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Do You Need Commercial Real Estate Broker?

6/28/2013

Tenant Representation Services

Whether you are relocating your business to South Johnson County in the Kansas City market or just need to expand or relocate your business, you really need to consider  to have someone on your side that knows the area market and can help you make informed decisions about leased commercial real estate for your company.  With REMAX Best Commercial, you can expect us to strive to stay ahead of the market to understand trends to assist you with your needs.  Our services are typically paid by the landlord, so enlisting the services of our team to aid in finding and negotiating your next leased space may be one of the best business decisions you can make.

Net Lease Property

With REMAX Best Commercial, our team dedicated to the investment brokerage of net-lease, triple-net, single tenant and sale-leaseback investments properties and can help you sift through the broad real estate investment market. You can expect our team to stay ahead of the market, understand trends and assist you in the acquisition and disposition of your net leased properties.  While Net leased, specifically Triple Net (NNN), real estate with credit tenants such as Home Depot, CVS, Walgreen's and McDonalds, are always the most popular with credit-tenant property investors, we believe that value can be found in all business sectors and geographic regions if you find the right professional to assist you in uncovering them. We believe that we can be that resource to make your goals in commercial investment property feasible and achievable.

Great Returns - Steady Growth, Commercial Real Estate for you IRA!

6/28/2013

Since 1998 I have been trying to assess the damage the stock market fluctuations have had on my dream of retirement.  My wife continues to ask me if living under a bridge or in a van down by the river is our future.  I try to reassure her that our retirement investments are not in the dire situation she thinks.  

I feel that I have no control of how my retirement funds will go and I'm at the mercy of a very fickle stock market.  So, over the past five years I have been exploring different types of investments with none of them meeting my financial expectations until now!  I have written in the past about how an individual can make money in Commercial Real Estate --  cash flow, appreciation and principle build-up through paying down the loan, but how can I use this type of structured investment for retirement?

Self-Directed IRA:

In Kansas City most financial advisors I talk to agree, commercial real estate investments, as part of a balanced portfolio, can reduce investment risk and increase cash-on-cash return.  A big question that keeps coming up is "Can I use my existing IRA funds for the purchase of a commercial real estate investment?"  For individual investors looking to diversify, your IRA funds can be rolled over to acquire an income producing commercial property.  But there are stipulations like using a qualified plan, an IRA Custodial Account, and Trust Company.  Additionally, investors are limited in the types of private equity investments that can be made.  As complicated as this may sound the steps are easy and you can control the return on your retirement investments.

 The company that was most referred to me was Sterling Trust, not only because their fees are affordable but also because of their flexibility.  So, let's explore how to go about the process of opening a Self-Directed IRA account and using real estate as a private equity investment in your account.

The first step is to select a financial institution that administers IRA accounts.  There are many companies out there to choose from but through Sterling Trust I found it to be easy to start an account. 

        You'll need to fund your account by making a contribution or by rolling over or transferring funds from another IRA.  Again the Advisor should be able to help.

   Commercial real estate property, remember that the property should be income producing and your Commercial Real Estate Broker should provide a pro forma on the investment and due diligence.

What Type of Building:

OK, that made it all sound very simple but the most difficult part is finding the right property.  In a recent article I wrote:

"Single tenant triple-net-lease properties are usually buildings in which a tenant agrees to take responsibility for maintenance, taxes and insurance during a long lease-leaving the investor with little to do but collect checks.  Through limited partnerships, investors are now grouping together and acquiring buildings with qualified long-term leases.  And, here in Kansas City the types of buildings look to have great appeal. 

These triple-net-lease ventures continue to out-perform not only the rest of the commercial real estate market but also the financial markets with less risk.  "In Kansas City triple-net-lease properties are generating incredible annual returns that just can't be ignored", stated Mike Nicholas, a local Kansas City investor.  "We have certain criteria that we use to evaluate properties and right now we are only looking at the Kansas City area market, it's an investment that we can control with minimal management responsibilities."

Cash-On-Cash Returns:

It is a critical element to conduct the due diligence on the property that will be part of a long term investment strategy.  It starts with analyzing the potential of the property and developing a pro forma to provide a cash-on-cash return for your IRA.  As I stated above, with these investment properties, investors need to evaluate the Net Operating Income on the property. The crucial elements to consider are the financing, interest and amortization, the Capitalization Rate, and finally credit worthiness of the tenant.

Most people understand cash flow.  It is the money left from rental income after the investor pays his mortgage and expenses.  Investors often refer to the term "cash-on-cash return."  This is the cash flow divided by the down payment the investor needed to make.  So a property that cost $1,000,000 would have a 12% cash-on-cash return if the investor put down $200,000 and had cash flow of $24,000.  But, many investors do not realize that the cash-on-cash return is different than the capitalization rate and greatly impacted by the loan terms they are able to negotiate.

Like many things in real estate investing, there's a lot of detail here that it doesn't necessarily make sense for you to master yourself.  Understand the basics, and hire a professional Commercial Real Estate broker to help you with the specifics.   

For more information contact:  Bruce Re  --  913-323-5408

Beginning Your Office Search?

