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What to Expect from the 2018 Anchorage Commercial Real Estate Office Market

In a recent blog post, we shared Anchorage commercial real estate trends to watch for in 2018 and among them was indeed an improvement in the office market. It is likely we will see the office market progress, albeit at a slower pace than last year, with tenants and investors favoring newer buildings and their varied amenities. This week, we’re diving even deeper into the Anchorage commercial office market and what you can expect to see as we head forward into the new year.

We’ve rounded up four more predictions for the office market in 2018 and as your local Anchorage commercial real estate experts, we’re sharing them with you below!

Rents will rise
The commercial real estate market is showing signs of increasing office rents in the coming year. Factors like an improved job outlook may even keep them rising until 2019.

Vacancies will rise
As supply grows in the Anchorage commercial real estate market, so too will vacancies. In the past two years, vacancy rates had stabilized, but as we move further into 2018, we will see these rates rise especially as more office construction is made available.

Suburban markets will grow
Suburban markets have been on the rise and that trend is slated to continue in 2018. Investors are growing more interested in walkability for tenants and employees and less with features like large parking lots. Such suburban markets that offer a variety of housing choices and amenities, such as public transportation and entertainment, will be high in demand this year.

Investors will favor office space
It will not be uncommon in 2018 for investors to begin to favor office space over industrial and multifamily properties. While these two sectors of commercial real estate are indeed growing, investors will look toward the office market this year to add to their investment portfolio.

Questions about the 2018 Anchorage commercial real estate market? Ready to invest in Anchorage commercial real estate? Not sure which property is the best fit for you? Give us a call!

We’re here to help!

Bond Filipenko Commercial Properties
Anchorage, Alaska
www.commercialrealestateak.com
Providing a full range of commercial real estate services.

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5 Tax Tips for Anchorage Commercial Real Estate Investors

We’ve approached the time of year again when everyone has taxes on the brain and if you’re an Anchorage commercial real estate investor, that means you’ve taken on an entirely new set of responsibilities, but also benefits. Investing in Alaska commercial real estate can yield a great return if structured correctly, so be sure to take the following tax tips into account as you organize your investments in the future.

Below are five tax tips for Anchorage commercial real estate investors to keep in mind:

Recruit a Great CPA

If you haven’t read our post on the 5 People You’ll Want on Your Side as a Commercial Real Estate Investor, now is a great time! And adding to the list of experts who will make your life easier as an investor is a knowledgable Certified Public Accountant or CPA. This expert will help you find the many ways you can reduce your taxes and keep your profit in your pocket, so if you don’t have one, remember that your real estate agent is a wealth of local resources and can likely recommend a CPA for you!

Buy Property

One of the best ways for you to grow your wealth is to purchase commercial real estate in Alaska—whether that means office spaces or rental properties—as you are able to depreciate the structure over decades. As an investor, that means you are able to use the deduction every year as long as you continue to own the property and oftentimes, the deduction is in the thousands!

Separate Your Investing Activities

A successful investor is an organized investor, so take the time to sit down and really familiarize yourself with your investments. If you have several, the first thing you will want to do is separate them into short-term investments (for investments less than one year) and long-term investments (for those you own longer than one year). This makes it easy for your CPA find the best entity structure for you.

Get Organized

As mentioned above, you will never regret being organized when investing in Anchorage commercial real estate. Get organized and stay organized as long as you own investments and you will likely be able to avoid any problems or red tape with the IRS. Create a useful system that allows you to track all of your expenses, from maintenance costs and beyond, as well as your income, readily accessible should you need to refer back to them. Another smart method is to keep a spreadsheet available to update as these figures and costs change.

Invest Wisely

Your goal as a commercial real estate investor should indeed be to grow your wealth, keeping your money in your pocket— especially during tax season. One way to stay on track with this is to invest wisely. Investments offer the potential to yield a great return while incurring little tax liability and by working with your CPA, you should be able to structure your investments in a way that taxes your profits very little when you sell and thus, fuels your next investment. Earning the majority of your income from investments as opposed to working for someone else is just one way to lower your tax burden.

Ready to make the most of the new year ahead and invest in Anchorage commercial real estate? Contact Bond Filipenko Commercial Properties today!

We look forward to hearing from you!

Bond Filipenko Commercial Properties
Anchorage, Alaska
www.commercialrealestateak.com
Providing a full range of commercial real estate services.

