Need to Figure Out Market Rents? Here’s How

If you’re considering a real estate investment, you’re probably asking yourself what the market rents are for a given property. So, how do you figure out the rental projections for a given market?

A rent study should answer that question and give you the tools you need to make an educated guess of where rents will go.

What is a rent study?

A rent study is a spreadsheet of rent comps, either asking rents or effective rents, with some basic information such as square footage and class of complex. For simplicity, multifamily rents are usually divided into “A”, “B”, and “C” class properties, and square footages can generally be found on or

How do I conduct a rent study?

To start, determine the market or trade area that you want to study, and make a spreadsheet of various apartment complexes in the trade area. Add columns for beds/baths, SF, rent, and class of complex. You may also want to have a column for amenities, such as clubhouses, pools, and walking trails.

Now go online and see what are the asking rates for each of these units. With square footages, sometimes various websites will give you a range—I usually take the average of the two numbers in the range. Be wary of outliers! Sometimes “executive” or furnished units will throw off your numbers, but be persistent.

You can also conduct the rent study by phone. If you’re calling, you will still want to put your spreadsheet together and populate it with as much online information as possible. I always recommend being honest: Tell property managers you are conducting a rent study, and offer to send them a copy when it’s finished. (You should do this, not only to avoid being a liar, but so they will help you with comps next time.)

I usually confirm rents and basic rental details—and ask them anecdotally how many calls and showings they are receiving. How strong is demand? You might make a column where you note that although a given complex is asking $1.50/SF for its one-bedroom units, the manager gets many more calls for two bedrooms than for one. That is useful!

Once you have a meaningful compilation of rent comps, it’s time to turn it into a rent curve. I usually select the rent/SF and SF of the units in a given class (A, B, or C), and add a logarithmic trendline to those numbers. Then, I project forward a few hundred points and backward a few hundred points. This will give you a nice smooth curve that looks suspiciously like the ones from economics class (these are demand curves after all). Now you can match the units in question with their class peers on the graph, and use the information collected to estimate the market rents.

Congrats! Now you have a completed spreadsheet that looks like the example here:  Download the Example Apartment Rent Study Here

And instead of guessing, you can base your projections on hard numbers. You may also be able to find some real anomalies in the market—undermarket rents—and some diamonds in rough. Good luck!

Copyright (c)2020 This post originally appeared in Jonathan Aceves’s blog and is republished with permission.

Downtown Market Report w/ Covid-Related Data Analysis

We’ve just released special edition of our 1st Quarter Downtown Market Report.  As commercial brokers, we have access to a powerful tool called that allows us to analyze anonymous cell phone and credit card data over time.  Using this data, we were able to compare the last quarter to Q2 2020, when Covid was first really beginning to have an impact on the local economy.  We found the information fascinating and hope you will too!   Below is an expert from our greater Downtown Market Report:

To state the obvious, this represents a unique time in our nation’s history. We’ve all been affected by Covid in one way or another. Our city has had to weather its fair share of challenges as well. As our nation and city awake and even begin to hit their stride again, we thought it an apt time to analyze the trends related to Covid in the city of Augusta in particular. Please note that while we admittedly aren’t data scientists, as commercial brokers, we are regularly having conversations with those most affected by the pandemic, small business owners. We also have access to data that most others do not, so we thought we’d share what we could. To do so, we used, a highly specialized consumer data tool that uses anonymous credit card and cell phone data, and compared the first quarter of 2021 to the second quarter of 2020 (one of the times of peak Covid impact). Let’s dive in!

In looking at the data, the number of consumers alone is a telling number, going from 123K last year to now 200K, a nearly 63% increase. The estimated number of visits ramped back up even further, going from 233K to 440K, a nearly 89% increase. (Of course, keep in mind this doesn’t account for seasonal activity changes.) The hourly visit trends reflect this, as you can visibly see the number of visitors making appearances in downtown storefronts being cut in half due to Covid in what are typically peak consumer hours. The “gold” visits trend line shows the visits that took place during Q2 of 2020. The uptrend coming out of the initial Covid shutdown is clear. It’s easy to gloss over data, but seeing these numbers hover so low for so long is a reminder of the trauma that so many have experienced, both as business owners and individuals.

