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A Day in the Life of a Property Manager

property manager

You may know your property manager as the guy who swings by sometimes to see if you need anything, fixes what’s broken and generally keeps the building in good shape. If the property manager is a good one, tenants will never see him or her because nothing is broken. Fire alarm tests will be done in the early morning and an HVAC filter change may be done on a Saturday afternoon. Because he often goes unnoticed, unless there’s an emergency, many building owners underestimate what the life of a property manager is actually like. Let’s look at a typical day to see what he does.

5 am: Joe wakes up to his alarm and rolls out of bed. It’s fire alarm day and the alarms in his buildings need to be tested before the tenants come in for work.

5:30 am: Joe meets the inspector at his first building. It’s a medical office, and the working day often starts early. They need to get all the alarms inspected before the first patient comes in at 7 am.

6 am: The blaring alarms go off for a good half an hour as Joe walks around the building checking all the blinking lights—what a way to wake up.

6:30 am: Joe is driving to an HVAC service appointment at another building when he gets a call from the owner of a retail store he manages across town. The air conditioning condensation line backfilled overnight and there’s a half-inch of water in the basement. Joe reassures the owner that he’ll be there as soon as he can.

6:35 am: Joe lets the HVAC contractor up onto the rooftop unit, explains how to lock the door, and then runs back down to his car and starts to drive across town.

7 am: Joe arrives at the small retail store and sees the tenant moving cardboard boxes up out of the basement, so they don’t get wet. He sighs inwardly. He told the owner that this would happen if it wasn’t fixed weeks ago. But the owner reasoned that it was almost Fall, they wouldn’t be using the AC much longer and it was an expensive fix.

7:05 am: Joe talks with the tenant about the situation and what to do next. He already has an HVAC contractor in mind who does a great job and often gives Joe a discount. They’ve been working together for nearly five years and have an established relationship.

7:10 am: Joe is already on the phone with the contractor as he heads into the basement to survey the situation and start the sump pump. Luckily, he convinced the owner to install the pump a year or so back.

7:30 am: Joe is working hard to get the water out of the basement when the contractor shows up and takes over. Joe heads upstairs to talk to the client, give them an update on what’s happening and then leaves the rest of the work to the contractor.

7:45 am: Joe finally has a second to roll through the neighborhood Chick-fil-A to grab breakfast. He starts to take a bite as he drives back across town to where the HVAC contractor is working on servicing the rooftop unit when he gets another call. A security alarm is going off at a manufacturing facility. He knows the tenants don’t start work until 9 am and is concerned that someone is breaking in. He hangs up with the alarm company and calls the building owner on his way over. The owner is understandably worried and wants Joe there as soon as possible.

8 am: Joe pulls up to the building and doesn’t notice any signs of breaking and entering. The police pull into the parking lot just behind him and start to review the building. Joe lets them into the building to check the inside. The burglar turns out to be a squirrel who managed to get in through an upstairs vent. Joe makes a note to look at the vent for damage.

8:45 am: Joe finally pulls back into the parking lot of the building that was receiving HVAC service on the roof. He inspects the work that the contractor did and then locks the door behind him. The contractor did a pretty good job, and Joe calls the guy to say thanks.

9 am: Joe arrives back at the building with the broken AC condensation line. The contractor is just finishing up and recommends that Joe discuss water damage from the break with the building owner. Joe knows that won’t be a pretty conversation. Bad news is never fun to deliver.

9:30 am: Joe starts his daily drive across the county to check in with some of his buildings, owners, and tenants. He finds that checking in periodically to see if there’s any preventative maintenance that can be done leads to fewer emergencies later.

12 pm: Joe heads home to eat a quick lunch before starting on some accounting. It’s not his favorite, but he needs to estimate yearly expenses for an upcoming triple-net lease renewal. Accounting like this will take him at least the next hour or two of intense focus.

2 pm: Joe is just putting the finishing touches on his accounting worksheet when the phone rings. It’s the tenant in a medical building. It’s a uniquely set up building with a therapist’s office right next to a dentist. The dental equipment can be occasionally noisy, and the therapist finds it hard to work with her patients over the noise of the equipment. Today’s complaint is related to a client who was undergoing a root canal. The not-so-relaxing noise made it very hard for the therapist to do her work.

2:30 pm: After a long conversation, Joe heads over to the offending dental office to see what can be done. Thanks to his basic training in construction and experience with engineering, he can possibly rig up a better soundproofing system.

3:30 pm: After talking with the therapist and the dentist, Joe gets a call about some suspicious individuals loitering in the parking lot of a corporate campus he manages. The building is near a not-so-great area and is often subject to individuals who use the parking lot as their hang-out place.

3:50 pm: Bumping over a curb, Joe pulls into the parking lot to find a group of five or six people drinking out of brown bags in a corner of the lot. They shout at a few employees walking into the building and Joe shakes his head.

3:55 pm: He surveys the situation and decides to call the non-emergency line for the local police department- he has it saved on his phone. After watching the police come by and move the trespassers off private property, Joe calls the building owner to talk about hiring a security guard.

The owner doesn’t want to hear it. He doesn’t see what the problem is with a few neighborhood kids walking across the lot. Joe makes a note to himself to bring the building owner out next time it happens so he can see what’s really going on.

4:15 pm: Joe checks his watch and then rushes to pull out of the parking lot. His son has his first middle school baseball game today and he doesn’t want to miss it. He’s going to be late as it is, but luckily his wife promised to bring his son to the game.

4:30 pm: With a wave from the stands, Joe greets his son and settles into the bleachers to cheer him on.

5:30 pm: Only an hour into the game, Joe’s phone rings. It’s a call from one of Joe’s new building owners. Not wanting to miss a call from the boss, Joe moves to the side of the bleachers and answers the call. He keeps one eye on the game as he talks to the building owner about some new upgrades Joe wants to make to the building’s security system.

6:00 pm: A cheer goes up from the stands. Joe is missing the game! He thinks he sees someone from his son’s team running the bases but can’t be sure. His view is blocked by the snack stand.

6:10 pm: Joe talks fast, trying to hurry up the phone call and manages to end the call relatively quickly.

6:15 pm: Joe makes it back to the bleachers just in time to see his son slide into home. He hit a home run and Joe missed most of it. Disappointed, he promises himself he’ll see the next one.

The typical day of a property manager is long. Constant emergencies, maintenance needs, and juggling multiple bosses plagued Joe all day. While property managers can take the occasional vacation, they often struggle with shutting off their phone. If an emergency happens, they need to respond- and fast. This fast-paced, never-ending lifestyle isn’t for everyone. An experienced property manager knows which contractors to call, has the team to take care of your building (and even sneak in the occasional vacation!), and meet all of the building owner’s needs.

Don’t take on property management alone with no experience. Blackwolf Commercial has the property management team you need. After decades in the business, we have the right connections with local contractors for quality work at affordable prices. Our team approach to property management means that you don’t have to worry about your building when you go on vacation. Our status as a management company with multiple buildings often provides us with discounts that we can pass on to our building owners. Think savings on your energy bill, cleaning services, and more.

Learn more about our property management services here.

What You Need to Know About Opportunity Zones

commercial real estate in MD

If you’re an investor in commercial real estate in MD, you’ve probably heard of opportunity zones. These zones provide a lot of tax benefits to investors who are looking to buy commercial buildings in designated areas. Unlike other incentive programs, the opportunity zone incentive can be combined or overlapped with various other programs.

Opportunity zones can be a big benefit to investing in CRE in Frederick, Hagerstown, or various other cities throughout the state.

What are Opportunity Zones?

Let’s dig a little deeper into what exactly opportunity zones are. The OZ program is a nationwide initiative that was created under the 2017 Tax Cuts and Jobs Act. The initiative allows commercial real estate investors to receive substantial federal tax incentives by investing their capital gains into select communities (also known as opportunity zones). Investments in these communities are made through Opportunity Funds.

Essentially, opportunity zones allow investors to receive a large tax break if they invest their profit from building sales in an opportunity zone via opportunity funds.

The last quarter of 2018 marked the full implementation of the program by the Department of Treasury. The first deadline to invest capital gains into an opportunity fund is December 31, 2019. This allows commercial real estate in MD investors to be eligible for 15% tax relief. In 2021, capital gains invested in opportunity funds offer a 10% tax relief. And at the program’s conclusion in 2026, capital gains must be invested by December 31st to be eligible for tax abatement on accrued value if held in an OF for 10 years.

Frederick Opportunity Zones

Frederick County has five different opportunity zones available. Three are within Frederick City limits, one is in Brunswick, and the last is located in a municipality. Several of these opportunity zones overlap with other incentive programs, including an Enterprise Zone, Arts and Entertainment District, and a federally-designated HUB Zone. Because the opportunity zone is designed to be flexible and accommodating to commercial real estate in MD, investors can take advantage of multiple programs at the same time.

The city of Frederick’s opportunity zone is located on the southern side of downtown and is adjacent to Carroll Creek. This zone makes for a particularly great investment as it sits in between two major highways and the location of Fort Detrick, the National Cancer Institute, and world-leading biopharmaceutical company, AstraZeneca. With the local airport, Marc train, and an extensive bus route nearby, this opportunity zone has large benefits.

The second opportunity zone in Frederick County is located along the route 355/85 corridors. Lying just south of the city limits, the region boasts 70% of the county’s employment including companies such as Thermo Fisher Scientific, Phoenix Mecano, and Music & Arts’ corporate headquarters. This opportunity zone isn’t just located in a prime area, but it also features significant corporate parks, including Westview Corporate Park, Arcadia Business Park, and Frederick Corporate Park.

The last opportunity zone in Frederick County actually is in the City of Brunswick. This opportunity zone overlaps with HUBZone, an enterprise zone, and even part of the main street area. The Brunswick opportunity zone includes the Brunswick Shopping Center that serves the town, which has a total population of over 6,000 people. There are currently three opportunities available in the culture, all three of which in the main street area.

Hagerstown Opportunity Zones

Hagerstown has only one opportunity zone which covers the majority of the downtown area. While Hagerstown doesn’t have as many different zones as Frederick does, it does have a wider variety of incentive programs which you can combine with the opportunity zone program.

Hagerstown offers the Façade Grant program which rewards Hagerstown business owners for improved storefront designs and overall aesthetic enhancements to the City Center. These projects only pertain to commercial and mixed-use buildings. While the Façade Grant is not large, it does offer some relief for commercial real estate in MD owners looking to update their storefronts.

The Invest Hagerstown Grants are also available as an incentive to developers. These grants focus on developers who are going to significantly redevelop the downtown area and create new job opportunities throughout the city.

If renovations are holding you back from buying a building in Hagerstown, look into the Partners In Economic Progress (PEP) Program. This program provides funding for building owners to renovate buildings in order to attract more businesses to the newly-renovated structure.

Are you looking to invest in a building for retail or restaurant purposes? The Retail and Restaurant Incentive Program helps fill vacant storefronts and attract restaurant and retail businesses. The grant is less than $5000 but does provide some extra incentive for tenants to move into your building.

Take Advantage of Available Opportunities

Whether you’re looking for commercial real estate in MD or across the country, make sure you research all of the grants, programs, and special zones that could provide you with benefits for moving into certain areas. If you don’t see property available in a valid opportunity zone at the time of your search, be sure to check back often. You never know when a commercial real estate agent in MD will add a new listing to the site.

If you’re looking for the best property for your business, check out the available properties on Blackwolf Commercial’s website. If you have questions about what incentive programs you’re eligible for, get in touch with us today.

We can help you achieve your commercial real estate in MD goals.

10 Tips to Rent Commercial Property

rent commercial property

When you rent commercial property for the first time, it’s good to know a few tips that can guide you through the lease negotiation process. Unlike renting an apartment or house, more negotiation and haggling often goes into renting a commercial building. To understand the process, it helps to work with a commercial real estate broker who has the years of experience to get you the best deal.

If you’re doing some research before you head into the negotiating room, here are ten need-to-know tips to rent commercial property.

1. Know Your Must-Haves

Every buyer has a list of things they would like, things they need, and things they absolutely don’t want. It’s important to have an extensive list of your priorities before negotiating. If you need more parking, then now’s the time to ask, not after you’ve signed the lease. Having a clear picture of your must-have items will help you negotiate a great deal. Without a clear understanding of your needs, you could find yourself swayed during negotiations and leave without key items in the contract.

2. Decide on Your Lease Length

How long will you be in this space? There are some perks to negotiating a longer lease. You can often get cheaper rent and you’ll be able to plan out the future of your business based on a solid location. However, there are some downsides as well. What happens if your business fails? Or your team grows, and you need a bigger space?

Take a close look at your business’s performance and how fast your team is growing before you sign on for a long lease. Remember, when you rent commercial property, your lease can range anywhere from three to five years.

3. Triple-Check the Contract

If you aren’t working with a professional real estate broker, you could be trapped into unfavorable terms, purely because you didn’t understand the language in the contract. If you’ve looked over the contract once, you need to look over it again. And again, a third time. Research anything you don’t understand and discuss the contract with your broker if there’s anything you don’t understand.

4. Negotiate the Perks

It’s difficult to negotiate key items like the base rent, lease term, or utilities. You may find it easier to negotiate on details like cleaning, who’s responsible for building maintenance, or wi-fi. If you’re able to negotiate free employee parking or more spaces for clients, you’ll save money in the long-run. Don’t forget how expensive it can be for your business if a window breaks or the HVAC system fails. Negotiating perks like these beforehand can save a lot of money long-term.

5. Understand Fair Market Rates

Understanding the CRE market in your area is crucial to rent commercial property. Could you tell if the rent your landlord is asking is way higher than what’s fair for the area? Understanding how the market in your area is trending take times and expertise. It’s more than just researching what similar buildings are going for. It’s knowing when to take the leap and when to wait. You’ll be kicking yourself if you sign a contract only to have rent prices drop a few months later.

6. Become an Expert on Types of Commercial Leases

There’s more than just one type of commercial lease. Understanding the different types will help you get a satisfactory contract. For example, a single net lease means that the tenant only pays for the utilities and property tax. The landlord pays for maintenance, repairs, and insurance. In a double net lease, the tenant is responsible for utilities, property taxes, and insurance premiums, while the landlord pays for just maintenance and repairs.

There are many different types of leasing contracts to rent commercial property out there. Understanding the difference between them means paying just utilities and property tax or paying for structural repairs.

7. Check the Cure Period

The cure period is the grace period you are given for breaching the contract. If the original contract states that your cure period is only a day, you could be subject to legal action for being only a day late on rent. Cure periods save you from facing large fines for small mistakes such as a bounced check or forgotten date. Don’t sign any contract to rent commercial property until a cure period is written into it.

8. Protect Yourself from Competitors

Let’s say you run a clothing store. You’re looking for space to rent. After you’ve found the perfect space, moved in, and set up shop, you’re horrified to hear that another retailer selling clothes to the same target demographic is moving in next door. Now, you’re losing customers to the new store.

It’s important to include a clause stating that the landlord won’t rent out space to one of your competitors. You don’t want to find yourself unable to pay your rent because a copycat of your business moved in next door.

9. Be Able to Walk Away

The first building you see, even the first building you start negotiations on, may not be the right building for your business. Instead of committing to one building immediately, be sure that if negotiations don’t work out, you can walk away. Being able to walk away gives you power over the situation and allows you to handle negotiations with a cool head.

10. Work with a Real Estate Broker

If this list has shown you anything, it should be that working with a professional real estate broker makes the process of renting commercial property that much easier. When you work with a real estate broker, you’re working with a professional who has the experience to guide you through the process. They’ll be able to help you get the best deal and are familiar with the negotiation process.

With the right partner, you can make finding a commercial property to lease less stressful and time-consuming. And, most importantly, you can have the full confidence that you’re getting the best deal possible so that your business can thrive in your new space.

If you’re ready to rent the commercial property of your dreams, get in touch with Blackwolf Commercial today.

Podcast Interview – Frederick Advice Givers

It was an honor to be interviewed on the Frederick Advice Givers podcast a few weeks ago.

Eric Verdi and the team at Frederick Advice Givers are experts at sharing stories. They have been interviewing business owners and professionals all around the Frederick area for years. Their goal is to get incredible interviews from local experts and share that information with listeners for a glimpse into the respective fields of their interviewees.

A big thanks to Eric and the team for giving me the opportunity to tell Blackwolf’s story. It was great working with them!

Read below for some of the highlights of our conversation.

Where is the Frederick market now? Are there a lot of places to lease and own in Frederick?

If you want to own something for your own business or company, it is a tight search, and many times it proves to be very difficult. If there are options you find, you are most likely going to have to retrofit the space to be what you want.

