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Cooperation is Key to fighting bed bugs

Tuesday, May 31st, 2011

Bed bug issues are becoming more and more common and no one, regardless of income, location or any other factor is immune from exposure and potentially spreading these pesky bugs.

Bed bugs have even been an issue at high end hotels and retail clothing stores in some cities. Experts say the pests are not picky and can take up residence anywhere there are warm bodies.  The resurgence of bed bugs is suspected to be caused by more international and domestic travel, lack of knowledge to prevent infestation, increased resistance to pesticides and ineffective control strategies. 

Bed bugs are not known to spread disease but their presence is unwelcome and does cause difficult challenges and distress to many people.  While it is difficult to determine who may have transported bed bugs on to a property, it is important that everyone work together to eliminate the problem quickly before the pests can spread.

The good news is there are ways to control bed bugs.  This is a cooperative effort.

Building Owners/Managers and tenants need to work together to solve this problem. There are 3 things tenants can do to help:

  1.  Report suspicions of bedbugs promptly, if there isn’t currently a problem but tenants later discover there is one, notify the building owner/manager in writing immediately.
  2. Please make sure your apartment is as CLEAN and picked up as possible. This will help building owners/managers to more effectively treat any problems.
  3. Comply with the treatment. The exterminator will leave instructions on how to proceed after and between sprayings.

Most property managers and owners strongly discourage acquiring second hand furnishings; especially mattresses and bedding if tenants cannot 100% guarantee that the item does not carry the bugs. (If owners don’t spray their items, there is no way to guarantee items are not infested.)

And never pick up upholstered furniture or mattresses from a curb or trash dumpster. Most people are throwing these items out for a reason.

Laws and requirements vary from state to state and city to city. If building tenants or building owners/managers have questions contact local agencies for specific information.

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Press Release:LAW FIRM RELOCATING TO SECURITY NATIONAL BANK CENTER

Wednesday, April 6th, 2011

Downtown legal landscape receives new look

Johnson, Heidepriem & Abdallah LLP will move into the main floor of Security National Bank Center at Ninth Street and Main Avenue. The firm plans to move in June, with an open house during the state bar association’s conference in Sioux Falls.

“We are very excited to have such a prestigious law firm moving in to the building,” said Les Kinstad, Broker with Legacy Real Estate.

The Security building provides additional space for the law firm on a prime corner of downtown. The firm is adding a partner and may reach 10 lawyers in the next few years.

“They gave us a great opportunity and created a space that would really fit our needs,” Abdallah said.

The firm has had input into the design of the main floor, which will feature an atrium with a conference area. Offices on the mezzanine level will overlook the main floor.

“I don’t think there will be anything like it in Sioux Falls,” Abdallah said.

The firm is working with designers to open up windows on the main level and bring the building back to how it looked when it opened in 1917.  The move nearly completes the Security building’s rehabilitation. Andy Fleming, Property Manager with Legacy Real Estate, said upper-floor loft apartments are all rented, and 3rd and 4th floors are 90% occupied.  Tenants include 9th & Mane Salon Suites, Gallardo Trust, The Hayzlett Group as well as Legacy Real Estate.

Johnson, Heidepriem & Abdallah picked its new spot, in part, because of its street-level location and the ability to have a one of a kind space in downtown Sioux Falls.

 

 

Legacy Real Estate is a full service real estate firm working with investors, business owners and other clients to maximize their real estate goals. Founded in 2002, the Legacy team offers their expertise in property management, investments, historic renovation and tax credits, and commercial and residential leasing and sales. Our mission is to fulfill your legacy through our relationships, commitment, dedication and hard work. To view our real estate opportunities visit our website at www.legacysiouxfalls.com.

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What is a net lease?

Monday, March 14th, 2011

Net leaseFrom Wikipedia, the free encyclopedia

The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject. 