Placer only tracks patterns and can’t really speak to the amount of money that individuals are spending. The length of stay is a window into the amount of time that consumers spend in a store. We all know intuitively that how much time we spend in a location correlates with the amount of money we ultimately spend there. In looking at these numbers, it’s clear just how much shorter consumer visits were to downtown stores during the height of Covid compared to where they are now. As you make your way to the right side of the graph, the proportion size of the gold bar to the blue bar reduces, meaning consumers just weren’t staying as long in places of business last year.

As a commercial broker working and focused in the downtown area, I can say anecdotally that the amount of interest we’re seeing in downtown Augusta right now is really encouraging and feels akin to the fervor we were seeing prior to Covid. It has taken time, but here’s to hoping that we’ve finally turned the corner for good. Augusta is still just realizing some of its incredibly great potential, and I’m hopeful that 2021 can be that next jumping-off point toward greater things to come.

3 Things You Might Not Have Known About a Triple Net Lease

For investors looking for a long-term steady source of income with minimal risk, a triple net lease offers a promising prospect. Unlike double net leases, which require tenants to pay some degree of the rented property’s maintenance costs, real estate taxes, fees, and property insurance, a triple net lease requires the tenant to pay all of those costs, in addition to rent and utility bills.

Without a net lease contract, the landlord (or investor) would typically pay for the building’s insurance, taxes, maintenance costs, and any other fees while renting to tenants, so a triple net lease, also known as a “triple N”, typically benefits real estate investors.

But when considering whether to draft up a triple net lease agreement, there are some important considerations to keep in mind. In this article, we will take a look at three things you might not have known about a triple net lease.

1. You Need A Portfolio of Properties

To invest in a triple net lease agreement, you will typically need to lease at least three commercial properties, and preferably more. Ideally, you will want a single tenant to rent all of the commercial properties in your portfolio, such as office buildings, parks, shopping centers, restaurant chains, pharmacies, or banks.

Since you are investing in high quality properties with all the upkeep and fees taken care of, you can enter the agreement without fear of losing your investment. Particularly given that the normal term for a triple net lease agreement runs from about ten to fifteen years, with a steady rent appreciation throughout that time. So, you are pretty much guaranteed a return on your investments at minimum.

You do, however, need to have a minimum accreditation of at least $1 million. And this net worth accreditation does not include the value of $200,000 in income, or a primary residence. Interested investors without access to sufficient investment offerings can invest in a real estate investment trust, or REIT, that pairs smaller investors with other partner investors.

2. The Issues of Taxes

For investors whose properties are sold, it is possible to simply transfer the initial capital into a new triple N lease agreement without paying additional taxes. This is called a 1031 tax-deferred exchange, and allows the landlord to continue their holdings almost uninterrupted.

On the flip side, however, triple net lease agreement holders have been deemed passive investors by the IRS, which means that they are not considered to be an active business or trade. As a result, landlords with a triple net lease agreement may not be eligible for the 20% tax deduction that most landlords count as a benefit. Even if a landlord with triple net lease agreements puts in significant work to oversee the tenant’s financial responsibilities (property taxes, building insurance, and regular maintenance), and takes on some level of economic risk in signing this agreement, they are still considered passive investors, and thus may need to renegotiate their contractual terms if they want to be eligible for increased tax deductions- or find a way to record and prove that they put in at least 250 hours each year of active engagement.

For tenants, one drawback of entering into this type of lease agreement is assuming the burden of paying property taxes. If a community raises the tax rate annually, or raises appraisals on commercial properties, then the tenant may not have recourse to contest the higher tax prices. For this they would have to rely on the landlord, who may be less willing to spend time and money conducting a private appraisal to fight the higher appraisal. This is to the detriment of the tenant, who is left footing a higher bill.

If a landlord adopts this fully hands off approach to investing, however, it may backfire on them in the end. If the lease expires and the tenant chooses to move somewhere with lower taxes, then the investor will suddenly assume all responsibility for the property’s fees, including the higher taxes, while searching for a new replacement tenant. And if the property has higher prices than other similar ones, it may be difficult to find a tenant willing to pay more on a regular basis for a similar building.

3. Tenants Can Benefit Too

A triple net lease agreement places all the responsibility for the property on the tenant, from a broken pipe to ensuring that the property’s Wi-fi is up to speed. So, it may seem like it only benefits the investors who own the building. In fact, however, this is not the case. Since tenants bear all the responsibility for the property, they also benefit from having more freedom with the building. They can change and re-arrange the interior and exterior of the building to fit with the needs and aesthetics of their brand. That way, tenants representing specific companies can keep a consistent appearance across all the properties they manage. This is a huge benefit, particularly for tenants who may not have a sufficient amount of capital to invest in their own property purchases.

