FAQs

Q?What is Commercial Real Estate

A.

Loosely defined the term commercial real estate often refers to any dealing with real property within a business context. Technically it is any real property not use for residence or greater than 4 units.

Q?Is a commercial real estate deal really that different from buying a house?

A.

Generally speaking, residential deals are uniform in process and for the most part all use the same contracts. Commercial real estate deals are more diverse in their nature, and do not have standardized forms or protocol. Each deal is unique! There are also fewer laws in place to protect the consumer in commercial deals. This is one of the many reasons it is strongly advisable to hire a real estate broker to watch out for your best interests.

Q?If I hire a real estate broker, do I need to hire an attorney?

A.

Although the state of Arizona gives licensed Real Estate Brokers the legal permission to write and modify contracts pertaining to real estate, we do believe that it is always in our client’s better interest to consult with specialists in the fields of law and accounting not only during the critical parts of a transaction, but at all milestones pertaining to a business. We work with many great attorney’s and CPA’s and are happy to give our clients a referral if needed.

Q?Is it better to buy or lease a property?

A.

Well, it depends on many factors! Markets and business needs are always changing. We sit down and conduct a needs analysis with each and every client. Based on the criteria provided, we then provide the pros and cons for buying and leasing as it relates to the current market conditions.

Q?If I am buying real property for my business, do I need to get an environmental site assessment?

A.

If you are planning on purchasing the property with lender funds, then the answer is almost always yes, as most lenders will require a Phase I environmental report. A phase I can range in price depending on the type and size of property. Even in instances in which an environmental report is not required, it may make sense to invest in one to get a better idea of the historical conditions that may affect the subject property and even neighboring properties.

Q?What’s a “1031 exchange”?

A.

A 1031 exchange, also known as a tax deferred exchange, is a strategy for selling one property and then proceeding with the acquisition of another property without having to pay capital gains (taxes are deffered out to some point in the future.) There are many rules and regulations regarding what properties qualify, the specific time frame, and how it is to be setup and executed. We have experience with 1031 exchanges and work with some of the most active and reliable qualified intermediaries in the industry.

Q?What is the difference between usable square feet and rentable square feet?

A.

The rentable square footage includes a proportionate percentage of the common areas such as a lobby, elevator banks, hallways, etc. Useable square footage is the actual space that is occupied and used by the tenant. It is common in office leasing to have two different numbers of useable and rentable square feet in the lease.

Q?How long does it take to complete a commercial real estate deal?

A.

We have completed deals in one day, and others have taken years! A typical lease or purchase can take one to four months, but more complicated deals can take much longer.

Q?How does a commercial real estate broker get paid?

A.

Most of the time, Landlords are compensating the brokers in the transaction, but there are exceptions to that rule depending on the specific property and agency relationships being considered. As a rule, all compensation options are discussed in the preliminary needs analysis consultation.