What is commercial real estate ?
If a person was asked ’what is commercial real estate, a flippant response could be ‘Anything that is not residential real estate’ and that would be reasonably close.
We all recognise shops, offices and industrial sheds as commercial but it also covers medical, storage sheds, hotel and motels, infrastructure such as airports, speciality commercial property like child care centres, service stations and car wash.
Therefore, commercial property is any buildings or land used to generate a profit either from rental income, capital gain or a combination of both.
If considering commercial property, it is best to understand the business behind the tenant. That is part of the reason retail and office commercial property is popular with many first time investors in commercial property.
Commercial Property Buyers Agency has a team of experts that will help you understand various processes involved in purchasing your next commercial property.
Types of Commercial Properties
Initial Due diligence
Offer and Contracts negotiations
5P's of commercial properties
What do you want to achieve? Are you getting more than 3 or 4 % gross return? What type of commercial property should you consider ? What timeframe?
what type of property ? what location ? Budget (purchase price+stamp duty and legals + interest)
Search, telephone agent, ask for information memorandum, perform a mini due-diligence, follow the process including organising building and pest inspection
Appoint property manager, ensure interest and outgoings covered for first month, diarise rent review, check utilities and other amenities including insurance
adding value to the property (ATM, solar and advertising signage), develop vacant land, storage cages in car parks, splitting the floor area into multiple tenancies
Types Of Commercial Properties
Commercial property covers a wide range of properties and listed below are the main types of properties that we search for on behalf of our clients:
retail strip of shops, shopping centres, bulk stores like Officeworks, A Mart
stand alone, strata, single storey or multi storey
retail, office and residential in one building
doctors, dentist and allied professionals
light, heavy manufacturing, factories
small, bulk, storage sheds
Hotel and Leisure
hotels, motels, caravan parks
child care, service stations, carwash, bowling alleys
Hotels, motels, caravan parks, restaurants
Child Care Centres
Storage Sheds Buy complex not individual units
high rise buildings in CBD
local shopping centres
These properties may be in the CBD of cities, in suburbs or in regional towns
|Property type||Asking price||Type||Yield||Annual Net Return|
|Motel||1 million||Long term lease||6.1 %||~60,000|
|Office||$795,000||5 years lease + 5 years lease||7.8 %||61,745|
|Cafe||$700,000||Leased till 2022 with 3 year option||7 %||49,000 with annual CPI|