Getting started investing in CRE requires a good deal of preparation and planning. One of the first considerations is forming a team, because this is not something one does alone. You’ll need experts in your corner to navigate this complex environment.
Technology developments have expanded our options and given us unprecedented access to experts and networks. Making use of these tools, investors can cover all of the bases much more efficiently and assemble a dream team.
#1: Property Comps
Access to information on comparable properties is essential in evaluating a potential investment and formulating an offer. While this information was once the domain of agents and brokers, it’s now available online. Several excellent platforms offer comps for commercial real estate. Compstak is a free source with thousands of comps shared by its users. It is searchable and accurate, so any investor can get the information they need. Loopnet offers listings and property records, as well as sales comps, for a subscription.
#2: Market Analysis
Understanding market conditions and forecasts is the basis for effective planning. Here again, technology has opened the gate to this information. Data aggregators compile massive amounts of information and analyze trends to develop an accurate picture of current conditions as well as credible forecasts for future growth. There are an array of online services that make Big Data into a manageable tool. Some examples are REIS, Real Capital Analytics, and Costar.
There’s a lot of number crunching involved in CRE investment, so an experienced accountant is a huge asset. A CPA can help you to maximize tax savings and avoid over-extending yourself. Ask other investors for recommendations, and keep in mind that an accountant that has participated in investing can take your perspective.
#4: Portfolio Management Software
Once investments have been identified and accumulated, tech tools will help you to manage them effectively. Platforms for managing portfolios are sophisticated and intuitive aids. Reoptimizer provides a comprehensive dashboard that lets you get a clear overall picture of your investments and reports and calendar features that help keep you on top of the details. Argus includes tools for budgeting, risk management, and analyses that help build your portfolio strategy.
The complexities of property management can be tamed by digital tools created specifically for CRE. These platforms assist with everything from rent collection to marketing, and can serve small operations as well as large property management firms.
Access to listings has never been so widespread. In fact, potential buyers often identify properties and then consult brokers for access to the details. The array of portals for CRE is vast, and many platforms are able to provide in depth property information online to interested buyers. Costar’s showcase site is a search engine for commercial properties, and CRBE’s site shares listings for properties worldwide.
Even so-called “off-market” deals, once known only to industry insiders, can now be searched online. One such private marketplace is Brevitas, which in a few short years has compiled a huge inventory of these opportunities.
An attorney is essential for navigating the investment process. This is a complex environment, so choose an attorney that spends the majority of his/her time (at least 60%) on real estate, and has at least 5 years’ experience in real estate law. Their clients should include many investors, in a variety of CRE properties. An attorney that has made some real estate investments of his/her own will also be in a better position to represent investors, in many cases.
Real estate brokerages have seen their roles evolve over the last decade. As clients are empowered by technology, they’re able to find preliminary information independently. The brokerage has become an expert consultant, providing clients with detailed information on market trends, economic and demographic factors, and the ins and outs of transactions. Major brokerage houses share a wealth of information online. Check the sites of JLL, CBRE, Marcus & Millichap, and others for useful statistics, news, and information. They provide a tremendous range of services relating to CRE.
Assembling an investment team is easier than ever, and these resources mean that your team can include some nationally ranked players.