Al Twainy
Vice-President

Office Phone:
(702) 836 3725

Cell Phone:
(702) 400-2001

Office Fax:
(702) 731 5709

Colliers International
3960 Howard Hughes Pkwy, Suite 150  
Las Vegas, NV 89169

(702) 735-5700


 
Commercial Services

Areas of commercial/investment specialization are as diverse and far-reaching as the Twainy network itself. Among the services available through the Twainy Commercial team:

Office

Whether you are buying, leasing, selling or building, Twainy Commercial services can help you make timely, cost-effective decisions. Up-to-the-minute market analysis will reveal the best space and location in a lease or purchase. In a sale, you will receive maximum return through a marketing plan grounded in a solid understanding of all pertinent market data, including the status of active leases and the level of improvements and amenities in comparable properties.

Industrial

A thorough and timely comparative analysis of properties will reveal the best option for purchasing, selling or leasing industrial space based on: local and regional economic conditions; transportation access; work force capabilities; and myriad other variables that can affect specific properties and/or businesses.

Retail

Stand-alone sites, downtown storefronts, multiuse complexes, strip centers, new or transitional malls, big-box power centers - whether located in a single market or across the continent - demand complete knowledge of demographic trends, traffic patterns, and growth projections. The Twainy Commercial team can quickly compile and analyze the information you need to achieve maximum value in any retail transaction.

Land

Whether for investment, long-term growth needs or immediate use, a vacant land transaction always hinges on obtaining an exact accounting of a property's history, future uses and status in relation to current trends in local and regional government planning. Twainy Commercial specialists, through experience and market awareness, can supply the guidance needed to ensure timely, successful transactions.

Investment

From working with a single-property individual investor to advising an institutional investor with a diverse portfolio of holdings, Twainy Commercial practitioners are prepared to quickly and competently structure acquisitions or dispositions that meet your return-on-investment requirements.

Advisory Services

If you are a small-business owner deciding between leasing, buying or building - or an investor contemplating an exchange; or a major corporation in need of a creative way to bring real estate costs under control - the Twainy Commercial team can find solutions. Services include: acquisition; disposition; asset management; valuation; financial analysis; lease audits; occupancy costs analysis; and developmental services such as concept design, site location and feasibility, permits and approvals, bidding, construction and financing.

Auctions

Often overlooked as a means for disposition of property, auctions can serve as a highly effective approach to maximizing return on certain properties and within certain markets. The opportunity to consider an auction among your options is a powerful example of. the Twainy Commercial team's focus on maximizing value

Business Brokerage

Whether tied to a real estate transaction or not, the acquisition or sale of a business can be effectively handled through the Twainy Commercial team - with the focus always on the results you need.

Commercial Listings             

Commercial Leasing Information

Lease Types


FULL SERVICE LEASE

Lease used almost exclusively for multi-tenant office buildings, a full service lease is a situation where everything is included in the rent. The landlord pays all of the property's operating expenses including maintenance, taxes and insurance. In this type of lease the landlord typically provides the following services:

   • Utilities including water, electricity, heat and air
   • Janitorial services
   • Maintenance services
   • Security services

Note: When using a Full Service Lease in a typical multi-story office building, the Tenant will be introduced to the concept of Load Factors.

A "Load Factor" becomes necessary when the Tenant uses a certain square footage inside their offices, but also shares in the hallways, bathrooms, elevators, lobby, etc. Therefore, a calculation is done to determine how much of the building's space is devoted to these common areas, and that "Load Factor" is added in to the Tenant's square footage. In other words, if twenty percent of the building is devoted to common areas, then twenty percent more footage is added to the Tenant's "usable" area.

MODIFIED GROSS LEASE

In this type of lease the tenant pays the landlord a gross amount for rent, plus sales tax where applicable. The landlord then pays the property's operating expenses such as property taxes, insurance, management or maintenance costs from the income he receives. The Tenant may be responsible for electric, telephone, and possibly water & sewer charges depending on the verbiage of the lease document. This type of lease is more common for office users or in older buildings where utilities may not be separately metered.

