Money For A Real Estate Project Needed

Equity for A Real Estate Project Needed!

Where do you find money for your real estate investment(s)?

 

“Well how much do you need?”

 

As much as we can get for our project, the more equity the less the risk because

we will have a lower leverage ratio. It would reduce our obligations to the bank and

leave more for our partners/shareholders to enjoy.

“Is there a property or a plan to work this equity in the real estate acquisition?”

“How much will the investors stand to make – profit, in this venture?”

“When will the investors be repaid their money; over the next 3 to 5 to 10 years?”

 

Those are lots of good questions and we intend to answer each one of them.

First, yes there is a property that we have secured conditionally and we intend to do some due diligence to see if the property is within the scope of our investment criteria and determine if there is any upside to the investment beyond a simple hold for rental income and therefore some hope of making money for our investors. There has to be a hope of making money this profit thing is what motivates our investors and partners to come into the opportunity in the first place.

There is no other kind of motivation for the small investor (with a minimum buy in of $175,000), and if we can’t find the appropriate trigger to make it exciting, the deal will die.

The plan is to make money — a profit. We need to make enough money over our initial investment

that will excite the accredited/ sophisticated investors to come in with their minimum investment of $175,000 and up. Our target are income producing commercial properties; industrial, retail or office.

We are limited in that only a few investors are allowed into any one group, we are investing in Greater Toronto Area real estate and we are hoping that the project becomes accretive in short order.

So that we can pay out quarterly or monthly distributions to all. Each project will be limited to a maximum of fifteen investors, with approximately $2.5 million dollars of equity towards any acquisition. So we are keeping it to small groups, small enough so that everyone could know each other. Small enough so that the invest remains simple and straightforward, understandable by the average investor and they can see all the moving parts of the investment.

The investments will range from $5 million to $7.5 million with the balance of needed funds to be financed with conventional mortgages with the most competitive rates.

As for the timeframe, we are considering using a timeline of five years from point of entry to exit, or alternatively a timeline of 2 to 3 years for any development projects undertaken. This means a smaller project relative to the mega projects all around the GTA which could take 5 plus years.

If anyone of the original investors wishes to remain or buy out the balance of the investors they get first right of refusal based upon either an appraised valued of the project or bettering the best market price obtained – whichever is fair to all concerned. And if you wish to exit before the five-year time line of the investment – then anyone in the group or collectively the group can decide to buy you out.

That’s the plan.

Answer all your questions?

“Just one more question needs to be addressed …”

“How much will the investors stand to make – profit, in this venture?”

This is a harder question to answer definitively, however we could explore a variety of options

based on the acquisition criteria and establish a range of possibilities from a low to a high.

So you can’t tell me a precise number?

“We can tell you any number, however you do realize we will not be as precise as a GIC and in any event there is no guarantee. So if we said 8% return on investment and it works out to be 7.5%or 9% – we are not guaranteeing 8%.”

 

“Whatever number is said, you should ask ; How was it arrived at and ask them the assumptions made to calculate the results? Show me!”

I guess that is why all these investment advisors and wealth management companies out there keep on telling everyone ; “ Past performance is No guarantee of Future Results!!!”

You can read all the annual reports and financial pro forma / forecasts — read them but understand they are simply a best educated guess of what they (both the financial marketing guys think you will be motivated by – to Buy!)…. Caution always. And yes go seek professional advise and they may tell you the exact same thing as was said, seek it anyway.

Have responsible and good management in place, or arrange for it.

And keep it simple, because real estate should not be a complicated business.

Make sure everyone in your group is in a healthy financial situation, otherwise there will be stress!

“So do you want to invest?”      

 

We would love to help you assess, strategize and analyze any of your real estate investment

opportunities in the GTA and give you and your company a third-party perspective.

