Benefits of Cypress Outdoor Furniture in Commercial Properties

Deciding on patio furniture for a commercial landscape can be a daunting task. Often, it can be difficult to predict what kind of qualities will give owners the highest ROI. While inexpensive pines are an economic choice, going with a high quality outdoor wood will elevate the appearance of your landscape.

Outdoor furniture represents a huge investment for commercial properties and it is obvious that patio furniture is constantly exposed to the elements as well as heavy use by the clientele. While there are any number of styles and materials suitable for commercial outdoor furniture, consider the many benefits of selecting furniture constructed using cypress wood.

Cypress wood inherently has properties that make it an ideal candidate for durable lawn furniture; hundred year-old cypress wood timbers are still in use. While other trees, like maples, contain a sticky sap, the cypress tree contains cypressine. Cypressine is an oil that naturally preserves the wood even better than man-made oil compounds used to make treated lumber. Cypress is an excellent choice for outdoor furniture at coastal commercial properties since it resists the salty air as well as fungus and insects.

Cypress wood is also incredibly easy to paint. Being able to add unique and vibrant colors to your commercial property’s outdoor furniture will make your site cheery and memorable. Whether choosing to create a color palate, or unifying your landscape with one consistent color, adding paint elevates any commercial area. Plus, brightening up your site is as easy as applying a new coat of paint!

Cypress outdoor furniture is an accessible, affordable, and high quality wood that will resist environmental damages, elevate the luxury of your site, and will let you add color to all of your outdoor furnishings.

Tips for Securing Commercial Lawn Mowers for Commercial Landscaping Properties

A lawn care or landscaping company with the knowledge and experience needed to handle the care for large commercial properties needs the right tools at their disposal in order to handle these commercial landscaping properties. That means only the best commercial lawn mowers designed specifically for large-scale properties. You want your handiwork to speak for itself whenever you drive off from a freshly-manicured commercial property, so here’s how to not just secure new commercial property owners as clients but how to keep them by providing the best service you can.

Don’t Be Afraid to Scout While On the Job

The life of a professional landscaper entails a lot of driving from job to job, and this represents an excellent opportunity to scout out new possible properties to approach to see if their owners are looking for landscaping services. Commercial properties with large, neglected lots are always ripe for the plucking, especially as sometimes the companies that occupy properties, such as law offices and similar professional services, are responsible for their own landscaping and do not have a property management company to rely on. Once you’ve gotten a good list of what might very well end up being new clients, you’ll have to track down who it is you’ll have to talk to in particular about landscaping services. Whether it is a grounds manager or a business owner, you will need to do some Googling – or better yet just knock on doors and strike up conversations with receptionists or other staff at the front desk.

Be Yourself with Prospective New Clients

It’s important to be genuine when you’re looking to forge new connections with potential clients. Business owners are inclined to be friendly with a fellow business owner, especially when they present themselves honestly and professionally. Being open and honest can help show prospective clients that it will be easy to work with you, even if it just means that you’re proficient at making small talk. However, when it comes time to get down to brass tacks, you’ll need to be straightforward and simple about what you can provide to a company, what types of commercial lawn mowers and other equipment you use on a regular basis, and how much all of these services will cost.

Don’t Lose Hope

Finally, don’t get discouraged if you keep asking around and all you’re getting is rejection after rejection. Not every business out there cares or even thinks about the landscaping on their property. Moreover, those who do reject your offer will sometimes give you feedback as to why you were passed over, providing you an opportunity to hone your sales pitch and strengthen your positions for future endeavors.

Of course, it doesn’t matter how well you can smooth-talk a client unless you have the equipment to back it up in your trailer. Make sure to use only the most safe and efficient commercial mowers that can stand up to the strain of large, robust commercial.

What Are Your Investment Objectives For Commercial Properties?

Investors often ask me to show them only the best commercial properties. This requirement is at least not clear or specific enough for this advisor. A best property for one investor may not be suitable for another investor. This is because each investor has different set of investment objectives. You should at least consider the following:

  1. Investment returns: when you deposit your money in CDs, you get 1.5% interest for 6- month CDs, so what kind of return, i.e. cap rate is acceptable to you when you invest in commercial real estate? The current cap rate in 2009 varies between 5% to 12% depending the property type, property condition, location, and various other factors. Properties in California tend to have lower cap than those outside of California due to higher demand.
  2. Appreciation: one of the benefits in real estate investments is its potential for appreciation. However, this potential also varies from one property to another. There are several factors that impact appreciation. Some you have little control, e.g. demand and supply. However, you know the demand is weak and supplies are abundant in declining rust-belt areas, e.g. Detroit. And thus the properties in these areas will not likely to appreciate. Some you have control, e.g. rents or net operating income of the property. So if appreciation is important to you, focus on properties with

