Net lease real estate is attractive for conservative investors who are looking for long-term profits and benefits from their investment in a property. In addition to net lease opportunities on existing structures, there is another revenue stream you can explore for your portfolio-ground leases. Read more →
In commercial real estate, it can be hard to know the true value of a property. CRE can be challenging to navigate, especially when investors have a lot of properties, are in many industries, or have properties in a wide range of geographic areas. When an investor is looking to grow their portfolio by adding a new property or selling off one they currently hold, knowing the value going into any real estate transaction can be helpful to navigate the next steps an investor and their team have to take. Read more →
Navigating commercial real estate listings and finding the best fit for your investment strategies can be quite challenging. Aside from price and cap rates, a key feature to consider is the type of lease that may already be in place on a property (which you’ll inherit as the new property owner). Lease types vary, and the unique details within each deal can differ significantly from one property to another.
There are many types of investors in this world. Some are very hands-on and know exactly what is happening with each investment. Others are less hands-on but still like to know a bit about how their investments are doing. Then, there are the passive investors. There is a place for each type of investor because every investment — from stocks to commercial real estate properties — needs investment funds to thrive. Every investor, no matter what type, has goals for their investment portfolio. For some, they just want to see growth. Others want to take advantage of as many opportunities and tax benefits as possible.
Commercial real estate investment can be complex, especially when you get into some of the more granular details and processes. For some investors, growing a portfolio is a key to success. In order to do this, there are many different opportunities to buy, sell and trade commercial real estate properties. When a real estate investor knows they want to sell one property and buy another for investment or business purposes, they can conduct what is referred to as a 1031 exchange. Read more →
Triple net lease real estate is popular for investors who want to add a low-risk, low-touch property to their portfolio that generates consistent monthly revenue for many years.
Triple net leases are typically used for larger and more complex structures, i.e., a strip center or a chain store such as 7-Eleven or McDonald’s. These properties with leases to large single tenants such as national restaurant chains are extremely popular with investors because they provide turn-key investments. The properties tend to have more complicated leases as the tenant is responsible for rent and utilities, along with all operating costs, which include three main categories (net-net-net) types of financial responsibilities typically included and outlined in the contract: Read more →
What is the difference between a triple net lease and a modified gross lease?
What is a Modified Gross Lease?
A modified gross lease can be best understood through comparison, as it represents a middle ground between a full-service gross lease and a triple net (NNN) lease.
Before signing an industrial, retail, or commercial lease agreement, it’s crucial to learn about complex lease terminology to understand and budget for the price you will be paying per square foot.
Leases are often gross, modified gross, or triple net, representing three methods in how costs are divided between tenant and property owner. The kind of lease is often determined by the type of building or the property’s location. It’s crucial to know the difference between these leases before signing a contract. Read more →
Some investors need unique ways to finance an investment. Conventional loans, bridge loans, Small Business Administration (SBA loans), and even some other alternatives that many investors aren’t even aware of. Some of these options are a great way for investors to diversify and grow their portfolio while getting rid of properties that may not serve them anymore but keep the businesses that do. Read more →
When you are looking to buy or sell a commercial property, there are many different steps and considerations you are making. You may be thinking about growing or diversifying your portfolio. You may be thinking of selling a property that no longer fits your goals or generates necessary income. You may have found your dream property to add to your portfolio. No matter what your goals are with the purchase or sale of a property, an appraisal will probably be necessary. Read more →
Wawa, a popular convenience store along the East Coast, can make a great triple net property type to add to a real estate investor’s portfolio. Convenience stores, in general, are always in demand and are found in every community across the United States. Customers will stop in on their way home from work, after filling up their car with gas, or on a road trip to grab some snacks before hitting the road again. This constant stream of customers ensures that the triple net property type can stay in business and are a worthy sale to pursue. For investors looking to add different types of retail or diversify from other types of commercial properties for sale, a triple net real estate property like Wawa offers a great way to have a credit-worthy single tenant in a fairly hands-off property type while ensuring a consistent income stream for you. Here are some tips and tricks for buying a Wawa NNN property. Read more →
Triple net lease investment properties are often a great, brand new addition to an investor’s real estate portfolio. NNN properties have a few key benefits for both the landlord and the tenant that make them a popular option for commercial real estate properties. These benefits, for property owners, include less time invested as property maintenance is passed to the tenant, and fewer expenses as property taxes and insurance premiums are handled by the tenant as well. This provides a consistent income stream without a ton of added stress. Now, when investors look for NNN properties, that can mean a variety of things. Some medical offices, strip malls, dollar stores and restaurants fall under this category. Within the restaurant sector, both dine-in restaurants and fast food restaurants are often triple net leased. Read more →
Triple net properties, or NNN properties, are an attractive real estate option for investors looking to expand their portfolios with a variety of property types. NNN leases can be applied to properties like retail, dining, offices, or industrial space. This means that acquiring NNN properties can truly diversify a portfolio with lower risks than other properties. When considering which types of properties to invest in for triple net leases, investors should consider fast food restaurants, such as Taco Bell.
