Recession-Proof Your Commercial Real Estate Investment

Economic recessions often stress a business’s income. However, commercial property remains a stronghold when you’re looking to diversify your investments and income. Mihal Gartenberg, an agent at Warburg Realty Partnership, said, “when the stock market is doing poorly, investors who are looking for other opportunities find that real estate is a safe haven.”

An economic downturn doesn’t have to spell disaster for your investments. There are several ways you can protect your commercial real estate and add value to your property through all economic cycles, even a recession.

Recession-Proof Your Commercial Real Estate Investment

How Do Economic Recessions Impact the Property Market?

An economic recession is defined as a major downturn in economic activity and business. Some examples of recession include the 2008 financial crisis and the coronavirus crisis. A recession is often characterized by a decline in the gross domestic product (GDP) and high unemployment rates. Still, many factors contribute to economic shifts. Because businesses begin to practice discretionary spending to stay afloat, job losses due to cutbacks are common during these times.

While recessions can be far-reaching, real estate investors are usually better positioned than most to ride out an economic storm. This is because typically, commercial real estate properties are considered recession-resistant investments. As an investor, the biggest challenge is keeping vacancy rates low, which becomes more difficult during a recession due to higher mortgage rates and lower consumer spending. Read on to find out how to make your investment recession-resilient. 

Protect Your Investment from Economic Recessions

Here are some methods to recession-proof your commercial investments:

  • Stay away from risky investments like fixer-uppers or developmental projects
  • Add value to your existing commercial spaces
  • Diversify your portfolio: invest in more than one type of asset

The good news is that every economic recession is followed by a period of economic growth. So while other investors will be paying competitive prices for their properties, your investment will already be secure. 

Commercial Real Estate in Melbourne, FL

Bad economic times don’t mean you should stop looking for great commercial property investments. Melbourne, FL is full of investment opportunities. Focusing on a prime location can place you on the right track to a recession-proof investment.

Ullian Realty is a trusted real estate firm with decades of experience working with investors, corporations, brokerage firms, and government agencies. Give us a call today to learn more about our services and property listings.


Editor’s Note: This post was originally published on August 20, 2020, and has been updated for freshness, accuracy, and comprehensiveness.