Answers - Real Estate

Office buildings can be very profitable, and long-term leases mean less management than with residential income properties.The downside? Nothing seems to go up and down as much

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

as office rents and office occupancy rates.

Investing in office buildings can be very profitable. A friend of mine bought the office building that his law firm was renting, and

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

rented it to his company. It generated cash flow from the start. Now that the original mortgage is paid off, the net income is a sufficient retirement plan by itself.

There ar

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

risks with office buildings. The biggest one is simply that the rental rates can go up and down with the economy. In the worst of times, the same number of people need housing,

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

but there may be a major drop in the number of businesses, or at least the number that are looking for an office to rent. After the dot-com crash, for example the rent for many

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

buildings in the silicon valley area dropped by 30% or more.

A drop of that much means losing the property for many investors. Suddenly having a large negative cash flow for ye

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

ars isn't an easy problem to overcome. But even worse is the fact that during these rough times, many office buildings are empty for a year or two, with no income coming in at a

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

l. I have seen office space and even whole buildings sit empty for several years.

You might think that long-term leases reduce this risk. They may to some extent. And the long

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

lease periods that are common are one of the attractions of this kind of investment. However, lease or no lease, if the company in your building goes bankrupt during a recession

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

they will not be paying the rent. Suing them probably won't help at that point either.

Does this mean you shouldn't invest in office buildings? Not necessarily. If there is a

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

low vacancy rate in the area, and the economy is doing well, you can have good cash flow from office space. However, because of the inherent unpredictability of future vacancy r

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

ates and rent levels, you should always plan to have a good chunk of cash set aside to cover the rough times.

You also want to get a higher rate of return than with something l

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

ke residential rentals. Higher risk doesn't make sense if you don't make more for it. You might do okay breaking even on your rental houses while the renters pay down those mort

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

gages, but you better have a good positive cash flow if you invest in office buildings.

Ideally, you want to buy a building that already has a the tenant or tenants in place, a

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

d with leases that have a couple years to run. There is not necessarily a line of tenants waiting to take their place, like there can be with residential rentals. Office buildin

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

gs, and the tenants in them, are unique, and fitting the two together will almost always take a little time.

If you risk buying an empty building (probably a bad idea), start a

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

vertising before you close on the deal. You should also plan on a year without income. You should also be getting the building at a price that assures you of really good cash fl

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

ow when you do get it rented - to make up for that vacant time period that will be eating up your money.

Talk to other owners of office buildings in the area, to see what their

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

biggest problems are. Find out what the usual arrangements are, like who pays for landscaping, and how much the tenants are allowed to modify a building. Find the buildings most

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

similar to the one you are considering, and see if you can find out what they are renting for. In other words, if you do invest in office buildings, you should do your research

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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When people think of investments, they usually think of taking a certain amount of money and putting it into something like stocks or bonds, with the hopes that in a few years they will see a significant return on their investment. In the case of stocks, the potential for a big return is quite large, but also risky as stocks can fall through the floor quite easily.

Forex currency trading is a zero sum game and those traders with a trading plan and the necessary discipline to stick to it will succeed over those that trade without one...

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Answers - Why Invest In Office Buildings?

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