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The Number One Reason Why Investors Need to Buy In Arizona Sooner than Later

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The Number One Reason Why Investors Need to Buy In Arizona Sooner than Later

Jack be nimble. Jack be quick. Will we need to tap dance around what’s coming in commercial real estate for 2019? It isn’t what you might think. This is hardly a story about pending doom and gloom for investors or novice buy-and-hold rental property owners. In fact, things are looking golden for the Phoenix area and the 2019 Arizona real estate forecast. While the overall tone across the country could leave you with a lackluster desire to plough ahead and bring dollars here, there or anywhere for that matter, let’s shed some light on why investors need to buy in Arizona sooner than later.

Deloitte Has Some Good News for Next Year

Each year, the worldwide financial service provider Deloitte bestows its industry-expert suppositions on what the recent past brings to the forecast of tomorrow. The statements bear a lot on how commercial real estate investing is subject to global economies, now perhaps more than ever. As we’ve already seen, predictability has gone out the window. While many long-standing investors and institutional investment firms continue to sing the praises of traditional models in asset allocation, today’s financial environment puts tradition to task.

How did this happen? Younger mindset. Versatility takes second place to flexibility. And business agility leads the pack. Here’s why.

Knowledge Will Remain the Engine of Power

Just keeping up with market perception, investment reality and the next big chess move in business is enough to make your head spin. And if you’re an investor in real estate, other markets still matter. But who has time to stay on top of everything that’s happening and changing on a dime? Not me, not you, and more than likely (though he’d never admit it) not even the President.

In short, the best way to head into 2019 to stay on top of investment strategies is to use global resources to acquire broad-based knowledge while aligning with local commercial real estate experts, such as COBE Real Estate, to fine tune property acquisition plans and map out the best time to sell.

According to a November 2018 Phoenix Business Journal article, next year will continue the Valley of the Sun’s ranking as a boomtown and that’s music to residential and commercial investors.

If you were reading real estate news as recently as October of this year, there were whispers of a slow down on the horizon, though it didn’t make much sense considering that vacancy rates remain low. But new numbers about Phoenix real estate and the state economy debunk the slow down and define a full-steam-ahead approach.

According to Trulia, more people are looking at moving to the Phoenix area than moving away from it. And with relocation to our borders comes more businesses looking to improve their success rate. Those businesses need property. Their employees need property. This is how the cycle of success runs well. Out of the U.S. 100 largest metro areas, Phoenix stands as number 7 on Trulia’s list of best places to experience growth.

Positioned Well for Growth in 2019

The growth analysis mentioned above was based on a variety of considerations to include affordability, percentage of population under 35 years old, vacancy rates, job growth and more. And while current property owners are praising recent year-over-year value increases, the momentum should continue, thanks to this year’s 2.9 percent job growth rate.

Homebuilders are buying up land and requesting permits to begin new developments. Areas of Chandler are seeing explosive growth due to a large influx from the technology sector near the Loop 202.

In short, our numbers still make sense and as long as there are areas in the country that put a damper on job growth and investment opportunities, Arizona will continue to reap the rewards in retail, land, industrial and more. Here’s a case in point.

California Business Owners Are Creating a Great Divide

It wouldn’t be a stretch to claim that California is in dire need of a middle ground between socioeconomic populations. Visual images of the poor living in squalor near the high rises and other beautiful architecture that made the bay area the foothold for economic success and prosperity is not only disturbing but defines imbalance.

Through the recent passing of Proposition C, the landscape quickly changed for the impoverished who live there and the business owners who operate above them. What is proving to be positive change for the people may not shake out so well for big tech in Northern California and it could drive relocation across our borders.

While Prop C is a collaborative initiative to help clean up the streets, provide shelter and other necessities for the homeless, it’s funding comes, in part, from local big business. And some are not happy about it because they aren’t getting the tax benefits that would make their investment in the proposition attractive.

There is talk of moving big business technology headquarters to other markets, especially the Southwest, where the cost of owning property and doing business is much more attractive. This is just one instance that supports our continued growth and why investors should buy in Arizona, sooner than later.

About that number 1 reason to buy in Arizona, now…

Leap but Don’t Jump into Arizona Investments

Bucking tradition in business seems to be the norm, as economic predictors, forecasts and reality hop around with inconsequential sequence like the lights on a video game. How do you make a straight-line decision on commercial real estate when the environment is changing faster than the speed of light (so it seems)?

Leap but don’t jump. They aren’t the same. Leap into opportunity with full force, looking forward and confident with the industry knowledge needed to land on solid ground. Without it, you’re jumping in on a hope and a prayer. There’s something to be said about a common sense approach.

Timing is everything. Timing isn’t just about the right market conditions, the right property at the right price. Timing has to do with your personal portfolio, investment goals and how they define what’s best for you in the short- and long-term.

