Charlotte NC Commercial

by Rob Cassam, CCIM

How To Increase The Value Of Investment Real Estate

Written February 1, 2025 by
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In this issue

    • Increasing Market Value Of The Investment

    ​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 therefore increasing equity when the property is sold. When working with larger commercial and apartment properties be aware of the things that have the potential of adding value. Do the required homework on the property. A feasibility study can measure the capacity to add value. There may be many other measures that must be taken, such as market analyses, applications for new zoning, design and construction planning and a plan for marketing……(more)

    • Building On Leased Land

    Building on leased land results in a separate ownership of that building and the land. The two owners, one of the land, and one the improvement, come together in one investment parcel. In this situation, the landowner wants someone to develop the land, but still wants to continue in ownership. The developer prefers to lease rather than buy the property.
    One owner wants the security of owning the land with a good lease to the owner of the improvement. The owner of the building puts up less money since the ownership of land is not part of the expenses in the development…..(more)

    • The Fair Cancellation Clause In A Commercial Lease

    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 market conditions improve, whether that occurs next year or five years from now. Another is the holder of vacant or underimproved property who plans to develop it whenever market conditions justify. In the meantime, these properties must be leased to generate sufficient cash flow to pay operating costs and debt service. Such an owner will be amenable to giving significant concessions, including a low rental, provided the landlord can cancel the lease during the term….(more)

    • How Property Management Makes Asset More Valuable

    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 property management seriously and fall behind in values. The professional property manager is keenly aware of all of the recurring costs of a property and how they can affect the bottom line. The owner may applaud and give attention to a one-time saving on a “high-cost” item such as insurance on the property while overlooking the multipliers in the number of units……(more)

The Versatile Real Estate Option

Written January 1, 2025 by
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In this issue

    • Owners & Tenants Must Have Insurance

    Insurance coverage must be addressed by both landlords and commercial tenants.
    For the everyday problems, a landlord must have the maximum coverage for the building and the tenant’s leases. The tenant must carry insurance with coverage that will protect his business. What if you have a small disaster that is easily repaired, but you lose a tenant because he was not covered for the damage inside the business?……(more)

    • The Versatile Real Estate Option

    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 sense of the right to buy it) for very little cash. It gives the most leverage and conserves cash, both very desirable for investors. An option can be compared to (1) a contract of sale with a liquidated damage clause, (2) a sale with a nonrecourse purchase money mortgage, and (3) a lease containing an option to purchase…..(more)

    • Shopping Centers – The New Town Center

    New mall construction and the renovation of existing centers are becoming more mixed use, with hotels and office buildings being incorporated into the plans. Larger malls are providing more than just shopping. We are seeing more cultural attractions, medical clinics, health clubs, spas, and other facilities locating there. With the success of the huge mall/amusement centers throughout the country, the idea of combining amusement centers with shopping facilities is still very popular. Shopping centers are increasingly becoming “town centers”, which is what the original planners had in mind for these facilities in the beginning….(more)

    • Percentage Lease And The Seasonal Business

    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 success of the tenant’s business and shares its ups and downs. Whether it is a hardware store, a furniture store, an ice cream and confections store, a supermarket, or a variety store, the percentage rental will depend on the turnover of merchandise, the margin of profit, and the cost of operating the business. The method of calculating the amount of the percentage rent must be simple and as foolproof as possible. This will reduce the chance for arguments and disputes. Accordingly, rather than using net profit (a term replete with potential for disagreement) as the yardstick, the figure used is gross sales, gross receipts, or gross revenue. The term “gross sales” should be clearly defined as, for example; all sales made at or from the leased premises, whether for cash or credit, whether by the tenants or subtenants, minus refunds for returned merchandise and minus sales taxes. The tenant usually must calculate the gross sales figure and the landlord is allowed the right to examine the books and records which pertain to the gross sales figure…..(more)

Industrial And Office Park Development

Written December 1, 2024 by
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In this issue

