Jon Brooks: Commercial Real Estate Agent, Brooklyn

Who is responsible?

Sun, 28 Apr 2013 10:50:00 -0400

In commercial leasing, many tenants are married for better or for worse to their landlord for many years. And throughout the years I can guarantee something out of the ordinary will happen. I can also make a guarantee that it will put you at odds with you landlord.

Example

Access is lost because the road serving the property (call it a shopping center) is temporarily or permanently closed by the government

A nearby bridge leading to the shopping center is closed and the alternative access route is undesirable to customers

A fuel delivery truck spills its load when parked on the shopping center so that its driver could run across the street (meaning that the driver wasn’t using or serving the shopping center)

The entire area is closed for a week as a crime scene

The arena across the street from the shopping center has been closed and the businesses at the shopping center relied on business from the arena

Power from the utility company directly to the tenant is interrupted

Power from the utility company directly to the landlord is interrupted and the tenant gets its power through a submeter

The shopping center is closed by reason of flood, famine, locusts, etc.

Cue, the lawyer.

Real Ira Meislik discusses these potential pitfalls in his real estate blog.

http://www.retailrealestatelaw.com/archives/1791

Disclaimer: Not all information above may be accurate. The advise given at the mentioned link might not be accurate. Please before you use any advise in this post or any other post in this blog, consult with a real estate professional and/or attorney.

Helpful! Brooklyn Neighborhood Map.

Sat, 27 Apr 2013 12:50:00 -0400

Even as a experienced commercial agent I find these neighborhood lines confusing. Am I in Carroll Gardens or Gowanus? Bushwick or Williamsburg? Crown Heights or Prospect Heights? This map will help shed some light!

ATTENTION NYC BUSINESSES: NYC is giving away free money and it's easy to see if it is waiting for you!

Fri, 01 Feb 2013 22:45:00 -0500

Let’s face it running a business in the city can be brutal. Businesses have to dodge a minefield of regulations, high rents, taxes, disasters , and most of all a vulnerable economy.

There is a small consolation. New York City and the NY State do provide economic incentives which can be especially helpful to Brooklyn businesses.looking for real estate.

But finding these incentives was mission impossible….until now.

Click here —-> NYC QUICK INCENTIVES ANALYZER

This quick online questionnaire points you in the right direction by analyzing your business and displaying your possible incentives.

I tried it. I answered the questions as a business moving from Manhattan to Brooklyn looking for manufacturing space. Here is what popped up.

Not bad, huh? Computerize bureaucracy isn’t so bad!

If you are eligible for any incentives that involves leasing, purchasing, or selling property in Brooklyn or Queens, drop me a line and I’ll point you in the right direction.

Email
Jon Brooks at

JB@5CRE.COM

I specialize in the leasing/selling of commercial spaces 1000SF TO 100,000SF . I can find the perfect warehouse to fit your business.

Follow me on Twitter for instant up to date information on properties and real estate information

Listed subject to errors, omissions, change of price, or other conditions, prior sale, rent , and withdrawal without notice.

The Most Expensive Blocks in Brooklyn - PropertyShark Real Estate Blog

Sat, 08 Dec 2012 09:03:20 -0500

The Most Expensive Blocks in Brooklyn - PropertyShark Real Estate Blog:

The Most Expensive Blocks in Brooklyn

No CommentsBy Catalin on March 21st, 2012

Map of the most expensive blocks in Brooklyn

It’s time for our third and final post covering the most expensive blocks in New York City, and this time we analyze Brooklyn. If you haven’t read the first two entries (covering the most expensive blocks in Queens and over NYC as a whole), you can do it here and here.

If you look at the map of the priciest blocks in Brooklyn, you may notice that Park Slope has 3 blocks in the top 10, followed by Cobble Hill with 2. Midwood, Brooklyn Heights, Carroll Gardens, Manhattan Beach and Homecrest are represented in the top 10 by one block each.

