What Should You Consider When Purchasing Commercial Property?

If you are thinking about buying commercial property for the first time, the landscape can be daunting. Even if you already own several commercial properties, you may encounter new challenges. So then, what should you consider before making your next commercial property investment?

Investopedia defines commercial real estate (CRE) as “property that is used exclusively for business-related purposes or to provide a workspace rather than as a living space.” The main categories of commercial properties are office, industrial, multi-family, and retail. Because commercial real estate typically requires more capital than residential real estate, investing in it can be more difficult for individuals.

We have all heard the cliché, “Location! Location! Location!” applied to home buying, and the same is true of commercial real estate. In fact, it is the very first point the U.S. Chamber of Commerce recommends investors consider when looking to make a real estate purchase. However, location can be a bit more complicated for an investment property. The infrastructure surrounding your location can make a significant impact on your investment, too. If you buy a warehouse with the intent to lease it to an industrial tenant, you need to make sure the infrastructure is there for this type of user. For example, proximity to interstates or highways can be beneficial.

After you have determined the classification of a property, it is important to really get to know the building. As the U.S. Chamber of Commerce points out, you want to know what the building was previously, how much wear and tear has been done to the property, and what potential repairs are going to be necessary now and in the future. Major expenses often include repairing or replacing items like the roof, the parking lot, or the HVAC system. Our commercial appraisals can help with this kind of insight, but you should do your own research as well.

Once you have gotten to know the property, there are four types of commercial leases you as the owner can offer for investment purposes, according to MasterClass. We would also add a fifth type of commercial lease to their list.

  • Single-net lease: Single-net leases make the tenant responsible for paying all property taxes for the duration of their lease.
  • Double-net lease: Double-net leases make the tenant responsible for paying insurance and property taxes for the duration of their lease.
  • Triple-net lease: Triple-net leases make the tenant responsible for paying insurance, maintenance, and property taxes for the duration of their lease.
  • Gross lease: In a gross lease, the tenant only pays the rent, and the property owner pays all other related fees for the property.
  • Full-service lease: An all-inclusive lease where the owner pays for in unit services (cleaning). These are often government leases.

If you have any questions about our commercial services, please contact us.

 

Appointment to the Iowa Real Estate Appraiser Examining Board

Congrats, Jordan Maus!

Our own Jordan Maus, Certified General Real Property Appraiser, has been appointed to the Iowa Real Estate Appraise Examining Board. Jordan will represent the Iowa Quad Cities for an initial term of three years.

As part of the Board, Jordan will take on the following responsibilities:

  • Examination of candidates applying for certification as an appraiser
  • Issuance of certificates
  • Investigations into violations and infractions of the law and rules
  • Revocation, suspension or administration of disciplinary sanctions

Jordan also joined the Board’s Disciplinary Committee which focuses on investigating complaints, identifying malpractice and rendering disciplinary actions as needed. “While on the board, I hope to gain a better understanding of the processes and procedures of the appraisal industry in our State and hope to contribute to the growth of the profession,” Jordan notes.

Jordan started his career in real estate appraisal in 2008. After working as an Associate Trainee for two years, Jordan joined Roy R. Fisher in 2012. He obtained his Certified General appraisal licenses in Iowa and Illinois just one year later.

Jordan has been married to his wife Fran for 15 years. They enjoy traveling, culinary adventures and attending Chicago Cubs games. When not appraising real estate, Jordan and Fran co-own and manage Me & Billy, one of Davenport’s favorite downtown restaurants.

Mark Nelson, President of Roy R. Fisher, Recognized for Excellence

Mark Nelson, President of Roy R. Fisher, was formally recognized with the MAI Designation by the Appraisal Institute – the world’s leading organization of professional real estate appraisers. He has distinguished himself through his impressive record of work experience and professionalism in the real estate industry for the past 35 years.

Mark Nelson manages the day-to-day operations of Roy R. Fisher, as well as performing duties as the primary appraisal professional in the practice. As an active member of the Quad Cities community, Mark has chaired the Davenport Park and Recreation Advisory Board, serves on the legislative committee of the Quad Cities Chamber of Commerce, and he is active in local politics. Learn more about him here.

The Appraisal Institute is a global association made up of almost 20,000 appraisal professionals across 50 countries. Since 1932, it has advocated for the advancement of global standards of professionalism and practice, as well as nondiscrimination and ethical conduct within the appraisal industry. The Appraisal Institute provides several designations for outstanding members, including the MAI Designation, to foster a desire for continued education and professional excellence. This follow through on its mission makes it the leading professional organization for real estate appraisers for over 85 years.

The presentation of the MAI Designation is reserved for members of the appraisal community who have demonstrated good moral character, are certified in good standing as a General Real Property Appraiser and meet stringent standards of professionalism and ethics. Candidates are required to pass a rigorous, comprehensive final exam to test their knowledge, qualifications and professional experience against the Appraisal Institute’s strict criteria. Mr. Nelson will be presented with his certification at an official meeting of the Iowa Chapter of the Appraisal Institute. Congratulations from the entire Roy R. Fisher Team!

Roy R. Fisher