Lakeville MN Housing is Booming – More Commercial Need

Lakeville MN Housing – New Development Approved

Lakeville’s Largest housing development since 2005 has been approved! Cedar Avenue Properties will add just shy of 1,000 new home sites to Lakeville MN. This massive addition of new homes will result in an increased commercial need in the area. CERRON Commercial Properties is currently marketing a property on the NWC of Cedar Avenue and Dodd Road which is easily able to accommodate a variety of commercial uses: apartments, memory care facilities, schools, places of worship, as well as retail or office opportunity. Now is the time to begin planning a large scale project to create opportunities to meet the needs of these new Lakeville residents.

You may read more about this new development in the Star Tribune or in the Sun Thisweek newspapers.

For additional information on the 15.5 acre commercial listing just off of Cedar and Dodd, visit the CERRON listing page and contact our team for more information on starting a commercial project near this new Lakeville MN housing development.

Lakeville MN Housing Development Planned at Cedar and Dodd Lakeville MN Housing Development Planned at Cedar and Dodd – concept plan by Mattamy Homes via Star Tribune

 

Cedar & Dodd - area commerce 15.5 acre parcel located just to the north of new housing development (majority of housing development to be located immediately south of the Parks Maintenance building on west side of Cedar)

Office Warehouse Space: Apple Valley, MN

Office Warehouse Space Apple Valley, MN – Apple Valley Business Campus, Phase III

Office warehouse space is now available in Apple Valley, MN. Phase I& II of the Apple Valley Business Campus is at almost 100% capacity and Phase III is now leasing with construction completion anticipated for mid-summer, 2014.

Apple Valley Business Campus (AVBC) is an office warehouse space located in Apple Valley (just a block away from Sam’s Club, Menards, and many area restaurants) & is zoned I-2

Click Image to enlarge

This is an ideal use for: Office/Warehouse, Instructional Athletic, Manufacturing, Distribution, or Show Room

For more information, visit our website.

Grab a flyer HERE: Phase III AV Business Campus – 6275 147th St. W-Flyer

 

MN Warehousing Tax – Part 1

MN Warehousing Tax – Part 1

MN Warehousing Tax– Part 1 is the first of two reports we are planning to bring to our readers regarding the new warehouse tax on the books for MN businesses. If you are involved in third party warehousing as a part of your business, we are sure you have heard the MN Warehousing Tax is due to go into effect on April 1st. It is actually one of three business to business (B2B) taxes to go into effect in 2014. This specific warehousing tax would impact businesses which provide third party warehousing services, as well as those businesses who utilize these third party services.

According to the MN Department of Revenue, “Starting April 1, 2014, business-related warehousing and storage services will be taxable in Minnesota. This means state sales and use tax is due when a business buys warehouse or storage services for its tangible personal property.” There are exceptions to this rule, which are dependent upon business use[1].

Come April 1st, Minnesota would be one of few if not the only state with a warehousing tax of this kind, which could ultimately put the businesses in our state at a distinct disadvantage. Some companies are already feeling the impact of this tax. According to an article by Jessica Harper for Sun Thisweek Dakota County Tribune, in an interview with warehousing General Manager, Kathy Forester, in talking about the tax, she states, “With its customers seeking services elsewhere, Strategic lost 18 percent of its revenue between August 2013 and January 2014, which prompted the company to lay off 22 percent of its workforce[2].”

The Minnesota Legislature is scheduled to reconvene on February 25th. At that time, the Minnesota State Budget will be reviewed. If there is a sufficient surplus, Governor Dayton may consider a repeal of one or more of these B2B taxes[3]. As it stands now, however, these taxes have been signed into law and only a new bill that strikes the provision of the current tax could repeal it. There are many groups working right now, toward the effort to repeal the MN Warehousing Tax.[4]

Stay tuned to learn more in the weeks to come, or feel free to contact our team with concerns about the impact on your current commercial space.

Upcoming Dates:

  • Mid-February – State Budget Forecast (Gov. Dayton will use this information to determine if these new taxes are necessary)
  • February 25th – New Legislative Session Begins
  • April 1st – New Warehouse Tax goes into effect

[1] MN Department of Revenue Warehouse Tax Summary

http://www.revenue.state.mn.us/businesses/sut/Pages/2013_WarehouseStorageServices.aspx

[2] Businesses impacted by the MN Warehouse Tax

http://hometownsource.com/2014/01/27/businesses-legislators-feel-heat-from-new-taxes/

[3] Businesses vow to repeal the warehouse tax and Gov. Dayton to support repeal if sufficient surplus exists

http://www.mprnews.org/story/2014/01/08/businesses-vow-to-seek-repeal-of-warehouse-tax

