New - Industrial Buildings For Sale - 16,000 SF on Triangle Street - Lakeland, Florida

Now Off Market

Attention Business Owners and Investors - New Lakeland, Florida Industrial Property on the Market For Sale

Recently Listed for Sale - 1019 & 1029 Triangle Street Industrial Warehouses

Priced to sell at $400,000 or $25/SF. Very versatile industrial/warehouse property.

For more information visit:  

http://lakelandenterprisezoneindustrial.blogspot.com/


Or for a complete property package/brochure visit:

Off Market



7,000 SF Office/Warehouse Building

 



9,000 SF Mini-Storage Building

Real Estate Appraisal - The Fee Simple Interest

"Real Estate Appraisal" - The Fee Simple Interest
The term fee simple in an appraisal is describing a group/bundle of rights associated with the ownership of the property.

Fee Simple is defined as "absolute ownerhsip unencumbered by any other interest or estate, subject only to the limitations imposed by governmental powers of taxation, eminent domain, police power, and escheat." definition from The Appraisal of Real Estate, Appraisal Institute

In essence, fee simple interest ownership in property is a complete form of ownership, subject only to standard goverment power. It is the most wholistic form of legal ownership there is.

So in an appraisal, when the appraiser states that he/she is appraising the fee simple interest in the property, they are stating that they are appraising the property unencumbered, except regarding the 4 governmental powers described above. The complete group of rights or many times referred to as a bundle of rights included with fee simple ownership are:

• The right to sell or sell an interest in the property
• The right to lease or lease an interest in the property
• The right to mortgage the property
• The right to give away/gift the property or an interest in the property
• The right to do none or all of these things

Doing any of the above, except of course for the last bullet of doing none of the above, will create a fractional ownership interest in the property that will typically need to be analyzed or discussed in an appraisal. For instance - when a property owner leases a property to a tenant for say a 5 year period, the property owner has given up the right of use/occupancy of the property and the tenant has gained that right for the 5 year lease period. However, the owner - now landlord - has given up that right for the right to receive income/rent from that tenant over the 5 year term of the lease. The leasing of the property to a tenant for 5 years has created a leased fee interest in the property for the owner and a leasehold interest in the property for the tenant.

Leased Fee Interest is defined as - "An ownership interest held by a landlord with the rights of use and occupancy transferred by the lease to others. The rights of the lessor (leased fee owner) and the leased fee are specified by contract terms contained within the lease" - Appraisal of Real Estate, Appraisal Institute

Leasehold Interest is defined as - "The interest held by the lessee (the tenant or renter) through a lease transferring the rights of  use and occupancy for a stated term under certain conditions as specified in the lease" - also from the Appraisal of Real Estate, Appraisal Institute

Leasing a property does create a form of fractional interest in real property. This is one example of how a partial interest in a property is granted/conveyed by an owner of property.

So does leasing a property change the value of the property, since some of the fee simple interest - bundle of rights - have been granted to a tenant? This is a very good question and one that is encountered often when appraising a property, however the answer is not yes or no but, it depends. It depends on the difference between contract rent and market rent, as well as the value of the fee simple interest (unencumbered), the length of the lease, the amount of lease (lease rate), and how that compares to market lease rates and terms. It also depends on investor perceptions, and a range of other issues.

If you have questions regarding how a lease could impact the value of your real estate or any other questions regarding a whole or fractional interest in real property, we are available to assist.

Please feel free to contact us.

Mike Cliggitt, MAI, MRICS

Cliggitt Valuation, Inc.
Real Estate Analysts & Advisors
Based in Central Florida (Lakeland, FL)
863-661-1165
www.cliggitt.com

What is a Triple Net Lease?

When leasing a property, the rental rate and expense sharing/responsibilities shared between a tenant and landlord are important items that should be considered in the leasing decision process and negotiations. Some rental rates may appear to be lower than others but the tenant is responsible for a larger amount of the property expenses, where as other properties have a higher quoted rental rate but that rental rate includes all property expenses with nothing passed through to the tenant. Below, is a discussion of the triple net lease, where property expenses are passed through to a tenant.

