Posted by: Bob Wiley | June 9, 2017

Featured Listing

IMG_2193

1729 W. Tilghman St., Allentown

1 Story Commercial Building with 1,348 SF of space available. Previously used as a clothing boutique, however, could be used for a variety of uses. This would make a great Office space with reception area, open space, 2 private offices & restrooms. Other uses could include medical office – such as a Chiropractor, Beauty/Nail Salon, Spa, Retail space, etc. On-site parking is available. High traffic area with surrounding commercial buildings.  $17/SF Gross Lease

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Posted by: Bob Wiley | June 7, 2017

Commercial Real Estate Loans

Commercial Real Estate Loans

 

Commercial real estate (CRE) is income-producing real estate that is used solely for business purposes, such as retail centers, office complexes, hotels, and apartments. Financing – including the acquisition, development, and construction of these properties – is typically accomplished through commercial real estate loans: mortgage loans secured by liens on commercial, rather than residential, property.

Just as with residential loans, banks and independent lenders are actively involved in making loans on commercial real estate. Also, insurance companies, pension funds, private investors and other capital sources, including the U.S. Small Business Administration’s 504 Loan program, make loans for commercial real estate.

Here, we take a look at commercial real estate loans: how they differ from residential loans, their characteristics and what lenders look for.

Individuals vs. Entities

While residential mortgages are typically made to individual borrowers, commercial real estate loans are often made to business entities (e.g., corporations, developers, partnerships, funds, and trusts). These entities are often formed for the specific purpose of owning commercial real estate.

An entity may not have a financial track record or any credit history, in which case the lender may require the principals or owners of the entity to guarantee the loan. This provides the lender with an individual (or group of individuals) with a credit history and/or financial track record – and from whom they can recover in the event of loan default. If this type of guaranty is not required by the lender, and the property is the only means of recovery in the event of loan default, the loan is called a non-recourse loan, meaning that the lender has no recourse against anyone or anything other than the property.

Loan Repayment Schedules

A residential mortgage is a type of amortized loan in which the debt is repaid in regular installments over a period of time. The most popular residential mortgage product is the 30-year fixed-rate mortgage.

Read more: Commercial Real Estate Loans | Investopedia http://www.investopedia.com/articles/personal-finance/100314/commercial-real-estate-loans.asp#ixzz4jKZLTBwV
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Read more: Commercial Real Estate Loans | Investopedia http://www.investopedia.com/articles/personal-finance/100314/commercial-real-estate-loans.asp#ixzz4jKZCcA8O
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Posted by: Bob Wiley | June 1, 2017

3 Great Investment Properties in Parker Ford, PA

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Posted by: Bob Wiley | May 23, 2017

FEATURED LISTING

Park Ave

67 PARK AVE., WIND GAP

$490,000

Highly visible 3,298 SF Commercial/Retail Building Available on corner lot in Wind Gap with plenty of parking. The 1st flr consists of an open showroom area, office, private restroom, and rear workshop. The 2nd flr offers additional rental income with a 1 BR, 1 BA apartment with private entrance. The property is currently being used as a vacuum cleaner store. This successful store has been in business for 30 + years and is included in the sale of the building. Many financing options available including lease and lease to purchase. Contact the listing agent to schedule and appointment to explore the possibilities.  See More

 

APRIL 18, 2017 BY

 

The residential and commercial real estate markets have recovered spectacularly since the dark days of the late 2000s. And technology is making it easier than ever to get a real estate loan. But developing and executing an effective real estate investing strategy is as tough as ever.

That’s especially true in the commercial sector, which has a long history of bewildering supposedly savvy investors. As powerful social and technological forces rapidly reorder our built environment and create new challenges for American property investors, the value of strategic thinking has never been clearer.

Sound strategy begins with a sound grasp of the fundamentals. These four major commercial real estate investing strategies account for the lion’s share of activity in the sector, encompassing a wide range of risk tolerances and property types.

Strategy #1: Opportunistic

This is the highest-risk, highest-reward CRE investing strategy. It’s not for the faint of heart. Despite that, Preqin predicted that nearly half of all U.S. CRE investors would pursue an opportunistic strategy in 2016. (No word on how that prediction panned out.)