[4] Commercial Real Estate Group works to repeal the tax

http://www.startribune.com/business/242830181.html

 

Commercial Real Estate Lending – 2014 Outlook

Commercial Real Estate Lending – What the Experts have to say about the 2014 Outlook

Commercial lending review by Jack Matasosky

According to a recent article by the ABA Banking Journal, Commercial Real Estate is coming back! The article caught our attention because commercial lending’s strict standards have had a direct impact on our business. We can go through all the necessary steps to assist our clients with a new purchase or the construction of a new building, but it is the hoops our clients are required to jump through we have found to be a major stumbling block to the process of securing an ideal property solution.

According to Steve Cocheo, in his ABA Banking Journal article, “CRE’s Coming Back”, “Amid indications that commercial real estate credit activity has been picking up again at the nation’s banks, an inter-industry survey reports a strong preference for commercial banks as a source of CRE credit.”

Cocheo further cites a Deloitte Center for Financial Services report, “2014 Commercial Real Estate Outlook: Trimming the sails for growth; business transformation is key,” in which the firm stated:, “Bank lenders are easing their standards, leading to increased CRE lending volumes and a rebound in commercial mortgage-backed securities issuance. Transaction activity and pricing are healthy for prime properties.”

We consider this good news in the commercial real estate lending arena and are optimistic for 2014 to be the year we start to see the pendulum swing in the other direction regarding lending standards.

You may read the full article at the ABA Banking Journal HERE.

As you consider your commercial property needs, contact our expert team at APPRO and CERRON to provide you with the most up to date trends in commercial real estate or commercial construction.

Purchase I-35 Land Now: Lee Lake Commercial, Lakeville, MN

Ready to purchase I-35 Land? Lee Lake Commercial Lots are Available in Lakeville, MN

Purchase I-35 Land Now at Lee Lake in Lakeville, MN. These picturesque lots are the ideal location for retail or office with excellent freeway exposure garnering 83,000-103,000 vehicles per day in traffic counts. The site may also be an ideal location for senior housing or a memory care facility, as this property is located in C-3 zoning district (which was recently approved for this type of use by the City of Lakeville – (see Star Tribune article, Nov. 24, 2013). Additional use options may include apartments (re-zone), medical, restaurant or hotel.

Conveniently located on the southwest corner of I-35 and CR-46, this 13.91 (saleable) acre site is divisible to one (1) to two and a half (2.5) acre lots to meet your needs. Water, sewer and electricity are available on this site and multiple site options and configurations are available to review.

Join area businesses which include: Starbucks, Fitness 19, SuperAmerica, KwikTrip, Leo’s South, KFC, McDonald’s, Brunswick Zone, Gander Mountain, Pizza Ranch, HOM Furniture, AmericInn, Cracker Barrel, and Fleet Farm to name a few.

Lakeville is a growing community and is anticipated to be Dakota County’s largest city by 2040 according to a recent Vision Study completed by the City of Lakeville.

Great demographics, great traffic counts, and a great community. Now is the time to purchase a lot at Lee Lake. See our Lee Lake Commercial Lot listing page for additional details and a full brochure.

Call our friendly team today to learn more about this property and to discuss site options at CERRON Commercial Properties, a full service Real Estate brokerage.

What to Look for in Investment Properties

Want to know what to look for in investment properties? This is a great place to start.

what to look for in investment properties information from CERRON Commercial PropertiesLove Real Estate? Thinking about getting into Investment Properties?

Most people know the common formula affectionately known as IRV.

Income = Rate X Value

Income is the net operating income (revenues minus operating expenses and before debt service).

Value is the real estate market value.

Rate is the capitalization rate. When you have a higher cap rate, the lower the value for the same amount of income or conversely, the lower the cap rate, the higher the value. Cap rate also reflects risk. Typically the higher the cap rate, the higher the risk. Lower cap rates come from credit tenants who are perceived as less risky. Cap rates run around 4% to 12% with an average of 8%. For easy figuring many use 10%–$100,000 of income is a $1 million value.

The other part of the equation is not reflected here: what does is cost to borrow. If interest rates remain low (as they are predicted to do), then the cost of borrowing will stay low and allow for greater property values that still provide a desirable rate of return. Some investors have recently enjoyed 5 year money for as little as 3% interest. When you can leverage your money, you can make more money, but it is also more risky. I suggest you talk to your banker before looking to buy to find out how much you could borrow and at what terms that work for you. If you don’t have a banker, we can provide several professional contacts we have enjoyed working with over the years.

