TURNKEY OUTSOURCING PROGRAMS: COMMERCIAL REAL ESTATE

TURNKEY OUTSOURCING PROGRAMS: COMMERCIAL REAL ESTATE

Real estate is a local business. Business owners can and should review local area demographics (population, income and age). However, selecting the perfect spot for your business requires composite analysis of data and local market knowledge. The bottom line is: unless you are familiar with the local market, you won't know the local market. The most critical player is the local agent who must understand your business needs in order to match the right location.

Outsourcing your commercial real estate needs provides:

One point of contact for all your real estate needs.
Innovative real estate solutions for businesses.
Proven lease negotiation leverage to lower your current occupancy costs.
Ongoing real estate support (annual CAM audits, long term strategies).

Outsourcing leverages BUYING POWER, decreases overhead and gives you, the business owner, a committed, fiduciary relationship with an agent. The agent becomes an expert in your business, your real estate needs and your long term business objectives.

SAVE by paying pennies on the dollar that will put money on the business owners bottom line.

Commercial Real Estate Assessments

A commercial real estate assessment can consist of a commercial tenant lease review and a commercial market analysis.

The commercial tenant lease review is a review of the business terms of your commercial tenant lease. It looks for the inconsistencies between lease payments and actual charges. It can find items mistaken by the landlord and tenant. Finally the lease review checks if you've overpaid your estimated expenses.

The commercial market analysis defines potential commercial trade areas for your business. Assesses the general number of business in the trade area. It identifies the commercial building opportunities in the trade area. And finally, general demographics of the trade area are described.

Hard Economic Times May Risk Cash Flow

Business owners understand that CASH IS KING!

(If you are unclear about this, please register for Enterprise ProfitAbility today! The next seminar is Dec. 9th.)

But what happens when you are caught between payment delays and this credit crunch? Banks are just not lending to businesses. And if you don't have your own funds, you may not be able to expand as needed or your business can potentially stop completely. So, what do you do?

FACTORING.

What is it? It's the stop gap between payment delays and an income stream. It ensures that you, the business owner has access to capital that you need. Sometimes it calls for selling your income stream. For example, if you have Medicare or medicaid or other government receivables, a factoring company will buy that income stream for you. You have the cash you need without the hassel of waiting on the receivable.

Businesses should be running as usual. But as you plan for the future it may be a good time to have a contingency plan in place, especially for delayed revenue streams.

Don't hesitate to contact us at http://www.tjgcommercial.com/CommercialRealEstate.html for more information.

Strategic Planning Crucial in Real Estate

Anytime decisions are made regarding the allocation of a company’s assets, the decision makers generally consult the company’s overall business strategy. Such actions as hiring and firing, purchasing equipment, and production demand knowledge of a company’s strategy in order to execute the plan appropriately.

However, many business owners do not fully realize that real estate decisions also need to be tied directly to the company’s overall business plan.

Without this type of executive planning, companies run the risk of getting themselves into difficult real estate transactions. Defining a company's real estate investment leads to positive productivity and growth, rather than negatively impacting the company's pocket book

In an article written in the Journal of Real Estate Research, authors Hugh O. Nourse and Stepehen E. Roulac provide rationale for incorporating a company’s real estate needs into its overall corporate strategy. Some topics that warrant consideration before any real estate transaction should occur include:

• What value does the new real estate add to the company?
• Is real estate essential to the success or failure of a firm’s product distribution, or an auxiliary factor of production?
• How important is geographic location to the business?
• Are workers impacted by a specific office or building design; specifically regarding job performance?
• Is there a plan in place should the company need to upgrade facilities in the future?

Surprisingly, many business owners do not give proper thought to incorporating, or even designing, a real estate strategy that fits into the overall business strategy of an organization. There needs to be a plan for action should an organization require real estate now or in the future.

Furthermore, many businesses focus in on “let’s make a deal” approach in securing real estate. Shopping around and performing due diligence is always recommended, however, price should not be the ultimate factor in making a real estate decision. The most important decision making factor should be whether the property connects with and supports the company’s overall business strategy.

In conclusion, tying real estate decisions to a company’s overall business strategy is crucial for any firm. Real estate decisions are just as important as those affecting personnel, production, or operations. Otherwise, it is possible that corporate real estate decisions “may be made that are unrelated to or even in conflict with the enterprise’s overall business strategy rather than being consistent with the real estate strategy and thereby reinforcing the overall business strategy” (Nourse 488).

To read the entire article, please click here.

Nourse, Hugh O. and Roulac, Stephen E. “Linking Real Estate Decisions to Corportae Strategy.” Journal of
Real Estate Reasearch. Volume 8, Number 4. 1993: Pages 475-494. 30 September 2008.

Quick note on Lease Review....

I must emphasize that it is very important an attorney review your existing or upcoming lease. Attorney's have a knack for catching the legal wrinkles in a lease and making sure that it is fair and equitable. They are also very clear on the fact that the lease follows the accepted and agreed to Letter of Intent between the Landlord and prospective Tenant.

So, you may be asking why am I bringing this up? A friend shared a story of how she chose to have her lease reviewed by a friend of a friend's friend. This friend reviewed the lease and addressed only the business terms that were already accepted and agreed to. Obviously that did not work well for the landlord and the landlord required the prospective tenant abide to the agreed and accepted business terms. This friend of a friend's friend also was not an attorney and did not address some major legal issues in the lease.

In my experience as a commercial real estate broker, I can read, review and discuss the business terms of the lease. I can also discuss the definitions of the lease and determine if there are red flags that should be legally addressed by the attorney. But I, as a commercial real estate broker, am legally required to refer all legal matters to your attorney. Specifically, in Illinois, Commercial Real Estate Brokers CANNOT advise you legally.

A good commercial real estate broker will guide you in acquiring the real estate that meets your needs. They will refer you to the appropriate real estate attorney. They will work with your attorney to make sure the business terms are reflected appropriately in the forthcoming lease and that there are no surprises.

Tenant Rep Loyalty: Priceless and Entitled by Law

As a tenant representative for small to mid-sized businesses, I find that business owners are very wary of taking advantage of Illinois State Law that entitles them to a Buyer Agency Agreement. Essentially, this agreement stipulates the activities and responsibilities the business owner should expect from the broker in finding the appropriate property for purchase or rent. Furthermore, typically there is no charge associated with this agreement, as the buyer's broker is paid a co-operating commission from the seller's broker.

So why is there a hiccup? I find business owners are hesitant to work exclusively with one broker. However, that does not perpetuate good customer service, let alone loyalty.

Good real estate brokers are hard to find. But when you do, it's not about the deal closing today or in 60 days. It's about building a realtionship that understands the business owners needs, so that the appropriate space is found at the appropriate time.