Two of Knoxville's most successful real estate firms join forces!

You can say you heard it hear first...


Beginning April 2nd, two of Knoxville's most successful real estate firms will merge to create the region's most comprehensive real estate services.  

Center Court at Lonas

The management and leasing divisions of Commercial & Investment Properties will combine with Cushman & Wakefield | Cornerstone to open a new office at Center Court on Lonas.  The transaction has been in the works for several months and things will come together next week when the new office opens its doors. 

With the merger of the two firms Cushman & Wakefield | Cornerstone now manages some of Knoxville's most prominent developments; such as Parkside Centre, Century Park, and Two Centre Square.  Cushman & Wakefield | Cornerstone adds 1.2 million sq. ft. of management to its current management and leasing portfolio of over 6.8 million sq. ft in middle and east Tennessee. 

There is no other firm in the region that can match Cushman & Wakefield | Cornerstone's reach, experience and knowledge on all sides of the real estate world.  The brokerage and property management staff designations include; Certified Commercial Investment Managers (CCIM), Society of Industrial & Office Realtors (SIOR), Certified Property Managers (CPM), Certified Shopping Center Managers (CSM) and members of the International Council of Shopping Centers (ICSC).

Cushman & Wakefield | Cornerstone's new offices

Cushman & Wakefield | Cornerstone offers a client centered approach for customized real estate solutions, not only locally, but globally.  The company offers services that address the consulting and strategic needs of businesses making critical real estate decisions. Cushman & Wakefield | Cornerstone leases and/or manages approximately eight million square feet of commercial property in Tennessee with offices in Nashville, Knoxville and Chattanooga.

Commercial & Investment Properties investment and development operations will continue as well.  The 40 year old company has been a stalwart in the east Tennessee development community since it was opened by Nick Cazana in the early 1970's.

“I am thrilled to expand our Knoxville operations with the high caliber and very professional team that Nick Cazana has built over many years. The combination of this property management platform and our existing brokerage operation enables us to serve all of our client’s needs seamlessly” says Warren D. Smith III, CEO of Cushman & Wakefield | Cornerstone.

For more information about Cushman & Wakefield | Cornerstone please contact us at 865-450-8883 or check out www.cornerstonecres.com

Good news for Knoxville and Interesting Office Developments

Its one of those good news, bad news things...

Good: Knoxville will be home  to the strongest job market in the country this spring, according to a national survey released by Manpower Inc.  Twenty-five percent of the Knoxville employers surveyed said they would add jobs in the April through June period.

Manpower surveyed more than 18,000 employers in the 100 largest metro markets.

Bad:  Tenants are squeezing employees in tighter than ever before. 

According to the Wall Street Journal, the "Corporate Cram" is single-handedly putting a hiccup in the office recovery.

Companies looking for cost savings are increasingly packing more employees into less space, a trend that is helping cause U.S. vacancy rates to linger at high levels even as employers add jobs in the slowly expanding economy.

Panasonic Corp., for example, is planning to move into a new 280,000-square-foot U.S. headquarters in Newark, N.J., next year. But it is taking significantly less than the approximately 575,000 square feet of office and labs at its current campus in Secaucus, N.J.  The electronics company says it isn't reducing its head count, but is simply reconfiguring its offices.

Employers gradually have been taking up less space for decades, but real-estate professionals say the drive to use less space has picked up since the economic downturn, as companies look to trim costs where they can across their budgets. 

Workstations are shrinking and private offices are disappearing, replaced by cubicles with low walls, and more employees are working remotely.  Companies today are taking space with an average of about 200 square feet per employee, down about 20% from a decade ago.  

Office landlords have been encouraged lately by news of job growth. They also are hoping that the dearth of new construction will give the market a boost.To be sure, not all companies are overhauling their space. Many tenants simply renew their leases when they come due, which makes it harder to rethink their approach to workspace than if they were moving to a different building.

But some industries are both contracting and using less space per employee. For example, many companies in the financial-services sector—a traditional driver of the office-space market—have been laying off workers and looking for more-efficient workspace.

Just when you think things are getting better...

Lease vs Buy-- What to do, what to do?

Lease or buy? This is the question. Small businesses have difficulty raising capital - that's no secret. This difficulty (among other reasons) has caused many to look at leasing as an alternative financing arrangement for acquiring the use of assets. 


All types of leasing have become more and more attractive.

This lease vs buy analysis describes various aspects of the lease/buy decision. It lists advantages and disadvantages of leasing and provides a format for comparing costs of the options.

Office, retail and industrial building leases are very common. A building lease is usually written for a specific term and will provides that:

• Periodic payments be made,
• Ownership or possession the building or space reverts to the landlord at the end of the lease term,
• The tenant  has a legal obligation to continue payments to the end of the term, and
• The tenant agrees to maintain space (however there are different types of leases that have the landlord maintain the space, this is typical in office leases).

You may also hear leases described as net leases or gross leases. Under a net lease the tenant responsible for expenses such as those for maintenance, taxes, and insurance for the building. The landlord pays these expenses under a gross lease. Net leases are typically found in retail and industrial buildings.  Gross leases are found in office buildings.  Many of these topics have been covered in previous blogs.  Check them for specific details. 

Advantages of Leasing:

The obvious advantage to leasing is acquiring the use of an asset without making a large initial cash outlay. Compared to a loan arrangement to purchase the same office space, a lease usually

• requires little to no down payment, while a loan often requires 25-40 percent down;
• Spreads payments over a longer period (which means they'll be lower) than loans permit; and
• Provides protections against the risk of obsolescence, since the tenant can leave the building at the end of the lease.

There may also tax benefits in leasing. Lease payments are deductible as operating expenses if the arrangement is a true lease. Ownership, however, usually has greater tax advantages through depreciation. Naturally, you need to have enough income and resulting tax liability to take advantage of those two benefits.

Finally, there is one further advantage of leasing that you probably hope won't ever be of use to you. In the event of bankruptcy, claims of the landlord to the assets of a firm are more restricted than those of general creditors.

Disadvantages of Leasing:

In the first place, leasing usually costs more because you lose certain tax advantages that go with ownership of an asset. Leasing may not, however, cost more if you couldn't take advantage of those benefits because you don't have enough tax liability for them to come into play.

Obviously, you also lose the economic value of the asset at the end of the lease term, since you don't own the asset.

Further, you must never forget that a lease is a long-term legal obligation. Usually you can't cancel a lease agreement. So, if you were to close a business that leases space, you might find you'd still have to pay as much as if you had used the office space for the full term of the lease.

Look Before You Lease:

A lease agreement is a legal document. It carries a long term obligation. You must be thoroughly informed of just what you're committing yourself to. Find out the landlord's financial condition and reputation. Be reasonably sure that the lease arrangements are the best you can get, that the offices space is what you need, and that the term is what you want. Remember, once the agreement is struck, its is legally binding.

The lease document will spell out the precise provisions of the agreement. Agreements may differ, but the major items will include:

• Payment amount,
• Term of agreement,
• Who is responsible for maintenance and taxes,
• Renewal options,
• Cancellation penalties, and
• Special provisions.

There are other details to consider if you want to buy; interest rates are at an all-time low.  Lenders are interested in owner/occupied properties and can get aggressive with their rates.  However, the underwriting requirements are stringent and the down payments can be large, unless you are doctor.  Lenders love doctors.

If you are looking for more information about leasing vs buying please contact Cushman & Wakefield Cornerstone at 865-617-2989 or myself at jcazana@cornerstonecres.com

Justin Cazana, CCIM