Top 10 Most Frequently Used Commercial Industrial Real Estate Terms

Posted on April 18, 2013 by admin

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The language of commercial industrial real estate is a dialect unto itself. Unless you have a need to speak the language on a regular basis, the terminology can be as foreign to you as speaking in tongues. In an effort to help translate, below are definitions for the most often used words when you are considering signing a commercial real estate lease.

Lease Rate – This is quoted as the annual cost per square foot of a commercial industrial real estate location. For example, if the lease rate quoted is $5.00 per square foot and the size of the warehouse is 10,000 square feet, then the rate is $5.00 x 10,000 square feet, or $50,000 per year. Divide $50,000 by 12 to get your monthly rate of $4,166.67.

Base Rent – The minimum rent of the Lease Rate, net of Tenant Improvements.

Triple Net Lease – Many times the Lease Rate is quoted as a triple net lease, or, for example, $5.00 per square foot NNN. This means that the lease rate is quoted net of taxes, insurance, and Operating Expenses. Some lease documents refer to it as Additional Rent. In the case of the example above where the monthly rate is quoted as $4,166.67, there are additional costs on top of that to cover for the net charges. This can potentially be beneficial for a tenant because if the landlord can get their operating costs down during the year, the savings will be passed along to the tenant.

Gross Lease – This is a lease where the Net Charges, or Additional Rent, is built into the monthly lease rate, so the tenant ultimately pays a flat sum of agreed upon charges.

Utility Costs – Although we all know what utility costs are from home ownership, it is a lease standard for a tenant to pay the utility costs directly to the provider. It is aside from Additional Rent and Operating Expenses.

Lease Term – This is the length of time that a tenant is legally bound to pay rent. Most landlords prefer a longer lease term. And, the longer the lease term, the more negotiating power there is for the tenant.

Lease Agreement – A legally binding agreement between a Landlord and a Tenant where the Owner or Lessor gives the right of possession to a Tenant or Lessee under mutually agreed upon terms.

Operating Expenses – The costs associated with running commercial property. The expenses may include but are not limited to real property taxes, property insurance, landscaping, snowplowing, building maintenance, and all mechanical and electrical systems. As discussed above, tenants pay their own utility expenses directly to the provider. Refer to your lease for a full and complete description of everything that a lessee is responsible for.

Pro-Rata Share – This is the proportionate share of the building that the tenant occupies and therefore the share of the Operating Expenses that the tenant is required to pay.

Tenant Improvements – Tenant Improvements (or Leasehold Improvements) are enhancements or work done to a space that is specific to a tenant’s use. A Lease Agreement may or may not have improvements included. Generally speaking, the costs of the improvements are incorporated into the monthly lease rate.

There they are. Confusing at times when you don’t have a need to use them. If you have any questions at all, please feel free to contact us at 440.349.9000 or http://www.teamweston.com.

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14 Tips to Letting Your Customers Know That Your Business Has Moved

Posted on April 3, 2013 by admin

Getting ready to relocate? Here are some quick tips to letting your customers know in advance about your new location, so that they have no trouble finding you:

2 Months Before Moving Day

1.  Order new letterhead – This can be done well in advance of the actual moving date. And if you have a relationship with your printer, they will probably store it for you so that you can pick it up after you relocate to avoid having to move it twice.

2.  Flag your website – Add a banner to your website with a notice about your move. Leave it a little bit obscure by saying, “New location coming soon” or “Our business is expanding…stay tuned for information”.

3.  Social media – Alert your customers about your impending move via your social media channels. Again, be a little bit vague with a Coming Soon message.

4.  Signage – Design signage for your new location, so that on the day of your move it can be seen by your customers. Also, post a sign in your current operation for customers to see when they stop by.

1 Month Before Moving Day

5.  Press release – Take some time to craft a well-written press release, or leave it to a professional. You can distribute it yourself or use a service like PR Web. If you circulate it yourself, send it to as many media services as you can.

6.  Postcard – Take time to design and mail a postcard to your customers with a “We’re Moving” description, the date of your move, and your new address.

7.  Add a note to your invoices – If you send out bills, post a note that is easily noticed on the invoice, or add a letter to the envelope with the details of your move.

8.  Place an ad – If the budget allows, place an ad in relevant places for your customers to see. Choose from TV, radio, or printed journals, whatever your customers will read.

