Author Archives: TMC-TheMahrCompany

About TMC-TheMahrCompany

Value added Commercial Real Estate Services Based in Tampa, primarily serving Florida markets, TMC-The Mahr Company offers a unique blend of expertise and disciplines. TMC specializes in User and Landlord representation for Office, Commercial, Medical, Legal/Attorney and Investment Properties, as well as: •Acquisitions and Dispositions •Land and Site Selection •Special Projects for Clients

TMC-THE MAHR COMPANY ESTABLISHES PRESENCE IN ICELAND

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TMC-THE MAHR COMPANY ESTABLISHES PRESENCE IN ICELAND | Now that Iceland Air has direct flights to Tampa Bay | TMC The Mahr Company has now established a presence in Reykjavik Iceland | TMC The Mahr Company through our extensive contacts and strategic alliance partnerships there, will provide a myriad of services and opportunities for travelers from Tampa to Iceland and for travelers from Iceland to Tampa Bay, Florida | TMC The Mahr Company is UNIQUELY POSITIONED AND CONNECTED to explore opportunities not otherwise readily available. We are gearing up to be of assistance to on both sides of the Atlantic | in Reykjavik, Iceland and in Tampa, Bay Florida | More details to follow with respect to available services and opportunities.

Kobe Bryant exits on Top of his game| TMC remains on TOP OF OUR GAME

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LA Lakers All Star | NBA legend Kobe Bryant | goes out in style with 60 points

Kobe Bryant showed the tenacity, toughness and talent that made him one of the all-time greats in basketball history. His final game with LA produced 60 points. A true champion and All Star.

TMC The Mahr Company | provides the HIGHEST level of service | persistence | skills | commitment and excellence | We strive to ALWAYS BE ON TOP OF OUR GAME FOR YOU

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TMC – THE MAHR COMPANY | Our greatest accomplishment for you is not behind us | It is yet to be | Your goals and commercial real estate needs | Whatever they may be | Wherever they make take us and whatever they may require | Our commitment to you.

TMC The Mahr Company | Ranked among Top Commercial Real Estate Brokers for 2016

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TMC-The Mahr Company is proud to once again be included among the top Commercial Real Estate Brokers for 2016, per Tampa Bay Business Journal’s Book of Lists.

TMC-The Mahr Company Receives 2016 Best of Tampa Bay Award

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TMC-The Mahr Company Receives 2016 Best of Tampa Bay Award

Tampa Bay Award Program Honors the Achievement

TAMPA BAY, FLORIDA  March 9, 2016 — TMC-The Mahr Company has been selected for the 2016 Best of Tampa Bay Award in the Tenant/User Representation Services category by the Tampa Bay Award Program.

Each year, the Tampa Bay Award Program identifies companies that we believe have achieved exceptional marketing success in their local community and business category. These are local companies that enhance the positive image of small business through service to their customers and our community. These exceptional companies help make the Tampa Bay area a great place to live, work and play.

Various sources of information were gathered and analyzed to choose the winners in each category. The 2016 Tampa Bay Award Program focuses on quality, not quantity. Winners are determined based on the information gathered both internally by the Tampa Bay Award Program and data provided by third parties.

About Tampa Bay Award Program

The Tampa Bay Award Program is an annual awards program honoring the achievements and accomplishments of local businesses throughout the Tampa Bay area. Recognition is given to those companies that have shown the ability to use their best practices and implemented programs to generate competitive advantages and long-term value.

The Tampa Bay Award Program was established to recognize the best of local businesses in our community. Our organization works exclusively with local business owners, trade groups, professional associations and other business advertising and marketing groups. Our mission is to recognize the small business community’s contributions to the U.S. economy.

 

Cap Rates | Everyone in real estate knows how to calculate | Or Do They ?

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Everyone in real estate knows how to calculate a cap rate — or do they?

Excerpted from article by Daniel Kann | Mar.Apr.15

Commercial real estate professionals live and breathe capitalization rates.

Cap Rate Overview

A cap rate in its simplest form is a return on an investment based on the principle of anticipation. Value is the present worth of future benefits. A cap rate attempts to quantify the risk profile of the future benefits. It is calculated by using a non-complex formula, R=I/V, where I is the net operating income and V is the value of the property. In more complex terms, a cap rate measures a single-period, unleveraged rate of return on a real estate investment. By converting income into value, a cap rate expresses the relationship of one year’s income and value.

