There’s been an astronomical boom in the overall growth of commercial real estate worldwide. Rents are exploding, and property prices are nearing their extremum. What place does Philly occupy in all these?
Philadelphia and Dayton are fast-growing cities. It’s one of the cities that boasts a long host of prime investment opportunities, commercial real estate included. Just look at commerical property for sale around Dayton for evidence.
If you’re looking to make a quick buck, in droves, then real estate investment would be worth considering.
However, it’s worth noting that your success in real estate significantly depends on the kind of broker you choose to entrust with all your real estate needs. Is the broker reputable enough not to sink you?
Check their experience, consistency in getting jobs done, and most importantly, their credibility and accessibility.
Not Enough commercial Tenants
Philly is ranked as one of the most terrible places in the world to set up a business. Blame it on the high taxes, not-so-friendly business practices and the loads of red tape that make it extremely challenging for startups to pick up.
A good example is starting a small boutique or restaurant. There are lots of hooves that will be thrown your way while starting out, and which may make your business a little hard to get on the ground as opposed to investing in other cities.
It’s for reasons such as this that commercial real estate is proving to be less lucrative, considering property owners have to throw in significant concessions and rent cuts to pull in tenants.
So technically, Philly doesn’t have enough commercial tenants to favor commercial real estate. If an investor isn’t willing to take a chance and set up a business regardless of the hurdles they have to jump, then rest assured they’ll consider investing in another city, not Philly.
Property owners are torn between charging exorbitant prices for rent or softening it up a little bit to keep the occupancy rates afloat.
Even with this, the average payable rent is still favorable to a property owner. According to the director of CBRE research, Philly rents are as reasonable as they can get for a property owner. He also foresees the rents rising even more in future, thus making real estate a more viable business to hop into as of now.
Another thing affecting commercial real estate in Philadelphia is office densification — companies shrinking their office space to create even more offices for their employees. This move is meant to combat the issue of sky-rocketing office rent. And worse, the practice is rampant all across Philadelphia, thus making real estate investment less profitable than they should be.
The president did promise a corporate tax cut, and if this promise ever comes to pass, that would mean Philly would be attracting more investors, thus putting an end to the tenancy problem experienced in the city.
Even better, this is bound to yield similar benefits without putting to much pressure on individuals–a win-win situation for both tenants and property owners.
The whole point is to be really smart with how you approach commercial real estate in Philadelphia. After all, all your life saving is on the line here. Take time to do your own research, and only get down to business after you’re convinced you’re making the right decision.