Green Mountain Realty

Tips on Buying Asheville Commercial Real Estate

greenmountainrealty — Sun, 03 Jul 2011 12:40:37 +0000

At Green Mountain Realty, our Asheville commercial real estate brokers often get asked for tips on buying Asheville commercial real estate. For Asheville commercial real estate investors looking for passive investments, many of the commercial real estate investments have local tenants with shorter leases. Since Asheville is not as large as Charlotte or Atlanta, there are just not a large number of properties to pick from with national tenants on long term leases. With that said, a Walgreens recently sold in the Hendersonville area. There are some other multi-tenant properties with a mix of national and local tenants.

Great Asheville Commercial Real Estate Properties do exist for Investors

Our brokers are finding that the local cap rates are generally in line with cap rates for similar properties in other cities. However, there are just fewer properties to choose from versus larger cities. There are some advantages for local investors. They can choose to handle their own management and eliminate that expense. In addition, they are able to keep a closer eye on their investment and spot potential maintenance problems before they become a major problem. In addition, local Asheville commercial real estate investors will be able to spot problems with tenants faster. Those problems can include reduced hours of operation, trash issues and a multitude of other issues.

Buying Tips for Asheville Commercial Real Estate

Many Opportunities for Asheville Commercial Real Estate Investors

The commercial real estate brokers at Green Mountain Realty believe opportunities exist for commercial real estate investing in Asheville, NC. However, our Asheville commercial real estate brokers still believe the best opportunities exist in empty or partially empty buildings for owner/occupants. Without meaningful cash flow, an owner or possibly the bank is motivated to sell the building below replacement cost. An investor who plans to occupy the space can often purchase a building at an unbelievable price. In addition, the mortgage payment will probably be less than the rent would have been. Call the brokers at Green Mountain Realty today for a free consultation.

Asheville Commercial Real Estate Cap Rates

greenmountainrealty — Sun, 26 Jun 2011 14:45:18 +0000

At Green Mountain Realty, our brokers are sometimes asked about Asheville commercial real estate and cap rates. Over one half of the listed Asheville commercial real estate properties have some empty space and are being marketed without cap rate information. The remaining properties have various cap rates. The Cranbrook Apartments on Long Shoals Rd. recently sold for a cap rate slightly less than 6% and had over 10 interested buyers. A company out of Greensboro was the purchaser. Fairly new retail space in Weaverville is being marketed at an 8% cap rate. A 15 year old post office in Ridgecrest is available at a 7.5% cap rate.

Understanding Asheville Commercial Real Estate Cap Rates

The Lone Star Steakhouse in Arden is available at a 7.6% cap rate. There are some small business parks with local Asheville commercial real estate tenants available at cap rates in the 8% range. There are several mobile home parks available with cap rates from 9-14%. However, our brokers usually advise investors to avoid parks that include mobile homes. It is much easier to handle the leasing of pads than get involved with mobile home rentals and the associated maintenance.

Understanding Asheville Commercial Real Estate Cap Rates

We find Asheville Commercial Real Estate Investors the best properties

The brokers at Green Mountain Realty don’t believe the best commercial real estate investments in Asheville are fully leased properties like one building on Tunnel Road with an 8.5% cap rate with only 4 years remaining on the lease. If an investor wants a solid investment and cap rate, we would probably advise them to work with our brokers on out of town quality commercial real estate NNN properties. The tenants are usually national with longer leases and better guarantees. In Asheville, we tell our Asheville NC commercial real estate investors that the best deals on commercial real estate are the buildings with empty space. There are bargains galore. Call the commercial real estate brokers at Green Mountain Realty today for a free consultation.

Loan Rates for Asheville Commercial Real Estate

greenmountainrealty — Sat, 25 Jun 2011 20:53:14 +0000

At Green Mountain Realty, our Asheville commercial real estate brokers continue to see more softness in the general economy. The stock market is down again for the week making it 7 out of 8 weeks that it’s been down. Interest rates are down and unemployment numbers are up. Those indicators do have some correlation to each other. The good news is that interest rates for commercial real estate loan rates have never been lower. As most commercial real estate investors know, commercial loan rates move in step with 10 year Treasury bills. However, the spread will be determined by the tenant quality and lengths of loan and rate lock.

Asheville Commercial Real Estate is great while loan rates are low

Our brokers still look for 10 year T-bills to visit 2.8% before long. They closed at 2.86% yesterday. We can’t believe that they can go much lower than that. Quality commercial real estate NNN properties with credit tenants are seeing loan interest rates in the 5-6% range. In the Asheville commercial real estate market, our brokers are telling owner/occupant/buyers to get off the fence and snap up an empty commercial property. With cheap financing available, mortgage payments will probably be less than paying rent somewhere else. If the property is bank owned, the bank will probably finance up to 100% of the purchase price. Why shouldn’t an owner/occupant take advantage of this unusual opportunity to pay less than rent and build equity in their own property?

