Michael's Commercial LLC

Commercial Land Absorption Rates – Prince William County – August 2009

Commercial Land Real Estate Absorption Rates for Prince William County are offered as a service of Michael’s Commercial LLC. The monthly absorption rates are categorized by the following Prince William County Zoning Districts:

• B-1 (General Business District)
• B-2 (Neighborhood Business District)
• B-3 (Convenience Retail District
• O(L) (Office Low-Rise District)
• O(M) (Office Mid-Rise District)
• O(H) (Office High-Rise District)
• O(F) (Office/Flex District)
• M-1 (Heavy Industrial District)
• M-2 (Light Industrial District)
• M/T (Industrial/Transportation District)
• MIXED

Absorption Rates are established by how many properties have sold during a given period of time (e.g., 365, 180, 90 and 30 days). Absorption rates also allow tracking trends in the market for any given number of days, weeks or months. These trends can indicate whether we may be in a Sellers Market, a Neutral Market or a Buyers Market. A monthly absorption rate of 5-6 is usually considered a Neutral Market. Anything below five is regarded as a Sellers Market and anything above six a Buyers Market.

• Sellers Market                         1-4 Months Supply
• Neutral Market                        5-6 Months Supply
• Buyers Market                            7 Plus Months Supply

The following tables reflect the Monthly Absorption Rates* for respective Zoning Districts in Prince William County ending on August 31, 2009:

• Total Number of Properties on Market. The properties that were available on the market during the reporting period.
• Total Number of Sales. The total number of Sold properties during the given reporting period.
• Monthly Absorption Rate. The rate at which the Sold properties were absorbed in the market on a monthly basis.
• Inventory. The number of available properties as of the report date.
• Months Supply. The number of months it will take the properties to sell based on the number of properties that have sold during the reporting period.
• Chance of Selling. The rate at which the properties in the inventory will sell based on the percentage of the total properties on the market and the total number of sales.

The tables above indicate that the commercial land real estate market in Prince William County has been minimal. There are currently properties on the market, but no activity. No properties have sold within this reporting period. We are currently in a Buyer’s market.

• General Business District – No activity during this reporting period and there are seventeen listings currently in the inventory.
• Neighborhood Business District – No activity during this reporting period and one listing currently in the inventory.
• Convenience Retail District – No activity during this reporting period.
• Office Low-Rise District – No activity within this reporting period.
• Office Mid-Rise District – No activity during this reporting period.
• Office High-Rise District – No activity during this reporting period.
• Office/Flex District – No activity during this reporting period.
• Heavy Industrial District – No activity during this reporting period and two listings currently in the inventory.
• Light Industrial District – No activity during this reporting period and three listings currently in the inventory.
• Industrial/Transportation District – No activity during this reporting period and one listing currently in the inventory.
• MIXED – No activity during this reporting period and one listing currently in the inventory.

*The data presented here is compiled from information provided by the Metropolitan Regional Information System.

The Commercial Land Absorption Report is the author’s own interpretation of the Prince William County Commercial Real Estate market and makes no warranty or claim regarding the usefulness or implications of this information.

Michael Setunsky is the Broker and owner of Michael's Commercial LLC serving the Northern Virginia commercial real estate market. His more than 23 years of experience as a commercial real estate and business broker has earned him the distinction for being one of the top commercial real estate producers in the Mid-Atlantic Region. He also serves on the Mid Atlantic Real Estate Marketing Association's (MAREMA) Board of Directors, and is a Commonwealth of Virginia licensed Instructor. He teaches Pre-licensing, Post Licensing Education, Broker's and Continuing Education courses. Visit his company web site at http://michaelscommercial.com/.

