Brook Walsh Real Estate Blog - Northern Michigan Commercial Real Estate

Gross Lease

What Is a Gross Lease and How Does It Work?

A gross lease is an agreement in which the tenant agrees to pay a flat rental sum to the property owner in exchange for the exclusive use of the property. The price covers all of the expenses involved with owning a home, such as taxes, insurance, and utilities. Gross leases are extensively utilized in the commercial property leasing market and can be customized to match the needs of the tenants.  (Click here to see all Northern Michigan Commercial Real Estate Listings)

Important Takeaways

• A gross lease is one that includes all of a tenant's out-of-pocket expenses.
• Property taxes, insurance, and utilities are among the additional charges rolled into a gross lease.
• Commercial real estate,…

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Commercial Real Estate (CRE)

What Is Commercial Real Estate (CRE) and How Does It Work?

Commercial real estate (CRE) is a property that is used solely for commercial purposes or to offer a workspace, as opposed to residential real estate, which is utilized for living purposes. Commercial real estate is frequently leased to tenants for the purpose of conducting income-generating operations. This vast category of real estate can range from a single storefront to a large shopping mall.

Retailers of all kinds—office space, hotels and resorts, strip malls, restaurants, and healthcare facilities—all fall under the category of commercial real estate.

Important Takeaways

• Commercial real estate refers to properties that are used primarily for business or to generate money.
• …

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Liquidity Risk

What Is Liquidity Risk and How Does It Affect You?

Liquidity refers to a company's or an individual's capacity to pay its debts without incurring significant losses. Liquidity risk, on the other hand, arises from an investment's inability to be acquired or sold quickly enough to avoid or reduce a loss. It frequently manifests itself in exceptionally broad bid-ask spreads or big price swings.

Important Takeaways

• Liquidity refers to a company's or an individual's capacity to pay its debts without incurring significant losses.
• Liquidity measurement ratios are used by investors, managers, and creditors to determine the level of risk in a company.
• Liquidity risk occurs when an individual investor, corporation, or financial institution is…

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Cash Flow

What Is Cash Flow and How Does It Affect You?

The net amount of cash and cash equivalents being transferred in and out of a corporation is referred to as cash flow. Inflows are represented by cash, whereas outflows are represented by money spent. The ability of a corporation to generate positive cash flows or, more precisely, to optimize long-term free cash flow, determines its potential to create value for shareholders (FCF). After removing any money spent on capital expenditures, FCF is the cash generated by a firm through its normal business activities (CapEx).

Important Takeaways

• The movement of money in and out of a business is referred to as cash flow.
• Inflows are represented by cash received, and outflows are represented by cash…

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What Is an Asset?

What Exactly Is an Asset?

A resource with the economic worth that an individual, corporation, or country possesses or controls with the hope of future gain is referred to as an asset. Assets are bought or developed to raise a company's value or benefit its operations, and they are reported on the balance sheet. Whether it's manufacturing equipment or a patent, an asset can be looked at as something that can create cash flow, cut expenses, or increase sales in the future.

Important takeaways

• A resource with the economic worth that an individual, corporation, or country possesses or controls with the hope of future gain is referred to as an asset.
• Assets are bought or developed to raise a company's value or benefit its operations, and…

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Loan for Commercial Real Estate

A commercial real estate loan is not the same as a home loan.

Commercial real estate (CRE) is an income-producing property that is only used for business reasons (rather than residential). Retail malls, shopping centers, office buildings and complexes, and hotels are all examples. Commercial real estate loans are used to finance the acquisition, development, and construction of these properties. These loans are secured by liens on the commercial property.

What is the definition of a commercial real estate loan?

Commercial real estate loans are made by banks and independent lenders in the same way that home mortgages are. Commercial real estate is also financed by insurance companies, pension funds, private investors, and other sources, including…

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Depreciation

What Is Depreciation and How Does It Work?

Depreciation is an accounting method for allocating the cost of a tangible or physical asset over its usable life or expected life. Depreciation is a term used to describe how much of an asset's worth has been used. Depreciating assets allows businesses to generate revenue while depreciating a percentage of the asset's cost each year it is in use. Depreciation can have a significant impact on a company's profitability if it is not taken into consideration. Long-term investments can also be depreciated for tax and accounting purposes.

important takeaways

• The cost of using a tangible item is tied to the benefit gained over its useful life through depreciation.
• Depreciation can take numerous forms,…

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What Is Illiquid?

Illiquid refers to a stock, bond, or another asset that cannot be sold or exchanged for cash without suffering a significant loss in value. Illiquid assets can be difficult to sell rapidly due to limited trading activity or interest in the issue, as evidenced by a scarcity of ready and willing buyers or speculators to buy or sell the asset. Illiquid assets have smaller trading volumes, larger bid-ask spreads, and higher price volatility as a result.

The polar opposite of liquidity is illiquidity.

• When security or another asset cannot be easily and rapidly sold or exchanged for cash without suffering a significant loss in value, it is said to be illiquid.

• Due to a lack of ready and willing investors or speculators to purchase the…

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6 Steps to a Successful Commercial Real Estate Transaction

If you ask any real estate specialist about the advantages of investing in commercial property, you'll almost certainly get a monologue on how commercial property is a better deal than residential property. Commercial property owners adore the extra income flow, the cost-saving economies of scale, the level playing field, the plentiful market for excellent, inexpensive property managers, and the potential for a larger reward from commercial real estate.

But how can you decide which homes are the best? What distinguishes the good deals from the bad?

TAKEAWAYS IMPORTANT

• Commercial real estate holdings, like other investments, begin with a solid blueprint.
• Learn how the commercial real estate market differs from the residential real estate…

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Liquidity

What Exactly Is Liquidity?

The efficiency or convenience with which an asset or security can be converted into immediate cash without influencing its market price is referred to as liquidity. Cash is the most liquid of all assets.

Important Takeaways

• The ease with which an asset, or security, can be changed into immediate cash without impacting its market price is referred to as liquidity.
• The most liquid asset is cash, while tangible assets are less liquid. Market liquidity and accounting liquidity are the two basic types of liquidity.
• Liquidity is typically measured using current, quick, and cash ratios.

Liquidity: An Overview

To put it another way, liquidity refers to the ease with which an item can be bought or sold in the…

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