Leasing is a different conversation; there is a lot of opportunity to lease in Frederick. There are Downtown Frederick residential and office spaces that were built in 70’s-80’s or even spaces that were remodeled just last year.

If you are looking for a warehouse, or more of a contractor space with a yard, that will most likely prove difficult as well. They were in high demand the past few years and require a bit more time to find.

Are you or someone you know looking to lease or buy commercial real estate property? Check out our property listings.

Being a business owner and an entrepreneur, what’s the drive and motivation inside of you that keeps you going?

It’s kind of odd, but there’s an interaction between people and properties that I don’t think a lot of people realize. Everybody knows how they feel at home, when you’ve had a bad day that’s where you want to go. You just want to be home.

However, when people go to work, it’s kind of like a home during the day. So, when business owners get annoyed at the complaints of employees about loud neighbors, or leaky roofs, I don’t quite get that. It makes sense that the employees would be a bit disgruntled by those issues in their workspace, because work is their home for most of their waking hours.

I like the way that people interact with properties and how that fits and functions both from the property management side and the sales and leasing side. There’s a vibe that you get from your real estate, and you need it to work.

What is a piece of advice that you would give an entrepreneur or business owner?

Don’t try to start at the top. Learn the foundation, learn the roots, learn how the tree is supported before you want to be at the top of the tree. Learn from the bottom up.

You have to be the talent yourself for a while before you grow big enough to hire out that talent. But, after working in it yourself, you then have a better idea for how to hire and what specifically to look for in those employees.

Looking for Help with Commercial Real Estate?

If you are looking for more information about Blackwolf and what we do, learn more on our about page. Blackwolf Commercial remains dedicated to taking the challenge out of commercial real estate and turning it into the joy it should be.

Ready to get started? Contact us.

5 Things to Look for In Frederick Commercial Real Estate

Frederick commercial real estate

Investing in commercial real estate can be exciting. You’re embarking on a new journey as a building owner. Soon you’ll have tenants, passive income, and a building to hang your hat on. But the process of choosing a building can be complicated. When it comes to Frederick commercial real estate, you want to make sure that you’re making the right choice in choosing your building.

There’s a lot to consider when picking out the right building. What are your goals? Are you looking to rent it out to tenants? Or will your business take the whole building? Are you planning to flip the building? Or will you have it for years?

While what you’re looking for in a building will vary based on your goals, there are a few things that will always factor into your search for Frederick commercial real estate.

Location

Frederick is a diverse city with industrial and medical parks, a corporate campus here and there, and, of course, the downtown full of thriving shops and various small businesses. Where you choose to buy a building will vary greatly based on what you’re looking for. Just as you wouldn’t put an industrial property in downtown, you also wouldn’t pick out a medical park as the perfect spot to build a small shop.

When choosing a building, pay attention to zoning laws. Frederick commercial real estate is subject to a strict set of regulations that enforce where you can put certain businesses. If you’re renting it out to tenants, do some research on the different types of markets for various business owners in Frederick. You’d hate to rent an industrial property only to find that there is no market for manufacturing businesses in Frederick.

Location also plays into your budget. While downtown buildings are prime real estate for stores and small businesses, they will come at a premium. It pays to explore other areas that attract foot traffic and may come at a cheaper price.

History

When buying an already established building, it’s important to know the history of the building inside and out. How much has it rented for in the past? What maintenance needs has it required? How often is it vacant?

Be wary of buildings that have sat vacant for long periods of time. While you will get one for a lower price, it may not be in the optimal location and you could have a hard time filling it. If you work with a broker who knows Frederick commercial real estate, you’ll have an experienced voice of reason helping you figure out what’s worth it and what isn’t.

You should also look at the rates for buildings in nearby locations. Is it worth moving to a different spot? Is it reasonable of you to expect to get higher rates for a better build out? Ensure that buildings nearby are of good quality. You don’t want to have the only nice building on the block, or you’ll find that your rates are lower due to your surrounding area.

Market

The Frederick commercial real estate market can be tricky. As a matter of fact, all real estate markets are tricky. It takes an experienced broker to be able to read the market accurately and decide when is a good time to buy or sell. The last thing you want is to buy a property, pay a premium for it, only to have the market drop right after you move in. You’ll see your building value plummet.

However, it can pay off to buy when the market is in a slight downturn. You’ll be able to spend less capital on the building itself and sell at a higher market value than what you paid for in a relatively short time period (should the market turn back around rather quickly).  

Demographics

Similar to your location, the demographics of the area near your building can have a big impact on the success of your new venture. If your new building is housing your business or the businesses of others, you’ll need a good source of talent. Dig into the demographics of your area to see how many people nearby have the skills you require. Is the surrounding area mostly college-educated? Of the right age? Are they ambitious and young or nearing retirement?

You don’t want to buy a building in the prime spot for your business only to find that all the talent in your area moves down to D.C. for work.

Utilities

How much does it cost to run and maintain your building?

Older buildings can cost a fortune in maintenance and energy efficiency. A drafty industrial property that hasn’t been updated since the 90s will need significant upgrades to cut down on energy costs. However, while you may spend more up front, a newer building that has had recent updates to its HVAC, electric, and water systems will cost you less in monthly maintenance.

Frederick has a long history of manufacturing properties that are currently being repurposed into shops or offices for local businesses. This could be an interesting route for you to take if you’re looking at Frederick commercial real estate with the goal of repurposing the building.

Before you sign on the dotted line, enlist the help of your commercial real estate broker to go over the maintenance costs of the building. When was the last time systems were updated? Remember, commercial buildings are much bigger than your average home and therefore put more strain on utilities and maintenance. If the previous owner didn’t do his due diligence, then you could be stuck picking up the slack.

Working with a great broker who knows the Frederick commercial real estate market is very important. As a lifelong resident of Frederick, Justin has a firm grasp on market conditions, and he uses his insight to find the ideal solution that impacts his clients’ bottom line. From design to legal document review, the Blackwolf Commercial president ensures real estate success from start to finish.

If you’re looking for a broker who can help you get the best deal in Frederick commercial real estate, get in touch with us today.

5 Tips for Buying Manufacturing Property

manufacturing property

Manufacturing property is unique. It’s required to meet a different set of needs than your average office park, corporate campus, or medical facility. Instead of air conditioning for tenants, manufacturing properties need to accommodate climate-controlled rooms to prevent equipment malfunction. Instead of a luxurious and plush office build out, manufacturing properties need durable large areas to fit heavy machinery.

Naturally, searching for a property that meets the needs of a manufacturing company can be difficult. In the past two decades that Blackwolf Commercial has been in business, we’ve helped clients find the right industrial property, broker a fair deal, and find the right tenant to match the property.

Here are five tips we’ve learned about buying manufacturing property over the last twenty years.

The Most Well-Known Secret in CRE

We’ve said it once; we’ll say it again. Ask any real estate agent in any field about what’s most important when buying a property and chances are good that location will come up. When you’re buying a residential property, you need to consider local schools, the distance to the grocery store, etc. When buying an office park, you need to consider competition in your area, parking, the accessibility of your facility and more.

But when you’re investing in manufacturing property, you need to consider zoning laws.

Most cities and towns don’t take kindly to the placement of a large and noisy factory right in the middle of downtown. So, on top of the usual considerations of buying commercial real estate, you also have to be very familiar with zoning laws and where you can operate a manufacturing plant. In some cases, you may be able to have a warehouse in one district, but not a plant.

Don’t Forget the Tenants

It’s easy to get caught up in your own perspective when investing in a manufacturing property. After all, it’s your decision, your money, and your livelihood. But if you’re renting out the property to tenants, you need to view it from the client’s point of view.

Is there enough parking for employees? Is it in a secure area or will they have to invest in a serious surveillance system?

If it’s currently being rented out to a tenant or tenants, make sure you collect data on the average lease length in the building’s history, how long it has sat vacant in between tenants, and how much it can be leased for. When you’re debating how much to lease a building for, study the surrounding area, what similar buildings have rented for, and the expenses it costs to run the building.

Pay Attention to the Market

What’s the market like in your area? Remember, the commercial real estate market can differ greatly from the housing market. Vacancy rates put you and your investment at risk. Work with a broker who’s familiar with the area you’d like to invest in. They can help you figure out the current market vacancy rate.

Markets with low vacancy rates offer the least risk for investors. Most markets with low vacancy rates have unique draws, like high-quality tenants with multinational presences, access to major transportation hubs like ports, railways, and highways, as well as limited land for development.

If it’s your first time investing in manufacturing property, ensure that you’re choosing a market with a vacancy rate that you feel comfortable with. You don’t want to be stuck with a bad investment.

Decide Between Buying or Building

Like most things, there are pros and cons to both building and buying. If you buy an appropriate piece of land that’s zoned correctly, you can build the ideal manufacturing property. As a new construction, there won’t be any damage and the tenant will have a fresh slate to work with without the energy inefficiencies or needed upgrades present in older buildings. There is an added possibility to make more money off of a new construction due to the better condition of the building and customizability of the layout.

But building a manufacturing property has its cons as well. Without a building history, it can be difficult to determine how well it will rent. Building a property requires a significant time investment. There could be weather-related setbacks, and due to the sheer size of manufacturing properties, they could take months to years to build. They also require a large monetary investment up front.

Buying a manufacturing property means that you don’t get the opportunity to create a custom layout, there could be existing damage to the property, and you most likely will have to upgrade several systems in order to be up-to-date with the latest technological innovations. However, buying an existing property also means that you have a full building history and you can start receiving a return on your investment almost immediately without having to wait for construction to complete.

Work with a Broker Who Knows

Manufacturing properties are unique. Work with a broker who’s familiar with their ins and outs. At Blackwolf Commercial, we don’t just help you with your commercial real estate brokerage needs; we can also help with finding the perfect property, renting a manufacturing property, and taking care of all of your property management needs.

Working with a great broker can prevent you from making a bad investment and help you find the perfect property for your needs.

Work with a broker who knows manufacturing property. Contact us today.

Spring Cleaning: 10 Things to Check at Your Commercial Property

Frederick and Washington counties are finally leaving winter behind and moving into a season of longer days, greener grass, and (probably) a lot of rain.

Spring is here. With it, though, come a host of items to consider for commercial property owners. As the weather warms up, the list of to-dos gets longer.

With that in mind, here are 10 spring cleaning items to check off the list at your commercial building this season to continue maximizing property value.

1. Check For Any Winter Damage

In the wake of winter, there are a few common areas to check for damage.

Curbs and sidewalks are more likely to crack and chip during winter months as water freezes and refreezes in and around them as well as accidental snow plow nicks and chips – check to see if any maintenance is needed.

Grass, too, can sometimes be damaged, especially around the edges of sidewalks and parking lots from excessive salt use.

2. Schedule HVAC Maintenance

As the weather gets warmer, you’ll need to transition your facility from heating to air conditioning. As you do, make sure your systems are ready to go.

It’s helpful during this season to schedule HVAC maintenance to ensure that all equipment is in working order, so that your systems are ready to provide comfortable temperatures before the heavy heat of summer really kicks in.

Don’t make the mistake of putting off this inspection and preventative maintenance. A lot of people do and what happens is that during the first few hot days there will be a lot of AC not working calls to the HVAC companies and the technician’s workload will build up and it may be days until they can get to your building to address your cooling issues. Plan ahead and stay comfortable.  

Another little secret – if you have an HVAC maintenance contract, you can usually get preferential scheduling for emergency repair calls.

3. Condensate Pump

On a related note, you may need to consider maintaining a condensate pump on your indoor air conditioner air handler to ensure proper drainage from your AC unit. If condensation flow away through a gravity line and your pump is not working properly it can accumulate condensation water and cause water damage.

Functioning condensate pumps ensure that this is prevented.

4. Schedule a Roof Inspection

Spring is also a great time to schedule a roof inspection, so that you can make sure your building’s protected during upcoming rainstorms.

We also prefer spring inspections because, in the summer, the black roofs of commercial buildings can get uncomfortably hot. Inspectors may be motivated to rush through an inspection to get out of the heat. The cooler weather during spring allows them to be comfortable and take their time delivering quality evaluations.

5. Pressure Wash Exterior Surfaces

During the winter, dirt and grime can accumulate on exterior surfaces like siding, sidewalks, and more.

Spring is a great time to restore the shine of your commercial building with pressure washing. Done right, it restores the aesthetics of your exterior and leaves surfaces looking fresh and clean.

6. Update the Exterminator Contract

Unfortunately, with warmer weather and more moisture come more bugs. Ants, bees, wasps, and other insects are all more active in the spring, and some, in addition to being a nuisance, can cause significant damage to your commercial building.

That makes spring a great time to review your building’s exterminator contract; for your sake and for the sake of your tenants, it’s important to make sure you have quick pest control at the ready.

7. Get Bushes and Trees Inspected

Spring is an ideal time to ensure that the bushes and trees around your commercial building are inspected for any damage. You may be able to see the consequences of insects, diseases or funguses, but it is a good idea to have a professional take a look, and, if needed, schedule the necessary treatment.

8. Prune and Plant

In addition to checking your plants for disease, spring is a great season to plant new landscaping arrays and prune existing growth for health.

Pruning should happen in late winter to early spring, before new growth starts in earnest.

In the spring, you’ll want to schedule mulching, and, along with it, the installation of early-season color – typically vibrant flowers like tulips, pansies, or hyacinths.

9. Check the Landscape Sprinklers

If your property has sprinklers that keep the vibrancy in your landscaping, you’ll want to ensure that the system is in working condition for the season.

If the lines weren’t blown out properly heading into winter, water could have frozen and damaged system components. Even if the system was properly winterized, it’s worthwhile to check for clogging or any unexpected issues.

10. Inspect and Clean Out Stormwater Management Inlets

Finally, it’s important to make sure that stormwater management inlets are inspected and in working order.

These are designed to accommodate heavy rainfall around your commercial building. Sometimes, over the course of time, they can become clogged with leaves, silt, gravel and debris which reduces their effectiveness in removing rainwater from your property.

If they aren’t cleared before heavy rainfall, your facility could be in danger of flood damage.

Is Your Property Manager on Top of All of This?

Spring is a great season, but it definitely brings a big to-do list with it. Is your commercial property manager on top of all of these items?

Unfortunately, subpar commercial property managers don’t comprehensively manage items like these. But the good news is that, if you’re working with us, the answer is yes – we’ve got it covered.

At Blackwolf Commercial, we’re veterans when it comes to the many ins and outs of property management. With understanding across industries and comprehensive knowledge of all types of commercial buildings, you can trust our proven expertise to provide the management solutions your building needs.

We offer a comprehensive breadth of property management service. From rent collection, to tenant communication, to vendor management, to spring cleaning, we take care of everything so that you can concentrate on other activities.

Want to make sure your property is in good hands this spring? Get in touch with us.

5 Warning Signs to Watch for in a Potential CRE Tenant

commercial real estate tenant

There are commercial real estate tenants that make leasing easy – the ones that are committed for the long-term, that treat your property with respect, and that provide value. On the other hand, there are tenants that elicit complaints, push the boundaries of their terms, and generally detract from your property’s value – or worse, break their leases entirely.

The need to find a valuable, and responsible commercial real estate tenant remains crucial.

Let’s look at a few early warning signs that will make you want to look deeper into your potential commercial real estate tenant’s history.

Are They Pushing for Short-Term Leases?

When potential commercial real estate tenants are indicating that they want a one-to-two-year lease, that is an immediate flag. Make sure to dig into the details of this in order to be fully informed on this push. It may be simply because they don’t know the location they plan to settle in for long-term (which is a problem in itself). However, it may also be that they don’t want to commit to a lengthier lease due to a cash flow problem or a business instability.

The last thing you want is for a business that is ill-equipped and inexperienced to move into your commercial real estate property and only stay a year or two. Many times, this will end in the breaking of your contract due to an inability to comply. In result of that, you will be immediately brought back to square one.

You do not want to go through that process multiple times over when, after doing the process right the first time, you could gain a steady tenant for 5+ years.

Do They Have Insufficient Finances?

As mentioned earlier, insufficient funds or a desire to cut a short lease should immediately raise concerns. This should not be a debate.

For starters, if the commercial real estate tenant cannot pay the security deposit, you know there is a cash flow issue. One way to avoid this issue and have a more thorough check in the beginning is by obtaining letters of credit and running a credit check prior to signing. This should be standard; it’s a great way to track the potential tenants and business’ income, credit score, cash flow, and other important financial details.

