Raleigh, NC – Is  a Career in the Commercial Real Estate Market a Bust?

I recently read a column on CarolinaNewsWire.com by two brokers from Trademark Properties called “Once Lucrative Commercial Real Estate Market faces 50% Job Cuts Nationally.”

The synopsis of the article basically said that according to “some industry experts” 50 percent of the 130,000+/- Commercial Real Estate brokers nationwide will be out of the business by 2011 by “sheer job attrition.”   

But is it really job attrition?  When the market was hot in the mid 2000’s closing deals seemed as easy as shooting fish in a barrel.  Rents flew, Cap Rates ran high, and Commercial Real Estate Brokers instinctively flocked like the salmon of Capistrano.  Where they truly Commercial Real Estate career seekers? No. Did they sell a few properties? Yeah.  At the time there wasn’t any other way for them.  It looked like a good opportunity and they took it.  

The process was simple, if you list it, they will come.  A broker new their ship had come in when they got their name on their own sign and their own shovel.  But the field of dreams came to an end in 2008 and brokers became adrift in sea of increasing inventory.  

Brokers are commissioned based, independent contractors, who are working much, much, harder and earning less money.  The lean times are disheartening and the brokers who once flocked the market are slowly retreating to more stable income jobs.

Think of the commercial brokerage career as a lifeboat on the ocean.  Until early last year, a broker’s lifeboat was tethered to a yacht called “The Good Times”, being tugged along on the water without much drama.

If you needed food, water, or anything else (like income), you just went to “The Good Times” and grabbed what you needed.

Unfortunately, “The Good Times,” similar the Titanic, hit an iceberg and started to take on water and sink early in 2008. Now all those ambitious Commercial Real Estate career seekers are trying to un-tether their life boat before it follows “The Good Times” into the deep blue sea.

Sometimes it’s a buyer’s market, sometimes it’s a seller’s market, but it is always a broker’s market.  Looking ahead, this is a great market for Commercial Real Estate Brokers.  Less competition, more cash waiting on the sidelines, and leaner, stronger, tenants.

While 2008 seemed relentlessly slow and 2009 has seen the worst of the recession, 2010 is poised to be one of the greatest commercial real estate markets since the late 90’s.  

Last night I was speaking with a close friend who had just raised $150 Million in private funding to buy distressed commercial properties across the United States.  In a recent smaller fund, they have made a 30% return monthly by investing in residential real estate. Mean while the big boys, like Simon Property Group, have risen billions of dollars in the past two quarters for “strategic commercial real estate acquisitions.”

When will those funds hit the market? Most likely starting in March of 2010.

Brokers make their money from commissions.  While the market has been lacking high dollar deals in recent quarters, the volume of smaller transactions has risen tremendously as jobless executives start up consulting practices or purchase franchise rights to retail businesses.   

With a surge of start up businesses and decreasing rents, savvy Commercial Real Estate Brokers are still making a good buck.  When the private money comes back to play in 2010, the Commercial Real Estate Market will likely begin to boom again.

The overall commercial real estate market has been a major casualty of the recession with values falling as much as 30+% from their peak, and sales down 83% from a year ago (113 Billiion to 9 Billion Nationwide), causing a decrease in broker income and forcing many commercial real estate firms out of business.  

GVA Advantis recently closed their Durham office along with 16 others in the Southeast.

But, the gap between US commercial property buyers and property sellers is narrowing, indicating the shattered market is closer to beginning a path to recovery.

The last two quarters have seen a slight improvement in transactions. Credible buyers are appearing and bidding on assets. Previous Property Investors who were showing up to bid weren’t credible and  were often unable to close their financing. Current Investors fall into the institutional category and are well capitalized to close large Commercial Real Estate transactions.
But prices are not improving and values have fallen over 30% from their peak prices reached in 2007.

Other sellers also are getting closer but have not yet embraced the new price reality and sales are being discussed but not done at a level that can clearly indicate market prices.  Investors understand that’s where the market is headed and yet transaction additivity remains extraordinarily low.
Commercial real estate sales worldwide in the second quarter were down some 67% from a year earlier, with US volume suffering more, down 83%.

The correction in the commercial real estate market, is going to be painful for a lot of people, particularly those who bought their commercial properties using considerable amounts of debt financing.

Commercial Real Estate remains edgy from current market operating conditions: limited capital, extremely tighter underwriting, shrinking net operating incomes, shrinking space demand and declining property values.

It is apparent that the “Great Gatsby Era” of Commercial Real Estate has come to an end following downward spiral of unraveling residential real estate portfolios which spread rapidly into commercial portfolios by the end of 2008 and beginning of 2009.

 For commercial real estate companies today, that means leaner and more efficient operations and more focus on tenant retention rather than tenant attraction.

Rankin Commercial Properties was formed as a Full Service Commercial Real Estate Firm in order to help “lean down” on operating costs for commercial property owners in North Carolina.  The company offers in house cleaning and janitorial, landscaping, maintenance, construction, and facilities services in combination with the traditional property management and brokerage services.  In doing so, Rankin Commercial Properties can shore up expenses, spread the overhead costs, and help commercial property landlords save considerable amounts of money.

The “Great Gatsby Era” wasn’t just a pecuniary boom for Commercial Real Estate Tycoons; it had also become an economic “cakewalk” for service providers.  Commercial Brokers had the luxury of slamming signs in the ground and collecting phones calls, general contractors added 50-60% profit margins while hiking salaries, and other property service providers enjoyed the constant climb of service fees from nonchalant property managers.

Rankin Commercial Properties (RCP) was originated in Late 2007 with the vision of constructing a fully integrated commercial real estate company to offer commercial property owners quality, affordable services accompanied with proactive management and aggressive brokerage services.  RCP materialized a year later with the closing of 4109 Wake Forest Road, its first rehab project.