 

Envoy Capitol Realty Inc.,Brokerage

www.envoycapitol.com

Twitter : EnvoyCapRealty

Blog : www.capitalmoves.blogspot.com

Blog : www.yeretsianonrealestateinvesting.wordpress.com

Investing Your Money In Real Estate to Make Money

Earlier today I had a meeting with an older gentlemen

investor who I usually have a telephone conversation with, however today was a coffee meeting.

“Anything new out there that’s interesting.

Anything worth investing in, he asked?”

“Well nothing screaming Buy Me,” I said.

“However I was driving down a street in the east end yesterday which seems under-appreciated

and some properties appeared to be available. They were in an industrial area with a real mixed

bag of uses and the buildings were of all sizes, shapes and vintages. But the location was

good and I saw potential.”

“What are the sizes of the buildings and the lands/lots they are situated upon?

What are they asking for them?” he asked

Let me quickly check my computer and see I replied.

This property is situated upon about an acre and has a building of approximately 20,500 square feet.

The building is about 40 to 50 years old and has a sixteen feet clear floor to ceiling (joists).

“What are they asking?”

“They want about $2 million, about $100 per square foot” – I said.

“Will they take  $1,250,000, he offers within seconds. It’s worth that to me and no more.”

The comparable sales are averaging approximately $85 per square foot, which would

give it a rough value (subject to a lot of things which we would discover only after a good

due diligence and an honest discussion with the current owner of the property via the

listing brokerage I commented. That would give it a value in the range of say ; $1,742,500.

“That’s too much, I would not be interested in it at that number.”

Well let me see, the building is 20,500 sf at a market rent of say $5 net psf that would give an

income of $102,500 at a 100% occupancy with say a 5% adjustment for vacancy and credit losses.

We arrive at $97,375 net to the landlord.

Playing a quick what if game of a range of cap rates, say from 8% to 4%;

the value range estimates based on a direct capitalization would be as follows;

Net income / cap rate = Value (estimate)

$97,375 / 8% = $ 1,217,188

$97,375 / 7% = $ 1,391,071

$97,375 / 6% = $ 1,622,917

$97,375 / 5% = $ 1,947,500

$97,375 / 4% = $ 2,434,375

This is a simple direct capitalization based upon one year’s potential revenues which

results in a value range estimate for this property.

The investor needs to worry about his cost of capital and factoring in the closing costs

(legal fees, land transfer taxes, reports, appraisals, survey, lender’s fees, etc).

The investor also needs to factor in RISK, as a safety margin over his cost of capital.

Is it really worthwhile doing this exercise of purchasing for the anticipated future profits — cash flows.

Is there enough here to motivate him or  keep him motivated?

The investor has to worry about how long it will take him to lease the property out and the challenges

of working with a tenant over the term of the lease.

For my real estate investor today, this was not an opportunity that was priced right for the level of risk

and the return expectations. It’s always a good exercise to know your investor(s), know their

investment criteria before you start going to far down the road and invest volumes of time and

energy with little results but experience.

What are your thoughts?

Share with us your comments and experiences we would love to know and grow with you.

Envoy Capitol Realty Inc.,Brokerage    Toronto  / Canada

www.envoycapitol.com

Twitter : EnvoyCapRealty

 

Blog : www.capitalmoves.blogspot.com

 

LinkedIn and Facebook : Nor Yeretsian  , join me.

Starting Your Real Estate Investing Game…

As you consider investing in real estate, you may want to prepare

an interesting exercise for you may be the simple and complex game of Monopoly.

It presents its challenges and opportunities with every roll of the dice – a purchase

opportunity, a collection of rental income or a tax penalty, landing in jail or

community chest where you must pay all other players a certain sum (sounds like a

zoning violation, or a re-zoning application, a development agreement).

The game is fun and rewarding as a family exercise providing both entertainment

and understanding strategy.

In reality you need to be cautious when entering the real estate arena, using a

professional who is licensed and insured will help mitigate your risk(s).

However there are things to worry about and plan for, as you consider your

real estate investment(s). You should discuss these with your real estate professional,

How will you deal with financial leverage and what debt to equity ratio will you be using?

