Our guest today is Cody Payne, an office and industrial investment specialist. In this episode, we dig deep into the office and industrial asset class, talk about the dos and don’ts, and the best ways to invest. If you want to know how to invest in office or industrial during the pandemic or how to build relationships with brokers to get the best deals, this episode is for you! Learn more about Cody and his journey at reiclarity.com!
“I don’t like having a tenant that has more than 15% or 20% of the building. Because in the event that they leave, you’re in trouble.”
Cody specializes in the office and industrial asset classes. Recently, he sees many multifamily investors getting interested in commercial investing as the entry barrier is much lower due to the pandemic.
Cody’s advice on how to invest in office the right way:
- Invest in multitenant offices, because the risk is spread out more. If it’s possible, don’t let a tenant have more than 15-20% of the building. This way, vacancy is not that risky and the lease rolls better too.
- Try to find a space that is around 2-5000 sq ft.
Investing in office space in the middle of the pandemic can be risky. Therefore Cody suggests focusing on smaller businesses like lawyers, accountants, or similar general businesses. He suggests staying away from technology companies, where they can work from home and the larger national companies because their leases in some cases are very long.
What to look out for when investing in industrial buildings
- Know the area very well where you plan to invest.
- Understand your risk: know what to do if the building becomes vacant, or if the building needs a bigger renovation.
- Keep it as minimal office as possible, around 10-15%, to minimize the cost.
- Find a specialist who understands the product, because office and industrial buildings are one of the most expensive asset classes to operate.
“What we like is a strong, credible, “ready to execute” buyer.”
Cody talks about the ways to find the best brokers for your deals and how to build a good relationship with them.
- Specify who you would want to connect with. In the office and industrial space, it is important to look for a specialist instead of a generalist.
- Create a list of the best specialists in the town where you want to invest in and contact them.
- Instead of just asking, always provide value.
- If you are a new investor, find an experienced team to be credible for the brokers.
According to Cody, the 3 main things that can ruin the relationship over time are not being a serious buyer, reliable, or responsive.
Mentioned in the show:
Learn how to grow your portfolio and reach incredible success the right way! Visit us here for everything you need to know: www.shineinsurance.com/reiclarity.
Special thanks to Cody Payne for taking the time to share so many great insights with us
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Show produced by Eni Horvath