 Today, Rankin Commercial Properties has over 500,000 SF of available property listings.

Despite some signs of overall economic stability, commercial real estate is still reeling from the effects of the credit crunch while trying to avoid the recession’s knockout punches. At the same time, they know the cycle will eventually turn will eventually come to an end.

We probably have already experienced the worst, but our economy is still falling, at a slower pace. Several leading indicators suggest that we will likely bottom out before the end of this year.

Nonetheless, property investors should keep in mind that the economy declining at a slower rate is a lot different from actually beginning to expand. The recovery process could be less robust and take longer than expected.

We believe that there will be more distressed assets coming to the market over the next 12 to 18 months, Property Investors with cash can cherry pick the best assets in the most desirable markets.

Preferred equity, mezz debt, super senior CMBS and ‘loan-to-own’ are also attractive investments during this period.

However, the end isn’t next month, continuations of reductions in job losses through the next two or three quarters, will offer some hope but won’t put a lot of money back in consumer’s hands, and a return to growth is another story, because inflation and rising interest rates resulting from the stimulus is a real threat, and that will hold down spending and hiring.

What does all of this mean going forward?

First, lenders want more equity in the deals (whether it’s a new loan or a refi). Second, prices have already dropped in most markets to the point where a lot of commercial properties are under water or close to it, which will continue that downward pressure on prices because lenders will be taking back more commercial properties and selling them at a discount to get them off their books and property owners will be selling them at a discount to avoid going back to investors to raise additional capital for a refinance.

 Commercial properties aren’t losing tenants as fast as people think, at least not in Raleigh, North Carolina.  Commercial Real Estate Brokers simply aren’t able to do deals because they haven’t been properly trained to prospect for tenants.  Proper marketing techniques, cold calling, and sincere drive will keep properties leased.

The disconnect between what commercial property sellers want and what commercial property buyers are willing to pay is clearly pointed out by looking at sales volumes around the country-anemic compared to any “normal” year.

Because of the pricing disconnect between buyers and sellers of commercial real estate, many in the industry are mining the books of lenders looking for nonperforming loans, foreclosed properties and pending loan maturities as a place to extract current opportunities.

We still have commercial property owners trying to sell properties at 7-8% CAP rates.  It’s not happening.  Then they try to reduce their costs to raise the CAP rate by firing their service providers and doing it themselves.  The problem there is that the property then goes south because tenants see the lost property services and could care less about the landlords struggles. 
With falling NOIs and corresponding lower property asset values, commercial real estate owners will be hard pressed to refinance and retain property ownership of their leveraged assets over the next 12 to 24 months. As banks begin or continue to foreclose on commercial buildings, many of these institutions will be forced to make hard decisions about their move-forward strategy for these assets. As the economy begins to recover, well capitalized commercial real estate buyers will have many assets to choose from, both distressed and non-distressed, since, as we’ve heard so many times recently, if you have money, you won’t find a better time to be a buyer.

Based on conversations and business meetings, banks are getting into the commercial real estate business. If a workout cannot be accomplished on a default, banks will foreclose.

REO (real estate owned) opportunities are rising. It will be similar to the RTC days. People chasing notes are the first wave of property investors stepping in. Purchasing notes have advantages but some serious disadvantages. What needs to happen is the foreclosures to happen expediently with the understanding that lenders are going to off load the commercial properties just as fast.

No commercial real estate investor is going to accept the prices that banks are trying to dispose of their assets because equity is expensive and the rules of the game are still changing. Immediate opportunities will continue to be those where property investors are buying the notes at less than par (if the banks get rid of them at that price) with the expectation that these troubled loans are really REO opportunities.
CMBS/Commercial lenders and their servicing agents are going to be drinking from a fire hose shortly as we are seeing an increasingly large waive of troubled assets enter foreclosure. For  the next 18 to 24 months, we are in for a rough ride downward as commercial real estate lenders continue to foreclose these troubled assets and more importantly sell them off at very low price-per-square-foot prices.

Commercial Property Owners need to position themselves as best they can to compete with the REO product in terms of rental rates and concessions; which if they are underwater is going to be tough to do.

The commercial real estate industry as a whole will shift from transaction oriented to property management oriented. Returns from commercial real estate are made up of income from cash flows (NOI) and appreciation; traditionally 70% from cash flows and 30% from appreciation. The past five years or so have seen the majority of returns stem from appreciation due to cap rate compression not NOI growth. Now that cap rates are headed back up and probably will not return to historic lows in the next five years, returns have shifted back to cash flows as the main source. Real estate companies that have a core property management focus will be well poised to assist property owners as they seek ways to increase their NOI by filling vacancies, increasing rents and reducing operating costs.

Traditional transaction brokerage companies will survive, but on much less volume. Further, companies that can show a strong track record of property management, leasing and disposition work will be well suited to partner with commercial lenders who are forced to hire “work-out” firms to help delinquent sponsors that lack these basic skills.

The real estate industry is not in transition from one cycle to the next, it is undergoing a major transformation that requires new strategies, new business models, new business practices and new systems. There are many positive long-term trends and opportunities, however, getting there requires vision, leadership, capital and a knowledge- and customer-centric focus. Some of the areas of opportunity include, but are not limited to: energy; waste management; healthcare; data storage; government; R&D; trade; pharmaceuticals; corporate campuses; defense and security; high tech; green industries; FIRE; back office services; and infrastructure.
Commercial Real Estate Companies will have to become leaner and more efficient. It’s a well known fact that many large commercial brokerages have not only let go their lower performing sales people, but more importantly a lot of the staff that supported those people. The opportunities coming out of the recession will in part be related to the accumulated market knowledge and more and stronger relationships that the survivors gained in the downtime, which only full-time immersion in the business can provide. Bad times can be a great opportunity to sharpen skills, take courses, clear your desk and your mind, refine marketing tools and techniques, and allow time to plan new strategies and tactics, some longer range planning than we are usually able to do during the busy times.

