Monthly Archives: March 2016

Mistakes to Avoid in Commercial Real Estate

2018-12-19T12:43:40-08:00

Life is full of mistakes and learning experiences, and commercial real estate investments are not immune to these trials and errors. INCO Commercial works thoroughly to ensure a smooth transition and avoid detrimental mistakes, providing guidance and employing our expert knowledge every step of the way. Though we’ll be working hand in hand with you on each deal, here are five things to keep in mind as you make your way through the process.

Don’t Be Afraid to Rely on Your Team

Even with a commercial real estate deal that poses few challenges, the process is still incredibly involved, possibly intimidating, and one requiring a meticulous eye. Having a team like INCO Commercial behind you every step of the way will save you the time, trouble and worry of having to face this process alone or with an inexperienced person. Whether you’re a seasoned investor or just starting out, having expert agents working closely with you will help streamline the process, in addition to ensuring all of the fine print is covered. An INCO agent will work with you to thoroughly understand your requirements and goals for your next investment, and with their extensive knowledge of the local area, will match properties that best fit your needs.

Lack of Due Diligence

The last thing you want to find out after you’ve solidified your deal is that your property has unexpected structural issues, or you’re limited because of zoning restrictions or other land-use regulations, or there are problems with the title, for example. This is why it is extremely important to perform due diligence on the property before committing to a deal. It’s definitely worth the cost in the end to have not only the physical property thoroughly examined, but its history, the survey, down to important documents such as the leases (with any exhibits and attachments), insurance policies, and title policy. For a commercial property with tenants, copies of concessions made to tenants, rent roll, financial statements, credit information and reports from tenants, are just some of the items to review.

INCO Commercial can help you outline the entire process and cover every detail. We realize that proper due diligence can truly help you make an informed decision on the property and help prevent you from dealing with unexpected surprises/expenses down the line.

Awareness of Local Market Conditions

Paying attention to local market performance can give you tremendous insight on the success of your upcoming venture. A great property in an area with declining demographic trends will do little or nothing for you; that’s why it’s necessary to have an overall picture of the property within its context. However, even if you have limited knowledge of the local market conditions, this is where our INCO Commercial agents truly shine. Our compassionate agents possess extensive knowledge and dedication to their fields. We’ll be sure to compare your interests with a particular property to current and projected trends for maximum profits and benefits.

Mis-Managing Finances or Being Overleveraged

Managing your finances to avoid financial disaster sounds like a no-brainer, but it truly requires the meticulous attention of watching each expense or dollar that crosses your business path and making realistic profit projections. After you’ve evaluated your finances for appraisals, surveys and other due diligence-related matters; don’t forget the taxes and closing costs, not to mention any costs for repairs, replacements, and upgrades. Identify what kinds of improvements can be made on the property that could potentially help with the cash flow of your business, and which features could hinder profit.

Make sure you have considered all of the financial figures concerning the operating expenses. Knowing which are hard figures and which are pro forma – even a given CAP Rate could be pro forma – will help with realistic financial projections.

Additionally, if you have other properties, be careful not to over-leverage your investments. It’s common to leverage in property acquisitions, for both beginning and seasoned investors, but again, watch your numbers. Having those real operating expenses from the property’s performance history can help keep your predictions and expectations realistic.

Evaluating Your Risk

If you’re investing in a property where you’re depending on tenants to fill the spaces, there’s always a chance that your tenancy will not fill as quickly as you had anticipated. INCO Commercial will be sure to analyze other similar properties in the area and evaluate the length of time it took for their vacancies to fill. This can help give you an idea of how your property will perform, but remember, each location will obviously have a slightly different dynamic.

Be sure to have a plan in place if your venture is really not panning out as you had hoped. While the ideal is that it’s not necessary, an exit plan strategy provides a safety net for an investment that may not work out. Also, ensuring that there are enough finances to cover a time when an unexpected expense may arise; a major repair, or a tenant vacating sooner than expected. Be sure that your sponsor is able to cover you in a time where you may need more financial coverage than expected; a major repair or a tenant vacating sooner than expected.

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These are a few things to keep in mind with your next commercial real estate venture. INCO Commercial will provide you with the assistance you need to close your next real estate deal. Explore our website to view our commercial real estate inventory, as well as our retail and restaurant inventory. Check out our Contact Page to fill out an inquiry or find the INCO phone number and location closest to you! We look forward to welcoming you to our INCO community.

