Because of the high failure rate of start-up companies and the significant cost entrepreneurs pay for the real estate component of their businesses, a need for commercial real estate analysis for entrepreneurs exists. First, consider the high failure rate. From a time perspective, 80-90% of new business will fail within 5 years (Benson, 1995). From a count perspective, only one in five survive (Mary, 1991).

Second, the cost of commercial real estate tends to be a high priced item. Not all start up entrepreneurs can afford to purchase a building by contributing to a hefty down payment and the associated mortgage payment. Furthermore, not all start up entrepreneurs would qualify for a mortgage.

Accordingly, many start-up entrepreneurs choose the leasing route. To examine the high costs, two examples of industrial, office, and retail property lease costs will be shared. As an example, a 3 year constant (non escalating) lease for a 50,000 sf warehouse in Philadelphia would cost $525,000 (Grubb & Ellis, 2010). One in Chicago would cost $620,000 to lease. Next, a 3 year constant (non escalating) lease for a 5,202 sf office space in Boston would cost $436,968 (NAI Hunneman, 2010).  A 6,000 sf office space in Dallas, TX would cost $252,000 (Thomson Realty Group, 2010). Last, a 3 year constant (non escalating) lease for a 10,000 sf retail space in Stamford would cost $1,110,000 (Dy-Co Mgmt. Corp, 2010).  A 10,000 sf retail space in Charlotte would cost $630,000 (Contessa Development, 2010). These figures do not include the cost of taxes, insurance, or utilities.

When examining reasons for start-up entrepreneurs’ failures, Solovic (2004) notes 10 common reasons. One of the reasons new businesses fail is that owners “do not have the right stuff.” Another reason that Solovic shares is that entrepreneurs understate costs. Commercial real estate analysis is not always a known topic to entrepreneurs and consequently, some entrepreneurs “do not have the right stuff” and may “understate costs” as related to commercial real estate properties.

Raineri helped workshop participants in the above two failure areas by equipping entrepreneurs with  analytical skills to better evaluate leases as well as industrial, office and retail properties.  Raineri’s workshop material has subsequently been shared in other states to further assist entrepreneurs with their analysis of commercial real estate.

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Board members of Lourdesmont School gather to plan a celebrity bartender night at Bistocchi’s Restaurant, Dunmore, scheduled Thursday, 5 to 7 pm. Celebrity bartenders will include Dunmore Mayor Patrick Loughney, Vinny O’bell from Penn Security Bank, attorney Frank Castellano, John Mackey of Flowers by John Mackey, John and Dave Perry of Perry’s General Contracting and Jimmy Haggerty of Joyce, Jackman and Bell Insurance. Proceeds will benefit Lourdesmont.

 From Left: Karen Thomas; Marilee Barone; John A. Antognoli, Ed.D, executive administrator; Mr. Haggery; Alice Vanston; and Sister Monica Nowak, coordinator of administrative services.

Gathering as local busness leaders and out-of-town developers enjoy a day on the links at Glenmaura National Golf Club, Moosic, during the Scranton Plan’s annual summer festival are, from left: John Paul Mantey, Jones Lang LaSalle; Jason Webb, Jones Lang LaSalle; Art Wegfort, Studley; and Mike Detter, Hinerfeld Commercial Real Estate.

Steve is a licensed Associate Broker since 1999 and earned a Bachelor of Science degree majoring in Real Estate from The Pennsylvania State University. Steve is a  Lackawanna County resident  and enjoys time with his wife Janice and three children.

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Mr. Azar joined the Hinerfeld team in early 2010, and will seek to grow the firm’s institutional real estate brokerage business on both a local and regional scale.  He will also focus on private equity fundraising, principal investments and consulting assignments.

Previously, Mr. Azar was an investment banker with JPMorgan in New York City for over 15 years, where he developed an extensive background and understanding of both corporate finance and commercial real estate.  Over the course of his career, Mr. Azar has executed over $35 billion in real estate mergers & acquisition assignments, and has raised over $30 billion in real estate debt and equity capital.

Mr. Azar was most recently a Managing Director within JPMorgan’s Commercial Mortgage-Backed Securities (“CMBS”) group, where he headed a team of professionals who originated commercial loans from the firm’s real estate investment banking clients.  During his three years heading this unit, Mr. Azar and his team successfully originated over $15 billion of fixed and floating-rate commercial loans, which were then either securitized or sold privately by the firm.

Prior to joining the CMBS group, Mr. Azar worked for nearly 12 years within JPMorgan’s Real Estate, Lodging & Gaming Investment Banking group.  During this period, he covered a large number of the firm’s institutional real estate clients, and was responsible for executing the full spectrum of investment banking products including mergers & acquisitions, property sales, mortgage placements, sale-leasebacks, syndicated loans, investment grade bonds, private equity placements, etc.

Prior to joining JPMorgan, Mr. Azar worked in the commercial real estate leasing division of Milstein Properties in New York City.

Mr. Azar is a graduate of Columbia University where he earned a bachelor’s degree in Political Science, and participated in both NCAA track & field and football.  He currently lives in Clarks Summit, PA with his wife Megan and their two young sons, Rodman and Adrian.  Mr. Azar is also a football and track & field coach at Tunkhannock Area High School.

 About Hinerfeld Commercial Real Estate.

Hinerfeld Commercial Real Estate (www.hinerfeldcommercial.com) has been in operation since 1934 and specializes in industrial, retail, office, land, and investment properties. Headquartered in Scranton, PA, the company services owners, tenants, developers, and investors in Northeast PA. Individual memberships include the Industrial Real Estate Brokers Association of Metropolitan New York, the Society of Industrial and Office Realtors (SIOR), Commercial Investment Network (CCIM), Warehousing Education and Research Council (WERC), and Northeast PA Logistics Club.