Quintessential Commercial Real Estate..........with Steve Landfield

October New York Real Estate Institute Commercial Real Estate Certificate Class Now Scheduled for October 15-16-17th 2010

2010-09-27T19:47:00.002-04:00

October Date for NYREI Commercial Real Estate Certificate Class

The next Commercial Real Estate Certificate Class @ The New York Real Estate Institute will be Friday October 15th, Saturday October 16th & Sunday October 17th at 9:30AM. each day:

A 19.5 hour class in commercial real estate is approved by the
NY Department of State for real estate continuing education credits.

For more information, see: http://www.nyrei.com/courses/commercial-real-estate-certificate.htm

Registration is directly through the school - www.nyrei.com

This class will present a comprehensive survey and examination of the field of commercial real estate, including commercial leasing, investment building purchases and sales, and case studies of commercial transactions; as well as an examination of the current state of the commercial real estate market in New York and what we can expect for coming year and beyond.
We will present a more in-depth review of commercial real estate in response to the demand for more material than we have been able to cover in the popular “Introduction to Commercial Real Estate” class, currently offered at the NYREI, as well as for those who just want to learn more about the interesting and potentially profitable world of commercial real estate transactions.

Upon completion of this class, you will receive a Certificate in Commercial Real Estate from the New York Real Estate Institute.

Course Information:

Among the many topics, this class will include:

Commercial Leasing

Basic types and terminology of commercial transactions.

Differences between commercial and residential real estate practices.

Types of commercial leases

Fair Housing laws and how they apply in commercial real estate

Leasing vs. Subleasing – definitions and the advantages and disadvantages of each

Issues regarding “location” and client needs

Working with commercial tenants & identifying their “real” needs

The features of commercial space – building features - hours of operation, elevators, availability of water, storage, traffic, etc.

Discussion of various tenants with special needs

Classes of Commercial Buildings – A, B, C & F buildings

How commercial space is measured, “loss factors” – rentable vs. useable space.

Additional costs – “Pass throughs” - electric, taxes & utilities

Commercial rent escalations & lease renewals

The process of finding & researching commercial space

Computerized Research Tools & How to Use Them – Property Shark, OLR, Loopnet & CoStar, Craigslist, etc.

The anatomy of a business leasing transaction

Commercial leasing case studies

Preparing, submitting & negotiating a commercial offer

Financial information/ Landlord location visits

Commissions & Getting Paid

The Lehman Scale

Other techniques and trends in computing commissions

Review of commission agreements & broker protection

Building Investment Sales & Purchases

Basic overview of sales & purchases

Types of Investment Properties

Reasons people buy & sell buildings

Flip transaction

The 1031 Exchange

Knowing your buyer & seller – buy & sell vs. hold

Issues in property location & buying strategies

Finding Buildings for Sale

Review of building Set-ups & basic information presented and weeding through Seller provided information & set-ups

Viewing & Inspection Issues

Financial Analyses – Measurement of Value & Financial Performance

Computation of accurate revenues, expenses & net income

Capitalization rates, gross rent multipliers

Debt service coverage, break even ratios, “cash-on cash”

Comparables – neighborhood & building analysis

Mortgage assumability and financial considerations

Distressed properties/Foreclosed properties

A purchase or sale offering & what it contains

“Due Diligence” and structural issues

Researching & dealing with building violations – DOB & ECB Violations

NYC building inspections

The broker’s role in closing the transaction

Post-closing Exit Strategies Case studies & analyses

Discount office rents spur activity | The Real Deal | New York Real Estate News

2010-08-22T09:57:00.000-04:00

Discount office rents spur activity | The Real Deal | New York Real Estate News

September Date for NYREI Commercial Real Estate Certificate Class

2010-08-11T13:19:00.000-04:00

The next Commercial Real Estate Certificate Class @ The New York Real Estate Institute will be Friday September 24th, Saturday September 25th & Sunday September 26 at 9:30AM.

A 19.5 hour class in commercial real estate is approved by the
NY Department of State for real estate continuing education credits.

For more information, see: http://www.nyrei.com/courses/commercial-real-estate-certificate.htm

Registration is directly through the school - www.nyrei.com

New Commercial Real Estate Investment Course Being Developed - "Case Studies in Commercial Real Estate"

2010-07-31T09:00:00.000-04:00

Because there does not seem to be time in my other three-day commercial real estate certificate course to adequately analyze real estate investment properties, I am in the process of developing a new commercial real estate course @ The New York Real Estate Institute.

It will be called "Case Studies in Commercial Real Estate" and it will be a practical guide to finding, reviewing and evaluating commercial real estate listings for buildings for sale.

The class will first review the various techniques for financial valuation of a real estate investment. We will then go online and look at buildings currently for sale, analyzing their building setups and trying to determine whether or not they are buildings that make "sense" to further look into, and if so, why or why not.

The course should be available early this Fall. It is awaiting approval by the New York Secretary of State for real estate continuing education credits.

