Buyer Representation
Whether you're an investor seeking commercial real estate or a business owner looking for a commercial property for sale for your business, Madison & Hoyt provides representation with integrity, competence, and diligence. Our in-depth market knowledge allows us to present you with relevant commercial real estate listings tailored to your specific goals.
Investor Representation
Madison & Hoyt has a long history of successfully representing buyers in NNN investments and 1031 exchanges. We possess the resources and established relationships for effective regional and national marketing and investment searches. For more detailed information, please visit our dedicated "NNN Investments" page.
Business Owner (Owner-Occupant) Representation
As Buyer Representatives for owner-occupant properties in Metro Jacksonville, we invest the time to thoroughly understand your current needs and future growth plans. Leveraging our strong knowledge of the commercial real estate market, we identify various opportunities that align with your requirements. We guide owner-occupant buyers through every stage of site selection and purchase negotiation, all the way to your grand opening. Our site selection services utilize advanced technology, including demographic studies, drive-time analysis, and custom mapping, to ensure informed decisions.
Important Note for Owner-Occupant Buyers: Begin the commercial real estate buying process several months before your anticipated move date!
Our Professional Buyer Representation Process
To ensure your best interests are met and expectations exceeded throughout the site selection and purchase process, Madison & Hoyt takes the following comprehensive steps:
- Comprehensive Needs Analysis: We define your current and future space requirements, financial resources, and buying preferences (site characteristics, location, demographics, interstate proximity, etc.).
- Market Survey Report: We prepare a detailed report of all available commercial real estate listings that match your specific criteria.
- Property Tours: We conduct guided site tours of the most suitable properties.
- Economic Analysis: We provide thorough economic analysis of the various properties you tour.
- Space Planning Consultation: We engage space planners to ensure a property can effectively meet your operational needs.
- Letter of Intent (LOI) Negotiation: We prepare and skillfully negotiate the terms outlined in the letters of intent.
- Due Diligence Coordination: We manage the collection and analysis of all necessary due diligence documents, evaluate property inspection reports, and review cost estimates for required work.
- Purchase Agreement Negotiation: We prepare and expertly negotiate the final Purchase Agreement.
- Contingency Management: We ensure all contingencies (financing, appraisal, permits, etc.) are met and that the seller adheres to the terms of the Purchase Agreement.
- Legal Consultation: We consult with your attorney to confirm the satisfactory status of the title, appraisal, and survey.
- Final Walk-Through and Closing: We conduct a final property walk-through and ensure a smooth closing process.
Seller Representation
Before you decide to sell your commercial real estate, whether it's an investment property or the property housing your business, Madison & Hoyt is committed to representing your interests with unwavering integrity, competence, and diligence.
Investor Property Sales
Madison & Hoyt has a proven track record of successfully representing sellers of NNN investment properties and facilitating 1031 exchanges for many years. We possess the necessary resources and established relationships for effective regional and national marketing of your valuable asset. For more comprehensive information, please refer to our dedicated "NNN Investments" section.
Owner-Occupant Property Sales
Are you considering selling your current business property, or perhaps exploring a strategic sale-leaseback arrangement? We employ proactive marketing strategies to ensure maximum exposure for your commercial real estate listings, reaching both the brokerage community and the public through comprehensive online marketing programs.
Leasing
Landlord Representation
As your Landlord Representative in Jacksonville, we manage your property as if it were our own. Our focus is on maximizing your net operating income and minimizing risks, while also paying close attention to attracting qualified tenants who contribute to the ideal tenant mix. We conduct thorough screening of prospective tenants to ensure their financial stability and suitability for your property.
Tenant Representation
As your Jacksonville Tenant Representative, we thoroughly understand your needs and growth plans. Leveraging our local market expertise and advanced technology (demographics, drive-time, mapping), we identify suitable opportunities and guide you through site selection and lease negotiation to your opening.
Important Note for Tenants: Begin your relocation process 4 to 8 months before your anticipated move date!
Our Professional Tenant Representation Process
Madison & Hoyt is dedicated to ensuring a smooth and successful leasing experience for tenants. Our comprehensive process includes:
- Comprehensive Needs Analysis: We define your current and future space requirements.
