Realty Reality: leasing

Showing posts with label leasing. Show all posts

Monday, May 12, 2008

Revenue Alternatives For Vacant Retail

If you have vacant retail property, ongoing costs are a major concern while it is empty.

If the property is located in a high traffic (pedestrian and/or automotive) area in a major metropolitan district, then we have a suggestion to help the vacant site to generate recurring revenue until you have a tenant in place...

You can alleviate some of the financial burdens of the vacant retail property by allowing your space to be used for displaying advertisements by blue-chip companies in it's windows.

(It may also help get your property noticed by potential tenants!)

Contact us for help with marketing your site and increasing your property's revenue potential anywhere in the Delaware Valley.

We provide landlord and tenancy representation as well as property management services.

Visit my web site for additional services and support: LawrenceYerkes.com [NJ/PA]

Thursday, March 15, 2007

Commercial Vacancies Up, But So Are Investments

WASHINGTON - As some tenants move to newly built locations, commercial real estate vacancies are rising modestly, following a record year for investment activity, according to the latest COMMERCIAL REAL ESTATE OUTLOOK of the National Association of Realtors®(NAR).

David Lereah, NAR’s chief economist, said an irony in today’s commercial real estate market is that some flush tenants are contributing to rising vacancies. “Job growth has been fueling the demand for space, notably in the office sector,” he said. “Even so, some tenants are not ‘back filling’ vacated space as they move to higher quality new space, contributing to a modest gain in vacancy rates. Office, hotel and industrial properties continue to be the most sought after commercial sectors for investment.”

Outside of the hospitality sector, investors channeled a record $306.8 billion to commercial real estate in 2006, up from $276.0 billion in 2005; that total does not include transactions valued at less than $5 million. An additional $35.3 billion was invested in the hotel sector; however, long-term historic comparisons are not available for the hospitality market.

Cindy Chandler of Charlotte, N.C., chair of the Realtors® Commercial Alliance, said the record investment in commercial real estate was based on sound fundamentals. “Investors poured funds into commercial real estate at unprecedented levels in 2006, underscoring the value of portfolio diversification into real property,” she said. “In general, we see rental rates rising with fairly broad consistency across most market areas.”

Most of the new commercial space has been build-to-suit, or with significant pre-leasing in place. The expanding new supply will modestly raise office and industrial vacancies through the end of the year.

The NAR forecast for five major commercial sectors includes analysis of quarterly data for various tracked metro areas. The sectors include the office, industrial, retail, multifamily and hospitality markets. Metro data were provided by Torto Wheaton Research and Real Capital Analytics.

Office Market

A flight to quality office space, notably in new buildings, will raise vacancy rates in older class B and class C buildings. In addition, employers are using space more efficiently through telecommuting and “office hotelling.” Speculative new construction is being held in-check.

Office vacancies are expected to rise to an average of 13.9 percent by the end of the year from 12.6 percent in the fourth quarter of 2006. Annual rent growth in the office sector is forecast at 3.2 percent in 2007, following a 5.2 percent gain last year.

Estimates for the first quarter show areas with the lowest office vacancies include New York City; Seattle; Honolulu; Orange County, Calif.; Washington, D.C., and Miami, all with vacancy rates of 9.7 percent or less.

Net absorption of office space in 56 markets tracked, which includes the leasing of new space coming on the market as well as space in existing properties, is projected to be 21.9 million square feet this year, down from 76.2 million in 2006.

Office building transaction volume set a record of $133.6 billion trading hands last year, up 32 percent from 2005.

Industrial Market

Trade is continuing to be the dominant influence in the industrial sector in terms of investing and leasing. The needs of modern distribution networks are fueling demand for new space. Property pricing and rising rents in some markets are forcing users to consider other locations where both land and operational costs may be lower.

Vacancy rates in the industrial sector should average 10.1 percent by the end of the year, up from 9.4 percent in the fourth quarter of 2006. Annual rent growth is likely to be 2.3 percent by the fourth quarter, up from a 1.4 percent annual gain in the fourth quarter of 2006.

