If the pen is mightier than the sword, then we are all out there fighting with butter knives. Commercial loans are tougher to come by, and bankers are being extra-cautious.
See why on my newest installment of the Echo Commercial Tip of the week!
Contact Howard Freedland for more information on Commercial Properties!
561.889.2735
Howard@EchoFineProperties.com
Every day, I am asked what I know about the real estate market in South Florida. People want to know what types of properties are best for investors. They want to ask if I have a good idea what company to use for an inspection. Lately, people are asking my opinion of what is going on with the craziness surrounding the recent NAR settlement. Should we wait to buy until the settlement is enacted? Will this cause the prices to drop? Will it mandate what color I must paint my industrial complex? Well, I am Howard Freedland with Echo Commercial Properties, and today, I focus on what I don’t know.
One: Should I stay or should I go?
If you want to invest, the same rules apply. Find a property that is worthy of your investment…and negotiate for it! The settlement will not change things in the commercial world, as commissions have always been negotiated at the beginning of each transaction, and many of us have buyer representation agreements in place to protect our work. Clear, honest communication will always win out over speculation. I don’t know if this agreement will improve profitability of any deal…just that how you get to the final number may change a bit.
Two: Will you save money after the settlement is finalized?
You might, but at the end of it, someone will need to perform work on a buyer’s behalf, and that person will need to be paid properly for doing it. Nothing worth anything in life is free. If people are positioning themselves to benefit from this, remember, you get what you pay for. This settlement is not to say that the work done by some agents is superfluous, just that the numbers may be negotiated. Trust me when I say that there are several things good agents do for their compensation, and if you think you can shave that down, try. But you may, indeed, be hurting yourself in the long run.
Three: Will building colors be mandated? Yes…everyone will have to paint their warehouses yellow, multi-family is brown and offices will now need to be green. Remember when I titled this piece “what I don’t know”?
Bottom line is that the NAR settlement will make agents more accountable to all parties in a transaction, and that some of the aspects of compensation can be negotiated. It will increase buyer representation agreements being used, and it will not require you to paint your building. Remember, at this point, this case is still evolving, and it is smarter to say what we don’t know…yet. I am Howard Freedland, and this was the Echo Commercial tip of the week.
Contact Howard Freedland for more information on Commercial Properties!
561.889.2735
Howard@EchoCommercialProperties.com
https://www.echocommercialproperties.com/
ECHO COMMERCIAL PROPERTIES PRESENTS:
5 Office Suites
1,400 sq ft
Intracoastal Pointe, Jupiter
Five executive office suites within office condo in the desirable Intracoastal Pointe submarket. A beautiful vestibule area opens up to a fully furnished waiting/reception area. Building has generous parking, and the condo also includes a kitchen, private bathroom, storage and conference room. 2024 A/C. Situated behind the Fresh Market Village, this space is centrally located, with numerous restaurants and retail stores within walking distance
Find out more: https://www.echofineproperties.com/search/results/116-intracoastal-pointe-drive-200-jupiter-fl-33477-rx-10969170-3557637/
Contact Howard Freedland for info:
561.889.2735
Howard@EchoCommercialProperties.com
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#RealEstate #FloridaRealEstate #florida #realtor #commercialrealtor #commercialrealestate #floridacommercialrealestate
Subject Property: Vero Beach Motel. Asking $9.5 million
This well-established Motel nestled just off of the picturesque Treasure Coast offers a lucrative investment opportunity. Priced at $9.5 million with a current cap rate of 5.2% post-expenses, it presents as a turnkey operation. Boasting amenities such as a refreshing pool and a new roof, this property promises both comfort for guests and reliability for investors. With its prime location and attractive features, this motel is poised to capitalize on the thriving tourism industry of the Treasure Coast.
Subject Property: 4 unit Condominium currently run as an Airbnb directly on the beach. Asking $4.5 Million.
