You thought there were McDonalds everywhere you went. Well they are in the US.  This night light map of McDonalds in the US demonstrate how intense their coverage is. It is even more so on the East Coast. Talk about a serious real estate portfolio!

Source: Business Insider

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In a joint congressional committee hearing today U.S. Treasury Secretary Timothy Geithner said that he expects commercial real estate to be a national problem for a long time with no quick fix.  He also said that the economy can withstand the continuing commercial real estate challenges.

On Oct. 29 (Bloomberg) he said commercial real estate woes won’t set off a new banking crisis, in remarks to the Economic Club of Chicago.

“I don’t think so,” Geithner said, when asked whether commercial real estate could set off another banking meltdown. “That’s a problem the economy can manage through even though it’s going to be still exceptionally difficult.”

My thoughts are that until job creation gets started, commercial real estate will stay in the doldrums even if the stock market is booming.

Related to job creation, Mr Geithner stated in today's hearing that he would like to see TARP money provided to smaller banks specifically for loans to small business to encourage job growth.  The problem he sees slowing this down is the negative perception the public has with banks accepting TARP money.

To me that would be a simple fix... use the funds, but call it something else.

If you are looking for information on real estate, Alltop has a listing of the all the top real estate blogs.  It is a great resource.  We are happy to be included, too.

Despite the recession Regus profits rose 25% according to a recent article at telegraph.co.uk in 2008.  Regus, headquartered in the UK, is the largest provider of executive suite space in the world with over 950 location with a total of over 171,000 work stations in 75 countries.

Mark Dixon, the chief executive, said the company's BusinessWorld division, which provides temporary workspace worldwide for business people who work without a permanent office, made more money last month than in the whole of 2008. He said BusinessWorld now has more than 180,000 members across the world.

Mr Dixon said the recession has caused a "fundamental change" in how businesses operate, with even FTSE 100 and Fortune 500 companies using its offices in an attempt to slash operating costs. The company said it has also witnessed a huge increase in demand for a new range of "recession busting" products, including video conference facilities.

He said the recession has been the "catalyst" in irreversibly changing businesses approach to flexible working. However, he added that the company is not "immune" to the global economic downturn and said "2009 will be a difficult year"

I ran into a brief discussion on Twitter as to how to sign a lease (they have to be brief with a 140 character limit). Should you use your company name or personal name on the office lease?  I found these responses at Business Seek, a small business weblog:

"NO you use your tax ID number EIN. You fill paperwork out in name of corp. and you sign as president. Only need to include personal info if you make personal guarantee."

"Any time you do business you HAVE to treat yourself as an employee, you NEVER personally guarantee anything. this way the company goes under you as the President unless gross negligence on your part like you left with the cash are not liable for the expenses of the company. "

Both good advice, but both pretty naive especially when it comes to small businesses. It is unusual when a landlord does not require a personal guarantee no matter what your business structure unless the term is a month to month and there is enough of a deposit to cover any midnight moves. If you were to never personally guarantee a lease or rental for a small business, there would a very limited choice of alternatives.

Trick of the Trade

What we try to do is place a ceiling on that personal guarantee.  An example of this would be to guarantee up to 3 months worth of rental. This would be enough to cover any landlord expenses related to their cost of your acquisition, such as brokerage fees. If there are any significant tenant improvements involved, some sort of amortized guarantee could be created where the amount of the guarantee is reduced over the term of the lease. You'd probably still need to add some period of rent on top of this, but you could also negotiate to amortize reduction in this over the term of the lease. A lease guarantee is a liability that you should show on your personal financial statements. So try to minimize them as much as possible.