Understanding Commercial Property Development
The narrow two block tract of land has sat empty for the last two years. What was once the location of a thriving lumber company in the middle of the community became an eyesore when the owners purchased a new location five miles away. The lumber company offered to donate the land to a group of developers who planned to create a new mixed use development, but the plans were significantly delayed during the mini recession that affected most of the nation.
Finally, after two years of looking like an abandoned lot, a commercial property development company is moving forward with their new plan to revitalize the area. Three different elevator shafts were the first structures constructed, serving as an indicator of the commercial development to come. The plans for a combination of upscale apartments, shopping, office space, and a community green space has everyone talking.
In the year 2014 alone, many areas like this empty lumber yard began to take on new life. In fact, the revenue from property management in America reached an impressive $69 billion that year. While many community leaders have big dreams, it often takes the planning and investment of a commercial property development company to make these dreams materialize into a reality.
It is most often management companies who are finally able to create a mixed use plan that will convince other investors that the reward is worth the risk. These commercial property development company plans show a group of investors how to maximize the return for the initial investment. Property owners and other investors become confident that by building valuable office and retail space they can not only increase their holdings, but also create profit generating leases that will in turn encourage even more development.
Investment sales for many commercial properties across the country began to show growth by rising more than 10% in the first quarter of 2015. Financial experts also predict that industrial rents will experience at least a 3.1% gain by the end of the year 2015.
Why Invest in Commercial Property Development?
Here are three compelling reasons to consider investing in commercial property development:
1. Strong Potential for Long-Term Revenue
Commercial properties, such as office buildings, retail centers, and industrial spaces, often yield higher rental income compared to residential properties. Lease agreements for commercial properties are typically longer, often spanning several years. This long-term commitment from tenants creates a more stable and predictable income stream, offering security and reduced vacancy risk.
2. Diverse Opportunities for Appreciation and Growth
Commercial properties generally appreciate over time, especially in growing or high-demand locations. Investors benefit from capital gains as property values increase. Moreover, the demand for commercial real estate often grows with economic expansion, creating opportunities for higher returns on property resale or redevelopment projects.
3. Tax Benefits and Incentives
Investing in commercial property development comes with various tax benefits, including deductions for mortgage interest, property depreciation, and operating expenses. Additionally, many governments offer incentives and tax breaks for commercial developments that bring jobs and economic growth to a community. These incentives can significantly boost the profitability of a commercial investment.
Investing in commercial property development can be a lucrative strategy for those looking to build wealth, leverage tax benefits, and enjoy steady cash flow.
Hire the Best Development Company
Land investment is often a risk, but the best commercial property development company leaders can correctly forecast the need for new development and the needed locations. It is these companies who can help communities move from a former lumber yard location to a thriving urban shopping area that also includes residential living, office space and community performance and gathering areas. If you are looking for a new investment opportunity, a property management company can help an individual or a group find a location and plan for its new purpose, while creating for you a profitable mix of lease and rent income.
