“You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur “ I AM YOUR LAND / INDUSTRIAL AND INVESTMENT SPECIALIST / LOOKING FOR Call me if you want to sell your property and need an estimated value. Direct : 602-759-1209, Prefer cell: 520-975-5207 or email me walterunger@ccim.net.
OWNERS CLICK HERE TO VIEW ALL MY $ 60 MIL OF LISTINGS . CLICK HERE: June 2019 MLS Monthly Statistics Report with Graphs for Phoenix Metro.
One of the largest industrial property owners in the country has started offering its tenants a new lease structure.
NATIONAL REAL ESTATE INVESTOR, Beth Mattson-Teig | Jul 23, 2019
Prologis made a big splash in the industrial market nearly two years ago when it debuted a new lease structure. The Clear Lease represents a significant shift away from traditional lease forms in that it offers tenants a simplified document and fixed costs related to operating expenses, capital expenses and HVAC equipment costs over the term of the lease.
As one of the largest landlords in the industrial market with a portfolio that spans some 786 million sq. ft. globally, when Prologis makes a move, people in the industry notice. “It did create some initial buzz when it was announced,” says David Eseke, a senior director at real estate services firm Cushman & Wakefield in Dallas. Now that Prologis has rolled it out and a lot of tenants and brokers have experienced it, the newness factor has worn off. The bigger question is whether the Clear Lease is going to be a differentiator for tenants when making location decisions, and whether or not it might push other landlords to make similar changes, Eseke adds.
Since Prologis first introduced the Clear Lease in the U.S. in the fall of 2017, it now accounts for about 25 percent of the firm’s portfolio in North America, with major corporate users that include Home Depot, Panalpina, DHL and XPO Logistics. Currently, about 75 to 80 percent of the leases Prologis is doing in North America are done with the Clear Lease structure. In some cases, the exceptions are those tenants who are renewing and choosing to keep the existing legacy lease already in place.
Now the company is moving on to phase two of the Clear Lease rollout as the standard lease being used across its entire global platform.
What is a Clear Lease?
One of the first things tenants notice is that the Clear Lease is shorter than most standard industrial leases at about 11 pages, and it is written in a way that is more straightforward and easier to digest vs. the typical legalese found in most leases. Much like its name suggests, the structure aims to create more transparency for tenants. “We sit down with our customers at the beginning of the lease and fix our operating expenses, and we have very open conversations with them about what their expenses will be relative to the capital in the buildings,” says Steve Kimball, managing director, East region operations at Prologis.
For tenants, the biggest selling point of the Clear Lease is that it eliminates a spike in costs or a surprise bill after a year-end accounting reconciliation. In a typical triple net lease, landlords charge a base rent, operating costs and taxes that pass through directly to tenants. Even with the best budgeting tactics, operating costs can spike due to unforeseen events, such as a record snowfall. The Clear Lease fixes those operating expenses with one set number.
In addition, most standard leases require tenants to reimburse the landlord for capital expenditures based on a cost that is amortized over the useful life of that capital expense, such as a roof replacement or resurfacing a parking lot. Generally, those capital expenses were never in the numbers, and would be just an added bill to tenants as those capital expenses happened, notes Kimball. The Clear Lease fixes the capital expenses at a set dollar amount, as well as fixing the cost of HVAC equipment that covers repairs, maintenance and replacement costs.
The Clear Lease does not fix expenses in a triple net lease that a tenant pays directly, such as utility costs or any damage the tenant causes to a property beyond the usual wear and tear. Property taxes will also continue to be billed back to customers and reconciled once a year.
Driving market change
One of the factors that allows Prologis to take on the risk of fixed expenses is its size and portfolio diversity. “Our scale has given us a very good sense of what the operating expenses of a property will be. We feel comfortable taking on the risk that, for example, it may snow heavily in Chicago one year while it may not in New Jersey,” says Kimball. Establishing fixed expenses may be more challenging for a local or regional owner that could be negatively impacted by one event, such as a big snowfall or flooding.
Certainly, there are some other large industrial owners, such as Blackstone, First Industrial or Liberty Property Trust that have significant scale that could offer something similar. There have been some landlords in Dallas and some other markets that have tried to mimic the expense cap specific to HVAC costs so the tenant doesn’t have to worry about the cost of repairing or replacing units, notes Eseke.
“However, I have not seen anyone come out and say they are going to guarantee the operating expenses yet quite like Prologis has,” he adds.
