Commercial Property Flashcards
Which searches should be done for a commercial buyer or developer
Same as for residential
What are the 3 types of commercial property
Industry
Retail
Offices
What is commercial property
Not used for residential purpose or primary industries ie agriculture and mining
Ownership of commercial property by a partnership
Transfer property from individual to partners and pay SDLT
Ownership of property by a contractual joint venture
No need to transfer property if owned by one individual that is enough so no SDLT
What is a special purpose vehicle
A limited company set up for a specific purpose. A subsidiary owned by companies
Ownership of property by a special purpose vehicle
After development can transfer ownership of property by selling SPV shares instead of property itself - tax benefits
What is share capital
When funds are raised by issuing shares
What is forward funding
When a developer is paid a fee and gets a share of profits from investor
What is equity funding
Investor and developer form a joint venture company to develop property. Investor gets preference shares to get priority return and profits and losses
What is sale and leaseback
Owner sells property and then leases it back from new owner by paying rack rent
What is debt finance
A loan
If above £50 million may have senior debt to be paid back first and mezzanine debt that is more expensive
What is a rack rent lease
Pay rent during a lease and not payment at the beginning like a freehold or long leasehold
What is a direct property investment
Buy to let
What is an indirect property investment
Buy shares in a company that invests in property
