Yep, You DO Need a North Carolina Commercial Real Estate Broker to Sell Your Land!
Commercial land transactions that did not end well are a leading contributor to the use of error and omissions insurance claims! There are so many variables in a land transaction that it pays to have someone experienced leading, guiding, educating and closing the sale for you. In the state of North Carolina we have seen far too many agents not educated in the potential intricacies associated with the purchase or sale of land. Often times the broker is a residential only agent that see dollar signs in front of them. We all understand this and many have been down this road. Heck, we know great land brokers today that once started that way and came through unscathed. But we also know brokers that have gotten in over their heads and ended up regretting the fact that they attempted. In many cases the client just moved on and a relationship was damaged. Often times the Broker has waited too long and the damage has been done. In which case, hopefully the Broker has good E&O insurance.
Land? Help me sell it!
Of course we want to determine the highest and best use of the property in question. But there are so many questions to be asked! Does the land have access to public utilities? Who manages those utilities? Are they onsite? Which utilities? How far from the subject property are the water main taps? Does the water line need to be extended? Are we are on a well? Commercial septic? Private septic? Ingress and egress? What will the municipality require? How is the topography? Are there wetlands? What is the current zoning? What is the tenor of the municipality regarding rezoning? Special use permit needed? What are the setbacks? Do you know about any upcoming road changes? What is DOT requiring? Turning lanes? Road widening? Traffic signals? Will you need curb and gutter? Of course many of these questions are more about the end user developing the land if indeed the highest and best use is to develop it for commercial or residential purposes. What about the things like the timber? Is the land being used or leased for agricultural purposes? Do you own the surface rights only? Do you own all of the mineral rights? Is any of the land in a floodplain? Will it perk? What about the impact of neighboring tracts? Has anyone done a Phase I environmental study? Is there rock on the land? Does the property need to be annexed? Are there cemeteries on the land? Are they of historical significance? Is there historical significance of any kind on the property? Easements and right of ways – have any been granted?
We recently sold and closed on a tract of land that experienced a delay in the process due to the fact that there was a small old (barely can find it) cemetery on the property. When the state took a look they recommended that the state historical and anthropology department take a closer look. For the next 30 days, while the Seller and Buyer waited anxiously, the anthropologists worked the soil to determine if there was additional historical significance. Thankfully for us, we are now closed. It is the unexpected contingencies that can cause stress if the buyer or seller are not prepared in advance.
Do not be blown away by Big Brokerages and/or Big Named agents. While they may be the answer you are looking for and be a great fit, they may not be? Ask them about the things above. Ask them if they have ever sold any land and how those transactions went. Ask them about the various contingencies that may present themselves. The pint here is. Find someone that will put the time in to “walk the land” and get to know it. Someone that will help identify the various Highest and Best Uses. Find someone with “reach” to investors and and users alike. Someone that wants to list AND sell your property. Not just list it.
Mineral Rights versus Surface Rights
If you have commercial real estate needs, please contact our team here at Kima Commercial @ KW Commercial. Our team is ready to assist you in the pursuit of your real estate needs.
- Raleigh commercial real estate
- Wake Forest commercial real estate
- Cary commercial real estate
- Apex commercial real estate
- Rolesville commercial real estate
- Fuquay Varina commercial real estate
- Morrisville commercial real estate
- Garner commercial real estate
- Holly Springs commercial real estate
- Wendell commercial real estate
- Zebulon commercial real estate
- Youngsville commercial real estate
Triangle Commercial Bits and Pieces…
RTP Getting New Mixed Use Development
The largest research park in America is changing things. Wait, that’s not right, America is changing things for the largest research park. A new concept mixed use development is hitting the park! Durham, NC is welcoming Beacon Properties Group and the mixed use development that will lay right along the busy 15-501 corridor looking to capitalize on new restaurants, variety of office space, hotel(s), and apartments. It will be a walkable mixed us district and the first of it’s kind in the area! Multifamily continues to expand in the Triangle market. Just this week there are several on planning board agendas throughout the region including one on Rogers Branch in Wake Forest, NC.
