If you’re like a lot of other shopping center landlords, when you purchased your retail shopping center, you had dollar $igns in your eyes.

And who could blame you, right?

Active, profitable tenants paying high-dollar rent every month. And those tenants cover ALL of your property expenses as part of their NNN charges…

  • Property taxes (your biggest expenses) – Check!
  • Insurance – Check!
  • Property upkeep and maintenance – Check!

And if you don’t have a loan, those tasty rents are PURE profit. Even if you do have a loan, you’re likely still banking cash every month.

Sounds like a pretty UNBEATABLE deal.

But then you dove into actual day-to-day management of your shopping center (an aspect you didn’t necessarily think about beforehand). It proved nothing short of a RUDE AWAKENING.

You realized, much to your distress, managing your shopping center was a real slog.

Turns out, property management is a relentless train of big picture strategic decisions and finite details that demand constant attention. And demands never end.

You discovered, the hard way, maintaining your shopping center investment is another full time job.

And that’s the LAST thing an investment should be.

But what if we told you there’s an alternative?

What if we told you it’s possible to convert your shopping center into an investment that generates PASSIVE INCOME (the kind of asset every investor agrees is the pinnacle of financial success).

Well, it’s true. Your shopping center CAN be EXACTLY that kind of investment.

How? Three words: Professional Property Management.

Here’s How it Works

When you hire a professional property management company, they handle the difficult, time consuming, and seemingly arbitrary (but legally require) tasks for you…

Overseeing Day-to-Day Management

Maintenance issues…“The toilet’s overflowing, and my unit’s flooding!” … “The AC quit and the sweltering heats driving all my customers away”)

Tenant “emergencies”… (“The dollar store employees are taking up ALL the customer parking” … “the market is selling sandwiches. But we have an EXCLUSIVE!”)

And the like are among the MOST time consuming aspects of shopping center property management.

With professional management, your property manager is “on call” 24-7 to field calls, requests, complaints and so-called “emergencies.” They handle tenant issues, field calls, organized vendors and moderate tenant disputes so you don’t have to have to (protecting your precious free time).

Staying on Top of Maintenance

Overseeing sweeping, trash removal, and general upkeep requires constant attention. Did the vendor actually show up? Did they do a good job? Are the tenant’s service complaints legitimate?

And when it comes to large scale projects – parking lot repaving and slurry, roof replacement, ADA compliance upgrades, and the like – knowing when to act or who to hire is another big challenge.

Whether it’s daily upkeep or major maintenance, your property manager is on top of it.

Your manager will monitor vendor services, assess quality and performance, and address tenant concerns.

More than likely when a big maintenance project is necessary, you’re manager will advise you. And they can make recommendations for vendors and gather project bids.

Keeping Up-To-Date With Finances and Accounting

Collecting rents, paying bills, and making sure everything is properly recorded and documented is an enormously time consuming proposition.

A professional management company employs an accounting department dedicating to handling all of these tasks. Moreover, the do so in a legally complainant manner, in accordance with local, state and IRS rules and regulations.

Staying Abreast of Condition in Your Marketplace

When a tenant vacates a space, how much do you much do you list the vacancy for? When it’s time to renew a lease, what’s “fair marketing value?”

Without a strong knowledge of your local marketplace, these are tough questions to answer.

Fortunately, your property manager monitors rental rates and the retail use trends in your area. They can help both determine the optimal lease rate, and identify the ideal tenant for your space.

Done with the trials and tribulations of managing your shopping center?

Do you want to agonize over these difficult and time consuming tasks? Or would rather hand them over to a qualified professional? (And turn your shopping center into an asset that generates PASSIVE INCOME.)

Click here to check out CBM’s services page and find out how professional property management can maximize your shopping centers passive income potential.

Another CBM Original…

When it comes to property expenses, taxes are one of your BIGGEST. It’s something every shopping center landlord struggles with.

Unfortunately, taxes are fixed expenses. There just isn’t that much you can do about it… Or is there?

The economy is certainly on the rebound. But despite the green shoots in our ongoing economic recovery, commercial retail property values are NOWHERE NEAR their post “Great Recession” heights.