©2009 Michael’s Commercial LLC, All Rights Reserved - Commercial Land Absorption Rates – Prince William County – August 2009 – August 31, 2009

Commercial Absorption Rates – Prince William County – August 2009

Commercial Real Estate Absorption Rates for Prince William County are offered as a service of Michael’s Commercial LLC. The monthly absorption rates are categorized by the following Prince William County Zoning Districts:

• B-1 (General Business District)
• B-2 (Neighborhood Business District)
• B-3 (Convenience Retail District
• O(L) (Office Low-Rise District)
• O(M) (Office Mid-Rise District)
• O(H) (Office High-Rise District)
• O(F) (Office/Flex District)
• M-1 (Heavy Industrial District)
• M-2 (Light Industrial District)
• M/T (Industrial/Transportation District)

Absorption Rates are established by how many properties have sold during a given period of time (e.g., 365, 180, 90 and 30 days). Absorption rates also allow tracking trends in the market for any given number of days, weeks or months. These trends can indicate whether we may be in a Sellers Market, a Neutral Market or a Buyers Market. A monthly absorption rate of 5-6 is usually considered a Neutral Market. Anything below five is regarded as a Sellers Market and anything above six a Buyers Market.

• Sellers Market                         1-4 Months Supply
• Neutral Market                        5-6 Months Supply
• Buyers Market                           7 Plus Months Supply

The following tables reflect the Monthly Absorption Rates* for respective Zoning Districts in Prince William County ending on August 31, 2009:

• Total Number of Properties on Market. The properties that were available on the market during the reporting period.
• Total Number of Sales. The total number of Sold properties during the given reporting period.
• Monthly Absorption Rate. The rate at which the Sold properties were absorbed in the market on a monthly basis.
• Inventory. The number of available properties as of the report date.
• Months Supply. The number of months it will take the properties to sell based on the number of properties that have sold during the reporting period.
• Chance of Selling. The rate at which the properties in the inventory will sell based on the percentage of the total properties on the market and the total number of sales.

The tables above indicate that the commercial real estate market in Prince William County has been minimal during this reporting period. There were no commercial property sales within the last 30 days. One property is currently Under Contract. We are currently in a Buyers Market.

• General Business District – No activity during this reporting period and 22 listings currently in the inventory. One property is currently Under Contract.
•  Neighborhood Business District – No activity during this reporting period and one listing currently in the inventory.
• Convenience Retail District – No activity during this reporting period.
• Office Low-Rise District – No activity during this reporting period.
• Office Mid-Rise District – No activity during this reporting period.
• Office High-Rise District – No activity during this reporting period.
• Office/Flex District – No activity during this reporting period.
• Heavy Industrial District – No activity during this reporting period and two listings currently in the inventory.
• Light Industrial District – No activity during this reporting period and four listings currently in the inventory.
• Industrial/Transportation District – No activity during this reporting period.

*The data presented here is compiled from information provided by the Metropolitan Regional Information System.

The information provided here is the author’s own interpretation of the Prince William County Commercial Real Estate market and makes no warranty or claim regarding the usefulness or implications of this information.

Michael Setunsky is the Broker and owner of Michael's Commercial LLC serving the Northern Virginia commercial real estate market. He has been licensed since 1985 and a Broker since 1990. As a commercial real estate and business broker, he has earned the distinction for being one of the top commercial real estate producers in the Mid-Atlantic Region. He also serves on the Mid Atlantic Real Estate Marketing Association's (MAREMA) Board of Directors, and is a Commonwealth of Virginia licensed Instructor. He teaches Pre-licensing, Post Licensing Education, Broker's and Continuing Education courses. Visit his company web site at http://michaelscommercial.com/.

©2009 Michael’s Commercial LLC, All Rights Reserved – Commercial Absorption Rates – Prince William County – August 2009 – August 31, 2009

Commercial Property Market Report – Prince William County – August 2009

The Commercial Property Market Report for Prince William County is offered as a service of Michael’s Commercial LLC. The August 31, 2009 market report is categorized by the commercial Prince William County Zoning Districts:

  Legend:

• B-1 (General Business District)
• B-2 (Neighborhood Business District)
• B-3 (Convenience Retail District
• O(L) (Office Low-Rise District)
• O(M) (Office Mid-Rise District)
• (H) (Office High-Rise District)
• O(F) (Office/Flex District)
• M-1 (Heavy Industrial District)
• M-2 (Light Industrial District)
• M/T (Industrial/Transportation District)
• MIXED Commercial

*The data presented here is compiled from information provided by the Metropolitan Regional Information System.

