Expanding Your Investment Portfolio - Why Now is the Time to Invest in Commercial Real Estate

 Posted on December 00, 0000 in Commercial Real Estate

During the U.S. economy crash of 2018, financially savvy investors jumped into the real estate market. Many started out in residential properties, which were being repossessed at an unprecedented rate. Most of the properties were distressed, but substantial profits were still made. Now, with climbing rates and other indicators of market shifts, residential investors are being encouraged to expand their portfolios. One sector worth considering is the commercial real estate (CRE) market. Learn why, and discover how an experienced real estate attorney can minimize you minimize the potential risks in the following sections.

Why Commercial Real Estate?

With the possibility of turbulent markets ahead, investors are encouraged to add more stable equity to their portfolios. Commercial real estate typically offers a better risk-return profile than other real estate sectors. For example, the absolute return on CRE backed by private debt (secured debt with a collateral contingency) ranges between 6 and 12 percent. Additionally, this sector does not experience the same daily swings as other markets. Use of collateral in a commercial real estate transaction can also minimize the risk of a default, and it ensures there is an asset safety net, should default, or a decline in the market occur.

Breaking Into the CRE Market 

While there is no “right way” to break into the CRE market, some investment choices may serve you better than others. For example, many investors choose to stick with metropolitan areas, where growth is almost guaranteed. Sadly, these properties can cost you more upfront, and the market is far more competitive. Suburban areas, which are still seeing growth, tend to be more affordable but they may carry a higher risk of loss. To gain a better understanding of when, where, and how to start investing in commercial real estate, contact a seasoned professional.

Contact Our Naperville Commercial Real Estate Lawyers

Whether you are expanding your portfolio or want to increases the chances that your next transaction will be a lucrative one, Lindell & Tessitore, P.C. can help. Dedicated to your financial well-being, our seasoned Naperville commercial real estate lawyers can assist you with everything from performing due diligence to negotiating better contracts. Get started by scheduling a personalized consultation. Call 630-778-3818 today.

Source:

https://www.forbes.com/sites/forbesrealestatecouncil/2018/03/30/why-its-time-to-add-commercial-real-estate-to-your-investment-portfolio/#68179aab1d42