That likely means you’re overpaying on your property taxes. Potentially GROSSLY overpaying.

A high percentage of properties appraised at the height of the mid-2000s real estate boom are now worth significantly less.

But How Do You Know if Your Property is Worth Less?

That’s $1 million question, right?

Once again, professional property management comes to the rescue.

Your property manager handles many properties. And they’re dialed into the current commercial real estate market. They’ve seen the slumping commercial property sales market first-hand. And they’ve also had multiple properties in their portfolio reassessed and the property taxes lowered.

Your manager, privy to your tax bill, will likely have a good idea if your property tax assessment is too high. They can also recommend the right action to lower your assessment. And they have the necessary backup to support your claim.

Property Tax Appeal Specialists

There are accounting firms that specialize exclusively in lowering property tax assessments. Likely your manager has worked with several such firms and can suggest a couple of options.

Most firms follow the same basic assessment appeal process:

  • Review the Property’s Documents on File with the Assessor’s Office
  • Review History & Uses of Property
  • Perform Relevant Research Applicable to the Assessment
  • Do Comparative Analysis of Similar or Neighboring Properties
  • Prepare Income Analysis Appropriate for Commercial Properties
  • Prepare all Appeal Documentation and Filings
  • Represent You in all Meetings and Hearings Regarding the Appeal
  • Track Appeal Process Through Resolution
  • Monitor Future Assessments and Tax Bills

Additional Support Your Property Manager Provides in the Assessment Appeal Process

Though it may not be obvious, your property manager contributes significantly to the appeal process outlined above.

Review History & Uses of Property Your manager provides documentation charting your property’s historical use and the income your property has generated.*

*Commercial properties that generate income, like retail shopping centers, are subject to special conditions. An assessment isn’t just base on the value of the land and improvements. Assessments also take into account the rental income the property generates.

Perform Relevant Research Applicable to the Assessment Your manager provides a great deal of the property data relevant to your assessment.

Prepare All Appeal Documentation and Filings – Your manager provides much of the backup and supporting documentation that goes into the appeal filing paperwork.

Perform Relevant Research Applicable to the Assessment – Your manager provides the tax bills the accounting firm uses to monitor the current taxes and future assessments.

How Much Does it All Cost?

That’s the other $1 million question… Most accounting firms specializing in assessment appeal charge a percentage of the amount by which they reduce your property tax assessment. Fees generally hover around 40%.

For example, if an accounting firm reduces your shopping center tax assessment by $50,000, their fee would be $16,000.

The Good News Here Is…

If the firm doesn’t think they have a reasonable chance of lowering your assessment by a decent amount, they won’t pursue the appeal. That means you don’t have to worry about a firm wasting your time and money for a tiny reassessment reduction.

Important Deadlines

If you’re considering an appeal, whether of your own accord or because you property manager recommended the action, it’s important to keep the annual deadlines in mind.

Deadlines vary by county in the state of California.

Here are the important SoCal deadlines:

September 15th

  • Ventura
  • Orange
  • San Luis Obispo

November 30th

  • Los Angeles
    San Bernardino
    San Diego

Want to Reduce Your Shopping Center’s Property Tax Assessment?

Click here to visit CBM’s Services page and find out how professional property management can reduce your property expenses.

By Globe St, Tuesday, May 12, 2015

How Omni-Channel Retail Increases Efficiency

LOS ANGELES—Smart retailers are realizing that consumers do their research online before entering the store, so they’re tweaking their digital and physical sales processes to provide a more efficient experience for both the retailer and the consumer, Matthews Retail Group’s Chairman and CEO Kyle Matthews tells GlobeSt.com. We spoke with Matthews exclusively about brick-and-mortar leasing trends as well as creative ways retailers are using omni-channel retailing to increase sales.

GlobeSt.com: How do you explain increased brick-and-mortar leasing at a time when so many retailers are scaling back their physical stores?

Matthews: You have an improving economy, cheap debt and an overall lack of new development coming out of the recession. All of these factors serve to increase retailers’ brick-and-mortar presence. Retailers are reinventing themselves in omni-channel retailing. Also, available large big-box space is being taken up by retailers serving specific demographic groups.

