the Listing is Signed?


Image Attribution: www.cbtherealestatecentre.com
You've conducted an exhaustive search for the correct commercial real estate professional to help you find a tenant or a buyer for your vacant building.

Three interviews, seven pin striped suits, and countless shiny pages of pitch books later, you've made a decision. You've signed an agreement and soon, prospects will be traipsing through your vacant space - hopefully.

Today, I want to outline what happens after the listing agreement is signed.

Marketing collateral. A brochure highlighting the building's features is created. Generally, these brochures are html'd into a format that can be easily transmitted electronically for "broker blasts". Certainly, a pdf of the brochure can be forwarded to inquiring parties. Postcards provide a nice respite from the myriad emails we receive. Snail mail still works! Especially if the postcard has a great image of the building prominently displayed. We are starting to see websites (I can hear my resi friends chuckling) for each available building and password secure document vaults for mission critical documents such as leases, reports, financials and others.

Multiple listing service entry. As discussed in previous missives, our MLS services are walled gardens. Only practicing brokers have the key. However, we do submit the listing data to CoStar, ILS, The Smith Guide, Loopnet, AIR, and Xceligent. The information is readily available to agents in the market.

Signage. Once upon a time, if you didn't have an available sign in front of your vacancy, you were invisible - as prospects drove around and wrote down phone numbers. Today, you must have two signs - one painted and planted in front of your building and also a digital sign as 90% of all searches start on line.

Advanced notice. We like to send the agents in our office and the local tenants or owners an advanced notice of the availability. Akin to the "coming soon" in resi parlance, our advanced notice alerts the market to coming attraction.

Marketing process. Ok. Let the games begin! In our experience, a cooperative effort works best - meaning broaden the net with social media, video, and email. Deal with all inquiries fairly and timely. Show up for the tours. If the offering is correctly priced, laden with amenities, and owned by a reasonable decision maker, the task should be smooth and speedy. Any variance will test your skill.

Tuesday, February 28, 2017

STOP Giving Advice. TUESDAY Traffic Tips





Say what? This from a guy who makes a point of advising us every week. What's up? Today, I discuss a VERY important part of the advice you give and more importantly, when it's requested. This and much more on this week's VIDEO TIP for commercial real estate professionals.

STOP Giving Advice. TUESDAY Traffic Tips

Tuesday, February 21, 2017

90% of you DON'T do this. TUESDAY Traffic Tips





Today, thanks to my friend David Mudge from Lee Riverside and Rod Santomassimo of the Massimo Group, I discuss a subject that nine of ten brokers fail to do. This and much more in this week's VIDEO Tip for commercial real estate professionals.



90% of you DON'T do this. TUESDAY Traffic Tips

Friday, February 17, 2017

Hidden Costs in a Commercial Real Estate Lease

Image Attribution: www.surepayroll.com
That commercial building you just leased has some hidden costs that make sneak up and bite you - akin to a rattlesnake lurking in the bushes.

The bite may not be as painful as a snakes but certainly more wallet draining.

So what are these costs and more importantly how can you limit the costs in your next commercial real estate lease.

Let's dive in, shall we?

Type of lease. Take a look at the lease you signed. Across the top should be a reference to the type of lease - generally Net, Triple Net, Gross, Full Service Gross. Each has a unique mechanism for handling expenses and who is responsible. By the way, these expenses are in addition to your base rent. As an example in most NNN leases, you, as the occupant, are responsible for all the costs in addition to your base rent. In a gross lease, the landlord typically maintains, repairs, and replaces the roof - but most other expenses are yours - they just inflate your base rent.

Base rent increases. The base rent you negotiated generally is only for the first year. Typically, in succeeding years your rent will be increased by some escalator. These days we see 3-4% annual increases in the base rent. When times aren't as robust, owners are willing to negotiate a base rent that doesn't tick up throughout the term.

Abated rent. If you were successful in convincing your landlord to concede some months of base rent as an incentive for your tenancy, good for you! Just know if should fail to fulfill your obligation for the full term, you may be liable for repayment of the abated rent. As an occupant, changing the word "abated" to "free" may limit your repayment exposure.

Operating expenses. Property taxes, insurance on the building, maintenance of the foundation, roof, and walls fall into the category of operating expenses. As the tenant, you are responsible for paying these expenses - in addition to your base rent - when they are due or reimbursing the owner for these expenses. Some owners prefer to estimate these expenses for the upcoming year and then bill you monthly for the costs. Great. However, if the owner over estimates the costs, you've a refund coming. The opposite is true if he mis-calcs the other way - you owe. Be aware, these expenses increase over the term of your lease. Owners typically are afforded the right to annually "pass through" these increases to you . A major one to avoid is the increase in property taxes as the result of a sale.

Common area maintenance. Sometimes referred to as C.A.M. charges, these nasty little costs are for mowing the grass, watering the bushes, trimming the trees, sweeping the parking lot, emptying the trash bin and powering the lights outside. If you lease a location within a business park with multiple tenants, plan on this charge adding several hundred dollars a month to your rent.