The Commercial Property Market Report is the author’s own interpretation of the Prince William County Commercial Real Estate market and makes no warranty or claim regarding the usefulness or implications of this information.

Michael Setunsky is the Broker and owner of Michael's Commercial LLC serving the Northern Virginia commercial real estate market. His more than 23 years of experience as a commercial real estate and business broker has earned him the distinction for being one of the top commercial real estate producers in the Mid-Atlantic Region. He also serves on the Mid Atlantic Real Estate Marketing Association's (MAREMA) Board of Directors, and is a Commonwealth of Virginia licensed Instructor. He teaches Pre-licensing, Post Licensing Education, Broker's and Continuing Education courses. Visit his company web site at http://michaelscommercial.com/.

©2009 Michael’s Commercial LLC, All Rights Reserved - Commercial Property Market Report – Prince William County – August 2009 – August 31, 2009

Investing in Commercial Real Estate – Property Valuation

Valuing property in commercial real estate is quite different from doing a Competitive Market Analysis (CMA) in residential real estate. Although the market dictates property values for both residential and commercial properties, that’s where the similarity ends. 

With residential properties, an Appraiser or REALTOR® will usually locate three similar properties to compare with the subject property. Appropriate price adjustments for bedrooms, fireplaces, decks, size of lot, financing, etc. are made for the comparable properties to make them equal to the subject property. Once the adjustments are made, the Appraiser or REALTOR® will choose the property that is most like the subject property and place the appropriate value on the subject property. That is why the home down the street may have sold for more money because it had for example more bedrooms or a larger deck. Please note in Virginia, a REALTOR®, unless he or she is a licensed Appraiser is not allowed to appraise properties by law. REALTORS® however can provide sellers with comparable property data known in the industry as a CMA.

Valuing Income producing properties such as apartment buildings, shopping centers, office buildings, businesses, etc. are based on the income stream the property produces. For example, if a building had a net operating income after expenses of $10,000.00, would you pay $500,000.00 for it? Probably not; however, depending on the market, you may pay $100,000.00 for the building. As you can see, the value is based on the income the building produces and not the value of the structure. The structure will come into play when doing the due diligence. The price may be right, but if the building is falling down the cost for fixing up the building will have a bearing on the purchase.

I stated earlier that the market will dictate for how much a property will sell. This is where the CAP Rate or Capitalization Rate will play a role in property valuation. The CAP Rate is the rate of return an investor can expect in year one of the purchase. The CAP Rate is determined by looking at the market and establishing the rate of return for comparable type properties. For example, the CAP Rate for an apartment building will be different from the CAP Rate for a shopping center.

Let us look at the example above again. If you decided to pay $100,000.00 for a building that has a net operating income of $10,000.00, the CAP Rate would be 10%. What if other buildings in the area were selling with a CAP Rate of 12%? You would have over paid more than $15,000.00 for the property. However, if the CAP Rate was 8%, you would have gotten a very good deal because the comparable value would have been $125,000.00.

As you can see, knowing the market CAP Rates for various types of properties is an important aspect when purchasing a commercial investment. Do you want to over pay your next purchase?

This is just one facet for analyzing a commercial property prior to purchasing. There many other factors involved in making an informed decision when putting together that important purchase.

Note: Laws vary in different States, always seek legal counsel and work with an experienced Commercial Real Estate Broker.

Image Courtesy of David Niblack

Michael Setunsky is the Broker and owner of Michael's Commercial LLC serving the Northern Virginia commercial real estate market. His more than 23 years of experience as a commercial real estate and business broker has earned him the distinction for being one of the top commercial real estate producers in the Mid-Atlantic Region. He also serves on the Mid Atlantic Real Estate Marketing Association's (MAREMA) Board of Directors, and is a Commonwealth of Virginia licensed Instructor. He teaches Pre-licensing, Post Licensing Education, Broker's and Continuing Education courses. Visit his company web site at http://michaelscommercial.com/.

