Author Archives: Richard Chapin

About Richard Chapin

After being born and raised on a farm in eastern South Dakota, I have been living nearly 2 decades in Arizona, 17 of those years in the East Valley of the Phoenix area, and over 2 years in Payson, the gateway to the Rim Country where I have enjoyed outdoor activities like hiking and mountain biking. Having spent most of my adult life engaged in sales and marketing as well as a decade of preparing income tax returns for small businesses, individuals and real estate investors, I have for many years had knowledge and interest in real estate as it relates to rental properties, tax deferred 1031 exchanges, investment real estate held in self-directed IRA's and such, so it seemed a natural fit to become involved in commercial real estate sales and leasing.

2014 Should be a Strong Year for the Commercial Real Estate Industry.

The commercial real estate industry should have a strong 2014, if academic economists and former policy makers are right in their predicting that the U.S. economic growth will accelerate this year.

Payson office building near Payson Regional Hosptital

office condos in Payson Arizona

 

“2014 is going to be a better year,” Martin Feldstein, a professor at Harvard University and chairman of the Council of Economic Advisers under President Ronald Reagan, said yesterday in Philadelphia. “There is no reason for pessimism about our near future if we adopt appropriate policies.”

JPMorgan Chase & Co. (JPM) is among the Wall Street banks turning more optimistic, predicting this week the economy will expand 2.8 percent this year, an increase from its 2.5 percent estimate of a month ago and faster than the 1.9 percent it calculates for 2013.

 

Former U.S. Treasury Secretary Lawrence Summers and John Taylor of Stanford University agreed in interviews that stronger growth this year was possible even as they clashed over what more policy makers could do to speed expansion.

 

Federal Reserve Chairman Ben S. Bernanke told a recent conference that headwinds to growth may be abating, cited a healthier financial industry, greater balance in housing, less fiscal restraint and accommodative monetary policy as reasons for optimism in coming quarters.

Bernanke added, “Of course, if the experience of the past few years teaches us anything, it is that we should be cautious in our forecasts”.

 

Having paid down (or defaulted on) nearly $1 trillion of household debt, U.S. consumers have aggressively improved their balance sheets and are better-positioned to increase spending. According to Federal Reserve data, household debt-service burdens are at their lowest level in more than 30 years,. Also, according to the Fed, Household wealth relative to disposable income has surpassed its historical average. This should give consumers the confidence to spend more of their disposable income, which will result in job creation.

 

In terms of absorption of inventory, we have seen and likely will continue to see extremely low levels of new supply, 2013 essentially tied with 2011 and 2012 as the weakest year for commercial construction since the late-1970s, according to Census Bureau data.

 

Investment in commercial real estate should increase as total returns to commercial real estate have been quite strong for three consecutive years now. Those commercial real estate investors who may have felt as if they have missed the party may now conclude that it is safe to go back into the water, based on the analyst recommendations s in favor of commercial real estate we have regularly seen in both the mainstream and financial press.

 

Commercial real estate’s potential to hedge inflation and interest-rate risks may attract income-oriented investors. Commercial real estate stands out as an attractive alternative that can provide relatively high yields and some degree of inflation along with interest rate protection.

 

As U.S. economic growth accelerates this year, according to academic economists and former policy makers, the commercial real estate industry should have a strong 2014.









The views and opinions expressed in this commentary are those of Richard D Chapin, PLLC as of the date of publication and are subject to change, and do not necessarily reflect the views of Arizona Elite Commercial Properties and/or its affiliates.

This information is for informational purpose and not intended to be investment advice, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared.

 

Is Your Office An Asset Or A Liability for Your Business?

Some important things to consider when selecting an office for your business to insure your office is an asset.20131206_081927

The office location

That’s right in real estate its about location location location, but for different reasons that searching for a home. Getting a professional office space for your company could be the shot in the arm needs to get to the next level. Whether to improve employee retention or because you want to look more professional to potential customers, getting a professional office space is the right move to position your business for further growth.

Things to consider:

  • How easy is it for your employees to get to work? Are you near major access roads? (Easy access from your employees homes.)

  • Is there ample parking for your employees and guests?

  • What about ingress and egress to and from the property?

  • Are you close to an airport? If the proximity to an airport is important to you.

 What about any Amenities?

  • Is there a daycare provider nearby?

  • Are there good places to take clients/customers to lunch?

  • How far do employees have to travel for lunch, going to a pharmacy, doctors’ offices, etc.? You can increase employee productivity through decreased time away from the office.

If you are in a convenient area, employees are able to get to work on time and spend less time out of the office. Having a lot of amenities in the vicinity will improve the employee’s satisfaction and results in fewer employee turnovers. This will also help you attract and keep the best talent.

