The Industrial Property Diamond in the Rough

January 17, 2024 – Atlanta, GA |  In the dynamic landscape of commercial real estate, the industrial market stands out as a sector that is both susceptible to threats and brimming with opportunities. Working exclusively in the Industrial store asset class, SIG Investment Advisor Solomon Colvin III has a good pulse and keeps a close eye on industry trends and data. With changing consumer preferences and advancements in technology, Industrial operators and investors alike must navigate a rapidly evolving market to stay competitive and capitalize on emerging trends. Read more →

Charleston, SC (August 15, 2023) – For the fourth time in a row, Sands Investment Group (SIG) is elated to report today that they have made the Inc. Magazine’s list of America’s Fastest-Growing Private Companies. The annual Inc. 5000 list is the most prestigious ranking of the fastest-growing private companies in America. Determination paired with data-driven advancements allowed for growth in both physical presence in the community and the scope of the success of the company’s pursuits.  Read more →

July 31, 2023 – Atlanta, GA |  In the dynamic landscape of commercial real estate, the convenience store market stands out as a sector that is both susceptible to threats and brimming with opportunities. Working exclusively in the convenience store asset class, SIG Investment Advisor Matthew Riznyk has a good pulse and keeps a close eye on industry trends and data. With changing consumer preferences and advancements in technology, convenience store operators and investors alike must navigate a rapidly evolving market to stay competitive and capitalize on emerging trends. Read more →

The market is shifting – what now? Despite the continuing rise in interest rates and the uncertain effects it will have on the economy, we believe certain sectors and markets are uniquely suited to thrive. You just need to know where to look. Read more →

AUSTIN, TX – Sands Investment Group (SIG) recently closed on Sky Ridge Plaza, a sprawling 141,000 SF shopping center with restaurants, stores, salons, and entertainment options. This establishment is located in Round Rock, TX, just outside one of America’s hottest investment markets, Austin, TX.  Read more →

Charleston, SC (August 16, 2022) – For the third time in a row, Sands Investment Group (SIG) is elated to report today that they have made the Inc. Magazine’s list of America’s Fastest-Growing Private Companies. The annual Inc. 5000 list is the most prestigious ranking of the fastest-growing private companies in America. Determination paired with data-driven advancements allowed for growth in both physical presence in the community and the scope of the success of the company’s pursuits. 
Read more →

July 29, 2022 – By Sands Investment Group (SIG) – Despite rising interest rates, inflation, and geopolitical instability, SIG Early Education investment experts remain optimistic about the market for the remainder of 2022. Read more →

To understand whether cap rates are moving, one must first understand their influence on the world of commercial real estate investing. A cap rate, or capitalization rate, is considered a real estate valuation measure that plays a role in comparing different real estate investments. The cap rate calculation is the annual net operating income (NOI) ratio to the asset’s market value. This provides the rate of return for professionals to use in comparison.

Now more than ever, the importance falls on the movement of these cap rates. In a year like 2022, it can seem like nothing is certain in the world of investments. However, understanding this valuation can give you insight that benefits your financial decisions in the long term. Learn more with Sands Investment Group to get started.

What Factors Affect Cap Rate?

As in the rest of the world of investing, specific factors can influence cap rates. It comes down to three main options that can make this number change. The first of these is macro-level economics and demographics. Next, the micro-level market influences come in. Finally, the property type plays a role in changing the cap rate.

By seeing the influence of each of these factors, it is understandable that cap rates can vary by the area you are observing. However, the market as a whole maintains a similar direction depending on the macro-level economics of the country and the world.

How Can The Cap Rate Move?

The movement of cap rates depends on the factors that affect the quantities included in the ratio. The direction of cap rates is considered cyclical as they go up and down depending on how the market looks at a given time.

To see how the cap rates are currently moving, you have to look at the state of the market. Take interest rates, for example. When interest rates are low, you provide lower payments, allowing for lower monthly debt payments on a given property. The cap rate drives down by increasing the purchase price in the cap rate equation. Thus, when interest rates are low, generally so are cap rates. When interest rates are high, the cap rates usually rise as well.

