Explore Commercial Real Estate

What types of commercial properties does your brokerage specialize in?

Our brokerage specializes in a diverse range of commercial properties, including office spaces, retail units, industrial warehouses, and specialized properties such as medical facilities and mixed-use developments. Each property type receives tailored attention to meet the unique needs of our clients.

How does your brokerage assist clients in listing their commercial properties?

Listing your commercial property with us involves a strategic approach backed by comprehensive market analysis and industry insights. We leverage our extensive network and marketing expertise to showcase your property to qualified buyers and tenants, maximizing its exposure and value.

How does your brokerage determine the value of commercial properties?

We employ a rigorous valuation process that integrates comprehensive market research, comparative analysis of recent transactions, income potential assessments, and local market trends. This approach ensures accurate property valuations that reflect current market conditions and maximize returns for our clients.

What can clients expect during the commercial real estate transaction process with your brokerage?

Clients can expect a transparent and collaborative approach throughout the transaction process, which includes initial consultations, property tours, negotiation strategies, due diligence support, financing guidance (if needed), and seamless closing coordination. Our focus is on delivering exceptional service and achieving successful outcomes for our clients.

Why should organizations use a commercial real estate broker?

Organizations often avoid commercial real estate brokers due to commission aversion. However, the commission is typically included in the property price. If an organization forgoes representation, the entire fee benefits the listing agent, essentially paying them double. Investing in a professional broker ensures representation, negotiation for the best deal, and market knowledge for potential cost savings such as lower rates, free rent, or concessions from landlords. In essence, the perceived commission savings alone may not outweigh the financial benefits and expertise gained by working with a broker.

How does the expertise and network of a commercial real estate team enhance the process of finding and negotiating commercial properties?

With over 50 years of combined experience, A Team commercial real estate experts have more access and a vast network of connections — access to off market listings, resources, tools, and data that an organization representing themselves would not be able to access; connections that have been fostered over years of working in the industry including Landlords, investors, real estate brokers, trades etc. Professionals monitor trends and data giving them the edge to find a perfect space and negotiate the right terms.

Why should a large organization consider hiring brokerage representation for real estate transactions?

A large organization without brokerage representation in a real estate transaction can be advantageous for landlords, who may perceive a lack of experience and attempt to take advantage. Hiring a professional signals seriousness, consideration of market options, and ensures someone is working in the organization’s best interest. Despite being a major entity, the landlord might view the organization as having vast resources, potentially hindering negotiation leverage.

Additionally, delegating real estate contract negotiations to experts, like the A Team, allows your team to focus on their primary responsibilities. The A Team takes care of tasks such as reviewing listings, scheduling tours, negotiating terms, and dealing with legal aspects. This ensures optimal terms without disruptions to your organizations operations, with the broker acting as a skilled coordinator for the entire transaction. Our team can efficiently handle contract terms, saving time and uncovering hidden restrictions to the client’s advantage.

How can prospective clients engage with your brokerage to initiate a partnership?

Getting started with our brokerage is straightforward. Prospective clients can reach out to us via our website, phone, or email to schedule an initial consultation. During this consultation, we’ll discuss your unique goals and outline how our specialized services can help you achieve them effectively in today’s competitive commercial real estate market.

What is Capitalization Rate?

The capitalization rate, or cap rate, of a property is the amount of money you can expect to get from a property compared to its value or price per year. This includes all the expenses of operating the property but does not include the costs of buying, selling, or financing the property. It is used to estimate the potential profitability of a property as well as compare it with other similar properties.

How do you calculate the cap rate?

To calculate the cap rate, first determine the Net Operating Income (NOI). This is the annual income generated by the property after deducting all operating expenses, such as maintenance, property management fees, insurance, and property taxes. Do not include mortgage payments. Next, find the property value or purchase price. This is the current market value or the price you paid for the property. Finally, calculate the cap rate by dividing the NOI by the property’s value or purchase price, then multiply by 100 to express it as a percentage. For example, if a property has an NOI of $50,000 and its value is $1,000,000, the cap rate would be 5%.

What does a higher or lower cap rate mean?

A higher or lower cap rate indicates different things about a property’s investment potential. The cap rate measures the annual return of a property relative to its current market value, similar to the dividend yield for a real estate investment trust.

