Come to Us for Central Massachusetts Commercial Real Estate
Many of our clients are interested in moving their real estate investments to areas where they can expect great returns. Nobody likes to follow the downward trend of a market - they'd much rather find a market that's ready to retrace the path and spiral upward.
Is Phoenix, AZ ready for such an upward trend? Here's a market report that offers insight into what's going on in Phoenix. We know it's been a boom town in the past. Now where is it heading?
Take a look at "Phoenix Commercial Real Estate Forecast 2009" and gain some insight.
at bobyale@svn.com
Central Massachusetts Commercial Real Estate
Come to Us for Central Massachusetts Commercial Real Estate
The concept of a sale/leaseback is straightforward. A commercial or industrial property owner who is also using the real estate to house their business finds that they need a new source of funding and realizes that they have a lot of equity invested in their property. There are two basic ways to get that equity converted to hard cash.
One is to approach a lender and take out a new mortgage. In most economic climates, that's pretty straightforward. As we morph from 2008 into 2009, though, this has become more difficult and the terms, if available, may not be attractive. The lender may also discount the value of the property, and therefore the amount they're willing to lend, based on declining market values.
Another approach is to sell the property to an investor agreeing to lease it back at a rate that will offer an attractive return to the investor while not being harmful to the business. This can free up cash to retire existing debt or allow funding to grow the business. While the investor will consider the current market value of the property, they will likely place more emphasis on the income stream generated by the lease. This may offer a higher sale value than if the property were sold on the open market in today's economy.
While the concept is straightforward, the transaction does require careful financial analysis based on possible tax implications. The sale will likely trigger a capital gains tax which should be calculated into the total return to the seller. A savvy real estate broker, together with the seller's own financial advisors, will help to calculate the net return and make a determination of whether this is the right approach.
For more info on sale leasebacks: bobyale@svn.com
Central Massachusetts Commercial Real Estate