Seaport Real Estate Group Blog - Commercial

The Low-Interest Bridge Loan Dilemma: A Financial Tightrope

Commercial real estate projects can be a lucrative investment opportunity for those who are willing to take on the associated risks. While financing options for these projects vary, bridge loans are often used to cover the gap between the initial investment and the eventual long-term financing. However, recent trends in the market have shown a rise in bridge loans with radically lower interest rates than the current rate. This may seem like an excellent opportunity to save on interest costs, but it poses significant risks to investors and lenders alike.

First, it's essential to understand what a bridge loan is. A bridge loan is a short-term loan used to finance the gap between the purchase of a property and long-term financing. Typically, these…

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Depreciation Hacks: How Cost Segregation Can Give Your Commercial Building a Quick Depreciation Makeover

Looking to accelerate the depreciation schedule of your commercial building? There's a tax strategy that can do just that - cost segregation. It's like going through your closet and separating the designer pieces for a unique, more rapid depreciation treatment.

Cost segregation is the process of identifying and reclassifying components of a commercial building that can be depreciated over a shorter period, such as five, seven, or 15 years, instead of the usual long-term schedule. To make this happen, you'll want to enlist the help of a qualified cost segregation specialist, who will identify assets such as electrical, mechanical, and plumbing components that can be reclassified for faster depreciation.

But don't forget to consider the long-term…

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Five Things to do Before Investing in Commercial Real Estate

Investing in anything requires determination and careful planning. Real estate is no exception. While investing in real estate is an amazing financial opportunity (consistent returns, passive income, and growth potential), it's important to understand that increased reward requires increased responsibility. As always, we strongly encourage you to reach out to a commercial-certified expert (reach out to us for more info), but here are some tips we think you should do before deciding to invest or purchase commercial real estate. 

Determine Goals and Needs

Before jumping into any decision, it's important to know why you're doing it. Are you looking for an investment property? Do you need business space? Are you interested in developing? Determining…

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1031 Exchange. What are they and how can they be of benefit

A 1031 exchange, also known as a like-kind exchange or a Starker exchange, is a tax strategy that allows investors to defer paying capital gains taxes on the sale of a property. This is done by reinvesting the proceeds from the sale into a similar property.

To qualify for a 1031 exchange, the property being sold and the property being purchased must be considered "like-kind," according to the IRS. This generally means that the properties must be used for the same purpose, such as for investment or business purposes. The properties do not need to be identical, but they must be of a similar type or nature.

There are several benefits to using a 1031 exchange. The most significant benefit is the ability to defer paying…

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New London County Multi Family Market Rent/Bedroom

The vacancy rate in the New London Submarket has remained stable over the past year, but at 2.6%, is somewhat below the long-term average. While developers have been active in recent years, nothing has been delivered over the past 12 months. But construction has started back up, and about 340 units are underway, which will substantially expand the existing inventory. Rents have increased by an impressive 7.9% over the past year, which significantly exceeds the average annual growth of 4.0% over the past decade. Investors have been active in the New London Submarket over the past three years. The market price, which is an estimated price of all properties in the submarket, has risen dramatically over that time period and now stands at $152,994/unit.

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Investing in Commercial Real Estate? Here's What to Know | Whiteboard Wednesday Ep. 5

The following is a transcription of the video above:

Hey, welcome to Whiteboard Wednesdays. I, as always, am Kyle Schrader, this is my friend Jeff Rizer We're here today to dip our toes into the commercial world and talk about the basic formula for commercial real estate valuation, which is the IRV formula: income, rate, and value. So what is it?

So one thing quickly about Seaport is the way we separate ourselves is marketing, research, and valuation. And one of the tools we use is this IRV formula. So with a lot of like uncertainty in the markets, one of the things that I think and what a lot of reports show is that commercial real estate is a great investment, even though interest rates are continuing to rise.

The three-year outlook…

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2022 Connecticut Real Estate Mill Rates by Town

Real Estate Taxes in Connecticut can vary greatly depending on the municipality and districts within them.  The graphic above illustrates the base rates for each town. Additional rates are applied to specific locations where services are provided.  These services can include public water, sewer, trash removal,  police services, or a firehouse.  A town or district with a lower Mill rate may not offer these services.  Your real estate agent will be able to help you to determine the services offered and their importance to you when purchasing real estate. The average property tax rate in CT for 2022 is $31.29 with the highest being Hartford at $74.29 and the lowest being Salisbury at $11. 

How to Calculate Connecticut Property Taxes

The…

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2022 Rhode Island Commercial Mill Rates by Town

Commercial Real Estate Taxes in Rhode Island vary greatly by town and are typically correlated to the services which each town provides.  A town with a lower Mill rate may not offer services such as public water and sewer, perhaps waste disposal, or a firehouse. Your real estate agent will be able to help you to determine the services offered and their importance to you when purchasing real estate. The average commercial property tax rate in Rhode Island for 2022 is 20.41 with the highest being Central Falls at 42.33 and the lowest being Little Compton at 6.04.  Please note that Property taxes can have a substantial impact on the cash flow of a property making it more or less appealing to a lender, investor, or potential owner occupant.  Contact a…

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17 Hancox St Multi-family in Stonington Borough Recently SOLD!

17 HANCOX ST – STONINGTON, CT

Located within the Stonington Borough, this 15-unit apartment building boasts of long-term full occupancy attributed to its shoreline village atmosphere with direct proximity to local shops, restaurants, and recreational attractions within walking distance. 

The property was placed under contract after being on the market for less than a week. With multiple offers submitted, a full price bid was secured and fortified with backup offers as well as further inquiries accrued over the span of the contract period until the date of closing.

Demand for multi-family properties (4 units or more), appears to have spiked over time, fueling speculation that this very demand could be linked to the affordability of home prices…

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