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   When economic times become tough, most people do not spend on big ticket items like trips, cars, new houses, renovations etc. They decide to settle for and concentrate their spending on pleasureable items, like dining out, weekend vacation trips, etc.

     Translation!!!    Steady increase in daily visits are seen at tourist attractions in the restaurants, hotels, B&B's, family entertainment parks.  This trend will last by all calculations for at least the next four years....

As a Real Estate Consultant, when somebody asks: "What kind of income producing property do I buy?" I bet you can guess what I would say. Under the right terms and understanding, I would recommend the following:   Family style restaurants, hotels/motels near attractions. Choose a location close to entertainments for the family and for the adults, bars, fine dining, dance locations, beaches, fishing, sports complexes, etc.

Of course, there is a catch in the above advice.  Like in any economic condition, changes happen and so does the mood of the people following the conditions. The type of up-swing dictates the type of spending people do. So... buy now, increase the room count per night, plate count at the restaurants. Enjoy for the next two to three years the increase in revenue, then sell the location for a profit based on an Income Approach and Real Estate Appreciation Factor. Get out of the investment at the prime of its life.  This practice is no different then selling stocks high when bought low. Buying Commercial Income property is like controlling the stock market ,because you can control the improvements that increase the stock value. It seems to me that this venture is a little safer then the stock market if you trust yourself to do the job well or have the right people around you to keep you safe.

What are your thoughts on this opinion? Have any questions on the Commercial income Market??

Travis Sawchuk Commercial Real Estate Consultant.

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Where to buy and why, What kind of return on my money can I expect and at what risk? This is the magic question many ask and few can answer without great speculation. Investors today have a different mind set, buy very low, well below market....., lease out, fix up and or sell. 

 Sellers are not wanting to deal with the fact that many bought high and still want to sell higher at a profit. Everybody says the market is down 100% over values last year. So what I say, the market is up in Commercial over 225% from 4 years ago. We can have our Commercial Real Estate market drop 150% and we still are above  market from 5 years ago. The difference today is that rate for commercial isn't 8% interest on 20 year loans, it is prime +1 on 25+ year loans and there is a better variety of new not old and depreciated to death properties to choose from.  Now just find what your tenant wants and buy that professional Plaza.

I think I just said what to buy!!!, now where! Easy!!!!, Highway frontage, next to a Regional Mall, Hospital or a central Distribution Center for the City/County. This is because the safe tenant is the one that is growing out of the garage, a small run down location and or is the one ready to expand.

The perfect Plaza is one that has units from 800 sqft to 1,500 sqft white boxed out or completely finished.  Keep the lease simple. Saying things like triple net, CAM, pass throughs, one time fees, scares the average tenant maybe even the seasoned professional tenant. Remember a simple rule, if the lease is more then a mortgage payment, and the tenant realizes this you are out of a tenant. This means longer vacancy times. It also means don't have units larger then 1,500 sqft or the lease rate will be too high. With current building costs, taxes, etc. The formula works staying under 1,500 sq ft to be the perfect size for the tenants looking.

As a Commerical Realtor wanting to consult(locate) properties for Hedge Funds, Reits, and private individuals, this is the formula I use.

 Who is out there looking and what is your opinion? Have any questions or thoughts on this matter?

Travis Sawchuk , Professional Commercial Consultant.