Save Big With Section 1031 Exchange

It is absolutely worth considering in your situation. Briefly, it allows you to “kick the can down the road” and defer federal income taxes and capital gains taxes on any gain that you may have on the sale of your present property. Because it is detailed in Section 1031 of the Internal Revenue Code, it…

It is absolutely worth considering in your situation. Briefly, it allows you to “kick the can down the road” and defer federal income taxes and capital gains taxes on any gain that you may have on the sale of your present property. Because it is detailed in Section 1031 of the Internal Revenue Code, it is often called a “1031 exchange.” It permits a taxpayer (an individual or entity) to dispose of property used in its trade or business or held for investment purposes without paying federal income taxes, including capital gains taxes, on any gain arising from the transaction.

There are some highly technical rules to which you must comply in order to qualify for the nonrecognition of gain. This includes replacing the property for other like-kind property identified within 45 days after Closing, and acquiring the identified property within what is generally 180 days. The term “like-kind” generally means any other real estate that is accepted for use in your trade or business or for investment purposes.

An interesting aspect of Section 1031 like-kind exports is that there is no prohibition against utilizing these changes in successful transactions, so payment of taxes on the gain can be deferred indefinitely. If the taxpayer is an entity with a perpetual existence (limited liability company, corporation, trust, etc.) the day of reckoning for payment of the capital gains taxes may never come. (Because the tax basis of the relinquished property will carry over as the tax basis of the replacement property, your depreciation deduction will be limited. If you contribute additional capital to acquire or improve the replacement property, the tax basis can be adjusted upward.)

If the taxpayer is an individual person, the Internal Revenue Code provides that upon the death of the taxpayer, the tax basis of all property owned by the taxpayer is adjusted to the property's fair market value as of the date of death. However, no capital gains tax or depreciation-recapture taxes will ever be recognized on the prior exchanges.

Because there are very strict technical rules that apply to Section 1031 like-kind changes, it is essential to engage a knowledgeable advisor or a 1031 intermediary service. Your accounting team should evaluate your federal income tax and capital gains exposure on the sale of your present facility to help you determine whether your savings will justify the cost of such advice. But the expense of such advice is often well worth the cost, so do not overlook it just because a 1031 like-kind exchange is complex!

Commercial Office Space: Assignment and Subletting Clauses Are A Necessity

The steps one must take to lease commercial office space are plentiful in number. Once you find the perfect office space to lease, you then have to delve into the lease terms and negotiations to ensure that the arrangement is beneficial to you, the tenant. The commercial lease has many terms to read through and…

The steps one must take to lease commercial office space are plentiful in number. Once you find the perfect office space to lease, you then have to delve into the lease terms and negotiations to ensure that the arrangement is beneficial to you, the tenant. The commercial lease has many terms to read through and there are certain clauses which must be included in order to properly protect you as a tenant. Two clauses in particular which are a must when it comes to lease inclusion include the assignment clause and subletting clause.

When you enter into a lease, you never know what the future may bring. Most business owners would like to believe that they will be in the leased concessions to the end of the lease term but this is not always the case. Instances may arise where exiting the commercial office space ahead of the lease term expiration is a necessity. This is where assignment and sublease clauses will come in handy.

Understanding Assignment and Sublease Clauses

With both of these clauses, the current tenant may have another tenant move into their position under the current lease. With an assignment, the tenant will assign the reminder of their lease term to another tenant. From that point forward, the initial tenant is no longer involved with the lease agreement. As for a sublease situation, the initial tenant will have a new tenant take their place in the lease but the initial tenant will still be liable for any payments which the landlord does not receive from the subletting party. In general terms, an assignment clause is more favorable to a tenant than a subletting clause as it allows the tenant to be done with the lease once and for all as soon as the new tenant enter the picture.

How the Inclusion of These Claus Will Safeguard the Tenant

Both of these clauses will safeguard the commercial office tenant by providing them with a way out of the lease agreement, in some form, should they need to move out for any reason. No business owner expects that they will have to leave prior to the lease term but there are certain instances which may occur that make it necessary to assign or sublet the reminder of the lease to another party. When the clauses are included within the lease, this provides an option for the tenant, if it is needed.

Landlord May Insert Various Requirements in the Assignment and Sublease Clauses

There may be certain specifications included within these clauses to help protect the landlord's financial security should an assignment or sublease take place. The landlord may require that the new tenant is financially secure and will be able to pay rent when due. There may also be some fees that the current tenant must pay to the landlord in order to ascertained the financial stability of the new tenant, such as fees for credit checks, etc. All of these factors can be discussed during lease negotiations to ensure that both parties are safeguarded in the arrangement.

Always review your lease prior to signing it and make sure that an assignment and / or sublease clause is present and will benefit you as the tenant.

Credit Tenant Lease (CTL) Loans Explained in Simple Terms

Credit tenant lease (CTL) financing is a unique lending platform designed for exclusive use with net leased real estate. Because of the distinct nature of CTL loans they are only available through specialized CTL lenders. What is Net Leased Real Estate? Net leased refers to clauses in a real estate lease that specify which party…

Credit tenant lease (CTL) financing is a unique lending platform designed for exclusive use with net leased real estate. Because of the distinct nature of CTL loans they are only available through specialized CTL lenders.

What is Net Leased Real Estate?

Net leased refers to clauses in a real estate lease that specify which party (owner or tenant) is liable for the taxes, insurance and maintenance of the property.

When a tenant agreements to bear the burden of some or all of these significant expenses the rent will accordingly be lower but the liabilities of the tenant will be higher. Rent is said to be “net of” any expenses shouldered by the renter.

