Just like in medical and legal fields, industrial and commercial real estate has its own terminology. Here are some common questions surrounding common jargon and lingo.
What’s the difference between an industrial agent and an industrial broker, and why does it matter?
While they may seem interchangeable to those outside the industry, the terms “broker” and “agent” aren’t just a matter of semantics. Typically, leasing agents are required to pass a state licensing exam following a predetermined number of hours of course work. A broker, on the other hand, is required to complete many more hours of specialized course work in addition to passing a broker’s license exam. A broker can hire agents to work for them, or they can work alone. Generally, you can expect a broker to be more experienced.
What’s a value-add real estate acquisition?
These are properties that need improvements to enhance their value and ultimate cash flow. These improvements can include:
renovations
layout reconfigurations
subdivisions
additions
zone changes
debt restructuring
repairs
property assemblage
vacancy lease ups
Often, these types of properties are targeted by investors to earn higher returns. However, these investors need experience and expert advice to determine how and where value can be added. Failure to factor for accurate timelines and price tags can be problematic, and potentially disastrous. Analysis must be thorough and careful to avoid missing items or underestimating the scope and cost of the job. Together with an experienced rep, an investor can then determine whether the price of the property now and after improvements will support the projected costs of the improvements.
Have an industrial real estate question? Let us answer it. Comment below, and we’ll write a blog post to answer it.
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