Stephen Plourde of Sands Investment Group explains that buyers expect increased cap rates across multiple product types as a direct result of the finance-ability of NNN deals, precisely because of the recent and anticipated rise in interest rates.

As we look at the current market, Plourde explains that there are still 1031 exchange buyers at aggressive cap rates similar to the last 24 months; however, there is a disconnect between buyers and sellers, specifically when a buyer requires financing. “Smart sellers will sell their properties more quickly in today’s market when they recognize that the market has shifted. They must work collaboratively with their Investment Advisor to price their properties with a forward-looking approach,” says Plourde. Looking in the rear-view mirror will lead to sellers missing the buyers looking to transact in the 3rd and 4th quarters of the year.

Learn More With Sands Investment Group

Understanding cap rates is essential as you enter the world of commercial real estate investing. That is why you must work with a company with the research and data-driven expertise to back it. At Sands Investment Group, our team is ready to get you started from the beginning to help you make impactful deals. Don’t waste any time, and get started with us today! There is always more to learn as cap rates move and change.  Learn more about investing in commercial real estate with Sands Investment Group today. Call 844.SIG.NNN or find out more on our website.

Are you looking for a way to achieve significantly higher real estate values? A sale-leaseback is a financing tool that allows property owners to sell their real estate assets to another buyer as they sign a long-term lease to be the tenant, securing the location in the process. Simply put, the seller of the asset becomes the lessee as the purchaser becomes the lessor.

In the current state of the market, the sale-leaseback is becoming more prevalent across industries. With the numerous benefits that come with it, this is no surprise. Sands Investment Group is here to provide you with the basics of a sale-leaseback, so you can decide whether it is the right fit for your commercial real estate investment decisions.      

Who should consider using a sale-leaseback? 

Often, the most common participants are builders or companies with high-cost fixed assets, in this case, commercial real estate. It allows these people to use the cash they invested in commercial real estate in other ways while still needing the asset to operate the business. 

Does this sound like a financing tool that could benefit you and your business as an investor? Sands Investment Group could be the resource you have been looking for to start.  

What is the process of a sale-leaseback? 

Understanding what a sale-leaseback looks like is one thing, but going through the process is another. At Sands Investment Group, we break down this process into three steps. 

1. Evaluate the Business 
2. Market Analysis 
3. Structuring a Lease

As the overarching tasks, each of these steps breaks down into extensive research tied to the characteristics of your specific case. Find the details here. 

What are the benefits of a sale-leaseback? 

The benefits of a sale-leaseback are broken down into that of the original seller and the purchaser. It creates a mutually beneficial agreement that creates opportunities for both parties to see positive impacts in their financial pursuits.  

For the original seller, one of the first benefits to consider with a sale-leaseback is that it is an alternative method of raising capital. In the instance of a loan, the company must repay the money, making it appear on their balance sheet as debt. With a sale-leaseback, the liability on the balance sheet decreases, while the current assets will increase. It does not present the same appearance of debt in the long-term overview of the business.   

Along with the benefits present on the balance sheet, sale-leasebacks give you the chance to grow your business with ease. This means you can use the capital to open other locations, expand the current company, or acquire another business or real estate property. As you grow, the volatility risks of owning the asset decrease with this method.  

On the other hand, the purchaser can expect benefits as well. From the start, they achieve ownership of a cash-flowing asset that also happens to be backed by a long-term lease. They also know that the long-term lease is tied to someone who wants to be a tenant and continue to utilize the property because of how a sale-leaseback originates. As a result, the purchaser can deduct the property’s depreciation expenses from their income taxes. 

Find the perfect sale leaseback listing for you by looking at the active inventory Sands Investment Group has to offer. 

Work With Sands Investment Group 

The sale-leaseback may be the financing tool you’ve been waiting for to expand your business. Now that you know the basics, it is time to take the next step. Sands Investment Group has experience in all types of commercial real estate to help you navigate leveraging your existing assets for more capital to fund future investments. 

At Sands Investment Group you can find highly personalized client services with an extensive network of investors to help you get started on discovering more about sale leasebacks. Call 844.4.SIG.NNN or find out more on our website.      