6/28/2013

Get started with your personalized&complimentary available office space report!

Use my easy office locator resources to help you in your search for finding space in the Kansas City metro Johnson County, Kansas area.

I will provide you a space report that will identify a minimum of two office spaces in your area that meet your office search needs.
Whether you let me represent you in your office space search, have another lease representative work with you, or will search on your own, let us help you start the search.

Simply email me with your space search needs and the following information:
Full Name and Company name
Email address
Anticipated move date
Desired Office Location
Minimum and Maximum square footage
# of full time employees
Specific needs requirement

With this information I will send you a minimum of two office space options (maximum of 5 listings) that are currently in your desired market including:
Building name and address
Available square footage
Lease/sublease status
Quoted square foot rate

Information and representation can help you in your search. Talk to a Commercial Broker that can offer their knowledge and expertise..it will save you both time and money. Commercial brokers do this stuff every day and they understand and track the current trends within the industry that pertains to Kansas City. Understanding the current norm is the key to finding the right space for your people.

If you would like help, contact Bruce R at brucere@remax.net or call me at 913-323-5408.

Information is power... get the information that you need to start your office space search today!

The Border War Continues - Co0mmercial Real Estate

6/28/2013

The Border War Continues

Since the Civil War, Kansas and Missouri have been in competition for everything.  The respective State Universities, Kansas University vs. Missouri University and their sports teams has been the hottest ticket around.  Now, Kansas and Missouri are competing for businesses to move their offices and corporate headquarters to call their State home.

All sorts of incentives are being provided to these businesses to bring in their employees and it has never been more competitive than it is in the Kansas Citymetro area.   There is the State Line that divides the city almost in half.   The Missouri side of the line has been home to corporate giants like Hallmark, H&R Block, Cerner, Bayer, Black&Veatch, and Union Pacific Railroad.   But Kansas is making strides and is now home to AMC Corporate Headquarters, Garmin, Teva Neuroscience, The Kansas Speedway, and Sprint.

So what does this mean to your Business when considering a move or an expansion?  It means that both Kansas and Missouri will compete to have you call their State home!  Both tout the fact that their State and City is a place with low operating cost, talented work force, and business friendly policies.  Both sell the fact that they offer competitive financial incentives to businesses, from property tax to income tax, from Industrial Revenue Bonds to Employee Withholding tax, when you consider where to move your Business, Kansas and Missouri have to be on your short list.

Recently, MARS, Caterpillar, John Deere, AMC Theatres, Cerner, Teva, and Siemens Energy all of which announced or built new facilities on the Kansas side of the State line recently.  These are all global companies that could have gone anywhere in the world but they chose the Kansas City metro area as the place to be.

For more information about Kansas City and how it would be a great fit for your business contact me:

Bruce R

ReMax Commercial Real Estate

Best Associates, Corporate Woods

913-323-5408 or

brucere@remax.net

2013 Commercial Real Estate Investor Forecast

6/28/2013

All I can say is that 2012 is our rear-view mirror and the optimism of 2013 lays before commercial real estate investors. With the distraction of the Presidential elections behind us and the resolution of the Fiscal Cliff issues even with the uncertainty that remains, more investors are again ready to focus on the opportunities they see in commercial real estate.

According to the fourth-quarter 2012 PwC Real Estate Investor Survey, investors expect to see an up tick in sales activity in 2013 as property owners cull portfolios to take advantage of the lower capitalization rate environment.  PwCs survey respondents expect cap rates to continue to compress across all property types.  Thats great news for investors with commercial property!  Property values are going up as cap rates go down.

So, what does this mean for mid-west investors, not to worry, there is still time.  The mid-west responds slower than the national average and even though finding the property delivering double digit returns has become more difficult, those properties are still out there!

Commercial Real Estate continues to show as an durable investment with assets looking to increase in value when compared to the volatility of the world markets and certainly offers more stability than stocks.  The PwC is stating that even, "Foreign investors are particularly bullish on U.S. commercial real estate as they look for stable investments during uncertain times abroad."

Even as Washington plays with legislative uncertainty, most property sectors continue to post occupancy gains and rental rate growth and an era of zero to low new supply is starting to give way to new construction starts in most property sectors.

So, Im starting to see, particularly in Kansas City and the Mid-West that the good news is starting to eclipse the bad news, and that makes us want to invest more capital in Commercial Real Estate.
Beating other investment opportunities, triple NNN buildings are still the best bet but investors should start to consider multi-tenant office properties as owners start to cull their portfolios.

Even the retail sector, not a strong venue with investors for now several years, is seeing cap rates compress.  Due to limited new construction, moderate spending on the part of consumers, and stabilizing housing markets, many investors are starting to revisit strip shopping centers and even power centers.  Lack of new supply combined with rising te
In the Mid-West, the Commercial Real Estate recovery remains positive and is stronger than what is seen on both tnant demand have caused investor interest in the warehouse sector to surge over the past year, creating both buying and selling prospects.he East and West coasts.  Commercial Real Estate remains a prime target for investment capital as it continues to perform well relative to alternative investments.


* Contribution by CoStar and PwC Research, Real Estate Investor Survey.


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