Thursday, December 11, 2014
Tuesday, December 2, 2014
Monday, December 1, 2014
Wednesday, November 5, 2014
Thursday, October 30, 2014
Many Canadians are already investing in real estate via their own homes. However, investing in commercial real estate can diversify an investor’s portfolio and bring other valuable advantages residential real estate can’t, such as ongoing passive income or multiple tax benefits.
In the past, commercial real estate has been thought of as more challenging than residential investing. And for new investors, the whole process can be overwhelming and scary.
While there are differences between the two and different procedures are needed, investing in commercial real estate doesn’t have to be intimidating. Today, there are many options investors can choose to help ease them through their investments. From commercial financing, third party partnerships and syndication structures, expert management is always accessible.
Before investing, here are five strategies that can lead you to successful commercial real estate investing:
Define your investment goals
Clarify how much you want or have to invest and know your limits
Layout timelines for when you want to start and how long you want your investment to carry on for
Research which investment types are best suited to you
Decide who can help, and what options are available
Thursday, October 23, 2014
News headlines have been buzzing with alerts about the latest stock market plunge. While this may be a temporary slump in the stock market, analysts have been predicting as much as a 60 per cent dive in stock prices for some time. It’s difficult to estimate a precise moment, but the current fundamentals of the stock market suggest that a steep sell-off is inevitable.
Money markets have already been reacting to the mayhem with mortgage interest rates reportedly edging even further down. This creates significant opportunities for Canadian investors to expand in commercial property acquisitions with low rate financing, which will enhance the property’s cash flow and NOI.
Existing commercial property owners can find lower rates ideal for restructuring debt leverage to improve investment property performance. Individual investors can also find it to be an ideal moment for refinancing their homes and even accessing additional capital to invest.
Many Canadian retailers are fighting for space in Canada’s top markets like Edmonton. Some commercial centers, such as the West Edmonton Mall and Calgary’s Chinook Centre have even been reportedly combating each other for brand name tenants.
Attempting to draw big name tenants and offering exclusivity has long been common practice in retail property investment and management, but this may not be the most profitable strategy going forward.
Historically, lower demand for retail space used to dictate that retailers could demand exclusivity in their domain within a shopping centre and landlords would oblige. However, this is quickly changing, especially in markets such as Alberta where retailers are competing with each other to secure floor space.
Big names are desirable, but they can also present issues. For example, well-known retailers may already have an extensive e-commerce presence. This can become a disadvantage, as it can reduce in-store sale performances and additional traffic to the shopping centre.
Furthermore, popular retailers are not always the most profitable tenants due to their negotiating power and prestige. Competing for these tenants gives the larger retailers more negotiating power, thus decreasing the landlord’s profit even further.
In order to combat this, landlords should diversify their tenants. Local and boutique tenants, especially stores revolving around services and food, can prove to be just as profitable as big name tenants.
According to Benjamin Tal and a new CIBC World Markets report, Alberta remains the “most favourable place for small business to flourish.” A recent infographic via Medium, documents a dramatic and exponential rise in new business startups and investment activity in Edmonton, flowing through 2014. Popular pitching and funding platform AngelList listed 87 startups and almost 4,000 angel investors in Edmonton.
However, while tech and startups are hot, there are many good reasons for angel investors and entrepreneurs to be prioritizing commercial real estate investments right now too.
For a start, these small businesses need to secure and maintain affordable office spaces going forward. Whether they remain boutique-sized, work in co-working office spaces or plan to expand into retail storefronts, one of the best ways for them to ensure survival in this rapidly appreciating commercial real estate market is to own a slice of it.
Many might not be able to afford or justify acquiring a whole office building, office condo, or shopping plaza, but they could utilize partnerships to own part of a building without having all the obligations. This will also provide them the benefit of sharing the wealth created from the lift in values.
For many it can be a strategy to pull in additional income, depending if they sublet part of the building or invest close to home.