The Future of Retail and Restaurants is Destination Focused

Posted on June 10, 2019

The old adage that location is everything in real estate has never been truer than it is today, as consumers tend to spend more of their time shopping and dining at locations that provide them with an experience. Similarly, savvy retailers and restauranteurs recognize that they are not merely leasing space to sell their wares but rather providing a destination where consumers want to return again and again to spend their time and dollars. With this in mind, some of the best properties right now are those that offer tenants the flexibility to accommodate consumers’ changing needs and provide them added value in the form of personalized services, partnerships with complimentary tenants and even the addition of drive-through windows and mobile order pick up lanes.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.

 

The Good News in Big-Box Retail Closings

Posted on June 05, 2019

It may come as a surprise to the average investors that the past two years of bankruptcy filings by long-standing retailers, such as Sears, Kmart and Toys R Us, may actually prove to be a big win for the owners of the properties where those retailers once operated.

For the most part, these long-term anchor tenants were paying lower rent for the amount of retail space they occupied. Over the past several decades, they made little to no investments in capital improvements and were unable to continue to be a draw for foot traffic. Therefore, as these retailers close underperforming stores, property owners have an opportunity to reposition and restructure the space to attract newer retail concepts that are flexible and willing to pay higher rent and invest in capital improvements to draw customers. In many instances, it will make sense for property owners to break up vacancies into smaller parcels to maximize the efficiency of the space and the retailers’ ability to improve the customer experience.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.

 

Investing in Real Estate when Your Time is Scarce

Posted on May 30, 2019

The potential income and rate of return generated by real estate investment has been a catalyst for a broad range of investors to jump into the market with both feet. However, not all investment properties are created equal, and some require investors to commit a considerable amount of their personal time, energy and resources to manage the day-to-day operations of the property in order to yield solid returns over the long term. However, not every investor has the time to get their hands dirty. When time is scarce, it behooves investors to work with professional advisors who have depth of knowledge, breadth of experience and deep tenant relationships to handle all phases on investment property, from due diligence and acquisition through to tenant relations and property disposition.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.

2019 Outlook for Net-Lease Properties

Posted on May 21, 2019

According to the results of a recent study conducted by National Real Estate Investor (NREI), the net-lease sector is on track for a favorable 2019. Interest rates have stabilized, cap rates remain unchanged and liquidity remains strong, helping to fuel robust transaction volume even in the retail sector where investors can find a number of good buying opportunities.

One of the primary benefits of net lease real estate is its ability to provide investors with a steady stream of rental income without requiring a substantial commitment of their time to manage the property. This is especially important for passive investors looking to complete 1031 tax-deferred exchanges of like-kind property. Moreover, many retailers, restaurant owners and other tenants looking for ways to improve their business operations and cater to consumers’ evolving needs are finding it beneficial to pull their money out of their real estate holdings to finance those improvements.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.

 

How Can a Slowing Economy Affect Commercial Real Estate Investment?

Posted on May 15, 2019

As the longest global expansion in history continues past 10 years, it is not unreasonable to consider or speculate when the next pullback will occur.

On the one hand, signs of an economic slowdown have caused the Fed to hold off on interest rate hikes in 2019, which could further extend 2018’s record-breaking commercial real estate deal activity without significant impact on deal value. Therefore, investors still have time in 2019 to prepare their real estate portfolios for potentially slower economic growth in the future. This may bode well for property owners looking to sell long-held property for a profit or replace outdated tenants and/or investors seeking to diversify their portfolios and grow income through investments in s new asset class or geographic locations.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.

 

How Much of My Investable Dollars Should I Allocate to Real Estate?

Posted on May 09, 2019

There is no magic number or mathematical equation to tell investors how much of their assets they should invest in real estate. While a general rule of thumb is to allocate between 5 percent and 20 percent of a portfolio to real property, individuals may invest more or less depending on their specific circumstances, including risk tolerance, income needs and tax circumstances.

For the most part, real estate is ideal for portfolio diversification and enhanced yield without the high level of risk that investors will find in the public equity markets. Moreover, different classes of real estate provide investors with a diverse range of options and benefits to meet their specific needs. For example, an investor who does not have the time to actively manage a property, make needed repairs and find tenants might be better served investing in commercial real estate, which typically has longer lease terms and often involve triple net leases for which tenants are responsible for maintenance, repairs, property taxes and insurance. Therefore, commercial real estate investors may simply sit back and collect passive income from tenant lease payments until they sell the property and potentially earn profits from its appreciated value.

As a word of caution, however, real estate investors must exercise patience and recognize that some investments in real estate are long-term commitments in illiquid assets that can restrict access to capital. As a result, if you will need access to your investable dollars in the next few years, a shorter-term real estate venture may be the best option for you.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.

Opportunity Fund Investors Beware

Posted on April 30, 2019

Much ink has been spilled and many billions of dollars already directed to the Opportunity Zone program, which provides tax breaks to private investors who reinvest capital gains into one of the country’s more than 8,700 certified, low-income Opportunity Zone communities. However, at this early stage of development, it is worthwhile to consider that not all opportunity zones are created equal. Investors must be prepared to ask questions and avoid quick decisions based solely on tax benefits rather than the merits of underlying real estate property.

Not every property in an OZ will qualify for a tax break, and choosing the wrong Qualified Opportunity Fund (QOF) to invest with could result in liquidity issues and unexpected tax liabilities. While QOF’s must meet rigid compliance standards to participate in the program, they are not required to provide details about their investment sources, how those dollars are being used and whether or not their investments yield desired results. For these reasons alone, QOF investors should seek the counsel of tax and legal advisors as well as experienced real estate professionals who can assess the viability of the underlying investments, potential risks and rewards. After all, a tax benefit alone should never be the primary reason for making investment decisions.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.

IRS Clarifies Deductions for Real Estate Investors

Posted on April 24, 2019

The IRS has finally weighed in on whether investors’ real estate rental income rises to the level of qualified business or trade income (QBI) that is eligible for a new 20 percent deduction under the new tax law. For tax years beginning in 2018, rental real estate enterprises structured as relevant pass-through entities (RPEs), such as S corporations, LLCs, partnerships, sole proprietorships, trusts or estates, may qualify to write off up to 20 percent of income they generate from rental activities they perform at least 250 hours of rental services per year per enterprise. Moreover, the IRS requires these taxpayers to maintain contemporaneous records of dates and hours of services as well as separate books to reflect the income and expenses of each of their rental real estate enterprises.

Specifically excluded from the QBI eligibility is real estate that taxpayers use as a residence for any portion of the year (such as a vacation home) as well as triple-net-lease (NNN) property, for which tenants are responsible for paying along with their rents property taxes, insurance, utilities and maintenance costs. This last point may require further clarification from the IRS since it could be argued that NNN still constitutes a valid trade or business.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.

 

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