Seller Disclosure

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Commercial Office Space Austin | Seller Disclosure Truths

If you are selling a commercial office or office building , this primer (summary) can help with Seller disclosure and the truths around having to use one.

Disclosure Truth 1

As a seller you can use TREC’s seller’s disclosure of property condition document TXR 1406 or another form however it has to meet the statutory requirements for disclosures required by the Texas Real Estate Commission.    As a seller however, once you have a commercial real estate broker helping you listing your property for sale, they can provide you with the member’s only form from the Texas Realtors which provides more details and reduce you risk of a dispute.

Austin Office market

Seller’s should fill out a property disclosure statement even if it is for more than one unit, such as a duplex although it is not required. What is required is seller’s must fill a seller disclosure for residential one unit dwellings.  You should again engage with a knowledgeable commercial real estate broker to help you fill out the right forms.

Updating the Property Condition Statement

Once you fill out your property condition statement , provide it to the buyer.  Seller disclosures are required to provide additional information if they find material issues with the property after the disclosure statement has been filled out. 

You can be provided an update form that is available for members only called TXR 1418.

A commercial real estate broker or agent should never fill out your disclosure document. Brokers or agents can provide consultations and support in filling it out however it is the Seller’s responsibility.

Shire Commercial represents Buyers and Sellers of commercial property in Texas. Brokers and agents are not allowed to provide any legal interpretative advice regarding documents.

Foreign Investment in Austin Commercial Real Estate

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Improvements White Box Space

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Improvements | White Box Space

What is a white box space? A question like this may come up from a tenant that is looking to occupy a retail space or office space in Austin. White box is defined as an improved space that is “vanilla” , it really does not have any amenities or tenant specific improvements to the premises. Let’s think of a space that is completely unfinished. Minimum attributes do exist in a white box space such as

  • Electrical
  • Drywall- Sheetrock – painted white
  • Glass walls
  • Plumbing- restroom areas
  • HVAC – typical for office building space
  • Duct work-sometimes

Every tenant has their own look, just like you have a your own look when it comes to the way you dress. A white box allows the tenant to start with a blank slate and renovate it with a new look. Permitting does come into play depending on what the tenant wants , it could include many things such as : Relocation of HVAC systems, lighting , sprinkler systems, exit doors etc..

 

Costs of Improvements for White BoxWhite Box and Tenant improvements

Costs of improvements seem to be a grey area for most people and it is usually under-estimated. Trying to provide some clarity on costs of improvements even for white box solutions can be a bit tricky. Here are some guidelines for costs of improvements. 

  • HVAC unit replacements depending on the tonnage? $5000-$8000 per unit- this is typically for retail if your unit goes out while you are leasing the space
  •  Drywall $5 to $10 per linear foot
  • Drop ceiling $4 a square foot
  • Lighting $4 a square foot
  • Restrooms $8000-$15,000 (if it is a new restroom)
  • Flooring $4 a square foot
  •  Architect design $3 a square foot
  • MEP- mechanical electrical plumbing $1.50 a square foot (upper range)
  • Management fees for construction if you want it – 4-5% of the construction costs
  •  Permitting costs : Demo permit $250 where as a full building permit is $1500
  •  ADA review is require on projects larger than $50,000

Texas Department of licensing and registration requirements exist for projects as well and will cost up to $1,500.00

 

 

Round Rock Incentives

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Round Rock Incentives

Summary taken from Round Rock Chamber of Commerce

The City of Round Rock and the Round Rock Chamber are offering customized incentive packages for relocation and expansion of businesses. Assistance may include tax abatements, waivers of fees, job training , and fast permitting. Here is a summary of the incentives on the table:

Tax AbatementsAustin Growth Population

Tax abatements are incentives being offered by Round Rock Texas for new businesses and existing expansions, included in this are personal property tax abatements associated with real property. If your business is making improvements to a facility or adding new equipment that add tax value those improvements may be considered for an abatement.

Financing and Grants Possible

Round Rock has a chapter 380 government code that provides authority to grant a loan of city funds to promote economic development. A 380 grant would be in the form of a municipal sales or property tax rebate. Performance based cash grants can be offered on job creation, capital investments and other factors as well.

