CE – 6 Hours – TREC Approval #43470

Written by Edward S. Smith Jr.

 

The two basic types of commercial customers and clients are users and investors. Each type focuses on different reasons for purchasing property.

Sometimes, the reasons overlap and we have user-investor customers and clients. When you add to this the many different types of commercial

and investment properties, you can see all the brokerage opportunities available in the commercial real estate field.

 

The information needed to sell and lease commercial and investment property falls into several categories: ownership information, specific details of the building or space, and financial data. In addition, it is necessary to recognize the role of other professionals who will be part of the transaction. This and subsequent units will address what you need to know about each of these areas.

 

The 6-Hour Course will Cover:

Chapter 1: Commercial Real Estate Opportunities

• Types of Commercial Property and Customers

1. 1. Types of Commercial Properties
2. 2. Kinds of Commercial Buildings
3. 3. Commercial vs. Residential Real estate
4. 4. The Business Cycle
5. 5. User Customers
6. 6. User – Investors
7. 7. Investment Clients
8. 8. Capitalization Rates
9. 9. Developers
10. 10. Tenant Buyer Representatives
11. 11. Summary of Opportunities

• Gathering General Property Information

1. 1. Ownership information
2. 2. Third Party Advisors
3. 3. Attorneys
4. 4. Accountants
5. 5. Financiers
6. 6. Special Funding Programs
7. 7. Listing Information Checklist
8. 8. Commercial Inventory

Chapter 2: All About Office Buildings

1. 1. Classifications of Office Buildings
2. 2. Class A
3. 3. Class B
4. 4. Medical Space
5. 5. Class C
6. 6. Office Building Considerations
7. 7. Phones and computers
8. 8. Treatment of Utilities
9. 9. Hours Open
10. 10. Ancillary Services
11. 11. Parking
12. 12. Net vs. Rentable Square Footage
13. 13. Add On Factor
14. 14. Loss Factor
15. 15. Floor Plans
16. 16. As Built’s
17. 17. Tenant Improvements
18. 18. Lease Clauses
19. 19. Common Area Maintenance
20. 20. Gross Leasable Area
21. 21. Tax Escalation Clause
22. 22. Option to Buy
23. 23. Assignment of lease
24. 24. Assumption Agreement
25. 25. NNN Lease
26. 26. Right of First Refusal
27. 27. Office Buildings as Investments
28. 28. Office Building Checklist
29. 29. Total Rent Per Foot
30. 30. Rent per Month

Chapter 3: Retail Properties

1. 1. Retail Buildings
2. 2. Anchor Tenants
3. 3. End Cap
4. 4. Tenant Mix
5. 5. AM Side
6. 6. Far Corner
7. 7. Plain Vanilla Shell
8. 8. Finishing Space
9. 9. Restaurants
10. 10. Cash Business
11. 11. Gas Stations
12. 12. Retail Zoning
13. 13. Permitted Business Uses
14. 14. Location
15. 15. Demographics
16. 16. Percentage Leases
17. 17. Retail Check List

Chapter 4: Industrial Buildings and their Physical Characteristics

1. 1. Site Inspections
2. 2. Size of Buildings and Sites
3. 3. Truck Access
4. 4. Column Placements
5. 5. Ceiling Height
6. 6. Loading
7. 7. Floor Plans
8. 8. Percentage of Office Space
9. 9. Technical Services
10. 10. HVAC
11. 11. Sprinklers
12. 12. Refrigeration
13. 13. Floor Drains
14. 14. Environmental Issues
15. 15. Phase I Inspections
16. 16. Phase II Inspections
17. 17. Phase III Inspections
18. 18. Marketing of Industrial Properties
19. 19. Industrial Property Checklist

Chapter 5: Introduction to Financial Analysis

1. 1. Investment Analysis Worksheet
2. 2. Line by Line Review
3. 3. Income Section
4. 4. Expense Section
5. 5. Repair and Maintenance
6. 6. Case Study Mountain View Mini Mall
7. 1. a. Potential Rental Income
   2. b. Vacancy Adjustments
   3. c. Operating Expenses
   4. d. Net Operating Income
   5. e. Market Value
   6. f. Review

Chapter 6: The Value of Investments

1. 1. Rate of Return
2. 2. Leverage
3. 3. Initial Investment
4. 4. Cash Flow Before Taxes
5. 5. Equity
6. 6. Cash on Cash Return
7. 7. Internal Rate of Return
8. 8. All Cash Purchase
9. 9. Leveraged Purchase
10. 10. Investor Strategies
11. 11. CCIM Institute
12. 12. Annual Property Operating Data form

Chapter 7: Forecasting Cash Flows

1. 1. Cash Flows
2. 2. Case Study: Mr. Smith’s Office Building
3. 1. a. Problem Review
   2. b. Lease Notes
   3. c. Other Considerations
   4. d. Location Information
   5. e. Current Rent Roll
   6. f. Income Analysis
   7. g. Expense Analysis
   8. h. NOI
   9. i. Review Form
   10. j. CFBT
   11. k. Cash On Cash
4. 3. The Spreadsheet
5. 1. a. Problem review
   2. b. Lease Notes
   3. c. Vacancy Adjustment
   4. d. NOI
   5. e. CFBT
   6. f. Upside Potential
   7. g. Cash On Cash
   8. h. Market Value
6. 4. Real Value
7. 5. Other Approaches
8. 6. Revised Calculations
9. 7. Assumptions
10. 8. Brokerage

Chapter 8: Depreciation and Cash Flow After Taxes

1. 1. Depreciation
2. 2. Leasehold Improvements
3. 3. Cost Segregation
4. 4. Cash Flow After Taxes
5. 5. Return of Equity
6. 6. Return on Investment

Chapter 9: Selling Property: Capital Gains Taxes and1031 Exchanges

1. 1. Capital Gains Taxes
2. 2. Calculating Capital gains Taxes
3. 3. Commercial Properties
4. 4. Depreciation Recapture Tax
5. 5. Commercial Example
6. 6. 1031 Exchanges
7. 7. 1031 Rules
8. 8. Examples

Chapter 10: Dealing With Other Brokers

1. 1. Overview
2. 2. Commission Overrides
3. 3. Referral Agreements
4. 4. Co brokerage Agreements
5. 5. Co brokering Open, Non-Exclusive Listings
6. 6. Noncircumvention & Nondisclosure Agreement
7. 7. Showing Records
8. 8. Showing Record Master File System
9. 9. Notice of Showing

Chapter 11: Marketing For Success

1. 1. Internet
2. 2. Advertising
3. 3. Print Media
4. 4. Classified Ads
5. 5. Press Releases
6. 6. Commercial Flyers
7. 7. Broker Open House
8. 8. Electronic Communication
9. 9. Communicating with Commercial Brokers
10. 10. Communicating with Customers
11. 11. Database Marketing
12. 12. You and the Web
13. 13. QR Codes
14. 14. Social Media
15. 15. E-Mail Signatures
16. 16. Property Marketing Plan
17. 17. New Business Marketing Plan
18. 18. Building your Business