Rankin Commercial Properties is a leaner, more efficient, boutique firm in Raleigh North Carolina.  For more information on Rankin Commercial Properties visit www.rankincommercialproperties.com .

Rankin Commercial Properties (RCP) is a fully integrated Commercial Real Estate Company, “built-to-suit” customers and clients, with exceptional commercial real estate products and services.  The mission of Rankin Commercial Properties is:

“To establish Rankin Commercial Properties as North Carolina’s Premier Commercial Real Estate Firm through systematic team work, proficiency, integrity, and a sincere desire to achieve success and improve the overall vitality of the communities and environments in which we do business.”  

At Rankin Commercial Properties, we realize that in tough markets, all bets are off.  What used to work when riding along “The Good Times” doesn’t necessarily work anymore.

We tell our commercial brokers to think of their career as their life boat.  How will that life boat not sink with “The Good Times?”

· Identify your destination and chart a course from where you are to where you’re going

· Detect storm clouds in the far distance and forecast the on-route weather

· Plot course changes to avoid the storm

· Continuously adjust the power settings and headings to steer your boat.

Becoming nimble hinges on a Broker’s ability to:

1. Quickly consider several inputs from the environment (markets, buyers, sellers, available financing, government action, etc.), and
2. Make several simultaneous changes to the way you run your business
3. Forecast and monitor the results of these changes on your entire business (sales pipeline, margins, income ratios, etc.) and repeat steps 1-2 with the necessary adjustments.

That is what having efficient systems gives Rankin Commercial Properties.  And efficient systems are what make our brokers nimble.

Proficiency is literally Rankin Commercial Properties knack to create, maintain balance, and improve in all areas of our Broker’s careers.

It’s not just about our brokers business skills.

To be truly proficient, brokers must continuously focus on all these areas:

· Personal relationships (friends, family, spouse, children, etc.)

· Professional relationships (co-workers, employees, partners, etc.)

· Health and vitality (including spiritual)

· Personal finances

· Personal growth and development (including life skills like time management)

· Business skills (including networking, sales skills, leadership, etc.)

As the credit crunch squeezes the sleeper-hold on the commercial real estate market, thousands of brokers are struggling to stay in business… and thousands have already called it quits.

But what if you’re somewhere in between doing well and calling it quits?  What if you have a couple of months of reserves and the prospects of closing a deal are not good before you run out of cash?

Should you take a side job to support yourself while commercial real estate makes a comeback?

After all, what do you have to lose?  The answer is everything! 

There is one immutable law when it comes to success in anything, including commercial real estate brokerage:  you will only make it if you’re 100% committed to the outcome.

You’re not cut out for commercial real estate brokerage — or any other work that rewards people for their results – if your not willing to put in 100% effort.

Commercial real estate brokerage is not for the faint of heart… it’s not for quitters… it’s not for sheep.  Anyone who has made it in this industry can tell you that successful brokers do not even consider failure as an option.

Successful commercial real estate brokers burn their ships when they get to the enemy’s shore. It’s success or nothing!

Desire is the first step to success. Commercial Real Estate Brokers must commit all their resources towards achieving their goals to be successful.  At Rankin Commercial Properties, our brokers are constantly driven to increase their desire to do more. 

A lack of integrity is usually the shortfall for most Commercial Real Estate Brokers.  Integrity is a brokers ability to pull everything together and make it happen regardless of the circumstances.

All the talent, technical know-how, commercial broker training, and whatever else you can think of is not going to make you successful if you: Can’t connect with people and build trust. Are out of touch with reality. Never finish. Never embrace the negative. Are not oriented towards perpetual improvements. Can’t look beyond the obvious.

Unfortunately Commercial Real Estate Firms do not build integrity, desire, or character into their Brokerage Training Platforms.  Rankin Commercial Properties does.

For more information on becoming a Successful Commercial Real Estate Broker, visit Michael Moshiri’s the Succesure.com.  Michael Moshiri’s Commercial Real Estate Training platform is one of the most successful platforms in the industry, a sure thing to be Succesure.

In terms of positioning for recovery, the big issue today is people making hard decisions to cut muscle (the fat has long since been cut), and not knowing when/where that muscle will be necessary in the future. The emergence of commercial real estate boutiques from all of those who have gone out to start their own firms will be interesting. Some will be very creative/successful doing interesting things.

The industry is also optimistic in office leasing. There is always a need, and the number of businesses far outweigh retail operators and landlords. During the next two to three years, commercial real estate companies that are faring well, comparatively, are going to be able to take advantage of the drastic cuts in office rents, and increases in landlord incentives. Over the next 12 months, landlords are going to realize that anything resembling the $200/PSF era of the 2006/2007 leasing bubble will not be able to compete in the new economy. The supply and demand rules are in complete effect, and with supply at its current levels landlords are going to have to adjust. If they aren’t able to adjust (because of their break-even point) they are probably going to be in distress. Which then brings us back to bank foreclosures, and the need for everyone to face reality.

There will certainly be pain to endure on the part of landlords, as many markets have seen rental rates start to soften and concessions have increased significantly. As loans mature and landlords look to restructure or renew their debt, many will face difficulties with higher vacancy rates and stagnant (if not decreased) base rental rates on their rent rolls. It seems that those companies with financial strength and long term perspectives would be wise to negotiate (or renegotiate) long term leases right now for those corporate locations that are deemed to be stable in the coming years. The company with long range strategic planning and the ability to make decisions will create tremendous value in the coming years as a result of transactions with excellent economics right now. With that being said, for branches or offices with uncertain futures, it makes sense to negotiate short-term renewals while ensuring for maximum protection and flexibility in the lease document.

