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

Referrals with Northern Colorado Commercial Real Estate

Tag: Commercial Real Estate Terms

Referrals with Northern Colorado Commercial Real Estate

April 24, 2024

Northern Colorado Commercial Real Estate

The commercial real estate world is complex. To navigate the ins and outs, Northern Colorado Commercial Real Estate is your go-to source for selling, purchasing, or leasing. 

Owner Steve Longenecker has over 30 years of business experience, including almost 20 years in the commercial insurance industry. As a trusted advisor for his commercial clients, he is known for his attention to detail, thorough standard analysis, diligent follow-up, and superior customer service. 

If you are looking to venture into commercial real estate, be sure to partner with an experienced broker to guarantee the success of your investment or transaction. 

Sending Us Referrals

Real estate is an industry highly dependent on referrals. So, how does it work when you send Northern Colorado Commercial Real Estate a referral? To show our appreciation, the referrer will earn a $250 gift card when the referral becomes our client!

Additionally, as industry experts, we have a variety of other experienced professionals we are happy to refer to you in return. For example, if you need a business broker to help sell or buy a company, we have you covered. Are you in need of specialty contractors for your next development project? We have worked with many and would love to pass along our recommendations.

At Northern Colorado Commercial Real Estate, our service extends beyond the transaction. We are eager to be a resource for any real estate-related needs or questions. 

Thank You!

Thank you for trusting us with your business! We are dedicated to serving our clients at the highest level and would love the chance to earn your referrals. 

If we haven’t gotten the opportunity to work with you before or if you have questions about commercial real estate, please contact Steve Longenecker and Northern Colorado Commercial Real Estate at WeBrokerCORealEstate or 720-600-9513.

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

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#longmontcommercialrealestate #commercialrealestatebroker #northerncocommercialrealestate

What is a Modified Gross Lease?

March 28, 2024

Commercial Leasing

If you aren’t familiar with commercial leases, they can appear much more complicated than a residential lease. There are various types, each with its own set of rules that the landlord and tenant must follow.

The three most common types are net leases, gross leases, and modified gross leases. Net leases assign the most responsibility to the tenant, while gross leases task the landlord with more duties. Modified gross leases land somewhere in the middle.

In a modified gross lease, the tenant pays a base rent amount and shares some of the other building expenses. Depending on how the lease is written, the tenant can be responsible for a portion of property taxes, insurance, utilities, or maintenance in addition to their general rent payment. 

Pros of Modified Gross Leases

The following are some of the pros of using a modified gross lease:

  • Negotiation: All operating expenses are up for negotiation to determine who will pay what. Unlike gross and net leases, where it’s already predetermined, a modified gross lease gives a landlord negotiating room to offload expenses. 
  • Shared Risk: As taxes, insurance rates, and maintenance costs fluctuate, the tenant and landlord share the risk. Neither party will face a drastic change in expenses on their own. 
  • Clarity: Modified gross leases provide clarity for the tenant. For example, rather than the landlord having to incorporate a fee into the rental amount to account for electricity, the tenant can clearly see their utility usage as a separate bill and budget accordingly. 

Cons of Modified Gross Leases

As a property owner, be sure you consider the following cons of modified gross leases:

  • Less Control: As a landlord, you have more control when you are in charge of all operating expenses. When you leave duties in the hands of others, you can’t be sure your renter will take care of everything to your standards. 
  • Resale: Investors tend to favor net leases as more of the expenses are the tenant’s responsibility. Therefore, selling a commercial property with a modified gross lease in place may be more difficult. 
  • Changing Costs: If the tenant were in charge of all operating expenses, any cost changes would not affect you as the landlord. However, with a modified gross lease, your yearly expenses are subject to change. 

Is it Right for You?

As you consider your next property purchase or renting your space to a new tenant, consult an experienced commercial real estate professional to determine the right fit for you.  

If you have questions about leasing or purchasing commercial real estate, please contact Steve Longenecker and Northern Colorado Commercial Real Estate at WeBrokerCORealEstate or 720-600-9513.

