Team Weston Commercial Real Estate Blog

Cleveland, Ohio, July 1, 2011:  “Great space at a great price,” says Chris Kiely, Business Development Director for Weston Inc. “If you are looking in this size range, take a look at this unit – it’s clean, functional, and wide open.”

With almost 17,000sf, the facility has 2 docks, 16.5 clear, and full sprinkler coverage. There is full access to active rail at this property. Located near the intersection of Route 91 (Darrow Road) and I-480, you can easily get where you want to go in no time.

This industrial warehouse space is owned by Weston Inc., and you can rest assured knowing that you are being taken care of by a reputable landlord that has been in the business for over 35 years.

About Weston Inc: Today Weston owns and manages industrial properties, which serves approximately 450 tenants in over 75 projects in the Greater Cleveland real estate industry and across the country.  For more information email Chris Kiely or Tim Breckner at Weston Inc.

Cleveland, Ohio, March 8th, 2011 – Weston Commercial Real Estate is pleased to announce the availability of Crossroads Distribution Center at 22801 Aurora Road in Bedford Heights, Ohio. The 75,000sf unit is clean and ready for occupancy.

“This facility is ideally suited for warehousing, distribution, and manufacturing”, says Chris Kiely, Business Development Officer for Weston. Our ability to work with tenants to achieve their facility goals is a key reason why tenants choose Weston, not only in Northeast Ohio, but across the country.”

The building features 12 fully-equipped docks and 20’ high ceilings. There is office space available, and plenty of trailer storage and parking. Located at the crossroads of I-480, I-271, and Rt. 422, the property is a short commute to Cleveland and its surrounding highways. In summary, the property has all of the right features for a distribution company to move in and begin operations.

About Weston Inc: Today Weston owns and manages industrial real estate properties, which serves approximately 450 tenants in over 75 projects in the Greater Cleveland real estate industry and across the country. For more information log on to their website at www.teamweston.com or contact Chris Kiely at 440.349.9000.

Net Lease
Triple Net leases are most popular; tenants are responsible for their proportionate share of operating expenses at the property. The expenses include but are not limited to landscaping, snow plowing, parking lot maintenance, building maintenance and all mechanical and electrical systems; property taxes, and casualty and liability insurance. Tenants pay their own utility costs directly to the providers. In our definition of triple net, the landlord maintains the roof, structure, and below the slab but that varies from market to market. A double net lease is where the tenant pays only taxes and insurance, single net includes taxes only.

Gross Lease
This type of lease includes all expenses in the tenant’s monthly rent payments. In other words, the base rent and any expenses are included in their rental rate. Generally speaking, tenants are still responsible for their own utility payments. If the expenses at the building increase, the landlord must absorb the costs, whereas if the expenses decrease, the landlord gets the benefit. Sometimes taxes are left out of that equation.

Base Year LeaseThe landlord will get reimbursed for any expenses incurred over the mutually agreed upon base year, usually the year that the lease begins. For example, say the lease begins in 2010, the expenses for that year become the base and the tenant will have to pay nothing. The following year, if expenses increase, the amount of the increase will be owed by tenant. This helps the landlord achieve his return on investment goals.

For more information on Commercial Real Estate, contact Weston today.

It was Academy Awards night last night. The biggest players in the industry came out in droves to show off their talent and good looks. For myself in the commercial real estate industry, I see a lot of parallels between bringing home an Oscar and bringing home the big deal. The whole industry relates back to ours. There is lots of entertainment value in our business. Since all of us have been through what they have, shouldn’t we be nominated, too?

Take the King’s Speech, for example. This was a story of King George VI, who needed a little help before he made his grand speech. He rehearsed to the point of perfection, and everyone held their breath as he spoke. We can all relate to that. Practicing for the presentation of our lives. We get out the Power Point with the drawings, the budget, the tenant improvements, the canned marketing speech. Making sure every last little detail is prepared and wonderful. Polish polish polish. And the work pays off, just as it did for King George.