If a tenant is liable for all three (tax, insurance, maintenance) of the extraordinary expenses the lease is described as being “triple net” (NNN). Triple net leases leave the property owner free of all responsibilities and liabilities relating to the real estate except paying the mortgage if it happens to be financed. Obviously net lease come in single and double net as-well.

Because a triple net lease pays monthly rent but places virtually no other requirements on the holder it is looked upon as a financial instrument very similar to a bond. Like a bond a triple net lease derives its value from the strength of the entity (tenant) that promises to make the payments.

What is a Credit Tenant?

Simply put, a credit tenant is a renter with good credit. A credit tenant will not only have the financial recourses to be able to make rent payments but will also have a strong legal and ethical incentive to stay current.

To be considered a credit tenant and be eligible for CTL loans a tenant must be rated “investment grade” by one of the established corporate rating services such as Standard & Poors or Moody's.

Credit claims are coveted by landlords and credit tenants who rent on a triple net basis are the most prized of all.

What is CTL Finance?

CTL finance is a unique and highly specialized form of lending designed to work hand in glove with net leased credit tenant real estate. CTL loans are actually securities products that combine commercial mortgage lending with sophisticated investment banking.

When a creditor tenant, net leased property is financed the lease is actually securitized and, in a sense, turned into a private placement corporate bond. At the same time a commercial real estate mortgage loan is underwriting the property. The mortgage is coterminous (matching the length of the lease), fully amortized, and non recourse.

The bond, which is backed by the lease, is then sold on the secondary market, usually to insurance companies or pension funds but also to private investors. The proceeds of the bond sale are used to fund the mortgage loan.

The lease and the mortgage are administrated inside a trust and managed by a third party trustee who collects the rent, pays the mortgage and distributes any overage to the property owner.

Net lease real estate investors with creditants should consider CTL financing when deciding how to capitalize their property.

CTL offers permanent, non-recourse, fully amortized commercial mortgages with no restrictions on loan-to-value (up to 100% LTV) or loan-to-cost (up to 100% LTC) and is available for finance, refinance and construction and development including cash-out financing.

Want a Loan From a Commercial Mortgage Bridge Lender? Talk About What’s Important to Them

The best piece of advice I can give to commercial property owners and investors trying to convince a private lender (often called a “hard money” lender) to make a loan is to talk more about things the lender cares about and do not talk as much about things you care about. Private bridge lenders have…

The best piece of advice I can give to commercial property owners and investors trying to convince a private lender (often called a “hard money” lender) to make a loan is to talk more about things the lender cares about and do not talk as much about things you care about.

Private bridge lenders have two primary goals the first is preservation of capital and the second is making money; from a business standpoint those are the primary things they care about. Any borrower who hopes to secure a loan approval and close a deal would do well to remain focused on these areas.

It is of paramount importance that you persuade the lender that they will get their money back, on time and with interest and that the property has the intrinsic value to support the loan.

Private Lenders Care about Current Values

Bridge lenders are short-term lenders. Most firms rarely makes bridge loans for terms of more than eighteen months. Grandiose visions of what a building will be worth after you refurbish it or how much income it will produce after you boost occupancy rates are all-well-and-good but will not be considered when a bridge lender is calculating their maximum loan amount.

Talk about the current value of the building and the current income the building produces and you will be speaking the language of the private commercial mortgage lender. Most private lenders have fairly strict loan-to-value (LTV) ratio standards that they are will not violate. Virtually all of them are based on current market value or quick sale value. Loan officers will listen to your plans for value creation and wish you well but they will only lend money against today's value and income.

Private Lenders Care about Protective Equity

Borrowers argument in vain when they argue with private commercial mortgage lenders for higher LTV ratios. Preservation of capital is a primary objective of every bridge lender out there. The people who invested millions of dollars in private commercial mortgage pools and private equity funds that make commercial mortgage bridge loans are very interested in making money but they are even more interested in not losing the money they already have.

Every LTV percentage point is a point of risk to the lender. The managers of commercial mortgage funds thought very carefully about how much risk they were willing to take and they set their maximum LTV ratios based on that assessment. The private investors, pension funds and trusts that placed money with a private lender did so based on the specific investment policy (including LTV rations) that was presented to them.

Do not bother requesting a higher LTV you will not get it. Instead put your efforts into archiving the required LTV. Consider bringing in a cash partner, think about contributing more hard equity (cash) out-of pocket, look into syndicating the deal, or, if you're buying an existing asset, renegotiate the purchase price with the existing owner.

Private Lenders Care about the Exit Strategy

One of the best ways to get into a loan is to work out how you are going to get out of the loan before you even apply. In-other-words, your exit strategy is more important to a private lender than any other aspect of your business plan. Make sure you have a good one and emphasize it through the loan process.

Short-term lenders want to know for sure exactly how and exactly when they will be paid back, in-full, with interest. You will be asked about your exit and your exit will be scrutinized. You will be tempted to talk about getting into a deal. Resist that temptation and talk to your lender about how you will be paying them off and getting them out.

If your exit is the sale of the asset have detailed comparable sales data on hand, have a comprehensive marketing plan already done before you ask for a dime. If you are planning to use a real estate agent, select them ahead of time, use one that specializes in commercial properties and have them draw up a broker price opinion for you.

If your exit plan is to get funded through a conventional lender meet with the loan officer and get as much commitment from them as they are willing to give; a forward commitment is ideal though not easy to get. Print out the banks lending criteria and prove to your private lender that you can and will meet them. Set up a call or meeting between your bank lender and your private lender so everyone can be sure everyone is on the same page.

