West Virginia Commercial Real Estate Market Trends Analysis

Commercial properties that house a company that does business with other businesses (B2B companies) are called industrial properties. These companies could genuinely manufacture the products, or they could be distributors that disburse a manufacturer’s goods to other businesses.

Recently an additional class of industrial renters has been created by fulfillment centers that deliver online orders to retail customers.

The proprietors of industrial assets are also long-term investor-landlords. These investments profit from both income (lease) and the expected appreciation in the value of the property. Industrial leases can be based on either gross or net rent provisions.

Annual and 10 Year Population Growth

Population statistics are vital for industrial investment plans in ways that are different from residential investments. Static or declining populations mean a decreasing tax base. Industrial investors want to see that the market’s infrastructure is adequate and sufficiently maintained.

All property values, commercial as well as residential, are impaired in areas that are losing residents. A big concern for industrial renters is the availability of qualified employees. These renters will not be comfortable betting on a place that doesn’t provide an increasing amount of possible employees.

Property Tax Rates

As we witnessed with apartment building investments, tax rates are a good prediction of the financial health of a potential location. Uncertain tax rates show a place that presumably isn’t beneficial for your investment’s success.

Our resources on industrial and commercial property taxation along with commercial property tax reduction methods will educate you on taxation rules.

Accessibility

Industrial building tenants typically ship substantial quantities of products or cumbersome products. Large tractor-trailer trucks are utilized to haul these products. Industrial real estate investors search for properties that are close to main highways that large tractor-trailer trucks can get to easily.

Some industrial tenants need to reach train or airport cargo terminals. Industrial properties that are placed close to an interstate make this more convenient, which makes the property more desirable.

Utilities

Manufacturers typically utilize large amounts of power and water. If a property does not contain suitable levels of these utilities, some tenants will search somewhere else.

Retail facilities rent space to companies whose clients are ordinary citizens in the area. They may be in a property alone (single-tenant) or in a structure with additional stores (multi-tenant). Retail businesses that need to be alone include banks, drug stores, restaurants, or auto equipment centers.

A property that holds a couple or more tenants is considered multi-tenant property, as are “neighborhood” shopping centers, “strip” malls, grocery store anchored shopping, or malls with big nationally known renters considered “big box” centers. “Lifestyle” retail centers might incorporate retail, office, and residential spaces.

Retail lease agreements are “net” with renters taking care of the landlord’s tax, property insurance, and maintenance of common areas as additional rent. Net leases additionally specify that the renter pays for the maintenance of the property.

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

Population Growth

The overall numbers and ratios for the complete region are just the start for retail real estate investors. Their renters are interested in the particular submarket, or trade area surrounding the suggested property. Retailers want to be where their clients live, drive past, or are employed.

Population growth is significant, but retailers require a minimal amount of customers at this time. Retail renters, and accordingly retail landlords will analyze all population data to include size, growth, and daytime population.

Median Income

The population’s income standards are a significant part of retail site requirements. Higher incomes indicate a suitable site for higher end retailers, while middle incomes are good for blue-collar stores such as car parts stores.

Median Age

The age of the market’s population can be important to companies renting your retail property. Based on the type of center (grocery anchored, entertainment anchored, big box retailers) the age of the populace could help draw desired retail lessees.

Property Tax Rates

Retail property owners use property tax rates the identical way as both multifamily and industrial investors. Growing taxes are charged to their renters which damages their occupancy rates, and the value of their property could be lessened over time.

Having your real estate erroneously valued by the government is a hidden problem that leads even to higher expenses. Protesting property taxes can be outsourced to the best commercial real estate lawyers in West Virginia.

Office landlords rent working locations to companies. Office buildings can be a one story flex space or a multiple story building. For many large businesses, leasing office space allows them to utilize their money for the improvement of their company.

Office renters sign a “full service” lease which is also categorized as a gross lease. All of the owner’s costs are included when the rental payment amount is determined. The details can be altered according to the renter and owner’s requirements.

These landlords are long term investors who project revenues from lease payments and the appreciation of the asset.

Population

The specific demographic data that office property owners employ illustrates the number of acceptable office employees in the populace. This often includes the total citizens living there, their levels of education, as well as median age. Successful office investors acquire property in areas where their renters need to work.

Property Tax Rates

Growing municipalities that are home to a good group of possible office employees will have expected, predictable tax rates. Desirable renters for your office property will analyze this item and so should you.

Incomes/Cost of Living

Office lessees acknowledge current wage levels as one sign of the quality of the labor pool. It also gives them an idea of the salary levels needed to contend for the optimum workers.

Education

Education levels are studied by office renters and investors to a greater degree than other real estate investors. Some companies don’t need to find college degrees but other businesses do.

Buy, rehab, rent, refinance, and repeat (BRRRR) is a growth method that develops a portfolio of leased assets. These are long-term or Buy and Hold investments. The advantage is that the property generates income while you hold it and could be sold later for a profit once its worth has grown.

The investor acquires a residential property, repairs or renovates it, and rents it out. Next, the property is refinanced subject to its enhanced value, and the additional value is paid out to the investor. The money is used for the down payment for an additional property, and the procedure is done again.

To acquire and repair commercial real estate, investors opt for unconventional financing. Conventional lending companies avoid to finance such projects because they are too risky.

