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Tag Archive: Commercial Real Estate

  1. Reflecting and Projecting, BDR’s Outlook on 2022

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    Macroeconomics (think interest rates and national productivity) greatly impact the commercial real estate markets we serve. Three major macro topics of 2021 were inflation, interest rates and labor participation. The most recent data released by the federal government indicates year-over-year inflation is at 6.2%, which is a rise from the previous quarter’s 5.4% and a multi-decade high. From higher price tags at the gas pumps to greater expense at the grocery store, inflation causes the dollars we have in our possession to have lower purchasing power.

    The current rate of inflation has initiated discussion about interest rate increases to combat inflationary concerns. Historically, the federal government has utilized one of its key monetary policy levers, interest rate control, in high inflationary periods. The Federal Chairman, Jerome Powell, and his team anticipates three interest rate hikes in 2022 and another three in 2023. BDR projects interest rates to rise 75 to 125 basis points in 2022. On average, BDR has seen commercial real estate interest rates hover around 3.5% (3.25% – 3.75%) in 2021. If BDR’s projected 2022 increase is accurate (utilizing 1% interest rate increase), a $1MM loan will be $6,322.68 more per year when amortized over 20 years.

    In 2021, BDR saw a significant increase in demand for investment commercial real estate. Investors are looking to diversify. Low interest rates is one key reason. Other contributing factors include high inflation, speculation the stock market is due for a correction and investors desire to move into tertiary/rural markets. Black Diamond Realty’s thoughts behind these contributing factors include:

    • Low Interest Rates: The low cost of borrowing funds allows purchasers to pay more which helps meet seller valuation expectations.
    • High Inflation: Commercial real estate has historically been an excellent hedge against high inflationary environments. Income producing assets (investment properties) are in highest demand. In some markets, rising rents can keep up with, or ideally exceed, the rate of inflation. Some commercial leases have automatic CPI adjustments. In other growing markets, demand outpaces supply which allows rents to be pushed beyond inflation.
    • Speculation of a Forthcoming Stock Market Correction: Markets react in unique and complex ways to variables. History tells us the average bull run lasts ~8 years. Excluding the ~6 month pandemic-initiated recession, the stock market has been on a bull run since 2009. History tells us a correction could be coming. Some believe it. Others do not. Nobody knows when but the fear surrounding this variable encourages investors to make diversification decisions.
    • Increased Demand for Tertiary Market Investments: The pandemic has created a shift in mindset, beliefs and practices that has hurt many metro markets but has also created positive momentum for some tertiary markets that boast high quality of life. Eds, meds and government are seen as recession-resistant sectors. Morgantown, WV and Bridgeport, WV are excellent examples of cities that are thriving in the midst of the pandemic. Demand for these areas has increased as remote working concepts have gained popularity and individuals are transitioning out of densely populated areas.

    The factors above have resulted in compressed cap rates and corresponding higher valuations. It is a great time for a seller to exit an asset while a difficult time for purchasers to find deals. Black Diamond Realty has experienced a significant increase in off-market deal activity and we anticipate this trend to continue.

    North central WV and southwestern PA are enjoying many economic highlights as our nation moves further beyond the Covid pandemic. Some of the north central WV highlights are captured below.

    • WVU Medicine continues to expand with the forthcoming opening of its 10-story Children’s Hospital on WVU’s main campus.
    • WestRidge Development continues to expand its footprint as new uses are introduced to the Morgantown, WV market. Most notably, Bass Pro Shop and Menards opened its door in 2021. Many more uses and buildings are in the works.
    • Morgantown Industrial Park is expanding to create additional, large pads in Phase II of the development which are anticipated to have more direct access to I-79. A 47-acre sale sparked Phase II’s development.
    • David and Rick Biafora are investing significantly into the revitalization of Middletown Mall, now called Middletown Commons. The total projected investment is ~$40-50 million which should have a significant positive effect on South Fairmont and White Hall’s local economy.
    • Mitsubishi hires 400-500 additional workers at North Central West Virginia Airport location in Bridgeport, WV.
    • Charles Point continues to expand which will soon include 50-60 acres of retail including anchor retailer, Menards.
    • Bridgeport introduced a state-of-the-art, 156,000 square foot multi-purpose facility to its community.  The Bridge Sports Complex brings tremendous recreational and quality of life opportunities to Harrison County and beyond.
    • Ascend WV is receiving positive national highlight reel exposure and has helped reverse a decades old trend of individuals migrating out of WV. According to WAJR, “Between July 1, 2020 and July 1, 2021, West Virginia had a net migration of 2,343. More people moved into the state than out of it.”
    • West Virginia’s Grant and Tucker Counties won big in securing Virgin’s Hyperloop. This multi-state, competitive process was successfully secured on an 800 acre site in central WV.
    • New River Gorge National Park System was introduced as West Virginia’s first federal national park.

    BDR worked hard to achieve its clients’ goals in 2021. The BDR team closed 87 deals in 2021 with 61% leases versus 39% sales. BDR added a new colleague, Caleb Wooldridge, to our growing team. Caleb joins BDR as a recent WVU graduate who majored in Economics and interned with David as an undergraduate. We are excited to watch Caleb flourish in the years ahead.

