The traditional definition of commercial real estate encompasses just five property types:
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8 Alternative Property Types for Today’s Real Estate Investor
office, retail, multifamily, industrial and hotel.
In recent years, however, institutional investors and developers
have become attracted to more niche product, including seniors housing, medical office buildings and self-storage facilities. In the following gallery we outline some of the emerging asset classes in commercial real estate.
Farms
Farms have been a lucrative commercial property investment since the Biblical times, but they’ve taken a backseat to more modern assets such as apartment buildings and office towers in the post-World War II years. Yet since everything old becomes new again, it looks like they are coming back in vogue with Gladstone Land Corp. becoming one of the first publicly traded farmland REITs last year. Gladstone invests in farms that grow annual crops, as well as in storage facilities, processing plants, packaging plants and distribution centers.
Billboards
It may not be immediately apparent to you that billboards are real property, but the IRS has ruled that they are, with companies such as Lamar’s and CBS Outdoor Americas Inc. on track to becoming full-fledged REITs. Perhaps the best thing about investing in billboard REITs? Unlike with multifamily, office or retail properties, there is no need to worry about the tenants.
Data Centers
As technology seems to improve at lightning speed, more and more of our data is kept in “the cloud.” In spite of its name, however, “the cloud” requires millions of square feet of data storage space to back it up, with millions more slated for construction in the coming years. After all, according to a forecast by networking firm Cisco, global “cloud” traffic will quadruple between 2013 and 2017, to 5.3 zettabytes.
Self-Storage
As both young and old Americans downsize, there’s been a proliferation of self-storage properties throughout the country. Revenues and occupancy levels for such facilities are currently growing by double-digits, according to research from Marcus & Millichap Real Estate Investment Services. Meanwhile, supply is trailing behind demand, so this may be a good time to invest in the sector.
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by Elaine Misonzhnik, posted on nreionline.com