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Seller financing, also known as an owner carry note, presents advantages for both buyers and sellers. Here are some key benefits:
For Buyers:
Access to Financing: Buyers who might not meet the criteria for traditional bank loans can still secure funding through owner carry notes.
Flexible Terms: Seller financing offers flexibility with terms like lower down payments, longer repayment periods, and potentially relaxed credit requirements.
Efficient Transactions: Compared to conventional mortgages, owner carry notes involve less paperwork and typically result in faster transactions.
Negotiation Opportunities: Buyers have room to negotiate terms directly with the seller, possibly securing more favorable conditions.
For Sellers:
Expanded Buyer Pool: Offering seller financing widens the pool of potential buyers, including those ineligible for traditional financing.
Steady Income: Sellers earn a consistent income stream through interest on financing, providing an additional passive revenue source.
Tax Benefits: Sellers may enjoy tax advantages, such as spreading out capital gains and deferring tax obligations over time.
Accelerated Property Sale: Seller financing speeds up property sales by making it more accessible to buyers, often leading to quicker transactions.
While owner-carry notes offer significant benefits, both buyers and sellers should carefully assess the terms and risks involved, including legal considerations and potential default scenarios.
Commercial Market Report – February
We are in the dead of winter, and many properties are using ice melt products. Here are some thoughts that will hopefully help select the best ice melt product for your property.
Ice melt products do two things, provide traction, and melt ice. Any product will provide traction just by being spread on the surface. Coarse products tend to provide the most traction.
Sand can be an inexpensive and safe alternative to chemicals and should be considered for new concrete
installations.
The temperature ratings on ice melt products indicate the temperature at which they will continue to interact
with any moisture and will help with melting. Once the temperature is below the rating, the ice melt will only provide traction and reduced melting.
Products that contain calcium chloride generally have the lowest temperature rating. Calcium Chloride when in contact with moisture is exothermic, meaning it creates heat when in contact with moisture. Calcium chloride as an additive to ice melt can help other chemicals be more effective by causing melting and allowing the other chemicals to interact with the moisture. Calcium Chloride based products can be very effective in reducing ice in problem areas. Calcium chloride tends to be the most expensive chemical in ice melt and does provide melting power. There are ice melt products that contain a colored dye (typically green, blue, or orange) to help with application and safety.
Pet and landscape friendly are important considerations for ice melt products. Many of the ice melt products contain chemicals that are “safe” when applied per the instructions. Problems
with pets and landscape tend to escalate when products are overapplied, or when snow removal concentrates applied product into banks or piles. Remove excess ice melt from surfaces to avoid overexposure and tracking. It may sound odd, but many ice melt chemicals
are present as food additives in small quantities.
Does Ice melt damage concrete or railings? The quick answer is maybe. The technical term for concrete damage that people attribute to ice melt is spalling. One major cause of spalling is poorly laid concrete. Ice melt can escalate freezing/thawing cycles, which can accelerate spalling. Ice melt can also cause metals to oxidize. Ice melts are reactive and will react with ferrous metals. Many handrails, stair supports, and pool fences are ferrous metal. The best way to reduce any problems is to be sure the rails are well painted and to not allow ice melt to come in contact with the metal. Easier said than done—right?
Generally, the best advice with ice melt is to apply the product following the application guidelines on the container. Don’t over apply the product (more may be a short-term remedy but can lead to other problems), watch where piles and banks of snow are placed so they don’t allow accumulation of ice melt products on landscaping or near metal (watch where the runoff accumulates), and clean up excess product after each storm.
Ice Melt is a necessity for property maintenance and safety in markets that experience freezing weather and good management of the product can help reduce any risk with using the products.
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Iván Anaya’s long and winding road to becoming a Denver developer did not begin in the Mile High City but in the mountainous canyons of Mexico.
And while many moments in his life motivated him to build rooftops for Denver residents, certainly the years when he didn’t have his own played a crucial role.
Now the Mountain West president at Atlanta-based Columbia Ventures, Anaya is launching a project on the Auraria campus that he thinks will set the bar high for future redevelopment there.
“What got me interested in affordable housing was, one, my mom’s dream of owning a home and, two, the fact that I saw a great opportunity to do something good and also something I might really enjoy, which is to develop: develop housing and specifically mixed-income housing,” Anaya told the Denver Business Journal.