Black Swan was another one of the award candidates. Two top ballerinas compete for the same spot in the ballet. They consume themselves with their goal, and in their case stoop to levels of absurdity. Those of us in commercial real estate – haven’t we all been there? Haven’t we competed against another broker for the same deal? As an owner, we compete with other owners all the time via rent structure, deal value, and location of our property. Ok, maybe not to the levels that they did, but, we do what it takes to get the deal, don’t we?

And we can’t do our job in today’s market without a lot of true grit. We may not have to look like Jeff Bridges did in the movie, but we do carry around a 22, a catch 22, that is – business cash flow is low because we are not doing as many deals as before and because average rents are down, so we can’t fund purchases that way, but banks won’t give us loans unless we put more money down on the purchase than we ever have before. If you define grit, you can define the qualities that it takes to be in commercial real estate today: determination, perseverance, bravery, tenacity, fortitude, and courage.

Sounds to me like those of us in commercial real estate have been through everything that the characters in the Academy Awards have experienced. So shouldn’t we be nominated, too?

9300 Dutton Drive, Twinsburg

Cleveland, Ohio, February 1st, 2011 - Weston Inc. is pleased to announce the availability of its distribution warehouse for lease at 9300 Dutton Drive in Twinsburg, Ohio. The 6,000sf freezer is one of the many great amenities to this building.

“This facility is highly functional, well maintained, clean and ready to go. Weston is known for how well their properties are maintained, and this is one of the many examples,” says Tim Breckner, Business Development Agent for Weston.

The site is well-equipped with 12 docks and 1 drive-in. The ceilings are 25′ high, leaving plenty of room to rack and stack. It is high-image and freestanding with a quick commute to Cleveland and its southern suburbs. The freezer operates at 0 degrees and below. In short, this facility is in move-in condition for any food manufacturer and/or distributor.

About Weston: Today Weston owns and manages industrial properties, which 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.

During the holidays, some of the associates at Weston had the opportunity to tour The Cleveland Foodbank.  Along with myself were Suzanne Broadbent, Director of Sales & Marketing, and Mark Horton, President of Weston Development. We were visiting that day to deliver the food and monetary donations which Weston had collected in our fundraising effort this past holiday season.  Mark has a special relationship with the food bank, as he was the project manager when the new facility was built in 2004. The building has the distinction of being christened the first Green building in Cleveland by the US Green Building Council of Energy & Environmental Design.

Upon arriving, the three of us were given a tour by Alan ­­­­­­Fratus, the volunteer coordinator.  Sue and I were amazed by the size and capacity of the building, and all the food that it was able to house. In the 2010 fiscal year, the Cleveland Foodbank distributed a record-breaking 32.9 million pounds of food to more than 600 member programs in six Northeast Ohio counties. The building is spotless, from the kitchen to the warehouse, and ran with strict attention to detail.  As we walked, Alan provided us with some interesting facts. We learned were that with just one dollar, the food bank with its resources can provide 4 full meals for one person. With one dollar, they can purchase 15 cans of tuna, or 9 jars of peanut butter. It truly is a reflection of the motto displayed prominently in their entryway,” Grain by grain, a loaf; stone by stone, a castle”.  Even the gift of one dollar makes a difference in the life of someone who is hungry.

The Foodbank sponsors many volunteer programs aimed at corporations. On the day we visited, PNC Bank and Cleveland City Council were there assisting in The Backpack Program, wherein volunteers pack a backpack with enough food for 6 meals, and school personnel discreetly send it home each Friday with children who are in need of food over the weekend.  This is just one of the volunteer programs that the food bank offers.  Also, their state of the art industrial-sized kitchen prepares and delivers hot and nutritious meals daily for those in need and unable to leave their home.  The top floor of the facility holds a conference area large enough to host fundraisers or large-scale meetings.

As we at Weston, a Cleveland Commercial Real Estate company, look into volunteering our time to this wonderful and worthwhile cause, we would like to extend our heartfelt gratitude to all of our friends and associates who assisted us in our holiday food drive.  It was a success due in large part to your generosity and caring. We thank you sincerely for your support.

~Written by: Kacey Shea of Weston Inc.

