In the commercial real estate investment world, an investor will more often than not make a mistake or two. They might be subtle errors, but over time the costs can be compounded and the entire real estate portfolio can be affected.

At Investment Analytics Group (IAG), we can help you see the big picture and we are your partner. We can help maximize the overall performance of properties by bringing knowledge and experience in property management, leasing, lease administration, acquisitions, and due diligence, enabling us to develop and implement ownership solutions to achieve the objectives in operating and leasing property. If you have a distressed commercial real estate investment property or just want us to look at the performance of your property please contact us at your earliest convenience.

Below are some common errors that in almost every case the cause can be traced to a lack of knowledge about a few simple precepts that form the ground rules of successful commercial investments.

1. Failure to mind the balance sheet – There are four ways to make money in real estate: cash flow, appreciation, equity growth, and tax benefits. The operating statement shows just one of those – the cash flow. The balance sheet shows the other three.

Just as one adjusts rents and expenses to improve operating performance, the balance sheet should be managed to best utilize the assets. The key measure, contrary to popular belief, is not ROI (return on investment); it’s ROE (return on equity). These decisions also affect the speed of wealth creation and tax efficiency.

That’s three of the four or 75% of the sources of profit! If you don’t understand your balance sheet, sit down with an accountant and get a lesson in the basics.

2. Bad deals and bad partners – It’s a given that we are not going to be right every time. We’re going to wind up with properties that don’t perform as expected, or that the market direction moved against, or ones we just don’t like. As Warren Buffet said, “the first rule of investing is to not lose.” Learn to spot a losing position quickly and get out.

This is not to advocate abandoning an investment plan because of minor setbacks. Every project has them, and that’s where perseverance is required. But a deal that goes sour on several fronts at once is a candidate for the “learning experience” pile. Don’t fall in the trap of being “married” to a position. The support payments will swallow you whole.

The problem may not be the property, but the people. When problems arise in partnerships, especially those that started as friendships, things can get sticky and uncomfortable. Pain may be required, but misery is optional. If your partners are driving you crazy, or if you’re all crazy, exercise a little civility and be willing to call it over.

If a good buy/sell arrangement was not included in your partnership agreement, make your own. One solution: You could write down a number that you will either pay for your partners’ interest or accept for your interest in the assets. That’s the same way my mom made my brother and me divide the last pieces of our favorite pie; one cuts the slices and the other gets to choose his piece. It instantly ends any haggling or jockeying for position.

Close the deal quickly and move on. Life is too short.

3. Over-reaching- Swinging for the bleachers in high-risk, home-run-type deals that require more capital or expertise than you have is a sure recipe for disappointment, frustration, and can end in disaster. Before you start “thinking outside the box” make sure you know how things work inside the box.

It takes hard work and perseverance to achieve success in any field, and real estate is no different. In addition to property-specific plans, it’s a good idea to also have a “big-picture” plan of your investments–where they need to take you, how, and when.

As you increase your knowledge and capacity, the big deals will come, and you’ll know you’re ready when you automatically focus on the pitfalls before the rewards.

4. “Dirt-rich, cash-poor” – This refers to the situation of having more land than cash to cover it and is a common outcome for an investor who accumulates a bunch of properties that have nothing in common but their owner.

If you have multiple properties and are using the gains from some to cover losses in others and losing the battle, it’s time to get off the treadmill, despite the temptation to hang on. Go through your portfolio in detail. Identify improvements that you can make immediately and do them. Dump losers and anything that has needs that can’t be funded in the next year.

Be merciless. Look at it like cutting diseased branches off of a tree: Serious cases may require aggressive pruning to save the core. Then focus your energy and resources on creating maximum value in the remaining properties that fit your big-picture investment goals.

5. Not using local market knowledge – We all read the national media and trade magazines and get a sense of what the “market” is doing. But in reality, all real estate is local. There is no national real estate market.

There isn’t a ticker at the bottom of the screen on CNBC that tells me what my buildings are worth. Their value is determined by local market conditions, for example: rental rates, occupancy levels, competitive space supply, demographic trends, etc.

Our existing investments provide a window on performance and needs of that market that is a competitive edge over other investors. But it is only an edge if it’s used.

By systematically collecting just a few local demographic statistics (job growth, population growth and income) and property performance fundamentals, we can get ahead of the curve. We see trends coming rather than trying to catch the last one; we create our own opportunities and reduce our vulnerability to competitive projects.

About Investment Analytics Group
Established in December 2006, Investment Analytics Group (IAG) provides integrated commercial real estate advisory services to investors. Our core services include asset level due diligence, asset management, financial modeling, feasibility studies and other related advisory services.
For more information visit us at www.iagroupllc.com or contact us at 208.846.8476 or info@iagroupllc.com.