In addition, triple net leases are generally more flexible, allowing the tenant to take full charge of the property without the landlord overseeing daily operations, but with the reassurance that there will be a limit on tax and insurance increases during the course of the agreement. Since the tenant is absorbing the risk of the investor’s overhead fees, they can often negotiate for a lower base rental fee amount that works better for them.

A Sound Investment

Despite the possible risks, a triple net lease agreement is a widely favored interaction between tenants and landlords that utilizes the landlord’s investment capabilities combined with the tenant’s on-site assistance, regular maintenance, and payment of fees. For commercial real estate investors, drawing up a triple net lease agreement is a smart approach to investing in commercial real estate with minimal risks and a slow, gradual, long term appreciation of the initial investment capital.


Augusta Economic Overview

Why Augusta?

Augusta, Georgia, is enjoying a renaissance that looks to continue for the long term.

The city is recognized globally as a cybersecurity capital, thanks to the relocation of the U.S. Army Cyber Command headquarters to the region’s already significant military presence at Fort Gordon. Then there’s its well-deserved international reputation as a health care destination, a high concentration of diversified and advanced manufacturing, several key hubs for corporate professional services, and a young, diverse, educated and upwardly mobile workforce.

All of these are accelerating a growth trend years in the making. These impacts have been seen in the city’s downtown area, with several projects set to break ground, as well as in the greater MSA, including surrounding Columbia and Richmond counties on the Georgia side, and Aiken and Edgefield counties on the South Carolina side.

As a result, Augusta, Georgia, is not only an attractive destination for work, but also an affordable and fun place to live.

So, the question isn’t why, but why not?

Top Employers and Growing

The roll call of corporate names who make Augusta home is long and diverse: Amazon, EZ GO Textron, Cardinal Health, Graphic Packaging, Kellog’s, FPL Food, LLC, Augusta Coca-Cola, Kimberly-Clark, John Deere, Starbucks, SITEL, ADP, Unisys, Electrolux, Delta Air Lines, Taxslayer, Comcast, T-Mobile, Teleperformance, WOW Communications, and many more.

Augusta is widely known as one of the best locations for national and regional corporate headquarters, health care and life sciences, manufacturing, energy, customer service centers, major retail investments, and hospitality ventures. As a result, corporations from the U.K, Germany, Australia, France, Canada, and elsewhere have chosen to make a base here.

Cyber has more recently taken its place at the table, fueling much of Augusta’s economic activity in the past several years. In addition, Amazon has plans for two separate distribution warehouses off of I-20 in Columbia County; the first is set to open in July, and the second was announced in spring 2021.

Other key components driving Augusta’s economy include Augusta University, Georgia’s research university and home to the state’s medical school; Savannah River Site, home of the Savannah River National Lab; and Plant Vogtle, an expanding nuclear facility. These two large energy projects provide 12,000 and 6,000 jobs respectively.

As the region’s single largest employer, the U.S. Army Cyber Center of Excellence and Fort Gordon employ about 25,200 workers. Augusta University and its associated health system employ another nearly 8,000 people.

Manufacturing is a major growth sector; Augusta’s top 10 largest manufacturers employ about 5,600 workers. Meanwhile, other major corporations specialize in customer-service-based work.

Major Economic Drivers

Military/Cyber: Augusta is the home to the nation’s U.S. Army Cyber Command headquarters, located at Fort Gordon. The Cyber Command HQ oversees five regional cyber centers in Arizona, Hawaii, Germany, Korea and Kuwait, and conducts global operations 24/7 with 16,500 soldiers, civilian employees, and contractors worldwide, to operate and defend military networks and protect critical U.S. infrastructure against global cyber threats. Its affiliated Cyber School is also expected to train about 1,500 students annually. Fort Gordon, established in 1914, is home to the U.S. Army Signal Corps; its Signal School focuses on communications technology. It’s estimated that 150 military personnel separate from the military each month, and of these, 60% have a background in information technology or intelligence—a fact that contributes to Augusta’s strong labor force.