©2009 Michael’s Commercial LLC, All Rights Reserved – Investing in Commercial Real Estate – Property Valuation – August 10, 2009

Commercial Property Market Report – Prince William County – July 2009

The Commercial Property Market Report for Prince William County is offered as a service of Michael’s Commercial LLC. The July 31, 2009 market report is categorized by the commercial Prince William County Zoning Districts:

Legend:

• B-1 (General Business District)
• B-2 (Neighborhood Business District)
• B-3 (Convenience Retail District
• O(L) (Office Low-Rise District)
• O(M) (Office Mid-Rise District)
• (H) (Office High-Rise District)
• O(F) (Office/Flex District)
• M-1 (Heavy Industrial District)
• M-2 (Light Industrial District)
• M/T (Industrial/Transportation District)
• MIXED Commercial

*The data presented here is compiled from information provided by the Metropolitan Regional Information System.

The Commercial Property Market Report is the author’s own interpretation of the Prince William County Commercial Real Estate market and makes no warranty or claim regarding the usefulness or implications of this information.

Michael Setunsky is the Broker and owner of Michael's Commercial LLC serving the Northern Virginia commercial real estate market. His more than 23 years of experience as a commercial real estate and business broker has earned him the distinction for being one of the top commercial real estate producers in the Mid-Atlantic Region. He also serves on the Mid Atlantic Real Estate Marketing Association's (MAREMA) Board of Directors, and is a Commonwealth of Virginia licensed Instructor. He teaches Pre-licensing, Post Licensing Education, Broker's and Continuing Education courses. Visit his company web site at http://michaelscommercial.com/.

©2009 Michael’s Commercial LLC, All Rights Reserved - Commercial Property Market Report – Prince William County – July 2009 – July 31, 2009

Commercial Land Absorption Rates – Prince William County – July 2009

Commercial Land Real Estate Absorption Rates for Prince William County are offered as a service of Michael’s Commercial LLC. The monthly absorption rates are categorized by the following Prince William County Zoning Districts:

• B-1 (General Business District)
• B-2 (Neighborhood Business District)
• B-3 (Convenience Retail District
• O(L) (Office Low-Rise District)
• O(M) (Office Mid-Rise District)
• O(H) (Office High-Rise District)
• O(F) (Office/Flex District)
• M-1 (Heavy Industrial District)
• M-2 (Light Industrial District)
• M/T (Industrial/Transportation District)
• MIXED

Absorption Rates are established by how many properties have sold during a given period of time (e.g., 365, 180, 90 and 30 days). Absorption rates also allow tracking trends in the market for any given number of days, weeks or months. These trends can indicate whether we may be in a Sellers Market, a Neutral Market or a Buyers Market. A monthly absorption rate of 5-6 is usually considered a Neutral Market. Anything below five is regarded as a Sellers Market and anything above six a Buyers Market.

• Sellers Market                         1-4 Months Supply
• Neutral Market                        5-6 Months Supply
• Buyers Market                           7 Plus Months Supply

The following tables reflect the Monthly Absorption Rates* for respective Zoning Districts in Prince William County ending on July 31, 2009:

• Total Number of Properties on Market. The properties that were available on the market during the reporting period.
• Total Number of Sales. The total number of Sold properties during the given reporting period.
• Monthly Absorption Rate. The rate at which the Sold properties were absorbed in the market on a monthly basis.
• Inventory. The number of available properties as of the report date.
• Months Supply. The number of months it will take the properties to sell based on the number of properties that have sold during the reporting period.
• Chance of Selling. The rate at which the properties in the inventory will sell based on the percentage of the total properties on the market and the total number of sales.

The tables above indicate that the commercial land real estate market in Prince William County has been minimal. There are currently properties on the market, but no activity. No properties have sold within this reporting period. We are currently in a Buyer’s market.