View original article…

By Globe St, Tuesday, May 12, 2015

Vacant Free-Standing Retail Creating “Terrific Opportunity”

IRVINE, CA—Recently there has been a shakeup with retail tenants in all categories. Some are closing stores or downsizing, while others are falling out of favor with today’s consumers. With single-tenant properties hotter than ever among a diverse buyer pool, a vacant retail or restaurant pad building may be more of an opportunity than an albatross. Chris DePierro, managing director with property investment advisory firm Faris Lee Investments, tells us why, in this environment, the opportunity to add value is greater than it has been in recent history.

GlobeSt.com: What types of single-tenant properties are being vacated?

Chris DePierro: There are still some vacant Blockbuster Video and Hollywood Video stores being redeveloped and backfilled by a single tenant or converted into multi-tenant buildings with higher rents. Banks fall along the same lines. They may not necessarily be going out of business, they just don’t need all the space they did in years past due to online banking alternatives.

View original article…

By Marcus & Millichap, Monday, May 11, 2015

April Hiring Revives Following Severe Winter; Job Creation Raising Commercial Real Estate Demand

Solid additions to payrolls in April put the U.S. labor market back on track and eased concerns that may have arisen following the poor hiring results in March and a weaker than anticipated initial reading of GDP. The further tightening of the labor market and the likelihood that economic growth will accelerate as 2015 progresses will likely encourage the Federal Reserve to raise its benchmark lending rate in the fourth quarter this year. In the meantime, low interest rates and subdued inflation will continue to support consumers’ spending power and will underpin a respectable pace of economic growth in the months ahead.

U.S. employers added 223,000 jobs last month, including 213,000 positions in the private sector. Most private-employment sectors accelerated hiring in April from the prior month, a trend exemplified by the creation of 45,000 construction jobs following staff cuts in March. Warmer weather allowed developers to initiate several projects, elevating multifamily development from its already strong pace, and sparking additional office, retail and lodging building. Professional and business services employment also grew by 62,000 positions in April; workers have been added each month for the past five years. Manufacturing payrolls have been flat for the past two months as exports were curtailed by the stymied West Coast port activity and the strong dollar. However, rising factory orders may lead to increased hiring.

The U.S. labor market is tightening, drawing down the overall unemployment rate to its lowest level in nearly eight years in April, to 5.4 percent. The underemployment rate that counts part-time workers seeking full-time positions continued to tighten, slipping to 10.8 percent, also a post-recession low. A shrinking pool of the unemployed, however, has yet to translate to substantial wage growth, with the average hourly wage in the private sector up a nominal 2.2 percent year over year through April. Wages have grown an average 1.9 percent over the past two years, but a faster pace of growth will slowly manifest over the coming year.

Impact on Commercial Real Estate

Retailers created more than 12,000 positions in April, about half of the total recorded in the preceding month. The retail sector still has not received a significant bump from the lower gas prices that have persisted throughout this year, although a recent increase in credit-card debt suggests that consumers may be loosening up. Despite the missing surge in consumption, the retail sector continues to log solid performance, with U.S. vacancy forecast to tumble 60 basis points this year to 6.0 percent. Completions will total just 47 million square feet and will be inadequate to meet retailer needs, so an upswing in development may finally be forming.

Steady employment gains are sparking the formation of new households and sustaining the vigorous performance of the U.S. multifamily market. This year, national vacancy will edge up to 4.8 percent as 250,000 new units marginally outpace net absorption. Approximately half of the construction will be in 10 key metros, which could face short-term vacancy increases, but other markets will see little slowing.

View original article…

Another CBM Original…

Property expenses like property taxes, insurance, and mortgage payments are all set in stone. There’s little to you can do to curb these outlays.

But what about vendor expenses? The reoccurring charges … Sweeping … Trash pickup … Landscaping … general ongoing maintenance … that are constantly eating away at your bottom line? With these fees, you’ve actually got quite a bit of leverage.

You’re not required to use a particular vendor. Nor are you bound to accept a certain fee. Everything’s up for grabs. If you’re not happy with the service your vendors are providing or the fees they’re charging, it’s time to reevaluate, reassess and renegotiate these services.