The office building

It’s critical that the property where you occupy space is efficient. To that end:

  • Is the building appropriately priced within your budget for your business?

  • Are the office operating costs high or low?

  • Is the office buildings load factor high or low?

  • Is it more space than you actually need?

  • How old are the building’s systems, example: HVAC, Internet and other communications capabilities. Will they likely need to be renovated, and how will that disrupt your operations?

Locating your business in an office building that is efficient and has a low operating cost reduces your business’s occupancy expense. Quality systems, a healthy environment and plenty of amenities can reduce your employees’ out-of-the-office time and increase your employee’s satisfaction rating.

The office space itself

Space efficiency is a hot topic these days in the commercial real estate world, as businesses are trying to keep their expenses down, while providing room for growth.

As Millenials will be making up 75% of the workforce in 11.5 years, we can expect the rapid changes in today’s office space is inevitable.

More things to think about:

  • Having standardized offices and workstations can reduce your overall real estate costs.

  • Is the amount of space in line with industry standards for employee-to-space ratio (1 employee per 200 to 350 rentable square feet)?

  • Do you have enough public spaces to optimize productivity ( meeting rooms, employee break room, printers, copiers etc.)?

  • Do you have a sublease plan ready if you need to downsize?

Let me know how I can help you find an office that’s an for your business that increases productivity and employee satisfaction, while decreasing your costs. A true win-win!

 









This information is for informational purpose and not intended to be investment advice, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared.

 

The Economic Recovery in Payson and It’s Impact on Tenants.

How Payson’s economic recovery will impact commercial real estate tenants.

As the town of Payson, state of Arizona and our nation pull out of the great recession and experience economic recovery, The era of retail tenants ruling the leasing market appears to have passed according to many retail real estate brokers.

Nationally it is certainly become a landlord’s market, concessions are definitely down this year and when it comes to renewals, more retailers are moving away from the trend over the past few years of signing for the short-term only (three to five years) and are more likely to renew for seven to 10 years, which is more in line with historical norms.

While there is currently ample inventory of retail space in Payson, we have to wonder how long that inventory will last since retail construction has been extremely little in the past few years.

Sales tax, Payson’s most important revenue source jumped about 15 percent compared to the same period last year, which outperformed the Arizona statewide figure of Sales taxes collected statewide and shared based on population rose 6 percent for the fiscal year.

As I have mentioned in previous post, Payson is making progress in becoming a destination point rather than just a pass-through area on the way to the cooler temperatures of the rim country, as it has been in years past.

Local businesses have for years longed for events within the town of Payson that would bring in tourism dollars from outside the area.

Success is evident, as a breakdown of the Payson sales tax figures by category showed hotel bookings showed a strong gain up 77 percent over the same period last year. Most other categories showed modest gains.

I think we all understand what will happen if these increases continue and commercial inventory continues to shrink. What none of us know is exactly when.

Let me know how I can help you with your commercial properties.









This information is for informational purpose and not intended to be investment advice, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared.

 

Commercial Property Owners Now Have Another Option!

 Owners of commercial property in Payson Arizona no longer have to go 90 plus miles away to find a commercial real estate agency.

If you are an owner of Commercial property, you know that the similarity between residential property and commercial property ends with the word “property”. I guess that would explain why the bulk of the for sale or for lease signs on commercial property in Payson, have phone numbers of commercial real estate brokerages many miles from Payson.

 

The good news is owners of commercial property in Payson no longer have to go 90 plus miles away to find a commercial real estate agency that focuses on commercial real estate.

 

Because we too understand, that selling and leasing commercial property is nothing like residential property, Elite Commercial has recently opened a commercial real estate branch office in Payson so you can benefit from the marketing knowledge and resources of a commercial real estate brokerage and also benefit from our local presence in Payson.

 

You know, and we also know, that mass marketing on a residential MLS works for selling houses, but those same mass marketing strategies produce poor results when attempted in selling or leasing a commercial property.

 

Because we know that mass marketing will not work (at an acceptable level) for commercial property, target marketing is the primary focus to market commercial property.

 

We also realize the importance of an internet presence, but rather than submit commercial properties for sale or lease on a residential MLS (that very few commercial agents even subscribe to) at Elite Commercial, we list commercial properties on commercial property listing services and databases (where commercial agents, buyers and tenants look for commercial property) like CoStar and Loopnet.

 

It is important for you to be aware, at Elite Commercial, we subscribe to both CoStar and an Unlimited Premium Loopnet account, that is of extreme benefit to you because many residential agents don’t subsribe to CoStar and (if they actually even have a Loopnet account) only have a (Free) Basic membership on Loopnet.

