Leases can run from one year to 10 years or more, with office and retail space typically averaging from five to 10 years. Large tenants typically have longer term leases. Short-term leases provide more adjustment while longer leases provide more security, especially with tenants living from credit.
Investing in commercial real estate can be lucrative and can hedge against the volatility of the stock market. Investors can make money via appreciation in the property when they sell, but most returns are generated through rents collected from tenants. In most cases, properties are sold by the building — one office building, one restaurant, one factory, etc. However, if a developer wants more capital to expand a project or wishes to see the returns more quickly, the project will be broken down into smaller units rather than sold as a whole.
One of the biggest advantages of commercial real estate is the attractive leasing rates. In areas where the amount of new construction is either limited by land or law such in large swaths of New Jersey, commercial real estate can have impressive returns and considerable monthly cash flow. Industrial buildings generally rent at a lower rate in most municipal industrial parks, but they also have lower overhead costs compared to an office building. Commercial real estate also benefits from comparably longer lease contracts with tenants than residential real estate. This gives the commercial real estate holder a considerable amount of cash flow stability, as long as the building is occupied by long-term tenants. Ocean Commercial Properties in conjunction with Century 21 can assist you in your search for affordable office or business lease spaces in Monmouth and Ocean County and also assist you in growing your commercial property investment portfolio if that is your objective.