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December 12, 2017

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The Rookie Agent’s Guide to Selling New Construction: Part 2

YPN Lounge - 1 hour 4 min ago

David Hakimi

By David Hakimi

This article is part two in a two-part series on how to sell newly-constructed homes. Read part one here.

In my last post, I discussed the buyer’s agent’s duties in a new construction transaction and the sales process. Now I’d like to touch on hurdles clients may face buying new construction, as well as contracts, financing, and agent compensation.

Selling new-construction isn’t without its own set of unique hurdles, all of which can prove to be sufficiently challenging.

In most states, challenges arise largely from the differences between the builder’s contract and the normal re-sale contract that agents are more familiar with. Many states allow builders to circumvent the normal re-sale contract provided by your state’s real estate commission or REALTOR® association, and substitute a proprietary contract of their own instead. These proprietary contracts are typically crafted by the builder’s attorneys and they normally contain extensive language that heavily favors the rights of the builder. Additionally, a typical builder contract is often 60 to 80 pages long, compared to the 3 to 15 pages found in most states’ resale contracts.  A smart agent should always ask the builder’s sales person for a copy of the contract a day or two in advance so that they can carefully read it in its entirety—highlight any crucial dates or clauses that a buyer should be particularly aware of. This will also lead to a much smoother signing once the buyer is present, because you won’t have to read and explain an entire 80-page contract on the spot. Many experienced agents keep a file in their office containing example contracts from every active builder in their area. This allows you to quickly re-familiarize themselves with each builder’s contractual nuances in advance, so you’re prepared when a buyer asks you to go see a that builder’s model homes.

Financing can be particularly tricky when dealing with builder transactions.

@paulbr75, 2017. pixabay.com

Most mortgage lenders typically cannot cost-effectively lock-in an interest rate for more than 90 days in advance of a closing. Therefore, when dealing with an unfinished (or dirt-start) home that likely won’t be completed for 4 to 18 months, this can pose a substantial risk. If a buyer’s debt-to-income ratios barely qualify them to purchase the home at the time it’s contracted, then there’s a risk that they may no longer qualify to buy it at all if mortgage rates increase before they’re eligible to lock-in their rate. Because none of us own a crystal ball to predict which direction the rates may go, it’s always very prudent to make sure your buyers will still qualify even if the rates increase. A good rule of thumb is to make sure they would still qualify even if the rates climb by 1 percent. If not, then they are taking a major gamble buying new-construction. If a buyer barely qualifies for the amount they are trying to spend, then it makes more sense to find that buyer a home that they can close on within the term of their rate-lock. None of us wants to hear the lender tell our buyer that after waiting 13 months, they no longer qualify for enough to close on their new home.

Most builders also have an ownership stake, or affiliated business arrangement of some kind with a lender and a title company. Additionally, most builders will tie their incentives and/or discounts to the requirement of using this lender and title company. While they cannot force a buyer to utilize these service providers, they will routinely withhold discounts and incentives from buyers who insist on using an outside lender or title/escrow company. Often, these incentives are substantial enough that most buyers will comply with this requirement in order not to lose them. Therefore, it is prudent that the buyers understand this in advance, so that it doesn’t cause issues if they are particularly loyal to their current bank or lender.

Make certain you understand exactly how the builder will compensate you for bringing them a qualified buyer.

Builder co-op commissions are often structured differently then re-sale commissions, so you need to be clear on how you’ll be compensated. In most instances, builders only pay a disclosed percentage of the home’s base price, but do not pay any commission on the lot premiums, structural upgrades, landscaping, or design center options. This is important to factor in, because these costs can reach as much as 50 percent of the final price on some homes such as former “model homes.” Make sure you clarify in advance whether a builder pays commission based on the home’s base price, or on the home’s final purchase price. Also clarify the percentage they intend to pay as well. In most cases it’s slightly higher than the percentage paid on a resale to compensate for the fact that we aren’t paid on the home’s entire price. However, in some instances builders do pay on the complete amount, and there are some instances where the percentage paid is slightly higher than the area average for resales. This typically occurs when a development is selling too slowly, the builder has too many completed spec homes in inventory, the market is declining, or the builder is closing out the development. In these instances, selling new-construction can be particularly lucrative!

Make sure your client has never registered in the past while touring model homes without including your name on the registration card.

The builder’s salespeople are tenacious about pressing everyone who enters the model homes to fill out a registration card. Much like an open house on a re-sale, they want to capture the buyer’s information for follow-up purposes. However, those registration cards also serve a more insidious purpose as well. There are questions on the card that ask the buyer how they found out about the development, and whether they are represented by an agent or not. If your buyer previously visited the sales office without you (even if it was before they started working with you) and they didn’t put your name on their care, the builder now has a record of it. If you bring that buyer back later and attempt to register them as your client, the builder may not allow you to. The builders only intend to pay you if they determine that you were truly the procuring cause and initially brought the buyer to them. If they determine that the buyer found them on their own, without your involvement, then the builder will most likely refuse to pay you a commission. So be careful and ask your clients early in the process if they have registered with any builders before hiring you!

As long as you do your homework, the pros outweigh the cons.

Selling new construction can be very rewarding, and it can provide you with precious inventory in a market where re-sale homes are in short supply. If you take the time to tour all the builders’ models in your area, and learn as much as you can about their homes and policies, it will be time well spent. Get to know the sales people and their floorplans, because a solid knowledge of the builders in your area will be a benefit to both you and your clients. Be confident in your abilities and go sell some new homes!

David Hakimi runs the Hakimi Team with Berkshire Hathaway HomeServices Innovative Real Estate in the Denver and Boulder, Colo. market. Connect with David at www.DavidSellsDenver.com or on Facebook, LinkedIn, or Google+.

Will CodeNEXT Spur Redevelopment in Austin?

Commercial Source Blog Feed - 6 hours 23 min ago

Today’s blog post is Will CodeNext Spur Redevelopment in Austin guest post is by Leigh Budlong, founder of Zonability. You can connect with her on LinkedIn or email her at leigh@zonability.com.

Austin continues to be one of the leading US real estate markets, as evidenced by its Top 5 ranking in the PWC Emerging Trends in Real Estate 2018 report.  New mid-rise buildings are popping up where there was just a small building, roads are under construction throughout the city and the downtown skyline is on the rise.

Proposed “CodeNEXT” changes, the name the city has given its re-writing of the zoning for the City, are in a hot debate with the second draft currently in review. Given Austin’s popularity with new companies, residents, and real estate development, is CodeNEXT going to be the catalyst for even more change? This piece strives to put the proposed CodeNEXT in context by analyzing an area I dubbed “The Triangle” (for its shape).

