Atlanta GA Commercial Real Estate Market Trends Analysis

Commercial properties that house a company that does business with other businesses (B2B companies) are called industrial properties. B2B companies either manufacture or deliver goods to other manufacturers or retailers.

The exception is the quickly expanding category of fulfillment centers that warehouse and distribute products sold by online sales platforms directly to their customers.

Industrial property investors will keep the asset long-term and function as the landlord. Their investment budgets count on revenue from both rent and the future liquidation of the property. Industrial lease agreements can be structured on either gross or net rent provisions.

Annual and 10 Year Population Growth

Industrial property investors require population statistics for purposes that are dissimilar from residential investors. A decreasing populace has a more indirect impact on industrial properties by way of a shrinking tax base. Adequate tax receipts are required to maintain highways and infrastructure that industrial properties need.

A decreasing population is a good signal that business property values are presumably to shrink as well. A large consideration for industrial tenants is the availability of qualified workers. These renters will not be comfortable gambling on a location that doesn’t have an increasing number of potential employees.

Property Tax Rates

As we witnessed with apartment complex investments, tax rates are an accurate clue to the economic health of a potential market. Consistent tax rates are an indicator of a foreseeable environment for your investments.

Our articles about commercial real estate taxation as well as commercial property tax reduction methods will inform you about taxation intricacies.

Accessibility

Companies that rent industrial properties transport big products or significant amounts of them. Big tractor-trailer trucks are utilized to move these products. Industrial properties have to be adjacent to highways so that big trucks can reach them without complications.

There are industrial companies that utilize trains or airplanes to ship their products. This means that being near an interstate, which typically takes traffic near airports and railway hubs, a large plus for industrial properties.

Utilities

Companies that make goods themselves need significant amounts of water and power. A property lacking the capacity to supply suitable utilities will not draw those renters.

Businesses that are located in retail premises sell straight to the people in the region. This includes single-tenant and multi-tenant assets. Recruited companies for single-tenant assets are drug stores, auto parts stores, banks, and restaurants.

A building that holds a couple or more tenants is multi-tenant property, as are “neighborhood” shopping centers, “strip” malls, grocery anchored shopping, or malls with large national renters called “big box” shopping centers. Shopping centers that incorporate condos or apartments, office space, and retail shops are called “lifestyle” centers.

Retail lease agreements are known as “net” leases where the tenants are responsible for the taxes, property insurance, and common area maintenance of the facility in what’s known as “additional rent”. Renters are responsible for maintaining the property as well.

A retail investor will employ the same demographic data that their target tenants employ to find an acceptable investment asset.

Population Growth

The total data for the area under consideration isn’t enough for retail investors. They also consider the region’s submarkets. Retailers want to locate where their shoppers live, drive past, or work.

A growing trade area populace is a plus, but if the current population does not hold sufficient clients, it’s considered an undesirable “green” trade area. Investors in retail assets will review all categories of populace data including population size, annual and 10 year growth numbers, and how many people work in the trade area.

Median Income

Nationally recognized stores or “credit tenants” have very definitive location requirements that involve wage levels. Median income information is a guide to the shoppers who can pay for pricey goods from luxury stores or customers on a tighter budget who require discounted prices.

Median Age

Retail real estate buyers depend on age data that other investors overlook. Depending on the category of center (grocery anchored, entertainment anchored, big box retailers) the age of the population could help draw desirable retail tenants.

Property Tax Rates

Retail real estate owners utilize property tax rates the same way as both apartment complex and industrial investors. Bigger taxes add to the amount of additional rent charged to renters which can hamper leasing attempts, and cause an adverse impact on property values also.

In a city showing elevated real estate tax rates, it’s even more crucial to ensure the property isn’t overestimated by the county. Protesting property taxes can be outsourced to the best commercial real estate lawyers in Atlanta GA.

Corporations lease real estate for their workers in office buildings. Office real estate can be a single level flex space or a multiple story building. Large companies often rent office locations from others rather than use their business’ assets to buy or develop space.

Office lease agreements are usually gross or “full service” leases. All of the landlord’s expenses are added when the rent amount is calculated. The terms can be altered according to the renter and landlord’s needs.

Office building investors own these properties for a long period which creates income from both ongoing lease revenue and the growing worth of the property.

Population

Office real estate investors need demographic data that signifies the availability of acceptable workers for their desired renters. They look for the complete population number, their ages, and their education. It is critical for landlords to realize what their potential clients want and to assess the area appropriately.

Property Tax Rates

A properly managed city or county that draws potential office workers to the region won’t have excessive or consistently expanding tax rates. A good workforce pool attracts good office renters.

Incomes/Cost of Living

Income standards show a prospective renter whether employees in the community are qualified, under-qualified, or overqualified for their jobs. It could additionally reveal the wage standards that employers will have to provide.

Education

Office investors understand that the education level of the labor pool will be important to their possible lessees. A call center might not require college graduates, but an attorney services firm could.

BRRRR, which means “buy, rehab, rent, refinance, repeat”, is an investment method to enlarge your assets by taking advantage of the improved value of the asset. These are long-term or Buy and Hold investments. The investor receives lease income during their ownership and a single sum when the property’s worth goes up, then they sell it.

Once the property is acquired and repaired, it is rented to a tenant. As soon as they are able, the investor gets a “cash-out” refinance that allows them to take funds out of the asset in cash. The investor uses this cash to obtain additional property which is rehabbed, rented, refinanced, and so on.

