As the real estate saying goes, a proper investment is determined by “Location, location, location.” It’s no mystery, location is a big part of what gives a property value. However, there are other factors to consider. Let’s take a closer look at those factors and how they can help you find real value in 2025’s property markets.
Supply and Demand
This is an 8th grade lesson in sales that holds true across the board. The supply and demand arcs are reliant on one another. It’s the same when it comes to commercial real estate. Keen investors will look to locations that offer a favorable supply of commercial properties that might be near thriving residential sectors. While these properties might cost more initially, the easy suggestion is that this would make for a proper return on investment.
Other investors might favor commercial properties that are underdeveloped and not living up to their potential. These distressed assets are not often in demand. Therefore, they can likely be purchased below market value and easily refurbished. This handily suggests a proper ROI down the road.
Tech and Infrastructure Matter
In recent years, the commercial real estate market has experienced considerable fluctuations. Brick-and-mortar operations are coming back to life but if you’re looking to expand on that trend, consider keeping up by offering smart technologies, renewable energies and advanced security systems. The inclusion of these technologies quickly makes a commercial property more valuable and more attractive to potential tenants.
Also, keep an eye out for city-wide infrastructure projects that might be bringing improvements to otherwise distressed parts of your city. New highways, transit systems and business districts quickly signal an opportunity for many CRE professionals. Projects like these tend to add real value to those areas of town.
Always Consider the “Comps”
It’s always a good idea to research comparable properties in the area you are invested in or wish to invest in. This will give you an idea of the current market value of surrounding commercial properties. This will also help you to determine how your investment and those around you will or should perform in the coming year.
Also, there may be some new play in the neighborhood that might get the attention of other potential investors. As an example, in 2024 noted rapper 50 Cent purchased several distressed properties in downtown Shreveport, Louisiana with an eye on renewal. One may presume that 2025 will be a good time to look at those properties surrounding his own investments. It’s easy to suggest that the revitalization of those downtown blocks will have a positive and cumulative effect on the value of those neighboring properties in the year to come..
Making 2025 Your Best Year Yet
These are just a few factors to consider when it comes to determining how to invest in the year to come. A smart CRE professional knows how to take advantage of any market condition. Whether the economy is suffering or a rising tide, there is always an opportunity in the business of commercial real estate. If you’re looking to upgrade your game in the CRE market, our industry-leading software can help. Schedule your demo today.
