As the country gradually opens up, in-person events are at the forefront of people’s minds. The world of commercial real estate has long since benefitted from the presence of events such as conferences. In an industry heavily influenced by relationships, conferences give brokers, market experts, investors, and other interested parties the chance to engage with others on a topic-specific scale. No matter your area of interest, there is a conference to explore. 

We’ve had the chance to see what it is like to host events online. While that filled the necessary gaps at the time, it’s important to take advantage of the benefits that only come with an in-person conference. You can find Sands Investment Group at many conferences throughout the year, where you can schedule time with one of our advisors.  

  

Step Out From Behind the Screen 

While programs like Zoom have become the closest thing to conferences in the past few years, they are not a replacement for the impact of in-person events. Your physical presence can say a great deal about your work. If you walk into the room confident and knowledgeable, that stands out to people in a way they cannot see over a computer screen. 

Networking Possibilities 

People attend conferences when the topic matters to them, and they want to be surrounded by others who feel the same. For commercial real estate, this gives you ample networking opportunities with colleagues who have similar interests in your area of expertise. 

This brings back the well-known concept of an elevator pitch. When the most relevant information about you is demonstrated in less than 30 seconds, you can establish credibility and cause without having to make the conversation too time-consuming. Make your commercial real estate skills clear from the beginning to draw out the most productive conversation.    

Grow Your Brand

By getting your name out into the commercial real estate industry, there is room to grow your personal brand. You can effectively generate leads for your business or establish a list of people to stay in contact with. 

Building leads in person creates that connection that the internet lacks. People can connect your face and actions with your business in a way that sticks. This is the best time to have business cards, handouts, and any extra information you need ready to give out, along with a strong handshake. 

Discover New Trends and Knowledge

There is always more to learn in commercial real estate. Conferences place you in locations surrounded by those who you can teach things about your market knowledge, but also people who you can learn from. Honing your skills can enhance your work once you step out of the conference and back into the workplace. 

This new knowledge often comes from two places: people and panels. By contributing to the networking and discussion, you are sure to learn from those you talk to. On the other hand, these conferences include informational sessions from industry experts on trends and foundational information. In the past few years, these have had to occur online. However, attending a session in person gives you more of a reason to pay attention and speak up when there is something to discuss. There is no more sitting behind a computer screen with the camera turned off. 

Schedule Time With a Sands Investment Group Advisor 

Have you signed up for an upcoming commercial real estate conference? This may be the perfect time to get to know one of our Sands Investment Group advisors. Step out from behind the screen and get back in person. The networking, knowledge, and growth that accompany it will be worth it. This year alone, we have had the chance to attend Inside Self Storage World Expo, BOMA International’s Medical Office Buildings + Healthcare Real Estate Conference, Private Equity New York Forum, The Car Wash Show, ICSC Las Vegas, and NAIOP – I.CON East 2022. We look forward to attending the NACS Show, Restaurant Finance + Development Conference and many others later this year. Contact our experts today to set up a meeting by calling 844.4.SIG.NNN or sending us an email at info@SIGnnn.com.

The stock market is often the first thing that comes to peoples’ minds when they hear “investment.” However, it has become more and more worthwhile to take those same dollars and move them into real estate investing. With the proper guidance and considerations, the choice to invest in the real estate industry can bring returns that the stock market does not have.

At Sands Investment Group, we understand the benefits of investing in the commercial real estate industry. Our goal is to make others see it as well. These advantages can steer you towards new ways to grow your portfolio over time, from practical tax advantages to long-term security.

Real Estate vs. the Stock Market

Understanding how investing in commercial real estate differs from the stock market is more straightforward when comparing the two categories. Real estate is not as liquid as stocks, requiring more time, but the results often outweigh the disadvantage of time lost. 

When investing in the stock market, you buy a small piece of a company. This allows you to make money in two ways: value appreciation and dividends. On the other hand, real estate requires acquiring physical land or property. Here, the returns stem from collecting rent and property appreciation. The choice of what to invest in is personal and requires analyzing your financial situation, risk tolerance, and goals.

Practical Tax Advantages

The choice to invest in the commercial real estate industry comes with practical tax advantages. There are multiple instances of deducting expenses tied to owning an investment property. This includes mortgage interest, property taxes, management fees, insurance, ongoing maintenance costs, repair costs, and money spent finding potential renters.

