Purchasing any commercial real estate is a major decision, but a multi-purpose property is its own animal. Rather than mastering one sub-asset class within real estate by being focused exclusively on renting offices, apartments, warehouses, or retail space, a different approach is required.
Here is what you need to know to make buying and managing a multi-purpose building less of a trial.
Appreciate the Class of Building and Risk Involved
Commercial buildings come with a classification. The ratings for office buildings typically go from a Class A through to a Class C property. Other types, such as retail stores or industrial buildings will be designated differently. Understand clearly how multi-purpose buildings are categorized to appreciate the risk level that you’re taking on. While their dexterity by being put to different uses enhances their usefulness, it can potentially increase the risk level.
Look at Similar Buildings to Get an Idea on Comps
Search listings for similar buildings including past sales to get a clearer idea of applicable comps for purchase prices per foot. Compare what they offer, including not just the different sizes of usable space within a multi-purpose structure but also support services too. Useful extras like parking and other facilities can save employees or visitors money and time finding a place to park, so they’re worth the extra cost.
Consider the Local Market
Let’s say that you’re looking at a building that can be utilized…