New Trends Affecting Wholesaling Commercial Real Estate
A major shift in demand could be altering the business landscape and real estate investors who are wired in could find great profits in wholesaling commercial real estate over the next couple of years.
Finally, after several years of weakness and high vacancies, the commercial real estate market seems to be moving again and attracting a lot more attention.
Multifamily has been on fire for a while, but now even retail and office space is picking up steam, and vacancies drop and rents continue to rise. Perhaps most significantly is a surge in activity by commercial mortgage lenders who are eager to fuel the market with liquidity and will make wholesaling commercial real estate even easier on both sides of the deal.
The hot competition to originate more commercial mortgages, together with continued low interest rates and appetizing prices means great cap rates and yields for income investors, especially in secondary markets.
While some residential single family markets have been booming again for well over a year, many commercial zones like San Diego may have just hit bottom in the 4th quarter of 2012. This positions them for more potential growth and perhaps even deeper spreads for those wholesaling commercial real estate.
Those who have been ignoring these types of property recently might be incredibly surprised to find a pretty attractive line up of listings, already rented on triple net leases and to very high quality tenants, while still throwing off high yields. This is what the real money will be chasing throughout 2013, no matter which way talks over the fiscal cliff go or how fast the economy is growing.
However, in a new twist, which opens the doors to more investors, as major players embrace expansion and remote working becomes the norm, more opportunities will appear outside of major metros and the popular business hubs of the past. With U.S. based businesses, less location dependent for revenues and access to top talent, new areas growing in population will be targeted by strong anchor tenants and startup communities will spread to more affordable areas of the country.
Those who foresee which areas will benefit from these trends could be the biggest winners in the months ahead. While truly savvy and forward thinking real estate investing pros won’t wait to see where the wind blows the money but will take control of the market, position their favorite locations as the hot new destinations for great minds and companies, and effectively create their own markets and fortunes.
The question is, will you be one of those who simply rides the trends, picking up dollars left by the wayside or will you be one of those innovators and market dominators driving these trends and dollars?
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