When commercial real estate investors want to acquire a new property, they often go to what they know. Their portfolios may consist of many similar types of properties. But it doesn’t have to be that way! Diversifying a real estate portfolio can be one way to ensure sustainable, steady growth over the long term. Commercial real estate investors may shy away from industrial properties for sale if they have never considered one before, but there is great growth in the industry and there can be strong returns to investors who do it right.
When considering expanding a portfolio, an investor may want to search for properties that are familiar to them. For some investors, that means multi-tenant residential properties; for others, that is retail or medical listings. However, one way to increase diversification is to go outside that comfort zone and find something completely new.
Industrial real estate is a growing industry for many real estate investors. Industrial spaces can have many uses, but they all have a few things in common: their tenants need the space to run their business and they will stay in one place for a long time. Let’s take a look at industrial spaces for sale and how these industrial properties can grow your portfolio. Read more →
As a commercial real estate investor, you may be seeking out the next opportunity right now, or just keeping your options open for future investments. New investment opportunities offer a great chance for you to diversify and grow your portfolio, or simply a chance to trade out a lower performing property for something that will bring you more value in the long run. Whether you currently have a vast array of property types or you’ve focused on one primary type like office buildings, you may be wondering about other ways to increase your investments — and your income. One type of commercial property that can help you grow your portfolio is commercial warehouses for sale.
Commercial warehouses come in all sizes, and they can be used for small, local businesses selling items online or for large, multi-state or multi-national companies with huge ecommerce and sales success. They are found across the country in order to serve their customers, who range from businesses to consumers to even a single company storing items until they are needed. No matter the size of the warehouse, there are a few key benefits investors have found when investing in this type of commercial real estate property. Let’s dive a little deeper into investing into the warehouse property type.
Investing in commercial warehouse properties for sale often makes sense for people. These leases tend to be much longer term, so you won’t have to constantly seek out a new tenant. With options for a longer lease, commercial warehouses can be a great property for triple net leases, where you can pass off many of the maintenance and tax costs to the tenant. You’ll see a higher return on this property type in most cases, as well. While commercial warehouses may have a higher entry point, most investors make their money back relatively quickly with this high value opportunity zone real estate.
Right now, we are still in the post-pandemic market. During the past 15+ months, ecommerce boomed, which means that there has been a great demand for commercial warehouses for sale across the country. People got used to online shopping and have shifted much of their shopping habits away from brick and mortar stores. This trend of online shopping and businesses needing warehouse space is not going away any time soon. That makes this a great time to invest in commercial warehouses to grow your commercial real estate portfolio.
Because commercial warehouses are in high demand, both from businesses and from their customers who are continuing to shop online necessitating more warehouse space for processing orders, these three advantages can be found with this type of commercial real estate:
Now, as with anything, there are cons to investment opportunities. So you have the best information going into any investment, you should know these three challenges associated with investing in a commercial warehouse:
When you’re looking for the right commercial warehouse to invest in, there are a few key things to keep in mind. Location is very important to these types of businesses, but often in a different way than other properties you may currently own. Here are four elements of the location to understand when seeking out a commercial warehouse space to invest in.
Location: Distribution centers and warehouses are often located near large population centers. This means there will be better access to more trucks for cross-country delivery. But a large population area doesn’t necessarily mean a big city, which would have more traffic and increased costs. You can find warehouses properties for sale in every state, and in most cities too. In most cases no matter where the warehouse is located, investors are able to plan for reliable monthly income with few landlord responsibilities, especially when tenants and landlords agree to a NNN lease.
