Florida’s warm weather, low taxes, affordable space and quick, easy flights back to the Northeast have many Wall Street companies abandoning cities like New York for the Sunshine State. Companies like Elliott Management, Citadel and Goldman Sachs Group Inc are just a few to say they will open satellite offices for a location close to the beach. For commercial real agents, this is dream come true. Find out more about this positive pandemic trend by clicking here!
If you are planning to invest in commercial real estate, there are a few terms you absolutely must know before you begin. These terms – and their acronyms – are at the heart of every commercial real estate investment you will come across. The following is a compilation of some of the most used commercial real estate terms and their acronyms.
ROI – Return on Investment. ROI is the ratio which measure net profit versus the cost of the investment. The higher the ROI, the more profit you are making.
LOI – Letter of Intent. LOI is an acronym for letter of intent, which is a document expressing the intent of each party in a real estate agreement. It is not a legal binding contract, but helps to avoid misunderstandings between both sides.
CAM – Common Area Maintenance. CAM charges are the charges paid by the tenant for the upkeep of the property for use and benefit of all the tenants.
LTV – Loan-to-Value. LTV is a ratio used to asses lending risk that financial institutions and other lenders use to approve a mortgage. Loans assessed to have a high LTV are considered higher risk and therefore have a higher interested rate on the mortgage loan.
DCR – Debt Coverage Ratio. DCR measures the ability to pay the property’s monthly mortgage payments from the cash generated from renting the property.
NNN Lease – Triple Net Lease. A NNN lease is when the tenant typically pays a base rent plus an additional amount for property tax, insurance and maintenance costs.
NOI – Net Operating Income. NOI equals all revenue from the property, minus all reasonably necessary operation expenses. NOI is used to calculate the profitability of income-generating real estate investments.
USF – Usable Square Footage. USF is space you can actually occupy. Generally, hallways, stairways, bathrooms and storage rooms are not calculated in USF. However, if you rent an entire floor, then these areas may be included.
CMA – Comparative Market Analysis. CMA is the process of determining an investment property’s value by comparing it to other properties similar in size and amenities.
REIT – Real Estate Investment Trust. A REIT is a company who finances, owns, manages and operates income-producing investment properties.
About Cohen Commercial Realty, Inc.
Cohen Commercial Realty, Inc., is a full-service commercial real estate brokerage firm dedicated to fulfilling client needs quickly and efficiently throughout the South Florida market and beyond. Our property management team combines knowledge of the market and client needs with expert marketing, research and specialization. This is the reason so many owners and investors choose Cohen Commercial to handle their commercial real estate transactions. Contact Cohen Commercial today! http://www.cohencommercial.com/index.html
Good news! Signs of a revival for the commercial real estate market have emerged. Not only have prices increased 1.4%, but there has been a 37% increase in investments for the third quarter from the prior three-month period.
To read more positive news, click here:
Congratulations! You’ve purchased a commercial property and are now officially considered a landlord. Managing a commercial property can be a lot of work. It’s a good idea to look for an experienced, professional property management company to help oversee your commercial property.
Here are 4 reasons why you want to choose a property management company to run your commercial property:
Protects Your Investment. Real estate investors all agree, working with a good management company is the best way to protect your investment, and in the end, can add value to your investment. An experienced management company that’s been in business for years will have seen it all and will know how to handle any problems that arise. Most likely, they can take better care of your property than you can from both the physical aspect as well as financial. Reputable management companies are skilled at forecasting, budgeting, cost negotiations, and the best management companies will have an educated, experienced Accounting staff to support.
Managing Tenants. An experienced property management team will handle all aspects of the landlord and tenant relationship. They will screen tenants to ensure they can meet their financial obligations, handle routine and emergency tenant services, as well as collect rent payments. They are also experienced in tenant lease negotiations and tenant retention. Quality customer service and communication can help decrease tenant turnover.
Marketing and Advertising your Property. Vacant space at a property is a drain on your investment. Experienced property managers are adept at supporting the sales and marketing efforts to keep vacancies at a minimum.
Less Stress and More Time. A company with years of experience will save you a ton of time and spare you all the headaches that come with trying to manage the property yourself. Experienced property management teams use industry-specific software and are highly skilled and organized. They will be able to streamline everything from emergency response, paperwork, inspections, bookkeeping, and many other tedious and time-consuming property management tasks.
About Cohen Commercial Realty, Inc.
Cohen Commercial Realty, Inc., is a full-service commercial real estate brokerage firm dedicated to fulfilling client needs quickly and efficiently throughout the South Florida market and beyond. Our property management team combines knowledge of the market and client needs with expert marketing, research and specialization. This is the reason so many owners and investors choose Cohen Commercial to handle their commercial real estate transactions. Contact Cohen Commercial today!
This is shaping up to be a unique year, but unique problems mean unique opportunities. Here are 3 ways real estate investment is changing and how that should impact your strategy.
|2020 is only the second time in history, the first being 2005, the National Hurricane Center has had to turn to the Greek Alphabet after running through the list of storm names for the season. If the rest of the season is even half as busy, do you feel prepared? Now is the time to get your business ready.|
|Click here to download FEMA’s Ready Business Hurricane Toolkit.|
The pandemic is expected to change the commercial real estate community, but some developers and investors are keen to seize the chance to convert those properties into other uses.
Some retail, hotel and office space shifts developers are already planning to convert empty properties to new uses. Are you wondering what these developers have planned? Click below to see what the future holds.
Have you ever wondered what a Ground Lease is? A Ground Lease can be a little tricky to understand because you are actually leasing the land that your commercial structure sits on. While you own the building, you don’t own the land under it. Still confused? Click below to explore the pros and cons to this type of lease.