“You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur “ . ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA, CLICK HERE AND PLEASE CALL ME. 520-975-5207 or email me firstname.lastname@example.org. …. VIEW ALL OF WALTERS LISTINGS.
Forbes Real Estate Council Opinions expressed by Forbes Contributors are their own.
POST WRITTEN BY: Evan Gentry. CEO and Founder of Money360. Gentry is an entrepreneur and innovator in bringing together technology, real estate, lending and investments.
Recent market shocks have investors on edge. After February’s spike in volatility and the largest one-day drop in the history of the Dow Jones Industrial Average (DJIA), many investors are wondering if the nearly decade-old bull market in equities is finally coming to an end.
Following the 2008 financial crisis, the equities market has outperformed almost all expectations and has provided a boon for investor’s portfolios. But with higher rates on the horizon and multiple other signs pointing to a potential shift in the market cycle, investors may want to trim their allocations to equities and explore other investment opportunities.
One sector that is attracting strong inflows right now is the U.S. commercial real estate (CRE) equity and debt markets. Over the course of my career, I have been involved in the funding or acquisition of several billion dollars of real estate loans, currently as the founder of a CRE lender. I’ve learned and personally observed the many different ways for investors to invest in CRE beyond just buying property. Savvy investors, including high-net-worth individuals, family offices and institutional investors, are now looking at all the opportunities within the CRE industry to achieve attractive, risk-adjusted returns. Compared to the increasing volatility of the equities market and the near-zero returns from bank deposits, CRE offers an attractive middle option that efficiently balances risk and return while providing cash-flow to a portfolio.
For investors considering CRE for the first time, there are two important things to keep in mind.
- Debt Or Equity
Investors have two main options for CRE allocations.
Most investors are likely familiar with equity investments, which can take the form of buying stock in a company that specializes in CRE or buying a property outright. There are also various mutual funds and ETFs that can offer equity exposure to the CRE market. The risk-return profile of any individual equity investment can vary widely, so it is best to consult with a financial advisor before making any allocations.
On the other hand, private debt offers investors what I consider to be a safer and often more lucrative way to gain exposure to the CRE market. Unlike other forms of private debt such as consumer debt, student loan debt and small business debt, which are typically unsecured, real estate debt is backed by physical property as collateral. This collateral minimizes the risk of a default and provides a safety net of assets, should a default occur.
In addition, private debt backed by CRE offers stability to a portfolio (as there are no daily swings in price) and the option for monthly fixed income distributions. With absolute returns in the 6-12% range, you can see why this market is getting a lot of attention.
Choosing between a debt or an equity investment is all about timing the CRE market. Early in the cycle, it’s best to have equity ownership since that provides the highest return potential. But later in the cycle, it’s best to have debt exposure because risk is dramatically lowered. We are currently in the midst of the longest upward real estate cycle in a century, which suggests we’re likely close to the top of the cycle. Given the potential headwinds, CRE investors may be better off sticking to debt until the cycle restarts.
- Which Specific Markets To Target
Like any asset class, not every CRE market is created equal. There are parts of the CRE industry that are undervalued, overvalued or somewhere in between.
Investors thinking about CRE should keep in mind that in a country as big as the U.S., CRE prices and valuations can vary widely from state to state and city to city. While the most mature CRE markets are in big cities such as Los Angeles and New York City, the best opportunities may actually be in suburban communities or in second-tier cities. For example, instead of Los Angeles, investors may want to look at Orange County or Riverside County where CRE prices are comparably cheaper.
The most successful CRE investors tend to have expertise in the markets in which they are investing. It’s important to understand the local market and what economic or demographic trends may play a role in driving up — or down — the value of a CRE property. Is the local population growing? Aging? Are there infrastructure projects in development that could make the property more profitable? Are there potential regulations that could cut into profits? Identifying these questions and, more importantly, the answers, can mean the difference between a modest loss and a huge return.
The CRE industry offers a great opportunity, outside of equities, for investors seeking to weather the turbulent markets ahead. It’s a growing market with an attractive risk-reward profile if considered carefully and strategically.
ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA, CLICK HERE AND PLEASE CALL ME. 520-975-5207 or email me email@example.com. …. VIEW ALL OF WALTERS LISTINGS. Let me know if you are interested in Apartments: CLICK HERE FOR APARTMENTS FOR SALE and CLICK HERE for Map of Apartments Under Construction or in Pipeline.
Phoenix Commercial Real Estate and Investment Real Estate: Investors and Owner / Users need to really know the market today before making a move in owner user Commercial Properties, Investment Properties and land in Phoenix / Maricopa County, Pinal County / Arizona, as the market has a lot of moving parts today. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands Commercial Properties and Investment Properties. I am marketing my listings on Costar, Loop-net CCIM, Kasten Long Commercial Group. I also sold hundreds millions of dollars’ worth of Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with brokers, Investors and Developers. I am also a CCIM and through this origination ( www.ccim.com ) I have access to marketing not only in the United States, but also internationalClick here to find out what is a CCIM: https://en.wikipedia.org/wiki/CCIM
PLEASE CALL ME 520-975-5207 OR E-MAIL ME firstname.lastname@example.org
ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA, CLICK HERE AND PLEASE CALL ME. 520-975-5207 or email me email@example.com
Let me know if you are interested in Apartments: CLICK HERE FOR APARTMENTS FOR SALE
- DEMOGRAPHIC FACTS ABOUT MARICOPA COUNTY:
- The average age of the population is 34 years old.
- The health cost index score in this area is 102.1. (100 = national average)
- Here are some of the distributions of commute times for the area: <15 min (22.7%), 15-29 min (36.8%), 30-44 min (25.1%), 45-59 min (8.6%), >60 min (6.8%).
Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Properties in Phoenix, Tucson, Arizona.
Kasten Long Commercial Group tracks all advertised apartment communities, including those advertised by other brokerages. The interactive map shows the location of each community (10+ units) and each location is color coded by the size (number of total units).
Walter Unger CCIM, CCSS, CCLS
I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years. If you have any questions about Commercial / Investment Properties in Phoenix or Commercial / Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us.
Please reply by e-mail firstname.lastname@example.org or call me on my cell 520-975-5207
Walter Unger CCIM
Senior Associate Broker
Kasten Long Commercial Group
5110 N 40th Street, Suite 110
Phoenix , AZ 85018
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