Contact:
Charles Rankin, President
Rankin Commercial Properties
800-737-9632
http://www.rankincommercialproperties.com

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Rankin Commercial Properties:

Rankin Commercial Properties works with commercial real estate buyers, sellers, landlords and tenants to assist in negotiating the sale, purchase, exchange or rental of North Carolina commercial real estate.

Tenants come to Rankin Commercial Properties with an idea of how much commercial space they need to start a business. They sign an agreement so Rankin Commercial Properties can act on their behalf to negotiate terms of the lease, sale, or purchase.

Rankin Commercial Properties works with landlords and building owners to help them rent their vacant commercial properties. Rankin Commercial Properties uses multiple computerized listings of available properties in the area to aid in narrowing the search for the perfect property.

Commercial Real Estate and the Internet Revolution:

When Rankin Commercial Properties lists a property, they list it where, anyone looking for property will see it.

Rankin Commercial Properties sees the future of Commercial Property Sales in the internet.  They focus on listing properties and advertising properties in multiple portals so anyone searching for particular commercial space will come across their property listings.

“95% of all tenants and purchasers of Commercial Real Estate search the internet for properties before contacting a commercial real estate broker, of those 90%, 25% will never contact a broker” explains Charles Rankin, President of Rankin Commercial Properties.

Property searchers have the world at their finger tips.  Hundreds of listings can be found online via sites such as Loopnet, Costar, CPE, etc.  However, most viewers can only see 25% of the available properties on the market.

Commercial Real Estate Marketing Issues:

Buyer Representation and Tenant Representation Services started as a means for businesses and investors to find available properties in the market.  Yet nearly 25% of business owners and commercial real estate investors now use the internet as their sole means for finding opportunities.  While using the internet to find commercial properties is only 25-45% effective, it is quickly growing as the most popular way to search for commercial properties.

Property Owners and Landlords are also beginning to take advantage of the internet for marketing their own commercial properties.  While street signs are still one of the most effective means of property marketing, the internet is the largest source of information for Commercial Real Estate Brokers and the general public.  The problem is, most of the time a landlord or property owner lists a commercial property online without the assistance of a Commercial Real Estate Broker, they effectively miss out on 45-65% of the market searching for their commercial property listing.  

Commercial Real Estate Agents have often been seen as saviors and slackers.  Some are terrific at what they do, others are bottom feeders who are only successful when the market is so hot, its like shooting fish in a barrel with a shotgun.

National Franchise Brokerages are often chosen over local firms because they are “BIG NAMED” and therefore must have the capabilities to lease commercial real estate or sell commercial real estate better and faster than the local boutique brokerage shops.  Yet the truth is, it is just a name, another franchise purchased by a local commercial real estate firm.  Their capabilities are no more than those of a local boutique firm.  

Most Commercial Real Estate Brokers underperform due to a lack of time and organization.  Most commercial property brokers have less than 1 to 2 hours per week to work on each of their listings. It is impossible for them to correctly market their available commercial property listings in that time frame.

Many inexperienced commercial property searches or sellers choose to work with a friend or colleague in Residential Real Estate for their Commercial Real Estate needs. Commercial and residential real estate are two completely different disciplines from the clients, property types, contracts and documents.

Innovative Commercial Property Marketing:

Rankin Commercial Properties uses multiple avenues in marketing their commercial property listings. Probably the most effective and efficient of these is a Direct Marketing Model.

Every commercial property listing has a best use or niche. Even office buildings, as some would call a commodity, serve a general purpose.  When marketing a commercial property, Rankin Commercial Properties first determines the highest and best user for the available commercial space.

The company then creates a prospect list from that information, deviating slightly left and right to expand the realm of possible users. Rankin Commercial Properties refers to this process as Alternative and Strategic Leasing.  Alternative being the deviated prospects that may be a good fit but not the norm for the property.  Strategic being those potential tenants who are the ideal fit for the available commercial property.

Rankin Commercial Properties then creates a direct marketing campaign uniquely designed to around that particular commercial property.  While every commercial property is marketed in many similar ways, the direct marketing campaign must be unique and require deliberate execution.

The direct marketing campaign is then implemented via a variety of media sources Print, Internet, Word of Mouth, Press, Broker Networks, Cold Calls, Mass Mailings, etc.

The Rankin Commercial Properties management and commercial real estate brokerage teams then meet weekly to discuss all property listings, their unique marketing campaigns, and hold brainstorming sessions to determine additional ways to implement the success of the program.

Weekly meetings and brainstorming sessions also provide an opportunity to make sure all commercial properties are being marketed weekly, brokers are not over loaded, and the proper allocation of efforts and time are going into each commercial property listing.

Most commercial real estate brokers fail at sales because they don’t have enough time to allocate to their commercial property listings.  Rankin Commercial Properties grows its commercial real estate brokerage team with its commercial real estate listings. 

Rankin Commercial Properties is a Commercial Real Estate firm with offices in Raleigh and offices in Cary, NC.

Unemployment is showing no signs of improving, foreclosures keep piling up and stresses are just now emerging in the commercial real estate sector.

It’s just too good to be true! Finally, an ideal time to lend money to real-estate developers. Why?

Real Estate Equity Investors can take advantage of high spreads and lack of competition from conventional lenders such as banks that still are licking their real-estate wounds.

There is a significant liquidity calamity. The banks and financial institutions are being conservative about lending new money, which history shows as the wrong option.

Now is the best time to be a lender. With the highest quality assets and highest spreads. Assets have been written down to realistic levels and there is a low potential for further write downs, and you sense the trough.

