A Wide Range Of Opportunities In Commercial Real Estate

Investors in real estate may have become fixed on one type of commercial property. There are a wide range of opportunities out there. Commercial properties provide space for businesses, and the kinds of properties are as diverse as the businesses.

Benefits Of A Small Shopping Center

When you are looking at shopping centers, bigger is not necessarily better. While a well-run regional or super-regional shopping center can produce a good financial return, so can a successful small-market shopping center. In many cases, the small town center can turn out a better return. One of the benefits is the control that the owners can have by being "the only game in town." This can help generate high returns.

Legal Definition Of A Shopping Center

We have all kinds of shopping centers from the smallest strip center up to the super centers. In a case in a federal bankruptcy court, the court was required to distinguish between a "shopping center" and other types of retail properties. The federal bankruptcy code did not define the term. The Third Circuit provided the following 14 elements to be used in determining whether a property is a shopping center.

Who Will Buy When You Want To Sell?

If you are new to investing in income property, you may have made a choice in advance of the type of investment property that you wish to own. There are many good types of investment properties: apartments, office buildings, shopping centers, high rise parking garages in downtown areas, warehouses, resort rentals and many others.

Suburban Office Buildings

With investment capital becoming available, demand for commercial real estate continues. Suburban office buildings remain many investors primary acquisition target. These investors reason that a suburban office building that can be purchased at a price below replacement cost must be a good buy. Careful choices must be made, as there must be a demand for office space in the area and a gradual increase in rents. Since rents have increased in most submarkets, the long-term demand for office space looks good.

Space Sharing Executive Suites

With the revolution in communications, building owners must keep up with the changing needs of the corporate tenant. Often the larger, well-organized businesses do not need the space that was necessary just a few years ago. Electronic communications to and from employees have substituted for leased office space. Managers are more willing to grant favorable lease terms to operators of shared space. The operator sometimes receives a monthly management fee for operating the shared space plus a portion of rent revenues over a certain amount.

Investment Decisions: High Rise Or Garden Apartments

There are distinctions between garden and high-rise apartment buildings when viewed as investments. While garden apartments have much more open space, the land is usually substantially less expensive than that in high-rise apartment projects. The result is a more favorable building-to-land-cost ratio for depreciation deductions (i.e., the land represents a smaller percentage of the total cost than in the case of a high-rise project). Since only the portion of total costs attributable to the building is depreciable (land, of course, is not depreciable for tax purposes), a garden apartment investor frequently can depreciate a larger percentage of his total costs than an investor in a high-rise project.

Condominiums Built For Business Owners

Like apartment dwellers who are finding that it is less expensive to buy than to rent, business and professional firms are moving toward buying offices rather than leasing. While buying or constructing an entire building is an option for major corporations or for smaller firms outside metropolitan areas, owning commercial space generally means being part of a condominium structure.

Preparing A Loan Request Package

When preparing a loan request package for presentation to the lender, the real estate borrower must be as complete as possible the first time. Insufficient, imprecise, or incorrect data in a loan request package can mean a rejection for an otherwise attractive real estate loan.

Matching Tenants To Apartments

Property managers must always think about the type of tenant that is most likely to reside in that particular building. For example, when apartments in a project rent for lower monthly amounts per year, tenants will be concerned primarily with shelter. This means a safe, clean, efficient building but without frills and amenities.

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