At our last Property Masterclass event, Chris Brown and Andrew Harkins, owners of Brightstone Spaces in Falkirk, shared their journey of transforming a property into a thriving business hub. Their insights into investing in Commercial Multiple Occupancy (CMO) properties revealed why this sector is gaining momentum and how aspiring investors can succeed in this lucrative market.
A CMO is a type of property that accommodates multiple commercial tenants within a single building or premises. They provide flexible office solutions that cater to growing demands for small, all-inclusive, serviced spaces. Unlike traditional retail or office buildings that can often sit empty, CMOs are designed for modern needs and offer significant opportunities for investors.
What made you consider CMOs?
“The potential for higher cashflow from a single asset was the biggest driver for us getting into the CMO space and commercial property in general. We were finding that residential buy to lets were great for the long run, but were a slow burn and didn’t quite have the scalability individually that a CMO building can have. One great CMO investment can make you “financially free”, and certainly with Brightstone Spaces in Falkirk, we have been able to focus full time on growing our property businesses. Additionally, since a CMO has multiple clients, you never have massive voids or uncertainty when a client hands in their notice - they are maybe 1 of 30 clients providing income from the building.”
How can you Fund a CMO Investment?
“We funded our CMO investment by working with a private SSAS trustee who had money in their pension that they wanted to get a great return from, while having the security of a first charge on a commercial asset. In the circles we’re in, we see a lot of people with their own SSAS or who want to do 3rd party loans with their SSAS to invest in CMO’s. One popular method is having your own SSAS buy the building (Property Company) and then lease the building to another company owned by them to do the CMO daily operations (Operating Company). This model allows someone to make money in and out their SSAS!”
Other funding options include:
Bridging Loans: Borrowing money from a specialist short term lender who can act quickly and are experienced in lending for investments.
Angel Investors: Partnering with private investors interested in high-yield opportunities.
Local Council Grants: Securing energy efficiency grants or other council incentives to support renovations.
Top Tips for Aspiring CMO Investors
Entering the CMO market requires careful planning and a solid strategy. Here are some essential tips from Chris and Andrew:
Get educated: “There’s room for high-quality office spaces, but understanding local demand is key. Do your research to minimise the risk and ensure you know the ins and outs.”
Know Your Numbers: “Always budget for unexpected costs and ensure your finances are robust. Remember to appreciate the scale that can come with a CMO investment versus a single let commercial or residential buy to let.”
Get Networking: “The right mindset and connections can help you navigate challenges and seize opportunities. Get networking with people in the same area and surround yourself with skilled developers, tradespeople, and advisors to deliver top-quality results.”
Is CMO Investment Right for You?
CMO properties offer high cashflow potential and align with growing market trends, making them an attractive option for property investors. However, they require patience, research, and a strong support network. If you’re ready to step into this exciting sector, follow the advice shared by Chris and Andrew to maximise your chances of success. Learn more about Brightstone Spaces here.
Ready to learn more about property investing? Sign up here to be the first to get tickets to our next Property Masterclass event, happening on 28th January 2025!
