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Commercial Real Estate
Commercial Real Estate Description:
Commercial real estate can be categorized according to the use to
which the property is put. The five primary commercial property
types are: office, industrial, retail, land brokerage and
multi-family. Other types include: hotels & motels, hospitals,
nursing homes, recreational facilities, restaurants, movie theaters,
nonprofit & municipal services, parking lots, storage houses, etc.
Different types of properties require different types of analysis
and information before making an investment decision. Expenses and
taxes also vary by property type. Understanding the characteristics
of each commercial real estate type is essential.
Office:
Office properties are occupied by
professional or business offices. The term ‘’office'' can refer to
whole Buildings, floors, parts of floors, or office parks. The
location of the property affects market value and rent. Properties
that are in downtown or in the Central Business District CBD) are
valued differently than suburban properties. The office space
measurement standards are very important and differ from market to
market. Measuring Office Space: Useable vs. Rentable Square Footage
should be understood and noted.
Expertise and knowledge
that are required to provide data for decision making for office
owners and investors are: location, knowledge of local market
conditions and trends, tracking rents, rent concessions, operating
expense pass through, changes in technology, speed to market,
demographic data and economic performance, negotiating skills and
other factors.
Industrial:
Industrial properties
house production, manufacturing, high-tech, distribution, or
warehouse operations. These properties may also include some office
space or storage space. By broad physical and functional
characteristics, including space falls into the following
categories, in which each having its own characteristics and
requirement. For example; sometimes Bulk properties are measured in
cubic feet because height can be critical to some industrial
tenants:
Bulk Office/warehouse
Office/service Freestanding
Multi-tenant
Large manufacturing
Research and development
Industrial park
Retails:
Retail properties are used
exclusively to market and sell goods and services to a vast variety
of consumers. The configuration of these properties is designed to
meet a particular consumer’s buying preferences. Retail properties
fall into general categories such as regional malls, neighborhood
shopping centers, commercial strip properties, and single-building
properties. In a more specific way, Retail properties fall into one
of the following properties, each having its own characteristics and
requirement. For example; while 20 miles distance and 30 minutes
driving time is acceptable to drive to an outlet center, but 5 miles
or 10 minutes drive to a neighborhood center might be too much and
unacceptable.
Expertise and knowledge
that are required to provide data for decision making for retail
owners and investors are: location, speed to market, demographic
data and economic performance.
Shopping Center
Neighborhood center
Community center
Regional center
Super-regional center
Power center
Fashion/Specialty center
Theme/festival center
Outlet center
Free-standing store
Commercial strip properties
Lands:
Expertise and knowledge
that are required to provide data for decision making for Land
owners and investors are: provide solutions based on constantly
evolving factors such as zoning and regulatory issues, demographic
and traffic patterns, and overall political and economic trends.
Multi-Family:
Duplexes and fourplexes
are two-to four-unit buildings that may be owner occupied. They are
usually an individual’s first investment outside of a single-family
residence. Individual investors or partnerships often own apartment
buildings with 4 to 60 units. Apartment properties with more than 60
units normally are owned by experienced investors. Larger apartment
properties are referred to as multi-family properties in commercial
real estate.
Expertise and knowledge that are required to provide data for
decision making for multi-family owners and investors are: market
knowledge, research, financing and analysis of market trends in
vacancy, rent escalations, comparable cap rates and buyer trends.
Commercial Real Estate:
There are a lot of details to be handled when selling, leasing or purchasing a commercial property. It requires strong analytical skills and expertise to maximize value for our clients. In summary it requires:
* experience,
* broad knowledge of the market dynamics trends,
* access to large real estate databases and legal forms,
* access to the latest technologies & tools,
* art of market and financial analysis,
* art of Decision Making (e.g., Conduct lease vs. purchase market analysis),
* knowing the neighborhood and pricing it right,
* negotiation skills,
* marketing,
* professional networking,
* handling volumes of paperwork,
* allocate a lot of time consuming tasks and many more tasks.
User Decision Analysis:
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Make sound leasing decisions about virtually any aspect of commercial real estate:
• Identify space users and investors\n• Compare financing options
• Evaluate leasing alternatives
• Negotiate terms and complete transactions
Investment Analysis:
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Analyze the critical aspects of the acquisition and ownership of commercial investment property:
• Assess the client's needs to determine investment strategy
• Analyze various properties to select the optimal investment
• Examine various disposition strategies
Identify and evaluate the key variables of market and location analysis
• Estimate supply and forecast demand for property
• Select a site
• Analyze retail, office, residential, and industrial uses for a site
• Calculate property value
• Measure investment performance
• Finance real estate investments
• Compare before- and after-tax yields
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