What about liquidity, does it concern you that it may take a long time to get to

your money invested in the property?

Do you have extra money to handle months when cashflow may be short?

Will you buy and put all your money on one property?

Are you concerned about the lack of diversification – again a defensive

investment strategy to help protect you and your money.

What about market cycles, market timing – are you concerned ?

Cyclicality of investments and the economy vis-a-vis the country you are in and the

demographics in the locations being considered for the investment opportunity.

Have you determined your investment time horizon?

When will you get out of the investment, your exit plan?

Exit strategy, getting out with your money and the desired return?

Have you determine this?

How will you hold this investment opportunity? Is there a structure set up?

This may impact the tax consequences, issues ; operational and sales proceeds/gain?

Do you have advisors or do you need to find some?

Such as lawyer, accountant, real estate representative, building inspectors, lenders, etc..

What about your investment criteria,returns,desired yields and expected objectives?

Have you considered the risk with the investment(s)?

How are you going to manage it; yourself or will  professional management be hired ?

Do you require the investment to be accretive from day one?

Or do you have a safety margin/ cushion to rely on as an option?

Just a few of the questions you should explore and discuss with your real estate

professional before you start your journey into the real estate investment game.

Whenever you feel you want to discuss investing in real estate and creating a cash flow

engine for your portfolio we at Envoy Capitol Realty Inc., Brokerage would be happy

to sit down with you and have an initial meeting and discuss the possibilities.

Follow us on Twitter; EnvoyCapRealty

http://www.envoycapitol.com

Blog: http://www.capitalmoves.blogspot.com

Envoy Capitol Realty Inc., Brokerage      Toronto      /  Canada

Facebook and LinkedIn,  also join us here : Nor Yeretsian.

[above images are credited ; from Google Images; Monopoly Game from the  www…]

Generation Y, What Can You Do About It?

Generation Y, Next Target Market Preferences…

 

Demographics explains two-thirds of what happens and why it happens in our economy, the other one-third is a mystery wrapped up in the complexity of human nature and crowd behavior. Professor Robert Shiller called this “Animal Spirits” in his book of the same name. 

There are some good reading sources for you if you wish such as David Foot; “Boom,Bust,Echo” as well as Harry S. Dent. These are two famous demographers who try to tell us where we are and where we may be going based upon the make up of our communities and the society we live in. Trying to understand what/how/why/when people buy  with the money they earn in our city and country. The economist Richard Florida tells us in his books where we choose to live and why and what effect this has on these chosen communities.

“There are no precise dates around when Generation Y (aka the Millennials, the generation that follows Generation X) starts or ends but many believe this generation ranges from birth dates in the early 80’s to early 2000’s. As the fastest growing segment of today’s workforce, reaching and sustaining this demographic is critical for businesses. Capitalizing on the growing incomes that Gen Y’s will soon, if not already, capture is key. The secret to this may lie in better understanding the characteristics of this generation.

Gen Y’s are known to be tech-savvy, embracing media and communications and high achieving. They want to stand out in a crowd and will leverage high-end staple products and services to achieve this. Studies have shown that Gen Y’s think more about the experience and less about the end product –they desire the feeling and status that high-end products and services provide. While luxury items are desired, quality products are just as important to this demographic. Many understand the value of a dollar as their successors have repetitively told them how difficult the path to success can be.

As a generation that can competently navigate through social media, internet forums and digital platforms in general, Gen Y’s have different experiences and expectations than those who came before them. They are more aware of their surrounding world and their place and role within it. They will avidly promote brands that they feel possess a strong sense of corporate social responsibility. They are also more inclined to share, listen and be influenced by the brand experience of others. Furthermore, they have been labeled the generation of ‘immediate results and accessibility’; if you make them wait they will move onto the next product or service available.

