Expansion and growth aren’t the result of doing what you’ve always been doing. If you have a fitness goal to improve the muscles in your arms, for example, you need to plan out exercises that focus on them. You can’t just “wing it” at the gym to meet this goal—or neglect your objective and focus on something else entirely, like your legs. You have to be intentional and you must have a strategy.
The same goes for commercial real estate portfolio growth. If you’re looking to expand your business, it’s going to take strategic developments and investments with that goal in mind. To help you out, here are six strategies for expanding your commercial real estate portfolio.
1. Analyze the Market
First, get a gauge of the market and do your research. Thorough market research is a must before embarking on any expansion efforts. Analyze trends, demographic shifts and other economic indicators to identify promising investment opportunities. (They’re there, even if the climate doesn’t appear ideal for investments at first glance.) The key is to focus on markets that are emerging, ones with strong growth potential and favorable supply-demand dynamics. Commercial real estate software like Quarem can help with your market research and analysis by giving you data-driven insights and analytical tools that will help you make more informed decisions and mitigate risks.
2. Diversify Your Assets
Specifically, diversify your assets across different classes. Most CRE professionals are trained (and know how to) diversify assets, but it’s important to diversify types of assets in addition to diversifying industries. Some examples of ways you can diversify asset classes include considering CRE investments in:
- Office buildings
- Retail centers
- Industrial warehouses
- Restaurants
- Malls
Diversifying the assets classes in your portfolio not only reduces risk, but also allows you to capitalize on various market segments and economic cycles. It’s much easier to track and organize all of this with a commercial real estate tool like Quarem on your side.
3. Choose Partnerships Wisely
Expanding your commercial real estate portfolio is much easier with collaboration. But the partners you work with should be chosen strategically. Joint ventures can provide access to capital, expertise and resources that will accelerate your portfolio growth in ways that wouldn’t be as feasible on your own. Some qualifications of beneficial partnerships include established investors, developers or institutional funds. You can leverage your partners’ market knowledge (or share your own), as well as network and better track records to identify and capitalize on lucrative investment opportunities. Just make sure the partners you choose also align with your investment objectives and aren’t a risk to your portfolio growth instead.
4. Focus on Opportunistic Investments
The fastest-growing portfolios feature investments that are good opportunities and add value to your list of properties. You can enhance your returns on these opportunistic investments by proactively managing, repositioning and/or redeveloping them, tapping into potential that would otherwise sit there. Examples of investments that might be a good opportunity include distressed assets and underperforming properties. If you do your due diligence (and utilize CRE tools like Quarem with robots market analysis tools), you’ll find attractive options quickly. Basically, if a property’s full potential hasn’t been realized, it might be worthy of an investment.
5. Leverage Technology
If you aren’t utilizing commercial real estate software, portfolio growth is going to be more of a grind. Sure, it’s possible and plenty of traditionalists have expanded without modern technology, but it’s more of an exception than a rule in today’s digital age. You simply can’t replace the power and information delivered by accurate and up-to-date data analytics. With Quarem, you can gain a competitive advantage when it comes to identifying, evaluating and managing your CRE investments. Furthermore, you can streamline your processes to quickly identify market trends, tenant preferences and property performance data that will help you make more informed investment decisions.
6. Optimize Your Asset Management
Assets and your CRE portfolio value are directly related. To maximize your current portfolio and better put yourself in position for the future, implementing proactive asset management strategies is a must. Tasks like regularly reviewing lease agreements, conducting property inspections and investing in upgrades will not only attract high-quality tenants, but give you an edge against your competitors when it comes to capitalizing on emerging opportunities that come with minimal risk.
These are just a few of the strategies that can help with expanding your commercial real estate portfolio. At Quarem, we’re committed to empowering CRE pros like yourself with innovative software solutions that streamline portfolio management, help you make better decisions and drive future growth. To see for yourself how Quarem can help you scale your CRE portfolio and unlock new opportunities for success, request a demo today.