A cap rate’s three main components are net income, property value, and the rate of return. If two of the three variables are known, the unknown variable can be extracted through a simple calculation.

Granted, different types of cap rates exist — overall, terminal, equity, mortgage, building, and land — which may cause some confusion among market participants. The overall rate, or OAR, is the cap rate applied to both the land and building and is the most commonly used rate by real estate professionals. A cap rate is essentially a dividend rate, so one could call the mortgage constant a “lender” cap rate and a cash-on-cash an “equity” cap rate. However, in commercial real estate transactions, brokers and investors tend to focus on two cap rates: acquisition and disposition.

Marketplace Misuse?

Common reasons for cap rate variations often come from the income stream and operating expenses used in the rate’s extraction. Failure to consider the likely future income of the property (year one pro forma) does not follow the principal of anticipation. The historical and current operating data is useful when developing a projection of year one data, but should not be used in the extraction of a cap rate when applying it to year one projections. Extracting a cap rate from market data using historical income and applying it to the year one projection of the property being valued will result in an incorrect value opinion.

Real estate is often considered a hedge against inflation due to the ability to increase rents at or above the rate of inflation. In an upward trending market the buyer of a property is expecting next year’s income (year one) to be greater than the trailing year to account for appreciation. Extracting a cap rate from the in-place income (less risk) and applying it to the future income projection (more risk) will overvalue the property.

In addition, the same method of income and expense projections used to extract a cap rate from the market should be used to value a property. Using a different income stream from a comparable property (not stabilized, no third-party management, no replacement reserves, under market operating expenses, and such) will result in a different risk profile of the income stream and corresponding cap rate.

Many market participants do not include replacement reserves as an above-the-line (net income) expense when developing cash flow projections. Replacement reserves for future capital expenditures are market specific. Including or excluding replacement reserves will have an impact on the cap rate extracted from the sales transaction, but not the value of the property. Neither method is incorrect as long as the same method is applied to the property being valued and the sale comparable. If the sale comparable does not include replacement reserves in its pro forma projection, and the subject does include replacement reserves in its year one projection, the market extracted cap rate must be adjusted downward to reflect a riskier income profile of the sales transaction comp when compared to the asset being valued. If no adjustment to the cap rate is made, then the subject will be undervalued due to differing risk profiles. Properties that do not include replacement reserves have increased risk due to the lack of a sinking fund for future capital expenditures.

In other words, the NOI needs to be “clean”: One cannot compare an NOI with deducted reserves above the line with one deducted below the line.

Owner-Managed Properties

Another common misconception concerns third-party management fees. Small properties or ownership entities that have a built-in management company often do not include third-party management fees in their pro forma. Having a third-party management company manage an asset may reduce the operational risk of the property and can result in a lower risk profile of the future income stream. A lower risk profile results in a lower cap rate. Table 1 shows how excluding third-party management fees impact the year one return and risk profile.

As Table 1 reveals, a 7.5 percent cap rate is appropriate if the property pro forma includes expenses for third-party management fees. Based on the projected NOI and market extracted cap rate, a value of $1,666,667 is indicated. If the same property does not include management fees in the pro forma projection, the value of the property is unchanged, with the risk adjusted cap rate increasing to 8.1 percent.

This is why it is necessary for potential buyers to reconstruct NOI to include such items as property management. The increase in the cap rate is to account for increased risk due to the lack of professional third-party management. Additionally, real estate is considered to be a passive investment with the opportunity cost of the owner’s time requiring compensation through a management fee or higher rate of return.

Expense Comparison in Sale Comparables

Comparing the operating expenses used in a sale comparable to extract a cap rate is a good indicator if the cap rate is market driven. A sale comparable that is owner managed and does not include reserves will have below-market expenses on a per unit comparison (percentage of effective gross income, per square foot, per unit, and such). A comparison of the expenses from the sale comparables to industry standards used in the local market will allow the analyst to adjust the extracted cap rate accordingly and then apply the revised cap rate to the property being valued. If a data set of comparable sales indicates a wide range of cap rates, then it is likely that one or more of the sales is not based on market derived income and expenses.

Impact on Property Valuation

Table 2 shows how various income and expense projections can impact the extracted cap rate and the asset’s value indication. For purposes of this analysis, only one variable has been adjusted. In actuality, a sale comparable will often have multiple variables that need to be adjusted in order to accurately extract a cap rate.

