"It's a tenant's market." What does that actually mean? To put it simply, the supply of space exceeds the tenant's demand/desire to fill it. Let's take it down one more notch. There is more space than there are tenants and this gives tenants more leverage in a negotiation.
We are currently in the section of the real estate cycle that is commonly known as oversupply. This is when the owners in the market place have built past the point where tenants readily fill the vacancies. This section of the cycle gives tenants more room to negotiate because they have a greater number of alternatives.
Tenants in this section of the cycle make many choices. They may:
-Neogitate for lower rates
-Improve the quality of their space through a move or tenant improvement allowances from Landlords
-Expand in their current location in exchange for a new lease
The key is how do Landlords entice the tenants into the one that s/he owns over another. If this is something Atlas Real Estate Advisors can answer for you please do not hesitate to call or visit our website at www.atlasrealestateadvisors.com.
Monday, March 2, 2009
Tuesday, November 18, 2008
Great Website-Take 1
www.thecoolhunter.net
This is one of my favorite websites. It is updated regularly and shows some ideas and concepts that are "way outside the box". I hope you enjoy it
This is one of my favorite websites. It is updated regularly and shows some ideas and concepts that are "way outside the box". I hope you enjoy it
Estoppel Certificate
What is an estoppel certificate and why do we use it?
First of all it is a letter or a form that generally contains the pertinent or important information found within the lease along with the status of the tenant's and landlord’s rights and obligations under the lease. This certificate is key when it comes to closing commercial real estate transactions where there are tenants in place when the property is sold. The certificate is often drawn up by an attorney and will contain information such as when the lease began, when it ends, how much the tenant has agreed to pay, if the tenant has any payments due but not yet paid, whether there are any options to extend the lease, security deposit amounts, if any free rent has or will be given. It also may cover any other additional agreements that may be out of the ordinary such as if the tenant has a right of first refusal, but has waived that right. As a part of the lease most tenants have agreed to review and show their agreement by signing the certificate or dispute the information in the certificate. This gives the purchaser of the property the opportunity to get a clear picture of the lease and the tenant's status under that lease before he or she purchases the property.
First of all it is a letter or a form that generally contains the pertinent or important information found within the lease along with the status of the tenant's and landlord’s rights and obligations under the lease. This certificate is key when it comes to closing commercial real estate transactions where there are tenants in place when the property is sold. The certificate is often drawn up by an attorney and will contain information such as when the lease began, when it ends, how much the tenant has agreed to pay, if the tenant has any payments due but not yet paid, whether there are any options to extend the lease, security deposit amounts, if any free rent has or will be given. It also may cover any other additional agreements that may be out of the ordinary such as if the tenant has a right of first refusal, but has waived that right. As a part of the lease most tenants have agreed to review and show their agreement by signing the certificate or dispute the information in the certificate. This gives the purchaser of the property the opportunity to get a clear picture of the lease and the tenant's status under that lease before he or she purchases the property.
Monday, January 14, 2008
Surveying Terms-what do they mean?
There is a great site about surveying called www.metesandbounds.com. They have a full collections of terms that we see on Surveys all the time, but maybe overlook their meanings. Here are a few that I found interesting. For a complete list go to the site and see what else they have to offer.
Acre - The (English) acre is a unit of area equal to 43560 square feet, or 10 square chains, or 160 square poles. A square mile is 640 acres. The Scottish acre is 1.27 English acres.
Arpent - Unit of length and area used in France, Louisiana, and Canada. As a unit of length, approximately 191.8 feet. The (square) arpent is a unit of area, approximately .85 acres.
Chain - Unit of length usually understood to be Gunter's chain, but possibly variant by locale. Chains equal to 2 poles (one half the standard length) are found in Virginia. The name comes from the heavy metal chain of 100 links that was used by surveyors to measure property bounds.
Engineer's Chain - A 100 foot chain containing 100 links of one foot apiece.
Gunter's Chain - Unit of length equal to 66 feet, or 4 poles. This unit was apparently defined as one tenth of a furlong, a common unit of length in the old days. The mile was redefined from 5000 feet to 5280 feet in order to be an even multiple of furlongs. A mile is 80 chains.
Hectare - Metric unit of area equal to 10,000 square meters, or 2.471 acres.
Vara - Unit of length (the "Spanish yard") used in the southwest. The vara is used throughout the Spanish speaking world and has values around 33 inches, depending on locale. The legal value in Texas was set to 33 1/3 inches early this century.
Benchmark - A survey mark made on a monument having a known location and elevation, serving as a reference point for surveying.
Call - Any feature, landmark, or measurement called out in a survey. For example, "two white oaks next to the creek" is a call.
Conditional line - An agreed line between neighbors that has not been surveyed.
Corner - The beginning or end point of any survey line. The term corner does not imply the property was in any way square.
Declination - The difference between magnetic north and geographic (true) north. Surveyors used a compass to determine the direction of survey lines. Compasses point to magnetic north, rather than true north. This declination error is measured in degrees, and can range from a few degrees to ten degrees or more. Surveyors may have been instructed to correct their surveys by a particular declination value. The value of declination at any point on the earth is constantly changing because the location of magnetic north is drifting.
Landmark - A survey mark made on a 'permanent' feature of the land such as a tree, pile of stones, etc.
Line Tree - Any tree that is on a property line, specifically one that is also a corner to another property.
Monument - A permanently placed survey marker such as a stone shaft sunk into the ground.
Out - An 'out' was ten chains. When counting out long lines, the chain carriers would put a stake at the end of a chain, move the chain and put a stake at the end, and so on until they ran "out" of ten stakes.
