1. Do your homework.  Go to the internet and use a search engine like Google.  Look up the type of property your are needing a broker for, such as “commercial real estate”.  A Company and/or individuals name will keep coming up several times. The ones listed the most are a good indication they are active in the business.
2. Go to the Company or individual brokers web site.  If they don’t have a web site – move on.  If they can’t market themselves, how can they market your property.
3. Check the site for testimonials, clients names and “done deals”.  Go through the site looking for names of people or companies you can contact.    Again, do your homework.
4. Make comparisons.  Compare “apples to apples”.  Do they have experience with your type of property.  Some agents are skilled at leasing but not selling.  Some are experienced in selling land but don’t have a clue how to sell an investment property. Some don’t have experience in commercial real estate because they sell homes.  There is a difference.
5. Make sure the agent you interview is the agent that will be handling your property.  It is not uncommon for the Broker of the real estate company to tell you how great he or she is and about all their experience only to find out they will not be working on your property. They plan on assigning your property to a new agent for training.
6. THIS IS THE MOST IMPORTANT PART.  Make sure you are absolutely sure you trust and believe the agent. Why?  Because when that agent tells you what they think your property is worth or what it should be listed for, your emotions will get the best of you.  At that point, you will forget about their qualifications and their knowledge and focus only on the price.  I am assuming you were thinking of a higher price.

Don’t get upset if you are not told what you want to hear.  At this point, many people quickly excuse themselves and tell the agent they need to think about it and will get back to them.  You will then start calling other agents and pick the first one that tells you what you want to hear, even if they aren’t qualified to be handling your property.

Chances are they gave you a higher price because of lack of experience – or worse.  Some agents have been known to list an overpriced property to get control.  Over time, they will work on the owner to get the price down to where it should have been all along.  This unethical but hard to prove.

If you did your homework and you are sure you have the correct broker, you should ask your preferred broker to justify the proposed listing price. Don’t let your emotions get the best of you.  This is your new team member.  They could be wrong or came to a conclusion without all the facts.  The only way you can know this is to discuss it with them. You always have the option of asking your preferred agent if they would consider listing the property at a higher price and let the market determine value.  Might work or could be a waste of time and money.

There are many more issues that we will cover in upcoming blog posts. Be sure to subscribe to join us as we explore other facets of commercial real estate.

I invite you to go to our web site and use it as a standard to measure other brokers by. Don’t hesitate to contact me.  You can find my contact information on our web site under Matthew Cravey.

The post How to pick a real estate agent – the right way appeared first on Cravey Real Estate.

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This may be accomplished by the following:

• The developer sets up a master plan that sets forth the general scheme of development and submits it for the approval of the owner.

• The developer and owner enter into an agreement setting forth the acreage prices for the entire property.

• Owner and developer agree on the number of years over which the full development is to be completed.

• To protect the owner against freezing of his property, the developer firmly commits to buy a predetermined number of acres each year.

• If the developer fails to meet this schedule, the owner is released from his commitment.

A Development Agreement

Another way of handling the problem is for the developer to share the net profits from the land development with the landowner. This can be done by a “land development agreement” in which the developer agrees to perform the platting, the laying out, the installation of lot improvements, and the promotion of the subdivision. The landowner agrees to accept a percentage of the sales price of each lot, with a fixed minimum guaranteed. For example, the developer agrees to pay net to the landowner 25% of the sales price of each lot sold, with a minimum of $50,000 per lot.

With this kind of arrangement, it is important to protect the landowner from finding his land cluttered up with liens left by a subdivider who went broke. The landowner should consider confining the developer or subdivider to a small tract of land at a time and give him “rolling options” to acquire additional parcels at intervals over a period of time. Failure to keep up with this purchase program results in loss of future options. The land that has been optioned but not purchased is not subject to liens against the developer.

Benefits Of Developing On Leased Land

The bundle of benefits for the lessee and lessor in a development on leased land are remarkable. The separate owners, land owner and building owner, come together in one investment at the same location. The land owner has a good lease to the owner of the improvement. The owner of the building puts up less money since the ownership of land is not part of the expenses in the development.

What The Lessor Wants

An example could be the developer of upscale homes who wants to keep the ownership of the land as an investment. The use of the land lease can widen his market by reducing the purchase price of the
house. In certain parts of the country, the value of the land equals the value of the house. Leasing the land can cut the purchase price nearly in half. With this type of land lease, there is usually a provision for a rent increase halfway through the lease term in accordance with the results of a reappraisal of the land. The

Benefits To The Builder

The land lease results in the following benefits for a builder or developer:

• He/she can acquire a valuable parcel of land with very little cash investment.

