Commercial real estate development in the United States has been steadily increasing since 2010. Retail real estate is much broader than multifamily apartment buildings or office space. Investors can diversify their portfolios and mitigate risk while incorporating stability during periods of volatility. Commercial real estate has the potential for both income and appreciation. Commercial real estate investing can be a hands-off affair.
Most people prefer to invest as limited partners in syndication or a fund. Some mutual funds, such as DFA Real Estate Securities Portfolio (DFREX), claim to provide consistent returns. Some real estate mutual funds have a mix of residential and commercial investments. Commercial real estate leases are typically longer (5-10 years) and structured as “triple net.” Those who understand the nuances of commercial real estate frequently find this market segment highly profitable.
REITs are another popular way to invest in commercial real estate without being a landlord. Avoid non-publicly traded REITs because they frequently lack liquidity and have high costs. Some prefer to buy and hold for the long term, while others prefer to invest for the short term.
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