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Commercial Real Estate FAQ With Dr. Forrest Bryant On Commercial Property Investors & Due Diligence

What Types Of Commercial Properties Do Investors Seem Most Drawn To And Why?

The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.

In this post-pandemic world, the investments that investors are more drawn to have changed slightly as new realities have come to light. While multi-family and senior living used to be two popular choices, the pandemic has brought to light some problems that lie within these investments particularly during this time in history. Instead, investors are more drawn to industrial and self-storage spaces that go along with these new emerging trends. 

Richard Wilson: What types of commercial properties do investors seem most drawn to and why? 

Dr. Forrest Bryant: So, good question. I’ll throw out maybe just a few things that we’re focusing on a little bit more in the post pandemic world. Two of the ones that we really really like are self-storage and industrial warehouses space. You know that, those were certainly some investments that we really liked before the pandemic, but in the post pandemic world it just became so much more pronounced that self-storage and industrial were just two places that we really need to be, sometimes I call them “bomb proof”. If you’re working with really good sponsors that understand supply and demand, that’s one of the biggies right there you’ve got to make sure that you’re going into the right area. 

But we really like self-storage conversions, so we have some sponsors we work with there, not a big fan of new development but I really like conversions. And then obviously industrial warehouse space with the Amazon effect, and with e-commerce, and really that last mile, you know that infill in the last mile, we really – that’s kind of getting niched down inside the bigger umbrella, but we really like that. And you know a couple things, you know multi-family and also I’d say senior housing are two that we really really love, but they’re different now, so you really have to, if you’re in those spaces with multi-family there’s been some shifts there, so we still are going to have some shake out with what’s happening. You know, obviously, maybe this is evergreen or maybe it’s not but as we’re recording this today we’re going into the winter months and we’re starting to see more states locked down and we’re probably going to have more economic stimulus to renters and to small businesses so definitely think that that’s, you know, the renters are going to have some protection against eviction and so that could have a negative effect in some markets, and some multi-family projects, and conversely with senior living. I mean we all, we’re a big fan of that space and looking at the silver tsunami and the macro economics of that space, you can’t deny that. However, now we’re looking at the potential negative effects of the coronavirus situation there, and senior living spaces are more susceptible and potentially more likely to have deaths, and lawsuits, and there’s just some other factors there that we didn’t appreciate before the pandemic. So you definitely have to look at those closely. 

Richard: Right, right. Sure. 

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Richard Wilson