9.  Social media – you can begin using a firm date in your social media posts.

10. Email – send an email to your customers with the details of your move.

Post Moving Day

11. Grand opening party – begin plans for a grand opening party to celebrate your new location. If you choose you can hand out collateral marketing items to reconfirm your new address.

12. Google+ – Claim your new location on Google+.

13. Social media – You can now shift to the We’ve Moved post.

14. Email – if you choose you can reinforce your move with another email. Or, perhaps it can be combined with the grand opening invitation.

Whatever the reason for your business move, following these tips will ensure that your transition is a smooth one, and most importantly, that your customers can find you. Putting your name out in the marketplace via social media and email announcements just reinforces your branding as well, moving your business onward and upward.

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The Dreaded Negative Feedback

Posted on March 20, 2013 by admin

Weston Inc.Weston prides itself on our reputation. Our reputation is everything to us, because without that, we would be a fly by night business that is not around for very long.  We are delighted by how many positive customer testimonials we get, many of which are viewable on our website. The widely held belief around Weston is that we have a good reputation within the industry; that we hold true to our word and we are known for that.

However, as much as I hate to admit it, yesterday I heard the phrase that every business owner dreads: Negative Feedback. And our belief in all that was good in the world came to a screeching halt.

Rob Namy and Chris Kiely from our office showed one of our vacancies to a broker and his client. It was a showing that we were looking forward to – we thought it was a really good fit for this user, and that the space would work perfectly for him.

They proceed with the tour, recounting all of the features of the building. As with each tour he gives, Chris began to talk about Weston and what kind of company we are, all of the good service that we give, and that we are the Best Landlord in Town. The client reacted immediately. “Best landlord in town? Worst landlord in town!” Chris and Rob felt like they got hit by a truck. The client went on to talk about his perception of Weston and how at one time our previous negotiations had gone awry.

Rob and Chris did a good job at assuaging him by discussing how the company has changed since his last encounter with us, but hearing that shocked them. We don’t hear a comment like that often, if ever. The dreaded Negative Feedback, something no business owner wants to hear.

Yet, here we are, presented with an opportunity. How do we change someone’s perception of us?

I want to tell him that Weston has made and continues to make improvements since that moment in time. I want to say that we continually focus on customer service, and we are extremely responsive to customer needs. I want to tell him to look at all of the positive things that people say about us on our website. That we partner with our clients and work together to keep their occupancy costs low. I want to add that we have multiple space options which allow us to accommodate a wide variety of tenants and their expansion needs. That we are a full service real estate provider – if we don’t own the product, we will go out and buy it for the right client. I want to tell him that we have helped thousands of businesses across the country solve their commercial real estate needs, and we can help him, too. While the lease it important to us, what matters most is our relationship with our clients.

I want to tell him to give us a second chance. Do you think he will?

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Love is in the air at Weston for Valentine’s Day!

Posted on February 12, 2013 by admin
Weston Inc., leader in Cleveland Commercial Real Estate at http://www.teamweston.com

4595 Van Epps in Brooklyn Heights, OH

For the month of February, Weston is featuring one of our facilities that we simply adore: 4595 Van Epps Road In Brooklyn Heights, Ohio, is a 40,300 square foot warehouse featuring 4,600 square feet of office space with fresh paint, carpet, and new lighting. The warehouse is a beautiful bouquet of 5 docks, 1 drive-in, ample clear height, and the new T-8 lighting will brighten your day. The exterior of the building boasts plenty of parking and landscaping that blooms beautifully in the spring and summer.

The lovely village of Brooklyn Heights, Ohio has so much to offer. It is a unique combination of a small town feel with a thriving industrial area. It is nestled next to a lake that, according to area officials, is some of the best bass fishing around. Situated right at the I-480 and I-77 interchange, it makes travel to Downtown Cleveland and the airport extremely close and convenient. Many area conveniences such as shopping and restaurants are only a short drive away.

See what neighboring customer, Global Net Logistics, has to say about us: http://bit.ly/VRauCN. The building is priced to move, so if you are in the market for industrial space, contact Weston Inc. immediately to set up a showing.

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STOP! Are You Paying Too Much in Rent?

