What are the Top Corporate Real Estate Challenges?

Corporate real estate is a profitable business. However, it is not devoid of any difficulties. According to surveys, various major concerns for corporate real estate executives range from securing space for business expansion to searching for flexible leases.


Finding a space for business expansion

One of the top corporate real estate concerns is finding adequate space for expansion. This is an issue when the markets are up. Businesses find it difficult to secure available and reasonably priced corporate real estate where they can hold offices. Usually, corporate spaces in key cities are very expensive while those outside the cities may not give a company sufficient client exposure.

Expensive utility costs

Another challenge regarding corporate real estate is the costly utilities like water and electricity. These utilities are expensive because of limited resources, power demands of business, and monopoly of utility ownership.


Lack of flexible leases

Finding flexible leases is also a corporate real estate concern. Corporate real estate leases are unpredictable because of the volatility of economic conditions. When the markets are down, six-month leases seem long, and 12-month leases seem to take forever. More often than not, business executives look for flexible leasing options to be able to adjust to the rise and fall of the markets.

Disposing of excess properties

During economic slowdowns, a big concern in the corporate real estate is getting rid of excess properties. When there are a few businesses to occupy leased spaces, costs can rise excessively. If the excess properties are not disposed of in time, a corporate real estate is doomed to closure. And obviously, selling those extra properties is hard to do when the financial times are tough.

While there are a number of concerns that corporate real estate executives should manage, the good side to it is that the corporate market is much more profitable than the residential market.


When is the Best Time to Invest in Commercial Real Estate?

Timing is everything—and real estate investing is no exception. Wondering what is the best time to invest in commercial real estate? It’s when the economy is down.


Lessons from the global recession

The global economic slump in 2008 is anticipated as the longest and deepest since the Great Depression of the 1930s. The downturn has affected the finance system in the United States and other countries worldwide.

The biggest impact of the economic crisis is on the purchase and sale of commercial properties. While the stock market is plunging at record lows, an increasing number of investors are considering investments in commercial real estate. The commercial real estate typically refers to shopping centers, office buildings, warehouses, and manufacturing plants.

What makes commercial real estate attractive during an economic slowdown?

Intense financial difficulties force many developers and owners of commercial real estate into going bankrupt. What the commercial real estate owner does is to put the real estate on the financial market at a discount, which certainly attracts buyers who can seal the deal. Therefore, prices of real estates go down when the economy is slow. And with the current economic crunch, now is the best time to invest in commercial real estate.

Considerations before jumping in

Because commercial real estate is a long-term investment, it needs to be done with caution. You don’t get rich overnight by investing in commercial real estate. If you think about purchasing a commercial real estate investment property, you must be aware of your future management responsibilities regarding physicals effort and time. If you are purchasing a net-leased property, the tenant pays most of the expenses, making property management a lot easier. This is the ideal property for you if you do not have much time to spare for your commercial real estate investment.