 Big players such as Morgan Stanley, Goldman Sachs, Merrill Lynch are out of the business for the moment.

The fear is that we are going to do very well in the initial years then all the banks will be healed and the spreads will come in and competition will grow. Recovery comes a year before employment recovers. By the time unemployment improves, it’s too late (to invest). There has never been an economic recovery that hasn’t been accompanied by a proliferation of real estate sales.

The commercial real estate market continues to look ill across the country. The latest indication came Sunday, following the bankruptcy filing of Capmark Financial Group, the massive commercial real estate financier that formed in 2006 when GMAC agreed to sell the majority of its commercial real estate business. The firm has been one of the country’s biggest investors in strip malls, office buildings, and hotels.

New York Times, “Capmark is only the latest to fall victim to continued trouble in the commercial real estate market, which many analysts have said will continue to deteriorate. Many small banks have collapsed this year under the weight of commercial loans.”

The Wall Street Journal “problems in that market are far from over.”

Downtown Cary Commercial Real Estate

Whether you are looking for Cary Office Space, Cary Retail Space, Cary Industrial Space, or Cary Land; the beautiful, boutique, heart of Downtown Cary has it all. 

Downtown Cary, also known as the “Heart of Cary,” is not only a glimpse into the past and a taste of urban living, but a place for gatherings and celebrations.

The Vision of Downtown Cary is: To Make downtown a unique, vibrant, dynamic, pedestrian friendly location that is a regional destination and place to live, work and play.

For more information on Downtown Cary.

For Available Properties in Downtown Cary.

Find a Cary Commercial Real Estate Broker

Looking for Office Space, Flex Space, or Retail Space in Cary, NC?

We have Cary commercial real estate brokers ready to help you locate the perfect space in downtown Cary.  Our commercial real estate brokers not only have years of experience in the Commercial Real Estate Industry, but have a working relationship with downtown property owners and brokers as well as the Town Hall and Cary Chamber of Commerce.

Our office is located in Olde Cary Commons a mixed used development in Downtown Cary on the corner of West Chatham Street and Harrison Ave. This location gives our brokers daily exposure to everything and anything occuring in Downtown Cary. Simply stop by or give us a call, we welcome all.

Buyer Representation and Tenant Representation Services are Free to our clients.  We work completely off commission. A Tenant/Buyer Representative will begin by helping the client to define specific requirements and objectives, and by providing market research and space alternatives meeting those objectives.

After identifying a variety of space alternatives, the Representative will provide further assistance in negotiating the terms of a lease, and ultimately signing a contract for space that best meets the needs of the tenant/buyer.

Leasing or buying space directly affects both your company’s operations and your employees’ well being. Use of a Tenant/Buyer Representative helps to ensure that this critical decision is the culmination of a professional assessment.

About Rankin Commercial Properties  |  About Our Brokers  |  About Charles Rankin  |  Rankin Commercial Properties Website

What’s New in Cary, NC?

• New Streetscapes
• New Town Square
• Community Arts Center
• Town Center Art
• Cary Center for Performing Arts
• Real Estate Developments
• New and Existing Businesses (Coming Soon!)
• Cary Town Hall
• Chamber of Commerce

Work With Cary Office Experts

A Cary office space lease is a major commitment.  The cost of your Cary office space lease can significantly affect your Net Operating Income as well as has many other important consequences. Working with a local Cary office space lease expert on your team, who is in tune with the market and understands your needs, will make a big difference in your Cary office space for lease search and negotiation outcome.

The Rankin Commercial Properties team has personally assisted requests from numerous businesses – of all sizes – looking for Cary office space.

Most businesses, rent Cary office space only a few times in their business life, while landlords rent Cary office space over and over again.

Level the playing field by working with a good Cary tenant representative.

Take advantage of the ability to get personal assistance in your market from a knowledgeable and experienced Cary commercial real estate office tenant representation expert.

Buying Cary Office Space?

Buying a Cary office building or Cary office condo for your business is a major decision. Careful market and financial analysis and negotiations are critical to protecting your company’s investment. Only a highly skilled and experienced professional can provide you the necessary information to help you make the best and most profitable purchase decisions possible.

Need to Sell, Lease, or Rent Office Space in Cary, NC?

Rankin Commercial Properties advertises their Cary commercial properties on a local and national level.  Throughout 2008 and 2009 while most brokerages were lower rates and occupancy levels, Rankin Commercial Properties was increasing occupancy, increasing rents, and offer a higher quality of service than its competitors.  We don’t use the market conditions as an excuse; we find ways to fill space. 

List your Cary office space with Rankin Commercial Properties and you’ll receive the same national listing exposure along with a strong local networking structure.  With current market conditions, you can’t afford to miss out on significant local exposure.

Local Firm and Local Brokers

Rankin Commercial Properties is a local Cary commercial real estate firm located in the heart of Cary, NC.  Our commitment to our community and local businesses helps our company stand out above the competition.  You won’t find the dedicated service from a national firm.

The Rankin Commercial Properties team are experts in Cary Office Space, Office Space Cary, Office Lease, Office for Rent in Cary, Cary Commercial Real Estate, Cary Industrial Space, Cary Warehouse Space, and Cary Retail Space.  Contact a Cary Commercial Real Estate Broker today to get started.

Work With Raleigh Office Specialists!

A Raleigh office space lease is a major commitment.  The cost of your Raleigh office space lease can significantly affect your Net Operating Income as well as has many other important consequences. Working with a local Raleigh office space lease expert on your team, who is in tune with the market and understands your needs, will make a big difference in your Raleigh office space for lease search and negotiation outcome.

The Rankin Commercial Properties team has personally assisted requests from numerous businesses – of all sizes – looking for Raleigh office space.