The priciest block in Brooklyn is in Midwood, delimited by Avenue I and Avenue J / Ocean Parkway and East 7th Street, with a median sale price of $4,350,000. The biggest sale here was the single-family home on 935 Ocean Parkway. It sold on November 11th, 2010 for $6,130,000. Less than one year later, on September 20th, 2011, it exchanged hands again, for a slightly smaller amount of $6,000,000.

The second priciest block is in Brooklyn Heights, delimited by Joralemon Street and State Street / Willow Place and Hicks Street, which had a median sale price of $3,125,000. A similar thing happened with the most expensive property here as with the one at 935 Ocean Parkway. Namely, the single-family home at 33 Willow Place exchanged hands twice, the first time on August 13th, 2010, for $3,600,000 and the second time on June 28th, 2011 for $3,920,000.

The block that completes the top 3 is in Park Slope, delimited by 2nd Street and 3rd Street / 8th Avenue and Prospect Park West. There were 6 properties sold here, with a median price of $2,818,775. Here’s the complete top 10 of the priciest blocks in Brooklyn:

A Discussion on Seller Financing

Thu, 22 Nov 2012 00:37:00 -0500

What do you do if you own a property free and clear that someone wants to buy, but they can only put cash down for 30% of the property’s value? Before the credit crisis, the answer was easy. They buyer puts down 30% and finances the rest. In the absence of traditional sources of financing, the above question is being asked for every deal, and the answer can be a real problem that often kills deals. But there are still some deals that make sense—in particular sales/purchases of low or no leveraged real estate. In this narrow context, the viability of the transaction will depend on not whether financing is available but, rather, whether the buyer has a sufficient cash deposit (which will typically be in the area of 20% to 40% of the purchase price) to permit the seller to satisfy its existing obligations (including any tax exposure upon the sale).

Unfortunately, while seller financing does not allow for the instant monetization of the value of any particular real estate asset, for the next few years, market illiquidity and failed deals will continue unless sellers are willing to participate in financing the sale of their own properties.

1. In a whole asset sale, the seller may take the place of the senior debt or may cover shortfalls between senior debt and equity by taking a mezzanine position, or the seller may agree to a sale leaseback of the property.

2. In land development or project redevelopment, the seller may carry back senior debt and may, in the future, move into a mezzanine debt or equity position by subordinating to the construction loan (as well as the requirement to enter into an inter creditor agreement favoring the senior debt). The seller may want to retain the right to repurchase the property (upon entitlement) or, alternatively, a profits rights (in exchange for a lower

purchase price or better loan terms).

3. An alternative commonly used in retail development or in very constrained high-value areas is for the seller to enter into a long-term ground lease of the property. The main difference between a long-term ground lease and seller financing is that the seller maintains ownership of the property and may be entitled to the reversionary interest of the improvements constructed on the property at the end of the ground lease (or a demolition fee).

4. In some transactions, it may even make sense to couple the seller financing with a lease back by the seller (this is ideal where the goal is to free up liquidity by selling a principal asset that is used by the seller for its operations).

Seller financing can be very attractive and a lucrative solution in the absence of covenant-light loans and highly leveraged debt. However, one must be aware that removing one of the key participants (lender) from a real estate transaction has both advantages and pitfalls. There are nuances specific to these transactions, good and bad, that users of traditional debt and equity are not accustomed to considering. The seller is carrying back debt for a reason: The seller is not necessarily your ally. Professionals including attorneys, accountants and real estate brokers with experience in these transactions should be consulted. Unique issues to seller financed transactions include:

1. If the seller still occupies the property in a sale leaseback transaction with a seller carry back, the seller effectively controls the cash flow and a substantial part of the value of the property. The lease is as important as the lending documents in structuring the transaction and protecting against default.

2. If the seller does not occupy the property, the buyer using seller financing should be aware of the potential for moral hazard, the requirements set out regarding same in the loan documents, and guard against default. Representations and warranties may not be as rigorous as traditional lending transactions (the thought being the seller knows the risks of property ownership better than the buyer).

