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Commercial Real Estate Ownership Options

 

Q:  I inherited a building. Do I have to form a corporation to keep it?

G. R.

A:  As in all businesses, commercial property ownership can take a variety of forms. The various types of ownership fill different needs, and it’s useful to have an overview of all options to know which one is right for you. You do not necessarily have to form a corporation, and most don’t. However, you may want to do that very thing, despite the inherent costs of start-up and maintaining a corporation, in order to protect your assets.

Sole Proprietorship

By far …

Buy Low, Sell High? Your Investment Property Exit Strategy

Q: My commercial property is performing well, but I see a lot of opportunities available in other real estate. I hesitate to maximize my credit, but it seems a good time to buy. I’ve also thought about selling to finance acquiring more property. How can I tell if it’s a good time for me to sell?

M.D.

 

A: The custom of holding onto income property til death do us part, more or less, is rapidly declining, along with the changing profiles of ownership and of how business can profit in this century. Long gone are the days …

Property Redevelopment Basics for Sellers

Q: My building has 12 retail units at street level and 10 large apartments on top, at a busy location, with several high rise apartment buildings and condos nearby. Due to age, there are increasing maintenance issues. After inheriting the property, about 30 years ago, I had a lot of work done to make the units attractive and livable. Since then, I’ve put off any major renovations to mechanics so as not to disrupt my tenants, and managed to pay off the loans involved. I now hesitate to take on debt for the necessary upgrades, but what’s my alternative?

-A.D.

Social Media and Networking for Commercial Real Estate

Q: I own a mixed-use retail and residential complex. How could social media increase my bottom line, and where do I start?

-G. S.

 

Facebook announced that they have reached the astonishing milestone of one billion users. Translate that to virtually one-seventh of the world’s population, and it’s not difficult to see that social media has become a fact of life for many people, and so a fact of doing business.

Through the interface of social media, your tenants, prospective tenants, and the consumers seeking goods and services offered by your retail tenants, all come together as a community. …

8 Great Tips To Make Your Retail Mall An Investment Success

Q:  I plan on selling my strip mall and retiring. How can I best maximize my property’s value before I sell?

-O.N.
A: In commercial real estate, market conditions, location, existing leases, and maintenance all combine to determine immediate value. While factors like routine property maintenance are key to obtaining a good sale price, when considering the ultimate value of any property, the principle of highest and best use can enable commercial property owners to realize the highest possible return on their investment. As individuals, investors have little or no control over market conditions and location, but can greatly …

Opinions of Value in Toronto Commercial Real Estate – Conclusion, Part 4

Q: What is an Opinion of Value?
-Connie M., Retail Plaza Owner

A: Parts 1 through 3 of this four-part response outlined three methods of valuing commercial real estate in order to create an Opinion of Value: the Direct Comparison method, the Cost Approach, and Direct Capitalization as it is employed for the Income Approach. In our final installment, the use of Yield Capitalization, also known as pro forma modeling and as discounted cash flows, is examined.

The main difference distinguishing Yield Capitalization from Direct Capitalization in commercial real estate is that a lengthier period …

Opinions of Value in Toronto Commercial Real Estate – Part 3

Q:What is an Opinion of Value?

-Connie M., Retail Plaza Owner

A: Parts 1 and 2 of this four-part response outlining the methods of valuing commercial real estate examined the Direct Comparison method and the Cost Approach in order to create an Opinion of Value. Another method employed to determine property value is the Income Approach.

The Income Approach employs capitalization wherein the net income of a property is capitalized into a specific value. The two types of capitalization used in commercial real estate are Direct Capitalization, which is formulated from a one year income …

Opinions of Value in Toronto Commercial Real Estate – Part 2

Q:  What is an Opinion of Value?

-Connie M., Retail Plaza Owner

A:  Part 1 of this four-part response outlining the methods of valuing commercial real estate examined the Direct Comparison method in order to create an Opinion of Value. Another common technique that informs an agent’s estimate is the Cost Approach. This method is a logical, proven analysis of replacement costs that takes into account both value and depreciation.

The Cost Approach can be described in five simple yet thorough steps that result in a property estimate, as is illustrated by this Ontario Real Estate Association …

Opinions of Value in Commercial Real Estate – Part 1

Q: What is an Opinion of Value?

-Connie M., Retail Plaza Owner

A: Opinions of Value are the informed market estimates produced by realtors that value property. This is often the start of the listing process, and several methods are typically employed to arrive at a realistic figure. Let’s begin with a commonly used method known as Direct Comparison.

Direct Comparison is a standard method of estimating property value in which the subject property is compared with similar properties in geographically equal locations that have recently sold. Dollar adjustments are also made to account for all significant differences …

Commercial Real Estate Trends

Q:  What’s in store for the Toronto Commercial Real Estate Market and how can I capitalize on my investments?

Robert A., Apartment Complex Owner.

A:  The enviably stable Toronto Commercial Real Estate climate affords investors opportunities to grow their portfolios.

According to the annual PricewaterhouseCoopers and the Urban Land Institute Emerging Trends in Real Estate report, long considered the most authoritative source on real estate market trends; the enviable stability of Toronto Commercial Real Estate is giving investors an opportunity to grow their portfolios throughout the Greater Toronto Area (GTA).

With the European and American debt-crises in mind; …

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