    • Below market rents. When the leases expire, the rent will be adjusted to higher market rents. As a result, the value will likely go up. Sometimes a tenant may pay 10-25% below market rent because the landlord does not know how to get the highest rents for his property. It’s not easy to determine by yourself if the rent is below market so you may need a professional to help you
    • Annual rent bump located in stable or growing areas with high barriers for entry. When the rent increases, the operating income increases; and the property is likely to appreciate in value. You can review the rent roll to see if there are any rent increases. It’s very common that the rent goes up 2-3% annually on multi-tenant shopping centers.
  3. Investment risks: there are risks associated with almost any investments. For commercial properties, one may have higher risks than another. Walgreens should do well during the recession. In addition, it also has very strong A+ S&P rating and so it should be able and willing to pay the rent on time. On the other hand, single-tenant car dealers selling big-ticket items may not fare well during tough economic times and so your rent checks may not come. Of course, there are other properties in which risks are somewhere in between Walgreens and Car dealers, e.g. multi-tenant strip malls. Life also throws a curved ball at you as risks also vary from times to times. Properties occupied by banks, e.g. Wamu were once considered very safe investments a very few years ago until many banks closed down due to subprime problems.

Investment risks and returns tend to go in opposite directions. In general, the lower the risk the lower the returns but there are also moderately low-risk properties offering high returns. They are called good buys. You may need a professional to help identify these. So should you choose a bullet-proof safe investment over moderate risk properties? Imagine that you work for a company that does not give you a raise in 30 years. It however offers a lifetime employment and consistently pays you a modest salary each month. Will you be a happy employee? If your answer is yes because you don’t ever want to be unemployed in your life then you will consider investing in Walgreens or Autozone. Their rent is often flat for 15 to 30 years and the cap rate is modest–in the 6.5% to 7.5% and so the investment returns are low. On the other hand, you know money does not bring happiness but you need more money for shopping which is proven to make you happy. In that case you will need to endure a reasonable dose of risk. Sit-down restaurants in which business is moderated affected by the recession tend to offer higher returns–8% to 11% cap.

To minimize or reduce the risks of your investment, you should

  • Choose a property at a great irreplaceable location Tenants will come and go but location does not change. Want to know how important a great location is to a business? A lousy business will be successful at a great location while a good business will fail at a bad location. It’s that important! That’s why some restaurants are still crowded during the recessions. If your property is at a great location, you will likely receive your rent checks on time and regularly.
  • Invest in multi-tenant properties. When one tenant vacates your property you will only lose a portion of the total income.

As an investor you need to do soul searching and determine the amount of risks that you feel comfortable with. On top of that, you also have different expectation regarding investment returns and appreciation. All these factors will determine what properties that you would consider. And now you know why there is no single best property for all investors.

What a Tenant Wants: Renovation & Remodeling Trends for Commercial Properties

The rental market can be a highly competitive one. And, as a property manager or owner of an apartment or office property, you know just how important a few essential updates can be. There are a number of remodeling projects potential and current renters hope for and knowing what they are can really help you get a leg up on the competition. Here is a brief rundown of what the most commonly requested tenant improvements are and why potential tenants seek them out in a place to lease.

Windows – First, when considering any large scale tenant improvements before renting your property, new and improved windows should be at the top of your list. Older properties in particular will benefit from updated windows. Newer, insulated windows are one of the very first features a potential tenant looks for, especially if they will be responsible for paying heating and cooling bills. New windows will regulate the inside temperature, therefore increasing energy efficiency.

Storage – How are the closets? In this day and age, ample storage is an absolute essential for any home or office. Potential renters want to ensure there will be enough room to store clothing, toiletries, files, and more. While you cannot increase the size of your property, there are several ways to increase the size of your storage. You can create storage space where it didn’t exist before, as well as make the most out of the storage areas you already have.

Clean Walls, New Paint – This is an essential one. Whether or not you have the time and budget for large scale tenant improvements, you should never turn over a rental property without giving the entire place a fresh coat of paint. Freshly painted walls lend an overall cleaner look and shows renters you put the time and effort into getting it ready for future residents.

Kitchen & Bathroom Renovations – Small but impactful details, such as new faucets, light fixtures, backsplashes, and energy efficient appliances will update the look of the unit and make it more appealing to potential tenants. If you can only focus on one or two areas during your next round of tenant improvements, make it the kitchen or the bathroom.

Amenities – Add tenant-attracting amenities to other areas of the building. Put in a new fitness center, common area or laundry room to increase your building’s renting potential. With today’s emphasis on healthy living, having an on-site fitness center is an attractive feature for your building to have; whether you rent apartments, offices or otherwise.

And, these are just a few the renovation and remodeling projects you should consider in order to attract new tenants. So, start gathering inspiration and ideas and call your local contracting experts to get your condo, office or apartment renovations underway!

