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A commercial real estate investment, like any other investment, has risks.
Carrow Real Estate Services can help commercial real estate investors mitigate risks through comprehensive due diligence and analysis. Our investor representation services can help you make more confident acquisitions.
Matching Is Key:
Matching the right investment for the investor is also important. Risk tolerance, cash investment expectation, long or short-term hold, asset management considerations, turn key versus “fix up” properties, and other investor objectives need to be evaluated.
Leasing revenue is the bloodline of an investment’s success and certainly poses the most risk.
Factors to Consider When Evaluating Risk:
- Credit worthiness of current tenants
- Remaining lease term commitments of current tenants
- Pros and cons of single tenant vs multi-tenant properties.
- Building configuration flexibility for multi-tenant properties.
- General market of the investment type (retail, multi family, office, industrial, health care, land)
- Does the current tenant rent structure compared to market create opportunity or risk?
- What is the market’s absorption projections in filling current or future vacant space?
As part of our investor representation services, Carrow Real Estate Services provides Pro Forma reports projecting revenues, expenses, debt service assumptions and return ratios using specialized software to best evaluate the potential risks and rewards of the investment.
Unlike other investment types, financing can “turbocharge” returns through “positive leverage” which occurs when the lending rate is less than the property’s capitalization rate increasing the overall return of the cash investment. Continued low interest rates really help boost commercial real estate returns.
Carrow Real Estate Services offers no cost, no obligation consultation to provide strategies and options that match your real estate investing goals and objectives. Contact Us today to learn more.