Generally, Gen Y’s place importance on quality over quantity.”[BOT,2012 online]

They are largely open-minded to new opportunities and unconventional methods, some also come with family businesses and money to support their discriminating tastes and desires, from foods and restaurants, hobbies to real estate ownership. Some are extremely talented and are determined to change the world in meaningful and innovative ways for the betterment of their communities,things are getting better. They are possibility thinkers and have the skill set to make it happen.

Understanding your market place and your target audience is always a great advantage to your business and marketing efforts.

How is your community impacted by the evolving nature of your community and the aging and growing population?

Leave a comment below and share your experiences, thank you in advance.

www.envoycapitol.com

Twitter : EnvoyCapRealty

Blog:  www.capitalmoves.blogspot.com

Blog:  www.yinvestthinktank.blogspot.com

Envoy Capitol Realty Inc., Brokerage               Toronto  / Canada

Join us on Facebook and Linkedin ;  Nor Yeretsian

Stop Wasting My Time!

Please Don’t waste my time, or I will hate you and your company!

Promoters of any kind need to worry about how and what they are doing today more than ever

when they decide to put on an event, call it a FREE event where people/prospects sign up and

put aside their valuable time to come out to your Event.

You must give them Value for their Time or you could lose a customer for life and

they will tell their friends and maybe even write a Blog about it to spread the word.

If you are going to put on a free introductory seminar to promote your real mission

(your Agenda, prospecting for new clients) – to sell your

future seminar(s), books/CDs , coaching/mentoring/consulting/training activity  then you must

do certain things correctly and very well.

Otherwise you will be creating a bigger problem for yourself and your organization.

In this high-tech,fast paced, rich content universe we live in – we expect more,

much more from people and professionals.

People that wish to do business with us, must educate and entertain profoundly.

The world is smarter now. Don’t waste my time with a weak or out dated presentation

which you have been delivering since 2008 and have not changed a story or a word.

Learn new material, try new things – stretch the envelope because the old world of marketing

the slap stick gimmick style of sales or the simple elementary education approach is gone.

The audience today will get up and leave because you have bored them, you have disrespected their intelligence

and worst of all you have wasted their valuable personal time. 

They came out to your presentation tonight, leaving other activities that give them pleasure and they sacrificed

themselves to spend time with you – honour them, respect them, give them a valuable gift of awesome entertainment,

profound information, a gift – something of value (your book, a CD,a free one hour session). Give them rich content.

They spent money and risked travelling to your seminar – you must do better.

The audience has a higher expectation today, don’t deliver content to the lowest common denominator.

Be Awesome!!! Blow them away, it must be a wow!

Time is Money!

Don’t insult them and their clients and future clients by robbing their valuable preparation

time to give them a 3 hour presentation with 45 minutes(or less) of content they can get on the internet

and do a comparison of you and your competitors as well as pricing of the services.

This is not earning their Trust. This is not delivering when it matters most.

Don’t waste people’s time, it’s their most precious commodity they have today.

Because if you waste my time if you throw it away, I will hate you and your organization forever.

We, you and I can not afford to be hated by our future potential clients – because then they will

never be – a client of  ours and they will tell their friends and anyone willing to listen – how bad you

and your company are and you are a waste of Time.

Whatever you do, make sure it is purposeful and of value.

Continuously improve your presentation with current technologies,new information and innovative concepts.

The audience is getting smarter and they do expect much more than before, your seminar must be fresh and honest.

Let’s deliver it in the best possible way.

Gage your audience’s appreciation and request comments, feedback and criticism for improvement.

Speak and test your material with a good cross-section of the people in your city – to determine

that the material is relevant and considered valuable.

Give your audience a gift upon arriving – a book , CD, a good pen and a nice pad with your logo on it,

that they will  take home and keep around for a while.

Win their hearts first and then their minds.

What are your thoughts about the seminars you have attended lately?

Have they been awesome, did they rock your world, did they compel you to action?

