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By AZ Advisory Team, February 26, 2010 10:31 pm

Negotiating a commercial real estate lease need not be that difficult. As a matter of fact, many landlords and property managers are now recognizing that providing superior tenant service means making lease negotiation process as simple and efficient for tenants as much as possible.  It is important to arrive at a lease contract that meets the needs of tenant and landlord in a smooth and quick fashion as delays over minor details is not beneficial for either party.

Increasingly, landlords are shortening the lease negotiation process through a system of alternate lease clauses that can be used to substitute for standard lease clauses as the situation warrants.  By making the effort to develop “standard” alternative clauses, the landlord’s legal counsel can avoid having to write specific language each time an issue arises.

Tenants, at least initially, need only raise the issue or concern, rather than make specific requests with respect to changing lease language.  This is most easily accomplished by employing a checklist that covers the issues which typically need to be addressed, at least from the tenant’s perspective. By using such a checklist, tenants can quickly review each negotiable clause in the landlord’s standard form lease, with the issues and concerns then brought to the landlord’s attention.

Stay tuned for the continuation of this post. If you want to receive the entire report, sign up here: AZ Advisory – Powerful Tips in Commercial Real Estate Investing.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, February 26, 2010 10:14 pm

Third Party Development

Hospitals and health care systems have embraced third party ownership and management of real estate, because it can preserve capital resources for acute care needs, eliminate the potential conflicts that arise in the landlord/tenant relationship between hospitals and referring physicians, and minimize the potential legal and regulatory challenges associated with leasing space to referring physicians. High profile transactions to convert existing medical office buildings and other non-core medical real estate to third party ownership and management have focused public attention on monetization over the past few years. Hospitals and systems are now beginning to use third parties to develop and own new medical real estate projects.

This concludes the topic Repositioning to Medical Office.  Take a look at my commercial real estate office listings here and take a look at this medical office in South Miami available for investment acquisition.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, February 25, 2010 10:24 pm

Alex Zylberglait of Marcus & Millichap is proud to present 6285 Sunset Drive. This ready for occupancy 5,200-square foot medical office building is ideally suited for a small medical practice.

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6285 Sunset Drive lies within an established medical hub just steps from South Miami Hospital (which recently completed its medical office complex), a few blocks from South Dixie Highway, and the Metrorail & bus stations.

This medical office building commands a high visibility location in a heavily traveled section of Sunset Drive. It is in the vibrant city of South Miami which borders the University of Miami main campus and the affluent communities of Coral Gables and Pinecrest.

Because of the unparalleled quality of its location, 6285 Sunset Drive would be a solid investment with significant appreciation potential.

Contact Alex Zylberglait, CCIM, SIOR
Vice President Investments
Director – National Office and Industrial Properties Group

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, February 25, 2010 5:03 pm

These changing market dynamics will increase demand for medical office space, presenting new opportunities for commercial real estate professionals. Repositioning office space for medical use can be expensive in the short term; however, the long-term value benefits can be substantial. Retrofitting these buildings can run about $80 per square foot to $100 psf and strong management is key as physicians tend to have more maintenance issues due to patient traffic. In addition, higher parking ratios are a difficult hurdle to overcome. Depending on the jurisdiction, medical office parking ratios can be between four to five spaces per 1,000 square feet.

With significant barriers to entry, medical office repositioning projects are geared toward sophisticated investors with a solid management staff as well as an understanding of the demand for this space in a particular market. A building approved and re-zoned as medical office can provide an immediate pop in value similar to that of an approved condominium map for an apartment building. The rental premium created can provide a strong hedge against lagging office rental rates and high market vacancy, since medical practitioners tend to stay put.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services..

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By AZ Advisory Team, February 24, 2010 11:26 pm

Repositioning

Adding value to office assets usually is achieved through improved leasing practices on ailing buildings. While owners and managers can only raise rents as the market allows them, some are seeking tenants whose market rent per square foot exceeds that of the typical office tenant. Repurposing a building into medical office is a top strategy in markets with strong medical demand, such as Florida and Southern California.

As of second-quarter 2007, medical tenants occupied only 4.2 percent of leased office space nationwide, according to CoStar Group. However, U.S. healthcare spending totaled nearly $2 trillion in 2005, or $6,697 per person, a figure that is expected to more than double by 2016, according to the Centers for Medicare and Medicaid Services. In addition, healthcare services are expected to be the fastest-growing office-using employer between 2004 and 2014, according to a recent National Association of Realtors study.  With more than 1.9 million office-using healthcare jobs expected to come online in the next decade, high concentrations of medical office and a rapidly rising population may be a winning combination.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, February 24, 2010 6:22 pm

The increased amount of care and attention needed for the aging baby boomer population will have a tremendous impact on the health care industry. Consequently, medical office properties may offer a particularly lucrative opportunity for investment.

Medical offices are particularly attractive to doctors because it puts them in close proximity to other medical service providers. Patients also benefit from the centralization of medical offices for the convenience of obtaining a wide range of medical services, such as diagnoses, MRIs and physical therapy all in the same building. Owning and renting out medical office properties can be an appealing and relatively affordable option for investors who wish to get involved in commercial real estate.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, February 19, 2010 11:24 am

Several factors continue to drive the medical office trend. The country’s aging population requires more medical care, and hospitals have been on a building binge for the past five years, spawning development of neighboring medical offices. Physicians and healthcare groups are also moving smaller stand-alone facilities closer to patients in suburban markets.

According to a recent study by Marcus & Millichap, the long-term outlook for the medical office market looks bright. “Once viewed as a higher-risk specialty asset, medical office properties have clearly become main stream for private and institutional investors,” notes the report. “Long-term leases and low tenant turnover, combined with a stable market outlook and advancing medical technology, point to a positive future.”

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, February 18, 2010 4:21 pm

Medical office properties have emerged as a growing sector in the real estate industry in the past few years, attracting a wider range of investors. It survived the worst of the recession and is coming out strong and healthier than other property types in this period of recovery.

There is a migration of capital from the commercial real estate world, which in general has become very soft, to the medical real-estate world. Medical office buildings typically have 70,000 to 100,000 square feet of space housing physician practices and related services. The buildings usually are located on hospital campuses, but sometimes are in satellite locations.

Their growing appeal is based largely on the perception that they are more immune from the economy’s ills than other property sectors, such as commercial-office buildings or apartments.

To be sure, investors are still snatching up commercial buildings that are well-leased despite the current weak conditions. But the medical office sector is considered healthier overall because physicians tend to stay longer and default less than other office tenants, and because medical office rents aren’t as sensitive to the economy.

Stay-tuned for the continuation.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, February 17, 2010 1:51 pm

Build-out a space, making it as generic and functional as possible. The tenant and buyer can then go in and add more offices if they want. The use of modular furniture is popular in these instances. It shortens that six-month period to where they can take immediate occupancy.

Other landlords identify a niche sector where the building and location will fit in best and target tenants in that niche to keep improvements at expected controlled levels eliminating major costly improvements for both landlord and tenant.

This concludes our topic on Ways to Reduce the Cost of Tenant Improvements. Feel free to contact us to discuss this with you further or for any other topics you are interested in.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, February 16, 2010 1:32 pm

Another strategy is to buildout a space using modular furniture, even floor-to-ceiling, movable walls with doors to create flexible office space rather than immovable walls. They can use that allowance in their furniture budget vs. construction budget. If they have more of a budget for furniture, it’s a good option for people. This open office setup might include a couple of traditional offices but the rest is comprised of cubicles and furniture. If a company with modular furniture moves to another space, it can take it with them. It’s pricier on the front end, but it gives them even more flexibility with their space.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.