Experts in the complex and challenging world of commercial real estate

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Frequently Asked Questions

Investors

Generally, each of our properties are structured as a standalone investment and acquired with a combination of investor equity, our own equity, and conventional debt. Our 500+ investor base is comprised of a mix of accredited investors and family offices, and some of our investments are purchased with institutional investors as joint ventures. Broad Street principals make an investment in each property.
To invest with Broad Street, you must be an accredited investor. We begin each new client relationship by first listening to and understanding your individual investment objectives. We then provide you with a thorough overview of our portfolio. If you are a real estate investor, we are also well-versed in tax-deferred exchanges. Our team will work closely with you and your Qualified Intermediary to make sure deadlines are met and all paperwork is in order. If you are interested in investing with Broad Street, please contact Tom Yockey by phone: 303-825-1735 x 3009 or by email: tyockey@broadstreetllc.net, Michael Jacoby by phone 301-828-1202 or by email: mjacoby@broadstreetllc.net or Niki Brickey by phone 301-828-1227 or by email: nbrickey@broadstreetllc.net.
No. Our properties are private, closed-end real estate investments which by their very nature have a longer term time horizon than that of liquid stocks or bonds. Each investment will have a thoroughly detailed business plan that will outline the timeline to realize the investment and typically varies from 3 years to 10+ years. We actively manage our properties during our ownership period with the dual objectives of cash flow and income growth. Most of our properties pay a quarterly cash distribution to investors. Please read and understand each investment offering carefully before making an investment.
We provide all of our investors a quarterly and annual performance review of each property and can provide additional financial reports to investors by request.
Most of our properties distribute a quarterly payment to investors. Investors receive their payment by check. The distribution amount may go up or down depending on property performance. Any adjustment to the distribution amount is made on a quarterly basis, as necessary, by our Asset Managers and principals. Some of our pursuits are focused on ground up development or more opportunistic re-positioning of existing properties where distributions should not be expected for 18-24+ months.
Our goal is to provide tax documents ahead of tax deadlines. Our investors typically receive a Schedule K-1 for each LLC in which they hold an investment or a year end income and expense statement for each investment property. If you have a more specific question, please consult your tax advisor.
Track Record: We have successfully been in the business of commercial real estate development, Acquisitions, Finance, Leasing and Management for many years. Team: We have surrounded ourselves with great people and we invest the time to help them develop into great business leaders. Relationships: We truly value and have developed powerful long term relationships with our investors, lenders, the commercial brokerage community and a deep pool of experienced lawyers, accountants, architects, engineers, general contractors and other professionals who have helped us achieve our goals. "Skin in the Game:" We always put our own money (Broad Street Principals, family and/or staff) in every investment we make.
When investing in a REIT, most investors have little to no information regarding actual properties the REIT invests in and cannot invest in their own backyard. Through Broad Street, investors can invest in individual properties, allowing for added transparency and control over investment selection and location.

In addition, REITs are such large entities that they can rarely participate in many of the modest investments Broad Street opportunities will offer, such as neighborhood retail centers or mixed use properties.
    1. Asset class diversification
      Investments don't all move in the same direction at the same time. This concept is measured by correlation. The lower the correlation number between two investments, the less likely they will move up and down with each other at the same time. Direct real estate has historically had a low correlation compared to most other major asset classes.

    1. Potential to generate income
      Direct real estate has historically generated a higher level of income than other asset classes. Typically, tenants pay rent and, after building and other expenses are paid, any remaining cash is passed on to owners and investors, which may provide a source of supplemental income.

    1. Potential for growth
      Real estate offers the potential for long-term growth from appreciation of portfolio properties.

    1. Potential to reduce volatility in a portfolio
      If you're saving for retirement or already retired, adding direct real estate to your investment mix may allow you to lower the overall volatility of your portfolio. Volatility is measured by standard deviation. The lower the standard deviation, the less likely it is for that investment to swing sharply above or below the historical average return.

      Please note that traded investments are subject to daily price volatility because market forces determine the price but they provide investors with ready liquidity. Non-traded REITs do not provide ready liquidity, and if investors are able to redeem shares, the redemption price may be worth less than their original investment. An investment in a non-traded REIT does not have the same level of share price transparency as a traded investment.

