A commercial real estate may consist of a single property or can include a versatile property type like an office building, a shopping mall, industrial business and stock, an apartment building, hotels and the likes. The property location is therefore a critical component when appraising commercial real estate. Position of the commercial properties determines its demand, its value and potential income.
Office Spaces
If the renting companies, the entrepreneurs or any type of tenant for that matter are seeking for the office space they get very careful when choosing the location. Prime office locations are basically associated with large city communities which provide necessary communication and computing facilities, skilled manpower and close contact with clientele or top management. It is also important to note that rents are still highest in central business districts of large cities, but now many companies can lease space in suburban office parks where total costs including commute time may be lower.
Outside the boundaries of the metro region, other items such as highway accessibility, parking, visibility, conveniences of the surrounding area, and walkability are considered when choosing an office site. For instance, the IT firms place a preference for, new ‘tech’ offices that are situated close to central business districts, to attract the best young brains. Regarding the criteria, executives, lawyers in law firms, consultants, and most other types of professional services companies prioritise a prestigious business address and convenience for clients.
Retail Properties
The core value of retailers is visibility and convenience access for his or her customer base. Thus, the best location might be quite different from one category of retail to another because of the differences of the areas of interest. For instance while big box stores tend to locate near highways, convenience stores and petrol stations are likely to develop property on busy intersection corner lots. On the other hand shopping malls centralize brand name stores in much bigger structures which are sited nearer the affluent suburban areas.
Retail selling density, population density, number of vehicles that pass the location and distances between other competitors are some of the considerations used in determining the hot spots formats. By doing so landlords can probably attract premium rent for leasing the shops in the strong retail locations or in the lifestyle centers with the best visibility. Rents tend to drop dramatically even just a few blocks from these main retail zones.
Industrial Real Estate
The industrial segment of real estate consists of manufacturing facilities, and storage or distribution facilities. With increased e-commerce, significant demand for new modern logistics real estate in close proximity to the primary metro markets has generated. This leads to quicker delivery to the online customers. Furthermore, there is good demand for business parks for facilities smaller light industrial users. Accessibility to and from highways, rail lines as well as airports appears to be a crucial factor for both categories of industrial premises.
Further, it deems the opportunity and the cost of obtaining the industrial space available to it when like selecting the areas by industrial occupancy. Corporate tenants who need more space and have more bargaining power, pressure some of these markets as Los Angeles and New Jersey forward some of their tenants to emerging markets across the Midwest and the South. For industrial users, supply and demand are key factors and regardless of the geographical areas the footprint should allow easy access to customers and suppliers.
It is on this premise that potency or strength of each of the commercial properties vie and perform within a given locale. However, they prefer growth markets and still prefer specific submarkets, sites and buildings that suit their commercial tenancy spaces and business. In this respect, the most profitable forms of CRE investments must meet these location factors for each particular property type.
