When it comes to potentially lucrative investments, real estate provides plenty of opportunities for entrepreneurs. The right investments can generate passive income and long-term wealth building, especially as properties gain value over time. Real estate is also a great way for an investor to diversify a portfolio. Bankrolling commercial real estate efforts can have high rewards for savvy investors. Here’s what expert James C. Dragon thinks you should know about future growth in commercial real estate.
Industrial real estate is slated for continued growth. This is mostly due to the rise in e-commerce, thanks to online retailers such as Amazon and Wayfair. Companies like these need to buy property to build warehouses to store goods and products. Large brick-and-mortar store companies such as Walmart, Target, Kroger, and others also need commercial sites for distribution centers. Manufacturers also require real estate not just for factories and plants, but also to house their products. Uncertainty and supply chain issues due to the pandemic and economic concerns have influenced many suppliers to amass inventory.
With a shortage of single-family homes in many markets, investing in multifamily units for rent is a good move. Apartments are doing very well and will continue to do so in the near future. The increased number of people working from home is also having a positive impact on multifamily real estate. As with real estate of any type, location matters. Pay attention to places experiencing significant population growth and local industry changes such as Austin, Texas, and Boise, Idaho.
Shopping and retail sites are also rebounding, according to expert James C. Dragon. Retail property transactions have surged in the past year, especially with shoppers returning to pre-pandemic levels in most places. According to MSCI Real Assets, retail property transaction volume in the first quarter of 2022 hit $25B, an 82% increase over the same period in 2021. Population shifts in suburban areas are also helping to fuel the strong numbers in this part of commercial real estate. Open-air shopping centers are especially popular.
James C. Dragon also recommends keeping an eye on the hospitality market. With travel and tourism on the upswing. Major hotel brands will invest not only in new projects but also in renovations and reconstruction of existing properties. Business-related travel is also returning to pre-pandemic levels. Think about cities and places with strong prospects for business conventions and major sporting events and festivals that bring in visitors.
Commercial real estate is still a worthwhile vehicle for your investment dollars. While prospects are strong in most areas, things are still a bit shaky when it comes to office spaces. With more individuals and companies adopting remote and work-from-home ways of working, the demand for office spaces is still a far cry from what it used to be.