Consider Buying Asheville Commercial Real Estate with Loan Rates Low

Buying Asheville Commercial Real Estate for much less than replacement cost

Asheville NC commercial real estate investors need to be looking at empty buildings that can be bought for less than 50% of replacement cost. If they can fill the building up with their business or possibly another, our brokers foresee large returns later. Our brokers recommend locking in interest rates for at least 10 years or longer on a 20 year amortization schedule. Don’t get tricked into a slightly cheaper rate that resets in 3-5 years. In most cases, the premium is worth it to get a 10 year rate lock. Call the commercial real estate brokers at Green Mountain Realty today for more information on Asheville NC commercial real estate and financing options.

Asheville Commercial Buildings and The Medical System

greenmountainrealty — Sat, 25 Jun 2011 13:26:55 +0000

At Green Mountain Realty, our Asheville NC commercial real estate brokers are seeing a disturbing trend in commercial real estate. More and more private medical practices are being forced to sell out to nearby hospital systems. Government (Medicare and Medicaid) and insurance reimbursements continue their downward spiral. In addition, more and more government regulations continue to increase costs for these practices. Our brokers are seeing doctors being forced to cut their salaries in half and still have to put money into the checking account to make payroll. Obama care is more gasoline on the fire. We recently saw one practice forced to sell out for $10,000 per doctor for a 25 year old practice. The practice is still concerned that the hospital will want them to lay off staff and doctors in the next 12 months to “achieve” margins. Owners of Asheville commercial buildings that service medical groups may be in trouble along with the doctors.

The Medical System may hurt owners of Asheville Commercial Buildings

Our brokers know that many of these medical buildings will be coming up for lease renewal soon. The owners of these Asheville commercial buildings will be forced to deal with the “bean counters” at the hospitals who want to see “blood in the street” before they sign a lease renewal. We are cautioning our investors on the purchase of medical office space. Read the leases carefully to understand the possible implications of a buyout and how guarantees and renewal options may be impacted. Be prepared for dealing with an organization whose mission is socialized medical care.

Asheville Commercial Buildings and The Medical System Slashing Prices

Asheville Commercial Buildings may get downsized along with the doctors

The commercial real estate brokers at Green Mountain Realty are concerned about the sluggish economy and the government’s continued efforts to enact more and more regulations that are slowly bringing socialism to our once great country. We are not trying to get political but we just want our investors to understand how the government’s actions will impact their investments. Our government’s actions and collusion with Wall Street have caused the greatest real estate crisis in 80 years. Call the Asheville commercial real estate brokers at Green Mountain Realty for a free consultation and how you can protect your investment in commercial real estate.

Asheville Commercial Real Estate Developers are Building Apartments

greenmountainrealty — Tue, 21 Jun 2011 16:26:19 +0000

At Green Mountain Realty, our Asheville commercial real estate brokers are seeing a new trend developing in some areas. New commercial real estate construction has been at historical lows the last few years in many areas. Apartment vacancies are going down in many areas and investors are paying 5% cap rates for newer properties in trophy locations. However, in a number of other areas, commercial real estate developers are running proformas that show that new apartments are needed. There is one large problem. In many cases, multiple developers are running their proformas at the same time. Some locations like here in Asheville are seeing a number of apartment projects coming out of the ground at approximately the same time.

Asheville Commercial Real Estate Developers Like Apartments

Our brokers have seen this phenomena occur before with office and retail space. As available space tightens up, too many new projects are started at the same time by developers that don’t know about each other. Our brokers know that it’s important to survey current vacancy and rental rates. However, it’s just as important to survey the upcoming projects to see their affect on the market. Commercial real estate does have a history of being cyclical. It seems that the commercial real estate market always has a hard time finding a “happy median.”Our brokers watch commercial real estate developers and see trends as they develop. We are big picture guys at Green Mountain Realty and our commercial real estate investors love the fact that we do their homework for them.

Commercial Real Estate Developers Like Apartments

Our Commercial Real Estate Brokers Know More about Market Trends

The Asheville NC commercial real estate brokers at Green Mountain Realty understand that it’s more important to know where the market is going versus where it’s been. It’s not good enough to know the current vacancy rates and rents. Our brokers help our commercial real estate investors know what’s in the pipeline and scheduled for future delivery. There is nothing worse than a rent war on apartments. This is especially true for commercial real estate investors that may have paid a premium price for anticipated low vacancy rates in the future and hoped to raise rents. Instead, they are forced to maintain rents or even temporarily lower them. Call the commercial real estate brokers at Green Mountain Realty today for a free consultation.