Your vision will be about getting in and adding value. Your bridge lenders vision will be all about getting paid and getting out. Talk about what is important to them.

Private Lenders Care about Commitment

If a private lender makes a short term commercial bridge loan to fund your project they will be making a huge financial commitment; they will want to see a huge commitment to the deal on your part.

Always talk about what you are willing to do to make a deal work. Never talk about what you refuse to do. When a potential borrower applications for a commercial mortgage and the first thing they mention is something they are not willing to do, it is the kiss of death to their loan application.

Negative statements are taken as a lack of commitment and will be extremely off-putting to lenders.

Declarations like: “I'm putting in X dollars in cash and not a dollar more” or “I will not sign a personal guarantee” to say to a lender “I'm not really committed to this deal.” If your not 100% behind a deal the lender will walk away.

The kind of borrower private lenders are looking for the kind who is so convinced that their deal will make them money that they are willing to go all in. If you nickel and dime a hedge fund or private equity shop about things like appraisal fees and legal expenses it will be taken as a sign that your deal is not all-that strong.

A good rule of thumb is until you have a preliminary approval in-hand and you know the bridge lender wants to make a deal do not say anything except that you are willing to do what ever it takes to get it closed. There will be time later to talk about who pays for the survey or the phase one environmental report (it will be the borrower) or to discuss the level of personal versus business recourse to build into the loan.

Never open with your demands. Lenders do not care about what you will not do they want to know what you will do.

Private lenders want to make deals; that's how we make our profits. That-being-said, do not forget that not losing money is at-least as important to bridge lenders as making money is.

When in talks with a private commercial mortgage lender, stick to things that are important to them. This will show that you are professional and have a realistic outlook.

Stress the current value of a property, do not ask lenders to relax LTV standards instead find ways to reach them, have a real exit strategy and be ready to defend it and demonstrate as much commitment to your deal as you are asking for the lender.

In-short, if you want them to write that big check, talk much more about what concerns them and much less about what concerns you.

Commercial Office Space Leasing: How To Use Your Financial Analysis Results in Negotiations

There are many ways to negotiate when it comes to commercial office space leases. Financial analysis is one tool which will help in your negotiations with current or prospective landlords. The financial analysis is the process by which you consider all of the costs associated with the lease and then use a financial program to…

There are many ways to negotiate when it comes to commercial office space leases. Financial analysis is one tool which will help in your negotiations with current or prospective landlords. The financial analysis is the process by which you consider all of the costs associated with the lease and then use a financial program to come up with an end figure detailing how much the lease will definitely cost you as a commercial tenant. It is these figures which will help you in the negotiation phase of commercial office space leasing.

Why You Need Financial Analysis for Negotiations

Negotiations for commercial real estate leasing are time-consuming and involved in nature. You are not simply renting a home or an apartment, you are securing an office space lease which often carries with it a length lease term. There is plenty to discuss during commercial leasing negotiations and large amounts of money at stake. Therefore, you want to be sure that the negotiations work well in your favor, the tenant. Financial analysis figures will help to show the landlord what you will be paying, outside of simply the base rental payments.

There are many other costs to consider with commercial office space leasing and you want to bring such costs to the attention of the landlord. This will also be a beneficial path to pursue, since you want to determine what your landlord will pay for and what you will be responsible for paying on your end of the tenancy. A financial analysis will lay it all out on the table and ensure that no stones are unturned during the leasing negotiation process.

Steps for Using Financial Analysis Figures During Negotiations

When a landlord is figuring out how much to charge a tenant for rent, they look at the effective rental rate. This rate takes into consideration factors such as market rental rates seen in comparable buildings, building operating costs and total transaction costs. With these three encompassing factors in mind, the landlord comes up with the rental rate. How do tenants go about reducing the rental rate asked for at negotiations? By completing a financial analysis of their own. By doing so, the tenant can show that certain aspects should be less, or more, in cost to get the negotiations to favor their side and, extremely, result in a lesser amount on the overall rental rate.

To have your points duly noted, use a proper financial analysis program to come up with the figures. This will hold the most weight when you are in the negotiation phase with your landlord as you have concrete figures to show for your point of view. Also, have a representative representative along with you for the negotiations. It's important to be properly represented so that you are not going it alone in negotiations with the landlord. Lastly, be reasonable with your requests, especially if the office space is a highly coveted one and there is a bit of competition as to other prospective tenants wanting the same location as you. The landlord will be less likely to be flexible if there is another business owner out there who will pay the asking price for the office space lease.

Financial analysis is extremely important in commercial office space lease negotiations and you want to make sure you sit down at the negotiating table with financial analysis paperwork in hand and a tenant representative by your side.

Unfriendly Commercial Lender and the Art of the “Cram Down”

Commercial lending is a fickle business. Property, plans, and expectations, which seem so logical at the time, are subject to political pressure and economic whims. These issues can affect the property and its plan, or could have a philosophical impact on the lender. If the current management is replaced, it forebodes the believe that the…

Commercial lending is a fickle business. Property, plans, and expectations, which seem so logical at the time, are subject to political pressure and economic whims. These issues can affect the property and its plan, or could have a philosophical impact on the lender. If the current management is replaced, it forebodes the believe that the management decisions were faulty, and the board of directors have lost faith in their ability to perform. For the borrower, if the management who supported your loan is gone, it creates by extension, doubts in all projects that were in favor of. The “new” management will be associated to take on support of a loan they did not originate. This is especially true if there are issues of performance in the security, late or missing payments, extension agreements, or in the lender's determination, lack luster performance. Many times a bank work out specialist CEO will make use of the fine print in your agreement, (the part you did not read!), And will re-evaluate the property, its business plan, to see if the loan-to-value requirements, and cash flow capabilities are current based on the security agreement. Basically an interior re-approval within the confines of an existing loan. If your loan is with a “regulated” lender, a design as a “substandard” loan, will create more difficulty.

