All Forum Posts by: Jacob Dawson

Hello Nicole, are there any new updates on the property you are closing on?

Hello Nicole, I am a commercial real estate broker from Chicago, specializing in retail and NNN investments.

The things that I would ask myself would be: 

1.  Who is backing the lease? (is the lease payment backed by a large company? Does the owner of the event space back it?)

2.  What is the likelihood that the tenant will be profitable? How long will it be until they ARE profitable? No one will be using event space for the next few months.

3. Filling a 13,000 SF space is a hard thing to do. Even in a city. You have to ask yourself if the tenant leaves and can NOT pay rent. How likely is it that I can refill the space. 

4. If the tenant vacates the area, can you subdivide the space into smaller units?

I love the BRRRR strategy applied to retail. I believe it is better than doing it with multi-families. But you need to look at the strength of the tenant. But with this deal, you need to weigh the risk of not having a paying tenant long term for your refi down the line.

If you want to have a more extended discussion on this subject, I would be happy to have that. Otherwise, good luck!

Hello Arian, Before I start, I want to say that I am a retail broker based out of Chicago.

I think retail is not dead and will not die. But it is changing. Retail used to be a place where you go shopping, spend your time, etc. Now the experience is more centered towards getting in and get out (that statement applies to small strips and larger malls). Retail is moving to an "amazon resistant model" Think service-based locations where you get your medication, pick up food, or an escape room. We still have the A, B, and C class centers like before. But your A class centers are moving towards your name brands like Whole Foods anchored center with a CVS on the lot. The midwest has fantastic cap rates for retail (7% cap for an excellent anchored center 9% cap if your buying in a more speculative environment) 

I hope I answered your question about retail. If you have any more feel free to ask away! 

@Daniel Forero Pineda I think you should keep the helpful links tab. It sets you apart from a lot of others that are doing wholesaling. My advice would be to keep them but spend the time to hand craft each article and post it on your website. You can also try the blog feature and see how it works for your case. 

@Daniel Forero Pineda yeah! Include the FAQ page. I’d do it in video form to the potential client can see you and begin to trust you. You don’t need to go crazy here. Just set up your phone and try a few different angles. Good luck!

Hello Daniel, first of all, I love how you are trying to be different in this space. I am a commercial real estate broker based in the Chicago land area. I also used to run a SMMA. 

I think the bones of the website are excellent. It's fast, the colors are great, and it just looks good. Here are my recommendations and feel free to ask follow up questions. I am happy to assist. 

1.  I would move the "about us" section to just right of the home. You want your potential clients to see that about us section first!

2.  I can tell you are using square space. Make sure to change the "Favicon" to your logo or something that isn't the square space logo. 

3.  When I hover over "helpful links," my eyes glaze over. It's just too much info. Maybe have the helpful links be a page that has a list of tops to click on. You can play with it obviously, but currently, the vertical text is to close together.

4. Try using the Square Space spacers when breaking up sections. Or use the block tools and make each section have a slightly different shade of white on the background. It gives the user a better experience in differentiating parts. 

I hope all of this helped!

Hello Sam, first of all, congrats on your first deal! I am a commercial real estate broker based out of the Chicago land area specializing in multi-tenant retail as well as STNL.  

You are right in saying that the strength of these tenants has changed. I would say you need to re-run your numbers on this current deal and determine if your initial risk metric is still valid. As far as going to tenants and asking them their status, that is a conversation that you could have and is warranted. But getting to them will be hard. Perhaps you could talk to current management or ownership and ask them to reach out to the mom and pops. 

Since this circumstance we are in is a different one (one that no one could have predicted) , I believe you may need to adjust your offer on the property to compensate for the new risk. 

I hope this helps! If you have any other questions feel free to ask

I am not sure why, either. I am a commercial real estate broker based out of Chicago specializing in multi-tenant retail as well as STNL (singe tenant triple net). I would say if you are looking for a property that takes zero effort to manage, then go for the STNL. But be aware that the cap rates will be lower since (in most cases) there is zero value add to the STNL deals. If you want a higher return, then I would recommend multi-family.

If you have any other questions relating to STNL retail, please feel free to ask!

Hey San, I am a retail broker based out of the Chicago area. I specialize in multi-tenant retail, as well as STNL (Single Tenant Net Lease)/NNN. I would say you should ask yourself how safe of an investment do you want? With the QSR (quick-service restaurants) or any, you run into the problem of deciding whether you want a franchise guaranteed or a secured corporate location. What's the difference? Well, let me give you an example. Let's say we have a KFC restaurant chain operated by an operator who runs three other KFC locations in the area. If the lease is a franchise guarantee, then your lease is only backed by the other three restaurants (super risky, and you probably won't be able to get a loan for one of those deals). However, if you go for a KFC that is corporate-backed well, let's just say for the remainder of your lease, you'll be getting cash flow. With a corporate-backed lease or corporate guaranteed as we call it even if the operator goes bankrupt, the corporation that owns KFS (YUM! Brands) is responsible for backing the space with another tenant. A corporate guaranteed lease is your best bet. Additionally, a corporate guaranteed lease will have a lower cap rate.

I hope I answered your question. If you have any more questions or want to discuss this topic further, please reach out! I am happy to assist. 

Hello Will, I work for CapRock Real Estate. We are a full service retail-focused real estate company based out of Chicago. We provide leasing, brokerage, and property management services. In addition to that, we own and manage our properties. For reference, we mainly operate B and C class retail. 

To directly answer your question as to what we are doing. We are giving our tenants an initial 30-day window of free rent. If the COVID-19 continues and we are still in lockdown, we are prepared to offer 30 more days of free rent. We will amortize the balance of the 30-60 day open rent window on the remaining term. We want our tenants to succeed long term, and we see this strategy as one of the ways to keep our tenants' lights on.

As far as renegotiating with our lenders goes, we have not been successful either. We have also not seen any help for landlords. 

The key takeaway from this is you need to work and be completely transparent with your tenants a little during these times. 

I hope that helped! If you have any more questions, please ask.