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Understanding Sale Leasebacks in Commercial Real Estate Transactions

Some investors need unique ways to finance an investment. Conventional loans, bridge loans, Small Business Administration (SBA loans), and even some other alternatives that many investors aren’t even aware of. Some of these options are a great way for investors to diversify and grow their portfolio while getting rid of properties that may not serve them anymore but keep the businesses that do.  Read more

What You Need to Know About a Commercial Real Estate Appraisal

When you are looking to buy or sell a commercial property, there are many different steps and considerations you are making. You may be thinking about growing or diversifying your portfolio. You may be thinking of selling a property that no longer fits your goals or generates necessary income. You may have found your dream property to add to your portfolio. No matter what your goals are with the purchase or sale of a property, an appraisal will probably be necessary. Read more

SIG Brokers $13M Sale of Tires Plus Portfolio in Atlanta

ATLANTA, GA – Sands Investment Group’s (SIG) Atlanta based automotive net-lease broker, Harry Archer, brokered the sale of a $13 million 8-unit Tires Plus portfolio across Atlanta and Athens, GA. Harry Archer and his team at Sands Investment Group represented the seller, a Southeast based private investor, as well as the buyer, a California-based REIT.
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Investing in a Commercial Warehouse for Sale

As a commercial real estate investor, you may be seeking out the next opportunity right now, or just keeping your options open for future investments. New investment opportunities offer a great chance for you to diversify and grow your portfolio, or simply a chance to trade out a lower performing property for something that will bring you more value in the long run. Whether you currently have a vast array of property types or you’ve focused on one primary type like office buildings, you may be wondering about other ways to increase your investments — and your income. One type of commercial property that can help you grow your portfolio is commercial warehouses for sale.

Commercial warehouses come in all sizes, and they can be used for small, local businesses selling items online or for large, multi-state or multi-national companies with huge ecommerce and sales success. They are found across the country in order to serve their customers, who range from businesses to consumers to even a single company storing items until they are needed. No matter the size of the warehouse, there are a few key benefits investors have found when investing in this type of commercial real estate property. Let’s dive a little deeper into investing into the warehouse property type.

Why Invest in Commercial Warehouses

Investing in commercial warehouse properties for sale often makes sense for people. These leases tend to be much longer term, so you won’t have to constantly seek out a new tenant. With options for a longer lease, commercial warehouses can be a great property for triple net leases, where you can pass off many of the maintenance and tax costs to the tenant. You’ll see a higher return on this property type in most cases, as well. While commercial warehouses may have a higher entry point, most investors make their money back relatively quickly with this high value opportunity zone real estate.

Right now, we are still in the post-pandemic market. During the past 15+ months, ecommerce boomed, which means that there has been a great demand for commercial warehouses for sale across the country. People got used to online shopping and have shifted much of their shopping habits away from brick and mortar stores. This trend of online shopping and businesses needing warehouse space is not going away any time soon. That makes this a great time to invest in commercial warehouses to grow your commercial real estate portfolio.

3 Pros of Commercial Warehouses For Sale

Because commercial warehouses are in high demand, both from businesses and from their customers who are continuing to shop online necessitating more warehouse space for processing orders, these three advantages can be found with this type of commercial real estate:

  • Higher return on investment
  • Long-term leases
  • Lower maintenance needs and costs

3  Cons of Commercial Warehouses

Now, as with anything, there are cons to investment opportunities. So you have the best information going into any investment, you should know these three challenges associated with investing in a commercial warehouse:

  • Higher entry costs
  • Longer timeframe for finding new tenants
  • Technological advancement may outpace the space

Top Tips to Finding the Best Commercial Warehouse Opportunities

When you’re looking for the right commercial warehouse to invest in, there are a few key things to keep in mind. Location is very important to these types of businesses, but often in a different way than other properties you may currently own. Here are four elements of the location to understand when seeking out a commercial warehouse space to invest in.

