In today’s world, both retail shops and offices are under a lot of pressure!
Online selling is killing brick and mortar retailers and the virus transformed the way the world works.
Companies everywhere are reducing their office foot prints and allowing people to work from home at an alarming (but mostly welcomed) pace.
These trends are causing downward pressure on the value of both office and retail spaces.
There are always exceptions, but as a rule, those categories of commercial property need to be carefully assessed before investing.
Let’s look at the less obvious categories…
Having bought commercial land and started down the path of becoming a developer, I can tell you, developing is not a wise place to start unless you have someone with development experience working with you directly.
Between permits, planning, approvals, builders, drainage, head works charges and more, it’s a LOT.
But what I REALLY don’t like is that you have no return on your capital during the development process (which can take a year or more) and then you have to find the tenants to make money at the end.
Hotel and Leisure assets are what I call active investments because the revenue comes from the business and not just the building.
These are businesses rather than semi-passive real estate investments.
I do own a large commercial asset in this category but I have a business partner who runs things day-to-day.
Without his extensive experience and a strong personal friendship that goes back years, I would never have done it.
Then there’s farming and rural.
For most city slickers, unless you know farming, I would avoid these asset classes because they’re a whole different ball game.
- Warehouses / Factories/ Industrial
- Showrooms & Bulky Goods
- Medical and Consulting