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You may have heard in the news that the National Association of Realtors settled a lawsuit in which they agreed to pay $418 million over the next 4 years and make certain changes to its members business practices. The settlement requires brokerages to no longer list compensation offered to co-operative brokers in the MLS. This forces brokers to discuss and document what, if any, commissions will be paid by a seller if a broker brings a buyer to the table. It opens a door for brokers working with buyers to require buyers to pay a commission to that broker for services rendered. It will also require brokers to get signed brokerage representation agreements with those buyers clarifying that the broker represents their interests and not those of the seller. What has worked just fine for many years was turned upside down. This is new so we are uncertain who will actually benefit from this. It is supposed to go into effect in July. Approximately 1.5 million Realtors are affected by this decision.


From The Desk Of

Bruce Bossow

Featured Listings

Office Suites

119 W. Main St.

West Dundee


180-2800 sq ft office suites in downtown area. Near restaurants. Competitive rents. $543.72-$1925/mo gross.

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Retail/Office on Route 120

4915 W. Elm St.

McHenry



Price reduced! 2576 sq ft single story building suitable for retail or office uses. 9 private offices, 2 baths, 2 large open areas plus kitchenette. Huge 25+ car paved lot. SBA financing available with 10% down. Now only $299,000.

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Office / Conference Building

4100 Shamrock Ln.

McHenry



13,030 sq ft former MCC Shaw Center on 4.4 acres. 6 large gathering rooms, 10 private offices, kitchenette, and 2 multi-stall baths. 203 lighted paved parking spaces. Solar farm attached for electricity savings. Just listed for $2,000,000.

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Multi-Tenant Industrial Investment

6704 Pingree Rd.

Crystal Lake


86% leased 96,070 sq ft industrial building on 5.6 acres. 8-9 tenant spaces. 1 vacant unit. 8.5% proforma cap rate. Much upside potential. $3,600,000

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Woodstock Office Space

1004 Courtaulds Dr.

Woodstock



3960 sq ft professional office space. 7 privates with large kitchen, conference room and 2 baths. Just off Rt 47. $14 psf gross.

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Ready to Build Industrial Lot

1503 Diggins St.

Harvard


3.2 Acres located in friendly, cooperative Harvard. Flat lot that is ready to build, located in an Enterprise zone. $199,500.

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Recently Sold & Leased

$1,000,000 / Investment

641 Industrial Dr.

Cary

Bruce Kaplan


$220,000 / Land

Prairie St.

Crystal Lake

Bruce Kaplan


$305,000 / Office

1000 N. Main St.

Algonquin

Heather Schweitzer


$260,000 / Land

7225 Teckler Blvd.

Crystal Lake

Bruce Kaplan


$222,500 / Investment

371 Prairie St. Unit A

Crystal Lake

Heather Schweitzer


$395,000 / Industrial

2604 Chapel Hill Rd.

Johnsburg

Bruce Kaplan & Shari Haefner


Office

380 Terra Cotta Ave. Unit E

Crystal Lake

Heather Schweitzer

Industrial

143 Industrial Dr. Unit B

Gilberts

Sharon Glasshof

Retail

8042 Binnie Rd.

Carpentersville

Shari Haefner

Industrial

13082 Washington St. Unit A

Woodstock

Bruce Kaplan & Shari Haefner

Office

511 Eichler, Unit 206

West Dundee

Sharon Glasshof

Featured Articles

WHY YOU NEED A REAL ESTATE ATTORNEY

 

In commercial real estate transactions, at least in Illinois, buyers and sellers both need an attorney to represent their respective interests. With the dollars involved, sometimes into the millions, it is foolhardy to think you can do without proper legal representation.

The main purpose of the attorney’s involvement is to ensure the legal rights are transferred properly from the seller to a buyer. Using someone who specializes in real estate law is important although for simple transactions, a general practitioner can work. The attorney will typically prepare and review scores of required documents, ensure title is clear of liens and encumbrances, and facilitate transfer of funds between the parties. They will identify any unpaid loans, liens, real estate tax obligations, litigation or other claims against the property. They will uncover deed restrictions and covenants and any breaks in the chain of title. In addition to these services, attorneys help their clients settle up prorations for rents paid, real estate taxes, utility charges, property owners association dues and security deposits. They will prepare settlement statements showing charges to all parties and how the funds will be allocated including commissions, attorney fees, taxes and title insurance expenses. At most real estate closings, there is an attorney representing the buyer and a different one representing the seller. The cost of legal representation can vary, depending upon the hours needed to accomplish the job. As a broker, we are incentivized by commissions which only get paid if there is an actual closing. Attorneys don’t have that incentive. Although some will offer to do the job for a flat fee, they often get paid hourly, so if a deal does not close, they still are due compensation for their time. It is best to ask your attorney, at the time you engage him or her, what the fee structure will be, so there are no surprises. It’s great if you can close a real estate deal with no complications. But there are often issues or complications and when there are, it is comforting and often a small price to pay to have an attorney on your side to help you work out the issues or resolve any disputes.



