Welcome to RES 110 Welcome to RES 110 Fall 2014 Introduction to Commercial Real Estate An On Line Experience

Patrick Mahoney Your RES 110 Instructor Business Background Hippotherapy Volunteer Office building developer Commercial property counselor Commercial property broker Trustee, NYSE listed REIT Realty Company Executive

General Administrative Issues Identify with RES Identify with RES Class web site Class web sitehttp://facweb.northseattle.edu/jmahoney/RES110F14H/ for the Weekly Newsletter, messages, Syllabus modifications and Collaborate class discussion recording link. You will be ing me “attendance Q&A assignments, class assignments and extra credit assignments. Please Identify all assignments and extra credit projects. : You will be ing me “attendance Q&A assignments, class assignments and extra credit assignments. Please Identify all assignments and extra credit projects. : Student Name & Course Student Name & Course Assignment # or Extra Credit Assignment # or Extra Credit Date turned in. Date turned in. Students should give Il Professori advance notice of any issues which could affect timely performance of student obligations. Students should give Il Professori advance notice of any issues which could affect timely performance of student obligations.

Syllabus Review

Let Us Begin

Session One Elements of Commercial Property - An Overview

Defining a Commercial Property An Income Producing Real Property Investment An Income Producing Real Property Investment Leased or Owner Occupied. Leased or Owner Occupied.

Commercial Property Investments Advantages and Disadvantages Advantages: Cash Flow Cash Flow Appreciation Appreciation Principle Pay Down Principle Pay Down Tax Benefits Tax Benefits Opportunities to Self Manage Opportunities to Self Manage Pride of Ownership Pride of OwnershipDisadvantages: Non Liquid Non Liquid Management Intense Management Intense

Buyers and/or Sellers of Investment Properties. Developers Developers Corporations Corporations Institutions (Banks, Insurance Companies) Institutions (Banks, Insurance Companies) Real Estate Investment Trusts (REIT) Real Estate Investment Trusts (REIT) Pension Funds Pension Funds Hedge Funds Hedge Funds Government Agencies Government Agencies Syndicators Syndicators

Typical Life Cycle of Commercial Properties Development Development Stabilized Occupancy Stabilized Occupancy Mature Investment Mature Investment Rehabilitation / Redevelopment Rehabilitation / Redevelopment Demolition Demolition

Major Commercial Property Types and Resources Available in Each Category

Office

Low Rise Office Fewer than 7 stories*

Mid-Rise Office Between 7 and 20 stories + /-

High-Rise Office More than 20 stories

Office Resources  BOMA (Building Owners and Managers Association)  SIOR (Society of Office and Industrial Realtors)

Industrial

Bulk Simplest of all industrial space.

Office/Warehouse 5% to 25% devoted to office, docks, doors, good access.

Office/Service More expensive, park like setting, about 25% office. Good access, OH doors, 14’+ clear ceilings.

Freestanding Usually build-to-suit, good access, sizes and storage requirements vary. Variety of uses.

Multi-Tenant Incubator space. Sizes, uses and storage requirements vary. Docks and OH doors.

Large Manufacturing Manufacturing, production, assembly, shipping, etc. Docks and doors. Rail and truck access. Heavy power requirements.

Research and Development Most people intensive. Office and manufacturing.

Industrial Park Covenant controlled. High quality, more expensive. Higher percentage of office or showroom space.

E Commerce Bulk Warehouses

Industrial Resources  SIOR (Society of Office and Industrial Realtors)  Corenet (Corporate Real Estate Network

Retail

Neighborhood Center Supermarket anchor. Drug sub-anchor.

Regional Center General merchandise. Apparel and services.

Super-Regional Center

Power Center Multiple anchors. “Category Killers”.

Outlet Center Rural locations. Manufacturers. Apparel, soft goods.

Freestanding Store Restaurants, banks. Out-parcel locations. Drug and specialty retail.

Commercial Strip Center Usually un-anchored. Retail, goods, services. Restaurants, financial, specialty.

38 Lifestyle/Village Centers Lifestyle/Village Centers

Other Retail Facilities Big Box Big Box Village Village Mixed Use/PUD Mixed Use/PUD Neighborhood Stores Neighborhood Stores Downtown Downtown Airport Airport eRetail eRetail

Retail Resources ICSC (International Council of Shopping Centers) Dollars and Cents of Shopping Centers

Multifamily Properties Duplexes and Fourplexes Duplexes and Fourplexes Often first time investments Often first time investments Larger Apartment Complexes Larger Apartment Complexes Increasing institutional ownership Increasing institutional ownership

Multifamily Resources National Apartment Association (NAA) National Apartment Association (NAA) Institute of Real Estate Management (IREM) Institute of Real Estate Management (IREM)

Thanks for Your Attention