Not saying it is better or worse than resi but I think you need to take the blinders off.
I'm 54 years old and have been involved in property since 1985. Blinkers are off.
No outgoings? Says who? It's all negotiated in the lease and in a slow market you'll be throwing in the sweeteners to get the box leased.
True. Butt it's not always bad news, and it's not every property of course. I've taken rent reductions over the years in resi also.
No midnight runners? Why not? I work in an industrial complex and I have seen a few magically shut up shop over night. We had a guy earlier this year who didn't get paid by a builder, in debt 700k, loaned money from "undesirables" to get out of the mess.
BOOM. Dissapeared over night.
Yep. they do occur. I should have said "not many".
How? Drop the rent? Throw in sweeteners? 6-12 month vacancies are not uncommon with commercial leases.
True. We have 2 Comm's here in my town right now that are both circa 2 years vacant. One was partially let after 18 months.
Both are extremely large floorspaces, in a retail section (one was a Sam's Warehouse, one was a sec/hand furniture shop), and a smallish seaside township....not a lot of demand for larger buildings down our way - there are big ones in the local industrial estate, and most of these are full, most of the time - trucks etc. Cheaper rents than the retail on the Foreshore retail section.
A large influence on vacancy is the location and size of premises etc.
A well located and established Comm property tends to have little tenant turnover generally...many of these have profitable businesses which will stay there indefinitely.
Obviously the price will be a premium to buy in.
This is what I would be looking at as one of the selection criteria for any I would be considering.
I'm not saying Comm is risk free - neither is resi, but all things considered; there are a few Pros to go with their Cons.