Commercial real estate is a huge investment for buyers. Commercial properties range from multifamily property, office buildings, retail stores, industrial properties, and shopping centers. Investors must be fully aware of all aspects of this investment before taking the plunge.
The good news about commercial real estate investments is that the general expectation from the sector is positive. 76% of the players in the industry are optimistic about its future.
Commercial property prices are the number one concern about potential investors and sellers. The price of a property can attract potential buyers or deter them. However, as an investor, you have to determine whether the quoted price is worth it. Here are the main factors that impact the value of commercial properties:
A property’s location is a determining factor even more so for commercial real estate. Certain areas pose greater desirability of they’re closer to consumers, or workers, or even raw materials. When choosing a commercial property, make sure you consider accessibility to it carefully.
The state of the economy has a direct impact on most things, from spending power to the demand for commercial property. When investors have positive expectations of the economy, expansion in commercial real estate investment increases its demand, driving its prices up.
The best way to determine if you’re getting good value for money on a certain property is to compare it with similar ones. With commercial properties, you’ll find similar ones in close proximity of another; the most common similar properties you can find are office complexes.
Condition of the premises
The physical condition of a space directly impacts the price a seller can place on it. The better the condition of the property, the more its lease or selling price is going to be. Properties in poor condition require repairs and maintenance, which takes away from its costs, but new owners have to invest that time and money into bringing the space into operation. Likewise, newer properties tend to be more expensive than old ones and their demand tends to be high.
Things to take into consideration when visiting a property include the condition of the roof, HVAC system, plumbing, electrical wiring and fixtures, state of the windows and doors, and most importantly, the foundation of the structure.
If your business is struggling to come up with the funds for a commercial real estate project, Global Capital Partners Fund provides CRE financing on favorable terms. They also provide asset based loans as well as hard money loans in Frederick, MD. Visit their website for more information or speak with their representatives at +1-800-514-7350.