    In his fourth year, Jeff Stenger continues his climb by surpassing production year after year. Jeff’s empathetic, hard-working and detailed-oriented demeanor adds tremendous value to the clients he serves.

    Chris Waters has been dubbed the medical marijuana and industrial guru in BDR’s office. Last year was a breakout year for Chris and 2022 looks to continue that growth.

    In her first full year with the team, Kim Licciardi set a BDR record for Year 1 production. Kim’s underwriting knowledge, business acumen and confidence have quickly propelled her onto a path as a top producer.

    BDR’s sales team would not be where it is today without the skillset, support and moral fabric that Janelle Zeoli and Andrea Cooper provide daily. These two women are invaluable to the BDR team and continue to support our growth and development.

    As we close the 2021 chapter, we are pleased to announce BDR is aggressively and actively working toward opening a second office in Martinsburg, WV. We will be recruiting and hiring key team members in the market with a specific focus on fostering client relationships and fortifying vendor contacts. We are optimistic our presentation, process and people will be well received in this new market. There will be more to come in a future announcement.

    Our team promises to continue to strive to raise the standard while exceeding expectations in this new year and beyond. Thank you for your trust and confidence and we look forward to making 2022 a great year, together.

     

  2. Inflation Uptick, What You Need to Know and Should Expect

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    The recent pandemic has caused significant construction supply chain challenges. Material costs have increased drastically; lumber futures are up 280%, steel mill product costs are up 55.6%, and gypsum product costs (plaster, drywall) have increased 12.5%. On top of the cost increase, lead times for construction materials have doubled or tripled, in many cases.

    One example to offer…a BDR client recently called a contractor for a 6,000 square foot build-to-suit retail structure. Upon giving the bid, the contractor stated, “We will hold this pricing for two days.”  This is in stark contrast to the typical pricing hold of 30 days. The urgency on both sides is a result of supply chain challenges.

    Tensions like these extend beyond material cost increases. The Federal government recently injected an estimated $6 trillion dollars into our economy. Many businesses, communities, and families depended on this money to sustain their livelihood during the government shutdown. While the government took this step to rescue our economy in the short-term, the long-term impact should not be overlooked.

    Inflation is a reality we will face in the years to come. Dating back to 1914, the yearly inflation rate in the United States has averaged 3.23%. The highest single month of inflation was in June 1920 when it skyrocketed to 23.70%. Since 2009, inflation has averaged 1.5-2% per year. According to tradingeconomics.com, April 2021’s inflation (most recent data point) is 4.2%. Each month in 2021 has seen an upward inflation trend.

    There are several reasons inflation can uptick. Some of the causes include:

    • Injecting money into an economy. During the COVID-19 pandemic, the United States government injected around $6 trillion in the economy, which has ballooned our national debt to an astonishing $25 trillion. Since February 2020, the monetary supply in the United States has increased 26%. This is the largest one-year jump since 1946. According to USA Today Money, “Creating too much money that chases too few goods leads to price inflation, decreasing the purchase power of the dollar.” To note, there is more US currency in circulation today than ever before.
    • Demand-pull effect in an economy. Staying at home has led many folks to save up money (fuel cost, eating out for lunch) while consistently living hours in a single space (home). The reality many have lived for the past 12+ months provides an abundance of opportunity to find things to upgrade within a home. This COVID-sparked phenomenon has led to a surge in demand for goods and services. Look at the current residential housing market. Virtually any residential real estate agent will emphatically tell you it is currently a seller’s market. This extends well beyond our home base in Morgantown, WV, to the entire country.
    • Cost-push effect in an economy. In addition to increased demand, suppliers have been unable to maintain pace due to labor and raw material shortages. For an extended period of time, factories were shut down or stalled due to the pandemic. The effect is large gaps in the supply chain across many sectors – from chicken wings to construction materials. Increased and/or consistent demand with a decrease in supply results in higher prices.

    These signs and more point to high rates of inflation. The volume of currency (USD) circulating in our system, pent-up demand for product and current supply chain issues are key indicators of increased inflation, which means tomorrow’s dollar will be worth less than today’s dollar.

    One way to invest smartly given this circumstance is an inflation hedge. An inflation hedge typically involves investing in an asset expected to maintain or increase its value over a specified period of time. The investment goal is to secure assets close to, at, or greater than the rate of inflation. Investors should weigh their options across all investment opportunities.

    Real estate is considered a strong hedge against inflation because property values and rents typically increase during times of inflation. Real estate has intrinsic value, is in limited supply, and is a yielding asset. People need to have shelter regardless of the value of their currency. Real estate investing also allows investors to utilize other people’s money, include the banks’, to make money.

    Interest rates are still hovering around all-time lows which makes real estate a particularly attractive option in the current investment environment. When the rate of inflation goes up, fixed-interest rate financing costs less than when the loan was taken out since the dollar has lost some of its value. The borrower is essentially paying the lender back money that’s worth less than when the borrower took out the loan. This allows investors/borrowers to pay back loans using cheaper dollars.

