Before you START marketing your commercial property for lease, consider these keys to success.
Your lease contract should reflect the type of building and its use. If you have an office building, a full service lease is industry standard; if you own a free standing restaurant building, a triple net lease would be required. Multi-tenant retail or flex space could use a modified gross lease.Additionally, having an appropriate lease contract prepared before finding a tenant can remove weeks of down time in the negotiating process. A good lease contract both protects your liability and maximizes your return on investment.
You only get one chance to make a first impression. Consider cleaning, landscaping, carpet and paint as marketing costs. Once the space is presentable, hire a professional photographer to help make the space stand out. Think about using 360 degree cameras and drones to create a unique marketing statement. In a competitive market, making your property stand out above the competition is a necessary investment.
An accurate floor plan can help streamline the leasing process. A potential tenant will use floor plans and other measurements to determine if the space fits their requirements. Once that tenant chooses your space, floor plans will be used by vendors, contractors, and others as a basis for renovations, buildout and technology infrastructure. Accurate floor plans will also ensure that you are getting a precise measurement of the revenue and expenses per square foot for your investment.
A landlord/tenant relationship is a long term relationship, as commercial real estate leases are typically 3-5 years, often with options for extensions and renewals. Finding a tenant whose use for your building aligns with your investment goals is important. Additionally, you want to find a tenant that respects your property, operates with integrity and you enjoy doing business with. The right tenant is essential a successful real estate investment.
A commercial real estate broker adds value to your real estate investment in many ways beyond putting your property on a listing service. A broker knows the market and how to present your property to the right potential tenants. Brokers also add value by handling the lease negotiation and renewal processes, and through their contacts with contractors and vendors that provide services to your building. A broker relationship should be viewed not as a transaction handler, but as a long term business partner with a shared goal of achieving your real estate investment goals.
Top Five Tips To Leasing Your Commercial Property
When selling commercial real estate there are several marketing strategies to choose from. Below I highlight four different ways to sell a property.
This is a highly effective sales process focused on achieving the highest sales price for a property and by far the most common sale type for real property. Property information is gathered, marketing material is created and the property is marketed through all sales channels; including, multiple listing services, buyer lists, the brokerage network, open house events and targeted advertisements.
This sale type is sometimes utilize by property owners that do you not want people to know their property is for sale for one reason or another. Property information is gathered and marketed to both individual direct buyers and brokers representing buyers. A confidential marketing process is followed. Candidates for this sale type are often property owners that have an operating business at the property.
Sale By Auction.
The focus in an auction scenario is speed and not necessarily sale price. Although, in a competitive auction environment both may be achieved. There is upfront marketing cost to advertise the auction and the strategy is focused on getting the market to show up to the auction.
Call For Offers.
This sales type is used for properties that you know there is a pool of ready, willing and able buyers. A call for offers is a closed bid auction process. All property information is gathered and marketing material is distributed. A best and final bid date is set and the seller reviews all offers on that day.
When choosing a marketing process for your commercial real estate, it is important to determine the priority between price, speed, and confidentiality.
As the leader of Jacksonville commercial real estate firm Prime Realty, Tyler Saldutti has seen his company grow exponentially as the market has rebounded. In the past 18 months, Prime Realty has more than doubled its staff to meet client demand.
"We've attracted the very best talent in this city, mostly because of the culture fit" he said. "The strength of our firm comes from our diversity. A variety of backgrounds and beliefs help our team look at each challenge and opportunity from multiple perspectives."
Raised in New Jersey, Saldutti says real estate is in his blood. His father, grandfather, and uncle were all in development and construction. After working in south Florida and London, Saldutti moved to Jacksonville and began his firm.
The company takes a boutique approach to commercial real estate, he said, with high-quality services for a handful of clients.
"I have a passion to help people generate transgenerational wealth" he said. "They're trying to build something for the future and have something to pass on."
Saldutti has served as a judge for Jacksonville University's Dolphin Pitch and volunteers for Daniel Kids Foundation and the American Heart Association. He also started a community garden in Ponte Vedra.
Every year, the Jacksonville Business Journal honors 40 of the city’s up-and-coming leaders under the age of 40. This class of honorees is diverse, with individuals hailing from companies from Holland & Knight to Mayo Clinic to CSX. Prime Realty’s CEO Tyler Saldutti is honored to be added to this years list!