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When it comes to due diligence, commercial real estate properties are a completely different animal from residential properties in regards to assessing value. That may seem like stating the obvious, but it is easy to overlook the many details that come into play.

For commercial real estate, value is determined in an inverse proportion to the degree of risk inherent to the continuance and stability of the income stream from the property. And of all the commercial property types, perhaps none is more complex in evaluation than a multi-tenant property, either office or retail.

The function of due diligence is to verify, verify, verify.
One of the first steps in your due diligence checklist should be the tenants of your potential investment real estate property.

Comprehensive due diligence services are Investment Analytic Group’s specialty. The IAG team has performed due diligence on commercial real estate valued at more than $1.2 billion including retail, office, industrial, and multi-family properties across the United States. We guide the process, keep clients involved as much as they prefer and, most importantly, communicate with you every step of the way. Due diligence is a way of preventing unnecessary harm to either party involved in a transaction and quality due diligence contributes to superior returns. Whether analyzing office, retail, flex, industrial or multi-family properties, a thorough evaluation in the beginning helps the investor realize projected returns.

Tenants
Review and confirm the terms of all leases, paying particular attention to co-tenancy clauses, which are common in retail properties. These allow retailers to reduce the base rent, eliminate base rent and pay percentage rent based on sales, or terminate a lease when an anchor tenant or another identified tenant exits the property. Other items to take note of include “early outs,” which permit tenants to terminate leases in advance of normal termination dates, downsizing rights that allow tenants to reduce the size of the leased premises, tenant bankruptcies, and claims by a tenant against the landlord.

Require estoppel certificates from each tenant. This item usually is subject to negotiation between the seller and buyer as to the number of estoppel certificates required and, if less than all, from which tenants (anchors, occupants of more than a certain number of square feet). It also will indicate whether the seller is in default.

About Investment Analytics Group
Established in December 2006, Investment Analytics Group (IAG) provides integrated commercial real estate advisory services to investors. Our core services include asset level due diligence, asset management, financial modeling, feasibility studies and other related advisory services.
For more information visit us at www.iagroupllc.com or contact us at 208.846.8476 or info@iagroupllc.com.

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Investment Analytics Group (IAG) is committed to registered representatives and financial advisors – and to the established relationship you have with your clients. We believe that mitigating an investment’s downside and seeking the best possible solution through a proactive approach, rather than a reactive approach is the key to a successful outcome. At IAG we can help by offering the following services:

* Lease administration/audits
* Financial modeling and repositioning strategies
* Property operations/asset management
* Accurate budgeting and budget reviews
* Continuous communication and efficient operations
* Disposition services
* Lease, ground lease, rent roll and operating analysis
* Post acquisition value creation and revenue/NOI maximization strategies
* Optimization of capital structure to include debt equity and hybrid financing
* Ownership structure analysis for all types of transactions including REIT, Tenant in Common (TIC), joint venture, and other single purpose entity structures

We see the big picture and we are your partner. At IAG, we can help maximize the overall performance of properties by bringing knowledge and experience in property management, leasing, lease administration, acquisitions, and due diligence, enabling us to develop and implement ownership solutions to achieve the objectives in operating and leasing property.

If you have a distressed real estate investment property or just want us to look at the performance of your property please contact us at your earliest convenience.

About Investment Analytics Group
Established in December 2006, Investment Analytics Group (IAG) provides integrated commercial real estate advisory services to investors. Our core services include asset level due diligence, asset management, financial modeling, feasibility studies and other related advisory services.
For more information visit us at www.iagroupllc.com or contact us at 208.846.8476 or info@iagroupllc.com.

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Investment Analytics Group’s (IAG) professional and experienced staff is devoted to the needs of high-net-worth and sophisticated investors and buyers seeking real property as their target investment. I know a pitch or a line you have probably heard from numerous companies, but what sets IAG apart from others is the dedication to establishing long-term relationships with clients, servicing a diversity of real property categories, and managing an asset transaction from start to finish with superior experience. Our number one goal is to build trust with every one of our clients first, and leverage that trust to grow those long-term relationships and deliver tangible results.

About Investment Analytics Group
Established in December 2006, Investment Analytics Group (IAG) provides integrated commercial real estate advisory services to investors. Our core services include asset level due diligence, asset management, financial modeling, feasibility studies and other related advisory services.
For more information visit us at www.iagroupllc.com or contact us at 208.846.8476 or info@iagroupllc.com.

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Do you have concerns about your commercial real estate investment? Is it distressed? Underperforming? Giving you sleepless nights? Then you should contact Investment Analytics Group (IAG) to help give you some peace of mind. Whether you are engaged in a transaction of a single asset or an entire portfolio, IAG’s experienced team with strong financial, accounting and legal backgrounds can provide you with these great resources. Investment Analytics Group will ensure that financial records reconcile with historical performance and projections.