Overall Manhattan leasing market struggles while high-end market soars | The Real Deal | New York Real Estate News

2010-07-02T10:16:00.000-04:00

Overall Manhattan leasing market struggles while high-end market soars | The Real Deal | New York Real Estate News

BORROWING MONEY CAN BE A VERY GOOD THING - THE ADVANTAGES OF A LEVERAGED TRANSACTION

2010-04-13T13:25:00.022-04:00

In this economic climate, many people are wary of borrowing money, even if you can get a commercial loan at all. However, where available, a savvy commercial investor should seriously consider and take advantage of the benefits of leveraging.

In a nutshell, leveraging is financing a portion of your commercial property acquisition with borrowed funds.

Leveraging allows an investor to profit from a double, if not triple benefit.

First there is property appreciation.

Assume you buy a one million dollar building ($1M) where an investor puts 20%, or $200,000 of his or her own money into the purchase. The remainder is financed.

If the economy improves as predicted over the next year, and it increases in value by 4%, the next year the building will be worth one million forty thousand dollars - an increase in value of $40,000.

But the investor didn't just make 4%, using the concept of leverage, he actually made 20% on his investment!

That's because the actual return on investment based upon the property's appreciation is computed by increase in value, divided by the dollar amount invested.

Return on Investment =     Appreciated Value - Original Value
                                        ------------------------------------
                                                       Amount Invested

In this example: 20% = 1,040,000 - 1,000,000
                                     -----------------------
                                                200,000

Obviously, this is a considerably better return than if you had simply invested the entire one million dollars of your own money.

In that case, the computation would be:       40,000
                                                                                 ------------       or only 4%
                                                                                 1,000,000


Any example of leverage must assume of course that the money can be borrowed at an interest rate sufficient to achieve a positive leverage. If the investor is not careful, he or she could get into a negative leverage situation, which is one where they might borrow the money at a higher interest rate than the return obtained by investing it. It goes without saying that such a situation would be a financial disaster - causing leveraged losses instead of gains.

Second, is the "cash-on-cash" return, which is the relationship of the annual income on the property to your own investment.

So, the "Cash-on-Cash Return" is the measure of the annual return on the income from the property in relation to that $200,000 down-payment.

Assume that your investment building also generated a net operating income ( the cash flow income less expenses, but before taxes) of $5,000 month. Over the course of a year, the before tax income would be $60,000 ($5,000 x 12).

Applying the cash-on-cash formula:

Cash-on-Cash Return = Annual Before-Tax Cash Flow
                                      -------------------------------
                                       Total Cash Invested

                                         60,000
                                       --------- = 30%
                                        200,000

That's right, in this example, you've earned 30% on your cash investment.

Without leveraging, you would have made only 6%, or 1/5 of the leveraged value:   60,000
                                                                                                                                                  ---------
                                                                                                                                                  1,000,000.

While these numbers are purely an example, the concept is clear - using OPM (other people's money) can greatly "leverage" a higher return than investment of your money alone!

Finally, it must also be noted that there is yet a third form of return on your investment - that is the increase in equity in the property.

As the mortgage is paid down, the extent to which the principal is repaid also results in an increase in the equity of the investment.

This of course assumes that principal is being repaid and that the loan is not an interest-only loan, as can sometimes be the case in commercial financing.

But as long as that is not the case, to the extent that principal is repaid, there is yet a third reason to smile if you made this transaction utilizing leverage.

Good News for New York Commercial Leasing!!!

2010-04-01T12:52:00.007-04:00

This article, from the April 2010 issue of the Real Deal, is good news for the New York City commercial leasing market. It appears that the commercial real estate market in New York is starting it's comeback:

N E W Y O R K R E A L E S T A T E N E W S

Leasing velocity rises to five-year

high: Studley

04/01/2010

Source: Studley

Manhattan office tenants leased up space at the fastest clip in five years during the first quarter of 2010 as they tried to lock in prices that many believed were at or near their lows in the current economic downturn, according to a report covering the quarter from commercial tenant advisory firm Studley.

But overall asking rents declined and the availability rate rose sharply Downtown, the report says.

There was 8.9 million square feet of office space leased in the first quarter in Manhattan, the highest volume of leasing since the first quarter of 2005, when 9.8 million square feet was leased in the borough, the Studley report, set to be released later this month, shows.

The volume was up from the fourth quarter when 8 million square feet were leased and was ahead of the quarterly average of 7.2 million square feet, Studley reported.

The leasing volume figures reported by Studley are higher than those seen in other market reports because the firm includes all space leased in its figures -- including renewals -- while other firms such as CB Richard Ellis and Cushman & Wakefield count only newly-leased space.

The spike in activity was driven by tenants renewing their leases early thereby pumping up leasing activity and not by new demand coming into the market, the company senior vice president of research, Steven Coutts, said. Many tenants are still reducing space as they ink new deals and average asking rents are falling, he cautioned.

