Simply put, investment sales in commercial real estate are the disposition of income-producing properties, also referred to as leased assets. The Sharko|Weisenbeck|Mendoza Group is a highly focused team of brokers working exclusively on the sale of multi-tenant and single-tenant retail, net leased, and medical assets.
Transactional vs. Advisory Brokerage
Every asset has unique variables that alter the property’s value. In an ever-changing market, it is particularly important to regularly assess those variables and create a catered approach to assist in understanding, maintaining and creating value. We don’t just sell, we advise.
Deciding whether to buy, sell, hold or refinance should be a conscious decision based off a strategic review of many factors.
We May Advise You To:
Hold the Property:
- Tenant is highly successful
- Location is irreplaceable
- Rent is below market
- Debt options are advantageous
- Impending lease extension or re-negotiation
- Estate planning, i.e. taking advantage of a stepped-up basis
- Improving submarket, i.e. in the path of growth
- No alternative use of the equity
- Encumbered by long term debt
Refinance the Property:
- Pull out equity
- Impending increases in interest rates
- Secure long term debt
- Increase cash flow through a lower rate, longer amortization
- Increase equity position through faster principal paydown
- Change in recourse structure, i.e. full, partial or non-recourse
Sell the Property:
- Added value through a new lease or extension, renovation, etc.
- Diversify into other markets or multiple properties
- Increase your true return on equity
- Submarket changes
- Confidence in sustainability and/or growth of income stream
- 1031-Exchange into a More Profitable Investment
- Sale-Leaseback
- Debt market uncertainty
- Uncertainty with a Tenant
- Lifestyle Change and/or Estate Planning
- Asset has been completely depreciated
Why Invest In Commercial Real Estate
- Investment Diversification
- Attractive returns
- Steady or increasing cash flow
- Asset appreciation
- Tangible/hard asset with intrinsic value in both the land and the property
- Hedge against Inflation
- Improve returns with the use of debt/leverage
- Tax Benefits i.e. depreciation, interest deductions
Lease Details That Can Affect Value:
- Lease Type: Net, Double-Net, Triple-Net, Gross, Modified, Ground
- Credit/Strength of the Guarantor
- Right(s) to Terminate
- Exclusion Clauses
- Rental Increases
- Comparable Rents in the Area
- Length of Lease
- Existing Debt
- Option Terms
- Co-tenancy Clauses
- Right to Assign Clauses
- CAM Stops
Suggested Items Needed for a Complimentary Analysis:
There are many factors that go into deciding the price of a property. Our team suggests supplying our agents with the following items for the most accurate assessment of your property:
Minimum Requirements:
- Leases and any amendments (a detailed rent roll may suffice for the initial valuation)
- Most recent full calendar year Income & Expense statement
- Reconciliation Statements – CAM & Real Estate Taxes
- REA/DCCR (if the property is subject to one)
- Age and general condition of the roof, HVAC units, and parking lot
- Notice of any accounts receivables/delinquent tenants
- Tenant financials (unit level, company level)
Ideal Requirements (for as accurate of an analysis as possible)
- Phase I and/or other pertinent environmental related documents
- Survey
- Leasing Plan
Buyside Representation
Our team is very well equipped to assist investors in canvassing the market for suitable acquisition opportunities, and working alongside them to vet each asset to determine which one(s) fit their specific needs and objectives. The market is full of options and alternatives, and identifying the right buying opportunities requires a critical and educated eye. Let us help you sort through the possibilities and determine the appropriate fit(s).