Last month, we introduced a discussion that compared leasing real estate versus owning. The focus of that article was on some of the primary advantages and disadvantages of each and included at least some degree of subjectivity. This month, we are going to look at a much more objective measure. There are actually two different analytical measurements that can be used. One utilized the net present value (NPV) of each alternative while the other utilizes the IRR of the differential…

By Ira Krumholz, President of NAI Daus Property Management Division ikrumholz@naidaus.com A few months ago, most property owners received a letter from their county auditor that revealed their new 2015 re-assessment. Every six years, the Ohio Revised Code requires each county to reappraise all of their respective taxing parcels. These reappraisals are updated every three years, a triennial update. In 2015, all of the parcels in Cuyahoga, Lake, Lorain and Portage counties were updated. Mistakes can sometimes happen, especially considering these…

Growing up as a child in the 1970s meant that I watched a lot of television. I was a car freak at a very early age and would always pay particular attention any time a commercial aired for a new car. Looking back at this now, two things stand out. First, aside from Ricardo Montalban touting the rich Corinthian leather of the new Chrysler Cordoba, I can’t recall all that many auto commercials actually airing – certainly not to the…

As the Starks Would Say, Winter is Coming By Ira Krumholz, President of NAI Daus Property Management Division ikrumholz@naidaus.com The 2015-16 edition of the Farmers’ Almanac includes a good news/bad news weather forecast for Ohio. The good news is that the fall is expected to be longer and milder than normal. But the bad news is that the winter is expected to be similar to last year – in the publication’s words, “snowfilled and frigid.” I’m sure that you will recall…

Architects can play a key role in helping your company create a workspace that matches your vision of how you want the company to operate. “An architect can sit down and interview your key people and gain an understanding of how everyone works in your business,” says Alec Pacella, managing partner and senior vice president at NAI Daus Property Management. “He or she can understand the critical components of your business and see what parts of the office need to…

On the eve of yet another youth soccer season, I recently took my son to the sporting goods store to buy a new pair of soccer shoes. We narrowed the choice to three – a relatively inexpensive pair, a moderately priced pair and an expensive pair. And to my surprise (or shock), my son didn’t immediately focus on the most expensive pair. Instead, he began to ask questions about why there was such a difference in price. And this led…

A wise real estate Yoda once told me that all a real estate agent has to offer are two things – time and knowledge. And sales comparables are certainly at the front of the line when it comes to knowledge. Commonly known as ‘comps,’ individually, they can provide guidance when attempting to value a similar property. And collectively, comps can provide insight into pricing trends, sales velocity and buyer characteristics. Back in the ‘old days,’ there were not many sources…

Written by Ira Krumholz, CPM® President of NAI Daus Property Management Division ikrumholz@naidaus.com Twitter @IraKrumholz 216-455-0905 Determining the value of a real estate asset is never an easy thing but the historic free fall in real estate values a few years ago and subsequent uneven recovery has made this task significantly more difficult. This month, we are going to discuss how a tumultuous market can impact the traditional approaches to determining value – cost approach, sales comparable approach and income capitalization…

Last month, we began a discussion regarding an analysis to compare a challenging decision that often faces a real estate investor – maintain the property as-is or upgrade the property with the expectations of achieving a higher rent. If you missed last month’s column (and shame on you if you did), we set up the following scenario: an investor owns a single-tenant office building and the tenant’s lease is expiring. The tenant is interested in renewing their lease. But the building is located…

There are many decisions that real estate investors have to make during the course of their ownership of an investment property. And one of the most challenging is the decision to upgrade the property with the goal of attracting a higher rent versus continuing as-is at the current rental rate. This month, we are going to discuss an effective way to compare these two scenarios by using a couple of familiar financial tools. You may recall that although IRR and NPV have different definitions, they can be considered…