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Invest Using the Health Ratio

Invest Using the Health Ratio

When evaluating an investment property, a quick helpful tool that can be used to assess how well a tenant’s business is performing, is the health ratio.

A health ratio shows the percent of rent that is being paid to the owner verses the tenant’s gross sales.

Simply take the annual rent paid and divide it by the annual gross sales.

For example, if a tenant is paying $100,000 a year in rent and the tenant’s store sales are $1,000,000, the health ratio would be 10%. The ratio is industry specific, below are four different industries and what is considered “healthy”.

Grocery: 1-5%

Restaurants: 6-10%

Fitness: 15-25%

Apparel: 10-15%

Please contact us today if you have any investment questions! We look forward to helping.

Raising Cash with a Real Estate Sale/Lease Back

Raising Cash with a Real Estate Sale/Lease Back

As we all work through these difficult times it has caused many clients, customers, and other business owners to get creative on how to create cash flow. There are many business owners that are not familiar with the leased real estate investment market. You may be surprised that there is an entire global market that chooses to diversify their money by putting money into real estate that is leased. The returns on those investments are paid by the tenants/businesses that occupy them when they pay rent. If you are experiencing a tight time of cash flow, you may want to consider selling your property to a third party investor and signing a long term lease.

These are just a few benefits of doing a lease back:

  • You are able to pull all of the cash/equity out of your real estate to help support you in this difficult time.
  • You relieve yourself of the stress the comes with managing the real estate and the debt that may hurt you even further.
  • You can control the building with a lease agreement just as strongly as if you owned the property. Yes, lease agreements are binding, so even if you sell the property to another owner, your lease agreement when negotiated right gives you all the control you need. Common terms of leases could include an initial 10 year lease to maximize the sale price with an additional 3-5 year renewal terms allowing you to control your former building for the next 25 years.

If this sounds like a strategy you are interested in, consider giving me or one our experienced agents a call to discuss how we can help you.

View For Sale listings Gerspacher Real Estate has on the market.

Understanding Types of Office Leases

Understanding Types of Office Leases

Every commercial lease is unique. There are many different types of leases you may encounter when looking for office space. And even within the broad categories of lease types – the devil is always in the details. A Landlord may use terms like “operating expenses,” “CAM (common area maintenance,” “all third party expenses”, etc; which typically include real estate taxes, insurance, snow plowing/lawn maintenance and may or may not include repairs.

Again, since every lease is unique, what is important is that you fully understand what expenses you will be responsible for and what expenses the Landlord will pay.

In General, the broad categories of lease types include:

Full Service Gross Lease – Tenant pays flat rental amount and Landlord covers all operating expenses and utilities

Gross Lease – Tenant pays flat rental amount + utilities and Landlord covers all operating expenses

Modified Gross Lease – Tenant pays flat rent + utilities and some of the operating expenses

NNN Lease – Tenant pays base rent + utilities + operating + taxes, insurance and repairs

If your lease is expiring make sure to explore the options in the market we have available. Let Gerspacher Real Estate Group assist you in finding your next office space and help you understand your lease structure.

Commercial Real Estate Investment

Commercial Real Estate Investment

What are buyers looking for when it comes to Commercial Real Estate Investment (CRE)?

When it comes to investing in CRE, buyers look at several factors. Below is a short list of items investors are going to look at:

Length of lease – If all goes as planned, how long should I expect cash flow?

Quality of the tenant – What is the chance of default?

Rent Escalations – Escalations in rent = increase in returns

Location of the building – What happens if/when the current tenant leaves?

These factors all plat into the return. When you are ready to sell or buy a commercial real estate asset, we would welcome the opportunity to discuss your options.

PROPERTIES

With over 60 years of experience, no one understands the commercial real estate market in this region better than the professionals at Gerspacher Real Estate Group.

Industrial Properties
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Retail Properties
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ABOUT US

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OUR TEAM

TESTIMONIALS

HISTORY

The Gerspacher Real Estate Group is a 3rd generation, family-owned commercial real estate firm in Medina, Ohio. We have been a trusted leader in the commercial real estate marketplace for over 60 years. Our team provides comprehensive real estate solutions that help our clients achieve their business goals. We help simplify the complexities of selling, leasing and managing commercial real estate.

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CONTACT US

When you work with Gerspacher Real Estate Group, you get more than just one connection.

AGENTS

Jeff Brandon

Jeff Brandon

Real Estate Agent & Consultant

Troy Gerspacher

Tony Day

Real Estate Agent & Consultant

Morgan Faunce

Morgan Faunce

Real Estate Agent/Partner & Vice President

James Gerspacher

Emily Faust

Real Estate Agent & Consultant

James Gerspacher

James Gerspacher, J.D., CCIM

Todd Gerspacher

Todd Gerspacher

Residential Property Management & Agent

Troy Gerspacher

Troy Gerspacher, CCIM, SIOR

Real Estate Broker & President

Keith Keltner

Keith Keltner, CCIM

Real Estate Agent & Consultant

Katie Kirby

Katie Kirby, J.D.

Real Estate Agent & Consultant

Sam Tecca

Brian Krusz

Real Estate Agent & Consultant

Sam Tecca

Sam Tecca

Real Estate Agent & Consultant

Sam Tecca

Sheila Miu

Real Estate Agent & Consultant

THE RIGHT AGENTS, WITH THE RIGHT EXPERIENCE
AT THE RIGHT TIME WORKING FOR YOU.

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