To purchase and fix up a commercial building, investors opt for unconventional loans. Banks and other traditional mortgage companies won’t work with this type of investments preferring to avoid a higher risk.

This commercial real estate vendor directory will shorten your way to the top Atlanta commercial private and hard money lending companies and the top commercial rehab lending companies in Atlanta Georgia.

There, you can also see the best commercial real estate brokers in Atlanta GA
whose professional advice will be priceless for you. They are glad to consult you about the important local market dynamics described further.

Median Gross Rents

Investors have to realize how much rent they can charge and if it is probable that rents will increase later. This one item is important when the final market decision is made.

Property Value Growth

Buy and hold investments clearly require properties that are expected to grow in worth.

Population

The critical population information for buy and hold investors is the growth rate. A growing population is a reliable supply of renters and is more likely to support growing property values.

Income

To buy the correct investment property, investors must be acquainted with their target renters’ amount of income. An asset that doesn’t provide the requirements of the community will show a high unoccupied rate.

Property Tax Rates

Higher tax rates will dampen both short and long term profitability. Reliable, appropriate taxes are a good signal that the market is a reliable environment for your project.

Moreover, in the local county’s register, your property can be overassessed, which means you overpay property taxes. To conduct a tax protest process, use the best commercial property tax consulting companies in Atlanta GA and top-rated Atlanta commercial property appraisers.

Professionals in the real estate business consider development as producing entire housing neighborhood projects or any kind of commercial real estate. Developers need property that allows the creation of parcels bought by homebuilders or commercial structures that are leased.

A developer has to make sure the property is properly zoned, engages civil engineers to plan the site work, finds architects and engineers to design building plans, and goes through the municipal approval process. When approvals are received, the land is developed, and the finished property is marketed to the desired audience.

The time required to finish a real estate development can be several years. A lot can occur, before the project is finished, that can hurt the developer’s profitability. This instability makes real estate development the most speculative category of real estate investment.

Risks may force investors to conserve the construction for an undefined term. During this period, the construction can be damaged by criminals, weather conditions, or other factors. The best commercial real estate insurance firms in Atlanta GA help local investors compensate for financial damage resulting from such events.

Insurance is a tool you may need to present to lenders while qualifying for financing. The best commercial new construction financing firms in Atlanta Georgia can suggest a list of insurers they think are reliable.

Population

To make sure that their residential and commercial development projects are located in promising areas, developers utilize the same population size, population growth, household wages, and education level of the populace that their intended users want to find.

Income

Income rates will show investors if the customers and restaurant patrons in the area are the shoppers that their tenants want. Premium retail stores look for higher income regions, whereas moderate priced retail businesses need middle class customers.

Data on wages can help industrial and office tenants understand what they’ll be required to pay their workforce in that area. Developers realize this, and look at income information to predict a market’s desirability for their preferred tenants.

Education

Businesses that occupy office and industrial spaces search for different educational factors in the market. White collar businesses need to see more college degrees. Industrial companies hunt for a larger concentration of high school graduates.

Age

Developers hunt for a median age that shows residents who are active workers and taxpayers. These are the workforce that office and industrial businesses have to have. Citizens who are actively working typically go shopping and dine out consistently at retail stores.

A working age populace also has the most active homebuyers that residential investors require.

Promissory note investors acquire existent loans cheaper than the sum due and turn into the new lender. The first lender may be willing to sell because they require cash, or because the borrower is behind in their loan payments.

Some note investors will re-amortize the loan to enable the borrower to keep paying their loan payments — for a long-term investment. They know that if the borrower stops making payments, they can take back the collateral and unload it, which is a portion of the plan.

Population

Mortgage note investors, like other investors, have to see the volume of people in the intended market and if that number is increasing or declining. This data is an immediate evaluation of the anticipated economic vitality of the area.

Property Values

A mortgage note investor wants to see that property values in the market are expanding. The growing value of the asset mitigates the liability of the investment.

Property Tax Rates

In an area with growing tax rates, the higher expense of owning a home may push borrowers into default. That’s unacceptable for interest revenue, but is actually preferred by note buyers who plan to turn a profit faster by taking back the property.

Real estate investment trusts (REITs for short) are investment companies that acquire and supervise income producing real properties. Their profit is derived from rental payments and the periodic liquidation of properties.

These trusts have to pay out ninety percent of profits to shareholders as dividends. The capability to cash out by selling their REIT shares attracts modest investors.

Such investors are passive investors who have no input in the selection or oversight of the properties.

Investors, who want to move away from active investing but want to stay in real estate, often buy REITs. Once you sell real estate, you can use the money to purchase REITs.

If that’s your plan, executing a like-kind exchange is the thriftiest strategy. Learn in-depth about this from our guides: Can You Do a 1031 Exchange into a REIT with a Section 721 Exchange? along with Pros and Cons of a 1031 Exchange into DST.

A 1031 Exchange Qualified Intermediary is required by the Government to be a middleman in the transaction. Our directory offers the best 1031 exchange companies in Atlanta GA to facilitate your search.

An additional investment vehicle that raises money from individuals to invest in real estate is a real estate investment fund. These organizations do not hold real property — they own interest in businesses that do, like REITs.

This investment option doesn’t distribute dividend income to their investors. Like with regular stock funds, the return is generated by appreciation in the worth of their stock.

The most popular investment funds include mutual funds, ETFs (exchange-traded funds), and private equity funds for high net worth individuals. Shares in investment funds are purchased and sold on the open market which is convenient for starting investors.

Fund investors don’t have anything to do with choosing assets or locations, as they are passive investors.