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Anchorage Commercial Real Estate Trends to Watch for in 2018

It’s a new year in Alaska, which means many real estate investors will begin to set their goals for the upcoming months or those who are new to the market will decide whether or not they are ready to make an investment in Alaska commercial real estate. Regardless of your experience as an investor—brand-new or seasoned pro—it is always a wise move to be up to date on what the industry may have in store.

As your local Anchorage commercial real estate experts, we have included five trends to watch for in 2018, especially as you make plans in invest in Alaska commercial real estate properties:

The economy will expand
The real estate industry is currently riding the wave of economic expansion and as we push further into 2018, that trend is expected to continue. While real estate experts remain cautious about this trend, optimism for the real estate industry in the new year is growing! Just remember that real estate is hyperlocal, so it is best to check with your commercial real estate agent to see how this trend might apply to your specific community.

Transaction volume will pick up
The beginning of last year saw a decrease in transaction volume, but just the opposite is expected in 2018. The number of deals will begin to pick up, although slowly, and investment activity will increase along with it. While investors were cautious in 2017, this year they are feeling a boost of confidence and will drive the commercial real estate market in the coming months.

Office market will improve slowly
The office market is expected to continue to improve in 2018, but at a slower pace than we saw last year. Investors and tenants alike are looking more toward newer buildings with more amenities and as a result, older office buildings could sit idle. However, suburban real estate markets that offer a range of housing choices and amenities, including transportation and entertainment, are better poised to see growth and demand in 2018.

Industrial market will grow
Industrial real estate was a breakout sector of the commercial real estate market in 2017 and will continue its growth in the new year. Warehouse and distribution centers are projected to be high in demand among investors, paving the way for a strong year in this sector alone.

Compressed cap rates could improve
If you are not familiar with the term “cap rate,” you will want to get to know it better for 2018. In the last year, commercial real estate cap rates were compressed in many markets through Q3 and experts predict over the next 3 years, cap rates could begin to rise. Much of this is left up to the economy which will determine if real estate values continue to rise and the amount of income returns investors could see.

Curious how the Anchorage commercial real estate market is projected to function in 2018? Give Bond Filipenko Commercial Properties a call today!

Bond Filipenko Commercial Properties
Anchorage, Alaska
www.commercialrealestateak.com
Providing a full range of commercial real estate services.

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How to Eliminate Risk in Anchorage Commercial Real Estate

When investing in Anchorage commercial real estate, there are many boxes to check in order to prepare properly, from ensuring you have the capital to finance your investment to choosing the best location. And no matter if you’re a seasoned real estate investor or brand new to the industry, eliminating risk is one of those necessary steps to take to set yourself up for success.

If you’re thinking about investing in Anchorage commercial real estate, below are four key ways you can eliminate your risk:

Choose the right property
It may seem simple, but choosing the right property is essential and can eliminate much of your financial risk. For instance, if you choose to invest in a property in need of too much repair, you could risk funneling more cash into the property than you will get back. If you choose a property in the wrong location, you could risk being unable to find a proper tenant. This first step is one of the most important, so be sure to know what you’re looking for in advance, what makes the most sense for your investment goals, and work with your agent to find the best options.

Run the numbers
As we mentioned above, properties in need of repair could cause you to lay down more money in the initial stages than you planned. Be sure to run the numbers before signing any contracts or agreeing on any terms. You will want to know that the investment will help you to profit, not post a loss. Look for answers to the following questions:

  • How much will the property cost to be fixed?
  • How much is potential rent?
  • What will the property be worth once I’ve made repairs?
  • What type of insurance am I required to have?
  • What is my return on investment (ROI)?
  • How long before I see a profit?

Choose the best financing
Not all Anchorage commercial real estate investors are able to purchase properties in cash. In fact, many use financing via traditional loans through lenders or even real estate lines of credit to finance their investment. If possible, you can reduce risk by purchasing properties without banks, but if you are not able to go that route, know what assets of yours are at risk if something goes wrong.

Work with an expert
Especially if you are a new real estate investor in Anchorage AK, you will want to work with a local expert who knows both the industry and the area. The last thing you want to do is go it alone and risk an oversight in your property search and more importantly, in the closing agreements and terms. One of the easiest ways to reduce risk is to choose a professional who has done this before.