Space: With a commercial warehouse, there needs to be plenty of space for delivery of product. The business relies on receiving products, as well as processing orders and distributing products. This means they will need to have space for trucks to come and go and unload or load materials. Commercial warehouses are often best situated near transportation, like highways or interstates, as well as airports or ports (if located near oceans and large rivers used for transportation). Because the costs of bringing in materials and shipping them out is usually more than half of the expenses these businesses see, location really matters for warehouses.
Storage: Aside from needing space for loading and unloading, commercial warehouses can be used for other things than ecommerce. The changing supply chains now mean more businesses have a need for extra storage or manufacturing space. Some businesses or product types need climate-controlled commercial warehouse space, and across the country the industry has seen a demand for cold storage during vaccine distribution. Storage for products, manufacturing, or other needs as supply chains, businesses, and offices change is continuing to grow.
Height: A unique element to commercial warehouses is the need to understand the importance of height (floor to ceiling space inside the building). The property’s square footage only tells part of its storage capacity, in floor space. But with height, this gives investors and tenants a better idea of the unobstructed space within the building, representing the stacking potential of warehouse contents like crates and boxes.
When you partner with a commercial real estate broker who has your goals in mind, you are better equipped to find the right listings and properties to grow your portfolio. At Sands Investment Group, our brokers across the country work with you to identify your goals, define success on your terms, and find the properties that fit your needs including industrial properties, office spaces and a variety of commercial properties. If you’re ready to discuss adding a commercial warehouse to your portfolio in the post-pandemic market, contact the broker team today by calling 844.4.SIG.NNN or sending an email.
If you are in the market to do some investing, look no further than a self-storage unit to bring in some cash. If Covid-19 taught us anything, it is that the financial world can change on a dime, but real estate investors would prefer something a little more stable. According to Bloomberg Markets, storage space is “… the number one alternative investment.” Compared to other forms of real estate investments, self-storage investing enjoys many attractive attributes: Resistant to Recession, Relatively High Returns, Opportunities for Consolidation, Lower Breakeven Occupancy Rate, Low Maintenance and Less Hassle. Owning a self-storage unit is an investment that will pay dividends without breaking the bank of time or money.
A self-storage facility has many advantages. With a low overhead cost, this asset class allows for an impressive potential income. The smaller and mid-size units do not need much hands-on management, and can get by with only part time managers. A self-storage facility also does not have the challenges and headaches that a rental apartment or housing unit might have.
Month to month leases provide the ability to change rental fees more quickly, and there are so many self-storage units around, offering a big pool for investors.
With fewer moving parts to a storage unit (no bathrooms, no human tenants, no grandiose expenses), investing in a self-storage unit is a great idea for positive cash flow. They are also very stable investments, even when the economy is not, and can be used by renters in various ways. US News and World Report said, “The flexibility of self-storage facilities makes them incredibly resilient through all economic cycles because people always seem to find a use for them.” Even if the market or the world’s health is unstable, people will always find a use for their storage unit.
Just like other commercial real estate investments, self-storage properties are listed and sold based on cap rates, which directly relate to the investments NOI. This is how much cash flow the investment produces after accounting for all expenses and income. The higher the capitalization rate, the higher return investment is likely to be achieved and the better rate of return for the investor. Prior to purchasing your first storage property, it is important to put together a cash flow analysis, looking at all expenses relating to operating the self-storage business, including:
The property should have adequate cash flow to cover all of the expenses listed above in this article and any debt service. If it is an underperforming property, it may not have enough cash flow to cover expenses and require property improvements.
Most self-storage facilities are Class B or C facilities, especially those owned by inexperienced or small-sum investors who invest minimally. Many of which older in age, need some improvements, and are not performing to standards of the market. This gives an opportunity to investors to add value by providing capital improvements, raising rents, expansion, limiting costs, and developing better management processes, among other areas of improvement.
The most ideal self-storage facility to find is one that meets the following criteria:
Dan Hogan is one of the successful self-storage entrepreneurs, having bought some land in 2020 and worked it into a successful self-storage business today.
