The acquisition of U.S. commercial real estate by the investment board for the Canada Pension Plan has tongues wagging, and investors scouring through projections and analysis to see what they, too, might find. That search is also being propeled by fears the domestic market may be correction bound.
CREW caught up with Gary Rand Lucas, managing director of Marcus & Millichap, to see what five important factors should be taken into consideration before a plunge south of the border.
1. Target a region you can easily access. Lucas advises choosing areas close by to make light work of property management and maintenance.
2. Know your submarket. “Utilize multiple Canadian and American brokers to learn various opinions and trends of the targeted submarket,” he says. “Study the market – demographics, job statistics and rent patterns.”
3. Keep it simple. Lucas advises even investors seasoned in Canadian markets to keep their first purchase in the States simple. “Pursue straightforward, less complicated properties on the initial purchases,” he says.
4. Have a plan. Like any investment, investors are cautioned to have a clear plan for purchase. Even though the market is hot, Lucas advises not to jump the gun without thinking through the full process: “Write down your investment criteria goals and exit strategy before you buy.”
5. Keep your options open. “Canvass the market and look at many properties,” says Lucas. While retail is gaining in popularity, he recommends looking at everything from office space to hotels, malls, warehouses, medical centers and industrial properties – and lots of each.
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