    A dollar today is worth more than a dollar tomorrow.

    At Black Diamond Realty, we have seen an uptick in demand for multifamily assets and other investment properties, income producing assets, across all sectors. We anticipate this trend to continue due to many of the reasons highlighted in this article. West Virginia has received tremendous positive economic momentum. From the Hyperloop announcement to the Smith’s Ascend WV program, momentum is building in WV. North Central WV remains an economic shining star in the state.

    Call Black Diamond Realty today to explore your investment options. We have a team of professionals who understand complicated dynamics driving the various markets we serve. Let us underwrite your next investment project. Hedge against inflation wisely.

     

    Article by: Article by: David Lorenze, Caleb Wooldridge Edited by: Dr. Stephanie Lorenze

  3. Buyer-Tenant Representation: How Black Diamond Can Assist You

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    Choosing the commercial real estate that is the best fit for you and your success can be tricky. Does the location align with the business’ demographic focus? How will visibility and accessibility positively or negatively influence the business’ performance? What deal structure preserves capital while minimizing long-term risks? These are a few examples of many challenging and complex questions that should be thoroughly analyzed when striking a commercial real estate deal.

    Black Diamond can be your commercial real estate parachute. Our team of experts adds value to a buyer and/or tenant representation relationship by providing sound market and experience-driven advice, utilizing resources to thoroughly canvass the market for all assets which potentially service your needs, advocating for your best interests during the negotiation process, connecting you with helpful professionals, and taking a comprehensive, team-oriented approach focused on looking out for your best interests. Our team works hard to service and protect our clients’ interests.

    Commercial real estate transactions are complex with many potential hurdles. The information below is intended to expand upon reasons you should consider securing buyer and/or tenant representation when searching for your next commercial real estate asset.

    • Expertise/Market Knowledge.  We all have areas of expertise in life. One individual’s strength is another’s weakness. Day in and day out, our team of experts are discussing, assessing, experiencing and closing complex deals in the commercial real estate markets we serve. This experience creates market knowledge that is unique to working in the commercial real estate trenches on a daily basis. Market knowledge can help minimize the risk associated with choosing an asset that becomes a profitable venture versus a financially challenged and stressful endeavor.
    • Greater Options.  Our team has access to off-market opportunities which are properties with no public advertising. A prospective tenant or buyer receives a greater range of opportunity when working with a real estate professional. The contacts we have developed in the region allow us to ensure our clients have a comprehensive understanding of the available assets that could service their company’s needs.
    • Connections.  Successfully navigating commercial real estate transactions requires knowledge in a number of specialty fields. Some of those fields include, but are not limited to, real estate law, construction, accounting, banking and marketing. Our team of experts works with regional professionals on a daily basis. Through our exposure to thousands of deals, we have developed a referral network of professionals that we feel confident can properly service the various needs of your organization.
    • Lease vs. Buy.  Our team has a strong understanding of underwriting, preservation of capital and resources needed to continue to grow. Having an open dialogue about the decision to buy or lease is healthy to ensure the correct long-term decision is executed.
    • Experienced Negotiators.  Navigating a commercial real estate negotiation is a dance. Many unknowns can arise. Exposed to thousands of deals over a collective career, BDR’s team has seen myriad circumstances. We utilize that experience and exposure to help our clients successfully navigate the negotiation to finalize a deal.
    • Save Time & Money.  Hiring a team of experts allows you to focus your time on your business while knowing a professional is working in your best interest. We handle most items needed in the process.  For the items we do not handle, we have referrals to specialty services (see Connections above). There is typically no cost to a buyer/tenant representation except in unique scenarios. Traditionally, the seller/landlord pays the brokerage fees.

    Whether you are in the market for investment assets, office, industrial, land or retail space, we will assist you with finding the right location and property. Clients benefit from our market knowledge, putting them on the inside track to evaluate locations, rental rates and purchase prices, negotiate lease and purchase agreements, and assess other pros/cons. We specialize in finding properties that are off market or not advertised as available, and we can recommend knowledgeable attorneys, architects, engineers, contractors, accountants, and other professionals to assist any purchase or lease transaction.

    We understand that every situation is unique, ranging from large corporations to small local businesses, which is why we tailor our approach to meet the needs of each industry. When you choose Black Diamond as your buyer-tenant representative, you will gain support from a brokerage firm that will help you achieve you short or long-term goals.

    If your business’s lease is near expiration or you’re looking to relocate or expand, call us today at 304.413.4350 and we will assist you in evaluating a new location for success!

  4. Dominion Post: Black Diamond Realty LLC opens new residential arm, White Diamond Realty

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    Melissa Berube, formerly of Howard Hanna, tapped to head company.

    For David Lorenze and Mark Nesselroad, principals of commercial real estate company Black Diamond Realty LLC, starting a residential brokerage was a no-brainer for the pair. “We grew to be the commercial bridge with national [commercial real estate] firms and had formed a great team,” Nesselroad said. “We saw an opportunity to serve the residential market.” Our outreach makes us different.” Lorenze agreed. “We are excited to utilize Black Diamond Realty’s presentation, process and people to develop a new organization focused on residential brokerage services,” Lorenze said. “Securing a well-respected, strong leader was a critical first step.

