Recent Articles

Good Management For Apartments–More Profits

Posted by Karen Meade | March 2, 2017

Investors purchase commercial income producing real estate to make money. There are two obvious ways of making money from a property. First, the owner takes a share of the annual operating profit generated by the investment, and Second, profits from increasing the market value of the investment beyond what it would be because of inflation alone. Apartment properties lend themselves to the second way of making profits better than many other types of investments. Increasing the market value of rental units does require know-how, absolute understanding of the market values of this type of property and excellent management. Management and Income Good management has always been the most important point in increasing or maintaining annual operating profits. Being a skillful… Read more »

Insurance Coverage By Owners and Tenants

Posted by Karen Meade | January 6, 2017

Insurance coverage must be addressed by both landlords and commercial tenants. For the run-of-the-mill daily problems, a landlord must have the maximum coverage for the building and the tenant’s leases. The tenant must cover the business with coverage that will protect it. What if you have a small disaster that is easily repaired, but you lose a tenant because he was not covered for the damage inside the business? Consequential Loss Coverage A fire or other peril may cause a financial loss other than that resulting from direct destruction of the property. Such losses are called “consequential losses” and include those resulting from the loss of use of the property destroyed, such as interruption of business, and property loss from… Read more »

Costly Mistakes In Real Estate

Posted by Karen Meade | January 3, 2017

Investors sometime make investments in real estate that turn out badly. They may then blame the loss on the “real estate cycle” when there were mistakes that could have been avoided by better planning and analysis. Based on data obtained through interviews with more than 200 real estate practitioners, several costly mistakes were identified and discussed. Here are three of them: Misjudging demand. Developers have faced costly setbacks by assuming that customers existed without undertaking adequate market analysis. For example, a retail development designed to attract shoppers from executive ranks in the adjoining commercial center failed to realize that high-income executives have demanding work schedules and tend to shop during their leisure hours near their suburban homes. Clerical workers, who… Read more »

Commercial Real Estate Representation

Posted by Karen Meade | November 21, 2016

Commercial Real Estate Representation There are a number of ways to buy, sell or exchange investment or commercial real estate. Having the knowledge of what you can do in some tax situations can be the difference between an annual profit or loss in a property that you intend to acquire or one that you already have in inventory. The professional commercial real estate broker is in the position to represent clients in real estate transac­tions by setting up sales, exchanges, leases, purchase and sales of options, and management of real estate. A professional real estate practitioner must stay aware of current tax laws and court decisions in order to structure transactions, but does not give legal or tax advice (unless… Read more »

Congratulations to Our Associate Broker!

Posted by Karen Meade | November 1, 2016

Congratulations to Our Associate Broker! Congratulations to Robert P. M. Stefka for receiving his CCIM designation. This designation is not easily earned, as only 6% of commercial real estate professionals hold the CCIM designation. The requirements include compiling a stellar portfolio of transactions, attending four week-long classes of education and successfully completing a lengthy exam in order to become a Certified Commercial Investment Member. Earning this designation makes Robbie 1 of only 3 CCIM members serving Western Nebraska.

Real Estate Managers Keep High Values

Posted by Karen Meade | September 23, 2016

Real Estate Managers Keep Values High The professional investor can usually spot the low-priced and currently unprofitable income property that can be purchased, then upgraded with little expense so that it becomes a cash flow property. That property can then be added to the investor’s real estate portfolio or quickly sold for a profit. All owners want their properties to have increased income and so increase in value during their period of ownership. The first-rate property will command the highest price when it is sold. To achieve these goals, income property must be properly managed. The major error that can be made by an income property owner is saving money by self-management. The professional investors know that enhanced value usually… Read more »

Apartments Are Most Popular Investments – September 2016

Posted by Karen Meade | September 20, 2016

In the world of investment real estate, multifamily housing is still the most popular type of real estate investment. Currently, it continues to account for nearly one third of real estate investment transactions. This has been the most popular type of investment because of rising rental rates. Investments in these properties are based on economic fundamentals. Lenders and investors closely scrutinize the financing of multifamily housing projects to be sure that cash flows will cover expenses. The recession and poor housing market has changed markets for new homes. But lower interest rates and lower prices have increased demand for new home purchases in some key areas. There have been some changes in the types of households and tenants who will… Read more »

The Tenant’s Expanded Space Requirements

Posted by admin | May 27, 2016

When a tenant feels that he might need to expand rental space during a lease term, he will usually ask for an expansion option in the original lease. The space wanted by the tenant will usually be adjacent to his present space. This is a problem for the landlord, since the option may make the adjacent space difficult to lease to others. The landlord’s best circumstance would be to have the option space already leased with a definite date of expiration and no renewal options. With this situation, an expansion option exercisable as of the expiration date would create no problems. A provision in the option should provide that if the lease terminates earlier for any reason, the expansion option… Read more »

Insuring Your Cash Flow With An Escalation Clause

Posted by admin |

Putting a Consumer Price Index (CPI) escalation clause in a lease is to make the lease fairto both the tenant and the property owner. Commercial leases commonly provide that while rents will follow the CPI upward, they will remain the same when the CPI goes down. Landlords will argue that this is necessary because the CPI rarely declines and the one-way provision is necessary in leases when the owner obtains financing. Institutional lenders are always concerned that the income stream from a property not be subject to decreases due to lease provisions. CPI clauses operate in one of two ways in the calculation of annual changes. Most common in use is the “yearly method.” At the end of the year,… Read more »

The Rent Acceleration Clause In Your Lease

Posted by admin | May 20, 2016

When you placed the acceleration clause in your lease, it was to make all future rent payable upon the default of a tenant. What will cause the acceleration depends on how the lease is written. Sometimes it is only a specific default, like nonpayment of rent, insolvency or the removal of inventory and fixtures. Alternately, any default may give the landlord the right to accelerate. Around the country, court rulings differ on the question of whether such clauses are valid, and the courts that do enforce them limit the remedy in various ways. Note: Under the common law, a landlord had no right to acceleration; he had to wait until each rent payment was due before seeking to collect it…. Read more »