Frequently Asked Questions
Gerry Macdonald launched CMS Real Estate Ltd. in 1983. We have proudly met Calgary’s real estate needs for nearly 40 years.
At CMS Real Estate Ltd., we are a full-service industrial and commercial real estate brokerage. Clients come to us for expert guidance regarding their real estate needs.
We help real estate buyers, sellers, landlords, tenants, investors, and more with the following:
- Industrial and commercial sales and leasing: At CMS Real Estate Ltd., we analyze present market conditions to deliver detailed and accurate data to clients. Consequently, we’re attentive to the transaction details and support and successfully represent our client’s position, operating from the client’s best interests
- Industrial and commercial property management: CMS Real Estate Ltd. delivers a broad scope of property management assistance to landlords and condominium corporations. As a brokerage specializing in condominium management, our management services include industrial, commercial and residential condominiums.
- Industrial and commercial mortgage brokerage: CMS Real Estate Ltd. doesn’t just stop at real estate and property management services; we also provide mortgage brokerage services to help you finance your real estate needs.
With the unending challenges associated with real estate, you need a company with your best interest in mind. A few things to look for in a commercial real estate company include:
- Positive reputation: Be sure the commercial real estate company in question has positive reviews. This process can save you a lot of heartache. View Google, Yelp, the BBB (Better Business Bureau) etc., to see how previous clients talk about them.
- A sincere interest in your needs: A company that takes a genuine interest in your needs is non-negotiable. Such a relationship will result in a smooth and successful transaction.
- Communication: Ensure your prospective commercial real estate company communicates clearly and effectively with you. Ignored phone calls, emails, and other communication attempts are red flags.
Commercial Property Mortgage Broker
This will depend on a few variables; namely, the term and the type of mortgage. Typically, most mortgage brokers’ commissions will fluctuate between the range of about 0.5% to 3% of the total amount of the mortgage.
Yes, mortgage brokers have many contacts that provide funding for commercial buildings. A commercial mortgage broker will be familiar with current rates and the guidelines for funding from many lenders. The broker would match the borrower’s information with the appropriate lender.
Mortgage brokers collect commissions (also referred to as a finder’s fee) when mortgages are closed. Typically, the commission is a single transaction that your broker receives when your mortgage is funded. However, in other circumstances, the broker might also receive another small commission when your mortgage is renewed.
Commercial mortgage brokers may be paid either by the lender or by the borrower. Some lenders provide fees to the broker for bringing clients to them for loans. Typically, the borrower pays the fee out of the funds when the mortgage is advanced. All fees paid are disclosed in the mortgage documents.
A proposal request requires as many details as possible. To provide an accurate fee and work scope for our services, the following will be needed:
- Building type and size
- Ownership structure
- Age of building
- Bylaws if it is a condominium
- Condominium plans
- Site plan
Defaulting on your commercial real estate loan entails an inability to make payments.
Hiring a commercial real estate mortgage broker brings many advantages. Some of these benefits include:
- Experience: Working with a commercial mortgage broker enables you to tap into their real estate knowledge and expertise. As a result, you can get the best rate and assistance by navigating the terms. Moreover, they have an extensive understanding of fund options to help you land your commercial estate. A broker would also know current market rates and lenders’ guidelines.
- Options: A broker helps you get the right commercial mortgage for your business. With a bank, you have a limited selection of mortgage products. But since your mortgage broker works with many lenders, more customizable options are available.
- Relationships: Your commercial mortgage broker has relationships and connections with many lenders. They can shop around to find the best mortgage on your behalf.
Commercial Property Management
It depends on a number of factors, including the property’s location, size, condition, and type. While there is no single price point that we can specify, we can customize a solution that meets your budget and needs. Typically, the rate is based on a percentage of the base rents. If the tenants are under a triple net lease agreement, then the management fees are recoverable by the landlord as operating costs.
Commercial property management is the process of overseeing and maintaining non-residential properties. Establishments such as retail spaces, offices, industrial facilities, storage accommodations, and more, go under the watchful eye of industrial and commercial property management.
Essentially, commercial property management handles the daily responsibilities of directing and running a revenue generating property.
A good commercial property manager will also assist the landlord in obtaining repair quotes and scheduling the maintenance to ensure cash flow requirements for the project.
Historically, commercial real estate has yielded high returns and has been considered by many to be a profitable, long term investment. However, there are plenty of other reasons to invest in commercial property including tax advantages, cash flow opportunities, beneficial financing rates, and of course – equity appreciation. While it certainly is a huge endeavor, investing in commercial property also offers many benefits.
There are many qualities a good commercial real estate broker should possess. First and foremost, they should have some experience in commercial real estate transactions.
Secondly, local market knowledge is important. You want your broker to be knowledgeable of the past, present, and future real estate market projections in your area. Having such expertise will go a long way in helping you make well informed decisions going forward.
