Joining family business of commercial real estate; looking for resources.
So a long story as short as possible....



My grandparents had a lot of commercial real estate in southeastern Pennsylvania.  Nothing huge, some small shopping centers, some individual plots with stand alone retail.  That kind of thing.  Close to 18 all together, almost all are commercial, but there's a couple residential.



Grandparents passed recently and their properties were handed down to their three children (my dad and his two sisters).  And they now want to bring in *their* children to basically run the show.  They're each picking one of their kids who can play a significant role in the operation (legal, finance, management, etc.).



My role is essentially gonna be a bit of the legal side (I'm in law school) but also a lot of the research side.  And that's why I'm here...


What I'd really love is to reduce the learning curve as much as possible.  We lease to a lot of local, private businesses.  But we also lease to several major national corporations.  I'm looking for resources I can go to for research that can give me a leg up in planning and negotiating.  Basically, I don't wanna have to pick between two companies and realize five years later the one we picked is going under and the one we passed on is thriving.  I'm looking for resources on what their typical real estate deals may look like or how their retail stores do in one geographical area as opposed to another, etc.



Any guidance to these resources would be very helpful.  And of course, any general advice would be great, too.  Thanks!



EDIT: For current and possible tenants in the works, think: McDonald's, Pep Boys, Advance Auto, Autozone, Rite Aid, Dollar General, KeyBank.
[{"id": "d4826j5", "text": "you should really look at hiring a broker and attorney to represent you in leasing matters.  Much of the data you need is proprietary, gained through a lot of years of doing this, or you have to know what you need to request it from the tenant.\n\nA better idea here may be to outsource everything from management/maint/legal/leasing/etc with a 5 year plan to bring it back in house and have the kids who will be running this work with the professionals you hire in their areas to get up to speed.\n\nJust looking at your list of 'potential' tenants a lot of this is going to come down to the gaurantee's unless they have sales based exit clauses.  Its also pretty rare for McDonalds (maybe almost non existent?) to lease property, so I am surprised that is on your list.\n\ntldr-  you are going to learn stuff much cheaper when your hired help tells you something and you shrug and go 'wow thats surprising' than when you fuck it up and it takes years to figure out you fucked up and costs you large sums of money.  CRE is very much a pay $1 to save $10 later game", "replies": [{"id": "d482pl7", "text": "Great advice.  But just curious, if the data I'm looking for is proprietary, what would make an outsourced mgt/maint/legal/leasing/etc. company that we'd hire give us any information that *they* use to their advantage in their business if/when we let them go?  I mean, yeah, we'd have access to whatever documents are filed and they give to us, but I'd have to think if they're good at what they do then they would keep their important info and data to themselves and just advise us based on the info.\n\n\n\nAnd yeah, the McD's is an interesting set up.  Ground lease and then they sublease to a gas station and the two operate under one roof.  ", "replies": [{"id": "d484a5v", "text": "Good question.  While they should give you all the information you need to assess a particular transaction, they of course wouldn't give you all the info they have access too (not because they want to fuck you or trap you, it just be impossible to do that).  Even if they did, re data gets out of date fast.  \n\nThe proprietary data bit was just one part of that comment.  I think after you do this for a while you will be better able to determine what data you need and where to get it.  For some deals maybe you can use costar etc subscriptions to get it, for some others maybe you contact a broker who does a lot of deals for that tenant and buy a research report, for some others there won't be much info available at all and you are going to be going through the guarantors personal assets and the company as a whole (smaller/regional tenants are great for this.  You know if someone has 6 locations in your city they may be a great tenant, but its not like there are going to be cap rate research by lease expiration date reports out there like you see for walgreens etc).\n\nOverall, I'd look at it as right now paying people to make sure things are handled correctly, and when or if you take it over you will understand how to handle it correctly.  In situations where you just don't have access to information you need, you will at least understand you don't have it and knowing what you know is half the battle sometimes :)  then you can assess what you need and who to pay to get it, if its worthwhile at that time to do so.\n\nI'm not sure on the specifics of your deals, but that mcdonalds one you mention sounds like 20+ years and it sounds like you guys are playing with NNN's and maybe doing some bts/dev work?  When you work with those types of time lines it can be real tough.  What you do now can really toss the property value all over 10 years from now, and lord forbid even a major tenant defaults, merges, an entire industry fails/changes etc.  \n\nThere is even a large difference in good and bad practicing re attorneys.  I imagine you are paying a hefty sum for your law school, look at hiring these people as additional tuition to learn real world stuff.  You will be able to assess when you are ready to take over, or maybe some items you never want to take over, over time.  Starting from scratch and just handling everything though sounds like a recipe for disaster.  Remember on the other side of the table you are pretty much always going to run into skilled folks who won't hesitate to fuck you like a 3 dollar hooker on the night their divorce is getting finalized if given the chance.  \n\nThis entire industry is just full of you don't know what you don't know issues, and those NNN deals are highly custom and nuanced", "replies": [{"id": "d4851ms", "text": "You've been extremely helpful.  