Are you interested in investing in commercial real estate? Investing can be crucial to an individual’s financial goals by offering financial security now and in the future. Investing can also allow you to increase your wealth over time as the value of the product increases. With the help of an advisor, you can begin building upon your real estate portfolio. Commercial real estate can offer a passive income with a premium return. 

Owning real estate assets may also allow for resale potential if the situation arises. If you are starting your commercial real estate investment journey, Sands Investment Group has the resources to help you confidently make investment decisions.

What is Commercial Real Estate?

Commercial real estate is different from its counterpart in residential real estate. Commercial real estate, or commercial property, is space used to conduct business, whereas residential real estate is used for living purposes. The commercial real estate industry is intended to generate a profit whether it be from capital gains or rental income. 

To invest in commercial real estate, an investment advisor can give you an overview of each category’s performance, supply, and demand. Then, you can choose what type of commercial real estate works best for you.

Types of Commercial Real Estate:

Commercial real estate can be placed in different categories based on the type of business residing in the space. You may also consider what the purpose of the property is when categorizing. These categories include multifamily, office, retail, industrial, hospitality, and special use. 

At Sands Investment Group, we specialize in the following commercial real estate product types:

• Automotive
• Convenience Store
• Dollar Store
• Drugstore
• Early Education
• Industrial
• Medical
• Office
• Owner-User
• Restaurant
• Retail / Big Box
• Self Storage
• Shopping Centers

Is it Sensible For Me to Invest in Commercial Real Estate?

Many people think of investments as stocks, bonds, mutual funds, or ETFs. However, investments can also be in commercial real estate.  There are numerous types of investments you can capitalize on in the realm of commercial real estate, and ultimately diversification is the key to managing your investment risk. However, successful acquisitions can vary due to multiple factors such as the economy and demographics. 

On the other hand, commercial real estate has proved to be a reliable investment during many market changes. To be successful with this choice of investment, you must set goals and decide what a commercial real estate investment could provide. 

What Type of Investor Are You?

Planning for your financial future entails deciding what the different choices will look like. During this time, you must analyze prior financial statements and determine what its current financial performance has the capacity to obtain. Then, when making investment decisions, you can take the time to evaluate time, risk, and value. This provides confidence in knowing that they will fit into your goals and future plans. Factors such as age, objectives, and tolerance to risk can be essential to what type of investor you are. 

After you determine the type of investor you are, it can help clarify how and why you should invest. Even if you have solid investments in place, you may find it wise to continue building your portfolio to meet financial goals. No two investment portfolios are identical. Investors can choose what options are best suited to their situation. 

Pros and Cons of Commercial Real Estate:

✓ Provide solid and predictable returns on investment over time.

X If not researched, potential risks of the market situation, such as oversupply.

✓ Provide a tangible asset.

X Can miss the property’s history of sales if not enough research is performed.

✓ Builds equity.

X Market cycles are constantly changing and do not last.

✓ Tax benefits from owning commercial real estate.

X Requires a commitment of time to upkeep.

✓ Commercial real estate assets have leverage.

X Maintenance costs may require professional help.

✓ Provide cash flow and more income.

X Requires a more significant initial investment.

Interested in Learning More About This Investment?

If you are interested in investing in commercial real estate, get in touch with a Sands Investment Group advisor to start your journey. Check out our current listings to see which commercial real estate investment would fit your needs. The opportunity you’ve been looking for might be one click away.  To learn more, get in touch with an expert today by calling 844.4.SIG.NNN or sending us an email at info@SIGnnn.com. 

Whether you are brand new to CRE or a veteran investor, the time is going to come when you want to start growing your commercial real estate portfolio. Even if you have solid investments in place, it’s wise to look for ways to build your portfolio into one that will help you meet your financial goals.

No two investment portfolios are identical and investors typically choose different CRE asset types to put their money into. Real estate portfolios can include investments in real estate investment trusts (REITs), real estate mutual funds, or investment properties like office, retail, multifamily, or industrial space.