3. In the absence of true third party due diligence that a lender would perform, the buyer is on their own to make sure that they perform adequate due diligence to protect their interests and allow them to proceed with their planned use and development of the property.

4. Sellers can provide attractive credit with acceptable interest rates to buyers that may cause buyers to pay a higher price for the property, even excluding loan fees. However, debt payment is often required in a shorter timeframe than conventional financing.

5. Sellers participating in a whole asset sale may over-restrict or over-enforce buyers’ covenants in a default situation.

6. Recourse takes on a different ramification (indeed, some states restrict recourse on seller financing under the theory that the lender should not obtain a windfall of obtaining the property back on top of suing under a guarantee).

7. Seller financing can be a way to defer tax on the sale of property. If the sale qualifies for the installment method of reporting for tax purposes, taxable gain on the sale will be recognized as payments on the seller financed note are received verses 100% of the gain recognized upon closing of the sale.

8. The note issued by the buyer may or may not be considered a liability that will provide the buyer tax basis to take tax deductions for potential operating losses generated by noncash operating expenses such as depreciation of fixed assets and amortization of intangibles.

9. If the property subject to the sale does not perform as planned, the buyer may have problems servicing the interest and making principle payments on the note. Unlike a loan reduction to the borrower from an unrelated 3rd party, which usually causes phantom cancellation of debt income to the buyer, the buyer and the seller can agree on a purchase price reduction of a seller financed note which usually does not create phantom cancellation of debt income to the buyer.

Seller carry backs can be a useful tool to complete real estate transactions that need extra financing as part of their structure. Real estate purchasers and developers should continue to rely on financial intermediaries to provide third-party financing, including due diligence and covenant structuring, to assist buyers who may be considering seller financing to complete a deal. Financial intermediaries will help buyers and developers by working with sellers to revive the old reliable tool of seller financing and make it profitably in vogue.

If you are currently looking for space in the 5 boroughs you can always call me for advise, call Jon Brooks, agent at 5CRE 212-366-0407, email me at jb@5cre.com..

Disclaimer: Not all information above may be accurate. Please before you use any advise in this post or any other post in this blog, consult with a real estate professional and/or attorney.

Preparation Guide for Leasing Commercial Property

Thu, 21 Jun 2012 06:22:00 -0400

If you are looking to lease a warehouse, loft space, offices, or retail property, you should be well prepared. Commercial Real Estate inventory in Brooklyn and the other boroughs in NYC is low and it’s competitive. I prepared this guide to assist you on making your big move.

Are you ready to lease? The number one thing a landlord wants to know is “will the tenant pay the rent”. Therefore he will investigate your company to determine the risk he might be undertaking in leasing his property to your company.

You must be prepared to have information on hand to show the property owner that you are a good candidate to lease his property.

I break this down two categories of business situations.

Category A. You are an existing business with a financially sound track record.

Category B. You are a Start-Up, In business for under five years, business with lack of track record (ex. all cash business), or struggling business

If you fall under Category A. you’re in a great position to lease. Landlords love to have thriving exisiting businesses come into their building. Also commercial real estate agents would be thrilled to assist you anyway they can to help you find a space and probably won’t charge you a fee (every broker varies). Working with one broker has big advantages that includes saving you time, recieving real estate advise, and assistence in lease negotiations.

However to put yourself in the best bargaining position during lease negotiations, it is always best to have your financial documents ready when you submit your offer. It is even better if you submit some financial information with your offer to show that you are serious about leasing. Use the advise of you broker or attorney on kind of information you should disclose.

Information you might want to disclose can include

1) DUNS NUMBER or D&B NUMBER: submitting a DUNS number is great to give to a owner. It doesn’t reveal sensitive financial information but is a reliable source for the landlord to see your business credit history. If you don’t have a DUNS number you can visit the Dun and Bradstreet Website.