Health Care: More than 51,000 jobs are provided by health care alone in the Augusta MSA. The Augusta MSA is home to a regional hub for health care, with nine major hospitals serving 18 counties and beyond. Augusta University Health is Georgia’s only public academic health center; it features the region’s only hospital solely dedicated to serving children, the Children’s Hospital of Georgia, and it also serves as the primary teaching affiliate of the Medical College of Georgia, the nation’s 13th oldest and 9th largest medical school. University Health Care System has served the region for more than 200 years as a not-for-profit community health system; it is Augusta’s oldest and the state’s second oldest hospital. Doctors Hospital is a full-service emergency care facility and features the nation’s largest burn center. Additionally, Augusta is home to a Department of Veteran Affairs hospital, the Charlie Norwood VA Medical Center. Neighboring Aiken and Edgefield counties are served by Aiken Regional Medical Center, with 245 beds and 183 physicians covering more than 40 specialties.

Industry: A wide variety of industries call Augusta home, thanks to the Augusta MSA’s highly skilled and trainable workforce, combined with a business-friendly environment and available infrastructure. Advanced manufacturing, aerospace, and chemical manufacturing are among the region’s top sectors positioning themselves for growth, with names like EZ GO Textron, Cardinal Health, Graphic Packaging, Kellog’s, Augusta Coca-Cola, Kimberly-Clark, John Deere, Starbucks, Lockheed Martin Corporation and Occidental Chemical Corporation. Customer service has also made a name for itself here, thanks to three higher education institutions and a major military installation educating a workforce with the soft skills needed to staff a customer service center. Augusta Technical College, for example, has a Customer Service Certificate as part of its course offerings. Companies such as ADP, SITEL, Delta Airlines, Unisys, Comcast, T-Mobile, Electrolux, Teleperformance, and WOW Communications have customer service and managed service facilities in Augusta.

Education: Augusta is projected to add more than 14,700 jobs from 2018 to 2023. Educating the workforce locally will play an impactful role. Augusta University is the region’s only public research university and is a part of the University System of Georgia, employing more than 15,000 people and having 56,000 alumni. Paine College is a private, historically black Methodist liberal arts college. The University of South Carolina Aiken is consistently ranked in the Top Three of U.S. New & World Report’s Top Public Schools in the Regional College in the South category. Both Augusta Technical College and Aiken Technical College provide excellent technical training through multi-service, two-year educational opportunities in the areas of health, industry, business, computer, public service and more.

The Augusta Region’s Advantages

  • The Augusta-Richmond County, GA-SC MSA has been ranked #85 in the nation by Forbes Magazine for Cost of Doing Business, and #161 on Forbes’ list of Best Places for Business and Careers.
  • Augusta has been named by as “The Most Affordable Place in the United States To Own A Home.” Housing in Augusta is approximately 61% of the national average. Overall, the cost of living is about 82% of the national average. This translates into overall lower operating costs for companies, making Augusta even more attractive for new locations.
  • Southern Business & Development magazine named Augusta as one of the “Top Ten Places in the South With Plenty of Talented Labor.” The 1800-acre Augusta Corporate Park was also named by the publication as one of the “Top Ten SuperSites in the South.”
  • Corporations benefit from Augusta’s low cost of living, supported by:
    • Tier Two Job Tax Credits of $3,000 each year per new job created for five years
    • Low state corporate tax rate – flat 5.75%
    • Low state and local tax burden, below the national average, with local tax assistance/abatements
    • Low-cost utilities
    • Low union representation in manufacturing – only 2.7% state-wide
    • Competitive wage rates
    • Low real estate costs
    • Low transportation costs
  • Other competitive incentives for relocating and expanding companies include:
    • Available land
    • Well-trained and disciplined work force
    • Central location, equidistant from the country’s transportation center, Atlanta, and the country’s financial center, Charlotte, with easy access to I-20, I-95 and I-77, and the ports of Savannah and Charleston both less than 150 miles away
    • Infrastructure / grading assistance at the Augusta Corporate Park
    • OneGeorgia grants, where applicable
    • Enterprise Zone Job Tax Credit Advantages
    • Amendment 65 & 74 tax assistance
    • QuickStart training for employees at no cost
    • Investment tax credits
    • Retraining, corporate headquarters, R & D, ports & child care tax credits

Future Ready

  • Augusta is projected to add more than 14,700 jobs from 2018 to 2023.
  • Since 2010, Augusta has enjoyed more than $1 billion in new investment and has added more than 10,000 new jobs.
  • In 2020, 26 new projects totaling $3.9 billion in potential capital investments and 7,856 potential new jobs put Augusta on their short list for consideration.
  • Also in 2020, 11 new locations or expansions occurred, totally $244 million in capital investments and 587 new jobs in just Richmond County alone.