    • Industrial And Office Park Development

    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 suburbs. Many of these have been planned and developed by private investors; others have been planned or sponsored by public agencies. Preparation for construction of an office or industrial park is expensive. It includes plotting, grading, and installing streets, utilities, rail connections and other facilities. With the increased difficulty in securing clearances and permits, speculative development in building these facilities was down……(more)

    • Major Reasons For The Asset Manager

    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 managers increases. Asset managers have become more important during the past decade for three major reasons:….(more)

    • A Good Management System

    A good management system efficiently records, reports, and manages income from tenants. A poor system, on the other hand, is likely to increase the amount of work, create tenant conflicts, and reduce the amount of total collections. The income from managed apartments and commercial units is determined by the actual collection of rents, not by the number of occupied units. A fundamental aspect of effective property management is the rent management system, which enables rents and other income to be billed, recorded, collected and deposited…..(more)

    • Office Building For Attorneys Only

    Property managers must show some imagination to keep a property fully rented. One way to keep an office building occupied is to consider specializing–renting to members of one professional field. Members of the medical profession have long realized the advantages of having an office in a medical building (that is, in a building occupied only by professionals in the health care field). The building is designed, equipped, operated and maintained solely for their particular professional needs…..(more)

The Investors Leverage With Options

Written November 1, 2024 by
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In this issue

    • The Investors Leverage With Options

    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 estate may be extremely desirable. One way to do that is with an option. High leverage is an excellent benefit. Remember though, that with an option there is a problem. Options have an expiration date. If you haven’t gotten the desired increase in value by the time the option expires, you must make the choice – buy the property and wait longer, or let the option expire……(more)

    • How Lease Property Is An Estate For Years

    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 investment in the property…..(more)

    • The Master Plan For Land Acquisition

    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 requiring an initial outlay of all of the capital necessary to acquire such a tract.
    From the point of view of the landowner, the disposal of a large tract at a good price may require a formula that will encourage the developer to commit improvement and development money for part of the tract that will build future value into the entire tract. This may be accomplished by the following:…..(more)

    • Real Estate Investment Advisors

    Today’s investor in real estate must be aware of market conditions and potential that is usually beyond their own available time to attain. Investors need assurance about the true condition of the market. With increased competition, the market place is becoming more complicated. As your professional commercial real estate advisors, we are in the position to represent you in real estate transactions by setting up sales, exchanges, leases, purchase and sales of options, and management of real estate….(more)

The Success Of A Prospective Tenant

Written October 1, 2024 by
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In this issue

    • The Success Of A Prospective Tenant

    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; (1) the prospective tenant’s financial stability; and (2) the prospective tenant’s potential for success…..(more)

    • Lenders, Property Managers – A Service Joint Venture

    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 decision of whether they wish to dispose of the property immediately or hold it for a period of time to hope for an increase in value. They would like to see the value of the REO increase to equal the loan amount. These lenders are not professional real estate investors but money managers. Therefore, they are reluctant to invest any additional money in the properties. This problem is compounded because a troubled property needs more attention than does a healthy one. It would not have been in foreclosure if it didn’t need help. The solution might be a service joint venture. This type of contract with a real estate firm allows the lender to minimize management fees until the property is generating cash flow again…..(more)

    • Rental Market For Senior Lifestyle

    Not all retired people want to own their own home. Many prefer to be tenants. Many feel that the proceeds from the sale of their old home can be used to supplement their pension and social security, rather than reinvested in another home. The money can be used for travel, visits to children and grandchildren or for medical expenses.
    For living quarters, these seniors prefer to be rent payers, not owners. A modest-sized apartment suits their needs and, as tenants, they are relieved of any worries about maintenance and repairs……(more)

    • Variations of Commercial Leases

    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 only part of it? If the property must be modernized, who pays for the improvement? Can the tenant be moved out during the renovation? If the costs of servicing the property rise, should the tenant pay none, all, or part of the increased costs? How should inflation be handled—with automatic rental increases? With increases tied to some index, perhaps the Consumer Price Index?….(more)