- Market Survey Report: We prepare a detailed report of all available properties that match your criteria.
- Property Tours: We conduct guided site tours of the most suitable properties.
- Economic Analysis: We provide thorough economic analysis of the various properties you tour.
- Space Planning Consultation: We engage space planners to ensure a property can effectively meet your operational needs.
- Lease Negotiation: We prepare and skillfully negotiate the terms in the letters of intent and the final lease agreement.
- Tenant Improvement Process: We monitor architects and building contractors to ensure they are on schedule and meeting your expectations. We also confirm that the Certificate of Use and Certificate of Occupancy are applied for and approved, and ensure the Landlord is fulfilling their obligations under the Lease Agreement.
- Move-in Process: We confirm your satisfaction with your new space and address any concerns that may arise.
Key Advantage for Tenants: Remember, as your Tenant Representative, we work solely in your best interest, not the Landlord's. Furthermore, tenants typically do not pay their Tenant Representative; the Landlord covers all real estate commissions.
NNN Investments
Understanding 1031 Exchange
Internal Revenue Code Section 1031 offers a powerful tax deferral strategy for selling appreciated commercial real estate, preserving and growing wealth. It allows deferral of long-term capital gains tax (20%), Obama Care capital gains tax (3.8%), depreciation recapture (25%), and state taxes (6-9%) on the sale of investment or business-use real estate. By deferring these taxes, investors gain significant buying power and leverage for new property acquisitions.
Benefits of Utilizing a 1031 Exchange
Investment objectives and personal situations evolve. A 1031 exchange allows investors to strategically transfer real estate holdings to different asset classes or regions, reduce management responsibilities, or improve tenant mix without immediate tax implications.
Example: Mr. Critelli, an Orlando apartment owner, wants to relocate to Cleveland to be near his family and simplify his real estate management. Through a 1031 exchange facilitated by Madison & Hoyt, he sold his Orlando apartments and reinvested the full equity into a NNN industrial property in Cleveland with a national tenant, deferring all capital gains taxes.
1031 Exchange Advantage: An Illustration
Investor Peter sells a shopping center (original cost: $500,000; current value: $1,000,000) and wants to defer capital gains taxes via a 1031 exchange, as advised by his Madison & Hoyt broker. He identifies a $2,000,000 replacement property. Over 10 years, $200,000 in depreciation and $25,000 in capital improvements were taken. Selling costs are estimated at $150,000.
Step One-Determine the Cost Basis
| Description | Typical Sale | 1031 Sale |
|---|---|---|
| Original Purchase Price | $500,000 | $500,000 |
| + Capital Improvements | $25,000 | $25,000 |
| - Depreciation Taken | $200,000 | $200,000 |
| Adjusted Cost Basis | $325,000 | $325,000 |
Step Two-Determine Gain on Sale
| Description | Typical Sale | 1031 Sale |
|---|---|---|
| Selling Price | $1,000,000 | $1,000,000 |
| - Costs of Sale | $150,000 | $150,000 |
| - Adjusted Basis | $325,000 | $325,000 |
| Gain on Sale | $525,000 | $525,000 |
Step Three-Determine Taxes
| Description | Typical Sale | 1031 Sale |
|---|---|---|
| Depreciation Recapture (25% x $200,000) | $50,000 | N/A |
| Capital Gain (20% x $325,000) | $65,000 | N/A |
| Obama Care Capital Gain Tax (3.8% x $325,000) | $12,350 | N/A |
| Total Federal Taxes | $127,350 | N/A |
Step Four-Determine Sales Proceeds
| Description | Typical Sale | 1031 Sale |
|---|---|---|
| Sales Price | $1,000,000 | $1,000,000 |
| - Costs of Sale | $150,000 | $150,000 |
| - Mortgage Balance | $350,000 | $350,000 |
| Sales Proceeds (Before Tax) | $500,000 | $500,000 |
| - Taxes on Sale | $127,350 | N/A |
| Sales Proceeds (After Tax) | $372,650 | $500,000 |
| Proposed Acquisition | $1,490,600 | $2,000,000 |
Based on a 25% Equity Investment (75%LTV)
1031 Exchange Impact: Cash vs. Leverage
A typical sale yields $372,650 cash after $127,350 in taxes. However, a 1031 exchange allows these deferred taxes ($127,350) to increase the replacement property investment by $509,400.
