New Development vs. Resale
There are two paths in commercial real estate: new development and resale. Depending on your investing strategy, one might better suit your portfolio.
New development and resale each have pros and cons. Your real estate broker likely has experience with both and can help you determine which is the right fit for you.
New Development
New developments in commercial real estate provide unique opportunities that can make it the ideal option.
Pros
The pros of new development primarily center around being able to design and build the exact property that you envision. You often make compromises in resale, as no building will check every box perfectly. With new developments, however, you are free to create the space that will function perfectly for your business or tenants.
Cons
The most obvious cons of new development are the time and expense of building something from the ground up. Coordinating contractors, getting permits, obtaining construction loans, and dealing with zoning and code requirements can be a hassle.
Resale
Resale purchases are an effective way for many to start investing in commercial real estate.
Pros
Resale transactions are very efficient in comparison to new developments. In a matter of weeks, you can own an income-earning commercial property. Eliminating the construction phase makes resale an attractive option for those on a shorter timeline.
Cons
In the resale market, you may face elevated levels of competition for a highly desirable property. In a competitive market, property values can become inflated, decreasing cash flow opportunities. Additionally, a resale property may require renovation or remodeling to make it the right space for your business.
Which is the Right Path for You?
If you are unsure which path (new development or resale) is right for you, please contact Steve Longenecker and Northern Colorado Commercial Real Estate at WeBrokerCORealEstate or 720-600-9513.
We give out $250 gift cards for referrals that become our real estate clients.
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