Clermont County Ohio Commercial Real Estate Market Trends Analysis

Industrial properties are a group of commercial real estate that is used by businesses that provide services to other companies (B2B tenants). B2B companies either make or deliver products to other manufacturers or retailers.

Lately an additional type of industrial renters has been created by fulfillment centers that deliver online purchases to retail customers.

The owners of industrial properties are also long-term investor-landlords. Their investment budgets rely on income from both lease and the future sale of the property. Lease contracts can be either gross or net.

Annual and 10 Year Population Growth

Population data is vital for industrial investment plans in ways that are different from residential investments. Sluggish or shrinking populations mean a shrinking tax base. Adequate tax receipts are required to maintain roads and infrastructure that industrial properties need.

An area that is losing its population will endure unacceptable commercial property value increase in addition to residential. The renters for industrial properties need a stable local employee base. Big industrial tenants will avoid markets that are dropping citizens.

Property Tax Rates

As we saw with apartment complex investments, tax rates are a good indication of the economic health of a potential market. Unstable tax rates prevent you from accurately predicting your expected returns in that location.

Our guides about commercial real estate taxation along with commercial real estate tax reduction will educate you on taxation laws.

Accessibility

Industrial building renters typically ship significant quantities of goods or cumbersome products. They utilize big trucks to ship their products. If the business is not far from major highways, trucks can access them more quickly and conveniently.

Occasionally industrial companies ship their goods by planes or railway. Interstate highways usually go close to those types of terminals which is an advantage for industrial properties situated near those highways.

Utilities

Manufacturing companies usually utilize large amounts of electricity and water. If an industrial building doesn’t possess adequate utilities, it will constrain the kinds of tenants that will rent it.

Retail buildings are leased by renters that sell products or services to the public. This includes single-tenant and multi-tenant real estate. Retail companies that have to be by themselves include banks, drug stores, restaurants, or automobile parts centers.

Multi-tenant buildings can be two or three unit facilities, modest “strip” shopping centers, significant “big box” or grocery store shopping centers with national anchor stores. A significant shopping center with a combination of uses such as office, retail, and residential are designated “lifestyle” shopping centers.

Retail lease agreements are net contracts with renters being responsible for the landlord’s tax, property insurance, and maintenance of common areas as additional rent. Net lease agreements also say that the tenant pays for the upkeep of the property.

Retail real estate investors look for the demographic data that their tenants will specify in their location criteria.

Population Growth

The overall numbers and ratios for the complete market are only the beginning for retail real estate investors. The important data will relate to the particular trade area surrounding the marketed investment property. Shoppers have to be able to locate and easily get to your retail renters.

Population improvement is significant, but retailers demand a minimum number of clients now. Retail property investors want to collect the existing population growth, average annual population growth, 10 year population growth, and daytime population.

Median Income

The populace’s income rates are an important part of retail site criteria. Larger incomes show an acceptable place for top end retailers, while middle wages are good for middle income retailers such as auto equipment centers.

Median Age

The age of the market’s populace could be critical to retailers leasing your property. If you need to locate and keep good renters, you’ll need to invest in an asset that is situated close to their required age groups.

Property Tax Rates

Tax rate data is used by retail investors for similar reasons as residential and industrial investors. Bigger taxes add to the amount of additional rent charged to tenants which can hamper leasing attempts, and have an adverse influence on property values as well.

You spend even more money if the municipality’s tax assessor’s evaluation of your real estate value was erroneous. If so, the best commercial real estate attorneys in Clermont County OH have a plan on how to protest the wrong estimate.

Office buildings rent working premises to commercial tenants. Office space can be large enough for 1 worker or tens of employees. Major businesses frequently lease office locations from others rather than use their corporation’s capital to acquire or build space.

The lease utilized for office tenants is a gross lease, occasionally called a “full service” lease agreement. These kinds of lease agreements add the landlord’s expenses, such as tax and insurance into the rent. You might deal with modified versions of gross lease contracts that are customized to fit that specific circumstance.

Long-term investments like office properties generate long-term rental income and the expected revenue from the future sale of the real estate.

Population

Office real estate investors study demographic data that shows the existence of suitable workers for their desired renters. They research the complete population number, their ages, and their education. It is vital for investors to understand what their potential clients require and to evaluate the area accordingly.

Property Tax Rates

A financially stable municipality that ensures a desirable living situation for office workers will keep stable tax rates. Good tenants for your office property will analyze this item and so should you.

Incomes/Cost of Living

Income levels tell a prospective lessee if workers in the market are qualified, under-qualified, or overqualified for their jobs. It could also indicate the wage levels that employers will need to pay.

Education

Education achievements are considered by office tenants and investors more than other real estate investors. A call center may not require college graduates, but an attorney services company could.

When an investor purchases real estate, renovates it, rents it, refinances the property, and then duplicates the procedure, it’s known as a BRRRR type of investment. It’s a Buy and Hold investment because the investor owns the asset for a long time. The advantage is that the property creates revenue while you keep it and could be liquidated later for a profit after its worth has appreciated.

Once the property is bought and repaired, it is leased to a tenant. As soon as they are able, the investor receives a “cash-out” refinance that enables them to pull equity out of the property in cash. The investor uses this money to purchase additional property which is fixed up, rented, refinanced, etc.

It’s unlikely to get approved for a conventional multifamily financing for a property requiring a considerable repair. This type of acquisitions mean an unacceptable risk for traditional financing firms.

