Tag Archives: Commercial Real Estate

Building Wealth in Commercial Real Estate Investment

This entry was posted in News and tagged , on by .

Exploring the Rewards of Commercial Real Estate Investment

by Brad Broyles

Commercial real estate investing can be very rewarding, both financially and personally. For many business owners and entrepreneurs, the objective of investing in commercial real estate is for wealth and security, which can be grown into a portfolio and passed down to future generations. Commercial real estate also offers an abundance of tax benefits for investors and increased diversity on their investments.

Office/ Retail Investment Property with Parking Lot

Commercial real estate investment offers the following advantages:

Higher Potential Income: The biggest reward of investing in commercial real estate is higher potential income. Typically, commercial properties have a better return on investment, which could average from five to twelve percent, while single-family home properties struggle between one and four percent annually.

Longer Leases: The hallmark of commercial real estate is the attractive length of leasing contracts.  Residential properties are typically set for one year, while commercial leasing contracts are set for three up to twenty years.  These leases offer impressive returns and considerable monthly cash flow to investors.

Investment Property: 2 Office Buildings, Warehouse and Fenced Contractors Yard

Cash Flow: Commercial investing has one very clear advantage: a relatively consistent stream of income. Remember, the tenants are business professionals and need the property for company operations. Therefore, rental payments are steady and thus deemed a reliable monthly income.  Some commercial properties consist of more that 1 unit, resulting in multiple streams of income.

Tenants Pay Property Expenses: In most leases, tenants will also pay operating expenses on a commercial property. This is commonly known in the industry as triple net (NNN) lease. Triple net leases generally state that the lessee must pay the building’s real estate taxes, property insurance and maintenance costs, in addition to monthly rent.

Lower Vacancy Risk: Another perk, is that commercial real estate provides lower vacancy risk with leases spread over several units or properties. Typically, vacancy rates range between ten to fifteen percent and can be leased within two to four months.

Auto/ RV Sales and Repair Investment Property

Building significant wealth through commercial real estate investing requires planning, patience, and persistence. It may take time, but the right property investment  it will generate genuine wealth and security that can carry on for generations.

For more information on how COBE Real Estate can help you find your next investment visit COBE Real Estate , or for listing information visit our Property Search 

Brad Broyles

Senior Advisor

Brad Broyles is a real estate professional with over 11 years of experience in real estate investments, management, development, leasing and sales.

Since joining COBE Real Estate in March 2013, Brad has participated and closed over $50 million of commercial real estate transactions. Prior to joining COBE Real Estate, he spent 4 years as a Vice President of Commercial Banking which he was responsible for managing and selling a $30 million commercial portfolio. Brad also specialized in business start-ups, SBA lending, cash flow capital and special asset management. His unique business and real estate background allows him to be the best representative to any business owners who are wanting to expand or relocate their company.

Brad has a Masters of Real Estate Development from Arizona State University and a Bachelors degree in Accounting and Finance from the University of Phoenix. He is a member of the Arizona Small Business Association and is active with the Mesa Chamber of Commerce.

brad@coberealestate.com
(480) 610-2400
Cell: (480) 797-5266

What Makes Land a Good Investment?

Factors to Consider when Purchasing Land

By Josh Brimhall

I was raised in a family that taught me to appreciate not only the beauty of the world we live in, but also the value of a raw piece of Land.  Most people see a parcel and don’t think much of it because, after all, there is land all around us. Why would it be special?

Some people aren’t aware of the superior benefits that come with purchasing land.  The simplicity and stability that comes with owning the right piece of land can far outweigh the myriad of problems that can to come up with other types of real estate. Land is a stable, safe place to invest and should be thought of as a secure long term asset that can surmount market trends.

Not all mark-twain-quote-buy-land-theyre-not-making-it-anymore-e1436949051801land is equal however.  There are a variety of factors that can positively or negatively affect the value of a piece of property. When considering a land purchase and whether it is the right investment for you, it is best to consider the following:


Zoning:

There are multiple Zoning Districts, the most common being Commercial, Residential, Industrial and Resource. The Zoning Ordinances dictate what uses are allowed in each district, or more notably, what is prohibited in a zone.  It is extremely important to understand what a property can be used for, and what the best use of the property is. With this knowledge you can quickly determine whether it will fit your needs.

Utilities:

Whether you intend to develop the property yourself, or market the property to a developer, it is important to understand what limitations you may have.  If a property does not have access to basic utilities you will lose a massive portion of the property’s usability, marketability, and value.