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

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#longmontcommercialrealestate #commercialrealestatebroker #northerncocommercialrealestate

Zoning in Commercial Real Estate

February 29, 2024

States and local governments use zoning to determine how various parcels of land are developed. Each zone has specific rules and regulations that municipalities implement to create a desirable layout for their community. 

For instance, zoning laws would ensure that a developer couldn’t build a large factory in the middle of a residential neighborhood. Consequently, when done well, the process aids significantly in strong property values.

Changing a parcel’s zoning is possible; however, it’s a long and challenging process that requires proving to the public that the new zoning is beneficial. Therefore, prior to purchasing any piece of real estate, it’s essential to understand any restrictions on its future use. 

Types of Zoning

Here are the five most common zones to consider as an investor or developer:

  • Commercial: Commercial zoning is reserved for businesses. Office buildings, retail spaces, and restaurants would all require commercial-zoned property. 
  • Residential: Residential zoning determines the type and density of housing in a given neighborhood. Some zoning only allows for single-family residences, while others may include multifamily developments. 
  • Industrial: Industrial zones include facilities like factories and warehouses. These developments are often further from the city center, where noise, pollution, and other environmental factors are less of a concern.
  • Agricultural: Agricultural zoning reserves specific parcels for farming-related activities. Various subcategories determine the types of animals and crops allowed on each property.
  • Mixed-Use: Mixed-use zones continue to gain popularity and often combine commercial and residential spaces. Building a handful of restaurants and stores within a neighborhood is an excellent example of mixed-use zoning.

Commercial Zoning

Commercial zoning guidelines determine how large a building can be compared to the property size (floor area ratio and lot coverage), how much parking needs to be onsite (parking ratio), and general safety features like the number of exits and fire escapes. A property’s zone also dictates other factors, such as building height, architectural features, and noise levels. 

Zoning laws dramatically impact a property’s use and development, so knowing the details is crucial before investing. If you have any zoning questions or commercial real estate needs, please contact Steve Longenecker and Northern Colorado Commercial Real Estate at WeBrokerCORealEstate or 720-600-9513.

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

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Gross Leases: Are They the Right Fit for Your Property?

February 2, 2024

What is a Gross Lease?

A gross lease is a type of lease that requires the tenant to pay one flat fee to the landlord to rent a given space. 

Rather than the tenant paying additional fees, the owner designs the rental amount to cover all operating expenses. These expenses generally include property taxes, insurance, and utilities, but the tenant could negotiate to have additional services such as cleaning included. 

In commercial real estate, there are several types of leases to choose from, depending on the property you own. Each variety of lease affects how your tenant-landlord relationship functions, so it’s best to consider all your options before making a choice. 

Types of Gross Leases

While all gross leases are similar, they fall into two general categories: modified gross and full service. 

A full service lease, as described above, includes all operating expenses in a flat rental amount. The tenant is not responsible for additional charges outside of their weekly, monthly, or yearly fee. 

Alternatively, a modified gross lease is tailored to the landlord’s needs. In this scenario, the rental amount may include property taxes and insurance but not utilities. A modified gross lease combines a gross lease and a net lease (where the tenant is responsible for operating expenses). 

Pros and Cons

Before deciding on a gross lease, it’s essential to understand the pros and cons. On the upside, a gross lease allows the landlord to collect a higher rental amount and pass along operating expenses to the tenant, especially as costs increase over time.

On the other hand, a gross lease requires more attention from the property owner as they are in charge of ensuring maintenance is taken care of, and bills are paid.

Be sure to partner with a real estate professional to help you decipher which type of lease is best for you and your property. 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 #northerncocommercialrealestate

What are Commercial REITs?

September 6, 2023

What is a REIT?

A REIT, or real estate investment trust, is an investment vehicle that is used as an alternative to purchasing a single piece of real estate. 