Point of Beginning - The starting point of the survey
Plat - A drawing of a parcel of land.
Witness Tree - Generally used in the public land states, this refers to the trees close to a section corner. The surveyor blazed them and noted their position relative to the corner in his notebook. Witness trees are used as evidence for the corner location.
Acre - The (English) acre is a unit of area equal to 43560 square feet, or 10 square chains, or 160 square poles. A square mile is 640 acres. The Scottish acre is 1.27 English acres.
Arpent - Unit of length and area used in France, Louisiana, and Canada. As a unit of length, approximately 191.8 feet. The (square) arpent is a unit of area, approximately .85 acres.
Chain - Unit of length usually understood to be Gunter's chain, but possibly variant by locale. Chains equal to 2 poles (one half the standard length) are found in Virginia. The name comes from the heavy metal chain of 100 links that was used by surveyors to measure property bounds.
Engineer's Chain - A 100 foot chain containing 100 links of one foot apiece.
Gunter's Chain - Unit of length equal to 66 feet, or 4 poles. This unit was apparently defined as one tenth of a furlong, a common unit of length in the old days. The mile was redefined from 5000 feet to 5280 feet in order to be an even multiple of furlongs. A mile is 80 chains.
Hectare - Metric unit of area equal to 10,000 square meters, or 2.471 acres.
Vara - Unit of length (the "Spanish yard") used in the southwest. The vara is used throughout the Spanish speaking world and has values around 33 inches, depending on locale. The legal value in Texas was set to 33 1/3 inches early this century.
Benchmark - A survey mark made on a monument having a known location and elevation, serving as a reference point for surveying.
Call - Any feature, landmark, or measurement called out in a survey. For example, "two white oaks next to the creek" is a call.
Conditional line - An agreed line between neighbors that has not been surveyed.
Corner - The beginning or end point of any survey line. The term corner does not imply the property was in any way square.
Declination - The difference between magnetic north and geographic (true) north. Surveyors used a compass to determine the direction of survey lines. Compasses point to magnetic north, rather than true north. This declination error is measured in degrees, and can range from a few degrees to ten degrees or more. Surveyors may have been instructed to correct their surveys by a particular declination value. The value of declination at any point on the earth is constantly changing because the location of magnetic north is drifting.
Landmark - A survey mark made on a 'permanent' feature of the land such as a tree, pile of stones, etc.
Line Tree - Any tree that is on a property line, specifically one that is also a corner to another property.
Monument - A permanently placed survey marker such as a stone shaft sunk into the ground.
Out - An 'out' was ten chains. When counting out long lines, the chain carriers would put a stake at the end of a chain, move the chain and put a stake at the end, and so on until they ran "out" of ten stakes.
Point of Beginning - The starting point of the survey
Plat - A drawing of a parcel of land.
Witness Tree - Generally used in the public land states, this refers to the trees close to a section corner. The surveyor blazed them and noted their position relative to the corner in his notebook. Witness trees are used as evidence for the corner location.
Tuesday, December 18, 2007
Vacancy and Credit Loss
So what is the actual difference between Vacancy and Credit Loss. Vacancy is the loss of potential income which is attributed to space in a building that is not leased. More simply put...this is empty space that could be making money for the landlord. Credit Loss, on the other hand, is the rent due that the landlord has not been able to collect due to a tenant's default. Again, simply put...rent that is owed that has not been paid.
This is one of the reasons that bankers will often use vacancy and credit loss in the formulas that is above a current vacancy rate. The apartment complex may have a vacancy rate of 5% for the last 3 years, but the banker may use a 10% vacancy and credit loss rate in order to cover any tenants that may be in place, but not paying the rent due.
This is one of the reasons that bankers will often use vacancy and credit loss in the formulas that is above a current vacancy rate. The apartment complex may have a vacancy rate of 5% for the last 3 years, but the banker may use a 10% vacancy and credit loss rate in order to cover any tenants that may be in place, but not paying the rent due.
Thursday, December 13, 2007
New Federal Funds Rate-Lowered Again
The Federal Open Market Committee decided today to lower its target for the federal funds rate 25 basis points to 4-1/4 percent.
Incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending. Moreover, strains in financial markets have increased in recent weeks. Today's action, combined with the policy actions taken earlier, should help promote moderate growth over time.
In a related action, the Board of Governors unanimously approved a 25-basis-point decrease in the discount rate to 4-3/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, and St. Louis.
http://money.cnn.com/2007/12/11/news/economy/fed_statement/index.htm
Incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending. Moreover, strains in financial markets have increased in recent weeks. Today's action, combined with the policy actions taken earlier, should help promote moderate growth over time.
In a related action, the Board of Governors unanimously approved a 25-basis-point decrease in the discount rate to 4-3/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, and St. Louis.
http://money.cnn.com/2007/12/11/news/economy/fed_statement/index.htm
Let's Define Net Operating Income (NOI)
The Net Operating Income (NOI) of a property is very simple to figure out. It is defined as follows:
Potential Gross Income=The total amount of money a property could make
-Vacancy and Credit Loss= subtract any empty space or tenants in place that haven't paid.
-Operating Expenses= subtract actual expenses on the property i.e. Utilities, Taxes, Insurance, maintenance, employees, etc. (this does not include the mortgage or income taxes)
=Net Operating Income
Potential Gross Income=The total amount of money a property could make
-Vacancy and Credit Loss= subtract any empty space or tenants in place that haven't paid.
-Operating Expenses= subtract actual expenses on the property i.e. Utilities, Taxes, Insurance, maintenance, employees, etc. (this does not include the mortgage or income taxes)
=Net Operating Income
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