Is commercial real estate still investible?

On Behalf of | Aug 3, 2023 | Real Estate Law |

If you are looking for a lucrative investment opportunity in Florida, you may wonder if commercial real estate is still a viable option. After all, these times have disrupted many sectors of the economy, including retail, office and hospitality. However, there are also some positive trends and emerging opportunities that make commercial real estate an attractive asset class.

The Boca Raton market

Boca Raton is one of the most affluent and desirable cities in Palm Beach County, Florida. And, the commercial real estate market in Boca Raton reflects its high-end status and diverse economy. According to the latest data from CommercialCafe, the office vacancy rate in Boca Raton was 11.69% in the fourth quarter of 2021, lower than the national average. The average asking rent was $32.64 per square foot per year, higher than the national average. The office market was driven by strong demand from financial, technology and professional service companies, many of which relocated or expanded from other states.

Tips for safe investing

As you can see, the commercial real estate market in Boca Raton is still investible, despite some challenges and uncertainties. However, investing in commercial real estate requires careful research, due diligence and risk management. Know your goals and risk tolerance. Before you invest in any commercial property, you should have a clear idea of what you want to achieve and how much risk you are willing to take.

For example, do you want to generate income or capital appreciation? Do you prefer stable or speculative returns? How much debt are you comfortable with? These questions will help you narrow down your options and choose the best property for your needs.

Do your homework

Once you have identified a potential property, you should conduct thorough market research and analysis to evaluate its performance and potential. You should look at factors such as location, demographics, supply and demand, competition, tenant mix, occupancy rate, rental rate, operating expenses, capital expenditures, cash flow, net operating income, capitalization rate, internal rate of return and exit strategy. You should also inspect the property physically and check for any environmental or structural issues that may affect its value or usability.

Hire a professional team

Investing in commercial real estate involves a lot of legal, financial and technical aspects that may be beyond your expertise or capacity. Therefore, it is advisable to hire a professional team to assist you throughout the process.