Key Disadvantage: The replacement property's basis is reduced by the deferred gain from the sold property.
Steps of a 1031 Exchange
Step One: Pre-Sale Consultation
Contact Madison & Hoyt for expert advice on whether a 1031 Tax Exchange aligns with your financial goals. We'll gladly coordinate a consultation with your financial or legal advisors. Upon determining the benefits of a 1031 exchange, Madison & Hoyt will list your property for sale and simultaneously begin searching for suitable replacement properties based on your criteria. We will also provide a list of reputable Qualified Intermediaries to ensure full compliance with all 1031 exchange regulations.
Step Two: Sale of Relinquished Property
Thanks to Madison & Hoyt's effective marketing, a buyer is secured. The sale proceeds will be directly wired to your chosen Qualified Intermediary and held securely in an escrow account. The day following the closing of your relinquished property marks the beginning of the 45-day identification period (Day One).
Step Three: Identification of Replacement Property
Within the critical 45-day timeframe, Madison & Hoyt will expedite the necessary research and due diligence to identify suitable replacement properties. The most commonly utilized identification rule is:
- The Three Property Rule: You may identify up to three properties, regardless of their individual values.
Step Four: Purchase of Replacement Property
Once a replacement property (or properties) has been identified, you must complete the purchase within 180 days following the sale of your relinquished property.
Basic Rules of a 1031 Exchange
01
Investment Intent
Both the sold property (Relinquished Property) and the purchased property (Replacement Property) must be held for investment or business use. Personal residences, vacation homes, and dealer properties are not eligible.
02
Time Frames
- Identification: Replacement Property must be identified within 45 calendar days of selling the Relinquished Property.
- Purchase: Replacement Property must be purchased within 180 calendar days of selling the Relinquished Property, or by the due date of your tax return for the year of the sale.
- Important: These deadlines are strict and cannot be extended. You don't need a contract to identify properties.
03
Like-Kind Property
The Replacement Property must be "like-kind" to the Relinquished Property. Most real property held for investment or business use qualifies as like-kind to other such real property (e.g., office building for a shopping center or vacant land). Personal-use and dealer properties do not qualify.
04
Common Ownership
The seller of the Relinquished Property must be the same entity purchasing the Replacement Property. A Qualified Intermediary (QI) acts as your agent to legally sell the relinquished property and buy the replacement property on your behalf. Sale proceeds go directly to the QI; you cannot directly receive the funds.
- Partnerships: Changing partnership interests by over 50% between properties can disqualify the exchange. A common strategy involves dissolving the partnership into a "tenants-in-common" (TIC) ownership, where each owner's interest is treated as separate property for exchange purposes.
05
Property Value
The Replacement Property's value must be equal to or greater than the Relinquished Property's value. Otherwise, the difference may be subject to tax.
06
Exchange Funds
All cash proceeds from the sale of the Relinquished Property must be used to purchase the Replacement Property. Receiving cash, notes, or personal property ("boot") is taxable. Seller financing on the Relinquished Property may also trigger tax as principal is repaid.
Avoiding "Boot" and Types of Exchanges
Avoiding "Boot"
To completely avoid "boot" (taxable proceeds), the replacement property's sales price, equity, and mortgage amount must be equal to or greater than those of the relinquished property.
Types of Exchanges
01
Forward Delayed Exchanges
This common exchange type involves selling the relinquished property and purchasing the replacement property within 180 days. For IRS safe harbor, a Qualified Intermediary (QI) must hold the sale proceeds during this period.
Common Misconceptions About 1031 Exchanges
Simultaneous Exchange Not Required
A direct, simultaneous property swap is not necessary. Forward Delayed Exchanges allow a 180-day window for replacement property purchase after the relinquished property sale. Reverse Exchanges involve purchasing the replacement property before selling the relinquished one.
"Like-Kind" is Broad
"Like-kind" under Section 1031 refers to the nature of the property (real estate for real estate), not its specific type. A shopping center can be exchanged for raw land, or an office building for an investment residence.
