Commercial Estates

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Should I increase my rent? How much is justified ?

Assuming your rental property is in the best condition inside and out, a reasonable increase starts at $200-$300 above market rates. If there are no takers for at the first week to half a month, then try lowering it to $150-$250 dollars above market rates depending on the unit size. You don’t have to go penny pinching when it comes to your rental property improvements because done wisely, they guarantee a return on your investment. You don’t need to have a mediocre rental property to pay for itself and provide you with a sizeable income. Contented and well pleased renters stay with you on a long term basis and on top of that, they are willing to part with a good chunk of their money just to stay in a great living space.

Like all the other sectors in the properties market, the commercial real estate market is feeling the effects of the housing lending disaster. Vacancy rates for retail, office and industrial properties are rising. With the decrease in rental income, building owners are finding it hard to generate enough income to pay off mortgage loans. Some lenders are beginning to put foreclosed properties on the market. Tighter credit has slowed the sales in the urban property market. Reis Inc., a New York-based real estate research firm, recently estimated that nationwide prices for office deals were down 11 percent from last year, while retail property prices were off 4 percent and warehouse property prices were down 7 percent. Foreclosed property is now being offered at substantial discounts, way below the lots’ original prices. There’s no indication that the market will be improving soon, so debt restructuring might be a better solution to the real estate problem.

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Lease Vs Buy
Many businesses reach a point in which they are curious as to whether it would be beneficial for them to purchase a building rather than continue to lease space. While every business is different there are a few common factors that should be taken into consideration when evaluating whether buying a building space would be better than continuing to lease space. We will take a look at some of the pros and cons to purchasing compared to continuing to lease space.

The Next Step While the evaluation of the leasing vs. buying space decision seems somewhat overwhelming, there is help.  Getting advice and assistance from a commercial real estate professional who is involved in the business day in and day out can significantly improve not only the accuracy of any analysis, but in general simplify the process.  Many of the lease vs. buy factors can only be decided by you, but having a helping hand in the areas where space expertise is important will assure you of making the best possible decision.

San Francisco will be seeing an additional 3 million square feet of new office space in the years 2008 to 2011. This is forecasted as the biggest increase in new office space since 1985 and with the approval of residential units in the permit stage; an additional 45,000 new condominium units will be available for occupancy in the same period.

The Real Estate Investment Trusts believes that San Francisco can sustain rents as high as $100 per square foot by the year 2009. This may seem high but it actually represents only half of the projected rental rate in New York during the same period.

Commercial property in the strictest sense is real estate that is acquired with the intention to use as a profit generating business like a shopping mall, office complex, restaurants, service stations and the likes. The property may be purchased by the developer outright or leased from a bank or an individual property owner. Commercial is in some aspects distinct from industrial and residential properties.

A commercial property falls under the regulation of the zoning system of the city or town which has jurisdiction over it. When a commercial property extends to a different zone, it has to secure special permits from the appropriate agency to allow its operation in the different zone.

They have just completed development of their fourth industrial building, the South California Logistics Centre in Victorville Califronia and theya re now in the process of securing a LEEDS certification from the environmental board. LEED cvompliant buildings are mainly environmentally friendly buildings that minimize taxing the environment and have active measures to do so. The facility has large skylights that minimizes the need for lightin in the daytime and has totally energy efficient lighting fixtures installed within them. They have also recently completed the Global Access Business Center which is similarly rated as a Class-A facility with better, more efficient environmentally friendly buildings that cater to the needs of companiues such as Newell, Rubbermaid, GE, Pratt & Whitney, FedEx, Goodyear Tires and Rubber Co., M&M/Mars and may other multi-national firms as they seek better greener facilities in green developments that have begun to sprout all over the US.

In efforts to recover from the devastation that resulted from the 9-11 attacks on the US mainly in Manhattan where the World Trade Center Buildings stood, the New Yorn and New Jersey Port Authority (which owns the land on which the new Freedom Towers are being built on) have released a statement that Beijing Vantone Real Estates has expressed a nonbinding agreement to lease property on the Freedom Tower which is steadily rising from the ruins of the former WTC.

Port Authority chairman Anthony Coscia said, “China Center’s expression of interest in the Freedom Tower, even before we begin our formal leasing program, strengthens our conviction that the World Trade Center site is a world-class business location. Serious interest from the China Center is a major milestone in our efforts to secure Freedom Tower tenants from around the world.”

This boosts the confidence of developers that the Freedom Towers is to become a viable commercial space for many global businesses that they are seeking tenants for.

Developemnts such as the one planned for Lowry Range, Colorado is currently getting more attention as more and more businesses go green. Viability studies are under way by Lend Lease Communities, their planned community would sport a solar generation facility that would provide for part the community’s energy needs. The proposed mixed use development is hailed to be one of Colorado’s first green development projects that would place them as one of the country’s green communities as we aim to become more environmentally-friendly starting with our communities.

They were taxed heavy during past hurricane seasons with losses amounting to billions in terms to property damage. This year, even with the 2008 hurricane season forecast still very well unknown, they breathe a sigh of releif for the past three years has been good to them with not much of the monster storms that damaged most of their properties in the Florioda area. They are hoping again for good conditions this year as they start to recover from their problems. They just hoep they get away with it again for another year of profits to aloow them to recover fully from the huge amounts of cash they lost due to storm damage.

Donald Trump, one of the US’s leading commercial developers turned TV celebrity has spoken on the current status of developemtns in the US and says that the opportunities for world-class developemtns has moved overseas in such areas that are still to see the cutting-edge developments that most US city’s already have.

“The problem that I see with the United States is that we’re no longer respected, we really aren’t,” lamented Trump, pointing out that there is plenty of blame to go around, starting with the political leadership. “I think that [perception] can be changed. We have the greatest people, the greatest businesses.”

We now hear of cutting edge and fast paced developments in Russia, China and India where the happenigs have shifted to and he blames the government for that eventuality.

The problem is that the U.S. has diplomats negotiating trade agreements with China and Japan, not seasoned business professionals and deal makers, argues Trump. “I’ve watched this for years, where Japan would just rip us. By the way, they [the Japanese] tell me, ‘I can’t believe we’re getting away with it.’” It’s much the same with the Chinese, says Trump.

Excerpts from NREIOnline.com, one of the leading real estates news portals around.