recession proof commercial property types

[eggnog]

Since I have not yet experienced a real slowdown in australia's economy I would like to hear peoples ideas on what types of commercial properties in a city like brisbane are best suited to survive through a tough economic cycle.

How would commercial properties in towns like ipswich, beenleigh, browns plains, etc fair in a slowing economy.

In the cheaper end of the market (below 1M), which commercial properties would survive the best. How would a <50m2 small shop on a retail strip or small office fair in such economic conditions.

 

[The Y-man]

We were just saying Medical Practitioners (GP's) were relatively recession proof - so medical centres (pref with a pathology outlet attached)?

Also buildings designed by, and fitted out specifically for, a large organisation (eg Government).

Cheers,

The Y-man

 

[RPI]

Hi Re Medical centres. There is a GP shortage in inner Brisbane at the moment. Several clinics have closed and several others are threatening to. Also many do not take new clients because of GP shortages.

I actually have a site that is ideal for a medical centre and was going to put the DA in this year but then after research found out above so am holding off. Issue is with immigrant doctors not being able to get GP provider numbers in the inner city until they have 10 years of Australian Residence. They have to go in areas of need (outer suburbs and rural) where as inner brisbane is not an area of need due to its proximity to major hospital.

 

[The Y-man]

Hmmm... how about Centrelink offices?

Cheers,

The Y-man

 

[jingo]

Funeral homes - Especially with the ageing population!

 

[Kenster]

Three industries that did well in past recessions and Depression:- Casinos, Brothels and Pubs.

Work out which types of properties you want to get in

 

[The Y-man]

Funeral homes - Especially with the ageing population!

Hmmm...got visions of backyard ceremonies during tough times.....

Cheers,

The Y-man

 

[gekko_99]

I like the retail properties on a corner allotment with good exposure and access in an estabished with good population growth. They should have a few simple tenants like a fruit barn, baker, IGA, type tenancies selling necessities that people always need. The success of the tenant and stability of their cash flow is key to paying the rent.

Everything has risk, the key risk with these are council changing traffic routes in a way as to kill access or exposure or new retail competition in the area. This risk is more prominent in less developed areas like country towns, i.e. a new shopping centre in them can kill a whole main street.

 

[grossreal]

hi all
interest question
but the answer is a comm that can be easily re leased.
so some thing that is not aimed at one market.
so if you have floor plate that can be leased to alot of different companies then you have a bigger market.
for comm I look for a property in an area that I can lease to alot of different comm customers and then tennants.
this is the main thing to look for.
if you are going to go into a comm for a particular customer base then you need to make sure that you have another tennant to fill that gap and thats a bit more difficult so steer well clear of those as they are not my market dazzling might have a view of those areas but for me to difficult.
I like floor plate in cbd's as tenant don't change and if they do they can be replaced very quickly.
but there is no such thing as no risk investing.
stick your money in a bank and if the bank goes under where is the no risk

 

[ArJay]

hi all
I like floor plate in cbd's as tenant don't change and if they do they can be replaced very quickly.

Hi GR.....what's meant by "floor plate". Can you extrapolate?

R

 

[JoannaK]

supermarkets, people still need to eat in a recession.

 

[markp]

Hi GR.....what's meant by "floor plate". Can you extrapolate?

R

Agents waffle for floor area. Like "key drivers"," hi tech" and all that nonsense.

 

[grossreal]

hi ArJay
not sure if its waffle as I'm not a real estate agent.
but a floor plate is a floor in a builbing
so if its a 10 storey building it has 10 floor plates.
and you can buy 1/2 or 1/4 of a plate and the plate can be divided into different types of businesses so you can have 1/2 a plate comm and 1/2 shop front.
the plate start in sydney at 262,450,900, and 1200 in size.
the plate price are moving at the moment and depending were it is and if it has views does change its value also so does the street.
the most expo street is macquarie in sydney but bond is catching up very quickand the most expo is also A grade and thats the flash building like aust square deucha bank building etc.
not for me bit high for my little plan.
I follow the plate value for sydney and cost per street and whats sold.
and then if something comes out side this value look at buying.
I buy small plates 262 or part plates 1/2 and with leases in place.
usually b grade as I can lease it easy.
I have negotiated on vacant and the real estate has to organise a tennant.
and this can work well
but in the market at the moment I don't get that luxury as they are gone before I can organise so have abandoned that Idea and now just buy leased and even that is drying up very quickly.
won't go to c grade would look at another market adelaide or melbourne.
but thats what floor plates are and when talking to a real estate you just ask what they have in a size or part of a floor plate.
hope this helps

 

[markp]

Since I have not yet experienced a real slowdown in australia's economy I would like to hear peoples ideas on what types of commercial properties in a city like brisbane are best suited to survive through a tough economic cycle.