In commercial real estate, a net lease requires the tenant to pay, in addition to rent, some or all of the property expenses which normally would be paid by the property owner (known as the “landlord” or “lessor”). These include expenses such as real estate taxes, insurance, maintenance, repairs, utilities and other items.[1] Contents [hide] 1 Types of net leases 1.1 Single net lease 1.2 Double net lease 1.3 Triple net lease 1.4 Bondable lease 2 Economics 3 References The precise items that are to be paid by the tenant are usually specified in a written lease. For properties that are leased by more than one tenant, such as a shopping center, the expenses that are “passed through” to the tenants are usually prorated among the tenants based on the size (square footage) of the area occupied by each tenant. The term “net Lease” is distinguished from the term “gross lease”. In a net lease, the property owner receives the rent “net” after the expenses that are to be passed through to tenants are paid. In a gross lease, the tenant pays a gross amount of rent, which the landlord can use to pay expenses or in any other way as the landlord sees fit. [edit] Types of net leasesThere are standard names in the commercial real estate industry for different sets of costs passed on to the tenant in a net lease. [edit] Single net leaseIn a single net lease (sometimes shortened to Net or N), the lessee or tenant is responsible for paying property taxes as well as the base rent. Double- and triple-net leases are more common forms of net leases because all or the majority of the expenses are passed on the tenant.[2] [edit] Double net leaseIn a double net lease (Net-Net or NN) the lessee or tenant is responsible for real estate taxes and building insurance. The lessor or landlord is responsible for any expenses incurred for structural repairs and common area maintenance. “Roof and structure” is sometimes calculated as a reserve, the most common amount is equal to $0.15 per square foot.[citation needed] [edit] Triple net leaseA triple net lease (Net-Net-Net or NNN) is a lease agreement on a property where the tenant or lessee agrees to pay all real estate taxes, building insurance, and maintenance (the three ‘Nets’) on the property in addition to any normal fees that are expected under the agreement (rent, etc.). In such a lease, the tenant or lessee is responsible for all costs associated with the repair and maintenance of any common area. This form of lease is most frequently used for commercial freestanding buildings however, it has also been used in single family residential rental real estate properties.[3] [edit] Bondable leaseA bondable lease (also called an “absolute triple net lease”, “true triple net lease”, or a “hell-or-high-water lease”) is the most extreme variation of a triple net lease, where the tenant carries every imaginable real estate risk related to the property. Notably, these additional risks include the obligations to rebuild after a casualty, regardless of the adequacy of insurance proceeds, and to pay rent after partial or full condemnation. These leases are not terminable by the tenant, nor are rent abatements permissible. The concept is to make the rent absolutely net under all circumstances, equivalent to the obligations of a bond: hence the “hell-or-high water” moniker. An example of this type of lease would be a leaseback arrangement in which a retailer leases back the building it formerly owned and continues to run the store. Bondable leases are typically used in so-called “credit tenant lease” deals, where the main driver of value is not so much the real estate, but the uninterrupted cash flow from the usually investment-grade rated “credit” tenant.[citation needed] [edit] EconomicsTypically, triple net leases (NNN) are ‘equity investments’, rather than ‘cash flow investments’. For example, the investor will finance a significant portion of the purchase price on a property and pay the resulting mortgage with the lessee’s monthly owed rent. There is usually a small amount left over as monthly profit for the investor (positive cash flow), but the greater investment payoff comes from the tax shields afforded to the investor through the use of leverage or gearing. The resulting property is then sold after a period of equity-building, usually five years – the typical commercial mortgage term.

References^ Principles and Practices of New Jersey Real Estate 6th Ed by Frank W. Kovats, DREI. ^ Hipp, Jonathan W. (2008-11-28). “What You Need to Know to Invest in Single-tenant, Net-leased Properties”. Calkain Companies, Inc.. http://calkain.com/exchange-toolbox/industry_expert_articles/netlease101.php. ^ http://www.prweb.com/releases/triple_net_leases/triple_net_houses/prweb3753374.htm Retrieved from “http://en.wikipedia.org/wiki/Net_lease”

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Office Property Sales Rise Amid Encouraging Economic News

Tuesday, March 1st, 2011

Link to full article

Dec 23, 2010 11:54 AM, By Denise Kalette, NREI Managing Editor

Office properties, which have languished over the course of the economic slowdown amid dismal unemployment figures, are showing some buoyancy. Office property sales jumped 122% in the year-to-date through the third quarter over the same period last year, according to a new report by the Mortgage Bankers Association (MBA).

