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June 26, 2016 - 9:50 pm

Seconded – might as well claim depreciation for the couple of days

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June 26, 2016 - 9:47 pm

Exposed aggregate or coloured oxide vs plain concrete are easy options.

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June 26, 2016 - 9:39 pm

Cougar is one of the best modelling packages available. Yardi is also the latest standard for the industry.

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June 26, 2016 - 9:23 pm

Multiple agencies are a waste of time unless it is a conjunctional agency agreement.

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June 26, 2016 - 9:20 pm

@azalia – you say that the tenant has exercised their option. What is the rent review at option? Market? CPI? Fixed?

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June 26, 2016 - 9:11 pm

@cjaysa says it’s low, @fredwisely says it’s too high. It requires more analysis especially regarding shifting of risk from vendor to purchaser.

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June 26, 2016 - 8:52 pm

Alternatively when companies are asset rich and cash poor, they will sell their assets and lease them back – this is a strategy by their advisors, accountant or CFO to make them look more profitable. Freeing up the capital to fund the expansion of the business or return to shareholders.

Many accountants underestimate the value of owning their own premises – it rarely appears on their balance sheets (take a look at most listed companies and look for the properties they own – hmmm not much there, not even head office nor their production sites).

If you have a couple of spare coins, you may consider this sale and lease back opportunity: http://www.smh.com.au/business/property/soul-pattinson-puts-building-in-pitt-street-mall-on-the-market-20160622-gppe8l.html

• This reply was modified 7 years, 10 months ago by  Scott No Mates. Reason: additonal information

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June 26, 2016 - 8:39 pm

@gshaheen @fxdaemon – direct comparison is not used for commercial property (primarily used in residential). I would used IRR & NPV as my primary valuation methodology and the summation method for my secondary review.

Being tenanted doesn’t guarantee a higher valuation but provides the valuer a basis for deeper questioning – they then need to determine the sustainability of that rent, ie is it above market or too low? Is the lease favourable to the lessee (if currently owner occupied)

There are distinctions between commercial and industrial premises dictated in part by zoning. Warehouses and factories may have an office component but the zoning will determine which is prevalent.

Real estate agents cannot provide valuations unless they are registered valuers, they provide appraisals.

Other commercial properties include retail and special premises eg. Telco facilities, marinas, purpose built facilities etc.

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June 26, 2016 - 8:09 pm

Return is related to risk (on many levels). Some are: finding a replacement tenant (time, quality etc), competition, functional obsolescence, zoning pressure.

I recently completed a lease renewal for a regional commercial property where the rent dropped 10% – so all is not rosy in this market. The lessor was more concerned with continuity of the cashflow rather than the rate.

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September 19, 2015 - 10:41 pm

FX – generally to attract a blue chip (or quality tenant) you need to have a decent asset – that does not necessarily mean expensive, large or A grade.

These tenants looking for well located, well maintained, good presentation etc. I have one client who has had a publicly listed building supplier for the last 20 years and more recently in another a string of no-names until an Foreign listed company moved in followed by another of the same ilk – with zero vacancy at change over to boot.

If you want growth look to areas which are under redevelopment pressure (not just via rezoning but also due to functional obsolescence).

As for dd on the tenant – won’t be forthcoming if it is a privately held company. You could ask but until you’re under contract, it would be unlikely that the tenant will provide you with any of its financials.

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June 2, 2015 - 9:48 pm

I’m surprised you didn’t jump at the chance.

As them to make a small deposit into your account so that your loan application can be sped up. Have them top up a refillable visa card.

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June 2, 2015 - 9:40 pm

Congrats!! Are you going to develop it as a turnkey project or going to flog it with the DA in place?

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June 2, 2015 - 9:38 pm

How about considering getting a depreciation schedule? Create a non-cash expense.

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December 26, 2014 - 4:42 pm

The answer to your question is yes, no and maybe.

If the insurance claim is for loss of rent, then the agent would be entitled to charge their % + gst, if it were for damage then they may only get whatever has been agreed in the management agreement for other charges (eg management of make good etc).

Not sure what you are asking in the third paragraph but I assume that you mean does the agent charge % on the bond when there is a claim, as above they would be entitled to be paid on the bond if it were applied to loss of rent.

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November 15, 2014 - 8:35 pm

By the sounds of it, the property is pre-Ordinance 70 & BCA. At the time of construction and issuing of the occupancy certificate (council), the building would have complied with the then current codes eg: height of buildings act and fire safety requirements were minimal.

If you were to proceed, you would need to ensure that basic requirements were provided ie. linked smoke detectors in each unit, FIP, distance to fire hydrant in the street etc. For peace of mind, you might consider installing fire exit lighting, solid core front doors (though fire rated doors/jambs might be more appropriate) & hose reels. The ceilings between floors probably aren’t fire rated (floors are probably timber), top floor ceilings wouldn’t be fire rated allowing the spread of fire into the roof space, dividing walls may not go through to the underside of the roof either.

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November 15, 2014 - 8:19 pm

Freedom wrote:

Moving on. I mean get their Real Estate Licence in order to buy/sell their own properties and investments that they purchase through their companies.

A developer, selling their own properties (100% ownership), does not require a real estate licence. If they are in a JV, then they are selling someone else’s property.

Unless they build the properties, they don’t need a builders licence either.

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September 5, 2014 - 11:46 pm

Richard’s been around for eons, so shameless self promotion goes with the gig. If he were a first poster, it’d be a different story.

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August 13, 2014 - 11:31 pm

The answer is how long is a piece of string. You mention 8 storeys but what does that really mean? Is that a fsr of 8:1? or you can build up to 8 storeys but only cover 1/10th of the site? The results are totally different? How much open space is required? How does the building envelope fit the site? Your group may be best served by contacting a valuer and town planner to come up with a highest and best use for the site.

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June 11, 2014 - 10:59 pm

I have given up on the vitamin VB, makes my head spin.

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June 11, 2014 - 10:56 pm

Issue a notice under the security of payments act through a debt collector experienced in this area.