A recent report found that investors in commercial real estate could face significant rewards in the near future – as long as they manage the competition effectively.
Commercial real estate forecast looking promising
According to the World Property Journal, commercial real estate opportunities and pricing power will remain strong in the coming year. The report specifically lists the particular areas of real estate showing promise, including:
For Colorado commercial investors, this means that they could potentially face a significant amount of competition in these areas over the next few years. Investors know that competition in the market is a good thing – it is a sign of a healthy market.
However, investors must approach competition strategically to protect their best interests and investments.
What should investors do when facing competition in the market?
Competition in commercial real estate has been increasing for several years now. If investors wish to succeed in a competitive market, there are a few things they must remember:
Investors strive for the best deal, but they must also ensure they protect their investments effectively. O’Brien Legal can help investors navigate commercial real estate transactions and investments with professional care and quality service.
]]>Fast forward to today. “Endless convenience” has a new definition, particularly for Colorado retailers.
The Impact of E-Commerce
Shoppers can buy products at all hours from the comfort of computers and smart devices in their homes. The changing tide turned into a quantum shift that cut into the bottom lines of “brick and mortar” retailers. Witnessing the changing tide, big-box stores are forced to literally and figuratively think “out of the box” and adapt to their ever-changing customer base and their purchasing habits.
Their efforts, particularly in Colorado, seem to be paying off.
Shopping centers statewide have gone beyond weathering the storm created by Amazon and other e-commerce companies, both large and small. They have thrived, expanding 20 percent over the course of the past decade. Structures in “trophy areas” featuring Starbucks and other high-profile anchors – specifically King Soopers and Whole Foods – continue to attract shoppers looking to leave the confines of their homes.
The explosion of actual foot traffic has made Colorado one of the most desirable markets nationwide. Investors are not only honing in on Denver which has enjoyed average annual retail rent growth of five percent from 2016 to 2019. There is also a particular focus on secondary and tertiary markets outside of the capital city that benefits from the booming economy that provides investors better yields.
Investing in real estate is risky, particularly in an ever-changing world. What was “old” is now “new” again. The insight of an experienced attorney can be the first step towards rewards beyond the risks.
]]>Environmentalist groups have turned their attention towards the construction industry due to their purported role in climate change. Their current pursuit is backed by the United Nations Environment Program’s claims of buildings and associated construction accounting for 40 percent of worldwide carbon dioxide emissions.
Investors Eyeing Potential in a Changing Industry
The shift to “greening” is in response to large cities throughout the United States strengthening their regulations to reduce carbon emissions. With dire predictions of potential natural disasters that could drive down property values, investors are taking notice of the trend. Adding new, “ground-up” green construction to their portfolios is more desirable investment-wise due to the high costs of updating noncompliant buildings.
The process will be gradual for both builders and those that invest in properties while both traverse the path of “decarbonization.” That road is long in selecting and constructing sustainable structures. Portfolios need to be updated to secure the tools that factor in climate-related risks.
Investors enjoy a certain level of power and influence in the day-to-day operations of construction companies. They could use that power via their greener portfolios. More environmental awareness among stakeholders could see them using their influence to convince companies to employ more environmentally and socially responsible methods.
Sustainable buildings are still in the early stages and a sign of the real estate industry’s evolution. As investors take on new ventures, the help of a skilled attorney staying on the cutting-edge of new trends is paramount to success.
]]>However, owning a vacation property in addition to your full-time home can have a significant effect on your finances. That is why many people make the investment and rent out their vacation homes when they are not using it to earn extra income.
There are a few things you must consider when investing in a vacation home with plans to rent it out. One of the most important factors is seasonality.
Take seasonality of the property into consideration
When looking to purchase a vacation rental property, there are several metrics that you must consider, including:
Since vacation homes have a largely seasonal nature, seasonality is one of the most important of these metrics. Conducting thorough research is essential to take advantage of the peak rental season.
For example, if you purchase a vacation home near Vail, it is critical to know that the peak ski season is between December and March. It might be beneficial to plan to rent during that time and stay in the home in the off-season to increase income opportunities.
Seasonality can also determine when you buy
The seasonality of a property not only impacts rental demand, but also the price you pay for the property. Essentially, if seasonality influences rental prices and demands, it will also affect the asking price for the buyer looking to invest in the property.
Buyers should look for the best deal, and approaching a sale with strategic insight is critical to protect your best interests. O’Brien Legal can help you safeguard your assets and interests now and in the future when it comes to real estate investments.
]]>The Trend Towards Renting
More people equals the need to create more places to reside. While homeownership is up 21 percent as are real estate prices with 104 percent growth, construction companies also swooped in to meet the demand of those looking to rent. Newly built multifamily homes and apartment complexes currently enjoy an occupancy rate of 94 percent, well above the national average.
