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Whitepaper: Market Opportunities

July 13, 2024 | Posted by Angela Gallik

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InCommercial announces the release of its latest whitepaper titled: Market Opportunities – Capitalizing on Current Conditions while Hedging Risks

The whitepaper discusses build-to-suit development strategy, key risks, opportunities, and underwriting in today’s market conditions. 

Written by Erik Conrad, CEO of InCommercial Property Group.

Download Whitepaper: Market Opportunities

Introduction:
A “Build to Suit” or “BTS” development is one wherein a commercial property tenant enters into an agreement with a developer or landowner to construct a new, purpose-built facility for the tenant tied to a long-term lease commitment from the tenant once completed. Build to Suit development opportunities are historically amongst the market’s most popular as well as the most limited investment opportunities. Once an investor understands and appreciates the nature of a build to suit development cycle it becomes apparent why, particularly in bull markets, the opportunity to invest in the build to suit space is limited to long-term market insiders.

Build to Suit developments seek to eliminate the speculative variables that accompany most development projects with the largest and most obvious being entitlements and lease-up. The additional certainty from eliminating these substantial risks compresses the development timeframe and drives attractive annualized returns comparable (on an IRR basis) to more speculative investments.

Sophisticated institutional investors and lenders have traditionally crowded out individual investors in this sector because of the high relative risk-adjusted returns and predictable, repeatable business opportunities afforded. The recent monetary tightening, combined with the persistently slower velocity of capital within the commercial real estate market (a result of the Federal Reserve’s efforts to reduce inflation), has resulted in opportunities for investors to capture a share of this attractive development sector and secure long-term gains that are not generally otherwise available.

Read the full whitepaper HERE: Market Opportunities