Getting Started in Commercial Real Estate in Today’s Modern Economy Many Opportunities Exist

Posted on: Thursday, October 12th, 2017, under Commercial Real Estate, Development.

Commercial real estate deals often take a lot longer than residential transactions, but each deal is (often) much more lucrative. Commercial real estate is a varied segment that encompasses so many different types of properties: shopping centers, office buildings, warehouses, and lots more.

There are many avenues to explore if you’re a newcomer wanting to get started in commercial real estate. You have to figure out which approach to take and then take the steps to get your career rolling.

Career Opportunities

Considering a commercial real estate career? There are three main paths to take to make it happen.

Commercial Brokerage: You represent buyers or sellers in commercial property deals. They usually work as independent contractors and may specialize in a certain type of commercial real estate, like retail, office, or industrial.

Development: Devolopers work to purchase land and build something on it. It’s up to the developer to arrange financing, hire architects and contractors, negotiate tenant leases, and supervise the entire project.

Property Management: Once properties are purchased and developed, property managers tackle the day-to-day operations, including staffing, repairs, maintenance, and .

Ready to Get Started?

If you’re ready to get involved in commercial real estate, it may be difficult to know where to start. Follow these steps to start networking and get your career :

  1. Make a list of everyone you know in commercial real estate. Then, ask your friends and relatives to do the .
  2. Start making calls. First call the people on your list. Ask if you can about 20 minutes of their time to learn more about the industry.
  3. Visit with CRE professionals. Talk about how they got started and ask for advice for newcomers. Get them to talk about the industry and suggest industry publications that you can read to learn more.
  4. Read up on the industry. Visit industry-specific websites and do some research on the industry and your specific market. Also, attend some local commercial real estate classes—you’ll learn a lot and meet some new .
  5. Find opportunities. Learn about CRE compensation structures and consider what type of opportunity you’re most interested in and how much salary you need to .
  6. Start applying for positions. Once you’ve narrowed down what you’re looking for, start the serious job search. Contact CRE professionals who you’re most interested in working with. Most organizations don’t have job openings, but create slots when need or opportunity arises.
  7. Explain what you can offer. Companies are most interested in what they will gain.

Many opportunities exist in commercial real estate. You just have to know what you want and where to look—and, you have to be persistent and do your .

6 Reasons Startups Should Purchase Commercial Property: Buying property comes with many advantages

Posted on: Tuesday, October 10th, 2017, under Commercial Real Estate, Real Estate Investing.

Bob Samii

If you’re a startup founder, raising capital and getting your business off the ground the first major hurdle. There are countless decisions that need to be made daily in order to bring your product or service to market. One decision that is often overlooked, at least until they are later stage startups, is whether to rent or buy your office space.

Most startups don’t think twice and jump immediately into the rental market. But there are some distinct benefits that buying commercial real estate offers and renters miss out on. The best way to make the decision is to decide what you can handle both short term and long term. Consider your individual real estate market and the stage of your business.

Here are six reasons that as a startup, you should opt to purchase your office space rather than rent it:

 

  1. You Get to Be the Landlord. Being your own landlord has its advantages. You don’t have to worry about your rent going up or lease agreements changing. Plus, you set all the rules. You can change the property however you see fit without having to ask for anyone’s permission. You can renovate the space or rent part of it out for additional cash flow. You can shape your space to fit your brand, your ideas, and your team.

 

  1. It Costs More to Rent. In some markets, the cost of rent exceeds the cost of purchasing property. You may be able to actually lengthen your runway by investing in your office space. That’s why we recommend that you carefully examine your individual market and weigh the pros and cons of buying versus renting. Look at the numbers from both a short-term as well as a long-term perspective. Buying property is almost always a better long-term investment and it may be better for your company in the short term as well. (ahem, you could save on moving costs down the road, too).

 

  1. You Can Focus on the Long-Term. There are two main reasons most startups go straight to renting: they don’t want to be distracted from their main mission and their investors didn’t fund them to get into real estate. So if you’re trying to grow users to get to your next funding round, it probably isn’t a good idea add any commercial real estate to your balance sheet. But, if you have the time and energy to take it on and are able to look 5+ years into the future, it starts to look like a good idea.  