Location: Distribution centers and warehouses are often located near large population centers. This means there will be better access to more trucks for cross-country delivery. But a large population area doesn’t necessarily mean a big city, which would have more traffic and increased costs. You can find  warehouses properties for sale in every state, and in most cities too. In most cases no matter where the warehouse is located, investors are able to plan for reliable monthly income with few landlord responsibilities, especially when tenants and landlords agree to a NNN lease.

Space: With a commercial warehouse, there needs to be plenty of space for delivery of product. The business relies on receiving products, as well as processing orders and distributing products. This means they will need to have space for trucks to come and go and unload or load materials. Commercial warehouses are often best situated near transportation, like highways or interstates, as well as airports or ports (if located near oceans and large rivers used for transportation). Because the costs of bringing in materials and shipping them out is usually more than half of the expenses these businesses see, location really matters for warehouses.

Storage: Aside from needing space for loading and unloading, commercial warehouses can be used for other things than ecommerce. The changing supply chains now mean more businesses have a need for extra storage or manufacturing space. Some businesses or product types need climate-controlled commercial warehouse space, and across the country the industry has seen a demand for cold storage during vaccine distribution. Storage for products, manufacturing, or other needs as supply chains, businesses, and offices change is continuing to grow.

Height: A unique element to commercial warehouses is the need to understand the importance of height (floor to ceiling space inside the building). The property’s square footage only tells part of its storage capacity, in floor space. But with height, this gives investors and tenants a better idea of the unobstructed space within the building, representing the stacking potential of warehouse contents like crates and boxes.

Work with a Pro to Find the Right Commercial Real Estate for Sale

When you partner with a commercial real estate broker who has your goals in mind, you are better equipped to find the right listings and properties to grow your portfolio. At Sands Investment Group, our brokers across the country work with you to identify your goals, define success on your terms, and find the properties that fit your needs including industrial properties, office spaces and a variety of commercial properties. If you’re ready to discuss adding a commercial warehouse to your portfolio in the post-pandemic market, contact the broker team today by calling 844.4.SIG.NNN or sending an email.

Two Keys To A Win/Win/Win Approach To Commercial Real Estate

This article was originally published on Forbes.com

In commercial real estate sales, a common philosophy is the “win-win or no deal” approach. This suggests that both parties in a transaction should aim for a mutually beneficial outcome or walk away from the deal altogether. This brings both parties’ needs into consideration while anticipating an agreement where both the client and the broker feel as though they’ve “won” a positive outcome.

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Chris Sands named in Connect Commercial Real Estate’s 2021 Top Broker Awards

Opening the doors of Sands Investment Group during the global financial crisis in 2010, Chris Sands has thrived in the face of hard times from the very beginning. He stays committed to investing for success well into the future by focusing on relationships built by win-win deals, collaboration and transparency. In 2020, through its founder’s leadership, SIG doubled in size—gaining recognition as one of Inc 5000’s Fastest Growing Private Companies in America.

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Finding Commercial Real Estate in North Carolina

With its sandy beaches, rolling mountains, and bustling cities, North Carolina features natural beauty, culture, and industry such as furniture manufacturing in High Point and hi-tech in Raleigh, Durham and Chapel Hill, the research triangle region.

With a population close to 11 million, North Carolina is the 28th largest and 9th most populous U.S. state. Raleigh, the state capital, has a population of about 474,000 people (2.2 million for the entire triangle region), while Charlotte has 870,000 residents. However, recent data collected by the U.S. Census Bureau records that both urban areas rank among fastest-growing U.S. cities.

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3 Ways SIG is Using Sale Leasebacks to Help Operators During COVID-19

The COVID-19 pandemic has created sudden change in the economy and is certainly having an impact on commercial real estate buying, selling, and financing. The lending environment itself has tightened up considerably, making it much more difficult to obtain and secure financing. Banks are overloaded with the PPE program and timelines are extending, making it difficult to stay agile and move quickly when an investment opportunity does become available in the market. 

As a result, many operators are looking into their existing portfolios and trying to identify opportunities to leverage equity and raise cash to move on new opportunities, make property improvements, or strengthen their cash position for operations. At Sands Investment Group (SIG), one of the strategies we are using to create capital and leverage opportunities in the current economic state is sale leasebacks. 