The total sales volume of commercial properties rose 82% in the same period over 2009 levels, according to the report. However, that transaction volume of $60 billion still falls well below the level of earlier years.

Apartment sales leapt 97% in 2010 through the third quarter, while industrial property sales rose 59% and retail property sales, 48%, according to the MBA.

Yet the overall volume of sales falls far below the level of pre-recession sales, the MBA emphasized in the hefty, 103-page report.

 Recorded prices per square foot increased, while cap rates declined. The highest cap rates, for industrial properties, fell to 8.4% from 8.6% a year earlier. Meanwhile, retail cap rates fell to 7.8% from 8.1%, and cap rates for office properties fell to 7.3% from 8.2% percent a year earlier. The lowest cap rates, for apartments, fell to 6.7% from 7.1% a year earlier, the report notes.

 The pace of commercial mortgage originations, including multifamily, picked up during the third quarter quarter. Third quarter 2010 originations were 32% higher than during the same period in 2009, and 15% higher than during the second quarter of 2010.

 On a year-over-year percentage basis, originations for inclusion
in commercial mortgage-backed securities (CMBS) grew a stunning 940% and originations for life companies grew 154%. Originations for banks fell 49% compared to the third quarter of 2009 and originations for Fannie Mae and Freddie Mac fell 16% year-over-year.

Life company mortgage commitments reached $9.5 billion in the third quarter, just $2 billion less than the 2007 third-quarter level, according to MBA.

Commercial and multifamily mortgage debt outstanding declined by $42 billion during the quarter, driven by a drop in loans held by banks, down by $30 billion, and in CMBS, which recorded a reduction of $12 billion.

 The latest fiscal data is providing encouraging signs of somewhat stronger growth in real economic activity, the MBA says. “The most heartening developments have been in consumer spending, which rose at a 2.8% annual rate in the third quarter and appears to be on track to equal that gain in the current quarter.”

The sales level of durable goods has been stronger than the total, suggesting a more confident consumer, according to the report. During the second and third quarters, consumer purchases of durable goods, adjusted for inflation, rose at an annual rate of 7%.

 The increase in fourth-quarter purchases of durable goods by consumers is expected to exceed the second and third quarter pace “by a comfortable margin,” the MBA reports.

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Commercial Lending Bounces Back In 2010

Thursday, February 10th, 2011

With CMBS and Life Company Financing Picking Up Speed, MBA’s Commercial Loan Index Reaches Highest Level Since Third-Quarter 2008

February 9, 2011
Powered by improving conditions in the real estate and capital markets, CRE loan originations rose by 36% in 2010 over the previous year, according to preliminary data released at this week’s Mortgage Bankers Association (MBA) real estate finance convention in San Diego. In a separate report, the MBA also found that loan maturities continue to roll at a manageable level, with just 11% of the $1.4 trillion in outstanding commercial debt expected to mature this year, shrinking to 9% in 2012.

“All the fundamentals are ripe for a very positive, solid comeback, especially in the multifamily sector,” Faron Thompson, who attended the conference as the newest addition to Jones Lang LaSalle’s real estate investment finance team, tells CoStar.

Mortgage bankers originated $110 billion of commercial and multifamily mortgages during 2010, with a strong fourth quarter powering an increase of 36% from 2009, according to preliminary estimates based on the MBA Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, released at the conference this week.