 

  1. Cash Flow Isn’t a Problem. When you’re cash flow positive (or are growing quickly and can easily attract investors), there are distinct advantages to owning rather than renting. Buying property is a long-term investment that allows you to build equity, which you can use as collateral for future growth. Commercial real estate appreciates in value, so if you choose to sell in the future, you could potentially make a solid return on the property. And, if you invest in a larger property and can attract tenants, their monthly rental payments will be a nice, steady source of income.

 

  1. Tax Benefits Exist. Tax benefits are available to businesses that invest in commercial real estate. As a property owner, you can receive tax deductions for property taxes, mortgage interest, and other costs associated with purchasing and managing the property. And if your business grows too fast and you outgrow your space, you can use a 1031 exchange to upgrade your space without paying taxes on increased value.

 

As a startup, the decision to buy or rent office space is tougher than many think. We get it. But it’s important to know your options. You may just be surprised at how purchasing your office space could be more cost-effective and while contributing to your ongoing success.

Why You Should Add Video to Your CRE Listing: Video paints a true picture and drives leads

Posted on: Wednesday, October 4th, 2017, under Commercial Real Estate, Marketing.

Bob Samii

Commercial real estate listings are all about the visuals. High-quality photos are obviously essential, but adding a video to your listing takes it up a .

A video walk-through gives prospective buyers or leasers a real-life perspective of the property. It provides much more detail and description of the building than photos alone  can. Viewers can see how rooms connect and get a better idea of the layout.

If you’re not using video in your listings, here are some reasons why you should.

Video Traffic Keeps Growing

YouTube is the second-largest search engine, behind Google. Websites with properly optimized video will rank higher in search results, which means more people will find you. Mobile videos are even more of a traffic driver. Online video will represent nearly 70% of all mobile traffic in 2017. Videos are among the shareable content. Listings with video will be more likely to be shared.

Video Better Conveys Information

People often prefer videos over text and photos these days. Most people don’t like to read and digest information. You can convey more information with video in less time than you can with text, and people are more likely to remember what they’ve seen in videos. So, you can provide all the information that potential leads need in a shorter timeframe, which they will appreciate.

You’ll Create Better Visuals  

Consumers respond to video. Letting them visualize the space in a real way, where they can see the true sizes of rooms and how they connect, increases their level of interest in the property. Videos tell a property’s story, as well as the story of its surrounding neighborhood.

A video paints a true picture. Just make sure your video is high quality, and hire a professional to get it right. Proper lighting, good pacing, and a steady picture will get the listing the attention it deserves.

You Can Establish Yourself

Consistently creating video for your commercial real estate listings can help establish your CRE business and you as a major player in the industry. Make sure you make an appearance in the video to introduce the property and talk about its features. It shows that you are innovative and creative, and it can help you grow your sales in the future.

Videos generate potential leads for your property, increasing the likelihood of a quick sale or lease. It can also help raise your company’s profile. When planning your listings, start making video an integral part.

4 Key Reasons to Buy Commercial Real Estate for Rental Purposes

Posted on: Monday, September 25th, 2017, under Commercial Real Estate, Real Estate Investing.

Bob Samii

Investing in commercial real estate has a plethora of attractive qualities. And, purchasing multi-unit properties that allow you to recruit tenants offer some of the best returns on investment around.

Of course, attracting the right tenant and negotiating leases can be challenging, but once that’s in the books, the doors are open to enjoying all the perks of your investment. The good news is most commercial tenants enter into long-term leases because they are looking for a reliable space in which to operate their business. This low tenant turnover rate, along with the steady stream of rental income, makes commercial properties a lucrative investment that you wouldn’t want to miss out on.

So, here are four reasons you should seriously consider buying commercial real estate for rental purposes:

Leases Are Long Term

We can’t stress this enough. Unlike residential leases, commercial contracts tend to be long term. Typically, businesses can enter into five year terms (some even double that).  Having a steady, long-term location is good for their business as well as yours. You have guaranteed rental income and time to build a trusting relationship with your tenant. Not to mention, banks look favorably on long-term leases if you ever plan to refinance or sell your property.

