Tuesday, 25 July 2017

Hacks on Finding the Best Area to Invest in Commercial Real Estate

Written by Posted On Tuesday, 09 August 2016 15:14


Commercial real estate investment is controlled by and pushed forward by urbanization. There is a booming global urbanization trend in the US that will continue as Millennials seek enhanced access to jobs and amenities that include shopping and entertainment. According to the US Census, the urban population increase of 12.1% from 2000 to 2010 outperformed the same period’s overall population growth of 9.7%, indicating that urbanization is the newest commercial real estate trend we should watch out for. At Trimark Properties, we offer renovated, custom-built Gainesville office space for companies looking to settle in a fast moving town. Many of our tenants are recent graduates of the University of Florida who need additional space for their startup companies. Gainesville is quickly becoming urbanized, since the students and talent in our community want their commercial real estate to be located in close proximity to their residences, the University of Florida campus.

Demographics are a highly important indicator to keep in consideration when planning the construction of a commercial property. Our commercial properties in Gainesville, FL, are perfectly suited for this community because our lab and office spaces are modern, fitting well with the young demographic of people looking to rent with us. We also personalize each office space for its tenant so that the office can fit their specific needs as a company. There is an abundance of college graduates, as well as professors and researchers looking for space to expand their businesses. Office space is one of our most successful ventures because of startups looking for space to grow, thereby choosing to rent at our Gainesville locations. However, if the demographics in your community consist of mostly older generations, there would be different retail and healthcare properties warranted for your commercial real estate investment to be successful.  

Young people are seeking access to places to jumpstart their careers, and even suburbs are taking on a more urban appearance with people wanting to reach more places by walking. Unemployment is decreasing to hover just below 5% this year, thus creating excess demand for commercial real estate space because of new job opportunities and income. The limited supply in office spaces is being replenished by new construction. People want to enjoy all of the amenities that the city has to offer while also not needing to travel far or spend high costs on transportation to get there. There is also an emphasis on placing retail stores into residential areas, usually located on the first floor of a high-rise office building. Having both retail and housing so close is a huge amenity for people working in the area and an added bonus for people looking to relocate. This can affect talent since you want them to be living in your city. Once people start relocating to your area and urbanization occurs, there will be enormous demand for even more housing, retail, and office space because of the area’s increased popularity.

As property managers, we should take advantage of the incoming talent that these millennials provide. In Gainesville, our commercial real estate is located adjacent to the University of Florida’s Innovation Hub. The Innovation Hub is a 48,000 square foot, state-of-the art incubator facility that houses start-ups in the Gainesville community by UF students. For students looking to explore their dream idea, this is the perfect opportunity since the Innovation Hub offers modern labs, short-term leases and shared facilities, as well as a caring culture of advisors that want students to succeed. Since its inception, the hub has attracted over $10 million in capital investment, and many of its past tenants want to stay in Gainesville to continue growing their companies. Talent is truly available as well, shown by two companies renting our space – Fracture and Feathr – both founded by University of Florida graduates who decided to stay in Gainesville instead of moving on to bigger cities. Another company, Options Medical, moved into the Gainesville office space at 104 Innovation Square earlier this year, citing the favorable location and climate for networking with other startups as primary reasons for their relocation. Innovation Square is conveniently located walking-distance between the UF campus and the heart of downtown Gainesville, rendering cars unnecessary when employees want to find a bite to eat nearby or take a leisurely walk.

Lastly, suburbs aren’t what they used to be. Younger generations want to live as close as possible to an urban space while keeping their sizeable living space. Suburban markets and commercial real estate investment areas go hand-in-hand because as millennials are raising their families and settling down, they continue to find the urban space and all of its offerings appealing. Suburbs are now being clustered around retail, workplace, and entertainment options so that people living in suburbs can still have a bit of everything. This closeness forms a live-work-play environment so that commuting time and transportation costs are reduced because the workplace is close to the living place and fun activities around town as well.

Continuing into the foreseeable future, we expect investors to aggressively invest into opportunities with value-add properties, as well as niche sectors like medical offices, student housing, and data centers. As a whole, lower operational expenses will make office occupancy less expensive and contribute to higher operating profits, which should in turn continue to fuel hiring and increase demand for additional office space.

 

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Kelly Klein

I joined Trimark properties right after graduating from the University of Florida, Gainesville in 2012. My core focus was to learn about the Gainesville commercial real estate business by working with a talented team of commercial real estate professionals in the field. Trimark offered me an internship to start working with their commercial leasing team which specializes in office, restaurant space, retail, lab space and other commercial properties for lease in Gainesville. This was my first time getting involved in understanding about the terminology and site analysis and feasibility studies. The talented team at Trimark helped me in my early career years which has built a strong foundation for my future.

In addition to the real estate knowledge, I have also learned about construction, remodeling, and development. Trimark is also one of the biggest residential real estate developers in Gainesville. With 25 apartment complexes and 2 dorms near UF campus, it is the largest off campus housing provider to UF students.

Four years later, I am now the co-manager of some of the nicest looking offices for lease which are located in innovation square. Innovation square is steps from UF campus and within walking distance to Downtown Gainesville. It is a hub of technology, high-tech companies, cafes, eateries and apartments located in the heart of Gainesville. Some of the biggest names in tech have made innovation square their home. These companies include: Fracture, Feathr, Mobiquity, Sharpspring, Vanad among others. 

Trimark has provided me a platform to catapult my career in commercial real estate to new heights. I am also working very closely with the team that is building Gainesville's first smart, green, and sustainable building - Nimbus. Nimbus will be playground where high-tech design meets functionality. Trimark's moves towards a greener Gainesville is the beginning of a better future, and I am very proud to be a part of it.

www.trimarkproperties.com/gainesville/commercial-real-estate/
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