Real estate investment and development basics pertaining to this analysis:

  • Real estate and real property reflect the existing structures, land, and contracts associated with the parcel. While real estate is “immovable” is it “re-doable.”
  • A parcel is an identifiable piece of land – with or without improvements – that can be bought and sold with title assurances. The assurance part of the equation is essential to understand when thinking about investing and developing.
  • Restrictions can be public or private and are “invisible” except on paper. Private restrictions include deed restrictions. A prime example of a public restriction is city zoning.
  • Zoning is an ordinance set by a specific city. The general intention behind zoning is to create rules that enhance public safety, quality of life, and property values.
  • A district is an area defined by either a government agency or quasi-government agency that grants them authority. The reason this is key for real estate investment and development is a property can be subject to multiple districts.
  • A zoning district can be expressed as having “base” or “primary” controls and also be subject to “overlay” or “secondary” zoning controls. In Austin, the average parcel has 3.5 layers of zoning districts. CodeNEXT is attempting to reduce the number but there will still be some overlay zoning.
  • Property rights are given to the parcel – the dirt – through zoning whether that is public, private or both. There are instances where an existing structure is less valuable than the dirt; this is an economic concept about what contributes to value.
The Triangle: A Use Case

This interesting shaped block has frontage on Burnet Road, an area with plenty of marketed “redevelopment opportunities.” The question is will CodeNEXT make it a truly “hot” area to focus on for development like when the City of Austin rezoned Rainey Street from residential to central business district (CBD) zoning?

 

 

 

 

 

 

Here are some images, courtesy of Google Street.

I also added notes on a zonability map which uses “blue” to show commercial zoning.

The Triangle and CodeNEXT

Under the proposed September draft (of CodeNEXT), all of the parcels in the Triangle would have a single district called Main Street 3A, or MS3A for short. Zoning is known for its vibrant use of letter/numbers! The glaring differences between current and proposed zoning:

More height allowed under the new plan – 3 stories now vs. 5 stories
Larger buildings allowed under the new plan – greater land coverage ratios

By my rough estimate, the current structures are less than 20% of the size compared to what could be there under CodeNEXT.

So will the boost in potential be the catalyst to spur redevelopment? While “up zoning” may create the economies of scale needed for a mid-rise to pencil out, there are still other considerations in the game of real estate. This is a short list (certainly not exhaustive) of such aspects to consider:

  • For starters, how do the existing rents compare to rents for new construction?
  • Is it better to “add-on” or “tear down?”
  • What are current and projected construction costs?
  • How great is demand for new construction in the immediate area?
  • What is the supply of new construction coming on line in the immediate area?
  • Would there be a premium to buy out any existing leases?

The Triangle location is a mix of Community and Neighborhood Centers given the high volume of traffic on Burnett Road relative to Hancock Drive.

Austin, TX 2017 Retail Annual Report

Element Community Retail Neighborhood Retail Rents $24.80 $21.00 Vacancy 5% 6% Expenses Triple Net Triple Net Going in Cap Rate 6.5% 6.5% Direction – Year Over Year Asking rent Up Up Going in Cap Rates Down Down

“Despite a relatively tight market, developers are being very selective about new and speculative construction, and we expect this market to remain strong.”

– Integra Realty Resources – Austin

In Summary, the Triangle Analysis Reflects
  • CodeNEXT may create new opportunities for real estate development but whether or not it is a catalyst to spurn redevelopment is only one piece of the puzzle.
  • Individual considerations will impact the timing for when owners decide to sell or transform their properties.
  • Even if a property doesn’t get redeveloped, owners seeing redevelopment and thinking about their property’s position may spring for upgrades to their buildings out of concern of “not keeping up” or just to make their properties look better.

The upward direction of commercial rents and downward vacancy rates combined with Austin’s low unemployment and increased population have spurred new construction – without CodeNEXT. Once this major subject is finally settled, I suspect the decision to develop or not will be influenced by the real estate and business cycle. We may have to wait to see just how influential CodeNEXT is – or isn’t – on what gets built and where.

 

The post Will CodeNEXT Spur Redevelopment in Austin? appeared first on CRE Blog | CommercialSearch.

Go for Unbroke in 2018

YPN Lounge - Fri, 12/08/2017 - 13:35

Lee Davenport

By Lee Davenport

I love a good challenge that helps me work smarter in my business. How about you? Well, as the New Year approaches, I’m challenging you to go beyond “going for broke” and “go for unbroke.” No more feast or famine. Stop involuntary income roller coaster rides. Make 2018 your best year yet!

If you are a veteran of real estate, I encourage you to take an hour and reflect on these questions:

1. What brought me new business in 2017?

2. How can I realistically double those things in 2018?

3. What brought me repeat business in 2017?

4. How can I try to triple those things in 2018?

5. What seemed to cripple my business in 2017? In other words, what needs improvement?

6. How can I make sure those issues are minimized, eliminated, or improved in 2018?

Whether you are a rookie or an experienced real estate agent or broker, I want to further challenge you to complete these four strategies on my infographic below. Make 2018 your year to go all-in.

Pay close attention to number 2, because only about 12 percent of agents and brokers admit to giving local, specific items of value.  Translation: You can clean up on missed opportunities by others if you really implement this strategy. Check out this complimentary explanation video to further this point:

I would love to hear from you. Give me a shout on Facebook, Instagram, YouTube, and Google+, or by visiting LearnWithLee.Realtor. Want more of the best practices from our nation’s top producers? Grab your copy of the short read, Profit with Your Personality. And, be sure to tell the real estate agents you know to get a copy of the 5-star rated workbook, Plan to Win!, to transform their real estate sales game plan. Here’s to your success.

Dr. Lee Davenport is an Atlanta-based real estate coach who trains agents, teams, brokerages, and other business organizations on how to use today’s technology to work smarter. Join Lee’s free RE Tech Insider’s Club by visiting www.LearnWithLee.REALTOR.

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Our 5 Hottest Stories of the Year

Weekly Book Scan - Fri, 12/08/2017 - 11:29

As the year winds down, we’re all in a reflective mood. And, as managing editor of REALTOR® Magazine, one of the more important items for me to look back on is what kinds of content our readers were most attracted to.

Photo: Brigitte Tohm via Pexels

Below I’ve compiled a list of five most-viewed articles on REALTOR® Mag Online in 2017, along with an excerpt to give you a flavor of the piece. Learn what your fellow magazine readers already know by checking out these popular articles before the year is out!

4 Ways Male Agents Put Themselves in Danger
Men are taught to be fearless, and that attitude can make them a prime target for criminals.
By Tracey Hawkins, former real estate agent and founder and CEO of Safety and Security Source

Why don’t some men take safety more seriously? “Because we’re stupid,” jokes Ronnie Thompson, GRI, SFR, broker-owner of Thompson Realty in Valdese, N.C. “We know it all and have no thoughts about our safety. We believe that no one is going to bother us.” From an early age, women are taught to fear for their safety. Men, however, are taught to stand up to danger — often on behalf of a woman. It’s not hard to see why some male agents might think nothing will ever happen to them because they’ve been socialized as the stronger sex.

