Hancock County Indiana Commercial Real Estate Market Trends Analysis

Industrial properties are commercial properties that are often occupied by Business to Business (B2B) companies. B2B companies either manufacture or deliver goods to other manufacturers or retailers.

The exception is the quickly growing world of fulfillment centers that store and distribute goods sold by online sales websites straight to their consumers.

The proprietors of industrial properties are also long-term investor-landlords. Their return calculations involve rental income and asset value growth. Their leases could either receive pass-throughs like property insurance and real estate taxes in one payment (gross) or individually (net).

Annual and 10 Year Population Growth

Industrial real estate investors have a need for accurate population data that is specific to their category of property investment. A declining populace has a more indirect effect on industrial properties due to a shrinking tax base. Industrial investors want to see that the region’s infrastructure is adequate and sufficiently managed.

An area that is dropping its populace will experience unacceptable commercial property appreciation as well as residential. A big consideration for industrial tenants is the availability of qualified workers. The desirable industrial renters will not locate in a place that is dropping possible employees.

Property Tax Rates

Industrial investors use real estate tax history as a signal of the stability of an area, just like multifamily property investors. Unstable tax rates keep you from accurately assessing your projected returns in that market.

Our resources about commercial property taxation and commercial real estate tax reduction will help you understand taxation details.

Accessibility

Industrial building renters typically move large amounts of products or unwieldy items. Tractor-trailer trucks are usually used to handle this. Industrial properties need to be adjacent to major roads so that large vehicles can reach them without complications.

Many industrial tenants have to reach train or airport freight terminals. Interstate highways typically go near those kinds of terminals which is a benefit for industrial sites located close to those interstates.

Utilities

Companies that make products themselves need large amounts of water and electricity. If a property does not contain suitable amounts of these utilities, some renters will hunt elsewhere.

Retail buildings rent space to companies whose customers are ordinary people in the area. This encompasses single-tenant and multi-tenant buildings. Retail stores that want to be by themselves include banks, drug stores, dining establishments, or auto parts centers.

A multi-tenant property might be as little as several spaces, slightly larger “neighborhood” or “strip” shopping centers, or bigger centers that are anchored by nationally known brands including grocery stores. A large shopping center with a combination of uses including office, retail, and residential are considered “lifestyle” shopping centers.

Retail landlords utilize “net” leases that obligate the tenants to separately pay for the taxes, property insurance, and upkeep of the common areas like the parking areas. Tenants are responsible for the upkeep of the facility as well.

Retail renters have specific location requirements that retail investors follow when reviewing demographic data.

Population Growth

The total specific data and ratios for the whole area are just the beginning for retail property investors. Investors also look at the community’s submarkets. Clients have to be able to locate and easily reach your retail renters.

A trade area that doesn’t currently have enough “rooftops” will not satisfy retailers no matter if it is growing. Retail real estate investors need to collect the current population growth, average yearly population growth, decade population growth, and daytime population.

Median Income

Nationally known stores or “credit tenants” have very particular location criteria that involve income amounts. Expensive products require clients with large wages while lower end goods require lower wage households.

Median Age

The age of the region’s population could be significant to companies who rent your retail property. If your retail property is situated close to the age groups that possible renters require, it is less difficult to draw them.

Property Tax Rates

Retail facility investors use property tax rates the same way as both apartment building and industrial investors. Increasing taxes are charged to their renters which decreases their occupancy rates, and the value of their asset could be lessened down the road.

Having your commercial building overvalued by the county is a hidden problem leading even to more waste of money. The best commercial real estate attorneys in Hancock County IN can assist you with a property tax reassessment procedure.

Office space is leased to corporations that require a place for their workers to work. Office areas could be big or tiny. Significant businesses often would rather employ their capital for business improvement instead of purchasing property.

The lease agreement used for office tenants is a gross lease agreement, sometimes called a “full service” lease. All of the owner’s expenses are included when the rental payment total is calculated. This agreement may be customized to answer the requirements of the landlord and the tenant.

These investors are long term investors who project returns from lease income and the appreciation of the asset.

Population

The specific demographic data that office property owners utilize illustrates the number of sought after office workers in the populace. They search for the total populace number, their ages, and their education. In order to lease to stable tenants, investors have to copy the renters’ specifications in their location conditions.

Property Tax Rates

A financially solvent local government that ensures a suitable living situation for office employees will keep consistent tax rates. Strong lessees will look for that type of community.

Incomes/Cost of Living

Office tenants acknowledge current income levels as one indication of the quality of the workforce. It also gives them an indication of the salary standards needed to compete for the best employees.

Education

The level of education completed by the possible market’s populace is particularly significant to major office tenants. They need to realize if they are targeting lessees who need higher levels of education or not.

BRRRR, which means “buy, rehab, rent, refinance, repeat”, is an investment plan to enlarge your assets by taking advantage of the appreciated value of the asset. These are long-term or Buy and Hold investments. This plan has the benefit of furnishing short-term (rental) revenue and net income from the long-term appreciation in value.

The investor acquires a rental, fixes it up or renovates it, and rents it out. As soon as they can, the investor gets a “cash-out” refinance that allows them to pull funds out of the asset in cash. The investor uses this money to purchase more property which is repaired, leased, refinanced, and so on.

To buy and fix up a commercial property, investors opt for nontraditional financing. Banks and other conventional lending firms can’t serve this kind of projects trying to avoid a higher risk.

