BA for Commercial IP ?

Discussion in 'Commercial Property' started by Daydreamer, 15th Dec, 2019.

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  1. Daydreamer

    Daydreamer Well-Known Member

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    Hi,
    Are there any Buyer's Agents who specialize in commercial property in Sydney or Melbourne?
    I have some experience with residential IP and also have used BAs for resi, but have found very little in terms of BAs for commercial property in this forum.

    I think commercial IP (eg. office space, retail) would require even more knowledge and experience, including working out yields, lease agreements, comparable sales, etc for there to be even more value to be added by BA, to ensure the numbers add up and for negotiations on price.

    I'm wanting to diversify my IP portfolio by adding commercial to the mix of residential, but have no experience in commercial. Having said that, do forum members think there is potentially more risk in commercial vs resi if there is potential risk of recession in Australia (and globally) in near future? I figure that commercial would provide better yield, and resi yields are not attractive at present in Syd or Melb.

    Thank you.
     
  2. Sackie

    Sackie Well-Known Member Premium Member

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  3. Todd

    Todd Well-Known Member

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    Check out Scott Oneill at rethink investing. Do a search on this site has some info on him. Also there are interviews with him out there, podcasts etc. Seems like a successful guy with a sound business model.
     
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  4. Daydreamer

    Daydreamer Well-Known Member

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    These are useful links and articles. I think they highlight the issues that I am already aware of. If I had not much residential IP already, I would probably go resi now. But the dilemma is that I already have some resi IP but zero commercial. So, in the principle of diversification (I also have shares/ETF), in terms of property IP, should I be going commercial?

    There may be some commercial IPs that are relatively recession protected, such as office suites leased to medical or similar professional business (lawyer, accountants)? There may be some short term CG bounce back in Syd and Melb next year or two but the yield remains very poor.
     
  5. Daydreamer

    Daydreamer Well-Known Member

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    This is great. Thank you - will contact them to start conversation about their service.
    Has anyone had direct experience with this firm?
     
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  6. Sackie

    Sackie Well-Known Member Premium Member

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    Imo there is no 'should be doing anything' like a robot.

    When i look at my portfolio i want to employ strategies that will get me towards my goals and that are within my risk profiles.

    Main thing is whatever you do, it needs to be getting you closer to your goals at an acceptable level of risk to you. I wouldnt be going anything unless it gets me closer to my goals, is within my risk trolerances and i have a good grasp of what im doing/good contacts to network with.

    People all have differnet approaches. Despite my higher risk strategies of adding value via renos and develoipments, I am very focused on minimising as many risks as i can along the way. I want to protect my emotional capital as much as possible.
     
    Last edited: 16th Dec, 2019
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  7. Daydreamer

    Daydreamer Well-Known Member

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    I completely agree. My serious consideration into commercial IP is to diversify my property investment portfolio (as I already have residential and equity exposure), as diversification is a key principle in risk mitigation.

    The way I see it, at present residential prices in Syd and Melb, net yield is perhaps around 2-3% for houses and although there is currently return in enthusiasm and sentiment, in the short-medium term, the chances are that we are not going to get continued stellar CG. On the other hand, commercial property may provide around double this net yield. There should also be CG in commercial property - and residential would have to outperform significantly in CG to compensate for the much inferior yield.

    Because I do not have personal experience or skills to do due diligence on commercial IP is why I am asking for some advice, feedback and in particular suggestion on BAs that specialize specifically in this area. I have had experience using residential BAs, and I think they add value (just like a good accountant or mortgage broker adds value).
     
  8. Daydreamer

    Daydreamer Well-Known Member

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    Does anyone else have any recommendations about BAs that specialize in commercial IP in Syd, Melb or Brisbane? It is interesting that there are lots of recommendations for residential BAs for all the major capital cities on this forum, but seems not much in the commercial space? Many thanks. Also feel free to PM me, if that is preferable.
     
  9. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    I do commercial in Adelaide. @Scott No Mates might know someone for Sydney?
     
  10. Beano

    Beano Well-Known Member

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    Let us know you get on with commercial finding a BA.
     
  11. Scott O'Neill

    Scott O'Neill Active Member

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    Appreciate the kind words.

    FYI - I have helped clients purchase over $450 million in commercial and around $200 million in residential over the years. Commercial investing is a niche space that requires a lot of care and good contacts to get the best possible returns.