North Carolina continues to grow quickly and remains on the top or near the top of many lists of best places to live and work! This is a reflection of that very thing.
View of RTP from the south
Featuring 57,000 square feet of retail and 25,200 square feet of office along with 17,000 square feet for restaurants and 300 apartment units, the project name, Oakridge will have major impact in our market. The first of several? We will see.
DOWNTOWN Raleigh By the Numbers….
While residential builders are helping change the face of the market near downtown Raleigh, it is the commercial impact that truly will drive the traffic to these homes! What came first? Chicken? Egg? Smoke? Fire? Residential? Commercial? Twenty nineteen has been a good year for Raleigh. Hemp stores, cocktail lounges, new restaurants, new office space, etc….. Here it is by the numbers according to the TBJ.
37 – Number of businesses closed since Jan 2018.
64 – Number of new businesses since Jan 2018.
15 – Number of storefronts closed in 2019.
20 – Number of new storefronts in 2019. (We call that growth)
Triangle Rental Rates Up
The second quarter showed a boost in Triangle area office rental rates. With the expansion of local businesses and the growth of outside companies coming in to the market, it appears that vacancy rates continue their decline. Average Class A office rental rates climbed in the second quarter to $29 per square foot. That is nearly a 40% increase from earlier in 2019. Rates were holding steady over the previous year as well. Again, we call this growth. The economy continues to flourish! Class A rates exceeded $32 per square foot in submarkets like downtown Durham, Six Forks/Falls of Neuse, and Raleigh. Where would you expect the first over $40 per square foot to be recorded?? Yep, you guessed it, Kane Realty announced earlier that Tower IV at North Hills hit $41.50.
Trending up. What goes up must come down…right? Not in the near future experts say. There are several proposed projects in downtown (remember the smoke versus fire thing earlier in this post?) that are likely to ask similar rental rates.
By the Numbers:
7.5% = Class A vacancy rate across the region
3.1% = Class A vacancy rate in downtown Raleigh
Massive Development Project – Johnston County
Whew, this one took some time. After a year plus of preparation, planning, designing, talking, drinking coffee, more talking, more planning…you get the idea…a new 470 plus acre mixed-use development in Johnston County has officially begun construction.
A 2.8 Million square foot project that will encompass the land running from exits 97 and 98 on I-95 near Selma. Retail? You want retail? Okay, this feature a massive amount fo retail, restaurant, office medical space, hotels, senior living, residential development etc….A total of 1 Million square feet will be created. Wow! This isn’t your parent’s Johnston County!!!
Locals will enjoy a farmer’s market, farm to table dining options and other ways to make the residents and workers feel “grounded”.
What Are You Looking For?
Our team here at Kima Commercial would love to earn your business. Whether you need land to build commercial space on, land for residential development, office, industrial, leasing, etc… our team stands ready and welcomes your business. Our partners are all encompassing. In other words there isn’t a commercial real estate team member we cannot bring to the table for you. Meaning if you need a reputable commercial builder to build or do an upfit or just quote one for you, civil engineers, architects, inspectors, designers, etc…we can help. Please feel free to visit us at one of our two offices. We currently run our day to day operations for our commercial business out of the Brier Creek location in Raleigh and also have an office in Wake Forest. We have sold all across the state of North Carolina and have resources across the country.
How to Buy Commercial Real Estate For the First Time
“Hey Peter, I want to get in to commercial real estate and buy a building, can you help me?” I hear this refrain often from colleagues, friends and family. The short answer would make for a BORING and not very helpful blog. “Yes, yes I can help you”. Blog over. Just kidding. Listen, while we CAN help you buy a commercial building I believe it is imperative for you to help yourself first! There are several steps to buying your first commercial space and many questions to be answered. While this may not be a “complete” guide it should get you started.
Steps to Buy Commercial Real Estate
1. Learn some commercial real estate vocabulary.
ROI – Return on investment
NOI – Net Operating Income.
CAP Rate – Capitalization rate (One way to determine if the investment makes sense)
Cash on Cash Return – Annual income on investment over a year.
Ad Valorem – Basis for taxes
Rentable Square Feet versus Usable.
