Commercial Real Estate Leasing
I am trying to supplement my CRE leasing knowledge. Would be awesome if anyone had a suggestion for a book or comprehensive source that covered various lease types and nuances for the different asset types and what to look for/be conscious of in each (as they pertain to that asset). Kind of specifically referring to a breakdown on gross, MG, and NNN, etc. Bring on the trolls to tell me how simple leases are and to just use google
You'd be surprised how informative a google search is with regard to Base Year leases, Modified Gross, NNN and so on. When I took my Argus Enterprise (AE) course last year, the case studies we did had some pretty interesting leases. If there was a 20 unit retail building none of the leases had any consistency. Their reasoning was that buildings change hands and lease structure depends heavily on ownership and management.
There is no answer here. It's all experience and tribal knowledge. There is no book. My first broker yelled at me all the time because I was always looking for a course or a degree or a book or whatever that I could reference on how it worked and fit together, but the truth is, there is no one answer. Every single deal I've done has been different. EVERY. Landlords have crazy ideas sometimes, sometimes it's a REIT(whole other set of issues, all are different), sometimes it's a local owner 1031 or whatever that doesn't know what he's doing because his other dentist buddies from the country club said hey it's a good idea to buy buildings! Then he's asking the broker what the hell a triple net is. I'm exaggerating a bit, but really, similar things have happened to me.
@PacNumber has it right. I wouldn't be so quick to auto judge the "trolls" telling you to use google. I mean, you're asking for advice on an internet forum, soo........ Honestly, for me and most others I know, google is my best friend in RE. I'm looking shit up all the time. Because obtw, everyone has different names for stupid things, things that you would think should and would be standardized. Is it tenant allowance? Or TI dollars? Or tenant improvements? Or tenant improvement allowance? I hear every one of those on a daily basis, and all of them involve the landlord giving the tenant a bunch of money to build their space out. Is it Triple net? NNN? TMI? Again, all the same, and all heard on a daily basis. Well, TMI not so much, I've only run into a couple of shops that use the phrase, but when I said oh you mean triple nets? They looked at me funny. Go figure. Canadians..... Anyway.
If you're looking for books, go read the Linneman book on CRE finance, it's probably the most solid resource you'll find and a textbook for all of the MSRE programs. If that doesn't answer your questions, google it. Really. Shit works bro.
Edit: Forgot to mention. There have been conversations before about learning resources and daily reading websites and all of that. Use the search function. Also, if you haven't read pretty much every page and book listed at asotreg.com, you're probably missing a lot. Joe actually comments here every once in a while, and his website is a solid resource.
"If that doesn't answer your questions, google it. Really. Shit works bro."
Truer words have not been spoken, lol.
There is this site that occasionally sends me links to their tutorials. It's called Property Metrics. Some if it is really entry level. But for lease structure you really just want to know the bones of what "it" or "they" are. While a lot of it is basic stuff, it's a pretty good overview for me. Try them out.
I responded to a post of theirs once on their 5yr proforma model they were teaching. I'm no analyst, but they used year 5 NOI in their reversion...not year 6 ;)
Yeah I've seen their stuff too. I probably wouldn't base anything I put in front of an investor on it, for the reasons you mentioned, but it'll at least point you in the right direction.
Veering off topic at this point, but there's nothing wrong with that. You want to cap forward looking NOI on a commercial property with leases with term, by all means go ahead. Plenty of groups would cap T-12 NOI at exit for something like multifamily or a hotel, though.
You're estimating what your disposition price is going to be, so there is no "right" way to do it, just good or bad argument to support your underwriting.
Awesome. thank you for taking the time to write all this. You're right - shouldn't auto judge.
The above posters are not wrong, but the following books (especially the first) are quality. You can never read enough blound - remember that.
http://www.amazon.com/How-Succeed-Commercial-Real-Estate/dp/0940352168?…
http://www.amazon.com/Negotiating-Commercial-Real-Estate-Leases/dp/0940…
Commercial Real Estate Leasing Associate (Originally Posted: 09/10/2013)
Hi everyone,
I landed an interview this wk for a real estate leasing associate with a top firm. I do not know much at all about real estate, so I would love some insight into the day to day, common interview questions, what I should know about real estate before the interview, and anything else you think may be beneficial. The job description (changed around) is below: -design, recommend and implement sales strategy to increase occupancy -market research and semi-annual market surveys and analyze market comparables -manage specialty leasing portfolio, field all tenant leasing inquiries -set all rates accordingly, to ensure revenue optimization -prepare and track all documents to be executed within leasing -negotiate rates and terms of parking deals and develop a parking retention strategy
Insight would be greatly appreciated!!Thanks!!
Agree. I didn't mean to say don't seek out books and info, just that there's no "one" answer for everything. Understanding leases isn't hard. It's not that difficult of an industry to master, there just isn't one textbook that everyone reads and subscribes to. Too much independent entrepreneur stuff for that to work. Like I mentioned in my edit though, there have been a few posts on this site that we've both contributed to regarding daily reading materials, relevant books, etc. Hell I read all day long. Ok, maybe not all day, and a lot of that time I'm reading leases and LOI's, but I always have a new book and 5 tabs open in my browser of different stuff. More importantly.... ABC. Always. Be. Closing. You want that coffee don't you? =)
Check out CRE's blog
Under this job description you are working as a landlord broker. This is what I do, so PM me if you have any specific questions. Day to day includes building tours, lease negotiation, cash flow analysis for deals, architectural meetings, market research, and more.
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