Tips for Growing Your Commercial Real Estate Portfolio

When growing your commercial real estate portfolio, there are several areas you should focus on. From finding the asset types that will serve you best all the way through deal negotiation, the following tips will be helpful as your CRE portfolio develops.

Setting Goals and Making Plans

The first step in building your CRE portfolio is to think about your financial goals. What do you want your investments to achieve? Are you looking for an additional source of monthly income to pay the bills? Do you want to work towards complete financial freedom and build a business based on CRE investments? Do you want to put away more money for your family and retirement? These are all valid goals that a good CRE investment portfolio can help you achieve.

Once you have set your financial goals, you can make a plan to build a portfolio that will serve your needs. Creating a real estate business plan with specific goals laid out will give you a roadmap to follow on your investment journey. The map may change, but having a starting point is essential. Consulting with an investment advisor specializing in commercial real estate is beneficial for making your CRE business plan.

Exploring Different CRE Asset Types

If you’re interested in growing your commercial real estate portfolio, keep an open mind about investing in different types of commercial properties. There are a lot of commercial properties out there, and not all of them will be right for your portfolio, but some will. The best type of property for your portfolio will depend on the market you’re in, how much money you have to invest, your timeline, and many other factors. That’s why we recommend consulting a commercial real estate advisor about different types of properties.

You will want to consider the type of income you want from your property as well as the CRE product type that will provide the best return on investment for you.

Types of Property Investment Income

One factor to take into account when you’re looking to build a strong CRE portfolio is the type of income you want from your property investment. There are two types of investment income: cash flow and capital gains (sometimes called capital growth). To build a strong portfolio, you might want to consider both types of investment income.

Capital Gains Investments

Capital gains investments are made with the goal of capitalizing on the long-term appreciation of a property. In simpler terms, you buy a property with the intention of keeping it for a period of time before selling it for a profit. The popular motto of “buy low and sell high” is the central idea of capital gains investing. ROI is usually higher in capital gains investment than it is in cash flow investment. However, it is riskier because there is more speculation involved and market fluctuations can make a big impact on success.

Capital gains investors are often called “flippers” and fall into two categories:

1. Investors who buy a property and flip it as-is: These investors buy on market speculation. They buy properties and don’t make any changes in anticipation that the market down the road will yield a profit when they sell the property.
2. Investors who buy, fix, and flip a property: These investors buy properties and invest time, money, and labor into improving the properties with the goal of using the upgrades to increase the value and selling price of the property.

Cash Flow Investments

Cash flow investments are based on the potential return on investment (ROI) the investment will yield on a regular basis. Rental properties in asset classes like office space, multifamily buildings, and self-storage facilities are examples of cash flow investments. Cash flow is your profit after collecting income, paying expenses, and reserving funds for future expenses or repairs.

Cash flow investments are usually long-term compared to capital gains investments. With a cash flow investment, you’re not purchasing the property with the intention of selling within a short span of time. When deciding whether or not a cash flow property is a good addition to your portfolio, keep these factors in mind:

• The rentability of the property and projected occupancy
• The expenses related to maintaining and/or improving the property
• The potential for property value appreciation

CRE Product Types

Commercial properties can also be put into different categories based on the type of business that uses the property, or what the purpose of the property is. These categories include multifamily, office, retail, industrial, hospitality, and special use. Sands Investment Group specializes in the following CRE product types:

• Automotive
• Convenience Store
• Dollar Store
• Drugstore
• Early Education
• Industrial
• Medical
• Office
• Owner-User
• Restaurant
• Retail
• Self Storage
• Strip Centers

Acquiring Assets

With your goals set and a plan in place, you can start building their portfolios by acquiring assets. The acquisition process includes:

• Studying Market Trends
• Evaluating Properties
• Analyzing Potential Income
• Calculating Expenses of Purchase
• Negotiating a Deal

Studying the market and looking at the properties that fit into your investment strategy are the beginning stages of the acquisition process. This groundwork is important for making the right choice, but there’s a lot more work involved. You may have found your dream property to add to your portfolio, but you need to analyze your potential income and calculate the expenses involved in purchasing the property before you can start negotiating a deal.