From there, selling the property for more than you bought it results in taxing the income as capital gains, which usually entails lower tax rates.

Commercial real estate investors also have the chance to participate in 1031 exchanges that allow them to move from one property to another, providing tax benefits along the way. Learn more about this opportunity here.

Passive Income

There are few day-to-day requirements when investing in the real estate industry while still generating income. Consider this: in multi-family or residential properties, the revenue stems from rent. The tenant pays this, and the result is income for you. There is minimal action required to ensure that money comes in. On the other hand, the stock market requires more patience in seeing the result of the choices you are making at the moment.

Diversification of Your Portfolio

In recent years, we have seen why diversification of your portfolio can be advantageous. When economic turmoil occurs, having your investments in multiple locations can even out potential loss in other areas. If the stock market is struggling, your commercial real estate investments can still see success. It gives you another method of growth that does not require you to rely entirely on stock market investments.

Long-Term Security

If there is something that everyone is looking for in their financial decisions, it is long-term security. When investing in commercial real estate, you know that the time commitment is more significant than options such as the stock market. Over several years of owning the property, you can wait to see it appreciate. Along with that, you have the potential monthly rental revenue coming in.

With 10 to 25 year options, NNN leases are a great way for investors to find a reliable, long-term opportunity. Here, the business takes on the role of occupying the space for years. Due to this, landlords do not have to worry about finding new tenants to take on the space.

Feeling of Control

The physicality of commercial real estate investments gives buyers a feeling of control. You are the technical “CEO” of your investment in the role. This gives you the ability to cut costs, make improvements, choose tenants, change the rent, and decide on the best market opportunities. This lack of dependence on a larger entity, such as the stock market, can provide peace of mind knowing you can make changes when you want to.

Consider Commercial Real Estate Investing With Sands Investment Group

The stock market does not have to be your only option in investing. While it is considered a more hands-on investment, the commercial real estate industry gives you the returns you’re looking for. As we have continued to observe, it is valuable to find an option that provides peace of mind and a feeling of security in a tumultuous economy. Are you looking to place your finances somewhere other than the stock market? Sands Investment Group is the perfect place to start your commercial real estate investment journey. Contact our experts today by calling 844.4.SIG.NNN or sending us an email at info@SIGnnn.com.

The world of commercial real estate has multiple facets of information. Investors, buyers, sellers, and anyone in between juggling plenty of important terminology, from the types of properties to how they are purchased. It is easy not to know where to start. 

This beginner’s guide to commercial real estate terms gives you a kickstart towards your goals. By breaking down the content into understandable sections and ideas, you can focus on what applies most to you—looking to take this new knowledge even further? Sands Investment Group is here to get you started. 

Understanding Commercial Real Estate Terms 

Categories of Commercial Real Estate 

Multifamily 

Multifamily is often considered the crossover between residential and commercial real estate. This means that someone can use the property residentially, but the property’s primary purpose is an investment opportunity. This is something such as a duplex or multi-unit apartment building. You can find out more by looking into the multifamily listings we have to offer.    

Office Space

Office spaces are typically broken up into urban or suburban. Urban office buildings are found in cities, often a part of skyscrapers and high-rise buildings. Suburban offices generally are smaller in size and often grouped in office parks. There are so many office listings to choose from, especially from the current collection of office listings we have at Sands Investment Group. 

Retail 

Retail spaces typically house retailers and restaurants. They can be single-use buildings that stand alone or multi-tenant. Often these are described as shopping centers as well. Shopping centers vary by size, concept, type, number of tenants, and trade area. If you are looking into investing in a retail space, there are many to choose from in our collection of retail listings.   

Industrial 

There are four main types of industrial-centered commercial real estate: heavy manufacturing, light assembly, flex warehouse, and bulk warehouse. They often vary heavily in size, depending on the specific use-cases. With many options to choose from, it is important to find the best fit for you. Sands Investment Group can help you make that call with our current collection of industrial listings. 

Hospitality  

Hospitality can also be referred to as hotels. These properties are described as full service, limited service, or extended stay locations.  

