This article will help anyone looking for information pertaining to a commercial real estate and commercial lending in the State of
Alaska.
Commercial real estate in Alaska can be a mixed blessing. With
its gorgeous landscapes and vast stretches of undeveloped territory, Alaska is
truly the land of opportunity for an ambitious entrepreneur who wishing to start
a new business on, or make an investment in, its land. However, with less than
a million people residing in the entire state, starting a new business, or finding
people to make productive use of the land, can be tough going.
Alaska is the least densely populated state out of all fifty due to the rural
environment and small population. Additionally, the cost of living in Alaska
is much higher than what you would find in other parts of the U.S. Even with
a cost of living allowance that most Alaskans receive, residents still struggle
to meet basic costs, so residential developers may have a harder time making
a profit on residential property other than vacation property.
The introduction of big retail stores such as Costco and Wal-Mart
have helped to lower living costs, and there is a great need for other inexpensive
retail alternatives. If an entrepreneur can stand to run a retail enterprise
on margins that are slimmer and than the already slim industry standards, retail
land is relatively cheap.
Alaska’s major private industries (most residents are employed by either
the federal, state or local government) are oil, fishing, and tourism.
Oil, of course, requires an intense investment of land, but it is unlikely that
a land speculator could make money in this way as most of the drilling is done
on public land and the oil rights attached to the land are generally held by
federal, state, or tribal governments anyhow. However, there are still opportunities
for the land speculator as there are many undeveloped lots within the larger
urban areas, some of them quite large and relatively cheap. Though it make take
longer than in other areas, it is almost certain that these plots will eventually
be developed. Some of the less developed areas have completely unzoned parcels
of land, and a speculator who can pick the next hot vacation destination may
strike it big.
Residential speculation may be lucrative for real estate investors as Alaska
is experiencing small but steady population growth, and its housing markets
haven’t plummeted there, or even really declined. In the major urban area
of Anchorage there continues to be more buyers than sellers for residential
property and more renters looking to get into ownership. Another area ripe for
residential development is Kenai, which sits on the edge of the Kenai National
Wildlife Refuge and is a major sport fishing destination and oil and commercial
fishing hub.