Home Who We Are About Us Our Agents Our Vision / Goals Contact Us Services Lease / Purchase / Sell News & Events Press Releases Newsletters Property Listings Find Properties Hot Properties Recently Sold Affiliations Affiliations Blog Marketing a Property by Jean at 12:01 04/19/2010 Marketing a Property By: Tim Jozwiak How brokers effectively market commercial properties in today’s market. The purpose of marketing can be as simple as getting information about a product in front of potential consumers. In commercial real estate, we advertise properties we represent to consumers in need for those properties. We start with some basic information such as 1) the type of property 2) the location 3) the potential users. We work to maximize the opportunities for the property to be presented to a potential user. We are most successful in the marketing campaign when we make it easy for the consumer to find out that the property is available and quickly access additional information the consumer might need. We use multiple avenues to make sure the property and the consumer will be matched. Internet The internet has revolutionized our marketing as it has most other business. It has certainly revolutionized the ability for the average consumer to get information on just about any property. The internet is great for research, comparisons and locating the property on a map. The limitations, even with the mapping and street/overhead views that the internet can provide, are that the web does not give the client the full context of the location of the property that being at the property can convey. For our clients it is critical that we have a presence on the internet. We accomplish this by having our own web site www.premier-comm.com, subscribing to the most popular property listing web sites (some are specific to different types of property), and even utilizing the local community web sites that offer the option usually found in the Economic Development section. While we continue to explore digital marketing, we have found that presence on the internet is not the magic answer and does not have a direct connection to the calls we receive on a particular listing. Signage Marketing is the ability to get product information in front of the consumer. Few avenues of marketing can convey the information about a property more than the property itself. In simple terms, a sign on the property designating that it is on the market for sale and/or lease conveys location, type and availability. While a picture (on a web site or flyer) may be worth a thousand words, it does not compare with seeing the property as it is located with the adjacent properties, the streets, the parking, traffic, etc.. Our signs are designed to catch the consumer’s eye. The size is dependent upon the property owner’s budget, the local sign ordinance and the message we are trying to convey. At a minimum our signs will designate the property is available and more information can be gathered by contacting Premier Commercial Realty. The effectiveness of our signs is best represented by an informal poll of the calls we have received this year. Since January, approximately 90% of the calls we have received by a customer looking for property to buy/lease have been as a result of a sign located on the property. While many may find additional information on the web, the reason they called on that property, on that day, was due to the sign on the property. Our signage is the golden goose that keeps on laying. Paper Media Traditional marketing venues are periodicals, newspapers and pamphlets. These were the mainstay in our profession for the last century, but the ability to get more information, in a timelier manner has greatly reduced the effectiveness of newspaper and periodical marketing. The effectiveness of flyers is directly related to the ability to get the flyer to those businesses most likely to need the property. It is expensive, but with the right mailing list, it can also be very effective. Networking Does networking qualify? It may seem odd, but even in today’s digital age, there is still the possibility that the consumer you are looking for will never see your web site, sign, or print ad. The customer may be someone you are introduced to through a business partner, someone you meet at a business mixer or even an individual you meet through personal relationships. While it is hard to qualify the time spent networking to current clients, it may very well lay the seeds to help find that next entrepreneur looking for a locations to start a new business. Furthermore, networking is more than just closing deals and finding clients, it’s also about MAKING and preserving relationships. Clients want to do business with people and brands they are familiar with and trust. It’s not always about the “bottom line”, good business relationships are priceless. In a Nutshell… In this market, it is very difficult to find someone to buy or lease a property. We operate on the assumption that at a particular price, there is always the potential to complete a deal. The key is to maximize the opportunities for a customer with the ability and desire to buy/lease the properties we represent. To maximize that pool of potential clients we utilize multiple marketing tools to reach the largest audience. Hands down our signs generate more calls and interest than any other single medium, including the internet. 0 comments Seller Financing by Jean at 11:59 04/19/2010 Seller Financing – a solution to getting your deal done. By: Tim Jozwiak In this economy, the biggest hurdle in purchasing a commercial property is how to get the deal financed. The majority of commercial real estate transactions are still done through traditional banks, but what happens if the banks turn you down. In this issue we will discuss one option that can be beneficial to both the buyer and the seller: seller financing. What is seller financing? In simple terms it is where the seller acts as a bank for the loan. The buyer can finance up to the entire amount of the purchase price through the seller. This can help both the buyer and the seller in a difficult commercial real estate market. Is seller financing an option for you? There are a couple of things that must be addressed before entering into an agreement for seller financing. If there is an existing loan on the property, the seller must comply with any provision for the sale of the property contained in the existing loan contract (such as a “Due on Sale” clause). It may require the loan be paid in full or it may limit the ability of the seller to subordinate the ownership interests in the property to another person. If the property is still being financed by a lender, you should have your attorney review the loan documents to find any limitations / requirements. If the seller owns the property free and clear of any existing debt, the transaction will be much simpler to complete. How is seller financing accomplished? One of the best aspects of this type of transaction is that all of the details are between the buyer and the seller. Once a purchase price is agreed to, the loan structure is negotiated. Similar to a bank loan, the buyer makes a down payment and agrees to an amortization period, interest rate and a final payoff date. The interest rate is whatever they can agree on (could be higher or lower than offered by the banks). Sellers will often require a balloon payment in three to five years to complete the sale (at which time the