I do want to clarify a few things...\n\n\n\n&gt;Overall, I'd look at it as right now paying people to make sure things are handled correctly, and when or if you take it over you will understand how to handle it correctly.\n\n\n\nSo right now, and for the past ten years or so, the properties have been managed predominantly by my father and his sister.  My father (and his father before him) were both property attorneys.  My dad is going to take a few years to \"show me the ropes\" if you will.  So he's going to show me *his way* of \"handling it correctly.\"  He's not going to be thrilled about the idea of hiring an outside broker to handle things he's been handling for a decade.  That's not to say you're wrong by any means.  It's just going to be a tough sell, that's all.  There will be a time when I and two of my family members will be running it, and that doesn't mean it has to be business as usual or \"how we've always done it.\"  But for now, at least for a couple years, hiring outside help is a tough sell.  I know this because I've actually already brought it up. haha\n\n\n\nYou mentioned somethings that are pretty much exactly what I was looking for with my initial question.  I don't know what a costar subscription is.  I had to google NNN to realize that's shorthand for triple net haha. I don't know what bts/dev is.  I'd love a breakdown of what research reports would be useful if/when I want to drop a few bucks on some.  I'm really interested in what literature and research resources I can dive into to cutdown the learning curve on what's out there, what's useful, what's a waste, etc.\n\n\n\nYes, most of the leases we're dealing with for stand alone parcels are at least 10 year ground leases.  Many 20.  Some of the leases we have on shopping center units are less -- 5 years.  But stand alone units, I believe, are usually 10-20.\n\n\n\nAnd yes, as you might be able to tell from the list I gave you, one of our current tenants is not only in the middle of a buyout/merge, AND their lease is up for renewal.  So... that's gonna be fun. haha\n\n\n\n\nBut seriously... I'm excited by this, and I wanna do it right.  I do believe the assets that we have are mostly free of dogs.  Maybe one or two, but most of our properties are in good shape and in good locations.  The family hasn't expanded its property in a long time, and my longterm goal is to do that substantially.  And like I said, I wanna do it right.  \n\n\n", "replies": [{"id": "d486ujf", "text": "will you be checking this tomorrow ?  I don't have time to answer that all right now but will in the morning.  a lot of times you write 30 minute comments and op is long gone though lol", "replies": [{"id": "d486xun", "text": "Haha no worries.  I check reddit pretty regularly.  I also welcome you to PM and we can exchange emails if that's of any interest to you.  If not, no worries either way.  You've already been helpful but as you can tell, I'm always trying to learn more.", "replies": [{"id": "d4dh2rs", "text": "Lobster sounds like he's got some experience. I can speak from the other side of it which is that I went through a similar situation in which I was thrown in the deep end of real estate, and got to ride that learning curve. I've done some reading and I've been able to play minor roles in big transactions. Those were helpful. BUT. The absolute most helpful assets to me were the people who knew exactly what they were doing. Specifically one landlord and one broker who I can ask anything. They have access to all my proprietary info. They are people I can trust no matter what. \n\nSo in line with what Lobster is saying, I agree that finding a broker, etc that you trust will be invaluable. Your dad sounds solid, but having more than one opinion is important because everyone is wrong sometimes. \n\nTLDR: Your dad will be an excellent mentor. Now find one more. ", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "d48mspr", "text": "FWIW, ground leased McDonald's aren't uncommon in my area.", "replies": [], "depth": 2}], "depth": 1}, {"id": "d488z0o", "text": "How about getting jobs at brokerages and not telling them what you guys own?", "replies": [{"id": "d48n6cs", "text": "Not in the cards at the moment.  I'm in law school.", "replies": [{"id": "d48o4cy", "text": "And the other kids?", "replies": [{"id": "d48o6ce", "text": "Everyone has careers.  ", "replies": [{"id": "d48p0sg", "text": "Then really, you need to hire a broker and work with a good real estate attorney.  You'll want someone who knows what they are doing, and gives you good information rather than just pushing to close any deal that comes up. Talk to other local owners and see who they like.  \n\nIf (at least some of) you can't really dedicate time to it, (all of your) ignorance will cost (all of you) MUCH more than a broker.   \n\nYou aren't starting off one at a time with the benefit of learning over many years, you're starting off with a lot on your plate.  After a while working with a broker, you'll be able to do more on your own. \n\nFor example, after you have a few deals under your belt, you can do a few rounds of LOI and contract review before passing things to your attorney.   \nFor local tenants, even having done 2 deals puts you ahead of many of them, so you may feel completely comfortable leaving brokers out of the equation. \nIf you have a location where a broker puts in some of your tenants, and you use your own network to put in smaller tenants, broker may share some good market info with you and be happy to make commissions on your big tenants and let you deal with small tenants on your own. ", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "d48u8th", "text": "You mentioned working at a brokerage isn't in the cards right now due to school, but you should really be doing your summer internships with a local real estate law practice. You'll get exposure to the types of issues you will need to run the business while also growing expertise in a career field. Shit man, you have the dream setup. Get paid for running the properties (eventually), leverage right into a career in the same field. ", "replies": [], "depth": 1}, {"id": "d5cw3nk", "text": "You need to hire someone who only does retail leasing. I like NunNum's 5 year plan. ", "replies": [], "depth": 1}]