Commercial Real Estate Advantages

Survival Tips & Risk Management in Real Estate

Many business owners are struggling with the current economy. One of the largest expenses of many business owners is the cost of space for their office operations. It is not unusual for a company to have numerous leases for space in various parts of the country or the world.

Leases in traditional office buildings can be problematic in that in tough times, you have to pay for the space even when it is not needed. In addition, most long-term leases appear on your *balance sheet and represent long-term liabilities. This may make it more difficult to obtain loans or maintain lines of credit.

The use of executive suite facilities for branch offices may be a solution for some. Executive suite space can also be described as “Flex-Space.” Executive Suites typically allow a lease term of one year or less. As a result, they are frequently categorized as short-term liabilities and therefore are more favorable to a lender.

Short-term executive suite space allows a company to expand and contract quickly and economically. Bret Chapman of ABT Executive Suites in Dallas, Texas says, “Many of our clients grow and contract several times during their tenancy with us. They find it especially helpful that we can meet their expansion requirements in the good times and help them defray costs in economically challenging times.”

When a company is considering regional, national, or international business, they should always explore the executive suite solution. Landlords find this type of facility to be a major benefit to their building complexes. Executive suites allow a Landlord to accommodate space users that are too small to be profitable for the Landlord. By taking a large floor and building it out as an executive suite center, a Landlord can build out the space and make minimal changes over a ten or twenty year period.

If you are managing multiple leases with various termination dates, you should carefully consider letting some of your less desirable leases expire and moving your operations into an executive suite facility. While your cost for the space may be more per square foot, you will realize significantly better economies in that you share conference rooms, kitchen and break areas, and large reception or meeting facilities.

A careful analysis should be done of all of your real estate leases. This analysis should include a long-term transition plan to minimize higher risk, long-term leases with shorter more flexible arrangements.

I am a Realty Advisor, Consultant & Real Estate Broker in the State of Texas. I am not a tax consultant or financial planner. Please contact your Financial Advisor or Accountant for your specific situation.

Please call me if you would like to discuss.

Sonny Moyers
Ebby Halliday Realtors - The O'Dea Moyers Group
972-464-4110


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Managing Assets in the OBCAI

As a Consultant to many of my clients, I am constantly amazed at how often sub-lease agreements are not treated as an asset of the center. Sublease Renewal Systems (SRS) are an essential part of Center Management.

The SRS puts into place a process or system that assures that the most important assets of the center are managed and protected. Most people will gladly insure the jewelry, automobiles, and other assets such as furniture and equipment. Yet, I am always surprised when I review a center and find that the most important asset of the center is neither managed or insured.

Subleases and service agreements are assets, they increase in value if properly managed, and can be lost or stolen if not managed.

What is your system for managing these important asset?

Tips for Success . . .

First, develop an inventory of current contracts and subleases. You would be surprised if you knew how many operators do not know when their subleases will expire. Second, establish a safe place for the maintenance of these assets. This place should be under lock and key and the original contracts should be stored here. You might consider it, your companies safe deposit box. Make copies of all agreements for the office file so that managers who have a need to know can find out what they need without using the original agreement. After you have completed this process, give me a call and I will give you some additional suggestions for proceeding with a Sublease Renewal Systems to protect your assets in the future.

If you are attending the OBCAI Convention in Miami next week, say hello. I will be there also.

Sonny Moyers
Shared Office Industry Consultant
Managing Partner
The O'Dea Moyers Group & Ebby Halliday Realtors
972-464-4110
Cell: 469-261-5715


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http://www.foxnews.com
http://www.wsj.com
http://www.marketwatch.com http://www.dallasnews.com
http://www.latimes.com
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http://www.abc.com
http://www.cbs.com
http://www.msnbc.com
http://www.worldnews.com
http://www.whitehouse.gov
http://www.change.gov
http://www.oprah.com
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