All Forum Posts by: Chris K.

@Ariana Pope

Where is the property located? Depending on who the buyer is and where you are from, it might be convenient to find someone nearby. I suppose if everyone is okay with remote closings, you could do it anywhere. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Rigo V.

Remote closings happen all the time in Pennsylvania. But once in a while, you may have situations where it makes sense to do an in-person closing. There are also old school folks/businesses that insist on an in-person closing. As a practical matter, it is hard to say "no" to a lender when you are trying to borrow money from them. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Bharath Raj

Not sure what kind of system you have but take a look at the gasketing (if any) to see if they are properly installed. If the building has not had maintenance in a long time, gaskets can get worn out and get lose. You can also try to find out what kind of glass you have. I assume you have some kind of tempered IGU but they tend to become less efficient as it ages due to gas leakage. 

If you really want to get nerdy, you can check out the solar heat gain coefficient ("SHGC") for the glass along with the U-Factor. Basically, think of SHGC as the amount of solar radiation that the glass lets in --- higher number means that it let's more solar heat in. In areas like Pennsylvania where the winters are cold, we may actually want a glass with a higher SHGC since it helps out in the winter. For Houston, I assume being cold isn't the major concern. So having a lower SHGC may help reduce the amount of air conditioning you need. 

It's a hard question to answer without poking around the building and doing some planning. But I do think most of your issues probably has to do with the fact that you own a glass heavy building. As much as I love the fact that the "all glass" look is popular, glass is always going to be the least efficient part of the building envelope. This is not to say that all glass buildings cannot be "green." But it takes a lot of effort and calculations to make it possible. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Chris Erato

Take a look at this link. It will take you to a list of all the metropolitan statistical areas in Pennsylvania. Philadelphia and Pittsburgh are the primary markets in Pennsylvania. That doesn't mean that there are no cash flowing properties there. But primary markets are primary markets because of their desirability. This affects real estate prices and the market cap rate. 

Allentown/Lehigh Valley is kind of its own market now. At one time, it was compared to the other markets but it grew a lot over the years. So let's say it's the second market in Pennsylvania.   

Then you have the bigger tertiary markets. This includes Harrisburg, Scranton/Wilkes-Barre, Lancaster, York/Hanover, and Reading. They all have similar features and have been that way for a long time. Some areas are arguably "hotter" than others (e.g. look at the downtown revitalization in Lancaster). Not to diminish the subtle differences but they are all comparable markets at a macro level. In other words, I wouldn't --- as someone living in the Scranton/Wilkes-Barre area --- make a strong effort to go south to these other teritary markets unless there is a very good reason to do so. They are basically the same markets so might as well save a drive. 

If you are looking purely for cash flow, probably the tertiary markets are your best bet. Pick the market that is most convenient from you and start there.  

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Matthew Paul

Our education system should probably teach the concept of margins to everyone at a young age...

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Diana Johnson

If you are forming a multi-member LLC (or a partnership), you will probably want to work with an attorney to form them. As others have said, you can probably get by without an attorney for single-member LLCs. Multi-member LLCs are a completely different beast. I generally discourage people from forming one until they absolutely need it since it can get a bit convoluted.

In terms of partnership versus LLCs, I would say LLCs have more benefit than general partnerships. In Pennsylvania, for example, I can't really think of a good reason to prefer a general partnership over an LLC. Maybe financing? But the fact that you have no liability protection from your other partners make general partnerships problematic.

I also agree with @Steve Vaughan about money partners. Over the years, I have had to deal with many corporate matters --- both as a lawyer and as a shareholder/member. Unless you are following the limited partnership model, I think it is generally a bad idea to give equity to someone just because they bring money. Based on my experience, it is almost always cleaner to just have the person be a private lender instead.  

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Rita Neri

I agree with @Nik Moushon. You are probably better off working with an architect on this than an engineer. Both have an important role to play in many construction projects. But for building layouts and zoning issues, you are probably better off working with architects. Maybe try to find an architect or an architect firm that has worked on similar projects in your area. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Bharath Raj

If you have a glass heavy building and the glazing system is old, it's unfortunately difficult to increase the energy efficiency. We do a lot of LEED and other "green" projects that are very glazing heavy. It requires a lot of finaggling between us, the GC, and the architect to meet that standard. It's doable but often time consuming and costly. 

Having a more efficient HVAC system may help. But it is generally difficult to make an energy efficient, heavy glass building. It is what it is. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Josh Cochran

Can't help you when it comes to WA law. But I would guess you probably don't want to form a partnership (unless you want to go all out and form a limited partnership). You are probably better off forming an LLC and structuring it however you and your partners want.

Agree with everyone else that you will want to find tenants before you break ground. Most development projects that we work on are already mostly leased by the time we get onto the construction site as a glazing contractor. 

Note that adding partners to a new construction project is not always optimal --- sometimes it can backfire spectacularly. I recently came across one where the ownership group partnered with a GC on a retail project of a similar size. Unfortunately, the project didn't go well due to sloppy design issues due to have a poor architect drawing. That created a massive tension between the GC and the owners. The owners probably should've fired the GC at some point but realistically couldn't due to the fact that the GC was a part owner. They pulled through at the end but I assume they ended up seriously over budget. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Keith Allen

Not sure what kind of non-profit you own but remember that most nonprofits cannot be "owned." A lot of nonprofit founders can get screwed over with the mistaken that they own a nonprofit. Because you cannot own a nonprofit, it is generally not a good idea to put any of your own assets under a nonprofit unless you intend to donate it. 

On a related note, many people feel that a non-profit lease instead of own real estate. Why that is the case gets complicated and depends heavily on the situation. But I personally lean towards this approach as well. From a non-profit perspective, I think a non-profit can generally "get more bang for its buck" by leasing then buying. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.