by Prince Licaylicay | Mar 24, 2020 | All Articles, Leasing
The unsettling market has expressed wide concerns for Landlords as tenants have reached out about subleasing their space and downsize their footprint. If you are a landlord have you received this call yet? As a Commercial Broker, I have. Many Landlords are dropping their rates to get space filled quickly in an effort to stem the competition from their own tenants about subleasing their space. It’s bad enough when the building across the street is a direct competitor to your building but when the Landlord’s tenants become competitors it always ends badly for building owners. Are you a Tenant, playing offense? Have you read your lease? Do you know what your options are and do you temporarily plan to down-size space? Your options will depend on the specific contract language and local laws. Contract language over the recent years have adapted to include “epidemic” or “Pandemic” scenarios, does your lease cover this? You might have a clause in your lease called, “Force ma-jeure” most commonly defined as unforeseeable circumstances that prevent someone from fulfilling a contract, is COVID-19 covered?
With more local governments mandating a city and state wide lock down of “non-essential business” this is pushing people into isolation, job losses are becoming more widespread across industries, and demand for office space is diminishing quickly. Since my last post on Friday referencing, “Should companies still expect to pay rent” I’ve received calls from Tenants seeking rent relief and Landlords not knowing what to do. In a recent article by CoStar it is estimated that the demand for subleasing space has risen 39% to 13.9 million square feet since March 13th and it’s only a matter of time before we see this number increase.
If you have questions about your lease or if you are a Landlord and need someone to work on your behalf to re-negotiate your lease with your tenant, please contact us directly.
Even after outlining all the information above, investing in CRE can still seem daunting. That’s why the Leveraged CRE Investment Team at Commercial Properties, Inc. is here to help you achieve your investment goals. Contact us at (480) 330-8897 or send us an email at request@leveragedcre.com.
Need help on how to get started investing in commercial real estate? We got you covered! We prepared a free e-book that will serve as your guide to achieve your long-term business goals or obtain that property you’ve always been dreaming of!
Phill Tomlinson is a commercial real estate broker with Commercial Properties, Inc. (CPI) in Scottsdale, Arizona, and owner of the Leveraged CRE Investment Team specializing in investment sales and tenant/landlord representation in the Phoenix and Scottsdale submarkets. Phill applies over 21 years of experience in the Real Estate industry helping investors and owners maximize their returns.
Bookmark www.leveragedcre.com to learn more about the Commercial Real Estate market and keep informed of relevant real estate strategies designed to maximize your income property investment results. Connect and follow Phill on Social Media at sm.leveragedcre.com/smplatform. #LeveragedCRE
by Phill Tomlinson | Mar 18, 2020 | Blog
My wife and I, along with 100 other commercial brokers, were at the CORFAC International CRE Conference in Mexico at the beginning of March. We missed the effect of the virus by only a week and half. In that short amount of time things have transitioned into a different world – a new era (at least temporarily). As I read the article below from Vitaliy Katsenelson, it put things in perspective for me. It is even more relevant now than it was just a couple of weeks ago…nn– Phillnn n
Set Your Egg Timer to 6 Months
nI bought my daughters bracelets at the Venice airport on my way back to Denver. When we changed planes in Frankfurt, I realized I had left the bracelets in the airport gift shop. I was upset for about 5 seconds, and then I remembered a story from The Last Lecture, the book I was rereading for the third time on the flight home. It’s the first-person story of Randy Pausch, a 46-year-old (same age as me) professor who has only six months to live – he has been diagnosed with pancreatic cancer.n
Here is an excerpt:
nOnce, about a dozen years ago, when Chris was seven years old and Laura was nine, I picked them up in my brand-new Volkswagen Cabrio convertible. “Be careful in Uncle Randy’s new car,” my sister told them. “Wipe your feet before you get in it. Don’t mess anything up. Don’t get it dirty.” I listened to her, and thought, as only a bachelor uncle can: “That’s just the sort of admonition that sets kids up for failure. Of course they’d eventually get my car dirty. Kids can’t help it.” So I made things easy. While my sister was outlining the rules, I slowly and deliberately opened a can of soda, turned it over, and poured it on the cloth seats in the back of the convertible. My message: People are more important than things. A car, even a pristine gem like my new convertible, was just a thing.nnThis story