Restricting the lender to strict adherence and forces increased collection procedures. The current flavor of “bank 101” economies, is to bundle all the problem or difficult to manage loans, into a package, and sell the whole lot! This will be at a discount, and sometimes a sizable one! This will not help the borrower. The “new” lender will seek to recoup its investments plus interest income fast. It would be a mistake to assume that these secondary, collector lenders, are going to become a long-term source of capital for your property or business, they are not. The task for borrower is to get out of this transaction, quicker and as cheap as possible.

To know where you can go, you must determine what your position is in this transaction. In fact, I see loans every month, where some uncontrollable economic circumstance, ruled in changes which led us to this result. In this case these loans should have been made by another fore-sighted lender. Experience encourages me to believe in “gray” areas, not black and white certainty. I would assume some variation of “gray” are in involved in your loan equation. Be critical in evaluating this. “Gray” areas which need to be rectified, the results are often gratifying. Quality loans can be incorporated on this basis. Get the accurate value of the real estate. prove your debt service, highlight management, and resolve the issues. With this determination, we have equipped ourselves to make the educated prediction of what kind of lender is our target and refinance terms which can be expected.

Negotiation is the “art”, high stakes poker, based on whether we need to make a full price offer in this amicable “divorce”, or in scope of settlement, find out if the other party, (the unfriendly lender), is willing to take a “short” settlement to be rid of you! Be cheerful and responsive to the current lender, it gains you knowledge. I would not suggest a discount until I had the alternative loan arranged for! To get a discount, you'll have to fish for it! Be aware, the current lender will also be fishing for a full price offer! Use the objections the lender cites requesting a payoff, as your rebuttal, precisely why you need a discount to proceed. Lenders are compelled to believe they are right! Particularly with their “in-house” research. Fish for it, and use the knowledge as a noose! Discounting the interest rate, accrual, and even reducing the capital amount of the loan are on the table and possible. We need to convince the lender that even with our best effort, payment in full, is not currently possible, reaffirm this lenders belief. Time vs. money, and perception are the lever. How bad they want to make a split. If they are just something serious you might get them to retract and provide more favorable terms, avoiding the crisis temporarily, but more often it will return.

If our loan was sold off, we are dealing with a liquidation lender, the only formula they recognize is foreclosure, or payoff. Same rules apply, but time is more critical, you it to your advantage. They are dealing with a discounted balance. Discounts and “cram down” settlements are more attractive, especially with a quick payoff. In a season of hesitant economic recovery, weakened lenders, tepid value of real estate, these situations are becoming common. Prepare, anticipate, and negotiate.

Office Lease Transactions: How Financial Analysis Plays a Part

Commercial office space leasing consideration is a bit more in-depth than renting a residential property, for example. When leaving a home, apartment or condo, you know how much the rent costs and whether or not you will be able to afford it. For commercial office space leasing, the decision-making process is a bit more time…

Commercial office space leasing consideration is a bit more in-depth than renting a residential property, for example. When leaving a home, apartment or condo, you know how much the rent costs and whether or not you will be able to afford it. For commercial office space leasing, the decision-making process is a bit more time consuming. In order to ensure that you are renewing your lease at the right location at the right cost or deciding to move your office space to a new locale to save money, you want to complete a full financial analysis to make sure that the leasing decision you make is the right one.

What a Financial Analysis Accomplishes

A financial analysis is the answer to determining what your overall cost will be to lease a commercial office space. Far from simply considering annual lease amount, there are many other factors to review in order to ascertain that the lease is a financially responsible move for you and your company to make. In addition to looking at the base rental price, you must consider factors such as increases in operating expenses, caps on operating expenses, reduced rent periods, contributions by the landlord, parking fees and more. By looking into all of these added factors, you can make the proper determination as to whether renewing your lease or moving elsewhere is the right decision to make.

How to Perform a Complete Financial Analysis

When starting the financial analysis process, you're going to want a little help with the calculations. Fortunately, there are programs for just this type of analysis. Some of the popular financial analysis help comes in the form of ProCalc, LeaseMatrix and more. By using these programs, you can get a correct number, as well as get the job done with ease. When performing a financial analysis, you'll be considering the various features listed above, such as base rental payments, operating expenses and all other costs and considerations which will provide you with a final determination as to whether or not your leasing arrangement will be of benefit to you and your company.

What to Do with the Financial Analysis Results

When the tabulations are complete, the final step is knowing what to do with the results. You want to look at the bottom line and determine if this number will fit within your budget or not. It will be helpful in making the decision wherever to stay and renew your commercial office space lease or lease an office at a new location.

If you have a tenant representative, your decision will be made much more easily. This advisor will go through the numbers with you and help you to decide which leasing option will benefit you the best. Making the right decision is a matter of going through the financial analysis, step-by-step, and figuring out whether it pays to stay in your current office space and renew your lease or move on to a new location which will be more cost- effective and better for your company overall.

