When Investing In Commercial Properties How Important Is The Geographical Proximity Of The Project To You Or The investor You Are Advising Who Would Be Making That Allocation?

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

Geographic proximity can be important, especially when you’re conducting due diligence on new construction or new property offerings. Having a team ready to travel for due diligence trips when they’re able is important to expanding your reach as far as geographic proximity goes. Working with investors that have a good track record, and those whose judgments can be trusted, can also help with expanding your desired territories. 

Richard Wilson: When investing in commercial properties, how important is the geographical proximity of the project to you or the investor you’re advising who would be making that allocation? 

Dr. Forrest Bryant: Yeah, good question. You know, for us well geography is important as far as what type of MSA is it. We typically are not going into primary MSAs, a lot of times we’re looking into secondary and tertiary, and we know the sponsors that we work with. We’re doing a lot of value add, we’re not doing a lot of new constructions. Sometimes we make exceptions but you know a lot of our clients are in the southeast and a lot of our investments are in the southeast and in the flyover states so that kind of gives you an idea of some of the markets we like to look at. But we don’t necessarily – I don’t have to go kick the tires of every investment opportunity that we take a look at. You know we really like to work with sponsors who have got a good track record and we trust them to go and we know that they’re going to have boots on the ground and they’re taking care of these. So, it’s not necessarily that important for us to be on site. 

But however, when we’ve got investors in 22 or 23 states, so if we wanted to send somebody to go take a look at something it’s not that hard, and we’ve got a due diligence team that can go. When we do, of course travel restrictions have kind of made that a bit more difficult in the circa pandemic world that we’re in, but we do like to do due diligence trips and go check some of these out. Especially some of the newer offerings – I hope that answers your question. 

Richard: Right, right. Yeah, makes sense.