A credit check will provide you with detailed information on the potential tenants past addresses, other names used, credit score, loan information, and possibly even past employer information. This is a step that is crucial in the commercial real estate tenant screening process, so do not skip it!

Do They Have a Negative History with Previous Landlords?

After obtaining information from the credit check on previous rentals or home ownerships, contact the potential tenant’s previous landlords. Dig around to see what the general feeling of the potential CRE tenant is. If there are any weird feelings, negative feelings, or strange answers to questions ­– that tenant may not be worth the hassle.

Negative history such as tenants not paying their rent on time, causing excessive noise, or damaging property, are all reasons to deny the potential renter. These issues give you clear reason to re-evaluate the potential tenant. Having a business or company move into your commercial real estate property when they are not equipped to handle the general guidelines in the contract is a mess you do not want to deal with.

Lastly, it wouldn’t hurt to throw in a quick Google search for their name to see if anything notable appears. It is surprising at times to see all of the personal information that is on the web for anyone to see.

Are They Too Friendly?

Listen to your gut on discrepancies or unsteady feelings from your potential tenants’ history, information, demeanor, etc. If the commercial real estate tenant you are interviewing seems too good to be true, don’t immediately dismiss those thoughts. That may very well be the case.

You don’t want to mess around with signing a lease with a possible trouble tenant, and consequently pass up on many other trustworthy tenants.

Are You Feeling Overwhelmed? Blackwolf Commercial Is Here to Help.

As important as this CRE tenant screening is, don’t let the process intimidate you. Yes, the stakes of finding great tenants are high ­– leases can go a long way toward impacting the success of your property investment. But there are good people who can help you navigate the process. Going it alone will cause unnecessary stress, restrict your access to industry knowledge, and may result in a failure to maximize the leasing potential of your building.

Hiring a property management company means you don’t have to worry about the nitty gritty of vetting tenants. At Blackwolf Commercial, we offer customized guidance through the tenant search so that you can trust you’re accessing the right knowledge and taking the right steps to find the best tenants. You’ll have a person to call for everything.

And at the end, you’ll have a leased building that maximizes its value.

By choosing to work with us, you can have confidence in finding great tenants without the stress of going it alone. To take the first step toward successfully leasing your commercial property, get in touch with us today.

What to Look for in an Industrial Property

industrial property

Industrial property is a unique subset of the commercial real estate market that can be tricky to shop for if you’re not working with a knowledgeable broker. Typically, companies that are searching for an industrial property have unique needs and require a building that is able to accommodate machinery, shelving, or climate-controlled rooms for storage. Because buying an industrial property is a little trickier than buying a residential home, or even another commercial property, make sure you’re looking for these five things before you buy.

Location

When it comes to real estate of any kind, it’s all about the location. You need to analyze the area around the building. Who are your neighbors? What is the foot traffic like? Are there any security concerns?

While you still need to answer those three questions when buying industrial property, you also need to consider zoning laws. Factories are not necessarily the most subtle buildings. They can be loud and full of heavy machinery or produce certain smells that aren’t the most pleasant. This is where zoning laws can impact the buying process. Most of the time, you won’t be able to place a loud factory right downtown. Make sure the areas you’re looking at are zoned appropriately for the type of building you’re investing in.

Signs of Damage

As with buying any property, you need to look the building over carefully for signs of damage before signing on the dotted line. However, industrial properties are a little different than an office building. Make sure you’re checking for signs of chemical spills or looking for underground storage areas. It’s not too far off to assume that the previous owners worked with some dangerous chemicals. You don’t want to be stuck cleaning up their mess. Also, hire an inspector to assess the structural integrity of a building. Structural damage is serious business and usually pretty expensive to fix.

If you do see signs of damage, you have to decide how that impacts your buying decision. Is it small enough that you don’t mind fixing it? Keep in mind that if it’s not a big problem and you don’t mind spending the time and money to fix some damage, you can usually get a decrease in price.

If this is your first time buying an industrial property, make sure you have someone with you who is familiar with the buildings. An experienced broker can tell you where to look, what to notice, and which areas are typically prone to the most damage.

Current Use

What is the building currently being used for? If it’s only being used for storage, and you would like to set it up for manufacturing car parts, you’ll have a lot more build out to do than if you were to buy a building that was already set up for heavy machinery.

When analyzing the current use of the building, make sure to take into account how successful it is as well. Does the building layout lend itself to inefficiency or efficient processes? If it isn’t doing well, is it because it’s in a tough location or is it because of its current management?

There’s a lot to consider when it comes to an industrial property’s current use. It’s important that you appropriately account for its profitability as well. An experienced broker can help you perform the correct calculations to get an accurate picture of its current financial state. Especially if you’re hoping to lease it out, understanding the price you could rent it for in your area as compared to your expenses is hugely important.

Correct Utilities

Running heavy machinery or maintaining a controlled climate for storage takes a lot of power. If the industrial property you’re looking at isn’t hooked up to the right amount of voltage, then you could be in for a big overhaul. The utilities your industrial property will have access to is also related to the location. An industrial park will be more suited to accommodating the energy-needs of various types of equipment versus a downtown area that’s more accustomed to small shops.

Don’t make the mistake of just checking the voltage available. Also take note of the water. Does it have enough pressure to run sprinklers? Is there gas available? How are the utilities charged?

Make sure that all of the utilities are compliant with the Occupational Health and Safety Act. This act was passed to regulate working conditions. For example, your workers need access to clean bathrooms, drinkable water, and enough light to work by comfortably. What utilities are currently installed in your building can have a big impact on the working conditions of your factory.

The Right Broker

When you’re buying an industrial property, you shouldn’t have to do it all by yourself. As a matter of fact, I would highly recommend against it. Working with an experienced broker gives you all the benefits of years of expertise and you’ll have someone working for your best interests. Remember, the seller and their broker are working towards the seller’s interests. You cannot count on them to include your interests as well.

Working with a commercial real estate broker ensures that you get the best deal possible on a great industrial property. Blackwolf Commercial offers proven expertise, deep knowledge of the market, and customized guidance.

If you’re ready to take advantage of all that Blackwolf Commercial can offer you, get in touch with us today. We’ll thoroughly review all of your needs and expectations for selling or buying a commercial property and set you up for CRE success.

Why You Should Consider Investing in Hagerstown

commercial real estate in hagerstown

When you’re looking to invest in commercial real estate, where you put your money is important. Between D.C., Northern Virginia, Baltimore, Frederick, and Gaithersburg, there are plenty of options in Maryland. But one city that is often overlooked is Hagerstown. When it comes to commercial real estate in Hagerstown, you’d be surprised by all the benefits of investing in Washington County’s biggest city.

Hagerstown gets a bad reputation for being a rundown, less-exciting Frederick. But that reputation is undeserved. In reality, the city is changing fast.

Perfect for Retail

If you’re investing in a retail building, you’ll need to consider the area it’s going in. What’s the foot traffic like? Is the area safe enough to park, walk, and shop in comfortably? The last thing you want to do is invest in a retail park, build it out, and then struggle to get tenants.

Retail commercial real estate in Hagerstown is a good idea. Liveability gives the town a walking score of 51, and downtown walking parks like the Hagerstown Cultural Trail help to funnel pedestrians downtown. The Hagerstown Cultural Trail has been a huge investment for the city. The trail connects the downtown Arts & Entertainment District with City Park and the Washington County Museum of Fine Arts. Along the way, pedestrians can enjoy several art installations, green grass, and pretty views.

With the help of installations like the cultural trail and strategic positioning, your retail building would have access to the foot traffic it needs.

Affordable, Yet Full of Opportunity

Hagerstown is a pretty affordable place to live. The median home value is just $149,000 and the average income is almost $40,000. This affordability attracts younger generations and means that you won’t have to pay the premium of D.C. or Northern Virginia investments. The last thing you want to do is compete for commercial real estate with large companies like Amazon.

Commercial real estate in Hagerstown offers you a way to invest affordably, yet profitably. With a population of 40,000 people, there are plenty of buyers, tenants, and staff in the local area. There are also plenty of incentives for businesses who want to move to Hagerstown, with programs like Partners in Economic Progress (PEP) Program or Enterprise Zones. There’s affordable downtown parking, dining, entertainment venues, and plenty of businesses looking to lease a nice building.

Despite the low cost of investing in commercial real estate in Hagerstown, you’ll find plenty of opportunity in the downtown area and local population.

Population with Buying Power

Just like Hagerstown, Millennials get a bad reputation that’s undeserved. Did you know that the Millennial population has a buying power of $200 billion? By 2020, they’ll make up nearly half of the workforce. Over 62% of Millennials have considered starting their own business.

So what does this mean for commercial real estate in Hagerstown? 70 percent of the population is over the age of 21, with the median age for the town clocking in at just 34. Hagerstown is a city of Millennials, which benefits those who want to invest in commercial real estate.

Between college students looking for work, entrepreneurs looking for a business lease, and that $200 billion in buying power, Millennials are a good population to work with for those looking to invest in commercial real estate.

Downtown Revitalization

The city of Hagerstown has recently undertaken huge revitalization projects to revamp its downtown, make it more pedestrian friendly, and bring new business to the area. But, unlike the already-established businesses in the area, if you invest in commercial real estate in Hagerstown now, you’ll benefit from the revitalization efforts without dealing with the related construction, traffic, etc.

The Urban Improvement Project is working to expand several downtown properties at a benefit to public school programs and the arts community that is thriving in Hagerstown. The Urban Improvement Project will be completed in the Spring of 2020 and will leave downtown with a new theatre, outdoor plaza, and a five-story building adjoining the Barbara Ingram School for the Arts.

But the Urban Improvement Project isn’t the only plan for downtown. The Community’s City Center Plan is an 8-project, 10-year roadmap to improve the downtown area and bring more businesses to the city. Projects include office development, hotel and conference center parks, new housing, expanded farmers markets, and home ownership support.

These programs may not directly benefit commercial real estate investors, but they do benefit the community as a whole and investors indirectly. With increased population, foot traffic, businesses and a growing city, commercial real estate investors should invest in Hagerstown now, while the investment is still affordable, instead of waiting until later.

Hagerstown is a growing, booming city that is quickly becoming the next Frederick. Commercial real estate in Hagerstown will soon become the next big market and is already full of opportunity for investors who care to see it.

Questions?

If you’re wondering where to start with your next commercial real estate investment, feel free to reach out. At Blackwolf Commercial, our team is here to help you find the right fit for your goals. Whether it’s a new retail location, a manufacturing facility, or an office, finding new space represents the chance for a fresh start, and often an upgrade.

Check out our properties listed on our website or contact us for answers to all of your commercial real estate questions.

A Guide to the CRE Buying Process

commercial real estate agent in Hagerstown

Are you thinking of buying your own commercial real estate? Whether you’re looking at land for commercial use, an apartment building, or an office building, there are a lot of similarities in the process. Our first recommendation is to find a great commercial real estate agent in Hagerstown. You want someone that’s familiar with the area and able to help you reach your goals.

Before you get started on your search for the perfect property, familiarize yourself with the buying process with these five steps.

Lock Down Your Goals

What are you hoping to accomplish by buying commercial real estate? What inspired you to buy a building?

Whatever your motivations might be, it’s important to understand what you’re hoping to accomplish with your commercial building. If you don’t understand what you’re looking to do with a property, then it will be much harder for a commercial real estate agent in Hagerstown to help get you into a building that suits your goals.

There are a lot of pros and cons to different building styles. If you’re looking to rent out offices, then you’ll need to decide what industry you’re looking for. For example, buildings in the medical field require more build out than your average office. But if you’re looking to rent out apartments, then you’ll definitely need to consider the surrounding area. Is there a lot of competition? Attractions within walking distance? How much are other apartments going for?

Buying land for commercial use may take more work, but it also gives you a blank slate that you can mold however you may like. Before you move forward in the process, spend some time researching and reflecting on what you hope to get out of this venture.

Build the Right Team

At Blackwolf Commercial, we’ve written many articles relating to what to look for in your commercial real estate agent in Frederick and Hagerstown. There’s a reason why we focus on it. Without the right team behind you, you could get yourself into serious trouble when it comes to lease negotiation or brokering deals. Commercial real estate is a big investment—the last thing you want to do is waste your money.

When looking for a good agent, take into consideration their experience. How well do they know the area? Are they appropriately certified? How many deals have they brokered in the past? Do they have good client testimonials?

Before working with a CRE agent, do your research. See if you can talk to previous clients and meet with them a few times to get a feel for their experience, attitude, and whether or not they can help you reach your goals.

Evaluate Buildings

One reason why it’s so important to work with a great commercial real estate agent in Hagerstown is to help you evaluate buildings. Especially if you’re new to the world of CRE, you’ll quickly discover that shopping for an office building is nothing like shopping for a home.

You’ll need to find out the answers to questions like vacancy rate, how much income it’s currently bringing in, what improvements it needs, and capitalization rate. If you don’t have experience performing the necessary calculations, then it’s a good idea to work with a great agent who can give you an idea of how well-priced the property is.

If your agent is familiar with your search area, they’ll help you narrow down which buildings to look at based on your goals. If you’re searching for an office building, you don’t want to look in the residential part of town.

Perform Due Diligence

Like we said earlier, commercial real estate is a big investment. The last thing you want to do is jump on a property without performing your due diligence. A due diligence period typically gives you thirty days to go over the property with a fine-tooth comb. You need to get all of your inspections done, calculations, and by the end of the 30-day period you should be 100% certain that you will be moving forward with the property.

A good commercial real estate agent in Hagerstown will help you stay on track. A month may seem like a good amount of time, but it will go by quickly when you have to organize inspections and make a big decision. Your agent should know the best inspectors in the area that are efficient and honest. Working with easy-to-schedule inspectors can speed up the process and help you make your decision.

Make an Offer

Here we go- the step we’ve all been waiting for. It’s time to make an offer on your building. After all of your poking and prodding during the due diligence period, the building has still held up. You’re ready to make it official.

But making an offer isn’t as simple as it is on your home. You’ll need to submit a Letter of Intent before the negotiations start. A Letter of Intent tells the seller that you’re a serious buyer interested in making a deal, but it does leave the door open to negotiate based on your findings from the due diligence period.

Next, you’ll need to write up the contract, including any addendums. Your agent should take care of this for you, as knowing the appropriate forms and language to use can make a big difference in the outcome of the deal. Make sure to include any liquidated damages, or what the seller is entitled to should you fail to uphold your end of the contract.

The last step is to create a Memorandum of Agreement. The memorandum prevents the seller from passing over you and selling the property to another investor.

Simplify the Process

Investing in commercial real estate is complicated. You need the right knowledge, experience, and connections. That’s why it’s so important to work with the best agent you can. If you’re ready to move forward on a commercial real estate investment, consider Blackwolf Commercial. Our team has the experience to set you up right.

Learn more about our brokerage services here.

5 Questions to Ask Before You Rent Commercial Property

Whether you’re starting a business or moving your old one to a new location, renting a new office space can be exciting and stressful. Oftentimes it represents a growth period for your business. But there’s a lot to consider when signing a commercial lease. Unlike your typical apartment lease, these contracts are often for five or even ten-year periods. You want to be 100% certain you’re asking the right questions to protect your own interests before you sign on the dotted line.

Here are five questions we recommend asking before you sign the lease and rent commercial property.

What’s Included in the Lease?

Does the lease address concerns like utilities, parking spots, or snow removal in the wintertime? Don’t get too caught up in the excitement of moving and forget the smaller details. Signing a lease only to find out you don’t have enough parking spots for your employees, let alone customers, can create big problems and extra expenses.

Don’t forget to make sure that all verbal agreements are also included in the lease. For example, if you were told during the office tour that the landlord would handle all snow removal, but you don’t see it in the contract, make sure to address it. Verbal agreements are very hard to enforce later on if they’re not in the contract. Conversations can be easily misunderstood, and words can be taken back. But once an agreement is in writing, it cannot be changed.

When you’re looking to rent commercial property, go over the lease with a fine-tooth comb and make sure you get answers to any questions you may have before signing. After all, your new office space will be the home of your business for as long as the contract is viable. You want to make sure everything is crystal clear.

Who’s Responsible for Repairs, Upgrades, etc.?

This is a major detail that needs to be clearly communicated before the lease is signed. The world is in a state of constant change. What if the building’s wiring needs to be updated to accommodate a 5G network? Who’s responsible for paying for that?

Who has responsibility for upgrades needs to be clearly stated in the lease to avoid problems later on. Most likely, repairs that are your fault and in your immediate office space will fall to you. But what about repairs in common areas? What systems are in place to get a pothole in the parking lot filled?

