June 4, 2020
When the stock market is volatile, unemployment is on the rise, and a recession seems to be waiting around the corner, it can seem like the worst time to buy commercial real estate property. However, smart investors know that the real estate market doesn’t always follow the same ups and downs as the Dow. They also know that many times, a volatile market can be precisely the right time to invest in real estate, as long as you know where to look for commercial and industrial real estate and do your homework before you buy.
Choosing a commercial real estate investment during a global pandemic and economic shakeup can seem like a big mistake. However, some sectors of the economy are positively thriving in these conditions and looking to grow. Healthcare might be an easy one to guess, but information technology is another example as millions of people work from home, and online shopping becomes the norm. Distribution centers are another example of a sector that cannot seem to grow fast enough to keep up with new levels of demand.
Of course, there are no guarantees in terms of industries or areas that will do well despite the pandemic, so it pays to know which steps to take to help reduce risks and improve the likelihood of a profitable outcome when investing in real estate. First, it’s usually a good idea to look for markets that have been historically strong as those are more likely to endure and rebound after a market dip. It’s also a good idea to avoid anywhere that has dipped exceptionally low compared to others, as those areas will have the most difficulty trying to revive.
Next, you’re more likely to find success in areas where job growth was strong before the disruption of COVID-19 as these trends are likely to continue once things start moving again. This also applies to areas that are centers for industries that tend to stay strong in tough conditions, such as military, healthcare, distribution, and technology. Another consideration should be areas that enjoyed strong migration before the outbreak. These cities may not have high numbers of people moving this spring or summer but are likely to begin growing again in the near future.
Lastly, while the economy remains unstable, purchasing commercial investment property means keeping an eye on long-term returns, especially considering the low interest rates offered by lenders in most areas. Ideally, find a property that has a reliable cash flow now, but more importantly, one that has the strongest potential for appreciation once economic conditions begin improving again.
Rakow Commercial Realty Group is committed to helping our clients achieve the most favorable terms and options for their commercial real estate investments, especially during difficult economic and social times. We start by keeping your property search efficient, so you won’t waste time with properties that are not a good fit.
We are also experts in commercial real estate properties and understand the intricacies of the commercial real estate market. That means we are the best real estate company poised to provide you with the right information to help make a balanced decision and avoid the hefty costs associated with a poorly negotiated deal.
Our expertise also means we can proactively consider some of the things that define a wise investment that may be a bit different than before the pandemic. For example, the highly popular open floor plans for office spaces may no longer be the norm, and spaces organized in this way may need significant renovation before a lease is signed. Air quality in some buildings may need to be improved, and commercial food establishments have to incorporate extra space into their floorplans to allow for social distancing among diners. Plus, all these accommodations will affect long-term income predictions and potential for a variety of spaces, and we’ll make sure you’re considering all these details as you reach a decision.
If you need the expertise of a big firm, but the service of a small team dedicated to protecting your interests and committed to being your partner in success, it’s time to contact RakowGroup today.
August 7, 2020
It’s no secret that the world we live in today looks a lot different from what it did a few months ago. COVID-19 (Coronavirus) has completely altered companies’ needs for office space, with about two-thirds of the U.S. workforce working from home during the pandemic. Some studies suggest that between 25 and 30% of […]
July 7, 2020
The Risk-Free Podcast · Episode 3 – The Future of Commercial Real Estate with David Richman With state economies slowly reopening, people are cautiously embracing optimism as they venture back to work and stores while navigating through an unfamiliar environment. Though we may be heading back to offices, nothing about our often-quipped “new […]
July 1, 2020
In commercial lease negotiations, most company owners and executives have much less experience and knowledge than the landlord or leasing agent who is sitting across the table. Adding a commercial real estate broker to your team will give you more leverage, rights, and flexibility at no cost to you. Traditionally, landlords have a commission […]
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