News

exan’s latest news

10 Things To Consider Before Investing In Commercial Real Estate

January 29, 2018 | by Forbes Real Estate Council

The commercial side of real estate can be an appealing proposition for any investor. It offers you the ability to dip into a new pool of clients and grow your business interests. But, the commercial side of real estate is also a different beast that requires some additional considerations versus the residential side of the business.

Patience is a virtue with these transactions as the sales cycle is longer, requiring an investor to remain vigilant with the market demand. But many indicators point to commercial real estate as a strong choice for agents looking to move their business forward in 2018.

Ten members of Forbes Real Estate Council shared the one thing investors should be aware of before getting involved with commercial real estate. Here is what they recommend:

All photos courtesy of Forbes Councils members.

Ten investing experts weigh in.

1. Remember Everything Takes Longer

Compared to residential investing, everything takes longer. Due diligence is months instead of days. Finding new tenants takes longer. Build out or renovation is longer. But the leases are longer, as well. Patience is key. It just takes longer. - Roger Blankenship, Flipping America

2. Understand The Market

Investors need to understand the market they are investing in. Having a good wherewithal of the fundamentals (legal implications, competition, vacancy, rents, etc.) will allow them to make savvy investments that could yield high returns. This will enable investors to fine tune their commercial real estate investments and diversify their portfolio. - Juan ZaragozaExan Capital LLC

3. Consider Area Demographics And Trends

When investing in commercial real estate, the investor needs to consider demographics and trends for the area. Do they play into the reason for investing? Do you plan to develop? If so, find a local broker who understands the area and knows the playbook of the local authoritative agencies. You will need to understand civil engineering and environmental law in this playbook! - Rita SantamariaChampions School of Real Estate

4. Assess Risk By Property Type

Risk assessment is very different in commercial when compared to residential real estate, and varies greatly by property type. The success of two residential properties right next to each other is typically similar, while commercial buildings in a similar position could fluctuate independently, so it's important to understand the range of risks inherent to your potential investment. - Nav AthwalRealtyShares

5. Avoid Failing Businesses Or Business Models

If your tenants include restaurants, grocery stores, bars or business models that are migrating online (like banks), you need to assume that they will default on their lease at one point, and you need to prepare your insurance correctly to make sure you are covered when that happens. Search for failing businesses and do your best to not deal with them as there may not always be a golden parachute. - Kent ClothierReal Estate Worldwide

Source: Forbes
https://www.forbes.com/sites/forbesrealestatecouncil/2018/01/29/10-things-to-consider-before-investing-in-commercial-real-estate/#77d317753b7f

  • 31
    Jan
    2018

    Exan Capital Starts the Year Buying a 144 Million Trophy Property

    900 G Street NW, a trophy 112,635-square- foot office building in the…

    Read more >
  • 03
    Jan
    2018

    Canadian Firm Acquires Central Loop Office Tower

    Slate Office REIT is nearing a deal for 20 South Clark St. in…

    Read more >
  • 02
    Feb
    2017

    Exan Capital recibe el mandato de venta de PAYCO, parte del proceso de liquidación de Banco Espírito Santo Luxemburgo

    Banco Espírito Santo Luxemburgo, que se quedó con los activos vendibles de…

    Read more >
  • 30
    Sep
    2016

    Un grupo de inversores españoles habría comprado el complejo Courvoisier Centre, en Brickell Key

    El anterior propietario, Parkway Properties, mantendría una participación en la sociedad que…

    Read more >
  • 11
    Dec
    2015

    Spanish investors pay $34M for Coral Gables office tower

    Buyer is tied to Spanish investors who partnered with Rilea on the…

    Read more >
>