The results show that loan production by life insurance companies sprang back to life in 2010. Life companies were the leading source of lending, with origination volumes 155% higher than 2009 levels. Government-sponsored enterprises Fannie Mae, Freddie Mac and FHA/Ginnie Mae also saw strong volumes, with increases for FHA/Ginnie Mae offsetting declines in production for Fannie Mae/Freddie Mac. Total originations for commercial mortgage-based securities (CMBS) conduits increased more than 10-fold in 2010 while originations for commercial banks saw a year-over-year decline.

CB Richard Ellis Group Inc. posted an increase of 233% in its commercial mortgage brokerage business, driven by loan originations and strong GSE activity as well as improvements on the parts of traditional and conduit lenders, said CFO Gil Borok during the Los Angeles-based company’s fourth-quarter conference call.

Originations jumped 63% in the fourth quarter over the previous three months and 88% over fourth-quarter 2009, pushing totals above 2009 levels, said Jamie Woodwell, MBA’s vice president of commercial real estate research. The late rally was driven by increases in originations for office properties, which rose 170% over the same period a year earlier; and hotels, which rose 169%. Loans for industrial properties, retail and multifamily rose 98%, 94% and 81%, respectively. Health-care lending was flat at 4%.

Origination volumes typically grow over the course of the year and changes between the third and fourth quarters are likely driven at least in part by seasonal factors. However, among investor types, CMBS saw an increase in loan volume of 298% compared to the third quarter, by far the largest quarterly jump. The next-largest increase, originations of commercial bank portfolios, rose a more seasonal 102%.

The stirring of the CMBS market after a three-year slumber reflects the improving picture for commercial real estate fundamentals. In addition to the ten-fold increase for all of 2010, CMBS conduits rose 60-fold increase compared to last year’s fourth quarter. Life companies’ volume rose 170% in the fourth quarter over a year ago.

“Life companies and FHA led the increase in dollar volumes, but a large percentage increase in originations for CMBS is likely the most symbolic change from last year,” Woodwell said.

The MBA’s Commercial/Multifamily Mortgage Bankers Originations Index, which averages 100 on a quarterly basis since 2001, started first-quarter 2010 at 45 and rose to 114 in the fourth quarter. That’s the highest since third-quarter 2008′s 116 and roughly parallel to 2002-2003 levels, according to an MBA chart.

Compared to the third quarter, fourth-quarter originations for hotel properties saw a 333% increase while health care properties ended the year strongly with a 204% increase.

Loan Maturities Hold Steady

Only 11% or $155 billion of the $1.4 trillion balance of outstanding commercial/multifamily mortgages held by non-bank investors through Dec. 31, 2010, will mature in 2011, and 9%, $125 billion, will come due in 2012, according to the Mortgage Bankers Association’s 2010 survey of loan maturity volumes. The survey found that maturities vary considerably by the type of investor holding the loan.

“The long-term nature of commercial real estate means that relatively fewer — not more — commercial and multifamily mortgages have been maturing during the throes of the credit crunch and recession compared to other credit types,” said Woodwell. “For most investor groups, commercial mortgage maturities are relatively spread out, with some increases starting in 2015 as the loans originated in 2005, 2006 and 2007 come due.”

MBA’s 2010 survey collected information directly from servicers on the maturity years of more than $1.4 trillion in outstanding non-bank commercial/multifamily mortgages. Only small shares of the commercial and multifamily mortgage debt held by life insurance companies, Fannie Mae, Freddie Mac or FHA, or in fixed-rate CMBS will come due in 2011 or 2012. Greater shares of mortgages held in short-term and floating-rate CMBS and by credit companies, warehouse facilities and other investors will mature in 2011 and 2012.

According to the survey, $155 billion, or 11%, of the total $1.4 trillion balance of outstanding mortgages held by non-bank investors, will mature in 2011 followed by $125 billion, or 9%, in 2012. The maturities vary significantly by investor group. Just 3% of the outstanding balance of multifamily mortgages held or guaranteed by Fannie Mae, Freddie Mac, FHA and Ginnie Mae will mature in 2011. Life insurance companies will see 7% mature in 2011.

