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What does 2021 look like in Commercial Real Estate?

What does 2021 look like in Commercial Real Estate?

The commercial real estate market continues to have pockets of strong demand in many areas we serve and I anticipate another strong year overall.  We estimate 10%-15% of businesses are devastated, 20%-25% are on fire with growth and the balance of businesses are sustaining or holding steady compared to Pre-COVID times.  I continue to see more industrial buildings coming on the market for sale and lease,  office vacancy increasing because of COVID stay-at-home orders,  and retail spaces adapting for different uses that are COVID resistant. We continue to see higher land demand because of record low interest rates.  The lower interest rates help offset the ever increasing construction costs.   Leased investment real estate continues to be very hot and cap rates remain very low with assets that have regional/national tenants with 7+ years of term remaining.    Lastly, I continue to see the apartment market transferring at record prices. There are great opportunities if you are ready and prepared to invest. 

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What does 2021 look like in Commercial Real Estate?

Raising Cash with a Real Estate Sale/Lease Back

As we all work through these difficult times it has caused many clients, customers, and other business owners to get creative on how to create cash flow. There are many business owners that are not familiar with the leased real estate investment market. You may be surprised that there is an entire global market that chooses to diversify their money by putting money into real estate that is leased. The returns on those investments are paid by the tenants/businesses that occupy them when they pay rent. If you are experiencing a tight time of cash flow, you may want to consider selling your property to a third party investor and signing a long term lease.

These are just a few benefits of doing a lease back:

  • You are able to pull all of the cash/equity out of your real estate to help support you in this difficult time.
  • You relieve yourself of the stress the comes with managing the real estate and the debt that may hurt you even further.
  • You can control the building with a lease agreement just as strongly as if you owned the property. Yes, lease agreements are binding, so even if you sell the property to another owner, your lease agreement when negotiated right gives you all the control you need. Common terms of leases could include an initial 10 year lease to maximize the sale price with an additional 3-5 year renewal terms allowing you to control your former building for the next 25 years.

If this sounds like a strategy you are interested in, consider giving me or one our experienced agents a call to discuss how we can help you.

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Commercial Real Estate Investment

Commercial Real Estate Investment

What are buyers looking for when it comes to Commercial Real Estate Investment (CRE)?

When it comes to investing in CRE, buyers look at several factors. Below is a short list of items investors are going to look at:

Length of lease – If all goes as planned, how long should I expect cash flow?

Quality of the tenant – What is the chance of default?

Rent Escalations – Escalations in rent = increase in returns

Location of the building – What happens if/when the current tenant leaves?

These factors all plat into the return. When you are ready to sell or buy a commercial real estate asset, we would welcome the opportunity to discuss your options.

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The Gerspacher Real Estate Group is a 3rd generation, family-owned commercial real estate firm in Medina, Ohio. We have been a trusted leader in the commercial real estate marketplace for over 60 years. Our team provides comprehensive real estate solutions that help our clients achieve their business goals. We help simplify the complexities of selling, leasing and managing commercial real estate.

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Jeff Brandon

Jeff Brandon

Real Estate Agent & Consultant

Troy Gerspacher

Tony Day

Real Estate Agent & Consultant

Morgan Faunce

Morgan Faunce

Real Estate Agent/Partner & Vice President

James Gerspacher

James Gerspacher, JD, CCIM

Real Estate Agent & Consultant

Todd Gerspacher

Todd Gerspacher

Real Estate Agent & Consultant

Troy Gerspacher

Troy Gerspacher, CCIM, SIOR

Real Estate Broker & President

Keith Keltner

Keith Keltner

Real Estate Agent & Consultant

Sam Tecca

Sam Tecca

Real Estate Agent & Consultant

Ty Patillo

Ty Patillo

Real Estate Agent & Consultant

Andrew Winkler

Andrew Winkler

Real Estate Agent & Consultant

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