CPE Executive Council: Important Factors for Evaluating Investment Opportunities
What should you consider when you’re evaluating potential investment opportunities in commercial real estate? The CPE Executive Council shares what they look for.
Look at Costs
When evaluating potential investment opportunities it’s important to factor in any potential costs that could arise over its lifespan. For example, facade updates, parking lot, the property’s roof, etc., knowing ahead of time what condition everything is in and how it might perform going forward is extremely important. Additionally, you’d want to learn if any physical aspects of the building: 1). Have an active warranty, and what that warranty length is and 2). Is that warranty fully transferrable to both you and/or any future owners? —David Schupmann, Enterprise Accounts Director, Fortis
Know the Market
When evaluating potential investment opportunities, several key factors should be considered to make informed decisions:
Understanding current and future market trends can help identify sectors with growth potential.
Analyzing a company’s financial statements, including revenue, profit margins, debt levels and cash flow.
Assessing the experience and track record of the company’s leadership.
Identifying what sets the company apart from its competitors, such as unique products, patents, or strong brand recognition.
Comparing the company’s valuation to its peers to determine if it’s fairly priced.
Considering the broader economic environment and how it might impact the investment.
Evaluating potential risks, including market volatility, regulatory changes, and industry-specific challenges.
Looking at the company’s plans for expansion and innovation. —Doug Ressler, Manager, Business Intelligence, Yardi
Interested in joining the CPE Executive Council and being featured in future articles? Email Jessica Fiur.
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