Purchasing a property takes large amounts of time, effort, and money. If buying real estate on your own feels out of reach, a REIT allows you to be a shareholder in a company that owns many pieces of real estate. This eliminates the need to search for and manage a property, and also greatly reduces the financial commitment. 

There are three major types of REITs, including equity, mortgage, and hybrid. Each offers unique benefits that are worth exploring if you are considering investing. 

How do Commercial REITs Work?

Commercial REITs are companies that own income producing commercial properties. These types of REITs typically own real estate such as apartment buildings, shopping centers, hotels, hospitals, and corporate offices. 

Most REITs focus on a specific type of property, however, some try to diversify their portfolio by owning several different subtypes of real estate. Diversification can help to reduce risk in the event that one sector of the real estate market performs poorly.

Overall, the company generates revenue by leasing its owned real estate to businesses in need. In turn, the REIT pays out a portion of its rental profits to the shareholders. 

Your Investment Strategy

Depending on your investment strategy and your financial situation, a REIT may or may not be the right option for you. Consulting a real estate expert is the best first step to determine how you’d like to set up your investment portfolio. 

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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Location, Location, Location: Does it Really Matter?

August 17, 2023

Everyone has heard the infamous real estate saying “location, location, location”. But how much does location really matter?

For many years, real estate professionals have touted location as the most essential aspect of any property. It seems to make sense that a home in a desirable neighborhood would be an ideal place to live. Additionally, buying a short-term rental in a resort town where people love to vacation is a savvy investment strategy. 

The question, therefore, is: What about commercial properties? Does location matter as much in commercial real estate?

Does Location Matter in Commercial Real Estate?

The short answer is yes. Location matters greatly in commercial real estate. The longer answer is that it heavily depends on the type of property.

For example, location is vital when considering potential property options for opening a restaurant, as the building and sign need to be visible to passersby. If your restaurant isn’t in a highly-visible location, you will miss out on many potential customers. 

On the other hand, you must consider location differently if you are considering purchasing commercial real estate to open a storage facility. Your building may not need to be exposed to quite as much foot and vehicle traffic, but you will need a location that provides easy access for your target demographic with storage needs. 

Additionally, to make a commercial real estate investment profitable, you may need to consider different locations based on price. Depending on the business and your goals, a prime location with a hefty price tag may make sense, or a smaller price tag with a better cash flow may be the best option. 

Working with a highly-qualified commercial real estate broker is the best way to find the property and location that is right for you. 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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Tips for Subleasing Commercial Real Estate

July 18, 2023

What is Subleasing?

Subleasing is common in both commercial and residential real estate, and involves the current tenant leasing their rented space, or part of it, to a new tenant. 

The new tenant, therefore, is known as the subtenant, and the agreement between the two is known as a sublease. The subtenant pays their rent directly to the original tenant, who then pays the landlord. Subleasing has many advantages, and following the tips below will ensure the process is successful. 

Tips for Subleasing

Here are a few tips to consider prior to subleasing commercial real estate:

  • Work with a knowledgeable commercial real estate agent who has experience in subleasing agreements and can advise you accordingly.
  • Research the area and property extensively before signing. Make sure it will be an excellent fit for your business!
  • Consider having an attorney review the sublease in detail to ensure the agreement is fair. 
  • Don’t be afraid to negotiate the terms of the sublease to better benefit you. 
  • Interview the tenant to make sure they are someone you can trust.
  • Throughout the sublease, communicate frequently with the tenant/landlord about expectations. 

Depending on your situation, subleasing might be the best option for your business. Subleasing can broaden opportunities for office locations and is often more cost-effective. Knowing the ins and outs of being a subtenant and following the tips above will help ensure success in your next subleasing endeavor. 

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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Understanding Owner Financing in Commercial Real Estate

July 11, 2023

In commercial real estate, buyers often select a type of financing offered by a commercial lender. There are a variety of traditional loan options, each with their own pros and cons. If looking for an alternative, however, buyers can consider using owner financing, also known as seller financing, to purchase commercial real estate. 

