Office Investment Properties

IN THIS GUIDE

What are Office Investment Properties?

Office investment properties consist of leasable space for business related purposes. These properties hold tenants that are performing income-generating activities. Examples of these tenants can include Aon, CBRE, PwC, Bank of America, JP Morgan, a marketing agency, etc.

Why Invest in Retail Commercial Real Estate?

Income: Investors in the office space benefit from large streams of incomes as the tenants occupying office spaces can usually afford higher leases.

Length of Lease: Investors benefit from tenants looking to establish themselves in a community and build a culture and a “home feel” environment for their employees. This leads to longer leases and lower tenant turnover rates. This decreases the investors risk significantly as cash flows levels will be consistent and vacancy rates will be low. Investors who manage to secure established brands as tenants can nearly guarantee a long-term lease and high levels of appreciation as companies seek to get into office spaces in prime locations.

How can you invest in Office Space?

Real Estate Investment Trusts (REITs): REITs make owning real estate accessible to the average investor. REITs are companies that focus on acquiring and managing real estate investment properties. Certain REITs focus on acquiring and managing office spaces. An investor can purchase office-focused REIT shares in the stock market and become a partial owner. The shareholder will benefit from the property’s appreciation and rental income through the stock’s growth and dividends.

Examples of Office REITs

Boston Properties (BXP) is a REIT that invests in office spaces. The trust’s market capitalization sits at $16 billion with properties in Boston, Los Angeles, San Francisco, Washington D.C. and New York City. The REIT offers a 3.83% dividend yield.SL Green Realty Corp (SLG) is a REIT that invests in office spaces. The trust’s market capitalization sits at $5 billion with properties in New York City. The REIT offers a 5.12% dividend yield.Hudson Pacific Properties (HPP) is a REIT that invests in 19 million square feet of office space. The trust’s market capitalization sits at $4 billion with properties all over the west coast of the United States and Vancouver. The REIT offers a 3.69% dividend yield.
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