What You Should Know About Property Management of Commercial Properties

Now that you have made an offer to acquire a commercial property and are waiting to close escrow, you may want to start looking for a property manager to professionally manage the property. Your real estate investment advisor should present you with 2 or 3 local companies, each with its own proposal. Your job is to decide which company you will hire. The property manager will be the main point of contact between you, as the landlord, and the tenants. Her main job is to:

  1. Receive and collect the rents and other payments from your tenants. This is typically simple until a tenant does not send the rent check. A good property manager will somehow get the tenant to pay the rent while a lousy one will throw a monkey on your back!
  2. Hire, pay, and supervise personnel to maintain, repair and operate the property, e.g. trash removal, window cleaning, and landscaping. Otherwise, the property loses its appeal, and customers may not patronize your tenants’ businesses. The tenants then may not renew their lease. As a consequence, you may not realize the expected cash flow.
  3. Lease any vacant space.
  4. Keep an accurate record of income and expenses, and provide you with a monthly report.

A good property manager is critical in keeping your property fully occupied at the highest market rent, the tenants happy and in turn helps you achieve your investment objectives. Before choosing a property management company, you may want to:

  1. Interview the company with focus on how the company handles and resolves problems, e.g. late payment.
  2. Talk to the person who will manage the property day to day as this may be a different person from the one who signs the property management contract. You want someone with strong interpersonal skills to effectively deal with tenants.

The property managing company normally wants a contract for at least one year. The contract should spell out the duties of the property manager, compensation, and what will require the landlord’s approval.

Agent’s Compensation: you will have to pay someone to manage and lease the property. You may have one company to manage the property and a different company to lease the property. However, it’s best to work with one company that handles both managing and leasing to save time and money.

  1. Management fee: the fee varies between 3-6% of the base monthly rent for a retail center, depending on the amount of work needed to manage the property. For example, it takes much less time to manage a $2M retail center with just a single tenant than a $2M retail strip with 12 tenants. So, for the center with 12 tenants, you may have to pay a higher percentage to motivate the property manager. You should negotiate the fee as a percentage of the base rent instead of the gross rent. Base rent does not include NNN charges. Ideally, you want a lease in which the tenants pay for their share of property management fee.
  2. Late fee: when a tenant pays late, he is often required by the lease to pay late fee. The property manager is allowed to keep this fee as an incentive to collect the rent.
  3. Leasing fee: this fee compensates the property manager to lease any vacant space. In a typical lease contract, the leasing company wants 4-7% of the gross rent over the life of the lease. It also wants the leasing fee to be paid when the new tenant moves in. In addition, the leasing company wants around 2% of gross rent when the lease is renewed. The tenant may also ask for Tenant Improvement (TI) credit, typically between $10-20 per square foot to pay for construction expenses. So if a new tenant with a 10-year lease goes under after one year then you may lose money. As the landlord you should:
  • Approve a long term lease (10 years or longer) only when the tenant’s financial strength is solid. Otherwise, it may be better to reduce the lease to 3-5 years.
  • Make sure the new lease has a provision for some kind of rent escalation, preferably based on Consumer Price Index (CPI), i.e. inflation which is 3-4% a year instead of lower fixed 1-2% annual increase.
  • Consider TI request from the tenant as one of the factors to approve a lease. The TI credit depends on whether you need the tenant more or the tenant needs you more.
  • Negotiate for a flat rate renewal fee, e.g. $500 instead of paying a percentage of the rent for the life of the lease. The negotiation is easier with one company that handles both leasing and management.
  • Negotiate to pay the leasing agent a lower percentage, e.g. 4% when no outside leasing broker is involved.

You can see that it’s very important to minimize tenants’ turnover rate as it has a direct impact on the cash flow of your commercial property. A good property manager will help you achieve this goal.

Monthly Report: each month the property manager should send you a report on income received, expenses incurred, and property status. You should Review the report to see if the numbers make sense. You should:

  1. Request a report showing both rent and CAM fees received.
  2. Request a separate bank account for your property and have a monthly bank statement sent to you. Without this, the property manager will deposit and commingle all the rents from all properties that she manages into her company’s bank account.

If you instruct the property manager to send you the excess cash flow then you will also get a check.

Landlord’s Approval: the management contract should specify the dollar limit for exceptional maintenance expense above which would require your approval. This amount varies from landlord to landlord as well as the type of property. However, it’s typically somewhere between $500 to $2,000 dollars.

Communication with property manager: in the first few months, you and the new property manager should communicate often to make sure things go smoothly. You should give instructions in writing, e.g. email, to your property manager and keep records of all your correspondence. If the property manager does not do what you instructed, you may refer to your records and minimize disputes.

If you want to work hard for your money, you may want to manage your own property. However, if you want to work smart, your partner should be a good property manager.