Share your thoughts, tell us what you would like to see at a future presentation or receive as a gift ?

http://www.envoycapitol.com

Twitter :  EnvoyCapRealty

Blog: http://www.capitalmoves.blogspot.com

Envoy Capitol Realty Inc., Brokerage       Toronto / Canada

Join us on Facebook and LinkedIn : Nor Yeretsian . Like us on Facebook and subscribe to our updates, its Free and Valuable.

Are You In Compliance?

How do you know whether the property you are looking at purchasing and investing your

hard-earned money is in compliance with all the rules?

What work or rather due diligence should be considered as a minimum short of purchase title insurance

and obtaining an up to date survey of the property and doing a full title search by your lawyer?

Getting a Building compliance report, along with checking the zoning bylaw dealing with the

permitted uses of the property and checking the Official Plan designation for the property.

Mr. S.Ronald Haber of the law firm Daoust Vukovich LLP writes…

“In the ordinary course, solicitors submit

inquiries to the local municipality requesting confirmation of compliance with zoning.

For the most part, municipalities, including the City of Toronto, will not

review a survey submitted in connection with such an inquiry. The

response is likely to merely indicate the zoning designation of the

property. Therefore, it will be up to the purchaser’s solicitor to review

the zoning. In the absence of an up-to-date survey, compliance of any

building on the property with coverage and setback requirements

cannot be verified. Further, given the increasing complexity of zoning

in Toronto some solicitors may be reluctant to provide zoning advice.

In addition, while Teraview has allowed solicitors to search titles and

close transactions throughout Ontario, they may not be familiar with

the zoning issues they encounter in all such jurisdictions. Therefore,

depending on the nature of the property, it may be prudent to engage a

land use planner to conduct a zoning review and report on matters

such as density, parking and use conformity. An alternative may be

title insurance for non-compliance with zoning by-laws affecting

existing uses. However, title insurance does not cover future proposed

uses.” 

You or your consultant/lawyer will have to “confirm compliance with registered

municipal agreements – subdivision agreements, development agreements,

restrictive covenants…confirm compliance with registered third party agreements –

reciprocal agreements, cost-sharing agreements.”

And don’t over look the need to check and verify information

regarding “Airport Zoning Regulations”

For example, ” because of its proximity to the Toronto Pearson Airport,

much of Brampton is subject to regulation by the Greater Toronto

Airports Authority (“GTAA”). Therefore, should development of a site

within the regulated area be considered, detailed plans must be

forwarded to GTAA for review. Similarly, it may be necessary to

engage a land use planner to determine whether an existing building

complies with the regulations.”

And with respect to beautifully maintained older properties beware and check

Properties listed/designated for Heritage Preservation and or designated Historical.

Buying real estate may be smart but make sure the proper due diligence is thoroughly done

with the appropriate professionals on your team so that in the end it will be a smart investment.

http://www.envoycapitol.com

Twitter : EnvoyCapRealty

Blog: http://www.capitalmoves.blogspot.com

Envoy Capitol Realty Inc., Brokerage          Toronto / Canada

Join us on Facebook and LinkedIn ;  Nor Yeretsian

Empire Rises Again, New York City

Nightline of the Empire State courtesy of Getty Images …

What’s good for the Empire State Building is good for New York and could be a good sign of things to come to the City’s properties.

The Income of  the Empire State Building is” poised to double within four years and more than triple by 2026,

according to a new securities filing related to the proposed public sale of the building”

wrote Craig Karmin in the Wall Street Journal.

The  increase in  income comes during a $550 million upgrade to the building.

The Malkins, the New York real estate family that manages “the skyscraper and is

spearheading the initial public offering, has been combining the more than 850 office spaces

in the building in an effort to attract larger and higher-paying tenants.”

New Tenants like Skanska ( a Swedish construction company) and Air China who are enjoying

the upgrading of the 1930’s property into a more energy-efficient building helping mitigate the

acceptance of the rising rents.

The  net operating income is” projected to rise to $160.6 million in June 2015, up from $76.8 million

in June 2012, according to Securities and Exchange documents filed on Monday. Income is seen rising

to $248.5 million by 2026, and balloons to $422 million by 2041.”