The list is endless but locate and learn the basics. You would not want to invest in something you do not understand. No need to go get a commercial real estate license … however, an educated buyer always makes better decisions. And I am assuming that you do want to sleep at night, correct?
2. Get Clear on Your Goals
What do you want? Simple question…leads to an awful confusing answer sometimes. In commercial real estate we work backwards. We work with the end in mind and then go out and assist you in accomplishing your goals. Are you wanting to lease it out? Are you looking to be an owner and have your office in the building? What is the plan with your accountant? Are you willing to be a landlord? Will the building numbers work in your proforma? Are you considering a partner? What is the exit strategy? What is your situation regarding cash? So many questions….but to be CLEAR in vision is most important.
3. Be Sure to Get Out and See the Market.
A well informed buyer always makes better choices. Get out and visit buildings similar to the one you are considering. Be sure to really understand the market. Once you do you are then able to analyze the numbers with better clarity. You can feel more comfortable in your decisions….remember that good night of sleep we were discussing?? Even in commercial real estate the old adage of Location, Location Location still stands. To be certain, it is still the most important ingredient in a good real estate decision.
4. Your Team.
Early in the process, possibly the very first thing to do is to assemble a great team. A team that works well together in a collaborative effort to defend your money. Yes, defend. There are a lot of moving parts and one can spend a lot of money on needless items throughout the process. And sometimes… sometimes it just makes good business sense to walk away from money spent in an effort to not spend more bad money. Your team should be able to help you. Who is on your your team? Your Lender. Your Broker. Your Accountant. These 3 hires are critical. Many people say that you make your money when you buy your property (in other words if you buy it correctly you later can sell for a profit), I would argue that you make your money when you hire the RIGHT people to help you.
Step #1. Find a great lender. One that has the heart of a teacher. One that will be brutally honest with you. One that is willing to speak to your accountant or financial advisor along the way if need be. So many people just hire a friend or someone that was recommended to them (by someone that has never done a commercial real estate deal) or just use their Big Bank that they keep a personal checking account at. DO NOT DO THIS. Ask around. Randomly call a few commercial real estate brokers and ask who they use. Ask your Broker for 2-3 names. Interview them. Have your financial advisor interview them. Your advisor may have someone. Take this seriously. It is important!
In commercial real estate you may not go straight to writing an offer after you found your dream location. You will likely write an LOI first. Wait….just wait. I know you want to know what that is. It is a Letter Of Intent. This letter is drafted typically by your Broker. It lays out only the Big Rocks….not the details. Price, timelines, commissions, deposits, etc…. When both parties agree to the LOI there is typically a 30 day window in which they will then work towards drafting a formal offer. This offer is likely going to be drafted by the attorney. This is the formal legally binding agreement. It will contain the details.
If you are ready to take on the process of buying commercial real estate….let’s chat. Call us today and let Kima Commercial at KW Commercial become your resource for all things commercial!
Go get em!
MY Goodness, look at the growth in Raleigh! Opportunity Zones, Beer, Buses!
What’s Happening In Triangle Area Commercial Real Estate:
Invest long term in more under performing areas of our country and be rewarded handsomely with tax incentives. Your federal taxes will be waived (some). The hope is that some investment dollars will be redirected to regions that typically do not see them. The IRS says the goal is to “spur economic development and job creation in distressed communities”. While we may question some
Opportunity Zones in NC
of the areas chosen to be opportunity zones (East Franklin Street in Chapel Hill and the Durham Bulls Athletic Park area) there is no questioning that the large majority of opportunities zones are in areas of needed growth or redevelopment. How do they work? Well, an investor can take A property, sell A property and take the capital gains from that real estate deal and invest it in to an opportunity zone (B property). Once A is sold, get a reduction in original capital gains tax and then pay no taxes on the capital gains of the sale of B property. One could essentially pay less in taxes to sell B (the higher investment) than the sale of A. Want to know more? Contact us at Kima Commercial and let’s chat.
200, 206 and 210 S. West Street Raleigh, NC – 40 Story Tower?