  1. Potential to guard against inflation
    Real estate has the potential to hedge inflation because property values and rents have historically increased. For tenants, leasing existing properties has been more attractive than new construction during inflationary times when the costs of building materials rise. Of course, no one can predict when inflation will hit. But the best time to buy an umbrella is before it starts to rain—not after you’re soaked. The same is true when considering an inflation-hedging investment.
Real estate syndication is "crowdfunding for real estate" before crowdfunding for real estate ever existed. In its most simple form, both syndication and crowdfunding involve pooling capital with other individuals for a common purpose or a common goal. In real estate, that common purpose is the purchase of a real property, a physical building you can see and touch.
The biggest reason investors participate in real estate syndication or crowdfunding for real estate is access to deal flow. Not every investor has the time to search and underwrite hundreds of properties to find a gem to acquire. But there are thousands of real estate companies all over the United States who do this for a living. By getting involved through real estate syndication, investors have access to this deal flow and the ability to invest in real estate without the hassles of property management.

 

Brokerage

Hiring a Broker is the most effective and efficient way to purchase or rent real estate, of any kind. Brokers are hired by the client and work specifically in your best interest. They are responsible for monitoring needs and comparing what is available in the market and presenting it to you, the client. If you find a space that you are interested in, your Broker will act as mediator between the parties involved in deal and ensure that you spend the right amount of money at the best terms and conditions. By hiring a broker, you can relax knowing someone is contractually committed, legally responsible to represent you in the deal, and focus on your own business venture.
  • Proper vetting includes ensuring that a firm has great references and a solid transaction history. Demonstrated knowledge of the market is a must.
  • Check who else your broker represents. At a minimum, make sure they disclose any conflicts of interest.
  • How busy are they? Will they have sufficient time and resources to meet your needs?
  • Ask brokers what services you're paying for.
  • How closely are the principals going to be working on a deal?
It varies depending on the terms of your lease, but about 97% of the time the Landlord will be responsible for transaction costs (you want to be sure this is included in your lease).
It is never too early. You should generally be thinking if you want to renew your lease, expand your space or look for a new space at least 12 months before your current lease ends.
  • 7,000 sf - 10,000 sf = 24 months advance
  • 20,000 sf and greater = 36 months advance
That said, it is rarely too early to meet with a broker, review the existing lease, and start thinking about growth, contraction, flexibility and cost savings for an organization. A lack of time will always cost money, sometimes substantial.
There are three types of leases available: Full Service Gross, Triple Net, or Modified Gross.
  • Full Service Gross means that your quoted rental rate is inclusive of all taxes and Operating Expenses such as all utilities, maintenance, and upkeep of the building. However, you must consider that most Full Service leases will not include your internet and phone service charges and some may or may not include janitorial fees as well.  In addition, the Tenant is responsible for its proportionate share of the increase in Operating Expenses during the lease term over a state Base Year.  Your broker can explain this in more detail.
  • Triple Net (NNN) means that your quoted rental rate is only a portion of what your monthly cost for the space will be. There are "triple net" fees that come along with this type of lease to cover the property taxes, common area maintenance fees and insurance for the property. This additional triple net number will also be quoted on a per square foot rate and these fees generally run anywhere from $3-$15 per square foot above your base rent. You will also be responsible for your own utilities, janitorial costs, phone, and internet charges.
  • Modified Gross is a hybrid of Full Service and Triple Net leases. You will have a base rent just like a Triple Net lease, but you will only be responsible for paying your own utility costs like water, electric, gas, etc. You will be responsible for phone, internet and typically janitorial.
Some typically unexpected costs include wiring, triple net (NNN) expenses, insurance premiums, escalations, rental bumps, operating expense and real estate tax pass-throughs, tenant improvement allowance shortfalls, sublet administration fees, after-hours HVAC charges, moving expenses, architecture and engineering fees, construction administration fees, and a myriad of miscellaneous others that landlords may include in a lease agreement.
Absolutely! Market conditions and rental rates are constantly changing over time. What your organization negotiated five to ten years ago in regards to renewal options, might not be the best deal for your organization today. By working with a broker to review your current lease and renewal options, you might be able to negotiate a better lease rate, options to expand or contract in your current space or even get funds from the Landlord to improve the space with new carpet and paint.  Moreover, having a broker shows the landlord you are serious about exploring your options and will likely lead to some savings if you end up renewing.
Board members are great assets to organizations and can provide excellent guidance and direction for a myriad of issues. In many cases, however, organizations need to be cognizant of conflicts of interest when using the services of Board members. Double check your bylaws and bid protocols before requesting the volunteer services of your board members. Organizations will often hire an outside broker to work in conjunction with the board member to provide a more objective view, as well as take some of the burden away from the volunteer member who might not have the time to devote to the project.
If your landlord says we are friends and he is giving you a good deal, it's still good practice to engage a tenant representative broker.  At the very least they will benchmark the "good deal" against deals recently made in the marketplace to make sure it is true. Let the broker do the work to show you if, and on what terms, a better deal can be made in the marketplace. Remember, the Landlord's business is real estate and they're in the business to make money. Negotiate wisely and strategically and a broker will ensure you do both.