Other things to look for:

  • quality of the tenants
  • length of the term of the leases in place and renewal terms
  • vacancy (and vacancy allowance)
  • quality of the building, grounds and parking lot
  • condition of HVAC
  • condition of the roof
  • responsibilities of landlord/tenant in the lease
  • property management
  • operating expenses—are they in line?
  • real estate taxes –property tax detail
  • location –ease of access, lit intersection
  • potential changes in roadways or development-contact the city
  • zoning code and allowable uses
  • potential reuse
  • parking stalls—parking ratio
  • visibility
  • signage

The good news is that anyone can be a real estate investor. The key is to have good people to help you with your property: banker, property manager, commercial real estate agent, contractor, accountant and real estate attorney. The APPRO/CERRON team can help with leases, sales, acquisitions, management, market/proforma analysis, architectural design, and construction. We have contacts to cover the other areas to fit your project. Take their professional advice, use common sense and follow the golden rule of real estate: don’t fall in love with it. When it is time to sell, sell.

<em>The information contained on this website and from any communication related to this website is for information purposes only. As with all financial matters, consult your tax, legal or accounting professionals to discuss how investment decisions may impact your specific circumstances.</em>

Lakeville High School Career Jamboree (2013)

Lakeville High School Career Jamboree (2013) – Lakeville Community Event

Casie Radford and Kris Bockelman at the 2013 Lakeville High School Career Jamboree

The 2013 Lakeville High School Career Jamboree was a very exciting and well attended event! Three (3) team members from APPRO and CERRON were able to attend the event held on on Monday, November 4, 2013:

  • Casie Radford, APPRO’s architect
  • Kris Bockelman, CERRON’s Commercial Administration Assistant
  • Andrea Kaderlik, Marketing Coordinator for both APPRO and CERRON

Representing both APPRO and CERRON, these team members spoke to many of the 850 Lakeville High School (North and South) juniors who were invited to this event between 2:30 p.m. until 4:30 p.m. While meeting with the students, we had the opportunity to discuss careers in each of our respective fields of design and architecture, commercial real estate and administration, and sales and marketing.

The students asked many thoughtful questions and hopefully learned about opportunities in the commercial real estate, design, architecture and construction services fields. Many students were surprised to find out the amount of years required to obtain an architectural degree and subsequent license upon visiting with Casie. Students were also curious to find out what a typical day in commercial real estate administration or of a marketer may look like, should they choose to pursue a career in these areas of interest.

Our two sister companies, APPRO and CERRON, were joined by approximately 70 other area businesses including: agriculture, food and natural resources, arts, communication and information systems, business management and administration, engineering, manufacturing and technology, health sciences technology and human services. It was a full house indeed!

The entire team at APPRO Development and CERRON Commercial Properties, is thrilled to be a part of the Lakeville community and to volunteer our time for events like this. We were very encouraged and highly optimistic about the future of our community as a result of conversations with the students with whom we met this week!

Feel free to read more articles about our commitment to and involvement in our local community in the “Community” section of our Blog Page. You may also see the handout we shared with students: 2013 – career jamboree handout-full page. We are grateful to Lakeville (North and South) High School and the Lakeville Area Chamber of Commerce for the opportunity to be a part of this fun day! Thank you!

 

 

Commercial Property Tips: 13 Spooktacular Ideas for Non-Creepy Spaces

13 Commercial Property Tips for Non-Creepy Spaces

 

APPRO and CERRON commercial property tips for non-spooky buildings “Spooky Moon” Source: rcbodden via Flickr

Our team would like to share some fun commercial property solution ideas to keep your space from being creepy (BEWARE: this blog post contains many links to helpful resources – you may need to hover your cursor over to see the link and a description will “magically” appear – only a little spooky, right!?):

  1. Clear out the spiders and cobwebs to make your space enchanting. We team up with the best subcontractors in the industry, including commercial cleaners & landscapers.
  2. If your parking lot is looking more like a graveyard, than a welcome space for your employees and visitors, it might be time to consider an exterior update. We hire the best Project Managers in the Midwest who oversee our remodel, expansion and new building projects.
  3. If your employees are looking more and more like zombies because their workspace needs changing, you may want to consider a possible remodel. Our design team can plan out ideal space configurations for your workplace.
  4. If you encounter monsters on your drive into work, you may want to consider moving your business to a different location. CERRON Commercial Properties – our website includes ALL Minnesota commercial properties*!
  5. Does the thought of finding a new space feel a little scary? A new lease space is waiting for you.
  6. Afraid of the Dark? Shed some light on your office, retail or industrial spaces by implementing new lighting and/or design options. Our award-winning Architect has the perfect solution.
  7. Are ghosts and tumbleweeds the only things passing by your retail space for lease or sale? The CERRON team can connect you with some live prospects.
  8. Wondering if it is time to sell your space, but the cat’s got your tongue. Get a quick, easy, and free market analysis.
  9. Do you find the prospect of financing a new project downright hair-raising? Clear, solid financing options are available.
  10. Face the skeletons in the closet and tackle building maintenance. Use our annual maintenance checklist.
  11. Looking for the perfect potion for configuring space or calculating financing? Easy estimating tools (space & mortgage calculators) are bubbling up in our cauldron.
  12. Are your employees howling for more space? APPRO can fast track a new building for your favorite werewolves.
  13. Finding vampires everywhere you go? Might be time to consider working with our friendly, (non-blood-thirsty) APPRO and CERRON team.

