If you’re a residential real estate agent looking to make more money in 2023 and beyond, you should definitely consider working with commercial developers. A simple referral of your client is all you have to do, while the commercial team will take care of the rest.
As you know, traditional commercial/industrial units have often been priced way above residential investment opportunities. But there are new unique commercial/industrial developments available in the GTA at lower price points that could appeal to a broader range of your clients as business purchases or investment opportunities.
A great example is the commercial/industrial condos and outside storage pads available within the Ancaster Business Park at 1620 Claybar Road in Ancaster, Ont., from Kingridge Developments. With units from the $300’s to the $800’s, it is an affordable solution for many of your investment clients who are looking to diversify their portfolios.
While residential real estate is a smart long-term investment, the same is true for commercial/industrial. And with a starting point of just $300,000, it’s now easier to invest in commercial condos since residential purchase prices have risen significantly over the past couple of years.
There’s a high demand for this type/size of industrial units as well – industrial condos starting at 2,181 square feet and outside storage pads from 1,664 square feet in the Claybar Road example – with a vacancy rate under 1%! And while this type of opportunity has been successful in Western Canada for several years, it’s a newer concept in the GTA within the past five years. This is an opportunity many of your existing clients would be excited to learn more about.
Get paid for your referrals
If you have clients looking for business use or investment opportunities, you can get paid for referring them to commercial developers. Once referred, you can still manage your client relationship while the commercial team takes care of everything else – from paperwork to Zoom call introductions and meetings.
Benefits of commercial vs residential condo purchases
- With commercial leases, the landlord holds almost all of the rights, whereas the tenant has more rights in the residential space
- Commercial lease rates are dictated by the landlord with zero rental increase restrictions, unlike the residential increase caps
- Commercial leases are long-term passive investments with very low tenant turnover. Consider a typical lease of 3-10 years compared to month-to-month or one year with residential
- Commercial landlords are able to review up to three years of audited company financials, which helps more adequately quantify the risk of default versus a residential tenant check
- Commercial condos offer a great bang for your buck in terms of square footage costs. Consider an average cost of $450-600 per square foot commercial units compared to $800-1,200 per square foot residential
- Historical data indicates that commercial condos appreciate at the same rate as residential condos. When it comes to cap rate, however, commercial condos present a much better investment return than appreciation alone – four to seven per cent vs 0 per cent where it’s assumed the asset will appreciate
Click here for more information on the 1620 Claybar Road project.
Click here to get in touch with the CBRE team working on the 1620 Claybar Road project. Kingridge has recently completed several other commercial condominium projects, including Kingridge Square, Kingridge Crossing, and The Interchange, and is just starting construction on 585 Hanlon Creek in Guelph. Learn more
Artist rendering. Source: Kingridge Developments
