When you invest in commercial real estate, knowing the different types of buyers is crucial, so you can make the right decisions that align with your goals. After all, it would be unwise to blindly jump into any investment without looking ahead and understanding the people you may encounter.
In this article, we will discuss the most common types of commercial buyers by purpose and disposition that you should be aware of.
Types of Commercial Buyers by Purpose
There are three main types of commercial buyers in real estate who each have their own motivations: those looking for spaces for their own business operations, those selling properties when prices are more ideal, and those buying properties to generate long-term income. Now, let us pore over each of these types.
1. Buyers Who Are Looking for Additional Spaces for Their Business Operations
As businesses grow, they may need to acquire properties to expand their operations. These commercial buyers are typically looking for spaces that can fit their needs and provide enough space or amenities for the business in question.
Generally, these buyers are very financially secure. As a result, they may have the money to buy commercial buildings and spaces outright and pay for renovations or improvements.
2. Buyers Who Sell Properties When the Market Goes Up
In commercial real estate, timing is everything. These buyers know how to spot trends in the market and will often make investments with an eye toward selling when prices rise. They look for properties that may become more valuable over time due to developments and other factors.
Typically, these commercial buyers would purchase properties, such as commercial buildings, vacant land, and commercial lots. They may also acquire commercial spaces for rent or lease.
3. Buyers Who Want to Own Properties to Produce Long-Term Income
These commercial buyers are interested in owning properties for the long haul. They may buy commercial buildings, office spaces, and other types of commercial real estate to generate a steady income from rental or lease agreements.
The best properties for these buyers are industrial buildings, such as warehouses and distribution centers, and other types of real estate that they can rent out for several years, such as triple net lease (NNN) properties.
Types of Commercial Buyers by Disposition
Apart from identifying buyers by purpose, you could also classify them by disposition. In this aspect, you will come across two main types: analytical buyers and intuitive buyers.
Analytical buyers are those who approach commercial real estate investments with a data-driven attitude. They make decisions based on hard facts and figures and often spend a lot of time researching before investing.
Intuitive buyers, on the other hand, follow their gut instincts when making their investments. They rely more on their intuition when it comes to making decisions. However, this does not mean that these commercial buyers do not use logic and are less successful. In fact, some of them have landed massive deals that made them a lot of money in commercial real estate.
Learn More About Commercial Real Estate with Levi Smith!
Now, are you ready to get involved in commercial real estate? If you are looking to make an informed decision, reach out to Levi Smith from PA Commercial. With his extensive knowledge in the industry and his knack for understanding the trade, he can provide sound advice that could help you succeed.