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Tips for Investing in Denver Commercial Real Estate

May 11, 2016

Choosing to invest in Denver commercial real estate could be one of the best decisions that you’ve ever made; that is, if you do it wisely. Avoid common mistakes that could cost you by following these tips:

Focus on one type.

If you’re a new investor on the Denver commercial real estate market, try to focus on one type of property at a time. Don’t invest in apartments, retail and office space all at once. Instead, focus on one of these areas at first and once you have a good grip on your new investment, slowly expand into other territory.

Have a long-term plan.
The work isn’t over once the property has been transferred into your name. In fact, it has only just begun! Denver commercial real estate investors must be prepared with a long-term plan. Each property will require maintenance at some point, so investors need to budget for upgrades and repairs that will be needed down the road. Investors should also think through how they plan on marketing their office, retail or apartment space once they have purchased it. How will you attract potential renters? What costs will be associated with doing so? These questions must be answered before you purchase a piece of Denver commercial real estate.

Location, location, location.
Some investors that are new to the Denver commercial real estate market forget to consider the impact that location has on a property’s long-term value. Before you purchase property, think how the location will change in the next five to ten years. Are you considering purchasing retail space in an area that doesn’t get much drive-by traffic? See if there are any residential developments in the works nearby that could change this in the next few years. Take a look at other commercial spaces around the one you have your eye on and see what the occupancy rates are. If a lot of office or retail spaces are empty and waiting for new tenants, perhaps this location is not the right choice.

Find a property with more than one tenant.

A safe way to invest in Denver commercial real estate is to purchase a property with more than one tenant, such as an office building or retail strip center. This will give investors peace of mind knowing that if one tenant moves out unexpectedly or cannot pay rent, there are still others that are able to make monthly payments. Think of multi-tenant properties as a way of reducing the risk involved in your Denver commercial real estate transaction.

Do your research.
Check into the true value of the property by researching its tax records. Because property tax is public record, you can easily search for the information through the Denver Property Taxation and Assessment System to see how the property has been valued over the last five years. Search the tax history of a Denver property here.

Are you interested in investing in Denver commercial real estate? Contact us at The Sherman Agency to help you succeed.