One of the most important factors that affect the success rate of commercial real estate investments is the ability of the building to attract tenants. A successful investment will have a high tenant turnover rate, as this is an indicator that the building and its vicinity are suitable for attracting a significant number of potential tenants. The greater the tenant turnover rate, the greater the chance that a profitable investment opportunity exists. In most cases, developments that have a high tenant turnover rate also have a low appeal factor, which can make owning commercial properties a less than lucrative venture.
Commercial real estate investors must also be wary of investing in properties that are too small. For a successful commercial real estate investment, an investor needs to purchase a property that will eventually be able to attract a significant number of tenants. For instance, purchasing a grocery store that is only a few hundred feet from a popular grocery store is not a good choice for an investor who intends to sell it for a profit. Developments that are too small also have a lower chance of generating the type of profits that a more mature commercial real estate investment will generate.