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Location and price crucial to CRE success

On Behalf of | Jan 19, 2017 | Commercial Real Estate |

Location is what demands attention in real estate, but savvy commercial real estate investors in California understand that the right price builds the foundation of success. To unlock value, investment experts recommend finding the right combination of the two.

Ideally, people should look for opportunities in places that have the potential to grow and eventually demand higher rents or resale prices. Because a property’s value depends largely on the economy of its neighborhood, a buyer should examine social and employment trends in an area as well as information from the U.S. Census Bureau. For example, census data could reveal trends in population changes in urban areas. Cities attracting rising numbers of young and professional workers could produce positive returns on real estate investments.

Sticking to an investment budget reinforces the chances of gaining value. Buying in a hot market might force people to overpay, which could make profitability difficult to achieve. Undervalued properties might be identified by finding ones that require repairs, suffer from poor management or could benefit from redevelopment.

Someone preparing to purchase commercial real estate might want legal advice. An attorney could evaluate multiple issues of importance to a purchase or development plan, such as tax consequences or property title status. From studying the terms of the leases for existing tenants to evaluating land regulations, an attorney could offer advice about short and long-term costs for the project. New lease terms or building permits might be gained through an attorney’s efforts. An attorney could also provide assistance negotiating the terms of a purchase agreement. Careful examination of liabilities during a transaction might allow a person to make effective decisions when buying an undervalued property or investing in a commercial property owned by parties suffering from financial difficulties.