COMMERCIAL RETAIL SERVICES

Our agents and brokers consider factors that enhance the value of shopping center and strip locations accounting for the number of parking spaces, walk-in traffic of and prominence of anchor tenant, percentage of total gross leasable area on triple net leases, and overage payments. We develop performance models for the specific retail type and work closely with investors to assist the with the strategies to limit legal exposure and mitigate risk.

Motivation of the investor’s decision to sale is key to determining the correct tactics to help them achieve their goal. A reason we have frequently heard from investors of self-managed retail properties is poor health, followed by age. Some investors have worked their entire lives and feel the need to sit back and allow their investment to work for them. Partnership problems that result in the parties going their own way can create the need to sell in order to split the net sales proceeds.

Management issues can be a reason to sell where the investor doesn’t care to take on the day to day management and decides to put the asset up for sale. Smaller neighborhood strips or retail centers are almost impossible to manage from a great distance, so some investors who are faced with a necessary move out of town may need to dispose of the asset if an exchange to a similar or alternative product type is not feasible.

There are some financial motivating factors for selling retail property. Some investors seek to minimize taxes on the sale of the retail investments because the owner retires from his or her job and is no longer in a high tax bracket. Tax shelter benefits will decline over time as taxable income increases. On amortized loans, mortgage interest deduction will diminish each period as well as the depreciation deduction.

RETAIL LEASING SERVICES

Shopping center leases often have clauses that affect cash-flow. Global Realty Group ensures there will be provisions for certain operating expenses paid by the owner to be pass-through to the tenant based upon gross leasable area of the tenant’s store as a proportion of the Gross area of the entire center. Other pass-through provision we negotiate on behalf of the landlord are Common Area Maintenance(CAM) where the charges are calculated as a percentage of the rentable space the tenant is occupying. This benefits the landlord when maintenance costs increase.

We consider a prospect business tenants based upon confirmation of seasoned reliability from prior landlord who can verify if the tenant paid on time, took care of the property and use the space as defined in the lease.

Creditworthiness is also considered as the DUN’s and Business Credit rating of the business is determined and we utilize the 10/10 rule for determine whether a guarantor will be required upon lease execution. Management/business structure is also considered as well as attract-ability and how a prospective business tenant could be compatible with existing businesses.

Global Realty Group Commercial executes a strategic and thorough marketing platform for your commercial sales and leasing needs. We have access to a grid of business owners, investors, and developers in the market for expansion or new portfolio assets.  We assign our asset manager to analyze your portfolio and determine appropriate market exposure technique to fulfill your objectives. Global Realty Group Commercial utilizes a wide range of performance-driven programs designed to address the needs of our commercial real estate client to best fit the needs of single-asset and multi-property portfolios, fee & leasehold interest, note & land contract sales and property spaces with operating businesses.

Our commercial division analyzes the micro and macro environment of Commercial Real Estate and how properties in various demographics, specifically properties in the inner city of Los Angeles, are currently impacted and how future economic conditions will affect the various product types relevant to small retail/community related spaces that uses necessary for a stable urban environment.

Global Realty Group Commercial has the objective to analyze business tenant engagement levels and behavior to understand preferences and provide a more customized experience. Our goal has been to assist Commercial tenants in creating COVID-19–safe seating and space utilization decisions. Our brokers use tenant data to predict lease renewals and devise appropriate strategies for tenant retention. We utilize strategies to combat the lower demand for space and recognize how the current environment has created longer-term, evolving shifts in tenant and end-user preferences, which will likely influence leasing demand.

Our objective as commercial real estate professionals is to ascertain the development standards for the community and ensure our marketing is consistent with your goals as an investor. We consider the following:

• General location of the property,
• Volume of pedestrian/automobile traffic exposure the building might have,
• Building entry/access points from front and rear
• Parking considerations
• Public transit connects neighborhoods to each other and the surrounding region

LEASING THE SPACE OR BUILDING

Global Realty Group Commercial will determine the usable square feet (all of the interior spaces combined)and rentable square feet of the space(size of the actual leased unit or space) and calculate the load factor (multi-tenant buildings).

We divide the total size of the lot by the total usable square feet and multiple that amount by the size of the space or unit and add the total to the rentable square feet. We will use the price per square feet based upon industry standards for area of the property for specific product types/business uses for commercial structures.

Our brokers ensure there are accurate measurements in terms of square footage at single building for lease so our clients are charging tenants for actual size of the space. This is achieved by having the space measured or by obtaining legal records from city building or planning departments.

TYPES OF LEASES

Net Lease: Tenant only pays property taxes in addition to base rent(usually a lower base)

Net-Net: Tenant pays property taxes and insurance in addition to base rent

Triple Net: Tenant pays base rent as well as taxes, insurance, and possibly CAM charges)

Ground Lease: Typically, where land is expensive and landlord leases the property for decades

Gross Lease: Tenant only pays base rent only and possibly annual increases

Modified Gross: Tenant pays base rent plus increases and a percentage of capital improvements

Step-up Lease: Establishes increases at set times throughout the life of the contract (2% each 18 mos)

Percentage Leases

Agreed upon portion of gross income of the business added to the base rent

(ex. $700.00 base plus 1% of the gross monthly income)

Percentage Over Base Amount

Percentage of all gross receipts over the minimum base amount

(ex. $700.00 base rent plus 1% of all monthly gross receipts over $5,000.00)

Percentage of Gross Receipts

Percentage of gross receipts in addition to the base rent

(ex. $500.00 base rent plus 2% gross receipts)

LEASE TERMS

Global Realty Group Commercial lease contracts will be based upon the product type and client specifications. Our firm is experienced in lease term negotiation to ensure our client’s best interests are prioritized in the contract with provisions and terms that reduce or absolve risks. We use a bondable triple net lease that cannot be terminated before its expiration date. Nor can the rent be altered for any reason regardless of any unexpected and significant increases in ancillary costs the business tenant incurs.

We negotiate who will be responsible for insurance deductibles as well as whether damages not covered by the policy will be paid out of pocket by the tenant. The length of occupancy is considered along with type of business, the income stream derived from it, and whether the business will have a long-term footprint at the location and in the area.

Negotiation leverage always depend upon certain factors such as how long the property has been vacant and how long the owner expects to hold onto the property or the current economic situation (disaster-related economic distress or standard recession cycle implemented by the Fed). We add a clause stating if the building is sold, the new lessor and current lessee split the amount of new assessed taxes.

We are experienced in the negotiating whether there will be early possession and when it may or may not be in the landlord’s best interest to abate the rent for a period of time at the start of lease while the maintenance or renovation is being performed. There are specific provisions added and negotiated relating to business that need city licenses. We ensure that lease spells out the actual ‘uses’ for the building and that there will be no other uses or type of business being conducted at the location than those indicated on the contract.