You have several property types to choose from when investing in Alaska commercial real estate— industrial space, retail space, multi-family buildings, and of course, office space, to name a few. We are here to help you navigate every aspect of your commercial real estate investment, no matter which property suits you best, and are happy to share a few smart investor tips to get you started.
Office buildings can be a lucrative choice for Alaska commercial real estate investors, but there are many factors to take into consideration, including the economy and location. So before you sign on the dotted line for an office building in Alaska, below are three things you should know:
The Economy Makes a Difference
A wise commercial real estate investor will note that much of the success of your office building depends on the state of the economy. For instance, if the economy is growing, more companies will look to expand into larger buildings to accommodate their staff, in addition to new companies looking to relocate to or open in the area. Before you choose to invest in an Alaska office building, make sure you are on top of the local economy and how that might affect your profitability.
Supply and Demand Will Vary
Choosing the best property type for your investment goals is not a task to be taken lightly. You may come across a great deal on an office building, but what you need to consider is whether or not there is a demand for that in the area. On the same note, you’ll need to look into the supply for that type of property— are there too many available or are there little? It is key to work with your Alaska commercial real estate agent to break down supply and demand in the area in order to avoid an investor headache later.
Renting All Space to One Tenant Can Be Risky
Once you’ve invested in an Alaska office building, you may find a tenant who is interested in renting the majority of the space. This sounds like a win-win scenario on the surface, but don’t be too quick to act without considering all of the pros and cons. For example, renting all of your space to one tenant means you won’t need to worry about filling the rest of the space and potentially losing money if you’re not immediately able to do so. On the other hand, if that tenant fails to renew their lease, you are left with a major void in your building and in your cash flow.
There are many bases to cover when investing in Alaska office space and we are available to walk you through it. Questions about Alaska commercial real estate or which property type would be the best fit for you? Contact Northern Edge Real Estate to connect with one of our experts!