What is Commercial Real Estate - why you should or should not invest?

A good quality commercial agent will ensure the best return for your premises.

Some multi international tenants will not look at leasing premises that do have an agent in place.

 

Chiili,

Why would this be the case? ie. multi international tenants not looking at leasing a premises that has an agent in place.

 

All,

Assuming one million dollars cash is at hand, what is the best result practically attainable from commercial property investment?

As an approximate assumption, I am thinking circa 9% gross return, equating to a net return of 160k pa, after interest costs.

I would appreciate your thoughts.

Regards
Greg

 

Hey Elca,

Depending upon your appetite for risk, ability to borrow etc I would suggest leveraging onto a larger ($$) property circa $3m providing a nett of around $220-$275k which would still leave adequate buffer for repayments.

 

Multi's prefer to deal with corporates rather than mum & dads - who may be away on holidays, uncontactable, not have established relationships with contractors. That is, it makes their life easier to deal with an agent rather than directly with the owner.

(Though I have dealt with many non-agent managed properties but with more often than not professional investors. I have found dealing with agents on M&D investments has been more of a PIA as the agent is working under the directions of the investor who is difficult).

 

As a commercial agent we have a responsibility to our client the landlord to be on top of unauthorised works, rental increases, rental arrears, detailed lease clauses and the like so no wriggle room.

 

Calculate the value as if it is full
Deduct off the purchase price
How long you think it will take to fill the place
The leaseing cost
The inducements to get a tenant
The fitout cost the prospective tenant may need
The interest cost attributed to not having a tenant

 

Unless the wriggle room is shown on the lessor approved plans.