By Bruce Kaplan, Senior Broker Associate with Premier Commercial Realty

SHOULD BROKERS BE PRESENT AT SHOWINGS?

 

Does that almost sound like a dumb question? As a practical matter, unlike residential real estate, we try to be present at all showings if we are representing the Seller or Lessor. Our theory is that no one knows the property and the owner’s situation as well as the listing broker. Notice I said “owner’s situation” and not just “the property”. Knowing what the owner needs and will do is as important as the property itself. And the listing broker knows this. So, unless we have a scheduling conflict or another broker is showing it for the second or third time, we try our best to attend the showings. Now, here is where I get a little nuts. When a broker from another company calls and makes an appointment to show one of his clients my listing but he makes an excuse why he or she can’t attend the showing, I get really irritated. He wants ME to show HIS CLIENT my listing. Of course if his client wants to buy or lease my listing, he will want his cut of the commission, as much as half the total fee. But by not attending the showing, he has not done half the job. Sure he has saved himself the time it takes to drive to the property and show the property. But it seems to me, that is a required part of the broker’s job. Sometimes the buyers or tenants don’t care if the broker is there or not….they just want to see the property. But what school of real estate teaches that it is ok not to attend showings with your clients or prospects? What makes a broker think it is ok to do this? I will admit that as a courtesy to brokers we know, we sometimes will cover a showing for them if they have an emergency or special problem being at a showing. Things come up for all of us. But if you are a broker and call me and ask me to show a property without you present, you are likely to get an earful from me. Forewarned is forearmed.



By Bruce Kaplan, Senior Broker Associate with Premier Commercial Realty

RETAIL SUPPLY AND DEMAND LIKELY TO REMAIN IN BALANCE FOR FORESEEABLE FUTURE - Minimal New Supply Underpins Tight Retail Forecast


The U.S. retail market has demonstrated remarkable resilience over the past three years, culminating in historically tight availability at the end of 2023 with the national average vacancy rate hitting a new low of just 4.0%. Current demand and supply-side factors are likely to persist regardless of economic conditions and keep a lid on available space options for retailers.


On the demand front, the retail sector has benefited significantly from a marked decrease in bankruptcies and large-scale store closures over the past three years, resulting in a 20% reduction in the amount of retail space vacated compared to pre-pandemic norms.

With retail tenants no longer moving out of space at the same robust clip seen in 2017 through 2020 and demand supported by a historic surge in consumer spending, the amount of available retail space tightened quickly as less and less backfill space became available.


Supply-side factors equally drove the rapid contraction in vacancy, as very little new retail development coupled with an active pace of demolitions resulted in the lowest levels of net retail space deliveries seen in decades. Specifically, post-demolition net deliveries dwindled to 52.9 million square feet in 2023, the lowest level recorded since CoStar began tracking the measure. Moreover, since the start of 2018, more than 160 million square feet of vacant retail space have been demolished across the U.S.


The net result of these two trends has been historically tight market conditions, which appear likely to remain in place for the foreseeable future based on the current range of outcomes under CoStar's forecast scenarios.


CoStar provides clients with seven scenarios to test possible outcomes for the expected performance of commercial real estate space and capital markets based on various underlying economic conditions. In only the two most-adverse scenarios, the Depression and Severe Downside alternatives does retail vacancy increase above 5%, and it is forecast to remain below the market’s post-2010 average of 5.4% under each of the two scenarios.


Several critical factors underpin this outlook. First, the current national retail vacancy rate is below its post-2010 average by 140 basis points, offering a substantial cushion against potential market softening.


Second, thanks to the boost in consumption coming out of the pandemic, retail sales, excluding e-commerce, stand 10% higher than pre-pandemic levels, even after accounting for inflation. This increased sales potential suggests closures will likely be limited to a select few underperforming stores and those stemming from bankruptcies. Notably, despite the well-publicized struggles of long-term underperformers such as Joanne and Express, retail bankruptcies are expected to remain below pre-pandemic levels into 2024.

Third, the amount of new retail supply is expected to remain well below historical norms due to retail construction starts plummeting in 2023. This scarcity of new supply is expected to play a crucial role in maintaining low vacancy rates across the retail sector, as any meaningful increase in vacancy will need to be solely driven by demand-side factors.

While a softening in demand is quite possible should consumer spending retrench in the year ahead, a significant decline in space demand seems unlikely given retailers' announced plans for thousands of new stores over the coming years, with little available supply to accommodate that growth.



By: Brandon Svec, CoStar Analytics

9225 S. IL Route 31

Lake in the Hills, IL 60156

 847-854-2300 

www.PremierCommercialRealty.com