• General Business District – No activity during this reporting period and there are fifteen listings currently in the inventory.
• Neighborhood Business District – No activity during this reporting period and one listing currently in the inventory.
• Convenience Retail District – No activity during this reporting period.
• Office Low-Rise District – No activity within this reporting period and one listing currently in the inventory.
• Office Mid-Rise District – No activity during this reporting period.
• Office High-Rise District – No activity during this reporting period.
• Office/Flex District – No activity during this reporting period.
• Heavy Industrial District – No activity during this reporting period and two listings currently in the inventory.
• Light Industrial District – No activity during this reporting period and two listings currently in the inventory.
• Industrial/Transportation District – No activity during this reporting period and one listing currently in the inventory.
• MIXED – No activity during this reporting period and one listing currently in the inventory.

*The data presented here is compiled from information provided by the Metropolitan Regional Information System.

The Commercial Land Absorption Report is the author’s own interpretation of the Prince William County Commercial Real Estate market and makes no warranty or claim regarding the usefulness or implications of this information.

Michael Setunsky is the Broker and owner of Michael's Commercial LLC serving the Northern Virginia commercial real estate market. His more than 23 years of experience as a commercial real estate and business broker has earned him the distinction for being one of the top commercial real estate producers in the Mid-Atlantic Region. He also serves on the Mid Atlantic Real Estate Marketing Association's (MAREMA) Board of Directors, and is a Commonwealth of Virginia licensed Instructor. He teaches Pre-licensing, Post Licensing Education, Broker's and Continuing Education courses. Visit his company web site at http://michaelscommercial.com/.

©2009 Michael’s Commercial LLC, All Rights Reserved - Commercial Land Absorption Rates – Prince William County – July 2009 – July 31, 2009

Commercial Absorption Rates – Prince William County – July 2009

Commercial Real Estate Absorption Rates for Prince William County are offered as a service of Michael’s Commercial LLC. The monthly absorption rates are categorized by the following Prince William County Zoning Districts:

• B-1 (General Business District)
• B-2 (Neighborhood Business District)
• B-3 (Convenience Retail District
• O(L) (Office Low-Rise District)
• O(M) (Office Mid-Rise District)
• O(H) (Office High-Rise District)
• O(F) (Office/Flex District)
• M-1 (Heavy Industrial District)
• M-2 (Light Industrial District)
• M/T (Industrial/Transportation District)

Absorption Rates are established by how many properties have sold during a given period of time (e.g., 365, 180, 90 and 30 days). Absorption rates also allow tracking trends in the market for any given number of days, weeks or months. These trends can indicate whether we may be in a Sellers Market, a Neutral Market or a Buyers Market. A monthly absorption rate of 5-6 is usually considered a Neutral Market. Anything below five is regarded as a Sellers Market and anything above six a Buyers Market.

• Sellers Market                         1-4 Months Supply
• Neutral Market                        5-6 Months Supply
• Buyers Market                           7 Plus Months Supply

The following tables reflect the Monthly Absorption Rates* for respective Zoning Districts in Prince William County ending on July 31, 2009:

• Total Number of Properties on Market. The properties that were available on the market during the reporting period.
• Total Number of Sales. The total number of Sold properties during the given reporting period.
• Monthly Absorption Rate. The rate at which the Sold properties were absorbed in the market on a monthly basis.
• Inventory. The number of available properties as of the report date.
• Months Supply. The number of months it will take the properties to sell based on the number of properties that have sold during the reporting period.
• Chance of Selling. The rate at which the properties in the inventory will sell based on the percentage of the total properties on the market and the total number of sales.

The tables above indicate that the commercial real estate market in Prince William County has been minimal during this reporting period. There were no commercial property sales within the last 30 days. One property is currently Under Contract with a Contingent/No Kick Out clause. We are currently in a Buyers Market.

  General Business District – No activity during this reporting period and 22 listings currently in the inventory.

•  Neighborhood Business District – No activity during this reporting period and one listing currently in the inventory.
• Convenience Retail District – No activity during this reporting period.
• Office Low-Rise District – One property currently has a Contingent Contract with No Kick Out and no available listings currently in the inventory.
• Office Mid-Rise District – No activity during this reporting period.
• Office High-Rise District – No activity during this reporting period.
• Office/Flex District – No activity during this reporting period.
• Heavy Industrial District – No activity during this reporting period and two listings currently in the inventory.
• Light Industrial District – No activity during this reporting period and four listings currently in the inventory.
• Industrial/Transportation District – No activity during this reporting period.

