How to determine best type of commercial real estate

Question

Hello, I am looking into buying a piece of vacant land on a highway that I think is undervalued. It is zoned for pretty much any type of commercial project - retail, office, warehouse, flex. I am having a hard time figuring out what would be the best type of commercial real estate to build. My goal is to rent the space out then maybe flip the property. Is there any type of analysis that I can perform to know which type of space would be best/ most profitable? Maybe by looking at the demographics? Existing businesses in close proximity? Any help is greatly appreciated. Thanks

Rob Riv · Answer

great stuff.. thanks @Karen Margrave - The more time I spend around the area the better I am able to see what is in demand and what is going on. I have reached out to an experienced commercial agent and looks like that will be a big help also. Thanks for your time most appreciated.

Karen Margrave · Answer

Rob Riv I'd like to say we have some great formula for figuring that stuff out, but it's more from experience. We get to know an area, and what the major influences in the area are, ask ourselves if there's a niche that isn't being met, what is the potential for growth in that niche, etc.

Once you familiarize yourself with an area, and you know what property is on the market, what's moving, and what doesn't, and ask yourself why or why not, it helps you build a foundation for making decisions in that particular market. Get to know the factors that influence the economy of an area, etc. Is the area growing or declining?

There's always a lot more to deals than the obvious. Just because there's land available that is zoned a specific way doesn't necessarily mean it is good for that use. You have to dig deeper. In some cases zoning gets out ahead of the market, in others zoning is behind what the use for an area is. It's all about local market knowledge.

I don't know that this makes sense, or not, but, that's what we do. If you don't know the area yourself, talk to the most active commercial agents in the area, and get up to speed. Good luck! Let me know if you have any specific questions.

Brandon Turner · Answer

I have no idea Rob Riv but I'll tag Karen Margrave cause she's a whiz at that stuff! :)

Also - don't forget a photo!