A significant part of the real estate expansion in Colorado’s capital city includes apartment construction, an area where Denver ranks high in the nation. Developers seized on the opportunity to increase the number of units to attract wealthier Denver Metro residents to high-end housing.
Specific data includes:
Both owning and renting carry their share of benefits and drawbacks. Ultimately, the decision for a prospective owner or tenant comes down to their respective financial pictures. Such an important decision may require the help of an experienced, Denver-based real estate attorney.
]]>Uncovering a Lack of Efficiency
In 2014, the National Institute of Standards and Technology studied 400 buildings residing in cool climates similar to Denver. A total of 70 were constructed between 2004 and 2014.
The results were alarming, revealing a significant lack of energy efficiency. Seventy-one percent were anything but airtight. Significant leaks resulted in 55 percent more natural gas consumption, and 28 percent were using more electricity.
The Financial and Environment Benefits of Energy Savings
One of the more significant expenses for owners of homes and commercial buildings is energy costs. The new code can potentially increase property cash flow and reduce the cap rate. Improving efficiency can potentially create 4,000 jobs and more than a billion in energy savings over ten years.
The financial perks are only the beginning. Employees in those buildings can work in more comfortable environments with significant noise reduction. Those important factors can increase both staff performance and overall productivity.
A new initiative originally introduced in Fort Collins six years ago that mandated the aforementioned blower door testing is making its way to Denver. An enterprise of this nature can improve the overall quality of life combined with more jobs and a stronger economy.
With building codes continuously changing, legal help from a skilled and experienced attorney can ensure that your project is in compliance with those rules and regulations.
]]>While continuing to dominate its industry, the well-known transportation rental provider for homeowners on the move has seen better days, particularly in the state of Colorado.
Inventory and Price Presents Challenges
Once residing in the top twenty for the “states to move to” listing – specifically 16th – the “Centennial State” has dropped to 42nd. The fall from real estate grace is the result of slim pickings for prospective homebuyers that are driving up prices as inventory shrinking.
Metro Denver, in particular, saw a reduction of nearly 30 percent by 2019’s end compared to the previous year. While sales were up six percent, the inventory of available single-family homes was 28.9% lower at the end of 2019 than it was at the end of 2018, according to the report.
The end of the year saw precipitous drops with September-to-October sales dropping 32.8 percent and November to December sales falling 29.5 percent.
Garfield, El Pason, and Pueblo counties were the hardest hit in the inventory department while Larimer, Weld and Mesa saw smaller declines.
An increase of new construction that will attract not only new homeowners but also those looking to increase their square footage. Colorado remains an attractive state with employment opportunities galore combined with weather that entices snowbirds currently feeling the freeze of a harsh winter.
The real estate industry is never stagnant when it comes to home prices and availability. In any market, the decision to purchase a home presents some risks and even more complexities. Having the help of an attorney with such an important investment is paramount.
]]>Sales volume for the previous year continued the increases. Specific data that fueled that continuing trend includes:
Homes selling for $1 million or higher also saw small growth at one percent ($1,526,999 to 1,535,900). Additionally, time on the market decreased by 14 percent from 72 days to 62 days.
Denver's Real Estate Market: The Good and the Potentially Bad
The past decade has been good for Denver. Since 2010, average gains have been much higher with 2018 reaching 7.2 or 7.9 percent growth, depending on the study. Many locations in the city showed promising consistency for the first part of the year before seeing a decline.
With 2019 at an end, the year's findings are tempered as experts express concerns about the reductions in growth. Some fear that the final numbers could be part of a larger problem that may continue throughout 2020 and beyond.
The news is not all dire statewide. The smaller amount of affordable options in metro Denver is forcing buyers to look elsewhere in the Centennial State. Communities such as Fort Collins and Colorado Springs are set to reap the rewards and outperform within five years, according to the National Association of Realtors.
Regardless of trends, the purchase of real estate is a personal process for any Coloradan. The best bet for success is to place your trust in a skilled and experienced real estate lawyer.
]]>Luckily, knowing the specifics of a commercial real estate transaction helps you find the perfect property for your needs while keeping your costs low.
Unique details in commercial real estate
Commercial transactions are like residential in the step-by-step process. However, commercial real estate has its unique complexities:
These details are crucial for buyers to know before purchasing a specific property. Without that knowledge, you may end up with the wrong property or location for your company.
One way to help balance the legal complexities of a commercial real estate transaction is to hire an experienced attorney. O’Brien Legal works diligently to listen to clients and act swiftly to accomplish their goals.
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