Despite low inflation and an upset retail segment, the United States economy has shown signs of growth which is generally good news for an Arkansas commercial property appraisal. Commercial real estate growth is critical for creating new jobs and growing companies. With our economy seemingly on the right track in 2018, should you buy commercial property and get an Arkansas commercial property appraisal?
Here are a few economic tips and trends you can expect to see for a while in the commercial property realm.
Should you invest in commercial real estate now?
When investing in real estate, it is wise to consider the current state of the United States economy. By looking at interest rates, lending trends, and other economic trends, you can better decide if it is the right time for you to purchase property. Interest rates contain big insight into the direction of the real estate market. Given the precariousness of the Federal Reserve System, investors cannot foresee whether or not it will continue raising interest rates. Although the ten-year Treasury rate has maintained fair stability, talks circulated in late 2017 of potential rate hikes. Whether or not rate increases occur could depend on inflation. If inflation rates remain low, then the Federal Reserve may not easily justify interest rate increases. Inflation has been lagging all year. If interest rates do not increase, then the cost of borrowing and the value of properties will remain stable. To know where your property currently stands, get an Arkansas commercial real estate appraisal. This could tell you what you need to know about the current and future value of your commercial property.
These factors can tell us a lot about investment, but ultimately it depends on your own goals as to whether or not you should purchase commercial property. Keep reading for some of the opportunities you will see in 2018 and beyond.
Millennial workspace growth
Millennials have changed the industry of commercial real estate. By 2020, this generation will constitute 40-50% of the workforce. With Millennials preferring to live in cities, this means revitalization of some urban areas. Moreover, with the changing costs of properties in revitalized areas, many opportunities for commercial real estate investing will become available in the next decade. Investors also see innovative housing options becoming available. Thus, Millennials have revitalized the residential scenes too. If you have property in these areas, a commercial appraisal may bring you profitable news.
The “silver tsunami” is coming
In the coming years, Millennial workspaces will not be the only commercial real estate investment need. As Baby Boomers get older, they are seeking out senior communities and housing which has opened up more opportunity for real estate investment. Over the next 25 years, the population of people over the age of 65 is expected to double. This group is expected to be more active and live longer than previous generations, so the need for living spaces with amenities will rise and greatly affect the commercial real estate industry.
Do not forget about technology
With technology developing rapidly, it is becoming normal to see advanced artificial intelligence in commercial real estate today. From energy-saving smart features that Millennials love and save property owners money to tenants and buyers demanding tech infrastructure upgrades, you can expect buyers to think a lot about technology. It is becoming an asset in 2018 for real estate investors to value buildings that support wireless technology. Considering modern building trends will do your commercial investment well in the long-run. If you are unsure how your property’s modern technological setup impacts the value of your property, then get a professional a commercial appraisal.
Online shopping and retail spaces
Many retail stores have recently closed, including Sears, JC Penny, Toys-R-Us, Kmart, Payless, Gap, J. Crew, and Banana Republic. Even Walmart closed 63 Sam’s locations. Competing with Amazon, Walmart has decided to convert some of Sam’s locations into e-commerce centers. As e-commerce expands, the retail sector’s need for commercial real estate property will not vanish but will instead shift to industrial real estate like warehouses and distribution centers. These repurposed properties play a huge part in reshaping the retail industry that is creating more opportunities for commercial real estate investors. PricewaterhouseCoopers and the Urban Land Institute reports naming the industrial sector as the leading real estate sector in 2018.
With online retail growing at such a vast rate, secondary cities will continue to attract new real estate investors as data centers will be in high demand during the next decade. Because of this, brands like Amazon seek locations across the United States to house secondary locations.
Although Walmart closed some Sam’s location, Walmart is expanding in its home state of Arkansas that has opened more retail and warehouse spaces for commercial investors in Arkansas as suppliers move into the state. Here are some of the reasons you should invest in Arkansas commercial real estate and obtain an Arkansas commercial real estate appraisal.
Current low prices in Arkansas real estate
Real estate prices in Arkansas have hit all-time lows for both residential and commercial properties. Simultaneously, rental rates have hit a high right now, showing avast profit opportunity for real estate investment in Arkansas. Profitable rental spaces include shopping centers, office buildings, convenience stores, and warehouses.
Investors can buy low and rent high in Arkansas areas including:
- Saline County (Little Rock area)
- Washington County
- Benton County
Contact Ferstl Valuation Services today if you need a commercial appraisal in Arkansas. We are the best choice for an Arkansas commercial appraisal. Call us for more information on how we can help you better understand the value of your commercial property.
We look forward to helping you with your real estate needs, including residential and Arkansas commercial property appraisals.