7 Real Estate Ideas That Deserve to Die
Just because everyone believes something is true doesn’t make it so.
By Meg White, managing editor of REALTOR® Magazine

Conventional wisdom dies hard. Popular perceptions may drive the decisions you make about your real estate career, from how you market your business to what your office should look like. But longstanding beliefs—these days amplified by social media bubbles and spin—can be flat wrong.

When Clients Talk Politics, Stay Above the Fray
How divisive public discourse is affecting business relationships—and what you can do about it.
By Graham Wood, senior editor for REALTOR® Magazine

Given that real estate is a relationship business at its core, the professional advice to simply stick to the nuts and bolts of helping buyers and sellers with transactions may not always cut it. “There’s an expectation for you to be genuine and transparent as a real estate professional. But you want to make sure your genuineness is not provocative in a way that disrespects people,” says 2011 NAR President Ron Phipps, ABR, GRI, who is helping to develop a REALTOR® University course on online etiquette for real estate professionals. “Great reputations are built one brick at a time, and buildings can come down with one bad move. You can destroy your reputation with one comment.”

Dos and Don’ts to Win the Listing
I had no idea how to handle my first seller lead. I failed to get the business, and here’s what I learned from that experience.
By Peter Murray, ABR, PSA, sales associate with RE/MAX Results in Frederick, Md.

After presenting comps and giving the seller an opportunity to ask questions, I ask one simple thing: “After looking at the comps, what do you think your property is worth?” Then I remain quiet until the seller provides me with their thoughts. If they don’t say anything, I sit in silence until they speak. This gives me a chance to examine their body language, which will hint at whether they will be realistic about their asking price. If they start to avoid eye contact, looking around the room, and can’t focus on answering my question, it’s a good sign they aren’t ready to handle some harsh realities. I’ve worked with many unrealistic sellers, and I’ve found they take up a lot of time and frequently don’t make it to closing.

The Right Way to Approach FSBOs
The vast majority of unrepresented sellers will eventually list with an agent. Whether you are the agent they choose depends on how you present your real estate services.
By Jared James, national speaker and trainer in the real estate industry

We’ve been taught to lie to these sellers from the very beginning of the relationship… When a FSBO is talking to an agent, they want to know one thing: Do you have a buyer for my property? If you’ve taken any training in our industry, you’ve probably been taught to say yes. But how in the world do you know if you have a buyer for a property before you’ve even started marketing it? FSBOs understand this conundrum you’re in, so if you say yes, they know you’re lying. And you’ve just lost credibility with them before you’ve even gotten started.

Comment on Insider Tips on Staging a Living Room by Vijay

Styled, Staged & Sold - Fri, 12/08/2017 - 04:56

Good Post.!

Really Glad to read this article, and follow these tips shared,

Thanks for sharing.!

Top 12 Landlord Major Missteps that Can Slow or Derail Your Leasing Efforts

Commercial Source Blog Feed - Tue, 12/05/2017 - 15:32

Today, David Morris, CCIM runs down the Top 12 Landlord Major Missteps that Can Slow or Derail Your Leasing Efforts. David is a Sales Executive with Xceligent and former president of St. Louis CCIM, SIOR, Missouri Commercial Realtors, and St. Louis Commercial Realtors chapters. Connect with David on LinkedIn: DavidMorrisCCIM

 

 

  1. Signing leases without a strategic plan. A whole-building approach to leasing is critical to achieving the best rates and best tenants.
  2. Leasing the best space first. This can devalue the rest of the building’s available space, such as leasing half of a floor with a better view, or leaving small spaces vacant.
  3. Failing to ensure each tenant’s lease terms support the long-term investment objectives for repositioning or disposition.
  4. Faulty termination clauses that allow tenants easy “outs” can leave you, the landlord, with unamortized costs from tenant improvements (TIs), incentives, and fees.
  5. Hiring a broker without the right specialization – experience working with properties of a similar type and location.
  6. Failing to investigate the tenant’s finances, business plan, and revenue stream, and failing to require a substantial security deposit.
  7. Allocating capital incorrectly; spending money on things that won’t help lease the building, e.g. replacing sconces on the exterior of a building. A better use of funds might be replacing dated light lenses in a vacant space to refresh it. Ask, “Does my improvement help lease the building more quickly or at a higher rate?” before spending.
  8. Choosing incompatible tenants. Placing a staid law firm next to a bustling sales organization or a come-as-you-are creative firm is bound to create friction.
  9. Pricing the building incorrectly. Holding out for an extra nickel or dime in pricing may keep the building stuck in vacancy limbo.
  10. Failing to evaluate the competition. Ruthlessly compare your building’s pros and cons against competitors – aided by your broker – to determine your unique selling points and high-impact improvements.
  11. Forgetting the small stuff. Prospective tenants can be turned-off by the little things, so keep empty spaces free of debris, lights working, and blinds open. Common areas should be clean, parking lots and signs in good condition, and consider investing in seasonal plants at the entrance points.
  12. The biggest mistake? Lacking a story. Your building should have a compelling message that differentiates it from the competition.The building’s story should be tailored to a key tenant driver, such as visibility, tech infrastructure, or accessibility. Some landlords develop a theme or foster tenant clustering.  The “story” is a creative element of a leasing business plan that many brokers fail to develop. Your broker should collaborate with you to identify and enhance your property’s unique story, then use that story’s powerful potential to drive tours and contracts.

The post Top 12 Landlord Major Missteps that Can Slow or Derail Your Leasing Efforts appeared first on CRE Blog | CommercialSearch.

How Volunteer Work Benefits Our Business

YPN Lounge - Mon, 12/04/2017 - 16:43

By Christina Pappas

Growing up in a Miami real estate family, I always envisioned working with my father and grandfather. But before I jumped into the industry, I wanted to give my other interest a try: hotels. After graduating from Cornell University, I moved to Los Angeles to launch a career in the hospitality field.

I landed a job at a top L.A. luxury hotel—Viceroy Hotels and Resorts—where I moved up the ranks and was excited about my career. I was planning my next steps and looking back on how far I had come when my phone rang. Everything changed.

My grandfather died.

Grandpa’s unexpected death altered me. Ted Pappas—one of Miami’s most successful real estate brokers and the 1975 Miami Board of REALTORS® president—was more than a role model. He was one of my best friends; someone I could talk to about anything. My grandfather’s death in 2011 made me realize all the family time I missed while living on the opposite coast.