Raleigh’s new Transportation Center plans are YUGE (said in President Trumps voice). These 3 contiguous properties are being considered for a rezoning that would allow for the new HUB to have a 40 stories! That’s more stories than James Patterson could tell…bad attempt at
Raleigh Union Station
humor, I know. The Research Triangle Regional Public Transportation Authority – known to the rest of us as GoTriangle – is asking for the rezoning so that a 40 story Bus Transportation HUB can be built. The skyline is changing in the Raleigh warehouse district. Conveniently the new station will be placed right next to the Raleigh Union Station. Best part? The rezoning includes a residential component and AFFORDABLE HOUSING! The applicant has indicated that they intend to retain the historical significance of the surrounding areas.
NC State’s Hillsborough Street Gets
93 New Luxury Condo’s Correction 180 Apartments!
Yep, if you have not driven up and down historic Hillsborough Street near the campus of North Carolina State University lately you may not recognize it any longer. And if you are one of “those” people that don’t venture back to campus very often you may fell, well, lost. Adding to the make-over of the prodigious street is a new project featuring 93 luxury condos named The Turnhill at the corner of Hillsborough and Turner Streets. The 1.72 acre assemblage was purchased and approvals given….WAIT! What? The developer is shifting gears and now that tract will be home to 180 apartments for rent. Location. Location. Location. The rezoning to NX-5 will allow for a 5 story building. Three blocks from Meredith Collage and certainly placed, we expect this one to be a success.
Hillsborough Street, Raleigh NC
Wake Forest, NC – Come Get Your Brew On?
The once sleepy little town of Wake Forest, NC actually may have a “scene”? What? In the early 2000’s the only places to meet out for a “cold one” we a few hidden bars no one talked about publicly and the soon to open Applebees! Insert that sound of a cassette tape fast forwarding here – Gang, not only is there a wonderful scene for those that like to have a cold beer, a glass of wine or maybe something a little stronger with places like White Street Brewing Co., Bodega’s, Over The Falls, Tonic, Real McCoys, Gatehouse Tavern and several others…TWO new places are coming to town. Almost ready to open is The Lonerider itself.
Lonerider Tap Room
Tap Room at the old go cart place at The Factory. And Pam Tarangelo is selling La Foresta to what rumor claims is full Brew Pub. Stay tuned as the once Nearly dry town continues to reinvent itself. And if you want to discuss any of this in person, please contact our team here at Kima Commercial. As a part of KW Commercial Internationally, we have the resources to assist with all of your needs.
$52.35M SALE SHOWS CONTINUED INTEREST IN TRIANGLE MARKET
W.P. Carey Inc. recently paid $52.35 million for a large office building located well at 3900 Paramount Parkway in Morrisville, NC. W.P. Carey, a net lease real estate investment trust…one of the largest in the country…acquired the significant property in Morrisville proving that the entire Triangle region continues to pace and attract investment from major players from other parts of the country. Currently the property is home to Pharmaceutical Product Development Inc. Headquartered in Wilmington, NC they are a player in the research healthcare provider market.
Built in 1998, at time of sale the building was had an assessed value in the $29 million dollar range. Featuring 224,880 square feet inside, the land had a value of $2.4 million.
3900 Paramount Parkway – Morrisville, NC
Legacy @ Brier Creek Sells For $34.1 Million
Legacy at Brier Creek celebrated a one year birthdate recently with a successful sale. Heritage Properties Inc. sold the fully leased building to a company owned by insurer Zurich North America. It appears to be a smart purchase by the Zurich owned company as there remains space to add a second building. The land that the building sits on…nine acres…is nicely situated on the lot facing Brier Creek Parkway.
The $34.1 million dollar deal is just another example of foreign and out of state investor money coming to the Triangle. The $28+ per foot average lease rate puts Legacy at or near the top of the market that extends down Glenwood Avenue in Raleigh. Fully leased with excellent tenants that include yours truly along with Keller Williams Preferred Realty, Infosys (a tech consulting services company) and IRS and Sage Therapeutics among others.
Kima Commercial, Llc. is poised to assist you with all of your real estate needs.