Maine Commercial Real Estate Market Trends Analysis

Industrial buildings are a class of commercial real estate that is used by companies that do business with other businesses (B2B tenants). B2B companies either make or distribute products to other manufacturers or retailers.

However, currently, there is an increasing type of industrial properties whose renters are online purchase fulfillment centers that disburse items directly to the purchaser.

Industrial properties are long-term portfolio investments that are wanted by investors/landlords. Their investment predictions count on revenue from both lease and the planned sale of the property. Leases can be either gross or net.

Annual and 10 Year Population Growth

Industrial property investors require population statistics for reasons that are dissimilar from residential investors. A shrinking population has a less direct effect on industrial properties due to a shrinking tax base. Sufficient tax revenues are needed to keep up roads and infrastructure that industrial properties need.

A declining population is a reliable indication that business property values are likely to decline as well. The renters for industrial properties require a consistent local employee base. Large industrial renters will avoid regions that are dropping residents.

Property Tax Rates

As we saw with apartment building investments, tax rates are a good indication of the economic viability of a potential market. Consistent tax rates are an indicator of a predictable area for your investments.

PropertyCashin have informative guides about commercial and industrial real estate taxation as well as how to reduce commercial property tax in the U.S. to help investors get informed about taxation more deeply.

Accessibility

Companies that lease industrial properties ship large items or large amounts of items. They utilize big trucks to transfer their products. Industrial properties have to be close to major roads so that significant trucks can get to and from them without trouble.

Many industrial renters have to get to train or airport freight terminals. This makes being close to an interstate, which typically takes traffic close to air and train hubs, a big benefit for industrial properties.

Utilities

Production properties frequently require large amounts of power and water. A property without the capacity to provide sufficient utilities will not attract those tenants.

Retail buildings lease space to companies whose customers are typical citizens in the region. These stores may be in a property alone (single-tenant) or in a structure with additional renters (multi-tenant). Recruited businesses for single-tenant locations are pharmacies, auto parts centers, banks, and dining establishments.

A property that holds a few tenants is classified as multi-tenant property, as are “neighborhood” shopping centers, “strip” malls, grocery anchored centers, or malls with significant national renters called “big box” shopping centers. A big shopping center with a combination of types including office, retail, and residential are called “lifestyle” centers.

Retail lease agreements are “net” with renters being responsible for the landlord’s property tax, insurance, and maintenance of common areas as additional rent. Tenants are responsible for maintaining the facility as well.

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

Population Growth

The total data for the region under consideration is not sufficient for retail investors. Their tenants are interested in the specific area, or trade area encompassing the suggested property. Retailers have to locate where their clients live, drive past, or work.

A trade area that does not already have enough “rooftops” won’t do for retailers even if it is expanding. Retail real estate investors have to review the existing population growth, average annual population growth, decade population growth, and daytime population.

Median Income

The populace’s wage rates are an important part of retail location requirements. Median income information is a lead to the clients who can buy costly products from luxury retailers or those on a smaller budget who require discounted prices.

Median Age

Retail property buyers depend on age statistics that other investors discount. If a retail property is placed near the age groups that possible tenants require, it is easier to draw them.

Property Tax Rates

Tax rate data is assessed by retail investors for similar reasons as residential and industrial property buyers. Growing taxes are charged to their tenants which lowers their occupancy rates, and the worth of their property could be diminished down the road.

In an area showing elevated real estate tax rates, it’s even more crucial to make sure your real estate isn’t overpriced by the tax office. Protesting real estate value assessment can be outsourced to the best commercial real estate lawyers in Maine.

Office properties lease work space to companies. Office units might be big enough for a single person or hundreds of workers. For a lot of major companies, leasing office space enables them to utilize their capital for the improvement of their business.

Office lease agreements are usually gross or “full service” deals. The lease payment contains the landlord’s projected expenses for utilities, taxes, insurance, and facility maintenance. You could find adjusted variations of gross leases that are tailored to fit that particular case.

Office property investors keep these properties for a long time which provides income from both ongoing lease income and the appreciating value of the property.

Population

Office building investors analyze demographic data that demonstrates the existence of acceptable workers for their favored tenants. This normally includes the total people living there, their levels of education, and median age. It is critical for investors to know what their potential renters need and to assess the area appropriately.

Property Tax Rates

A properly run city or county that draws possible office employees to the area won’t have high or constantly rising tax rates. A qualified labor pool attracts sought after office tenants.

Incomes/Cost of Living

Office renters acknowledge existing wage levels as one sign of the qualifications of the workforce. It could also indicate the wage standards that employers will need to provide.

Education

Education levels are analyzed by office lessees and investors more than other property investors. Some companies don’t have to see college degrees but others do.

When an investor purchases real estate, fixes it up, rents it, refinances the property, and then duplicates the procedure, it’s designated a BRRRR type of investment. This is a Buy and Hold investment because the investor holds the property for a long time. The investor earns lease income during their ownership and a single sum when the property’s price goes up, then they sell it.

Initially the investor obtains a property, then they rehab it and secure a renter. As soon as they can, the investor obtains a “cash-out” refinance that enables them to take equity out of the property in cash. This becomes the down payment on their next property, and they repeat it all again.

It’s hardly possible to qualify for a regular multifamily loan for a property needing a serious renovation. Banks and other traditional lenders don’t lend on this type of projects fearing a higher risk.

