Sell for More News is a weekly blog series with interesting information from the world of commercial real estate.
As buyers survey the commercial real estate landscape, they’re seeing some peaks and some craters. Their compasses are pointing them toward commercial real estate investments that they believe are positioned for long-term growth.
In this climate, many buyers are steering toward acquisitions of medical assets, warehouses and multifamily properties.
Some are willing to settle for lower short-term returns for stability. And the quality cash flow makes for an attractive long-term investment.
In pursuit of stability and cash flow amid the current economic environment, buyers are looking at recession-resistant asset classes. The medical office sector is a standout in this regard, thanks in part due to pandemic-spurred demand for health care services. This trend includes stand-alone offices, retail spaces, medical clinics and urgent care facilities.
Health care is essential, and people will still need to see doctors and other health care professionals no matter the economic conditions.
While the use of telemedicine is on the rise, the aging population of baby boomers, coupled with the short supply of well-located, class-A medical offices should help ensure a continued need for health care properties.
The warehouse sector is another one that’s attracting the attention of buyers. This includes supply chain warehouses (think Amazon) and refrigerated warehouses.
The pandemic-fueled jump in e-commerce, the “reshoring” of manufacturing and the climb in business inventories bode well for long-term industrial demand. It’s estimated that a 5% increase in business inventories calls for an additional 400 million to 500 million SF of warehouse space.
We are even more optimistic about industrial today than we were pre-COVID.
Another sector drawing continued interest is multifamily. It’s been reported that pandemic lockdowns and economic uncertainty lowered the multifamily turnover rate from 47.5% in 2019 to 42.1% in April. That’s the lowest turnover rate in over 20 years.
This low turnover is helping owners maintain occupancy and cash flows.
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About Beau Beach, MBA CCIM
Beau is a tenacious Commercial Real Estate Broker, author and adoring father of four. His clients appreciate his no-nonsense demeanor and his legendary work ethic.
Beau leads Beachwood which is a commercial real estate broker for sellers in the Nashville, Milwaukee and South Florida markets.
He’s the author of the books The 3 Reasons: Why Most Commercial Properties Don’t Sell and True Wealth: What Every Seller Should Know About 1031 Exchanges.
Beau can be reached at 800-721-3287, click to schedule a call or Beau@BeachwoodSells.com