If all works out as planned and contracted then the valuation will goose step in

an upward direction over this period.

The rental income of the property has been disappointingly flat for the past several years although

it is said that the observation deck was profitable.

“This long-anticipated rise in the building’s income has caused some of the 2,800 current investors in

the Empire State building to wonder if they would be better off from an IPO or by voting against it.

The proposed plan requires 80% of the shares to approve it.”

The projections are based on a discounted cash-flow analysis conducted by Duff & Phelps,

which has issued its opinion that these valuations are fair to investors, according to the securities filings.

The new public company, which will be known as Empire State Realty Trust, would roll up the iconic

building with 17 other Malkin properties. These buildings are also projected to see rising rents over this period of time.

The Empire State Building has been valued at $2.52 billion of the new company’s $4 billion valuation,

according to securities filings.

Why you may ask is the Iconic property coming to the market now?

Well according to Craig Karmin’s article it seems the catalyst to move now is “Leona Helmsley’s estate which

has a stake valued at $1 billion, needs to cash out its position in the building’s operating company.”

There are a number of good learning points in the above article…from the idea of an organized exit plan

for a syndicated joint venture arrangement and the requirement of the consent required from the shareholders.

The requirements of professional valuation estimates, the organized filings – what

was omitted was the associated costs estimates

with this organization cashing out and potentially inflow cash from investors.

Also the number of hours spent by lawyers to put it all together and orchestrated it in proper legal fashion.

The tax consequences of the above arrangement will require good tax advise from skilled tax lawyers and accountants.

It is interesting to stand back a bit and see all the moving parts in the

above organization, sale of the asset – as a new package individual purchasers should have all

the material reviewed so that their capital is

protected and they understand what they are purchasing.

New York is an amazing City and you will be more amazed when you visit the City – a mecca of commercial real estate.

Fifth Avenue retail properties with its absolutely fabulous rental rates and the volume of traffic gives stability to the prized valuations.

New York has many jewels and great properties in its variety of real estate categories.

The Empire State building remains one of  the significant icons of the City and with its

continuing upgrade will remain a good to great building representing the spirit and strength of the City…

What are your thoughts about the continuing strength of New York City?

Leave a comment below…

 

http://www.envoycapitol.com

Twitter : EnvoyCapRealty

Blog : http://www.capitalmoves.blogspot.com

Blog : http://www.yinvestthinktank.blogspot.com

Envoy Capitol Realty Inc., Brokerage           Toronto   / Canada

Dashing Towards Opportunities

Dashing towards Opportunity

 

 

 

You can’t get a good yield in Toronto and there is not any decent product available. And what is available is crap at a high price – thereby creating a very low yield.

What does a small to medium-sized real estate investor do?

 

The opportunities are outside Toronto, maybe even outside the country they tell me.

First it’s the GTA (greater Toronto area) next its cities or smaller communities outside the GTA however still in Ontario – then they leap outside the country into the U.S. to the right to work states – places where they perceive there maybe opportunity for growth.

If the U.S. gets the right president with a growth and employment agenda, rather than a tax and spend agenda, this is the critical time – this is the fork in the road where a decision can make you wealthier over the next few years or be dead in the water.

 

In speaking to a lot of private investors the first thing that comes up is; what cap rate is it being offered? With the hope that the cap rate can capture the entire story

of the property – the investment – the opportunity.  The cap rate is certainly interesting and it does tit- a-late investors to look closer at the investment and consider getting attached. As their hope is to be able to draw this yield consistently over time to their advantage plus this have the asset gaining an increasing valuation over time. Taking the optimistic view of timely cash flows that are being provided in steady fashion. And having the benefit of a valuable asset that can be leveraged and refinanced or sold at a higher valuation.

This blue sky perspective is what draws us into the investment. Is this enough thinking? Should we only be driven by cap rates and yields promised.