Why Office Spaces Have More Influence On Clients

If you are new and if you do not have much experience it is not easy to create a balance between the awards that is perfect and the amount you are capable to afford. It is very important to get an appropriate space for office because you have to carry on the business in that…

If you are new and if you do not have much experience it is not easy to create a balance between the awards that is perfect and the amount you are capable to afford. It is very important to get an appropriate space for office because you have to carry on the business in that space at least till the duration of the lease comes to an end. If you get the appropriate place then the staff will be productive and happy in the other case it slows down the people, waste money and create aggravation.

Things to consider:

Does the place have good links for transportation?

You will have to note whether the concessions is in a place where it is easy to commute. For the offices that are big the obvious aspect to consider is whether it is located near to a rail line or a subway but you have to consider the access through the routes of automobiles, bicycle and bus.

Any services of reception is available

You have to verify whether the building offers manned reception or a customer service that is good. Even though the staff in the reception is not a man skill of the company you have to know that they create the first impression that is ever lasting to the visitors and clients of the company.

Plans for renovation in future

You have to verify with the owner whether he has got any plan in the future for renovating the building work. This is important because you would have signed an agreement and you have to put up with the mess and noise for months, which is not favorable.

Parking facilities

There is no need to measure the distance it takes to have a ride or drive to the office unless you have a consideration of what will you do with the vehicles. You have to verify that you have sufficient space for parking the vehicles of all the visitors and staffs of the office. If the building does not have slots for parking then check where there is any place which is nearby to park the vehicles.

Check wherever there are any other competitors in the building:

It might sound odd; the truth is if you have the competitor in the same building then the employees of the companies may have a chance to meet in the public places of the building or the elevator. This may give a chance to spread any negative info about the company and it would further lead in losing all precious clients.

Executive Suites – A Way to Save Money

According to the US Small Business Association (USSBA), over 67% of small business startups fail within one year of operations. Another study by Entrepreneurs Organization (EO), done in 2011, showed that choice and cost of office premises causes over 78% failure of new businesses. These numbers are shocking, and if you are a new investor,…

According to the US Small Business Association (USSBA), over 67% of small business startups fail within one year of operations. Another study by Entrepreneurs Organization (EO), done in 2011, showed that choice and cost of office premises causes over 78% failure of new businesses.

These numbers are shocking, and if you are a new investor, it is imperative to appreciate how you can avert such a situation for your business. The issue of concessions choice when starting up is tricky because of capital constraints, but with executive suites, this problem has now been solved for you.

Cost Effectiveness of an Executive Suite

First impressions speak volumes in business. If you are targeting established clients, they already have high standards and your dingy office downstairs or a run-down hotel is no place to meet.

The major advantage of going for furnished suites is the low cost, which comes as a much needed Godsend for your business. What does such it offer?

1. Wide Range of Amenities
When you choose a well-established suites company, you will get an impressive array of amenities which you need for your business. For instance, you have office facilities within it with 24/7 access, wireless internet, reception services, video conferencing technology and meeting rooms in case you have a conference.

Others include office equipment like copier, fax, laser printers and much more. You do not have to invest your capital in all these invaluable amenities and this saves you a lot of capital expenditure.

2. Professional Staff at Your Service
It invests in professional support staff to serve in different roles including receptionists and secretaries. The benefit of this is that you get a professional outlook to your business at a very low cost. Hiring the same, especially if you are a constant traveler, is a daunting and costy affair.

3. Saving on Meals
If you are keen when looking for an executive office, you can locate one where the kitchen is fully furnished. It becomes easier to either make your meals as office staff or get someone from in-house to make such meals. You will save a lot as a business and eventually such savings will go a long way in establishing your business.

4. Saving Time
It might be a cliché, but time is definitely money. When you save money on your office's administration, cleaning and maintenance you will in turn be more productive and your bottom-line will reflect this success. Such operational tasks consume a lot of time and in the same breath they are costly. Your executive suite is fully furnished to save on such costs.

5. Saving on Hotel Fees
As you start off, hotels are your only option for meeting new clients and conferences. There are costs unique to hotels including parking, tipping and taxes and executive suites eliminate such unnecessary costs. '
Definitely, the future of office space is furnished suites; it is a tried and tested alternative that enhances productivity and saves money. What more can you ask for?

Guide to Investing Out of State for Commercial Real Estate Investors in Los Angeles, California

Is not real estate supposedly one of the best categories of investment classes in the world? People always need a place to live right? Then why does it seem almost impossible to invest in real estate in California, which is known next to New York and Florida, as one of the top places in the…

Is not real estate supposedly one of the best categories of investment classes in the world? People always need a place to live right? Then why does it seem almost impossible to invest in real estate in California, which is known next to New York and Florida, as one of the top places in the world to invest in real estate, unless you have a few million dollars? It is because they are densely populated and in the case of Los Angeles have already risen dramatically not only in the last six years by 40% but have quadrupled, 400%, over the last 30 years. (S & P Index LA) Those are great returns for an asset that is considered to be safe and moderately growing. So what should a person do nowdays if they live and grow up in Los Angeles, and want to invest in real estate but do not have a million dollars to invest? The solution is simple, invest out of state!

A lot of people think it is hard to invest in a state such as Texas. You have to manage the property, collect rent, and make the right investment decisions for the long term in a state that at this point in time you are only something familiar with, right? Well allow me to explain to you why it is great for someone to think otherwise, and how a great agent can acquire property for you in another state in a deal which the tenants, the ones using the property space, are managing the property for you and even paying your property taxes! Not only that, but these are institutional companies who guarantee you the money you are promised for periods of up to 10-15 + years, per contract. This is only the beginning of me explaining how investing outside of your comfort zone with the proper advice can benefit you and your family.

