People who continually wait to invest in commercial real estate may find themselves priced out of the market, looking at fewer properties or fighting other buyers. Although current prices are down from the peak of 2005 to 2007, these values are substantially higher than they were 20 or 30 years ago. For long-term investors, there has never been a better time to get the properties they want at reasonable prices.
Higher Prices
As soon as the market turns around, prices start appreciating. Although retail space is still a tenants market, less office space is available than a year ago. Demand for industrial space is strong while apartment vacancy rates have dropped to under 6%.
Limited Choices
Right now, buyers have choices. Investors simply decide if they are interested in apartment complexes, industrial warehouses, mini storage facilities, office buildings or medical offices. The commercial real estate agent gathers information on available units and discusses the pros and cons of each with the investor. However, in the future, the list may only have two or three properties on it instead of five to ten available now.
Competing Buyers
The biggest challenge to financiers who wait until the investment market is packed with other buyers is the bidding wars. When two or five buyers compete for the same property, each one offers something special. Some may have all-cash while others offer higher prices or faster closings. There is one thing everyone knows: when buyers compete, sellers win.
Smart investors are buying commercial real estate now. These financiers are in the real estate business for the long haul and are not worried about short-term market dips. Experienced property owners negotiate on each offer asking for lower prices and coveted seller concessions. Not only do these buyers have a choice of properties, they have no competition.
About bob
Connect with Me