Commercial Real Estate

Chip LaFleur

Over the past month or so, CREGR.com has climbed steadily up the Google Rank ladder, and now sits comfortably on the first page of Google Results for a variety of different searches.  This is great publicity, and I’m really happy that we’ve been able to climb in the results to where we are.  Additionally, since I can see what people are searching for that brings them here, we’re going to work to bring answers to the questions people are searching for.  Here is a sampling of today’s search results:

Grand Rapids MI Commercial Loans
The Importance of a Land Survey in Commercial Real Estate
Commercial Real Estate Broker in Grand Rapids
How to Reduce Commercial Taxes
Survey Requirements in Real Estate Transactions

And also someone searched for “Chip LaFleur Grand Rapids Michigan.”  I am very curious who you are; since I saw the search that means you must have found me!

Moving forward, we’re going to strive to pick up on the trends that bring readers to us and focus on topics that clearly need attention.  Obviously some of the terms people are searching for are already covered here, but several new topics relating to commercial real estate are not addressed yet, and we are going to attempt to cover them.  Also some that already have been touched on can be refined and added to, for the benefit of our readers.

That being said, if anyone has a specific question or a specific topic that they would like addressed, we would like to help you!  I can be reached at clafleur@ccmichigan, through twitter: http://twitter.com/chiplafleur, or via comments at the end of this post (if you don’t see a comment box, click on the title of this post and it will be below.  I watch the comments closely, as well as my twitter feed and of course email.

I’m looking forward to expanding our content to include additional topics that affect our readers, and I hope that we are able to answer all of your commercial real estate questions!

For Additional Information Click Here

We just drastically reduced the price on this property in Lowell, Michigan.  The building actually consists of potentially two individual storefronts – currently the space is combined as one but it could easily be re-adapted to accommodate two users.  The main floor is being used as a combination photography studio and office space at present, but could be converted into a fully retail or office use very easily.

Additionally, there is an apartment that could be rented out upstairs, it needs a little bit of work but would be ideal for an individual that would like to live where they work or reduce their payment by renting out the apartment.

This really is an extremely unique property and has a tremendous amount of character.  It sits in the center of Lowell, right in the middle of the Lowell Dam on the Flat River, right before it joins the Grand River.  It is essentially the only property that has an unobstructed view both to the north and south on the Flat River.

If you would like to take a walk through the property (and it’s worth it!), please give either Greg Mahalick or Chip LaFleur a call at (616) 459-8000, or send an email to clafleur@ccmichigan and we’ll schedule a showing!

The aerial photos below are quite large, so please be patient as they load!

Available East Beltline Properties

Calling all developers!  The day is finally upon us – The Village at Knapp’s Crossing has broken ground!  After months, if not years, of anticipation, Lamar Construction Co. has initiated construction for D & W Fresh Market!   The Village at Knapp’s Crossing will soon transform into the area’s main shopping destination, located on the prime corner of East Beltline & Knapp.  The question you should ask yourself is: “Who owns the surrounding parcels to this development and how are they currently postured towards the market?”

Why blog about this you may ask?   You haven’t told me anything about the development that the news didn’t report this morning.  Well, I do not wish to shed light on the ever illuminating Village at Knapp’s Crossing; rather, today I wish to shift your attention towards the next piece of the puzzle.  A diamond in the rough situated just over a half-a-mile up the road to the north, on the west hand side of the road.  3 adjacent parcels with 3.05 acres total available.  534’ of prime frontage on East Beltline, public water and sewer available.

2501, 2515, & 2539 East Beltline are contiguous parcels all zoned R-1 (http://www.grandrapidstwp.org/ordinances/zoningchapters/Chapter7.pdf) but master planned for PUD 3 (http://www.grandrapidstwp.org/ordinances/zoningchapters/Chapter7.pdf) which is medium-density residential & low density office.  The master plan for these parcels (PUD 3) will allow: multi-family, professional office, churches, restaurants, child care centers, & many more!  Call Callander Commercial today and ask for Greg Mahalick or Chip LaFleur for more information: 616-459-8000

Click Picture for Property Information

This building is easily demised for multiple tenants or one larger office user with some warehouse storage requirements. The property is located at 3529 Lousma Drive in Wyoming, Michigan, off of Roger B. Chaffee just north of 36th Street.  The building is located under 5 minutes from the entrance to US-131 at 36th Street, and includes an overhead door for access to the warehouse area.

