what is the average/standard vacancy rate for commercial real estate - say warehouses or retail. like the national average?
You really shouldn’t pay much attention to national averages. They have no bearing on your local market(s). That being said, here are some numbers I’ve heard:
Commercial Residential- 6-10%
Retail- 4-8%
Industrial- 9-12%
Office- 12-15%
The reason for the ranges is because the people doing the surveys collect their data from all different places.
small Apartment complexes? say between 5 to 10 units?
additionally, now with commercial - does the financing work the same with lenders? what i mean is, are assumptions a pain in the rear, like residential?
and what about seller financed deals…where the seller has a mortgage on the property? are their DOSC in commercial?
HUGE NOOB question - but one i must ask, not familiar with commercial at all.
i’m going to do all this research myself anyway, but i figured i’d ask here first.
DOSC’s are in commercial loans just as they are in residential. A small 5-10 unit building you may find that they are enforced more and the lenders may be inflexible opposed to a large building.
Vacancies are usually similar in a particular market no matter the size of the building. Ofcourse if the owner/manager owns 5 units they will be able to spend more time and energy filling vacancies than an owner with 500 units. Occupancy rates (for the most part) are still caused by external factors though.
TMCG,
The other thing to consider with commercial is whether the building is easily suited to another business if the commercial tenant moves out. One of the risks with commercial properties is that they can remain vacant a LONG time while waiting for a new customer. This is especially true of warehouses, specialty buildings (buidings with a characteristic shape like certain restaurants), etc. There are two 2-million dollar buildings in my area that have been vacant for several years. Apartment buildings, strip malls, etc are easier to re-rent and have more renters in a single investment, which lessens the risk.
Mike
mwrenonline.com this is a publication of commercial real estate in the midwest
there are others that cover your area by this publisher and others
they will have several statistics on vacancy, etc the 1-200 it costs to subscribe (or go online and view for free many articles) will be a worthwile investment for someone in persuit of commercial real estate deals