What is the difference between a Real Estate Agent, Commercial Realtor Advisor and a Pure Commercial Realtor?
All require the same state license, but may differ in focus and expertise. Most Real Estate Agent brokerage firms are “one stop shops” toggling between Residential, Commercial, Vacation Rentals and Property Management. A Commercial Realtor Advisor brokerage firm has additional focuses including divisions within their business besides commercial real estate. A Pure Commercial Realtor brokerage firm has 100% focus on commercial real estate and any additional need of their clients for residential, etc. is referred to a trusted industry partner of PURE Commercial Real Estate.
What is the difference between a net lease and a gross lease?
Net and gross are different ways of quoting rent. A gross lease means that the stated rental rate includes the major expenses from real estate taxes, property insurance and common area maintenance, and that no additional rent for those items is required to be paid. In an absolute gross or full service lease, the quoted rate will include basic utilities such as electricity, gas, water and sewer.
What does triple (NNN) charges mean?
A triple net or NNN lease is one where the rent is quoted as a base rent “net of”, or not including the expenses for real estate taxes, building insurance and common area maintenance (CAM). These three expenses, as well as the utilities, are an extra charge over and above the base rent. Under a NNN lease, the tenant will also be responsible for utilities in addition to the NNN expenses. In between a gross lease and a NNN lease is a gross plus utilities lease where the quoted rent covers the taxes, insurance and maintenance expenses but does not include utility charges for the leased premises such as gas, electricity, sewer and water. In a multi-tenant building, the tenants will pay these expenses proportionately in the same ratio that their square footage of space to the total square footage held for rent in the building. In the event some of the space in the building is vacant, the property owner will generally bear that proportionate amount of the NNN expenses.
What are CAM charges?
CAM stands for common area maintenance and typically includes the costs of landscape maintenance, utilities and, janitorial services for common areas, etc. Landlords and Tenants should be careful to note all the things that can be included in CAM charges and whether it includes management fees, administrative costs, seasonal shopping center decorations, and advertisement, entertainment and special events. Landlords should be prepared to outline costs for prospective Tenants and Tenants should ask prior to signing an agreement.
What is a 1031 Exchange and how does it work?
There are many technical requirements for this type of exchange, and we can help guide you through the process. A 1031 exchange is a method of trading properties that, under Section 1031 of the Internal Revenue Code, is done without the current payment of tax on the capital gain. The owner's tax basis on the property is transferred to the replacement property received in the exchange. When a property is exchanged in accordance with the rules set by the IRS, the tax on the gain is not eliminated, but is deferred until the replacement property is subsequently sold or transferred. Under the IRS rules, once a taxpayer sells a property, he or she is allowed a specified time period to identify the replacement property and then to close on the new property. At no time during this process, can the taxpayer have access to the sale proceeds from the first transaction. Those funds need to be held by the title company or other qualified entity until used to acquire the replacement property.