The interior is nicely finished and ready for occupancy.  There are currently three tenants in the building, although the space could be arranged for an owner to take occupancy immediately.  The building contains several demised offices, as well as conference rooms and larger rooms that are perfectly laid out for training courses or presentations.  I-1 Zoning allows for a variety of uses and make this property very versatile.  Plenty of parking completes the package!

Take a look at our e-book located here.  If you would like more information or to arrange a showing, please contact either Greg Mahalick or Chip LaFleur.

Chip LaFleur

Last week was a little bit light on the postings, but heavy on the accomplishments.  I guess that’s a good thing, especially in this economic climate.  But in the few minutes that I have today, I wanted to post about a few things from last week.

Market Activity

This is by no means a scientifically accurate picture of the market, but the activity level over the past few weeks seems to be picking up.  All of us in our offices have been showing property constantly, and even writing offers that don’t make our owners choke.  Offers that property owners are willing to counter, and the counteroffers are being discussed and re-countered.  I’ve met people that are looking to start up new businesses that have the capital to do so and even the credit-worthiness of a decent, longer term lease.  We’re still working on some of the details for some of them so I can’t get into detail here, but things seem to be happening, and we are excited.

Continuing Education

Last week Wednesday (October 14) a few of us here at Callander Commercial attended the “late season” Continuing Education at the Commercial Alliance of Realtors.  The course was taught by William M. Schlecte, Esq., from Schlecte Law Firm, PC, and the Professional Learning Network, Inc. Hopefully Mr. Schlecte will have some additional real estate updates for us here at CREGR.com.  The class was outstanding; Mr. Schlecte presents information that not only fulfills the requirements of the state, but that helps us be better agents and REALTORS®.  His course includes not just the how but the why; providing case law and legislative changes and updates that affect how we do business.

To cover some changes / upcoming changes in environmental law Sandra K. Clark, with Applied EcoSystems-Great Lakes, Inc. spoke about some of the potential changes to the DEQ and DNR, as well as changes that could drastically affect properties with environmental issues.  In short, the State of Michigan is considering making some sweeping changes to environmental law that is likely to have quite an impact on how property owners deal with environmental contamination and cleanup.  In the near future we should have some comments and insight from her as well; I wouldn’t be able to begin to get into the detail that is required on this subject.

Peninsular Club

I had the opportunity on Thursday to meet some friends for lunch at the Peninsular Club; it was my first time there and it was an incredible experience.  If you have an opportunity to look into the club, you can find out more at Penclub.net.

Grand Rapids Symphony

Lastly, I unfortunately missed an opportunity to attend the Grand Rapids Symphony on Friday for a show that, from what I heard, was simply outstanding.  In order to make sure that I don’t miss any of the upcoming performances I want to see, and to let as many people know about a wonderful program that has been bringing people and therefore business to the downtown area, I’ve invited the Symphony to send me notices of upcoming shows, which I will then post here.  I think that the Grand Rapids Symphony does an amazing job of not just providing some excellent entertainment, but they have for many years made coming “downtown” an exciting event, and I would like to lend whatever support I can to a great program.

Exciting Things to Come

Perhaps this was more of a preview of some upcoming features than an update, but either way I’m left with a positive feeling about West Michigan and the unique elements that make up Grand Rapids and the surrounding area.  I believe that it is the combination of the efforts of groups like the Peninsular Club, the Grand Rapids Symphony, the Broadway Theater Guild, and the many other exciting and unique organizations and institutions that make Grand Rapids a great place to live, and great places to live create great places to invest in property; they create great places to start a business.  If you know of any organizations, groups, businesses, etc., that you feel enhance our area and make it a better place to live please send me an email at clafleur@ccmichigan.com or just leave a comment below!