If you’re considering investing in Anchorage commercial real estate this year, do not hesitate to give us a call! We are here to walk you through the process, from recommending a lender to closing the deal on the best property in the best possible location.

We look forward to hearing from you!

Bond Filipenko Commercial Properties
Anchorage, Alaska
www.commercialrealestateak.com
Providing a full range of commercial real estate services.

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5 People You’ll Want on Your Side as an Anchorage Commercial Real Estate Investor

As you begin to make plans for 2018, either as a seasoned or new investor in Anchorage commercial real estate, you’ll want to also begin building your team. From contractors to real estate agents, you will want to have experts on your side that you can turn to for advice on saving money and reaping the benefits of your investment.

Below are the five people you will want on your side as an Anchorage commercial real estate investor:

Real estate agent
Your real estate agent is an invaluable resource when it comes to investing in Alaska commercial real estate. If you’re new to the industry, your agent will be able to help you find the best properties and oversee the closing of deals to ensure they are in your favor. You can turn to your agent for everything from questions on the best locations to the terms of a real estate contract.

Contractors
If you will need to do any updates or build-out in your Anchorage commercial real estate properties, a contractor will be a key player on your team. It is important to find one you can trust, so be sure to gather several quotes before deciding on one. If you need recommendations, know that your real estate agent is a wealth of resources and has a wide network that they can open to you!

Lender
Unless your commercial real estate deals will be done in cash, a lender will be a great asset to your team. You will likely need a lender to put up the capital to finance your properties and there are a few options to choose from, including a private lender and a traditional lender at a major bank. If you’re unsure of which is best for you, remember to utilize your agent!

Attorney
Remember that commercial real estate deals differ greatly from their residential counterparts. Commercial real estate deals will involve many documents and terms you may not be familiar with, which is why it’s always wise to have an attorney you can call upon for legal expertise. An attorney that specializes in real estate is essential as they will be able to handle the in’s and out’s of your property acquisitions and those deals involving a partner.

Property manager
If you do not intend to become a full-time Anchorage commercial real estate investor, you will likely want to bring on a property manager to take charge of your properties, from finding the best tenants to collecting rent. All of these responsibilities can quickly become overwhelming for a new commercial real estate investor, so a property manager can take a load of stress off of your shoulders.

Ready to invest in Anchorage AK commercial real estate? You can count on Bond Filipenko Commercial Properties to walk you through the entire process, from finding the best property for your business to closing the deal.

Give us a call today!

Bond Filipenko Commercial Properties
Anchorage, Alaska
www.commercialrealestateak.com
Providing a full range of commercial real estate services.

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How Investing in Anchorage Commercial Real Estate Can Save You Money

When you find yourself asking the questions, “What is the best investment I can make right now?” or “What is the best way for me to save money?,” you might be surprised to learn that real estate is the answer for both. Real estate has been named the best investment over stocks and gold many times over and when it comes to saving money, it comes out on top yet again as a means of forced savings.

As your local Anchorage commercial real estate experts, we have included below five ways that real estate investing can help save you money— just in time to start making your plans for the new year ahead!

1. Leverage

A smart Alaska real estate investor will use leverage to increase their assets without having to spend their own money. After all, the key to saving money is to always keep it in your pocket! If you can grow your wealth and assets by using, for example, the bank’s money through a loan, then you are still growing your value while acquiring little expenses.

2. Equity

One of the best ways you can save money in commercial real estate investing is by building up equity. Create equity goals for your investments and once you have reached them, you can sell the property to invest in something new, while also making a nice profit.

3. Lower Taxes

There are incentives available for Anchorage commercial real estate investors— one being deductions for your properties that you can use to offset income. Such deductions might include managing and operating expenses, financing costs, maintenance, repairs, utilities, and even advertising fees. What’s more, investors can deduct mortgage interest and insurance premiums! Because of these deductions, many times investors are able to turn a loss into a profit.

4. Cash Flow

If you have yet to familiarize yourself with positive cash flow in commercial real estate, you’ll be glad to know that your investments can save you money if planned and budgeted well. Pre-tax positive cash flow, for instance, occurs when the income you receive is greater than your expenses. After-tax positive cash flow occurs when your expenses exceed your income, but due to tax breaks for investors, you still are able to come out ahead.

5. Inflation

Over time, inflation will ultimately help Anchorage commercial real estate investors save money. Properties will increase in value and rent will follow suit, but your mortgage expenses will stay the same. Your cash flow will increase given the rise in rent and as your maintenance costs hold steady, investors will find they don’t have to spend as much to maintain the property and are thereby saving money.