I quit my L.A. job and moved back to Miami. Three months after grandpa’s death, I was working at the family business like I always thought I would. My father, Michael Pappas, is the CEO of The Keyes Company, Florida’s largest independently-owned firm with more than 50 offices and 3,500 agents.

My negotiating skills and hospitality background eased my transition to real estate, but I did struggle with the pressure of trying to follow in my father and grandfather’s footsteps. My attention to detail and passion for the industry helped me triumph. In 2012, I was named Keyes Rookie of the Year for highest sales volume. I rose the ranks and today I’m managing Keyes’ Brickell area office—one of our firm’s highest-producing offices. I oversee 41 agents, and my goal is to continue to grow the Brickell office and inspire Keyes’ “Next Gen” group of under-40 associates.

I’ve been fortunate to have the same growth as a leader of the MIAMI REALTORS® (MIAMI), the nation’s largest local REALTOR® association with 45,000 members. I started volunteering with MIAMI as a member of its Young Professional Network. I was elected as 2015 MIAMI YPN chair, creating new events and seminars to help young members. In 2017, at the age of 31, I became the second-youngest in MIAMI’s 97-year history to serve as residential president.

Christina Pappas at her 2017 inaugural as president of the MIAMI Association of REALTORS®

During my year of service, I didn’t feel I had to prove any skeptics wrong who might have questioned how a young female can handle a presidential role. I knew that as long as I served with an open heart, open mind, and pushed our association in the right direction, I would gain support from my colleagues. REALTORS® support each other like family as long as you put our members first.

I have experienced the breadth and resilience of this REALTOR® family power while serving as MIAMI’s 2017 residential president. I saw our members in action before, during, and after Hurricane Irma. I watched how they mobilized quickly to help friends, families, communities and complete strangers after the hurricane made landfall in the lower Florida Keys on Sept. 10, 2017.

The MIAMI Association as well as The Keyes Company and many other South Florida brokerages held donation events to collect items for victims impacted by Hurricane Irma. The MIAMI Association connected with other REALTOR® groups to secure a plane to fly the items to Monroe County in the Florida Keys the day after the donation event. REALTORS® are the heart of the community. No other profession has such a close link to the community. We are truly leaders.

Next year, I will stay on as a Miami leader serving on MIAMI’s 2018 Residential Board. I’m also thrilled to continue volunteering with Florida REALTORS® and the National Association of REALTORS® (NAR). I am honored to serve as the 2018 NAR Large Firm and Industry Relations liaison. I believe I bring a valuable insight as a conduit between large firms and the NAR Leadership Team, to help my committees see beyond what I know.

We at Keyes encourage our brokers and agents to volunteer because it provides leadership training and builds networks. Here are some ways volunteer work can help your business:

Leadership Training

Being able to understand a board room full of experienced real estate professionals and communicate what other board members are trying to say is a strong skill-set. It is remarkable to be able to coalesce our ideas in the MIAMI boardroom into an action or a program that helps thousands of REALTORS®. You bring that leadership training back to your office to help your office, team, and fellow associates. I’ve also benefited from the spokesperson training class that comes with serving the Florida REALTORS®.

At the Forefront of the Industry

Serving on a local board gets you the most up-to-date information on the real estate industry so you can bring the changes back to your office first. As a MIAMI leader, we are at the forefront of our industry. When you serve at the association level, you understand how you can impact your business and agents.

You are also building a trust level with some of the region’s top brokers. Real estate is a very small world, even when you serve on the national level. Building that trust and camaraderie with fellow brokers and agents through my volunteer work has helped grow our company’s network.

Building Your Network

I tell agents all the time: No one knows where their next deal is coming from. You don’t have a crystal ball. You need to be everywhere. A lot of people talk about using technology, but I never overlook association events or board meetings as a possible referral networking event.

I now know people who live all over the country. For me, it’s not just a referral; it’s a client and a person. I want to give that person the best real estate professionals in my network. So, I want to understand how different brokers and agents run their business. Whenever I meet someone with a winning business model during my volunteer work, I look at if they could be a good referral match for me. I find out if they’re a trustworthy businessperson. It’s about looking at all the angles.

Managing Work and Volunteer Time

People ask me all the time how I manage all of my volunteer obligations with my work. My answer? A calendar—a really good calendar with a skilled administrative assistant.

You can’t manage time. Managing time means telling time to stop. It’s about managing your calendar on a daily basis. It’s about prioritizing what takes precedence. What did I commit to? My grandfather used to say that it takes 25 years to build a reputation and five minutes to destroy it. If you commit to something and don’t follow through, ultimately that’s not serving anyone well.

I estimate I spend about 16 hours a month volunteering at local, state, and national boards. As a MIAMI leader, I attend four quarterly three-hour meetings for each board. I also attend many conferences, such as when I represented MIAMI at MIPIM, the world’s leading property event in France this year. I’ve also participated in state, local, and national conventions.

When I come back from an NAR meeting, I share what I learned with our vice president of operations and our leadership team to discuss how it can improve our agents’ business. There are so many takeaways, from NAR Chief Economist Lawrence Yun’s presentations to NAR’s lobbying efforts on legal issues to new technology developing in our industry.

I believe the brokers and associates who volunteer find great value. With the New Year approaching, I would challenge those of you who have not volunteered to find something you’re are passionate about and get involved. And always remember: You have to give to receive.

A third-generation Miami real estate professional, Christina Pappas is the second-youngest board president in the 97-year history of the MIAMI Association of REALTORS®. Pappas oversees 41 agents as the district sales manager for The Keyes Company’s Brickell area office, a top-producing office in downtown Miami. Pappas, who led MIAMI’s Young Professionals Network in 2015, will serve as the 2018 National Association of REALTORS® Large Firm and Industry Relations liaison. Learn more at www.keyes.com.

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Comment on How to Choose the Right Stain for Hardwood Floors by Kathleen Turner

Styled, Staged & Sold - Tue, 11/28/2017 - 15:41

Great informative article. You touched upon so many relevant questions. Thanks for sharing.

Charity Deduction Faces Same Tax Reform Risk as MID

Speaking of Real Estate - Mon, 11/27/2017 - 14:31

Of all the itemized deductions, the one for charitable contributions might seem to come out the best under tax reform. That’s because it’s the only deduction under both the House and the Senate versions of the bill that is largely undiminished. And yet charities complain donations will dry up under tax reform. What gives?

“Provisions in the tax bill the House and Senate are considering would make the situation worse” for charities, Ray Madoff, director of the Boston College Law School Forum on Philanthropy and the Public Good, says in a Nov. 27 New York Times opinion piece.

The problem, Madoff says, is the near doubling of the standard deduction. With all of the other itemized deductions either going away or constrained by new caps, most households will opt for the standard deduction rather than continue to itemize. That renders the tax deduction for charitable giving nearly meaningless. As Madoff puts it, “A vast majority of American taxpayers would no longer itemize and therefore would receive no benefits for their charitable giving.”