If you have put off your continuing education class(es) and need an online class that’s interesting and very well put together, I’d suggest giving these a try.  I’ve taken this online course in the past and found it very well done and informative.

This is the online version of the same Continuing Education course attended in classrooms annually by over 45,000 Michigan real estate licensees.  The author, Jack Miedema, has been an instructor since 1994, and has been a featured speaker for many local and state associations of REALTORS®, the National Association of REALTORS  (NAR), the Real Estate Educators Association (REEA), and the Association of Real Estate License Law Officials (ARELLO).

Before enrolling in a course for the first time, you may want to complete the five-minute Demonstration Course below, which explains the requirements for completing an online course.

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Economic Development Foundation

October 2009

20-year debentures were sold this month.  The effective SBA 504 October 20-year rate hit an all time low at 4.86%!  The September 10-year debenture rate is 4.25% (10-year debentures are sold every other month).  Please note that these are fixed rates for commercial real estate and equipment purchases.

October 1, 2009 marks the start of a new year for SBA lending.  With that comes changes to SBA fees and updates according to the Standard Operating Agreement (SOP).  We have listed below some of the more important changes.

New Business/Change of ownership:

We can now include experience in the analysis of whether or not a small business is a new business or existing business.  This revision allows us to evaluate new business ownership and debt incurred through ownership change.

The borrower can qualify as an existing business based on past experience.  However, a sufficient case must be made by presenting an explanation to SBA.  We must explain that the new owner’s experience and any additional debt incurred through ownership change does not directly impact the operating company.

Third Party Lender Loan:

The third party lender may close and begin amortizing their loan prior to the debenture funding if the project is completed and business is operational.

Public Policy Goal/Green lending initiatives:

SBA clarified that the 10% energy reduction applies to existing operating companies only.  If the borrower can show a 10% reduction in energy (after improvements) in their existing building or with the new building purchase then they qualify for a $4 million debenture amount.

Eligible project costs/Land and required infrastructure Improvements:

Land is counted at cost if bought less than 2 years prior to application or at fair market value based upon appraisal if owned for 2 or more years.

Appraisal Requirement for new construction:

After construction is completed the appraiser must provide a statement that the building was built with only minor deviations (if any) from the plans and specifications upon which the original estimate of value was based.

If the appraiser cannot provide such a statement, then the lender may not close the loan without SBA’s prior written permission.

Appraisal value exceptions allowed by SBA:

This change provides us with guidance regarding appraisals that have a value of 90% or less than the total project cost.  If additional collateral or investment is not available for the 10% shortfall, but the CDC can demonstrate in its analysis that the operating company has strong, consistent cash flow to support the debt, then SBA may approve the appraisal.

FY 2010 504 Program Subsidy Rate

Beginning October 1, 2009 (gov’t fiscal year 2010) the on-going borrower fee went from 0.00% to 0.389% or 38.9 basis points per annum.  This is an increase in program cost for the borrower, and is paid by the borrower annually to SBA.  SBA holds the dollars in a pool, which are used for debenture repurchases.

The fee is increasing for a couple reasons.  One reason for the fee increase is due to SBA’s formula for the on-going borrower fee.  SBA uses the nation’s unemployment rate in the econometric subsidy model.  As everyone knows, the national unemployment rate has increased to 9.8% YTD 2009, with indications that it will continue to increase.

Another reason is the use of forecasted loan default data in the model’s calculations.  SBA is forecasting loan defaults to increase from 3.5% to over 7.3% in FY 2010.

The on-going fee only applies to loans approved after October 1, 2009.  If your authorization is dated prior to this date, but you plan to close after October 1, 2009, the on-going borrower fee remains at 0.00%.

October Rates

20-year rate: 4.86%

10-year rate: 4.25%

EDF Contacts

Ph. 616-459-4825
Fax 616-458-5736

Reprinted with permission from the Economic Development Foundation.