As any real estate company will tell a serious property investor, commercial real estate should form a substantial percentage of their holdings.
Commercial real estate companies are the companies who own and manage our shopping centres and malls. A commercial property is any property from which a commercial enterprise is carried out. These can be a small business, medium sized business or very large businesses.
We are all familiar with shopping centres and malls and these can range in size from the small shopping centres or strip malls to the very, very large shopping centres like the West Edmonton Mall in Edmonton, Alberta, Canada, which is rumoured to be the largest in the northern hemisphere. http://www.westedmontonmall.com/home/default.asp
Rumour or reality, it’s absolutely huge. If you are a shopaholic, it’s the sort of place you go to over many days with each day doing a different wing, because it’s just too much walking to do in one day. It is more than just a shopping centre; the entertainment that is there both free and ones you have to pay for, is extensive.
One of the free activities was to go and see the fire dragon breathe his fire. It was real fire that roared from his smoking nostrils as he roared his displeasure and as to how the commercial real estate company got the show passed by the Edmonton fire brigade is another miracle. It is an unbelievable shopping centre until you see it for yourself and it is a credit to the commercial real estate company that built it and to whichever commercial Real Estate Company now manages it. Shopping centres and malls is only one side of any good commercial real estate company’s holdings.
Most towns and cities have their industrial areas where small groups of sheds are located in one area. These are often occupied / rented by trade businesses that congregate in one area. These smaller units are big enough for plumbing businesses and other commercial activities that require a smaller space in an industrialised area.
These small industrial sheds can be a real ‘cash cow’ to a savvy investor. Often in Australia, the shed gets maintained by the tenant (unless it is a major repair or maintenance problem) in which case it becomes a good tax deduction for the investor.
The only real problem with these small industrial commercial properties is that if a small business hasn’t been going for very long, it could be one of the high percentage that fail. So, if you are thinking of investing in an industrial area, be sure to keep the tenant paid up to date.
Commercial Real Estate Companies invest in other commercial properties as well. The level of investment can be as varied as the properties they invest in.