With some modified gross leases, the landlord may put an expense stop provision in the lease. In this type of clause the tenant pays the excess over a specified ceiling on operating costs. For example, the owner of an office building may require tenants to pay for heating and air conditioning if costs exceed $1.25 per square foot as well as any increases in taxes over the base year.

NET LEASE

Most common with today's commercial properties, the Net Lease directs the tenant to pay the landlord a "Base Rent" which is net of property expenses, PLUS an additional amount for tenant's share of the property's expenses such as property taxes, insurance, common area maintenance (C.A.M.), management, etc. Many times this is referred to as a "triple net" lease in reference to base rent being "net" of: (1) Property taxes (2) Insurance (3) Common Area Maintenance

CERTAIN TERMS IN THE LEASE

The incentives offered by a landlord depend on the softness of the rental market as well as the financial strength of the tenant. Landlords will only offer incentives when absolutely necessary. As the rental market gets stronger and more space is absorbed, incentives will tend to decrease

RENTAL RATE

Negotiating the best possible rental rate is probably the single most important item to most Tenants and can be one of the easiest assuming the proper research is done!

YEARLY RENT ADJUSTMENTS

During the initial lease term, the landlord may offer a fixed rate over the term of the lease or offer yearly adjustments. Rent can either be adjusted by a dollar amount, a fixed percentage or tied to a fixed index such as the Consumer Price Index(CPI).

TERM

The length of the lease is usually a very important issue. Some Landlords may want a long lease for financial stability, others may prefer a short lease because of hopes that rental rates may rise in the short term future. Tenants may want a short lease in case of a decline in their business, or if their business becomes more profitable and they need more space for expansion purposes. Other tenants may want a LONGER term lease because of their large investment in tenant improvements, amount of money spent advertising a new location, as well as moving costs if their lease isn't renewed.

Depending on what the landlord wants, the length of the lease will effect all other concessions offered.


"KICK-OUT" CLAUSE Also known as a Lease Termination Clause, some Tenants may want to build-in an option which would allow them to pay the Landlord a penalty fee and cancel the lease. A Tenant may anticipate future expansion or fear that this location may not produce profitable results for the business. The tenant may also fear that the anchor store may leave, thus significantly reducing traffic flow. Without this clause, the landlord could sue the tenant for all future rents due for the entire length of the lease. This clause can make it less costly for the Tenant, who could then pay a set penalty fee and move out.

TENANT BUILD OUT ALLOWANCE

Commonly referred to as "Tenant Improvement Allowance" ("T.I. Allowance"), this is the amount of funding the Landlord will give to the tenant to reimburse the tenant's cost of finishing the interior improvements.

NOTE: Many times the Landlord will refer to providing the Tenant with a "Vanilla Shell" or "Vanilla Box". Since each landlord defines the meaning of a vanilla box differently, the tenant may want the definition of the vanilla box spelled out in writing. Generally speaking however, the term "vanilla shell" means the Landlord is providing the space with four walls ready for paint, concrete floor, ceiling, lighting, bathroom, standard electrical, plumbing and HVAC systems. This would NOT include floor covering, wall covering or any interior partitions.

PERSONAL GUARANTEE

For startup businesses and those with limited assets, landlords may require that the tenant personally guarantee the lease. Usually the owner of the business acts as personal guarantor. By guaranteeing the lease, the owner can be sued personally by the landlord upon default by the tenant.

OPTIONS

Options benefit the tenant, not the landlord, since the tenant can choose whether he remains in the building or locates elsewhere. Rather than sign one ten year lease, the tenant could sign a five year lease with one five year option. The more options, the more flexibility the tenant has in deciding whether to stay or leave.

For the same reason, landlords prefer limits on the amount of options offered because it gives them less control of their property. Some landlords will not give options at all for that reason, but insist on negotiating a new lease at expiration.

NOTIFICATION

Usually there is a notification period prior to lease expiration in which the tenant must notify the landlord if he intends to exercise the option. Many times a notification period ranges from three to six months. The purpose is to give the landlord time to start leasing the space if the tenant vacates.

