Investments in commercial real estate are at an all-time high, especially in the Southern California and Los Angeles submarkets.  Southern California has always attracted investors willing to pay higher prices, and receive initial lower CAP rates as this market has substantially outperformed the national average for rental and property value appreciation. This is no different in the current market, with prices remaining high, properties that are priced right are selling almost immediately. This is primarily due to the demand from new investors and lower inventory, as well as easily accessible and low cost debt. Many owners are looking to capitalize off of this up market and sell their properties; however, there are at least three things to consider first.

Location, cost, property type, size – the list goes on and on. There are many variables to consider when investing in commercial real estate, especially for a first time buyer. For someone who is new to real estate investments, it might be difficult or even intimidating to decide which properties to consider as candidates to buy. This is understandable; there will be lots of questions on your mind. One of the questions will inevitably be: in what property type should I invest? We focus on this because once you decide on what type of property to finance, it is easier to narrow your search.

I think the most important facet to begin investing in CRE is to identify what your goals are. Example questions to ask yourself would be: How much do you want to invest and why do you want to invest, is it to build equity, for cash flow purposes, or are you looking for larger future appreciation?