Getting a commercial property appraisal is an important part of the property evaluation process. No matter what your goals are with the purchase or sale of a property, an appraisal will be necessary. A commercial real estate appraisal helps to determine the value of a property. To learn about this step in the process, read our guide on What You Need to Know About a Commercial Real Estate Appraisal.

And of course, negotiating and closing the deal completes the acquisition process. Partnering with the right broker during your CRE purchase will help you negotiate the best deal possible for all parties involved. After a property is acquired and added to your portfolio, you can start considering your next move.

Balancing and Diversifying the Portfolio

As you are growing your commercial real estate portfolio, it’s important to take steps to balance and diversify the portfolio. As has been stated many times, you cannot avoid risk in the world of commercial real estate investment if you want to reap the rewards of profit. However, there is a line between taking risks and being reckless with your money. Diversifying your investments has the potential to strike a healthy balance between risk and reward.

Even when staying on top of commercial real estate trends, the market can be unpredictable and sometimes volatile. Having a balanced and diversified CRE portfolio can reduce the risk of loss or soften the blow if a certain asset class takes a hit in the market.

What Is Diversification?

When referring to investing as a whole (not just CRE investments), a diversified portfolio would include components like domestic and international stocks, bonds, short-term investments, mutual funds, and real estate investments.

Diversifying Commercial Real Estate Investment

Diversification means investing in different property types with unique risk-reward profiles. Investors can diversify their CRE portfolios in several ways, including:

• Investing in different asset types
• Investing in different asset classes
• Diversifying investments by geographical location or market
• Using multiple investment strategies and hold-times
• Mixing passive and active investments

Exploring different CRE product types is a great way to start the diversification process. You may also want to consider growing your commercial real estate portfolio with alternative investments. To learn more, read our guide to Diversifying Your Portfolio with Alternative Investments.

Choosing the right strategy for growing your commercial real estate portfolio will depend on economic and demographic cycles. An experienced commercial real estate advisor will be able to help you navigate the different types of properties and which would suit your CRE portfolio best.

Get in Touch with a SIG Advisor

If you’re interested in growing your commercial real estate portfolio, get in touch with a SIG advisor. Our experts are uniquely positioned to help you get the most out of your investments. We have brokers that are designated experts in each CRE product type.

Want to learn more? Call 844.4.SIG.NNN or contact us here to consult with a SIG advisor about growing your commercial real estate portfolio.

Commercial real estate investors and owners have faced a series of challenges due to the COVID-19 pandemic and those challenges will evolve. Nobody can predict the future, but we can get an idea of how things in 2022 will progress by looking at current CRE market trends.

While we can’t claim to be on the other side of the pandemic, the country is recovering. That means demographic and business trends will accelerate. When it comes to CRE investments, there will be an increased demand for certain assets as the year progresses. 

Savvy investors will consider CRE market trends when making decisions about where to put their money so they can take advantage of the more popular assets and how to look for opportunities among all asset classes.

CRE Market Trends to Watch

Here are 10 CRE market trends investors should watch for as we move into the Q2 of 2022 and look even further into the future.

1. Continued Market Recovery Post-COVID-19

The first CRE market trend to keep an eye on as 2022 progresses is the continued recovery of economic and CRE markets. That’s not to say everything will be on a constant upward slope. As current events affect prices, you can expect natural ups and downs. As we move further into 2022, we are getting closer to a “new normal” where the market will gain more stability and CRE investment opportunities will keep improving. There may be setbacks and flare-ups along the way, but trends indicate that they will be short-lived.

2. Evolving Retail Models

The way people shop has changed over time, which impacts retail property investment. During the early days of the pandemic, consumers were pushed to spend a lot more online. But now that people are routinely out-and-about again, consumers are returning to retail spaces for in-person shopping. That doesn’t mean online shopping will drop off. Sales have risen in both online and in-store channels, so consumers seem to want more of both types of shopping.

In-store sales are rebounding for retailers because shoppers want to see their buying options in person. Leading to reduced vacancy rates in brick-and-mortar retail spaces, good investment opportunities in the retail property sector will increase and capital for financing will be readily available.