The areas with the lowest industrial vacancies include Los Angeles; West Palm Beach, Fla.; Orange County; Ventura County, Calif.; Tucson and Tampa, all with vacancy rates of 5.7 percent or less.

Net absorption of industrial space in 54 markets tracked is estimated at 75.9 million square feet in 2007, down from 189.1 million last year.

Industrial transaction volume in 2006 was a record $38.9 billion, up 9 percent from 2005.

Retail Market

Consumer confidence is rising at a fairly slow pace, but a sluggish housing market and economic concerns are dampening consumer spending and, possibly, demand for retail space.

Vacancy rates in the retail sector will probably slip to 8.1 percent in the fourth quarter of 2007 from 8.2 percent in the same quarter last year. Average retail rent is expected to grow 1.1 percent this year, following a 3.9 percent gain in 2006.

Retail markets with the lowest vacancies include Orange County; San Francisco; San Jose, Calif.; Las Vegas; Honolulu and Miami, all with vacancy rates of 4.4 percent or less.

Net absorption of retail space in 54 tracked markets is projected at 19.9 million square feet in 2007, up from 8.4 million in 2006.

Retail transaction volume declined 7 percent in 2006 to a total of $46.9 billion; much of the decline was in regional shopping centers. However, unanchored strip centers, free-standing drug stores and big box retail centers saw large gains. At the same time, pricing for retail space rose 13 percent in 2006 to an average of $168 per square foot.

Multifamily Market

In the apartment rental market – multifamily housing – vacancy rates are forecast at an average of 5.9 percent at the end of this year, which would be unchanged from the fourth quarter of 2006. Average rent is likely to rise 2.8 percent in 2007, following a 4.1 percent increase last year.

With the condo conversion craze coming to an end in most markets, multifamily investment is normalizing. Condo converters accounted for $30 billion out of $88 billion in multifamily transactions in 2005, but were down to $9 billion out of $87.4 billion in 2006. Some converted projects are returning to the rental market, and investors are now focused on income appreciation and improving fundamentals.

Multifamily net absorption should total 223,900 units in 59 tracked metro areas in 2007, up from 221,900 last year.

The areas with the lowest apartment vacancies include Northern New Jersey; San Jose; Salt Lake City; Los Angeles; Miami; Washington, D.C., and Norfolk, Va., all with vacancy rates of 3.1 percent or less.

Hospitality Market

Hotel occupancies are expected to average 68.1 percent in 2007, up from 67.8 percent last year. Revenue per available room (RevPAR) is seen at $82.30 this year, up from $78.40 in 2006. A record 45,500 hotel rooms are scheduled to be added to the inventory in 52 markets tracked this year, compared with 22,000 in 2006.

Markets with the highest RevPAR include West Palm Beach; New York City; Honolulu; Miami; Fort Lauderdale, Fla.; and Phoenix, all with RevPAR of $125 or more.

For properties valued at $5 million or more, transaction activity during 2006 totaled 1,166 hotels with a combined value of $35.3 billion, nearly 20 percent higher than 2005.

The COMMERCIAL REAL ESTATE OUTLOOK is published by the NAR Research Division for the Realtors® Commercial Alliance. The RCA, formed by NAR in 1999, serves the needs of the commercial market and the commercial constituency within NAR, including commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and NAR affiliate organizations. These organizations include the CCIM Institute, the Institute of Real Estate Management, the Realtors® Land Institute, the Society of Industrial and Office Realtors®, and the Counselors of Real Estate. The RCA also provides commercial products and services.

More than 100,000 NAR members offer some level of commercial service, with 66,000 specializing primarily in the commercial real estate market.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

# # #

The next Commercial Leading Indicator index will be May 21; the next commercial real estate market forecast is scheduled for June 13.

Visit my web site for additional services and support: LawrenceYerkes.com

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Sunday, December 03, 2006

Lease Clauses

Here are two topics related to leases that an investor needs to understand to maxime value and to minimize risk involving leases...

