Are you in the market for a commercial property? I have a client looking in the O’Hare corridor for a place with a minimum of 20,000 sq ft.
They are running into a number of obstacles. The limited amount of buildings available, not buying outright in cash and Hedge Fund buyers.
Hedge Fund buyers are buying for the long term. The interest and taxes are tax deductible. The property is depreciated over 39 years. Once paid off and fully depreciated, the property is a cash generating machine. This is what allows some funds to generate returns far greater than the markets.
So why would all of these Funds not be snapping up the best buildings available? Especially multi-unit buildings.