actually took place before Randy was diagnosed with cancer. I forgot this detail when I told the story to my brother Alex, which made the point even stronger. Though we don’t think of ourselves as being in Randy’s situation, we all are – we have an expiration date. Randy’s egg timer had been set for 6 months by his doctors (he actually lived for 11 more months). Others of us have our lives suddenly interrupted, like Kobe Bryant, or greatly extended, like Kirk Douglas. We don’t know.nnHow would you live your life if you knew you had just six more months to live? Would you let yourself care about the same things? Would you let yourself be upset about leaving some tchotchkes at the airport? Would you let a stained back seat or dirt on your car upset you? Think about it. Randy died 12 years ago. Where is his car today? Does it have clean backseats? Does it have dents? Does it really matter? The truth is we make a choice when we allow (let) ourselves to value things that are so fleeting and unimportant.nnI keep saying we, but when I say we I really mean me. Before I left for our ten-day European trip, I asked my wife to please not park my new Tesla Model 3 close to other cars, so it wouldn’t get scratched. My wife loves to play a game of finding the closest parking spot to the door of the grocery store, which means she often parks too close to other cars. So she was texting me pictures of my car parked alone on the outskirts of parking lots, with the caption “Your car is scratch-free”.nnIf I knew I had six months to live, would I still have asked her to do this? We objectify things, cars especially. If we had our egg timer set on six months, we’d prioritize what really matters: relationships, inhaling life, walking in the park. We’d reset what we care about, and it wouldn’t be things.nnI don’t know when the buzzer on my egg timer will go off, but I’ll be trying to keep it mentally set on six months (and at some point it will be). And honey, if you are reading this, you can park that piece of metal anywhere you want.nnP.S. The world has changed in a matter of weeks, if not days – schools, restaurants, almost everything is closed. We went from normal life to a surreal world of empty store shelves, quarantines, and socially distancing from others. (Suddenly “social distancing” is part of our normal vocabulary). We are at war; we are fighting an invisible enemy – a virus.n
There is a silver lining in this.
nThough the number of people in the US who have died so far from the virus is less than number of people who died by choking over the same time period, we are reminded about our mortality by the coronavirus death counter on the evening news.nnWe are given a very unique opportunity to divorce ourselves from material things and spend time with our family. To really spend time with them. We cannot go to sporting events, but we can go to the park, ride bikes, play Monopoly. (I can let my six-year-old daughter Mia Sarah beat me in Connect Four for the fiftieth time, just to see her smile). We are given the rare opportunity to prioritize what is most important to us without guilt. The material world is on pause, at least for a few weeks.nn
Vitaliy Katsenelson, CFA
by Prince Licaylicay | Mar 18, 2020 | All Articles
My wife and I, along with 100 other commercial brokers, were at the CORFAC International CRE Conference in Mexico at the beginning of March. We missed the effect of the virus by only a week and half. In that short amount of time things have transitioned into a different world – a new era (at least temporarily). As I read the article below from Vitaliy Katsenelson, it put things in perspective for me. It is even more relevant now than it was just a couple of weeks ago…
– Phill
Set Your Egg Timer to 6 Months
I bought my daughters bracelets at the Venice airport on my way back to Denver. When we changed planes in Frankfurt, I realized I had left the bracelets in the airport gift shop. I was upset for about 5 seconds, and then I remembered a story from The Last Lecture, the book I was rereading for the third time on the flight home. It’s the first-person story of Randy Pausch, a 46-year-old (same age as me) professor who has only six months to live – he has been diagnosed with pancreatic cancer.
Here is an excerpt:
Once, about a dozen years ago, when Chris was seven years old and Laura was nine, I picked them up in my brand-new Volkswagen Cabrio convertible. “Be careful in Uncle Randy’s new car,” my sister told them. “Wipe your feet before you get in it. Don’t mess anything up. Don’t get it dirty.” I listened to her, and thought, as only a bachelor uncle can: “That’s just the sort of admonition that sets kids up for failure. Of course they’d eventually get my car dirty. Kids can’t help it.” So I made things easy. While my sister was outlining the rules, I slowly and deliberately opened a can of soda, turned it over, and poured it on the cloth seats in the back of the convertible. My message: People are more important than things. A car, even a pristine gem like my new convertible, was just a thing.