Asheville Commercial Real Estate Opportunities

greenmountainrealty — Sat, 18 Jun 2011 20:43:16 +0000

At Green Mountain Realty, our brokers often get asked about Asheville commercial real estate opportunities in the Asheville NC commercial real estate market. We have to tell investors that some properties are better deals than others. Our brokers work primarily as buyer’s brokers and will always tell our clients “the good, the bad and the ugly” about their potential investments. We wouldn’t have it any other way. There are two types of commercial properties that represent the best deals in Asheville. Our brokers always tell our clients to “follow the blood” for the best deals. If the seller has negative cash flow, the seller is motivated. The more the negative cash flow, the better the deal usually becomes.

Many Asheville Commercial Real Estate Opportunities Exist for Investors

It doesn’t matter whether the seller is a bank or an individual or LLC. No one wants to bleed every month when they write the checks for the various expenses. However, just because our investor can get a great deal on the price, he needs to have a plan to turn the cash flow around or have an exit strategy that will produce a profit. At Green Mountain Realty, our Asheville commercial real estate brokers work with our clients to develop a plan that makes sense and is very logical in its execution. As builders, engineers, investors and savvy commercial brokers, we can do what most brokers can’t or won’t take the time to do.

Asheville Commercial Real Estate Opportunities

Commercial Real Estate Investors Can Reap Rewards in the Asheville Market

The commercial real estate brokers at Green Mountain Realty like “dirt” for the biggest discounts. Investors need patience and a good plan to reap the rewards. In addition, retail, office and industrial properties with empty space offer some unbelievable real estate opportunities. The local Asheville, NC newspaper just announced that Buncombe County is considering buying the empty Volvo plant with over 400,000 SF under roof and 65 acres of land for $7mm. That’s under $20/SF for a recently vacated industrial plant in favorable South Asheville. The replacement cost is over 5 times that price. Call the brokers at Green Mountain Realty today for a free consultation on Asheville Commercial Real Estate to see how we can help you.

Commercial Real Estate Brokers Explaining Phantom Income

greenmountainrealty — Thu, 16 Jun 2011 21:27:30 +0000

At Green Mountain Realty, our commercial real estate brokers occasionally get asked about “phantom income.” Phantom income can sometimes affect commercial real estate investments when the IRS determines that the taxable income exceeds the “actual” income to the investor. Many novice investors don’t realize how this can happen. Our brokers know that phantom income can occur when there is financing in place on a commercial real estate property. The IRS only allows the interest portion of the mortgage payment to be deducted for tax purposes. The principal portion of the mortgage payment is not deductible as an expense. The IRS treats the principal reduction as taxable income or “phantom income.”

Our Commercial Real Estate Brokers Educate Investors to Minimize Losses

Our Asheville NC commercial real estate brokers know that amortization schedules are structured to allow very little principal reduction in the early years of a loan. However, as the loan gets older, more and more principal is paid and less of the mortgage payment goes to the interest. While that may be great to reduce the loan balance more quickly, it can wreck havoc on a commercial real estate investor’s tax return. In the early years of the loan, the phantom income or principal reduction is usually offset by the depreciation that the investor takes on the building. However, at some point, the principal reduction becomes larger than the depreciation. At this point, the investor is paying taxes on money that he did not receive but went to the mortgage holder.

Phantom Income Taxes Could Destroy a Real Estate Investors Portfolio

Phantom Income Taxes could destroy a Real Estate Investors Portfolio

Many commercial real estate investors have been bankrupted because they failed to understand this principle. At some point, it becomes necessary for the investor to refinance the mortgage to start the amortization schedule over again. Our commercial real estate brokers recommend that the new remaining term be close to the remaining years on the original loan. Of course, we recommend that investors seek professional tax advice. Call the Asheville commercial real estate professionals at Green Mountain Realty for a free consultation and to talk more about phantom income.

Investors Like Asheville Commercial Real Estate Investments

greenmountainrealty — Sun, 12 Jun 2011 17:26:36 +0000

At Green Mountain Realty, our brokers continue to see investors looking to us for Asheville commercial real estate investments. Asheville is located at the intersection of I-26 and I-40 and is easily accessible to east coast and mid west cities. Asheville has been spared from the worst of the real estate bubble but a number of opportunities are still available for savvy investors. There are a number of empty retail, office and industrial buildings that can be purchased for a fraction of their replacement cost. Asheville commercial real estate prices are great and we love educating investors on the area.