2) Two Years of latest Tax Returns

3) Six Months of Bank Statements

4) Recent Profit and Loss Statement from your accountant.

5) Contact information of your lawyer

6) Contact information of your current landlord.

7) Media information (press, website, brochures etc)

Even if your company is financially sound, it does not mean the landlord will automatically accept you. If you are expanding, the landlord will want to see that you are not biting off more then you can chew so having a business plan on hand wouldn’t be a bad idea. The landlord might also consider your business model (are you in an industry on the way down?) and if your type of business will negatively affect his building (loud noise, environmental, foot traffic etc). Be prepared to show the landlord your current locations. Even if you disclose all the information provided it does not guaranty the landlord will accept you as a tenant, provide additional guaranties for the lease, or that you won’t have to provide additional security.

PLEASE NOTE: IF YOU ARE PLANNING ON DOING EXTENSIVE CONSTRUCTION OR RENOVATION, THE LANDLORD MIGHT REQUIRE MORE INFORMATION. STAY TUNED FOR FUTURE BLOG POSTS WHERE I ADDRESS THAT SITUATION.

If you fall under Category B you should have ALL THE INFORMATION I MENTIONED IN CATEGORY A, if you are able to provide it. But you should be prepared to disclose information.

Additional Preperations for Category B

1) You should have your business plan ready.

2) You should be prepared to post six months security. Now you SHOULD NOT offer six months security to the landlord at the get go, but you should know you have the security on hand. A landlord can ask for more or less then six months. You should discuss with a real estate professional about how much security you should have on hand. But if you really want the space and you get rejected, then offering additional security is a great way for the landlord to consider you. Please also note that you might be able to negotiate in your lease contract to get a portion of that security refunded if you are a good tenant and pay on time after a certain set period of time.

3) If you want to save yourself having to pay additional security, a good way to do this is to find a financially sound company or person to guaranty the lease. This means that if your business was to fail, then this company or person will guaranty your obligations to fulfill the lease contract. The entity or person guarantying the lease should have ready to provide their financial information to the landlord.

4)If you are a new business it might be a good idea from the owner/s of the new business to supply a personal resume. For instance if you want to lease a warehouse in Gowanus to use for a boxing gym, if you have been a boxing trainer for the last 20 years working with a exclusive clientel, that would certainly show the landlord that you have experience in your new business.

5) Personal Tax Returns, Credit Scores, Bank Statements. If you are a new business and can’t show a track record, you can show the property owner that you are personally financially strong to assume the lease obligations.

6) Information on past businesses. If you have owned successful businesses in the past, it would be a great idea to supply the owner information on your past businesses.

If you are currently looking for space in the 5 boroughs you can always call me for advise, call Jon Brooks, agent at 5CRE 212-366-0407, email me at jb@5cre.com..

Disclaimer: Not all information above may be accurate. Please before you use any advise in this post or any other post in this blog, consult with a real estate professional and/or attorney.

See Photos of Properties on Instagram!

Thu, 21 Jun 2012 04:23:42 -0400

See Photos of Properties on Instagram!:

As a commercial real estate agent that works in selling and leasing warehouses, loft buildings, and retail spaces- I have the unique opportunity to travel all around Brooklyn every day. I take photos of what I see. Find me on the phone app Instagram or click the above link to see my photos online. My user name is @jondavidbrooks.

Purchasing and Lenders: The differences between receiving Preapproval and being Prequalified.

Sun, 10 Jun 2012 04:09:00 -0400

If you are looking to buy Industrial or Commercial Real Estate it’s important to identify how you are financing purchasing deal. While this seems obvious, often times I see buyers identify their type of financing to me but don’t prepare themselves to show proof of their ability finance a deal. This can erode a seller’s confidence in you as a buyer and reduce your chances of doing a deal.