A potential downside to the Clear Lease is that it may create some challenges for the sale of assets. A potential new buyer may not have the same scale to be able to support the Clear Lease structure, and they could end up discounting the value of the building because of it, notes Eseke. “You also have to think about your exit strategy, and from an ownership and investor perspective, not everybody is going to like what Prologis is doing,” he says.
FROM ME:
Phoenix Commercial Real Estate and Investment Real Estate: Investors and Owner / Users need to really know the market today before making a move in owner user Commercial Properties, Investment Properties and land in Phoenix / Maricopa County, Pinal County / Arizona, Properties and Investment Properties. I am marketing my listings on Costar, Loop-net CCIM, Kasten Long Commercial Group. I also sold hundreds millions of dollars’ worth of Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with brokers, Investors and Developers. I am also a CCIM and through this origination ( www.ccim.com ) I have access to marketing not only in the United States, but also international as the market has a lot of moving parts today. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands Commercial en.wikipedia.org/wiki/CCIM I AM YOUR LAND / INDUSTRIAL AND INVESTMENT SPECIALIST / LOOKING FOR OWNERS CLICK HERE TO VIEW ALL MY $ 60 MIL OF LISTINGS PLEASE CALL ME – Direct : 602-759-1209 , cell: 520-975-5207 or email me walterunger@ccim.net
WEEKLY LAND SALES
“The major fortunes in America have been made in land.” John D. Rockefeller
WEEKLY LAND CLOSING UPDATE / July 12, 2019 / Phoenix Arizona Metro, Maricopa County, Pinal County.
WEEKLY LAND CLOSING UPDATE / July 5, 2019 / Phoenix Arizona Metro, Maricopa County, Pinal County.
WEEKLY LAND CLOSING UPDATE / June 28/ 2019 / Phoenix Arizona Metro, Maricopa County, Pinal County.
WEEKLY LAND CLOSING UPDATE / June 14, 2019 / Phoenix Arizona Metro, Maricopa County, Pinal County.
WEEKLY LAND CLOSING UPDATE / June 7, 2019 / Phoenix Arizona Metro, Maricopa County, Pinal County.cc
WEEKLY LAND CLOSING UPDATE / May 31, 2019 / Phoenix Arizona Metro, Maricopa County, Pinal County.
WEEKLY LAND CLOSING UPDATE / May 24, 2019 / Phoenix Arizona Metro, Maricopa County, Pinal County.
WEEKLY LAND CLOSING UPDATE / May 17, 2019 / Phoenix Arizona Metro, Maricopa County, Pinal County.
WEEKLY LAND CLOSING UPDATE / May 10, 2019 / Phoenix Arizona Metro, Maricopa County, Pinal County.
WEEKLY LAND CLOSING UPDATE / May 3, 2019 / Phoenix Arizona Metro, Maricopa County, Pinal County.
I AM YOUR LAND / INDUSTRIAL AND INVESTMENT SPECIALIST / LOOKING FOR OWNERS CLICK HERE TO VIEW ALL MY $ 60 MIL OF LISTINGS
WEEKLY INDUSTRIAL SALE:
I AM YOUR LAND / INDUSTRIAL AND INVESTMENT SPECIALIST / LOOKING FOR OWNERS CLICK HERE TO VIEW ALL MY $ 60 MIL OF LISTINGS
WEEKLY APARTMENT SALES
WEEKLY APARTMENT CLOSING UPDATE THROUGH July 19, 2019, Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH July 12, 2019, Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH July 5, 2019, Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH June 28, 2019, Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH June 21, 2019, Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH June 14, 2019, Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH June 7, 2019, Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH May 31, 2019, Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH May 24, 2019, Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH May 17, 2019, Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH May 10, 2019, Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH May 3, 2019, Phoenix Arizona Metro.
I AM YOUR LAND / INDUSTRIAL AND INVESTMENT SPECIALIST / LOOKING FOR OWNERS CLICK HERE TO VIEW ALL MY $ 60 MIL OF LISTINGS
Walter Unger CCIM
Senior Associate Broker
Kasten Long Commercial Group
5110 N 40th Street, Suite 110
Phoenix , AZ 85018
CELL: 520-975-5207
Direct: 602-759-1209
Office: 602-445-4112
Fax: 602-865-7461
CLICK HERE TO VIEW ALL MY LISTINGS
“You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur “ ARE YOU READY TO SELL OR PURCHASE YOUR INDUSTRIAL / OFFICE OR RETAIL BUILDING OR YOUR LAND in Phoenix, Maricopa County and Pinal County, Arizona, please call me. Office: 602-445-4113, Direct : 602-759-1209 , cell: 520-975-5207 or email me walterunger@ccim.net. … CLICK HERE TO VIEW ALL MY LISTINGS.
