Office space could be investment opportunity
6/20/2016 | Real Estate Blog
With commercial real estate prices rising in most sectors, investors in Pennsylvania may wonder where to invest. According to the CEO of Marcus & Millichap, the nation’s largest real estate brokerage firm, prices for office properties are still below their pre-recession levels. Office properties may be a good investment opportunity as prices are expected to go up.
The Marcus & Millichap CEO said that office properties lagged behind other property types during the economic recovery. One of the reasons for this was an excess of available office space due to overbuilding. When more jobs were created, empty office space was already plentiful, so the job growth did not cause office space prices to rise.
Continued job growth may cause office space prices to rise soon. The executive says that overbuilding is no longer a factor, and the professional and business services sector is expected to create 600,000 new jobs this year. Rising land prices has curtailed construction of new office buildings, so vacancies should begin to decline. Though many companies are reducing the amount of office space per worker, lack of new construction will probably offset the effects of this trend.
Commercial real estate investors who are interested in purchasing office space before prices increase to pre-recession levels may want to work with an attorney. Legal counsel may be able to represent an investor during a purchase and during development of a commercial office space. Later on, the attorney may help an investor to negotiate short-term or long-term leases and handle any disputes that could arise with business tenants.