I live in a suburban area where there are quite a few office buildings that are either for sale or that have space for rent. Oddly enough this same area has seen quite a bit of growth in new subdivisions with single family homes.
Is there a reason why business space is so hard to rent out or sell when there are so many new residents to the area?
Is there a way to capitalize on a situation like this?
Thanks for any suggestions.
Simple. ONly businesses rent out commercial spaces. If the business in your area sucks, then well, tough shit for commercial landlords. In Bay Area (san jose, ca and surrounding areas). There’s 15-18% vacancy for office ever since the dot com bust. Landlords are hemmorhaging up their butt. If you are right and residents are moving in, you should see businesses move in too.
Have you ever looked into rezoning like an office into condos or lofts? that’s pretty profitable if your market is not in the one of the bubble-about-to-bust areas.
Growth in residential use (homes & apartments) generally spur retail commercial first. Office space usage will change to reflect demand changes affected by supply & demand for various uses, employment factors by industry and economic incentives from community government. If residential is booming, then service related office use should start to grow as well. Talk to the economic development staff and find out what’s their plan for the area and who has been inquiring about the area. They are often good sources for the big picture without the potential biases that brokerage firms may add.
Speedyword, thanks for the reply. I would love to look into rezoning offices into condos, the only thing is I don’t have the funds right now to buy or start the construction on a project like that. However I would definitely look into that kind of investing if I could do it without using my own money.
Sounds like a good suggestion, I’ll definitely look into it. One of the unique things about my area is that homes are quite a bit cheaper than homes in other suburban areas. Because of this there has been a lot of growth, every other day there seems to be a new subdivision or new building site for SFH’s. I would love to find out how to take that data and present it to a few dozen businesses who are looking for commercial space. The problem is I need to know how to market to the type of businesses who need office space and how to work with owners of these empty buildings and convince them to pay me a few to get their spaces leased out. In fact I’m going to visit the bookstore today and see what I can find to help me in that area.