Tenant, Landlord Both Can Create Value Through Leases
Consider the CPI, Cotenancy and Whether There Can or Should be Restrictions on Use

Lease clauses can create value for both tenants and landlords. For landlords, there are the clauses that relate to the rent to be received over the term of the lease. This value increases with the creditworthiness of the tenant and the strength of the guarantor. The value diminishes with below-market rental rates.
Tenants, for their part, also can increase value with clauses that provide fair rent and cost increases, avoiding excessive payments over the life of the lease as well as so-called "double-dipping" increases.

Some lease clauses also create value by protecting both tenants and landlords from uncertainties, such as the loss of an anchor tenant or a change in a tenant's operations.

Click here for pointers on what to watch out for in these clauses.

Singling Out Triple-Net Leases
Interested Investors Should Understand the Critical Components of These Lease Structures.

Many real estate investors think nothing could be simpler than an investment in a triple-net-leased (also known as NNN) property. Some liken it to buying a bond. While straightforward to own and operate, triple-net-leased properties can be the most challenging type of real estate investment for advisers to structure or — if the lease already exists — to understand. With lease terms as long as 50 or more years when options are taken into account, due diligence is critical, as changes usually cannot be made later on.

To prevent costly mistakes during the lease term, investment advisers must completely master all critical components of the transaction early in the negotiations. These include the client’s objectives for the investment, the lease document, the type of tenant, the physical real estate, and the type of seller.

Full Leasing Story

Visit my web site for additional services and support: LawrenceYerkes.com

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Wednesday, October 18, 2006

Real Estate Glossary - Definitions

Here are links to some real estate glossaries, containing definitions of real estate terms, that can be found on our site and others:

Glossary-Definitions at our sites:
Real Estate Glossary - Common Real Estate terms.
Real Estate Glossary - General #2 - Definitions for common real estate and legal terms.
Mortgage Glossary
Real Estate Encyclopedia - Searchable

Glossary-Definitons at other sites:
Real Estate Glossary - General - Regularly used Real Estate terms (provided by the e-Pro organization).
Real Estate and Mortgage Glossary and Definitions
Glossary of Real Estate Terms
Real Estate Abbreviations and What They Mean...Maybe
RE/MAX Real Estate Glossary

Real Estate Glossary - provided by WSJ.com - Real Estate Journal

Commercial Real Estate Glossary - CityFeet.com

A glossary of commercial real estate terms provided by the CCIM Institue, is available via the Realtor's Commercial Alliance's (RCA) section of the National Association of Realtors® (NAR) web site...
Click here for the Commercial Real Estate Glossary [Downloadable PDF file]

Commercial Real Estate Glossary - provided by RentLaw.com
Commercial Real Estate Glossary - provided by IREI

Commercial Real Estate Glossary - terms used in the United Kingdom

Real Estate Investment Words
Real Estate Investment Abbreviations
Real Estate Acronym Guide

House Glossary and House Facts
For a glossary keyed to house diagrams, and including links to detailed house facts; that is understandable by the novice, as well as useful to the person more experienced in home improvement, remodeling or building: check out the Technical Library on U.S. Inspect's web site. An inspection company, they also provide general information about home and other property inspections.

Visit my web site for additional resources and services: www.LawrenceYerkes.com

and visit BestHomes-NJ.com for the latest New Jersey Real Estate property listings (residential, commercial, multi-family, farm, land)

Monday, February 13, 2006

Tenants & Landlords - Part 4 of 4

Although homeownership rates have risen steadily over recent decades, roughly one-third of Americans still rent their homes or apartments. The needs and concerns of renters are different from those of homeowners. This month's newsletter contains useful information for both tenants and landlords.