Commercial Real Estate Investing 

Land Banking  

Land banking refers to acquiring land, leaving their cash in a tangible, fixed asset rather than a savings account or the stock market. There are no extra payments of utilities, tenant issues, mortgage payments, or anything else that could impact a property.  

Fix and Flip 

With fix and flip, an investor purchases a property, renovates it, and then sells it for a profit. This is typically done at a discount because of its condition.   

Wholesaling 

Wholesaling is considered a strategy that includes a wholesaler entering in on a contract for a property before then selling it to a new buyer on behalf of the owner. This type of contract means that the wholesaler did not purchase the property, but they have the right to sell it for the owner.  

BRRRR  

BRRRR stands for “Buy, Rehab, Rent, Refinance, and Repeat.” This is a standard method of investment that contains more steps but brings forth a profitable result. 

Passive Investing  

Using passive investing, you can minimize buying and selling and maximize returns. This tracks a market-weighted index or portfolio. While it is most common in the equity market, it is more used in other investment spaces, such as commercial real estate. 

Location Considerations

Zoning  

Commercial zoning laws create regulations for different buildings. This often controls the type of activities a business can participate in, depending on the area. It also notifies what categories of business can occupy a zoned area. This can also factor into the features of the building as well in ways such as its setback.

Building Classification

There are three metropolitan base definitions for building classes. 

Class A 

Class A is deemed the most prestigious of buildings that have rents that are higher when compared to places in the proximity. They are considered state-of-the-art, accessible, and have a strong presence in the market.  

Class B

Class B is where most of the users can encounter average rent for the area. The finishes are not typically as well-done as Class A, but they are considered suitable for the site. These do not compete well when priced similarly to a Class A option.   

Class C

Class C classifications are properties with function space to rent below the area’s average cost.  

Request For Proposal 

As you determine what you need and want in a space, sharing that with a commercial real estate broker is an essential first step. You can submit these specifications in the “request for proposal” document as you find properties that meet your criteria. This document gives landlords information about what you are looking for to begin negotiations.  

Right of First Refusal 

This clause is advantageous for commercial buildings that receive a lot of attention. It requires a landlord to offer you additional space to lease before making it available to the general public. While you are offered this space first, you can refuse without implication.   

Rentable Square Footage   

Rentable square footage is the amount of usable square feet in a space, including a portion of the shared space. That common space is defined as the space that every tenant has access to and can use. 

Usable Square Footage 

Compared to rentable square footage, the usable square footage is the total area unique to the tenant. This does not include the shared common space that all tenants can use. 

Parking Ratio 

The parking ratio is the number of parking spaces in the property’s lot reserved for a company’s employees. This can be found by dividing your space’s total rentable square footage by the number of parking spaces.  

Option To Purchase

This part of a lease is the place of providing information to a company about how they can potentially purchase a space they are leasing. This is most commonly seen in whole-building leases with a single-tenant being responsible for the property. 

Sublease Clause

While not every landlord chooses to incorporate this clause, tenants need to reference it to see whether or not they can sublease the space to another business or individual. The tenant can consider renting out the space to someone else for some or all of the remainder of the lease when it is allowed.  

Estimating Value 

Cap Rate   

Capitalization rates are estimates used to compare the rates of return on commercial real estate properties. This number is found by dividing the property’s net operating income from its property asset value.    

Cost Approach

Cost approach is one of the methods used in real estate valuation. It estimates the price that a buyer should pay for a property as equal to the cost to build an equivalent building. 

Market Approach

The market approach determines the value of an asset by observing the value of other similar assets. This comparison can help decide what to price the asset at that fits fairly into the rest of the market.   

Income Capitalization Approach 

The income capitalization approach is a type of real estate appraisal that allows investors to use the property’s generated income to estimate its value.  

Gross Rent Multiplier (GRM) 

The gross rent multiplier (GRM) takes the property’s purchase price divided by the annual gross rents. This equation takes the numbers into account before considering property taxes, insurance, and utilities.  

Learn More With Sands Investment Group 

This beginner’s guide is just the start to learning the ropes of commercial real estate. Putting these terms into action can provide investment opportunities and a growing financial plan. Do you want to know more about the commercial real estate industry? Sands Investment Group is here to provide you with the resources and the knowledge you need. Talk to one of our advisors today to get started on your investment journey.