Here are our wishes for Jacksonville in 2016...
Let's make it happen in 2016!
Our new year’s resolutions for Jacksonville, FL in 2016.
Tiffany Lane, Property Manager
I recently attend ICSC’s Florida conference in Orlando. One of the many things I learned was how a
property owner can reduce risks and insurance claims at a retail center.
Listed below are six suggestions on how a property owner can be proactive regarding insurance claims.
1. Maintenance: Keep the property as clean as possible. A well maintained property is the best
defense against facility issues.
2. Be Proactive: Survey your property regularly. Dead trees, limbs, and other debris can pose a
hazard to customers and employees. Once you realize these issues exist, develop a plan to
present to the landlord on how to correct them in a timely manner.
3. Be Transparent: ALWAYS make your property owner aware of any issues before a claim is filed.
4. Keep Good Records: It is important to get it writing. Complete an incident report whenever
there is an event at the property. Note the time of day and the weather on all reports.
5. Get The Right Insurance and Keep It Current. Educate yourself on your insurance coverage
including terms and expiration dates. A lapse in policy could result in a large unnecessary payout
for the owner.
6. Keep Vendors and Contractors Insured: Require proof of insurance from all vendors and
contractors. Consider a contract for the plaza and your management company for additional
About the Author: Tiffany Lane is the Property Manager at Prime Realty. She manages
retail, office, and industrial properties in Northeast Florida. Her property management
best practices are focused on cutting operating costs, reducing risk, and increasing
rental income. Tiffany has a background in design and management, and works with
the leasing team, property owners/asset manager, and the accounting department to
build consensus and achieve targeted financial objectives at the properties she
services. Contact Tiffany at 904.349.7176 or firstname.lastname@example.org.
Listed are six suggestions on how a property owner can be proactive regarding insurance claims.
Despite concerns over the large number of new apartment units being built across the country and high market valuations, the multifamily rental market continues to hum and may be on track for several more years of growth, according to the latest Freddie Mac Multifamily Outlook.
The multifamily sector was the first to recover following the Great Recession and new supply has been coming online at elevated levels ever since the 5-year streak of robust growth began.
Freddie Mac doesn’t see that abating any time soon. In fact, the government-sponsored entity reports supply will continue to enter the market at elevated levels and reach higher levels of apartment completions not seen since the 1980s.
Multifamily deliveries saw a spike in the first half 2015, mostly in the second quarter, when 285,000 units, annualized, entered the market, the highest level post-recession, according to Freddie Mac.
Renter demand for the new units has kept pace with new supply, calming concerns that growth might start to decelerate, Freddie Mac said.
Because of the improving economy, pent-up demand has started to release into the market, benefiting the rental sector. Freddie Mac said it expects the strong demand for multifamily units to continue in the years to come.
"It is now clear that the increase in multifamily demand is more than a temporary correction stemming from the Great Recession,” said Steve Guggenmos, senior director of Freddie Mac Multifamily investments and research. “Favorable demographic trends will support strong multifamily growth for several years. Individual market performance will vary based on the pace of new supply delivered to the market and local economic strength.”
As of this summer, CoStar data showed national vacancies dropping below 4%, with year-over-year same-store rental growth at a solid 3.9%. Demand was holding up stronger than expected, extending the supply-demand balance.
If supply growth doesn’t accelerate further, or slows down while developers consider new projects, the current trend could keep vacancies low while bringing rental growth close to or above levels observed during the 2012 peak, according to analysts with CoStar Portfolio Strategy.
The current economic environment continues to favor renting over owning and that trend is supported by the most recent U.S. Census Bureau data and CoStar analysis.
The homeownership rate compressed to 63.4% in the second quarter after reaching 70% at the peak of the housing market. And the decline in homeownership has come with a soaring number of renters, now close to 43 million.
In addition, the share of older, formerly home-owning households that is now renting is increasing because of lifestyle and financial reasons. At the same time, factors like immigration, often underestimated, appear to be giving an ongoing boost to the renter pool.
When the homeownership decline will end is still unclear. When it does happen, though, CoStar Portfolio Strategy analysts see it occurring first in metros where the economic recovery is above average and home prices are reasonably affordable. In places where homes are expensive relative to income, renting will be-at least for a while longer-the preferred choice.