Opportunistic strategies target “properties that need a significant amount of work—either because of renovation needs, high vacancy, or relative strength of the market,” says Billy Fink of the leasing management platform VTS. “With a typical time horizon of 3–7 years, “opportunism” is a medium-term approach that banks on a turnaround—preferably of the investor’s own making.

Strategy #2: Value-added

Value-added strategies also carry substantial risk. According to Fink, value-added targets include “properties that have significant execution risk to add the necessary value to drive enhanced returns—like major renovation, repositioning, or lease-up to stabilization.” Value-added strategies typically take a full business cycle to execute—time horizons can stretch to or beyond seven years, ideally with substantially increased cash flow on the back end.

Strategy #3: Core-plus

Core-plus strategies target quality properties that present some opportunity to add value with relatively little downside risk. Since core-plus strategies tend to focus on “known quantities” with little execution risk, the potential return isn’t as high as opportunistic or value-added strategies. The upshot: Investors typically don’t have to pony up for major renovation projects or devote lots of energy to addressing pending lease expirations.

Click HERE to read more

 

Source:  realtybiznews.com

 

Lou Pektor and his team at Ashley Development Corporation have done it again! Teaming up alongside Thomas Lubben with Easton Arts Academy Charter Elementary School in the revamping of the old Express Times Building. Covering Kindergarten through Fifth Grade, the Arts Academy will bring in over 400 students looking to further their education through the arts. The property is owned by Pektor, who is currently building the city’s new Police Station.

“We will have extra security knowing there is a police station there,” Lubben stated in a previous interview, when asked why he thought the site would be a good location for the school.

“We have always enjoyed our collaboration with Mayor Sal Panto and his team at the City as we collectively continue to transform the beautiful city of Easton we all know and love,” said Peter Reinke, VP of Development at Ashley Development. “We anticipate following up the Police Station and Charter School projects with a new addition to the city’s residential market.”

Source: http://www.lehighvalleylive.com/easton/index.ssf/2017/01/see_improvements_planned_for_e.html#incart_river_index

Posted by: Bob Wiley | January 25, 2017

Rodale to sell three Emmaus properties, asking $4.6M

By Wendy Solomon, January 24, 2017 at 11:51 AM
Rodale's Headquarters in Emmaus (Contributed photo)

Rodale’s Headquarters in Emmaus (Contributed photo)

Rodale Inc. plans to sell three properties in Emmaus, a move the publishing giant says will help centralize operations at its headquarters in the borough.

The three properties include two office buildings and a 10-acre parcel that could generate about $4.6 million for the company if sold.

NAI Summit in South Whitehall Township listed the properties: a two-story silk mill converted to offices at 554 North St. listed for $3.42 million; the Rodale Energy Center and Food Services building at 1134 Pennsylvania Ave. listed for $825,000; and a 9.85-acre lot and 1,600-square-foot service garage at 1480 Pennsylvania Ave. listed for $394,000.

Rodale plans to renovate its headquarters on East 10th Street, including photo and video studios, a food-testing kitchen and fitness facilities.

“This is a move that is smart for our business and our culture,” chief operating officer Beth Buehler said in a statement.

“With a centralized South Mountain campus, we will be looking to refresh and modernize our work environment to be reflective of our transforming culture,” Buehler said.

“We will be developing a workplace that will further break down silos, enhance collaboration across departments and offer a more dynamic floor plan and vibe.”

In 2015, Rodale sold for $2.95 million three properties that comprised its former corporate headquarters on East Minor Street to the borough of Emmaus.

 

Source:  LVB

Posted by: Bob Wiley | January 6, 2017

A Practical Guide to Understanding Zoning Laws

Why is zoning important? Zoning laws determine what kind of structures can be built, whether or not an existing property can be re-purposed, and even whether or not an existing structure can be replaced with something new at all. Of course, even if these aren’t changes you are currently considering, you might have a neighbor trying to make one of these changes… to the detriment of your own property.