You Set the Standards

As an owner, you are able to negotiate any types of rent, deposits, or other collateral that you want with your tenants. Some leases may require a couple of months’ rent as a security deposit. You can also ask tenants to personally guarantee the space, which means that they will be held personally liable for any damage or unpaid rent caused by the business. Leases can also include what happens if the tenant terminates the agreement. So, you can be sure to protect yourself and get set-up a little bit better on the on-set of a new tenant.

Rent Provides Consistent Income

Having consistent tenants will ensure that you’ll receive a certain amount of income each month. This can help you achieve a significant return on the investment for the property. During lease negotiations, you can work out many different rental agreements with tenants.

Unlike residential properties, there are rarely any rental control regulations on commercial properties. However, landlords sometimes give new business a reduced rate in the beginning so that they can establish their business and get things ready to grow on their end. There is always an expectation is that the rent will increase over time. More established businesses are likely to pay more rent to ensure that they maintain their space – especially if they’ve created a brand awareness in the space you’ve provided. Added bonus? Tenants also often pay a portion of utilities and some maintenance costs.

Exclusivity Offers

As a landlord, you can offer exclusivity to your tenants. While this limits who you can rent to—for example, your exclusivity agreement may limit your building to one accounting firm—it also limits where the tenant can move to if they vacate your building. Essentially, it limits a tenant’s competition, which makes it an attractive feature for recruiting tenants. You want your tenants to have successful businesses, so it benefits everyone.

If you’re ready to take the plunge into commercial real estate – it’s definitely worth your while to dig in and consider purchasing a tenant-driven property. The benefits are endless, and it is a great opportunity to really get a high ROI.

Check Out Avison Young’s Tech Spaces Q3 Newsletter!

Posted on: Thursday, September 21st, 2017, under Announcements, Thought Leadership.

Bob Samii

Get an update on the Austin tech sector’s workplace trends. Get insight on everything from who’s on the move to M&A and market news.

Download the report here and connect with the Avison Young team.

The Tech Spaces team at Avison Young specializes in office leasing advisory. Its members share a strong focus on the technology sector, representing a large number of technology companies throughout Austin as well as nationally.

Building a CRE Agency: Being a good fit determines your success

Posted on: Wednesday, September 20th, 2017, under Thought Leadership.

Bob Samii

Networking, a strong work ethic, and being knowledgeable about your local commercial real estate market can help you break into the industry. It’s also vital that you’re a good fit for commercial real estate.

Being successful in commercial real estate and building your own CRE agency hinges on where you specialize and the reputation and culture that you create. These elements are essential as you build your CRE agency.

Your Market

Commercial real estate brokerage and development is big business just about everywhere, but markets in big cities are often a little more active. Breaking into large markets sometimes takes more persistence, but your hard work will pay off. In smaller markets, it may be easier to make waves, but the deals are usually smaller, as are the fees and CRE .

Your Specialization

Finding a specialization keeps you focused so that you can build your agency and not get distracted with smaller deals or ones with elements you aren’t familiar with.

The specialization determines the types of properties you’ll handle, as well as the types of people that you’ll interact with, the knowledge that you need, and the environments you’ll work in. Depending on your personality type and interests, you’ll likely gravitate to a certain industry segment.

Your Agency’s Culture

Successful CRE agencies foster the idea that when everyone works together, everyone makes more money, gets and retains clients, and dominates the market. Make collaboration a part of your company culture. Fierce competition and distrust do more harm than good. Let this drive how you pay your staff, split commissions, and assess fees, as well as how you set up your .

Your Personality

Self-improvement can go a long way, but certain personalities are more successful in CRE. As a broker, you will simultaneously be a contractor, architect, salesman, attorney, financial analyst, and design consultant—depending on who your client is and what property you’re working with. Successful CRE professionals are personable, good with money, and driven.

Your income is not always steady. Can you manage your lifestyle on a commission, or not getting paid for several months? And, if you were to get a large six-figure check, you would likely need to make the money last for a while.

Success in commercial real estate depends on being a good fit. You have to fit in well with the industry, the lifestyle, and your specialization. And, as you build your agency, you have to create a company that fosters collaboration and fits within the.

 

 

Technology is Making Investing in Commercial Real Estate Easier

Posted on: Monday, September 11th, 2017, under Commercial Real Estate, Real Estate Investing, Technology.

