Category Archives: Commercial Real Estate

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Greed Is Good? I Disagree!

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Greed is good, eh?  Are we sure?

Greed is Good?  I Disagree!
by Bo Barron, CCIM

Most brokers love Gordon Gekko.  How could you not?  He swings for the fences and rarely misses.  He lives on the edge, bends the rules, and does the deals.  One word, though, is synonymous with Gordon Gekko, and that word is Greed.  Brokers love Gordon Gekko because he made this phrase famous – “Greed is good.”

It’s not good, but commercial real estate has never gotten that message.  Let me show you what I mean by illustration.  Imagine Gekko’s boy

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Twitter: The Commercial Real Estate Barometer

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Those who have been in the commercial real estate industry for any amount of time know it lags the business cycle. Nobody gauges the economy by what commercial real estate is doing. Commercial real estate brokers, investors, and principals watch the economy, knowing that whatever happens there will be coming down the pike a year or two later for commercial real estate. It’s a frustrating way of life, but commercial real estate professionals have learned to deal with it.

Savvy commercial real estate investors always seek advice and counsel when it comes to making investment decisions. That said, all “experts” are not created equal – Those investors who have access to better, more timely information provided by more sophisticated advisors simply have an edge. So here are a few questions to ponder: How broad is your sphere of influence? Who are the “experts” you’re seeking advice from? What if I told you that you could have real-time, 24-7-365 access to the world’s best practitioners in every aspect of commercial real estate, and that this unfettered access was free – would you be interested?
Want to get a better idea of economic trends? How about
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Top 5 Reasons for Dedicated Tenant Representation

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“Top 5 Reasons for Dedicated Tenant Representation” by Bo Barron, CCIM

The guy that came up with Supply and Demand was either incredibly smart or incredibly lucky. Adam Smith was definitely smart. Supply and Demand drives everything in real estate, and the same holds true for leasing space. How much space is available? How many active tenants are in the market competing for the space? Does it matter?

It absolutely matters. What tenants need to understand in this market is that competition for their tenancy is fierce. Nationally, there is more office space vacant than any time since 2006 and transactional activity is down 40%. Translation: tenants aren’t moving or expanding. This means that tenants who do need to expand or relocate should have landlords salivating over them.

But is this happening? No. Tenants tend to negotiate in silos – meaning they will deal with one landlord at a time eliminating competition that will work in their favor. So here are 5 reasons why dedicated tenant representation is in a tenant’s best interests.

1. Strategy – You do not win a leasing battle without a strategy. An advisor specializing in tenant representation will seek to understand the tenant’s objectives, relationships, and expectations.

2. Analyze – After understanding the strategy, a tenant rep advisor will conduct a detailed needs analysis to comprehend space needs, growth plans, budget, and location and building requirements.

3. Market – This is where the fun begins!

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Cost Segregation – Save on Taxes and Find Hidden Cash in Your Building

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“Cost Segregation” by Bo Barron, CCIM

Investors buy investment property for numerous reasons, and I had a conversation with a business owner today about the benefits of owning space for his business. Some of those benefits include cash flow produced by the property, future appreciation value, and tax shelters from the IRS. However, property owners are giving too much to the IRS and missing out on real cash flow because they are not taking advantage of Cost Segregation. Substantial tax savings and realized cash flow are hidden beneath their feet, within the walls, and even in the parking lots of their buildings.

A Cost Segregation Study is an IRS approved method to reclassify original costs of construction or the purchase price of Real Property. By properly classifying costs, assets can be depreciated over, 5, 7, and 15 years as opposed to 27.5 or 39 years. These studies can do at least three things. First, it creates immediate tax savings by cutting down on what you pay the IRS this year and in upcoming years. Second, because of the accelerated depreciation deductions and the deferred income tax payments, it instantly increases your cash flow. Third, the IRS now allows you to “catch-up” previously under-reported depreciation without filing amended tax returns. This allows you to “catch-up” during your current year return with the use of a Cost Segregation Study.

Now, I am clearly not a CPA, but I do understand

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