Portfolio Analysis

Portfolio Analysis

Know Your Worth With a Commercial Real Estate Portfolio Analysis

Whether you’ve been investing in commercial real estate (CRE) for decades or you’ve just gotten started with your first property, a real estate investment property analysis will let you know if you’re choosing good investments and how to make your portfolio even more robust.

What is a Commercial Real Estate Portfolio Analysis?

During a commercial real estate portfolio analysis, a CRE expert will take a look at your commercial investments, along with information about your loans, rental income, risk tolerance and more. A professional real estate investment analyzer will consider the properties in your portfolio alongside historical market data, market trends and forecasts. This process provides a holistic look at your investments and gives you an idea of what to plan for the future as you continue building a commercial real estate portfolio.

Tips for Building a Commercial Real Estate Portfolio

There are few one-size-fits-all tips for building your CRE portfolio. Best practices differ based on your local real estate market, your risk tolerance and your business goals. A real estate investment analyzer will be able to guide you and give you customized advice based on your specific situation.

To diversify or not to diversify? — one of the big questions for commercial real estate investors. When we sat down with Joe Ekis, a local Des Moines property owner, he shared that he likes to stick to one type of property — multifamily — and not get involved in a bunch of different things. However, some property owners and industry experts recommend investing in different types of properties in order to diversify revenue streams and mitigate risk if one particular area experiences economic downturns.

Whatever types of commercial properties you choose to invest in, we can help you make wise decisions about managing your portfolio and growing your profits.

6 Types of Commercial Real Estate

1. Multifamily Rental Properties

There are three categories of multifamily real estate, designated according to the property’s age, aesthetics, location and quality of infrastructure — class A, class B and class C. Class A properties are in prime locations and have luxury features. Class B properties are less desirable than class A and therefore less expensive. Class C apartments are typically in undesirable locations and often need significant maintenance or renovation.

When investing in multifamily properties, it’s wise to diversify across classes. Demand for certain types of apartments can shift depending on economic trends, so spreading your investments across different types of buildings can help guarantee steadier income no matter what is happening in the various markets.

2. Office Spaces

Office spaces can be categorized according to a class system similar to the one used for multifamily properties. When you own office spaces, your tenant relationship is different from residential situations, and you’ll want to look at different market data for making decisions about rent payments and prices.

3. Retail

When you own a retail space, you’ll want to consider the types of businesses you have as tenants. The health of those individual businesses may impact your income, and high turnover in a retail space can be expensive. As with residential property, location has a huge influence on the value of a retail space.

4. Hotel/Hospitality

The hospitality industry offers attractive opportunities for commercial real estate investors. We’re also seeing growth in alternative hospitality real estate options like short-term vacation rentals, Airbnb hosting and hotel/multifamily hybrid co-living spaces.

5. Industrial Property

Industrial property includes factories, warehouses, manufacturing facilities and distribution centers. Industrial opportunities have potential for high rental yield, but these types of properties often require a much higher up-front investment. They can also be risky, depending on what type of industry you’re investing in.

6. Mixed Use

Mixed use property is becoming more popular as we’re seeing many new urban developments featuring retail space on the ground level and apartments on upper floors. These types of properties can be very profitable, but they can be complicated to manage since you have two very different types of renters to cater to.

Why You Should Meet With a Professional Real Estate Investment Analyzer

Our CRE experts have been in this business a long time. We spend time tracking market trends so we can provide you with an accurate real estate investment property analysis with real-time information about your investments and similar properties. If you’re wondering where to get started or what your next type of commercial real estate investment should be, we’ll point you in the right direction to help you mitigate risk and increase your ROI.

Take a look at our multifamily listings, or reach out to our team to speak with a real estate investment analyzer about building a commercial real estate portfolio that achieves your goals.

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