Delaware County Ohio Commercial Real Estate Market Trends Analysis

Commercial properties that house a company that works for other businesses (B2B companies) are designated as industrial properties. Industrial tenants may be manufacturers and distributors like supply houses.

The exception is the quickly growing world of fulfillment centers that store and deliver products sold by online sales websites directly to their buyers.

Industrial properties are long-term hold investments that are desired by investors/landlords. Their return projections involve lease income and asset appreciation. Lease types are either gross or net.

Annual and 10 Year Population Growth

Industrial property investors have a need for accurate population data that is specific to their category of property investment. Sluggish or declining populations mean a declining tax base. If the local government can’t collect adequate taxes, it can’t keep up its responsibilities to sufficiently maintain the infrastructure that industrial tenants require.

A declining population is a reliable indication that business property values are likely to shrink as well. A big consideration for industrial tenants is the availability of suitable workers. The top industrial tenants won’t locate in a region that is dropping potential employees.

Property Tax Rates

Real estate tax rates are the identical economic indicator for industrial property investors as they are for multifamily investors. Unstable tax rates reveal a place that most likely is not beneficial for your investment’s profitability.

Our blog contains informative resources about industrial and commercial property taxation as well as commercial property tax reduction methods to help investors learn about this topic more in-depth.

Accessibility

Industrial property tenants usually move large amounts of goods or cumbersome items. Tractor-trailer trucks are usually used to do this. Industrial real estate investors hunt for assets that are close to main roads that big tractor-trailer trucks can access quickly.

Sometimes industrial businesses transport their products by planes or railway. Industrial properties that are placed close to an interstate make this more convenient, which makes the property more valuable.

Utilities

Manufacturing facilities often need high levels of power and water. A property lacking the capacity to furnish suitable utilities will not draw those renters.

Retail facilities rent space to companies whose customers are typical consumers in the region. Those properties could house one renter (single-tenant) or a few tenants (multi-tenant). Single-tenant properties may contain a bank, a pharmacy, a dining establishment, or an automobile repair center.

A building that houses a few businesses is multi-tenant property, as are “neighborhood” shopping centers, “strip” malls, grocery store anchored centers, or malls with significant nationally known tenants considered “big box” centers. “Lifestyle” retail centers might combine retail, office, and residential spaces.

Retail lease agreements are net contracts with tenants being responsible for the owner’s property tax, insurance, and maintenance of common areas as additional rent. Retail renters also are required to handle maintenance of the property.

Retail property investors hunt for the demographic data that their tenants will require in their site requirements.

Population Growth

Retail investors don’t just look at the overall market’s population and improvement. Investors also look at the community’s submarkets. Retail locations need to be visible and accessible to their customers as they go about their lives.

A growing market populace is a plus, but if the current population doesn’t contain sufficient customers, it’s considered an undesirable “green” area. Retail property investors have to analyze the existing population growth, average yearly population growth, 10 year population growth, and daytime population.

Median Income

Income levels tell retailers where their shoppers are. Median income data is a guide to the clients who can pay for expensive items from high-end stores or those on a smaller budget who need discounted prices.

Median Age

Retail property owners depend on age information that other investors discount. If you need to find and maintain good tenants, you will need to choose a building that is located near their desired age categories.

Property Tax Rates

Retail real estate owners utilize real estate tax rates the same way as both apartment complex and industrial investors. Bigger taxes mean higher rents which inflate vacancy rates, and regions with growing tax rates frequently have declining property prices.

In a location with elevated real estate tax rates, it’s even more important to check if your real estate isn’t overvalued by the tax assessor. Protesting real estate taxes can be outsourced to the best commercial real estate lawyers in Delaware County OH.

Corporations lease space for their employees in office buildings. Office properties can be big enough for one employee or tens of individuals. Significant brands often prefer to utilize their assets for company growth rather than possessing real estate.

The lease contract utilized for office tenants is a gross lease, sometimes referred to as a “full service” lease. All of the owner’s costs are included when the rental payment amount is calculated. You could encounter adjusted versions of gross lease contracts that are tailored to fit that specific circumstance.

Office property owners are long term investors who project revenues from lease income and the appreciation of the property.

Population

Office property investors analyze demographic data that signifies the existence of suitable employees for their favored renters. They research the complete populace number, their ages, and their education. In order to rent to stable renters, investors ought to reflect the tenants’ requirements in their site criteria.

Property Tax Rates

Growing towns that are home to a desirable group of possible office workers will have reasonable, predictable tax rates. Successful renters will look for that type of community.

Incomes/Cost of Living

Office tenants see current wage levels as one sign of the quality of the workforce. The statistics also helps them estimate labor costs.

Education

Education levels are studied by office renters and investors more than other property investors. A call center may not need college graduates, but a financial services renter could.

When an investor buys a property, fixes it up, rents it, refinances the asset, and then duplicates the process, it’s called a BRRRR category of investment. These are long-term or Buy and Hold investments. The investor gets lease revenue during their ownership and a one time amount when the property’s value goes up, and they liquidate it.

Initially the investor acquires a rental property, then they rehab it and locate a tenant. When a positive cash flow is achieved, the owner takes money out of the asset for refinancing their mortgage loan. The investor utilizes this money to buy more property which is rehabbed, leased, refinanced, etc.

Regular commercial property mortgages aren’t an option for buy and fix up projects. Banks and other traditional lenders don’t lend on such deals fearing a high risk.

