Contracting Commersial Property
He,
My question is what would be the proper procedures to follow to find the owner(s) of a commercial property which has been vacant for close to 10 months. My reasons are that I am not interested in purchasing the property. I am however interested in renovating the property to find a prospective renter.
If you live in California would a leasing agents license be required or could I freelance in this venture?
if you have an equity interest in the property you can be lease agent, other wise you need a brokers license.
w/ retail it is well worth paying the fee to get access to all the potential tenant.
as for finding the own, same as for residential.
tax rolls / deed
if corp/llc/lp owned look for agent of service
watch that you done violate any broker laws.
Whoa ... lets not get too far head of ourselves here. I merely asked a question. I AM AWARE OF THE LAWS ...but thanks your information was helpful.
THERE IS NO NEED FOR FURTHER COMMENTS THANK YOU
IMHO.
Every vendor who sells roofing materials, windows, heating systems, floor coverings, siding, appliances, etc., etc. wants the buyer to believe that their product will increase the productivity, life, value, curb appeal, etc., etc. of your properties.
The choices have to be made on an individual basis considering not only the structure but the investment plan of the individual investor.
Jim
just curious... thanks for the info
I understand well that the price of a commercial property at any given point in time will depend on many factors, including the cap rate(which is hugely effected by the current sub prime rate), regional economics, national economics, etc.. Different set of factors may determine the value of commercial property at any given time, but there can still be a long term average national rate of appreciation, which is what I am trying to find out.
Residential property also has regional differences effected by all of the above. Interest rates, economic conditions, regional conditions, etc..can all cause homes in an area to appreciation or depreciate, sometimes by a little, sometimes by a lot, but over many years we see an average long term appreciation of 6.34% across the nation.
Over time, is there an AVERAGE national appreciation rate that anyone has measured for commercial?
(duplicate deleted)
[ Edited by Dewdman42 on Date 12/13/2007 ]
Check out this article. This will give you some insight
http://money.cnn.com/galleries/2007/real_estate/0704/gallery.stocks_v_realestate.moneymag/index.html
I peg commercial re in general at a 2.5% appreciation rate. This correlates with average rent increases. Note this re appreciation rate does not directly correlate with general inflation rate or take into account changes in cap rates. If cap rates increase then you get depreciation not appreciation unless rents offset this dynamic.[ Edited by haxton1 on Date 02/22/2008 ]
I peg commercial re in general at a 2.5% appreciation rate. This correlates with average rent increases. Note this re appreciation rate does not directly correlate with general inflation rate or take into account changes in cap rates. If cap rates decrease then you get depreciation not appreciation unless rents offset this dynamic.
Quote:On 2008-01-27 22:15, haxton1 wrote:I peg commercial re in general at a 2.5% appreciation rate. This correlates with average rent increases. Note this re appreciation rate does not directly correlate with general inflation rate or take into account changes in cap rates. If cap rates decrease then you get depreciation not appreciation unless rents offset this dynamic.Hi All-So as I read it- for non-problem commercial properties with cap rates of, say, 6-7%, one would add appreciation of 2.5% for 8.5-9.5% total return.Does that agree with your take on it - for you experts out there?
To be conservative I would use 2% appreciation (average).
But keep local market dynamics in mind - they can be VERY different.
Interesting read here. I think investors look at ROI from all different angles.
Example: I bought land 2 years ago with a tenant that is paying me a 6% cap. Most people might say 6% is not a great deal, but I say differently
Analysis of the deal:
1) Strong Tenant with long term lease
2) No management of property required
3) No landlord expenses (NNN)
4) If the tenant goes dark, land is valuable because of the surrounding retail and car traffic
Because of the low risk and the initial demand, the rate of return is low ( 6%), however rental increases over the next 10 years put the cash on cash return at 8%. If you factor in the current appraisal the present value rate of return is 30% due to appreciation.
while no one can predict the rate of return in the future, if you want a 20 cap right out of the gate your going to have to negotiate for it upfront or raise the cash flow/rents once you acquire the property. Or you are going to have to take more risk...I.E. handle expenses and management..