Discover How Common Sense and Market Agility Move Well Together

Why Buying Commercial Property in Arizona Without a Broker Isn’t Worth the Risk

Everyone wants to save a buck when they can. Do-it-yourselfers have risen to fame over the past decade as YouTube, Vimeo and other social media channels have provided a public forum to teach non-experts how to do things.

The reasons for the shift have much to do with our drive to save time, aggravation and the almighty dollar. But does this mindset apply when buying commercial property in Arizona? The answer, like commercial real estate itself, is complicated.

Understanding the Value of a Good Commercial Broker

Not every state in the country conducts the real estate transaction in the same manner; in fact, some of the players are different. While areas in the east coast, for example, often include a real estate attorney and a real estate broker as part of the process, Arizona transactions sometimes exclude attorneys on either side. This puts the onus of proper real estate dealings on brokers and brokerage firms. Though there is a caveat in this, the buyer of commercial property must take responsibility in performing the necessary due diligence before and during the escrow period to uncover matters than would affect their desire and ability to close.

Commercial brokers help facilitate all dealings related to the search, identification, negotiations, investigations and successful closings for the sale and transfer of real property. How well they perform is often contingent upon their overall local market knowledge, which includes, but is not limited to:

  • Proposed changes in the industry
  • Municipal and private developments in the works
  • Strength of peer relationships
  • Understanding of transaction process
  • Use of commercial real estate contract language and nuances therein that provide negotiating edge
  • Their network of strong third-party resources

The Art of Timing and Playing a Good Game of Chess

A purchase contract is boilerplate content that presents the ins and outs of what is expected, the timelines to execute, and available remedies in the event that an issue arises or a party deems it necessary to back out. What may be of more importance is what the paragraphs and line items don’t say. This is where a commercial brokerage firm can represent a buyer’s best interests exponentially.

For the unsuspecting (and that would be most buyers of real estate not using a broker), time is of the essence and progresses similar to a move in a game of chess. For example, if you want to bide time to ensure you have chosen the best property for your needs, make sure to ask for a lengthier inspection period. This allows you a larger window of opportunity in discovery of issues that may present concern, especially pertinent when buying real estate on or near environmental hazards (such as a gas station or Circle K).

What You Don’t Know When Buying Commercial Property in Arizona Will Hurt You

We’ve seen this happen in many geographic areas in cities from coast to coast. Often, buyers of residential property, including investor pools, will consult their residential REALTOR® for information and representation in commercial real estate transactions. Even for the most well-intended agents and brokers in this part of the industry, accepting the undertaking puts them, their brokerages and buyers at risk.

Residential agents and brokers have to abide by a Code of Ethics that, in part, stipulates the need to serve customers and clients best by referring them to industry professionals who specialize in the specified market niche, whether that be the type of property desired, and county of location.

The above info just illustrated some of the pitfalls in dealing with real estate experts who don’t normally work the commercial market. Now, imagine what it’s like to navigate the hills and valleys of the business without any formal knowledge and licensing in real estate.

You wouldn’t perform surgery on yourself. Why would you consider buying property without the right experience and certifications under your belt, through buyer representation?

The Slippery Slope of Due Diligence Is Best Left to Those Who Hike It Every Day

For the novice in real estate, negotiations don’t start and end when all parties fully execute the purchase contract. It’s a step-by-step roadmap that is often dotted with traps. Some can be anticipated while others come about by surprise. A well-crafted letter of intent can pique the interest of a seller. It can spur a conversation between listing and buyer brokers. This convo can reveal hot points that shape the way the offer will be written. But if you were a buyer without representation, you’d never know what you missed.

The intricacies of a commercial real estate transaction can be arduous … especially during the due diligence process. Some of what it entails includes:

  • Site research about property use and other history
  • Why the seller wants to sell
  • Pertinent details about the area
  • Recent city code changes that affect property condition
  • Potential deferred maintenance or ADA guidelines unmet
  • Environmental hazards
  • Zoning and difficulty in obtaining a variance if needed
  • Buzz on the street amongst other brokers
  • Private and municipal developments and redevelopments that could affect value, foot traffic and ease of ingress/egress
  • Current market value
  • Current market rents
  • Proof of rent rolls, cap rates, net operating income, and operating costs

Do you really want to do this solo?

Most Common Misunderstandings, Errors and Overlooks in Commercial Transactions

As long as you’re probably questioning your ability to enter into a commercial property purchase without qualified representation, here’s a list of other reasons to remove any doubt.

5 Common Mistakes in Commercial Property Purchases:

  1. Underestimating cost of ownership
  2. Negligence in performing per contract
  3. Weak knowledge of competitors (location, location, location)
  4. Glossing over details that can cost you
  5. Inspecting property with verified, licensed, bonded third-party resources

Let’s take a moment to dive into No. 4 noted above, which is all encompassing. In a hot market, when properties fairly priced are hard to come by, haste in securing property can lead to errors in judgment and overlooking clues of issues on the horizon.

