Owning commercial properties that you rent out to others can be a very lucrative enterprise. As commercial property investors ourselves, we are very familiar with the amount of money to be made with this sort of thing. But we also know that there are downsides. One of the biggest is volatility. We suspect ongoing volatility could still be harming many UK commercial landlords.

Volatility is part of every investment. It is just that some investment opportunities are more volatile than others. The volatility in commercial real estate comes in many forms that all point to the same thing: long periods of no income due to tenancy voids. It’s something the commercial sector has actually seen quite a lot of since the start of the COVID pandemic.

High Street Retail Hit Hard

When COVID first made it to the UK, shutdowns forced just about every business to turn off the lights and lock the door. High street retail was hit especially hard because, even as other sectors were allowed to reopen, retail wasn’t. When retail was eventually given the green light, people were still reluctant to go shopping. You know the rest of the story.

Retail operators being unable to function are left without adequate income. Their rent falls into arrears in short order. Should they eventually vacate the space, whether voluntarily or otherwise, finding a new retailer to come in can prove quite the challenge. A retail sector going south usually harms everyone in the sector.

We’ve been working with property owners since the earliest days of the pandemic to obtain their properties and get them out from under the heavy weight of having to find new tenants. It is a lot easier to sell to an eager investor than to beg for retail tenants to come and sign a lease.

Volatility Affects Lease Values

One of the interesting side effects of volatility on commercial property is its impact on lease values. When tenants are struggling to keep their businesses afloat, they also tend to look for lower rent payments at renewal time. Landlords obviously want to maintain current lease values, at the very least. They generally prefer to increase rents for the coming lease term. That’s the way commercial property works.

During tough economic times, you have two contrary agendas. Something must give. Lately, we’ve seen an increase in the number of tenants looking for longer rent-free periods in their renewal leases. More rent-free time balances out higher monthly rates. Unfortunately, landlords are more frequently acquiescing to such demands out of fears that they won’t find new tenants.

None of this is good for property owners. In fact, sustained periods of volatility can do quite a bit of damage. And the fewer number of properties a landlord owns, the greater the potential damage per property. On the other hand, volume tends to lessen negative impacts of increased volatility.

We Are Ready to Buy

Sell My Commercial Property is looking to buy all sorts of commercial properties right now. We already have the volume to withstand the current market. Not only that, but we are also prepared to do so. We would like to hear from you if you have a commercial property that you think we might be interested in.

We invest in retail spaces, take-away locations, warehouses, industrial buildings, office buildings, medical space, and more. What we’re looking for is potential. Where you see a source of headaches and frustration, we might see the potential for much better returns in the future. If that’s the case, we might be able to make you a very good offer.