Commercial Real Estate Price Guide
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Commercial Real Estate Tips
Practically all businesses are involved one way or another with commercial real estate. Whether you operate from an office building or use a large warehouse, you are dealing with commercial property.
The commercial real estate market is huge. Globally, it is worth about $23.9 trillion, and as of 2012, the US makes up 25.4% it. Commmercial real estate and management is a diverse industry with a global scope and investment outlook.
For more information on your modern commercial building options, take a look at our Steel Buildings Buyer's Guide.
Commercial Real Estate Options
Five categories of commercial real estate include:
- Leisure (hotels, restaurants, etc.)
Leases between the landlord and tenant for commercial property consist of four different types:
- A single next lease where the tenant is responsible for paying property taxes in addition to rent.
- A double-net lease where the tenant pays both property and insurance
- A triple-net lease where the tenant pays property tax, insurance, and maintenance costs
- A gross lease where the tenant pays only the rent and the landlord is responsible for all other payments.
The State of Commercial Real Estate
Business real estate has been through an incredibly rough period. The financial crisis of 2008 brought the sector to the brink of catastrophe. Commercial property values fell by 10.8% in just the fourth quarter of that disastrous year. However, CNBC reported in July of 2012, "From a national level, the market remains a renters’ and buyers’ market. Office and industrial availability remain elevated at 15.8 percent and 14.8 percent, respectively, and have improved only slightly from peak 2010 peak levels."
This increased the positive outlook for investment. Low prices mean great bargains for investors with the money to purchase them. Owners of this sector of real estate rely on the cash flow from rental income and the bigger appreciation payoff. This sector benefits from attractive leasing rates and longer-term contracts than the residential real estate sector does.
Company property for sale attracts investors from all over the world who are looking for good deals. Investing in commercial real estate requires a considerable amount of startup and extensive knowledge of the legal aspects of owning this type of property. Whether you’re purchasing to run a business or plan to rent out the space, it’s important you know what you can afford, what the industry is looking like and how valuable the property is.
Business real estate, despite the lingering and looming crises, still remains attractive to investors. In 2011, the number of commercial real estate sales grew 33.4% from the year prior. The latest industry research suggests that real estate investors are optimistic about the opportunities ahead for 2013.