Franklin County Ohio Commercial Real Estate Market Trends Analysis

Industrial properties are commercial properties that are typically leased by Business to Business (B2B) companies. B2B companies either make or distribute products to other manufacturers or retailers.

But, currently, there is an increasing number of industrial properties whose occupants are internet purchase fulfillment centers that disburse items directly to the customer.

The owners of industrial properties are also long-term investor-landlords. Their profitably calculations include rental revenue and asset value growth. Industrial leases can be based on either gross or net rent terms.

Annual and 10 Year Population Growth

Population data is vital for industrial investment plans in ways that are dissimilar from residential investments. Stagnant or declining populations mean a declining tax base. Sufficient tax receipts are needed to maintain roads and infrastructure that industrial properties require.

A shrinking population is a good signal that business property values are presumably to decrease as well. A large consideration for industrial renters is the availability of desirable employees. The best industrial renters won’t locate in a market that is losing potential employees.

Property Tax Rates

Industrial investors use property tax trends as a signal of the strength of an area, just like multifamily investors. Unstable tax rates keep you from correctly predicting your expected returns in that place.

Our resources about commercial property taxation as well as commercial real estate tax reduction will inform you about taxation basics.

Accessibility

Industrial building renters typically move substantial amounts of goods or unwieldy products. They use large trucks to transport their goods. Industrial property investors hunt for assets that are close to main roads that big tractor-trailer trucks can access easily.

Many industrial tenants have to get to train or airport freight terminals. This means that being near an interstate, which typically goes near airports and train hubs, a large plus for industrial assets.

Utilities

Businesses that produce products themselves require large amounts of water and electricity. A property missing the capability to provide sufficient utilities will not draw those tenants.

Retail facilities contain tenants that sell goods or services to individuals. They could be in a structure alone (single-tenant) or in a property with additional renters (multi-tenant). Sought after tenants for single-tenant assets are pharmacies, automobile equipment stores, banks, and dining establishments.

A multi-tenant asset might be as small as a few units, slightly bigger “neighborhood” or “strip” centers, or larger shopping centers that are anchored by national brands such as grocery stores. Shopping centers that include condominiums or apartments, office space, and retail shops are known as “lifestyle” centers.

Retail landlords utilize “net” lease agreements that obligate the renters to separately take responsibility for the taxes, property insurance, and maintenance of the common areas including the parking areas. Renters are responsible for the upkeep of the property as well.

Retail tenants have specific site requirements that retail investors use when analyzing demographic data.

Population Growth

Retail investors do not exclusively consider the total area’s population and growth. The critical information will relate to the specific area around the potential investment property. Retail locations need to be visible and accessible to their customers as they go through their daily activities.

A trade area that does not already have sufficient “rooftops” will not work for retailers no matter if it is increasing. Retail real estate investors have to review the current population growth, average annual population growth, decade population growth, and daytime population.

Median Income

Income levels reveal to retailers where their customers live. Median income data is a guide to the clients who can afford pricey products from high-end stores or clients on a smaller budget who require lower prices.

Median Age

Age information is more useful to retail investors than other investor categories. Depending on the category of center (grocery anchored, entertainment anchored, big box retailers) the age of the population could attract desired retail lessees.

Property Tax Rates

The prior illustration of the way property tax rate information is used by industrial and apartment building buyers pertains to retail investors too. Larger taxes equal larger rents which inflate vacancy rates, and markets with growing tax rates often have decreasing property values.

Having your property overvalued by the county is a frequent problem that leads even to higher expenses. If this happened, the best commercial real estate lawyers in Franklin County OH will advise on how to protest the wrong estimate.

Office landlords rent working locations to commercial tenants. Office space might be big enough for one person or hundreds of workers. For many major companies, leasing office space enables them to use their money for the growth of their company.

The lease agreement utilized for office tenants is a gross lease agreement, occasionally called a “full service” lease. All of the landlord’s costs are included when the rent amount is determined. The details can be changed depending on the tenant and landlord’s requirements.

Office real estate investors hold these assets for a long term which provides returns from both ongoing lease revenue and the growing value of the asset.

Population

The specific demographic data that office property owners use illustrates the number of acceptable office employees in the population. This often includes the total citizens living there, their education, and median age. Knowledgeable office investors purchase assets in places where their tenants want to locate.

Property Tax Rates

Vibrant municipalities that possess a good group of potential office employees will have understandable, predictable tax rates. Good lessees for your property will consider this statistic and so should you.

Incomes/Cost of Living

Income levels show a potential tenant if workers in the community are qualified, under-qualified, or overqualified for their positions. It additionally gives them an indication of the wage levels needed to contend for the optimum employees.

Education

Office owners understand that the education level of the labor pool will be vital to their possible lessees. A call center might not need college graduates, but a financial services company might.

When an investor purchases a property, fixes it up, leases it, refinances the property, and then repeats the procedure, it’s called a BRRRR kind of investment. It’s a Buy and Hold investment because the investor keeps the property for a long time. The advantage is that the asset generates income while you own it and can be liquidated later at a profit after its value has appreciated.

First the investor acquires a rental property, then they rehab it and locate a renter. When a profitable cash flow is documented, the landlord takes money out of the asset for refinancing their loan. This becomes the cash investment on their next property, and they repeat it all again.

To purchase and fix up a commercial property, investors use unconventional financing. This kind of acquisitions pose a high risk for traditional financing firms.

Use our commercial real estate vendor directory to select the best commercial rehab lenders in Franklin County Ohio and the best Franklin County commercial hard money lenders.

