Naperville, IL 60563
Call Us Today for an Initial Consultation
630-778-3818
Recent Blog Posts
Banks Agree to Relax CRE Lending Rules
After the recession, banks tightened their lending requirements for all borrowers. Individuals in the commercial real estate market took the hardest hit. Several institutions stopped offering lending options to CRE investors altogether, and all remaining lenders were bound by federal regulations. Of particular concern was the requirement that all CRE transactions valued at $250,000 or higher had to be valued by an independent third-party. Thankfully, the Federal Reserve, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) has recently relaxed this requirement. Learn why this matters and how it could give you the freedom you need to expand your investment portfolio in the following sections.
Relaxed Lending and Your Investment Portfolio
Forbes Real Estate Council Reveals which Real Estate Markets Are Booming in 2018
To be successful as a real estate investor, you need a vision. More importantly, you need to be willing to change your vision, according to the market trends. For example, you may have started out as an investor who buys and flips houses, but the trends show that such investors are making smaller returns. As such, you may need to expand your portfolio into another market (i.e. commercial real estate or residential rental properties).
Where you invest is also important. After all, it does little good for one to invest in areas that are distressed or declining. To help you find direction, the Forbes Real Estate Council recently revealed which market areas are expected to boom in 2018. Furthermore, you shall learn how the aid of a seasoned real estate attorney can help guide your investment choices for the future.
Expanding Your Investment Portfolio - Why Now is the Time to Invest in Commercial Real Estate
During the U.S. economy crash of 2018, financially savvy investors jumped into the real estate market. Many started out in residential properties, which were being repossessed at an unprecedented rate. Most of the properties were distressed, but substantial profits were still made. Now, with climbing rates and other indicators of market shifts, residential investors are being encouraged to expand their portfolios. One sector worth considering is the commercial real estate (CRE) market. Learn why, and discover how an experienced real estate attorney can minimize you minimize the potential risks in the following sections.
Why Commercial Real Estate?
With the possibility of turbulent markets ahead, investors are encouraged to add more stable equity to their portfolios. Commercial real estate typically offers a better risk-return profile than other real estate sectors. For example, the absolute return on CRE backed by private debt (secured debt with a collateral contingency) ranges between 6 and 12 percent. Additionally, this sector does not experience the same daily swings as other markets. Use of collateral in a commercial real estate transaction can also minimize the risk of a default, and it ensures there is an asset safety net, should default, or a decline in the market occur.
Examining How Driverless Cars Could Impact the CRE Market
With autonomous cars becoming more commonplace, experts are now saying that it is no longer a matter of "if" the commercial real estate market will be impacted, but "when." Smart investors know that means they need to start planning now - before the future arrives. Learn more about how you can stay ahead of the trend of driverless cars, and discover how the assistance of a seasoned commercial real estate lawyer can help you mitigate against the potential issues that may arise along the way.
Autonomous Cars and CRE Development
To be successful as a CRE developer, one needs to stay ahead of the trends, but autonomous cars are not just a trend; they are becoming a way of life. The government believes they have the ability to reduce the number of traffic fatalities that America experiences each year, so they are pushing to have more cars developed and tested. People and businesses are responding, en mass. In fact, rideshare companies are already using autonomous cars to increase their profit margin. Countless others are hoping to follow suit.
Construction Corruption - What Every CRE Investor Should Know
Commercial real estate investors heavily rely on the work of construction companies. Sadly, corruption within the construction industry is costing investors millions of dollars each year. Learn how you can mitigate against such issues during your next real estate transaction, and discover how the aid of a competent real estate attorney can save you both time and money.
Construction Corruption is Rampant in CRE Development
One would like to believe that the stories of corruption are one-offs, rarities that can be easily avoided. Unfortunately, nothing could be further from the truth. Corruption in form of bribery, larceny, extortion, grafting, and bid-rigging are rampant in the construction industry, and CRE developers are some of the most heavily impacted victims. If hit severely or frequently enough, corruption could have a permeant and catastrophic effect on a developer's bottom line.
Tariffs Already Affecting Prices in the CRE Market
There is only one true constant in the commercial real estate market: prices change and fluctuate on a regular basis. Unfortunately, those changes in the market can dramatically affect the success of a project. Consider those who are currently under contract and facing price hikes from the recently imposed tariffs; many are starting to realize that they cannot complete their projects within their proposed budgets, so they may be forced to either abandon their ventures or hope that the losses can be made up elsewhere. However, there are some benefits to the tariffs for existing real estate developers, and those that are facing challenges because of the tariffs can mitigate the issues. Learn more, including how a skilled real estate attorney can help.