Understanding zoning is important because it will in large part determine whether or not you get the change you want, and also whether or not you can prevent or modify the change you don’t want. In this article we’ll give you a practical guide to how zoning works, step by step.

I. The Purpose of Zoning

First of all, let’s start with the big picture. What exactly is zoning and what is its purpose? Zoning is the legislative process for dividing land into zones for different uses. Zoning laws are the laws that regulate the use of land and structures built upon it.

If you’ve ever dealt with a city, then you’ve probably heard some variation of the phrase “For the health, safety and general welfare of the public.” It means that every act of governance should (ideally) be made in the best interests of the people. Accordingly, zoning laws are created for the simple purpose of protecting the health, safety and general welfare of the people as relates to land use.

To achieve this purpose, zoning laws regulate the impacts of land use that may not be in the best interests of the people, generally including such things as:

  • Protecting the value and enjoyment of properties by separating incompatible land uses and minimizing their potentially negative impacts upon each other
  • Protecting the value and enjoyment of properties by allowing a property its most appropriate land use given its location and surrounding uses
  • Providing for the orderly development of a city, including making provisions for land uses in the best interests of its citizens, and
  • Providing adequate public infrastructure, e.g., roads, water and sewers

Cities want industrial uses for economic growth, but cities also want single-family residential areas for people to live. But will either the industrial users or residential users be happy if the two uses sit side-by-side? Not likely. When are neighboring uses happy? When they are compatible. This compatibility of the whole is the task of zoning; a sort of government-imposed “love thy neighbor as yourself.”

To accomplish this compatibility of uses, zoning gives the community a road map and a set of rules for driving. It considers how the city would like to grow. It then divides the city into different districts, limiting the uses allowed in each. It then creates laws regulating:

  • How each district can be used (e.g., commercial, residential, agricultural),
  • What types of buildings and other structures can be constructed within each district (e.g., size, number of stories, configuration)
  • Where those structures can be located (e.g., setbacks, green space), and
  • What measures the landowner must take to further compatibility with neighboring uses (e.g., buffers, flood control).

And then because the law recognizes life is not black and white, zoning laws provide flexibility for inevitable changes (who knew the state would construct that overpass, and make west-side ideal for retail instead of a quarry?) and also for inevitable special circumstances.

Let’s take a closer look at how zoning works.

 

READ MORE

Source:  Property Metrics

 

Posted by: Bob Wiley | January 4, 2017

Uncertain 2017 ahead for Lehigh Valley business community

Scott Kraus

By: Scott KrausContact ReporterOf The Morning Call

What’s in store in 2017 for Lehigh Valley business community?

Past performance, as investment advisers often remind us, is no guarantee of future results.

That could be the maxim for the Lehigh Valley’s business community in 2017 as it braces for a year of potentially unprecedented change.

The biggest question, and a common thread that runs through nearly every business sector with a local presence, is how the incoming administration of President-elect Donald Trump will affect the region’s economy?

“Certainly at the top of the list in a broad sense is what will this new administration mean to this country, this business community?” said Tony Iannelli, president and CEO of the Greater Lehigh Valley Chamber of Commerce.  Ready More

When renting office, retail or warehouse space there are basically three essential kinds of commercial real estate leases that revolve around two different approaches to calculating the rent: ‘gross’ and ‘net’.

The net type of lease involves a smaller base rent, with the tenant also paying other expenses. On the other hand, a gross lease generally indicates that a tenant pays rent in one lump sum, whereby the landlord then pays their expenses. A modified gross lease is a plausible combination of the two. Although the terms will vary widely according to each building, this general outline will help businesses and individuals get the best deal available.

Full Service Lease or Gross Lease

The rent is basically all-inclusive regarding a gross lease. The landlord pays most or all of the expenses related to the property, including maintenance, insurance, and taxes from the rent money received from each tenant. Both janitorial services and utilities are included for just one easy payment from the tenant.

When it comes to negotiating the terms of a gross lease, ideally the tenant should ask which specific janitorial services are included along with how often they’re offered as well. Overconsumption of utilities that surpass typical building standards is charged back to the renter sometimes. Therefore, if a certain tenant is a particularly excess consumer of electricity or gas, this needs to be pointed out in the terms of the lease. The tenant will pay their own taxes and property insurance.

