WHY YOU SHOULD BE INVESTING IN COMMERCIAL REAL ESTATE.
Written by,
Rick Dimidjian President & Broker of Record
Drew Dimidjian Associate
28 April 2023
Industrial real estate offers several benefits as an investment, including:
1. High Demand: The growth of e-commerce has led to an increase in demand for logistics and fulfillment centers, making industrial real estate a highly sought-after asset class.
2. Long-Term Leases: Industrial tenants typically sign long-term leases, providing investors with stable cash flow and reducing the risk of vacancy.
3. Low Tenant Turnover: Industrial tenants have low turnover rates, as relocating their operations can be
expensive and time-consuming. This makes industrial real estate a stable investment option.
4. Diversification: Investing in industrial real estate allows for the diversification of a real estate portfolio as industrial properties can accommodate a wide range of tenants from different industries.
5. Higher Yields: Industrial properties tend to have higher yields compared to other types of commercial real estate, making them an attractive investment option for investors.
6. Low Vacancy Rates: Industrial properties typically have lower vacancy rates compared to other types of commercial real estate due to the high demand and low supply of industrial properties in many markets.
7. Value Appreciation: Industrial real estate has experienced steady appreciation in value over the years, particularly in areas with high demand and limited supply. The increasing demand for e-commerce and logistics is expected to continue to drive up the value of industrial real estate in the future.
8. Inflation Hedge: Industrial real estate is considered a good inflation hedge, as rent increases can be built into long-term leases. Additionally, industrial properties
often have a high replacement cost, which means that the value of the property can increase with inflation.
9. Tax Benefits: Investing in industrial real estate can provide investors with tax benefits, such as depreciation deductions, interest deductions, and the ability to defer capital gains taxes through 1031 exchanges.
10. Multi-Tenant Properties: Investing in multi-tenant industrial properties provides additional benefits, such as reduced risk through diversification and the ability to generate higher rental income through multiple tenants.
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