Common Leasing Mistakes

#1 MOST COMMON MISTAKE

HIRING THE WRONG BROKER OR USING NO BROKER AT ALL

Unless someone in the company is already an expert in commercial real estate, most business owners cannot (and should not) take the time to learn this new industry.

A good Tenant Rep counterbalances the Landlord's team of professionals, and is an important source of market knowledge and negotiation expertise. The wrong broker may provide incomplete information, or have conflicting loyalties because of hidden agendas or Landlord relationships.

Since commissions are paid by the Landlord on virtually all transactions whether or not the Tenant is represented, knowledgeable companies retain an experienced professional to represent their interests.

(A similar mistake is when Tenants fail to keep their broker involved in the expansions, contractions, renewals and extensions that occur during the lease, resulting in uninformed decisions and lost opportunities.).

2nd MOST COMMON MISTAKE

BEGINNING A SPACE SEARCH WITHOUT DETERMINING BOTH CURRENT NEEDS AND LONG TERM PRIORITIES

Current needs include evaluating square footage requirements (how many rooms and what size), type of floor plan (open, private, or a mixture), communications needs, parking needs, access and security needs, etc.

Long term planning includes obtaining facilities and lease terms, which allow companies to expand, downsize or relocate as circumstances dictate the company grows or shifts products and services. (See "Future Flexibility" below)

Suggestion: Start the market research and facility search after meeting with leasing experts and space planners/architects and after decisions have been made regarding office layouts, modular furniture, hoteling, size and amenity requirements, etc.

3rd MOST COMMON MISTAKE

WAITING TOO LONG TO START THE EVALUATION PROCESS

Market research, facility inspections and analysis can usually be completed in a week or so by highly motivated companies, which are already familiar with the local market. However, even after a location has been targeted, negotiations with the Landlord and legal preparation of the documents can take weeks, even months depending on the Landlord, attorneys and corporate bureaucracy (Landlord's and Tenant's).

After the Lease is finally signed (and assuming the space is not going to be taken as-is) architectural plans need to be completed (1 -2 months), building permits need to be obtained (1 - 2 months, depending on local government policies and requirements) and then the actual build-out can get started (1 - 2 months, average).

If existing facilities cannot be found which are acceptable, then a ground-up Build-to-Suit needs to be performed, which can easily take 9 to 12 months or longer.

Lease vs. Purchase


Which is best?

When a company has the option of purchasing a property or leasing, a careful analysis may need to be performed to determine the best choice. While some business owners feel it is obvious that purchasing is better (after years of monthly payments they could have OWNED the building), it isn't always that simple.
Specifically, the Lease Vs. Purchase decision must be made relative to three prime considerations:

1) OPPORTUNITY COST - This cost relates to the alternate choices given up because the Tenant decided to purchase a facility. The most typical Opportunity Cost would be a decrease in inventory or equipment the business owner faces because of the need to use available cash for a down payment. If the business owner can make higher profits using the cash differently, then that factor must be taken into consideration.

2) CASH FLOW - Most businesses run on cash flow and are valued based on Cash Flow. It would be unfortunate if a business owner purchased a property because of $100,000 in an expected increase in property values, and then lost $500,000 in the sale of the business because of reduced sales volumes caused by reduced inventory, equipment, training, plant modernization, etc.

3) RISK - Finally, risk is an integral part of owning real estate. Are values increasing or declining? If they are increasing currently, will they continue to increase over the life of the investment, and will the property be worth more than the amount invested in it? What are the chances of your business needing to expand, contract or relocate? Is it easier to accomplish while renting or owning?

Each individual business will have vastly different circumstances relative to the above considerations, however the following procedure will serve as a rough guide. (To be completely accurate, an owner would have to project an eventual re-sale price, costs of sale, mortgage principal reduction, tax bracket, etc.)

To avoid other common mistakes or

if you are looking for answers to your real estate questions contact Al Twainy.
 
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