By Vicki Trapp, AHWD, ASP, CRS, GRI, SRES, SRS, President
Greater Chattanooga Association of REALTORS®
For most consumers, the term REALTOR® is associated with the purchase or sale of a home. Not everyone is familiar with the services that the more than 200 REALTORS® in the Greater Chattanooga commercial real estate sector provide. The recent forecast from the National Association of REALTORS® (NAR) reports a positive outlook for commercial practitioners.
As with a home search, it pays to consult an expert when you are searching for commercial property. Also, it is important to know the difference between the various specialties within the commercial real estate industry.
I’ll start with land, which, depending on its use, can be defined as either residential or commercial property. For commercial purposes, land is referred to as “raw” and used for development such as some of the other commercial properties described below.
Office buildings can include anything from single tenant spaces to professional buildings with multiple tenants. These can be small professional buildings to giant skyscrapers. According to NAR, office vacancy rates are expected to decline over the course of the year, and office rents are projected to increase slightly.
Industrial buildings provide space for research and development, as well as warehouse space. Considerations for this type of property include ceiling height (clear height versus actual height), loading docks and access to railway for train cars to load and unload. Like office buildings, we should see a decline in vacancy rates for industrial space, as well as a slight increase in rent.
Retail space and restaurants can be stand-alone buildings with one tenant to shopping centers with multiple tenants, often with an anchor store. Similar to office and industrial, this commercial category should also experience a decline in vacancy and slight rise in rent.
Multifamily is just that – space for more multiple families. Multifamily properties house more than four families such as apartment complexes or high-rise apartment buildings. Unlike the other commercial categories, it’s anticipated that the apartment rental market will see an increase in vacancy, as more tenants opt to make the long-term investment in a single-family home. Another factor potentially driving up vacancy in this area is the anticipated rent increase by year’s end.
Like their residential counterparts, REALTORS® specializing in commercial transactions adhere to the REALTOR® Code of Ethics. Also, they can provide knowledge about the local commercial market, plus negotiation skills and expertise unique to commercial transactions, including brokerage, property management and consulting. Whether you are looking for assistance in buying, selling, or leasing office space, warehouse, multifamily property, or land, a commercial real estate specialist can provide you with the knowledge and expertise to ensure that your interests are protected in the real estate transaction.