According to Michael Bull, president of Bull Realty Inc, commercial property values continue to be cyclical. There are four phases to the commercial property market cycle; Recession, Recovery, Expansion and Contraction. It may be useful to identify which stage we are in the cycle in order to establish whether it is a good time to buy a commercial property.
The best time to purchase a commercial property would be during the Recession Phase when the property prices are the lowest and financing availability becomes unaffordable for many. This often results in the consequential loss of tenants and commercial property owners struggle to find occupiers. This, however, may be a great opportunity for buyers to secure prime locations.
The worst time to buy a commercial property would be during the Expansion Stage, when financing becomes affordable. This allows the property owners to increase their prices. During this phase, it may be more difficult to secure a property that you really want. This is due to higher competition, with other commercial property investors pursing the same properties.
During the other two phases, buying decisions should be based on your need.
You should seek professional help from a commercial property agent, who will be able to help you identify whether the yield curve is expanding or contracting. The yield curve affects corresponding property values.
Choosing the Right Location for Your Property and Business