*The data presented here is compiled from information provided by the Metropolitan Regional Information System.

The information provided here is the author’s own interpretation of the Prince William County Commercial Real Estate market and makes no warranty or claim regarding the usefulness or implications of this information.

Michael Setunsky is the Broker and owner of Michael's Commercial LLC serving the Northern Virginia commercial real estate market. He has been licensed since 1985 and a Broker since 1990. As a commercial real estate and business broker, he has earned the distinction for being one of the top commercial real estate producers in the Mid-Atlantic Region. He also serves on the Mid Atlantic Real Estate Marketing Association's (MAREMA) Board of Directors, and is a Commonwealth of Virginia licensed Instructor. He teaches Pre-licensing, Post Licensing Education, Broker's and Continuing Education courses. Visit his company web site at http://michaelscommercial.com/.

©2009 Michael’s Commercial LLC, All Rights Reserved – Commercial Absorption Rates – Prince William County – July 2009 - July 31, 2009

Investing in Commercial Real Estate – Property Types

Commercial properties are principally defined as; if it isn’t residential it’s commercial. This meaning is rather simple, but defines it categorically. Within this grouping, commercial properties are primarily classified by its specialized usage. Property types are typically described as:

• Office
• Retail
• Industrial
• Warehouse/Flex
• Multi-Family
• Hospitality
• Medical
• Commercial Land

Prince William County classifies these property types into six major categories:

1.  Commercial Districts

2.  Office Districts

       3.   Industrial Districts

       4.   Planned Business District

       5.   Planned Mixed Use District

       6.   Suburban Residential High and Urban Residential Districts

Commercial Districts. The Commercial District is broken down into three specific areas:

       1.   General Business District (B-1) – Planned to provide areas for community-scale retail, office and institutional uses. There are currently 61 uses by right within this District, three secondary uses and an additional 36 uses which require a Special Use Permit. Maximum building is height 45 feet.

       2.   Neighborhood Business District (B-2) – Intended to provide for areas of neighborhood-scale retail and to a lesser extent office and institutional uses but particularly consumer product and service centers. There are currently 44 uses by right within this District, one secondary use and an additional 11 which require a Special Use Permit. Maximum building height is 45 feet.

       3.   Convenience Retail District (B-3) – Designed to serve nearby residents, rather than pass-by or regional traffic. There are currently 19 uses by right within this District, one secondary use and an additional three which require a Special Use Permit. Maximum building height is 35 feet.

Office Districts. The Office District has four subcategories.

       1.   Office Low-Rise District O(L) – Designed to provide areas for low- to mid-rise office buildings, and research and development facilities. There are currently 17 uses by right within this District, 18 secondary uses and an additional eight which require a Special Use Permit. Maximum building height is 45 feet.

       2.   Office High-Rise O(H) – Planned to provide areas for high-rise and institutional uses with limited supporting retail and service uses. There are currently 20 uses by right, 20 secondary uses and an additional seven which require a Special Use Permit. Maximum building height is 100 feet.

       3.   Office Mid-Rise District O(M) – Designed to provide areas near appropriate transportation facilities for mid-rise office and institutional uses with limited support for retail and service uses. There are currently 18 uses by right, 20 secondary uses and an additional eight which require a Special Use Permit. Maximum building height is 70 feet.

        4.   Office/Flex District O(F) – Intended to provide areas for research and development centers, office, institutional and minimal impact industrial uses with limited supporting retail and service uses. There are currently 24 uses by right, 28 secondary uses and an additional 21 which require a Special Use Permit. Maximum building height is 45 feet.

