Brian Fielding Reveals Why Scaling is Easier in Commercial Real Estate

Brian Fielding discusses scaling in the commercial real estate industry

Brian Fielding reveals why scaling in commercial real estate is so much easier than in residential real estate.

When it comes to scaling in the real estate industry, it is much easier for an investor to manage multiple commercial real estate properties than it is for them to manage a large number of residential real estate properties. When investing in residential real estate, it is important to be nearby to each of the properties to ensure that there are no major problems. The same is true for commercial real estate investments. However, instead of one person looking over one single-family unit, that person has to look over dozens or hundreds of units. This expense is more justified for commercial real estate than it is for residential real estate. Managing large properties also cuts costs on things like maintenance and landscaping, which is a huge plus for investors shares Brian Fielding.


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Concerns About Older Buildings Answered by Brian Fielding

Dear Mr. F.

We are thinking of buying an older building on a great corner in our neighboring community. My partners worry that the property is “dated”  and not terribly attractive. Do you have any advice on this type of concern?

Bill and Mary G.

 

Dear Bill and Mary,

Congratulations on your new venture! We wish you all the success in the world.

Actually, I am pleased that you broached this topic. Few new investors are able to assess an investment property when it is [currently] unattractive. If you have been satisfied that the building is structurally sound and well positioned, you may only need to have an architect and/or interior designer help you determine if some paint and minimally invasive construction can turn your ugly duckling into an exciting “new offering”.

Wonderful examples of old industrial buildings converted into “Creative Space” abound in a number of communities [West Los Angeles first comes to mind, but there are examples in most any city] … investors recognizing the value of the bow truss structure allowing for open space soaring ceilings. While the highest end conversions have cost up to $100/ft., there are many more minor renovations that have led to incredible returns for the insightful investor. Similarly, we have seen structures come to life with nothing more than a stroke of bold colors and perhaps some inviting awnings.

If you have the eye and understand the costs … all the better. However, if there is any question, many professionals will be happy to make creative suggestions, hoping that your acquisition of the asset will lead to new future business for their firms.

Brian Fielding


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Brian Fielding Discusses the Importance of Diversifying Your Portfolio

So what happens after the U.S. reports a growth in the economy and encouraging employment trends? The stock market took a one day major fall! It seems to go without saying that one needs to expect volatility in the various stock markets and advisor Brian Fielding suggests that this simply reality suggests that prudent investors should try to balance their portfolio by adding commercial properties to their holdings.

“There is no one avenue that guarantees protection from the vagaries of the efforts to create a nest egg for retirement and for a ‘head-start’ for one’s heirs, but solid tenants in quality properties is an important hedge to consider.”

While shares of Fortune 500 companies adjust to quarterly reporting and concerns over economies internationally, as tenants, these companies can provide a reliable return to their landlords. Further, the tenant’s excellent credit history allows the savvy investor to finance his/her purchase, often with long-term financing at very attractive rates.

Brian Fielding does not suggest forgoing investments in stocks, bonds and, perhaps, commodities. Rather, he ascertains that one should consider balancing that portfolio with quality commercial assets, preferably with strong, creditworthy tenants.

“We not only own the stocks of fine companies such as WalMart, but we also enjoy owning properties with their tenancy. We chose our assets carefully, weighing term, rental rates versus the local comparative indices and a variety of other critical factors such as projecting sales numbers to make an informed decision. It certainly does not hurt that a number of lenders were eager to compete for the financing element.”


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