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By Gary Tasman Fledgling investors are typically given the same advice: Set your goals, know your risk tolerance, and start with broad investments like mutual funds in a tax-deferred Individual Retirement Account. Many people stick to this advice right up until their retirement, investing primarily in stocks, bonds, and mutual funds. These types of assets can be purchased quickly, often with the click of a mouse, and don’t require tens of thousands of dollars at a time to invest. For investors with limited time or capital, these investments are a sound long-term strategy. Real estate, however, should not be overlooked as an investment opportunity. Although there are some significant barriers to entry which we’ll discuss later, there are also numerous advantages to including commercial property in your investment strategy. Benefits of Investing in Commercial Property: You can invest with debt Anyone who’s purchased a home knows that you don’t need to pay the entire amount in cash. Instead, buyers place a down payment then finance their home. Commercial property investment can also be purchased with leveraged funds. On a $2.property, you might invest $50,000 as an initial down payment, but you’ll still reap the benefits of owning $250,000 worth of real estate. You can earn passive income One of the largest benefits to investing in real estate is the cash flow that your property can produce. The monthly rents you receive from your tenants should offset your expenses and produce passive income. You’ll receive healthy tax benefits There are numerous tax advantages to real estate investing. Property owners are able to write off their interest payments, depreciation, renovations, maintenance, and other operational costs. Additionally, the passive income earned by investors is taxed at a significantly lower rate than ordinary income. You can hedge against inflation While no investment is truly recession-proof, the value of real estate reacts in proportion to inflation. When inflation rises, so does the value of your property, and rents will often increase. Nearly every other type of investment, including stocks, react to inflation in the opposite direction. You’ll experience less volatility Anyone who follows the stock market can tell you that stock prices can change quickly, as dozens of variables can impact stock prices. As an example, just this year, Tesla stock has ranged from a high of $880 per share to a low of $563, dropping in value 36 percent between January 8 and March 8. Property is substantially less volatile. While you may not experience the exhilarating highs of a bull market as a property owner, you also won’t endure the nauseating lows of a bear market. Challenges to Investing in Commercial Property: While there are many benefits to investing in real estate, there are also challenges. Although buyers are able to mortgage their properties, cash can still create a high barrier to entry. Investors need large down payments to enter the market, and transaction fees can total as much as 10% of closing costs. Additionally, purchasing real estate takes substantially more time and research than purchasing stocks and bonds. Between due diligence, financing, and paperwork, it can take up to three months to purchase commercial property. After completing a purchase, real estate investors must still pay taxes and operational costs like maintenance, utilities, and insurance, even if the property is sitting empty and not generating income. And because real estate is an illiquid asset that can’t be sold with a simple click of a mouse, investors can be saddled with their property for much longer than they initially expected. Even with these drawbacks, real estate can be a valuable asset in your investment portfolio, and your commercial property broker is an instrumental partner as you consider your future investments. The professionals at Cushman & Wakefield | Commercial Property Southwest Florida are ready to help you determine your investment goals and strategy, locate properties that meet your needs, secure appropriate financing, and even assist you with the management and maintenance of your commercial property after your purchase. To learn more about how experts at Cushman & Wakefield | Commercial Property Southwest Florida can assist you in your property investment strategy, call us at 239-489-3600 or contact-us.

By Gary Tasman With the Southwest Florida business landscape changing at the speed of light, many business owners are faced with a dilemma: Should they sell their building to invest in a larger facility, or add on to their existing structure? You may be facing this very decision right now. The decision whether to buy or expand is a complex choice involving many variables, including cash flow, interest rates, existing debt service, the needs of the business and its employees, and countless others.  Fortunately, business owners don’t need to make this decision alone. A well-chosen commercial property brokerage is armed with the experience, data, and knowledge you need to choose the right option for your business. Property brokers like the Go-To Team at Cushman & Wakefield | Commercial Property SWFL are experts at guiding businesses to the optimal solution for their workplace needs. For those who determine that it’s time to sell, the professionals on our team are prepared to help sellers net the highest dollar in the shortest amount of time. The process starts with our brokerage’s dedicated research team, who tirelessly study the individual property itself, using public records and other available data to become experts in that property.  Based on this information, the Go-To Team then thoroughly investigates recent sales of comparable properties to develop a starting point at valuation. Finally, the researchers take a deep dive into other properties currently on the market to determine a property’s competitive advantages, proper positioning and pricing. Thorough, accurate research is only the first phase in the 15-day process to get a property to market and start generating demand. Because our team has experience in all asset classes, they understand the dynamics of the commercial real estate market and are able to cast a wide net to ensure that properties receive optimum attention.  Because our brokerage is part of Cushman & Wakefield’s global real estate network, properties are marketed to potential buyers locally, regionally, nationally, and around the world to generate maximum interest and maintain awareness. Once there are offers on the table, our brokers thoroughly examine each proposal and their benefits. While the offer price is always a consideration, it certainly is not the only factor in determining the best buyer for a property. The offer’s terms, a buyer’s credit, and other dynamics are at play. In an active market, brokers are often able to generate multiple offers on a property, at which time our team implements a controlled auction process to secure the most competitive offers for sellers. Using knowledge of the local market, our team encourages bidders to compete against one another to produce the best possible offer available under current market conditions. Whether a client is selling a 3,000 square foot single-unit office or a portfolio of multiple million-dollar properties, the process remains essentially the same, as does the care and attention our team provides. Our goal at Cushman & Wakefield | Commercial Property SWFL is to secure our clients the highest selling price in the shortest amount of time.  From your initial decision to sell all the way through closing, our Go-To Team will be there every step of the way. Are you facing a tough decision about the location of your business? The experts at Cushman & Wakefield | Commercial Property Southwest Florida have access to best-in-class data, analytics, and proven processes to help you make the right decisions for your property needs. Contact us at 239-489-3600 or contact-us.

