Where To Find Real Estate Investment Opportunities In The Current Market
By : Taro Chellaram, CCIM
Commercial Real estate investors, looking to maximize profits have set their sights on Texas. The Lone Star State has made a name for its self as a strong market for Commercial Real Estate Investors. Currently leading the nation in commercial real estate development for warehouse and flexible use facilities, including e-commerce distribution centers, fulfillment facilities and retail real estate, Texas remain the top U.S. state for commercial real estate development contributions to the economy.
Investments have surpassed $24 billion in direct construction spending, the building sector contributed almost $59 billion to the state's economy, according to a new report by the NAIOP, the Commercial Real Estate Development Association. The sector supports almost 380,000 jobs in the state, the new study finds.
Investors success within the Texas marketplace, has allowed for a plethora of promising opportunities open to the savvy commercial investors, if he is willing to be a bit creative —e.g. neighborhood shopping centers, warehouses, small offices, supermarkets, etc.
Traditionally, commercial deals at the higher end—$2.5 million and above—comprise a large share of investment sales, and generally receive most of the press coverage.
However, Smaller commercial transaction's properties comprise the backbone of daily economic activity. Given the importance of these buildings to local communities, and REALTORS®’ investing in small cap properties has become a popular choice.
Another chance for investment success lies within the industrial sector, which remains on a hot streak. In 2017 industrial properties were the only property to see gains. No surprise though, transaction volume has steadily advanced by 20 percent year-over- year.
PricewaterhouseCoopers and the Urban Land Institute, who publish an annual report on commercial real estate trends, have singled out the industrial segment as the top-ranked property type for 2018 as well as the previous four years, while Colliers recently found the industrial sector far outperforms all other segments.
Finally, one cannot deny Texas’s affinity for office space, only second to California in national rankings. Currently, unemployment ratings are at 4.1% its lowest point in over ten years. With more Americans employed, the likelihood that business will hire more workers on a full-time basis and, in turn, will require more space for these additional workers is highly probable.
No matter the choice, by investing in real estate you can add diversity to your portfolio and spread out the amount of risk you’re taking on. What’s more, you can benefit from the fact that real estate investments have historically been less susceptible to major market swings.