Among loans held in CMBS, 12% will come due in 2011, including 8% the $521 billion of loans in fixed-rate conduit CMBS and 22% of the $190 billion of loans in floating rate and large-borrower CMBS. On the high end of the spectrum, 30% of commercial mortgages held by credit companies and other investors will mature in 2011.

Wells Fargo, PNC Lead CRE Mortgage Servicers

Wells Fargo led the MBA’s year-end ranking of commercial and multifamily mortgage servicers with $451.1 billion in U.S. master and primary servicing, followed by PNC Real Estate/Midland Loan Services with $337.4 billion, Berkadia Commercial Mortgage with $194.9 billion, Bank of America Merrill Lynch with $126.6 billion, and KeyBank Real Estate Capital with $118.9 billion.

Wells Fargo, PNC/Midland, Berkadia, Bank of America Merrill Lynch and KeyBank are the largest master and primary servicers of commercial/multifamily loans in U.S. CMBS, CDO and other ABS; PNC/Midland, GEMSA Loan Services, Prudential Asset Resources, Northwestern Mutual, and Northmarq Capital are the largest servicers for life companies; PNC/Midland, Wells Fargo, Berkadia, Deutsche Bank Commercial Real Estate and Prudential Asset Resources are the largest Fannie Mae/Freddie Mac servicers.

PNC/Midland ranks as the top master and primary servicer of commercial bank and savings institution loans; GEMSA the top credit company, pension funds, REITs, and investment funds servicer; PNC/Midland the top FHA and Ginnie Mae servicer; Wells Fargo the top for mortgages in warehouse facilities; and Berkadia the top for other investor type loans.

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5 States Where Housing Is Predicted to Recover the Quickest

Tuesday, January 25th, 2011

Taken from: Link to full article

By Steve Kerch Print Article Print Article

RISMEDIA, January 14, 2011—(MCT)—Housing will rebound moderately in 2011, economists at the International Building Show here are predicting, and should gain even more steam in 2012. But the recovery in home building and home sales will vary widely from one part of the country to another, with the states that had the most success during the boom times of the past decade being the last to come back from their historic bust, according to an analysis from the Portland Cement Association, a national trade group.

“The headwinds are still facing us in housing. They are less than they were, but they are still in place,” said Edward Sullivan, chief economist for the PCA, who examined data on mortgage delinquencies, unemployment rates and home-price declines to create a state-by-state recovery prediction.

The housing markets that still face the hardest going, led by Nevada, account for more than 50% of the U.S. housing market, Sullivan pointed out, while those that will recover the fastest make up only 20%. That means the better times in those states won’t do much to lift overall national housing numbers.

Here are the five states where housing is predicted to recover the quickest:

1. North Dakota. North Dakota has the lowest mortgage delinquency rate of any state, just 0.9%. It also has shown the best home price performance of any state, with values up 7.2% from the peak of everyone else’s boom in 2005 to what was a trough for everybody else in 2010.Only Texas, Vermont and South Dakota also reported gains over that time. The category the state did not lead was unemployment, which at 7.5% was just about double that of its southern neighbor South Dakota, which at 3.7% boasted the lowest rate.

2. South Dakota. In addition to its low unemployment number, South Dakota also sports the second-lowest mortgage delinquency rate at 1.5%. And the state also managed to steer clear of the home price cliff, with prices having risen 0.5% from 2005 to 2010.

3. Iowa. The Hawkeye State managed to keep its home prices nearly level over the worst five years in history for everyone else, with prices falling just 0.4%. Mortgage delinquencies are only 2.2% of outstanding loans in the state, and the unemployment rate of 6.8% is still well below the national average.

4. Nebraska. At 4.4%, Cornhuskers enjoy the second-lowest unemployment rate in the nation. Just 2.0% of outstanding mortgages are delinquent, and home prices fell only 3.5% from peak to trough, while the average for the country was a 20% drop.

5. Oklahoma. Home prices in the Sooner State fell just 2.3% from peak to trough and mortgage delinquencies are 2.9%. Unemployment is 6.9%.

If you see a pattern in those five states, you’re right.

