Longmont , CO
(720) 600-9513
Longmont , CO
(720) 600-9513

Are Apartments the Answer to Unused Office Space?

Tag: Commercial Office Space

Are Apartments the Answer to Unused Office Space?

November 13, 2023

Much of the workforce now has the ability to work part-time or full-time from home. Remote work, in turn, has freed up a large portion of commercial office space in certain areas.

At the same time, many metros across the country, including Denver and the surrounding suburbs, are facing housing shortages. So, how do we fix the problem? Transforming unused office space into apartments may be the answer.

Office Space to Apartments

Converting office space to apartments is rapidly gaining popularity across the United States. If you are a commercial real estate owner, there are a few things to consider before making the decision. 

Zoning

Changing a building’s use depends on how the property is zoned. When a property is built as commercial space, changing the zoning to allow for residential use can be a complex and lengthy process. Be sure to check city, county, and state regulations to determine whether it’s possible to change how your building functions. 

Budget

Converting office space to apartments is not for the faint of heart. The infrastructure of the building will need to be entirely reworked to account for new plumbing, electrical, HVAC, etc. If you are interested in diving into this development project, be sure you have the budget to support its completion. 

Investment Strategy

Considering your investment strategy is a crucial aspect in making this decision. Would you prefer to manage residential space or office space? Both involve a different set of skills, tasks, and potential problems. Additionally, offices and multifamily residential each bring differing returns on investment, so it’s crucial to pick the one that supports your long-term goals. 

The Good News

The good news? In real estate, you always have options. Converting the use of your commercial assets can be an extremely successful strategy when done wisely. Talking with your trusted commercial real estate advisor is the best first step.

Please contact Steve Longenecker at WeBrokerCORealEstate or 720-600-9513 regarding any commercial real estate needs in Longmont, CO, and our neighboring communities.

We give out $250 gift cards for referrals that become our real estate clients.

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Pros and Cons of a Triple Net Lease

March 30, 2023

What is a Triple Net Lease?

A triple net lease is one of several lease structures in commercial real estate. In general, net leases require the tenant to pay other expenses in addition to their base rent. There are single, double, and triple net leases, which refer to the number of additional costs the tenant must pay.

A single net lease involves the tenant paying base rent and property taxes. A double net lease is structured so that the tenant pays property taxes and insurance in addition to their rent. Finally, with a triple net lease, the tenant pays the base rent plus property taxes, insurance, and maintenance.

Pros of a Triple Net Lease

There are several pros of a triple net lease. As a landlord, a triple net lease leaves little room for risk. The tenant is paying all of the building’s expenses, so the property owner can be sure they will not incur unexpected costs. 

For a tenant, a triple net lease gives more control. They don’t have to manage the building’s upkeep and appearance. Additionally, the tenant often has control over their utility usage and the associated costs. 

Cons of a Triple Net Lease

There are a handful of cons to keep in mind when considering a triple net lease as a landlord or tenant. For landlords, finding a solid tenant willing to take on a triple net lease can be challenging and, therefore, may result in vacancies. In addition, the tenant is given lots of automomy, and the landlord must trust that they have the financial ability to maintain their leases space properly. 

As a tenant, the biggest con is the risk. With complete control of the building comes elevated risk exposure. If the building starts experiencing maintenance problems, the cost falls on the tenant. Additionally, property taxes and insurance increases will directly impact the tenant’s overhead. 

Figuring out the right lease structure for your property or business can be difficult. Please contact Steve Longenecker at WeBrokerCORealEstate or 720-600-9513 regarding any commercial real estate needs in Longmont, CO, and our neighboring communities.

We give out $250 gift cards for referrals that become our real estate clients.

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Common Commercial Lease Terms to Know

March 2, 2023

Does Commercial Real Estate Have Its Own Language?

Depending on your level of experience, commercial real estate may seem like it has its own language. There is no shortage of acronyms and unique vocabulary. Educating yourself on standard terms in commercial real estate is crucial to excelling as an investor or real estate professional. 

More specifically, when looking at a commercial real estate lease, you need to understand the terms used. A commercial lease can have severe financial and legal implications if you don’t correctly understand its terms. 

Common Commercial Lease Terms to Know

Let’s take a look at a few common commercial lease terms to know:

  • Lease Term: This is simply the lease length from start to finish. After the lease term, there may be specific rules about renewing your lease.
  • Purchase Option: Depending on the verbiage, a purchase option can require or allow you to purchase the commercial real estate space at the end of the lease.
  • Subletting: This determines whether or not you can rent out a small portion of your rented space to another tenant. 
  • Go Dark Provision: A go dark provision allows the tenant to stop operating their business when they are no longer making a profit without defaulting on the lease terms. These are common in retail centers. 
  • Landlord’s Solvency: This aspect of a lease details the tenant’s rights if the landlord goes into foreclosure. 
  • Zoning: The building’s zoning determines what type of business may operate in that location. 
  • Escalation Clause: An escalation clause increases rent over a given period. The increases may be due to higher maintenance costs or stronger sales/business activity. 

Understanding commercial lease terms and partnering with a professional to help you through the leasing process is critical. Please contact Steve Longenecker at WeBrokerCORealEstate or 720-600-9513 regarding any commercial real estate needs in Longmont, CO, and our neighboring communities.