As a young child, Anaya lived in Copper Canyon in the Mexican state of Chihuahua with no electricity or water. His father worked with a crew building a railroad through the mountains, and Anaya and his family were part of a boxcar community of about 150 people who lived alongside the workers during Mexico’s warmer months. The conditions were harsh; before Anaya was born, his brother became sick and died.
When he was 6, Anaya’s family moved from Mexico to Denver, where his father had been working part-time. The family of five was homeless for a time, lived in a basement, then later moved into a one-bedroom apartment before bouncing around to other low-income housing throughout Anaya’s adolescence.
Before attending North High School, Anaya went to 11 different schools around Denver. His parents never made it past a middle school education, but they always encouraged him to excel in school. Anaya graduated from the University of Northern Colorado with a degree in finance in December 2007, propelled by a desire to assist his mom with her housekeeping company and to help her buy a home.
Through an internship program aimed at putting minority college students in the boardroom, Anaya landed work at Compass Bank in its real estate lending group. There, he witnessed many Denver developers skirting a city inclusionary housing ordinance by paying fees in lieu of actually building affordable units.
This experience made Anaya realize he’d rather be developing housing for people like his mom, who needed it, rather than underwriting or financing real estate.
But with the real estate downturn on the horizon in 2008, Anaya chose to hold off on his real estate dreams, and instead worked for a bank holding company as a portfolio risk analyst.
“I learned a lot … about what makes development projects successful and what doesn’t, which I’m really grateful for. I got to see the bad stuff before I saw the good stuff,” Anaya said.
Anaya then worked for a telecommunications company, but he set himself a deadline that by the time he was 30, he’d get into real estate development. He wanted it so badly that he took a pay cut when he went to work for Zocalo Community Development.
SETH MCCONNELL | DENVER BUSINESS JOURNAL
After three years at Zocalo, started his own real estate consulting and development firm called Astucia Development, where he focused not only on building rooftops for residents but also on the services people need to thrive. His clients at Astucia included the Emily Griffith Technical College, the Littleton Housing Authority, the Denver Public Library and Denver Public Schools.
He started his current role as Mountain West president at Columbia Ventures in 2022. There, he’s been a part of multiple projects. He’s proposed senior housing at Viña in Denver’s Elyria-Swansea neighborhood. He’s working with a church to bring housing and supportive services to Aurora.
“What I love most about Columbia Ventures is they do transformative community development, and the level of integrity that they do that with is high and above other developers that I’ve worked with, and so that aligned very well with me and my value set,” Anaya said.
While many of Anaya’s past projects he’s been involved in — including Cadence near Union Station and working with the Littleton Housing Authority to keep 71 homes affordable — have made him proud, he said his latest mixed-use project will transform an entire neighborhood.
Called Ballfield at Auraria, the project has the potential to reenergize Auraria, a downtown neighborhood just west of the Central Business District and Union Station that houses Metropolitan State University of Denver, University of Colorado Denver and Community College of Denver.
Ballfield at Auraria will bring a new 120,000-square-foot mass timber office building that will host MSU Denver’s Classroom to Career Hub and offices belonging to the Auraria Higher Education Center, the state entity that manages the Auraria Campus’ facilities. The Auraria Early Learning Center will move into a larger space, and retail is part of the plan, too.
Anaya wants to oversee a more equitable project than the one that took place in Auraria in the 1970s. Before then, it was a neighborhood of working-class residents, but urban renewal efforts displaced them to make way for the construction of the current campus.
In contrast, Ballfield at Auraria’s plans include a 13-story, 350,000-square-foot workforce housing building for tenants between 60% and 120% of the area median income, designated not for students, but for faculty, staff, alumni and others.
“We’re really looking at this return to a complete neighborhood, so to speak, and hopefully it’s done in a way that is more equitable than the previous version. At a high level, that’s what’s exciting to me: we have an opportunity to bring this 150 acres back into the city as a complete neighborhood,” Anaya said.
Anaya currently manages three people on his team. He wakes up at 4 a.m. and typically works close to 12-hour days. His passion for his work means he’s a tough boss, something he readily admits.