 

Property Management

Charges paid by the tenant for the upkeep of areas designated for use and benefit of all tenants. CAM charges are common in shopping centers and other shared spaces. Tenants are charged for parking lot maintenance, snow removal, utilities and other fees. Each lease will outline different CAM responsibilities.
Generally you contact the Property Manager, who you will be introduced to upon moving into your space.
Property Managers are each assigned to oversee a property. They are your point of contact and will assist you with any needs or questions you may have. They will maintain the property, be sure everything is running smoothly and rent is being paid. In addition, they oversee and regulate anything that occurs at the property, ensuring all parties are satisfied.
Consult your Lease first: in general, most issues on interior of space are Tenant's responsibility to repair/maintain and behind the walls and larger issues fall under the Landlord/Property Manager's responsibility. Unfortunately this varies quite a bit depending on how the Lease is written. Most times, anything such as lights out would be a typical responsibility of the Tenant. Whereas if the heat was broken, the Landlord could be responsible. Bottom line, make sure before you sign a lease that you fully understand your responsibility - this is where a Broker comes in very handy.
The sf allowance and timeframe are typically negotiated into the leasing contract. Spaces 5,000 sf or less are generally turnkey ready. The larger the space, the more tenant participation is involved.. Spaces 10,000 sf +, tenants typically choose their own architect/contractors.
Upon signing a lease, it is important to inquire if there is an afterhours or emergency phone number to call. Broad Street Realty has a 24/7 Maintenance Service Line, which is always answered by a live person and can be called toll free, 888.696.3325

 