That argument might sound familiar. It’s the same one NAR is making about homeownership. Under the Senate bill, the mortgage interest deduction would be left intact, but the deduction for state and local taxes would go away. In the House, MID would be limited to mortgages of $500,000 and the deductions for property taxes would be capped at $10,000, while the deduction for state and local income and sales taxes would be entirely repealed. So, while MID is preserved, either entirely or in part, very few households that itemize today would continue to do so. As a result, MID would continue to be a benefit only for the wealthiest households.

Given the structural changes to the tax code lawmakers have before them, preserving the deduction for charitable contributions is mostly meaningless. This is exactly the same thing REALTORS® are saying about tax incentives for homeownership. They’re meaningless for most households if tax reform passes in its current form in both the House and the Senate.

More on tax reform’s impact on homeowners in The Voice for Real Estate.

Save the Eulogy! Retail is Not Dead!

Commercial Source Blog Feed - Mon, 11/27/2017 - 09:11

Today’s post warns you to Save the Eulogy! Retail is Not Dead! The author, Misty Belsha, is a Director of Analytics for Xceligent’s Kansas City market. Connect with Misty on LinkedIn: Misty Belsha

 

 

 

 

We’ve all read reports indicating the sky is falling for shopping centers and malls. Then, a contradictory report is released the following day stating the retail market is just fine and we need to adjust the way we’re looking at it. Well, which is it?

To simplify, retail is the optical illusion of commercial real estate. From one perspective, media reports paint the picture of a lifeless and stale retail industry. However, when you look from another angle, statistics and factual reporting from credible sources throughout the country cite new restaurants, specialty stores, and non-traditional retail tenants are driving growth in the retail sector.

According to the August 2017 U.S. Census Bureau report, estimated retail sales totaled more than $1.2 billion dollars in 2Q17 with online sales accounting for only 8.9% of that total. However, year-over-year sales volume in the eCommerce division increased by 16.2 %.

You’re probably wondering what’s fueling this rise in eCommerce sales. My guess is no one wants to put “real” pants on and walk into a store. Or, maybe that’s just me…. Joking aside, convenience is a major factor. The modern American lifestyle is so busy we’re always seeking to find balance and enjoy a little downtime. After a typical work day (or week), taking children to activities, finding time to prepare meals, etc., the thought of even walking into a store is enough to bring on stress hives. For many, standing in checkout lines, fighting crowds, and digging through unorganized racks isn’t the way they want to spend what little free time they can scrounge up. Instead, after finishing what feels like a 29.3-hour day, changing into their most comfortable sweats, plopping onto the couch, and ordering nearly anything a heart desires from their snazzy smartphone is much more appealing. Heck, even groceries are available online now! Beyond the convenience it offers, additional advantages to online shopping include price comparisons, increased variety, no crowds, and less impulse shopping. Did I mention you also don’t have to wear “real” pants?

Though online shopping has become increasingly popular, you can save your eulogy. The need for brick and mortar stores isn’t dead, but traditional retailers are having to step it up to stay in the game. You’ve heard the saying “go big or go home”? That’s exactly what stores are going to have to do to survive in the evolving world of retail. But, adapting requires some creativity. Landlords have kept vacancy rates low by backfilling large big-box type spaces with non-traditional uses such as gyms, postal services, churches, and daycares. Specialty stores such as Spirit Halloween are also backfilling large spaces, often previously vacated by national tenants like Gordman’s. Others have even converted the space to mini storage. The rules of retail have changed.

What could traditional retail stores offer that would outweigh the benefits of online shopping? Plenty, actually – if they’re willing to make changes that will appeal to the modern shopper. If consumers are going to give up their precious free time to visit a store, they expect the trip to be worth their while. Maybe they just ran in for yoga pants, but that’s not what will keep them coming back. People want the experience, social interaction, and atmosphere that you can’t get from shopping online. This includes upbeat music, entertainment, and energetic, attentive staff that will provide personal service. In-store shopping is often used as a social gathering where friends and family meet to catch-up and browse, grab a bite to eat at nearby restaurants, and/or just enjoy a fun day.

Like an optical illusion, when you look closer or approach it from a different perspective, we see that brick and mortar is not dead. While true that stores that aren’t evolving their business model to meet modern expectations will lose relevance and be left behind, those who adapt will continue to thrive.

The post Save the Eulogy! Retail is Not Dead! appeared first on CRE Blog | CommercialSearch.

Comment on Hot Home Trend: The Statement Shower by Brent Wells

Styled, Staged & Sold - Wed, 11/22/2017 - 08:51

Melissa,
You are spot on with this. So many of our clients are doing major bath remodels to build luxury “spa” baths. One of our clients just won “Dallas for Best home renovation under $250k” and they did exactly what you mentioned.

Comment on Top 10 Stupid Staging Ideas by Susan Crema-Martin

Styled, Staged & Sold - Wed, 11/22/2017 - 07:15

Great article, so many points for people to understand about our “job”.
I would love to add virtual staging to the list as well.

The Rookie Agent’s Guide to Selling New Construction: Part 1

YPN Lounge - Tue, 11/21/2017 - 18:33

David Hakimi

By David Hakimi

This article is part one in a two-part series on how to sell newly-constructed homes. Read part two here.

It’s no secret that the housing market has fully rebounded over the past eight years and is now experiencing tremendous growth. In fact, demand in many major metropolitan markets has clearly outpaced supply. In numerous cities, builders have been spurred to start churning out new homes as fast as they can build them.

According to economic data from the U.S. Census Bureau, builders are now producing approximately 1.18 million homes per year nationally. Given the proliferation of new construction, new agents entering the business will be wise to quickly familiarize themselves with the key differences between selling existing homes and brand-new homes.

Understand the key differences between a buyer’s agent’s duties when dealing with re-sales vs. new-construction transactions.

There will always be some difficult deals that require extra steps on the agent’s behalf, but for the most part, a buyer agent’s primary responsibilities on a re-sale transaction typically revolve around the same five general functions:

  • Structuring the offer terms competitively to compete against other offers, and lining up any contingent sales that must occur concurrently.
  • Researching price by analyzing comparable sales to maximize the chances the home will sufficiently appraise, and ensuring that the buyer isn’t over-paying.
  • Negotiating price, post-inspection repairs, and concessions.
  • Managing deadlines such as loan application, earnest money delivery, appraisal scheduling, title review, review of HOA documents, binding homeowner’s insurance, contingent sales, and closing.
  • Protecting the buyer’s earnest money, by recognizing any inability (or unwillingness) of the buyer to comply with a date outlined in the contract, and working to either extend that deadline or terminate the offer in time.