Mistakes to Avoid in Commercial Real Estate2018-12-19T12:43:40-08:00

5 Trends in Commercial Real Estate for 2016

2018-12-19T12:43:40-08:00

The Commercial Real Estate, or CRE sector appears to have a stronger foothold in comparison to previous years.  Investors are seeing increased performance across all property types and markets as the US market is picking up speed again. Even with these encouraging signs, it’s understandable for investors, especially new investors, to be overly cautious or reluctant. With INCO Commercial, we can help alleviate your fears with a comprehensive approach to your commercial real estate investments. Our expert agents are highly knowledgeable and specialize in the local market and can guide you each step of the way. Though you don’t have to worry about navigating the commercial real estate landscape alone, INCO Commercial has compiled for you a list of 5 trends we expect to see for the 2016 year.

Global Urbanization:

Urbanization is on the rise throughout the world, and especially continues in the U.S. Millenials are seeking access to places to jumpstart their careers, and Baby Boomers are downsizing their homes,  moving towards more urban places of convenience. It has been noted that, the United States urban population has grown by 12.1% from 2000 to 2010, over the California’s total increase of 9.7%. Additionally, suburbs are beginning to take on a more urban appearance, with mixed-use development and the ability to reach more places in walking distances, versus having to rely on vehicular transportation. As this trend of urbanization continues, it is definitely creating more demand for home, retail, offices as well as other property types.

Unemployment Falls, Demand for Space Rises

With unemployment rates projected to fall below or hover around 5% this year, this is also creating a demand for commercial real estate space in the form of multi-family housing, office space, industrial/distribution space, and even retail spaces. The growth in job opportunities and income has created an optimistic mood for California, and reveals continued confidence among developers, as noted by the latest Allen Matkins/UCLA Anderson forecast for commercial real estate. This job and income growth has also limited the supply in office spaces, to which developers have happily answered with starting new projects, and projecting even more for 2016.

Spike in Interest Rates:

Interest rates look to increase this year; though predictions can vary greatly, it is more likely that the Federal Funds Rate (FFR) will increase at least to 1% this year, along with the treasuries of 10 years moving slightly higher towards 3% mark. There are varieties of variables responsible for the interest rates being low for now, like the strong dollar as well as low inflation. However, the Fed is likely to proceed with caution and examine the consequences of any action before implementing something that would stir current economic growth trends.

Increased Capital Flows:

Increased international capital into the U.S. market will likely continue and even increase. The U.S. real estate market is viewed as the most stable and secure marketplace, making it an easy option for many investors. According to the research company, Real Capital Analytics (RCA), 2015 saw foreign purchases alone of U.S. real estate assets increase to $62 billion, with Canada, Norway, China and Singapore as the countries with leading investors. These types of investments are only expected to increase in 2016.

Shifts in the Use of Retail Space

Clothing and department stores used to dominate the retail landscape, but lately we have seen the fall of even some of the major retailers. JC Penney, Sears, Kohl’s, and Kmart, to name a few, are among those closing their stores. Despite these trends, there is an anomaly named Amazon who successfully opened their first retail storefront last fall, and project opening more in the future. Some analysts predict that many successful retailers will continue to offer a combination of physical stores and online experiences as well. Many retailers are also transitioning their space from simply a place to buy merchandise to an all-around experience for the consumer.

However, for those traditional retailers closing stores and leaving vacancies, we are seeing an increase in other industries occupying these spaces. Technology-based stores do well since their products are in demand, and profits easier to turn with the more expensive price tags. Health and fitness are consistently popular trends, and many gym, activity, and fitness centers have capitalized on people’s continual quest for physical self-improvement.

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With the overall 2016 forecast looking like a successful extension of 2015, let INCO Commercial take your investment goals to the next level this year!  INCO Commercial works with each client to assess and evaluate their business goals and objectives, and find the opportunities to best suit their needs. Our affiliated services, CORE Property Management and IMC Municipal Consulting can also assist in handling full-service property management or real estate advisory services, respectively. Visit our contact page to fill out an inquiry form, or find the INCO location most convenient for you and give us a call!

5 Trends in Commercial Real Estate for 20162018-12-19T12:43:40-08:00

Leading Commercial Real Estate Company Welcomes New Agents

2018-12-19T12:43:40-08:00

Press Release: Leading Commercial and Industrial Real Estate Company INCO COMMERCIAL Welcomes New Agents 

This morning, an INCO Commercial press release featured our newest members to the team. We are enthusiastic that our new additions mean INCO Commercial can extend our reach even further throughout the Long Beach, Irvine and Riverside communities, and continue to provide our clients world class service. We look forward to promoting even more success and growth with our newly-expanded team!

Click on the link below to view the full press release.

Leading Commercial and Industrial Real Estate Company INCO COMMERCIAL Welcomes New Agents To Provide Better Service to the Community

Leading Commercial Real Estate Company Welcomes New Agents2018-12-19T12:43:40-08:00