    The result of that opportunity is the recent formation of White Diamond Realty LLC, Black Diamond’s new real estate arm. And to lead their new residential venture as its broker, the principals tapped Melissa Berube, a veteran Morgantown area realtor who was the 2019 president of the Morgantown Board of Realtors.

    Melissa brings to the table a strong reputation, a charming demeanor and an unwavering work ethic, which we are confident will lead to tremendous results. … We are excited to see what the future holds and appreciate the community’s support,” Lorenze said.

    At White Diamond, Berube, who has been selling homes for nearly two decades, is being tasked with recruiting and building a team of seasoned agents who know the local real estate market and are tech savvy. The White Diamond agents will be based at Black Diamond’s Stewartstown Road headquarters.

    I am excited to be building something new,” said Berube, who was previously with Howard Hanna Real Estate Services Cheat Lake office. “I am working on the foundations now,” she said. “Our goal is to become a boutique agency that emphasizes quality over quantity.

    Berube said she is looking at recruiting more than a dozen agents at White Diamond, a goal she hopes to accomplish by spring. She sees White Diamond’s niche mostly as second-time home buyers, or transition buyers who are new to the area. “Experience is always good, but I would consider a newbie,” said Berube, when asked about the kind of residential agent she hopes to recruit. The agents who join White Diamond will be incentivized and encouraged to work together as a team — a concept important to Black Diamond, she added.

    For us, it’s all about team building,” said Nesselroad, who also serves as the chief operating and legal officer of developer Glenmark Holding LLC. “Starting a residential company has been in the backs of our minds for a while.” It also helps to have Berube as its residential broker, he said. “We have full faith and confidence in Melissa Berube to lead our team.

     

    Article By: Suzanne Elliott, The Dominion Post 

  5. Investing Your Way to Financial Freedom

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    Quarter 4 marks a fun and exciting time for many. We are experiencing changing seasons, ratcheting up anticipation for forthcoming holidays and enjoying the excitement of football season. It is a time to be thankful, push hard to the finish and plan for the future.

    In the coming months, many will begin setting new yearly goals which may include traveling with family and friends, pursuing new business ventures, giving to charity or sculpting your body. Many things in life, goals included, require time and/or money. In our professional careers, each of us is consistently trading time for money. What if the opposite could be true?

    Money is an empowering tool that, if utilized properly, can enact positive change and help facilitate positive outcomes. Money is necessary to live your life and allow you to enjoy adventures, conquer goals and achieve dreams. Is there a way to trade money for time? How do you get out of the rat race while making enough money to live your life on your terms? There is no easy answer but diversifying your investments to include real estate could offer passive income. Passive income can help you achieve financial freedom (more money coming in each month than your expenses) and “buy” more time.

    According to The College Investor, “Over the last two centuries, about 90 percent of the world’s millionaires have been created by investing in real estate.” This is a staggering statistic:  9 out of every 10 millionaires created their wealth through real estate investing.  Real estate investing is not a “get rich quick” scheme. Real estate investing utilizes leverage, compounded over time, to an investors’ advantage resulting in long-term wealth. If purchased and managed correctly, an income producing asset should be working for you every second of every day.

    With the above in mind, it is imperative to fully understand there is risk associated with real estate investing. Commercial real estate investing is a complex process with many potential pitfalls. We recommend consulting with trusted advisors before solidifying your next investment. Black Diamond Realty’s tips are meant to guide your real estate investments toward positive cash flow, wealth creation and passive income. The tips below provide some general guidelines to consider as you expand your portfolio or kick things off in a successful real estate investment venture.

    1. Know the market. Macro-economic factors, such as interest rates, environmental policy and federal investment programs (1031, Opportunity Zones), and micro-economic factors, such as local employment trends, infrastructure and school districts, can positively or negatively impact your real estate investment. Unless you are actively involved in a real estate market, it is impossible for you to fully understand the intangibles and intricacies of any given market.
    2. Create a rainy-day fund. It is preferable to have it in place from the start but, at a minimum, build up via cash flow before taking a dime of distribution. A minimum of six months is recommended with a preferred 12 months of cash reserves in place. Cash reserves should cover “what if” scenarios and anticipated future capital improvements. Everyone loves to dream about and plan for the “rosy days.” That’s easy. Within your proforma and underwriting, it is also important to look at challenging circumstances that could negatively affect your investment position and overall return. Plan for the negative “what ifs” even if the chance of happening is relatively small. The good news: If you pursue bank financing, the credit department at ABC Bank will, at least in part, serve as a backstop to filter out some of the negative what ifs.
    3. Plan for capital improvements. They will happen: A hot water tank goes down. A roof goes bad. Flooring needs replaced. The parking lot needs paved. These examples only touch the surface. Capital improvements are not a matter of if, but when; so, plan on them. On your proforma, plan for 2-5% (of gross income) in capital improvement money. Very few individuals want to endear the title of “slumlord.” “Milking” a property is risky business and reflects negatively on the community you are serving.
    4. Maximize your strengths. Develop a strong team. All of us are gifted in certain areas and bring value to any given deal. For some, they are gifted communicators and can help a tenant feel comfortable moving forward. Others are gifted in real estate law, accounting, marketing, or construction. Many specializations are required to help ensure a successful real estate venture. You cannot climb to the top of the real estate mountain by yourself. Finding strategic, trusted relationships and vendors is critical. Build relationships. Focus on building people up within your team.
    5. Do not marry your property. You are only married to your husband/wife and your family. Do not hold your real estate investments on the same pedestal. Real estate investments are meant to make money while providing a service to the tenants it serves. Treat it that way. Run it like a business while maintaining a high level of integrity, honesty and diligence.