Copyright (c)2020 This post originally appeared in Jonathan Aceves’s blog and is republished with permission.

Industrial Basics – Why Care About Ceiling Height?

You’ve probably seen ceiling height called out in listings for warehouses and manufacturing buildings. But why should that number matter to you?


What is “clear ceiling height”?

  • “Clear ceiling height” is the height at which product can safely be stored on racking. It’s also defined as the height of a building from the floor to the bottom of the lowest-hanging item on the ceiling, such as sprinklers or HVAC ducts.


Why should ceiling height matter to you?

  • Warehouse capacity is determined by clear height. So, a tenant can increase the capacity of a warehouse by 10% to 25%, just by increasing clear height from 32 feet to 36 feet. After all, true warehouse capacity is how much product can be stored in a three-dimensional space—a measurement of volume (cubic feet) rather than area (square feet).


How have ceiling heights changed over time?


What impact do ceiling heights have on building operations?

  • A pallet of goods generally measures 64 inches, meaning that a building with 32-foot ceilings can stack between four to six pallets high. A building with 36-foot ceilings can provide between 10% and 25% more capacity. But the cost of the additional height has to measured against the cost of a larger building with lower ceilings—assuming that a user could actually make use of the higher ceilings.
  • Low ceiling heights affect how much inventory can be stored in a building, as well as what kind of equipment and machinery can be used or moved around in a building. Many manufacturers have equipment that requires high ceilings—think monorail systems to move merchandise for processing.


Can low ceiling heights be remedied?


What’s the takeaway?

  • During site selection, ensure the team you’re working with is thinking creatively in order to identify the space you need for your operations. Ceiling height is one of many factors that can help you maximize a warehouse’s full potential.



This post originally appeared in Jonathan Aceves’s blog and is republished with permission. You can read the original here. 

4 Reasons why you benefit from Exclusive Representation in Commercial Real Estate

In a commercial real estate transaction, a seller can leave a lot of money on the table if the buyer is well represented and they are not.  Worse still, the seller may look to the buyer’s broker for advice and mistakenly believe that they are being represented and receiving advice that is in their best interest.  How do you know if you need independent representation?  Every seller can benefit from having their own representation, and I will lay out a few reasons why below, as well as a few case studies.  

“Plans fail for lack of counsel, but with many advisers they succeed”   

A few years ago, an owner who we will name “Steve” owned an automotive shop on a busy downtown corner.  He was approached by his neighbor, who wanted to buy his building for what Steve believed to be a fair price.  Steve accepted the offer and closed on the property.  A few months later, he realized that due to the capital gain on the fully depreciated building, his taxes were nearly a quarter of the sales price!  Not only had he underpriced the building, but after paying off his mortgage, the burden from tax bill started a process which ultimately led to his bankruptcy.  If a good agent had advised him, they would have advised him of his tax implications, as well as making sure that the sale price was in line with the market.

About two years ago, a woman we will name “Sherry” owned a home in a downtown neighborhood.  Her family was growing, and she wanted to purchase a larger home.  She put an offer on a nearby home which was for sale by owner.  Neither buyer or seller had any real estate experience, and they used a form they found online.  Once the property was under contract, she put her home up for sale by owner.  Within days, a buyer’s agent brought her an offer on her home. Sherry wanted to make sure that the contract was contingent upon her closing on the other property, which the buyer’s agent assured her it was.  There were some complications with her loan, and the seller of the property she was buying refused to give her an extension—and she was forced to terminate.   When she asked the buyer’s agent about terminating the contract on her home, she refused, and said that they would sue for specific performance if she did not sell.  Ultimately, she was forced to sell her home under market value, and rented an apartment across the street.  If a good agent had been involved, Sherry would not have been forced to sell her home for below market value, and likely would be living right now in what she considered her “dream home”.