“The central portion of the country generally will recover first,” Sullivan said. Add Kansas, Texas, Louisiana and Arkansas to that bunch.

Other states that fall into the early-recovery category include Vermont, Hawaii, Montana, Wyoming, New Mexico, Colorado and New Hampshire.

On the opposite end of the spectrum, here are the five states where the housing recovery is expected to be a lot longer in the making:

1. Nevada. The poster child for the housing boom was Las Vegas, but now it’s lights out on Glitter Gulch. The state has the highest mortgage delinquency rate in the country at 8.3%, the highest unemployment rate at 14.4% and has suffered the biggest peak-trough home price declines of any area, a 56.4% tumble.

2. Michigan. Not a state that enjoyed the boom, but one really feeling the bust. It has the second-highest unemployment rate in the nation at 13.1% and mortgage delinquencies hit 5.1% of outstanding loans. Home prices have also fallen hard, 31.7% from the peak.

3. California. The second-highest mortgage delinquency rate in the country at 6.0%, the third-worst unemployment rate at 12.4% and home price declines of 40.8% put the Golden State on a long path to health.

4. Florida. Tying California with a 6.0% mortgage delinquency rate but beating its cross-country rival with a home-price decline of 46.9%. An unemployment rate of 11.7% doesn’t help.

5. Rhode Island. Unemployment trips up Rhode Island, which ties for the fourth-highest rate in the country at 11.7%. Home prices declines were 25.6%, and 4.9% of mortgages are delinquent.

(c) 2011, MarketWatch.com Inc.

Distributed by McClatchy-Tribune Information Services.

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What is CIP?

Wednesday, January 12th, 2011

http://www.bls.gov/cpi/

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How to Increase Cash Flow

Tuesday, October 19th, 2010

Sale-Leasebacks Get Clients Back on Track

Taken from Scotsman Guide August 2010

 By Sidney Domb, President, CEO and director United Trust Fund

Selling and the leasing back property may increase a business’s cash flow

 With banks searching for new ways to generate revenue and increase capital, many companies that own their own real estate are discovering the value of sale-leaseback transactions. These transactions are structured to unlock the equity a company has in its real estate and to convert that equity into cash. This involves selling the institution’s headquarters or branch offices and simultaneously leasing them back long-term. Many property-owners are recognizing the tax benefits and other advantages of these transactions. Commercial mortgage brokers can advise clients on the benefits and help them find sale-lease-back providers. In general, by selling and simultaneously leasing back its property, a company can lower its operating costs and use that money to increase its cash flow. Benefits of sale-leaseback transactions include the following: *Favorable impact on earnings. A sale-leaseback transaction converts non-current fixed assets such as real estate into current liquid assets – i.e., cash. It can generate a gain on the sale when properties’ market or appraised values are more than the depreciated book value. Property-owners often can improve their earnings by reinvesting the cash at a greater rate, retiring high-cost debt, funding mergers and acquisitions, expanding operations, or taking advantage of special investment opportunities.

*Regulatory compliance. The cash a business receives from a sale-leaseback transaction can help it improve its primary and total capital-to-assets ratios. The profit on a sale-leaseback transaction from depreciated value to current appraised value can increase a company’s net worth.

*Total facility control. Simultaneously with the sale, the company leases back the property for an initial lease term – typically, 15 years with five five-year options. In effect, this gives the company control of its real estate for at least 40 years. This would be identical to ownership for the property’s normal useful life.

 *Off-balance-sheet financing. By carefully structuring an operating lease, the transaction would not require capitalization under Financial Accounting Standards Board 13 criteria. In turn, this allows off-balance-sheet treatment, which in effect would have a more favorable impact on the company’s earnings and improve its financial ratios.

*Low cost of money. A sale-leaseback transaction can be a quick, economical way to raise capital, compared to the process of originating a new stock issue. Issuing new stock may result in an ownership dilution at unfavorable prices or with unwanted investors. The leaseback is a low-cost technique that avoids these consequences. As a rule, a sale-leaseback transaction should provide capital at an effective cost of 100 to 150 basis points less than that of long-term mortgage financing or the long-term conventional debt market. It should have not restricted covenants and no principal repayment after all lease payments.