Round Rock Incentives with Permitting and Job Training

Permitting incentives to fast track a project exist. Local officials can customize a development time table for businesses requiring and aggressive build schedule. Round Rock touts this as a distinct advantage versus their neighboring towns. The Round Rock Chamber can assist companies locating or expanding in Round Rock by securing state-provided job training. The Texas Workforce Commission offers the Skills Development Fund and other training to finance customized job training provided by public community and technical colleges.

For help with relocation and expansions, Shire Commercial has been helping clients since 2004 to locate their businesses.


Commercial Real Estate Broker Austin

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Why you should hire a Commercial Real Estate Broker in Austin?

Whether you are a Buyer , Tenant or Seller of a commercial real estate property in Austin , wouldn’t you need a trustworthy professional to help you get a reasonable deal and help you avoid problems? There are plenty of situations over the past 15 years, where we have encountered the “do it myself” folks only to hear that they now have issues and need help, perhaps a bit too late?  Simple examples such as executing a lease that is way over market and now they are stuck and can’t sublet cause its too pricey.  They didn’t know what to look for in a lease document and now they have to pay much higher NNN expenses or they are liable for HVAC replacements.  There are many more examples that we can fill this article with.  So let’s discuss why its a smart move for you to hire a Commercial Real Estate Broker in Austin?

What is required by Brokers?Commercial Real Estate Broker in Austin

A professional commercial real estate broker in Austin must be licensed by the Texas Real Estate Commission and take continuing education every 2 years to renew their license.  You can’t get that looking at Loopnet like everyone else, there is expertise and knowledge from direct experience that has to be gained.  A Broker has a fiduciary to their client, that means represent their clients interests above their own first.  Does that mean a commercial real estate broker just does whatever their client tells them to do? No, it does not if a Client asks a seasoned professional to do something that is out of line, unreasonable they owe it to their Clients to let them know that it isn’t a good strategy and why.  Think about it, what is the reason to have experience and training if everyone knows more than you do, the bottom line is they don’t although the internet may trick you into thinking so.

Avoiding Problems

Filling our promulgated forms correctly is critical, which by the way costs the commercial real estate broker money just to have access to these. As a client, you get them for free! What a Deal! We have exclusive access to over 100 different forms , as a buyer, tenant or seller you have access to a few if you go it alone.  All commercial real estate brokers in Austin are supposed to abide by the National Association of Realtors Code of Ethics , the Code of Ethics holds commercial real estate brokers to a higher standard of professional behavior.  A Commercial Real Estate Broker in Austin has access to subscription only tools that we an pair with our experience of the local market and its trends to make sure negotiations are in your favor.  Don’t know what to look for in a For Sale contract, lease contract or listing agreement? We do.. although we cannot provide legal advice on language or re-write provisions we are able to point out the warning signs for Clients.  So, if you have a property for sale, property for lease, looking to purchase or looking to lease why not get an advantage to your team today? We are here to help, we help you, then we help ourselves in that order.

Austin Commercial Leasing

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Austin Commercial Leasing

 

This is a summary of Austin’s commercial leasing market for office space moving into the 3rd Quarter of 2017.  Continuing occupancy has been the theme for some time now in Austin. The current vacancy rates are now at a 16  year low.  Tenant demand remained strong for the 3rd quarter with approx 1M square feet of office space being leased for 2017. Construction wise for offices is expanding with approx an extra 2M square feet under construction . Austin commercial leasing for only 2 sub-markets was low which was Round Rock and East Austin.

Sectors producing the demandAustin office market Q2 2016

Austin’s commercial leasing for offices was lead by engineering and tech firms which accounted for more than 1/3 of the leases executed. Vacancy rates are not sitting at 8.8% which is down 50 points, the lowest since the second quarter of 2001.  Current OPEX costs have risen,up $0.30 cents per sf per year while NNN lease rates moved downward by $0.90 cents per square foot per year. The market is being supported by a very low un-employment rate coming in at 2.8% . Tenants can expect more of the same in the near term with rates staying static , most landlords are looking for minimums of 3+ year term commitments. Contact Shire Commercial to help you find a suitable office space , specialists in Austin Commercial Leasing.