4 Reasons to have independent representation

  • Representation
    • The buyer’s agent has a duty of loyalty to protect their client’s best interest. Some brokers may attempt to practice what is called Dual Agency.  Dual agency is a slippery slope and frowned upon by most brokers.  Often what happens is that one party is treated as a “client”, and the other as a “customer”—meaning that client receives the duty of loyalty while the customer does not.  All these details should be clearly disclosed to both parties, and failure to do is an egregious license law violation.
  • Better Leverage
    • Another reason to have separate representation is for negotiating leverage. Commercial Real Estate agents, especially CCIMs, are trained to help negotiate the best possible price and terms.  If you are communicating any personal details to the buyer’s broker, then they have a duty to tell the seller—which may completely remove any negotiating leverage you may have had.  Think about it—any personal details which may make the Buyer think you need the money more than they need the property WILL be used against you.  Your exclusive agent’s duty is to protect those details, while working to tip the scales in your favor.
  • Pricing
    • If a buyer’s agent brings you an off-market offer on a property, how will you know if that price represents a fair market offer? Think about it—if someone is willing to go to the trouble to contact you, to do the due diligence and make an offer, could there be someone out there who would pay  a little more?  In my experience, off-market properties seem to sell for about 20% less than they might if they were properly marketed.  Your agent’s role is to make sure that you are priced in accordance with the market, and not leaving any money on the table.
  • Contracts & Due Diligence
    • Your agent should be familiar with the documents and amendments you are reviewing and will be able to advise you about their implications. They will be able to suggest language that would better protect you, or additional clauses to add. They should also remind you to talk with your CPA to determine what your tax consequences will look like.  You agent will also be able to help with due diligence items required by the Buyer—documents such as leases, tax returns, plats–as well as interfacing with government agencies for things such as permits, zoning details and environmental concerns.  They will also be able to connect with the appraiser, and hopefully give them what they need to appraise your property for the highest appropriate amount—something that a Buyer’s agent could not do.

We would love to hear from you!  Please comment below.   Have you ever been in a situation with an unrepresented party?  Or have you ever been in transaction where you lacked appropriate counsel? Do you have any horror stories from real estate deals where good advice could have made a difference?  

Additional Resources: 

SIOR – How to select a commercial real estate broker

Founders Guide – How to choose the right commercial real estate broker

Commercial Property Advisors – Choosing the right commercial real estate broker

This post originally appeared in Jonathan Aceves’s blog and is republished with permission. 

(c) 2020 Jonathan Aceves

What is a rent roll and how do you use it?

For commercial and multifamily investors, no two documents are more fundamental to understand an investment than the Rent Roll and the Operating Statements. We will be studying the rent roll, looking at some case studies, and hopefully improving our due diligence process.

So what exactly is a rent roll?

A rent roll is a list of the rental units of an income property, with some basic details essential for basic property underwriting.  It is one of the foundational documents needed to property understand a rental property.  

Basic Items contained in a Rent Roll Items.

Exact Information can vary by property type, but these are the most common:

  1. List of units
  2. Name of Tenant
  3. Rent amounts
  4. Beds/Baths
  5. Square footages of units
  6. Rent Per Square foot
  7. Prior Balances
  8. Market Rent
  9. Loss to Lease
  10. Lease Start/End
  11. Additional Fees
  12. Security Deposit
  13. Notes
  14. Date the Rent Roll was created

Rent Roll Uses

  • Loan Applications—When purchasing a property, a lender is going to want to see a proper rent roll.   You may have to create the rent roll if the owner doesn’t have one.  
  • Market Research—Are the rents low compared to market?  Is there an opportunity to raise the rents?  
  • Lease Expirations—Are there leases expiring over the next 30 days?   Are the tenants month-to-month or do they have long-term leases?
  • Rental History—Are there balances on accounts growing, or shrinking? Are there a lot of vacancies?  Do the tenants pay on time?  

How do make a rent roll?

  1. Example – Download the template at the end of this article
  2. Ask – If you are considering purchasing a property, ask the owner for the details.
  3. Find the Source Documents – Leases, County Records, etc.