A key advantage of this kind of lease is that it’s incredibly easy for the renter since it can predict expenses without the need to worry about an unforeseen lobby maintenance fee, for instance. The landlord is responsible for the building in general, while tenants focus on expanding their businesses.

What is a Net Lease?

In the case of a net lease, generally the landlord charges a lesser base rent regarding the commercial space as well as all or some of the typical costs, which usually include key expenses related to operations, use, and maintenance that the landlord covers. Some of these expenses may include, property insurance, real estate taxes, and CAMS (common area maintenance items), which involve:

• Property management fees
• Janitorial services
• Water
• Sewer
• Trash collection
• Fire sprinklers
• Parking lots
• General landscaping
• Any commonly shared service or area

There are a number of different kinds of net leases overall.

1. N Lease (Single Net Lease)

In this kind of lease, the occupant pays the base rent in addition to a pro-rata share of the property tax of the building, which refers to a part of the entire bill based on a portion of the total building space that’s leased by the occupant. Although the tenant pays for janitorial services and utilities, the landlord is responsible for all other expenses concerning the building itself.

2. NN Lease (Double Net Lease)

For a double net lease, the occupant is liable to pay base rent in addition to a pro-rata share regarding property insurance and property taxes while the landlord covers any expense for common area maintenance and structural repairs. Once again, the occupant is responsible for their own utilities and janitorial expenses.

3. NNN Lease (Triple Net Lease)

A triple net lease is the most common kind of net lease regarding retail & warehouse space, and freestanding commercial buildings. It’s also becoming more common for landlords to use this type when leasing office space.  It’s referred to as a ‘net’, ‘net’, ‘net’ lease (NNN lease), whereby the occupant pays part or all of the three said ‘nets’, including CAMS (common area maintenance items), insurance, and property taxes in addition to the base rent each month. Operating expenses and common area utilities are generally thrown in as well. For instance, the expense for hiring a lobby attendant would stem from the NNN fees. Naturally, occupants also pay for the costs of their own occupancy as well, including their own taxes and insurance, utilities, and janitorial services.

4. Absolute Triple Net Lease

Although this option is less common, it’s more binding and rigid than an NNN lease in general, whereby occupants carry virtually every real estate risk imaginable, for instance, being liable for the expense of rebuilding following a disaster or for paying rent even if the building is condemned. Appropriately referred to as the ‘hell or high water lease’, occupants are ultimately responsible for the building regardless of what happens.

5.  Modified Gross Lease

While the net lease is more landlord-friendly, and the gross lease is somewhat more tenant-friendly in nature, there’s a ‘compromise’ lease that exists for both parties. Sometimes referred to as a modified net lease, the modified gross lease is much like a gross lease in that the primary rent is provided in one lump sum and can include all or any of the ‘nets’, such as CAMS, insurance, or property taxes. Janitorial services and utilities are generally covered by the occupant. Both landlords and tenants negotiate which specific ‘nets’ will be included in the base rate of the rent.

With most tenants, the modified gross lease appears to be more popular overall due to its flexibility that translates into much easier terms of agreement between the landlord and the tenant. Different from the NNN lease, the rate of the lease will not change if taxes, insurance, or CAM fees increase.

Overview of NNN Lease, Full Service, or Modified Gross Commercial Leases

When weighing all the pros and cons of leasing office, retail, or warehouse space for your business, it’s crucial to compare all the different options available to you with a keen eye on all expenses, rather than just the primary rental rates. Overall, NNN primary rental rates tend to be substantially lower, with added fees for the actual monthly rate.

Regardless of the specific kind of lease, market forces will generally even out the rental rates regarding comparable properties. Occupants should expect to shell out the same amount with a full service, modified gross, or NNN lease for comparable quality office spaces around the same vicinity.

When it comes to commercial leases, the most important rule to remember is to thoroughly read the entire lease from beginning to end very carefully, and to clarify which expenses and fees you’re liable for. Certain situations for which additional charges may arise should be readily acknowledged and negotiated.

Source:  Austin TenantAdvisors

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