Bernice Lin of SBL Professional Realty Discusses Current Trends in the Commercial Real Estate Market

Bernice Lin of SBL Professional Realty, with its affiliates & partners, is a successful investor who comments on trends of commercial real estate marketplace.

Online PR News – 14-August-2014 – Orange, California – Bernice Lin of SBL Professional Realty, with its affiliates, partners, and subsidiaries, invests, develops, and manages commercial real estate assets and infrastructure projects. SBL currently holds and manages numerous commercial real estate assets throughout the United States, for international partners as well, with tenants in the SBL portfolio including listed and established companies such as Bed Bath & Beyond (NASDAQ: BBBY), LA Fitness (Madison Dearborn Partners, CIVIC Partners, Seidler Equity Partners), Kroger (NYSE: KR), Best Buys (NYSE BBY), Walgreens (NYSE: WAG), Ross Dress for Less (NASDAQ: ROST), Starbucks (NASDAQ: SBUX), Radio Shack (NYSE: RSH), Verizon Wireless (NYSE: VZ), and numerous other Fortune 500 companies.

One of the trends in the commercial real estate market, says Bernice Lin SBL Professional Realty, is the attraction to investments with net leases.

Net Lease

In the United States, it is a standard for tenants to execute net leases with landlords when leasing a retail premises. The net lease requires the tenant to pay, in addition to rent, its prorated portion of the three main property expenses referenced as follows.

• CAM (Common Area Maintenance): Utilities, Repairs, Landscaping, Plumbing, Cleaning, Parking Lot, Security, and All Other Property Maintenance Expenditures
• Property Insurance
• Property Taxes

Therefore, the rents paid by the tenants of a retail property may often reflect the EBITDA of the investment.

In comparison, office, industrial, and residential income properties (includes apartment units) utilize gross leases when contracting with tenants. A gross lease requires the landlord to be responsible for some (modified gross lease) or all (full service gross lease) of the property’s expenses while the tenant’s monetary obligation to the landlord for occupying the premises is limited to rent. This scenario exposes the landlord to the unpredictability of variable expenses, especially with efforts to sustain a certain EBITDA objective.

The credit of the tenancy, says Bernice Lin SBL Professional Realty, is also very important when considering stability of the income stream.

Credit Tenancy

In comparison to residential properties (single-family residences, townhomes, condominiums, apartments complexes, etc.), the commercial real estate market provides a wide range of tenants that may be considered more credible than lessees of residential properties. Commercial property tenants include national, international, publicly traded, or financially established firms and operations.

Additionally, the term or duration of residential leases range between an average of a 6-month to 1-year period. Commercial property lease terms average 5 years and above. But more importantly, turnover of residential tenants may often occur before the expiration of the short-termed lease, and can be expensive, with regards to the invested amount vs. turnover expenses (e.g. eviction costs, repairs, preparation for new tenancy).

The future holds many exciting opportunities for commercial real estate investments, but keen analysis of the sustainability and growth of the income stream, and the prospective growth of value of the invested assets, are what will ultimately alleviate investment risks, believes Bernice Lin SBL Professional Realty.

About: Bernice Lin SBL Professional Realty unveils trends and considerations in the commercial real estate marketplace, moving forward in the 21st century.

 
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