Opinion of Value
It’s Time for Your Opinion of Value
When you own property, you must stay up to date with 1) the underlying leases value and expiration, 2) debt financing rate and maturity date, 3) the market cycle, and 4) your investment horizon.
These four pillars of your investment platform determine your success. Not to mention new tax laws. Most clients have me prepare a Broker Opinion of Value for them annually. Get yours today.
The top items we contemplate in preparing an opinion of value are:
- Current in place lease rates, terms, rights, responsibilities and history
- Market rents, leasing sentiment, absorption figures, market cycle timing data and analysis
- Market, income, and replacement cost approaches to value
- Capital expenses, property condition, deferred maintenance
- Higher and best use of the property and potential value-add opportunities
- Competing property, recently sold comparable property, and transaction environment analysis
- Potential sales platforms and approaches
- Prospective buyer pool analysis
- Lending environment, maturity date and interest rate analysis
Clients benefit from the synthesis of the above factors into a coherent property strategy to maximize values and proceeds from sale when relevant. We pride ourselves on cutting-edge research, marketing and technology in order to ensure our clients make informed decisions and that we deliver on the decided upon strategy with confidence and peace of mind.
You have no need to relocate. In fact you know you want to stay in the same building for the foreseeable future. If your landlord knows that too, who do you think will get the better deal? While lease renewals do not need to be adversarial, they do need to be balanced.
Our comprehensive lease renewal process ensures that you are afforded all of the opportunities that a new tenant to the building would gain when they move into the project. In today’s economy, your work space is one of your greatest assets for attracting top talent. We can help you utilize your lease renewal as an opportunity to enhance your bottom line while creating a positive environment that breeds success.
Whether you are relocating across the hall, across town or across state lines, we understand the importance of site selection. What is your incentive to choose one location over another? How does each decision impact the future performance of your company? What office or warehouse is best suited for your company to drive revenue?
In competitive markets, speed to market is critical. Can you identify and secure the right location when demand outstrips supply. Seconds matter. It pays to have an advocate that can deliver speed to market in order to capitalize on opportunities. The difference between locating a new facility in time and being forced to renew or holdover can cost tens to hundreds of thousands of dollars on one location.
How far out do you typically think through your strategy and approach with your current landlord? Once engaged, we keep a constant temperature of the leasing environment surrounding your locations. Is it possible your landlord sells the property to a new investor during your current lease? How about your next lease? How would that affect you? Do you have time to relocate if you needed to? Does your landlord know that? How many options do you really have? What is your cost of moving? Will other landlords subsidize your move?
We create options for you so that you are driving the discussion. We create options before you need them so that your organization can remain nimble enough to capitalize on opportunity when it presents itself. Send us one of your leases and we can show you what is possible. You may have savings in your current lease that you aren’t even aware of.
There Are Many Types of Investors
Many property owners are business owners who have acquired property for their business, recently sold their business and now have an investment vehicle.
Others are professional investors who acquire property through LLC’s by themselves, with their families or with like-minded investors.
Lastly, there is the institutional crowd. Institutional investors are pension funds, insurance companies and private equity funds. These three investor profiles all have unique needs and motivations.
Business owners prioritize business operations when evaluating a property. They may use the property as a retirement vehicle, to finance their business acquisition needs or enhance the image of their business for an eventual sale of the business.
Professional investors have an acute sense of value, acquire opportunistically and scrutinize cash flow. They keep a close eye on tenant improvement allowances and trade free rent in lieu of tenant improvement in many cases. One must be mindful when matching their lease terms with their financing maturities.
Institutional investors are conservative and cautious. They ensure that they maintain their properties in first class condition and are often the first parties to be able to raise their rents and the last to lower them. They prefer Class A and B assets although many have set up additional funds for riskier value-add investments.
E-Commerce is growing at 15%, industrial rent growth is hovering around 6% annually, and vacancies are lower than any point in the last cycle. Big buildings and smaller units keep pushing rents. Now is the time to harvest investment returns and reinvest profits into larger assets.
While Industrial assets are not cheap, there are deals to be had.
We track all major markets and can find property for your portfolio. If you are an investor, we want to hear from you. What do you want to buy? What do you have to sell? Not in the real estate market and want to be? I’d love to chat and have access to opportunities to buy, co-invest, and borrow.
Do you have a specific property in mind that you would like to discuss? Contact us today.