005. CREI Weekly Update: March 1st, 2021

CREI Weekly Update: March 1st, 2021

The Commercial Real Estate Investor Weekly Update (or the CREI Weekly Update if you’re not up for a mouthful) is the first commercial real estate news show bringing you the biggest news stories and market trends from around the country. Each week, we cover the Nashville market, which markets should be on your watchlist, office / retail / industrial / and multifamily updates, and a wildcard on a topic or trend we feel is worth sharing.

Tune in Mondays at 5:30pm CST to ask your questions live!

CREI Weekly Update: March 1st, 2021
The Commercial Real Estate Investor Podcast
Subscribe to the Podcast

Articles Mentioned:

○ https://www.bizjournals.com/nashville/news/2021/02/08/cre-data.html

○ https://www.nashvillepost.com/business/development/article/21146225/record-set-in-germantown-home-sale

○ https://www.wkrn.com/news/nashville-2021/primary-work-completed-on-fifth-and-broadway-project-in-downtown-nashville/

○ https://www.researchtriangle.org/news/raleigh-durham-overtakes-austin-as-the-hottest-real-estate-area/

○ https://digiday.com/marketing/businesses-mull-blending-residential-units-with-office-real-estate/

○ https://www.cpexecutive.com/post/cbre-backs-industrious-in-200m-flex-office-deal/

○ https://www.bisnow.com/boston/news/retail/once-part-of-simons-massive-portfolio-shopping-centers-see-dramatic-valuation-drops-107857

○ https://www.cnbc.com/2021/02/26/retailers-sign-more-short-term-leases-in-a-risky-bet-for-mall-owners.html

○ https://www.bisnow.com/national/news/retail/the-pandemic-has-shown-rural-retail-resilience-107823

○ https://www.cpexecutive.com/post/top-10-markets-for-industrial-transactions-in-2020/

○ https://www.cpexecutive.com/post/net-lease-market-rises-to-60b-in-sales/

○ https://www.bisnow.com/chicago/news/multifamily/institutional-investors-stand-ready-to-pour-equity-into-mid-market-multifamily-107868

○ https://www.multifamilybiz.com/news/9588/multifamily_housing_construction_starts_kickoff_20…

○ https://www.bisnow.com/houston/news/economy/the-bill-will-come-due-can-texas-support-its-massive-growth-107881

Featured
How to Use AI in Real Estate Investing
How to Use AI in Real Estate Investing

AI is changing how commercial real estate investors find, analyze, and manage deals, but which tools are actually worth using?

In this video, I break down how AI is being used in real estate today, from market research and underwriting to marketing, leasing, and property management. I'll walk through the tools available, where they work best, and where they fall short.

I'll also show you how I'm using AI in my own real estate business, with real examples from my day-to-day workflow, and share a few practical ways you can start using it on your next deal.

Read more →
Commercial vs. Residential Real Estate: Which Is Better for Investors?
Commercial vs. Residential Real Estate: Which Is Better for Investors?

What if I told you the same $400,000 could work a lot harder in commercial real estate? In this week's Office Hours, I'm breaking down two investments side by side: a $400,000 duplex and a $400,000 four-unit strip center. The duplex generates $22,001 in annual net operating income, while the strip center brings in $29,950, even with one unit sitting vacant. But here's the interesting part: that extra $7,949 a year isn't even the biggest difference.

Read more →
Can Architecture Students Help Save This Abandoned Mill?
Can Architecture Students Help Save This Abandoned Mill?

I brought 20 architecture students from the University of Tennessee at Chattanooga to Peerless Mill, a 1.5 million square foot historic mill campus in Rossville, Georgia that we're bringing back to life. They walked the buildings for the first time and pitched what this place could become. If a good idea comes out of this design charrette, there's a real chance we build it. This is Part 1.

Read more →
How to Buy Your First Commercial Property With Little Money Down
How to Buy Your First Commercial Property With Little Money Down

Two real term sheets on the same $400,000 building, read line by line. The local bank quotes 7.00 percent and the credit union quotes 7.75, and the cheaper rate costs $19,022 more cash at closing for 19 basis points of return. The reveal is that neither lender honors its stated loan to value: both fail their own coverage test and resize the loan down, which is the thing that surprises first-time buyers two weeks before closing. Closes with the exact package to send a lender before they ask for it.

Read more →
Commercial Real Estate Leases Explained (NNN, Gross, and Modified Gross)
Commercial Real Estate Leases Explained (NNN, Gross, and Modified Gross)

Two identical commercial spaces. Same size, same property type, but one is worth $97,222 more because of how the lease is structured.

One rents for $14/SF triple net, while the other brings in $18/SF gross. You'd think the higher rent means a better investment, right?

Not necessarily.

Read more →
How Much Will It Cost to Save This Building?
How Much Will It Cost to Save This Building?

Four years ago we bought Peerless Mill in Chattanooga: 32 acres, 29 buildings and about 1.5 million square feet. The plan was always to keep every piece of it. In this video I'm walking Building 21 because I'm selling it.

Read more →
How to Underwrite a Commercial Real Estate Deal (Step-by-Step)
How to Underwrite a Commercial Real Estate Deal (Step-by-Step)

Would you buy a $400,000 commercial building if the bank told you to bring an extra $27,378 to closing? That’s exactly what happened in this example. In today’s Office Hours, I’m breaking down how to underwrite a commercial real estate deal from start to finish using a 4,000-square-foot retail strip center. We’re going beyond the asking price and advertised cap rate to look at the numbers that actually determine whether a deal works.

Read more →
How to Analyze a Value-Add Commercial Property (Full Deal Walkthrough)
How to Analyze a Value-Add Commercial Property (Full Deal Walkthrough)

In this week's Office Hours, I'm walking you through my entire underwriting process using a real value-add industrial property in Denver, Colorado.

Starting with a $650,000 listing, I'll show you how I evaluate a property's potential, estimate renovation costs, research market rents, structure financing, and stress-test returns.

Using our CRE Central Pro Deal Analyzer, I'll break down how small changes in purchase price, rental income, financing terms, and exit assumptions can completely change whether a deal is worth pursuing.

Read more →
How to Negotiate a Commercial Real Estate Loan
How to Negotiate a Commercial Real Estate Loan

What’s worth more: $200,000 off the purchase price—or 12 months of interest-only payments?

Most investors focus on negotiating the price. But loan terms can change a deal’s cash flow just as dramatically. On the same $2 million building, the right financing can make a big difference:

• Interest-only — How much more cash could stay in your pocket during year one?
• Amortization — How could a longer schedule improve cash flow and borrowing power?
• Recourse — What might you negotiate to limit your personal risk?

In my example, a $200,000 price reduction adds about $12,000 in annual cash flow. Twelve months of interest-only payments adds roughly $31,000 in year-one cash—and more than doubles the cash-on-cash return, from 3.6% to 7.7%.

Read more →
Why Buc-ee's Builds $50 Million Gas Stations (Retail Real Estate Strategy)
Why Buc-ee's Builds $50 Million Gas Stations (Retail Real Estate Strategy)

Buc-ee's spends around $50 million per store, then sells gas at almost no margin. In this video, I break down the real business model: the 75,000 sq ft retail machine running ~40% margins, why they own 30+ acres at every interchange and refuse to franchise, and the “Anchor Flywheel” that re-prices all the land around them. Plus the one move regular investors can copy: the 18-to-24-month window between a Buc-ee's announcement and opening day.

Read more →