If the exterior of your office building is in disrepair, it can reflect badly on your business and cause you to lose customers. Knowing who’s in charge of such repairs can give you either the responsibility of fixing it or set precedence for you to confront your landlord.

Who’s Your Neighbor?

If you’re a prestigious law firm, you most likely don’t want to be housed next to a noisy bar or the official hangout of the city’s skater population. Your neighbors can have a big impact on your business. If you’re a medical professional, there can be plenty of benefits to having a physical therapist, psychiatrist, or chiropractor as neighbors. Setting up a referral network that benefits everyone is particularly easy when you’re all within walking distance.

Who your neighbors are can easily add or detract from your business. Do you have a means of recourse if your direct competitor moves in next door? Make sure to look at the existing clientele of the building before signing the lease. Discuss any issues before signing as well.

Are You Allowed to Sublease?

Unfortunately, emergencies happen. What if you need to leave the area or your business sadly comes to a close earlier than you had predicted? Subleasing can provide you with an “out” without breaking your contract to rent commercial property. Make sure your lease includes the process for subletting, any restrictions on who you can sublet to, and what your responsibilities are as far as finding someone to sublet to, vetting, etc.

If subleasing isn’t allowed, but you feel you still need to have an out should the worst happen, discuss options with your landlord. Commercial leases to rent commercial property are notoriously strict. After all, it’s a big investment for both you and your landlord. But there are ways to include an “out” in your contract. Make sure it’s discussed before signing and with the help of a broker or lawyer.

Who’s Representing Your Interests?

Entering into a lease to rent commercial property is a serious activity. If you’re unsure of what you’re doing or haven’t entered into a commercial lease before, then you need to have someone there with the experience to guide you. Remember, the landlord and his team have their own interests in mind. You can’t rely on them to promote your interests as well.

Working with an experienced real estate broker can help you get a great deal on your commercial property. They’ll be able to help you find a great area with the right neighbors and the right conditions on the lease.

Blackwolf Commercial is proud to offer not only commercial brokerage services, but also help in finding the perfect property. Blackwolf has owned, developed, constructed, leased, and sold commercial investment properties throughout the Frederick and Hagerstown area. We understand the processes, nuances, challenges, and victories that come with commercial real estate ownership. We apply that knowledge so that our clients make the best decisions.

If you need help with your decision to rent commercial property, get in touch with Blackwolf Commercial today. We can help you make the right decisions to get your business into a great building.

How Long Should My Lease Be?

 

How long should a commercial lease be?

If you’re searching for a new office location, it’s an important question to get right. A good lease can prime your business for long-term success. The wrong lease can cause recurring inefficiencies that drag your business down.

Leases matter. And the timeframe of a lease is one of the determining factors that shapes the entire agreement. That puts a lot of pressure on all parties to come up with a length that makes sense.

If you’re feeling intimidated, don’t worry – we’re here to help. With decades of experience in commercial real estate and lease negotiations, we take pride in identifying winning solutions for all parties. The right timeframe exists, and we can help you find it.

So, how long should your lease be? Let’s take a look.

 

The Average Length of a Commercial Lease

Here’s a good baseline to start with: the average length of a commercial lease is five to seven years, with the majority of leases falling into the five-year side of that range.

Why is five years the average? Well, it tends to be a good middle ground for property owners and prospective tenants. It’s long enough to guarantee a level of stability for the property owners, but it’s generally not so long that it feels restrictive to the prospective tenant.

Anything that’s significantly longer or shorter is often the result of special circumstances or a creative agreement. That said, there are several factors that can influence the length of a lease above or below the industry average.

Those include:

The stage of the business.

Is the business in growth or decline? Or, is it stable?

If you’re a growing business, you may opt for a shorter lease to allow for flexibility; you don’t want things to be uncomfortably cramped in the space when you get to the third year because you’ve grown and are squeezing all the new employees that was perfect before you hit your growth.

Similarly, if you’re working to phase out of your business, you’ll also want a shorter lease term. We’ve witnessed, for instance, a doctor near the end of his career opt for a three-year lease term with the option to renegotiate at the end of the agreement. He wasn’t sure whether or not he’d be ready to retire at that time, but he wanted to leave his options open.

If your business is notably stable, on the other hand, you may want to consider a longer lease term. You may be able to get decreased rent via a longer term if you have a very high confidence in the fit of the space. Take note, though: this can be risky if you hit an unexpected growth or contraction phase and your space no longer fits your needs.

The type of business.

There are a few types of business that may be well-suited for longer lease terms. These tend to be companies in highly-specialized industries, or situations where an extremely customized fit-out / layout / design is a necessity. These layouts are specialized and many times expensive to replicate so locking in a longer term is typically preferred.

Dentists, for example, generally require unique amenities that increase the cost of the fit out so that a longer term makes sense. Laboratory or medical environments often fall under this umbrella, too.

The longest lease we’ve seen was in the biomedical space for 15 years. It was negotiated on the basis of a highly-specialized fit out that involved intricate lab equipment installation. Because of the longer term, the high upfront cost was amortized to become more cost effective on a monthly basis.

The age of the space.

Finally, the age of the space can be a contributing factor in determining the length of the lease.

First generation spaces (new construction), for example, tend to generate longer leases. It costs more to get a new space up, and owners are looking to recoup that cost, which is more easily done via a longer lease. After that, though, things normalize; second and third generation spaces fall back toward the average lease length of five years.

 

A Few Tips on Negotiating the Length of a Lease

With those factors considered, hopefully you’ve gotten a better idea of how long your lease should be. Here are a few things to keep in mind:

You’ll be able to get a more advanced fit out if you take a longer lease. If a landlord is going to put $30K into a space, they’ll want to know that you’ll be staying there for the amount of time it’ll take to make the commitment worthwhile.

You can work out renewal terms to reduce risk. If you think you’ll be in a place for 15 years but are hesitant to completely commit, you can set a lease up to have renewal terms with pre-negotiated rent. This give your business a chance to opt-out but eliminates the hassle of renegotiation (and potentially saves you rising rent costs in the process).

Breaking a lease isn’t advised, but it is possible. If the fit isn’t sustainable, you may end up paying the unamortized amount in order to leave or some other negotiation tactic.

It’s usually best to go with something close to the standard. There’s a reason most leases are five to seven years: that length almost always makes the most sense. Going with anything shorter can be unreasonably costly. Going with anything longer can be unreasonably risky.

Unless your circumstances really are special, don’t be afraid of the average.

 

Ready to Find the Best Lease for Your Business?

If you’re ready to find the lease that works for your business, let’s talk.

At Blackwolf Commercial, we have years of experience in brokering commercial real estate in Frederick to make great deals happen, and we take pride in benefitting our clients’ businesses. Whatever your ideal lease term is, we’ll help you to find it.

Don’t be intimidated by the prospect of lease negotiation. Treat is at an opportunity and capitalize it by getting in touch with us today.

Five Factors that Affect the ROI of Your Commercial Property

commercial real estate investment

Investing in commercial real estate can be a fun and exciting business. You get to transform buildings from something unwanted into to something beautiful, productive, and money-making. But it can be a risky business, too. The success of your commercial real estate investment all depends on its resale value.

But what causes the return on your investment to go up and down? How do you balance expenses versus potential value?

Let’s take a look.

The Build Out

Your location’s build out is a deciding factor in your commercial real estate investment’s future success. What industry should you build it out for? Which one will give you the most return on your expenses?

While it may make sense to wait on the build out until you have a potential buyer for some industries (the healthcare industry for example), a build out can really increase the value for your commercial real estate investment for relatively little expense.

Projects that add clear aesthetic value can include painting the hallways, renovating signage to increase visibility, or even updating entryways with flooring and lighting. A beautiful entryway makes a great first impression on a potential buyer and can instantly increase your return for relatively little input.

Location

Now, if you’ve already bought your commercial real estate investment, then you’re stuck with your location. But if you haven’t bought your resale project yet, then you need to carefully consider the location.

What’s around your building? What industry has a large impact in this part of town? How far is the commute to major cities? Commuting systems?

This could have a major impact on your resale value. A building in a great location with a talented workforce to hire and customers waiting outside the door will clearly sell for more than one that is far from any major commuting routes, has little foot traffic, and has no interesting things to do in the area.

However, location can also depend on the industry. For example, buying a building that’s located near a large healthcare office park and building it out into a retail store wouldn’t make sense, just like buying a building near a mall and turning it into a corporate warehouse probably wouldn’t make sense, either. Your future plans for your building have to match the industries around it. Do they complement each other?

Demographics

Take a close look at the demographics of the area around your building. Is it well-educated? Are there think tanks, universities, or other idea-creating entities around?

You want your building to be surrounded by a hirable workforce that offers opportunity for potential tenants. If would-be tenants shy away from the area because the employee pool is thin there, then most likely your building will have relatively low value.

You also want to look at market growth in the building’s area. Have more shops, restaurants, and apartment buildings gone up recently? Has the population grown at all? Does it look like it will? Or, on the other hand, is the population declining and are shops beginning to close?

You’ll get the most value for your building if you catch an area on the upswing versus trying to catch the last bit of growth in a declining market.

Tenant Desirability

How much money is the building pulling in now? Does it have a steady and reliable community of good tenants who pay their rent on time and have plans to stay? Or does it struggle to rent out office space and attract tenants who are just looking for a cheap place to set up shop?

You can learn a lot about the future of your building by looking at its past. It’s going to be much harder to turn a tenant population around 180 degrees and begin attracting well-paying class A tenants when the building has only been rented sporadically by not-the-greatest tenants in the past.

But if your building can display a history of excellent visibility for tenants whose businesses have grown and flourished, then your building will be more profitable and have an easier time attracting tenants in the future.

Building Efficiency

When you’re setting up a commercial real estate investment for resale, you need to consider its operational efficiency. Does it cost a fortune to heat it in the winter and cool it in the summer? If so, that’s not exactly a selling point for future owners.

Take the time to install the little things that make your building more efficient – or, in some cases, the big things. Switch out lightbulbs for energy-efficient LEDs and try your best to get fixed-rate electricity contracts. Take a close look at your HVAC system – is it set up for success or is your furnace starting to reach the end of its lifetime?

Your commercial real estate investment will be much more profitable if the future owner sees a lean, mean machine that’s set up to cost them the least amount in day-to-day operational expenses.

Get the Guidance You Need

When it comes to buying your commercial real estate investment, building it out, and selling it on, you need to know what you’re doing. Without the right guidance, it can be hard to get a good ROI.

Blackwolf Commercial has been working in the Maryland commercial real estate industry since 2002. We’ve worked in commercial real estate investment, brokerage, property management, and can offer you customized guidance to meet your CRE goals.

Don’t wait until it’s too late. Blackwolf Commercial is here to help you get the best ROI on your commercial real estate investment.

Talk to us today.

How Much of the Moving Process Should I Delegate?

The process of moving an office is a ton of work.

Identifying the right space. Negotiating the lease. Nailing the fit out. Coordinating the move. Most people underestimate the amount of work involved, and by the time the process gets rolling, it can become overwhelming.

That’s understandable. Moving an office is too much for almost any one person to handle alone.

Thankfully, you don’t have to go it alone.

Having the right people on your team can help – and delegating during this process is almost a requirement if you want to maintain a little bit of your sanity. Many hands make the light work, and they’ll make the transition to the final finished office a lot more smooth too.

With that in mind, let’s break down a bit of the moving process, with a look at how good delegation practices can make the transition more seamless.

Who should you involve?

If you’re going to delegate during the office moving process, it makes sense to ask: who are you delegating to?

Here are some of the players you’ll want to bring onto your team. Note that this doesn’t account for other parties, like potential vendor partners or building owners.

The Broker

One of the most important pieces of the delegation puzzle is finding the right commercial real estate broker. They’ll be able to guide you through all components of the moving process, from space selection, to lease negotiation, to the final fit out. With a great broker, the moving process is like driving down a pristine street. With a bad broker, it’s like off-roading in the dark.

The Company Team Leaders

on the size of your business, you’ll probably want to periodically involve leaders within the company. They’ll be able to provide insight into how the moving process will impact their teams, and their buy-in will go a long way in making the process smooth for your employees.

The Office Admin / Project Manager

Throughout the process, it can be immensely helpful to have an office admin or even a project manager involved. This person will be able to manage a lot of the logistics, bringing options and ideas forward to be priced out, approved, and implemented.

When should you involve other people?

If you’re going to involve other people, when should you do it?

In general, the best approach is the sooner, the better. If you get started early enough, you will have longer timeframes to make decisions and coordinate the process while having time to eliminate a lot of stress. This means you must begin this process well in advance of the end of your current lease. Working against the near-immediate end of a lease is much more difficult.

That means starting to plan early; the minimum time to start preparing for the move is six months in advance; nine to twelve months is even better. Find a broker first. They’ll be able to identify areas where you’ll need help, and then start asking people.

Many of the service providers you will need for a move are not available at a moments notice so coordinating may be difficult if you wait until the last moment – moving companies, for example, are best solicited at least a month or two in advance.

The caveat here is that, as a business owner, you will ultimately be the one to make the most impactful decisions: the location, the direction of the fit out, etc. Your role should be make the high level decisions to identify direction and then get confirming feedback from key staff members.

For example, instead of letting company leaders offer suggestions for locations, it’s wiser to identify a location you think is a good fit and then get their feedback to confirm. If you invite collaboration too early in major decisions the old adage will surface – too many cooks in the kitchen spoil the broth. Making the high level decisions then involving personnel later can expedite the process.

What should you delegate?

The final point of consideration: what should you delegate? The answer: almost every part of the process that can be easily and effectively done by someone else.

As a business owner, your primary responsibility is strategic direction. If you try to handle all of the tactical implications of your choices, you’ll be buried. Ideally, your job is to delegate and then approve things like:

The design of the new space.

There are a thousand small decisions to be made relating to the design of your new space. Will the floor be carpet? Vinyl? Composite tile? What color will the walls be? Where will interior signage go? What will the lighting be like?

Your broker should be able to walk you through the necessary decisions, potentially with help from designers.

Additionally, specialty industries may have certain space and design requirements. Call centers or dental offices or law offices, for example, have industry specific functions, flows and specialized requirements that necessitate strict usage of space – you’ll want to work with a specialized consultant. If you don’t have connections based on your use case, your broker should be able to connect you with consultants who can help.

Vendor management during the fit out.

There are a variety of ways the fit out might play out, but the worst case scenario is the one where you’re responsible for overseeing every vendor interaction personally. With the fit out designed and confirmed, your new landlord may manage the vendors during this process. Your broker may play a role.

Don’t handle it alone.

The moving process.

There’s a lot that goes into the actual process of physically moving your office: finding the moving service, changing your mailing address at the right time, making sure paper files are available in the new space when it’s set up and scheduling and coordinating the move so that downtime is minimized – everything adds up. This is where an admin or project manager can be extremely helpful.

They’ll make sure the moving process goes smoothly, so that your first day in the new space is celebratory instead of dysfunctional.

Ready to make a move? Get in touch.

Intimidated by the prospect of moving? At Blackwolf Commercial, we’re here to help. We have years of experience in brokering commercial real estate in Frederick to make great deals happen, and we take pride in helping our clients make the most of their moves.

You don’t have to go it alone – and you shouldn’t. By delegating the right things to the right people, you can make your office move the exciting opportunity it’s meant to be.

Avoid the stress. Get in touch with us to get started.

Why It’s Important to Work with a CRE Broker

With the proliferation of apps in the marketplace that connect buyers or renters directly with real estate sellers, you may be tempted to “go it alone” when attempting to buy or rent commercial properties. And sometimes, certain people with the right skillset may be able to complete the process successfully on their own or with the help of a few smartphone apps. However, the majority of people will miss out on some key benefits if they decide to take that approach.

The occupation of CRE broker has been around since there was first commercial property to sell. And there’s a few key reasons why the profession first began. A CRE broker has experience, expert knowledge, and skills that you may not have. Here’s why you need these five key qualities a commercial real estate broker can offer you.

Market Knowledge

Oftentimes a CRE broker will specialize in a region or even a city. This is because the commercial real estate market can change drastically between regions, states, counties, and cities. Selling a commercial property in California is very different from brokering a CRE deal in Frederick, MD. This is not only because the laws can be different based on state, but also because the market is different.

Washington, DC and Baltimore, MD are both larger real estate markets – they’re a bit different than the markets in Frederick and Hagerstown. Both Frederick and Hagerstown also have lots of historic buildings which have their own special laws in regards to building preservation and codes.

