SOLD: 5926 W US Hwy 14

Bill Mears represented both sides in this million-dollar deal! Call (608) 752-6325 for more information.

LEASED: 4433 Woodgate Dr

Mandy Witt represented the landlord in this transaction.

Chipotle vs Qdoba - Milton Ave Rivals

Forget McDonald's and Burger King or Taco Bell and Taco Johns - there's a new rivalry in town! With the increasing popularity of the FAST CASUAL restaurant, Milton Avenue is adding yet another to the line up. The grand opening for Chipotle Mexican Grill (Chipotle), located at 3515 Milton Ave next to the NEW Diamond Center, is slated for a June 18, 2015 OPENING.  

You may know that Chipotle is a chain of restaurants specializing in

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burritos and tacos. Its name drives from chipotle, the Nahuatl name for a smoked and dried jalapeno chili pepper. The company mission statement, Food with Integrity, highlights its efforts in using organic ingredients, and their restaurants serve more naturally raised meat than any other restaurant chain. Chipotle is said to be one of the first chains of fast casual dining establishments. 

Construction at new Culver's site!

SOLD: 645 Midland Rd

Bill Mears negotiated the sale of this land near an I-90/39 interchange for a new Culver's location. Congratulations!

LEASED: 701-727 S Janesville St

Blackhawk Community Credit Union has leased space for their first branch in Milton, WI, in a transaction brokered by Mandy Witt!

LEASED: 4539 Woodgate Dr

The final suite available in this office complex was leased out by Mandy Witt early this week.

SOLD: 1333 Excalibur Dr

This office building with a large garage space was sold today for $160,000!

Why all the FUSS over Festival Foods?

Courtesy of Isthmus.com

Since the rumors started circulating about Festival Foods coming to the former Kmart site, all I've heard is, “ANOTHER grocery store?” I know, I know. I've done the rundown of all the grocers in Janesville so let’s review them together: we have Woodman's, Walmart, Sam's Club, Target, Schnuck's, Sentry, Piggly Wiggly, Pick N Save, Basics, and Aldi. Am I forgetting anyone???

SOLD: 1162 E High St

Bill Mears brokered the sale of this 5,800 SF industrial building in Milton, WI, that closed earlier today!

SOLD: 535 W Wall St

Bill Mears and Kurt Egan represented the sellers in this industrial deal with a sale price of $940,000 - way to go, guys!

Roundabouts are OUT and Diverging Diamonds are IN

Janesville residents were first introduced to the "modern" roundabout in 2007, one at the intersection of Sandhill Drive and Sandstone and the other on Morse Street off of Hwy 26 at the entrance of the new Menards development. Two more roundabouts were constructed in 2013 at the Racine Street on/off ramps with I-39/90. The roundabout was such a hot topic during construction that the City of Janesville posted a "Roundabouts" selection under Department and Services tab on their website in hopes of helping drivers navigate around the central island. 

While I've never personally been in or witnessed an accident in these areas, I can't deny that the roundabout provides a safer driving environment by reducing speeds and conflict points and allowing easier decision-making for drivers. So maybe the roundabout is everything they said it would be. 

Courtesy of http://www.mikeontraffic.com/

But what is a Diverging Diamond Intersection and will the City of Janesville soon be providing us with yet another selection under the Department and Services tab? The Wisconsin Department of Transportation already has.

LEASED: 2747 Milwaukee Rd

Beloit wings fans, rejoice! Our sales associate Mandy Witt, representing the landlord, has brokered a 10-year lease with Buffalo Wild Wings in Beloit. Adam Dreier of Mid-America Real Estate represented the tenant.

SOLD: 1824 & 1840 Lafayette St

Congratulations to Kurt Egan for brokering the $195,000 sale of this office and warehouse building!

There’s Gold in Them Thar Hills!

Well, it’s not a gold rush, but if you have net-leased or better yet a sale-leaseback property, hitch up your wagon. According to a recent article in National Real Estate Investor magazine, “Investment Irony”, there is stiff competition and a shortage of supply for both real estate types.

