The commercial real estate market has definitely gone through some ups and downs over past years, which has had an influence on the economy.
There is a lot of money to be made in commercial real estate, however just like anything else timing and knowledge is key. Many developers today are re-starting commercial projects that had been placed on hold when the economy started declining in 2007. In the city of Atlanta a lot of condo projects are being completed after several years of delay.
The important thing to note however is that these developers did not re-start these projects until they were sure that the local economy could sustain them. Atlanta is slowly rebounding in several key area which has included a population increase and a stronger job market. These two key factors were motivators for developers.
The key to the success of a million dollar condo project is location. The midtown area of Atlanta has established itself as a popular place for young college grads, retirees and business executives. Developers have taken notice of this, which is why more and more condo projects are going up in that area.
There have also been some developers that have tried to develop commercial projects in neighborhoods that are going through a transformation. In some instances the projects are successful and in some other instances they are not. Although these projects are well built and designed, the immediate community cannot support it. Which is the reason why there are so many abandoned projects across the country. If an investor with a lot of insightful knowledge about the local surrounding community came aboard, they would probably be able to turn projects like these around because they would know how to market them.
This scenario is a good example of how local community knowledge plays a key role in the success of a commercial project. Unfortunately many projects are started by out of state developers who have no local knowledge about the community.
Building a commercial retail store also requires a lot of knowledge about the community and the local consumers. This includes knowing if the building is in the right location and if the store will sell things that local consumers will buy. This might seem like common sense, but unfortunately this is something that a lot of commercial real estate developers don’t think about before building. These type of developers live by the motto ’if just build something it will make money‘. As you well know this motto does not always work. All you have to do is look at all the boarded up empty retail buildings.
The lesson to be learned here is to do your homework when investing in commercial real estate.