If you have questions about Anchorage commercial real estate, the right property for your business, or even which commercial lease may work best, do not hesitate to give us a call!

We look forward to hearing from you!

Bond Filipenko Commercial Properties
Anchorage, Alaska
www.commercialrealestateak.com
Providing a full range of commercial real estate services.

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Finding the Best Anchorage Commercial Real Estate Space

Just like when shopping for residential real estate, it is important to consider a variety of factors in your Anchorage commercial real estate search before you choose the best property. Factors like the location, return on investment (ROI), square footage, lease, and the like will all come into play for investors and you will want to be well-versed on each prior to signing on the dotted line.

As you begin your search for the best Anchorage commercial real estate space for your business, add the following to your list to ensure you’re making the right decision:

1. Know what you want
When you head into a property search without knowing what it is you’re looking for, the entire process can quickly become overwhelming. There are dozens of properties in dozens of locations and if you’re not careful, you could wind up with serious investor’s remorse. Make a list of must-haves in a commercial real estate space, so you are prepared when you arrive to view properties. Remember, even if a property looks great, there could be a list of problems that comes along with it.

Tell your real estate agent about your priorities, so they can help find the best properties, and as always, be prepared with questions.

2. Do your research
Making a list of priorities is indeed a form of research, but you will need to look up additional information surrounding insurance costs and other fees associated with the property. For instance, are there maintenance costs you will need to factor into your overall budget? What are the utility costs each month? Remember that certain leases may require certain insurance coverage for tenants, so you’ll need to know your costs in advance.

3. Know your leases
As an Anchorage commercial real estate investor, it is essential to know the different types of leases that can be offered with different properties. From a gross lease to a net lease, you should know which lease suits you best and the terms that will be associated with it. That way, when you find a property that works for your business, you are ready to make a move!

4. Brush up on negotiation
When the time comes to finalize the deal on your Anchorage commercial real estate property, you should be ready to negotiate. The rent, lease, and build-out can all be negotiated, so know what you are and are not willing to compromise on. Your commercial real estate agent is also key in helping to arrive at the best deal, so let them assist you!

Contact us today for more information about available commercial real estate property in Anchorage! We look forward to hearing from you!

Bond Filipenko Commercial Properties
Anchorage, Alaska
www.commercialrealestateak.com
Providing a full range of commercial real estate services.

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Top Mistakes of Anchorage Commercial Real Estate Investors

As we near the end of the year and begin to make plans and goals for 2018, you may start to consider investing in Anchorage commercial real estate. This can indeed be a lucrative move—given you do the necessary research and team up with a Alaska commercial real estate professional—but as your local experts, Bond Filipenko Commercial Properties has included the top mistakes of new investors below to ensure you don’t make the same on your investing journey.

Keep the following new investor mistakes in mind as you map out your 2018 Anchorage commercial real estate plans:

Ignoring the local market
So much depends on the local commercial real estate market in Anchorage— including whether or not you should move forward on a great property. Remember, a great property in a not-so-great market can yield poor results. Your first steps should be taking a look at factors like income, employment, and population growth, as well as supply and demand. It helps to navigate the market with your Anchorage commercial real estate expert as they can answer any questions you have along the way and provide insight on the current market conditions, in addition to helping you spot a great deal!

Ignoring the math
Commercial real estate investing does involve a bit of math and crunching numbers in order to find success. Failing to do this can result in a bad deal and overestimating your potential profit. Every aspect of expenses, potential income, and property value should be factored into your preparations. Write out your operating expenses and debts and be sure to calculate any and all risks involved. It’s important to understand these first before projecting revenue as making assumptions or cutting corners often has a losing effect.

Ignoring property condition
As a new investor, it’s essential to do your due diligence on the property itself. What kind of condition is it in? What repairs will need to be made? Are you able to do any yourself or will you need to hire out the work? Is the property zoned correctly? Gather estimates from several professionals and don’t be afraid to admit when you’re unsure of something— that is where your Anchorage commercial real estate expert comes in! They are also a wealth of resources if you need to find local professionals from contractors to accountants!

There are many moving parts to an Anchorage commercial real estate investment and it is key to cover all of the bases— including research—ahead of beginning your property search. Questions about the local market, available properties, or how you can prepare to invest in Anchorage AK this coming year? Contact us today!