Bob Samii

Commercial real estate investment has always been built on relationships. Traditionally, those relationships were built upon face-to-face interactions and lots of paperwork. Technology is changing that, making investing in commercial real estate all that much easier.

Technology increases organization, boosts efficiency, and helps people connect. Because technology is making investing more streamlined, new investors are empowered to enter the market. They can search for properties online, use online tools to research investment strategies, and even complete transactions online.

Investors can easily form relationships online, and the information that previously took weeks to collect and consider can now be created and examined within a few hours. These trends are helping to attract new commercial real estate investors:

More Data Is Available

The vast amount of data available can save time for commercial real estate brokers and allow them to provide property and market data to potential investors much more quickly. In the past, this data had only been available to professionals and insiders.

In addition, tech-driven investment platforms can help investors more easily find investments because data, insights, and trends are easily accessible and located in one spot. Investors can learn about properties and the market, and make smart decisions.

Details Are Easy to Access

Owners can create detailed online listings that provide potential investors with everything they need to know about properties, including history, location, tenants, and the local market. Technology better enables owners to tell their property’s story and discuss investment opportunities and philosophies.

Technology allows for a clear expression of value propositions and other essential details so that no surprises come up. Technology also enables investors to access information about their properties in real time and on demand.

New investors and a younger generation of investors are more drawn to CRE investing as information becomes more easily accessed online. With information and investment opportunities readily available, investors can build knowledge, and the flow of information and completion of transactions is easier than ever before.

Beyond the Building: 3 Ways to Show Off a Property’s Personality in an Online Listing

Posted on: Thursday, August 31st, 2017, under Marketing.

Bob Samii

Aside from location – walls, floors, price, and square footage are what most people consider when they’re looking to purchase or lease commercial real estate. But, as you know, there’s so much more to a space than the four walls that contain it.

Every building has a personality and gives off a certain vibe. The more you help highlight and show off these aspects, the more likely you’ll be able to attract tenants or buyers. When you’re creating your online listing, be sure to factor in key aspects of the property that capture its personality and essence. Here are four ways to do just that:

 

  1. Focus on Location Location is one of the top things that people consider when looking for a space to buy or rent. Online listings should highlight a variety of aspects related to location, because different things matter to different people. Discuss whether it’s located near major highways or neighborhoods and share some engaging, active images of nearby hotspots and the surrounding area. As walkability is another factor that comes into play, particularly to millennials and younger businesses, it’s important that you highlight the property’s proximity to cafes, restaurants, parks, shops, and more. And, of course, make sure the listing includes a map and plenty of photographs of the exterior of the building, along with the street where it’s located.

 

  1. Highlight Demographics. Neighborhood demographics can make or break a business. So, when business owners look for spaces to buy or rent, they want to know who and what makes up the neighborhood. Include whether the neighborhood is more commercial, industrial, or residential. Mention some of the types of businesses that are included in the neighborhood.

 

  1. Give the Space Life. When people are looking to buy or rent a space, they want to see all the potential that you see. Be sure to tell a great story of the space – describe it in jaw-dropping detail. Get your potential buyers salivating at the idea of occupying it.  Share whether or not the space is already built out, or if build outs will be customized for the tenant. Give options and ideas. Don’t forget the basics like  the square footage of the building as a whole and each individual space. How many units are available? What amenities does the building offer? Who are some of the existing tenants? Do tenants have the right to make changes to the space? Is storage available?

The dimensions and other practical information are obviously important for buyers or tenants. But, a building’s vibe and personality is often what truly draws attention to it. So, go ahead and truly show off the property’s best features. People will take notice.

Are You Ready to Be a Landlord? The high return on investment comes with many responsibilities

Posted on: Tuesday, August 8th, 2017, under Commercial Real Estate, Real Estate Investing.

Bob Samii

Purchasing an office building or other commercial real estate property is a lucrative investment. It’s an asset that appreciates in value, and having ongoing and steady tenants means a continuous cash flow.

Investing in a building with tenants means you’ll become a landlord, which comes with a wealth of benefits and challenges. Making a commercial real estate purchase is the first big step, but before you buy, make sure you’re ready to be a landlord. Here are some signs that you are.

You have the money (or can get the financing) to invest.