  • Investment Planning

A prospective investor may have a problem getting started with a real estate investment because of the great variety of properties that are out there. They may be fearful that someone will “sell” them something – something that is wrong for them. An answer to these problems can be an interview with an interested professional real estate broker who can act as a real estate investment counselor. Each prospective investor can be interviewed in depth to find out specific needs in an income property. At the same time their needs are being evaluated, the broker will also communicate what benefits are available in various properties and how to identify them. (more)

The Benefits Of The Commercial Appraisal

Written September 1, 2024 by
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In this issue

    • The Benefits Of A Commercial Appraisal

    The value of a particular property is made up of the future benefits that the owner of the property can expect to receive from rental or other income. In determining the future benefits that an owner can receive from a property, the current use of the property is considered, and all other uses that it may be capable of in the foreseeable future. As an example, a property that is being used as farmland could be usable for a residential subdivision in a few years, but later might be usable as commercial or industrial sites…..(more)

    • Climate Controlled Self Storage

    A feature that developers and owners of self-storage properties are adding to increase the appeal to more users is climate-controlled space for storage of microfilm, computer records, antiques and other sensitive materials……(more)

    • Creative Commercial Management Tips

    Property managers must always think about the type of tenant that is most likely to reside in that particular building. For example, when apartments in a project rent for $16,000 to $24,000 per year, tenants will be concerned primarily with quality shelter. This means a safe, clean, efficient building but without a lot of frills and amenities.
    On the other hand, if the apartments will rent for $35,000 to $45,000 per year, or more, tenants typically expect and demand much more than just shelter. These tenants want a luxurious life-style, and that means the building should contain a health club, a swimming pool, a private park, and similar conveniences…..(more)

    • Office Building Vacancies

    Office buildings are excellent commercial properties to own. One of the most important jobs of a leasing agent for a building with available space is to analyze other buildings to see if any tenant could be induced to move. Newer buildings may fill up at the expense of older 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 receive, before a final decision is made by the tenant on staying or moving. Here are some of the items for comparison….(more)

  • Your Commercial Real Estate Broker

How can I be of service to you? When you are buying or selling a commercial property, of course. At other times, we can handle property management for any properties you might own. Let me help in determining the value of your investment, anytime you need to know. Call my office when you need services of an expert in this community’s real estate. I have the records of all properties for sale at all times. Today’s interest rates, availability of loans, and any other financial information that can affect your property is as close as your phone. Keep our newsletter as a file of useful real estate information and to remind you to call me whenever you need “Professional Service”. (more)

How To Control Property With A Purchase Option

Written August 1, 2024 by
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In this issue

    • Controlling Property With A Purchase Option

    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 buy the property. But, if the optionee does not exercise the option, the deposit paid to the seller-optionor is forfeited…..(more)

    • Multi-Screen Theatre As Key Tenant

    The multi-screen theater in shopping centers has been around for a long time but they have not been thought of as a key tenant. The shopping center has gone way beyond a place where you can buy appeal and shoes. The shopping center of today is more of an entertainment center than just a shopping center. The key tenant in a shopping center was often a store from a nationwide chain that carried a wide variety of quality, brand-name items. Instead of signing just a department store as the anchor tenant, some large shopping center owners and operators are now choosing to sign a multi-screen movie theater as the key tenant. The multi-screen movie theatre may attract more people, more often than any type of store because they feel a movie theatre is a better drawing card for getting people into the center……(more)

    • Acquiring Investment Land

    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 ideas on how those professionals do it…..(more)

    • The Upkeep On Your Rental Property

    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…..(more)

  • Your Commercial Real Estate Broker

How can I be of service to you? When you are buying or selling a commercial property, of course. At other times, we can handle property management for any properties you might own. Let me help in determining the value of your investment, anytime you need to know. Call my office when you need services of an expert in this community’s real estate. I have the records of all properties for sale at all times. Today’s interest rates, availability of loans, and any other financial information that can affect your property is as close as your phone. Keep our newsletter as a file of useful real estate information and to remind you to call me whenever you need “Professional Service”. (more)

Choosing The Right Investment Property

Written July 1, 2024 by
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In this issue