From one of the top commercial and industrial real estate brokers in Franklin County OH, receive an expert opinion on the perks and pitfalls of the city for your project. Read below to learn about the stats it’s best to talk with them about.

Median Gross Rents

You need to locate desirable current rent levels and evidence of reasonable rental rate increases. Rent numbers are a vital component in an investor’s decisions.

Property Value Growth

Property values are supposed to be going up in the community for a buy and hold investment to be successful.

Population

BRRRR investors will look closely at the population growth rate. Without an increasing number of residents, properties will be unoccupied and depreciate.

Income

Housing investors must understand their targeted renter, including their income levels. If you are comfortable investing in mid-priced properties, you do not need to see high wages.

Property Tax Rates

Higher tax rates will stifle both short-term and long-term profitability. On the other hand, reliable real estate tax rates can indicate a growing market.

Moreover, in the local government’s register, your asset can be valued incorrectly, which makes you pay extra in property taxes. To conduct a tax protest process, reach out to the top commercial property tax appeal firms in Franklin County OH and best Franklin County commercial real estate appraisers.

The industry definition of development typically means complete residential neighborhoods or commercial projects of almost any size. Developers need land that allows the development of homesites bought by builders or commercial structures that are rented.

Property development involves working with zoning permits, managing sitework plans prepared by civil engineers, working with engineers and architects on construction plans, and shepherding the project through the local municipality for approval. When all of those steps are successfully done, the developer oversees the building and advertising of the completed project.

It could take one or two years from the beginning to finish of a development project. A lot can happen, before the venture is completed, that can hurt the developer’s returns. Because of this reason, development is the most speculative type of real estate investment.

Risks can force you to conserve the development for an undefined period of time. While the builders aren’t on the site, the property can get damaged. The best commercial landlord insurance companies in Franklin County OH help professional developers avoid financial damage caused by this.

Lenders expect your project to get covered by a reliable insurance. The best commercial construction real estate lending companies in Franklin County Ohio may suggest a list of companies they think are reliable.

Population

Property developers use the same demographic statistics that their targeted buyers and renters estimate to locate places with acceptable standards of populace size and growth, economic viability, and educational achievement.

Income

The income amounts of the market’s people will determine the sort of retail development that the market will support. A neighborhood that doesn’t attract a high-end retail store might be exactly what a low priced tenant is looking for.

Office and industrial tenants will need to discover the pay rates that their possible workforce will require. Those developers look at wage data as one sign of a site’s potential for profitability.

Education

Companies that occupy space in industrial and office properties have particular education information in consideration for their locations’ populace. Office property tenants frequently look for possible workers with a college degree. Industrial employees don’t want more than high school graduates.

Age

Developers search for a median age that indicates citizens who are active employees and taxpayers. A citizenry that is still participating in the labor pool is perfect for office and industrial property developments. Retail building developers require households and workforce participants who eat out and shop more regularly.

A working age population also has the most dynamic homebuyers that residential investors seek.

To invest in real estate notes, the investor pays less than the outstanding amount for loans currently in effect, and takes over from the first lender. The first lender could be willing to sell because they want cash, or because the borrower is not current with their payments.

One loan note investment method is to set up a new loan payment calendar that’s more convenient for the borrower to maintain, and preserve the investment in their portfolio long-term. The investor is shielded by the mortgage note that the borrower executed and can recover the asset if need be.

Population

Promissory note investors, similarly to other investors, have to see the volume of people in the intended area and if that amount is growing or shrinking. This is a quick “sniff test” of the financial viability of the locale.

Property Values

A mortgage note investor wants to discover that real property values in the market are increasing. The investor is loaning on the strength of the asset and not the borrower’s reliability.

Property Tax Rates

If property taxes increase too often, borrowers who have difficulty paying their mortgage payments will find it challenging to keep up. That is bad for interest income, but is in fact accepted by investors who expect to make a profit quicker by taking back the collateral.

An easy way of investing in the acquisition and oversight of real property is to purchase shares in a REIT (Real Estate Investment Trust). They produce revenue from rent and build long-term property value.

REITs are obligated to distribute 90% of their net revenue in dividends which is attractive to a lot of investors. Small investors appreciate REITs because they could liquidate their shares when they want.

REIT shareholders are classified as passive investors which means that they have nothing to do with the purchase or operation of any assets.

Real estate owners pondering becoming passive investors are interested in buying REITs. When you dispose of real property, you can use the proceeds to purchase REIT shares.

A tax deferred exchange is meant to benefit investors who have this plan in mind. Our resources — Can You Do a 1031 Exchange into a REIT with a Section 721 Exchange? and Pros and Cons of a 1031 Exchange into DST — will enable you to learn the advantages and rules of this investment vehicle.

A 1031 Exchange Qualified Intermediary will be required by the Government to serve as a middleman in the procedure. Find such companies in PropertyCashin’s list of the best 1031 exchange Qualified Intermediaries in Franklin County OH.

An additional investment choice that raises money from people to invest in real estate is a real estate investment fund. These ventures own shares in companies that invest in real estate, including REITs.

Investment funds don’t have to disburse their income to shareholders. Similarly to regular stock funds, the return is created by increases in the worth of their stock.

Mutual funds, ETFs (exchange-traded funds), and high-end private equity funds are thought of as real estate investment funds. Similarly to REITS, real estate investment funds provide investors liquidity by enabling them to unload their shares on the market anytime.

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