CHP 52 - Retail Brokerage Flashcards
Retail properties are classified by __ & ____
Physical properties and user type
3 Physical properties of retail
- Shopping Centers
- Free standing
- Commercial strip centers
Shopping Center characteristics
- Super-Regional
- Regional
- Super communitiy
- COmmunity
- NEighborhood
- Strip
- Specialty/Theme Ctr
Regional
30 -50 acres
1-2 anchor dept stores
Super Regional
3+ major dept stores
Site area of 100 acres
Super Community
No full dept store anchor, several strong specialty store anchors instead
Community
Near supermarket, jr dept store or discount store
convenience, personal services and goods
Neighborhood
Usually aroudn supermarket or drug store
National chains
Outlets in 4+ metro areas in 3+ states
Local CHains
3+ outlets in 1-3 metro areas in less than 3 states
Independent Retailers
Single metro area, no more than 2 outlets
Adjusted Basis
Cost of a property + capital imprvements - cost deducations and partial sales during holding period
Base (lease)
A face dollar amount representing rent in dollars per sq ft per yr
Breakpoint
Sales threshold over which percentage rent is due
annual base rent / percentage applied to gross sales
Capital Expenditures
Property improvements that cannot be expensed as current operating expenses
Cash on Cash rate
= cash flow before taxes / initial equit inestment
Debt Coverage Ratio (DCR)
net operating income / annual debt service
Economic obsolence
Reduction in prop value due to external circumstances
Gross leasable area
area designed for tenant occupancy and exclusive use
Imperfect Market
product diffrenciation
Net lease
tenant pays all operating expenses (tax insurance, maintenance)
Percentage lease
rent based on % of gross sales made by tenant
Real estate investment trust REIT
investors purchase certificates of ownership in trust which invests money in real property…then distributes profits to the investors
Not subject to income tax
shareholders report on personal returns
Securitization
investing in real estate markets in ways that minimiz risks
Taxable income
Adj gross - personal deductions and exemptions
USeable Area
Rentable area less common areas
Guidelines for drawing retail trade areas
- population adn expenditure approach
- Drive time approach
- Traffic count approach
Balance of Trade Figures
Affect value of domestic goods
Consumer ocnfidence indices
Reflect purchasing volume
Unemployment rates
Influence types of good purchased
Periodic gross domestic product figures
Reflect overall economic performance of the economy
Advisory services a retail specialist can offer:
- market and location analysis
- Advising on optimal tenant mix
- Advising on store size
Population and expenditure approach
draw the area around a site that contains enough people and per capita spending to generate required sales
Pad
outparcel in the parking area of a shopping center
Drive time approach
Draw the area around a site from which it can be reached in a specific time and then check to see if it contrains enough demand dollars to generate sales
Retail tenant representation is….
Common
Concept of tenant mix aims to optimal arrangement of ______-
Anchor and satellite stores