The NY Times provides a nice breakdown on the difference between being PREQUALIFIED and recieving PREAPPROVAL when looking to recieve institutional financing on purchase of property. Understanding this key difference strengthens your negotiation position. It is highly recommended that you recieve preapproval from your lender because the lender requires you to disclose your financials for their review. While a lender’s preapproval letter does not guaranty 100% that the you will actually receive financing that matches the preapproval, but it’s enough to gain a seller’s confidence in you.

Getting Prequalified by your lender does not usually require to show the lender hard proof of your finances.. Sellers doesn’t recognize being PREQUALIFIED as proof that you are a serious buyer.

If you are currently looking for space in the 5 boroughs you can always call me for advise, call Jon Brooks, agent at 5CRE 212-366-0407, email me at jb@5cre.com..

Disclaimer: Not all information above may be accurate. Please before you use any advise in this post or any other post in this blog, consult with a real estate professional and/or attorney.

Great Article in Sonic Scoop about the Sunset Park Music District Project!

Wed, 30 May 2012 20:08:05 -0400

Sonciscoop did an amazing job talking about the great opportunity in the Sunset Park Music District. Check out the article

The cost of an office buildout

Mon, 28 May 2012 16:33:56 -0400

The cost of an office buildout

Made the NYTimes again! Retail For Lease on Court St. in Carroll Gardens, Brooklyn

Sat, 26 May 2012 00:17:00 -0400

I recently completed a commercial retail lease that was featured in the NYTimes, with the franchise Kidville on 380 Court St. in Brooklyn. Along with specializing in selling and leasing of warehouses, commercial lofts, I also am very active in the retail market in Brooklyn.

Recently Featured in Crain's Business Magazine

Wed, 23 May 2012 15:17:00 -0400

I was recently featured in Crain’s Magazine for my work in Industry City Bush Terminal in Sunset Park to creating a music district out of upper floor warehouses.

Click Here to see the article

Swimming with Sharks, Traits of a Great Real Estate Agent Part II

Thu, 17 May 2012 23:01:00 -0400

In case you missed my previous post, I discussed in detail the traits of a great commercial real estate agent. See Part One.

6. A good real estate agent has no problem saying “I don’t know.” Most people have trouble saying “I don’t know”. In fact the writers of the famous book “Freakanomics” discuss it in depth. It is impossible to know everything there is to know about real estate. Dealing in real estate covers many disciplines. A good real estate agent will never dispense false information in order to try to look appear knowledgable. Further more even if a real estate agent does say “I don’t know”, a good real estate agent will be quick to find the answers.

7. If you give a good offer, a good real estate agent will know what to do with it. If you trust the real agent enough to give your best offer, and it’s close to the asking price, a good real estate agent will never give it up right away. Often times it is hard to tell what goes behind the scenes of a negotiation, and perhaps you will never know. The best piece of advise I can dispense is, if you give a good offer and the real estate agent quickly comes back to you to get you go higher, he probably did not protect your good offer.

8. Negotiations are intense, especially when there are many areas to the negotiate. A good commercial broker should always plays the role of mediator and not secretary. Now this is where this can dance a fine line, but I will explain this as best as I can. During negotiations, there are points where it can be adversarial. Harsh words can be said about one and another, and those harsh words can be reflected in their respective counter offers. This can lead to a collapse in negotiations, when a collapse was unnecessary. A good agent can play this delicate word dance to accomplish a deal. A quality broker will never communicate verbatim what the other party’s private communications, he will not play the game of “telephone”. He will always massage words and put everything in proper prospective. There is an exception to this. If the parties are negotiating a contract where it starts a long term relationship (like a commercial lease), and if one party acts unscrupulously, then the agent should advise the other party.

There are many other traits that make a good real estate agent, I discussed some of the lesser known traits that are known to the public. Hopefully this will give you a leg up on your search.

If you are currently looking for space in the 5 boroughs you can always call me for advise, call Jon Brooks, agent at 5CRE 212-366-0407, email me at jb@5cre.com..