By comparison, an agent’s primary role in a new-construction transaction is a little different, and can generally be summarized by the following eight functions:

@paulbr75, 2017. pixabay.com

  • Interpreting the buyer’s rights outlined in the builder contracts, and noting any crucial deadlines relating to the buyer’s ability to terminate without forfeiture of the deposit money.
  • Negotiating the price, incentives, and inclusions. Just like a car dealership, new home salespeople can often offer extra inclusions, or discounts to secure a contract.
  • Solidifying the price the home will come to after lot premiums, design center options, structural upgrades, low voltage options, appliances, landscaping, and builder incentives have all been factored in. The builder’s advertised “base price” is generally tens of thousands of dollars below the final completed price, once these factors are added together.
  • Analyzing the meaning of soil surveys/engineering reports pertaining to the chosen lot, or reading blueprints and floorplans.  The amount of expansive soils found during the soil survey, determine the type of foundation that the engineer will require the home has to be constructed on. Slab-on-grade foundations can be used when the expansive soil content is low, but costlier pier-and-beam foundations must be used when high amounts are present.
  • Advising the buyer on making the best use of the budget. Choices like which lot, what structural upgrades, or which design center options, can all make-or-break a buyer’s budget. Some cosmetic options can be done more affordably after closing, while some structural items cannot easily be done at all after the house is completed. Most builders will also require additional deposit money, once a buyer’s design center choices exceed a set amount. This can be up to 50 percent of the cost of the upgrades, once the cost of the options goes past a predetermined dollar amount.
  • Questioning the builder’s sales rep about all the inclusions, contingency terms, financing and incentives that a buyer might not think of on their own until it’s too late. The model homes are packed with every imaginable upgrade, so it’s extremely crucial to ask which features are included with the basic home, and which items are upgrades. Even basic things like lawn grass, sprinklers and fences in the back yard, are often not included. Refrigerators, garage door openers, window blinds, and central air conditioners aren’t always included eitherSee my complete “Builder Questionnaire.”
  •  Accompanying the buyer on the walk-throughs the foreman will conduct at the various stages of construction. Pre-drywall, electrical, low voltage, and the final pre-closing walkthrough for identifying touch-ups. It’s the agent’s job to help hold the builder’s foreman accountable for completing any repairs or necessary corrections discovered at these walk-throughs.
  • Protecting the buyer’s earnest money remains a common thread. There aren’t as many crucial deadlines, but there are still a few like the loan application deadline and the contingent sale deadline. It’s your job to make sure the buyer understands them. Also, some builder contracts have verbiage that entitles them to keep a percentage of the deposit, even if the buyer backs out for a legitimate reason defined in their contract. Make sure you and your buyer are clear on this point, so there are no unpleasant surprises.

Selling new-construction is a different process, but it’s certainly nothing a new agent should be afraid to take-on.

In fact, most experienced agents consider selling new construction a less taxing process than selling a re-sale. This is true because there is often less negotiation over earnest money, possession dates, concessions, post-inspection repairs, and even price in some circumstances. Post-inspection repair negotiations don’t exist, because new homes are fully covered by the builder’s warranty and a builder’s reputation depends on delivering homes that are free of problems. However, you should pay close attention to the verbiage in their contract that deals with defects that are discovered during the routine walk-throughs. Most builders will not allow a buyer to terminate over these items, but rather insist that the buyer allow them to correct the issues before the home is delivered. Also make sure your client is aware that builders will not normally allow changes to materials, or structural features once construction has started. This is because the builders cannot deviate from the initial plans they submitted to the county to obtain the building permit. Likewise, materials such as tile, wood flooring, countertops, appliances, cannot easily be changed midstream either. Builders place their material orders in bulk to receive wholesale pricing, therefore, it isn’t feasible for them to make changes after the materials order has been placed.

Completion timelines can also have variances and delays that push the closing back. Things like bad weather, materials shortages, labor strikes of unionized trades, delays with county permit issuance, project financing issues, etc., are all factors out of the builder’s control that can prolong the construction process. Make sure you are clear on the maximum time frame the contract provides a builder to complete a home. Most builders typically promise delivery somewhere between 6 and 13 months, but the contract may allow them to delay completion up to 24 months without penalty or legal recourse.

Builders will often insist that their prices are non-negotiable. This may or may not be true, depending on the market.

This varies from market to market, and sometimes even between neighborhoods and builders. If a particularly hot neighborhood is selling faster than a builder can release lots, then odds are they won’t deal on price. However, if the builder has several unsold “spec” homes in inventory, then it’s usually a good bet that they will negotiate. This is even more true at the end of the month, the end of the fiscal fourth quarter, or when the builder is down to the last few homes and they are trying to close out the development. In these instances, a smart agent will negotiate hard for their client!

New homes are typically offered on a first-come, first-served basis, which means that the first qualified buyer to place a deposit on a newly released lot, gets it.

Therefore, creatively structuring offers to be more competitive against competing offers often isn’t necessary. Researching comps is rarely a factor either, since the builder prices are carefully set at levels that the builder can justify based on the value of the land and construction costs. Unless a buyer goes overboard with design center options, new construction homes rarely fail to appraise. However, it’s worth noting that many builder contracts state that the buyer is still required to close on the home, even if the appraisal does somehow come in low. Therefore, agents need to advise their buyer’s not to over-improve the home (in the design center) too far above the norm for the neighborhood. The burden of managing deadlines is greatly reduced as well, because most builder contracts make a buyer’s earnest money hard within 2-3 days after the contract is executed. Aside from the buyer’s loan getting declined (assuming it was no fault of the buyer) or the builder failing to compete the home in time, builder contracts generally have no other provisions in place for a buyer to terminate without forfeiting their deposit. Therefore, there are far fewer crucial deadlines to manage on a new-construction transaction.

In my second post, I touch on some common challenges associated with new construction, including buyer financing.

David Hakimi runs the Hakimi Team with Berkshire Hathaway HomeServices Innovative Real Estate in the Denver and Boulder, Colo. market. Connect with David at www.DavidSellsDenver.com or on Facebook, LinkedIn, or Google+.

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Comment on Top 10 Stupid Staging Ideas by Irene Wright

Styled, Staged & Sold - Mon, 11/20/2017 - 07:46

Couldn’t agree with this article more. As the owner of a company that rents staging furniture and accessories we see a lot of homeowners who try to stage themselves. Hire an experienced stager who is educated in the principles of staging for a polished and complete look every time.

Comment on Smart Staging Solutions for the Owner Occupied House by House basement

Styled, Staged & Sold - Fri, 11/17/2017 - 05:52

Really amazing article,Thank you so much for this article.

Beautiful, Gift-Worthy Real Estate Books

Weekly Book Scan - Thu, 11/16/2017 - 12:04

One of my favorite gifts to both give and receive is a book. It may seem passé in this world of digital media, but I think the fact that our lives are lived increasingly online makes books especially luxurious and gift-worthy. Here are a few examples of real estate topics writ large that would be welcome at any holiday gathering this year.

