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Why commercial real estate is still a gamble

August 15, 2013

Tips You Need to Know Before Investing in Commercial Real Estate


A pickup in these areas could signal another leg in the recovery, with some investors looking for diversification, or just cheaper prices than the coasts can offer. But Hyman cautions reading too much into the nascent action. The largest part of the commercial real estate market, what Geltner calls the “soft middle,” has barely budged. And Hyman’s view is that a greater number of marginal and distressed properties are moving mainly because, after sitting on them to see how the economy shakes out, sellers are finally willing to take a hit. “It just seems like people have become more reconciled to the world as it is today,” he says. “It is definitely being more realistic, than optimistic.” One reason it’s hard to start popping champagne corks is the nation’s employment rate, says Hyman. A rough gauge is that each new hire creates about 250 square feet of economic activity. Despite some gains, the nation’s private-sector hiring has not shown enough strength to budge the unemployment rate and many companies are still planning layoffs. .

U.K. Commercial Property Values Rise for Third Straight Month

commercial real estate values rose for the third straight month in July, led by office buildings, Investment Property Databank Ltd. said. The average value of stores, offices and warehouses climbed 0.2 percent from a month earlier, London-based IPD said in a statement today. Total return, which combines changes in real estate values and rental income, was 0.8 percent.

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Theyre not difficult but you need to fully understand what each means and how they affect your profitability. 4. Patience is a virtue when investing in commercial real estate. You dont always want to invest in whatever is currently on the market just because you have the money. First, you want to determine what you want to invest in based on tip 2 above. Next, build a network of professionals involved in the type of investment you want to make. Finally, wait for the right property to come along at the right price based on the formulas in tip 3. 5. Consider the long term impacts before investing.


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