Commercial real estate (CRE), with the exception of the Multifamily asset class, is property used exclusively for business or commerce related purposes. Unlike residential real estate, commercial real estate is leased to tenants who are businesses focused on conducting income-generating activities.
Commerical property values are typically driven by rental income. The value of a property is a multiple of the rental income using market CAP rates.
Commerical lease terms are typically 5-15 years with annual rent escalators. This offers stability and time to develop a business plan and grow reserves if the tenant exits the property.
We help solve business problems for business owners. Our tenants care about our properties since it’s their main source of income. Unlike residential, they invest in our properties because it is in their best interest to look good.
Our tenants are paying down the principal of the loan which will increase the overall return on investment (ROI) at the time of sale. In addition, we can reduce our tax burdens leveraging depreciation. Lastly with annual rent escalators, the overall property value increases.
Every investment has risks. Our job is to find opportunities and develop a plan that offers the most stability to our investors. Our experience will help reduce risk and ensure a positive outcome.
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