Photo by Daria Shevtsova on Unsplash.

Cabin Porn: Inspiration for Your Quiet Place Somewhere, by Zach Klein and‎ Steven Leckart, with photography from Noah Kalina.
Along with many of you, I’ve loved the Cabin Porn Tumblr for years now. But being able to page through these beautiful, unique hideaways in print is a pleasure all its own. A cozy gift for the hermit in all of us.

Placemakers: Emperors, Kings, Entrepreneurs: A Brief History of Real Estate Development, by Herb Auerbach with Ira Nadel.
If you want to know how I really feel about this one, you can read my full review from earlier in the year here. It’s perfect for history buffs and aspiring developers alike, offering a long view of the very human need to put our stamp on the land by building.

The Garden Bible: Designing Your Perfect Outdoor Space, by Barbara Ballinger.
It’s never too early to begin planning next year’s garden, and this book from our very own Barbara Ballinger has inspiration to spare in the form of beautiful imagery and practical tips. Or, if your intended gift recipient is more of a cook than a gardener, check out my review of her Kitchen Bible here.

100 Interiors Around the World, by TASCHEN.
Honestly, pretty much any compilation from the German publishing company TASCHEN makes a great gift. I chose this one because the wide variety of designs and spaces featured in this collection appear to offer a good entry point into their offerings. But their books concentrating specifically on innovative brick, concrete, and wooden buildings are all fun choices if you’re looking to do some more targeted shopping for the building enthusiasts in your life.

Repurposing Commercial Real Estate

Commercial Source Blog Feed - Wed, 11/15/2017 - 13:56

An empty office building doesn’t have to remain an office building — and an old supermarket doesn’t have to continue to house groceries. As the needs of communities evolve, the way people use older buildings can also evolve. Repurposing commercial real estate gives you the opportunity to revitalize an older building and breathe new life into a neighborhood or town.

Revitalizing commercial real estate can have many benefits for the area around it. Although the definition of abandoned property varies from state to state, it has a similar effect across the U.S. For example, buildings within a certain distance of abandoned property are likely to see a decrease in value. In some cases, buildings within 250 to 1,500 feet of an abandoned property can have their values negatively affected by the presence of the vacant real estate.

Abandoned and unused buildings also have an adverse effect on quality of life for people in the area. In Pittsburg, for example, crime tends to be 15 percent higher within 250 feet of a vacant property. Empty and unused buildings also cost cities money that could be better spent on other things. Philadelphia spends more than $20 million each year maintaining vacant buildings, for example.

One solution to the abandoned building problem is to transform former office buildings, warehouses and stores into in-demand properties. Repurposing commercial real estate is a good idea for cities that have plenty of empty buildings and a high demand for housing. It can also be a cost-effective move for developers and others in the commercial real estate sector. It often costs less to repurpose an existing structure than to build a new one.

 

Finding Property to Repurpose for Your Needs

Whether you’re transforming an unused warehouse or a vacant office building into a residential property or mixed-use building, there are a few things to keep in mind. You may need to get the support of area community members and residents before you purchase the property and make any changes.

Depending on the age of the building and its zoning, you might need to spend some time and money to change the zoning or making sure your project meets historical code requirements.  Pre-Due Diligence can help you quickly understand the amount of time and effort that may be required to make your project a reality.

 

Zoning and Ordinance Considerations

Zoning determines what can be developed and dictates the acceptable uses for a property. A city or municipality usually creates a zoning plan to direct what how development will occur. For example, buildings zoned for industrial purposes are often located in the same general area, while residential buildings are usually situated near each other.

Although specific zoning categories might vary by municipality, there are several broad categories:

  • Commercial. Within the commercial zoning category, there are many subcategories determined by the use of the property and the businesses located in it. Office buildings, hotels, nightclubs, restaurants, shopping malls and some apartment buildings are usually zoned as commercial.
  • Industrial. Industrial zoning is similar to commercial zoning in that it has several distinct subcategories. Considerations that inform zoning include noise, pollution and how close the building can be to other properties. Industrial zones usually also have higher setback requirements, meaning the buildings need to be a certain distance away from the road or property line.
  • Residential. Buildings zoned for residential use include any type of property where people live, including single-family residences, duplexes, co-ops, condos, apartments and trailer parks. Zoning determines how many separate buildings are allowed and whether a manufactured home can be located on the property. Residential zoning laws have a say over which animals can live on the property. For example, it’s usually against the law to keep cows or chickens on a residential property, but cats or dogs are okay.
  • Agricultural. You won’t likely find many properties zoned for agricultural use in a developed city. Agricultural zoning is usually used to limit the number of non-farm properties in a primarily agricultural area.
  • Combination. Combination zoning is any type of zoning that combines two categories into one. You might find buildings that are zoned for both commercial purposes and residential, for example.
  • Historic. In some cases, older buildings might have a historic zoning or be on the National Register of Historic Places, which affects what you can do to the property. Historical buildings often come with a tax credit or incentive to encourage owners to rehabilitate them.

If you intend to renovate or repurpose an existing property for a use that’s not consistent with its current zoning, you’ll most likely need to apply for a change of zoning or zoning approval. You might also be able to request a zoning variance, which would let you use the property in a way not currently specified by the zoning, without changing the zoning itself.

The process for changing zoning is likely to vary slightly from area to area. You will usually need to complete an application and pay a fee. A hearing is typically part of the process. During the hearing, residents and business owners can express their opinions and argue for or against changing the zoning.

 

Historical Code Considerations

Buildings of a certain age — usually at least 50 years old — might end up on the National Register of Historic Places. The register seeks to protect and preserve historic and archeological resources in the U.S.

If your building is on the National Register or is otherwise considered a historic property, you are limited in some ways when it comes to renovating it. But working with a historical property can open the door to some opportunities for you.

For example, properties on the National Register often qualify for federal tax credits and grants for their rehabilitation and preservation. State tax incentives and grants might also be available.

You can do what you want to the historic property so long as you aren’t taking any money from the federal government and as long as your state doesn’t have specific rules or regulations concerning the preservation of the building. It’s a good idea to review the laws in your state before you start any projects. You may need to preserve the exterior of the building and limit your changes to the interior.

 

Location and Size

The property’s size and location will both factor into the success of your repurposing project. In real estate, few things matter more than location. You might be able to get a good deal on a property in an out-of-the-way neighborhood or an underused section of a city. But that might not be the best option for you.

For example, if you transform a warehouse in an industrial part of a town into apartments, but there are few amenities in that area, you might struggle to find tenants. On the other hand, if you transform a warehouse in a worn-out and neglected area into a mixed-use property complete with restaurants, cafes, a supermarket and housing, you’re much more likely to attract people.