Dan was attracted to self-storage for two reasons. “With the self-storage business, I saw two things immediately: managing the facility was very simple and could be done with one employee or one and a half employees. Second, the facility would get to the point where it would throw off cash flow. And it’s proven to be true,” he says.
After 11 years in business, Hogan is not only making money, but he is thriving and at 90% capacity. He is also getting ready to add 65,000 square feet to his business. Despite the upheaval of the past year amidst Covid-19, his self-storage facility is going strong.
“Personally, it is nice to have the comfort that we have equity in self-storage. There aren’t any guarantees in our other business whereas the self-storage model has demonstrated for years continuous incremental growth with incremental profit. And the peace of mind that brings is infinitely valuable.”
No matter what stage of life you are in, investing in self-storage is a good way to find some stability in an uncertain world. Whether building your own or buying an existing business, the sky’s the limit for this successful investment opportunity. Read his story here.
“The bottom line is that if we go into a bad housing market, people have to put their stuff somewhere. When the economy is good and people buy too much stuff they have to put it in storage. You’re winning as the market goes down, and winning as the market goes up.” – Joel Cone, US News
“Self-storage is a unique asset class. It has a reputation of providing relatively high yields and has shown to be relatively resistant to recessions due to its lower declines and default ratios versus other asset classes.” – David Thompson, BiggerPockets
“One of the hallmarks of a recession is the movement of consumers into less spacious accommodations. As wages stagnate, and the employment picture gets grimmer, homeowners and renters tend to downgrade the size of their homes, but they still need a place to store their stuff. Self-storage facilities benefit from this demand and can see increased rental rates during a downturn.” – Ari Rastegar, SpareFoot“
Let’s assume you had $200,000 to invest in 1994 and put your money equally into two investments. One investment for $100,000 in a self-storage REIT and reinvested all earnings while you put another $100,000 into the S&P 500 and reinvested all dividends. By 2017, the self-storage REIT would have grown to $4,026,413 while your S&P 500 stock fund would have grown to $532,243. Self-storage outperformed the large capitalization stocks index by a whopping $3,494,170.” – David Thompson, Bigger Pockets
When you’re ready to start the conversations with net lease experts about an investment in storage properties for sale, the team at Sands Investment Group can help. We have facilitated transactions of many self-storage facilities across the country, ensuring that investors not only find the right opportunity but get the best deal when adding to their portfolio. SIG’s self storage experts can discuss all the factors and considerations in investing in a storage property and help you identify the listings that meet your goals. From single net lease opportunities to an absolute NNN lease and triple net real estate, Sands Investment Group has you covered. If you’re ready to make a smart net lease buy for 2021 and purchase a self-storage property or similar commercial real estate properties for sale, our broker team is ready to assist with the growth, expansion and management of your portfolio. Contact the team by calling 844.4.SIG.NNN or check out our current self-storage listings to get started with your next self-storage investment.
When conducting a 1031 exchange, investors can utilize a 1031 exchange intermediary for an easier process. The term 1031 exchange comes from the Internal Revenue Code (IRC), section 1031, which states, “No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment if such real property is exchanged solely for real property of like kind which is to be held either for productive use in a trade or business or for investment.”
As an investor searches for their next property opportunity, there are many different types of real estate that may jump out as a possibility. From fast food restaurants to strip malls and everything in between, real estate can be a lucrative investment opportunity. In 2021, especially, it can seem like there are many good options for investments. One such investment that can add significant value to a growing real estate portfolio is a CVS for sale.
If you’ve been researching investment opportunities in commercial real estate, you have probably come across many terms you are unfamiliar with. It can seem overwhelming to figure out if investing in real estate is truly what you want, especially when you don’t understand what is being discussed.
Investors are always looking for the next opportunity. Whether you are new to commercial real estate investments or you have a robust portfolio already, a convenience store for sale might make a great addition to your portfolio. Convenience stores are always in demand, and are found in just about every city, town, or community across the country. A convenience store or c-store meets the essential needs of their communities and considered recession-proof, too, as customers will stop to buy what they need even if they don’t have a ton of disposable income, especially if the store is located in a good area near people’s work, home, or commute.
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