Investing in
Commercial
Real Estate
A PATHWAY TO BUILDING WEALTH
Commercial real estate (CRE) investments have consistently been recognized as a significant driver of potential growth, appealing to both individuals and institutions – including substantial endowments.
Stable Cash Flow Potential through Rental Income
Commercial real estate leases tend to have longer durations, often spanning several years. This provides investors with a more predictable and stable potential cash flow.
Appreciation in Property Value
Over time, commercial real estate properties that are well-located and used for essential needs – like distribution of goods, medical office space and self-storage – typically appreciate in value. This means that aside from the rental income, the property itself can become more valuable, providing a potential source of shareholder returns upon sale.
Hedge Against Inflation
One of the notable advantages of CRE is its ability to act as a hedge against inflation. As inflation rises, generally so does rental income and property value, helping to ensure an investor’s purchasing power is maintained.
Tax Benefits
Depending on the structure of the investment offering, there potentially can be tax benefits associated with CRE investments, including deferring capital gain taxes in 1031 tax-deferred real estate exchange transactions.
Diversification
Investing in CRE allows for diversification of an investment portfolio. Real estate tends to have a low correlation with other asset classes, providing a buffer against market volatility.