Glossary of Terms

Individual/Entity to whom a contract is assigned.
The manner by which a contract is transferred from one individual/entity to another individual/entity.
The minimum rent due to the landlord. Typically, it is a fixed amount. This is a face, quoted, contract amount of periodic rent. The annual base rate is the amount upon which escalations are calculated.
The construction or improvements of the interior of a space, including flooring, walls, ceiling grid, finished plumbing, electrical work, etc.
Written government/municipality permission to develop, renovate, or repair a building.
Any major physical development or redevelopment to a property that extends the life of the property. Examples include upgrading the elevators, replacement of the roof, and renovations of the lobby.
The value given to the property when the Net Operating Income (NOI) is divided by the current market value or sales price. A cap rate can be used as a rough indicator of how quickly an investment will pay for itself. The higher the cap rate, the better.
Household goods, including personal property such as lamps, desks, and chairs.
For lease purposes, the areas of a building (and its site) that are available for the non-exclusive use of all it tenants, such as lobbies, corridors, and parking lots.
Charges paid by the tenant for the upkeep of areas designated for use and benefit of all tenants. CAM charges are common in shopping centers. Tenants are charged for parking lot maintenance, snow removal and utilities.
An imposed restriction in a deed that limits the use of the property. For example, a restriction could prohibit the sale of alcoholic beverages.
The percentage rate at which money or cash flows are discounted. The discount rate reflects both the market risk-free rate of interest and a risk premium.
The process of examining a property, related documents, and procedures conducted by or for the potential lender or purchaser to reduce risk. Applying a consistent standard of inspection and investigation one can determine if the actual conditions do or do not reflect the information as represented.
A legal instrument executed by the one taking out the mortgage (i.e., mortgagor). The owner of a property may require an individual leasing a property to sign an estoppel certificate, which verifies the major point (e.g., base rent, lease commencement and expiration) existing lease between the landlord and tenant.
Under Section 1031 of the Internal Revenue Code, like-kind property used in a trade or business or held as an investment can be exchanged tax-deferred. Under a fully qualified Section 1031 exchange, real estate is traded for other like-kind property. All capital gains taxes are deferred until the newly acquired real estate is disposed of in a taxable transaction. The underlying philosophy behind the deferral of capital gains taxes is that taxation should not occur as long as the original investment remains intact in the from of (like-kind) real estate (like-kind refers to real property as such, rather than the quality or quantity of property).
Personal property so attached the land or building (e.g., improvements) it is considered part of the real property.
See Rent Concessions.
A lease of land only. Usually the land is leased for a relatively long period of time to a tenant that constructs a building on the property. A land lease separates ownership of the land from ownership of buildings and improvements constructed on the land.
A tenant who remains in possession of leased property after the lease term expiration.
Ownership of real property by two or more individuals, each of whom has an undivided interest with the right of survivorship.
An informal, usually non-binding, agreement among parties indicating their serious desire to move forward with negotiations.
The potential rental income plus other income, less vacancy, credit losses, and operating expenses.
The tenant signs this to prevent himself from being evicted if the property owner does not pay its mortgage to the bank.
A commercial property type used to maintain or occupy professional or business offices. Such properties typically house management and staff operations. The term office can refer to whole buildings, floors, parts of floors, and office parks. Office space that can be used for a variety of purposes is sometimes referred to as generic office space. Office properties may be classified as Class A, B, or C. Class A properties are the most functionally modern. Properties Classed B and C in the same market typically command lower rents because they are older and in need of modernization. They may not be as efficient or desirable as Class A properties because their design or condition causes functional problems.
Cash outlays necessary to operate and maintain a property. Examples of operating expenses include real estate taxes, property insurance, property management and maintenance expenses, utilities, and legal or accounting expenses. Operating expenses do not include capital expenditures, debt service, or cost recovery.
The additional rent (over a base amount) that is paid by tenants to owners on tenant sales over a specified dollar amount. It is frequently found in retail leases. Also known as overage rent.
An investment vehicle in which investors purchase certificates of ownership in the trust, which in turn invests the money in real property and then distributed any profits to the investors. The trust is not subject to corporate income tax as long as it complies with the tax requirements for REIT. Shareholders must include their share of the REIT's income on their personal tax returns.
A period of free rent given to the tenant by the lessor.
Single or multifamily housing units that are used, serve, or are designed as a place of residence.
Properties used exclusively to market and sell consumer goods and services.
A leasing and financing strategy in which a property owner sells its property to an investor, then leases it back. This strategy frees capital that otherwise would be frozen in equity.
When a court requires a defendant to carry out the terms of an agreement or contract.
A lease in which the original tenant (lessee) sublets all or part of the leasehold interest to another tenant (known as a subtenant) while still retaining a leasehold interest in the property. Also known as sandwich lease due to the sandwiching of the original lessee between the lessor and the subtenant.
A segment or portion of a larger geographic market defined and identified on the basis of one or more attributes that distinguish it from other submarkets or locations.
Ownership of property by two or more individuals, each of whom has an undivided interest, without the right of survivorship.
Preparation of leased premises prior to or during a tenant's occupancy, which may be paid for by either the landlord, the tenant, or both.
See Tenant Improvements.
Entry on the tenant's Cash Flow Form. A specified amount of money the owner will pay for tenant improvement.
Rentable area, less certain common areas that are shared by all tenants of the office building (such as corridors, storage facilities, and bathrooms). Also defined in office buildings as the area that is available for the exclusive use of the tenant. Usable area = rentable area x building efficiency percentage.
Government authorization to use or develop a property in a manner which is not permitted by the applicable zoning regulations.
An amount of money that a landlord agrees to spend on the construction.