Discover an exclusive investment opportunity with a 100% ownership of this small condominium complex that is, ideally situated directly on the pristine beaches of Melbourne. Currently operated as a successful Airbnb, it generates over $400k annually in income. Recently refurbished to the highest standards, this property offers a seamless blend of luxury and functionality. With an asking price of $4.5 million, this beachfront gem presents an enticing turn key opportunity for investors seeking high returns and a coveted location in Melbourne’s vibrant real estate market on the Space Coast.
Subject Property: 5 unit Multi family in Boynton with no renovations since the 80’s. Asking $1.2 million
Explore the potential of this prime investment in the heart of Boynton, boasting a 5-unit multifamily property with significant upside. With no renovations since the 1980s, this property presents an excellent opportunity for value enhancement. Even after complete renovations, it maintains a strong pro forma cap rate of 6.3%, ensuring attractive returns for investors. Conveniently located just 5 minutes from Boynton Beach Blvd and less than 10 minutes from the vibrant AVE in Delray, this property offers both convenience and potential for long-term growth in a sought-after location.
Subject Property: 10+ unit multifamily in Fort Pierce in an up and coming neighborhood with new roof, plumbing, and electrical. Asking $2 million
Seize the opportunity with this turnkey 10+ unit multifamily property in the up-and-coming neighborhood of Fort Pierce. Recently upgraded with a new roof, plumbing, and electrical systems, this investment promises low maintenance and immediate returns. With a solid 7% cap rate, this property offers both stability and potential for growth in a rapidly developing area, making it an enticing option for savvy investors seeking attractive yields in the Fort Pierce market.
Subject property: Quadplex in Lake Worth. Asking $900k
Embrace the potential of this quadplex in Lake Worth, offering a hassle-free investment with four reliable tenants already in place. Featuring a brand-new roof and spacious backyards for each unit, this property provides both comfort and convenience. Situated on a generous parcel of land in the fast appreciating Palm Beach County, this is a bullet proof investment at its current 6.4 cap rate.. With stable tenancy and promising growth prospects in the Lake Worth area, this quadplex presents a solid opportunity for investors seeking steady returns and future value appreciation.
If you are looking for a specific property of would like for us to market yours, please contact our Echo Commercial Specialists Howard Freedland and Andrew Silver.
Howard Freedland
561.889.2735
Howard@EchoCommercialProperties.com
Andrew Silver
561.350.2109
AndrewSilver@EchoCommercialProperties.com
All Commercial Properties In Palm Beach County and the Treasure Coast Commercial Properties
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At first glance, when you see the numbers 10 and 31 put together, you might think that we were talking about October 31st, or Halloween. After all, it is an awesome celebration…when else can you go to someone’s home and demand candy? However, this combination of those numbers is a fantastic investment tool in the world of real estate. Yes, I am referring to the 1031 exchange. I am Howard Freedland with Echo Commercial, and this is your tip of the week.
A 1031 exchange is a swap of one real estate investment property for another which allows capital gains taxes to be deferred. The name is derived from Section 1031 of the IRC or Internal Revenue Code. It has a lot of detail to it, so reviewing it with a proper financial advisor is very important.
The Basics
-A 1031 exchange is a tax break. You can sell a property held for business or investment purposes and swap it for a new one that you purchase for the same purpose, allowing you to defer capital gains tax on the sale.
-Proceeds from the sale must be held in escrow by a third party, then used to buy the new property; you cannot receive them, even temporarily.
-The properties being exchanged must be considered like-kind in the eyes of the IRS for capital gains taxes to be deferred.
-If used correctly, there is no limit on how frequently you can do 1031 exchanges.
-The rules can apply to a former principal residence under very specific conditions.
Now, there is always fine print, and that is where things have the chance to go sideways. If they do, the government can claim 15-25% in taxes – not to mention your Halloween candy – so pay attention to those details.
