What makes a great investment property?

I established Box Commercial in February 2015 in order to offer a select group of clients the best passive investment property opportunities available.

The question then became: what does ‘best’ mean?

This isn’t an easy question to answer. I’ve been active in real estate agency and investing since 1983, so I have a long history of observing what happens to real estate over time. Sound commercial property investing, in my view, involves understanding the qualities that make a property desirable, whether to a tenant, an investor or a developer.

The most important qualities I look for are:

  • Main road locations
    Over time, the uses of land and buildings change. (Blockbuster video is no longer a sought-after tenant.) I specialise in selling self-storage complexes, fast food outlets, petrol stations, and large format retail centres on main roads and highways, because main road locations spread ‘change of use’ risk. Those old Blockbuster stores, if located on a main road or a highway, might be perfect for a fast food tenant, or for a medical centre, or for a service station. For that matter, if zoning allows, its highest and best use might change entirely to a high-density residential complex. Only great main road locations deliver this kind of flexibility, securing the value for the investor.
  • Multi-tenanted investments
    Numerous tenants are better than one tenant, because having multiple sources of rent spreads the income risk. The investor might lose one tenant, or maybe more than one. If there are numerous tenants, the property can still generate enough income to enable the investor to hold the property. Self-storage complexes, of course, are the ultimate ‘multi-tenanted’ investment. A large complex might have 1000 storers paying monthly rent–this makes for a very secure investment.
Finding enough great investments is the hard part.

Great investment properties with the above attributes are in high demand, especially from self-funded retirees looking for secure, reliable income through their SMSF. At Box Commercial, we’re always on the look-out for quality investment properties to sell, but increasingly we can’t generate enough listings to satisfy our investor’s demands. So we have to initiate quality investments.
We do this by:

  • Helping owners or developers turn a vacant or under-utilised site or building into a better investment by introducing tenants looking to pre-commit.
  • Identifying a better use for an existing property that isn’t reaching its potential, and offering the property for sale to this different market.
  • Offering vacant sites for sale or lease to developers wanting to establish a new investment property.

We work with market-leading developers, tenants (including retailers wanting main road locations), builders, and property analysts to achieve our ultimate goal: present the best investment properties for sale and syndication.

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