How Does Owner Financing Work?

With a traditional loan, a lender agrees to give a buyer a specified amount of money (based on their income and assets) to secure ownership of a property. The borrower then pays the lender directly according to their loan terms.

Owner financing, on the other hand, allows a seller to finance a property for a prospective buyer. Rather than going through a third party, the buyer and seller agree on an interest rate and payment schedule, and the buyer pays the seller directly. 

Pros & Cons of Owner Financing

As a buyer, there are several pros and cons to consider when using owner financing. 

Pros

  • A buyer is not required to qualify for a specific loan product offered by a commercial lender.
  • The buyer and seller can directly negotiate the loan’s interest rate, payment, and length.
  • The lack of commercial lender fees reduces the total closing costs. 
  • Not using a third party for financing allows for a faster closing. 

Cons

  • Not all sellers will offer owner financing.
  • The loan terms can be written in the seller’s favor (higher interest rate, larger monthly payment, etc.) because they are taking on more risk by carrying the loan.
  • The seller can dig into the buyer’s finances, including income, debt, and credit. 

An experienced real estate professional will help you determine the best type of financing for your situation. 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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6 Benefits of Hiring a Commercial Real Estate Broker

June 20, 2023

The world of real estate can feel like the Wild West. There are many different ways to navigate the buying, selling, and leasing process, and some try to do it all on their own.

In commercial real estate, it is common for businesses and individuals to go unrepresented when looking to purchase or lease. Some consumers simply don’t understand the advantages of partnering with a commercial real estate broker. 

Working With a Commercial Real Estate Broker

Let’s dive into a few reasons why working with a commercial real estate broker is the right decision. 

  • Time: Allow your commercial real estate agent to do the heavy lifting! They will search for properties, set up showings, and prepare contracts on your behalf to save you time. 
  • Money: Hiring a broker does not always mean money directly out of your pocket. Often commissions are paid based on the lease amount or purchase price and are normally paid by the seller or leasing landlord. 
  • Negotiations: Negotiating a real estate transaction is a skill. Your agent knows the tactics to secure the best terms possible and save you money. 
  • Legal: Commercial real estate contracts are complicated and have legal consequences. Having an experienced professional to explain the nuances is key. 
  • Data: Your real estate agent has access to many search engines and market stats you will need to make a well-informed decision. 
  • Knowledge: A broker’s general knowledge of the industry, your local market, and real estate contracts will ensure you stay on the right path. 

Hiring a Professional You Trust

Hiring a professional that you trust, who will work in your best interest throughout the transaction, will make the process seamless. 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

Deferring Taxes Using a 1031 Exchange

June 6, 2023

When you sell a piece of real estate, you may need to pay capital gains tax on the proceeds. Capital gains tax payments can be hefty in commercial real estate, where price tags are often significant. 

To avoid paying taxes immediately following a sale, some investors choose to use a 1031 Exchange. 

What is a 1031 Exchange?

A 1031 Exchange is a tool used to defer taxes. It doesn’t eliminate tax payments; it simply allows investors to pay capital gains tax at a later date. When using a 1031 Exchange, an investor can sell a piece of real estate and use the proceeds to purchase another property of like kind without paying taxes on the gain. 

Deferring taxes in this way allows funds to be reinvested in a new asset and continue to grow without a tax penalty for many years. The new property must be of greater or equal value, and the purchase must happen within a specific period to qualify. 

Regarding commercial real estate, your business could sell its current office space and purchase a new office (of greater or equal value and within the specified period) without paying taxes on the proceeds from the sale. Ultimately, it means keeping more money in your pocket to continue investing.

What’s Your Strategy?

The first step is determining your investment strategy. Your commercial real estate agent can help guide you based on their experience and the type of real estate you hope to invest in. Depending on your goals, a 1031 Exchange may not be the best option, but it’s a highly beneficial tool to implement in the right situation. 

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

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