“I’m just honest with myself: I’m not easy to work for. But it’s because I have high expectations of the work we do, the quality and delivery of what we do, and the impact that we expect all of our work to have,” he said. “When we’re done with the Auraria project, from an impact perspective, that’s probably going to be the one that makes me most proud.”
Name: Iván Anaya
Position: Mountain West president at Columbia Ventures
Age: 40
Son of the year: Anaya ultimately helped his mom get a house, which she has owned since 2008.
Business that’s not in Denver but should be: Eataly
Favorite spot in Denver: The mezzanine level at Whole Foods near Union Station. “You can go sit up there and watch the city and listen to whatever’s happening at Union Station. I actually like that spot a lot. I think it’s a pretty cool place.”
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The number of residential units being converted from office buildings across the country has hit a record, as cities and developers look for new ways to reimagine an abundance of office space sitting vacant in U.S. downtowns.
Between 2021 and 2024, the number of apartments scheduled for conversion from office space has grown from 12,100 to 55,339, according to RentCafe, part of Yardi Systems Inc. That means office conversions represent 38% of the estimated 147,000 apartments in adaptive-reuse projects.
But among the 55,000-plus units included in the findings, only 23%, or 12,842, of the residential units being added in former offices are expected to be under construction this year. The rest remain in either the “planned” stage — where permitting and development work has been submitted — or the “prospective” stage, where no formal documentation or design has begun yet.
Office conversions to other property types, especially residential, are being looked at in cities across the U.S. as a way to help bring people and revenue back to city centers. But office conversions are notorious for being difficult and expensive to pull off.
Some obsolete office buildings aren’t good candidates for residential conversion simply because of their floorplate size. For others, it’s because of where plumbing and electrical services are or can be located within the structure, or placement of windows.
Also, since the onset of the pandemic and the subsequent rise in interest rates, there’ve been few sales of the types of office towers that could be potential candidates for conversion.
But office building trades are starting to occur again now — some at deep discounts from their most-recent sales — potentially paving the way for more conversion activity.
Doug Ressler, manager of business intelligence at Yardi Matrix, said sellers are starting to recognize reality when it comes to whether to hold or sell certain buildings, including ones that might make sense for a conversion.
“Whether you convert (a building) or not, it’s really built on a set of assumptions,” he said. “If the assumptions change, you have to rethink your strategy. Right now, it should be environmentally better to recycle than demolish.”
Office-to-residential conversions, whether actively underway or in an earlier stage of development, are happening in the usual lineup of cities that have an abundance of older office towers. But cities with a younger office supply, including some places in the Sun Belt, also are starting to see an uptick in conversion activity.
Washington, D.C., has the most office-to-residential units underway, with 5,820 in the pipeline for 2024, according to RentCafe. That’s followed by New York, with 5,215; Dallas, with 3,163; Chicago, with 2,822; and Los Angeles, with 2,442.
Whether the 42,497 units nationally in the planned or prospective stages turn into projects under construction likely will hinge on broader economic forces, including what happens with interest rates and the cost of capital, as well as what local and state governments may offer in the way of incentives to make those projects feasible.
“Interest rates going down is certainly going to free up a lot of investment, but you’ve also got zoning and permitting and the cost associated with moving that forward,” Ressler said. “The longer-term issue seems to be, three to five years out, do I have the (net operating income) to support what I want to do?”
The national apartment market is expected to have a record number of unit deliveries this year after a significant amount of rental-housing supply finished construction in 2023. That volume is softening apartment markets where supply currently is outpacing demand. Some of those metro areas are starting to see rental rates flatten or decline.
As a result, apartment construction starts are slowing considerably, Ressler said. That also prompts questions about whether rental housing will hit a cliff once the current pipeline finishes delivering in 2024 and 2025.
“It takes 18 to 30 months to get a high-rise or midrise or garden-style type of apartment (built), functioning and leased up,” Ressler said.
Municipalities are motivated to figure out a solution for the obsolete office buildings sitting vacant in their downtowns, particularly because of the hit those reduced building valuations — and taxes — will have on local government revenue. That’s prompting cities, states and even the federal government to introduce both financial subsidies to reduce the overall cost of conversions as well as reforms to land-use and other policies to reduce regulatory barriers.
