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  • Answers - Ways To Minimize Risks In Your Commercial Real Estate Investment

    When you invest in a commercial property, you all hope that the property value will go up and the income will continue to increase. However, you also hav
    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
    e to plan for the downturn too. There are ways to minimize your risks when you invest in a commercial property:

    1. Choose a property w
    ; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

    Examples of combination products may in
    ith multiple tenants instead of single tenant. This will spread out the risk as you don’t put all eggs in one basket. When a tenant terminates a lease, y
    lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

    u will potentially just lose a portion of the total income. It’s also easy to find a tenant looking for a small 1000 SF unit.
  • Choose a property
  • here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
    with long term leases over month-to-month leases. Month to month tenants can move out with short notice when their businesses go down.
  • Avoid hav
  • d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

    Combination pro
    ng most of the leases expire at the same time. That way in the worst case, you will not have to face with a scenario that the whole building is vacant.
    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
    r>
  • Choose brand-name over no-brand tenants when you have a choice. Leases from brand-name companies like Walgreens, Subway, HR Block are sometimes g
  • 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
    uaranteed by the corporations. So when they have to shut down the store, the corporations will continue paying rents. According to statistics, brand name
    nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
    tenants are more likely to be in business next year than non-brand name tenants.
  • Ask for lease guarantee. When a tenant is a small corporation, a
  • 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
    sk the owner of the corporation back up the lease with his or her personal assets. This way you are more likely to get your rent paid during bad times.
    ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
    >
  • Have a mixture of tenants with different businesses. For example, you don’t want to have 3 barbershops in a shopping center as they will compete ag
  • ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

    Following aspects would a
    ainst each other and take the other out of business. When the economy slows down, it may affect a certain industry. By having tenants with different bus
    dd to the challenges in developing combination products:

    Which markets to tap where the combination products can do fairly well?
    Which combination prod
    inesses, you reduce the chance that the economy affects most of your tenants.
  • Request seller for rent guarantee. When you purchase a commercial p
  • cts are meaningful and rational?
    Which therapeutic categories to select?
    Which Combinations can address unmet needs of the patients?
    Do combin
    operty that is not 100% leased, ask the seller to provide a 12-month rent guarantee for vacant units. That way you have up to 12 months to look for tenant
    tions increase the patient compliance?
    What would be the developing cost?
    How to tackle the risks encountered during combination product developmen
    s.
  • Invest in a stable and growing area instead of a declining area. Your tenants are more likely to do well and have money to pay you the rent.<
  • 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
    r>
  • Invest in an area with strong income. The median household income in the US is about $46,000 per year. So if the area has median household incom
  • ping new procedures for reviewing their safety, efficacy and quality.

    Professional from academic institutions, pharmaceutical industries, health care indust
    e of only $28,000 per year, it’s likely a rough area with lots of graffiti’s. This is a risky area to invest.
  • Choose triple-net leases over gros
  • y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
    s leases. Maintenance is something varies from year to year. On the triple-net lease, the tenant is responsible to reimburse you with all the expenses
    .

    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
    o your net income does not fluctuate.
  • Avoid property that has chemical. If you are an investor looking for a passive investment, you should avoi
  • elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

    Companies that provide selfless information through particip
    d gas station. When there is a gas leak, the soil is contaminated. You won’t be able to sell the property as no lender will provide financing.


    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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