Tariffs and New Project Budgets
CRE Partnerships - Avoiding Some of the Most Common Partnership Killers
Partnerships in the commercial real estate (CRE) industry can either make or break your business. Most savvy investors understand this, but they may not fully understand what factors may lead them to a path of success. Learn more in the following sections, including how the assistance of a seasoned commercial real estate lawyer can help improve your chances of growing a healthy and profitable business now, and in the years to come.
Partnerships that are born out of financial convenience (i.e. because you lack capital or cannot afford to hire someone for the job) are rarely profitable. That is partly because only one person is bringing in the money, but there are other issues that can cause these partnerships to fail as well. For example, if you partner with someone who does not have the business sense to keep up, you may find yourself doing all the hard work with very little payback. You could also find yourself liable for the mistakes they make along the way. Alternatively, if you partner has capital but you have all the ideas, you risk them stealing your ideas and profiting from them on their own. Avoid such matters by ensuring you only partner with someone who can bring more than money to the table, and always ensure you have a contract that clearly outlines the duties and responsibilities of each party.
Empowering Women in the CRE Industry - What Every CRE Investor Should Know
Although there are more women in the workplace today, statistics indicate that only 9 percent of companies have women at the top. Some of the reasons seem obvious: family conflict and there are still fewer women who remain in the pipeline - but there are some other, more obscure issues at hand.
One news source, which interviewed some of the leading women in business, cited issues with how women are raised. Others say that the biggest issues related to the continued biases on gender. Whatever the case, and regardless of the reasons, there are companies who are choosing to set the example - and for good reason.
Understanding the Benefits of Diversity in the CRE Industry
Diversity can greatly benefit a company - and not just because it provides them with a broader view of their consumer's needs. A small study found that women-founded businesses tend to grow faster than those founded by men. Moreover, 75 percent of the fastest growing companies (experiencing growth of 200 percent or more) were founded by women. When one also takes into account that only 14 percent of all start-up businesses were founded by women, the weight of that statistic becomes staggering.
Technology and Competitiveness Are Making “Experience” a Critical Component in CRE Development
Consumers have more choices than ever, and thanks to the constant and rapid evolution of technology, those options can be researched and accessed in a matter of seconds. Because of this, companies are having to work even harder to maintain their competitive edge - and that includes commercial real estate businesses. Environmental experience is one of the key, creative elements that they are using to draw in and maintain a strong, thriving customer base. Learn more about how you can incorporate this element into your commercial real estate business, and discover how a seasoned commercial real estate lawyer can help to further increase your profits.
What CRE Investors Can Learn from Theme Parks
Theme parks base their entire business on experience. They combine sights, sounds, and even smells to create an immersive experience that both entices and entertains their consumers. Their shops and stores are the bi-product that drives profits, but it is the experience that encourages consumers to spend. They are in an alternate world, and they want to hold onto their experience forever. Of course, this is an overt and blatant example - one that is unlikely to be seen in an office building or high-rise condo, so one must think more creatively in the commercial real estate industry.
International Investment in the U.S. CRE Market - What Does It Mean for Local Investors?
According to data from the National Association of Realtors (NAR), nearly one-fifth of realtors closed a sale with an international client in the year 2017. Moreover, a total of 35 percent of realtors stated that they have seen an increase in the number of international clients over the past five years. What does all this mean for local commercial real estate investors, and how can you ensure future growth of your real estate portfolio? The following information explains.
Foreign Investing - Good or Bad for Local Investors?
At first glance, it might appear that foreign investments are negatively impacting local investors, but that is not necessarily the case. Market trends showed an acceleration for the last quarter, with a 9.1 percent increase in sales volume. Granted, investors are still concerned over the shortages of available inventory, and wide pricing gaps between buyers and sellers are still an issue. Yet, when one considers that cap rates closed at 10 basis points higher than 2016, it becomes clear that the CRE market is still growing and expanding. In short, the uptick in foreign investment may mean more competition in the CRE industry, but the savvy investor could potentially use this influx to his or her advantage.
1730 Park Street, Suite 117, Naperville, IL 60563
630-778-3818