This story actually took place before Randy was diagnosed with cancer. I forgot this detail when I told the story to my brother Alex, which made the point even stronger. Though we don’t think of ourselves as being in Randy’s situation, we all are – we have an expiration date. Randy’s egg timer had been set for 6 months by his doctors (he actually lived for 11 more months). Others of us have our lives suddenly interrupted, like Kobe Bryant, or greatly extended, like Kirk Douglas. We don’t know.
How would you live your life if you knew you had just six more months to live? Would you let yourself care about the same things? Would you let yourself be upset about leaving some tchotchkes at the airport? Would you let a stained back seat or dirt on your car upset you? Think about it. Randy died 12 years ago. Where is his car today? Does it have clean backseats? Does it have dents? Does it really matter? The truth is we make a choice when we allow (let) ourselves to value things that are so fleeting and unimportant.
I keep saying we, but when I say we I really mean me. Before I left for our ten-day European trip, I asked my wife to please not park my new Tesla Model 3 close to other cars, so it wouldn’t get scratched. My wife loves to play a game of finding the closest parking spot to the door of the grocery store, which means she often parks too close to other cars. So she was texting me pictures of my car parked alone on the outskirts of parking lots, with the caption “Your car is scratch-free”.
If I knew I had six months to live, would I still have asked her to do this? We objectify things, cars especially. If we had our egg timer set on six months, we’d prioritize what really matters: relationships, inhaling life, walking in the park. We’d reset what we care about, and it wouldn’t be things.
I don’t know when the buzzer on my egg timer will go off, but I’ll be trying to keep it mentally set on six months (and at some point it will be). And honey, if you are reading this, you can park that piece of metal anywhere you want.
P.S. The world has changed in a matter of weeks, if not days – schools, restaurants, almost everything is closed. We went from normal life to a surreal world of empty store shelves, quarantines, and socially distancing from others. (Suddenly “social distancing” is part of our normal vocabulary). We are at war; we are fighting an invisible enemy – a virus.
There is a silver lining in this.
Though the number of people in the US who have died so far from the virus is less than number of people who died by choking over the same time period, we are reminded about our mortality by the coronavirus death counter on the evening news.
We are given a very unique opportunity to divorce ourselves from material things and spend time with our family. To really spend time with them. We cannot go to sporting events, but we can go to the park, ride bikes, play Monopoly. (I can let my six-year-old daughter Mia Sarah beat me in Connect Four for the fiftieth time, just to see her smile). We are given the rare opportunity to prioritize what is most important to us without guilt. The material world is on pause, at least for a few weeks.
Vitaliy Katsenelson, CFA
Vitaliy Katsenelson, CFA
Student of Life
I am the CEO at Investment Management Associates, which is anything but your average investment firm.
I wrote two books on investing, which were published by John Wiley & Sons and have been translated into eight languages.
In a brief moment of senility, Forbes magazine called me “the new Benjamin Graham.”
