Investment Real Estate


Investment_Real_EstateInvestment Real Estate options including Net Lease commercial real estate opportunities have increased in availability in recent months.

Our team at APPRO Development and CERRON Commercial Real Estate has put together a page on our website featuring current properties available for sale which may be of interest to commercial real estate investors.

Additionally, we have curated articles on this same page related to investment real estate and include topics like: 

  • Accurately Calculating CAP Rates
  • What to look for in Investment Real Estate
  • 8 Common Mistakes Real Estate Investors Make

You may read more about these topics and view current offerings HERE.

Interested in purchasing investment real estate? Or, have interest in single tenant net lease opportunities? Contact our team today.


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>

Reducing Your Renovation Costs by Thinking Green


Save money during renovation and constructionReducing Your Renovation Costs by Thinking Green – Economical, Green Solutions for Renovations & Commercial Building Projects in South Metro Minnesota and North Dakota is offered by APPRO Development, Inc. & CERRON Commercial Properties.

Being “thrifty”, “cost conscious” and “green” is something we’ve hopefully all learned to do over the past few years of economic change. The positive impacts of implementing good business practices, is good for both your bottom line and the environment, a double bonus! Instead of hastily throwing something away, find a way to re-purpose the item to save you money and help prevent our landfills from over flowing, something we all benefit from.


During renovations or commercial building project, there are potentially ways to donate or sell items that you no longer need. Countertops, office equipment and other items could become a tax write off* or benefit someone else. If you have customized or industrial equipment you no longer use, it could be listed for sale, potentially offering you more cash for your project!


If you’ve decided to build or remodel a space that you own, lease, or are new property you are searching for, we are happy to help you find an economical solution by possibly re-using items and finding cost conscious options. For example, let’s say you want to open a restaurant; there may be options for purchasing used kitchen equipment vs. buying everything new. In remodeling, you may be able to reuse countertops. Take a moment to look at what you have as a way of saving $ during your project! Additional financial information for your project is available on our website for cost segregation, 1031 tax deferred exchange and finance resources.


Remodeling or building, in an office space, bank, hotel, restaurant, warehouse, industrial, or other commercial buildings, whatever your needs are, we work with our vendors and subcontractors to ensure that we are providing our clients with the best pricing available, while providing green alternatives. Here is an example;


Recently, we had a project that we tested lighting in and opted to remove as it didn’t serve the needed purpose. Instead of being frustrated with the failed test and throwing out the lights, we stopped and asked, “Is there someone who could benefit from these materials instead of throwing them away?” A short internet search led us to the MN Association of Community Theatres, where we found four theaters in the south metro, who are now the elated recipients of new lighting. It has brought us joy knowing that we have been able to provide our community theater, Lakeville Area Arts Center, along with the Northfield Arts Guild, Mankato Mosaic Theatre Company and New Ulm Actors Community Theatre with much needed lighting.


The next time you are considering a remodel, expansion / addition or new building, know that there are options out there to be as economical & green as possible! We’re here to assist you in using your dollars as best as possible to ensure the success of YOUR business. Please contact us to discuss your options at 952-469-2171 (APPRO Development, Inc.) or 952-469-9444 (CERRON Commercial Properties).



*As with all financial matters, please consult your tax and/or financial advisor for advice/impacts regarding your specific situation.

2013 Real Estate Market Looking Up

The 2013 Real Estate Market is looking up as – The National Association of Realtors forecast that things are going in the right direction! Expect to see gains in new and existing home sales. Commercial real estate is seeing vacancy drop and rent growth across all property types. They also foresee job growth by 2 million this year and 2.6 million next year. This is all good news for our country including a projected 3% increase in GDP by 2014. These national trends are also reflected in our state of Minnesota.

Markets vary across the Twin Cities metro as noted by this chart:

Submarket Vacancy Ranking-Retail

Rank Submarket Vacancy Rate YOY Basic Point Change Effective Rents YOY % Change
1 West Hennepin County 6.1% -40 $18.35 -.3%
2 Washington County 6.4% 30 $13.85 .8%
3 Dakota County 8.7% -40 $12.37 .2%
4 Anoka County/SE Sherburne 8.9% 80 $11.17 .3%
5 St. Paul 10.1% 40 $13.86 .7%
6 E Hennepin Cty/Minneapolis 10.7% -10 $16.37 .7%

The bottom line is that markets vary not only on rent but availability. It is important to use a qualified broker like Cerron to help with your real estate needs. Interest rates are projected to remain low while unemployment is high. SBA has proven to be a great lending tool option for owners. 1031 exchanges have not been affected by current legislation and remain a viable alternative to avoid the increased capital gains tax. Call us at 952-469-9444 or email me at to answer any questions you may have. 2013 Real Estate Market is looking up indeed!

Investment Opportunities

At a time of the year when we would normally be a little slower, we are thrilled to find ourselves very busy as we anticipate an amazing 2013!

Right now, we have two very exciting investment opportunities:

The first is a manufacturing facility in Southern Minnesota.

Southern Minnesota Manufacturing Building - Investment Opportunity

The second is an Apartment Complex in North Dakota.

North Dakota Aprtment Complex Investment Opportunity

If you would like more information on either of these opportunities, please contact Jack Matasosky in our office right away at or at 952-469-2171.

The New Year is full of promise and all of us at APPRO Development, Inc. and CERRON Commercial Properties, LLC are looking forward to “Creating Property Solutions For You and With You” in the days and months to come!

New Health Care Tax 3.8%

In 2010, Federal legislators passed a 3.8% tax on some real estate transactions to help fund $210 Billion for President Obama’s Healthcare Plan and goes into effect in 2013. While it will not effect all real estate transactions, it will significantly affect commercial real estate transactions that are typically purchased with pass through entities such as Limited Liability Corporations or Sub-S Corporations. The type of entity that is common for small business owners.