Industrial Districts. The Industrial District is divided in three areas:

        1.   Heavy Industrial District (M-1) – Planned to provide areas for and to encourage development of heavy and intensive industrial processing, manufacturing and storage with limited retail and service uses. There are currently 67 uses by right, four secondary uses and an additional 23 which require a Special Use Permit. Maximum building height is 75 feet/

        2.   Light Industrial District (M-2) – Designed to provide areas for research and development centers, light industrial manufacturing, warehousing, wholesaling and related office and institutional uses. There are currently 38 uses by right, 14 secondary uses and an additional 17 which require a Special Use Permit. Maximum building height is 60 feet.

        3.   Industrial/Transportation (M/T) – Intended to provide areas for and encourage development of heavy industrial uses including those which generate considerable truck and/or heavy equipment traffic, or which require access to more than one mode of transportation. There are currently 69 uses by right, four secondary uses and an additional 22 which require a Special Use Permit. Maximum building height is 75 feet.

Planned Development. There are two Districts in this category:

        1.   Planned Business District (PBD) – Designed to implement the regional employment center, office and flexible use employment center land use classifications designated in the Comprehensive Plan. Non-residential areas shall be established in accordance with the following zoning Districts:

             a.   General Business - B-1

             b.   Neighborhood Business - B-2

             c.   Office Low-Rise - O(L)

             d.   Office Mid-Rise  - O(M)

             e.   Office High-Rise - O(H)

             f.   Office/Flex - O/F

             g.   Light Industrial – M-2

There are currently 24 uses permitted in the above Districts which are not permitted in the Planned Business District.

        2.   Planned Mixed Use District (PMD) – Designed to provide a single zoning district which promotes an integrated business community within which business and residences are conveniently linked. Non-residential areas shall be established in accordance with the following zoning Districts:

             a.   General Business - B-1

             b.   Neighborhood Business - B-2

             c.   Office Low-Rise - O(L)

             d.   Office Mid-Rise  - O(M)

             e.   Office High-Rise - O(H)

             f.   Office/Flex - O/F

             g.   Light Industrial – M-2

There are currently 21 uses permitted in the above Districts which are not permitted in the Planned Mixed Use District.

Suburban Residential High and Urban Residential Districts. These three Districts include Multi-Family dwellings:

        1.   Suburban Residential District (R-16) – Designed to provide for and encourage quality development at urban densities in locations well-served by public utilities and roadways not to exceed 16 dwelling units per acre. There are currently four uses by right, two secondary uses and nine uses which require a Special Use Permit.

        2.   Urban Residential District (R-30) – Intended to provide and encourage quality Multi-Family development at urban densities not to exceed thirty dwelling units per acre. There are currently four uses by right, three secondary uses and an additional eight which require a Special Use Permit.

        3.   Urban Residential District (R-U) – Planned to provide and encourage quality Multi-Family development at urban densities not less than 31 units per acre. There are currently five uses by right, three secondary uses and an additional eight which require a Special Use Permit.

These categories and subcategories are specific to Prince William County. Other City and County zoning ordinances may and more likely classify these property types differently. It is always important during the due diligence process to check with your City/County Planning Office prior to purchasing a property.

Note: Laws vary in different States, always seek legal counsel and work with an experienced Commercial Real Estate Broker.

Image Courtesy of David Niblack

Michael Setunsky is the Broker and owner of Michael's Commercial LLC serving the Northern Virginia commercial real estate market. He has been licensed since 1985 and a Broker since 1990. As a commercial real estate and business broker, he has earned the distinction for being one of the top commercial real estate producers in the Mid-Atlantic Region. He also serves on the Mid Atlantic Real Estate Marketing Association's (MAREMA) Board of Directors, and is a Commonwealth of Virginia licensed Instructor. He teaches Pre-licensing, Post Licensing Education, Broker's and Continuing Education courses. Visit his company web site at http://michaelscommercial.com/.

©2009 Michael’s Commercial LLC, All Rights Reserved – Investing in Commercial Real Estate – Property Types - July 23, 2009

Investing in Commercial Real Estate

Investing in commercial real estate may seem like a challenge, but it is really no different than investing in residential real estate. The typical office, retail, industrial, etc. properties are obviously commercial type properties. However, there is a major distinction when it comes to multi-family properties. Multi-family properties with four or fewer units are considered residential and properties with five or more units are considered commercial properties. Why is there a distinction?