by Phill Tomlinson | Mar 12, 2020 | Blog
Let’s talk about “like kind” in a 1031 exchange. The Internal Revenue Code provides that a taxpayer may sell property and defer the payment of any capital gains tax if that taxpayer uses the proceeds to acquire like kind replacement property. It is always important to share first, section 1031 of the Code states:nnNo gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment.nnSo, in this discussion I want to highlight what “like kind” really means for the seller of an investment held property. The IRS uses this term however it is broader than it appears to be. Like Kind is any property that is “held for investment” or “for use in a trade or business”; meaning the property sold must be exchanged for other property that is also “held for investment or for productive use in a trade or business.” Most sellers don’t realize this now gives them the ability to sell one type of property and buy another. Giving examples, a taxpayer can sell land and buy residential OR one can sell commercial and buy multi-family. As well, sell one and buy multiple and ALL are considered like-kind. The problem is how this term is interpreted, most taxpayers think like kind must have the same characteristics, or like a vehicle, be the same make and model. That is not the case. This term should really just state: … if such real property is exchanged solely for real property of which is to be held either for productive use in a trade or business or for investment.nnWith this being said, a tax payer should always consult with their tax or legal advisors. Knowing the true meaning of like kind gives an investor the opportunity to understand there are many alternatives to diversify with another type of investment real estate in a §1031 Exchange. If you want to know more about the Exchange process or review your options, we are happy to assist.nn
nn
nnSheila Long nnRegional Sales Executive | Old Republic Exchange CompanynnC: 480.341.2032 | T: 480.443.6830 -AZ | T: 818.543.6584 -S.Cal nnSheilaL@oldrepublicexchange.com nOld Republic Exchange | Old Republic Insurance GroupnnOldRepublicExchange.comnnWith 20 years of RE background in commercial and residential, Sheila is part of the national sales team for a Qualified Intermediary dealing with 1031 exchanges.nn nn nn nnNeed help on your 1031 Exchange? We got you covered! We prepared a free e-book that will serve as your guide to achieve your long-term business goals or obtain that property you’ve always been dreaming of!n
nn nnPhill Tomlinson is a commercial real estate broker with Commercial Properties, Inc. (CPI) in Scottsdale, Arizona, and owner of the Leveraged CRE Investment Team specializing in investment sales and tenant/landlord representation in the Phoenix and Scottsdale submarkets. Phill applies over 21 years of experience in the Real Estate industry helping investors and owners maximize their returns. nn nnBookmark www.leveragedcre.com to learn more about the Commercial Real Estate market and keep informed of relevant real estate strategies designed to maximize your income property investment results. Connect and follow Phill on Social Media at sm.leveragedcre.com/smplatform. #LeveragedCREnn nn
by Prince Licaylicay | Mar 12, 2020 | 1031 Exchange, All Articles, Buying, Investing
Let’s talk about “like kind” in a 1031 exchange. The Internal Revenue Code provides that a taxpayer may sell property and defer the payment of any capital gains tax if that taxpayer uses the proceeds to acquire like kind replacement property. It is always important to share first, section 1031 of the Code states:
No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment.
So, in this discussion I want to highlight what “like kind” really means for the seller of an investment held property. The IRS uses this term however it is broader than it appears to be. Like Kind is any property that is “held for investment” or “for use in a trade or business”; meaning the property sold must be exchanged for other property that is also “held for investment or for productive use in a trade or business.” Most sellers don’t realize this now gives them the ability to sell one type of property and buy another. Giving examples, a taxpayer can sell land and buy residential OR one can sell commercial and buy multi-family. As well, sell one and buy multiple and ALL are considered like-kind. The problem is how this term is interpreted, most taxpayers think like kind must have the same characteristics, or like a vehicle, be the same make and model. That is not the case. This term should really just state: … if such real property is exchanged solely for real property of which is to be held either for productive use in a trade or business or for investment.
With this being said, a tax payer should always consult with their tax or legal advisors. Knowing the true meaning of like kind gives an investor the opportunity to understand there are many alternatives to diversify with another type of investment real estate in a §1031 Exchange. If you want to know more about the Exchange process or review your options, we are happy to assist.
Sheila Long
Regional Sales Executive | Old Republic Exchange Company
C: 480.341.2032 | T: 480.443.6830 -AZ | T: 818.543.6584 -S.Cal
SheilaL@oldrepublicexchange.com
Old Republic Exchange | Old Republic Insurance Group
OldRepublicExchange.com
With 20 years of RE background in commercial and residential, Sheila is part of the national sales team for a Qualified Intermediary dealing with 1031 exchanges.
Need help on your 1031 Exchange? We got you covered! We prepared a free e-book that will serve as your guide to achieve your long-term business goals or obtain that property you’ve always been dreaming of!
Phill Tomlinson is a commercial real estate broker with Commercial Properties, Inc. (CPI) in Scottsdale, Arizona, and owner of the Leveraged CRE Investment Team specializing in investment sales and tenant/landlord representation in the Phoenix and Scottsdale submarkets. Phill applies over 21 years of experience in the Real Estate industry helping investors and owners maximize their returns.
Bookmark www.leveragedcre.com to learn more about the Commercial Real Estate market and keep informed of relevant real estate strategies designed to maximize your income property investment results. Connect and follow Phill on Social Media at sm.leveragedcre.com/smplatform. #LeveragedCRE
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