All Forum Posts by: Jon Allen

@Blaine Armstrong are you asking if it’s possible to 1031 into developing land you already own? It is possible, but complicated. I have done this for clients before. Message me if you’d like more details.

Hi Adam,

1. Your broker should be the one to answer the question actually. Typically you see NNN with retail tenants, but office can go either way. The broker should be able to tell you if it is a NNN market or not.

2. If these areas are truly for one tenant's exclusive use, yes you should be including that in their rentable SF. Additionally, depending on the market, you can allocate to each tenant their pro rata share of the common areas square footage in an office building. Again though, this is another question your broker should be able to help you with.

I would offer one additional piece of advice - it is worth your money to work with a *good* leasing broker (assuming you are not one yourself). I have seen leases prepared using standard forms without a broker's assistance, and you can easily leave things on the table, or even worse, lack of clarity around issues that will come back to bite you. I'm not a broker myself, and I admit sometimes stroking that check is a little painful, but that pain pales in comparison to the pitfalls of doing it on your own. Plus often your tenant will have their own representation, which would put you in a position where you are going up against the experts on your own. If it were me, I would interview a couple more brokers and find one you trust to utilize as a team member, in addition to a leasing attorney. Hope this is helpful.

My advice would depend on how many deals you’ve done and how many investors you’ve worked with. If this is your first time raising money, I would say don’t worry about making it that lucrative for you as the sponsor. In this case, use this as an opportunity to learn more than earn. Come up with a home run for your investors and it will be way easier for you to raise money and have more lucrative terms.

If this is not your first time, I’d talk to your attorney. A lot of variables to consider. 

While a landlord obviously prefers to keep a SD, we have waived them for strong retail tenants before (lots of locations, strong financial backing, good for tenant mix, etc). Everything is negotiable. 

Check out The Real Estate Syndication Show podcast with Whitney Sewell. Great info on there. 

In our area we are paying 6% of total rents during the initial lease term. If there is only a broker on one side, it is 4%. For renewals, it is more like 2%.

@Michael Kugler check out Pensford, the interest rate consultants. I highly recommend their weekly letter to any investor. https://www.pensford.com

Thanks to all!

Does anyone know of any self storage brokers in the Charlotte, NC vicinity? I’ve got plenty of relationships in the office/retail/MF spaces, but a partner and I are looking at the SS space now.

I am willing to drive to meet with them - I am just looking for folks who are in tune with the Raleigh/Charlotte/Greenville markets.

To answer the latter part of the question, yes that arrangement is pretty standard. Alternatively, the tenant could simply make minimum rent payments throughout the year, and when the CAM reconciliation is performed, the tenant would be billed for the entire amounts, since they had not made any of these payments during the year.