Not a Tax Loophole
Section 1031 has been a part of the tax code since the 1920s. It's a legitimate tax deferral strategy that encourages investment.
Qualified Intermediary is Essential
You cannot directly hold sale proceeds and perform a valid 1031 exchange. A Qualified Intermediary (QI), who must be independent and not your agent in the past two years, provides safe harbor protection. Exchanges without a QI are at high risk of IRS invalidation.
Strict Deadlines
The 45-day identification and 180-day purchase deadlines have no extensions except for federally declared disasters.
Tax Deferral, Not Elimination
A 1031 exchange defers capital gains taxes; it doesn't eliminate them. The cost basis carries over to the replacement property. Strategic, ongoing 1031 planning can potentially lead to tax savings over time.
Disclaimer: This information is for informational purposes only and does not constitute legal or tax advice. Consult with your attorney or CPA for advice specific to your situation.
Commercial Property Management
At Madison & Hoyt, we offer unparalleled commercial property management services. With over 20 years of industry experience, we provide strategic solutions to manage your commercial real estate investments. Whether you need tenant representation, buyer representation, or comprehensive property management, our team has the expertise and local knowledge to help you succeed. Our commitment to excellence ensures that your properties are managed efficiently and effectively.
Property Management
Our Core Objective
As your commercial property management partner, our primary goal is to maximize the net operating income and enhance the value of each property we manage, always upholding our fiduciary responsibility to you, the owner.
Comprehensive Property Management Services
We expertly manage the day-to-day operations of both single and multi-tenant commercial properties, including office, retail, and industrial spaces, treating your investment with the same care as our own. Our full-line of services includes:
Tenant Focus: Relations and Leasing
In today's market, strong tenant relations and retention are paramount. We prioritize fostering positive tenant relationships and have a robust platform to attract high-quality national, regional, and local tenants to minimize vacancies.
Financial Management
- Annual budget preparation and monthly variance monitoring.
- Multi-year cash flow projections incorporating rent roll and future expenses.
- Monthly Balance Sheet and Net Operating Income Statement preparation.
- General ledger maintenance and monthly reconciliations.
- Efficient rent/receivables collection and timely invoice payments.
- Preparation and submission of sales tax returns.
- Comprehensive CAM reconciliation, allocation, and billing.
Administrative Services
- Diligent administration of tenant leases and accurate rent roll maintenance.
- Coordination, supervision, and thorough inspection of repairs and maintenance.
- Maintenance of permanent records and detailed reports.
- Assistance with ad valorem tax disputes, cost segregation programs, and other necessary requirements.
Vendor Management
- Negotiation of competitive pricing for all service contracts.
- Thorough reference checks and verification of adequate liability insurance.
- Routine property inspections to ensure quality vendor workmanship and risk assessment.
Sales and Leasing Support
- Strategic marketing of your property for sale or lease.
- Leveraging our extensive database and national broker network to find suitable tenants or buyers.
Our Commitment to Exceeding Expectations
Since 2004, Madison & Hoyt has been a trusted property management partner, consistently exceeding client expectations. Contact us today to discuss your specific property management needs and discover how we can maximize your investment returns.
Consultation
Property Valuation Services
No Cost Consultations
If you own commercial property and are weighing your options, Madison & Hoyt offers a no-cost property valuation to aid your decision-making process.
Determining Whether to Lease or Buy
If you are unsure about the best choice between leasing or buying commercial space, we will present all relevant commercial real estate listings and expert guidance to steer you in the right direction.
Exploring Options for Vacant Land or Similar Properties
Discover the potential of your vacant land and learn about other comparable commercial properties currently for sale.
Resolving Your Commercial Real Estate Concerns
Buyers, sellers, landlords, and tenants frequently encounter confusing questions in the commercial real estate market. Madison & Hoyt will assess your situation and provide clear options to address your concerns and guide you toward the optimal solution.
Maximize Investment Gains
Discover how our tailored commercial property management solutions can help you achieve your real estate investment goals in Jacksonville. Partner with us to benefit from our extensive experience and local market insights.