Repairs and maintenance. The heating, air conditioning, warehouse sprinkler system, plumbing, and roof (if a NNN lease) are all yours to maintain and repair. So what happens if one of these systems needs a full replacement? That can be significant bucks! Generally, the owner must replace it if the cost to repair it exceeds a certain percentage. However, the owner may bill you for the replacement over a period of years.

Liability insurance. The cost of insuring the building against fire and destruction is billed to you as the tenant. You must also carry a level of liability, contents, and loss of rent coverage.

Avoid these expenses. Unfortunately, I'm not privy to a way to completely avoid the expenses - however, you can be aware they exist and put safeguards in your lease to limit your exposure. One suggestion - ask that your C.A.M. charges be capped at a certain annual increase. Another suggestion - negotiate property tax increases, in the event of a sale, be limited to a certain percentage. Finally, before you sign the lease, ask for a complete accounting of ALL the expenses in addition to your base rent.


Tuesday, February 14, 2017

Are you in a DEAL Hole? TUESDAY Traffic Tips





The TV streaming industry refers to a "show hole" - that sinking feeling you get when you've binge watched every episode of Breaking Bad and you wonder what will consume you viewing time. We experience a similar sinking feeling when we near the end of our pipeline - "deal hole". Today, I discuss a remedy for "deal hole". This and much more on this week's VIDEO tip

Tuesday, February 7, 2017

Should you CONFIRM Appointments? TUESDAY Traffic Tips





No brainer, right? YES, you should. We must manage our time wisely. However, is there something you're missing? Are you giving folks an excuse to cancel your meeting? I discuss this and the California RSVP on this week's VIDEO Tip.

Friday, February 3, 2017

Can Commercial Real Estate Affect your Company's VALUE?

Image Attribution: www.kerrypostel.com
In a word, YES! But since it’s a New Year and I've a few more words, let's examine specifically how, shall we?

Your business falls into one of several broad categories – retail, manufacturing, warehouse and distribution, or service.
 
Each business has specific needs for a location – some can be managed from your home office and garage while others require thousands of square feet of commercial space from which to operate. A retail business must rely on visibility or stores nearby to attract customers.
 
Depending upon where your company falls in this spectrum, dictates your facility costs.  

One of the biggest facility costs is rent – that sum you stroke each month to yourself, if you own, or your landlord, if you lease.
 
We can layer in utilities, licensing, compliance, improvement costs, and location operating expenses such as property taxes and insurance.
 
Don't forget to add in an amount for the gardener and trash man.
 
All of these costs comprise a line item of profit reduction.

Speaking of profit, your businesses worth is a multiple of said profit. A potential buyer, of your business, will analyze the Earnings (profit) Before Interest Taxes and Amortization also known as EBITA. Then, depending upon the buyer’s appetite to acquire your business, the multiple will vary and thus the value will ebb and flow.

Generally, business buyers are either attracted to your business to expand their own – known as a strategic buyer or looking for a “value add” opportunity  – referred to as a private equity buyer. If the strategic buyer has local facilities, your commercial real estate will be viewed as a hindrance – they have space and don't need more. Conversely, a short term lease at below market rents will repel that value seeking private equity firm – because their facility costs will increase in the near term and reduce the business earnings.

Recently, I've witnessed commercial real estate crater two business sales – one a merger and the other an acquisition. In the former, a printing operation seeking a strategic partner, found resistance to the long term over market rent on their production facility. Every buyer looking to merge or acquire was faced with a costly surplus of buildings – an insurmountable challenge. In the latter example, a buyer walked away because the lease for the business was set to expire next month, the rent was half of the market rent, and the landlord was unwilling to re-write a new lease with the buyer. Boom. Deal over.

Tuesday, January 24, 2017

Today, I go Activist. TUESDAY Traffic Tips





No, not with pink kitty caps, but just as important to our industry. 1031 tax deferred exchanges are VITAL to the commercial real estate business. Today, I solicit your help in writing your D.C.
elected officials to let them  know your stance on this most critical topic. IPX 1031 exchange has made it easy for you. Just click on the link and you will be led to a portal to write your representatives. This and much more on this week's VIDEO tip.

www.ipx1031.com

Friday, January 20, 2017

This a GOOD Offer - But is it the BEST Offer?

Image Attribution: www.naldzgraphics.net
This is seemingly an easy question to answer, right? You should instantly be able to discern an offer's benefits and whether the offer is a good one.

In practice, the determination of the BEST offer is maybe not as simple as one would believe.

Today, I want to explore the characteristics of a good offer for your commercial real estate and what makes it the BEST offer.

Most sellers of commercial real estate gravitate to the price offered vs. the asking price. If the offer is at asking price, cool! Game on. If the offer fails to reach the asking price expectation, it is summarily discarded. Finally, if the offer eclipses the asking price - silence ensues as a quick determination is made - did you ask too little?