PropertyCashin’s directory of commercial real estate service providers can shorten your way toward the top Maine commercial private and hard money lending companies and the best commercial rehab lenders in Maine.

From one of the best commercial real estate brokers in Maine, receive an expert opinion on the advantages and disadvantages of the location for your business. Read below to learn about the indicators you should discuss with them.

Median Gross Rents

Investors need to locate allowable existing rent standards and evidence of acceptable rent bumps. This can impact decisions regarding locations for investment and which properties to pick up.

Property Value Growth

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

Population

BRRRR investors will look closely at the populace increase. Absent an increasing population, real estate will stay unoccupied and depreciate.

Income

To buy the appropriate investment real estate, investors must be aware of their desired audience’s level of income. If you are happy owning mid-priced real estate, you don’t need to find high incomes.

Property Tax Rates

High or rising taxes will be bad for an investment. Consistent tax rates are one sign of a strong, growing economy.

Moreover, in the local tax office’s register, your asset can be overassessed, which makes you overpay property taxes. The best Maine commercial real estate appraisal companies along with the best commercial property tax consultants in Maine are used by thrifty property owners to review the value.

For a real estate investor, real estate development refers to the creation of any commercial property or a complete residential community. Developers purchase property that allows the development of homesites sold to builders or commercial buildings that are rented.

Real estate development includes working with zoning permits, managing sitework plans developed by civil engineers, working with engineers and architects on construction plans, and shepherding the project through the local government for approval. Once the okay is obtained, the property is developed, and the finished product is marketed to the intended users.

Real estate projects can take years to complete. The economy or area laws can shift in a damaging way before the development is done. This instability makes real estate development the most speculative sort of real estate investing.

Risks may force a development company to stop the construction for an unknown term. While the construction workers are away from the site, the building can get damaged. You will need help from the best commercial landlord insurance companies in Maine.

Insurance is a vehicle you may need to show lenders when getting approved for a loan. You will be able to learn about the insurance providers that are deemed acceptable by asking the best commercial construction lenders in Maine directly.

Population

Developers utilize population size and growth speed in conjunction with economic and education information to make sure that they have enough retail customers and residential homebuyers in the market.

Income

Retail real estate developers utilize salary data to place their development where it will draw the buyers that their targeted renters require. Premium retail stores hunt for higher wage markets, whereas moderate priced retail stores require middle class customers.

Office and industrial tenants will need to see the pay rates that their possible workforce will expect. Developers realize this, and examine wage statistics to project a market’s appeal for their desired renters.

Education

Businesses that lease space in industrial and office developments have distinct education data in mind for their sites’ population. White collar employers need to see a majority of college graduates. Industrial businesses look for a larger accumulation of high school degrees.

Age

An older citizenry that more intensively utilizes public services is not what developers are searching for. These are the employees that office and industrial businesses need to have. Active employees and their families patronize stores and restaurants that rent retail real estate.

Residential real estate developers need the identical age category because they are presumably moving up the social ladder, which helps residential transactions.

Mortgage note investors buy existent loans for less than the amount due and become the current lender. The original lender could be agreeable to selling because they require money, or because the borrower is behind in their payments.

The investor could restructure the loan with reduced payments giving them a long-term investment with interest income payments. They understand that if the borrower discontinues making payments, they can take back the asset and sell it, which is part of the plan.

Population

One of the most basic indicators in real estate investing of all types is the magnitude of the market’s population and whether it is growing. This information is an immediate evaluation of the future economic vitality of the market.

Property Values

Growing real estate values are the most crucial indicator when promissory note investors analyze a neighborhood. The viability of the property is the reliability of the investment.

Property Tax Rates

In an area with growing tax rates, the larger expense of possessing a house may drive borrowers into foreclosure. This is dangerous for long-term investors, but advantageous for the ones who plan to turn their investment around quickly through a liquidation of the collateral property.

A REIT (Real Estate Investment Trust) is a business that possesses and manages revenue producing property. Rent receipts and periodic property liquidations create the REIT’s income.

REITs are required to distribute ninety percent of their profits in dividends which appeals to many investors. Low net worth investors prefer REITs because they may sell their shares when they want.

Individuals who acquire REIT shares have no vote in which properties are purchased or how they are handled — that’s why they are called passive investors.

REITs are often acquired by people looking for a way to shift focus from active to passive investing. They purchase REIT shares once they liquidate real estate.

A like-kind exchange is created to benefit investors who intend to do this. Learn details about it by reading our articles: Can You Do a 1031 Exchange to REIT Shares? and A-to-Z Guide to Delaware Statutory Trust (DST) 1031 Exchange.

A 1031 exchange accommodator is required by the IRS to be a middleman in the procedure. Find one in our list of the best 1031 exchange Qualified Intermediaries in Maine.

Real estate investment funds are an attractive venture that pools cash to invest in real estate. These ventures possess interest in entities that invest in real estate, such as REITs.

Investment funds do not have to pay out their income to shareholders. The investment revenue to the shareholder is the anticipated growth in share worth.

Mutual funds, ETFs (exchange-traded funds), and high-end private equity funds are designated as real estate investment funds. Shares in investment funds are purchased and unloaded on the open market which is convenient for newbie investors.

Share buyers are passive investors who are not participants in the decisions of the fund’s managers.