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Cost Comparison: A Case Study 

When looking to extinguish fixed rate debt, borrowers have two alternatives yield maintenance or defeasance. Both methods allow the borrower to unencumber the underlying real estate asset, and both compensate for the lender’s reinvestment risk following prepayment. However, each method

Engineering Value 

It seems like only yesterday that real estate investors and developers breezily talked about easy exit strategies and double digit internal rates of return. When lenders and investors were eager, winning at real estate was more about managing the capital

Foreclosure Fortunes 

In today&rsquo s market, the difference between traditional and distressed sales is mostly in the buyer&rsquo s mindset. Traditional sales currently are driven by need &mdash only investors who need to fulfill Section 1031 exchanges or other financial or market

Cap Rate Calculations 

A capitalization rate is the overall or non financed return on a real estate investment, akin to the return on total assets in accounting terms. A cap rate is calculated as a mathematical relationship between net operating income and an

The Benefits of Cost-Segregation Studies 

When a commercial property is purchased or constructed, a building asset is created and the dollars are entered into a fixed asset system as 39 or 27.5 year property. Using the straight line method,

Buyers Are Back 

Commercial real estate investors are lumbering out of the woods and back into the game. The menagerie of buyers shopping for properties in today’s market runs the gamut from private individuals to billion dollar institutions. But one thing they all

Cost-Segregation Savvy 

If you’ve been using cost segregation studies to accelerate depreciation of your commercial property, you’ve likely cut your taxes considerably. But could you save even more? Not all cost segregation studies are created equal. So what can you do to

TIC Tactic 

During the past decade, many investors have taken advantage of Internal Revenue Code Section 1031 tenancy in common exchange strategies. The TIC concept permits small to midsize accredited investors to own and obtain title to professionally managed, potentially institutional quality

Compound Logic 

In today’s highly competitive market, commercial real estate professionals continually look for ways to enhance their value to clients. Fortunately one of the best tools for accomplishing this value add status may be the well known Section 1031 tax deferred

Contract Exchanges 

In specific markets such as California, New York City, South Florida, Las Vegas, and Phoenix, condominiums are the hottest investments. Many investors are looking for creative 1031 transaction structures to cash in on these booming commercial real estate markets. One

Balancing Act 

Commercial real estate investors and traditional wealth managers live in the same world but speak different languages. While both camps are involved in asset allocation, wealth managers seldom understand how to deal with leveraged, illiquid property assets. Real estate investors,

Exchange Your Strategy 

An increasing number of today’s commercial real estate investors are knowledgeable about the benefits of exchanging qualified investment real estate under Internal Revenue Code Section 1031. However, they might not realize that 1031 exchanges aren’t ideal for every investor or

Just Due It 

The current economy and the lack of available credit have created a new paradigm for commercial real estate investors. Many lenders are indicating that, in the future, an appraisal won’t be enough to obtain financing Market feasibility studies will be

Restaurant Re-use 

Most owners of retail properties have restaurant tenants. Whether they are located on an end cap, inline, or on a free standing outparcel, these restaurants make up an integral component of the retail investment landscape. Savvy property owners recognize that

Where's the Money? 

Asked where real estate investors are putting their money (if unable or unwilling to invest in real estate), Integra analysts ranked the capital vehicles in most to least preferred order. From the looks of REIT prices in April 2009, the

ROI Check-Up 

Many investors ignore the return on investment that property condition assessments often can deliver. PCAs yield an ROI in three ways protecting buyers from bad purchases providing buyers with information for price negotiations with sellers and finding opportunities to improve

Cashing Out 

Over the years, many real estate investors have had the good fortune of large appreciation in the real estate market. At the same time, many of those investors now are worried about potentially losing a significant amount of their appreciation

A Tale of Two Markets 

&ldquo It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the

Triple-Net Triple Threat 

Looking for a rock solid investment in a shifting economy? Look no further than single tenant net leased properties. In markets where shopping centers sit empty and office buildings are dark, the lights are on (usually 24 hours) at the

TICs Today 

Several years ago, tenancy in common 1031 real estate exchanges were on a steady upward trajectory that seemed destined to continue indefinitely. Within the past year, however, the growth curve has flattened, with the securitized TIC market taking the majority

Navigating the Maze 

The labyrinth of rules that taxpayers must follow when completing Internal Revenue Code Section 1031 exchanges can be overwhelming. Commercial real estate developers often prefer to avoid this maze, thinking that most of their work involves non qualified inventory. However,

Money Magnets 

Capital that is now on the sidelines is likely to return to the market as a floor on asset pricing emerges and values become attractive once again. However, while lending conditions are expected to remain tight during the next 12

QI Questions 

The unregulated Section 1031 exchange industry has suffered instances of misappropriated client funds, breaches of fiduciary duty, theft, and qualified intermediary bankruptcy filings. The task of qualifying a QI has become paramount for real estate investors and their advisers. Understanding

Physical Fitness 

Commercial real estate investors conduct many types of due diligence, such as financial, legal, and physical. Regarding the latter, many investors assume that if they follow the current physical due diligence standard, ASTM guideline E2018 08, Standard Guide for Property

Ready for Reform? 

On July 21, 2010, the Dodd Frank Wall Street Reform and Consumer Protection Act was signed into law. The risk retention requirements under Dodd Frank for asset backed securitizations, including commercial mortgage backed securities, have garnered substantial attention from the