Most businesses, rent Raleigh office space only a few times in their business life, while landlords rent Raleigh office space over and over again.

Level the playing field by working with a good tenant representative.

Take advantage of the ability to get personal assistance in your market from a knowledgeable and experienced Raleigh commercial real estate office tenant representation expert.

Buying Raleigh Office Space?

Buying a Raleigh office building or Raleigh office condo for your business is a major decision. Careful market and financial analysis and negotiations are critical to protecting your companies investment. Only a highly skilled and experienced professional can provide you the necessary information to help you make the best and most profitable purchase decisions possible.

Need to Sell, Lease, or Rent Office Space in Raleigh, NC?

Rankin Commercial Properties advertises their Raleigh commercial properties on a local and national level.  Throughout 2008 and 2009 while most brokerages were lower rates and occupancy levels, Rankin Commercial Properties was increasing occupancy, increasing rents, and offer a higher quality of service than its competitors.  We don’t use the market conditions as an excuse, we find ways to fill space. 

List your Raleigh commercial space with Rankin Commercial Properties and you’ll receive the same national listing exposure along with a strong local networking structure.  With current market conditions, you can’t afford to miss out on significant local exposure.

Local Firm and Local Brokers

Rankin Commercial Properties is a local commercial real estate firm located in Raleigh, NC.  Our commitment to our community and local businesses helps our company stand out above the competition.  You won’t find the dedicated service from a national firm.

The Rankin Commercial Properties team are experts in Raleigh Office Space, Office Space Raleigh, Office Lease, Office for Rent in Raleigh, Raleigh Commercial Real Estate, Raleigh Industrial Space, Raleigh Warehouse Space, and Raleigh Retail Space.  Contact a Raleigh Commercial Real Estate Broker today to get started.

TriangleBroker.com

Looking for a Commercial Real Estate Broker in the Triangle Area of North Carolina?  TriangleBroker.com is the official source for information on Commercial Real Estate Brokers in the Triangle of North Carolina. On this site you’ll be able to research broker profiles, recent deals, reviews, recommendations, read their blogs, and make an informed decision on your broker.

What is the Triangle Area?

The Triangle Area of North Carolina includes a number of Cities and towns surrounding the Research Triangle Park.  The Triangle also refers to three major rival colleges UNC Chapel Hill, Duke University, and NC State. 

Cities and Towns in the “Triangle Area” include:

Raleigh
Durham
Cary
Chapel Hill
Holly Springs
Fuquay Varina
Clayton
Knightdale
Morrisville
Wake Forest
Rollesville
Apex
Goldsboro
Research Triangle Park (RTP)
Raleigh Durham International Airport (RDU)
…and the surrounding areas.

Why Use A Broker?

For Tenants / Buyers…

• DIRECTION: Acts as your guide through the leasing process
• LOGISTICAL KNOWLEDGE: Analyzes your space needs to avoid leasing too much or too little space
• Market Knowledge: Shares their knowledge of asking rates and incentives available in the market
• CONTRACT TERMS: Assists in negotiations to obtain terms that meet present and future needs of your business and avoids critical mistakes
• BUFFER: Serves as a buffer between you and the landlord to keep your relationship with the landlord cordial
• DOCUMENT KNOWLEDGE: Handles the paperwork necessary to complete the transaction and other details of lease negotiation.Although Brokers are not Attorneys and do not attempt to carry out legal consultation, they can evaluate the lease document’s function in normal and customary market situations.  Some institutional landlords use the same lease throughout the country without taking into account regional differences.  Local Landlords often reuse the same lease they have used for 10-20 years even though times have changed.
• TIME Most office decision-makers do not have the time to devote to a successful office relocation. Broker do the majority of information gathering, while decision-makers do just make decisions.
• Experience Tenants usually relocate once every five or ten years. They cannot compete with the in-depth market knowledge of the commercial real estate specialist who is involved with the marketplace on a daily basis. Commercial Real Estate Brokers who know details of recent deals in the market have resources for negotiations that are not available to tenants.  

For Landlords / Sellers…

• BEST RATE: Brokers are often able to negotiate the highest price for your commercial property. Especially if you lack knowledge in real estate, enlisting the help of a broker could be immensely helpful in selling your property and getting the best price.

A commercial agent is also trained to use national databases online to buy, sell and lease properties. Use their experience to your benefit.

• MARKET EXPOSURE: Brokers know the real estate market well and are able to maximize the exposure of your property listing by using the right advertising methods to achieve the best results. Since advertising is typically one of the highest expenses related to selling properties, having a broker can save you quite a bit.
• WORD OF MOUTH SALES: Brokers have connections with other brokers, real estate professionals, lenders and buyers. It is easier for them to sell through word of mouth advertising. When working with a broker, you may deals may be put on the table that are not available to you through bankers or other selling methods.
• DOCUMENT KNOWLEDGE: Brokers are able to bring significant document expertise to the table. Unless you are a jack of all trades and are able to handles such aspects of the sale for yourself, investing in a broker is a wise choice. A good broker will know the market well, will be able to read and interpret legal documents, has a number of years experience helping clients with commercial property sales and has the ability to close the sale for you.

What goes into finding Space?

Companies faced the question of relocating, have to make a significant of complicated decisions. No matter the company’s size, large or small, evaluating alternative space options is the same–a complicated, painstaking, and time-consuming process.

Having plenty of time is an essential contributor to the relocation process; users occupying less than 10,000 square feet should have at least nine months from the space survey until the move-in date; users who need more than 10,000 square feet should plan for approximately nine to 18 months or longer.

Some of this time is needed to sort out the many questions and alternatives that present themselves.

Such As:

Number of properties to investigate.

