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​Why To Use a Commercial Real Estate Agent for a Commercial Real Estate Transaction and Not a Residential Realtor.
Commercial real estate brokers have the experience & expertise to handle commercial deals, they can be used as a time management tool, they know what questions to ask and how to identify what is important to your business. Commercial brokers like to deal with other commercial brokers, plain and simple. They will share sales and leasing information with other commercial agents that may not be open to the public. They also share information on properties they have listed that might fit another buyers’ or tenants’ needs or vice versa.
Is a Realtors Commission Negotiable? 
So, what does a commercial real estate broker take into consideration when calculating a commission. Here are a few considerations that commercial brokers look at:
 
  • 50% of my commission with the Buyer’s broker. They are paying them for their expertise which they will use to make the overall transaction better and potentially close faster.
  • They pay for the marketing platforms that they will use to expose your property to the market. This can include internet commercial marketing websites and MLS’s, marketing brochures, videos, and virtual reality tours of your property. 
  • They belong to professional commercial trade associations such as CCIM, SIOR, marketing groups that are specific to commercial brokers. These groups allow for commercial brokers to have a larger pool of contacts that have clients who are looking for a property like yours. Without belonging to these groups these contacts would more than likely not be made.
  • They have relationships with title companies, attorneys, accountants, and investment professionals that they can use to help save you money, time and more that likely provide a greater return on your property.
  • They have overhead expenses just like you. They pay for space, utilities, staff, internet & phone, business insurance, car expenses, etc.
  • They pay themselves so that they can support their family.
What is an Easement and Why is it Important?
​An easement is a right to cross or otherwise use someone else’s property. This could be the right of the neighbor to cross your land to get to theirs, a utility easement such as a pipeline or electrical power line, or water or sewer lines. Think through how wide is the easement, how close you can build to it, can you pave or concrete over the top of it, what are the rights of the easement holder into access, repair and replacement or damage to your property.
The Difference Between Assessed Value and Market Value?
Assessed value is the value of the real property that has been assigned to the property by the County Assessor. The gist of the formula is that the county assessor uses a sales value for the land and then adjusts for differences such as build-able square footage as opposed to total square footage, access to public utilities, recent sales in close proximity, property zoning etc. Market value is the price that a willing buyer and a willing seller agree to sell and buy a property. This value is driven by things such as location, visibility, access, what surrounds the property (drivers of business). ​
You’ve Now Purchased a Commercial Property, What Type of Financing Should You Use?
1)     SBA financing – These are loans that are guaranteed or direct loans from the Small Business Administration. Their advantages are that they usually offer low interest rates, lower down payment (10% in some cases) and are fully amortizing. The disadvantages to these loans are that they require quite a bit of documentation and they usually have prepayment penalties if you sell the property or pay off the loan earlier than expected.
2)     Commercial loans – These loans are loans that are funded by the lending institution and are held in the lending institutions loan portfolio. These loans can have maturities as long as twenty years, but most of the loans have maturities of 10 years or less. These loans are usually amortized over 15-20 years but have a balloon payment at maturity. You need to be aware that you might need to pay off the loan at maturity even though there is remaining time on the amortization. These interest rates on these loans are fixed for the term or have adjustment periods during the loan that adjusts the interest rate to the current market. These loans are typically relationship driven meaning the lending institution wants to have the business deposit accounts so that they can earn money from your deposit accounts. The good news is that many times if you give the lender your deposit accounts, they will potentially waive some fees on the loan such as prepayment penalties, loan origination fees, etc.​
Important Questions to Ask When Talking with a Commercial Broker?
  • What's important to you?
  • What would this help your business operations?
  • How much office space do I need?
  • How much warehouse space do I need?
  • How high are the overhead doors?
  • Do you need floor drains?
  • Do you need environmental waste areas?
  • How much yard space do you need?
  • Parking requirements and space?
What is a Title Commitment and Why Do You Need it?
A title commitment is very important to you. It is a search of the property to let you know who owns the property, what the full legal description of the property is, it will tell you if there are any mortgages on the property, or any encumbrances (lawsuits, child support, separate maintenance, etc). Title commitments also have exceptions to the property, this means that there is something that is attached to the property (a pipeline, easements, etc.) It will also tell you if you have the mineral or water rights to that property. 
Ways to Market Your Property?
As a commercial broker, I use many different types of marketing for your property. We take a lot of pictures, develop marketing packages, email blasts, video footage, use our network of contacts and we utilize many different commercial real estate websites as well. All of these marketing tools help get the best possible tenant or buyer for your property. ​
​Some Fees to Expect When Selling a Property?
  • Loan origination fee (typically 1% of the loan amount)
  • Title insurance to the lender
  • Proration of taxes
  • Inspection bills & fees (plumbing , electric, asbestos, roof, foundation, etc).
​5 Tips for Leasing or Buying Industrial Property
  1. Have an expert by your side
  2. Carefully read all contracts
  3. Think through all the costs
  4. Know all your wants & needs
  5. Research the market
​5 Tips for Leasing or Buying Retail Space
  • Foot/car traffic – is the shop frontage in view of a highly-used footpath or road?
  • Accessibility – is there good public transport or major roads nearby?
  • Signage rights – what are you and your tenants entitled to?
  • Car parking – is there sufficient parking facilities and are these paid parking or free?
  • Locus of activity around the property.
​How Do I Calculate My Monthly Rent Cost on a Commercial Property?
​It depends. It depends on who's paying the operating expenses. Many times for office and retail the lease rate is quoted as a gross lease, meaning the landlord is paying all of the operating expenses and those are included in the lease payment.
Top 5 Commercial Real Estate Deals Lenders Like to Finance & Least Favorite ​
Top 5 favorite (1 being favorite): 

  1. Owner occupied properties (esp. SBAs)
  2. Stabilized income producing commercial
  3. Stabilized income producing multifamily
  4. Landlord improvements on stabilized income producing assets
  5. New construction development for signed lease tenants 

Top 5 least favorite (1 being least favorite): 

  1. Raw Land
  2. Restaurants (non brand)
  3. Speculative mixed use development
  4. Speculative residential development
  5. Tenant improvements for businesses
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