What is a "Specialty" Property?
The real estate industry has a lot of terms of art. One of which is “specialty” property. What does it mean? This is generally a reference to a property that has limited function or one that is designed with a specific use in mind, like a car wash. There are many others, for example drive-in restaurants, funeral homes, marinas, greenhouses just to mention a few. Owning or buying this type of property should come with warning lights. Because the function of the building is often limited to a specific use, the marketability is likewise limited and therefore value will also be effected. Sometimes adversely and sometimes positively.
On the positive side the use for which it is designed may be very productive, generating a good revenue stream. Competition will be limited, particularly if the area is built up and competitors cannot locate nearby without demolition of competing sites and often costly construction for a similar use facility. On the negative side, the use of the specialty building or land is fading in popularity. An example would be golf courses which have been adversely affected with the younger generation looking to other amusements. Another would be certain drive-in restaurants where a brand fades in popularity. When this does happen, owners and investors are faced with finding alternative uses, which usually involves costly demolition, remodeling and new construction to meet the needs of the alternative use now in demand.
At the right price these changes present great opportunities. This is even more true in a real estate market that has been in boom mode for properties that are multi-functional with many optional uses and are at the top of their value. This is when good investments in “specialty” properties happen. Call the Gerspacher Real Estate Group, Inc. to help guide you in the right direction and take advantage of a special real estate opportunity.
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