Many Investors Choose Asheville Commercial Real Estate Investments

Our brokers see the biggest opportunities for “end users” that choose to purchase and occupy these empty spaces. In most cases, these new owners can have mortgage payments that are much less than their rent would have been on these properties. In addition, if the property is bank owned, the bank will probably finance the new owner with very favorable rates and terms. Owner/occupants can own for less than rent while building equity. Of course, the new owners are allowed to “write off” the interest and amortize the building for tax purposes. The tax benefits are comparable to lease payments.

Investors Love Asheville Commercial Real Estate Investments for Many Reasons

Asheville Commercial Real Estate Investments make sense for many Investors

The Asheville NC commercial real estate brokers at Green Mountain Realty are builders, degreed engineers and developers. We can help commercial real estate investors evaluate empty properties and help determine the suitability for their potential uses. We recently saw one owner/occupant have his first offer to the bank accepted even though he thought it was ridiculous himself. Our commercial real estate brokers are even available to help with upfit work for our clients, if desired. Call the brokers at Green Mountain Realty today for a free consultation and to see if Asheville commercial real estate investments are the right investments for your portfolio.

Asheville Medical Centers as Commercial Real Estate Investments

greenmountainrealty — Tue, 07 Jun 2011 19:52:07 +0000

At Green Mountain Realty, our Asheville NC commercial real estate brokers read hundreds of different publications monthly to keep informed on all aspects of the economy. One area of the economy that continues to grow through the current recession has been medical. More and more hospitals are buying up other hospitals and medical practices to create “medical centers” that can feed more patients to their system. Some medical centers even call the feeder practices their “care partners.” It seems to be the new business model for healthcare. Asheville medical centers can be great commercial real estate investments due to the large and growing medical community in the Asheville area.

Commercial Real Estate Investors are doing well with Medical Centers as Investments

As these medical centers expand, they are buying and even building medical space for these medical practices that they now own. Hospital systems don’t want to own medical buildings other than their hospital. Our brokers just received an offering today on some medical office space that is guaranteed by the medical center in that area. The cap rate is 9.5% with 3% annual rent increases. The property is true NNN. There is 9 years remaining on the lease with two 5 year options. While our brokers are not normally big fans of office space in general, we believe there are some good opportunities out there for investors with medical space. The cap rate will be up to 12% when the first option starts.

Medical & Healthcare as Commercial Real Estate Investments

Healthcare and Medical for Commercial Real Estate Investments

Our Asheville commercial real estate brokers believe that well positioned medical space close to existing hospitals could be an excellent investment in many markets. Health care is one of the few industries that continue to hire new employees and has one of the lowest unemployment rates of any industry. As baby boomers get older, this trend will only continue. Existing hospitals can’t move and only makes well located space more valuable. Call the brokers at Green Mountain Realty in Asheville NC today for a free consultation on commercial real estate investments such as Asheville medical centers, healthcare facilities or assisted living type commercial properties.

Commercial Real Estate Investments in the Asheville Area

greenmountainrealty — Mon, 06 Jun 2011 12:49:24 +0000

At Green Mountain Realty, our Asheville NC commercial real estate brokers work with listing brokers and investors all over the country. However, we often get asked about commercial real estate investments in the Asheville area. There are a number of opportunities to buy developed land at deep discounts in the Asheville area. The developed land is often owned by the bank or is in a “short sale” situation. Unless the investor has an immediate use for the land, it could take a while to resell the property for a profit. In the meantime, there are property taxes, maintenance and HOA fees to pay. This type of investment is not for the faint of heart.

We Offer Asheville Commercial Real Estate Investments for Investors

Our brokers see another good commercial real estate investment in the Asheville area for many investors. There are a number of empty retail, office and industrial buildings for sale. They are owned by individuals, banks or companies. In most cases, the owners just want to get rid of them since they are generating no income and only expenses. Our brokers are advising investors to look at these empty buildings that range from 2,000 to over 400,000 square feet. If the investor can come up with an immediate tenant that will pay rent, there is an opportunity to buy the property at a substantial discount to replacement cost and make money. In addition, we are advising some individuals to buy the property and move their business. Their business can probably pay less rent to themselves than they previously paid to their old landlord.

Asheville Commercial Real Estate Investments

Many Current Opportunities for Asheville Commercial Real Estate Investors

The brokers at Green Mountain Realty see many opportunities for business owners to quit renting and buy an existing building. In most cases, their monthly rent and expenses will be reduced. In addition, they will be building equity and creating tax deductions. Call the commercial real estate brokers at Green Mountain Realty today to find out more about these Asheville commercial real estate opportunities.