ESQPMG Real Estate Investment Blog

Commercial Investing

What Are All the Legal Tax Deductions in Commercial Real Estate (CRE)?

Owning commercial real estate can be highly lucrative, particularly when you utilize the numerous tax deductions legally available to property owners. These deductions can significantly lower your taxable income, increase cash flow, and enhance the profitability of your investments. While understanding the tax code can be complex, a well-informed strategy can yield substantial benefits. Below is a detailed guide to the key tax deductions available for commercial property owners.

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1031

What are Typical Commercial Property Management Fees?

Owning commercial property can be an excellent investment, providing steady income and appreciation over time, but it is not for the faint of heart. Managing commercial properties involves various responsibilities, from handling tenant issues to maintaining the building, solving challenges, being creative, marketing, etc. Many commercial property owners choose to hire a professional property management company to handle these tasks. While hiring a property manager offers peace of mind, it also comes with costs and expectations.  We help explain the types of fees typically involved in commercial property management and outline the services professional commercial property managers provide.

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Commercial Investing

White House Implements Plans to Facilitate Office-to-Residential Conversions

In collaboration with federal agencies such as the Department of Housing and Urban Development (HUD) and the Department of Transportation (DOT), the White House has penned a strategy to encourage private sector involvement and participation in the crucial transformation of commercial office spaces into affordable housing. This initiative involves leveraging federal grants and offering financing at below-market rates to incentivize participation from private entities and commercial landlords.

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1031

Attention Downsizing Baby Boomers – Sell Your Home and Avoid Capital Gains Taxes

A Guide for Baby Boomers: Maximize Your Home Equity and Avoid Capital Gains Taxes

As many Baby Boomers look to downsize from their homes, they face a significant challenge: how to sell their properties without losing a substantial portion of their hard-earned equity to capital gains taxes. Fortunately, there are strategies available, thanks to provisions in U.S. tax law that can help homeowners protect their investments.

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Commercial Investing

Do You Know WALT (Weighted Average Lease Term), the Commercial Real Estate Guy?

Weighted Average Lease Term, commonly referred to as WALT, is an important metric that commercial real estate investors and commercial property managers are well-versed in, or at least they better be. A WALT calculation, or figure, represents the average time remaining on the combination of leases within a commercial property, a commercial portfolio, or a commercial real estate investment and is weighted or calculated according to the proportion of rental income each lease contributes to the overall portfolio. It is a paramount factor of investment and concomitant income stability, combined with tenant turnover risk. A longer WALT calculation is indicative of a more secure income stream and lower re-leasing or turnover risks.

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Commercial Investing

Commercial Real Estate – Binding Letter of Intent, Or Not?

A letter of intent is customarily employed to reduce to writing a preliminary understanding of parties who intend to enter into a contract, or who intend to take some other action such as merger of companies. An agreement to agree to something in the future.

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Commercial Investing

Commercial Tenant Risk Mitigation, Insurance, Tracking, and Best Practices

Managing tenant insurance is a crucial element in overseeing commercial real estate (CRE) from a landlord and commercial property management perspective.  All landlords and commercial property managers should require tenants to have various forms of insurance depending on the type of business operations occupying the relevant space.  Tenant insurance comes in several forms.  Business renters’ insurance helps pay to repair or replace business property if it is damaged or stolen.  Commercial general liability (CGL) insurance helps protect against third-party injuries and property damage.  Finally, business owner’s insurance is a combination of business renter’s insurance and a CGL policy. 

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Commercial Investing

Q3 Silicon Valley Commercial Real Estate Outlook

In the third quarter of 2023, the iconic Silicon Valley commercial real estate office market faced ongoing challenges. Net absorption recorded a negative 1.8 million square feet, surpassing the Q2 2009 record during the Global Financial Crisis of 2007-2008. The decline in net occupancy was multifaceted, influenced by reduced office demand amid evolving remote work trends, stubborn interest rates, and uncertainties in the technology sector’s hiring patterns post-Covid layoffs. Additionally, the cautious venture capital environment was shaped by uncertainties about the economy and impending Federal Reserve interest rate decisions.

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Commercial Investing

Commercial Mortgage-Backed Security (CMBS) Loans, its Mechanics, Risks, and Lender Recourse

Not all commercial real estate loans are conventional.  Commercial Mortgage-Backed Security loans (CMBS), sometimes referred to as conduit loans, are a category of commercial real estate fixed income loans that are secured by a first position mortgage on a commercial property asset. CMBS loans are typically offered by commercial banks, conduit lenders, or investment banks, and, once they are issued, they are packaged in tranches and sold to investors. 

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