With the real estate market in NYC providing more options to property investors, transitional properties are rising in popularity. Once thought of as risky investments, transitional properties are providing lucrative investment opportunities for New York commercial real estate investors.
What Are Transitional Properties?
Transitional properties are structures that at one time served a dedicated purpose, but are now used differently. An old house in Queens, for example, may now serve as offices for therapists. A church may be converted into an art gallery. A textile mill in Brooklyn might be used as a brewery and restaurant. Transitional properties The reason for the rise in transitional properties is that many areas in NYC have been rezoned recently. With the influx of businesses, previously residential sections have been zoned as commercial.
Finding Transitional Properties in NYC
When a previously residential property is rezoned as commercial, its value skyrockets. Commercial real estate investors in NYC look for residential properties that are on the cusp of transitioning. This allows the property to generate revenue through rent until a point is reached where the property can be converted for commercial use. Even properties that have just been rezoned as commercial can be purchased at residential prices, allowing investors to save quite a bit on the transaction.
Generating Revenue from Transitional Properties
There are a number of ways in which commercial real estate investors can make money from transitional properties. The most obvious method is to sell the newly zoned property. Placing an emphasis on the property as commercial instead of residential gives investors the ability to increase the asking price. The second method is to convert the property for commercial use, so the improvements give the property a higher selling value. Leasing the property to businesses is another option. Depending on the location of the transitional property, it may make more sense to keep it are a residential rental. This “fix and hold” strategy allows NYC investors to keep a steady stream of revenue until the surrounding neighborhood has brought in enough businesses to sell the property at an increased price.
Financing Transitional Real Estate in NYC
Financing transitional properties is a delicate and time-sensitive process. Investors need to find properties in the right location and act before cost starts to rise or gets snatched up by a competitor. Express Capital Financing works directly with NYC commercial real estate investors to create fast and accessible solutions tailored to their needs. Whether you are purchasing a newly zoned property to turn into a commercial investment, acquiring a formerly residential property to put up office space, or anything else, Express Capital Financing is your one-stop place for all your commercial real estate needs.
