Looking for the next big and most profitable plays in real estate this year?
We are all aware that there is a substantial amount of financial distress in the economy. That may not flow through to a lot of foreclosures and REO homes for sale yet. Though there are likely going to be many big opportunities to participate in. Many of them may come in the form of various types of conversions.
The New Trend In Office Conversions
Changing property uses from one type to another can be costly and take time. Some office building and warehouse owners have found that one alternative is to simply break up buildings into small pieces.
For example, selling off individual floors and commercial condos instead. Lower price points can attract a bigger pool of buyers, who see less risk with a smaller investment.
Retail To Mixed Use
Both office bound businesses and retailers appear to be making an endless stream of mistakes. More frequently implementing technology and cutting back on customer experiences to their own demise.
While some retail malls which invest in improved experiences will thrive, many others will be ripe to be converted to residential, mixed use, or other commercial uses.
Builder Buyouts & Condos To Rentals
Builders are under immense pressure. Even though the mainstream media is still pushing the narrative that home prices are soaring thanks to little inventory, many are finding that the reality is lenders are tightening up, and buyers are more scarce and unwilling to take risks.
This is the perfect time to buy out whole projects. They can be reworked, or converted into rental properties to be held until the market rotates again.
Public Land Use
This may cut both ways this year. We could see more private land grabbed under eminent domain in the name of climate change in disaster prone areas. Then converted to being public property, and not to be built on.
There have also already been at least two attempts to convert public lands into private, available to sale to international buyers, or to house new residents. These could be incredible new development opportunities, and the basis for public-private partnerships.