Those interested in profiting the most will learn about rules on the following categories:
-like properties
-what is a principal residence
-the special rules for depreciable property and depreciable recapture
-the 2017 Tax Cut and Job Act which eliminates the exchange of personal property from qualifying 1031 exchanges
-THE TIMELINE! Know your 45 and 180 day rules, which run concurrently
-the Reverse Exchange
The bottom line is that like any investment, it is the investors responsibility to understand all that goes into the tool that they invest in.
So, in review, the 1031 exchange can become a very positive investment tool to use. Consult with your financial advisor and CPA so that you understand the tax implication on any investment tool you choose. Otherwise, instead of enjoying your “Halloween” you will find yourself crying over your candy as you receive a hefty tax bill. This has been Howard with Echo Commercial Real Estate with your tip of the week
If you would like assistance with securing a particular commercial real estate investment, contact Howard Freedland today!
📱 561.889.2735
✉️ Howard@EchoCommercialProperties.com
www.EchoCommercialProperties.com
I am wearing a jersey instead of typical business attire today. This jersey features the Red Wings’ number 19, Hall of Famer and current General Manager Stevie Yzerman. As the GM of the Tampa Bay Lightning, he was responsible for building a team that won multiple Stanley Cups. He did so by knowing when to trade and release players that no longer helped the team and brought in talent that would make them better. Your investment portfolio should be treated the same way. You need to know when it is the right time to shed properties that are just costing you too much or not making you enough. Let’s focus on some factors that should motivate you to make some changes to your portfolio. I am Howard Freedland, and this is your Echo Commercial Tip of the Week.
Point One – Interest Rate Change
If you are leveraged with your investments, the rapid uptick in interest rates may be catching up with you. As stated in my writings earlier this year, The Mortgage Bankers Association (MBA) estimated that “of approximately $4.4 trillion of outstanding commercial and multi-family mortgages, $728 Billion (16%) matures in 2023, with another $659 Billion (15%) maturing in 2024.” This is significant – going from rates that were in the 3-4% range to 8-10% can put you into negative returns overnight. There is still low inventory for high-quality property, but the number of calls we are getting about “pocket listings” – listings that are not on the market, but the owners are ‘testing the waters’ – are growing, which indicate that there may be a significant number of opportunities in the near future. Know where you stand with your adjustable-rate note.
Point Two – Insurance
Nationally, we have seen insurance rates explode in recent years. Florida, a state that has seen it’s fair share of natural disasters, is often at the top of the list of state increases. Some of this is attributed to the number of insurance companies that have pulled out of Florida. The increased frequency of tragic weather events has put even more pressure on a very tightly wound industry. The push for reform is strong, but the state is not moving quickly, leaving many people with decisions to make due to skyrocketing premiums.
The Wall Street Journal reported in October that national CRE Insurance costs have risen 7.6% annually since 2017, but we are seeing over 10% in areas such as Florida. Unlike mortgages that often cover long terms, insurance contracts are renewed annually, which has forced commercial property owners to sign more expensive policies or skip coverage altogether.
These are just two of the mitigating factors that can affect a business’ cap rate. If you invested with cash, you have a much better chance of weathering the storm. However, if you are leveraged, you have to channel your “inner Stevie Y” to be able to make good decisions about your company’s future. Get to know all of the factors that can change the trajectory of your investments.
If you are questioning if it is time to divest and want to talk it through, please reach out to my team at howard@echofineproperties.com. We are currently working with a number of property owners that are assessing their portfolio’s future.
561.889.2735
Howard@EchoCommercialProperties.comHoward Freedland is our Echo Commercial Properties Real Estate Specialist. As an independent wine broker, Howard has executed international deals with corporations and conglomerates. While working with Echo Fine Properties, Howard is a part of a team currently managing the interests of national and international companies wanting to secure land and property in South Florida. All of his prior business experience has brought him to this point as a professional, effective real estate leader. You can contact him on 561.889.2735 or Howard@EchoCommercialProperties.com.
So, you have grown your business to a size that needs some square footage and maybe even frontage. How do you sort through all the possible locations to choose from? Howard Freedland offers a few tips on how to land that new storefront.