Posted on February 5, 2013 by admin

Stop! Are You Paying Too Much in Rent?

Signing a new lease is an exciting yet nerve-wracking time for business owners. It is a very large commitment to make – after all, the lease is one of the most, if not the most, expensive line item on your balance sheet. With a good landlord it is intrinsic to continually work at keeping rents as low as possible in order to pass on the savings to a net lease tenant. The following are some of the ways that Weston continues to keep rents as low as possible:

Relationship With Lender. The relationship that an owner has with his lender is an essential part of real estate ownership. A lender dictates what the interest rate will be for a particular property asset. If the borrower has a track record with the lender, if business has been done in the past and the loan covenants were fulfilled, if the reputation is there, then the borrower is more likely to negotiate a more favorable rate for his transactions. If goodwill is involved, all the better, because the tenant will become the beneficiary of the savings. Weston has a long standing reputation as a property owner and we fulfill our promises. In other words, we are the type of client that a lender looks for. As a result we get better pricing, are able to buy a building with better terms, and can turn around and make space available at more advantageous rates than our competition.

Reduction of Property Taxes. One of the largest component of operating expenses or additional rent paid by the tenant to a landlord is property taxes. Although real estate tax is an unavoidable expense that is levied by the county to property owners, Weston is very attentive and watches it carefully.  According to the tax law a property owner is allowed to appeal their taxes once every 3 years. Weston has procedures in place whereby once every 3 years, like clockwork, we start the appeal process. This requires us to hire an attorney, file the paperwork with the county, and appear in court to plead our case. It is a somewhat arduous process but we are diligent in our procedure. While the decision can go either way, you can bet that if we win, the savings are passed along to our tenants.

Reduction of Property Contract Service Costs. Another component of additional rent on a triple net lease is the contract services. This is the cost to operate and maintain the facility, outside of utilities. A triple net lease provides for landscaping, snowplowing, and other contract services that get billed back to the tenants on their monthly rent bill. If a landlord can negotiate good pricing on contract services, the tenant will realize the savings. Weston actively searches for the best contractor to do the best work at the best price. We challenge our contractors to find ways to do the work that we need at better than market rates. As a result we are able to save money for our clients.

Insurance. Property insurance also makes up some of the additional rent on a triple net lease. Although insurance is usually the smallest expense, a good landlord will give consideration to the associated fees. In order to keep the cost as low as possible, Weston takes our book of properties out to bid each year to ensure that we are guaranteed a fair price for the services that we as well as our lenders require. Also, because of our larger portfolio size, we are likely to get better pricing simply due to economies of scale.

I know what you’re thinking – this is just an attempt at shameless self-promotion! But actually that is not the case. We continuously strive to make ourselves better by negotiating better rates with lenders and reducing the operating costs of our properties. These savings are passed on to our tenants in our attempt to keep our base rental rates low and our triple net operating expenses as minimal as possible. Contact us if you have any questions or you would like further information.

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Leasing vs. Owning Commercial Real Estate

Posted on January 31, 2013 by admin

It’s the age old question for business owners: Should I lease space for my business or should I buy an asset to call my own? There certainly are some benefits to proprietorship, such as depreciation and pride of ownership. However, more times than not it is beneficial to lease. Here are 5 points to consider before making a real estate purchase.

1. The ability to reinvest your profits. This is pretty cut and dry. As a building owner, it is likely that your net operating income will not only go towards paying down debt but also the maintenance of your facility. And those repairs add up pretty quickly. Mechanical, roof, and parking systems can be expensive to sustain but a necessity to maintaining the building’s function and value. As a tenant you can take your company’s returns and reinvest them to grow your business while your landlord worries about building issues. And, in good years, you even get to put some of the profits into your pocket.

2. It will cost you more for repairs and maintenance than your landlord. And they will get the job done quicker, too. This is that pesky law of the economies of scale. This concept essentially states that as the amount of a good or service increases, the cost per unit decreases. With repairs needed every once in a while, your cost per repair will be much higher than that of the landlord. A larger landlord often has longstanding relationships with contractors from the maintenance of multiple commercial facilities all year long.  Additionally, since the contractor relies on the landlords business, all jobs become a priority, and get done quicker.

