Any space that is used to produce income qualifies as commercial real estate and serves as a potentially valuable venture for investors. Leveraging leased investment property diversifies a portfolio with hard assets, a steady source of income and secures capital gain. If properly executed, commercial real estate investment promises high returns, even over extended periods of time. Gain insight below as to why commercial real estate remains a proven lucrative practice.
Commercial real estate is a steady source of income.
Unlike other investment opportunities, the capital gain of commercial real estate investments does not rely entirely on the sale of the asset itself. Tenants pay rent and other expenses, as well as operate a business on the premise, which gives the investor several avenues of possible increases in property worth. The intrinsic value and cash flow of the property provides a steady source of revenue.
Commercial real estate is secure.
The idea of commercial property investment is built on the foundation that businesses need a brick and mortar establishment. Additionally, commercial real estate value does not share the same radical variance as the stock market. As it takes time for the value of a property to fluctuate, commercial investment property is low-risk.
Leased commercial investment property can be optimized.
Property can be leased using pass-through leases, percentage leases, gross leases or single, double or triple net leases. This abundance of customization makes commercial property investment very attractive to both landlords and tenants.
Commercial property investment offers diversification.
Commercial properties are often comprised of several different types of businesses or tenants, whose markets fluctuate independently of one another. Accordingly, commercial real estate has a very low correlation with the stock market and gives investors distinct, advantageous diversification.
Commercial real estate results in high returns.
Investors can purchase commercial real estate with a percentage cash down and pay off the remaining total over time. When the investor is ready, the property can be sold for the full amount of the building’s value. This allows for a much higher return on investment with a minimal proportional contribution.
Interested in commercial real estate investment? Ground + Space is a leading commercial real estate brokerage firm that specializes in single-tenant and retail NNN investments. Contact us today to find out more about our current listings!