Freddie Mac also expects multifamily market fundamentals to vary locally as new supply is dispersed across geographic areas, with conditions affected by new supply and economic drivers in particular metros.
For the majority of markets, current vacancy rates are favorable relative to historical averages, Freddie Mac said. Vacancies have trended upward but at a slower pace than predicted in 2015.
Rent growth is also mixed across markets and will further disperse as new supply enters the markets.
The Freddie Mac Multifamily Investment Index has steadily declined over the past few quarters as the growth in multifamily property prices outpaces net operating income (NOI) growth. The index indicates the current investment environment is comparable to that seen in 2004.
"Favorable multifamily investment opportunities along with a high volume of loans reaching maturity in the near term will continue to push origination volume up into 2016,” said Guggenmos.
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Freddie Mac: Increase in Multifamily Demand More than a Temporary Correction Stemming from Great Recession
By Mark Heschmeyer
Prime Realty sees the same values of focus, hard work, diversity, finishing, disciplined planning and experienced matched with talent disrupting college lacrosse the way Prime is bring change to the CRE industry.
By Tyler Saldutti.
As the final seconds counted down, the horn sounded, the University of Denver lacrosse players rushed the field in celebration, a new champion was crown, and I couldn't help but reflect on what just happened and how it relates to my life. You see, Denver's victory at the NCAA Division I Men's Lacrosse Championship in Philadelphia this May is not only historic it represents a transformation. I see my company, Prime Realty, and the city of Jacksonville, FL achieving much of the same successful transformation.
For those of you outside of the lacrosse world, the sport has historically been dominated by the same east-coast university since the first intercollegiate lacrosse tournament was held in 1881 with Harvard beating Princeton 3-0 in the final. Starting in 1971 modern college lacrosse has crown a champion each May at the NCAA Division I Mens Lacrosse Championship. Prior to Denver's win this year the same nine east-coast "lacrosse schools" had won the previous 44 tournaments. Likewise you may look at the commercial real estate (CRE) brokerage landscape and see a similar history of established competitors, cronyism, and status quo operations. When faced with this phenomenon in Jacksonville it has been referee to as "the good ole boys club".
Denver's win shows that times have changed, talent and hard work prevail over all else, and anyone can win in open competition! This is true for Denver on the lacrosse field (lacrosse is our nation's fastest growing college sport) as it is for Prime Realty in the Florida CRE sector, one of our nation's fastest growing real estate markets.
A few other takeaways:
You Don't Have to be Big as Long as You Are Focused. Denver faced The University of Maryland in the finals. The size difference between Denver, the small private school with 11,000 students, and Maryland, the larger public university with 37,000 students, is congruent with the resources available to their respective Athletic Directors. But years ago Denver focused it's efforts and resources on building a lacrosse program and now they are champions. The competition on the field between these two institutions was nothing short of a David vs Goliath battle.
Experience is not Everything But It Sure Helps to have Someone on Your Team that Has Been There. Maryland had played in the national championships eleven times and won twice prior to taking the field against Denver. This year was Denver's first time playing a championship game. With that said, although none of the Denver players had national championship experience, their head coach, Bill Tierney, was right at home. This was Bill's seventh championship win as head coach.
Close Doesn't Count and Only Results Matter at the End of the Day. Both semi-final games to get to the championship were decided by a one point margin and Maryland hit the post of the goal multiple times during the championship game. One point here or there, or one inch this way or that way, and the results of the tournament are much different.
Have the Discipline to Plan, Work the Plan, Stick to the Plan, and the Championship is Yours. As Wesley Berg, the game's MVP, said in his interview after the game, "We stuck to a system and won." Both teams in the finals are known for playing their game, sticking to a game plan, and grinding out victorious with disciplined ball handling and a slower pace of play at times.
A Diverse Team is a Strong Team. The more diverse team won. Denver has assembled one of the most, if not the most, diverse college lacrosse team ever to play in a championship game. Denver has players from eighteen states and two Canadian provinces. This mixture of different talent from around North American gave them an edge this May and these diverse recruitment practices are sure to be replicated.
Prime Realty sees the same values of focus, hard work, diversity, finishing, disciplined planning and experienced matched with talent disrupting college lacrosse the way Prime is changing the CRE industry.