Sounds obvious, but do you have the money to invest in commercial property? Paying cash may be ideal in some situations, but there are also many financing options out there. One option is the CDC/504 Loan Program through the U.S. Small Business Administration.

504 loans specifically finance major assets, such as real estate. While there are several eligibility requirements, these loans are fixed rate, come with flexible terms, and are less expensive than other types of financing. A 504 loan is a great option for first-time commercial real estate investors.

You can find solid tenants.

When you own commercial real estate, tenants are your lifeblood. Having solid, long-term tenants will keep cash flowing, helping you pay back loans and adding to your bottom line. Finding such tenants can be challenging.

Advertising the property online is one of the best ways to attract tenants. You create a profile for your space (link to: https://www.realmassive.com/signup), include lots of appealing amenities, and take enticing photos to stir interest. You can share the listing on social media to attract even more interest.

You’re not dependent on the cash from rent.

While commercial real estate brings a nice return on investment, don’t rely on the rental income as your sole source of income (or even a large part of it). Chances are there will be times that you have vacant spaces—and, no matter how successful your tenants are, they might not always pay their rent on time. Not to mention that companies can go out of business.

You understand the responsibilities.

Being a landlord comes with many responsibilities. You will be responsible for maintaining the property, making any repairs and keeping it in a state that will attract tenants. You also have to insure the building and keep all certifications, like fire safety, up to date. Landlords are also responsible for creating lease agreements and sticking to the lease’s conditions.

If you’re ready for the responsibility that comes with being a commercial landlord, these tips will help you get started.

How Good is CRE Big Data? Three Ways to Use Big Data to Your Advantage

Posted on: Tuesday, August 8th, 2017, under Commercial Real Estate, Data, Technology.

Bob Samii

The term big data sounds incredibly complicated, implying vast layers of statistics and trends to translate and then use to make solid predictions. It’s intimidating to those who not only don’t have access to big data, but who are also inexperienced in harnessing its power to make proactive and well-informed decisions.

By anyone’s estimation, though, big data is a valuable tool that reveals new trends and opportunities for those in commercial real estate. In fact, solution providers who give their clients enough content and numbers to navigate through all stages of the buying process are chosen 95% of the time over those who do not. Everyone is potentially accessing the same numbers as everyone else, but it’s the sort of questions these stats prompt that matter.

It’s clearly crucial to understand and use big data. How? Here are a few ways to turn the numbers into sales:

 

  1. Creating a comprehensive site evaluation. Office buildings equipped with sensor technology can provide real-time foot and vehicle traffic statistics and predictions. Such unstructured data, when merged with the property information already available in structured data outlets, creates a strategically tight target to identify appropriate tenants. Also crucial to consider are past price negotiations and loans, the current state of the property, maintenance costs, and policies. Transparent transactions are the goal.
  2. Predicting client behaviors and preferences. Well-researched assessments of a property help targeted buyers make decisions, whether they’re new tenants or currents tenants deciding whether to extend leases. Unstructured data that monitors leasing trends and stays current on related topics appearing on social media streams and via online opinions has a direct connection to identifying focused business opportunities. For example, with insights gleaned from recent increases and interest in shared office space, large offices are now being divided into smaller units to attract start-ups and sole proprietors, bundling shared services all tenants will need regardless of their industries. This is a clear response to predictive unstructured data layered with structured information.
  3. Revolutionizing property technologies. The needs and expectations of potential buyers and tenants are changing on a dime, and the only way to process and implement the most recent developments is by keeping current with big data. Analytics including every important entity in the sales process, as well as the use of smart sensors to manage up-to-the-minute energy resources on property, are necessary to acquiring and keeping buyers engaged.

 

Big data is all about making insider information available to those who formerly had limited access. One of the biggest complaints about big data is that major corporate players with deep pockets have invested in compiling data to be uniquely useful; it’s the governance of the data that gives smaller players pause. Transforming the numbers into meaningful and accessible business intelligence across the commercial real estate industry is the ultimate goal of the new big data. Using its power is the key to enabling innovations in the commercial real estate industry, as well as enabling growth, continued smart development, and profits.

Gain access to CRE Big Data through our innovative platform, built for Commercial Realtors. Sign up today.