    Following the guidelines outlined in this article should help avoid investment pitfalls during ownership. Knowing when to buy, hold and divest is another critical element of real estate investing. We highly recommend consulting with a real estate professional, with strong expertise in the investment field of your choosing, before pulling the trigger. At Black Diamond Realty, we have sold tens of millions of dollars in real estate investments. Our firm is building a market niche in this space. Our Black Diamond Realty team invites the opportunity to meet with you and your partners to discuss your goals with the purpose of helping you achieve financial freedom.

    To view all of our available investment opportunities, Click Here.

     

    Article by David Lorenze. 

     

  6. Mon Health EMS gets new Gateway facility

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    Mon Health EMS officials were at The Gateway on Sept. 20 to show off their new digs — a two-story, 15,780 square-foot facility that serves dual roles as doctor’s office and EMS substation.

    While the  majority of the building houses Wedgewood Family Practice, roughly 1,000 square feet of the building contains a drive-through vehicle bay large enough for two ambulances and the needed accommodations — a day room with a kitchenette, seating and television, office space with multiple work stations, storage and restroom facilities.

    Mon Health EMS Director Dave Custer saidEMS operations began rolling out of the new facility earlier this month. “This is replacing and upgrading our station we had in Osage,” he said. “It’s a better location for us to respond, not only to the interstate quickly, but to Star City, Westover and the Blacksville area.” Custer said one ambulance is operating out of the new building, but a second could be added permanently or temporarily in the event of anticipated traffic disruptions or other circumstances. He went on to say that Mon Health EMS is looking at the Grafton Road area and the Pierpont/Cheat Lake area for additional ambulance staging locations.

    The agency already has an agreement with the Blacksville Volunteer Fire Department that allows an ambulance to be staged at the fire station. “By having stations out in all four quadrants of the county, we really can cover this county pretty well,” Custer said. Mon Health invested $5 million to build and equip the entire facility.

    Ben Conley, The Dominion Post
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    Are you interested in The Gateway as a new or additional location for your business? Click HERE to view our detailed marketing flyer for The Gateway and see what’s available within the park.
    Detailed Marketing Flyer Link

  7. WVU Medicine Children’s Neurodevelopmental Center

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    Doctors and administrators gathered at WVU Medicine Children’s newest facility – a Neurodevelopmental Center on Baker’s Ridge Road – to celebrate its opening Thursday.

    Neurodevelopmental Center Photo 2Neurodevelopmental Center Photo 3
    It’s unbelievable,” Dr. Jodi Lindsey, center director, said of the 9,000 square foot space on Baker’s Ridge Road. Lindsey said there’s always been a need for this type of service in West Virginia and her dream, even before medical school, was to build a center like this. The center brings all levels of child neurodevelopmental disability treatment under one roof including diagnosis and evaluation, medical workup and treatment and therapy services she said.

    Albert Wright,president and CEO of the West Virginia University Health System, said the center was designed for a very specific purpose – helping pediatric patients with neurodevelopmental disabilities. Those disabilities include Autism Spectrum Disorder, developmental delay, cerebral palsy, and Tourette Syndrome. The best treatment is “intensive and early behavioral intervention,” Nikki Shriver, an applied behavior analyst (ABA), said.

    There are 10 individual rooms where ABA’s can work with their patients one-on-one and help build skills. Shriver said helping improve communication skills is a big focus because the ability to ask for what one wants and needs is important. The early part of “intensive and early” refers to the age patients start treatment. Shriver said the best time to work with kids is between the ages of 2 and 6 when their minds are still growing. She said anyone can learn, but the younger treatment starts the better. Intensive refers to the amount of time patients spend at the center. Some patients spend the equivalent of a school day in treatment – five days a week, Joseph Shane, ABA, said.

    The goal of treatment is to prepare patients for the next environment they will be in and for most that means getting them ready for school he said. The center also has a large play area where kids can work on group skills such as sharing and taking turns, Shane said. Kids will also eat lunch in the play area during their treatment and lunch is another opportunity to work on skills. If treating patients is the primary goal, one that’s almost as important is training the next generation of care providers.

    There are two assessment rooms used by pediatric psychologists connected by an observation room. Jenna Wallace, pediatric psychologist, said the observation space is about double the size of the previous space. Lindsey said she hopes that this center becomes a model used across the state where a team based approach is used in treatment.