A higher cap rate suggests a potentially higher return but usually comes with increased risk. For instance, a property with unreliable tenants may have a high cap rate due to the possibility of tenant default, leading to vacancies.

Conversely, a lower cap rate typically indicates less risk but also lower potential returns. These properties are often stable and located in high-demand areas.

Additionally, the cap rate can help estimate the time required to recoup the initial investment in the property. For example, a cap rate of 5% implies it would take approximately twenty years to recover the original investment. However, this calculation does not account for the associated risks of the property.

What is a good cap rate?

A good cap rate typically falls between 4% and 12%, depending on the location and type of property. To determine a more accurate range, research the cap rates of similar properties in the same area. If your property’s cap rate is lower than comparable properties, it might be overvalued. If it is higher, it might be undervalued. These situations are not inherently good or bad but indicate the need for further investigation to understand the property’s valuation.

Ultimately, a suitable cap rate for your investment will vary based on your investment strategy, purchase location, and other factors. At a minimum, the cap rate should exceed your financing costs. For instance, if you have a 5% mortgage, a property with a cap rate of 5% or lower is likely to result in a loss.

Is mortgage included in the cap rate calculation?

Debt-related expenses, such as mortgage and interest payments, are excluded from the cap rate calculation. The focus is solely on the property’s performance, independent of the financing methods used to acquire it. This makes cap rates advantageous because they assume a cash purchase, allowing you to evaluate the property’s worth without the complexities of various financing methods.

Are taxes included in the cap rate calculation?

Property taxes are included in the cap rate calculation, but income taxes are not. This is because income tax rates will differ between owners and situations but property taxes will stay the same.

What is the difference between cap rate and ROI?

Return on Investment (ROI) is a measurement of your income from the property compared with its cost. It adds financing costs such as mortgage interest to the cap rate calculation. Accordingly, ROI can vary drastically from buyer to buyer since different buyers will use different financing methods; ROI is more focused on how the investment will affect the individual investor while cap rate is more focused on the property itself.

Who pays for commercial build-out?

Commercial build-out refers to the work done on a building before a tenant moves in to occupy it. They can be big or small renovations depending on the functionality one wants to add to the building. The catchphrase when it comes to the build-out is negotiation. The owner might agree to foot the costs, or the owner might cost-share with the tenant. It depends upon the type of renovation and how they negotiated the deal.

How long does it take to build a commercial building?

A commercial building of 10000 feet takes between 4 to 6 months to build. However, for complex structures of up to 50000 feet, the construction takes anywhere between 8 to 10 months. When the budget is not a constraint, projects that last year-long usually are valued at over 1 million dollars.

How do you estimate construction costs for a commercial building project?

Construction costs vary greatly from project to project and from one location to another. Estimating these costs involves several key factors, including building quality, design and architecture, materials, labor costs, permits, mechanical and electrical systems, and finishes.

To begin with a standard construction estimate, identify the building class, which ranges from Class A (highest quality) to Class C. Next, calculate the floor area based on the structural design and architectural plans. The more intricate the design, the higher the construction cost per square foot. Multiply the per-square-foot cost by the total floor area to determine the overall costs.

Labor costs also significantly impact the total expense, with urban buildings typically costing 2% to 6% more than suburban ones. After calculating labor costs, add them to the estimated construction costs. Material expenses also play a crucial role, especially for large-scale or complex steel buildings due to the volume and cost of materials. Additionally, factor in permit fees and the costs of finishes.

While there isn’t a precise method for cost estimation, a thorough understanding of these variables can lead to accurate estimates and effective planning.

How are commercial leases calculated?

Commercial leases are calculated based on several factors. The primary component is the base rent, typically quoted annually per square foot of leased space (e.g., $20 per square foot per year). This base rent is multiplied by the total square footage of the leased area to determine the annual rent amount. The type of lease also plays a crucial role in how costs are structured. For example, a Triple Net Lease (NNN) includes base rent plus additional expenses like property taxes, insurance, and maintenance costs. These additional costs are often calculated per square foot as well. Some leases, such as Gross Leases, lump all costs into a single rent payment, while others, like Percentage Leases, tie rent payments to the tenant’s sales revenue. Understanding these factors helps both landlords and tenants negotiate lease terms effectively.