IAG also can:
– Audit operating statements and reconcile tenant billings to lease terms
– Analyze collection issues
– Conduct capital expenditure analysis
– Review expense trends and adjust for deferred maintenance
– Perform complete lease file review and default analysis
– Assess contract services and other operation costs

About Investment Analytics Group (IAG)
Investment Analytics Group (IAG) was established in December 2006 ago to provide integrated commercial real estate advisory services to investors. Our core services include asset level due diligence, asset management, financial modeling, feasibility studies and other related advisory services. Our business model and services are not reactionary to what many other firms consider “opportunity” in this current distressed environment. For more information visit us at www.iagroupllc.com or contact us at 208.846.8476 or info@iagroupllc.com.

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By hiring a reputable and respected commercial real estate advisory firm your commercial real estate investment can be a success. So how can IAG help? Investment Analytics Group (IAG) sees the big picture and we are your partner. IAG can help maximize the overall performance of properties by bringing knowledge and experience in property management, leasing, lease administration, acquisitions, and due diligence, enabling us to develop and implement ownership solutions to achieve the objectives in operating and leasing property.

Regardless if you’re a veteran at commercial purchasing, or a rookie that has just stepped into the game, the future isn’t always predictable. Obstacles will arise, yet many – to a large extent – can be avoided. To minimize the stress level, having a concrete and unambiguous purchase contract is crucial. Clearly, the document should be comprehensive. Though one should consult his/her attorney regarding the terms’ legality and suitability, there are some ground provisions to include:

* Parties to the CRE transaction (buyer/seller)
* The history of the transaction; the purpose of the real estate venture
* Property description – price, condition, etc.
* Payment terms/ closing date and conditional closing
* Title abstract and insurance
* Rights to adjust purchase contract
* Duration/ termination provision
* Assignment/delegation rights
* Escrow
* Warranties
* Zoning and land use issues
* Inspection rights
* 1031 tax deferral/exchange
* Liability insurance
* Contract breach remedies
* Possible dispute settlement options (arbitration)
* Governing laws

About Investment Analytics Group
Established in December 2006, Investment Analytics Group (IAG) provides integrated commercial real estate advisory services to investors. Our core services include asset level due diligence, asset management, financial modeling, feasibility studies and other related advisory services.
For more information visit us at www.iagroupllc.com or contact us at 208.846.8476 or info@iagroupllc.com.

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Nothing is as simple as it seems, and hiring the right advisory firm is no different. Aside from the obvious requisites such as knowledge, experience, personality, a strong support team, a broad sphere of influence, market savvy, etc., the key to engaging the right firm is defining the relationship in such a fashion that goal alignment is achieved out of the gate. Productive professional services relationships insure that there are no conflicts of interest, and that the advisory firm’s loyalty and fiduciary obligations are to the owner and no other third party. Creating a certainty of execution in this market goes far beyond sales ability.

If you want to know if a commercial real estate project (new or existing) is viable, you need to know whether or not it is positioned, or can be repositioned properly in the market place … Put simply, any property you acquire needs to have a strategic competitive advantage in the market. Put even more simply, it has been our experience that when a sponsor will make the decision to engage a qualified commercial real estate advisory firm at the time a project is first being conceptualized, it is the single best form of insurance an owner can purchase.

Commercial real estate should be approached like any other business in that you need create a clear vision, a sound strategy, and demand precise execution to come out on top. Examine any successful commercial real estate investor and to the one you’ll find that they have surrounded themselves with professional advisers whose sound counsel they rely upon to avoid the ever increasing number of mistakes that can be made in this market.

About Investment Analytics Group
Established in December 2006, Investment Analytics Group (IAG) provides integrated commercial real estate advisory services to investors. Our core services include asset level due diligence, asset management, financial modeling, feasibility studies and other related advisory services.
For more information visit us at www.iagroupllc.com or contact us at 208.846.8476 or info@iagroupllc.com.

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If you answered yes to that question then you should call Investment Analytics Group (IAG) immediately. National distressed commercial real estate totaled $97.4 billion in early June, including foreclosures, lender-owned properties and those headed in that direction, according to a new report from Delta Associates.

Distressed commercial real estate volume has doubled every three months since December 2008 with retail properties representing the largest segment in June, at $29.7 billion. Commercial mortgages had a 3.2 percent delinquency rate in the first quarter, up from 1.8 percent in the first quarter of 2008.

So how can IAG help? Investment Analytics Group (IAG) sees the big picture and we are your partner. IAG can help maximize the overall performance of properties by bringing knowledge and experience in property management, leasing, lease administration, acquisitions, and due diligence, enabling us to develop and implement ownership solutions to achieve the objectives in operating and leasing property.

