A recent development in a local community in Orlando could be the start of the next wave in the commercial real estate (CRE) market. The development focuses on community health and well-being. It covers just less than 20 square miles and includes a children’s hospital, Veterans’ Affairs medical center and university medical centers as well as community pools and sports facilities.
Could this be the next big thing? It is possible. Those who are considering investing in this developing CRE trend should consider the following before opening their wallets:
- Know the market. Review the market of the proposed location. Is the cost of property in line with other, comparable parcels? Is it in the ideal location and are zoning laws conducive to the plans?
- Check the trends. If planning to focus on rentals, review the area to see if there are tenants. If not, you may want to consider adjusting the plans to include single family homes or town homes or find another location.
- Plan wisely. These things take time. Account for the time it takes to get building permits (anywhere from a couple of months to a couple of years depending on the jurisdiction) and potential construction delays.
- Hedge your bets. Since this is a relatively new trend, instead of going all in it may be wise to use this opportunity to take on a role as a partial investor to diversify your CRE portfolio.
It is also important to obtain legal documents drafted to your specific transactions. A boilerplate document will not account for the needs of your project and could leave you exposed to liability in the future.