Our commercial real estate vendor directory may shorten your way to the best Delaware County commercial hard money lenders as well as the top commercial rehab lending companies in Delaware County Ohio.

Also, don’t forget about the local knowledge of the top commercial and industrial real estate brokers in Delaware County OH. Below is a list of indicators a broker can consult you on.

Median Gross Rents

You want to see desirable existing rent standards and evidence of acceptable rent increases. This single factor is important when the final market choice is made.

Property Value Growth

Buy and hold investments obviously need properties that are supposed to increase in value.

Population

The critical populace data for buy and hold investors is the growth rate. Without an increasing populace, properties will be vacant and lose value.

Income

Residential investors must understand their desired renter, notably their income levels. A property that does not provide the needs of the community will have a high vacancy rate.

Property Tax Rates

Higher tax rates will stifle both short and long term returns. Stable tax rates are one signal of a vibrant, improving economy.

Moreover, in the local government’s register, your real estate can be overestimated, which means you pay excessive property taxes. The best Delaware County commercial real estate appraisal companies as well as the top commercial property tax appeal firms in Delaware County OH are used by smart property owners to reduce your taxes.

The industry understanding of development typically means complete residential neighborhoods or commercial ventures of virtually every scope. Developers buy land that permits the development of homesites bought by homebuilders or commercial buildings that are rented.

An investor has to make sure the property is properly zoned, hires civil engineers to design the site work, employs architects and engineers to create building plans, and manages the municipal approval procedures. When all the plans are authorized, the site work and construction are completed and purchasers or tenants are located.

It could take one or two years from the beginning to completion of a development project. Much can occur, before the development is finished, that could damage the developer’s profitability. Because of this reason, development is the most speculative kind of real estate investing.

Risks can cause investors to delay the project for an unknown term. During this period, the building risks to be damaged by vandals, natural disasters, or other factors. You require help by the best commercial real estate insurance firms in Delaware County OH.

Lenders want your project to get covered by a reliable insurance. The best commercial construction real estate lending companies in Delaware County Ohio could give you a list of companies they deem worthy.

Population

To make certain that their housing and commercial development projects are located in acceptable places, developers utilize the same populace size, populace growth, household incomes, and education achievements of the population that their intended users want to see.

Income

The income amounts of the area’s citizens will dictate the kind of retail development that the populace will support. Moderate incomes can still mean a profitable market for middle income shopping centers.

Data on wages can help industrial and office renters know what they will be required to pay their workforce in that market. Developers realize this, and use wage information to predict a location’s desirability for their target tenants.

Education

Businesses that occupy office and industrial buildings look for different educational indicators in the area. A lot of office tenants require college grads for their workforce. Industrial employers search for a larger accumulation of high school graduates.

Age

A lot of developers need to find a young to mid-life populace that provides a reliable tax base. Industrial and office developers require a working age population. Retail property developers require families and workforce participants who eat out and shop more often.

Residential real estate developers require the same age group because they are presumably upwardly mobile, which invigorates residential transactions.

To invest in promissory notes, the investor is charged a smaller sum than the remaining balance for loans already in effect, and takes the place of the first lender. Lenders sometimes liquidate loans to raise cash, but they normally liquidate them because they are not being paid as agreed.

A part of promissory note buyers will renegotiate the loan to help the borrower make their debt payments — for a long-term income. They know that if the borrower discontinues making payments, they can recover the property and sell it, which is part of the strategy.

Population

One of the most basic indicators in real estate investing of all kinds is the size of the market’s population and whether it is expanding. Investors know right away if a market is a possibility by analyzing population statistics.

Property Values

A mortgage note investor has to discover that real estate values in the area are expanding. The reliability of the property is the strength of the investment.

Property Tax Rates

In a market with increasing tax rates, the higher cost of owning a property may drive borrowers into default. That’s unacceptable for interest revenue, but is in fact desired by note buyers who plan to make a profit faster by foreclosing on the collateral.

Real estate investment trusts (normally called REITs) are investment businesses that purchase and manage income producing real estate. Their revenue is derived from rental payments and the occasional unloading of assets.

Being a trust, REITs have to distribute ninety percent of that revenue to its shareholders. The ability to invest and withdraw your capital as your demands require make REITs an appropriate method for a typical person to invest in real estate.

REIT shareholders are passive investors which demands that they have nothing to do with the purchase or oversight of any assets.

REIT shares are sometimes purchased by people wanting to shift focus from active to passive investing. They acquire REIT shares after selling real property.

A tax deferred exchange is meant to benefit investors who plan to do so. Learn more about it by reading our resources: Exchanging Real Property into REIT Shares with IRC Sections 1031 and 721 along with What Is a DST 1031 Exchange?.

For such a procedure, you will be required to get help from a 1031 Exchange Qualified Intermediary. Our directory lists the best 1031 exchange Qualified Intermediaries in Delaware County OH to facilitate your search.

Real estate investment funds are another venture that gathers capital to invest in real estate. They don’t own real property — they own interest in ventures that do, for example REITs.

Unlike REITS, funds aren’t expected to distribute dividends. Similarly to regular stock funds, the return is created by appreciation in the worth of their stock.

Mutual funds, ETFs (exchange-traded funds), and high-end private equity funds are designated as real estate investment funds. Shareholders are permitted to liquidate their shares if they need capital, similar to REITs.

Share buyers are passive investors who aren’t involved with the decisions of the fund’s managers.