By Gary Tasman With Southwest Florida’s population booming and interest rates at near historic lows, our region is once again ripe for commercial development, and investors are taking notice. But for first-time buyers looking to capitalize on the commercial property market in Southwest Florida, the process of scouting properties can be intimidating. Before you take the leap into commercial property investing, there are five questions you should ask yourself. What’s my goal? One of the first questions your broker will ask you is your investment strategy: Are you interested in growth or income?Investors who pursue a growth strategy are hoping to buy a property in a prime location in the hopes that they will be able to re-sell the property for a profit after the property appreciates. Often, however, these properties come with high price tags and low operating income potential, which creates a significant barrier to entry for first-time investors.The second property investment strategy focuses on income production and cash flow, also called high yield properties. In this scenario, investors seek properties with low operating costs in relation to the rental income they generate. While the monthly and annual returns on these properties can be favorable, these properties also tend to increase in value slowly, meaning an eventual sale may not generate a significant profit. What’s my risk tolerance? Just like any type of investing, some property investments have relatively low risk, and some are high risk ventures. A commercial building that already has tenants locked in for several years can be fairly low risk, because the income is somewhat guaranteed. On the other hand, a completely vacant building might appeal to you because it’s a clean slate. Unfortunately, you’ll take the risk that lessees may be challenging to find.Another indicator of the level of risk you’re taking on is the property’s capitalization rate, or “cap rate.” This ratio essentially represents your annual return on investment and is calculated using your investment’s net income divided by the property’s purchase price. The higher the cap rate, the higher the reward, but high cap rates also come with increased risk.Even with a comparatively high-risk investment, a strong commercial property broker can help you mitigate some of that gamble. By conducting a thorough market analysis, your broker can determine the best possible use for your property, ideal rental rates, and how to position your investment properly to get the best price possible on your timeline. How long of a commitment am I ready for? If you’re thinking short term and want to start earning on your investment today, your broker will likely guide you towards infill properties. Infill properties are those already in high density areas, with established infrastructure and demand generators nearby. You’ll be located in a neighborhood that customers are already visiting for their business needs, but you’ll likely pay a high price and still need to deal with the aggravation of maintenance or upkeep of an older building.If you’re in it for the “long haul,” however, your broker may guide you towards “path to growth” areas. These properties are located in an up-and-coming region that is not yet developed, or which has experienced minimal development but shows outstanding potential. A strong broker will use his or her knowledge of the local market, growth patterns, neighborhood demographics, infrastructure updates, and recent transactions to identify the ideal properties to take advantage of future development. In the short term, you may not see much income from your path-to-growth property, but with guidance from the right broker, you’ll be well-positioned for the long haul. Who are the current tenants? Unless you’re purchasing raw land, your commercial property investment will likely have current occupants in place. These could be the current owners, or more likely tenants who are renting one or more units in the property. Believe it or not, the quality of your tenants can often dictate the quality of your investment, and learning about the property’s tenants is an essential part of your due diligence.Obviously, the more creditworthy your tenants and their businesses are, the better position you’ll be in financially. You’ll want to review the lease terms for each of the current tenants to project future income from the property, and to develop a plan for upcoming vacancies. Your professional commercial property broker can complete a thorough analysis of your existing tenants, and guide you on decisions like rent adjustments, lease terms, improvements and modifications, as well as the types of tenants you’ll want to pursue in the future. How hands-on do I want to be? If you have tenants in your property, you’ll need to find a way to manage the day-to-day operations. Accounting, marketing, repairs, daily maintenance and managing your tenants can be a full-time job, depending on the size and condition of your property and the number of tenants you’ll have. If you’re not an experienced property manager, the responsibility can be overwhelming. If you live far from your investment, have other full-time obligations, or simply want to be hands-off, it’s a smart decision to hire a property manager. Fortunately, many full-service brokerages like Cushman & Wakefield | Commercial Property Southwest Florida offer property management services to take care of the daily responsibilities of ownership. Once you’ve truthfully answered the five questions above, you’re ready to take the next step on your property investment journey: Consulting with an experienced commercial property broker. The experts at Cushman & Wakefield | Commercial Property Southwest Florida have access to best-in-class data and analytics to help you make the right decisions to meet your property investment goals. Contact us at 239-489-3600 or contact-us.