3. Structural reserve. This goes hand in hand with repairs and maintenance. Lender requirements usually dictate that money is set aside for structural reserve; however, if it’s not a loan obligation, it’s good security to have in place. This is calculated as a percent of the net operating income and used for larger, capital expenses such as roof replacement and parking lot work, items that the landlord is typically responsible for per the lease. Again, a good portion of your company’s profits must be put towards your real estate expenses, instead of reinvesting it into your business.

4. Finding tenants. If you own a facility and occupy a part of it, you are left with some empty space to fill. Chances are that you want or need the additional income. Depending on the market, it may or may not be easy to find lessees. Markets fluctuate, and it takes time and resources to secure tenants. In today’s economic situation, you are competing with many other building owners for occupancy and may not get the income you had anticipated.

5. Building management. This can be a full time job in and of itself, let alone simultaneously running a business. Fielding tenant calls, doing the accounting, collecting rent, handling that leaky roof and the toilet that won’t flush will all become a part of your daily life. As a building owner, be prepared to take on a lot of additional responsibilities. As a tenant, your landlord would most likely be responsible for day to day maintenance, depending on the lease.  With a landlord in place, you have less to worry about, leaving you with the ability to focus on the current operations and improvement of your company.

Depending on your goals, building ownership may or not be for you. Keep in mind how each of the above points will impact your business, both financially and operationally. Consider it carefully when making your decision whether to own or lease commercial real estate.

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Twinsburg, Ohio Freezer Space Available For Lease at 9300 Dutton Drive from Industrial Landlord Weston Inc.

Posted on January 9, 2013 by admin
9300 Dutton Drive, Twinsburg

9300 Dutton Drive, Twinsburg

Cleveland, Ohio, January 8th, 2013 - Greater Cleveland Real Estate specialist Weston Inc. is pleased to announce the availability of a free-standing distribution warehouse at 9300 Dutton Drive in Twinsburg, Ohio.

This high image building features outstanding amenities in Twinsburg’s premier industrial area. The building is well-equipped with 12 docks, 1 drive-in, and a 6,000 SF freezer maintained at 0 degrees Fahrenheit and below. The ceilings are 25′ high, leaving plenty of room to rack and stack.

“Our Dutton Drive location is highly functional,” says Tim Breckner, Business Development Agent for Weston. “This is the perfect location for any distributor or manufacturer, either in the food business or otherwise.”

About Weston: Today Weston owns and leases industrial properties, and serves approximately 450 tenants in over 75 projects in the Greater Cleveland Commercial Real Estate industry and across the country. For more information log on to our website at Team Weston’s website or contact Tim Breckner at 440.349.9000.

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WESTON BUILDERS IS DOING DEALS

Posted on November 13, 2012 by admin

Cleveland, Ohio, November 10th, 2012— Weston, Inc. announced today that it has formed a new entity, Weston Builders, LLC.  In discussing this new venture, T. J. Asher, CEO of Weston Inc. underlined Weston’s continued need to expand its business opportunities, particularly in the multifamily residential industry it has forged into. He explained that Weston Builders primary focus will be on Low Income Housing Tax Credit (LIHTC) renovation work, the senior living industry, and higher education student housing.

“This venture is a natural progression for us,” Asher says. “It makes complete sense. We have the staff in place. We have long-standing relationships with our lenders so that we can get deals done. And, we have a great reputation in the marketplace.”

Mark Horton, President of Weston Development, will head up this effort, supported by Chris Gellin, formerly of Merit Enterprises, the building arm of Associated Estates, Inc., as Vice President “You would be hard-pressed to find  two people with as much combined experience as Mark and Chris”, Asher adds.

Gellin defines the strategy for the future growth of Weston Builders as “practical”, referencing its first project as a key example. The Residences at Carronade in Perrysburg, Ohio is a HUD financed ground up construction of 108 residential apartment units. Described as “upscale, yet affordable” the second phase of this complex has an anticipated groundbreaking slated for April, 2013.

“We have standing relationships with subcontractors and an understanding of Low Income Housing Tax Credits,” Gellin adds.  “We also have a network of lenders and financial institutions.”

As to why he has decided to jump on board with Weston, Gellin proudly adds, “Weston’s reputation is unsurpassed.  It’s a pleasure to be part of this team.”

Weston Builders will be introduced at Booth # 20 at the  Affordable Housing Finance Live  Conference in Chicago, November 14-16.