How would commercial properties in towns like ipswich, beenleigh, browns plains, etc fair in a slowing economy.

In the cheaper end of the market (below 1M), which commercial properties would survive the best. How would a <50m2 small shop on a retail strip or small office fair in such economic conditions.

I am sure all commercial property types will survive long after any economic downturn. In fact I have not known of a single building that has not survived any recession. Sure some tenants may go bust and vacate a building but the reason may or may not be related to a slowing economy.

I think the most important thing is to buy quality, maintain good tenant relationships and building maintenance and of course have long leases in place.

 

[Dazz]

Since I have not yet experienced a real slowdown in australia's economy I would like to hear peoples ideas on what types of commercial properties in a city like brisbane are best suited to survive through a tough economic cycle.

I have no idea CF+. I've just landed in Brisbane and spent 4 days here. Looks like any other big city really.

How would commercial properties in towns like ipswich, beenleigh, browns plains, etc fair in a slowing economy.

I have no clue where these places are. The question you are asking is way way too big and broad for any real in-depth answer. I could list off about 40 different types of comm. properties. Which ones do you mean ??

In the cheaper end of the market (below 1M), which commercial properties would survive the best. How would a <50m2 small shop on a retail strip or small office fair in such economic conditions.

Depends where it is, what the Lease term is, and who the tenant is, and what type of guarantee structure you have in place, as well as what type of cash buffer you have.


I'm getting the feeling if I asked you the following question ;

"What do you want out of your property ?"

...you'd answer like most investors do who don't get specific enough ;

"I want it to just grow heaps and heaps and fling off heaps of positive cashflow so I can buy more."


This is the type of answer I usually receive when I ask that question. Obviously the investor has a wishlist.....not a solid, structured plan of action.

Seeing as though this is your first delving into CP....why not go the Rixter approach.....get it going rather than get it right......when you've bought your 15th comm. prop you'll probably look back and consider it a real dog of a property.....but by then with your mass of wealth behind you - who cares ??

 

[wanty]

Hmmm... how about Centrelink offices?

Cheers,

The Y-man

lolol Might be a real goer in the near future in our welfare society.

 

[wanty]

Three industries that did well in past recessions and Depression:- Casinos, Brothels and Pubs.

Work out which types of properties you want to get in

he he Casinos, Brothels and Pubs.

I agree with a few of you here.

Funeral parlours are the way to go. Plant one right next to the brothel.

A bloke is on his last legs,so he goes and blows the remainder of his life savings at the casino,full of despair he heads to the pub to drown his sorrows and only then he comes up with the idea of going to the brothel.
Whilst there, he keels over and dies and is quickly shipped to the booming funeral parlour next door.

 

[RPI]

In Qld anyway if you find a Centrelink there will also be a Cash Convertors opposite so maybe that would make as a good a pair as some of wanty's

 

[PrimeCommercial]

Three industries that did well in past recessions and Depression:- Casinos, Brothels and Pubs.

Work out which types of properties you want to get in

Funny you should say that, A guy that I bought my last business off bought an industrial property on Victoria Rd. Rydalmere in Sydney. The property came with a tennant in the front and a brothel in the back. The brothel business was included in the sale. He and his business partner ran it for about 3 months until a couple of burly 'mob' looking guys that owned a few brothels in Kings Cross came a visited him one day. They sold the business the next week but still continue to own the building 10 years on.

 

[willair]

The brothel business was included in the sale. He and his business partner ran it for about 3 months until a couple of burly 'mob' looking guys that owned a few brothels in Kings Cross came a visited him one day. They sold the business the next week but still continue to own the building 10 years on.

It's a jungle out there..willair