Disclaimer: Not all information above may be accurate. Please before you use any advise in this post or any other post in this blog, consult with a real estate professional and/or attorney.

Panarama photo of industry city

Mon, 14 May 2012 20:13:46 -0400

Panarama photo of industry city

Swimming with Sharks, Traits of a Great Real Estate Agent Part I

Thu, 10 May 2012 04:22:00 -0400

NYC is the home to the most saviest population when it comes to Real Estate. You will never see a city population more in tuned to their own real estate market. Owners of Commercial Real Estate are notoriously famous for being challenging to deal with

To help you navigate through these treacherous waters to lease or purchase commercial real estate, a good broker can be a guide to help you accomplish your goals. In this series I discuss how to identify the traits of a great broker.

So you are looking to lease a warehouse in Williamsburg for manufacturing hoola hoops, you are looking for a retail space to open a underground burlesque, or you are looking to purchase a commercial loft building to create an “Oragami Collective”. What ever kind of business you are in, you are probably looking to work with an agent. But these agents appear to have the same bland corporate portrait, drab website, and bland real estate signs. How do you tell these sharks apart? How do you find a good shark to trust and work with? You cannot tell from their suit, their car, or fancy business cards. There are distinct traits to look for, and once you know them, your battle through the real estate jungle got easier.

Traits

1. DO NOT, I REPEAT DO NOT, USE A RESIDENTIAL AGENT to find commercial property. Using a residential agent to help you find a commercial property is like bringing a plastic yo-yo to a knife fight. The overall knowledge gap between a residential and commercial agent is wide. Residential Agents are good on finding you a home or a apartment to live in. When you speak to them, they will understand very little about what you are trying to do and will waste your time.

2. This is the most important trait for a great agent. A good commercial real estate agent doesn’t aim to just to do a deal. His/Her aim should be to build relationships. This important trait should be apparent in every interaction you have with this agent. This agent will allign his goals according to your goals, even if it means missing out on a quick deal, because he/she knows that a long term relationship with you will benefit in the long run.

Another important point about an agent who looks to build great relationships, is his ability to find properties for you other average agents can’t.

If you look for commercial properties online, you find only a small fraction of whats out available on the market. Commercial Real Estate industry is largely exists offline. Great relationships lead to frequent communication between agents and owners, which therefore leads to have the scoop of up and coming properties.

3. A good agent will ask you many questions during your first interaction. Many buyers/tenants can get put off talking to an agent on the phone. Trying to communicate with an agent through email is a big mistake. Call them. Let them ask you questions about your business, your budget, your property requirements, your desired location. This agent can open up a whole new world of options open to you. He will narrow down properties for you to look at and will save you time not seeing properties that won’t work.

If your first conversation with the agent is short, he will probably be useless to you.

4. A great agent will show you every property that can possibly work for you. If nothing works, he will keep in touch and continuing searching for you until you find what you are looking for, no matter how long it takes.

5. The first time you call this agent and leave a message. He will call you back in 24 hours, no matter how busy he is. Even if he is going through personal issues or on vacation, he will still make arrangements to have another agent cover for him. If he calls you weeks afterward your first call, he is not managing his time well, and he won’t manage your time well.

End of Part 1 of traits of a good traits of a Commercial Agent. Part II will continue my list of great traits.

If you are currently looking for space in the 5 boroughs you can always call me for advice, call Jon Brooks, agent at 5CRE 212-366-0407, email me at jb@5cre.com..

Disclaimer: Not all information above may be accurate. Please before you use any advise in this post or any other post in this blog, consult with a real estate professional and/or attorney.

Why you need a Tenant Rep

Wed, 09 May 2012 07:41:00 -0400

Why you need a Tenant Rep:

The process of securing office space for your organization, whether it is a new location or extending a lease in your current building is a complex and time consuming process. This endeavor is filled with numerous opportunities to make a decision that doesn’t best compliment your business objectives.

