Financials
What is Net Operating Income (or NOI)?
Revenue minus all operating expenses
How great is the market today? (Mentality)
The market is as good as what you tell yourself when you show up.
What is usable square footage?
The actual space you can occupy in a commercial rental property
What is a 1031 exchange?
What is second generation space?
A term typically applied to office space that has had a prior tenant and so has some improvements that are reusable by a subsequent tenant,such as some walls,doors, ceiling treatments, and light fixtures. Contrast with first-generation space, which has never been customized for a tenant and consists of wide-open space with support columns, concrete flooring, and the concrete bottom of the floor above.
What is the average length of a deal in commercial real estate from the moment of introduction to closing?
4-6 months.
When should you always cold call?
In the mornings, 9:00-12:00 AM.
What is rentable square footage?
The total space that can be occupied in a building plus shared space (lobbies, hallways, restrooms, etc.)
How long is a commercial HVAC typically good for?
Typically 20 years
Darren Hardy and Top SVN Producer both agree on one element to be successful. What is that?
Consistency!
What are operating expenses?
Financial category that includes repairs and maintenance, utilities and cleaning expenses
What is the first thing you do when you get to a meeting and meet the LL?
Thank them for having you/for their time.
What is the difference between a Full Service Lease, a Modified Gross Lease & a Triple Net lease?
Triple Net = Tenants pay all pass throughs separately/on-top of the base NNN rent
Modified Gross = Pass throughs are shared between landlord and tenant (Slightly higher "base" rents than typically seen with NNN)
Full Service = All pass throughs are paid for by the Landlord, therefore the base rent is the total expense that is paid by the tenant for their space. Full Service rents are significantly higher than the base of a NNN lease rent in a similar building.
What is the timeline to identify and complete the acquisition of a 1031 exchange?
Per the IRS code, you only have 45 days to identify, in writing, all potential investment properties you want to consider acquiring. You only have 180 days in which to complete the acquisition or 'up leg' transaction.
What items should be included in the CART analysis after every closing, inspired by Bob Knakel.
Challenge, Action, Result, & Testimonial
What are non-operating expenses?
Financial category that includes management fees, insurance and General and administrative expenses
What are hard costs in construction of commercial real estate? How do these compare to soft costs?
Hard costs - Referred to as the “brick and mortar costs” - costs of the physical construction of a space
Soft Costs - Examples include costs for architectural and engineers
What is Rent Abatement exactly? Why do landlords agree to it?
Rent abatement is "free rent" for a month or a few months depending on the length of the lease. It extends the lease by the amount of free months. It benefits landlords in bettering the numbers on their T-12 for potential future buyers.
How long is an ALTA survey valid for?
10 years
Stop limiting yourself with your story. The story you tell yourself on a daily basis is what holds you back or propels you to bigger heights
What are capital improvements?
Financial category that includes leasing commissions, tenant improvements and really big projects like roof replacements or lobby renovations
What is the name of BellStreets Podcast?
Chatting on BellStreet
What is the difference between a Sublessee and Sublessor?
In a sublease, there is the landlord/ lessor, the tenant/ sublessor (the party who leased the property from the landlord but is now subleasing the property to a third party), and the sublessee.
What is adverse possession? When can somebody claim it in your state of operation?
- Under Georgia law, a person may be eligible to start an adverse possession claim if they have been living on the property for 20 years — or seven years with Color of Title.
- Colorado statutes define this statutory period as being 18 years, or 7 years if the adverse possessor, under a good faith claim and color of title, was paying taxes on the possessed real property.
What is done during the Environmental Phase I? How about Phase II? Why are these important?
A Phase I Environmental Site Assessment (ESA) or Phase I ESA, is short for a study conducted on a property to evaluate the likelihood of environmental contamination.
The Phase II ESA, also referred to as a “subsurface investigation” or more commonly “site investigation,” typically consists of collecting a series of soil, soil gas, which includes sampling for vapor intrusion, and groundwater samples and sending the samples to a laboratory to determine if dry cleaning operations have impacted the property negatively through environmental contamination.
It helps a purchaser determine potential liability.