Diversify Your Real Estate Portfolio
Operating as the CEO and president of NorthDevelopment, a Chicago real estate development firm I founded, I have over 35 years of expertise in residential and commercial real estate.
Operating as the CEO and president of NorthDevelopment, a Chicago real estate development firm I founded, I have over 35 years of expertise in residential and commercial real estate. I am always looking for commercial opportunities, and in 2004, I acquired over 31 FannieMay candy stores, leasing half of the stores to other merchants and half back to their proprietors.
Diversify Your Real Estate Portfolio
As with investors active in other fields of investment, real estate professionals can diversify their portfolios by investing in both residential and commercial properties. However, investors considering doing so would do well to know the particulars that distinguish commercial real estate beforehand. As an illustration, residential apartments diversify risk in a useful way. If an owner of a residential apartment complex leases 10 apartments and one tenant leaves, he or she only loses one-tenth of the income. Multi-unit commercial properties, such as units in a strip mall,follow this same logic, but as they also generate income for their tenants,they offer further opportunities.
Lenders and owners value commercial properties differently. A bank will ask for a bigger down payment on commercial spaces,often as much as 30 percent more. That may not matter as much, however, when one factors in how commercial properties draw income. The income a commercial property generates is often proportional to its usable square footage. In other words, buying a larger commercial space costs more up front, but owners can make up those upfront costs by working with tenants who make efficient use of the space and draw a steady stream of customers.
About the Author
Calvin D. Boender was raised in the Dutch Christian Reformed area of Highland, Indiana. After high school, he attended Calvin College in Grand Rapids, Michigan, for three years and thereafter graduated from Grand Valley State College, Allendale, Michigan, in December, 1978, with a bachelor's degree with honors in political science. For the past 35 years, he has focused his attention on real estate by successfully investing in and redeveloping residential, commercial and industrial properties. He has now turned his quick mind and strong business acumen to developing Renew Biomass into a market leader. Cal has been a major contributor to various philanthropic causes and non-profit organizations addressing the needs of children and less-fortunate individuals. He resides in the suburbs of Chicago with his wife and two dogs, where he enjoys reading and biking.