 

What that means to you is that according to Loopnet “a premium Lister’s listings get 10X more exposure than a Loopnet basic member.

 

Bottom line the Elite Commercial Payson branch office can benefit you as a commercial real estate agency, with valley resources and with a local presence.

 

Let me know how I can help you with your commercial properties.









This information is for informational purpose and not intended to be investment advice, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared.

Are You Out of Touch, Or is it just Me?

 Is it best practice to interrupt my client I am meeting with, when they are speaking, so I can answer my cell phone or reply to a text or read an email?

Do you mind if I answer my cell phone when you and I are in a meeting?

Being in the commercial real estate business, I generally find myself in meetings with property owners or business owners who’s schedules are very busy.

I respect their time and truly appreciate their taking time out of their busy schedule to meet with me and as such I have made it a point to shut off or put my cell phone or put it on vibrate and not answer my cell phone or read my texts or emails when I am in a meeting with them.

I instead check and respond to any texts, emails and voice mail messages that may have come in during our meeting right after the meeting.

Apparently not everyone believes this is the proper way to handle communications these days.

I recently read a post on social media by a residential real estate agent I know ( not just Facebook “friends”) who regularly boosts about how he always answers his phone (even when with clients).

In my opinion if you are at a meeting or meal, and you answer a call, you’re basically telling the person you’re meeting with that someone else is more deserving of your time than they are.

There is always a rare exception of course. A couple of years ago my dad was in the hospital scheduled to have bypass surgery in a couple days. I was flying out the day before but was still meeting business owners to discuss commercial real estate two days prior. I briefly explained the situation and apologized in advance that if the phone vibrated I would answer it. (fortunately it didn’t)

I believe if you are expecting an important phone call during your meeting and there’s no way you can reschedule it, then make sure to let the person you’re meeting with know ahead of time.

This isn’t the best scenario, but if it happens, you can say “I have to answer this” and briefly explain why before taking the call.

Am I out of touch, is it best practice to interrupt my client I am meeting with, when they are speaking, so I can answer my cell phone or reply to a text or read an email?

If so I apologize in advance if you try to call me and get a voice mail, and it takes me 20 minutes or an hour or so to call you back.

If someone schedules in advance, time out of their busy day to meet with me, I appreciate and respect their time.

Let me know how I can help you with your commercial real estate needs. If I don’t answer the phone, I will call you back as soon as I can and also give you the undivided attention you deserve.

 

Payson Planning and Zoning Commission Oks Propane Storage Business near Payson Airport.

 Planning and Zoning Commission approved a conditional use permit, allowing Griffin’s Propane to go ahead with plans to seek approval to build near the Payson airport.

The Payson Planning and Zoning Commission approved a conditional use permit on Commercial land near Payson AirportMonday nights meeting, allowing Griffin’s Propane to go ahead with plans to seek approval to build a storage facility and sales office near the Payson airport.

A citizens participation meeting had been announced to area residents and held at the Payson Public Library on September 4 2013, enabling residents to voice any concerns if they had any.

The Payson Planning and Zoning Commission approved CUP13-004 in the M-1 zoning district subject to the 7 conditions recommended by staff.

The motion was approved by all six members who were present, Dan Jaeger was not present.

I have to concur with chairman Loyd to commented after the vote, paraphrasing, that is is good to see new businesses move into Payson. I wish Griffin’s Propane business much success in Payson.

Let me know how I can help you find the commercial property you need for your business.









This information is for informational purpose and not intended to be investment advice, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared.

 

Reasons You Shouldn’t Negotiate Your Own Commercial Lease.

 Trying to find a professional office without professional help may actually cost your businesses.

Sure you want your business to grow, but trying to find a professional office withoutanother office building chandler az professional help may actually cost your businesses.

Running your business out of your house for a short time may have help your business survive during a downturn. Ultimately, moving your business into a professional office may be best for you and your company to grow to the next level. Whether if be from expanding your marketing base to hiring more employees.

Whether it is because you can’t effectively manage your employees out of your home anymore or because you want to look more professional to potential customers, getting a professional office is the right move. Bottom line, getting a professional office for your company could be the shot in the arm needs to get to the next level. Taking the next step is deciding to lease a professional office space to help your company grow.

Long term, it is impossible to get by with a meeting here and there, in restaurants or at houses. If you want to make your company to grow and be successful, you need to create a space where people can focus on production, where they can come to share a common goal, and constantly be a part of the work they need to do for your organization.