As a buyer, are you ready, willing and able to complete the transaction? Unrepresented commercial real estate investors can find themselves in a quandary should they use the inspection services from vendors that don’t have clearance or aren’t deemed as approved vendors from their lender. A buyer broker who’s on your side will know the questions to ask a lender before you spend any money on inspections.

In addition, seasoned commercial brokers will review a closing statement and know what to look for in the numbers. They can check for duplication in fees, overcharges and other inadvertent oversights that can increase the buyer’s cash-to-close.

What Do You Mean There’s No Code of Ethics in Commercial Real Estate?

As daunting as this may sound, there is no formal code of ethics for commercial real estate brokers. Hhhmmm … how do you deal with that and have a chance at getting the commercial property you want at the price, terms and conditions desired?

The Truth About Getting a Better Deal By Not Paying Buyer Broker Commissions

Here’s the biggest sticking point for business owners and investors looking to buy office, retail, industrial, land or multi-family property in Arizona without the use of a commercial broker working on their behalf: the money.

If you need to reread all the information provided in this article up to this point, please do. Take it all in. These, among other reasons, are why an un- or under-represented buyer is in a vulnerable position when making an offer on a property.

If you’re considering this course of action as a means to save the 3 percent (give or take) in commissions that go to the buyer broker, here’s the reality of how that “savings” breaks down:

  • Listing broker will convert the buyer commission into an increase in Seller’s net proceeds.
  • Listing broker will increase their own commission.
  • The broker’s fiduciary responsibility is to the Seller not the buyer, which can then:
    • Compromise disclosure of material facts or defects.
    • Compromise the due diligence and inspection process.
    • Misrepresent at any point in the transaction.
    • Compromise negotiations, not in best interest of buyer.

Experience is the greatest tutorial in commercial real estate. You can’t get a how-to online and have the adequate knowledge and protections that come from seasoned, local professionals working diligently on your behalf. It’s what you’ll find at COBE Real Estate.

Consult a Local Leader in Commercial Brokerage

Featured Property : Pinal Professional Village

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Pinal Professional Village offers Commercial Office Opportunities in Prime Growth Area

The Pinal Professional Village is located south of the southeast corner of N Gantzel Road in San Tan Valley, AZ.  Across the street from Banner Ironwood Medical Center and adjacent to the Encanterra Masterplanned Community, this professional village has a wide array of medical and professional tenants located within the development including: Rural Metro Fire, Pinal County Public Health Clinic, SimonMed Imaging and Arizona Public Safety Advocacy Center.


Pinal Professional Village and Surrounding Area

The Pinal Professional Village is just southeast of Banner Queen Creek Medical Center and 1.5 miles southeast of CHW Hospital.  Porter Brothers Construction, one of the premier builders in the valley are constructing the buildings for the professional village. Each unit has an excellent design and is the highest quality shell buildings on the market. Building and monument signage is available.

A major North-South Corridor with traffic counts exceeding 22,000 VPD runs along this property in a prime growth area.  San Tan Valley is considered the Fastest Growing Region in Arizona according to the 2010 Census.

Queen Creek also forecasts a potential growth in population to 41,970 by 2020 and has named Healthcare and Biotechnology as a key focus area in the Queen Creek Strategic Plan.

For more information on availability in the Pinal Professional Village Click Here

or contact Broker Steve Beck 480.610.2400



Dobson Grove Plaza Sold for $1,200,000

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June 28, 2016 – COBE Real Estate brokers, Brad Broyles and Steve Beck recently completed the sale of Dobson Grove Professional Plaza at 1405 N Dobson Rd in Chandler, AZ.  The plaza consists of 3 buildings and sold for $1,200,000.  Located in the historic Dobson Ranch area of Mesa, the original building on the property was the homestead for the Dobson Family.  The home was converted into executive offices and additional buildings were added.  The Plaza was 100% leased at the time of the sale.   COBE Real Estate represented both parties in the transaction.  COBE Real Estate has several investment properties for sale: Click Here to Search


Boston Professional Plaza Recent Closings

May 13, 2016 – Construction on several buildings at Boston Professional Plaza have recently been completed and closed.  The Plaza, located within minutes of the SanTan Village Shopping District, Mercy Gilbert Medical Center and Loop 202 Freeway, is in the heart of one of the fastest growth areas of Gilbert, Arizona and is quickly becoming a medical hub.  COBE Real Estate Broker, Steve Beck, representing the developer in the transactions, has been enthusiastic about the response to the Plaza, “Medical and professional end users have recognized the value of this strategic location and have responded very favorably, as all available buildings are now sold.”  The two buildings that have recently been completed will be used as medical space.  Porter Brothers Construction, a highly renowned valley builder, will be completing the remaining buildings over the coming months.

Two lease spaces are available at Boston Professional Plaza.  1772 E Boston Suite 107 and 1684 E Boston, Suite 102.