Industrial Warehouse:
With the rise in consumer spending and an increase in housing construction, it will only increase the need for more industrial space. Given the limited areas that certain warehousing can be utilized only adds to the high potential for a return on investment.
Office Space:
Office properties in Central Business Districts (CBDs) had the highest price increase of 3.6 percent, and the greatest price increase over a three-month period, at 12.1 percent. Suburban Office space had the lowest increase, so look for properties in downtown areas for the best results.
Neighborhood Retail:
As before with the increase of consumer demand, retail spaces are beginning to fill up again after the downturn. There are still great bargains on spaces that have not yet benefited from the upturn in the economy. Look for those that still have a few vacancies and the area shows a potential for increased traffic.
Student Housing:
REITs are actively looking to acquire pedestrian-to-campus housing units, so if you see an opportunity to purchase a small or large apartment. This is the time to do it as demand will ultimately increase sharply.
Hotel:
Hotels were the worst-hit property sectors during the downturn, but now are reaping the benefits of a growing economy. In fact they are nearing their pre-recession price peaks in some areas. Look for properties with either a tourist destination or a business district for business travelers.
Apartment:
Due to the increased rental income average of 5.2% apartments are beginning to show some added interest and valuations. Lower turnover and construction delays have been a major factor that increased rents and fill vacancies. the economic recovery has also been a major factor in this high interest in apartments.
It is important to look at all factors when investing in commercial properties, including the local economic condition and the potential for increase. Municipal capital improvements is a sign that it might be the right time to invest in these properties before prices increase even more.
Rene Sabatini
Azure Realty Services, Inc.
