Commercial Real Estate Property- How Do The Asset Groups Differ?

Jan 13, 2015

Retail, Office, Warehouse, Storage, Medical: Why Purchase One Over The Other Instead Of Simply Buying a Combination Of Them All?


Ups And Downs Of ALL Commercial Real Estate Property Asset Groups


Brick and mortar stores sell products such as clothing, food, toys, appliances, auto parts etc. Most people like to physically shop, try on clothes, touch and feel merchandise before purchasing but in the end may buy on line being cheaper. There will always be room for both ways of ordering.


People like to work away from home in a professional atmosphere surrounded by staff and equipment that can help make their jobs easier and get away from the distractions of family. Along with proper computer services and the proper energy sources to communicate and the synergy and office provides, the office building will be around for a very long time. The office is shrinking but still necessary for most mid to large businesses.


This specialized building permits storage of goods and services and the necessary distribution points for most retailers and large companies shipping product nationwide and globally. The trucking companies are dependent on these warehouses to load and unload product requiring dock doors ,lifts and high ceilings with little office to store the merchandise for delivery.

Storage places:

The average apartment dweller and home owner relies on the storage facilities around their city for all the extra items they have no room in apartments and homes without basements to place their treasures. Since rental units are here to stay, the storage business has boomed and the only game in town for space requirements needed for the apartment and condo residents. Rents rising and fewer places zoned properly are available close by the residents.

Medical Buildings:

A necessity for doctors to practice their skills with specialized exam rooms and equipment to serve their patients. Special parking required and zoning to build these offices that are close to hospitals. Higher rents are required for the full service office building for these medical practices.

Each commercial real estate property asset group listed above has its own powerful attractions to investors but always comes with some form of risk.

Retail can be hurt with slow consumer demands due to slow economy and little rise in spendable income per family.

Office can be hurt by more workers desiring to work from home with the cloud technology giving the computer requirements they need and large law practices as example not needing law libraries or filing rooms with records and books now on line.

Warehouse role diminished with slow down of world economic growth and improper ceiling heights to store newer product or other obsolescence in the older buildings that don’t support newer advancements.

Older storage places not keeping up with the times and the facilities don’t have the most updated security systems or size of bays needed.

Medical buildings outdated and not practical to serve the advancements in medical with newer technology and higher energy requirements and additional parking.

Bottomline, commercial real estate property must be DIVERSIFIED into various asset groups, less money in more deals and never load up on the same group. Try to stick with necessary businesses associated with mid to older age adults that have money to spend and have needs that must be met.


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