The is the last of a 4-part series taken from one of our recent Newsletters that was e-mailed to all registered subscribers, via our RE/MAX of New Jersey web site. We are looking at Tenants & Landlords topics:

What Are Your Rights As A Tenant? (Part 1)
The Low-Down On Renter's Insurance (Part 2)
8 Tips Every Landlord Should Follow (Part3)
Resolving Landlord-Tenant Conflicts (Part4)

Resolving landlord-tenant conflicts

Tenants and landlords may disagree over issues ranging from changes in rent to responsibility for repairs. Whatever the problem, both landlords and tenants should take steps to resolve the conflict before resorting to legal action. Both landlords and tenants should:

Know their rights and responsibilities under federal, state, and local law.
Make sure the terms of the lease are clear and thorough.
Maintain good two-way communication. Any disagreement between landlord and tenant should be discussed between the two parties first.
Keep all written correspondence or documents on file, and make written notation of any problems. For example, a tenant should make a maintenance request in writing (keeping a copy on file) and the manager should file the request and also a written notice of how the problem was repaired.
Consider the help of a third party mediator if problems cannot be solved one on one. Publicly funded programs often provide mediators for housing disputes at little or no cost. A mediator's decision is not binding, but is intended to be a mutually acceptable solution.

Should all of these approaches fail, you may want to take your case to small claims court. Small claims court fees are relatively low and you aren't required to bring a lawyer.

There is one major exception to these guidelines. If you feel that the action (or inaction) of a landlord or tenant jeopardizes the health or safety of yourself or others, you may want to seek immediate help from the proper authorities.

Visit my web site for additional resources and services: : http://LawrenceYerkes.com

or visit http://BestHomes-NJ.com for the latest property listings (residential, commercial, multi-family, farm, land)

Sunday, January 15, 2006

Tenants & Landlords - Part 1 of 4

Although homeownership rates have risen steadily over recent decades, roughly one-third of Americans still rent their homes or apartments. The needs and concerns of renters are different from those of homeowners. This series contains useful information for both tenants and landlords.

The is the first of a 4-part series taken from one of our recent Newsletters that was e-mailed to all registered subscribers, via our RE/MAX of New Jersey web site. We are looking at Tenants & Landlords topics:

What Are Your Rights As A Tenant? (Part 1)
The Low-Down On Renter's Insurance (Part 2)
8 Tips Every Landlord Should Follow (Part3)
Resolving Landlord-Tenant Conflicts (Part4)

What are your rights as a tenant?

Although landlord-tenant laws vary by state, many basic tenants' rights are universal. If you have a specific concern, it's always best to consult state and local laws that govern landlord-tenant agreements prior to signing a lease. Here are some of the most common rights afforded to tenants:

It is illegal to deny a prospective tenant housing on the basis of race, sex, religion, disability, family status, or national origin.
Residential units must comply with housing and health codes. Essentially this means that they must be structurally safe, weatherproofed, sanitary, and provide adequate water, electricity, and heat.
A landlord should make necessary repairs in a timely fashion.
Landlords must give notice before entering your residence in non-emergency situations. Typically at least 24 hours notice is required, and the landlord (or representative) can only enter your residence for the purposes of performing maintenance or to show the property to prospective tenants.
If landlords have violated key terms of the lease regarding your health, safety, or well being you may have legal grounds to break the lease.
If you do break a long-term lease, most states require landlords to make some effort to find a new tenant. While you are responsible for the full term of the lease, they must try to find someone to relieve you of that obligation.
A landlord may not deduct money from your security deposit due to damage caused by normal "wear and tear". Unfortunately, few landlord-tenant laws adequately define "wear and tear". Generally you should not be charged for minor damage that results from day-to-day, non-negligent use. Worn carpet is perhaps the easiest example.
Most states require landlords to return refundable portions of deposits within a set period of time. They also usually require that any deductions withheld be fully explained and itemized.
It is illegal for a landlord to evict a tenant as retaliation for any action the tenant takes regarding a perceived violation on the part of the landlord.
A landlord cannot legally lock out tenants or shut off utilities as a means to force eviction or influence the payment of rent owed. Court-ordered eviction is the only legal means to force out tenants.
Landlords cannot legally seize a tenant's property for nonpayment or any other reason, unless in the case of abandonment as defined by law.

Realty Reality