T
he world of commercial real estate may not be as thrilling as Evel Knievel's daredevil stunts, but it's a perilous and unpredictable profession in its own right. Risks abound when buying and selling properties that will house businesses or workspaces for companies. Brad Kowit, a seasoned real estate expert with years of experience, emphasizes the importance of doing thorough research and working with skilled professionals to minimize risks.

    Kowit, who graduated from The Ohio State University in 1987, has had his hand in numerous commercial projects in the Cleveland area. He's developed properties, overseen renovations, and managed leasing for various clients. His advice for success in the industry is simple: "You've got to do your homework." This involves gathering information, conducting due diligence, and being prepared for unexpected setbacks.

    Money is always a top concern in commercial real estate. To make a profit, you need to invest significant funds, but it's crucial to know how much to spend on a project to ensure a return on investment once the property is occupied. Kowit identifies costs as the biggest risk factor, citing interest rate fluctuations, construction cost increases, and unforeseen expenses that can arise during development.

    Dealing with unexpected issues is an art that comes with time and experience. Kowit notes that learning from past projects about what worked and what didn't is essential for future success. The pandemic has brought significant changes to the commercial real estate market, with many office buildings becoming vacant as companies opt for remote work arrangements. However, this trend predates COVID-19, with conversions of office spaces into apartments or other uses already underway.

    The market is constantly shifting, influenced by economic and global factors such as supply chain issues, interest rate changes, and trade dynamics. Kowit emphasizes the importance of staying attuned to these shifts to make informed investment decisions. His extensive experience in the Cleveland area has also taught him the value of understanding local markets and demand patterns.

    "It's location by location and market by market," Kowit says. "What works in one area may not work in another." By grasping these nuances, commercial real estate investors can increase their chances of success in this complex and ever-changing field.