A quality CRE broker will know the market in the city they specialize in. They’ll be able to tell you when the best time to sell is, or in what neighborhoods you should find your next commercial property or what industry. This is something that can’t be replicated with a few google searches or by reading a book or two. Commercial real estate brokers specialize in the particular markets because they have the experience to know those markets inside and out. Because of this, they’re able to interpret information and trends in the market in ways that a google search won’t be able to.

Property Experience

A CRE broker with a good amount of experience has been there and done that. Most likely they’ve bought or sold the type of property you’re looking for a few times over and know exactly what a good deal looks like or which red flags that you should watch out for.

Depending on the type of property that you’re buying, there can be different challenges. For example, when buying a warehouse property for manufacturing equipment or a distillery, you need to be wary of issues like climate control and how the property handles plumbing or electricity. Does it have the power supply that you need?

But when you’re looking to purchase a building for office use, your concerns may be very different. Instead of worrying about power supplies for manufacturing equipment, you’re worried about the number of conference rooms you’ll be able to fit, or the build out it will need for the lobby to appear luxurious enough to attract corporate clients.

Commercial real estate brokers can guide first time clients in some factors they’ll want to consider when purchasing the right property for their needs. A CRE broker may be able to guide a first time investor from purchasing a plot of land and steer them towards a light build out instead. However, for a more experienced investor, a CRE broker can help find a promising property with the right amount of challenge.

Connections in the Market

Part of the reason why commercial real estate brokers are so helpful are their connections in the field. CRE brokers will know industry leaders who might be interested in selling their building or have the business card of the right buyer for your building. With the years of experience a CRE broker has in their specialized region, they know who the major players are and how they can help you sell or buy the right building.

Not only will a CRE broker’s connections help you find the right buyer or seller, they’re also able to help you after the initial buying/selling is over. Where do you look to find a developer with the right skillset for the buildout you need? Your CRE broker may know someone. How about to find the right HVAC or cleaning service for your building? Try your CRE broker.

The networking connections that you’ll have access to with a CRE broker are tantamount to your own personal walking yellow pages.

Negotiation Experience

Negotiating a real estate deal is not as easy as it seems in the movies. You can’t just sit down, slam your fist on the table, throw some money in the air, and get what you want. Negotiating takes real skill, experience, and time. Especially if you work in industries like manufacturing where you don’t have to worry so much about interpersonal skills, negotiating may not come naturally to your skillset.

Negotiation requires intense communication, conflict diffusion, and rapport building. The right person for negotiating real estate brokerage situations will have ideally done this before. A CRE broker will know where they can push for better or have to give a little on your expectations. They’ll be able to build rapport with the other side and avoid conflicts that could risk a great deal.

If you’ve never negotiated a deal before, it’s not a good idea to try it by yourself. You can easily find yourself with a worse deal and be taken advantage of by more experienced parties.

Get the Benefits of Working with a CRE Broker.

With Blackwolf Commercial, you’ll get all the benefits of working with a CRE broker that you need. At Blackwolf, we have years of experience in Frederick, MD to be able to interpret and help you understand the market in order to use it to your advantage. We’ll guide you through the process to find the perfect property for your business and help you to seal the deal with a high quality negotiations experience.

Blackwolf Commercial does it all. From buying or selling a property, to finding tenants or finding the right property, we take the challenge out of commercial real estate. If you need help with CRE brokerage, contact us today.

10 Things You Need to Know About Letters of Intent

buying/selling commercial real estate

There is often a lot of confusion around a letter of intent when buying/selling commercial real estate. Is it binding or non-binding? Is it the same thing as a term sheet or memoranda of understanding? Buying/selling commercial real estate is a serious time in an investor or owner-to-be’s life. Buying property of any type is a big financial investment, but buying a property you hope to make money off of is an even bigger leap. That’s why it’s important to truly understand everything about letters of intent.

What is a letter of intent?

A letter of intent is the first step when buying/selling commercial real estate. It can help you judge whether or not there’s a great deal on the table or it’s a flop. A letter of intent is, quite literally, a letter from one party to the other countersigned by an addressee. While it may look informal, these letters are legally binding unless they explicitly state otherwise.

Letters of intent are usually the first step in negotiating a deal because they bring any issues right out into the open. If there’s something that the parties disagree on and cannot resolve, then the deal is off before it even started. Because LOIs cut to the chase, they can save both parties a good bit of money when negotiating a deal.

Letters of intent set the groundwork for the negotiations involved with buying/selling commercial real estate and mergers and acquisitions beyond the real estate industry. They list out terms that both parties have already agreed to, what’s left to be negotiated, and specify a timeframe within which negotiations should be completed.

While letters of intent are similar to a term sheet or memoranda of understanding, they are not the same thing. A term sheet is a nonbinding agreement that just sets forth the terms and conditions of an investment. A memorandum of understanding is a more formal document that, while technically nonbinding, is still viewed as a serious document under the law; while they can be used in real estate transactions, they’re more common in international agreements.

Letters of Intent in Real Estate Transactions

While letters of intent are used in many different industries, in commercial real estate they’re used to document an intent to purchase. These letters allow the buyer to provide evidence of a purchase deal to their lender, document progress towards the end of negotiations, and also document terms before committing to the sale.

When used in real estate, it’s a great way to minimize misunderstandings. However, they are usually non-binding in real estate and the seller can still sell the property to someone else.

What’s the impact of a LOI on negotiations?

Letters of intent can have huge impacts on negotiations between two parties. As stated earlier, they can end negotiations before they even start, but they also set ground work for a successful negotiation.

These letters can protect both parties throughout negotiations. For example, it can restrict one parties ability to poach employees from the other party should the deal fall apart. It can also specifically protect the buyer by setting conditions around their obligations should they be unable to secure financing for the position.

Once you enter into an agreement with another party via a letter of intent, there are some downsides. As negotiations continue over the agreed upon time period, the markets may change against you. You can also inadvertently come across public disclosure agreements and find yourself releasing information you didn’t necessarily want to.

Are letters of intent legally binding?

How binding a letter of intent is depends on the specific content of each letter. If a letter has a clear statement that it is not legally binding, then clearly it isn’t. However, if a LOI is more formal and does not contain a clear statement of legality, courts may rule that it is legally binding. In order to be safe in your negotiations, treat all documents without an explicit statement of legality as binding. If there isn’t a statement or the statement is unclear, think hard before signing.

To make buying/selling commercial real estate even more complicated, some LOIs have specific sections of contract that are binding and other sections that are not. If this is the case, specific elements that are usually binding can include who writes the contract, the date a deal needs to be reached by, and financing requirements.

When it comes to buying/selling commercial real estate, your broker can draft the letter. However, you may need to get a lawyer involved if there are parts of the contract that are legally binding. If this is the case, the legal language needs to be meticulous and requires a lawyer’s expertise.

Use A Broker Who Understands

Buying and selling commercial real estate in Frederick both represent incredible opportunities – but they can also represent high risk and lots of hassle.

Blackwolf Commercial knows the ins and outs of buying/selling commercial real estate in Frederick, MD. Backed up by years of brokerage experience, we know how to help you with everything involved, including letters of intent.

Minimize the hassle and maximize your value. Get in touch with Blackwolf Commercial today.

 

What to Do When the End of the Lease Is in Sight

The end of your business’ lease is in sight, and decision time is approaching. There’s an impending choice to make.

Should you stay in the space? Should you move? Your choice will carry significant weight; after all, location can play a defining role in shaping your business. That only adds to the pressure you’ll feel as the countdown ticks on.

What should you do?

Don’t worry – we’re here to help. Let’s weigh the possibilities to find out.

The Three Possibilities

When the end of your lease is in sight, the possibilities can seem overwhelming, but in reality, they can be boiled down into three options. You can:

  1. Move to a new location.
  2. Remain in your space and negotiate for upgrades.
  3. Remain in your space as it is.

Each presents its own opportunities and challenges that may influence your decision. To give you an idea of what’s possible, let’s unpack each option.

1. Move to a new location.

This option involves the most change and timing for this option is extremely important so that you allow enough time to successfully execute it. You’ll be cutting ties with your current space and venturing out toward greener pastures. Of course, the biggest question to ask when considering this option is: do greener pastures exist?

If you’ve been at a location for a number of years, the chances are good that you don’t understand the full context of the current market. The last thing you’ll want to do is commit to a move when no better options are available. You’ll end up settling for a space that’s a worse fit, or you’ll come crawling back to your current landlord with absolutely no leverage.

Make sure there are spaces available that can meet your needs. A real estate broker can help you to understand the market and identify potential landing spots before you make the leap.

If there are options available, you’ll have a many considerations to think through to ensure the move goes well. Those are discussed in more detail here.

2. Remain in your space and negotiate for upgrades.

The second option you have is to remain in your current space and negotiate for upgrades.

The reality is that, while the end of a lease may feel like pressure to a tenant, it puts at least equal pressure on the landlord. If tenants don’t renew, building owners (or property managers) are forced into the laborious work of finding new tenants. Depending on the market, this may be difficult to accomplish, and, at the very least, it introduces a level of risk into the equation – what if a new tenant turns out to be a bad tenant? For a landlord it is usually best to keep the tenant you have than have vacancy and undertake the task of finding a new tenant.

This situation grants some amount of leverage to tenants when the time comes to renew a lease. You can choose to put that leverage to use by requesting upgrades to your space.

Has an old paint job been bothering you? Is the flooring looking its age and showing wear marks or does it look outdated? Is the lighting a bit outdated or do you need a few walls built or moved?

If you like your current location and landlord but there are elements about your current space that bug you, bring requests for updates to the landlord as your desire for them to do in order for you to stay. They’ll be incentivized to work with you in order to minimize the risk of you leaving and maintain consist rental revenue from their property.

And here’s a pro negotiation tip: if you add a few items that you don’t expect to receive, you’re more likely to get at least some of your requests. Psychologically, people can feel more comfortable granting concessions if they’ve been able to exercise the power of rejection, too – it makes the situation feel fair.

3. Remain in your space as it is.

Your final option – and potentially the simplest one – is to remain in your current space and forego requesting any upgrades.

This may be a good option if you’re satisfied with your setup. However, it also presents opportunities to negotiate in other areas for more favorable lease terms.

Propose a list of items you’d like to see in your new lease, and don’t be afraid to think creatively. You could ask for reduced rent or other monetary freebees since your landlord is not paying for upgrades. What if you asked for a free month of rent at the start of each lease year? Or one quarter or free utilities? An interesting request can give your landlord pause – and you may be able to benefit from unique solutions.

Don’t Miss Your Opportunity

Whatever you do, don’t wait until the last moment to consider your next steps. If there’s only a month or so left on your lease, your landlord has all of the leverage in negotiations; there’s almost no way you’d be able to find a more suitable alternative solution at that point. If you plan to move you will need a good six months minimum and the whole situation feels less cramped and stressful if you have all the details worked out without waiting until the last minute.

And, to maximize your chances of making the best move, work with a professional real estate broker. Not only does it help to have a middleman to play the “bad cop” and fight for your best interests, but you’ll also benefit from their expertise into the market.

Concerned about the cost of consulting with a professional real estate broker? 9 times out of 10 the Landlord pays for this anyway.

At Blackwolf Commercial, we’re here to help. We have years of experience in brokering commercial real estate in Frederick to make great deals happen, and we take pride in benefitting our clients’ businesses.

Is the end of the lease on the horizon for your business? Don’t let the process intimidate you. Treat it as an opportunity and capitalize on it by getting in touch with us today.

How to Properly Vet Potential Tenants

As a commercial property owner, you may be tempted to accept the first tenant with good credit and decent handwriting on the application that comes through your door.

Don’t do it.

It pays off to do a little bit more digging into your potential tenants. If you hire a property management company, they’ll probably have a thorough process to screen tenants. But if you’re managing your own property, there are some things to keep in mind.

Your tenants have a lot of control over your commercial property. Choosing a tenant that is irresponsible—physically or financially—can do some serious damage to your business. A tenant that is physically irresponsible can trash your office building – maybe they aren’t careful enough with their furniture, leading to scratched floors, dented walls, or worse. If they aren’t financially responsible, well, you can kiss on-time rent goodbye.

So how do you screen a tenant in order to find the right one for your commercial real estate property? Check out these five steps below.

Use a Thorough Application

Think of your application as the gateway to your commercial real estate property. If an application seems pretty decent, then the gates open and your potential tenant moves on to the next step. However, don’t be afraid to turn them away if the application seems off. Maybe their business doesn’t seem legitimate or you’re unsure about their financial stability.

Without a thorough application, you may not have answers to some of your concerns. A thorough application should almost read like a resume. Where have they worked? For how long? How many job changes? Have they lived at their current residence for more than a year? How long have they been running their business?

If your potential tenant has changed jobs more often than not in the past few years and they’ve just started their business, you likely want to hesitate on opening your gates to the next step. Oftentimes your decision is based on a gut instinct. However, when you’re first starting out, that gut instinct may not be fully developed. A property management company will have had years of experience in screening tenants and will know who to gamble on and who has got to go.

 

Run a Credit Check

So, your potential tenant submitted a good application. They’re using your space for a reputable business and you think they’ll be able to pay their bills on time. But before you deem them financially responsible, it’s time for a credit check. A credit check is extremely useful in telling you if the tenant owes any money to their previous landlord or if the information submitted on their application holds up.

For example, a credit check will tell you how many previous addresses your tenant has lived at in what time span. However, keep in mind that this is based on where the tenant receives mail. It doesn’t hurt to ask if it seems there are many more addresses listed on a credit report than are listed on the application.

When looking over the credit report of your potential tenant, take a close look at the number of lines of credit are open, installment loans, and account payment history. If your tenant has a plethora of credit cards open and plenty of past-due payments, it may be time to pass on this potential tenant.

Once you gain some of the years of experience of a professional property management company, you’ll know where you can toe the line and what type of credit score you can accept for your commercial real estate property.

 

Background Check

A credit check and a thorough application aren’t the end-all, be-all of a good citizen. Make sure you run a background check before accepting a tenant. Accepting a new tenant into a building means accepting a new security risk. Make sure your potential tenant does not have a history of violent crimes. You could be putting your other tenants’ safety at risk.

While some youthful discretions may be acceptable for you, you’ll want to keep an eye on any arrests, warrants, sex offenses, and incarceration records that appear. The last thing you want is to let someone with a truly dangerous past onto your commercial real estate property.

However, there is some personal preference that comes into play here. If you’re someone who believes in second chances, you may not mind a little bit of a record. But if there are other tenants in your building who work with confidential or sensitive information, be respectful of their needs and keep your building crime-free.

 

Case Search

Case search is a great way to supplement your background check. In Maryland, many court records are public with some exceptions based on individual privacy in severe cases. It never hurts to look up your potential tenants in case search. You’ll be able to see any time they’ve spent in the courtroom.

Beyond case search, it never hurts to do some googling. Not all bad people in the world wind up in the court room. There’s plenty of public information available on the internet that can inform your decision. A professional property management company will have the experience to know what’s acceptable and what’s not, but to start with, take a close look at your tenant’s social media. If there’s evidence of inappropriate behavior online, you may not want to accept them into your building. But again, there is personal preference here. What may be considered bad behavior by some is a Saturday night for others.

 

Contact the Previous Landlords

Screening a previous tenant is not the time to be shy. You need to know exactly how their relationship with their previous landlords was. Was their rent paid on time? Did they leave the unit in good condition? These questions are crucial to your decision.

You should be able to find the contact information for previous landlords on their application or online. This is also an excellent way to check and make sure the potential tenant was telling the truth on their application. For example, mom’s basement does not count as a reputable previous landlord for your business.

When contacting other landlords, make sure to be polite and try to foster professional relationships. You’re trying to build trust within the industry and help each other out by truthfully recommending tenants.

 

Choose a Property Management Company

Nothing is more essential when properly screening tenants than experience. And unfortunately, experience is not something you can gain from a blog post. Hiring a property management company gives you access to those years of experience and helps you avoid the mistakes and pitfalls of a beginner.

When you work with Blackwolf Commercial, you don’t have to think about your property every day. Your property management experience becomes 100% hands-off. If you’re searching for management services for your commercial income property but don’t have the time to deal with preventative maintenance programs, maintenance requests, tenant issues and correspondence, or upkeep, we can help.

We take care of the legwork, so you don’t have to.

Contact Blackwolf Commercial today to get started with our property management services. You won’t have to worry about criminal background checks or choosing the right tenant for your commercial real estate investment. Take the first step toward simple property management.

 

Investments to Increase the Value of Commercial Property

In any form of investing, the basic objective is to maximize returns. It sounds simple enough. But, in almost any arena, it’s much easier said than done.