We give out $250 gift cards for referrals that become our real estate clients.

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#longmontcommercialrealestate #commercialrealestatebroker #northerncoloradocommercialrealestate

Build-Outs in Commercial Real Estate

January 18, 2023

A commercial build-out comes into play when a space, previously occupied by a tenant, is now leased by a new business that will use the suite differently. 

Tenants use commercial real estate spaces for various reasons, and every renter has their own needs. Some spaces may be the perfect fit as is, and some will require minor or extensive renovations to suit a new tenant. 

Commercial Real Estate Build-Outs

A commercial real estate build-out refers to anything required to make a space ready for your business. Depending on the existing building, a build-out may include new lighting, removing or adding walls, designing a waiting area, installing a kitchen, or creating new offices or storage areas. 

If the current space functions well for your business, a build-out may be unnecessary, and you may simply add a fresh coat of paint to complement your brand.

If your company is looking for new office space, you will likely be able to find a building that works efficiently as is. If, on the other hand, you are looking to open something more unique, like a bar, restaurant, or arcade, you will likely renovate (build-out) to create the right atmosphere.

Who Pays for a Build-Out?

There is no perfect answer as to who pays for a build-out. Everything is negotiable in commercial real estate transactions, and the same applies to a build-out. The landlord may cover the expenses, the tenant may be solely responsible, or they may share renovation costs, depending on the negotiated lease.

Be sure to consult an experienced commercial real estate broker as you choose your new space and decide on a build-out strategy. Please contact Steve Longenecker at WeBrokerCORealEstate or 720-600-9513 regarding any commercial real estate needs in Longmont, CO, and our neighboring communities.

We give out $250 gift cards for referrals that become our real estate clients.

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Types of Commercial Leases

December 8, 2022

If you have ever considered purchasing, owning, or renting commercial property, it’s critical to understand the different types of commercial leases. Not all commercial leases are created equal, and being familiar with the pros and cons of varying lease structures could save your business money. 

The three most common commercial lease types are gross leases, modified gross leases, and net leases. 

Gross Leases

In a gross lease, the landlord collects one lump sum rent payment from the tenant, which includes taxes, insurance, utilities, and maintenance. Then, the owner is responsible for using a portion of the collected rent to pay their taxes, insurance, etc.

Rental amounts tend to be higher when using a gross lease as it includes all operating expenses and is the only payment the landlord receives.

Modified Gross Leases

A modified gross lease is similar to a gross lease, but the tenant pays a certain proportion of the operating expenses on top of the base rent. 

Properties with multiple tenants, such as office buildings, often use modified gross leases. Overall, this type of lease offers a great middle ground between gross and net leases. 

Net Leases

A net lease is where the tenant pays a base rent to the landlord and is also responsible for other costs associated with the building. 

There are three general types of net leases that each require the tenant to take on different costs. The cost categories the tenant may be required to cover are taxes, insurance, and maintenance. 

  • Single-Net Lease: The tenant is responsible for one of the three cost categories mentioned above.
  • Double-Net Lease: The tenant is responsible for two of the three cost categories mentioned above.
  • Triple-Net Lease: The tenant is responsible for all three cost categories mentioned above.

In general, these leases are a great fit for owners who don’t want to be responsible for coordinating building maintenance or paying taxes, insurance, and utilities. They can tend to favor landlords but also give tenants the ability to review the landlord’s operating expenses.

Have Questions?

Please contact Steve Longenecker at WeBrokerCORealEstate or 720-600-9513 regarding any commercial real estate needs in Longmont, CO, and our neighboring communities.

We give out $250 gift cards for referrals that become our real estate clients.

Like, Share & Follow us on LinkedIn and Facebook.

#longmontcommercialrealestate #commercialrealestatebroker #northerncoloradocommercialrealestate

What to Consider Before Moving Office Spaces

July 5, 2022

Time to Move

Have you outgrown your current office space and decided it’s time to move? Has the global pandemic changed your business’s commercial real estate needs? Are you looking for a more updated and functional building?

There can be many reasons for moving to a new office space. You should consider a few things before deciding when and where to make your move.

Tips for a Smooth Transition

  • Know What You Are Looking For: Before you start looking for new commercial property, make a list of must-haves. Not every office space will provide the same functionality, so it’s important to know what you need.
  • Don’t be Overly Picky: Keeping your list of must-haves in mind, you shouldn’t be afraid to compromise on a few less essential items. Keeping an open mind will help you land a new space that fits your needs without spending years looking for an office that checks every single box.
  • Find a Moving Company: Finding movers who care for your company’s possessions the way you would can seem impossible. Look for recommendations from other business owners or your trusted real estate professionals.
  • Check Your Dimensions: No matter the size of your office, you have likely acquired pieces of furniture, equipment, and decorations. Make sure that all the necessary items will fit in your new space before wasting time and energy moving them.
  • Celebrate: Once you have found your perfect new office space and settle in, remember to celebrate! Real estate shopping and moving are not always easy, so remember to reward yourself and your employees. 

Rely on Expertise

While moving office spaces may be sometimes necessary, it can feel daunting. Make sure you partner with a real estate professional with the expertise to make the transition seamless. 

Please contact Steve at WeBrokerCORealEstate or 720-600-9513 if you have any questions about the commercial real estate market in Longmont, CO and our neighboring communities.

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