Chapter 19 Commercial and Industrial Real Estate1 New Jersey Real Estate for Salespersons and Brokers By Marcia Darvin Spada Thomson/South-Western Copyright,

Chapter 19 Commercial and Industrial Real Estate

1

New Jersey Real Estate for Salespersons and Brokers

By Marcia Darvin SpadaThomson/South-Western

Copyright, 2006


2

Chapter 19

Commercial and Industrial Real Estate


3

Chapter 19 Key Terms

Asset based loans

Brownfield and

Contaminated Site

Remediation Act

Debt coverage ratio

Expense stop lease

Industrial

establishment

Industrial Site

Recovery Act (ISRA)

Rent escalation clause

NJ Franchise Practices

Act

NJ bulk sales reporting

requirements


4

Types of Commercial and Industrial Property

Multi-family

Office

Industrial

Retail

Health Care

Brokers must research demographics and competing properties


5

Commercial Leasing

Building amenities

Type of lease

Lease duration

On-site management


6

Concerns of Commercial Tenants

LocationLocationLocationLocation

Building designBuilding designBuilding designBuilding design

Effective rentEffective rentEffective rentEffective rent


7

Commercial and Industrial Site Analysis

Community acceptance

Mora-torium

Feasibilitystudy

Zoning

Physicalsite

Site


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The NJ Brownfield and Contaminated Site Remediation Act

Reimbursement to

owners who address

contamination

Liability protection

for developers, users

and lenders

Covenant not to sue

from NJDEP

Protections apply to

innocent parties-

those who did not

cause contamination


9

Industrial Site Recovery Act

Sale, closure, or transfer of industrial property

Industrial establishment

NJDEP


10

Commercial Financing

UnderwritingUnderwritingUnderwritingUnderwriting

Lending Lending ratiosratios

Lending Lending ratiosratios

Debt coverageDebt coverageratioratio

Debt coverageDebt coverageratioratio

PropertyPropertyanalysisanalysis

PropertyPropertyanalysisanalysis

CreditCreditworthinessworthiness

CreditCreditworthinessworthiness


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Business Loans

Creditline

Creditline

LeasingLeasing

EquipmentEquipment

TermTerm

FactoringFactoring

ContractfinancingContractfinancing

Assetbased

Assetbased

Shortterm

Shortterm

LoanLoan


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Transfer of Franchises

Franchise

An arrangement in

which one grants to

another a license to

use a trade name, or

other characteristic

NJ Franchise Practices Act

If a franchisor wants to deny the transfer of a franchise, there must be material reasons relating to character, finance or business experience.


13

New Jersey Bulk Sales Reporting Requirements

For those who make

a sale, transfer or

assignment of

business assets not

sold through the

usual course of

business.

Purchaser must

notify NJ Division of

Taxation 10 or more

days before taking

possession of assets.

Documents

Chapter 19 Commercial and Industrial Real Estate1 New Jersey Real Estate for Salespersons and Brokers By Marcia Darvin Spada Thomson/South-Western Copyright,