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By AZ Advisory Team, February 27, 2010 9:00 am

The generation of Americans now between 44 and 62 years old, 76 million of them, collectively known as the baby boomers, make up about 30% of the U.S. population according to the U.S. Census Bureau. They helped shaped America into what it is now. The economic boom of the 1990s, when these baby boomers were 26 to 44 years old and when most were producing income for themselves, created an unprecedented amount of personal wealth in America—currently estimated at more than $33 trillion.

With this, we are now at the forefront of what is expected to be the largest transfer of wealth in American history.  This huge transfer of wealth, estimated to be $40.6 trillion in a 55-year period according to Paul G. Schervish and John J. Havens in a Boston College research, will be a mix of waves of retirements and inheritances spanning three generations surrounding the largest and richest generation in America, the baby boomers.

First, the oldest of the baby boomers are retiring.  A couple of years ago, Kathleen Casey-Kirschling born on January 1, 1946 – the first baby boomer – retires and files for early retirement benefits at 62.  Other millions of baby boomers will be retiring as well in the next 26 years. It won’t be long before they think of transferring their wealth to their heirs.

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 8, 2010 12:03 pm

Alex Zylberglait of Marcus & Millichap is proud to present 11981 Southwest 144th Court, a two-story Class B office building that was built in 2002 of concrete and stucco. The property has approximately 14,700 rentable square feet and will be delivered vacant. The building features upscale finishes. There is ample on-site parking with 50 parking spaces.

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The property is directly across from the Kendall-Tamiami Executive Airport which is one of the busiest airports in Florida, serving corporate, recreational, flight training, and governmental agency activities.

The Kendall area is one of the most densely populated metropolitan areas in Miami-Dade County, creating one of the most diverse cultural mixes that Miami has to offer. It is anticipated that the population of the Kendall area will continue to grow at a healthy pace over the next number of years. The property is minutes from the business centers of South Miami-Dade County and close to Southwest 137th Ave, Krome Ave, the Florida Turnpike and the Don Shula Expressway. The property’s location also provides fast and easy access to the Florida Keys as well as recreational and business activities in Miami and Miami Beach.

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 2, 2010 12:41 pm

The Commercial Real Estate Stack:

GPI
- V/C
= EGI
- OE
= NOI
- ADS
=CFBT

-T

=NI

NI1+NI2+NI3…..

- IC

= ROI

So here it is. There are other factors to be added to the equation as we try to evaluate what will help add value to the building and increase its revenue-producing potential in terms of upgrading to various energy, environmental and accessibility building standards as well as improving amenities.

Each element influences the equation and even a slight upgrade or an application of expertise will factor in to a decreased, for example, Operating Expenses, or decreased Taxes – contributing to a significant ROI.

This concludes this topic. Feel free to contact me for other commercial real estate investment 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 1, 2010 12:36 pm

Continued…

Annual Debt Service (ADS)

The ADS is the total of loan payments for the year. The annual debt service includes the principal and interest portion of the payment for all twelve months.

Cash Flow Before Taxes (CFBT)

Cash Flow Before Taxes is the amount of money realized by the investor for the year, whether positive or negative, before income taxes are computed.

Taxes (T)

This is simply the taxes you pay in connection to your property.

Net Income (NI)

This is your Net Income for the year after paying taxes. This is the amount of money realized after the payment of taxes.

Investment Cost (IC)

Investment Cost is the total amount of money you released to purchase that property including the professional fees and other expenses associated with buying that commercial investment property.

Return on Investment

When your Net Income added yearly reaches to a point that it surpasses your Investment Cost, then you have reached a Return on Investment.

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, January 28, 2010 10:56 am

Vacancy and Collection Losses (V/C)

Vacancy is the measurement of time, expressed in percentage of the GPI, that you would expect the property to not have a tenant. Every property will have periods of vacancy due to change-over in tenants plus market cycles that make it harder to find tenants.

Collection losses, much like vacancy in that no income is being collected, is when non-paying tenants are in the property and either need to be motivated or evicted. This too is expressed as a percentage figure of GPI.

The key to Vacancy and Collection Losses is that you can compare different types of properties in different market cycles. Perhaps an office in the higher price range will have longer occupying tenants, thus a lower vacancy, whereas a property in a student area can be expected to turn nearly every year, resulting in a higher vacancy. Using the correct figures for vacancy allows us to compare these two properties and determine which one is the better buy.

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, January 27, 2010 10:22 am

As a commercial real estate investment advisor, I evaluate every property’s potential return on investment for my clients.  I have found out that some people do not know where to start. Location, accessibility, demographics are some important factors but these are not enough.  Qualitative characteristics of a property seem to play a major role but let us remember to look at the numbers to have a good picture of what we are going to invest in.

There is an equation I call the Commerial Real Estate Stack.  This is a basic of measurement model which allows an investor to look at an investment property and convert it to a mathematical model so that it can be compared with other investment options.

This mathematical equation will allow the investor to determine the Net Operating Income (NOI) of a property. Here are key terms:

Gross Potential Income (GPI)

The Gross Potential Income of a commercial property is the best case scenario of what it can generate in rent. If a property can charge $2,000 per month, then the GPI would be $2,000 x 12 = $24,000 per year.

Please stand by 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.