Size also matters. Some industrial properties are huge, which might make them prohibitively expensive for the average developer or small business to manage. The larger the property is, the more it will cost to purchase, renovate and maintain.

 

Tips for Revitalizing Commercial Real Estate

Once you’ve found a commercial property you think is ideal for renovating, how do you decide what to use it for and how to do you prepare it for that use? There are some things to consider when repurposing commercial real estate — including playing to the strength of the building and its amenities and dealing with the inevitable setbacks and delays.

 

Planning

One way to determine how you’ll repurpose a building is to examine the surrounding area carefully. If you intend to renovate a shuttered school in a residential area, one option might be to transform at least part of the school into condos or apartments. You might also include retail shops and restaurants in the building to make it more appealing to potential tenants.

Paying attention to the structure of the building and its needs will help plan a renovation project:

  • Play to the Building’s Strengths. Older buildings have lots of architectural details and features you just won’t find in newer construction. Those details are usually the things tenants desire. For example, if your building has lots of old wood and exposed beams in the ceilings, keeping those intact will be a selling point with tenants. The same goes for high ceilings, large windows and pressed-in ceilings and molding.
  • Natural Light Considerations. Most people enjoy working and living in environments that provide abundant natural light. The great thing about older warehouses is that they often have large windows that let in plenty of sunlight. Some buildings, such as older office buildings and schools, might not have enough natural light or might have interior areas with no windows at all. If that’s the case, you might need to rethink how you’ll upcycle the building. It might be better suited for a different purpose or you might want to pass on it entirely.
  • HVAC, Plumbing, Electrical and Tech Updates. Although repurposing an older building is often less expensive than building a new one from scratch, there are cases when the required updates add to the cost significantly. If a building lacks adequate plumbing, cable, internet connections or electricity, it might cost you a pretty penny to update it. Along with a plan for installing any necessary electrical, HVAC, plumbing or other tech connections, you need to have a plan to keep them up-to-date and functional.

 

Finances and Loans

Another thing to consider when planning a makeover for an existing property is how you’ll finance the renovation. Although you might be able to cover the cost of renovating the property out of pocket, taking out a loan for renovations or updates might help you manage your cash flow better.

Commercial real estate loans are available in a variety of configurations. If you already own the property, you might decide to apply for a construction or renovation loan to cover the cost of the project.

If you don’t yet own the property, a commercial mortgage — with additional funds to cover the cost of the renovation — might be the way to go. Whether a mortgage is the right option will depend on how much you have to put down and your credit history or financials. Depending on the size of your down payment or your credit history, you might not qualify for a loan big enough to cover the acquisition cost and the renovation cost.

Another loan option that might be right for you is a commercial bridge loan. Usually, commercial bridge loans are reserved for borrowers who have completed similar real estate projects and who have some experience under their belts.  The loan is designed to give certain borrowers a leg up in the negotiation and purchasing process. If the seller of the property prefers all-cash buyers, applying for and obtaining a bridge loan can give you the assets you need to compete even if you don’t personally have the cash on hand.

Once you purchase the property, you should be able to refinance the bridge loan into a conventional commercial mortgage. Compared to your typical mortgage, the terms for bridge loans are very short — often less than one year. The interest rates offered on these loans also tend to be considerably higher.

 

Dealing With Setbacks

When you’re renovating an office or warehouse, something is bound to come up. If there’s one thing you can count on in commercial real estate, it’s that there will be a setback or two. Although you won’t be able to plan for specific delays, having some room in your timeline and budget for unexpected issues lets you roll with the punches.

For example, it’s a good idea to plan on an additional 10 or 20 percent to the expected cost of the project. That way, you won’t be scrambling to make up the difference if there are unexpected costs or delays.

It’s also a good idea to add some time to the timeline. Leave space between your anticipated completion date and the target completion date. If your project ends up taking longer than expected, you won’t need to reschedule grand openings or other events.

 

Examples of Repurposed Commercial Real Estate

Repurposing commercial real estate isn’t a new concept. In fact, there are great examples all across the country of old buildings given a new lease on life:

  • Bok School in South Philadelphia. Bok is a former technical high school located in South Philadelphia. The school closed for good after the 2012-2013 school year and the building sat empty while the school district looked for a buyer. In 2015, a development company purchased the school with the goal of making it into a “creative hub.” One of the first projects to come to Bok was the opening of rooftop bar called Le Bok Fin (after Le Bec Fin, a renowned restaurant in the city). Slowly but surely, new tenants began to fill in the empty classrooms at the school, including a wedding planning company, hair salon and a furniture design company.
  • The Pearl in San Antonio, Texas. The Pearl was once one of the largest breweries in Texas. Today, it’s a massive mixed-use community with 13 retailers, residences, a hotel and a farmers’ market. You can still find Pearl beer at the complex, but today it’s brewed in Fort Worth.
  • The Cotton Gin Factory in Atlanta. Located in the Atlanta Metro area, the Cotton Gin Factory was built in the 19th century. It’s made up of 12 buildings and sits on 12 acres. Two developers bought the property in 2010 for $8 million and transformed it into an arts hub with performance space and artists’ studios.
  • Alehouse Inn in Portsmouth, New Hampshire. The Alehouse is another former brewery that’s been transformed for the 21st century. The hotel is located in the old warehouse for the brewery, which closed in 1917 thanks to Prohibition.
  • The Century Building in Pittsburgh. The Century Building is a 12-story, 80,000-square-foot former office space in the Cultural District of Pittsburgh. In 2012, the building was transformed into an apartment complex with 60 units. Twenty-eight of the units were designated as “workforce” units and are now rented by people who earn between 60 and 120 percent of the median income in the city.Developers completed the renovation using a mix of grant money from private organizations like the Richard King Mellon Foundation plus funding from Pittsburgh Cultural Trust and federal low-income tax credits. It received the Jack Kemp Workforce Housing Models of Excellence Award in 2012 for providing housing options that meet the needs of the modern workforce.
  • The Arcade in Providence, Rhode Island. The Arcade is one of the country’s oldest indoor shopping malls. Its redevelopment project kept the first floor as a shopping center but transformed the second and third floors in micro-lofts, which are small and energy-efficient living spaces. The first tenants moved into the 48 micro-lofts in 2013 and demand has been high ever since, despite the fact that the lofts don’t include stoves or many of the other amenities people typically look for in a residence.

 

Search for Your Property on CommercialSearch

How do you plan on repurposing a commercial property? Whether you hope to turn an office space into apartments or a warehouse into artists’ studios, browse the listings at CommercialSearch and find your next real estate project today.

The post Repurposing Commercial Real Estate appeared first on CRE Blog | CommercialSearch.