Third, your commercial real estate broker should be connected with the right people in the industry, including property owners and commercial property managers.
Last but certainly not least, a good commercial real estate broker is available. They’re easy to get a hold of, they’re responsive to your calls, messages, and emails. And if they are busy and can’t get back to you right away, they will inform you of when they can get back to you within a reasonable amount of time. You’ll never be left hanging with a good real estate broker.
A property manager gives you peace of mind. You can rest easy knowing your property is managed by a competent professional. Trying to run it yourself, or even employing the wrong firm, could result in you suffering losses rather than enjoying profits. Moreover, professional property management protects your investment with knowledgeable and skilled staff who can monitor revenue and expenses, coordinate service calls and communicate with tenants on your behalf.
This depends on the particular report in question. For example:
- Management and release of surplus capital with complete reports is released monthly
- Financial statements required for tax returns are released annually
- Profit and loss statements are released monthly
- The general ledger is released monthly or for a predetermined period
- Budget vs Actual costs monitored monthly
- Collection of receivables and monitor of tenant ledgers monthly
There isn’t a set property management fee. The fees are based on the property type, the number of units, and the estimated management time. So if there was a request for proposal to manage the property, we would take into consideration all of those factors.
Routine inspections are crucial for commercial property management. For this reason, Property inspections are agreed upon in the management agreement and structured into the management fee. So they could be weekly, bi-weekly or even monthly.
Commercial Property Leasing and Sales
When it comes to commercial property leasing in Calgary, there are a few components that should be included and agreed upon. Namely:
- Use Clause: Includes all details of how the property will be used.
- Parties Clause: Commercial property leasing in Calgary entails precise information of both the tenant and landlord. The tenant should have their full legal business name and the activities of the business.
- Rent Clause: Rent is determined by market rates and set and negotiated by landlords and tenants based on a rate per square foot. In a retail setting, retail rates can sometimes include an additional rent based on a percentage of sales, but they will also have a base rent. In addition to base rent there will be operating costs calculated by a rate per square foot for the tenant’s proportionate share of the building. The operating costs are usually the property taxes, exterior insurance, and exterior maintenance.
- Term Clause: This will specify both the start and finish dates of the lease as well as due dates for rent payment.
This will be based on a variety of factors such as size and location of the property, as well as its current state or condition – among other things.
While each situation differs depending on property location, type of property, type of business you operate, among other considerations, leasing a commercial building typically involves the following steps:
- You must decide which commercial property is most appropriate for your specific needs (space, location, budget, etc).
- Find a commercial real estate broker, someone who can help you find the ideal property.
- Understand the various kinds of lease agreements so you can determine which is best for your particular situation.
- Negotiate the terms and conditions of your lease agreement, which our experts at CMS Real Estate can help you with.
It’s essential to be well-informed about potential commercial real estate opportunities. For this reason, knowing the right questions to ask goes a long way. Here are some questions you should consider:
- Who pays for property improvements?
- Are utilities included? If so, which ones?
- Is the lease renewable?
- Is the rent likely to increase?
- How long has the landlord owned the property?
- Who is the owner of the building?
- What are the terms and conditions of the lease?
Commercial leases work by giving tenants the right to legally operate their businesses within the location in question. The ensuing commercial activity is permitted for the duration of the agreed-upon lease period. This deal remains valid so long as the acknowledged payments (rent) are disbursed to the landlord.
This question is scenario-dependent; different notices carry different timelines. For example, commercial leases are for a fixed term. As such, the tenant would be obligated to vacate at the term’s end or complete a renewal at the current market rates.
A commercial lease is an agreement that permits tenant rights to a specific commercial property. It’s a legally binding contract agreed on by both tenant and landlord. The agreement describes the lease’s terms and conditions that both sides must adhere to.
Calgary has many commercial properties available for lease. So regardless of your business needs, there is something for you. Some of the available properties include:
A triple net lease is a commercial real estate lease where the tenant is to pay the expenses related to the property. These expenses typically refer to property maintenance, insurance and property taxes and comprise the main components of operating costs. In addition to operating costs, the tenant will have their base rent and utilities.
There are 3 commercial real estate leasing options you may want to familiarize yourself with. They include:
- Gross lease: The tenant’s rent covers all property operating costs in a gross lease. These expenditures can include property taxes, upkeep, utilities, etc. The landlord bears these costs using the lessee’s rent to counter the expenses.
- Net lease: A net lease is a very flexible commercial real estate lease. The tenant bears a share of a property’s insurance fees, property taxes, and maintenance expenses. These leases are typically found in commercial real estate.
- Percentage lease: A lease used in retail; it’s a rental charge hinged on a tenant’s gross sales. In most cases, the rent percentage is only applicable after a specific base rent is paid.