Archive for the ‘Katchen News’ Category

One man’s opinion

Tuesday, April 17th, 2012

Based upon my business marketing, utilizing networking as a major tool, it might seem strange to hear that I’m truly an introvert.  I’m not one to readily start a conversation and must work hard to carry on a conversation when meeting with people.  However, asked me my opinion on almost any subject and without hesitation I can become very talkative.  I have never really know why I become more relaxed in conversation when I’m giving my opinion other than I assume it is
comforting to know that someone wants to know what I think.  Another thought is that my opinion is just that, my opinion, it is neither right or wrong, it is just one man’s opinion.

I do see a problem with opinions, however;   not with me giving my opinion but with those who are listening.  Sometimes people who are listening to my opinion try to interject their own views (opinions) while I’m still in the process of divulging mine.  It makes me feel that the only reason I was asked about my opinion was so that the person listening would have an opportunity to tell theirs.  I question whether they are even listening to what I’m saying and wonder if they are only thinking about what they want to say.

Another concern I have with opinions is political correctness.  I find that opinions are not always politically correct as opinions are a display of our innermost feelings.  Comments taken out of contexts can be very damaging to a person’s personal life or professional career.  While I have a concern with political correctness I don’t believe that people should have to buffer their views because of concerns that those opinions might hurt someone.  There will always be someone who is offended by an opinion so why should a person bother to filter their comments.

My last concern with opinions is that they are sometime delivered with such authority that they appear to be fact rather than opinion.  This seems to be more the case when listening to people who hold powerful positions such as politicians,
company executives and even our parents.  I’m sure that the term, consider the source, came about from such delivery of opinions.

Well, that’s it for my blog today.  If you come away with anything from reading it I hope that it will be to consider the source and remember whether right or wrong it is just one man’s opinion.

Edward Boyle

CEO, Employing Broker

Katchen Company

Katchen Company, founded in 1962, is an integrated real estate company with its corporate headquarters in Lakewood, Colorado.  The company offers real estate development, redevelopment, property management, brokerage, consulting services, construction oversight and maintenance services to individual and institutional real estate investors throughout the greater Denver metropolitan area in Denver with satellite offices in Chicago, Las Vegas and Miami market areas.

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Figures lie and liars figure

Monday, January 31st, 2011

We’ve all heard the saying, “Figures lie and liars figure’, but normally it is used in conversations about politicians and economists.  However, I’ve found it equally true when dealing with the real estate industry.  It is a tough pill for me to swallow as I make my living through real estate services but I must admit a lot of real estate professionals aren’t being completely honest.  For the record, I want to make it clear that I’m not generalizing that all real estate professionals lie, certainly I don’t.  What I’m saying is that there are a significant number who do.

 My firm, Katchen Company, represents commercial buyer clients as a broker, consultant or joint venture partner.  Through this representation we help our buyer clients with their due diligence necessary to make an educated buying decision.  One of the main documents that are utilized is an Income and Expense recap or a Pro Forma of expected performance for the property.  As you might expect, the listing agents prefer to us a Pro Forma rather than real numbers.  Hum, I wonder why that is?  Obviously, an Income and Expense recap indicates the real income and expense for the property where a Pro Forma indicates the expected performance once a property is purchased.

There are several areas where, “Figures lie and liars figure’, in a Pro Forma document with the most obvious being income.  Properties that are currently receiving rents below market will magically start receiving market rents or even higher at the moment of purchase without loss of rent to vacancy or cost for repairs, tenant finish or commissions.  Speaking of vacancy, regardless of how much vacancy the property currently has it will fare better than the current market the moment it is purchased.  Obviously, the seller does a terrible job of managing the property expenses because the Pro Forma indicates how much the buyer will be able to reduce the cost of property management, utilities, repairs, property taxes and insurance.  All without having to make any repairs to the differed maintenance on the property.  Since they’ve already toyed with the number so far it is not unusual to see the CAP Rate mirror or be lower than the lowest rate being offered for the same type of property.  Please notice that I didn’t say similar quality of property.  I’ve seen Class C properties being offered at CAP Rates only considered for “Investment Grade” properties.

