Meet Ron Roberti of Landmark Partners
1. Why should I work with a “commercial” real estate agent? I have a friend who is a residential agent who helped me sell my home. She’d be happy to assist me.
First let me say that I enjoy working with many residential agents who refer their commercial clients to me. Residential and Commercial real estate requires two very different skill-sets and resources. A seasoned commercial agent will have access to different databases such as LoopNet, CoStar, Showcase, Land & Farm, etc. which lists the majority of commercial properties. The typical MLS, which most residential Realtors subscribe to, only has a small fraction of the commercial properties on the market. Secondly making an offer, negotiating and bringing a commercial transaction to close requires an understanding of specific matters such as; lease types, Letters of Intent, zoning, highest and best use, the various property types and the terminology used in a commercial real estate contract.
2. What is a Letter of Intent?
A Letter of Intent (LOI) is a short document that outlines the basic parameters of a lease or the purchase of commercial real estate. Once the LOI is agreed upon and signed by both parties, a commercial real estate attorney will then draft the final lease or purchase contract.
3. Can you explain the different types of commercial leases?
There are three customary lease types; NNN, Modified Gross and Full Service.
- • NNN – A commercial lease also known as Triple-Net. This means that in addition to base rent (which is usually quoted as per square foot per year), the tenant will also pay their prorata share of the property’s real estate taxes, insurance, and common area maintenance expenses
- • Modified Gross – A type of a commercial real estate lease where the tenant pays rent that already includes the building’s operating and tax expenses for the initial base year at the lease’s inception. However, in subsequent years pays, the tenant would also pay their proportionate share of any “increase” in costs associated with the property, such as property taxes, utilities, insurance and maintenance.
- • Full Service – A full service lease most commonly means a lease in which the rent includes all building operating expenses, property taxes and often times certain services & utilities. Typically the tenant will responsible for their own phone, internet and cable services.
Keep in mind that there are many variations within the three lease types. Ask your experienced local commercial agent for more details.
4. What is a 1031 Exchange?
The 1031 exchange program is part of the federal tax code for real estate investors. This program sometimes referred to as the Starker Rule allows you to sell a commercial property then purchase another commercial property of equal or greater value and defer the capital gains tax. There are very precise rules for this program so feel free to contact me to discuss this great program in more detail.
5. When interviewing commercial agents, what are a few qualities I should look for?
One of the main things I do before agreeing to take on a new assignment is to meet face to face with any new potential clients. This allows me to listen to their needs, understand their specific requirements, time frames, budget, geographic areas, etc. If an agent takes your information over the phone and simply starts emailing you property listings, how engaged is he or she in fulfilling your commercial real estate needs? If you are uncomfortable with the agent after your initial contact then keep looking. Very importantly, ask the agent about their level of experience and a list of all the databases, resources and listing services that will be used to assist you in your commercial real estate needs.
For information about the Landmark Partners Premium Marketing Plan or to discuss any of your commercial real estate needs, please contact Ron Roberti, Senior Broker, at Landmark Partners Commercial Real Estate directly by calling 847.651.0656 or emailing to RRoberti@LPcommercial.com. Visit LPcommercial.com for further information.