 

Wishing you and your team a very Happy Halloween!

“Orange” you going to consider sharing this? We sure would love it if you did!

Trading Up: The Basics of a 1031 Tax Exchange

Trading Up: The Basics of a 1031 Tax Exchange

A Commercial Real Estate Topic Review of the purpose, rules & options in a 1031 Tax Deferred Exchange

1031 Exchange How to by CERRON Commercial PropertiesI’ll start by saying you should consult with your tax and financial advisors for information on whether a 1031 Exchange is right for you and your financial goals. I can help you find the new property and also help you sell the old property.

A 1031 Exchange can be a great tax benefit for someone that wants to stay invested in commercial real estate and would also like to trade up and improve their commercial investment. Maybe that office warehouse with the low ceilings and dated office finish has become increasingly expensive to keep up and to lease out. Maybe a newer, high clearance warehouse with a beautiful office space and state of the art cabling and communication capabilities is just what your renters are looking for. You’ve just hit on the perfect 1031 exchange scenario. Sell that old building and buy one that fits your goals without having to give Uncle Sam any of your hard earned commercial investment profit.

There are a few things you need to know about 1031 exchanges before you take my advice and call Cerron for your property solutions. So what is a 1031 Tax Exchange? In this article I’m talking about a 1031 (also called “like-kind exchange”) being used to swap one commercial property investment asset for another and not losing 15 to 20 percent to the government in tax liability. In other words, you can change the form of your investment (trade up) without cashing out and being liable for capital gains tax, the tax is deferred.

Sorry, you can’t use a 1031 exchange for personal use. If your spouse would like a bigger, nicer, more expensive house, that’s a personal problem and a 1031 isn’t going to work to solve it. It’s for commercial investment property. There are other rules that apply also. You need to identify your property that you’re selling for a 1031 exchange before you close on it. Then you must submit the replacement property to a qualified intermediary in writing within 45 days. The qualified intermediary will hold the money from the property you sold until you purchase the new property and will facilitate the transaction. You must also close on the new like-kind property within 6 months of the sale of the original property. The IRS gives like-kind property a surprisingly liberal meaning so it may be possible to sell a farm and buy a shopping center. To get the full benefit the new property should be of equal or greater value.

There’s a quick lesson in 1031 Exchanges. Any one of us at CERRON Properties would be glad to help you get more information and help you find the perfect property for your 1031 Exchange.

Thanks,

Dan Huntington

Commercial Real Estate – The Week in Review

Commercial Real Estate – The Week in Review

October 5-11, 2013

CERRON Commercial Properties reviews Office Space Changes Image Source: Wikimedia Commons (State_Office_Building)

It has been a busy week in commercial real estate as CERRON takes a look at the week in review…

Office Spaces & Demands are Changing, according to an article by Costar this week. With a review of the many class A office buildings across the nation, “the increasing age and relative inefficiency of these properties present big challenges and risks for owners and investors as businesses increasingly re-evaluate and re-engineer their office requirements to meet leaner 21st-century workplace needs,” according to Drummer (October 8, 2013) in his Costar Article. With an increase in the amount of technology used to run businesses, a reduction is being seen for the amount of space needed in this sector. Tech firms and call centers are increasing in demand and present an opportunity for owners to market to these potential users.

Developers turn to office space to meet the needs of lodging, according to Melvin Backman at Wall Street Journal, September 24, 2013. As the need for lodging increases, developers are getting creative and turning to office space as a resource to meet this growing need. Examples of this type of space conversion are being seen across the nation. “By converting buildings to hotels, owners hope the buildings will produce higher incomes and better returns on their investments.”

Third quarter data show continuing improvement in the CRE lending market, with banks increasing their exposure in secondary and tertiary markets, according to Eric Hawthorn for Llenrock Blog, October 11, 2013, as originally reported via REIT.com.

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