Look at our commercial real estate service provider directory to select the top commercial rehab lending companies in West Virginia and the best West Virginia commercial hard money lenders.

There, you will also see the top commercial and industrial real estate agents in West Virginia whose local expertise can be useful for your project. Below is a selection of data an agent can advise you on.

Median Gross Rents

This information informs the investor whether they could hit their primary and projected profit goals. Rental rate numbers are a vital component in an investor’s choices.

Property Value Growth

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

Population

The dynamics of the population’s increase is a crucial number to BRRRR investors. Absent an expanding number of residents, real estate will be idle and lose value.

Income

Multifamily property investors need to understand the wage level of their prospective tenants. You don’t need a Class A high-end apartment complex in a market of mid or low level wages.

Property Tax Rates

Increasing taxes can eat into your profit. Consistent tax rates are one sign of a strong, growing economy.

What’s also important, in the local government’s register, your property can be overestimated, which means you overpay property taxes. To start a tax protest procedure, consult with the best commercial property tax consultants in West Virginia and best West Virginia commercial real estate appraisal companies.

The industry understanding of development typically means whole residential communities or commercial ventures of just about every scope. The developer should find property that meets their specifications so that they can produce residential parcels for sale or commercial leasing properties.

A developer must be certain the property is properly zoned, engages civil engineers to design the site work, finds architects and engineers to design building plans, and controls the local approval process. Once the okay is received, the property is developed, and the finished property is marketed to the intended users.

The time it takes to complete a real estate development could be longer than a year. The economic picture or area laws can shift in a damaging way before the project is completed. That is why the most financially dangerous type of real estate investing is development.

A project can get stopped by different factors causing a long delay before continuing construction work. During this pause, the building can be damaged by criminals, natural disasters, or other factors. You require help by the best commercial real estate insurance firms in West Virginia.

Insurance must be included in your project costs for showing it to a lender. The best commercial new construction financing firms in West Virginia could suggest a list of companies they think are worthy.

Population

To make certain that their residential and commercial development ventures are located in favorable places, developers assess the identical populace size, population growth, household wages, and education level of the population that their desired users need to see.

Income

Retail real estate developers utilize wage levels to place their development where it will draw the buyers that their intended tenants need. A place that does not appeal to a high-end retail store might be exactly what a low priced business is searching for.

Businesses that rent office and industrial properties utilize income data as a sign of their employee costs in that location. Wage levels help developers see whether a location is suitable for industrial or office spaces.

Education

Industrial and office property tenants look for distinct levels of education in the locality’s populace. A lot of office renters require college graduates for their employees. Blue collar employers are okay with high school grads.

Age

Developers hunt for a median age that shows people who are active employees and taxpayers. These are the labor pool that office and industrial tenants have to access. Involved workers and their households shop at businesses and dining establishments that rent retail units.

A working age populace also has the most dynamic residential buyers that residential investors have to have.

Investing in mortgage notes entails paying a lower amount than the payoff total for a loan that’s in effect so that the note buyer becomes the lender. Lenders can sell loans to increase cash, but they normally unload them due to them not being paid as promised.

A part of note buyers will re-amortize the loan to enable the borrower to continue their loan payments — for a long-term investment. They know that if the borrower discontinues making payments, they can take back the property and sell it, which is part of the strategy.

Population

Population size and rate of growth are important to these investors for the same reasons as the rest of investors. This is a quick “sniff test” of the financial vitality of the market.

Property Values

Expanding real property values are the most significant indicator when promissory note investors assess an area. The note purchaser is lending on the value of the property instead of the borrower’s payment ability.

Property Tax Rates

When property taxes increase too often, borrowers who have problems paying their mortgage payments will find it hard to keep up. That picture hurts long-term investors, but it assists short-term note investors who aim to monetize their investment immediately.

An interesting strategy of investing in the purchase and management of real property is to acquire shares in a REIT (Real Estate Investment Trust). They create revenue from rent payments and build long-term property value.

REITs are obligated to distribute ninety percent of their profits in dividends which appeals to a lot of investors. Modest investors like REITs because they are able to liquidate their shares anytime.

People who buy REIT shares have no vote in which properties are purchased or the way they are managed because they are passive investors.

People pondering becoming passive investors are interested in buying REIT shares. They dispose of their own real estate to reinvest the money into REIT shares.

There is a very convenient legal procedure allowing you to postpone paying taxes on real estate sale in this case. Study our experts’ resources to learn how to benefit from it: Can You Do a 1031 Exchange into a REIT? and What Is a DST 1031 Exchange?.

For such a procedure, you will need to hire a 1031 exchange accommodator. Our directory lists the best 1031 exchange Qualified Intermediaries in West Virginia to facilitate your search.

Real estate investment funds are an additional venture that collects money to invest in real property. These ventures maintain shares in companies that invest in real property, notably REITs.

This investment choice doesn’t disburse dividend revenue to their members. The shareholder’s return is generated by the valuation of the fund’s stock.

The most popular investment funds include mutual funds, ETFs (exchange-traded funds), and private equity funds for high net worth investors. Shareholders are permitted to sell their shares if they need capital, similar to REITs.

Shareholders are passive investors who are not involved with the determinations of the fund’s managers.