    By William Dean, The Dominion Post

  8. What to Expect When Selling Commercial Real Estate

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    Have you been thinking about selling your commercial real estate asset?

    To some, it can be an overwhelming process. At Black Diamond Realty, we educate our clients about what to expect while working diligently to prevent “deal potholes,” such as transactional surprises. When selling your commercial property, it is important to be prepared for the process and informed about the fees associated with the deal.

    Selling a parcel for $1,000 does not mean you get to deposit $1,000 into your bank account.  Below is a list of some of the standard commercial real estate transaction fees you can expect in West Virginia (other states have additional nuances – for example, PA has school taxes that run on a 7/1 – 6/30 basis) with a notation indicating which party is typically responsible.  A common saying in commercial real estate also applies to this list…everything is negotiable.

    Closing Costs (State Customs) First American

    Generally speaking, all due diligence expenses are the buyer’s responsibility. On the seller side, transfer taxes/stamps and the real estate brokerage commission are the primary line items in closing a commercial transaction. Real estate transfer taxes (aka stamps) are taxes imposed by states, counties and municipalities on the transfer of the title of real property within the jurisdiction. Real estate transfer taxes (aka stamps) are taxes imposed by states, counties and municipalities on the transfer of the title of real property within the jurisdiction. Each state has varying regulations which affects the responsible party. In addition, the rate can vary from county to county within any given state. In WV, the transfer tax is the seller’s responsibility. The rate is $1.65/$500 ($1.10 state, $0.55 county). A county may levy an optional excise tax up to $1.65. On the brokerage side, you get what you pay for. Black Diamond Realty adds value via presentation, process (aggressive/teamwork approach), and our people (knowledge, skills, abilities). Black Diamond’s clients are happy to pay the transactional fee. Brokerage commission rates can be fairly standard but some percentage adjustment can be expected based upon the value and scope of the project.

  9. Retirement Community To Open In Fall

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    A new, state-of-the-art retirement community is slated to open during this fall, at 2996 Point Marion Road, Morgantown.

    The Crossings at Morgantown is managed by Harmony Senior Services. Harmony is a fully integrated management service company led by proven senior care professionals with a record of providing great care and service at numerous senior living communities across the mid-Atlantic.

    The Crossings at Morgantown will provide independent living, assisted living and memory care on a private campus located within 4 miles of the area’s three main hospitals. The facility has not yet obtained a license from the state of West Virginia. Pursuant to WV Code § 16-5D-6(a), no assisted living – including memory care – can be occupied until such license is obtained.

    Employees are actively taking tours at the welcome center, located below the construction site. This is a 79-unit senior living community with 84 suites for independent living 59 suites of assisted living 36 secured memory care suites. The independent living suites have 32 floor plans to choose from and are either one bedroom one bathroom, or two bedroom and two bathrooms.

    “With affordable monthly costs and no large buy-in, all it takes is a one-time deposit to secure your suite in our independent living community,” said Kelly Drayer, director of Sales and Marketing. She added the apartments are the region’s largest. The Crossings at Morgantown prides itself on the many resort-like amenities included in month-to-month leasing. The community extends the living space with common areas, outdoor courtyards and access to popular amenities, such as a movie theater, pup, salon, billiards, library and bistro. “March-Westin is our construction company on this project, between their reputation for solid workmanship and consistently staying within our timelines, we are on schedule to open this fall,” Drayer said.

    For more information, contact The Crossings at 304.212.4939 or visit thecrossingsatmorgantown.com.

    Article By: The Dominion Post.

  10. An Increase In Leads Generates Closed Deals

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    Historically, the commercial real estate market tends to slow during the winter season. At Black Diamond, we can confidently report the trend is quite the opposite this year. The new year has brought a vibrant market filled with deal making attitudes. For example, Black Diamond Realty has gained nearly 100 unique leads between industrial, investment, office, land and retail. These statistics are from folks who specifically reached out to us. There are countless others our team has targeted for product specific offerings.

    Leads translate into deals. Deal velocity is trending up. In quarter 1, Black Diamond Realty closed five deals in 2016 versus eight deals in 2017. With several weeks to go, Black Diamond Realty has already closed (leases and sales) 12 deals with a strong pipeline. Check out next month’s newsletter to get a snapshot of our Quarter 1 deals.

    Leads and deals have picked up across all sectors of commercial real estate, but there are shining stars setting the pace. Black Diamond Realty’s Top 5 Performers are revealed below.  These statistics are provided by LoopNet and represent a 90 day period from December 1, 2017 through the end of February.