Browse our commercial real estate vendor directory to select the best commercial rehab lenders in Hancock County Indiana and the best Hancock County commercial hard money lenders.

Also, don’t miss out on the local knowledge of the best commercial real estate brokers in Hancock County IN. They can advise you about the important local property trends described below.

Median Gross Rents

This data tells the investor whether they could reach their initial and future profit goals. Rent numbers are a key component in an investor’s decisions.

Property Value Growth

If real estate values are not increasing, a buy and hold investor gives up half of their investment strategy.

Population

The critical populace information for buy and hold investments is the growth rate. Absent an increasing populace, real estate will be unoccupied and lose value.

Income

To acquire the right investment real estate, investors must be aware of their target renters’ level of income. An asset that does not provide the needs of the community will have a high unoccupied rate.

Property Tax Rates

Rising taxes obviously eat into your returns. Stable, appropriate taxes are an accurate signal that the community is a strong environment for your project.

Note that counties’ estimates of property market price are frequently inaccurate, which makes investors pay excessive tax amounts unknowingly. When that happens, you may seek the services of the best commercial property tax consulting companies in Hancock County IN and the best Hancock County commercial real estate appraisal companies.

The industry understanding of development typically means complete residential communities or commercial ventures of almost any size. Developers purchase property that permits the creation of parcels bought by homebuilders or commercial buildings that are rented.

This involves acceptable zoning, land use design by civil engineers, construction plans for buildings, and the okay from the local authorities. When all of the work is properly finished, the developer oversees the building and marketing of the completed product.

It can take one or two years from the start to completion of a development venture. The economy or area regulations can change in a damaging way before the project is finished. That is why the most financially perilous type of property investing is development.

A project can be interrupted by various events causing a considerable delay before resuming building. If the builders aren’t on the site, the property can get damaged. The best commercial property insurance companies in Hancock County IN help local investors compensate for financial damage caused by such events.

Insurance should be included in your project costs for showing it to a lender. Ask the best commercial construction lenders in Hancock County Indiana whom of the local insurance firms they trust.

Population

Developers utilize populace size and growth pace along with economic and education statistics to make sure that they will have enough retail shoppers and residential buyers in the area.

Income

Salary rates will demonstrate investors whether the customers and diners in the location are the people that their renters need. A site that does not attract a high-end retail store might be exactly what a low priced business is looking for.

Businesses that rent office and industrial properties utilize income data as an indicator of their labor expenses in that location. Those developers analyze wage data as one indication of a site’s possibilities for profitability.

Education

Companies that rent office and industrial spaces search for different educational factors in the area. Office property occupants often prefer potential workers with a college degree. Mid level businesses are fine with high school graduates.

Age

Developers look for a median age that indicates residents who are active workers and taxpayers. Industrial and office developers need a working age population. Active workers and their families shop at stores and restaurants that rent retail space.

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

Mortgage note investors acquire existing loans for less than the amount owed and become the current lender. Lenders are usually willing to unload loans in order to increase their cash, however they frequently get rid of the note because the loan is “non-performing”.

Some note buyers will renegotiate the loan to enable the borrower to make their loan payments — for a long-term income. They understand that if the borrower discontinues making payments, they can take back the asset and liquidate it, which is a portion of the plan.

Population

Promissory note investors, similarly to other investors, want to know the volume of residents in the prospective area and if that amount is growing or shrinking. This is a fast “sniff test” of the financial vitality of the area.

Property Values

A mortgage note investor needs to discover that real estate values in the area are expanding. The rising worth of the collateral decreases the liability of the investment.

Property Tax Rates

If property taxes increase consistently, borrowers who have trouble paying their mortgage payments will find it challenging to stay current. This is dangerous for long-term investors, but advantageous for the ones who plan to turn their investment around without delay via a sale of the asset.

A REIT (Real Estate Investment Trust) is an organization that holds and manages income producing real estate. They produce revenue from rent and create long-term asset value.

REITs are obligated to distribute ninety percent of their profits in dividends which is attractive to many investors. The capability to place and withdraw your money as your needs dictate make REITs an appropriate way for an average individual to invest in real property.

People who acquire REIT shares have no input in which assets are acquired or the way they are operated — they are passive investors.

Those pondering becoming passive investors consider buying REIT shares. They acquire REIT shares when they sell real estate.

There is a wonderful legal procedure enabling you to postpone paying Capital Gains Tax on real estate sale in this situation. Learn in-depth about tax-deferred exchanges from our resources: Can You Do a 1031 Exchange to REIT Shares? along with What Is a DST 1031 Exchange?.

For this transaction, you will be required to hire a 1031 Exchange Qualified Intermediary. Find such companies in our directory of the best 1031 exchange companies in Hancock County IN.

Another method in which cash is pooled for real estate investments is a real estate investment fund. These businesses hold shares in companies that invest in real estate, such as REITs.

Investment funds aren’t obligated to pay out their income to shareholders. The shareholder’s return is produced by the value of the fund’s stock.

A real estate fund could be a mutual fund, a private equity fund for high net worth investors, or exchange-traded funds (ETFs). Like REITS, real estate investment funds give investors liquidity by allowing them to unload their shares on the market anytime.

Real estate fund investors are passive investors who can’t be involved with the decisions of the fund’s management.