A triple net lease is a lease arrangement where the landlord passes through property expenses to the tenant. The term pass-through is regularly used in the real estate leasing environment and just means an expense item that is being passed on from the owner/landlord to the tenant. It can be passed through in a yearly annual fee or the actual specific bills for each pass through item can be handed over to the tenant to pay directly to the billing entity (i.e. property taxes, insurance, etc.). If the building is a multi-tenant property than the pass-through should/will be based on a pro-rata share of the tenant’s percentage of occupied space in relation to the entire building/property. Example – If a tenant occupies 10% of a building then their pro-rata share of the expenses will be 10% of the total expenses being passed through. The term “Tripe Net”, also known as “Net Net Net” or “NNN” are all used interchangeably and typically mean that certain/specific property related expenses are passed through to the tenant. Under this type of lease the tenant will be responsible for the agreed rental rate, as well as additional property related expenses. The primary expenses typically passed through in a Triple Net lease are property taxes, building replacement insurance, and property maintenance. So the term Triple Net or NNN, means the rental rate is net of (or does not include) three expense items, hence Net Net Net. So Triple Net means the rental rate is net of property expenses, net of property insurance, and net of maintenance and repairs – Net Net Net.
 

Example:

NNN Lease Includes:

Negotiated/Agreed Base Rent
+ Property Taxes (Pro-Rata Share)
+ Property Insurance (Pro-Rata Share)
+ Maintenance & Repairs (Pro-Rata Share)
= Total Lease Costs/Responsibility of Tenant

Triple Net Lease (with real $) Example:

$15.00/SF – Base Rent
+$2.00/SF – Property Taxes
+$0.60/SF – Property Insurance
+$1.00/SF – Maintenance & Repairs
= $18.60/SF - Total Lease Costs/Responsibility of Tenant

So a triple net lease passes through the cost of certain property expenses, as well as the possible risk of future increases or decreases of those expenses over the term of the lease to the tenant. Landlords typically prefer this lease structure as it helps limit uncertainty/risks related to property expense increases and many large property owners (REIT’s, institutional investors, etc.) lease property to tenants on a triple net basis or similar terms.

Just as the triple net lease typically refers to exclusions of three property expense categories, the term double net or single net refers to the exclusion or pass-through of two property expense items (Double Net or Net Net or NN) or a single property expense item (Single Net or Net or N). There are also other ways to refer to leases/lease expense sharing such as a Net Lease, Modified Net Lease, Gross Lease, Modified Gross Lease, Full Service Lease, etc. Each of these various categories refers to how expenses are classified/paid for/shared between the landlord and tenant. Some are utilized interchangeably and may vary from region to region based on local terminology and expectations within various markets around the county. When contemplating entering into a lease, understanding how the property expenses are being paid for/shared is an important item and hiring an attorney to draft a lease or provide clarification and interpretation of a lease is highly recommended.

As a business owner/tenant or prospective tenant understanding the structure of the lease agreement and total cost (base rent and expenses) of a lease is important business decision. Some leases on the surface may look cheaper but when factoring the various pass through expenses end up costing more than other leases.

Our firm performs comparable rent analysis and studies, comparable expense analysis, total lease cost analysis for a single year or multi-year lease contracts, leasing versus owning cost analysis. We also provide negotiation services for tenants and/or landlords with market based evidence/support of our recommendation used as a basis for negotiation or renegotiation of a lease. For all non-legal lease related questions, we are available to assist so please feel free to contact us. We can also recommend an attorney to help with drafting and/or legal interpretation of a lease.