Commercial real estate investments have the particular advantage in that a way to maximize returns is to make improvements that are tangible: a new façade, new paint, refinished flooring – things that you can touch and see, which can make them easier to measure. Because of that, commercial property investment can feel less abstract.

But that doesn’t make it easy.

The trick is still optimizing for the right things so that value is best improved. There are countless options toward improving the value of a property; choosing the right ones at the right times requires the right knowledge and guidance.

We’re here to help. Over a decade spent maximizing commercial property value, we’ve walked with property owners and sellers to ensure that they’re getting the best return on their investments by making the best choices.

So, when and how should you invest in your commercial property to increase its value? Let’s take a look at three scenarios to find out.

You’re optimizing a building you own.

If you’re investing to maximize the value of a building you own and plan to continue to own, you have a longer timeframe to work with. Put another way, there’s no end date by which value must be maximized.

That doesn’t mean you should let your commercial property stagnate, of course – but it does mean that there isn’t pressure to make changes on a timeline, which allows you to take a longer-term and more patient approach to investment.

Schedule consistent upgrades.

There’s no rush to get everything upgraded by a certain date, but it’s best to be proactive in scheduling out work.

Plan projects that will add clear aesthetic value (and make great first impressions): update entryways with flooring and lighting, renovate signage, or apply a fresh coat of paint.

It’s also important to ensure that building functionality is maintained and improved if necessary: surveillance systems, parking lot lighting, or HVAC systems, for example, can boost value even if they aren’t as aesthetically obvious.

Optimize for operational efficiency.

Increasing operational efficiency can result in costs upfront but can also add a great deal of value over time, which makes it an ideal area of focus for building owners who plan to continue holding a property.

How can you make building processes more efficient? A few avenues to consider:

  • LED lighting: this can reduce energy costs. Installers will often give you an estimated timeline for when you will and then begin to see a positive ROI.
  • Maintenance contracts: vendors such as HVAC providers often offer service agreements that make continual care more affordable over time. Building owners should take advantage of these options.
  • Energy sources: as a property management company, we’re skilled at sourcing energy from numerous electricity companies to gain cheaper rates for our clients. We often even lock in flat electricity rates for years at a time to help hedge rate fluctuations and assist in more accurate expense budgeting.

For building owners operating on full-service leases, reducing operational costs is a great way to boost value because the savings go right to the bottom line for the owners; even triple-net buildings can add value through operational efficiency on re-leasing by providing reduced occupancy costs to tenants.

You’re planning to sell.

If you’re planning to sell a commercial property, investing to maximize its value is influenced by your timeframe. You’ll want to complete the investments which provide the most bang for the buck prior to selling. This means spending the least amount for the improvements that generate the greatest immediate value.

There are several ways to do this.

Make updates that have immediate returns.

These tend to be the aesthetic updates: landscaping, facades, entryways, flooring, and lighting, to name a few. The better a first impression a building can make, the better chance it’ll have of selling high.

Finish any deferred maintenance items.

To maximize value, you can’t afford to kick the can down the road when it comes to maintenance – you’ll be best served by accomplishing any items you can within your timeframe. Even if maintenance items aren’t immediately pressing, they often make sense to accomplish; most buyers are wary of buildings that will have impending maintenance over the next several years.

So, give prospective buyers confidence by scheduling maintenance before the sale. This may mean resealing parking lots, redoing roofing, or scheduling HVAC work. A building with minimal maintenance issues is well-positioned for maximum selling value.

Create value in the rent stream.

The greater the revenue stream from rent, the more valuable the building is. So, before the sale, maximize rent revenue as much possible. There are two was to do this. The first is to Lease vacant space and the second is to extend existing Leases because the longer the amount of time the Tenants are obligated to pay rent the longer the amount of time the investment will be stable for the new owner.

You’re buying to sell.

Finally, if you’re buying a property with the intention of upgrading its value and selling it quickly, you’re likely working on a very short timeframe. This will mean investing in activity that generates the quickest ROI possible.

The actions will likely be similar: making updates, performing maintenance, and creating value in the rent revenue stream. It could also mean that the property is vacant and needs full overhaul. The difference is that you’ll likely have a shorter timeframe to work within, and you’ll be best served by focusing on the areas that are of highest impact to your building.

If you’re buying to sell, then, make sure you’re pursuing property that has high potential for these types of upgrades and if it is vacant you will need a strong leasing team to find you those valuable tenants to occupy the property once you are done with all the upgrades.

When should you start?

If you are planning to sell a building, when should you schedule upgrades?

We’d recommend starting within 6 months of the expected selling date. This generally allows for updates to feel extremely fresh, while ensuring that there’s adequate time to get things done. Of course, depending on the work, you may need to allot more time – but don’t move too soon – you don’t want you fresh upgrades to be dated if the intention is to capture the value quickly.

Remember, the more immediately you can sell after upgrades, the less time you’ll allow for depreciation. Schedule accordingly.

Get guidance you can trust.

Hopefully, these tips have made the process of maximizing your commercial real estate investment more tangible than ever and equipped you to start boosting the value of your investment.

Remember, though: to get the most out of your commercial property means getting guidance you can trust.

Whether you’re planning for the long term or planning to sell, we can help you to maximize the value of your property based on our knowledge from years of experience in Maryland commercial real estate.

With Blackwolf Commercial, you can rest easy knowing that your investments in your property will bring you value in return.

Get in touch with us today, online or at 240-578-4220, and start enhancing the value of your Hagerstown commercial real estate.

5 Questions to Ask before Hiring your Property Management Company

Hiring a property management company in Frederick MD is a smart decision. After all, attempting to manage your own commercial real estate is not a walk in the park. Hiring property management services can lessen your headaches, take a huge burden off your back, and allow you to accumulate passive income.

But choosing the right property management company in Frederick may be harder than it seems – especially if you’re new to commercial real estate. You may not know what to look for in the perfect property management company. Your inexperience can lead to issues later on if you don’t know what to look for in a property management company. Choosing a bad one can lead to low return on your properties and unhappy tenants.

Avoid these pitfalls. When you’re interviewing a new property management company in Frederick, MD, ask these five questions to make sure your property manager is a good one.

What type of property management services do you offer?

Not all property management companies provide the same levels of services and although a company offers a variety of services, not all property owners need or want to use all of those services.

In property management, there are a gamut of services ranging from simple tenant relations to an in-house maintenance team to leasing and releasing your property. Some owners prefer to be more hands-on with maintenance but leave the accounting to the property manager. While other property owners prefer to sit back and let the property manager handle every aspect of the management and just look at reports and receive their income.

It is important to understand the full capabilities of the property manager that you are considering hiring so that you can truly receive a full service experience or customize their services to what meets your needs.

How long have you been working in property management?

The number of years of experience your property management company in Frederick MD has is crucial to your building’s success. There are many things that you can only learn by doing.

Property management is one of those industries.

A brand new property manager may not be able to handle angry tenants as smoothly as an experienced manager or may not understand when to replace versus repair certain maintenance issues. An experienced property manager will have worked with many of the maintenance and commercial cleaning companies available in Frederick, MD. Because of their history, they may have built relationships with these companies, and they’ll be able to give you a discount. They’ll know which companies to pursue and which to avoid.

An experienced property manager will also have a better handle on vetting tenants. Some tenants may appear like a good choice at first glance but may wind up causing a major issue in the long run. An inexperienced property manager may pick the wrong tenants for your building and lower your return on your CRE investment.

When picking a property manager with experience, choose one that is CPM certified.

How often will I see reports?

Maximizing a return on your CRE investment does not happen without your involvement. As the owner of the building, you need to be actively involved and interact with your property manager often.

Before hiring, ask your property management company how often you’ll hear from your manager. If it’s less than once a month, you may want to choose another company. You should be receiving regular reports on your tenant relationships, vacancy rates, and any important information regarding maintenance updates.

Be passionate and involved in your building. The more hands-on you can be, the more your property manager should feel confident in your support. If your property manager refuses to be responsive in their communication with you and sends reports that are minimal and not detailed, then they’re probably not the right fit.

Do you do property inspections and provide inspection reports?

It is not enough to hire a property manager and expect them to just respond to tenants or owner questions and complaints. You need to make sure that your property is being paid attention to. How can you be sure your property is being paid attention to? By seeing inspection reports.

Property management, by definition, is the management of a property. This is not simply driving by to see that the grass is cut or checking to see if the rent has been paid. It is a comprehensive review of the property and a comprehensive review does not consist of a stroll around the grounds. It is an inspection report – a checklist to ensure everything is looked over.

It is important to know that a property manager you may consider hiring has a checklist that they use on a regular basis. The property owner should be able to review this checklist as needed.

Do you have the availability for my building?

When finding the perfect commercial real estate property management company in Frederick MD, you want to pick one that has time to focus on your building. If your property manager is in charge of fifty other buildings besides yours, your tenants may not get the personal attention they need.

On the other hand, if your property manager manages commercial real estate as a side job and works a nine-to-five, the company may be too small to give your CRE investment the attention it deserves. Choose a well-reputed company in the area with either enough staff or a small enough management list that your building can come first.

The last thing you want is your tenant relationships suffering because your property manager barely has time to attend to their needs. It’s okay to talk to other building owners under the same property manager to get a sense of their experience with this property management company. A property management company that has plenty of well-reputed referrals is a great sign that their building owners feel they receive enough attention and maximized ROI.

Choose Blackwolf Commercial

Blackwolf Commercial has the experience you need to ensure that your commercial real estate is in good hands. We offer a comprehensive breadth of property management service. From rent collection, to tenant communication, to vendor management, we take care of everything so that you can concentrate on other activities.

We’re veterans when it comes to the many ins and outs of property management. With understanding across industries and comprehensive knowledge of all types of commercial buildings, you can trust our proven expertise to provide the management solutions your building needs.

In property management as in relationships, communication is key. Nothing degrades trust like unclear communication or radio silence toward a property owner or tenant. At Blackwolf Commercial, we’re built on a foundation of trustworthy communication.

Maximize your commercial real estate value. Get started with Blackwolf Commercial as your property management company in Frederick MD.

The Biggest Barriers to the Sale

Selling commercial property isn’t something most people do every day.

That’s understandable. The timescales in commercial real estate are generally longer than in many fields, because commercial real estate is a large investment it takes time to manage. It takes a time investment (and a financial investment, too) to maximize its value. When it comes time to sell, finding the right buyer takes time.

It’s a big deal, and most people don’t do it frequently.

As a consequence of that, for those who aren’t immersed in the world of commercial real estate, some of the barriers to successfully selling a property may be unexpected. It’s hard to anticipate the twists and turns in a road if you don’t drive it often.

We’re here to help. Selling commercial property is a big project, and it’s best to be prepared for the hurdles you’ll need to clear along the way.

With that in mind, here are some of the biggest barriers to the sale.

1. Lining up logistics.

Lining up the logistics that go into making a commercial property sale takes some legwork. It’s a legitimate barrier – for those looking to sell, the intimidating nature of the first step can result in inertia.

An object at rest tends to stay at rest. For property owners, it generally requires more effort to sell than to maintain the status quo. That’s compounded by the reality that there’s a lot of necessary paperwork, and many people aren’t sure exactly where to begin. Things can quickly feel overwhelming.

Recommended documentation includes things like:

Building Plans

Comprehensive building plan documents are important to obtain so that prospective buyers can have an understanding of the property. Sometimes, these are readily available; sometimes, they may not be easy to find, or they may not even exist – in which case they’d need to be recommissioned.

Maintenance Information

What is the status of vendor contracts? And how up-to-date are building systems?

For instance, commercial buildings require backflow preventer valves that prevent water from the building to flow backwards into the public system – these must be inspected every other year, and if there isn’t documentation to confirm that they have been, work will be required. Has the roof been inspected? Has the HVAC been maintained regularly? All this paperwork proving the building has been cared for is important.

Status of Tenants

What is the state of the building’s tenancy? Prospective buyers will want to have paperwork around the status of tenant leases to understand what will be required when they assume ownership.

All told, locating documentation and lining up logistics can certainly be a barrier to the sale. Working with a commercial real estate broker can help to break it down. A trusted partner will know what paperwork is needed, and they’ll be able to help with the legwork of acquiring it so that the sale can move forward.

2. Unreasonable expectations.

This is a common theme of commercial real estate: unrealistic expectations can hold processes back.

Often, expectations are built around price. A prospective seller may have a certain idea of what they’ll be able to get for a property, only to begin the process and find that the market doesn’t share their perception.

We’ve seen commercial buildings priced at $5 million that, in all likelihood, should be priced at around $3 million. Though this is a large disparity in perception versus market pricing, some level of difference is not all that uncommon. When the discrepancy is the result of unrealistic expectations on the part of the seller – and when the seller is unwilling to alter those expectations – making the sale becomes much more difficult and frustrating.

A commercial real estate broker can help to guide realistic expectations and remove this barrier.

3. The market demand isn’t there.

Sometimes, there simply isn’t market demand for certain types of commercial property.

For instance, the current state of the market has made selling big box retail space much more difficult than it was a decade or two ago. With the rise of ecommerce, there simply isn’t as much demand for big box retailers – and, naturally, there isn’t as much demand for the commercial spaces that were built with those tenants in mind.

In today’s market, a 3,000 square foot warehouse will be snapped up quickly. A 45,000 square foot retail space will take more time to fill.

Other factors contribute to demand, too – including building age, zoning status, nearby infrastructure, neighborhood, and more. But there’s no way around the fact that low market demand is a barrier to a commercial real estate sale.

4. Taxes.

Yes, it’s true: taxes are often a major barrier to selling commercial real estate.

Depending on a variety of factors, such as how much the building has been depreciated as well as other personal income levels, the tax on income from a commercial property sale can drastically reduce the take-home profit from the transaction. Because of this, it can sometimes make more sense to hold onto the building and lease it and collect the rental income. Over a period of years, this revenue could surpass the take-home value you may get from a sale.

So, be aware of the tax ramifications of the sale.

More than anything else, this is a reminder not to rush headlong into the commercial selling process without considering the likely outcomes.

5. The negotiation.

Finally, even when all of the barriers that can delay finding a prospective buyer have been overcome, negotiation with that buyer can still represent a major hurdle.

We’ve covered many of the issues that can happen during negotiation before. Essentially, many of the same barriers that can hold back a seller apply to prospective buyers, too: unrealistic expectations on price, timeframe, or logistics can bring negotiations grinding to a halt.

Again, a commercial real estate broker can help sellers to navigate this process. They’ve gone through it many times before. They’ve seen all of the common sticking points, and they know the ways around them.

Get Past the Barriers

If you’re intimidated by the prospect of overcoming the barriers to a commercial real estate sale, don’t worry – you don’t have to go it alone.

At Blackwolf Commercial, we’re experts in the Frederick commercial real estate arena. We’ve walked through the selling process with hundreds of clients, helping to navigate the complexities and challenges that stand in the way of a successful sale.

We can help you to line up the logistics, set realistic expectations, and find an ideal buyer to capitalize on the value of your investment.

Don’t let the barriers to the sales process hold you back from making the best decision. Get in touch with us today.

How to Maintain Commercial Real Estate

frederick maryland commercial real estate

Frederick Maryland is a beautiful city that is becoming a profitable location for commercial real estate fast. It’s home to over 3,500 businesses and has an average household income of $87,860.

Commercial real estate is a big investment, and Frederick Maryland is a great place for it.

But after you invest in commercial real estate, you need to ensure its well maintained. Commercial real estate often involves buildings from the size of a small retail store to skyscrapers. Clearly, those buildings have different maintenance needs. But, they also have some systems in common.

Here are some tips on how to maintain your commercial real estate in Frederick, MD.

 

Hire a Managed Service Provider

Your IT system runs the critical systems in your building for your tenants. Without a properly maintained IT network, your tenants could lose essential data, slowing down their day-to-day business processes, and increasing the complaints that you have to handle.

A managed service provider for your IT system is a great way to receive proper maintenance at a monthly fixed price. Instead of paying for emergency fees when a system goes down, you’ll save money and have fewer emergencies.

What’s even better than a managed service provider is a property management company that works with a managed service provider. If your property management company has an ongoing relationship with a managed service provider, you could save even more money through discounts provided by your property manager. Also, you’re more likely to receive better service because of the pre-existing relationship between your commercial property manager and your managed service provider.

Using a property manager not only lessens the load on your wallet, it also lessens the load on your stress level. When you hire a property manager, any complaints about the IT system go straight to the property manager who then contacts the managed service provider.

 

Join a service agreement with an HVAC Company

Similar to a managed service provider for your IT network, a service agreement with an HVAC contract gives your building bi-yearly maintenance that will lead to money saved and less breakdowns.