Negotiating Strategies with the Landlord / Seller

How to compare properties on a shortlist

Parking Ratios

Operating-expense and Pass Through Expense calculations

Renewal or Expansion Options

Tenant-improvement allowances

In recent years we have seen these factors be more complicated in the Triangle Area from excessive amounts of office space available and the differences between the quoted rental rate and the lower rates that can often be negotiated due to the market’s current climate.

Higher a broker before your search begins. Finding office space contacting the agent, then hiring your own agent to help negotiate usually confuses and complicates the entire process.

Don’t work with multiple Brokers, companies sometimes hire multiple brokers while simultaneously delegating the space search amongst several internal managers.  This situation only results in conflict and confusion often causing landlords to be less negotiable.  Most brokers have access to the same information they will bring you the same properties.  If you are serious about finding space, take your broker seriously DON’T HIRE MULTIPLE BROKERS!

Renewing your current lease is even a decision that warrants careful thought and planning by the tenant. The Real Estate Market is constantly changing, an attractive renewal rate offered in a contract signed five years ago may not be as attractive in today’s market. Hiring a Commercial Real Estate Broker in Lease Renewals is essential.

Being well represented is coinsides with being well informed. In Market Conditions where relocation alternatives are abundant and tempting, landlords are likely to give more concessions. Landlords are competitive only when they have to be. Hiring a broker in Lease Renewals could save you 15-20% from the landlords initial offer.

Landlord’s will incure significant costs if the tenant vacated. These costs include:

Tenant Improvements

Rental Losses

Marketing costs

Brokerage Commissions

Landlords always prefer to pay a commission to retain a tenant rather than sit vacant space and pay for a new tenant with no proven rental history with them.

A Request for Proposal (RFP) is valuable in the negotiating process. It outlines the tenant’s “wish list” for rent, terms, conditions, improvements, expansion, and a number of other crucial items.

In order for the Request for Proposal to be well recieved it should be properly prepared and presented to landlord’s and their brokers.

Asking for too much often terminates negotiations with many property owners; sensitivity is critical to the success of negotiations.

Brokers Work For Commission:  You won’t get a discount by working without a broker. 

Most Landlords are working with their own broker, the commission is then split between their broker and your broker the fee is not discounted just because the tenant walks in the door without representation. Besides, who wants to be represented by the opposing party’s broker? You would’t do it in court.

Brokers often save clients 15-20% and are only paid 2-4% by the landlord. Would you rather save 2-4% or 15-20%?

If a Landlord does not have a broker, he isn’t going to cut you a deal beacuse you don’t have a broker.  Most likely the Landlord will use the situation to his best adavantage.

Tenants without representation often make direct deals at above-market rents due to their lack of market experience.  

Tenant brokers can provide users a number of useful reports:

Discounted cash-flow analyses of the various alternatives and evaluations of free rent, tenant improvements costs that go beyond standard building allowances, parking charges, base rent increases, operating expense calculations, and options to renew and/or expand.

The operating expense bases are often the subject of Landlord / Tenant lawsuits. Landlords who offer future expense estimates that are sometimes unrealistically low give cause for litigation when tenants receive their first-year “increase” bill. Brokers can normally negotiate terms to these expenses that keep them reaonsable.  We have seen some clients have 100% annual increases 5 years in a row on their operating expenses.  Brokers also know what is reasonable for these expenses and can compare them to other properties.

Simply Reviewing the base-year may not provide a true comparison between property alternatives. Many buildings have equipment with service contracts that upon expiration can cause increased operating costs, or a building may be up for a property tax re-appraisal that might increase operating pass-throughs.

After-hours HVAC costs. The cost of after-hour usage can vary substantially, ranging from $10 per hour in small buildings to $400 per hour or more in large office complexes.  Knowing your HVAC requirments and the the buildings regulations directly impacts your operating expenses. Brokers can negotiate and evaluate these terms for you.

Load factors or Core Charges. Are the costs of the building’s shared spaces. Understanding how the Core Charges / Load Factors are determined and calculated is extremely important when evaluating space.

Commercial Buildings and Structures are capital investments that require proper property maintenance and upgrading in order to protect the investments and preserve the commercial properties image and functionality.

Through our expertise and diversity in commercial property management and facilities services, RCP Contract Services helps property owners develop a maintenance system that address both their property needs and budgets.

RCP Contract Services objective is to assist property owners in protecting the value of their commercial property through a scheduled maintenance program of their property’s exterior and interior components.  The maintenance program is designed to keep the building in excellent condition to maximize the life span of the buildings systems and materials.

For new clients, the RCP facilities team will do an initial visual inspection via a comprehensive checklist for an overall assessment of the building to come up with a property or building specific maintenance contract. 

For existing clients, the RCP facilities team routinely does building inspections and maintenance regardless of the design or the materials the property is built from.  This is because all materials need to be serviced in order to reach their full lifespan potential.

By implementing a regularly scheduled property maintenance program RCP Contract Services prolongs the life of the property and help commercial property owners make informed proactive decisions.  Poor or no maintenance could mean higher renewal costs or earlier replacement costs.  Facilities planning requires thorough inspection of the property with an understanding of what is needed to maintain a large variety of materials.

RCP maintenance plans are developed uniquely for each building and reflects the functional characteristics of each property individually.

RCP Contract Services Offers:

Porter Services -  keeping the exterior of the facility and landscaping areas litter free, as well as mid day follow-ups on restrooms, ashtrays, and common area cleaning.

Janitorial and Cleaning – Nightly cleaning and trash collection of tenants suites, common areas, and restrooms.

General Property Maintenance – addresses most areas of external and interior building maintenance.

Pressure Washing – maintaining the appearance of sidewalks, exteriors, curbs, etc.