Case Study

I received a call from an owner of a quadplex, who wanted me to study the property. I asked him to send me rent rolls and operating statements.  He didn’t have them, but sent me the leases and two year’s tax returns.   I put together a rent roll, and immediately saw issues.  First, his rents were $100 low compared to comparable apartments.  Second, three out of four of his leases were month-to-month.  Third, he had MAJOR collection issues—two of his tenants hadn’t paid rent in over six months, and all of them were behind.  These issues were immediately obvious from a review of the rent roll.  When I asked him about this, he got quite defensive.  He’d grown quite attached to his tenants, and wasn’t willing to evict them.  Obviously, it was going to be very hard to sell the complex in the condition it was in, and I advised him to deal with his tenants before selling the complex.  I often think about that owner because I’m not sure he realized the state that his property was in, and a quick review of a simple rent roll would have really helped him to prepare his property for sale.

We’d love to hear your stories and lessons learned about reviewing rent rolls from prior deals!  Comment below!  Also please share this with people you think may benefit from reading.


Click here for a Free Excel Downloadable Rent Roll and PDF Rent Roll Template.

Article from Jeff Rohde on Roofstock with an overview of the Rent Roll.   Article from American Apartment Owner Association on the basics of the rent roll.

This post originally appeared in Jonathan Aceves’s blog and is republished with permission. 

Evans Georgia Outparcel Market Report

Evans, Georgia is not only the best place to live in the United States according to Money Magazine, but also a great place to conduct business.  If you are looking to locate your business in Evans, here’s some information that may help you as you search for a location.

From 2019 to 2020, the price of an outparcel averaged almost $900,000.  The outparcels in our study ranged in size from .54 acres to 1.16 but averaged .92 acres.

An outparcel is defined as a small lot on the outer edge of a shopping center, usually reserved for later sale of fast-food or chain restaurant, also called a pad site.  Generally, outparcels are around 1 acre in size.  In theory, the price of an outparcel should have some relationship to fundamental attributes such as access, visibility, demographics, and quality of the anchor or development that it sits in front of.

Sites that had full-motion direct access to traffic had the highest sale prices per acre.   515 Mullins Crossing had the highest sale price (1.296M/Ac) in our study and sat on a signalized intersection in front of a Belk-anchored shopping center.

Access is another important factor.  Washington road is a thriving commercial corridor partly because it has a turn lane (or suicide lane) on most of its stretch from Downtown Augusta past Evans.  Many commercial corridors are seeing medians and concrete barriers installed, and this limits access to the other lane, and creates “dead zones” or pockets where there is not enough traffic to satisfy retailer’s requirements.   Many shopping center developers limit access to the main road and give outparcels access via an internal road structure.  The Mullins Crossing Outparcels are good examples of this.  This can be an issue for Quick-Serve Restaurants (QSRs) that need to get parking and a drive-thru on a small site—having two curb cuts can be a good way to get cars in and out and still have room for parking.

Another consideration for retailers is off-site utilities.  Many shopping center developers size stormwater and parking in such a way to allow the outparcels to be very efficient—not only saving them money in site costs but also allowing them to be very efficient and potentially fit on a smaller site.

Something to be aware of is residual value.  Many anchors such as Wal-Mart will place Covenants, Conditions, & Restrictions (CCRs) on their outparcels, which will impact the number of users that occupy the outparcel, which would negatively impact their sale value.  Another item to consider would be size—although your current user may be able to use a site smaller than .7, most others can’t, and will make finding another tenant a challenge should your current tenant vacate.

You can find our Evans Outparcel Report here..  Please let me know if you see additional details for us to add, and don’t hesitate to reach out to us with questions.   For developers—what trends are you seeing as you search for outparcels?   For users—what are common themes you’ve seen across the best sites that you have occupied?   We’d love to hear from you.  Thanks for reading!

This post originally appeared in Jonathan Aceves’s blog and is republished with permission. 

Industrial Basics – Roll-Up Door Considerations

If you are interested in buying a warehouse or industrial building there are a few critical items to familiarize yourself with. Roll-up Doors are a defining feature of  industrial buildings, and it’s important for users and  investors to know some the details regarding their selection, use, and construction.