Growth patterns:

Analyzing the development growth patterns and land availability of an area could play a huge role in the success of your asset. There is likely to be more demand for land as an area expands, which can add value to your investment.

Easements:

Simply put, an easement is the right that someone has to someone else’s real property.  As you can imagine, this information is vital for the access, planning, and development of your property, but is not always apparent to the naked eye.

These factors, along with many others, have the potential to make or break an investment if not discovered and/or taken into serious consideration. Although this may all seem a bit overwhelming land can be an excellent investment and working with an experienced broker is critical to your success.

 

JoshJosh 11-28-16-2ua Brimhall

Senior Advisor

Joshua S. Brimhall joined COBE in 2016 and specializes in Land acquisition and disposition throughout the State of Arizona.  He is a sixth generation Arizona native that has been involved in agriculture growth corridor transactions since 2000 which has translated into a lifelong passion for real estate.  He is a partner at Langley Properties and his expertise in acquiring, operating, developing and marketing properties for his clients shows in his vast market knowledge.  He has worked with home builders, developers, and investors in the every facet of residential lots, working farms, and numerous commercial properties throughout Arizona.  Joshua finds great joy in earning and maintaining long lasting trusting relationships with new clients and investors.

He studied Finance and Spanish at Brigham Young University and Utah Valley University.  Joshua has an Ambitious, energetic personality that motivates him to achieve anything he sets his mind to.  He is an active member of his church and enjoys doing anything recreational with his wife and family.

josh@coberealestate.com
(480) 610-2400
Cell: 480-580-6838

For more a information on available land properties visit : COBE Property Search

 

Cost Segregation: The Cash Hiding in Your Commercial Property

This entry was posted in News and tagged on by .

UNLOCK THE CASH HIDING IN YOUR COMMERCIAL PROPERTY

By Steve Beck, principal of COBE Real Estate, Inc.

In today’s market, it’s critical that every business seeks opportunities to save money. Reducing your monthly payment by purchasing your office space is an excellent place to start. An added bonus to owning your commercial space is Accelerated Depreciation using an Engineer-Based Cost Segregation Study.

What is Cost Segregation?

Cost Segregation is a tax strategy that allows significant portions of your building’s cost (around 40% to 60%) to be depreciated in as few as 5, 7, and 15 years, instead of the standard 39 years for commercial property. By speeding up depreciation, you maximize tax deductions faster, lower your taxable income, and significantly increase cash flow.

Think of it this way…if you were given a bag of cash with $1,000,000 inside with the option to either use that money in 39 years or use it today, which would you choose? Well, most people are going to use it today because a million dollars today is worth much more than a million dollars in 39 years.

This is the same concept with Cost Segregation…a tax deduction today is worth much more than that same tax deduction years later. Property owners who utilize Cost Segregation, capitalize on the time value of money!

Cost Segregation Graphic

Who Qualifies for Cost Segregation?

Cost Seg is available to any commercial property owner (who is subject to federal and state tax laws) who has purchased, constructed, renovated, remodeled, or expanded any commercial property since 1987. This would include office buildings, medical/dental suites, warehouses, restaurants, apartment complexes, retail, etc. This also includes leasehold improvements (over $100K) and 1031 Exchange properties.

How Much does a Cost Seg Study Cost?

Typically, a Cost Seg Study is effective if:

  • the property has a minimum value of $500,000 (including tenant improvements).
  • you plan on keeping the property for at least 2 years.
  • you have taxable net income.

The after-tax savings can be well in excess of 5-15 times the one time cost of the study which typically runs between $6,000 and $12,000 for a new 2,500 to 50,000 SF property.

While the IRS does allow you to “catch-up” any missed depreciation from years past, the best time to perform a Cost Seg Study is the year in which the building is purchased, constructed, or renovated. If you are interested in getting a projection of savings for your current office or an office you are looking to purchase, we can set up a meeting to show you the potential savings.

As COBE Real Estate does not give legal or tax advice; if you are interested in learning more about the advantages of cost segregation, we can refer you to the firm we use to assist you.

 

steve-11-28-16

Steve Beck, principal and president of COBE Real Estate, has over 18 years of experience in real estate brokerage and development. He has participated in the acquisition, sales, and development of over $500 million worth of commercial and residential developments in both Utah and Arizona totaling over 2 million SF. From this, he has established quality and long lasting relationships with commercial real estate owners and tenants. Steve’s background in real estate brokerage, development, and investment provides a strong foundation of knowledge and experience in the real estate field.

 

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.