Top Articles From Q1 2023
Gain valuable insights to make informed investment decisions in commercial real estate by exploring the latest trends. We provide cutting-edge market research reports covering various property types and conditions across the United States. Stay updated with the latest market trends by browsing through our top articles of Q1 2023, which offer detailed analysis and research.
How to Find the Most Profitable Investment Property
Commercial property investment offers many benefits, including tax advantages and high return rates. To build wealth and diversify portfolios, investors should research the location and analyze the market before making a purchase. When analyzing an income property, key metrics include net operating income, cash flow, cash on cash return, and cap rate. The most profitable types of commercial properties include high-tenant properties, properties in areas with growth, and triple-net lease properties.
What is a Good Cap Rate for an Investment Property?
Cap rates are a useful method to evaluate a property’s profitability. While there is no single ideal cap rate, investors can use various techniques to determine if a property’s cap rate aligns with their investment objectives. The ideal cap rate depends on the investor and the property, but a cap rate between 5 and 10 percent is generally considered good. Various economic factors, including interest rates, rent growth, GDP, unemployment, and location, influence cap rates. When assessing a property’s value, investors should also consider other metrics like ROI, IRR, and GRM.
The Future of Gas Stations
Gas station operators are looking to transform their business models as they face rising costs, high inflation, and an increasing number of drivers switching to electric vehicles (EVs). To stay relevant and convenient, operators are seeking alternative business channels outside of fuel and implementing new initiatives, such as food and beverage subscription programs, to incentivize consumers and increase revenue.
Direct to Consumer vs. Wholesale
As e-commerce has surged, many consumer brands have shifted from relying on wholesale retailers to direct-to-consumer (DTC) operations, but the business model may not be the “end-all, be-all” of business success. The cost of operating a DTC business is significantly higher than selling products to a retailer as marketing, advertising, and SEO are all backend costs that come out of pocket for a DTC brand. On the other hand, wholesale retail provides a hybrid solution for retailers, providing storage and sale space. Both business models have their pros and cons, and it is important to analyze a business’s strengths, weaknesses, and target audience to determine which fits best.
Los Angeles Multifamily Market Report | 2023
Vacancy rates in Los Angeles have decreased from their peak at the end of 2020. However, vacancy rates are expected to rise moderately through 2023 and 2024 due to increased supply and modest demand. Despite high pricing, investors are still active in L.A.’s apartment market. Development has also increased, with activity highly concentrated in areas such as Downtown Los Angeles and Koreatown.
Growth Expected in Huntsville in 2023 – Here’s Why
Huntsville’s real estate market is projected to grow further in 2023 due to strong job and population growth, low cost of living, and development opportunities. The city, nicknamed “The Rocket City,” has a booming economy with billions of dollars being invested in the area. In 2021, Huntsville led the U.S. in economic growth, and in 2022 it saw a 2.04 percent increase in population, a five percent increase in employment, and a $20,000 rise in household income from 20 years ago. According to Real Estate U.S. News, Huntsville was also ranked the #1 place to live in the U.S. in 2022-2023.
Southeast Port Markets | Industrial Outdoor Storage
Industrial outdoor storage (IOS) has emerged as a new frontrunner in the industrial real estate market in the US, attracting institutional and private capital. Port markets have become the most sought-after locations for IOS due to supply and demand. Southeastern ports like Charleston, Savannah, and Jacksonville have grown tremendously due to historic real estate market conditions, port expansions, and projected growth. The trend is expected to continue, making IOS one of the fastest-growing asset classes in commercial real estate.
2023 Net Lease Tenant Report
In 2022, inflation and interest rates negatively impacted net leased properties, causing upward pressure on cap rates. However, investors still value the strong nature of net lease retail and are seeking safe, passive investments to ride out the challenging rates environment. Matthews™ analyzed data from 30+ tenants, including on-market data for lease structures, key statistics, and transactions, to provide insight into opportunities in the market. The report includes information on single-tenant cap rates for retail, office, and industrial properties in Q4 2022.
California Apartment Laws: What Owners Need to Know for 2023
New resident manager laws are now active in California, which include an increase in the minimum wage, stricter contracts, rent credit limits, and more. Apartment owners with 16 or more units without an on-site owner must have a “responsible person” living on the premises. Owners must also pay employees twice a month, provide accurate time sheets, and offer a retirement plan to workers. The article also discusses rent credit, check exchange payment options, limitations, and benefits. Staying informed about the evolving laws and regulations is essential for apartment owners to avoid profit losses and employee issues.
What Impact Will the Super Bowl Have on Glendale, AZ?
Super Bowl LVII took place in Glendale, AZ on February 12, 2023, at State Farm Stadium, and generated over $500 million in total revenue for the city. The Super Bowl is a major event with a significant impact on local economies, and Glendale has previously hosted the event in 2008, 2015, and 2018. The stadium has paid for its original cost of $455 million through hosting other events, and the Super Bowl will be paired with other events such as the Waste Management Open, a five-day PGA-sponsored golf tournament.
Advantages of Bridge Loans in the Current Market
A commercial bridge loan is a short-term financial instrument commercial property owners use to bridge the gap between getting a loan and obtaining permanent funding. Bridge loans generally have high-interest rates but provide flexibility and execution that other loan types do not. They are short-term, usually lasting between one to three years, with an interest rate higher than conventional financing. Bridge loans are often easier to apply for, approve, and fund than conventional loans. Bridge loans are quick, have a high probability of execution, and provide flexibility for borrowers.
Single-Family Rentals and Build-To-Rent Communities
The commercial real estate market in 2023 is uncertain due to rising interest rates, cautious investors, and a challenging lending environment. Multifamily investments boomed in 2021 due to the pandemic and migration, but the sector regressed in 2022 as rent rates became high and homeownership appeared to be a better option. The current high mortgage rates are pushing consumers back to renting, and single-family rentals and build-to-rent communities are becoming popular alternatives.