In 2013, real estate transactions may have a 3.8% tax on some (but not all) income from interest, dividends, net rents and net capital gains for individuals (or entities that have pass-through income) with an adjusted gross income (AGI) above $200,000 and couples filing a joint return with more than $250,000 AGI.

Most small businesses are formed as pass through income entities. This income is different than W-2 income. If you own commercial real estate, the IRS does not allow you to fully deduct your expenses when they are actually paid. Property improvements must be amortized over 39 ½ years. In essence you have to deduct the cost over time in the form of depreciation, instead of taking the expense in the year it occurred in to reflect the useful life of the property.

It is not uncommon for small business income to be over $200,000 on the tax return, but since expenses aren’t realized immediately, the number is inflated. At this level, income taxes are 35% to the IRS and 8% to Minnesota. With the additional healthcare tax that is 46.8% tax rate. Commercial property taxes are typically $3.00/SF – $7.00/SF per year. To put it in perspective, a 2,000 square foot building (or small shop) would pay $6,000 – $14,000/year in property taxes. This 3.8% tax will only come into play if a property is sold or inherited, so consult your tax advisor to see how this affects you. You may want to consider selling your property this year to avoid the tax.

This legislation was passed along party lines March 23, 2010 with little or no prior discussion on this tax.

The National Associations of Realtors has a brochure with examples:

: Brochure Link

MNCAR Report

Reasons To Do Business in Dakota County

Sometimes we fail to acknowledge the value we have in the Twin Cities. Here is some information from a presentation made by Dakota County commissioners this fall.

What Businesses Want:

*Smart productive workers


*Growing Labor Force

*Easy access to markets

*Available, affordable facilities

*Robust, diverse economy

*Reliable, affordable services

*Pro-business leadership

*Great quality of life

Dakota County has a well-educated, productive workforce. 37% have a bachelor’s degree or higher compared to 32% State and 28% US. As of June 2011, unemployment was 6.7% with 76.8 % employed and 77.5% two-income families. Higher education is valued and we have access to dozens of world class universities and colleges. We have a history of innovation including Rollerblade, Northern Tools, Goodrich Sensor Systems, Image Trend and more. Dakota County saw a 12% increase in population from 2000 – 2010 and also an increased labor force. Accessibility comes in several forms, including MSP International Airport plus several smaller airports, Mississippi River barge transport, rail lines and 440 miles of well-maintained, well-connected system of highways—interstate, state and county. There is 5.6 million square feet of commercial/retail buildings, 14.4 million square feet of office space and 980 industrial buildings with 40 million square feet. If you need commercial, retail, office or industrial space, we have choices for you!

Dakota County believes in pro-business leadership and has the lowest county tax rate in the state! Plans for an extensive fiber network and Intelligent Community designation by 2012 are underway. There are six engaged Chambers of Commerce advocating for business.

Several Fortune 500 and 1000 companies from a variety of sectors create a diverse and robust economy. Businesses in Dakota County include Blue Cross, Blue Shield, CHS, Thomson Reuters, Flint Hills Resources, Fairview Ridges Hospital, Patterson Dental, and several growing small businesses such as Outdoor GreatRoom, Space Trailers, Bio Thera and Image Trend. There are 9,452 private sector firms with 148,130 employees. Manufacturing and health care sectors account for around 24% of total employment.

Dakota County has a high quality of life as rated by Money Magazine. Median household income is $69,545 with 77% ownership rate and lowest percentage of cost burdened homeowners in the metro area. Public schools average some of the highest ACT test scores in the nation with over 80% participation rate. There are several opportunities to access the arts, leisure and entertainment.

As you can see, Dakota County is a great place to live and work. Ask us if you have any real estate needs to grow your business. Our specialty is real estate in the south metro area of the Twin Cities and our motto is creating property solutions for you, with you.

Commercial Real Estate Financing is Back in the Twin Cities!!

After a three year hiatus – we would like to report recent contacts from both the banking and institutional lending communities looking to place capital in the commercial / industrail markets.

Refinancing, new mortgages, additions and construction financing are all eligible uses for these funds.

Institutional sources look to provide long term (15 to 25 years) permanent fxed rate financing. Current rates for commercial / industrail projects and re-fi are 5.5 to 6.25 % – fixed for the term. Some non – recourse loans are being considered again. Target loan amounts 3 million and up.

Banking sources are looking to provide construction and permanent financing. One bank shared – they look to place over 90 million dollars in commercial real estate in the next few months ! Target loan amounts 1 to 5 million.

Please call us at APPRO / CERRON – and we’d be happy to point you in the right direction for your consideration of any of your loan needs !



The Advantages of Airlake Industrial Park.

Is your business looking for a home? Airlake Industrial Park may be it. The park is located in Lakeville MN and is home to roughly 1,500 acres, 120 businesses, and 4,200 jobs. This park is conveniently located off of I-35 and County Road 70 giving it a transportation advantage over many other locations. Progressive Rail also operates within the park and offers rail transportation as an option for shipping and receiving goods. The park also has an airport that can accommodate corporate jets and helicopters.

Airlake Industrial Park has options for any size and type of business. There are many shovel ready sites if you need a facility built to your exact specifications. APPRO Development resides in and has been involved with the park for nearly 30 years and is a design-build general contractor that can help you with the design and budget pricing of your new facility. There are also many existing facilities for lease or purchase. Cerron Properties is a sister company to APPRO Development and can help you locate the perfect facility to lease or purchase within the park.

If you would like more information regarding the advantages that the Airlake Industrial Park has to offer please contact APPRO Development or Cerron Properties.