• This leasehold that is acquired is an asset that can increase in value, and then could be used as security for a loan, or could be sold for a profit.

• The rental payments are fully deductible by the lessee.

• With a subordinated land lease, the lessee-developer gets the equivalent of a 100% loan on the land.

The Best Lease For Both

Usually, a developer-lessee will attempt to get the longest possible term in the lease because the shorter term land lease would have a smaller market for resale. A long-term land lease is generally a net lease under which the lessee pays the carrying costs, including real estate taxes.

When the land rental is a fixed amount, it is a percentage of the fair market value of the land when the lease is executed. This lease will often include a provision for reappraisal of the land at fixed intervals, with new adjustments in the rent. In some cases, for instance with a shopping center, the landowner might demand a share of the percentage rentals over and above the fixed land rent. (Much of the income in the shopping center will come from percentage overages from the sub-lessees.

Subordination Of The Lease

If the owner of the land will not subordinate the lease to a leasehold mortgage, the developer should get a reduction in rent because the unsubordination will cause his financing to be more expensive. Subordination could be the most important item in the terms of the lease. Even a short subordinated lease might be better than a longer unsubordinated lease, even though the longer lease is more salable.

The landowner may or may not allow his interest as owner-lessor to be subordinated to the interest of a leasehold mortgagee. When there is a subordination to the mortgage, the lender, in effect, gets a fee mortgage on the land rather than a leasehold mortgage.

When the lease is unsubordinated, the landowner-lessor has first rights over the lender in case the lessee-mortgagor should default. With these terms, the lessee could find that he cannot get a loan, or can get one only at a higher rate of interest. Without the subordination, the mortgage is, in effect, a second lien since the lessor’s claim on the rents takes precedence over payments on the mortgage.

The objections of an owner to subordination of the lease could be as follows:

• He could lose the property if the lessee defaults on the leasehold mortgage.

• Subordination reduces his possibility of mortgaging his fee interest in the land, which would be a logical move for the lessor. If the subordination is part of the terms, the landowner would record his right to receive any notice of default from the leasehold mortgagee and the right to cure the default. The expense would be reimbursed to the owner by adding the amount to the lessee’s rent obligation.

This article appeared in the September issue of The Commercial Real Estate Investment Newsletter.  One of the newsletters we offer to our clients. You can subscribe to the newsletter by going to NAI Cravey Real Estate Services website.

We are always looking for ways to serve you and would like to hear from you.

matt@craveyrealestate.com or 361-289-5168

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CORPUS CHRISTI APARTMENT OCCUPANCY UP

CORPUS CHRISTI (Apartment Realty Advisors) – Corpus Christi’s multifamily market boasted an average occupancy of 92.5 percent at the end of second quarter 2010, according to the latest market summary from Apartment Realty Advisors (ARA).

This was up from fourth quarter 2009, when the reported occupancy for that MSA was 90.8 percent.

Average market rent for the entire MSA was $706 per unit, or $0.86 psf, with units averaging 825 sf. With concessions, the average effective rent was $674, or $0.82 psf, a difference of 4.54 percent in effective versus market.

The majority of area apartment communities offered some type of concession in the second quarter, ARA reports. The most common was one month’s free rent on a 12-month lease, or a $99 move-in special, covering first month’s rent as well as deposit and application fee.

Properties built in the 1960s and earlier had an average occupancy of 93.3 percent. Complexes built in the 1970s were at 91.9 percent; 1980s, 91.9 percent; 1990s, 95 percent; and 2000s, 93 percent.

@ THE CENTER

To subscribe or unsubscribe to RECON or to view back issues go to the Real Estate Center’s website.

To send news items for consideration, e-mail Bryan Pope.

The Real Estate Center is part of the Mays Business School at Texas A&M University in College Station – the heart of the Research Valley.

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Baskins Western Wear to open in Corpus Christi

Opening scheduled for later this year

• By Fanny S. Chirinos
• Corpus Christi Caller Times
• Posted July 21, 2010 at 1:43 p.m., updated July 21, 2010 at 2:03 p.m.

CORPUS CHRISTI — Baskins Western Wear will open later this year in Corpus Christi. The Livingston-based western apparel retail has leased space on Airline near McArdle roads.

The store is one of four the company announced Wednesday. Other cities include Lufkin, Texarkana and Waco and bring the total to 20, once open.

“We are excited to grow our market share by expanding to these vibrant cities,” said Bryan Baskin, President of Baskins Western Wear, in a written statement. “These new locations represent the types of markets that serve us well.”

