3 Cool Facts About Commercial Real Estate Investing

The commercial real estate market is nearly impossible to pin down simply because it fluctuates so often — about every five to seven years, according to the most recent expert estimates. But even though it’s not always possible to make detailed predictions about commercial real estate values, it’s important to understand the basic trends of the market before investing in real estate on a large scale.

With that in mind, here are some interesting statistics and facts about the real estate market regarding commercial properties:

• For investors looking to get involved in the real estate industry, commercial properties are often fairly easy to finance. Banks are typically willing to provide loans worth about 60-70% of a property’s total value for commercial properties, while commercial property lenders often want to make sure the buyer can provide 30% of the total value in a down payment before providing a loan.
  

• The size of average Class A buildings can vary quite a bit depending on which region, and even which city, you’re looking at. Class A buildings in the suburbs, for example, are typically around 50,000 square feet. In major metropolitan areas and city centers, a Class A building is typically considered to be around 250,000 square feet.
  

• Location is always the most important detail when it comes to commercial real estate investments, but it’s important to realize that the hot locations now aren’t necessarily going to be as popular in a few years from now; the most decrepit neighborhoods often go from being ghost towns to flourishing communities within a matter of years when developers begin moving in. Many investors look to big cities like New York City or Los Angeles, simply because commercial values tend to remain high in these areas. But with some advance planning it’s possible to find up-and-coming neighborhoods with properties that aren’t too expensive, thereby increasing your return on investment in the long run.

Choosing to invest in commercial real estate isn’t a small decision by any stretch of the imagination, and it certainly can get stressful at times. But with enough organization and dedication, the benefits of investing really do pay off!