How about the safety of these investments? I do not want to lose my hard earned dollars. Neither do you. So why would you invest in anything outside of the Los Angeles, or the California region? A region that has proved itself for decades and showing promising signs of growth in certain areas. These are definitely valid points in the eyes of an avid investor, but maybe it's time to reconsider. I already mentioned that property prices in Los Angeles are expensive, that being one of the main reasons to invest elsewhere.

Have not you noticed a lot of people who have been living in California are moving to the surrounding states where it is a lot cheaper to live and in places where new and old business industries are beginning to thrive? I personally know a few people who have moved away. Texas alone has added over 5 million people to its population in the last thirteen years according to Texas Department of State Health Services, and it is still growing. With that in mind, it does not seem like a great deal to acquire a commercial property in a state where you can buy commercial real estate around $ 150,000- $ 300,000 down? You could not dream of that in Los Angeles unless you wanted to buy an old run down building.

Are you starting to understand how easy it can be to invest outside of your state, and why it is more lucrative? If you do, that's great, if not here is another way to understand it in a situational scenario with numerical figures.

My friend Jack has $ 500,000 right now that he wants to invest.

This is what would happen if Jack invested in a Los Angeles Commercial Property from 2015-2020.

Let us say Jack does not take out a Loan and buys a Fee Simple Commercial Estate.

$ 500,000 x 4% Interest Yearly = $ 20,000 Income / Year (Before Taxes) x 5 years = $ 100,000

Over this period of time the value of the property goes to $ 600,000 by 2020, and Jack sells its property to Jenner. That makes for a profit of $ 200,000 before Capital Gains, and Income Taxes.

Now, let us say Jack went outside his comfort zone and decided to get a property in Texas.

$ 500,000 x 8% = 40,000 Income / Year (Before Taxes) x 5 Years = $ 200,000

Over this period of time the value of the property goes up to $ 750,000 and Jack now shows Jenner how much easier it was to invest out of state because of the structure of this deal. He told Jenner that since Starbucks was managing his property and paying him on time without question every month, this made it much easier for him as an investment. Now, Jenner wants to buy this investment off Jack, because he sees the benefit and Starbucks wants to sign again for an additional 10 years with a rent increase!

Jack just made another $ 250,000, on the increase of the value of the property.

In total, Jack has now accumulated $ 450,000 before taxes over the last 5 years investing in Texas. Get it ?! Do you understand the benefits and the financial rewards? Not to say you can not have these structured deals in Los Angeles, but remember they offer half as much interest in a market that has already gone up 40% in the last six years.

Jack has made $ 450,000 investing in Texas vs. $ 200,000 investing in California with the same amount of money. That's an extra 125% increase in profit, which will make you an even astonishingly larger amount of money on your next big investment!

How To Make The Tenant Improvement Allowance Work For You

Many office space leases will be a good fit for companies yet there may be some improvements which have to be done in order to make the concessions a perfect fit for the tenant. For this reason, tenant improvement allowances are often included within the commercial office space lease. These allowances come in different forms.…

Many office space leases will be a good fit for companies yet there may be some improvements which have to be done in order to make the concessions a perfect fit for the tenant. For this reason, tenant improvement allowances are often included within the commercial office space lease. These allowances come in different forms. Two of the most common forms include a turn-key build-out and a fixed rate allowance.

Difference Between a Turn-Key Build-Out and Fixed Rate Allowance

With a turn-key build-out tenant improvement allowance, the landlord will pay all costs to get your leased promises located the way that you want them to be. On the other hand, a fixed rate allowance is when the landlord will give you a set amount of funds and anything over that amount will need to be paid by you, out-of-pocket. Both provide tenant improvements for the company owner leasing the space, however, both are quite different in nature.

With the turn-key build-out, you will be ensured that the money is paid for your improvements, however, you may not have the last word regarding what is done, how it is completed and when it is completed by. The landlord will have more control over the work. With the fixed rate allowance, you will have more control over what improvements are made and when but you may find yourself facing some out-of-pocket costs in the end if the project costs more than what was allotted to you under the lease.

How to Benefit from the Tenant Allowance

In order to benefit most from the tenant allowance, consider what improvements you plan on making to the leased awards. If you only plan on completing simple repairs and construction to your office space , a turn-key build-out may work fine for you because you will not need too much control over simple tenant improvements and you will be ensured that the landlord pays for everything which has to be done. If your tenant improvements are more voluminous in nature and you can figure out exactly how much money you need to get the job done and want to ensure that it's done according to your specifications and schedule, a fixed rate allowance might be best.

Keep in mind that you may always negotiate when it comes to tenant improvement allowances. You can choose a hybrid form of the two options listed above to have the type of tenant improvement allowance which will work in your favor. You may ask the landlord to provide for a turn-key build-out allowance but request that you be able to choose a project manager to oversee the entire project and have this individual report to you. Should you prefer the fixed rate allowance, ask if the landlord would be willing to pay for any extra money needed during the process, which could not be accounted for until the project was underway. Just be sure to have these terms listed in the lease, otherwise, they will not be valid terms.

Your tenant representative will guide you in the tenant improvement allowance process and go through all of the details with you to ensure that you are making the right choice with regard to this lease term.

Agents Reveal 12 Steps On Leasing Your Commercial Property

Investing in commercial properties is one of the most lucrative ways of seeing great returns provided you are well-informed, up-to-date, and have access to reliable and accurate data every step of the way. Know that making smart decisions is a must in any business. When it comes to commercial leasing, agents can help you arrive…

Investing in commercial properties is one of the most lucrative ways of seeing great returns provided you are well-informed, up-to-date, and have access to reliable and accurate data every step of the way. Know that making smart decisions is a must in any business. When it comes to commercial leasing, agents can help you arrive at those decisions as they have the knowledge and expertise on commercial property management.

