No two companies are alike. With so many differences in size, industry, operating style, growth strategy and culture, it takes a certain kind of care and attention to identify what a company needs in terms of their real estate. It’s part of the challenge of a being broker, and one we gladly take on each and every time we work with a new client. (more…)
We guarantee you won’t find a team of brokers, developers and investors who enjoy what they do quite as much as us. We love Denver, and make it our job to know the ins and outs of this market so we can make informed decisions that maximize value for our clients and partners. Plus, we have fun doing it. Our customized approach to Denver brokerage, development and investment is built on strong relationships and data-driven insights. Watch this video to get to know who we are and what we’re all about!
Our team recently sat down with Molly Armbrister from CoStar News to walk through the launch of Tributary Real Estate, our successful growth over the past few years and where we’re headed next. (more…)
When a building changes hands – a trend all too familiar in Denver right now – it’s hard to understand exactly how it will affect you and your business as a tenant. That’s why we’re continuing our “Building Sale Basics” series with this next installment that breaks down how a building sale can potentially increase your cost exposure.
As commercial real estate continues to increase in value, buildings are selling at record prices. There are multiple factors that feed into this increased value, including a rise in land prices, construction costs and mostly assessed taxes. In our current market, many buyers are willing to pay a higher price tag because they know they can get a good return on their investment.
Here’s how: During the due diligence process of a building purchase, owners create a proforma, which is a set of calculations that projects the financial return that a proposed real estate project is likely to create. Proformas are typically used to determine cash flow for the investment and assess operational costs, including potential for capital improvements for the building. Along with other elements, this helps determine a price point any buyer is willing to pay for the property.
So, what does that mean for you?
When a new owner purchases a building at a high price, they typically find a way to pass that expense onto the tenants throughlease agreements, and specifically as it relates to the operational costs for the building. These expenses are passed through as triple net (NNN) expenses. That means in addition to your base rental rate (which might increase just due to the market), you are also responsible for covering NNN expenses, which are property taxes (largest contributor to the increases seen today), property insurance and common area maintenance. In short, you’re helping cover your proportionate share of the operating costs of the building.
In the past, the majority of office leases in the Denver market operated on a gross lease model, where the operating costs of a building were rolled into your rental rate year one and you paid a minimal passthrough each year thereafter based on actual expenses. Now, it’s more typical to see NNN leases that separate lease rates and operating costs. For example, two buildings in Lower Downtown might both be listed with a lease rate of $30/sf NNN. However, they could easily have different NNN expenses, meaning your all-in might be $41/sf for Building A vs $46/sf for Building B. We recommend working with a tenant rep broker who understands how to break it down so you’re never caught off-guard with respect to this additional operating cost exposure in a lease.
While it might seem like you have zero power when your building sells to control these cost increases, there are a few steps you can take to protect you and your business.
While rising operating costs are a concern for every business, remember you have choice in how you approach your commercial real estate decisions. If and when your building sells, reach out to a trusted broker who understands your options and will work in your best interest to mitigate your risk and explain all of your options.
Interested in learning more? Click here to read the first blog post in our Building Sale Basics series about Estoppel Certificates and what you should do with them.
As the Denver market continues to grow, one particular type of real estate seems to be popping up everywhere you turn: Coworking spaces.
Designed for flexibility and ease of use for startups, freelancers and even established companies looking for interim or flexible workspace options, coworking spaces are attracting major attention and making headlines almost weekly. No longer just a fad, this type of office space is a force to be reckoned with. (more…)
With Denver’s commercial real estate market showing few signs of slowing down, hardly a week goes by without a headline exalting the sale of another commercial real estate property. And while it may not seem all that relevant to your business if you don’t happen to lease in that building, it’s important to be prepared to protect your interests and limit your risk should your building change hands. (more…)
You’ve gone from being a fledgling startup to a full-fledged business owner. Your client list is growing by the day, maybe you’ve received your first round of funding, and it’s not just you and your dog in the basement anymore. You know you need an office to house your growing team, but deciding how much to spend and the best office space for you has probably left you with a lot more questions than answers. (more…)
Commercial real estate, as an industry, has traditionally been slow to adapt to new technology. From brokerage to development to investment, the processes have been relatively static (and heavily reliant on good ol’ fashioned paper), but CRE is finally starting to embrace the efficiencies technology affords, and at Tributary, we aim to lead the way.
While we’ve already made the shift to using tablets and iPads rather than printed packets to lead potential investors and tenants through walkthroughs of available developments, we’re in the process of making an even bigger transition that we believe will allow us to better serve our clients. Tributary is going completely paperless.
According to Real Estate Tech News, technology start-ups are increasingly realizing the latent potential in the CRE industry as firms like Tributary look for ways to modernize practices. As a result, we’re seeing more in the way of new solutions geared specifically to the needs of the CRE industry:
While all of these technological advancements shifting to serving the needs of CRE brokers, investors and developers, we’re entering an exciting time for our industry. Rest assured, your Tributary team will always be on the lookout for ways we can provide more tailored solutions and streamlined services.