    • Choosing The Right Investment Property

    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 basic strategies for dealing with them. Here are some suggestions to help the investor devise other approaches to meet special needs…..(more)

    • Lease Negotiations With A Corporate Team

    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 brokers or tenant representatives, design and engineering consultants, and others. In today’s market, corporate tenants with high credit ratings, who are willing to make long-term lease commitments negotiate from a strong position. Therefore, corporations that formerly treated real estate transactions in a casual way have now developed detailed real estate negotiating strategies. The corporate tenant sees these negotiations as a way to cut costs within the company (whether upsizing or downsizing). Landlords, developers, and brokers must be aware of this new style of negotiation. While the real estate executive plays a key role in developing the strategy, the other parties must be ready to respond quickly to requests for information and be prepared to discuss issues that rarely if ever arose in the past…….(more)

    • Drafting The Shopping Center Lease

    When leases for shopping centers are being drafted, they can be more difficult than most other commercial leases. In a shopping center, the owner wants the leases to be as uniform as possible, but knows that each lease must have variations to meet the individual tenant’s particular problems in business and in certain size or shaped spaces.
    Here are some suggestions of items that should be covered in your shopping center leases. There could be many more depending on each property……(more)

    • Who Buys Commercial Property

    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 important to that type of buyer…….(more)

    • Your Real Estate Investment

    Knowing what you can do in some investment situations can be the difference between an annual profit or loss in your currently owned commercial property or the one you intend to acquire. How you acquire it can be important……(more)

    • Your Commercial Real Estate Broker

    How can I be of service to you? When you are buying or selling a commercial property, of course. At other times, we can handle property management for any properties you might own. Let me help in determining the value of your investment, anytime you need to know. Call my office when you need services of an expert in this community’s real estate. I have the records of all properties for sale at all times. Today’s interest rates, availability of loans, and any other financial information that can affect your property is as close as your phone. Keep our newsletter as a file of useful real estate information and to remind you to call me whenever you need “Professional Service”. (more)

Investing In Land For Long-Term Profit

Written June 1, 2024 by
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In this issue

    • Investing In Land For Long-Term Profit

    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 on capital, and must stand alone as a good business move. Land has never been a tax advantaged investment and should be worth considering as a way to increase wealth. The trend has always been up…..(more)

    • Changing The Use Of Investment Properties

    There is a big difference between investing in the rejuvenation of real estate projects and investing in stocks, bonds and other securities. When you invest in securities, you have no control of any factors that can enhance the value. In real estate, you have control of the investment yourself. In an investment in converting use of buildings in real estate, the investor can use creative imagination to change a property into something that has a much greater value, and even better than before…….(more)

    • Turn-Around Negative Cash Flow

    In investment properties, when cash expenses are more than cash receipts, there is negative cash flow. Most investors avoid properties where this is the situation, unless there are strong underlying economic factors that indicate the cash flow can become positive…….(more)

    • Keeping Key Employees Happy

    Office amenities are the little things that transform a regular work place into an exceptional one making for happy employers and happy employees. Key executives were the ones who always had the “office with a view”. Now, however, on modern buildings built in recent years the atrium is one of the most popular (and expensive) amenities. It is popular because virtually every office can have a window view, either toward the conventional view, the outdoors, or toward the spaciousness and openness provided by the atrium. It is an example of “keeping key employees”……(more)

    • Contact Your Property Manager In Advance

    The usual way that a property management company comes upon the scene is when the owner of a building makes a contact. Often the owner has just acquired the property through a purchase or exchange, then looks for a manager…..(more)

    • Your Commercial Real Estate Broker

    How can I be of service to you? When you are buying or selling a commercial property, of course. At other times, we can handle property management for any properties you might own. Let me help in determining the value of your investment, anytime you need to know. Call my office when you need services of an expert in this community’s real estate. I have the records of all properties for sale at all times. Today’s interest rates, availability of loans, and any other financial information that can affect your property is as close as your phone. Keep our newsletter as a file of useful real estate information and to remind you to call me whenever you need “Professional Service”. (more)