While your air conditioning and heating may not hold essential data like your IT network, your HVAC system is a large part of a comfortable office environment for your tenants. If your air conditioning goes out in the middle of a hot summer day, or your heating goes out and leads to frozen pipes in a blizzard, you could risk serious damage to your building and unhappy tenants.

A service agreement allows you to calculate your costs in advance and have fewer equipment breakdowns. The key word here is proactive. Proactive maintenance can save you a lot of money and help you suffer fewer breakdowns.

Success in commercial real estate will mean keeping your tenants happy and your buildings filled. If your tenants remember you for having air conditioning that is constantly on the fritz, you could be looking at empty rooms.

A property manager is a great way to help prevent this from happening. Part of a property manager’s job is proactive repairs. They can devote the majority of their time to these repairs that will keep your tenants happy and content while preventing complaints.

 

Commercial Real Estate Redevelopment

As time marches on, don’t let your commercial real estate get stuck in the past. Keeping on trend and remodeling your buildings maintains a fresh façade for your business and incentivizes your tenants.

These remodeling and renovation plans can include a complete interior redesign for your building. For example, one trend to follow would be the move from closed office spaces to an open floor plan to foster teamwork. Following trends like this can become a selling point for your building as you can interest tenants with a grand opening and a better office environment.

This type of maintenance can also take shape on a smaller scale. For example, you can redesign your building office by office as tenants move out or switch office space within the building. This way you can stay on trend without inconveniencing your tenants.

Commercial property management companies have a huge portfolio with commercial real estate across industries. They’ll be able to point you in the right direction for trends in your industry. This way, your commercial real estate investment will stay a step ahead with minimal research from you.

With their years of experience, a good property manager should also be able to design your redevelopment plan for your building. They’ll be able to tell you how to renovate with minimal inconvenience to tenants while keeping everyone happy.

 

Maintaining a top-notch security system

As a commercial real estate investor, you could have a wide variety of tenants come through your building. Some businesses may have different security needs than others.

For example, an agency that works with credit card companies or banking institutions is going to need a higher-level security system than a company that handles clothing design or book sales. In order to keep all of your tenants happy, you should provide a baseline of security for the protection of everyone.

Keyless entry systems are a great way to control who has access to the building while still maintaining convenience for your tenants. A single swipe of a keycard or code will get them through.

In order to keep the businesses that need a more intense security system happy, you could consider having an additional key card or secure entry system for their specific office. Another option would be to install security cameras in front of their office door.

While this sounds like a lot of work for just a few tenants, it can also become another selling point for future tenants. It opens up your building for advertising to agencies that need higher security.

A property manager would be able to help you navigate the balancing point between accommodating your tenants needs and spending too much to achieve a positive ROI. A good commercial property management company would also be able to recommend an excellent security company for installation, and may also be able to get you a discount as based on their pre-existing relationship.

 

At the end of the day, commercial property management may be one of the most important maintenance systems you can use. A good property manager will be able to keep an eye on proactive repairs that need doing, when you should redesign or renovate your investment, and even be able to get you discounts on maintenance systems like HVAC and managed service providers. Your commercial property management company’s years of experience can be your largest asset in maintaining your commercial real estate.

Here at Blackwolf Commercial, we can simplify property management for you in Frederick Maryland. As a property owner and investor in the Frederick, Maryland area, the success of your real estate investment hinges on ensuring that tenants are safe, comfortable, and satisfied.

That’s where we come in.

When you work with Blackwolf Commercial, you don’t have to think about your property every day. Your property management experience becomes 100% hands-off.

Our property management services include:

  • Managing tenant matters and ensuring everyone enjoys a safe, productive environment without maintenance issues.
  • Supervising any maintenance or repairs, so that your commercial property investment is protected at all times.
  • Ensuring your property remains in top shape, and alert you or any proactive repairs that will save your investment dollars.

 

If you’re interested in protecting your commercial real estate with a property management company in Frederick, Maryland, contact us today. We’re here to help.

3 Game-Changing Tech Trends in Commercial Real Estate

Drones flying overhead, people wearing virtual reality headsets, artificial intelligence predicting human behavior – these tools are no longer inventions you might see in a futuristic movie. We live in a world where these tools are helping revolutionize industries from package delivery to video games to self-driving cars.

Another industry they’re impacting? Commercial real estate. Let’s take a look at how these tech trends are changing the business.

Drones

Video taken by drones provides incredible, stunning aerial shots of your commercial real estate property. This is a powerful marketing tool when you’re selling or leasing a large property or building. Drones allow you to get a better view of your property and its surroundings, providing a more comprehensive view to clients.

Not only can drone photography help you capture aerial media of your properties, but because of the small size and versatility of drones, you can inspect virtually anything from ductwork to roofs to crawlspaces.

You can see parts of your building that you may not be able to inspect otherwise. Aerial views can help you understand your properties on a deeper level. By studying overhead video, you can better understand the flow of vehicles, pedestrian traffic and access for delivery vehicles.

Certain drones go beyond basic video, like ones with infrared cameras that allow you to track heating or cooling leaks. Drones can also be used to test for gas leaks and measure the strength of cellular or other radio coverage at different points around your property.

During the pre-acquisition and pre-lease due diligence process, you want to know as much possible about a prospective property but only have a certain amount of time for inspections. All these drone techniques allow you to see more space in less time, with less effort.

Virtual Reality

Virtual reality (VR) is a wildly growing trend, expected to make a $15.6 billion impact on the economy in 2020. It’s not exclusive to gaming and entertainment industries, but it’s beginning to have an impact on the commercial real estate industry.

It can be hard for clients to visualize a vacant lot as a new apartment complex or a warehouse as their new, hip office space. VR can be used to show clients what an uncompleted development or space will look like after construction or renovations. People are looking for unique spaces, and sometimes the best option for them is to re-envision a building as something completely different.

Clients are now able to take virtual tours of properties or spaces they are interested in and get the feeling of moving around in it. A benefit of this is it significantly saves potential investors and tenants time and money. They may not have time to drive around to physically look at different properties, but with VR, they can simply spend time at your office virtually “touring” different spaces. This is especially convenient for clients that are not local and are traveling to look at locations.

VR is revolutionizing industries like commercial real estate by allowing clients to imagine the unimaginable and realize the potential of a space.

AI

Artificial intelligence (AI) is a term being use more and more today. AI is essentially computers or machines being able to imitate intelligent human behavior. Though the practice of using AI in real estate is newer, it’s proving to be very valuable. AI in commercial real estate offers opportunities for process automation, leading to lower costs.

AI can be used to gather predictive analytics in building automation systems. For example, building automation systems collect data from patterns from the use of smart LED lights self-programming thermostats. When AI can use this data to control these building systems, this can lead to savings through lower energy, water, HVAC, and maintenance costs. Machine learning for buildings can be a challenge, but like any new technology, will only improve over time.

AI is also being used to help negotiate final leases. Brokers put in a lot of time and effort discussing and negotiating details of the lease terms and fair pricing. AI helps by basing a final price off hard data and clear analysis. AI can calculate a fair deal based off comparable prices of other office spaces in similar locations, saving everyone involved in the deal a lot of time.

Stay on the Cutting Edge with Blackwolf Commercial

When it comes to commercial real estate in Frederick, MD, Blackwolf Commercial is the leader in guiding your business to a better location. Our services include full-service property management and commercial real estate brokerage, construction management and investment property consulting.

We’ve found that there is nothing more challenging to a business owner than finding and creating the right space for your business. We’ve been behind some of the area’s most successful businesses and real estate deals, from creating advanced technical offices and medical spaces to coordinating the area’s biggest commercial real estate projects. We take the challenge out of finding a new space and turn it into the joy it should be.

Interested in finding a new space for your business? Contact us today!

Tips to Commercial Real Estate Lease Negotiation

So, your organization is looking for commercial real estate space. You’ve identified a potential landing spot, and you’ve begun to envision your business in the space. Get ready: it’s time for commercial real estate lease negotiation.

For some people, lease negotiation is exciting; there’s some amount of romanticism or gamesmanship attached to deal making. For others, though, the process is nerve-wracking.

There’s no denying that there’s a lot of pressure during the lease negotiation phase. Leases are big commitments, both in terms of time and finances. A favorable lease can set your organization up for success for years. An unfavorable lease can be a crushing burden.

In light of that, it’s important to negotiate a lease so that your organization is primed to succeed. Here are a few tips to help.

 

1. Ensure all information is known.

First, be sure that you have a full and accurate understanding of all the information involved in the negotiation.

Fully Know the Space

Part of this means fully knowing the space you’re negotiating for. Do you have accurate floor plans? Do you know the square footage? The usable square footage? Do you know who the other tenants are in the building?

Know the Market

Work to understand how the space fits into the current market. Is price per square foot standard for the area? What are similarly positioned locations priced at?

Fully Know the Details of the Proposed Lease

There can be a temptation to assume that leases are standard. In the face of dense lines and pages of text, it can be easy to assume that it’s all basically common sense, and you’ll be best served by moving ahead.

Don’t assume. Read, in full, every time.

What costs are covered? How will utilities be divided? Will cleaning be included? Is the lease full service or triple net? Are there insurance responsibilities?

You can’t negotiate what you don’t understand. Ensure that you have as complete a picture of what you’re getting into as possible, and you’ll be in a much better position to obtain a favorable outcome.

 

2. Avoid unrealistic expectations.

Second, as you move through the negotiation process, do your best to steer clear of unrealistic expectations – your own, and those of the other party.

For instance, you can’t expect to have below-market rent and unlimited resources for a fit-out. You can’t expect to sign a lease that’s only a year long. You can’t expect to completely dictate exit or repayment terms.

But there are expectations for the other side, too. For example, you should expect negotiations to happen within a certain timeframe. Sometimes, landlords will delay negotiations in an attempt to pressure prospective tenants into a deal, knowing that when the move date arrives they’ll have little choice but to accept terms. If the landlord expects to drag negotiations out – watch out.

Unrealistic expectations are an immediate red flag.

 

3. Choose a team that knows the game.

Finally, as you approach lease negotiation, the reality is that the best way to be prepared is with a team that knows the game.

There is only so much a prospective tenant can do to be prepared. You may know the terms you want, but the truth is that unless you spend every day in the world of commercial real estate, you won’t have the same familiarity with context that brokers have. There are simply too many subtleties and tricks of the trade.

Two examples:

When you sign the lease, be sure to sign with your title – that way, the signature legally represents your company instead of making you personally liable. Additionally, tenants may be asked to sign a personal guarantee. In this case, it’s helpful to know that a personal signature only denotes liability for the signee – so, if you’re married, anything owned in tandem with your significant other is not liable (which can potentially protect a majority of your assets).

A common negotiation is to agree to lower initial payments by negotiating a longer term or a gradual increase in rate.

And there are many more intricacies, too.

A team that knows the game will help you to determine where to compromise, where to hold firm, and what subtleties you may be able to use to your advantage.

 

Blackwolf Can Help

At Blackwolf Commercial, we’re experts in the Maryland commercial real estate arena. We’ve worked with clients like you on lease negotiations to ensure that win-win deals were reached, setting up organizations for long-term success.

We understand the game. And we’re ready to be on your team.

If you’re nervous about lease negotiation, get in touch with us today.

Is it Worth More to You?

Selling commercial real estate in Hagerstown, Maryland can be a very cautious and detail-oriented game. Selling real estate is unlike most other types of transactions, mainly due to the large sums of money involved.

There are numerous factors that can affect a property’s price: the age of the property, it’s condition or the area that it’s located in. With such high prices, these minor details can make thousands of dollars of differences.

Another factor that can cause a significant price difference is how much the property means to the seller, from a personal standpoint. A property’s value on paper may be around $2M, but what if it’s more than just real estate to the seller? You may be asking for $3M instead, because the property has been passed down through several generations of your family, or maybe because it was where you started your first business.

Regardless of the reason, personal value can certainly affect your asking price. It can be hard to determine how much weight this should have in increasing your property’s price. The following guidelines can help you in shaping your decision.

How important is the property?

Before making any serious decisions, you certainly need to consider just how important the property is to you. Why exactly does it hold a special place in your heart? Was it the place where very something special happened in your life, like your first business, or are you just biased because you’ve owned it for a long time and have grown attached to it?

The best way to figure this out is to think about your situation from the buyer’s perspective.

Could you justify buying the property for 5% more than it’s worth due to the history and circumstances? If not, then you need to be realistic and try to let go of your feelings toward your property. There are many other sellers that have emotional attachments to their property, but they can’t all sell above market value. If you do attempt to sell at too high of a price, you can expect an abundance of negative feedback from buyers – and ultimately, you’ll have a far worse chance of selling.

If you think a higher price is justifiable, then you should express your reasoning to your interested buyers. There’s no sense in trying to sell a property above its market value when your buyers can’t see it from your perspective. With this said, many buyers may still pass on the opportunity if they think it’s a bad deal, but this will give you a better chance to find a buyer who can understand your reasoning.

You’ll need to come terms with the fact that your property could take much longer to sell. Consider whether the importance or your property is worth this extra time and effort.

Use these strategies to help you sell.

Hagerstown is a great place for selling commercial real estate, so if you’re committed to selling, there are some steps you can take to make the process easier.

First things first: you need to get your property appraised by a professional. You should be doing this anyway when selling a property but doing so in this situation could help you reach the asking price that you’re looking for. An appraisal will give you something tangible to show your buyers when trying to justify your price.

Once you know your property’s market value, you can try using anchor pricing to give you the upper hand before starting a negotiation. List your property for slightly higher than what you actually want for it. When people send you offers, (which are almost always lower than the asking price) the offers will be closer to the price that you’re actually looking for.

In addition to these steps, it goes without saying that you’re going to have to play hard ball in your negotiating. Hopefully you have patience, because you may be turning down a lot of offers in order to find the right price. If you’re committed to a price, you need to stick to your guns and learn how to say “no.”

You can also try putting an expiration on your counteroffers to show that you mean business. Assuming your counteroffer should be close to your goal price, the pressure of time could be just enough to make someone pull the trigger on buying your property.

Don’t be blinded by your emotions.

These strategies are used in almost any instance of selling property. If they’re not working, the price you’re asking for may just be too unreasonable.

The truth is that almost everyone has some degree of emotional attachment to their property. In a perfect world, everyone would get an extra buck for the sentimental value and history attached to their property. Unfortunately, the world is not perfect, and sometimes we have to be realistic and settle.

By going about your deal more reasonably, you will save yourself from significant amounts of stress and time. In most cases, asking for a high price because you’re overly attached to your property will bring about many negative interactions and ultimately cause a frustrating experience.

So, try to see it from the buyer’s perspective and set a reasonable price.

Get the right price for your commercial property.

Hopefully, this article has provided you with the general guidelines for dealing with emotional attachment in regard to selling your commercial property. If you’re still seeking advice on selling commercial real estate in Hagerstown, we can help.

We pride ourselves in providing commercial real estate services in Hagerstown with our trusted brokerage expertise.

Blackwolf Commercial is a commercial real estate broker and property management service that excels in selling commercial real estate. Get in touch with us today online or give us a call at 240-578-4220 to get started.

25 Need-to-Know Commercial Real Estate Terms

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If you’re not familiar with commercial real estate industry jargon, it can feel like a foreign language. If you’re confused by things like Differential Cash Flow or Load Factor, don’t worry – you’re not alone.

But don’t lose heart. Understanding some of the basic terms can give you a foundation to speak that language – and, hopefully, leave you better equipped to make commercial real estate decisions.

To that end, we’ve put together an introduction to 25 common commercial real estate terms.

While each of these terms could likely be discussed in detail in its own right, for our purposes here, we’ll work to give you a familiarity and basic understanding of each.

Let’s get started!

Annual Percentage Rate

The Annual Percentage Rate, or APR, is the interest rate for an entire year – instead of a monthly fee or rate – as applied on a loan.

Effective APR (or EAR) takes into account the fee and compound interest.

Annuity

An annuity is a fixed payment over a designated period of time.

Break Even Point

The break-even point is the condition at which property income covers recurring expenses. Often, this will be dependent upon building occupancy.

Building Classifications

The most commonly-used building classification approach in commercial real estate is applied to office buildings:

Class A: Highest quality buildings in the market, with favorable locations, structural integrity, and infrastructure.

Class B: A step below Class A, yet still with quality components. May have potential to upgrade to Class A with aesthetic renovations

Class C: The lowest class of building. These properties are older, poorly located, and in need of substantial renovations.