A sale leaseback is a financial strategy in which a property owner sells their commercial property and retains a long-term lease with anywhere between 40-50 years of control. This option can create capital necessary to move on other new business opportunities, reduce bad debt and costs, and potentially reduce the overall occupancy cost for the business.

Here are three ways Sands Investment Group is using sale leasebacks to help operators weather the current financial situation brought about by the COVID-19 pandemic and come out the other side stronger than ever. 

1. Get rid of bad debt and trade it for reasonable landlords.

In the current economy, banks have become more rigid in their lending and financing practices, which is causing undue pressure on investors who need the flexibility to move quickly when a commercial real estate investment opportunity becomes available in the market. 

A sale leaseback provides you with the opportunity to reduce debt loads by selling a property while staying on as a tenant with a fixed lease payment. This allows you to retain your initial capital investment in the property. This option can also provide more operating capital for your business and provide a more favorable, humanized landlord-tenant relationship.  

2. Identify ways to reduce occupancy costs.

At SIG, we are finding that principal and interest payments on highly leveraged assets are commonly held for a higher monthly payment than a rolled or fixed cost at today’s CAP rates. Additionally, in a sale leaseback—as an operator—you will be able to both recoup your initial down payment and pay off all debts. 

In uncertain times like these (where every penny counts), SIG is looking for ways to forecast post-COVID sales for businesses. We’re also looking for every possible way to reduce overall occupancy cost of real estate and stack up the war chest so we not only have a runway to operate the business, but make sure funds are available for post-COVID opportunities.

3. Raise capital for future buying opportunities.

Most of the deals on the table today are prompted by quick fixes and the ability to come to the table with cash, and for most of us, that cash is sitting in our existing real estate investments. A sale leaseback strategy provides necessary capital for future investments or buying opportunities. 

The common sentiment in the market is that this disruption is going to turn into opportunities. In this way, COVID-19 has accelerated selling or retiring from the business, creating opportunities for investors who are looking to expand.

Overall, SIG is providing a capital solution to fund portfolio acquisitions and growth opportunities as they arise.

About Sands Investment Group

Sands Investment Group has extensive experience in all types of commercial real estate and is an industry leader in the net lease investment space. We can help you navigate and advise you on how to leverage your existing assets in the current economic climate and create capital to fund your future investments. 

With over 2,200 transactions in 48 states worth $4.7 billion since 2010, Sands Investment Group is the fastest growing net lease investment company in America. We provide highly personalized client services, employ innovative marketing techniques, and have access to an extensive network of investors to help you find the perfect investment or sell a property you own for the best profit. 

Want to learn more sale leasebacks and other investment opportunities that don’t require you take on any more debt? Get in touch with an expert today by calling 844.4.SIG.NNN or sending us an email at info@SIGnnn.com.

SIG Named to Inc. 5000 List of America’s Fastest-Growing Private Companies

Sands Investment Group Earns Recognition For Excellence in Leadership and Dynamic Growth!

Sands Investment Group (SIG) announced today its placement on the prestigious annual Inc. 5000 list of America’s fastest-growing private companies. The independent American business magazine provides insight into the dynamic success of small businesses in the US economy. Read more

Top Broker Honoree: Sands Investment Group’s Chris Sands

Named Rookie of the Year for 2004 at Marcus & Millichap, Chris Sands launched his own business in 2010. His vision for Sands Investment Group was to establish a highly-specialized and knowledgeable company able to provide buyers and sellers of net leased properties with a level of service unprecedented in the industry. To this endeavor, the former professional tennis player applied the drive and termination that enabled him to compete at the highest level of his sport. Read more

SIG Handles Transaction of AutoZone Property For Sale in TX

SIG brokers successfully handled the transaction on an AutoZone location for sale in Midland, TX, closing the deal despite the property being under construction during marketing the listing.

Working with SIG brokers is the best way to leverage top listings, lending, and marketing efforts. In this deal, lead SIG broker Max Freedman with co-brokers John Kerr, Matson Kane and Elan Sieder successfully closed the transaction on an under-construction AutoZone property in TX.

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