buyer will hopefully have enough equity in the property to qualify for a traditional bank loan). This type of transaction allows the buyer to obtain “equitable interest” in the property, meaning the buyer has all the advantages of ownership including interest deductions, equity buildup, etc. It allows the seller to repossess the property if the buyer defaults on the terms to the sale. To protect the seller, some agreements will require the buyer to offer additional collateral if they do not have the cash for the down payment. The seller can also require an insurance policy. As with any financial transaction, due diligence is the key to a successful sale. What are the benefits / advantages? ? Flexibility of the loan terms (banks are requiring 25-30% down while in seller financing, the buyer and seller set the rates). ? Quick closing. ? No closing costs (points). ? Buyer can purchase a property with substandard credit. ? More potential buyers – lower down payments than banks. ? Buyer can use collateral instead of cash for the down payment if seller agrees. ? Seller gets monthly income for the duration of the contract. ? If buyer defaults, seller gets to keep buyer’s down payment and gets the property back. ? Taxes: 1) Buyer has equitable interest in the property giving them all the normal tax deductions (interest, depreciation, etc). 2) Seller may have income tax advantage by not getting all their proceeds at once. ? Increased chance of finding a buyer in an otherwise slow market. What are the disadvantages? ? More risk to the seller than a traditional sale. ? Sellers’ equity is tied up in the property during contract period. ? Buyer does not typically get the deed until the loan is paid off. ? Buyer must pay off loan when due at a time when it may not be possible to get a bank loan. Seller financing is a solution to limited financing options and may open a property up to more prospective buyers. We are seeing more and more of it in this difficult market. Please contact Premier Commercial Realty for seller financing opportunities. We can tell you what the feasibility is for you, whether you are buying or selling. 0 comments Brokers as Shrinks by Jean at 11:54 04/19/2010 Brokers as Shrinks By: Bruce Kaplan Someone close to our industry recently suggested that commercial real estate brokers are a lot like shrinks these days. A good portion of our days are spent taking phone calls from clients who spill their guts with a tale of woe about how: 1. their tenants stopped paying rent or filed for bankrupcy or 2. the tenant tried to re-negotiate the rent down 20% from the scheduled lease payment or 3. their bank refuses to renew their mortgage or line of credit or 4. the bank is foreclosing on their property, or some variation of these four. Although it gets a bit depressing listening to these conversations all day, every day, we take stock on the fact that we are providing a service. Believe me when I tell you real estate classes don’t prepare us for the role of counselor and the amount of handholding and commiserating that we routinely do. Being a good listener has always been a requisite quality for a sales person (we need to listen much more than we talk). They say that’s why the Good Lord gave us two ears and only one mouth. Having high empathy is another trait that makes a sales person effective. I don’t think this can be taught. You either have it or you don’t. But rather than go home and kick the dog, our clients call us to let out their frustrations. We do our best to assure them that they are not alone and convey any ray of hope we can. In all honesty, those of us in the business 30, 40 or 50 years, have never seen it this bad. Real state has always seemed somewhat immune from periodic economic downturns. Commercial real estate has lost as much as 40% of its value in the last couple of years. That may not be enough to cause our clients to jump off the Willis (Sears) Tower. It hurts when that much of your personal wealth evaporates in such a short period of time. If you knew the market was coming back anytime soon, it would be easier to swallow. But this little “episode” shows no sign of letting up. Many of us brokers are also real estate investors, so we have personally experienced the literal decimation of our hard earned equity. This allows us to "walk in the shoes" of our clients. We truly feel the pain and can swap stories if that makes them feel better. How do we keep our spirits up during all this consoling and handholding? After all, we don’t typically charge by the hour. . . only when we are successful at selling or leasing something of an office, retail or industrial nature. Maybe we are gluttons for punishment, masochists or the like. We do all our work up front, all the research, all the marketing, all the showings, all the negotiating, all the waiting for a closing or lease signing and we don’t make a cent until we consummate the deal. What other profession works like that? Not attorneys. Not accountants. Not doctors. Certainly not REAL shrinks! We measure our successes and get our greatest satisfaction when our clients make profit. My partner, Joe Billitteri, and I have a slogan we live by . . . “your profit is our success.” The successes and the profits are few and far between these days but as professionals, we have to settle for helping clients minimize their losses. Getting someone out of a bad situation before they completely lose their shirt is a success in and of itself. I never thought all the Psych classes I took in college would ever do me any good in the real world. I even abandoned my psych major because I saw no future in it. The future is now and we’re open for business if you want to unload your personal tale of woe. Having been through a number of recessions over the years, I will tell you to hang in there. Better days are ahead . . . perhaps sooner than you think! 0 comments Do you want to invest in Commercial Real Estate? by Anita at 11:24 05/21/2008   (updated 11:36 05/21/2008) We are often asked by our clients how one goes about investing in commercial real estate. Over the last 16 years, we have concentrated on only the brokerage side of the business but myself and many of my brokers have, for years, invested to enhance our own real estate portfolios and to make the most of opportunities that were presented. With the recent turmoil in all of the capital markets, it became apparent that there were going to be significant opportunites on the investement side of our business. In anticipation of this, we joined forces last year with an experienced real estate consultant (Denny Coll), who has invested in about 30 properties for his own and his investors' accounts. Denny's former firm, which he later merged with a major Wall Street firm, owned 2 million SF in the Chicago Loop and another 1 million SF in St. Louis, as well as about 1,200 multi-family units. With Denny's help, we co-sponsored "Learn to Invest" (a three-part seminar) which intended to show potential investors how to invest. Please contact us for further details regarding our seminars or to sign up for our next seminar at (847) 854-2300. Visit our website. Commercial Properties, Lake in the Hills PCR Web 2 comments Show all posts from Today, Yesterday, this Week, this Month 2010 2008    Any   All Help 9225 S. IL. Route 31, Lake in the Hills, IL. 60156 Telephone (847) 854-2300, Fax (847) 854-2380 A Leading Commercial Real Estate Firm © 2005 - 2008 Premier Commercial Realty. All Rights Reserved.