The Top 7 Commercial Real Estate Commandments

Updated on September 8, 2020

Real Estate Investment, especially in the private equity world, needs to have strict rules and guidelines. I wanted to share with you what I like to call the “Seven Commercial Real Estate” Commandments:

  1. Commercial real estate is a local business

There is no substitute for local market knowledge. I’m not calling the company in New York to ask about a property in LA. Local operators will outperform investors who do not intimately understand the market. 

  1. Commercial real estate is a full-time business

There is no such thing as effective, part-time real estate. Competent professionals must constantly monitor and oversee properties to ensure that the value of each asset is maximized.

  1. Creating value is essential

The highest, most profitable segment of the commercial real estate deal process is to find assets below replacement cost and then create value through professional, active management.

  1. You make your money on the buy

The single most important key to success in a particular deal is buying at the right purchase price.

  1. Middle market assets generate superior returns

Middle market deals are too large for poorly capitalized local operators–and too small for large institution personnel–to manage effectively. Superior, risk-adjusted returns are found in the middle market.

  1. Access to capital is imperative to success

Commercial real estate assets need constant funds for building expenditures and new leasing expenses. Institutions with personnel who have access to new debt and equity will outperform smaller operators who are without the same access to capital.

  1. Self-management is vital to success

Ownership can be the greatest performance incentive. We believe the most effective manager of an asset is its owner. This applies to leasing, property management, and asset management.

Contact Us

If you have any questions regarding investment in commercial real estate, please reach out to the team at First National Realty Partners. The asset types that we have available to our individual investors are a very attractive alternative to the stock market or real estate crowdfunding platforms. We have commercial property types in various vehicles that are strategically purchased to be stable and provide significant upside potential.  

Access Our Deals