Question 1: WHAT TYPE OF COMMERCIAL LEASE IS BEING OFFERED?
Knowing what type of commercial lease is being offered is one of the most important items to consider when looking at properties for your new office space. Is the lease triple-net, modified gross, or any other of the many types? The type of lease determines how your rent bill will be calculated.
Next, WHAT IS THE MINIMUM LEASE TERM?
A lease term length can be a decisive factor in your property search. Typically, commercial properties offer lease contracts with a minimum term length of at least a year. Many contracts require a 3-to-5-year commitment. Longer terms can be restrictive, while shorter terms allow you to be more flexible if you don’t want to be tied down to a property for a certain amount of time. However, long-term contracts give you more negotiating leverage and security with predictable rental costs.
Third, WHAT AMENITIES ARE INCLUDED?
This is one of the most essential questions to ask when leasing office space. Understand what building services are included in your monthly rent, such as repairs and maintenance, cleaning assistance, electricity, heating and air conditioning. These additional costs can have a huge impact on your decision, especially if you’re on a strict budget.
Next, you want to ask WHAT INSURANCE COVERAGE IS REQUIRED?
Often times, commercial landlords require a certain level of insurance coverage. Be sure to ask what type and amount of insurance coverage is required by the lease, as it may add a costly fixed expense.
You want to be visited by customers, so HOW MUCH PARKING IS ALLOTTED TO THE RENTER?
If you have multiple employees, you’ll want to make sure you have enough parking for everyone. It’s best to find out the parking situation when you’re viewing a corporate rental space to understand how that will affect your team.
Make sure to ask: IS THERE ROOM FOR EXPANSION?
If you plan to expand your team or services in the future at the same location, be sure to ask about what available space is offered in or near the building.
Sixth, CAN YOU MAKE CHANGES TO THE OFFICE SPACE LAYOUT?
Before signing a lease on a commercial building that you plan to rearrange, it’s best to ask whether or not that is acceptable. Some building owners may require that you leave the building layout the way it is or optimize the space within their guidelines.
After all that, what about Exclusivity?
Will the landlord protect your type of business? Do you need to worry that a business just like yours will open in the same plaza as yours? Best to delineate what is and is not acceptable before signing so you don’t end up competing with someone in your backyard!
So, look forward to growing your business the right way! Make sure you are armed with the right information, and that you are not afraid to make your landlord work for you. This has been Howard Freedland with the Echo Commercial Tips of the Week!
For assistance with your commercial acquisition, please reach us at 561-889-2735 or howard@echocommercialproperties.com
Howard Freedland is our Echo Commercial Properties Real Estate Specialist. As an independent wine broker, Howard has executed international deals with corporations and conglomerates. While working with Echo Fine Properties, Howard is a part of a team currently managing the interests of national and international companies wanting to secure land and property in South Florida. All of his prior business experience has brought him to this point as a professional, effective real estate leader. You can contact him on 561.889.2735 or Howard@EchoCommercialProperties.com.
Search the Commercial MLS
Welcome to Part three of our series “What do ya do?” where we have explored what it is we do as agents to add value to the transaction. In this section, we look at the final steps to finishing the transaction positively. After searching for our clients, we negotiated a price and terms for the sale. Now, it is time to “Do the Due”. No, not Mountain Dew. We mean due diligence.
Previously, we recorded a piece focusing on this topic. Now, we investigate how it relates to a close, how clients utilize the results found through the process and ultimately, come to terms on whether to close on the property. I am Howard and this is part three in our series by Echo Commercial.
Due diligence is the period in which a company can inspect, examine and test all aspects of the property. We spoke a great deal before about environmental examinations, and there are several other categories of inspections. These can include title and survey reviews, physical analysis of the building and property and zoning checks to confirm that the buyer can do what they want to do on the property.
Often, the longest part of this phase is dealing with the government on permitting and zoning. While environmental and structural exams can be done in weeks, we are reminded regularly that government moves at the speed, and efficiency…of government. We do our best to know the individual players in each municipality so that we might be able to help the process come to a quicker conclusion.
