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  • Top Adding - Where Should You Consider Investing In Commercial Real Estate?

    After identifying which type of commercial property you should invest in, you probably wonder where you should consider investing. To answer this question you need to ask yourself what your investment objectives are. They could be to:
    • Maximize leverage: you want to be able to borro
    According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
    w as much money as possible. If this is the case then most if not all properties in California will not meet your objective. Properties in California often offer 4 to 6 percents cap rate. This would require 40-65% down payment. So to maximize leverage you will need to invest outside of California where t
    ; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

    Examples of combination products may in
    he cap rates are in the 7-9% ranges.
  • Receive strong positive cash flow: most if not all of commercial properties that offer high cash flow are outside of California. These properties in turn allow you to maximize leverage, i.e. borrow up to 75% of the purchase price.
  • Real
  • lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

    ze strong appreciation potential: if you invest in a right property at a good location (refer to the article “What location Means in Commercial Real Estate”) and right time, the biggest return often comes from appreciation. It’s hard to predict the potential for appreciation for a certain area. The fac
    here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
    t the area has strong or weak appreciation in the past does not necessarily mean it will have similar appreciation in the future. However, if you choose to invest in a newer NNN-leased property on a main road in a growing or stable area with strict zoning, i.e. limited supplies of properties then your prope
    d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

    Combination pro
    ty has a better chance to appreciate in value.
    To achieve your investment objectives there is a very good chance you will invest outside of California. If so, you want to choose properties in
    • More well-known metro areas that most people have an idea where these cities are.
    ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
    Growing cities.
    These 2 factors will ensure your commercial property is in high demand so it’s easy to sell later and has low vacancy rate. You definitely don’t want to invest in a tiny little city located in a middle of nowhere or declining areas where it is easy to buy but hard to sell.

    This
    easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
    article is not intended to list all the areas in the country where you should consider investing. Rather it is meant to high light a few major metro areas that you should consider; However if you have ruled out or have not considered these two metro areas, you probably don’t know what you are missing!
    nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
    >
  • Atlanta Metro Area, GA: This is a clean and modern area which has taken off since the Summer Olympics in 1996. Atlanta metro is one of the fastest growing markets in the country where the cost of doing business is 97% of the national market. It has well-developed transportation network. The
  • and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
    Hartfield-Jackson Atlanta airport is the world busiest airport. It’s not an accident that UPS chose Atlanta as the main sorting center for all of its domestic next day air packages. All of UPS air packages have to be flown here for sorting before flying to their final destinations. The Atlanta Hartfield-J
    ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
    ackson airport is rarely shut down due to bad weather so UPS planes can fly in and depart day or night 365 days a year. Atlanta has been able to attract various companies due to well-developed infrastructure and low business costs: Home Depot, Coca Cola, CNN, Delta Airlines, UPS, Walmart, Bell South, AT&T,
    ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

    Following aspects would a
    IBM, and Kroger. This is the place where Center of Disease Control (CDC) and the world largest Georgia Aquarium are located. The median cost of a home is around $180K in Atlanta compared to about $770K in Santa Clara. As a result, the population in this area has experienced tremendous growth. The North E
    dd to the challenges in developing combination products:

    Which markets to tap where the combination products can do fairly well?
    Which combination prod
    st suburbs, e.g. Duluth, Lawrenceville are more prosperous where population has increased 20-30% from 2000 to 2005. The current cap rate for Atlanta metro is around 7-8.5% which offers high cash flow and maximizes leverage while offers strong potential for appreciation. The leases in this area are also ver
    cts are meaningful and rational?
    Which therapeutic categories to select?
    Which Combinations can address unmet needs of the patients?
    Do combin
    y favorable to landlord: NNN leases with tenants also paying for property management fees.

  • Dallas/Fort Worth Metropolitan Area, TX: this is the fourth largest metro and one of the fastest growing markets in the US. It is home of 19 Fortune 500 companies: Southwest Airlines, Texas instruments,
  • tions increase the patient compliance?
    What would be the developing cost?
    How to tackle the risks encountered during combination product developmen
    DS, JCPenney, Kimberly Clark, ExxonMobil to name a few. The area offers an excellent transportation network, affordable housing (median cost of a home is around $150K range), and unparalleled lifestyle at reasonable cost (Cost of Living Index is 89 compared with about 170 for San Francisco which means earni
    t?

    As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
    ng 89 cents there is equivalent to $1.70 in San Francisco). Dallas Fort Worth International Airport handled 57 million passengers in 2004 and ranked the world’s third busiest airport. The rise of telecommunications and hi-tech industry in 1990s led to unprecedented growth for this area. It is forecasted
    ping new procedures for reviewing their safety, efficacy and quality.

    Professional from academic institutions, pharmaceutical industries, health care indust
    his region will add another 500,000 jobs by 2010. Dallas Northern suburb is a high income, fast growing and new area. This consists of small cities such as Coppell, Keller, Denton, Flower Mound, and Colleyville with very high median household income, e.g. $80-110K/year. This area has strict zoning so there
    y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
    are limited supplies of commercial properties available. Commercial properties available for sale in the Dallas metro are in general fairly new and good quality. The cap rate for this region is around 7-7.5% which is very decent compared to California.

    It’s important to invest in the right propert
    .

    As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
    and the right area to meet your investment objectives. You should work with a company who specializes in commercial real estate who can advise you on where to invest. When investing outside California, you will need to hire a property manager to take care of the tenants and the property for you. In the c
    elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

    Companies that provide selfless information through particip
    oming issue, you will learn about issues you should know about property management.

    Disclaimer: information in this article is deemed reliable but not guaranteed to be correct. There is no implied or expressed guarantee regarding results of your investment should you take the advice from this article


    tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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