3. Self-Storage as a Popular Asset

Self-storage is a very popular asset to invest in now. A large number of American households rent storage units and demand remains high during all phases of an economic cycle. That means occupancy rates are stable and revenue streams are steady. Investing in self-storage is advantageous because it is somewhat passive and requires less capital. Check out our post on why self-storage investment is a smart move for your portfolio for a more in-depth look at this CRE trend.

4. Continued Growth in the Multifamily Sector 

In 2021, multifamily investment performed very well. Investors can expect that to continue through 2022. According to Crexi, multifamily was the fastest-selling asset type in 2021. The average closing times reached 123 days in Q3 and the market should see increased demand in the next year.

Factors behind this CRE market trend are low supply in single-family homes due to construction limits, price competition along with household formation. The economy is growing, leading to the formation of new households looking for housing. Along with household formation, growth is being driven by people looking for quality multifamily housing with more space to accommodate growing families and working from home.

5. Increased Interest in Senior Housing

Senior living, skilled nursing, and residential health care facilities were heavily impacted by COVID-19. Infections limited move-ins and occupancy of those facilities dropped. However, occupancy rates started increasing at the end of 2021 and will continue to rise as a CRE market trend in 2022. Full recovery may not happen this year, but investors should start considering this asset class again.

6. Changes in Office Space

Due to the pandemic, there is an existential change in the way people view workspaces. Working from home shifted attitudes about working in an office, making some investors wary of office properties. But that doesn’t need to be the case. While working from home seems to be here to stay, it will be part of a flexible hybrid model that also includes in-office work. 

The office will once again be the hub of business activity as people split their time between remote and in-person workplaces. As this setup becomes more common, occupancy in office spaces will be steadier. Demand for flex space, coworking space, and turnkey office space will also create investment opportunities. Forbes predicts that employers will look for larger, cost-effective locations while also demanding spaces with nice amenities and flexibility.

7. More Mixed-Use Space and Adaptive Reuse 

Investments in hospitality, office, and retail spaces will be smart moves as recovery from the pandemic continues, but changes to properties in those sectors may provide opportunities that will add value to portfolios in the future. Mixed-use zoning and adaptive reuse will be CRE trends to keep an eye on going forward. For example, an office becoming a mixed-use space may yield impressive returns in the future as the market continues to change.

8. Investors with Cash In Hand

Many real estate investment firms and private equity investors have cash ready. Many investors are making faster decisions and looking to invest capital before the cost of borrowing increases too much. They will be looking to put money into the hot asset classes like self-storage and multifamily, but they will also look for other places to invest their stockpiled cash, in sectors such as hospitality and retail.

9. Supply-Chain Issues Impacting Industrial Development

Manufacturers, logistics companies, and retailers are all seeking solutions for supply chain issues. These issues have been plaguing businesses for a long time, but it has just recently caught up to the commercial real estate market. 

Transportation and insurance costs are rising and space near seaports is limited and in high demand. For those reasons, things are moving inland for people building new facilities and working on development projects for expansions. There will be an increase in industrial properties in population centers, and in close proximity to highways and airports. 

10. The Proptech Revolution Continues

Technology and software will continue to grow in importance in the commercial real estate world. Property technology (proptech) is vital to many aspects of CRE investments for both brokers and landlords. Software platforms and databases are used for managing deals and portfolios and aid in property management.

Proptech is the key to making things more customer-centered as tenants expect online platforms to streamline operations and improve their user experience.

However, it’s important to keep in mind that technology alone won’t yield success in the commercial real estate industry. An online platform or database will never replace the industry knowledge of an experienced broker. Using property technology to connect people and systems simply makes things more efficient, which drives revenue.

Work with an Experienced Broker

If you’re an investor looking to take advantage of the current CRE market trends and grow your portfolio, get in touch with a SIG advisor. Our experts are uniquely positioned to help you get the most out of your investment. We have brokers that are designated experts in each CRE product type so you can explore the current trends within each specific asset type.

Want to learn more? Call 844.4.SIG.NNN or contact us here to talk about working with our team.

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.

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