After the due diligence phase is done, we look for a “clear to close.” This is the directive that both parties are satisfied with the deal, and that the title and closing officers have deemed the transaction clean. Before we break out the celebratory beverages, we need to prepare both parties for the closing process.
Preparation for closing includes following a long checklist of items needed regarding: financing, an owner’s affidavit, sales proceeds forms, payoff statements, invoices requiring payment, confirmation that there is no additional work or construction going on the property, 1031 information, if applicable, organizational documents for the buyer…trust me, there is more…just appreciate that there is a lot that must be accounted for.
So, there you have it. A successful close and everyone is happy! Celebration time, indeed. Wait…we are forgetting an important part of what we do.
Our next step, perhaps our last step for the time being, is to help the new business owner market their new acquisition. Echo Commercial offers several items to our clients so that they can get a leg up on launching their business.
For one, we have a long list of service purveyors that do everything from build-out to painting, HVAC to pest control. Also, we have an in-house video team that can produce an interview style advertisement. Yes, the same talented, good-looking guys that produce our videos here! Echo commercial is proud to produce and amplify the message, so we help drive people to the new location. Helping with the launch is just another thing that we do here. If you would like assistance with securing a particular real estate investment, I can be reached at 561-889-2735 or howard@echocommercialproperties.com.
Howard Freedland is our Echo Commercial Properties Real Estate Specialist. As an independent wine broker, Howard has executed international deals with corporations and conglomerates. While working with Echo Fine Properties, Howard is a part of a team currently managing the interests of national and international companies wanting to secure land and property in South Florida. All of his prior business experience has brought him to this point as a professional, effective real estate leader. You can contact him on 561.889.2735 or Howard@EchoCommercialProperties.com.
Welcome to part two in the series “What do ya do?” In part one, we explored what we do to be active participants in commercial real estate. We focused on search, communication, and creativity. Now, let’s turn our attention to the contract phase of our job. This is the Echo Commercial tip of the week.
A large part of our job is making sure that our clients pay the right price for the property or opportunity that they are trying to acquire. If representing the seller, we must figure out the right price range that will spur activity and a subsequent offer. All roads lead back to knowing the terrain.
Just like in residential real estate, we must be knowledgeable of like properties. But our job now goes further in understanding zoning rules and regulations, potential tax incentives and appreciating the environmental impact of not only what is there, but what is ALLOWED to go there.
A commercial negotiation has many levels to it. Phase one is an LOI, or letter of intent. This is used to let the seller know you are serious about doing business and fleshes out some basic terms before moving to the contract. Since there are many things to analyze to know just how much a property is worth, an LOI spells out the specific parties involved, the time limits to each part of the due diligence, the base commissions and the amount of deposit. A letter of intent is designed to create a positive expectation from the start so that both parties are properly engaged in the process.
Appreciating that a good result is achieved, a proper contract between parties will be drawn up by a lawyer and presented for negotiation. Commercial contracts can be monsters. Fifty or sixty pages in length is not unheard of, so a lawyer is very important here. In some cases, agents may have a juris doctorate. However, in most, outside council is required to stay withing the ethical and literal framework of the law.
So, navigating the legal part of the transaction is a very important component of what we do. We help the clients employ proper legal representation so that their interests are looked after. Meticulous, detailed…and oftentimes not very exciting: part two is not glamorous, but very important in helping get your clients to close. In Part three, I will show how I help guide our clients to retain the right parties to inspect and value the properties that they are interested in during the due diligence phase. Again, it’s what we do.
Howard Freedland is our Echo Commercial Properties Real Estate Specialist. As an independent wine broker, Howard has executed international deals with corporations and conglomerates. While working with Echo Fine Properties, Howard is a part of a team currently managing the interests of national and international companies wanting to secure land and property in South Florida. All of his prior business experience has brought him to this point as a professional, effective real estate leader. You can contact him on 561.889.2735 or Howard@EchoCommercialProperties.com.
