Non-traditional real estate investments
When we think of commercial real estate investments our first thoughts are of the basic five sectors: office, industrial, retail, multifamily and land. These are the mainstay of commercial real estate and in most cases easiest to understand and invest.
Investors who like to diversify their portfolio may see an opportunity in more non-traditional types. Alternate types of investment real estate include: self-storage, medical office buildings, marinas, senior housing, vineyards & wineries, data centers, student housing and portfolios of thousands of single-family houses.
Becoming a niche investor has several advantages. Knowing your product well and knowing the players in a sector can help you locate and secure a good investment. It also helps being in tune with the trends which may call for expansion or contraction.
With such a focus, an investor may need to expand his territory to locate and secure a quality investment. For example, there are few self storage facilities or medical office buildings in Napa Valley. This investor will need to expand his territory to a multi-county or state level.
You will find an entire industry surrounding a sector of alternate types of investment real estate. Self-storage facilities had grown in popularity with many of us downsizing - we find there just is not much room for all the stuff. However, there was a surge in construction so we currently find an over supply of facilities, which makes for a good time to buy.
Medical office buildings are not your typical office building. There are significant upgrades made to a building to allow for the specialized needs. With the Affordable Care Act rolling out many hospitals are looking at ways to cut corners so having smaller outpatient facilities could be one of them.
With all of our data moving to the “cloud” the equipment and personnel to house the data needs to go somewhere. Throughout the nation massive buildings are constructed to house the infrastructure for these services. The buildings require close proximity to the Internet backbone as well as significant power from the grid. Additionally, security is high in and around these buildings and much effort is placed into keeping them nondescript.
We all know the niche market vineyards and wineries play in the Napa Valley. Many investors of vineyard land and winery facilities are most likely operators as well. We do have the corporate vineyards and wineries, but also the lifestyle owner and winemaker who plays a major role.
Senior housing and student housing are a more specialized focus of residential apartments. With the aging population the need for senior housing is growing in many areas of the US especially resort areas and areas with a more comfortable climate. Student housing is becoming popular with colleges and universities limiting new housing as well as increasing the fees.
Whatever niche you find yourself there is a specialized broker to help you along the way. Many brokers specialize in a particular sector and cover a vast territory while many of us choose to handle multiple property sectors in a smaller locale.