 *Recapture of all costs. In a typical sale-leaseback transaction, the company would recapture all costs relating to the property’s current market value, including legal fees, surveys, architectural, engineering, title, and any other closing costs or property-related fees. This contrasts to conventional long-term mortgage financing, which is usually restricted to 75 percent of the current market value.

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It’s prime time for tenants, commercial leases

Tuesday, July 20th, 2010

(taken from Sioux Falls Business Journal)

As a business, transaction and real estate lawyer at one of the largest law firms in Sioux Falls, Brendan Reilly has an insider’s vantage point in a key sector of the area’s economy.

Reilly, a partner at Davenport, Evans, Hurwitz & Smith, is a player in this new era of commercial leasing – an important reflector of local economic activity – on both the landlord and tenant sides of deals.

He sees opportunities and burdens on both sides. But tough market conditions, including high vacancy rates in commercial buildings, have created opportunities especially for tenants.

“It’s kind of a buyer’s market right now. It’s kind of the same in leasing. It’s a tenant’s market right now,” he says.

Landlords want tenants, but business tenants can shop around and look for bargains.

In addition to reduced lease rates, prospective tenants might find landlords are more willing than in the past to grant other enticements, such as a build-out allowance to help remodel space, Reilly says.

Depending on the space, landlords also might be willing to lock in a lease rate for a longer period without a built-in price increase.

Tenants, meanwhile, might face greater advance scrutiny from landlords.

Landlords have to take the due-diligence process especially serious during challenging times because replacing unsuccessful tenants is expensive, Reilly says.

“You don’t want to give away the farm and have tenants that are unable to carry out the terms of the lease,” he says.

So, more so than a few years ago, landlords tend to want stronger financial guarantees built into leases, he says.

In the past, a landlord might have been willing to settle for the financial promise of a business entity. That left open the risk that if a business folded, no one was responsible for the remaining financial obligations.

These days, landlords often want the personal financial guarantee of a key shareholder of the business as well as the promise of the limited liability company or other legal entity, Reilly says.

Reilly, who’s been practicing business law for 12 years, says legal work flows with the market. If development is slow, work related to filling existing space might require more attention.

If real estate agents are busy, business lawyers will be busy, too. So Reilly is a cheerleader for the commercial real estate industry.

“The market hasn’t stopped. It’s slowed. Maybe the focus has changed,” he says.

Behind-the-scenes business activity is up, compared to six or nine months ago, however.

“I think in Sioux Falls we’ve hit rock bottom, and we’re on the way back up,” Reilly says.

Rob Swenson can be reached at rswenson@sfbusinessjournal.com.

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Money Saving Tips

Thursday, July 1st, 2010

Did you know that MidAmerican Energy has more than one rate for their customers? 

By checking with MidAmerican, you can find out which rate you are on.  Rate “MVF” is available for residential, commercial, and industrial customers, but costs more than rate “SVF.”  Rate “SVF” is available to residential, commercial, and industrial customers who have peak day requirements of less than 500 therms.  If you call MidAmerican’s customer service line at 800-329-6261, you can review your rates and decide if this is a switch that may help you too.

One business recently reported that by asking MidAmerican to change their rate to the “SVF” rate plan, they will save over $300 a year!   

 

Joann Messersmith is the Book Keeper for Legacy Real Estate.  She is responsible for the accounting for all property management, communicating financial information to owners, and processing payroll for the staff.  With over 15 years of experience and a bachelor’s degree in business management, Joann brings knowledge that benefits the clients and customers of Legacy Real Estate.  She enjoys the fast pace and varied work that comes with this industry.  When not in the office, you can find Joann out with her horses, as she is an avid dressage and hunter/jumper rider and competitor.  You can reach Joann at 605-336-7376 or via email.

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