I have always loved the movie “Office Space.” There is a scene at a dysfunctional engineering company where two guys, both named Bob, are brought in as management consultants. As we can remember from the 1990s (ok, some of us can remember) the consultants were usually brought in to cull the workforce. The funniest scene to me was when the Bobs were interviewing an employee that is very nervous and can’t explain exactly what they do. They have been exposed. One of the Bobs leans in and in a frustrated, sarcastic tone, tries to cut through the stumbling with “So, what would you say, on a daily basis, do ya do here?!?”
When I chose to go into Commercial Real Estate, there were a lot of questions from friends and relatives. Now, everyone gets questioned about their choices in life. Oftentimes these people are inquisitive because they are interested in what you do, and/or want to show concern for your well-being. Sometimes, there is even cynicism. What I have found is that real estate is one of the most mis-understood professions, and Commercial real estate is very confusing to many people.
Over the next few weeks, I will look to pull back the veil and show how we do our jobs properly. So many people have investment wants and have little to no knowledge on how to make them come to life. We help people make good decisions on their financial future.
What, Exactly, Do Ya Do Here?
During our time in real estate, we are asked from time to time what it is we do. Most of the time, it is out of curiosity, but sometimes it is because the impression that people have is based on what they see on television.
With the growth of HGTV, we get shows like “Love it or List it,” “The Property Brothers,” and of course, “House Hunters.” Yes, these shows are about residential real estate, but the pilot for our commercial sitcom is being “delayed” due to dry content. Point being, these shows are like sitcoms, painting a picture that agents can, in half an hours’ time, solve everyone’s needs. Whether you want to renovate for 10% of what it costs in the general market or find the perfect home in one day, this network makes it look easy. Unfortunately, it is oftentimes delusional.
We will explore our regular responsibilities as Commercial Real Estate Specialists in the next few vignettes so that you get an accurate depiction of what happens, and what doesn’t in today’s marketplace.
In part one, let’s examine what we do during the search phase. Since clients do not fall from the sky, oftentimes we scour the market for opportunities to both sell and buy. We remain active, meeting business owners and developers so that we can stay on top of what is on the market, and what COULD be for sale or lease if the right deal came together. This can include mapping out a geographic area and driving to see in person what is described online, or by making calls, emails, and texts to reach proprietors.
We are also active with our local Chamber of Commerce offices so that we get to know different leaders in the community. Those relationships can become one of the best sources for business prospects.
Our search includes research done on the specialized, subscription-based, search engine called CoStar. LoopNet is a tool available to the public but does not have nearly the details that CoStar does. CoStar is more current than any other website and provides detailed analysis of most every property, whether on the market or off.
Constant communication with clients is needed so we do not miss an opportunity. Ferris Buehler reminded us that life moves pretty fast, and if you do not stay in touch, you can miss the perfect space. We tell our clients to be ready for a 9-1-1 text message at any time if a property comes available. It is our job to make sure that the sense of urgency is maintained.
We must be creative on how we approach the job. If our client wants to open a bakery, not only do we do demographic studies to know where the current ones are, we look to talk to some of the active bakers in the area…you never know who is getting ready to retire and would welcome an offer. In times like these where supply of inventory is particularly low, we look for unique solutions daily, so we can create opportunities where there are none.
So, web and road search, communication, meetings, and creativity. These all go into our daily search routines so we can be as effective and efficient as possible for our clients.
In the next section, we will focus on what happens when you either find the right spot or land the right customer. Remember, it’s part of what we do here.
Howard Freedland is our Echo Commercial Properties Real Estate Specialist. As an independent wine broker, Howard has executed international deals with corporations and conglomerates. While working with Echo Fine Properties, Howard is a part of a team currently managing the interests of national and international companies wanting to secure land and property in South Florida. All of his prior business experience has brought him to this point as a professional, effective real estate leader. You can contact him on 561.889.2735 or Howard@EchoCommercialProperties.com.
561.500.ECHO