What are different kinds of industrial building doors?  There are a few different types of industrial doors; overhead doors, roll-up doors, and scissor doors.   Here’s an overview with some pros and cons for each type:

  • Overhead Doors (Or Sectional Doors)–these doors fold or bend to open, and slide into an overhead track.  They don’t coil, and they may have multiple sections, like residential garage doors.  When these doors are open, they hang overhead in front of the opening.
    • Pros: Often the panels that make up an overhead door are much wider and thicker than the small slats of a roll-up door, and can be heavily insulated.
    • Cons: Because the track hangs in front of the door, they limit the ceiling height of a building, and are seldom used for industrial buildings.
  • Scissor Doors (or Scissor Gates or Security Grilles) open to the sides, like a mesh, and often function as security measure in front of a storefront or opening, and can be used as a movable fence.  Often these doors are closed during operating hours for air flow and visibility.
    • Pros: These doors are easy slide open, and don’t take up much space. You can also easily see through them.
    • Cons: Generally used as security gates, often in conjunction with roll-up doors, and not usually used by themselves.  They also are not insulated and don’t block the elements.
  • Roll-Up Doors (Coiling Doors).  These doors are series of slats in a coil that pull into a drum with an enclosed greased spring.  They can be insulated or non-insulated.  These are are the industrial doors that probably come to your mind: ubiquitous in self-storage facilities and warehouses.
    • Pros:  Dont’ swing out (maximize space in warehouse), open and close quickly, are difficult to penetrate, and when open provide clear and open visibiliy.  Roll up doors coil into a drum, and provide maximum use of interior space.
    • Cons:  More difficult to insulate as they roll into

What size doors do you need?  That generally depends on what size vehicles will be using the door, what size the loading dock is, and how high the materials are that you will be moving.  For loading doors, trailers tend to be 8′-8’6″ wide, so a 9′ door will accommodate a 8’6″ trailer, and 10′ high door should provide unobstructed access to most trailers.

What have been your experiences with the selection and operation of industrial doors?  Are you satisfied with your current doors?  Do you have a certain type or size of industrial door and have regrets or lessons learned?  We’d love to learn from your experience!

This post originally appeared on Jonathan Aceves’ Blog.

History and Overview of Downtown Augusta’s Olde Town Neighborhood

The Olde Town Neighborhood is located in Downtown Augusta, between 5th Street and East Boundary, and from the River to the Cemeteries on Watkins Street.  Originally known as “pinch gut” the neighborhood was originally built in 1737 as the original neighborhood of Augusta.  Almost the entire neighborhood was burned in the great fire of 1916, and most of the buildings date from 1917-1920.  Both Broad and Greene had streetcar tracks in between the lanes, which have now become linear parks.  The neighborhood has experienced a renewal in the past 10 years as demand for housing close to the urban core, coupled with great infrastructure and amenities has made it downtown’s neighborhood of choice.

One of the things that has made Olde Town so popular is the Traditional Neighborhood Design (TND).  Measuring about 4 city blocks by 6 city blocks, the neighborhood is easily walkable in 10 minutes.   Almost all the streets in Olde Town have sidewalks, and the median parks contain pet waste stations.  The streets are lined with trees, and almost all homes have front porches, and anytime you go out you will run into your neighbors. A short bike ride will take you anywhere in Downtown Augusta and the Medical District.

The buildings in Olde Town represent a wide variety of different styles, from Craftsman to Victorian, and the construction from that era is quite sturdy.  The homes are generally built on piers over crawl spaces, balloon framed, with thick framing and structural decking.  Many of the homes feature intricate woodwork and columns.

Olde Town is also an incredibly diverse neighborhood—of 991 housing units in 2018, 37% of them are single family homes, 44% are duplex-quadplex, and 19% are in apartment buildings!  Typical lots in Olde Town are quite narrow, ranging from 40-80 feet, with an average being 55 feet.  This contributes to an amazing diversity of residents, from young people to elderly, black and white, owners and renters, rich and poor.

Olde Town contains a number of wonderful neighborhood amenities.  Heritage Academy, a private Christian school located in the Historic Houghton Schoolhouse, is located on Greene Street.  The Fox’s Lair, where neighbors gather at the neighborhood pub, is located on Telfair Street.  Christ Community Health Services, a community health center providing medical and dental care, provides quality healthcare to the families in Olde Town.  The Savannah River is the neighborhood’s northern border, and moments away for kayaking and paddle boarding, with easy access to the marina and boat house.

Olde Town residents enjoy a strong demand for short term rentals.  Augusta is the home to the largest Ironman Triathlon in the united states, and Olde Town’s boat house is where the triathletes transition on their bikes.  Every year, triathletes fill the neighborhood, and residents line the street to watch the runners come down Broad and Greene Street.   Augusta is also home to the world’s premier golf course, and being a straight shot down Broad street to the course, Olde Town owners enjoy hosting golf patrons every April.