The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.
When looking at smaller niche strategies, the post-pandemic world has really brought a few things to light. Investing in essential businesses properties, like takeout spaces, medical or dental spaces, or essential businesses that work virtually, can help to safeguard your investments during these uncertain times. Additionally, investing in smaller needs linked to multi-family, like vending machines or similar, can be a lucrative lesser-known space.
Richard Wilson: In the commercial real estate industry there’s some really broad food groups, you know, hospitality, multi-family, and self-storage, and then there’s niches within the niches of cold storage, or residential assisted living, or maybe pre-senior living multi-family, where it’s kind of targeting seniors with on a golf course, or bingo and other things going on. So in your community and with high net worth investors, what type of really small niche strategies are really interesting to you, and you think are kind of growing in momentum right now?
Dr. Forrest Bryant: You know, I probably don’t have a really good answer for you on this one. I mentioned a few earlier like self-storage conversions, and industrial kind of like that last mile. You know, obviously medical dental is a big one, so a lot of times if we’ve got an owner occupied – you know, a lot of times a lot of our new clients are renting space, so one of the big wealth builders that we can do for them is to get them in an owner occupied commercial space. Sometimes that’s a strip where there’s four or five other tenants, and you know I guess this is a pretty good one is we’re looking at niches to consider just essential versus non-essential businesses in those spaces. So an example of that, we just helped a client who’s looking at a five plex, so we wanted to go through and look at all five of those spaces – are they essential businesses? Are they – we don’t want any dine-in restaurants, we’ve got to be really careful with service providers like barber shops or nail salons, so if it’s takeout coffee, or takeout donuts, or takeout restaurants, maybe that’s fine. Or if you’re looking at, you know, a business that can be virtual and that can still pay their rent, somebody that’s essential that’s not going to have to shut down, I definitely think that that’s a really good thing that we didn’t have pre-pandemic, a really good filter to look at there.
Triple net is a big one in medical or dental. Here’s another one, too, I know this is a commercial real estate podcast and all, and I’ll tie it back, but some of the operating businesses that we really look at are investing into some things like ATMs, or bulk water vending, or ice machines, and so that’s kind of a side business. But if you’re in commercial real estate and you’ve got an apartment complex, well why would you not have a bulk water vending machine or an ATM that you own access – a lot of them have dry cleaners, or vending machines there. But, you know, that’s just some other ways and some other ideas that kind of, if they’re captive, that can do that. Because we found that some of those areas to be very lucrative for some of our clients.