And when it comes to tackling this endeavor, there’s no better tool than a veteran property manager.

Here are four ways your property manager can help you reduce your property expenses.

Analyzing Property Expenses

When a new property manager takes over the management of your shopping center, they conduct a complete review and assessment of your property expenses.

As seasoned professionals with multiple properties in their portfolios, property managers are dialed into the going rate for shopping center vendor services. If a particular vendor’s fees are high, or they manage other similar properties with lower cost services, they’ll flag those charges for further discussion.

Similarly, properties managers will routinely audit the properties in their portfolio. If they notice a particular vendor’s fee has risen above competing vendors fees, they’ll flag the charge for further discussion with the landlord.

In both of these scenarios, the property manager will thoroughly investigate the vendor’s services and evaluate the benefits relative to the cost. More often than not, these investigations reveal the vendor in question is not only charging a premium, they delivering substandard service.

Negotiating With Vendors

If your property manager flags a particular vendor’s fees as excessive, they’ll suggest negotiating with the vendor to lower the fee. Additionally, if your manager is dissatisfied with the vendor’s service quality, they’ll address that issue as well.

On your behalf, your manager will reach out to the vendor and request a fee reduction. The manager may also request a site visitation with a vendor rep to illustrate where and how their services are failing to live up to expectations.

Most vendors would prefer to retain a client. As such they’re usually willing to reduce fees and pledge to improve their service. But not always…

Biding New Vendors

In some cases, existing vendor rejects a request to lower fees and fail to improve their service quality. This means it’s time to terminate that vendor and move on to another provider.

Fortunately, your property manager has a sizable list of qualified and seasoned vendors, culled from the portfolio of properties they manage.
Your manager can solicit bids multiple, make recommendations, and offer advice on which vendors makes the most sense for your property.

– Click here for a Case Study about a property manager dramatically reduced a shopping centers property expenses and significantly improved the quality of service.

Taking Advantage Specials Offers

Vendors sometimes offer special promotional discounts. Such discounts include new service signup specials, annual and seasonal discounts, and customer loyalty programs.

Here again, your property manager’s associated with a wide range of vendors works to your advantage. Your manager is dialed into all the special discounts and promotions vendors offer.

If a particular offer makes sense for your property, your manager will bring it to your attention. And these discounts and special offers can dramatically reductions in vendor fees.

– Click here for a Case Study about a property manager that slashed trash and recycling collection fees by nearly two-thirds.

Need Help Reducing Your Property Expenses?

Click here to visit CBM’s Services page and discover how professional property management services can help you reduce your property expenses.

Another CBM Original…

Ask any seasoned investor, and they’ll tell you…

The best investments earn PASSIVE income.

Well, believe it or not, your shopping center has the potential to be a lucrative passive investment, too.

How you ask? A fair question considering the tremendous amount of work that goes into managing a shopping center. In fact to many, a shopping center appears to be an incredibly time intensive investment.

There is, however, a solution. It can take the management burden off your shoulders and maximize your shopping center’s passive income potential: Professional Property Management.

Shopping Center Management: A Complex Undertaking

Managing a retail shopping center is an involved and complex process – managing multiple tenants, dealing with vendors, paying countless bills, staying on top mortgage payments, paying property taxes, insurance payments, and on and on…

When tasked with managing a shopping center, you’re constantly pulled into the fray, forced to deal with a myriad of unforeseen problems, disputes and emergencies.

In this light, your shopping center appears to be the exact opposite of a passive investment. It can feel like, if not actually become, another job.

Turning Your Shopping Center a Passive Investment

But it doesn’t have to be a grinding slog or become another job that consumes your already overwhelming schedule.

Enter professional property management.

Here’s what property management can do you:

  • Oversee day-to-day management – deal with maintenance issues, tenant “emergencies” and the like
  • Stay on top of maintenance – oversee sweeping, trash removal, general upkeep and large scale projects
  • Stay up-to-date with accounting – make sure rents are collected and applied accordingly, bills are paid and everything is properly recorded and documented
  • Stay abreast of condition in your marketplace – monitor rental rates, rising and falling area vacancies and legislation effecting retail use trends

Instead of agonizing over these difficult and time consuming tasks, hand them over to a qualified professional.