 As you can see, “Figures do lie and Liars figure’.  So what is a person going to do to protect them self when looking to purchase a commercial property.  My best advice is to find an experienced professional for representation.  How will you know if they are no better than the one representing the buyer?  You won’t, but at least you’ll be assured they can play of good hand of “Liars Poker” when representing you in negotiations of the purchase price.

Posted in Commercial Real Estate, Joint Ventures, Katchen News, Property Acquisition, Property Development, Property Maintenance, Property Management, Real Estate Consulting | 1 Comment »

If it walks like a duck and quacks like a duck it must be a duck!

Monday, January 24th, 2011

In the United States at the local, state and national level we are seeing the wide spread use of semantics by our politicians.  A verbal form of smoke and mirrors to deceive the public into believing that these government representatives are being fiscally responsible and that they are reeling in expenses and reducing taxes when all along they are spending more and taking more out of our pockets.  How so you may ask, when taxes have remained flat or in some areas been reduced.  It is through the use of fees for services that were once paid for from the revenues generated through taxes. 

 For example, look at my home state of Colorado where the Tabor Amendment is in place and requires politicians to get voter approval of any tax increase.  The idea of the amendment was to get politicians to live within a budget.  There is very little chance of that happening so the local and state representatives have found a way to increase revenues without having to get voter approval.  They slowly and methodically moved services once covered under the umbrella of property taxes out on their own to stand alone and now charge a fee for the service.  The storm sewer bill that shows up once a year in your mailbox is a prime example of a service that was once paid for through property taxes and is now separately billed as a fee.  Tax … fee; if it walks like a duck and quacks like a duck, it must be a duck.

 As a commercial developer I’m flooded with “fees” on every project attempted.  The politicians call them “Impact Fees” and imply that the “Rich Developer” is putting a burden on the local government in order to benefit themselves economically.  This is readily accepted by the general public who seems to be fine with the money grab as long as it isn’t from them; but it is.  Any costs associated with a development project are passed on to the consumer.  “Impact Fees” add to the cost of developer constructing a shopping center, the retailer will have to pay more in rent in order for the developer to be reimbursed for these expenses and the  consumer will pay more for goods and services so the retailer can recoup the higher cost of rent.  To the developer, retailer and consumer it is an increase in a fee, but is it really a fee.   If it walks like a duck and quacks like a duck, it must be a duck.

 Look at the taxes we now pay and take a minute to think back at what they once covered.  Now look at all the fees we pay today and I think that you will agree.  Fees are taxes; if it walks like a duck and quacks like a duck, it must be a duck.

Posted in Commercial Real Estate, Joint Ventures, Katchen News, Property Acquisition, Property Development, Property Maintenance, Property Management, Real Estate Consulting, Residential Real Estate | No Comments »

One Man’s Opinion

Wednesday, January 12th, 2011

A few years back I got the idea to write a book which I would title One Man’s Opinion.  While I never pursued the idea I had made a rough draft as to what it would contain.  The draft consisted of a laundry list of hot button topics like taxes and immigration and my intention was to write a chapter on each topic detailing my opinion.  Since it was strictly my opinion the content would be neither right nor wrong, just one man’s opinion.

 Yesterday I was receiving training on Social Media from Victoria Wolf of Red Wolf Marketing and she advised me to decide what my voice would be for the company’s social media campaign and to make a committed effort to maintain that voice throughout all venues.  I thought about it for some time and it struck me that while I hadn’t found time to write my book I could certainly use that idea and implement it into the company’s social media campaign.  Thus, in the coming weeks, months and years I will give my opinion on timely business topics and how it relates to real estate in particular.  I will endeavor to entertain, inform and educate through my articles.  If you agree with what I write, thank you; if you disagree with what I write remember that it is just One Man’s Opinion.

Posted in Commercial Real Estate, Joint Ventures, Katchen News, Property Acquisition, Property Development, Property Maintenance, Property Management, Real Estate Consulting, Recommended Vendors, Residential Real Estate | No Comments »