What crosses your mind when you hear the term “Commercial Real Estate”? Oftentimes we think of a high-rise office building, shopping mall, or even an old grocery store building. While these assumptions are not wrong, there is a whole wide array. At the end of the day, Commercial Real Estate is simply property where business happens. Forgotten gems like mobile home parks and storage facilities can bring you much fortune.
Let’s take a look at six commercial properties that tend to get overlooked.
That’s right, apartments are a valuable commercial investment. There are two classes of apartments, residential multifamily and commercial multifamily. Residential multifamily can be purchased through a residential loan and is typically a smaller scale property with 2-4 available units. Commercial multifamily is attained through a commercial loan and is typically 40-80 units.
- Self Storage
Ever wonder why every corner seems to have a storage facility on it now? They are great investment properties and according to BiggerPockets there are approximately 54,000 storage businesses in the U.S. (for scale: that is all the McDonalds, Starbucks, and Subways combined).
- Mobile Home Parks
Not only do mobile home parks boast appealing cap rates, but stocks for these assets have also gone up over 4,100% since the housing market declined during the early stages of the pandemic. Did you know that Sam Zell, America’s top commercial real estate investor, owns over 150,000 mobile home park sites. Warren Buffett also owns the largest manufacturer of mobile homes (Clayton) as well as one of the most aggressive lenders (21st Mortgage) and Berkadia (a large lender that finances mobile home parks and more).
- Cell Towers
In exchange for a quarter of an acre of land and a deeded easement for access, investors can earn a steady income for decades. Another way to accomplish this is to buy out someone else’s existing income stream for a cash payout from you.
- Data Centers
Naturally, data centers have risen at a tremendous rate due to COVID-19 and the reliance on our virtual/remote world. Zoom meeting and 5G have solidified the need, and with the development of more sophisticated AI and automated transportation this can only continue to escalate.
- Senior Living
Independent senior living facilities are becoming an increasingly popular investment option for some. While we are not talking about skilled nursing facilities in this post, there is a demand for independent seniors who desire to maintain their independence.
Contact us so that we may assist you on your next commercial real estate venture.