 

Does location not matter?

Does risk associated with any type and category of real estate not matter?

Does the area’s demographical trends matter?

What about the grow prospects for the area, region?

Is there competition?

What about the infrastructure in the area, the region – its age and quality?

The vacancy factors in the area relative to the growth of the business environment?

What governmental restrictions, by laws, development freezes exist that may trap your investment for years to come?

What about environmental issues in the area, any history?

Is real estate all the same wherever you decide to buy it and all that really matters is the simple cap rate?

 

Or all you really need is Love? Does Love Conquer All?

 

What are your thoughts on the above?

What is your impression of the Picasso works above and do they fairly represent investors in our time?

Freely and emotionally (some would say mindlessly) running towards an investment opportunity with their money without the care of due diligence.

Believing that investing in real estate is as simple and easy as attaching yourself to an investment and sucking back the yields from the assets?

Leave your comments below, share your wisdom and experience with us…thank you in advance.

 

www.envoycapitol.com

Twitter : EnvoyCapRealty

Blog: www.capitalmoves.blogspot.com

Envoy Capitol Realty Inc.,brokerage    Toronto  / Canada

Join us on Facebook and LinkedIn , Nor Yeretsian

Absolutely Nothing

Of all the blog sites and social media channels out there trying to attract our attention

to join, to post, to read, to comment and engage us so we get tied into them and habitually

revisit and drive up their traffic counts. And hopefully click and buy something from one of

their many advertisers who are really paying for it all.

As we  provide our free labour to enrich and enliven the sites.

Try to do this in moderation for your own sake…we contribute many posts and articles

to a real estate blog site called Active Rain which boasts a community of some 250,000 realtors to

others that are either involved in real estate or somehow support the industry.

One big Question is how many people in that community really read, comment or take seriously

all the blog posts that are dished out minute by minute throughout the day – it’s like a running newsreel

or a twitter screen. For what impact and for what purpose one may ask?

How effective is this really for your business?

How interesting and valuable is it for a target market of real estate focused audience?

How much time should you spend, researching and writing articles for blog posts as

part of your overall marketing plan?

Is anyone really out there?

And do they really care about what you are doing,writing and posting?

Is it adding any measurable value for your audience ( are you really getting to them?) or to your business?

Well in forty-eight hours of leaving my last post out in Active Rain, trying to see if I could encourage anyone

in the community to come “Like” my brokerage’s Facebook page –

— I received  all of 2 comments that both these gentlemen were not on Facebook and therefore could not help out.

Ok, feedback is good and I am thankful to get it.

As you well know getting feedback in real estate seems to be

so hard to get, honest feedback that is almost impossible.

Maybe those in our industry are practicing what their mother told them many years ago;

“If you have nothing good to say — say nothing!”

So no feedback is a response, it means you missed – perhaps on many levels.

You did not do anything that compelled, inspired anyone into action.

You were not engaging your audience or exciting them, or your message was not clear enough to warrant action.

You have to try harder, refine your message ,

change the channel [find a better channel] to find the target market – audience.

Maybe your value proposition is not complete enough for your target audience.

Your not motivating them to Act, to comment , to call you or invest time and money

in your idea/concept/product or service.

Comments are FREE, leave one below – tell us what’s on your mind, your thoughts – with your experience

how do you engage and motivate?

What channels or sites have you found that are better delivery vehicles for your message, your services or products?

What works for you and your clients?

http://www.envoycapitol.com

Twitter : EnvoyCapRealty

Blog: http://www.capitalmoves.blogspot.com

Envoy Capitol Realty Inc., Brokerage     Toronto  / Canada

Google leads with Leasing Space in Chicago

Google Inc. has leased space in Chicago Merchandise Mart,, one of the city’s largest office buildings, was viewed by many as a big win for downtown Chicago. But to real-estate industry executives, the deal is also a coup that may help Vornado Realty Trust the landlord speed up its exit from the furniture-mart business.This is a part of the complexity of Vornado Realty whose financial performance may well have been depressed by the furniture-mart division, the sooner the exit the better some say.