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In Beth Mattson-Teig’s piece she quotes Mark West, senior managing director at a commercial real estate capital intermediary firm. “Across all product types in real estate, there is no shortage of capital...looking for good quality deals…And in the net lease, sale-leaseback space it is very attractive, and plenty of capital is looking for the long-term, predictable cash flow that is represented by sale-leasebacks.”

With the demand up and supply short, it would certainly appear that we are in a seller’s market for at least one segment of the commercial real estate arena. Real Capital Analytics tallies the total sale-leaseback transactions in 2014 at $9.4 billion.

The 2014 volume in sales can be attributed to what commercial brokers see “From the owner perspective, we have seen a high potential of sales, as owners have made it through the depression and have decided to capitalize on current market conditions.” They are monetizing those assets to fuel growth and expansion.

What I found very interesting in the article was the interest in shorter term lease deals. Brand new investment properties, whether they are net-leased opportunities like a Walgreens or a sale-leaseback, typically have a long-term lease. Long-term leases usually mean low cap rates, which translate to higher prices per square foot. Existing net-leased properties typically have leases with shorter terms that often times translate to higher cap rates, which deliver lower prices per square foot.

One investment company purchased a large warehouse in the greater Chicago area leased by Solo Cup. They had 10 years left on the lease which, in that market, allowed for the sale at a 7% cap rate. With a longer term lease, the article suggests, that rate would have been about 6%.

The buyer was thrilled that they were able to acquire this asset at $51 per square foot. That still seems pricey, but it is, after all, the Chicago market and not Rock County. However, it does appear that the treasure in the market is sale-leasebacks with shorter-term leases. If you own a property and would like to generate cash for growth, the time could not be better to go to market.

REBLOG: What is Fast Casual Food?

"Fast casual is THE THING, but it’s surprisingly hard to define what it is exactly. What makes fast casual food fast casual—and not simply fast food? And at what point do we draw the line between fast casual places and the likes of Applebee’s, which have table service, but also takeout? The answer might simply depend on whom you ask."

Read the rest here!

SOLD: 12 S Pontiac Dr

Kurt Egan represented the seller in the sale of this 2,368 SF building for $140,000!

1031 Exchange Basics (Part 2 of 2)

Sheltering taxes can be tricky but also beneficial. Finding a CPA with experience in commercial real estate is important to effectively protect yourself. A 1031 exchange is a tool often used to defer taxes and in my first blog post “1031 Exchange Basics”, I talked about the different types of 1031 exchanges. This blog will focus on the general rules of the Internal Revenue Service’s code Section 1031 that taxpayers must meet when identifying a replacement property. 

Three (3) Property Rule – The taxpayer may identify up to three potential replacement properties, without regard to their value.

200% Rule – Any number of properties may be identified, but their total value cannot exceed twice the value of the relinquished property.

95% Rule – The taxpayer may identify as many properties as he wants, but before the end of the exchange period, the taxpayer must acquire properties with an aggregate fair market value equal to at least 95% of the aggregate fair market value of all the identified properties.

When selecting a replacement property, the funds from a 1031 exchange cannot be used for a personal residence (unless it has been a rental property for 2 years), notes, an interest in a partnership, Certificates of Trust, or homes held for sale by speculation builders (among others).

Knowing the rules & regulations, using a Qualified Intermediary, and having the necessary professional help can secure the tax shelter and benefits of a 1031 exchange. 

For more information or an exchange checklist call Kurt Egan at 608-752-6325 Ext. 4.

#FeaturedListingFriday - 1810 Sutler Ave

Retail/Office Space for Lease - 1810 Sutler Ave, Beloit, WI

Space available from 980 SF to 4,500 SF in Beloit's Morgan Square shopping center located on the Milwaukee Rd corridor. Visible from both Milwaukee Rd and Cranston Rd with a traffic count of 17,100 VPD on Cranston. Co-tenants include Dollar Tree, GNC, Sherwin Williams, Concordia University, Allstate, and Rogan Shoes. Great setting with lots of retailers and restaurants close by!

Click here for more information.

SOLD: 4539 Woodgate Dr

Bill Mears represented the seller and Kurt Egan represented the buyer in the sale of this office investment property for $375,000. What a great way to start the new year!