Leasing your property is an important process in getting the best returns on your investment. If you want to secure tenant fast and stop throwing money away on a vacant property, below are the 12 essential steps you must know.

Step # 1: Determine the real worth of your property. The true rental value can be discovered if you research your market. Make sure that your price is in proportion to the current market. You would know that if your property is sitting there vacant for a long time then it's probably over-priced.

Step # 2: Create a marketing strategy that is effective. There are online and offline marketing strategies to drive more potential tenants to your property listing.

Step # 3: Conduct inspections and attract potential tenants.

Step # 4: Receive lease offers and screen out applications to quality your tenants.

Step # 5: Draft your lease agreement. Be sure that you are clear on what your obligations will be under your lease during the negotiations.

Step # 6: Prepare to accept the offer. Everything can be negotiated but take time to consider your lease agreement. A lease should be negotiated on terms and conditions that will enable both businesses to succeed.

Step # 7: Collect for a deposit and bond. Make sure to get the appropriate security bond from your tenant.

Step # 8: Let your solicitors create a comprehensive lease agreement. A lease is your legally binding contract with the tenant. It is essential that both parties fully understand the terms and conditions before making the commitment.

Step # 9: Execute the lease. Tenant and landlord will sign the agreement prepared by solicitors.

Step # 10: Record in a report about the property condition before the lease commences. You can approve modifications with the provision that your tenant will reinstate the property to its original condition at the end of the lease.

Step # 11: Hand over the keys.

Step # 12: Collect your rent.

Your property and its capacity to generate profit is a valuable asset and should be protected. Obtain legal and commercial advice from commercial property management firms as lease agreements can be complex and difficult to understand.

Pros and Cons of Apartment Life

Some people love living in apartments, while others look at them as merely a temporary place to live while they save up to buy a house. There are certainly plusses and minuses to apartment living. Let's look at some of the main points. Pros 1. Amenities. Many apartments have some great amenities, like around the…

Some people love living in apartments, while others look at them as merely a temporary place to live while they save up to buy a house. There are certainly plusses and minuses to apartment living. Let's look at some of the main points.

Pros
1. Amenities. Many apartments have some great amenities, like around the clock security officers, gyms and recreation centers on site, a maintained swimming pool, and play areas for children. Many apartments are in the city so they are located near entertainment, restaurants, and bars.

2. No maintenance you have to do. In most apartment buildings, all of the maintenance is handled by the landlord. This includes replacing any appliances that came with the unit, fixing any plumbing issues that arise, and handling all of the landscaping. Winter snows are shoveled away without a single thing you have to do.

3. Small size. Apartments are perfect for people who live alone or with one other person. It's a smaller space to furnish and not as much space to rattle around in by itself. They are also easier to clean in one day top to bottom.

4. More things are covered. An apartment's rent often includes a lot of the utilities like water and sewer. Some even include electricity or heat in the bill.

5. Less expensive than a house. The rent on an apartment each month is typically less than a house's rent, so it's easier on the budget.

Cons
1. Small size. For some it's a bonus, but for others it's a confined space that is difficult to handle, particularly if you have a studio apartment or you are trying to live with family. Bathrooms and kitchens are often much smaller than those found in a house, and there is no possibility to expand them since most apartment DWellers do not own the property and can not do any structural changes.

2. Limitations. There are sometimes limits on even being able to paint the unit a color you like better, or to change out any of the appliances yourself. You might not be able to put nails in the walls to hang paintings, so you have to get creative about decorating.

3. Privacy is compromised. Your walls are right next to someone else. You are often above someone else. Your windows look onto common areas or courtyards. This means you can not crank up the stereo or dance about in your living room.

4. Thin walls mean hearing your neighbors. You may be willing to be quitter because of the thin walls and close proximate to your neighbors, but they are not always so thoughtful. If you have a neighbor who sings in the choir or holds lots of parties, you'll know all about it.

5. Parking can be an issue. Particularly if you live in the city, parking can be extremely limited, or if you do have an assigned space, there are no extras for any guests coming to visit.

Ultimately, living in an apartment depends on the unit you find, the type of building you are in, and your personal tastes and needs. It also depends on how long you will live there, because even the most irritating neighbor can be tolerated in the short term. Weigh the pros and cons of apartment living and see what suits you best.

Standard Enquiries Before Contract: The Fire Risk Assessment

Section 11 of the standard enquiries before contract deals with fire safety issues relating to the property to be leased / sold. Now us humble surveyors always pay deference to solicitors but after a client just took a lease without anyone really checking as to what the fire risk assessment had thrown up; I am…

Section 11 of the standard enquiries before contract deals with fire safety issues relating to the property to be leased / sold. Now us humble surveyors always pay deference to solicitors but after a client just took a lease without anyone really checking as to what the fire risk assessment had thrown up; I am just wondering whether this section could not be worded better so that everyone can see more clearly where the building might be wanting and what liabilities the occupier might face.

In the case of this building the fire risk assessment was clearly stated that the coverage of the existing fire alarm was not adequate. Had the client been made aware of this deficiency that they could have had a discussion with the owner as to who should be paying for the upgrade. The lease has now been signed and whilst that discussion can still be had, the client is in a much weaker position as there is a covenant within the lease that tenant will comply with all rules and regulations.

