A few weeks ago I had the privilege of teaching with one the CCIM Institute’s most experienced and knowledgeable instructors. He has spent a career mastering one of the most important, and often overlooked, components of commercial real estate analysis: identifying and quantifying demand.

He says that demand for space is 80% of the real estate decision and that financial analysis is the other 20%. Too often, investors and users focus on the 20% without really digging into what drives the numbers, who’s going to be using the space, and why the proposed use makes sense.

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An investor asked us to give him a rental rate that would quickly lease his vacant space. The problem with this question is that it’s only half the problem. The other half of the question should be:

“At what rate would you recommend I quote in the market to lease my space quickly while maintaining my debt service coverage ratio and building a long term positive cash flow?”

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When successful commercial real estate investors lease their commercial real estate to a tenant of varying creditworthiness, they adjust for risk by altering rental rates, security deposits, guarantees, and improvement allowances, not the fees they pay commercial real estate brokers.

Often, commercial real estate investors confuse the tenant’s risk associated with the commercial real estate broker’s fee.

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Many of you would like to close more commercial real estate deals but see your commercial real estate opportunities crushed when the first agreement is circulated. The problem is that too many commercial real estate investors make the mistake of mishandling the transition of the meeting of the minds….

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Working with a commercial real estate broker is not for everyone. Commercial real estate investors and tenants choose not to hire a commercial real estate broker for several reasons. Here’s a free checklist for you to use the next time you’re wondering whether hiring a commercial real estate broker is really for you.

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