"[The increase in leasing volume] is saying that we are close to the bottom if not at the bottom. But the question is how long will it be [there]," Coutts said. "Will it be a quick recovery or will it be bouncing along the bottom for four to eight quarters?"

The industry is closely watching deal velocity, pricing and availability rates in order to identify the start of a recovery, but many point to job growth, which remains anemic, as the key to firming up the Manhattan office market.

While velocity rose overall in the first quarter, overall asking rents declined from the fourth quarter of 2009.

Manhattan asking rents fell by 2.7 percent to $49.14 per square foot. Midtown Class A rents were down in the first quarter by $0.17 per foot to $63.40 per foot. Since the$101.17 peak in the first quarter of 2008, Class A asking rents have fallen 37 percent, Studley figures show.

Downtown the decline was sharper, with Class A asking rents dipping $2.01 per foot to $44.21 per square foot, and down 30 percent from the first quarter of 2008 when they reached $63.86 per square foot.

The availability rate for Class A properties declined in Midtown by 1 point to 13.7 percent, while it rose sharply Downtown by 3.2 points to 10.8 percent, its highest level since mid-2006, the report shows.

Author: Adam Pincus

New Certificate in Commercial Real Estate Classes

2009-12-17T20:30:00.003-05:00

Commercial Real Estate Fans - It's finally here! At The New York Real Estate Institute: http://www.nyrei.com/courses/commercial-real-estate-certificate.htm This is a 19.5 hour commercial real estate course, covering all aspects of commercial leasing and investment building sales and purchases.

Commercial Real Estate Certification Program Coming Soon

2009-11-18T10:11:00.001-05:00

The New York Real Estate Institute has submitted a 19.5 hour Commercial Real Estate Certification Program for real estate professionals to the New York Secretary of State's Office for approval. We hope to have it approved shortly and to have the first classes announced and scheduled.

This program will be a comprehensive class, covering the basics of commercial leasing and investment building sales & purchases.

Over the past couple of years that I have taught the NYREI's continuing education program's "Introduction to Commercial Real Estate" class there has simply not been enough time to cover all aspects of commercial real estate. This program should meet that need and I am excited to be preparing and teaching it.

Please look for it on The New York Real Estate Institute's website: www.nyrei.com

If you have any thoughts or ideas of things that you would like to make sure are covered and included, please drop me an email and let me know, at: slandfield@gmail.com

THE PURPOSE OF THIS BLOG

2009-11-16T00:53:00.004-05:00

For the last several years, I have taught "Introduction to Commercial Real Estate" at the New York Real Estate Institute in Manhattan.

I have focused on the basics of commercial real estate - the basic principles and information, from my perspective of having worked in small and medium-sized brokerage firms in Manhattan.

When I teach this class, there is simply not enough time to go over enough of the basics of commercial leasing and building sales and purchases to satisfy people's interest in this subject.

As a result, we are in the process of creating and obtaining approval from the New York Secretary of State's Office, to offer a 19.5 hour commercial real estate certification program. We expect to have the program ready for early 2010.

In the meantime, I intend to use this blog as a place to discuss some basic commercial real estate concepts in greater detail, or to answer your questions on the topic.

Please feel free to email me at slandfield@gmail.com with your questions and ideas, and I'll try to address them on this blog. Or, you can call me at (718) 687-9131.

Quintessential Commercial Real Estate..........with Steve Landfield

October New York Real Estate Institute Commercial Real Estate Certificate Class Now Scheduled for October 15-16-17th 2010

October Date for NYREI Commercial Real Estate Certificate Class

A 19.5 hour class in commercial real estate is approved by the NY Department of State for real estate continuing education credits.

For more information, see: http://www.nyrei.com/courses/commercial-real-estate-certificate.htm

Registration is directly through the school - www.nyrei.com

Discount office rents spur activity | The Real Deal | New York Real Estate News

September Date for NYREI Commercial Real Estate Certificate Class

A 19.5 hour class in commercial real estate is approved by the NY Department of State for real estate continuing education credits.

For more information, see: http://www.nyrei.com/courses/commercial-real-estate-certificate.htm

Registration is directly through the school - www.nyrei.com

New Commercial Real Estate Investment Course Being Developed - "Case Studies in Commercial Real Estate"

Overall Manhattan leasing market struggles while high-end market soars | The Real Deal | New York Real Estate News

BORROWING MONEY CAN BE A VERY GOOD THING - THE ADVANTAGES OF A LEVERAGED TRANSACTION

Good News for New York Commercial Leasing!!!

Leasing velocity rises to five-year

high: Studley

New Certificate in Commercial Real Estate Classes

Commercial Real Estate Certification Program Coming Soon

THE PURPOSE OF THIS BLOG

A 19.5 hour class in commercial real estate is approved by the
NY Department of State for real estate continuing education credits.

A 19.5 hour class in commercial real estate is approved by the
NY Department of State for real estate continuing education credits.