Nick Debeyiotis has worked in commercial real estate for many years and understands the unique benefits and challenges of this field. 2023 is going to be a fascinating year for this investment option, he states, as there are many potential options and unique experiences. He recently discussed these factors and highlighted where you should put your money in commercial real estate this year.
Nick Debeyiotis on Commercial Real Estate Trends in 2023
Nick Debeyiotis has watched the trends in commercial real estate for this year and believes there will be some hurdles to leap. For example, inflation has been at its highest since the 1980s, and rent has increased heavily in recent months. The federal government is combating these issues with higher interest rates, though this can make investing in commercial real estate a real uphill battle.
Furthermore, the continuing war in Ukraine and sanctions on Russia have affected oil prices, increased complications from COVID-19, and created a risk of recession. If a recession doesn’t come in 2023, it will be shocking to most. A majority of economic forecasts believe a mild to moderate recession is in order. How can you invest in commercial real estate in these times and succeed?
Nick Debeyiotis states that a long-term focus is critical in these upsetting times. It is essential to know that economic ups and downs occur all the time and to focus on buying properties that continually succeed. For example, multi-business real estate properties have increased by 5% in recent months, meaning that they’re a powerful option for investors trying to make good money.
These include things like large office buildings and shopping centers, though malls may be going the way of the dodo thanks to online shipping. Instead, it is better to focus on smaller-scale shopping facilities and service-based industries. Even with food delivery hitting many restaurants hard, service is always popular, and their properties are only going to increase in value, even through a pandemic.
Furthermore, Nick Debeyiotis strongly suggests looking into affordable commercial properties, such as vacant lots, that businesses can develop themselves. These properties will become a hot commodity in a recession because many companies won’t be able to afford to rent more extensive facilities. Smaller and more compact properties are a better option during these challenging rental periods.
Urban retail may take a hit during 2023 as fewer and fewer people work in downtown areas. Suburban shopping centers are going to be more popular, while nearly empty malls may still be a wise purchase. Instead of buying malls and trying to revive them, redeveloping the property is a better option for savvy commercial investors.
For instance, Nick Debeyiotis suggests turning these malls into storage or shipping centers for Amazon or other online retail centers. Doing so takes back what would be dead property and provides real jobs for a community. Beyond that, Amazon often buys these facilities at great prices, which intelligent investors like you can purchase for heavy discounts from desperate buyers offloading them. Savvy investing in a recession can help you sell these properties at a high rate when the economy inevitably bounces back.