Parking Lot Maintenance – from pothole repair to lighting issues.

Building Maintenance – a program established uniquely for each individual property.

RCP Contract Services is a division of Rankin Commercial Properties, a Full Service Commercial Real Estate Company.  Rankin Commercial Properties and RCP Contract Services is a source property owners can count on with a proven track record among commercial property and multi-family residential property owners.

RCP Contract Services provides facility services primarily to shopping centers, shopping malls, office buildings, industrial warehousing, apartment complexes, and government municipalities.

In addition to Facilities Maintenance, RCP Contract Services provides Janitorial, Cleaning, and Landscape Services.

Rankin Commercial Properties offers property management and brokerage services primarily to shopping centers, malls, office buildings, industrial warehousing, and apartment complexes. It’s commercial brokerage and leasing team is well diversified in all areas of the commercial real estate market and well staffed.

Is it time to invest in Commercial Real Estate?

We heard that question asked over and over again when we purchased 4109 Wake Forest Road in Raleigh, NC. My answer is the same… YES. I’ll admit, we only signed one Lease from August 2008 until January 2009 ON 4109 Wake Forest Road and most move-ins didn’t happen for months.

But now it’s August 2009, 12 months after the purchase of 4109 and the property has gone from 40% lease 70% occupied to 98% leased this month. That’s only one property though. Two weeks ago, the Rankin Commercial Properties Business Developer and I took a ride around Raleigh and saw tons of multi-million dollar properties vacant.

Better Financial Markets:

Property values have fallen 35 percent since October 2007, according to Moody’s Investors Service.

That’s making it tough for owners to refinance almost $165 billion of mortgages for skyscrapers, shopping malls, and hotels this year, pressuring companies such as Maguire Properties Inc., the largest office landlord in downtown Los Angeles, to put buildings up for sale.

The FED thinks Commercial Real Estate is the next “shoe to fall.” They just finished day one of a two day meeting with the Senate Committee to determine how they are going to “bailout” the Commercial Real Estate Industry.”

http://www.boston.com/business/articles/2009/08/11/commercial_real_estate_woes_weigh_on_fed/

How? Easy, extend TALF programs another 6 months… put it on the tax payers to refinance properties that never should have been built in the first place. Does TALF work? Sure, if you were wise and bought some shares for Developers Diversified Realty for $2 a share last month (which I wasn’t), you would have made a 400% return by now after they were the first REIT to successfully re-finance through TALF funding.

http://www.reuters.com/article/marketsNews/idCAN2447273120090724?rpc=44

So what happens if TALF isn’t extended. Take it to the Courts. General Growth Properties filed bankruptcy earlier this year. Once again, if you were smart, you would have bought them for $0.30 to $0.40 a share and made over a 500% return today (which I did do). General Growth Properties is a perfect example of a REIT in a credit crunch. Billions of Dollars in debt and no way to refinance. Since filing bankruptcy, the Judge, Allan Grouper, has started making headway with setting guidelines for restructuring REIT debt. His guidelines… the “cram down effect” . One of the most significant rulings to date was his ruling that Special Purpose Entities (SPE’s) are to be grouped into the bankruptcy hearings.

What does that mean? That means large investors like General Growth can pull performing assets into BK with non performing assets to help restructure the financing, allowing them to essentially use the cash flows from the performing assets to help make payments on the non performing assets.

http://www.reuters.com/article/marketsNews/idINN1154810420090812?rpc=44

If you look at the Commercial Real Estate industry as a whole, the market bottom was clearly last March. The recovery has already began. Tenants are beginning to sign deals, laid off workers are starting their own businesses and leasing additional office space, retail tenants are taking advantage of distressed rents and acquiring new locations, franchises are signing up new franchisees (people who have significant capital from their previous job that have decided to invest in themselves).

Improving Lease Activity:

So, is it time to invest? I would say if things were hot pocket the cash, but when things are as cheap as they are now, BUY. The Raleigh-Durham market last quarter showed a 4.3% growth rate, one of the highest in the nation. Yet vacancies increased 2%. While the growth is high for the area, the markets are still seeing a recovery from struggling businesses. Some simply can’t hold on for another 6-8 months. Neither can some property owners. In addition to previously high income individuals opening up private companies and franchises, some are starting to feel the desire to acquire investment property with the hopes of building a retirement nest egg. These investors are going to start gobbling at the sub 3 Million Dollar market over the next year as the banks regain their appetite for financing rental properties.

Buying Opportunities:

Commercial Properties have hit the auctions going for 35% less than market value. But what is market value anyway? If the markets are selling for less, it’s pretty clear the market value is less. Wrong.

Properties going to auction went to auction because the previous owner wouldn’t face the harsh reality their property was worth less. When they only needed a 15% haircut, they forced themselves into shaving it all off. So are auctions the best way to buy? Absolutely not. Normally banks will contact commercial real estate firms with property deals well below REO pricing.

Why? Because they want to unload them quickly. Once a property goes to the REO department, they often reposition, wait 6 months and “fire sale” at 25-15% below market value in a pool of investments. If a bank can dump the property vs. sitting on it for 6 months or so, they’ll do it. At Rankin Commercial Properties we’ve been offered 1 Million Dollar Buildings for 400K with a guaranteed lease back from the bank.

Time To Invest:

If you are a contrarian, you only buy when there is an add value opportunity. Right now it’s out there. And with a clearly defined bottom last March, increased leasing activity, matched with astonishing deals, NOW IS THE TIME TO INVEST.

Are Deals Everywhere? Not anymore, while there are some, as the financial markets continue to strengthen, Commercial Property Owners are beginning to hold on to their investments. But let’s face it, everyone asks for what they want but takes a reasonable offer… deal structures mean everything in this environment.