Tackling this process without the benefit of an experienced tenant representative to guide you the process and structure a transaction that best serves your operational needs and financial objectives only increases the chances of making the wrong move.

In my twenty years of experience it is typically the smaller organizations who tend to take the do-it-yourself approach, probably because they either (1) don’t understand the value of the service; or (2) have a misconception that by eliminating the tenant representative’s fee, they will get a better deal.

Article continues at
http://www.coydavidson.com/2010/10/16/why-you-need-a-tenant-rep/

If you are currently looking for space in the 5 boroughs you can always call me for advice, call Jon Brooks, agent at 5CRE 212-366-0407, email me at jb@5cre.com..

Disclaimer: Not all information above may be accurate. Please before you use any advise in this post or any other post in this blog, consult with a real estate professional and/or attorney.

Signing a commercial lease? Hire an Attorney.

Sat, 05 May 2012 13:01:23 -0400

Signing a commercial lease? Hire an Attorney.:

As a Real Estate Agent I would like nothing more then for a deal to move along quickly without friction. With that being said, I would never advise a tenant to simply sign a lease contract without hiring an attorney. REPEAT HIRE AN ATTORNEY before signing a commercial lease. Most likely you will be leasing the space for quite a number of years and signing unfavorable terms can cost you dearly, much greater then the cost of hiring an attorney. Landlord’s can sometimes tell a tenant “This is our “standard lease” everyone signs it. Remember the lawyer who drew up this standard lease, drew it up with the owner’s interest in mind.

I will in later posts explore in greater detail, the best way to find a competent attorney, exploring the elements of a lease contract, and how to ensure your attorney doesn’t hurt your deal.

I specialize in the leasing/selling of commercial real estate from 2500SF TO 250,000SF in NYC and surrounding boroughs.

Visit WWW.CTNYC.COM for my listings

Follow me on Twitter for instant up to date information on properties and real estate information

BUY OR LEASE IN BROOKLYN?

Sat, 05 May 2012 01:05:00 -0400

For those businesses lucky enough to find themselves in the position to either rent or buy, this article is certainly for you.

In this post I’ll be discussing buying or leasing in regards to Industrial (warehouses etc) and Commercial Lofts.

Brooklyn has been undergoing for the last 20 years a huge metamorphosis to the point where you can say “Brooklyn is the best Borough” and no one would laugh. DUMBO has Brooklyn’s most successful neighborhood where rental numbers in Residential and Commercial are rivaling Manhattan. Dumbo is reporting vacancy for commercial properties at 2%, those are Michael Jordan numbers.

The rest of Brooklyn is beggining to see vacancy rates drop, especially in properties such as warehouses and lofts. Anyone who has tried to find space in East Williamsburg or Bushwick was in for a rude awakening when they saw how competitive it was to find a space.

Industrial rental prices have risen to the point where industrial users find out that it no longer makes sense to stay in Brooklyn and leave. Only manufacturers of higher end products, and certain food products remain.

Taking it’s place is an exciting assortment of new creative businesses ranging from tech companies, to unique event spaces, art galleries, and music studios.

If you are considering renting or buying I want to illustrate a few key points.

Leasing has a few advantages, 1) You don’t have to commit to a property long term 2) You are not responsible for the upkeep of the structure of the building 3) In an industrial lease, you are typically (not all cases!) not responsible for the base taxes (just any increases) 4) You don’t have to worry about the fluctuations of property values. 5) Industrial and loft properties are expensive

However I feel that purchasing has many more advantages. Here I list a few.

1) The market in Brooklyn looks expensive. Where are the deals? Don’t let the high numbers fool you, despite it’s expense, it has not peaked, and I would bet that 10 years from now, your purchase will look like a heck of a deal. Much like what has happened in places like the meat packing district and the rest of lower manhattan, the same change will be applied to Brooklyn, only on a much larger scale, ranging as far north Greenpoint, as far east as Bushwick/Bed Stuy, and as far south as Coney Island. Buying a building is a terrific investment for your business’s future and can hedge against your business failing.

