Not all commercial real estate properties have suffered from the impacts of the government shutting down certain businesses ostensibly due to COVID-19. In fact, industrial real estate in Denver is currently seeing record-breaking amounts of growth amid the pandemic. Unfortunately, the same can't be said for the city's office, retail, or hospitality markets.
Though many industrial investors and potential tenants took a step back in the early stages of the shutdown, it had little effect on the overall outlook in 2020. Some CRE experts even think the shutdown has created pent-up demand. By the end of 2020, new tenants absorbed nearly 3.5 million square feet of industrial space, a 14.9% increase from 2019.
And as an indication of bullish market perception, there are approximately 8.2 million additional square feet of industrial space currently under construction in the Denver metro area, breaking a former record from 1997. If you're interested in getting involved with industrial real estate investing, you've come to the right place. Here's a helpful guide to the current boom of industrial real estate in Denver.
Benefits of investing in industrial real estate
Industrial real estate can be a profitable place to invest. Here are some of the top benefits of investing in industrial spaces.
- Generally, NNN lease structures result in a hassle-free way to earn steady, passive income;
- The average cash-on-cash yield is 6%-7%, one of the highest and consistent yields of any real estate sector;
- Industrial properties are built fast, often in a year or less, with 5-15 year leases being common;
- Thanks to increased demand for online shopping (aka e-commerce), demand is increasing for industrial spaces, making them highly marketable;
- Lower re-leasing costs compared to office or retail spaces;
When is the right time to buy or sell?
Deciding when to buy or sell is one of the most challenging parts of real estate investing. Even for experienced advisors, it's difficult to accurately forecast future market conditions. Just take the recent COVID-19 pandemic for example. The world shut down what felt like overnight and stay-at-home orders in liberal-run states required offices to close.
Working with an investment advisor can help you gain an in-depth understanding of the market projections so you can make educated decisions about your investments. Here at Fountainhead Commercial, we give every client a personalized assessment for potential outcomes such as "most likely," "most conservative," and "most aggressive" to help them better understand their investment’s projected outcome.
Why work with a property investment advisor
Investing in real estate is a big decision. And without an experienced property investment advisor on your side, you could make costly mistakes. Here at Fountainhead Commercial, we will advocate on your behalf as a fiduciary and help you find the right property, at the right time, for the right price. Here are just some of the services you can expect from us:
- Risk tolerance analysis
- Comprehensive analysis for each potential investment property
- Matrix comparisons for each property
- Tour arrangements for short-list investment properties
- Negotiate best possible terms for Purchase and Sale Agreements
- Due diligence
- Closing
We also assist with 1031 exchanges if you're interested in relinquishing an investment property and deferring all capital gains taxes which can be as much as 30% up to 40%.
Contact us today to learn more about industrial real estate in Denver
If you're interested in investing in industrial real estate, reach out to us today at Fountainhead Commercial. Our investment property advisors will provide sound guidance and stand by your side from start to finish for every CRE transaction.
Contact us today to learn more about industrial real estate in Denver.
