Generate Income with Commercial Real Estate Investing

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Discover A New Way To Diversify With Commercial Real Estate

If you see the tremendous opportunities in the commercial real estate world, Saint Investment Group is here to help you get into the game. When you want a stable, low-volatility place to grow your wealth, diversifying your portfolio with a commercial real estate fund from Saint Investment Group could provide you with asset security, appreciation, and stable long-term income.

What Defines A Property As Commercial Real Estate?

First, let’s define what qualifies as commercial real estate property. At a fundamental level, commercial real estate is space that’s leased for business reasons. Most often, the construction of commercial property is designed to be specific to business use rather than residential use, with the exception of multifamily properties. There are five common categories of commercial real estate.

commercial real estate

Types Of Commercial Real Estate For Investment

There are various property types when it comes to commercial real estate, each with unique factors that make them more or less optimal for a growth-oriented real estate investment fund.

Commercial properties can serve a wide array of uses, but the common categories of commercial property are:

Industrial property is often used for manufacturing and logistics uses, as these types of buildings provide greater height clearances and truck docking capabilities for large shipments. These commercial properties can be some of the most prime assets held in a commercial real estate fund. Industrial properties are generally leased for multiple years with high credit, stable tenants, providing consistent and significant positive cash flows.

Multifamily commercial property ranges from small multifamily buildings in the suburbs to entire apartment complexes, to luxury high-rise condominiums in hot areas of major cities. At their core, these properties could be as small as a duplex. Still, most often, real estate investors choose to focus their capital on more significant multifamily properties that offer a better risk distribution, and greater economies of scale with expenses (bigger is better!). Typically, multifamily properties have shorter lease terms and higher turnover than more business-oriented commercial properties like industrial and office buildings. However, many markets have experienced greater rent increases in multifamily versus other commercial property types.

Office buildings are the most common type of commercial property, and they range in size from tiny single-unit buildings to high-rise buildings with hundreds of tenants. These commercial property types are classified as Class A, Class B, or Class C commercial space, with A being the most prime type of property, with the highest rents, and in the best locations.

Class A office space is usually newly constructed or recently renovated, along with being located in areas that provide high visibility and foot traffic. These properties are often in areas with easy access to major thoroughfares and professional property management teams. Often Class A Office buildings will have high quality, high credit tenants occupying the space.

Class B office space is usually older than its Class A counterpart, and can sometimes need further capital infusion to bring it up to par for tenants. The benefit to these properties is that they can be solid long-term investments with excellent returns after relatively minor repairs and updates.

Class C office space is primarily an opportunity for redevelopment into more practical uses or significant renovations. The most challenging aspect of Class C commercial property is the often high vacancy rate and less desirable location, making them difficult to market and harder to establish stable rent streams from.

One of the other most common types of commercial real estate is retail space. These commercial properties can range from small strip malls of a few thousand square feet to sprawling community centers filled with banks, restaurants, and specialty shops exceeding a quarter-million square feet.

Special purpose commercial property is purpose-built for special use cases, making them hard to use or adapt for other commercial purposes. Examples of special use commercial properties include car washes, churches, and self-storage complexes. These can also include more commonly-seen properties like amusement parks, hotels, music venues, resorts, and sports venues.

These commercial property types can also include mixed-use property that can serve functions for residential, restaurants, and retail shops all within the same building. Specialty purpose properties provide a high-quality mix of tenants that typically carry premium rent rates and prominent exposure in high-demand areas that can offer solid investment opportunities.

Invest In Commercial Real Estate Safely

Commercial property investment can be one of the safest ways to grow your capital over time, especially when the commercial properties within the portfolio are deftly selected based on stringent criteria and exacting standards of performance. Carefully choosing a commercial real estate fund for your investment capital can pay off in multiples, so it’s crucial to gain a solid understanding of how a prospective fund chooses its portfolio assets.

What Criteria Does Saint Investments Consider For Commercial Real Estate?

Investing in commercial property can be both a lucrative and stable addition to your investment portfolio. Still, with the recent pandemic, some commercial properties provide a higher likelihood of stronger returns than others. What are some of the commercial property considerations Saint Investment is making in the wake of COVID-19 when curating its commercial real estate investments?

Commercial properties that have been utilized as retail space in large urban areas are expected to transition toward healthcare, grocery, and alternative store niches. In addition, concepts that utilize an online component successfully have flourished, with examples being food delivery, dry cleaning services, and others.

While office spaces have certainly taken a hit because of the recent pandemic, moving forward as the country recovers, office space vacancy rates and rents are expected to stabilize by the end of 2021 as many companies bring their workforces back under their own roofs. Recovery in office has rebounded significantly, with additional upside expected in the future.

A hard-hit commercial real estate sector is hotel and resort properties, some being predicted to struggle for years. However, in markets where the recovery has been more rapid, these properties are recovering at faster paces.

When it comes to commercial property for real estate investors, warehouse space has the potential to be a top-performer in a fund’s portfolio. E-commerce is driving much of this trend, with experts forecasting 250 million square feet of demand still unmet and ripe for capitalizing on in 2021. Industrial has shown to be extremely recession-resistant over the last several years and is considered a major focus for long-term stability and growth.

Although experts were initially uncertain of the stability of multifamily properties, they’ve proven to be strong performers for commercial real estate investment and they expect that trend to continue as people regain income stability.

When you’re ready to dive into the commercial real estate investment realm, get the professional guidance of the experts in commercial real estate investing—Saint Investment Group. Contact our team today for a free consultation and discover the difference commercial real estate can make for your portfolio growth, diversification, and income.