However, you’re busy running your business, it is hard to find the right office space and it takes a lot of time. If you have looked at leases, you understand that this process is something you almost don’t want to get involved in without professional guidance.

You’re making a long-term decision on location, layout, amenities and all the financial and legal matters that go along with a commercial lease, including:

Current Market.

ADA compliance.

Does the lease cover property taxes?

Does the lease cover insurance?

Does the lease cover maintenance?

Let me know how I can help you find your professional office for your business.









This information is for informational purpose and not intended to be investment advice, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared.

The Corner on the Most Heavily Trafficked Intersection in Payson is No Longer Available.

The commercial property at the busy intersection in Payson is no longer available.

The tearing down a long-vacant restaurant at the busy intersection of Highways 87 and 260 to make way for a Carl’s Jr. restaurant in Payson.

Earlier this week, crews started tearing down a long-vacant former Chinese restaurant, that has sat empty for the better part of the last decade.

I noticed the other day, on the Payson Roundup’s Facebook Page, many people expressed disappointment, that the most prominent piece of commercial property in Payson will host a fast food joint and not a sit-down family restaurant.

While several expressed they had wished a Panda Express moving to town, undoubtedly, I think most everyone would agree, anything is better than an old abandoned commercial property.

Carl’s Jr is a fine establishment and I have now doubt they will find much success in the Rim Country and I am sure the people of Payson will welcome them with open arms.

Let me know how I can help you with your commercial property needs.

 









This information is for informational purpose and not intended to be investment advice, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared.

 

The Main Reason Not to Wait till the Last Minute, to Search for Property for a Commercial Lease.

It is important to maintain a strong position when negotiating your commercial lease.

It’s not that I am suggesting not waiting to start your search for Commercial propertyoffice building chandler az to lease because inventory is shrinking, although it could be another reason not to wait. It is because sometimes the commercial leasing process may take longer than we might think it should.

 

In the past few weeks, I have had a number of business owners wanting to find property to move into in a week or two. I find it encouraging the number of people that want to start up a new business. I just wish some of them would consider the advantages planning ahead a little longer.

 

Now of course anyone that has been in business for any length of time knows of course that leasing a commercial property is nothing like simply renting an apartment of course but, sometimes the commercial leasing process takes a lot longer than we would expect and I believe it is good to be prepared it case that happens.

 

It is possible to move into a move-in ready property that requests no tenant improvements in a relatively short period of time, however, if you want more options available (perhaps considering a gray shell), the process could take considerable longer, I have worked on a commercial lease took about twice as long as I would expect, just a simple vanilla shell retail space that took over 2 months just to get from the initial LOI to signing the lease.

 

I would suggest not waiting till you are in a desperate time crunch to start to search for a commercial property to lease. Think about it if you are desperate, who do you think has the most leverage in the negotiations?

 

It is a good idea to be prepared in the event the commercial leasing process you may have thought would take 3 months to complete may take 6 months so be prepared just in case, don’t wait until a week before your current commercial lease is up to start your search for your next commercial property to lease.

 Let me know how I can help you search for your commercial property to lease.

 









This information is for informational purpose and not intended to be investment advice, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared.

 

Why Pay a Commission to Sell Your Commercial Property?

Do you think selling your commercial property yourself really save you money? Really?

I understand, we all want free stuff, but how much will it cost you to sell your commercial gilbert office condoproperty without a commercial real estate professional?

Going down to the local Walmart and buying one of those little red and white for sale by owner signs may work ( I would still recommend help from a residential real estate professional ), to sell a house. But that little red and white for sale by owner sign will be even less effective with a commercial property.

A commercial property is not a house, just think about it, I bet 100% of the people you know have a strong desire to live indoors ( you can’t get a bigger market than that). The percentage of people you know that have a strong desire to buy a commercial property is, wow, unless you are in the commercial real estate business, you likely can count them all on one hand.

Target marketing is required to successfully market a commercial property, mass marketing , like you do with houses for example is not enough, because the masses have no need.

I talked to a nice gentleman the other day that had put one of those red and white for sale by owner signs in the window of his commercial property. After a year and a half, all that has happen is the phone number he wrote with a black marker on the sign has faded, to the point it is difficult to read.

He didn’t seem to be concerned about the the building being unsold and vacant for over a year and a half, after all it is paid for so it wasn’t costing him anything to sit there, right.

What about taxes? What about insurance? Oh that’s true, money going out and no money coming in, sounds more like a liability than an asset! That may be a reason to pay a commission to have the building actually marketed by a commercial real estate professional.

Let me know how I can help you with your commercial property needs.









This information is for informational purpose and not intended to be investment advice, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared.