Located on the state line with Georgia, Phenix City, Alabama, is excellent for commercial real estate investing. It is a place with good opportunities and lots of diversity. But how do you build a diversified commercial real estate portfolio in Phenix City? This post will cover some options.

Diversify Your Phenix City Commercial Real Estate Portfolio

For investors, diversification is essential for protecting against risk. Various economic trends can impact different types of assets or investment strategies. When you diversify, you spread your investments to other property types and strategies. Doing so protects against economic changes that may impact one type of asset or strategy but not another.

Expand to More Types

Specializing in one type of commercial real estate can be wise for some investors. You learn the ins and outs of how a particular market operates and use specialization to its full advantage. It can be beneficial for new investors. However, you should still try to spread some of your investments out. For example, you could specialize in office space but also own assets in retail. Mixed-use properties can also offer a lot of value for diversification.

Own Properties in Multiple Asset Classes

Beyond expanding to more property types, you could consider more asset classes. With asset classes, you are referring to the quality of the property. Classes also have number designations. Class A properties represent the highest quality. Class A would be newer properties in better locations if you are talking about office buildings. Class A office properties also have various amenities to attract the best tenants. However, as you move to Classes B and C, you are looking at properties with less value.

Holding Period

Investors could also consider strategies that involve buying properties and holding them for more or less time. Most commercial investments have longer timelines than residential investments. Commercial investors also prefer to focus on the stability and upside of more extended holding periods. However, short-term investments can have value. Consider strategies with varying timelines and exit strategies.

Equity vs. Income

Some properties depend on steady income while the investor holds the property. For example, you might own retail space and rent it to other businesses. However, some investments generate no income until the sale. The investor relies on growing equity in the property. One way to diversify is to mix income properties with equity-driven assets.

Do you need help with commercial real estate investing in Phenix City, AL? Click here to contact the Cummings Commercial Team. We are a dedicated team of local real estate experts who serve the Georgia and Alabama commercial real estate markets, and we would be happy to help you navigate the market.

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