Since late last year, Vornado Realty Trust, based in New York and one of the nations’ biggest office and retail landlords, has surprised skeptics by whittling down its trade-show and furniture-showroom division. The company is selling a string of properties that include the Washington Design Center, Boston Design Center and L.A. Mart. The separate deals, valued at a total of $228 million, have closed or are expected to close by October.

Then, by bringing 3,000 jobs from Google’s newly acquired Motorola Mobility unit into the Chicago Merchandise Mart, Vornado Realty is shoring up the property and is widely expected to put it on the block to unlock the value.

 

“That’s the one that really matters,” said Michael Knott, a managing director at real-estate research firm Green Street Advisors, who estimates the 3.5 million-square-foot Merchandise Mart could fetch between $787 million and $875 million. “It’s the big mother ship.”

Vornado Realty Trust has not decided or commented as yet to publicly whether to  offer the property for sale.

Vornado Realty acquired the Chicago Merchandise Mart in 1998 and some related assets for $630 million from Joseph P. Kennedy Enterprises, the Kennedy family holding company. The sprawling terra-cotta building overlooking the Chicago River was built by retail tycoon Marshall Field and opened in 1930. In 1945, it was acquired by Joseph P. Kennedy for $13 million, and it became a national hub for the home-furnishing industry and one of the most valuable Kennedy family assets.

For the next half century its rents helped fund the lives of his children and grandchildren.And here is the value of real estate as a passive and secondary investment to your main entrepreneurial activity and a foundation for your family to fall back upon if and when needed.

The housing crisis in America has depressed furniture sales and showroom demand. Annual home-furnishing sales volumes hit $83 billion last year, up from a trough of $78 billion in 2009 but still below the previous peak of $94 billion in 2007, according to Jerry Epperson, a partner with financial-services company Mann, Armistead & Epperson in Richmond, Va., which tracks the industry. Some showrooms became creditors as a number of tenants folded, Mr. Epperson said.

In 2010  Vornado Realty felt the pain. It gave five High Point buildings back to the special servicer overseeing the company’s $191 million securitized mortgage in lieu of a foreclosure action. At about the same time Vornado Realty tried to sell the Mart business and “came close with one buyer, but no cigar,” Vornado’s Chairman Steven Roth wrote in his annual letter to shareholders in April. As of Dec. 31, the company’s Merchandise Mart Properties unit owned five properties containing 5.7 million square feet. Others saw a signal of change when Christopher Kennedy, son of the late Sen. Robert F. Kennedy, announced last year that he was stepping down from his post as president after many years with the division.(sourced , Wall Street Journal,07/2012)

Understanding cycles of  business and real estate and the use of the different investments as counter cyclical risk reduction measures is a great defence for the businessman and his family. Having the diversity of assets in your portfolio could help when one area may not be performing as you expect or is hurt by the bigger economy. And real estate as a quasi-passive/long term investment vehicle, does give you the time to work on other things and businesses and political campaigns whatever your heart desires meanwhile appreciating in value over time as we can see in the above case study. However having good management of this asset over this period of time with a great leasing/marketing program for the space is vital for your real estate’s performance.

A great location can mitigate poor management over time as values steadily rise over the decades,

if you can keep the real estate because cash flow will be impacted.

Knowing where and how to make money is only one part of the wealth equation the other is the

protection of your capital from major downside pressures/risks having a variety of assets ( asset allocation) helps.

What are your thoughts about the case study within this story about the different levels of value of real estate?

Leave your comment below, share your experience and wisdom with us.

http://www.envoycapitol.com

Twitter : EnvoyCapRealty

Blog: http://www.capitalmoves.blogspot.com

Envoy Capitol Realty Inc., Brokerage      Toronto , Canada

Join us on Facebook and LinkedIn ;  Nor Yeretsian