Changes, Commercial Real Estate Markets
Changes, Commercial Real Estate Markets
Commercial real estate markets are rebounding from the crashes and downturns of previous years. But what about the returns for investors?
As with any investment, returns are based on the effectiveness of overall strategy. A poorly managed commercial building may not show the returns of a well managed one. For the investor who specializes in turning around commercial buildings and apartment complexes, buying a property that appears to have little value for return can be very profitable if the timetable and planning are right.
There’s a new optimism about owning commercial real estate that has not been present for a few years. According to Gary Kaminsky, a vice chairman at Morgan Stanley Wealth Management, wealthy investors favor real estate as an alternatives to the stock market. They see stocks becoming more expensive and interest rates possibly declining. For them, real estate makes sense for returns and income.
Bloomburg reports that many of the wealthy investors favoring commercial real estate are foreign investors. They like the security of owning an asset valued in dollars, and also the opportunity for US based income and equity. Real estate is also an investment that can be affected by how it is managed and controlled, unlike the stock market.
What are wealthy commercial investors buying? Self storage facilities are growing in popularity. Retail strip malls are losing favor, as consumers increasingly turn to online shopping.
What does this mean for the beginning investor, or the average person who does not have a million dollars to invest?
It means that there is continued interest in commercial properties, indicating that the market is coming out of a slump. You may not be able to afford a luxury office tower, but you can afford the smaller office complex, and obtain financing from a variety of resources, including private lenders and hard money loans. Wealthy investors look to commercial real estate for the long term, and always have a strategy in mind for maximizing returns and increasing value. Small investors should follow those same principals as well.
Whether you are a seasoned real estate investor or a pro, I can assist you with all your real estate needs, from locating and purchasing the right investment properties for your portfolio, connecting you with valuable resources for bank owned properties, and marketing your property for sale. Contact us about selling your house, or with any questions you have about real estate.