Location, location, location. Anyone with any experience at all in real estate knows that this is what the market boils down to. Those looking for a new property to buy or rent are considering many different factors, but location is often the one that carries the most weight. A couple looking to buy their first home will likely be willing, albeit probably not happily, to forgo the large bedroom balcony that caught their eye if the home is located 50 miles from the nearest school. But knowing that location is such a large factor, realtors also have a lot of factors to consider, especially when dealing with commercial real estate.
The big business of real estate
Commercial real estate companies deal with several different businesses and types of properties. Typically these commercial buildings are divided into two subgroups, those that are valued over $2.5 million, and those that sell for less than that amount. Though the concept of commercial business often conjures up an image of large buildings where major corporations hustle and bustle about, around 70% of commercial buildings are relatively small in size, usually totaling no more than 10,000 square feet. These buildings are often home to retail spaces, smaller offices, and strip malls and small shopping centers, in comparison to their larger counterparts like warehouses and multi-level and multi-corporation offices.
Comparing residential and commercial real estate
A good realtor knows that both commercial and residential real estate are completely subjective to their prospective buyers, but realtors looking to sell residential properties are going to be paying attention to different aspects than those attempting to sell the perfect commercial space. The right residential property will obviously have more ideal features that make living more comfortable. A good kitchen, functional bathrooms, the right number of bedrooms, maybe a big yard, and any specific areas or rooms that are particular to the lifestyles of those doing the home shopping. Conversely, the right commercial buildings and spaces need to have the appropriate layout for the job at hand, and depending on the nature of the business, specific spaces designated for activities other than simple office space.
Real estate notes for the right property
Oftentimes, in both residential and commercial real estate buying situations, it is necessary to make use of real estate notes. Real estate notes indicate the agreement between the borrower and the lender in regards to the mortgage transaction. These real estate notes differ from the actual mortgage agreement in that they do not necessarily lay out the terms of the agreement, rather they detail the acknowledgement and promise of the lender to pay back the borrowed sum. Real estate is valuable, especially in the right location, and there are very few individuals or even companies that can buy a property outright without the help of a loan.
The success of businesses with the right storefront
The economic struggles of 2008 left lasting effects, but things have steadily improved. Across the United States, the values of commercial real estate properties have seen a significant improvements since then, as much as 42%, in fact. And there continues to be a demand for the right commercial space, particularly for those businesses that generate significant customer traffic from the ideally prominent and visible storefront. A business looking for a retail store for rent will want it to be in the right location, where the right amount of potential customers will be able to identify and easily access it. These storefronts for rent will allow for prominent and notable signage, ideally with convenient parking and sidewalk accessibility as well.
But of all the commercial real estate sectors, or CRE sectors, the most dominant are multi tenant buildings and industrial spaces such as factories and warehouses. The apartment sector in the United States was averaging 125,000 rental units just four years after the recession, up a significant amount from the mere 45,000 that was the yearly average before that. The percentage of apartment vacancies across the country is as low as 4.8%, and the demand for commercial real estate as far as the industrial spaces are concerned has also risen quite higher than before the economic dip. It appears that things will continue to improve as we gain time and distance from the recession.