You just made your first step to becoming a commercial real estate agent, where we close bigger, and smarter. Here’s what happens next: 1. Drop your intro. Make a post introducing yourself and what brought you to commercial real estate. 2. Dive into the Classroom and get started on Introduction to Commercial Real Estate. Let’s trade houses for handshakes worth $30K+. 💰

We received the following question from a prospective client today: If the deal falls through, do they still owe commissions. The answer is No. On leasing transactions our commission is earned when they have a fully signed lease.

Occationally we will have an appraisal company reach out asking to confirm details of a transaction so they may use the information. This particular appraiser also asked some questions about what we are seeing in the market. Here are their questions - and my answers. Let me know: is this helpful, what questions do you have, or maybe you aren't sure what questions to ask, are there any terms used that you are not familiar with? - What you seeing in the retail/office/strip center market? - ANSWER: Rental rates for these spaces continue to increase and remain solid which supports the value and the strength of these assets. There continues to be strong demand for retail in particular. Continuing from our Covid-Era office space also continues to have strong re-tennatability for smaller office (5ksf and under). Larger office spaces, spaces with second stories and no elevators or in areas with higher market office vacancy rates require longer hold times and will sit vacant longer than thier counterparts.   - - Has there been any decreases in demand from the interest rate hikes? - ANSWER: No, demand does not decrease because of interest rates on the purchase of the property. It decreases based on lack of access to liquid capital. What happens is there is a decrease in transaction volume on the cusp of interest rate changes because Sellers have gotten an idea of how much they think their property is worth and do not want to accept that the cost of debt affects the value. The Buyer pool gets smaller the longer a property is for sale, not because there is less demand, but because most Buyers look at a property and if they can't get the numbers to make sense they move on and will not come back to re-review a property. They say that didn't work and don't spend the time to look at further. It is a lack of systems and follow up, especially on the cusp of an interest rate change that give the appearance of a decline in demand. This Seller originally listed the property for sale when interest rates were low and then it took two years of follow-up to construct something that worked for the Seller, the Buyer, and the Lender - in order to get it to the closing table.. because the Seller had unreasonable expectations on pricing and became more motivated as his prospective buyer pool dwindled because over time. - - Have you seen a change in cap rates for retail/office/strip center properties? - ANSWER: In order for us to hit a Debt Service Coverage Ratio that a lender will accept and lend on - we are at a solid 9 cap on most deals with conventional lending. Yes, the cap rates change as interest rates change, keeping matters of risk constant. 

Just a few things that are different in Commercial Real Estate. 1. Scheduling property inspections. If the property is occupied by a tenant we have to arrange a day and time that works for the Inspector and the parties attending the inspection. Sometimes the Listing Agent shows up, sometimes the Seller themselves will show up. We also have to make sure that the Listing Agent is given enough notice so that they can notify tenants that we will be entering their space (usually a 24-hour notice). We always want to confirm that tenants have been notified. When we are at the properties we are NEVER the ones to tell them that the building is being sold or under contract. If they ask what we are doing we just let them know that we are there to look at the condition of the property. If they ask more you can always say "I don't know, the owner just wanted us to come look at the condition of the property" or "We are just seeing what work is going to need to be done". Sellers love to default to telling the Tenants that we are with the Insurance Company. That's fine - except I did have a Tenant one time start asking me about insurance and I don't know enough about insurance to keep that conversation going too long! 2.Lending and Appraisals. We don't have pre-approval letters. The lender will be reviewing the property just as much as the Buyer, if not more. And so they start their process once they are under contract in solidifying what lender they will be using, getting terms from the lender, getting a commitment letter from the lender, and then the lender ordering the appraisal. Depending on the lender and the size of the loan, they take the underwtiting through committee before approvals, etc. The appraisals right now have about a three week turn around time. So it's always important to check 4 weeks prior to close and make sure they are on track for the appraisal to be ordered and returned in time for closing.

Hope everyone had a great Thanksgiving Holiday!! Did you take ALL the time off, or did you work? I took all the time off. And it is snowing here today and I will be picking my kids up from school - so I moved our VIP call to tomorrow so I can give you my undivided attention at that time.