Brokers involved in leasing commercial real estate need to be especially cautious of high property costs. If they are unable to rent spaces at profitable rates, it can mean serious trouble for the industry and the economy as a whole. The current rise in real estate may make some brokers proceed with caution, but it is more important to understand the context of the prices to determine if they are indeed “too high.”
Just How High Are They? Current commercial real estate prices are rising higher than they were before the 2008 bubble burst. Relative to rents, especially, the costs of commercial property are nearing a historic peak. Overall, however, a flat-line trend is beginning to take shape. Dangers of High Real Estate Prices Elevated prices in commercial real estate can be dangerous to the financial stability of the economy. There is particular risk when banks issue sizable loans for real estate development and the property value goes down before the loan is repaid. This is what caused the near collapse of the economy in 2008. As prices rise, moreover, the commercial real estate leasing business business suffers and brokers may struggle to collect profits What to Expect Going Forward While prices peaked in 2016 and are currently beginning to steady out, the market continues to vary depending on the real estate sector.
Today’s economy, however, is more capitalized and banks are more resilient now than they were before the 2008 crash. If bank regulations that were established during the financial recovery are maintained, the commercial real estate business and the economy as a whole is likely to continue to grow.
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Once you decide to start a business, you need to find a piece of commercial real estate that is in a prime location for your service or product. However, without the proper knowledge, this can be trickier than it seems. For this reason, it is important to hire a broker who is experienced in commercial property.
You May Save Money A real estate agent who works with commercial properties will have specialized knowledge regarding how much a particular property is worth based on location, amenities and other features. When you work to close a deal on your own, you could end up paying more than a property is worth if you don't have the right knowledge. An agent's job is to help you find the best deal. You Will Have More Options Commercial real estate for sale can be harder to find than residential properties, but an agent often already has a list of available properties. He or she will be able to come up with a short list that meets the needs and budget of your business. That list will probably feature properties you hadn't considered or didn't realize were for sale. You Will Have More Time Getting a new business of the ground takes time, making time management abilities more important than ever. If you are constantly out looking for potential property, you probably won't have enough time to take care of other important aspects of starting a business. When you hire an agent to look for property for you, your time is free to use elsewhere. Legal Knowledge Even if you find the perfect property on your own, the legal jargon in sales contracts can sometimes be overwhelming. To avoid the risk of accidentally signing something you don't fully understand, hire a commercial property agent who is knowledgeable in the legal system surrounding property sales and contracts. When searching for a commercial real estate agent, look for someone who has experience, great references and the proper license. He or she should make you feel comfortable and be willing to guide you through the process and answer any questions you have along the way. For more info regarding commercial real estate brokers in Southern California, please visit www.incocommercial.com. If you are looking at investing in commercial real estate, have a property that you need to sell, or are a business owner looking for properties to buy, working with a company like INCO Commercial that has all of the knowledge, expertise, and qualifications to help you is paramount. Here are five things that you need to look for when thinking about commercial real estate transactions. 1. Local Knowledge Make sure that the agent and brokerage you work through has relevant experience. What you are looking for here are companies who have specific experience processing the same transactions that you will need and have represented similar clients before. 2. Regional Reach Look for an agency that not only has a good reputation in the local area but also has multiple offices in other regional locations. You might live in one city but have a commute to where your office is or where you would like to purchase property and need an agent available in either or both locations. 3. Wide Network Look for agents that have a wide network throughout the areas you are looking at. When buying, selling, or leasing commercial property, you may need to have access to surveyors, contractors, other real estate agents, and more. 4. World Class Service
Find out from reviews online about the company’s record of service. You can usually get a good feel for a commercial real estate company’s values in terms of customer service as well when you meet with them for the first time. 5. Experience Last but not least, be sure that the company you work through is local and has extensive knowledge about the local area. You can find this out by asking the agent about the company’s history in the local area. You can also find out by looking at reviews online for local companies who have utilized the agency’s services. Looking for a commercial real estate professional with an experienced team that provides excellent service will help ensure a smooth transaction for you and your team. |
AuthorHello, my name is Roger Dennison and I'm a successful commercial real estate broker, with more than 20 years in the field. Archives
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