Prior to the 2005 Regulatory Reform (fire safety) Order coming into force in 2006, solicitor's inquires before contract is probably merely asked whether the property had a fire certificate, to which the answer was either yes or no. Once the property had a fire certificate it remained valid unless the property was altered. Now, under the RRO 2005 fire safety order the goal posts can change as British Standards evolve. So a situation that was acceptable in 2008 may not necessarily be acceptable in 2014. Look at BS 5306-8: 2012 which states each floor of a building up to 400 sq. m. should have at least 2 A-rated extinguishers having a minimum minimum fire rating of 26A. These are the questions are currently drafted:

11: FIRE SAFETY AND MEANS OF ESCAPE:

In this inquiry Fire Safety Order 2005 means the Regulatory Reform [Fire Safety] Order 2005 and any regulations made under it.

1. Please advise us where we may inspect any records in relation to the property, made for the purposes of complying with the 2005 Fire safety Order, including any records of findings following a fire risk assessment of the Property.

2. Please advise us where we may inspect any records in relation to any premises within any building of which the property comprise part, made for the purposes of complying with the Fire Safety Order 2005, including records of findings following a fire risk assessment of any such concessions.

3. Please provide details of any steps taken in relation to the property to co-operate with any other people and to co-ordinate measures to comply with the Fire Safety Order 2005.

4. What are the current means of escape from the property in case of an emergency?

5. If any of the current means of emergency escape from the property passes over any other land other than the property or a public highway please;

a. Provide copies of any agreements that authorize such use;
b. confirm that all conditions in such agreements have been complied with; and
c. provide details of anything that has occurred that may lead to any agreement for means of escape being revoked, terminated or not renovated.

To my mind questions 4 and 5 pose the questions in relation to the emergency escape routes in a very clear manner and the potential purchaser / lessee will know exactly where they stand. However I do not think that questions 1, 2 and 3 are as clear and the potential purchaser / lessee is unilaterally to be quite so certain as to where they stand and what potential liabilities they might face. I would suggest redrafting along the following lines:

11: FIRE SAFETY AND MEANS OF ESCAPE:

In this inquiry Fire Safety Order 2005 means the Regulatory Reform [Fire Safety] Order 2005 and any regulations made under it.

1. Please advise whether a Fire Risk Assessment [as defined by the Fire Safety Order 2005] has been carried out.

2. If one has been carried out what actions were recommended?

3. Which recommendations have been followed?

4. Where can we inspect a copy of the Fire Risk Assessment?

5. What are the current means of escape from the property in case of an emergency?

6. If any of the current means of emergency escape from the property passes over any other land other than the property or a public highway please;

a. Provide copies of any agreements that authorize such use;
b. confirm that all conditions in such agreements have been complied with; and
c. provide details of anything that has occurred that may lead to any agreement for means of escape being revoked, terminated or not renovated.

Tulsa Architects Are The Reason

For several decades, there have been numerous comparisons made between Oklahoma City (state capital) and its Northeastern counterpart, Tulsa. Growing up in Tulsa, I've heard many people decry that “Tulsa is more modern, less chaotic and have better aesthetics”. Oklahoma City folks feel the same about their larger, more industrious home and harp on the…

For several decades, there have been numerous comparisons made between Oklahoma City (state capital) and its Northeastern counterpart, Tulsa. Growing up in Tulsa, I've heard many people decry that “Tulsa is more modern, less chaotic and have better aesthetics”. Oklahoma City folks feel the same about their larger, more industrious home and harp on the size of the market, burgeoning entertainment districts and superior infrastructure.

If you ever wanted to know why the heart of “Green Country” has such an interesting skyline, you can do what I do and blame Tulsa architects. I write this in jest, but in actuality, the evolution of my hometown has taken many twists and turns over the last few decades and shaped what we see today. I am grateful for its beauty and marvel at its splendor.

Over the years, I've had countless conversations with people, usually around a few pints of beer, in an attempt to understand the rationale behind WHY people prefer Tulsa or OKC. I'm fascinated with the logic and preferences that Oklahomaans exhibit, when talking about their hometown.

One area that I feel Tulsa has excelled over the state capital, is architecture. Some of my fondest memories of childhood were hopping in the backseat on a Saturday afternoon with the family and driving along Brookside (Pennington's), Utica Square, downtown and other areas of Tulsa. At that time, the buildings were different than the ones in South Tulsa and were older and had the city history on full display in its construction.

The indoor shopping mall made its debut in the late 1970s and this caused a major shift in the way people spend their time on weekends. Downtown and London Square would thrive, but when the places came to town, people started shopping at those places. Business discharged up downtown, mainly because the shiny new toys were in South Tulsa and not close by, so people made a decision on what they wanted to do for the day.

For the next 30 years, Tulsa architects created Eton Square, Fontana and the 71st Street corridor, while downtown slowly began to deceay. One-by-one, businesses closed up their shops and either relocated to the newer areas or found a new line of work altogether. Even today, as people continue to move farther South and to emerging towns around Tulsa (eg. Owasso, Broken Arrow, Bixby, Glenpool), architects are drawing up new designs for developers, as well as new looks on existing property.

In 2004, Elliot Nelson opened up McNellie's Public House, which paved the way for an influx of activity and a new vision for what downtown could actually be. Blake Ewing saw the possibilities after purchasing Joe Momma's and relocated it to a warehouse that was repurposed, just a few blocks away.

El Guapo's was originally a bar that was then converted into a three level space with two kitchens and a rooftop bar. The downtown you see today is a complete revamp thanks to Tulsa architecture firms. I might live in Pasadena, California now, but I beam with pride when talking about my home and they are the reason.