The Table 2 example reports a market extracted cap rate that ranges from 5.70 percent, based on the asking price commonly quoted by brokers in third-party surveys for marketing purposes, to 6.48 percent, based on using year one projections. All of the extracted cap rates are correctly calculated. However, the difference in rates is attributed to varying risk profiles of the income stream. Based on the provided example, adjusting just one variable can result in a 13.68 percent difference in value. If additional variables are included, the spread between the cap rates can widen and further magnify the miscalculation.

While there is a simple formula for finding the cap rate, there is no standard method for cap rate extraction. Various markets and market participants apply different income and expenses projections when calculating NOI. However, a standard method for extracting a cap rate from market data is critical to properly value a property. Not all NOIs have the same risk profile. A property that includes third-party management and replacement reserves will have less net income, a lower risk profile due to adequate third-party management, and appropriate funds for future capital expenditures — and result in a lower cap rate. Regardless of the variables included or excluded in the cap rate extraction, if applied consistently to the property being valued, a reliable estimate of value will result.

Daniel Kann, MAI, is director of multifamily valuation for Valbridge Property Advisors/Shaner Appraisals in Overland Park,  Versions of this article have appeared in Valuation and the Colorado Real Estate Journal.

Real Estate Is Dynamic | Never Static

Commercial Real Estate like all things is dynamic it is never static.

There are always cycles | Always changes | The Art of being engaged in Commercial Real Estate is to understand the turning of the wheel so to speak.

There is a combination of art and science in making decisions and matching opportunities to objectives | balancing risk against performance.

What is it that you seek ? Where are the market opportunities today ?

Is it time to buy or sell ? Lease or Own ?

At TMC The Mahr Company we make it our priority to understand the subtleties and nuances of the market cycles.

Our greatest accomplishment for you is not behind us, it is yet to be. Your goals and commercial real estate needs, whatever they may be, wherever they make take us and whatever they may require, is our commitment to you.

TMC Shares | One More Piece to The Puzzle | Tampa Bay Growth |

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Tampa International Airport rides new route successes to a 7-year high for passenger traffic

Oct 15, 2015, 3:00pm EDT Updated: Oct 15, 2015, 3:04pm EDT

Deputy Editor- Tampa Bay Business Journal

Tampa International Airport hit a seven-year high in fiscal 2015 with almost 18.5 million passengers — a 6.7 percent increase over 2014.

The growth in the fiscal year ended Sept. 30 also makes five consecutive annual reports showing year-over-year passenger growth.

A big part of the success was a dramatic increase in international traffic with a one-year 14.9 percent jump to 684,799. Since 2010, TIA has seen 73 percent growth in international traffic, according to a release from the airport.

Domestically, Alaska Airlines finished its first full year of service to Seattle and carried more than 113,000 passengers. Likewise, Frontier Airlines added 220,000 more passengers than last year with new flights to Cleveland, Chicago and Philadelphia and more flights to Denver.

The annual numbers from TIA track similarly with the record-breaking numbers out of the St. Pete-Clearwater International Airport, which is riding a growth wave from Allegiant Airlines to passenger records.

Tampa International also recently added daily Lufthansa flights to Frankfurt that should continue to boost TIA’s numbers.

TMC | Steps to Succeed | Results You Need |

Stairway To Success

The stairway to success is accompanied be many and varied steps |

TMC is committed to the steps required | to achieve the results desired |

Our greatest accomplishment for you is not behind us | It is yet to be | Your goals and commercial real estate needs |  Whatever they may be |  Wherever they make take us | Whatever they may require |  is our commitment to you.

The Mark of a Champion is Consistency | Passion | Dedication |

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“Perfection is not attainable, but if we chase perfection we catch excellence”. Vince Lombardi

TMC- The Mahr Company | The mark of a Champion is CONSISTENCY  and PASSION | The true Champion does not create results just once in a while | The true Champion does not feel joyously for only a moment or be at peak performance only sporadically |  The true Champion wants to consistently experience excellence at all times |  So how does TMC establish consistency? It’s all based on our habits | work ethic | skill sets | and dedication to Constant and Never Ending Improvement | Being in the game and knowing what to do is not enough | As TMC does one must do what they know. 

Our greatest accomplishment for you is not behind us | It is yet to be | Your goals and commercial real estate needs |  Whatever they may be |  Wherever they make take us | Whatever they may require |  is our commitment to you.