This commercial real estate vendor directory will shorten your way toward the top Clermont County commercial private and hard money lending companies and the best commercial rehab lenders in Clermont County Ohio.

From one of the top commercial and industrial real estate brokers in Clermont County OH, get an expert opinion about the pros and cons of the location for your investment. They will consult you about the important local property dynamics described in the following section.

Median Gross Rents

Investors need to understand how much rent they can charge and if it’s likely that rental rates will grow later. Rent levels are a vital component in an investor’s decisions.

Property Value Growth

Buy and hold investments clearly need assets that are expected to increase in worth.

Population

The key population information for buy and hold projects is the growth rate. Anemic housing areas that they want to avoid will show stagnant or declining rates.

Income

Housing investors must know their desired renter, including their income levels. A property that doesn’t meet the requirements of the community will have a high unoccupied rate.

Property Tax Rates

High or increasing taxes will be harmful for an investment. On the contrary, reliable real estate tax rates can signal an expanding region.

This is even more important when your property is overassessed by the local tax assessors. When that is the case, you may seek guidance by the top commercial property tax appeal firms in Clermont County OH and the top Clermont County commercial real estate valuation companies.

The real estate industry understanding of development typically means whole residential neighborhoods or commercial projects of just about any scope. A developer finds and buys acceptable land and creates either lots for purchase or buildings that are leased to occupants.

Real estate development includes dealing with zoning permits, overseeing sitework plans prepared by civil engineers, working with engineers and architects on building plans, and shepherding the venture through the local municipality for approval. Once all the plans are approved, the site work and construction are done and purchasers or renters are located.

Real estate projects can take years to complete. The economic picture or area laws can adjust in a negative way before the project is completed. For this reason, development is considered the riskiest category of real estate investment.

A wide range of events could force developers to put a building process on hold. If the builders are away from the site, the building can get damaged. Nevertheless, you can use the best commercial real estate insurance firms in Clermont County OH to make sure that you have a proper compensation in such case.

Lenders expect your project to be covered by an appropriate insurance. The best commercial construction lenders in Clermont County Ohio could provide a list of companies they deem worthy.

Population

Real estate developers utilize the same demographic data that their possible buyers and renters estimate to find areas with acceptable standards of population size and growth, economic strength, and educational levels.

Income

Wage data will demonstrate investors whether the shoppers and restaurant patrons in the area are the customers that their tenants are after. Premium retailers search for upper income regions, but lower priced retail stores require middle class customers.

Statistics on incomes can help industrial and office renters see what they’ll be required to pay their labor pool in that market. Developers realize this, and utilize income rates to project a location’s attraction for their desired renters.

Education

Employers that rent office and industrial spaces search for contrasting educational indicators in the market. White collar employers want to find a majority of college degrees. Industrial workers do not want more than high school education.

Age

Developers hunt for a median age that shows people who are active workers and taxpayers. These are the workers that office and industrial companies have to have. Active employees and their households shop at stores and dining establishments that lease retail units.

Residential real estate developers need the same age group because they are more likely to be moving up the social ladder, which boosts residential transactions.

Investing in promissory notes entails paying less than the payoff total for a loan that’s in effect so that the investor becomes the lender. The first lender could be agreeable to selling because they require money, or because the borrower is behind in their loan payments.

The investor can re-amortize the loan with lower payments providing them a long-term investment with interest income payments. If the borrower can no longer pay, the investor has all the foreclosure rights of the first lender and may foreclose to recover their investment.

Population

One of the most fundamental indicators in real estate investing of various kinds is the magnitude of the market’s population and whether it is expanding. This information is a fast evaluation of the anticipated economic strength of the market.

Property Values

Rising real property values are the most crucial sign when promissory note investors analyze an area. The note buyer is lending on the viability of the property and not the borrower’s payment ability.

Property Tax Rates

When property taxes escalate too often, borrowers who have problems paying their debt payments will find it hard to stay current. That’s bad for interest income, but is in fact accepted by investors who expect to make a profit more quickly by taking back the property.

A REIT (Real Estate Investment Trust) is a company that holds and manages revenue producing property. They create revenue from rent and build long-term asset appreciation.

Being a trust, REITs have to disburse 90% of that income to its shareholders. Modest investors appreciate REITs because they could liquidate their shares when they want.

REIT investors are passive investors who have no input in the choice or operation of the assets.

REITs are sometimes considered by professionals planning to transition from active to passive investing. They acquire REIT shares after selling real estate.

If that’s your plan, opting for a 721 exchange is the best solution. Take a look at our experts’ articles to learn how to use it: Can You Do a 1031 Exchange to REIT Shares? and A-to-Z Guide to Delaware Statutory Trust (DST) 1031 Exchange.

For this transaction, you will need to be served by a 1031 exchange accommodator. Consult with some of the best 1031 exchange companies in Clermont County OH delivering this service.

One more investment option that raises cash from individuals to invest in real property is a real estate investment fund. These businesses maintain shares in organizations that invest in real estate, including REITs.

Unlike REITS, funds are not required to pay dividends. Similarly to other stock funds, the profitability is created by growth in the value of their stock.

The most popular investment fund types are mutual funds, ETFs (exchange-traded funds), and private equity funds for wealthy people. Shareholders are permitted to liquidate their shares if they want cash, like REITs.

As they are passive investors, fund shareholders are not part of any choices such as property acquisitions.