Capitalization Rate

The capitalization rate, or cap rate, is the ratio of Net Operating Income (NOI) to a property’s asset value. For example, if a property is valued at $1,000,000 and has a net operating income of $100,000, then the cap rate would be $100,000 over $1,000,000 (or 10%).

Cash Flow After Tax

Cash flow after tax, or CFAT, is determined by adding non-cash accounts, such as amortization, depreciation, restructuring costs and impairments, back to net income.

Cash Flow Before Tax

Cash flow before tax, or CFBT, is the amount of money generated by an investment after collection of all revenues and payment of all bills, yet without any deductions for depreciation or other noncash items, and before calculation of income tax consequences.

Common Area Maintenance

A common area is a space shared by all of a building’s tenants. In commercial buildings, these spaces often include areas such as entryways, dining areas, or conference rooms that are available for shared use.

Maintenance is the amount of additional rent charged to the tenant to these areas and may include services like custodial care or snow removal.

Concessions

Concessions are granted benefits by a landlord in order to attract tenants. Examples include free rent, lease buyouts, moving allowances, or tenant improvement allowances

Contract Rent

Contract rent is the total rental obligation as specified in a commercial real estate lease.

Depreciation

Depreciation is the loss of utility and value of a property over time.

Differential Cash Flow

Differential cash flow is the difference in the cash flow from one alternative and the cash flow from another alternative. This is a barometer used to determine the viability of new projects.

Leased Fee

A leased fee is a landlord’s right of use to property and the right to lease to others. Essentially, it means that the landlord still owns the property.

Multiple-Use Office Space

Multiple-use office space is simply commercial space that can be used for a variety of purposes.

Net Operating Income

Net operating income, or NOI, is a calculation used to analyze real estate investments that generate income.

NOI equals all revenue from the property minus all operating expenses. Revenue may include things like parking and service fees, vending machines, and rent. Operating may include maintenance, insurance, property management fees, utilities, property taxes, etc.

Present Value

Present value (PV) is the current worth of a future sum of money or stream of cash flows based on a specified rate of return. The general principle is that money today is more valuable than the same sum of money in the future, based on return on investment.

Principal

Principal refers to an original sum invested or lent.

Real Estate Investment Trust

A real estate investment trust, or REIT, is a company that owns, and in most cases operates, income-producing real estate as a means of generating profits for investors.

Rentable Square Footage

Rentable square footage is a space’s usable square footage in addition to a portion of the building’s common areas (such as entry ways, conference rooms, etc.)

Rentable-to-Usable Ratio

Also known as the load factor, the rentable-to-usable ratio is the rentable square feet over usable square feet, where rentable square feet include common areas and usable square feet include the specific area a tenant will occupy to do business.

Return on Investment

Return on investment, or ROI, refers to the gain or loss generated on an investment relative to the amount of money invested. This is calculated by taking net profit over cost of investment.

Sublease

To sublease means for a renting tenant to lease a property of their rented space to a subtenant.

Triple Net Lease

A triple net lease is a lease agreement in which the tenant is responsible for paying the building’s property taxes, building insurance, and maintenance or repair costs during the term of the lease. Often, rent is reduced in this context.

Usable Square Footage

Usable square footage is the space occupied by a tenant from wall to wall, excluding common areas such as lobbies, restrooms, stairwells, etc.

Zoning

Zoning refers to the designation of certain areas as being legally categorized for certain land uses and is usual enacted by a local planning authority.

Next Steps to Make Great Commercial Real Estate Decisions

Hopefully, these definitions are helpful for you as you consider commercial real estate information in your decision-making process. If you’re still a bit intimidated, though, don’t hesitate to ask for help.

At Blackwolf Commercial, we have a breadth of expertise in commercial real estate consulting and management, right here in Frederick, MD. Whether you’re looking to buy, sell, or lease, there’s a lot of jargon out there clouding the waters. But we can help you to sort through it and find the commercial real estate steps that are best for you.

Don’t let jargon cloud your decisions. If you’re ready to leave commercial real estate mystery behind, get in touch with us today.

Biggest Commercial Property Pricing Mistakes

commercial real estate price target

If you’re looking to sell commercial real estate, you understand firsthand the tension associated with pricing a property correctly.

Perhaps you’ve investigated comparable properties to get an idea of price, only to have an appraiser set your property somewhere completely different. Maybe you’re questioning whether the market is right at this point in time, or whether selling is even the right call.

Or, maybe you’re weary of thinking about the subject altogether.

We’re here to help.

There’s no denying that pricing commercial real estate can be difficult. But, at the end of the day, commercial property pricing comes down to basic economic principles and a willingness to adapt. If you can uncover an accurate understanding of the factors involved in setting value, you’ll be well-positioned to make the most of your property’s sale.

With that in mind, here are five big commercial property pricing mistakes that often obscure an accurate perception of a property’s value, presented with the hope that understanding them can help you to avoid them.

1. Attaching Personal Value to the Price

One of the most common mistakes in pricing, in general, is to attach personal value to the price.

We inherently add value to things we own simply because we own them. Known as the endowment effect, it’s a concept that’s obvious, but still hard to let go of. And when nostalgia or memories are attached, as well, our perception of our property’s value only increases.

Countless deals have been brought to a standstill by this.

It’s difficult, but the best pricing model ignores personal attachment to the property. That’s part of the benefit of bringing in an objective appraiser – they won’t attribute your value to the property.

Don’t make the mistake of attaching personal value to the price. You’ll end up pricing the property too high, likely out of the reach of potential buyers who would otherwise be interested.

2. Anchoring Incorrectly

Anchoring is another psychological term that can help or hinder you as you price commercial property. The concept refers to the human tendency to value the first piece of information above subsequent ones.

This can work in several ways.

One mistake often made in pricing commercial real estate is to weigh the price points of “comparable” properties too heavily.

As price setting begins, “comparable” properties are a natural place to start – but if you weigh those values too heavily in the pricing equation, you may end up with a price that doesn’t reflect your property’s true value. Your property may have features that set it up apart from “comparable” properties, so don’t anchor yourself incorrectly.

Another mistake relating to anchoring is to set the price point lower than necessary, thereby anchoring potential buyers to the lower end of the price spectrum.

As you price your commercial property, keep in mind the concept of anchoring. Make sure that you’re not weighing first information too heavily – and that you’re not providing potential buyers with first information you’ll end up wanting to take back.

3. Failing to Consider Timing

Timing is a major factor in the property selling process, and it can often play a role in pricing mistakes.

One rule of thumb: never sell a property in a rush. Of course, there are unfortunate circumstances where a quick sale is a necessity, but the fact is that attempting to sell quickly often leads to settling for a low price in order to make the deal happen.

Market timing is another factor to consider, although, admittedly, the market can be difficult to predict. Easier to predict, though, is the value of a local market. For instance, in Frederick, there are areas that are being built up – locations where planned construction will inevitably impact the value of surrounding properties, as new retail centers open, or as old businesses close down.

The price of a property today may be vastly different from its price in three years. Pricing with this knowledge in mind can help to ensure good value.

4. Being Too Concerned About Sunk Costs

Sunk costs are those that have already been incurred and can’t be recovered. Essentially, the more you invest into something, the harder it becomes to abandon it.

As you’re pricing your commercial property, it’s a mistake to allow sunk costs to affect the process. For instance, if you’ve invested in certain renovations that are now superfluous or won’t serve a new tenant, it can be tempting to hike up the price, or to wait until you find a buyer who will value the renovations in the same way you do.

This can hinder an accurate concept of price, however. So, do your best to avoid the sunk cost trap.

5. Getting Locked into One Idea

Finally, one of the biggest mistakes people make when pricing commercial property is to get locked into one idea.

Did you envision selling the property to a manufacturer? Maybe manufacturing real estate is currently providing less value than retail space; don’t be afraid to switch from your expectations and find a retail buyer, if that’s possible.

Did you envision a certain fit-out for the property? To get the most value from your property, you may need to adjust those expectations. Did you hope to sell within a certain timeframe? You may not get the best price.

The bottom line is that locking your pricing concept into one idea doesn’t allow room for the creativity that’s needed to get best value.

Get the Best Price for Your Commercial Property

Hopefully, understanding these mistakes will position you to avoid them. But, if you’re still less-than-confident that you’re on track to get the best price for your commercial property, get in touch with us.

At Blackwolf Commercial, we have a breadth of expertise in helping commercial property owners negotiate for the best prices on their properties, and we’re proven hands at navigating the local intricacies of Frederick commercial real estate.

We’ll help you to avoid the mistakes and get the best value. If you’re looking to sell, give us a call.

How do I Sell this Property?

Selling a commercial property takes careful consideration. To sell well, you can’t rush things. You also can’t wait around forever. And you need to know a lot about your property and situation.

It can be a little intimidating, but with the right help, it doesn’t have to be. Here’s a brief overview of what you’ll need to do to sell a property well.

1. Understand What You’re Selling

To make the sale fair, both for the seller and buyer, it’s imperative that you have an accurate understanding of what you’re selling. If you don’t, you may as well set your price with a random number generator – any guess you make will be just as well-founded.

There are countless factors to understanding the value of a commercial property (location, square footage, neighborhood, amenities, and the list goes on and on). But one essential factor that’s perhaps less obvious than others is the property’s state of occupancy.

An unoccupied commercial building is generally a lower value, but it’s ideal for move-in should the buyer be looking to occupy the space themselves.

A building that’s about 80% or less occupied is considered a value-add; the price point is often lower than it would be if the property were fully occupied, but a buyer can supplement tenancy after purchase.

A building that’s fully leased is typically at its most valuable as long as the rents being paid are at or close to market rates.

That’s only one factor, of course. Realistically, to fully understand the value of a property, it’s best to get market statistics from somebody you trust. Doing that will help you to set a fair anchor point for value.

2. Make It the Best Version of Itself

Once you have an understanding of the property’s value, it’s time to make the property the best version of itself so that you can generate the best possible return on investment. A few ways to do that:

Ensure Tenants Are Happy

Potential buyers are likely going to walk through the property and speak with tenants. If tenants aren’t happy, that’s bad news; the potential buyer might perceive them as more likely to leave, and negativity could seep into the sales process. If the tenants are happy, that’s good news, they will be more inclined to speak well of the building, which cannot hurt the sales process.

So, do what you can to ensure tenant happiness. That may mean making a minor upgrade a tenant’s been asking for. It may mean simply checking in. It may mean sending somebody an edible arrangement – who knows?

But the bottom line is that ensuring tenant happiness is a good way to put a property’s best foot forward.

Enhance Curb Appeal

Another way to contribute toward your property’s value is through enhancing curb appeal. Curb appeal is a reference to exterior aesthetics – so, components like outdoor signage, landscaping, and the building’s parking lots and façade all come into play.

Often, spending a bit of effort on those aesthetic components can benefit the sale, because these small factors can make oversized impressions.

Make Selective Improvements

On a similar note, making selective interior improvements can help the sale, too. A new coat of paint can go a long way toward shaping the perception of a space. New carpet, new flooring, or updated interior lighting can be impactful, too.

3. Compile Documentation

A third crucial step to selling a commercial property is compiling all of the necessary documentation associated with the property. When a purchase offer is accepted by the seller, the buyer will generally have an period of time to review the property’s documentation to ensure that everything is up-to-speed, properly maintained and generally in good working order.

That will include things like service agreements on the property – HVAC, cleaning, maintenance, etc. It will also include summaries of all the costs to tenants and basic financial statements including income statements and expense budgets. Essentially, documentation should be compiled on all of the activities it takes to keep the building running.

4. Make the Sale

The last step is simple: find a buyer and make the sale!

Sounds easy, sure. But obviously there’s a little bit more to it than that. The truth is that finding a potential buyer whose needs and expectations align with your own can be difficult. Often, commercial property owners value their property differently than the market does. A property owner has an emotional attachment or some escalated perception of value; the market doesn’t.

But that doesn’t mean you can’t find a great buyer. If you’re struggling to do so, it’s nearly always due to unrealistic property pricing or terms. If that’s the case, it’s time to review and adjust.

And here’s the reality: at the end of the day it is impossible to be 100% certain you’re getting the best value for your property. There may be a buyer somewhere waiting to come out of the woodwork and make a dream offer.

But you can’t wait forever. If you are in fact ready to sell you property it is better to sell your property at a fair price today than to hold out for three years for a better price that may never materialize.

On some level, selling a commercial property simply comes down to trust: trust in yourself, trust in your buyer, and trust in your commercial real estate broker.

Next Steps to Selling Commercial Real Estate

Hopefully, this overview has been helpful as you consider the steps toward selling commercial real estate.

If you’re ready to sell your commercial property and you’re looking for consulting you can trust, let’s talk.

At Blackwolf Commercial, we take pride in serving clients around Frederick with trusted brokerage services. We can walk through the selling process with you, ensuring that you have the information you need to get the value you deserve. Get in touch with us today online or at 240-578-4220 and take the first step toward a great sale.

5 Factors to Consider When Your Professional Services Firm is Looking for a New Space

Professional services have unique needs. And in commercial real estate, professional service facilities often don’t get the attention that other forms of real estate do.

First: what do we mean by professional services? For our purposes, we’ll refine the term to mean for-profit organizations that offer expertise as opposed to a physical product – think lawyers, advertising professionals, architects, accountants, financial advisers, or consultants.

And, we’ll exclude medical – although that’s technically a professional service, it’s a different animal altogether.

What we’re left with are organizations that have a lot of flexibility in terms of choosing commercial space. While there are obvious aesthetic and physical needs for retail or medical commercial real estate spaces, the needs are less obvious for professional services. They don’t need to stock inventory. They don’t need to conform to the stringent regulations that medical facilities do.

Commercial real estate for professional services is more open-ended. But that can make selecting a space more difficult.

So, when you’re choosing professional service real estate, what should you be considering?

1. Location

The old real estate cliché still applies to the professional service space. It’s all about location, location, location – just maybe not in the way it is for other industries.

So, be sure to consider: where does your professional service commercial real estate need to be located?

Unlike retail, professional services may not need to be grouped around high-traffic areas. They may not need to be around similar businesses, or in an especially aesthetically appealing area of town.

Location may not as obviously and directly affect professional services – but it still matters. Some commercial real estate may not be centrally located but may offer affordability and spaciousness instead – which could be ideal for accountants. On the other hand, some industries may benefit from having a “cool” location, both in terms of impressing visiting clients and benefitting HR pitches – marketing agencies or architectural firms may fall into this boat.

2. Time In-Office

How much of your time (and the time of your employees and coworkers) will be spent in-office?

This is one of the major factors to consider in professional services, because the reality is that many professional service firms spend a good deal of time outside of the friendly confines of the office. Consultants may travel to clients, IT techs may spend time on-site, and so on. If the majority of the workforce is out of the office more than in it, you should plan for the needs of your space accordingly.

We’ve seen it firsthand: vast offices become strangely empty when professional service firms bite off more space than they can chew and fail to account for out-of-office work.

3. Frequency of Guests

How often will guests – especially clients – be visiting your professional services location?

Some firms rarely host clients; these organizations can afford to choose space based more on function over form, often at a lower cost. What need is there for a fancy lobby fit-out if nobody ever sits in it?

For some professional service firms, though, the appearance is part of the appeal. Clients may even expect a certain personality in a certain space. For example, a marketing firm might be expected to frequent a space that’s modern and trendy.

4. Conference Space

Another consideration that can be particularly relevant for professional service firms: conference space.

There’s nothing that can divide an organization quite like the wars over limited conference space. One employee has a big client presentation, only to find that the conference room has been reserved by someone else for an interview with a prospective employee. A battle is wage. The end result: somebody is left out in the cold, trying to squeeze a meeting into the awkward area of the front lobby.

Consider: how many client meetings do you have each week? How many are on-site, or, if remote, require a conference room?

Make sure to plan for your conference space needs as you seek professional services commercial real estate.

5. Getting the Right Support

The truth is that factoring professional service needs into account is difficult when seeking commercial real estate space. There are nearly limitless variables to consider – and they aren’t always obvious.

That’s why getting the right support is so important. Accordingly, it can be profoundly helpful to work with a commercial real estate expert.

That’s where we come in.

If you’re searching for the perfect office, we offer real estate brokerage services that help you navigate your options and implement solutions that work for you.

Blackwolf Commercial helps businesses as well as commercial real estate investors survey the market and find properties to make educated decisions that boost profits, working with organizations to fully understand what their unique needs are. And, we have deep expertise in Frederick, Maryland commercial real estate.

Don’t settle for professional service commercial real estate that doesn’t fit your business. Are you ready to grow your business into a perfect fit? Get in touch with us today, online or at 240-578-4220.