The Corpus Christi store will be 20,000 square feet and will be in the The Promenade shopping center, which features stores such as Toys R Us, Bamboo Garden restaurant and Gourmet Brown Kitchen.

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Since the economy has declined, real estate agents and specifically commercial real estate agents have reduced the size of their signs.  I recently noticed a for sale sign the size of a residential yard sign on a commercial property.  This might not have been such a big deal if it weren’t for the high weeds and the speed of the traffic passing the site.

With the current economy, it is vital that every detail be considered by the commercial real estate agent when marketing a property.  The owners are trusting a large and valuable asset to the agent.  The sad part is the owner probably didn’t put much effort into selecting the agent so why would I be surprised that the sign wasn’t even considered.

The size of the property, the location and type of property dictates the type of sign.  If the property sits on a major highway, even a typical 4’x8′ sign may be hard to see.  In many cases, even a large banner placed up high may be more appropriate than a sign on the ground.  However, a large banner may cost over a thousand dollars.  Not many agents are willing to spend that kind of money on a listing.  Maybe they don’t really believe in the listing in the first place.

Owners, please consider this issue when interviewing a prospective commercial real estate agent.  If the agent doesn’t think enough to have a proper sign, properly placed and maintained, why would you trust them with one of your more valuable assets.

Speaking of maintaining, how many times have you seen a sign hidden by weeds or leaning and about to fall down because your agent doesn’t care enough to have the sign maintained much less go by and visit your listing.  It’s not uncommon for an agent to acquire a listing, put up a sign and wait for the phone to ring.  Never to see the property again until their listing is about to come up for renewal.

A proper size sign for commercial real estate should be at least 4’x8′. It should contain bright colors and be noticeable.  At Cravey Real Estate Services, Inc., we also put up riders that contain additional information such as e-mail addresses and web sites to make it easier for people interested in the property to acquire additional information 24-7. The riders may add as much as 4′ to the sign so the sign may end up 8’x8′.

Size matters, especially in this economy when every possible tool should be used to help the owner sell or lease their property.

The post Does Size Matter? appeared first on Cravey Real Estate.

• By Fanny S. Chirinos
• Posted April 7, 2010 at 4:33 p.m.

Contributed Illustration

L&F Distributors will build a new warehouse and office on State Highway 44 near the airport. Construction will be begin in May and be completed in 10 months on the 150,000-square-foot facility.

CORPUS CHRISTI — Tony LaMantia, a partner in L&F Distributors, plans to begin construction next month on a new 150,000 square foot facility after seeing his company grow substantially since he purchased the Budweiser distributorship in 2001.

The current warehouse and offices, 601 19th St., have reached capacity, and LaMantia said he would rather build a green facility that allows the company to grow well into the future.

“We have needed to add on for a while, but it takes a while to plan things,” he said. “We’ve been planning this for about a year and a half. I think our next 10 years will be as good as our last nine, and it felt like the right time to move.”

The new building will be on State Highway 44 between Clarkwood and Bockholt roads. It will feature green elements such as insulated concrete walls for energy efficiency, a specialized roof system that reduces heat gain and 1-inch insulated, reflective glass.

It will be about twice as big as his current building and will accommodate about 165 employees, LaMantia said. It includes about 20,000 square feet of office space.

Construction is expected to begin in May and be completed in 10 months. Beecroft Construction of Corpus Christi and St. Louis-based S.M. Wilson and Co. will oversee the project, which is expected to employ about 175 workers, LaMantia said.

L&F also operates warehouses in Beeville, Alice, Laredo, McAllen, Harlingen, Rio Grande City, El Paso, Alpine and Roswell, N.M. The company recently expanded its facility in Roswell and plans to build a new warehouse in Laredo in the next two years or so, LaMantia said.

Not mentioned in the article

Weldon Dietze an agent with NAI Cravey Real Estate Services represented the family that owned the land.  Matthew Cravey, President of NAI Cravey represented the LaMantias in the purchase of the land.

Also, NAI Cravey has the existing L & F facility on 601 N. 19th street in Corpus Christi listed for sale. Sales information on that facility can be found at:

http://looplink.loopnet.com/15906929/broker/cravey

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The almost 2,000-square-foot building sits on about .321 of an acre. After some modifications, the agency will use it as one of its offices. Nueces County Community Action Agency is a nonprofit that provides a range of community services throughout the county.

Capital Farm Credit the seller of the building was represented by Josh Gaines of NAI Cravey Real Estate Services Inc.

This was announced in the Corpus Christi Caller times in the Biz Buzz section of the paper 3-28-10.

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