We look forward to hearing from you!

Bond Filipenko Commercial Properties
Anchorage, Alaska
www.commercialrealestateak.com
Providing a full range of commercial real estate services.

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What Is a Real Estate Line of Credit in Anchorage Commercial Real Estate?

When it comes to purchasing Anchorage commercial real estate, you have several options for financing. In fact, in a recent blog post, we shared the many different ways you can go about it— from banks to private financing. But what about the real estate line of credit? This too is an option for Alaska real estate investors and if you’re not familiar, it may be worth researching prior to making your purchase.

Real estate lines of credit are not as common as other means of financing a real estate investment—for instance, traditional lenders, home equity loans, commercial loans, or even owner financing—however, they could be the best option for you to have access to cash when you need it. As you may have guessed, a real estate line of credit operates similarly to any other line of credit. You apply and if approved, you receive the credit you need, in some cases, in just a matter of days. The time frame alone makes this an appealing financing option for Alaska investors.

Unlike a home equity loan, real estate lines of credit do not require collateral or any other financial documents up front like your tax returns. Oftentimes, the line of credit is hedged upon your personal credit report and your credit score. If you are approved, there are no limitations to how you can use the money or the number of deals you decide to use it on. You can draw on your line of credit or make payments on it as many times as you wish.

Additional benefits of real estate lines of credit include:

  • No appraisal
  • No restrictions
  • No financial statements
  • No upfront fees

Having a real estate line of credit available when you’re considering an Anchorage commercial real estate investment can be a great help and an even better strategy. What’s more, you can use your line of credit in addition to other types of funding for your purchase, so your options are virtually limitless.

As your local commercial real estate experts in the Anchorage AK area, you can count on Bond Filipenko Commercial Properties to help you prepare to purchase commercial real estate or simply learn the in’s and out’s of the industry, from costs to consider as a tenant to important terms and types of leases.

Give us a call today with any questions you have or for more information about available Anchorage commercial real estate properties!

Bond Filipenko Commercial Properties
Anchorage, Alaska
www.commercialrealestateak.com
Providing a full range of commercial real estate services.

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3 Questions to Ask Before Signing an Anchorage Commercial Real Estate Lease

When searching for the best Anchorage commercial real estate space for your business, it is important to consider a variety of factors— the location, the space itself, and of course, the rent. It is easy to get caught up in the idea of how your business will function in this new space, but before you get carried away and sign on the dotted line, there are a few questions you need to ask first. If you don’t, you could risk overpaying for the space and ultimately hurting your business (and your budget!) in the long run.

Start with the following questions as you browse Anchorage commercial properties this year:

What type of commercial lease is offered?

This is undoubtedly one of the most important questions to ask before you sign an Anchorage commercial real estate lease as it will determine how you will be charged rent each month. In a past blog post, we shared several sections and terms you may find in your lease. Once you feel comfortable with these, you can move on to negotiating the type of lease offered, which may include the following:

  • Gross Lease
  • Net Lease
  • Triple Net Lease
  • Percentage Lease
  • Fully Serviced Lease
  • Sublease

Always ask the type of lease that is offered and if any services or percentage fees are included.

Are the lease terms negotiable?

Sifting through stacks of documents can seem overwhelming, especially if you’re new to the commercial market. But if there is one thing to note, it’s that leases should always be open to some negotiation. If you find yourself attempting to negotiate with a stubborn landlord, it may be best to reconsider and keep moving in your search. To help sharpen your skills, we recently shared how to negotiate an Anchorage commercial real estate lease and the terms you should familiarize yourself with in order to feel fully prepared.

What type of insurance coverage am I required to have for the space?

In calculating your expenses to determine if you can afford an Anchorage commercial real estate space, you must also consider the insurance costs. Ask what type of coverage you will be required to have as well as the amount. If you fail to ask this important question, you could find yourself underinsured or facing a large expense each month depending on what the landlord requires.

The aforementioned questions are just a few you should ask to protect yourself in the local commercial real estate market. Contact us today for more information about Anchorage commercial real estate properties and any questions you may have surrounding commercial real estate leases, the best space for your business, or commercial real estate investing.

We are here to help!

Bond Filipenko Commercial Properties
Anchorage, Alaska
www.commercialrealestateak.com
Providing a full range of commercial real estate services.