Why Commercial Real Estate
Why invest in commercial real estate ?
Here a few points that commercial real investment uniquely offer to the investor may not be applicable in others investment vehicles.
|1- Provide opportunity to monetize the intangible assets of other investors such as the tenancy.
i.e anchor. Here is great example
Building 17,550 sq ft. on 11,250 sq ft. lot , was leased to Borders.
2008 sold for $26,925,269 as leased property to Boarder on then in 2010 sold for $24,800,00 on 2011 the property where rebuilt as 10,350 sq ft. for Apple then sold 2012 $58,000,000 with apple as a tenant of 2014 sold for $101,000,000.
|2- Organic higher return collecting the tenant Investor get paid from intangible of the tenancy. This is very unique to commercial real estate would not be offered by residential real estate.
|2- Built-in protection and hedge against economic turbulences builtin leasing structure.|
|3-Commercial real estate has historically delivered higher income returns than other major asset classes.|
|4- The commercial real estate higher prices lead to less affordability and less competition and providing better qualities.|
|5-Sophistication required specialized education, training and expertise not a common household item can be claimed by everyone.|
|6- Enhanced Risk-Adjusted Return Potential: Commercial real estate has delivered higher returns than equities and bonds while also being at the lower end of the risk spectrum (which represents volatility) than equities, making its historic risk-adjusted return more favorable than these other asset classes|
|7- Less sophisticated investors provide greater deal to be picked up by those who have specialized commercial real estate and relevant expertise, education, background and network.|