Investing in Commercial Real Estate
Commercial real estate is a type of property that generates cash flow for
a business and is generally very expensive. The other common way to
achieve exposure to commercial real estate is through REITs. Clearly, the
business of commercial real estate is an ever-expanding investment market
that is here to stay.
Commercial real estate loans are normally long term loans that are very
large in size. Commercial real estate investments can be broken down into
basic asset classes, each with unique set characteristics that address a
wide range of investor needs. Commercial properties are generally
classified by type of use, such as Residential Rental, Office,
Industrial, Hospitality, Land, and Retail. Commercial real estate is all
about supply and demand.
Office: From downtown high rises to suburban office malls, this specialty
is a large one in the business of commercial real estate. By doing their
own due diligence, small investors can invest directly in a variety of
commercial real estate properties, such as free-standing retail
locations, apartments, small office buildings, mobile home parks, etc.
The buyers are needing to see a faster return on their investment so in
turn are having sticker shock when it is time to renew or sign a lease.
If the new owners are raising their rents to recapture their investment,
other property owners are just as happy to raise their rents in tandem.
Direct investment in properties as a self-guided investor either
individually or through small partnerships, LLCs or tenants-in-common
The best way to price your property is to gather information on what
other commercial properties are doing. The basic appeal of Residential
Rental or Multi Family properties is that we all need to live someplace,
regardless of what the economy is doing. Examples of commercial real
estate investments requiring little or no management are triple net lease
single tenant properties (Walgreen Drug Stores for example) or Tenants in
Clearly, the business of commercial real estate is an ever-expanding
investment market that is here to stay. The process of financing,
developing, constructing or managing commercial real estate is a fluid
and ever-changing process that is increasing in complexity, requiring
specialized knowledge and skills not generally found within most
organizations. This sounds easy only in theory, but renting commercial
real estate is not always simple. Overall, renting commercial real estate
is a great way to make money.
Scott English. Full time Licensed Realtor in South Florida. Specializes
in waterfront properties, relocation, new construction, condominiums. Any
and all real estate needs. Visit http://www.RealEstateExplainedBlog.com
for updated information on current Real Estate Challenges.