Questions to ask a commercial broker before buying

If you are interested in purchasing Commercial Real Estate here in Las Vegas you may define it to include office buildings, strip and retail malls, restaurants , free standing buildings, manufacturing and industrial to name a few.

It’s important when you think about buying that you ask these questions and gather the following information from your broker. If you’re working with a savvy and experienced commercial broker than they will already know to get these things for you on any property you may be interested in.

Many commercial buildings are leased, so you would want to ask for a rent roll and copies of the current leases. What a rent roll tells you who the lessees are, how much rent they pay so you can evaluate the current cap rate.
The leases will give you information about whether they contribute to the common area expenses, what the terms of the leases are and when they expire among other things. It will also talk about tent increases and if the annual rent increases are based on a percentage or on the Consumer Price Index (CPI).

Ask for a pro forma, which is a document that details all the expenses and income associated with a building. The income should match the total rents and fees indicated in the leases. Expenses will include anything the landlord pays to maintain the building and keep it rented. These will include common area expenses, such as electricity and maintenance of the grounds and parking areas. It may also include trash removal, a repair budget and a number that accounts for the vacancy rate. The bottom line will show the net operating income, or NOI. You or your accountant will need this number to calculate the return on your money and, hence, the buildings profitability
If there is not a property management company in place and is managed by the owner, you also want to make sure that if you plan on incurring that expense you make any adjustments to your profit line accordingly.

It’s important also to let your agent know if you plan to use the property for personal use and if so what kind of business you would plan to put in there so they can make sure no special use permit, variances or zoning issues may occur.

Also be sure to check with the cities planning and zoning department for any proposed projects around the immediate area to ensure that the building your considering purchasing will not lose any value.
It is always best to be represented in a commercial transaction and you should always check the broker your considering hiring references and reputation.

Please call me anytime, Id be happy to work with and am never to busy for you or your referrals . You can also visit my website to receive a free list of any commercial properties that may fit your needs and I will send you that list within 24 hours of everything available valley wide and would be happy to represent you.

Jennifer Weinberg