Weston is one one of Northeast Ohio’s largest privately-held industrial building owners and developers with more than 400 tenants in 10 million square feet of space in 10 states. Founded in 1972, it is a second generation commercial real estate business led by the Asher Family.  For more information about Weston, log on to www.teamweston.com.

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What I Did on My Summer Vacation

Posted on August 24, 2012 by admin
Rob Namy, Senior Vice President for Weston Commercial Real Estate

Rob Namy, Senior Vice President for Weston Commercial Real Estate

Weston Senior Vice President Rob Namy was buoyed by his recent summer vacation. However, anyone that know him knows that it was not a typical beach getaway. Rob has been involved for several years with the organization known as MedWish, and his vacation was spent in El Salvador on a humanitarian effort to provide personal and medical care and hygiene items to the people of this under-developed country.

MedWish International is a not-for-profit organization committed to re-purposing medical supplies and equipment discarded by the healthcare industry. Their objective is to provide humanitarian aid in developing countries to save lives and reduce waste in order to save our environment.  Rob has been a volunteer for 8 years, going on humanitarian missions every year with different groups, or ‘brigades’ as MedWish calls their aid groups. The groups are composed of doctors, nurses, teachers, and everyday people with the desire to help in any way they can. Rob says the experiences he has had with MedWish have been some of the most enriching he has had in his life. “To be able to spend time with these people just listening to their problems and knowing that you are helping to fulfill their needs, both basic and medical, is an experience beyond words”, said Namy. “I look forward to these brigades every year.”

MedWish relies on donations from individuals to make these missions possible. Rob, along with 40 other volunteers,  brought along hundreds of pounds of first aid and hygiene items donated  by kind individuals to give to the 1,500 people they saw there.  Hundreds of humanitarian aid workers  rely on MedWish to fill their suitcases to fulfill important work in remote Peruvian jungles, resource-scarce African villages, Southeast Asian orphanages and earthquake-battered Haiti. On their first day in El Salvador, the 2012 brigade treated 300 patients in their field clinic. It is truly staggering to realize that this is the only medical treatment that most of these people will receive all year. 

If you would like to learn more about MedWish and their incredible humanitarian work, contact Rob at rnamy@teamweston.com, or please visit their website.

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Weston Introduces New Marketing Campaign

Posted on June 25, 2012 by admin

Weston Inc. FOR IMMEDIATE RELEASE

Cleveland, Ohio, June 14, 2012—One biography is about a night fisherman, the other about a man in love with his dog and his Harley and still another about the author of a soon-to-be-released novel about the Lake Erie Islands.  These are but three of the revelations in Weston’s new eight-part, tenant-focused marketing campaign.

The campaign highlights eight Weston tenants unveiling details about what they do outside of the office. 

“We could have promoted the usual bricks and mortar, but we recognized that concrete is not what this company is about” says Suzanne Broadbent, Weston’s Director of Sales and Marketing.  “We have always been about people.  Marketing buildings without revealing the personalities in those buildings is just not us.  This puts our best face forward in the truest sense.”

The tenants responsible for putting a face on Weston agree.  Most lauded Weston for being personable, acknowledging their friendship over the years with their leasing agents.

Yet, even the folks at Weston were surprised by what their tenants revealed.  Who knew that the music producer was out fishing on Lake Erie into the wee hours the night before?  Or, that the corporate executive spends hours creating a headboard for his daughter and roly-poly toys for her newborn?

“As the campaign came together, we were drawn by these stories,” says Broadbent. “And, she says with a smile, “we thought we knew these tenants well,” she adds.  “There’s something about the honesty of the interviews that makes this very appealing.”

The campaign will be introduced as a business-to-business application, taking its place alongside other Weston collateral materials at meetings and presentations.  Postcards will be distributed to potential customers to give them a better understanding of Weston.

“We are hopeful that this will set us apart from every other company that leases space to faceless clients. That is not Weston.  This is us. This is what we’re about.”

About Us: Weston is one of Northeast Ohio’s largest privately held industrial building owner and manager with 400 tenants in 10 million square feet of space in 10 states.  Founded in 1972, it is a second generation commercial real estate business led by the Asher family.

For more information about Weston, log on to http://www.teamweston.com.

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