BY CHUCK WEST, CCIM AUTHOR AND EDITOR
Forever West SEPTEMBER 2021
WHY SHOULD I HIRE A COMMERCIAL REAL ESTATE BROKER? This question might evoke another series of questions such as “Why do I need a broker at all?”, “Why do I need another broker since my broker is my friend and has bought and sold two houses for me?”, “Doesn’t the State of Wyoming license all brokers to sell all real estate?”, and, “What is a commercial/ investment broker anyway?” Before attempting to answer the above questions, one might ask “If I needed brain surgery would I go to a brain surgeon or my GP since they are both licensed by the State to ‘practice medicine’?” If I wanted to have a complex medical procedure done, would I be concerned if my MD did not know the difference between liposuction and lobotomy? If Donald Trump wanted to sell one of his Trump Tower investments to the Clinton Foundation, would he hire an attorney who just passed the bar exam or an experienced attorney who just specialized in real estate law? Aren’t all attorneys licensed to practice any kind of law? Our society and our lives are becoming more complex every day. Just look at the Federal Income Tax Code, review your insurance policies, sign up for Obamacare, review the hunting and fishing regs even in WY, fill out a loan application etc. I could go on and on. It is no longer easy to do things on your own nor is it easy for a professional to be a generalist. The vocabulary of professions differs from the general language used in everyday conversations. Likewise professional specialists have a vocabulary that differs from generalists. Knowing the definition of a technical word might make you a champ on jeopardy or impress people at a cocktail party but knowing how the term is applied and what it means is even more important and relevant.
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LEGAL REGISTERED AGENT CORNER
Wyoming Statutes Article 17 et seq require all LLCs and Corporations to have a registered agent (RA) domiciled in Wyoming to receive service of process. The RA must have a physical address in Wyoming. In addition: Every entity shall provide to its registered agent , or to the secretary of state as provided in W.S. 17-28-107(b), and keep current the name, mailing address and physical address, if different, and business telephone number of a natural person who is an officer, director, limited liability company member or manager, managing partner or trustee of the entity who is authorized to receive communications from the registered agent and is deemed the designated communications contact for the entity. The designated communications contact for the entity shall not be the entity’s registered agent or an employee of the entity’s registered agent unless the registered agent is the entity’s officer, director, limited liability company member or manager, managing partner or trustee. W.S. 17-28-104(d)
FEATURED PROPERTY
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Chuck West of #1 Properties was awarded the Certified Commercial Investment Member (CCIM) designation #897 in 1978 by the CCIM Institute, one of the leading commercial real estate associations in the world. More than 15,000 commercial real estate professionals have earned the CCIM designation requiring a rigorous combination of coursework and experience since the program was founded in 1969. Chuck is a licensed real estate attorney in CA since 1983 and broker in CA and WY, and has been involved in commercial real estate for over 30 years in private practice, as a corporate executive in charge of 10 million square feet of commercial properties on a national basis and as Director of Real Estate for two large counties handling 14 Million square feet of leased space and 50 million square feet of government owned space.
118 EVELYN STREET CHEYENNE, WYOMING $9.95/sf 15752 sf divisible.
#1 Properties has closed 1,459 sales in 2021 YTD with a total volume of $522,640,956
09.13.21
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BY CHUCK WEST, CCIM AUTHOR AND EDITOR
Forever West CONTINUED FROM PAGE 1 For example, in the analysis of income property the term “Cap Rate” (Short for Capitalization Rate) is bantered around quite frequently. However, unless you know how to calculate it properly (and most do not) and how to apply it properly you are shooting bats in the dark at midnight with a blowgun. A Cap Rate is a poor tool for effectively analyzing most income property as explained in Westline Commercial News. However, since it is a common rule of thumb used by appraisers, bankers, and real estate brokers it is necessary to know how to calculate it properly, apply it judiciously, and know its limitations. Just because someone tells you that a property is selling at an 8% cap rate don’t accept it at face value. Ask for the expenses and income that were used in calculating the net operating income. It has been my experience that advertised cap rates are actually lower in reality than statedmeaning that your expected return is less on your investment. Here is a potpourri of some additional technical terms that your broker should know how to define and apply if he or she is truly a specialist trained in commercial investment real estate: Gross Rent Multiplier, Internal Rate of Return, Net Present Value, Discounted Cash Flows, Positive/Negative/Neutral Leverage,
Rentable Square Ft. BOMA, Triple Net Lease, Absolute Triple Net Lease, Modified Gross Lease, Full Service Gross Lease, CAM charges, Alienation Clause, Due on Further Encumbrance Clause, license vs. Lease, Exculpatory Clause, 1031 exchange, 453 tax deferred sale, Financial Managers Rate of Return, Subordination, Holdover Lease, Tenant at Sufferance, Cash on Cash Return, Mortgage over Basis, Adjusted Cost Basis, deferred sales trust, Delaware statutory trust to name a few. A certified commercial investment member (CCIM) is a nationally recognized professional designation only awarded after a series of extensive one-week courses and the completion of term papers summarizing actual commercial transactions completed of a substantial size where the commercial property transactions are verified by an independent reviewer. I have been a CCIM since 1978.
“The essence of knowledge is, having it, to apply it; not having it, to confess your ignorance.” -Confucius