Tag Archives: CRE

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CRE Investing 101: 4 Reasons to Invest In Commercial Real Estate

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A guy told me one time that there are two types of people in the world:  those that spend all their time trying to make their fortunes, and those that once they make their fortunes, spend all their time trying to guard them.  Regardless of whether you are in the first category or the second, there are 4 compelling reasons to invest in Commercial Real Estate (CRE) – especially as the alternative investments, like the stock market, bonds, etc., are yielding such a minimal return.

1.  Cash Flow – Cash flow is the most obvious of the reasons to invest in Commercial Real Estate, and this is what people are generally referring to when they remark about making “your money work for you.”  Whether we are talking about retail, office, industrial, or multifamily, CRE investments produce cash flows, and that is really what you are buying – future cash flows generated mainly from rent.  Now, investors vary wildly on what they do with the cash flows.  Some live off the cash flows while others plow all that money back into retiring whatever debt is on the property.  Regardless, everything from the value of the property to how it is managed is derived from the cash flows that the property creates.

2.  Principal Reduction –

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Lessons from the Corps – Part 2

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I’ve spent many minutes over the last couple of days thinking about preparedness and swagger and how connected these to qualities are.  It is interesting to me that Marines do 2 things:  they go to war and they train.  At a bottom line level, that is all they do.

Marines train ad nauseam!  And they do so in conditions as close to war as possible so that the Marine becomes accustomed to performing at a hero-level under conditions of extreme stress.  Boot Camp is like this.  For the first 2 weeks, I was completely disoriented.  Nothing was said that wasn’t yelled.  Drill Instructors talk so fast that they can be hardly understood, and regardless
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Lessons from the Corps – Part 1

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I have a pretty sweet situation at my office.  I share the office with my dad.  Technically, it is his office, and when I bought the real estate company from him a while back, I stayed.  So his office is still next to mine, and he is still an incredible resource to me.  Frankly, I just like seeing him nearly every day.  As is often the case, as the day winds down, I find myself in his office, or he is in mine – and we chat.  Today’s chat brought back a memory.

After a Marine graduates boot camp, he’ll go to SOI – the School of Infantry.  6 weeks of hell for the true ground-pounder, and 17 days of the same for the rest of us.  When I graduated SOI, I had a day lay-over before my flight took me to California the next day.  So for the first time in months, I had some free time to walk around base.  I made two huge rookie mistakes that day.  First, I was walking with something in my right hand which was a big no-no because you can’t salute.  Second, I walked by a Lt Colonel without noticing him.  I was sunk.
Some Gunny standing next to the Colonel got ahold of me and ripped me a new one,
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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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What Really Matters in 2011

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Don’t get the picture?  Keep reading…

Booyeah!  My sons’ favorite word, and the word that describes my excitement for the beginning of this year.  As I, like so many others, look back on 2010, I remember a roller-coaster ride.  The first 7 months of the year were brutal, but then in August, we closed a big sale and were off and running.  Many of the marketing and prospecting activities to which we committed and relationships that we had been pouring into and developing began to bear fruit.  Heading into 2011, I am giddy about what lies ahead and the opportunities that have been laid before our company’s feet.

And a quick aside…I had a short conversation with a few of my CRE friends via twitter about the unscrupulous over use of the phrase “cautiously

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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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