Established in December 2006, Investment Analytics Group (IAG) provides integrated commercial real estate advisory services to investors. Our core services include asset level due diligence, asset management, financial modeling, feasibility studies and other related advisory services.
For more information visit us at www.iagroupllc.com or contact us at 208.846.8476 or info@iagroupllc.com.

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a) Tokyo
b) Hong Kong
c) London
e) New York
d) Moscow

Is that your final answer?
If you guessed Tokyo, Japan then you should give yourself a pat on the back because that is the only prizes we are handing out today.

Tokyo’s Inner Central District has supplanted London’s West End as the world’s most expensive office market, according to a recent survey.

London’s West End, is now the world’s second most expensive office market, followed by Moscow, Hong Kong’s Central Business District or CBD, and Tokyo’s Outer Central District in the report, which tracks office occupancy costs in more than 170 cities around the globe.

Financial centers have been most significantly affected by declining occupier demand and, as one would expect, registered the most material decreases in office rents. In many cases, major global office markets have seen occupancy costs fall by 20 percent or more over the last 12 months. Across the 170 cities as a whole, office occupancy costs fell 2.8 percent over the 12 month period ending March 31, 2009 (on an un-weighted average basis) compared with an increase of 8.0 percent in the 12 month period ending September 30, 2008 Singapore had the largest year over year decrease in occupancy costs with a drop of 34 percent.

Some markets did record increases in costs over the last 12 months but these markets—such as Charlotte (U.S.), Marseille (France) and Perth (Australia)—are very much the exception rather than the rule. Generally, these increases are either due to exceptional local market conditions, such as the completion of a top quality new building in a market where none was available previously, or simply that occupancy costs remain above the level of a year ago despite the fact that they are now falling. Such situations illustrate the uneven way in which the economic downturn is affecting different markets around the globe, according to the report.

Americas
The most expensive office location in the Americas is still New York’s Midtown with occupancy costs of $68 per sq. ft. However, that market’s occupancy costs declined 32 percent–the second steepest decline in the global survey. While occupancy costs in New York’s Midtown are high for North America, it ranked just 21st globally. Boston’s suburban market posted a decrease of nearly 30 percent, putting that market in fourth position in the top decreases chart in the report.

São Paulo (Brazil) posted the Latin American region’s highest occupancy costs at $57 per sq. ft. and is ranked 33rd globally. Latin America has held up better than the rest of the world with only three cities posting small negative growth rates, the worst being Mexico City with a 5.6 percent decrease. Nine markets in North America posted double digit declines.

Asia-Pacific
Tokyo (Inner Central) was the world’s most expensive market with an occupancy cost of $183 per sq. ft. Hong Kong (CBD) was the fourth most expensive global market with occupancy costs of $150 per sq. ft. Tokyo (Outer Central) and Mumbai were the other two Asia-Pacific markets in the top 10 most expensive cities roster.

Singapore, while experiencing the largest drop in occupancy costs, was not alone among Asia-Pacific financial centers in seeing a sharp decline. Hong Kong, Tokyo and Mumbai posted large drops in office occupancy costs. Conversely, Perth had the second fastest growing occupancy cost during the past 12 months with costs rising 22 percent, although it’s important to note that the increase took place in 2008.

Europe
London’s West End was the world’s second most expensive office market at $172 per sq. ft. and Moscow was a close third with occupancy costs at $170 per sq. ft. Dubai, Paris, the City of London and Dublin all were in the top ten most expensive markets.

Twelve cities in the region posted doubled digit declines in office cost. Moscow had the sharpest decline in the region followed closely by Oslo (Norway), while occupancy costs in London’s West End, previously the most expensive market in our report, fell 20 percent. In addition to Marseille, Durban (South Africa) was among the world’s top five markets with occupancy cost growing by 18 percent during the past 12 months.

So why is this information important to Investment Analytics Group and our future clients? At IAG, our team is not new to the commercial real estate business. With combined experience in managing and operating commercial real estate exceeding 65 years, the IAG team comprises decades of relevant experience including the management of tenant-in-common investments, land assets, and development product. The IAG team includes personnel with a 25-year history in banking and finance with specific, relevant focus on commercial assets and development lending. Additionally, we have lender workout experience both on behalf of lenders and borrowers.

As Asset Managers, IAG can effectively manage assets in any geographic location across the country, and does so for its clients today. Investment Analytics Group is committed to providing commercial real estate owners consistent communication, transparency in all of the services and functions we perform, and access to all asset level information, providing round the clock access to all members of our team including IAG’s Principals.

IAG will work side-by-side with legal counsel in this current state of turmoil to determine where property cash reserves have gone and ensure property tax, insurance, and relevant lease obligations are protected; provide workout strategies and options in addressing LLC entities; maintain your investment’s 1031 Exchange status; ensure any applicable loan maintains a “performing” status.

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