Harness the True Passive Income Potential of Your Retail Shopping Center

Tired of struggling with managing your shopping center?

Click here to check out CBM’s services page and find out how professional property management can maximize your shopping centers passive income potential.

By Globe St. Wednesday, April 29, 2015

Merchandising Has Replaced ‘Filling Space’

TUSTIN, CA—No longer desperate to fill vacant square footage, retail landlords nationwide are developing sophisticated merchandising strategies to craft the ideal tenant mix for their centers, Coreland Cos.’ president Chris Hite tells GlobeSt.com. We spoke with Hite about some of those strategies and how they help landlords remain competitive in the retail sector.

GlobeSt.com: With occupancy levels so high in many major markets, where should landlords be focusing their energies to increase returns and enhance value?

Hite: You have to be looking critically at all of your tenants, and in particular, actively reviewing tenant sales. Ideally, landlords should be receiving sales figures from their tenants, and if not, they should be putting that requirement to report back into their leases as they negotiate renewals. The improved economy has restored stability. We can now begin to analyze tenants from a content and operational perspective. We can ask ourselves: are they doing a good job of driving sales and traffic?

Naturally, landlords want to reach a level of stability so that energies can be focused on raising rents as the primary driver of returns. To that end, it is also important to strategically manage pre-negotiated lease options. Be ahead of the curve. It might behoove you to let those options lapse. Take a hard look at the operational piece. What sort of things did you give away in the downturn that you now want to take back? Did you give anything in terms of CAM caps or other things that are putting downward pressure on your triple-net reimbursements? All of this goes to NOI just as rent does.

GlobeSt.com: How does having a great merchandising strategy enhance a shopping center’s tenant synergy?

Hite: We’re no longer talking about just filling space. Merchandising is a way of crafting your tenant mix—a way of figuring out which tenant needs to be next to another to enhance synergy. For example, you might have a destination tenant that doesn’t need to be front-and-center. That tenant can be relocated to free up space that would allow you to enhance a food area or group similar services.

We’re currently working on a center in Denver that had a grouping of mom-and-pop local shop space in a prime location. We successfully relocated all of those tenants into other spaces and we’re in the process of rehabbing the vacant space to accommodate a national specialty grocer. That’s the kind of creative thinking today’s owners should be focusing on.

View original article…

By Bisnow, Monday, April 27, 2015

Investors Dig Deep for Retail

Investors are digging deeper than ever for OC’s available retail properties, including smaller properties with strong shadow anchors—and owners are eager to position their properties for sale.
Investors Dig Deep for Retail

Avison Young principal Keith Kropfl and colleague Michael Ganz recently repped the buyer of the 30k SF 11100 Garden Grove Blvd in Garden Grove, Santa Ana-based Red Mountain Retail Group, as well as the seller, Bella Vista-based Gallinas Properties. Keith tells us the property was a challenge to lease because it wasn’t in a vacant, shell condition. “With Office Depot going from occupying the entire building to downsizing, it was important to help potential tenants envision the finished product,” he explains.
Investors Dig Deep for Retail

During the escrow process, Keith and Michael negotiated a new 15.8k SF lease with Office Depot. Though downsizing, the retailer wanted to remain in the location, an infill space in a densely populated area. The remaining space, totaling 14k SF, was leased to East Seafood Buffet. Dating from 1996, the property is adjacent to Costco and across from Home Depot.
Investors Dig Deep for Retail

The market for retail-oriented lending in OC is also robust, PCCP’s Michael Hoyt tells us. PCCP recently provided nearly $9M for the recapitalization of the 535k SF Buena Park Mall in Buena Park, on behalf of the property’s owner, Coventry Real Estate Advisors. “We’re seeing continued demand for this type of loan product, especially in deals where a fresh capital injection is required to execute the business plan.”
Investors Dig Deep for Retail

Buena Park Mall is within an infill location in north Orange County that enjoys a site adjacent to the Knott’s Berry Farm theme park. The property is 92% occupied, with major tenants that include DSW, John’s Incredible Pizza, Krikorian Theater, Ross Dress for Less and Olive Garden, among others.

view original article…