    Investment160 Fayette Street in Morgantown, WV
    45,146 Search Displays
    743 Listing Views

    Special Purpose/Event Center/LandHeston Farm (Upper Level) in Pleasant Valley, WV
    42,462 Search Displays
    401 Listing Views

    Industrial LandVentura Drive in Fairmont, WV
    20,460 Search Displays
    289 Listing Views

    Sabraton Plaza1397 Earl Core Road in Morgantown, WV
    18,202 Search Displays
    219 Listing Views

    Industrial/Land1524 Grafton Road in Morgantown, WV
    17,590 Search Displays
    171 Listing Views

    A “search display” means a property was displayed as a potential fit based upon the criteria input by a specific buyer/tenant.  A “listing view” means that an individual clicked specifically on the property.  All of Black Diamond Realty’s Loopnet listings are directly linked to its website (www.blackdiamondrealty.net) which generates even greater exposure.

    At Black Diamond, we feel the regional market is heading in a positive direction on many different fronts.  Momentum is quickly building with tremendous economic excitement to come in the months and years ahead.  Buckle up and enjoy the ride.

  11. Crossings Construction Continues – The Dominion Post

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    Luxury Living

    Construction continues on a new senior living community on Point Marion Road.

    Scheduled to open in fall 2018 near The Pines Country Club, the 8.9-acre Crossings at Morgantown will include 175 senior living units — 84 of them independent, 59 units of assisted living and 32 secured units of memory care. The Crossings at Morgantown will be operated by Harmony Senior Services, a management services company with experience in senior living based in Roanoke, Va.Construction_Continues_The_Dominion_Post_2

    The Dominion Post reached out to the company to find out if anyone has yet expressed interest in the community, but representatives from Harmony Senior Services declined to comment, noting that advertising for the Crossings hasn’t begun yet.

    According to the Crossings’ website, the community’s amenities will include an on site fitness center, a pub, beauty/barber shop, library, and a computer lab. According to Black Diamond Realty, this $35 million development will create about 45 full-time-equivalent jobs initially. The Crossings at Morgantown is expected to generate 100-130 part-time and full-time jobs over time. 

    View additional photos at The Dominion Post.

  12. 2017 Sectors In Demand

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    Our team is often asked, “How is the market?” Some brokers may respond with a generic, “good”. If you are interested in a general response, we are happy to report the market is currently “great.” Black Diamond Realty’s pipeline is the busiest it has been in its four-year history. That said, we suspect you are more interested in a sophisticated, detailed response. Look no further; we have your answers.

    What…. Sectors?

    At Black Diamond Realty, one of our competitive advantages is our thorough and detailed process. We track every single lead. This allows us to present you with accurate statistics that serve as a reflection of market demand across all sectors. Keep in mind our statistics are influenced by Black Diamond Realty’s current inventory of assets. The following statistics provide the number of sector leads since January 1, 2017:

    Industrial = 83        Office = 59         Retail/Restaurant = 58         Land = 32        Investment = 32

     

    Why… Macro vs Micro?

    Do you believe in the mantra that tells you to focus on what you can control? We do, too. However, we also believe it is not wise to bury your head in the sand. It is critical to think about how macroeconomic factors influence regional market demand. Two positive influencers are currently in play.

    Historically speaking, interest rates remain near all-time lows. This bodes well for investors looking to get into investment opportunities. Although cash is king, we are seeing a lot of companies and individuals levering up to take advantage of favorable bank rates. Refinances have flocked through banks’ doors. Sellers also like low interest rates because funds are cheaper to secure which results in higher valuations while still clearing bank debt-coverage ratios.

    The second macroeconomic factor relates to the reenergization (pun intended) of Marcellus Shale activity. Oil and gas pricing is fluid, literally and figuratively. Pricing has seen nominal rises over the past 12 months. However, recent industrial space demand leads us to believe many companies on the front lines sense prices moving north in the coming years. We suspect their goal is to get established in this area while industrial real estate values are still relatively inexpensive. This will heighten their ability to capture the market and capitalize on contracts as things ramp up. Many articles reference cracker plants and pipelines as the saving grace to lowering the current supply glut. These two variables are currently progressing in a very big way. The O&G industry has potential to replace job losses from coal. Time will tell if this is a long-term regional industrial revolution.

    Where?… Concentrated Areas of Development

    Jobs drive economic growth, and there are plenty of jobs coming to two booming exits along the I-79 corridor. University Town Center/West Ridge and White Oaks Business Parks are the two distinct front runners when considering development hubs in north central WV. University Town Center and WestRidge, both located at I-79, Exit 153, lead the charge as driving forces behind retail and office development in Monongalia County. Simply put, this new exit has created significant buzz in Monongalia County which is expected to remain in play for the next three to five years. A lot of announcements will happen in the coming months. 2018 is slated to be a heavy construction year for this development.

    Thirty miles south of Morgantown, White Oaks Business Park is leading the development charge for Harrison County. Numerous Class A office buildings, spanning a plethora of services, hotels, retail space and several restaurants round out the line-up for this state-of-the-art development. White Oaks is an upscale development, which includes sidewalks throughout and pristine landscaping, while serving as “the talk” of Harrison County as it capitalizes on close proximity to the interstate, UHC and FBI’s Campus. Growth and positive economic announcements are projected to continue in the coming years.

     

  13. June Newsletter

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    View our June Newsletter: Summer Fun Awaits! See Where…

    Click Here!