Let me know if you are interested in Apartments: CLICK HERE FOR APARTMENTS FOR SALE
CLICK HERE: Arizona Opportunity Zones As We Understand /maps. Interested!!! Please contact me.
History of Arizona from 900 BC – 2017 -Timeline.
8 Reasons You Should Invest in Land
History of Arizona from 900 BC – 2017 -Timeline.
WHY PHOENIX? AMAZING!!! POPULATION IN 1950 – 350 K PEOPLE; “NOW 5 MIL”. – “5TH. BIGGEST CITY IN USA”
DOT – LOOP 202 / SOUTH MOUNTAIN FREEWAY / PHOENIX AZ – UNDER CONSTRUCTION
ARIZONA FACTS – YEAR 1848 TO 2013
- DEMOGRAPHIC FACTS ABOUT MARICOPA COUNTY:
- The average age of the population is 34 years old.
- The health cost index score in this area is 102.1. (100 = national average)
- Here are some of the distributions of commute times for the area: <15 min (22.7%), 15-29 min (36.8%), 30-44 min (25.1%), 45-59 min (8.6%), >60 min (6.8%).
PHOENIX PROJECTED AS NUMBER ONE US HOUSING MARKET FOR 2017
LIST OF ECONOMIC DEVELOPMENT PROJECTS IN PINAL COUNTY, REVISED 2-14-17
Reasons to Consider me for Commercial Referrals – I have the Knowledge and Experience
Click here to View My Listings and Profile
Click here to find out what is a CCIM:
Click here to view my website:
Click her to join my mailing list :
Walter Unger CCIM – walterunger@ccim.net – 1-520-975-5207 – http://walter-unger.com
2016 Official Arizona Visitors Guide
Timeline of Phoenix, Arizona history
Facts of Arizona – year 1848 to 2013
Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Properties in Phoenix, Tucson, Arizona.
Walter Unger CCIM
Senior Associate Broker
Kasten Long Commercial Group
5110 N 40th Street, Suite 110
Phoenix , AZ 85018
Direct: 602-759-1209
CELL: 520-975-5207
Office: 602-445-4112
Fax: 602-865-7461
CLICK HERE TO VIEW ALL MY LISTINGS
“You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur “
Also Call me if you need an estimated value of your Property.
Call me if you want to see a map with what is in the Construction Pipeline for Apartments.
Direct : 602-759-1209, Prefer cell: 520-975-5207, or email me walterunger@ccim.net. CLICK HERE TO VIEW ALL MY LISTINGS.
Check out my professional profile and connect with me on LinkedIn.
Kasten Long Commercial Group tracks all advertised apartment communities, including those advertised by other brokerages. The interactive map shows the location of each community (10+ units) and each location is color coded by the size (number of total units).
Walter Unger CCIM, CCSS, CCLS
I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years. If you have any questions about Commercial / Investment Properties in Phoenix or Commercial / Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us.
Please reply by e-mail walterunger@ccim.net or call me on my cell 520-975-5207
Reasons to Consider me for Commercial Referrals
Delivering the New Standard of Excellence in Commercial Real Estate
- Commercial Real Estate Scottsdale
- Commercial Real Estate Phoenix
- Commercial Real Estate Arizona
- Commercial Investment Properties Phoenix
- Commercial Investment Properties Scottsdale
- Commercial Investment Properties Arizona
- Land Specialist Arizona
- Arizona Land Specialist
- Land Specialist Phoenix
- Phoenix Land Specialist
- Land For Sale Phoenix
- Land for sale Arizona
- Commercial Properties For Sale Phoenix
- Commercial Real Estate Sales Phoenix
- Commercial Properties Phoenix
- Commercial Properties Arizona
- Commercial Land Specialist Phoenix
- Commercial Land Phoenix
- Multifamily land Phoenix
- Retail Land Phoenix
- Industrial Land Phoenix
- Land Commercial Phoenix
- Land Retail Phoenix
- Land Industrial Phoenix
- Land Multifamily Phoenix
- Industrial Land for sale Phoenix
- Land Industrial
- P
- Investment Real Estate
Disclaimer of Liability
The information in this blog-newsletter is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.