2) Capital Improvements. Let’s face it, Brooklyn Industrial properties are typically a sight for sore eyes. They are old, beat up, kind of creepy. The chances are you will put in a lot of money to improve the space. Do you want your landlord to reap the benifits of $100,000 of your work or would you like to reap the benefits?

3) Expansion: What if your business expands and you feel like you need to purchase? If you sell your building for a profit to move to larger facility, don’t you have to pay capital gains tax? NO YOU DON’T. The IRS allows to do a “1031 exchange”. A 1031 Exchange allows you to sell a building and purchase another commercial property, no matter the size and you don’t have to pay taxes.

4) Get a bigger space then you need! Divide it up and rent it out and it will cushion you on your mortgage payments, or if you buy it out right, you provide yourself with additional income. If you don’t feel like playing landlord, there are management companies that will just take a small percentage of the monthly rent to manage the upkeep of the building, rent out the space, collect rents, evict, and deal with the city.

5) You are protected against the perils of a lease contract. The lease contract almost always favors the landlord. There are loopholes your attorney might not of saw, and if you are not smart, your lease can be a huge detriment to your business.

6)Very few landlords are willing to give longterm on a lease. Landlords in Brooklyn think there property are gold mines. With projects like Atlantic Yards (arena), renovated water fronts, and businesses exiting from Manhattan to be part of the Brooklyn brand, landlords are preferring to keep their leases short despite their properties needing extensive improvements.

I just listed a few reasons on why you should, there are many others. For those businesses that might not have the cash to buy, but have been in business for years, have good credit, and have been profitable, you might want to consider a SBA loan. It can help you purchase a building for up to five million dollars with just 10 percent down. I’ll get to that in another post.

Feel free to contact me at jbrooks@ctnyc.com for any further questions.

Visit WWW.CTNYC.COM for my listings

Follow me on Twitter for instant up to date information on properties and real estate information

Listed subject to errors, omissions, change of price, or other conditions, prior sale, rent , and withdrawal without notice.

What is a good guy clause?

Mon, 30 Apr 2012 10:02:00 -0400

What is a good guy clause?:

“As long as I pay the rent, I can leave whenever I want, that’s a Good Guy Clause, right?” That statement is wrong, and it’s a common misperception.

A Good Guy Clause is a personal guarantee that protects you when you break the lease. However, typically there are certain conditions that a landlord will want you abide to.

Firstly the landlord will probably make you guarantee that you’ll stay in the space for a set amount of time, for example he’ll want you to guarantee at least two years of a five year lease.

The landlord will request that you also give him a notice that you’ll be leaving the space, so for example he might require that you give him a 3 month notice so it gives him time to market the space.

The landlord will want you to restore the space back to the original condition.

I was profiled in the Brownstoner for my work in Industry City

Sun, 29 Apr 2012 10:18:00 -0400

I was profiled in the Brownstoner for my work in Industry City:

Broker Envisions a Music District for Industry City

It’s been reported that Sunset Park’s Industry City, which has 6 million square feet of warehouse space geared toward creative tenants, has had a hard time finding tenants. (Not surprising, perhaps, give how huge the complex is.) Butbroker Jon Brooks thinks the warehouse space may have potential as a future music district, and he has started marketing it as such. The manager of Industry City gave Brooks around 60,000 square feet to play with and agreed to fund at least half of the build-out once space was leased to a music business. So far Brooks is in the leasing stage for 10,000 square feet of space and is in talks with another tenant interested in rehearsal space. In his words: “Musicians will have access to cheap rehearsal, recording, production space. Also the idea is to have music equipments shops, music event businesses, in the building as well.” The idea is that the increased foot traffic will also bring in ground-floor commercial space.