Quote from the Cleveland FoodbankExterior of the Cleveland Foodbank

The old saying, “Cash is King” has never been more important than in the current economic conditions we are experiencing.  “OPM” (Other People’s Money) is another popular phrase that every real estate investor should consider utilizing to make every dollar count when entering a transaction.  The lesson from both expressions is to use the power of leverage. The article to follow illustrates how leverage can stretch the dollar to create greater wealth when investing in Real Estate.

The larger the pool of money the larger the investment one can make.  Lenders, equity investors (private and institutional) or individuals can be the vehicle to provide this pool of funds.  One word of caution is the cost of capital relative to the capitalization rate on the project. In the example below I am going to illustrate “The Power of Leverage” by using the same cost of capital, just to keep things simple:

An All Cash Buyer

Let’s assume an investor has $1 million to invest and buys a property that yields a 10% return and the investor pays cash for the investment.   The Net Operating income would equal $100,000 per year.

Dipping in to OPM

Now instead of paying $1 million in cash the investor obtains leverage up to 75% of the investment amount.  In this case that would be a loan of $750,000 and the investor would provide $250,000 in cash.  The cost of capital on the $750,000 for this case is 6%, and when amortized over a 20 year amortization period, the annual debt service on the loan would be $64,478 per year.  The net cash flow to the investor would be $35,522 per year, realizing a 14.2% return on your investment.  This is a 4% increase using leverage.

Now Comes the Fun Part

If you want to get even more creative you can add back in the principal amount you pay on the loan ($20,000-$25,000 each of the first 5 years of the loan) and now the adjusted annualized return equals roughly 22%!  This is more than double the actual return from paying cash for a property.

The initial criterion was to invest the $1 million dollars into real estate. Next, I showed you the benefit of OPM. Now, consider the purchase of multiple properties. If you buy a total of 4 properties and utilize leverage, a total investment of $4 million dollars will be realized versus $1 million paying all cash. 

This leads me to my final thought on leverage and the appreciation of assets.  Granted, today this is non-existent, but over the long term there is an appreciation factor realized.  Let’s assume a 3% appreciation factor for the above investments:  that’s a $120,000 in value per year on a $4 million dollar investment compared to $30,000 per year in value with the all cash example. 

OPM and Cash is King. Two very important expressions when it comes to real estate investing. In remembering the meanings behind the two statements and using the power of leverage, you can turn your good real estate deal into a great one.

Written by: Christopher J. Grobelny of Weston, Inc. a Cleveland Commercial Real Estate company.

Cleveland based Commercial and industrial real estate company Weston Inc. has been selected to develop a new state of the art facility for a nationally recognized healthcare company. Fresenius Medical Care North America, (FMCNA), based in Boston, is a major provider of kidney dialysis services and renal care products. Providing dialysis care services, education and support for Chronic Kidney Disease, Fresenius also manufactures and distributes a variety of dialysis products and equipment, including dialysis machines, dialyzers and other dialysis-related supplies. FMCNA is a wholly owned subsidiary of Fresenius Medical Care AG & Co. KGaA, located in Bad Homburg, Germany. The building will be leased and managed by Weston.

Weston Development Company is purchasing 3.11 acres of land from the City of Euclid, and has hired The M.E. Osborne Company as the design/build contractor for the project. The 10,750 square foot building will be built to Fresenius’ specifications and house over 25 employees. The ground-breaking is tentatively scheduled for November 2010 “We are thrilled to be chosen to deliver this project for Fresenius”, said Mark Horton who will spearhead the project for Weston. “Our experience in healthcare development, coupled with the expertise of the M.E. Osborne Company, will make this an exciting addition for the City of Euclid.”

 “Mark Horton’s past experience as Project Manager on healthcare facility projects such as Summa Health System’s Cardio/Pulmonary Center in Akron, Ohio  made choosing Weston Development a natural choice for us”, said Bill Popken, Senior RE manager for Fresenius. “We have every confidence that our newest facility will be exactly as we envisioned.” 

About Weston

Weston owns and manages a real estate portfolio of more than 12 million square feet in 10 states. Established in 1972, the company today has offices in Cleveland, Ohio, and Louisville, Kentucky.  They maintain strong relations with over 450 tenants nationwide.