 

Mike Cliggitt, MAI, MRICS

Cliggitt Valuation, Inc.
Real Estate Analysts & Advisors
Based in Central Florida
Lakeland, Winter Haven, Bartow Commercial Property Specialists
863-661-1165
www.cliggitt.com

Price vs. Value in Real Estate Valuations and Appraisals

In real estate "Price" is the amount a purchaser agrees to pay and a seller agrees to accept under the specific circumstances surrounding their transaction. Sometimes the price is reflective of "Value" as determined by an appraiser/appraisal but sometimes it can be substantially different depending on the circumstances of a specific transaction. For instance, if a seller offers financing at attractive terms to entice the buyer to purchase at a price different than most other potential buyers may pay under a normal financing arrangement, than that price has been affected and would need to be quantified and adjusted to reflect the value of the property/transaction. In essence, in the above described situation, the favorable financing led to an increase in the purchase price and is not considered typical of the market. This is just one brief example of how price and value can differ.

Appraisers spend lots of time researching transactions and figuring out how price was determined and how it relates to determining an opinion of value. An appraiser typically tries to mirror the market when determining an opinion of value for a property. Although many variations of the definition of value exists, a very brief description of value can be summed up as: value should be a reflection of the collective market as to how it relates to a specific property including consideration of a variety of market based evidence/data that reflects the combined/collective value judgement of market participants (buyers, sellers, tenants, owners, brokers, etc.). So an opinion of value usually results from the culmination of analyzing a number factors, including: comparable sales, rental rates, land sales, construction costs, current economic conditions, economic forecast, available properties and listings (inventory), various other supply and demand factors, etc.

For more information about real estate pricing, value, or the appraisal/valuation process, please visit our website and contact us with your questions.

Mike Cliggitt, MAI, MRICS
Cliggitt, Valuation, Inc.
863-661-1165
www.cliggitt.com

Real Estate Appraisals for Estate Planning

There are many reasons to get an appraisal of commercial property, including when planning to make a purchase, planning to sell, obtaining financing, estate planning, gifting property to heirs or charity, partnership transfers, divorce settlement, foreclosure, bankruptcy, obtaining appropriate insurance coverage, financial reporting requirements, investment analysis, just to name of few. In all of these situations, obtaining an accurate value is paramount and should be entrusted only to a highly skilled appraisal professional.

A spike in appraisal activity occurred around the last quarter of 2012 much of which was for the estate planning and/or property gifting scenarios mentioned above. The main reason behind this flurry of appraisal activity had to do with the fiscal cliff and the looming adjustment to the estate tax laws.  Many property owners needed current valuations of their assets to help plan and make appropriate arrangements in light of the potential change in the laws and tax rates that were being anticipated. Although the final result of the fiscal cliff negotiations resulted in very limited changes to the estate tax, having a current accurate appraisal of property for long-term family estate planning is prudent a decision.

Appraisals can be utilized in estate planning a number of different ways. Many times intrafamily transfers of either minority or majority ownership in property is necessary and knowing the current market value helps everyone involved feel comfortable that the value associated with the transfer is accurate. Additionally, a variety of tax strategies and planning can be accomplished in advance of major family changes and having an up to date appraisal when plans are being put in place helps in the planning and structuring process. Gifting property to heirs and/or charitable organizations is another instance when having a qualified appraiser perform a current market appraisal of your property is a good idea. 

Anytime an appraisal is needed by a property owner or family estate, only a highly qualified appraiser should be hired, but it should also be noted that for many issues surrounding estate planning, gifting, charitable donation, and any number of other reasons that the IRS requires an appraisal, the appraiser selected must meet IRS requirements as a "Qualified Appraiser" (See IRS Publication 561 for complete details). A brief description from the IRS website states that a Qualified Appraiser is an individual who meets all the following requirements:

The individual either:  