However, the offer with the highest price may not in fact be the best offer. Recently, we received an offer for a project we lease and manage. The buyer planned to tear down the existing buildings and construct multi family. The buyer was prepared to pay a huge number for the real estate - and well above market. The problem was he wouldn't close for eighteen months - no deal!

Terms. Terms vary in a commercial real estate deal. Most contain a contingency period which can consume as few as two weeks to as many as 90 days. Buyers use the contingency time to study the physical aspects, complete a title search, obtain financing and vet the occupants, if any. Two offers at the same price but one with a shorter contingency period is generally preferable.

Number of competing offers. If you have the luxury of multiple competing offers, you should create a grid outlining all of the points contained in this post. Rank the offers based upon all of these factors. The best offer will come shining through.

Nature of the buyer. Will the buyer occupy the real estate or rely upon rents from an occupant as his purchase's justification? Typically, an owner occupant will pay more and focus upon the utility of the real estate for his use.

Source of funds. Has the buyer a cache of cash waiting to be deployed to buy your building? Or, will the buyer rely upon other people's money (OPM) to complete the buy? How about financing? A deal that includes a bank's OK is by nature more time consuming and risky. All of the buyer's AND banker's boxes must be checked in order for the sale to progress.

Buyer's motivation. Why does the buyer want to buy your building? You may be thinking, who cares? He just does. Contained within the answer to this question, however, may be a clue as to whether the sale will close at the agreed upon price and terms.

Contingencies. Mentioned above under the terms paragraph, certain items must be satisfied in order for a sale to occur - title, financing, physical inspection. Caution should be given to conditions outside the normal realm such as conditional use permits, construction of improvements, zone changes, or the sale or lease of another property. If a buyer's purchase is contingent upon any of these conditions, you must carefully weigh the likelihood of waiver - otherwise, what appears to be a great offer might in fact become a failed effort.

As advertised, many factors should be considered to convert a good offer into the BEST offer.

Tuesday, January 17, 2017

#cre Brokers SUCK at This. TUESDAY Traffic Tips





Today I discuss a topic ALL of us can stand to improve because typically we ALL suck at it! This and much more on this week's VIDEO tip for commercial real estate.

Tuesday, January 10, 2017

STOP Saying This! TUESDAY Traffic Tips





STOP Saying This. TUESDAY Traffic Tips. Are you asking your client for permission to fail? If you are saying this, chances are, yes. I discuss this and MUCH more in this week's VIDEO tip.

Friday, January 6, 2017

Six Commercial Real Estate Lessons Learned in 2016

I’m sure many of you reading this post have broken all of your 2017 New Year’s resolutions. That's what a week back to the grind will do for you. What appears to be a good lifestyle change in the fog of December 31st quickly becomes fodder for the refuse once the reality of life kicks in. So, I won't bore you with my resolutions but instead provide you with some commercial real estate lessons I learned last year. 

Lesson one. Commercial real estate is woefully behind our residential counterparts when it comes to technology. Our industry is dominated by old, grey haired men. We haven't embraced technology. Quite the contrary, we shun it. Have you ever attempted to conduct an on line search for a commercial property? Forget about it! The options are limited, clunky, and costly. Plus, to truly gain any knowledge about the offering, you must contact a broker. You'll be lucky to get a returned call. The reason? Our data is differently shared. We aren't bound by boards of Realtors, like our residential brethren. Thus, you need a key to the walled garden -  a commercial broker - to see inside. 

Lesson two. The key to a sustainable source of transactions is your network. Chances are, your network is comprised of three sets of professionals – those upstream from your deals, downstream from your deals, and others unrelated to your business. Build your network with those whom you can trust and refer to them generously Team with your network in creative ways – introduce a contractor to a building owner, give a talk at a trade group, or author an article for an industry publication. In the process, you add tremendous value to your clients and help your network build their business. 

Lesson three. Champion content marketing. Approximately nine of ten searches for commercial properties begin on line. If you refer to Lesson one above, searchers become frustrated as they realize commercial queries aren't as fruitful as residential. Therefore, a digital presence is critical. Rich, helpful, and timely videos, blog posts, and “how to” articles, are the best way to build an on line presence. If folks can’t find you on the web, you're invisible!

Lesson four. As business people, we only have our time and our knowledge to share. If you are generous with both, your life is more meaningful. 

Lesson five. Find a way to focus on your strengths. Every business day contains tasks that expose a weakness – whether it's a lack of technological skill, an aversion to details, or a reluctance to prospect.  Chances are, someone is close by whose strengths are your weakness. A collaboration – blending differing skill sets to affect a positive result – is frequently the answer. 

Lesson six. Don't be afraid to go “old school” – such as: Drop by in person vs calling, avoid an email and mail a handwritten note, or attend a tour of your listing.