One difference is how lenders look at these two categories. Four or fewer units are financed like residential properties and the lending criterion is based on the strength of the borrower. Does the borrower have sufficient resources and do they earn enough money to cover the mortgage? Five or more units are considered commercial real estate and the lender will usually finance the property based on the income the property produces. If the property has a positive cash flow, and the income can cover the expenses and the mortgage, the lender may overlook the borrower’s credit worthiness.

Is there a risk when investing in commercial real estate? Like any investment, there is always a risk. However, there are ways to help minimize this risk.

• Do appropriate due diligence. Work the numbers and make sure the deal makes sense. Does the property have a positive cash flow? Is the property free of hazardous materials? Does the property have clear title?

• Get accounting advice. Make sure the deal doesn’t have tax implications. Everyone’s tax situation is different.

• Get legal representation. Closing a real estate deal requires several legal measures. Have an attorney review the Offer to Purchase. This will insure the purchaser’s best interests are looked after.

• Work with a lender. A lender who will work to get the deal done and assist in getting underwriting approval in a timely manner is crucial to a successful transaction.

• Get buyer representation. Maximize the investing experience by working with someone who can assist in finding an appropriate property, analyzing the numbers and negotiating on the purchaser’s behalf.

Investing in commercial real estate can be very profitable and rewarding. Insure your first or next commercial transaction runs smoothly from the initial offer to a successful timely closing.

Note: Laws vary in different States, always seek legal counsel and work with an experienced Commercial Real Estate Broker.

Image Courtesy of David Niblack

Michael Setunsky is the Broker and owner of Michael's Commercial LLC serving the Northern Virginia commercial real estate market. He has been licensed since 1985 and a Broker since 1990. As a commercial real estate and business broker, he has earned the distinction for being one of the top commercial real estate producers in the Mid-Atlantic Region. He also serves on the Mid Atlantic Real Estate Marketing Association's (MAREMA) Board of Directors, and is a Commonwealth of Virginia licensed Instructor. He teaches Pre-licensing, Post Licensing Education, Broker's and Continuing Education courses. Visit his company web site at http://michaelscommercial.com/.

©2009 Michael’s Commercial LLC, All Rights Reserved – Investing in Commercial Real Estate – July 2, 2009

Commercial Property Market Report – Prince William County – June 2009

The Commercial Property Market Report for Prince William County is offered as a service of Michael’s Commercial LLC. The June 30, 2009 market report is categorized by the commercial Prince William County Zoning Districts:

 Legend:

• B-1 (General Business District)
• B-2 (Neighborhood Business District)
• B-3 (Convenience Retail District
• O(L) (Office Low-Rise District)
• O(M) (Office Mid-Rise District)
• (H) (Office High-Rise District)
• O(F) (Office/Flex District)
• M-1 (Heavy Industrial District)
• M-2 (Light Industrial District)
• M/T (Industrial/Transportation District)
• MIXED Commercial

*The data presented here is compiled from information provided by the Metropolitan Regional Information System.

The Commercial Property Market Report is the author’s own interpretation of the Prince William County Commercial Real Estate market and makes no warranty or claim regarding the usefulness or implications of this information.

Michael Setunsky is the Broker and owner of Michael's Commercial LLC serving the Northern Virginia commercial real estate market. His more than 23 years of experience as a commercial real estate and business broker has earned him the distinction for being one of the top commercial real estate producers in the Mid-Atlantic Region. He also serves on the Mid Atlantic Real Estate Marketing Association's (MAREMA) Board of Directors, and is a Commonwealth of Virginia licensed Instructor. He teaches Pre-licensing, Post Licensing Education, Broker's and Continuing Education courses. Visit his company web site at http://michaelscommercial.com/.

©2009 Michael’s Commercial LLC, All Rights Reserved - Commercial Property Market Report – Prince William County – June 2009 – June 30, 2009