1. 1. Has earned an appraisal designation from a recognized professional appraiser organization for demonstrated competency in valuing the type of property being appraised, or
   2. Has met certain minimum education and experience requirements. For real property, the appraiser must be licensed or certified for the type of property being appraised in the state in which the property is located. For property other than real property, the appraiser must have successfully completed college or professional-level coursework relevant to the property being valued, must have at least 2 years of experience in the trade or business of buying, selling, or valuing the type of property being valued, and must fully describe in the appraisal his or her qualifying education and experience.                              
2. The individual regularly prepares appraisals for which he or she is paid.
3. The individual demonstrates verifiable education and experience in valuing the type of property being appraised. To do this, the appraiser can make a declaration in the appraisal that, because of his or her background, experience, education, and membership in professional associations, he or she is qualified to make appraisals of the type of property being valued.
4. The individual has not been prohibited from practicing before the IRS under section 330(c) of title 31 of the United States Code at any time during the 3-year period ending on the date of the appraisal.
5. The individual is not an excluded individual.

For the highest qualified appraisers select a MAI Designated Member of the Appraisal Institute.



Mike Cliggitt, MAI, MRICS
Cliggitt Valuation, Inc.
Commercial Real Estate Analysts and Advisors
Central Florida Real Estate Valuation Firm
Available in Lakeland, Auburndale, Lake Alfred, Winter Haven and numerous other cities
863-661-1165
www.cliggitt.com

Mike Cliggitt, MAI Awarded MRICS Real Estate Designation

Mike Cliggitt, MAI, commercial real estate appraiser, real estate broker, and property tax appeal consultant at Cliggitt Valuation, Inc. has been awarded the prestigious internationally recognized MRICS professional designation.

Mike Cliggitt, MAI, MRICS - Link to Full Web Page Press Release


Mike Cliggitt, MAI, MRICS - Link to Full PDF Press Release
For additional information please visit www.cliggitt.com.

LEED Buildings of Note in Winter Haven, FL

LEED Buildings of Note in Winter Haven, FL


Planned LEED Certification - Winter Haven, FL

Polk County has hired Register Construction to build the new Polk County Public Safety Complex located along State Road 540 in Winter Haven. This facility will consist of a 100,000 Operations Facility for the Sheriff’s Office, 13,300 SF Communications Center, and a 16,000 SF Crime Scene Investigations Building. The project is nearing completion and the LEED certification process will be ongoing.

Sources: Register Construction Website and Polk County Government Website
Links: http://www.registerconstruction.net/home/news/newsdetail.asp?NewsID=47
http://www.polk-county.net/cipprojectdetails.aspx?type=fac&id=16358

Planned LEED Gold Certification – Winter Haven, Florida

The new Fire Safety Complex located at the corner of Avenue G and Highway 17 (3rd Street) in Winter Haven has been planned and constructed to achieve LEED Gold Certification. The address is 301 Avenue G SW. This facility was recently completed and consists of 22,280 SF.

Sources: City of Winter Haven Facebook Page and Winter Haven Fire Department Website
Links to info: http://www.facebook.com/note.php?note_id=133342902903
http://whfd.mywinterhaven.com/index.html

Planned LEED Certified Home – Winter Haven, Florida

Located along the shores of Little Lake Otis in Winter Haven, Florida, a 4,200 SF home has been planned and is being constructed to achieve LEED Certification. This is reported to be the first home in Winter Haven registered to achieve LEED Certification. Some special design items include: a white membrane roof covering to keep it cooler, peel-and-stick solar panels will be installed by Quickbeam Energy of Winter Haven, geothermal air-conditioning, rainwater capture system, concrete made from fly ash, lumber that meets Forest Stewardship Councils standards, etc. Max Strang Architecture designed the home and Alan C. Ulch, Inc. is building the home.

Sources: Alan Ulch Inc. Website featuring Ledger.com article
Link to Info: http://alanulch.com/TheLedger.html


For more information or an in-depth analysis contact:

Mike Cliggitt
863-661-1165
Central Florida Commercial Real Estate Analysts & Advisors
http://www.cliggitt.com/