  14. Real Estate Investing 101

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    Are you putting all of your eggs in one basket? What is the first rule of thumb your financial advisor will work hard to instill into your investing DNA? Diversify your assets! Parents often gloat when they feel their kids are well-rounded; the same holds true for your investments. In theory, a portfolio with stocks in multiple sectors can better withstand one industry tanking, if another sector rises.

    Investors encouraged to pick investments that are a comfortably balanced between risk and reward. Have you considered real estate investments? Do you currently own some assets and want to expand your portfolio?

    Income-producing assets can offer a nice diversification play to your portfolio. The bullet points below highlight the key perks to real estate investing. 

    • Appreciation: Similar to other investments, you are aiming to buy low and sell high. Real estate is the same. It is important to complete proper research and due diligence on any investment asset to understand the risks. We are proponents of buying across stable, diversified (there’s that word again) markets. We also like value-add opportunities.
    • Cash Flow: As is the case with a blue chip stock that pays a dividend, your goal in purchasing an investment property should be to have a monthly surplus of cash after all expenses are paid. Value-add opportunities offer room for cash flow growth.
    • Tax Benefits: Nobody likes paying taxes. Real estate offers effective, legal ways to lower your yearly tax exposure. Two of the most prominent tools include depreciation and interest. These are paper write-offs allowable by the IRS. When you receive “an offer you cannot refuse,” remember/consider four important numbers: 1.0.3.1. Under Section 1031 of the United States Internal Revenue Code, a taxpayer may defer recognition of capital gains and related federal income tax liability on the exchange of certain types of property. This allows you to effectively kick the can down the road and leverage into larger assets over time.
    • Building Equity: As an owner of leveraged real estate, every month, you will write the largest expense check (in most cases) for your LLC in the way of a mortgage payment. This is a positive thing; you are building equity in yourself. That’s right; think of your mortgage payment differently. You are leveraging other people’s money (banks, alternative forms of financing, etc.) to make money. Each monthly payment results in a slightly lower overall balance, which means you are building your net worth.

    At any given moment, Black Diamond Realty has on and off market investment opportunities. Call us to explore the concepts above further and/or to discuss our current inventory of income-producing assets.

    Disclaimer: Black Diamond Realty LLC and its agents do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Prospective investors/purchasers should consult their own tax, legal, and accounting advisors before engaging in any transaction. We will work with your independent tax/legal/accounting advisors to help tailor a real estate transaction specific to your needs.
  15. A Strong Outlook for Industrial Demand

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    shutterstock_468576131

    As real estate professionals, the BDR team is often asked these two questions:  How are things going in our market and what are you seeing? Here’s what we have to say in response to these popular questions:

    BDR has experienced unseasonable demand during what is traditionally the slowest time of year in commercial real estate.  Although demand has increased in all sectors, the industrial sector is leading the charge in 2017.  There are so many factors that affect a market.  Most of these factors are outside of our regional control.  Each sector under the commercial real estate umbrella is different and driven by varying economic forces which can also be directly affected by macroeconomic factors stemming from federal policy and regulation.

    Many believed Trump’s surprising presidential election would result in pro-business policies.  Time will tell on that one.  Many also thought Trump’s election would result in pro-energy policies.  In less than two weeks in office, we are already seeing this bear some truth.  Within his first week of office, President Trump signed an executive order to encourage federal review folks to pass Trans Canada’s resubmittal of the Keystone Pipeline project in the Dakotas.  According to Marcellus Drilling News, “On January 19, 2017, the Federal Energy Regulatory Commission voted to approve and issue a certificate to Columbia Pipeline’s Leach Xpress and Rayne Xpress pipeline projects.  This is fantastic news for the Marcellus/Utica region.”  While traveling in Morgantown, have you looked over at the acres upon acres of green pipe being stored in Morgantown Industrial Park?  We are not getting the world’s longest water slide, but we will begin to hear about progress relating to Atlantic Coast Pipeline, a 600-mile interstate natural gas transmission line. The project will begin in 2017 and stretch from Harrison County, WV to Chesapeake County, VA and Robeson County, NC.

    What does all of this mean for the region?  Commodity pricing has been suppressed due to an oversupply of natural gas in the market.  Two factors will increase demand:  Pipelines and cracker plants.  We have already touched on pipelines.  There are currently three cracker plants being consider in the region.  One is moving forward in Monaca, PA with two additional cracker plants still in the planning stages.  Cracker plants effectively isolate the molecular components (think chemistry class) in natural gas which are then used in other manufacturing processes such as the development of various plastics.  Due to high usage needs and the expense of transportation, many believe manufacturing will follow and locate within close proximity of the cracker plants.  This results in more jobs for the region and will undoubtedly have a trickle-down economics effect on various sectors.  When looking to open a location, many energy companies have a need for industrial space.

    How can you tell demand has increased in the industrial sector?  Black Diamond Realty records and tracks every lead that comes into our office via phone and internet.  Since Election Day (November 8, 2016), there have been 27 unique leads that have come into our office.  This number is in line with the number of industrial leads we typically see in an entire year.  Things are looking bright for the industrial sector.  Act now before pricing increases.